Abstract–Just when a team thinks that a project is smooth sailing in its early stages, a critical deliverable is missed… now what? While many owners and scheduling specifications have requirements for owner approval of contractors’ baseline and update schedules, too often there is concern about possible risks associated with approval, or approvals are simply ignored. Sometimes specifications require ‘approval,’ sometimes ‘review,’ sometimes they mention ‘acceptance,’ occasionally they simply address a ‘record submission.’ Often the concerns are related to the worry that review might ‘direct’ the contractor to a specific means and methods that could be problematic for the owner later if the project runs into delays related to the means and methods employed. Studies show that one of the traits of project success is the involvement of the management team (owner, project controls group, construction manager and contractor management staff) in schedule review. [4] This article discusses the different review and approval options for owners and makes recommendations for the appropriate level of approval, including discussion of the benefits and risks of any approach. The reasons for schedule rejection are discussed, as well as recommendations for requirements that will improve the chances of receiving an approved schedule. Working for a top-50 program management firm, the authors have dealt with the issues of drafting scheduling specifications and schedule approval. They bring an extensive depth of experience in scheduling and schedule review, through working with contractors, consultants, and owners. This article was first presented as PS-3428 at the 2020 AACE International Conference & Expo.

Introduction
Creating and approving a workable baseline schedule in the first precious months of a project is of critical importance. Project baseline schedules (“baseline”) are meant to be used by all stakeholders (owner, owner representatives, contractors, etc.) to compare project progress against the plan. Unfortunately, most “plans” are not agreed upon by all the stakeholders within a reasonable time after the project starts. This causes misalignment between stakeholders and weakens the ability to provide proper analysis of disputes and delays occurring in the early stages of the project. These misalignments (or disconnects or confusions or frustrations) could be solved by agreeing on a baseline early in the project. This article explains the important value of an approved baseline and details options for the stakeholders can use to achieve this key deliverable early in the project or program.

Background
Stakeholders discuss and decide early in the project on key milestone dates including interim and final completion dates. What seldom is discussed by the stakeholders is when the project will be baselined. The “how” to get to these milestones is usually ignored or at least not prioritized. Early in the ‘game,’ stakeholders such as subcontractors, suppliers, inspectors, and management staff rarely have all the information needed to make fully informed contributions. Their contributions typically are expressed in commitment dates so the ‘how’ to get to these milestones is often ignored, or at least not prioritized as preferred.

In this article, the terms ‘owner’ refers to the client and their representative; ‘contractor’ refers to general contractor and sub-contractors within a project.

Unless stipulated in the contract, there is always the question of how long after notice to proceed (NTP) is granted should the contractor submit a baseline schedule for approval. The contractor is usually challenged to achieve submission within the contractually allowed time, and this often leads to a baseline schedule that is submitted late. This might be because the contractor recognizes that once the baseline is completed and approved, their work progress will be subject to monitoring and possibly judged more harshly or intensely by the owner and the owner representatives. This sense of judgment can freeze a contractor’s project controls team and cause shortcomings in the schedule if not acknowledged and dealt with early.

Alternatively, a late submittal could be due to the limited amount of time available to develop the schedule, the lack of professional scheduling staff, or the inability to facilitate a schedule development session with the full construction management team.

The goals of this article include making the case that the owner should require formal submission, provide formal approval, and require the contractor to accommodate any review comments. Additionally, it hopes to challenge the assumption that the baseline is a threat and risk to the contractor and their team. It is important that the baseline is recognized as an integral deliverable which should be championed to be achieved by every stakeholder. A successful baseline process leading to approval early in the project will improve project success.

Submitting a baseline just because it is a contract requirement without much effort is counterproductive. The submission should be scrutinized by the team to make sure it conforms with standard practices and contract specifications.

Only after the baseline is vetted and improved will the project reduce the risk of receiving change orders incrementally during progress due to missing logic, insufficient durations, and/or constructability issues in the baseline.

Review and Response is Important
The baseline schedule is the benchmark against which progress is measured, performance is determined, and delays are analyzed. Review of a project baseline and response is important because it improves the quality of the schedule which increases the likelihood of completing the project on time and on budget. Depending on the size, complexity, and duration of the project, the baseline should be submitted as early as possible so it can be used to manage the early stages of the project when there are likely to be conflicting delays. These early delays tend to fall into one of two categories; owner delays due to quality of the plans, and contractor delays due to the inability to negotiate and award all the early trade contracts on time.

It is common in claims to discover inaccuracies or missing information in the drawings during shop drawing preparation by trade contractors. These are clarified or answered through formal requests for information (RFI) that tend to take time to resolve and thus delay the project. If these were the only delays and the schedule was approved in sufficient detail to analyze and prove the delay quantum and responsibility, the entitlement to an extension of time (EOT) would be clear and simple. But without a baseline in place, the delays are often not identified, and analysis is very difficult without an agreed-upon baseline.

At the same time, the general contractor may run into a delay in bringing on early trade contractors like underground plumbing, causing a delay to construction. With no baseline, these delays just accumulate and corrode the collaborative culture necessary for a successful project. On top of the problems with attempting to analyze without a baseline, the delays tend to be concurrent which are more difficult to analyze and resolve than most isolated delays.

One of the solutions to this quandary is to allow a two-step baseline schedule submission such as owner representatives like the US Army Corps of Engineers (USACE) specifies. This approach requires an initial project schedule (IPS) due within a fairly short time frame, such as 45 calendar days (cd), and a detailed project schedule (DPS) due within a longer time frame, such as 120 cd. The IPS is required to include all the paperwork and the early construction activities in full detail with the rest of the project scheduled at a summary level, and the DPS is required to be built on the IPS and provide the full project detailed schedule. The IPS can be updated routinely to capture the actual dates and monitor performance until the full DPS is approved, and since the DPS is built on the IPS, if there are multiple updates of the IPS, the as-built data in those updates can be easily imported into and match activities in the full DPS.

