Should Transportation Agencies Approve Early Completion Schedules?
I’ve been involved in many discussions with transportation agency staffers over the years regarding the merits of early completion schedules. It’s not an easy subject and there are many conflicting opinions based on a lot of undocumented assumptions about contractor behavior.
In general, transportation agencies sometimes don’t realize that, given the way many of them have written their contracts, the contractor is entitled to payment for delays even if the contractor is projecting an early completion date.
Unlike some private sector development, there is not really much of a downside to completing a highway construction project early. It just means that the contractor and owner can move on to the next project sooner and the public gets to use the new roadway sooner.
I feel there is possibly a hierarchy of options. They might go like this:
A + B bidding is the best approach, perhaps, in that it ensures that the contractor’s scheduled completion date and the contract completion date are the same date. It also gives the owner a little warning, at least, regarding the resources that will have to be mobilized to support the administration and inspection of the project. I suspect, however, that the concern that A + B bidding favors larger contractors may be real.
If A+B Bidding Is Not Possible
If A + B bidding is not possible, and my guess is that it usually is not, then the first step is for the agency to do a great job of estimating the appropriate contract duration.
This is a real challenge, given that contractor resources and experience and, hence, productivity might vary significantly.
The other issue in some states is that durations are intentionally set long to allow contractors to balance their workload throughout the construction season. They will let all of their paving projects early in the construction season and give them contract durations at the end of the construction season.
Most of the projects won’t take nearly that long, but the expectation is that the contractors will space the projects out over the construction season to level their resource requirements.
Accepting Early Completion Schedules
As an aside, there are certain situations where the agency really should be prepared to accept “early completion” schedules. The most significant is the situation where there is an incentive. It’s silly to offer an incentive and then forbid or penalize a contractor for submitting a schedule that shows it completing by the full-incentive date.
In the past, I’ve recommended to agencies that they accept early completion schedules. Here’s why:
Planning for success: Wise managers don’t plan to finish on the last possible date. They plan to finish early to build in a little cushion against catastrophe. If you penalize wise managers for prudent planning, pretty soon wise managers wise up and stop planning wisely (or at least they stop telling you what their real plan is, which is bad, too).
It’s easy to make an early completion schedule show the project finishing by the contract date by adding to the planned durations of each of the activities on the critical path. I would call this sequestering float, but if done discreetly, it would be hard to prove. And, once you’ve proven it, what would you do – force the contractor to submit an early-completion schedule? That would be a tough thing to enforce.
My point is that if a contractor truly plans to finish early, but you penalize the contractor for submitting a schedule that shows early completion, the result will be that you won’t get the contractor’s real schedule for completion of the work and you’ll still be forced to support the contractor’s accelerated schedule.
Why would we want to stand in the way of early completion? In many instances, it seems like we’re concerned about something that isn’t a problem.
As an aside, I think you also need to think about both early completion baseline schedules and schedule updates that show early completion. For example, the agency could turn around acceptance of a submittal faster than planned and, as a result, the project schedule update might predict an early completion. Does that create float? If so, for whom?
Scott Lowe is a Principal of TRAUNER and is an expert in the areas of critical path method scheduling, construction claim preparation and evaluation, and specification writing. He can be reached at email@example.com.
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