Regardless of the solution chosen for schedule submission timing, one good approach is to require a reasonable period of time between the award of the contract and the issuance of the notice to proceed (NTP), using that time to develop the schedule. The issuance of the NTP could be dependent on schedule approval, as long as care is taken to protect the project duration and owner’s responsibility for delays due to any prolonged failure to get the schedule approved.

Besides the issue of dispute and claims prevention, timely and practical baseline schedules have enormous value to any company. The main issues can be elaborated based on the value in professional, psychological, collaborative, and contractual matters.

Professional Value
Building relationships and a professional network in the industry is complicated. Achieving early deliverables on time for a project – especially the project baseline – increases the chances to build stronger and lasting relations with colleagues, consultants, contractors, and owners. The stakeholders will recognize the value of the project controls team with early submission of a reasonable baseline that helps prevent conflict. This makes them more likely to reach out to the project controls team for support because of their professionalism in getting this key early deliverable successfully completed.

Psychological Value
The added value from working on a project schedule with the team early in the project improves the quality of the schedule, based on a study that shows good correlation between better project performance and “detailed review of schedule by the project team.” [1] This also increases the likelihood of everyone getting along, strengthens team confidence and improves owner satisfaction. The likelihood of the project controls team being involved and interconnected with the other stakeholders of a project increases if the team works together early to achieve a comprehensive project baseline.

Collaborative Value
Interaction between the project controls teams (owners, contractor, etc.) to achieve an approved baseline increases collaboration early in a project. It is one of the first key milestones which indicates that the stakeholders are in agreement for contractor and owner actions necessary to meet the scheduled means and methods. A well-designed baseline also helps define the scope and the implementation plan so that all stakeholders understand how the project will be built. This opens the door for better cooperation among stakeholders as the project matures, and also helps prevent misunderstandings over the nature of project deliverables.

Legal/Contractual Value
Most project contracts require analysis of delays based on the critical path method (CPM) schedule and stipulate a sanction if the baseline is not approved within a reasonable time. In addition, not achieving a project baseline approval will increase the likelihood of disputes later in the project. All time disputes will be analyzed based on the baseline and subsequent updates and if those do not reflect the implementation plan and contemporaneous field operation, those disputes will be harder to resolve. The baseline benchmarks this plan and provides the basis for monitoring and analyzing with each update. This risk and the subsequent additional cost are generally reduced if the stakeholders agree on a project baseline within a reasonable time from NTP.

Review and Response Options
Project baselines should be reviewed by the owner’s project control team, who will analyze the received schedule and provide recommendations on how to respond to the submission. In most projects the owner defers to their project controls team’s conclusion for their response to the submission. The following are the most common options used by owners for dealing with the baseline schedule and subsequent updates.

Require Approval and Reconciliation of Comments
Most contracts require that the baseline schedule be reviewed and approved by the owner before it becomes a project document. The achievement of receiving “approval and reconciliation of comments,” also known as “approved with comments” or “approved as noted,” should be the most desired response for a contractor. This is not just because, in a dispute resolution forum, the contractor can rely on the schedule for analysis when the baseline was approved by the owner, but also because they know the owner is supportive of their plan. An approved schedule starts and helps guide the project team on a clear path toward project completion. The achievement of receiving approval of a baseline schedule should not be taken lightly and all comments by the reviewing team should be required to be answered within a reasonable time. This approach has significant benefits to the contractor, as noted in language from a recent online presentation by one of the authors, [2]

• “Schedule approval is the owner’s opportunity to ensure reasonableness, not missing vital scope, positioning for claims, or unrealistic in expectations for owner’s work.
• Approval does not mean that the owner is directing the contractor to follow the schedule, merely that it meets the specification requirements.
• Approval would imply that the owner has agreed to perform his work within the constraints of the schedule, it appears reasonable, and meets owner needs.
• Approval also means that the owner agrees to cooperate with the schedule for any owner responsibilities or coordination with third parties.”

Require Acceptance Only
Unlike the previous option, merely accepting the submitted project baseline is more of an acknowledgement that is sometimes used when the owner believes they might take on some liability if they approve the baseline. Unfortunately, this option removes the owner’s ability to help improve the quality of the schedule and ensure owner tasks are modeled appropriately in the schedule. In some contracts acceptance might be a term indicating only a step in the approval (or rejection) of a baseline submittal process to notify the stakeholders that the submission has been received and is under review.

Require Submission Only
Some project contracts (usually small) might just require that the contractor shares with the owner their schedule and leave it entirely to the contractor to implement their means and methods to complete the project without any owner interaction or feedback. This might be reasonable for small design projects where the owner does not have a design engineer or the ability to support the review of a contractor’s schedule. However, it still creates risks to the owner because of the contractor’s expectations for the owner to perform some tasks in alignment with contractor work. Regardless, it is recommended that the owner reviews the contractor schedule and provides feedback to help improve quality of the schedule network.

Some textbooks caution owners to not require acceptance of a schedule if they do not have the facilities to properly review it, address it as an internal product [5], or treat it as a product that is “sold” [7] when accepted. The act of only accepting a schedule can involve the owner by not identifying planning risks that could have been addressed.

No Required Owner Involvement
The lack of owner involvement in the baseline schedule review is not recommended, and often contributes to the project being managed without a schedule. Being completely indifferent to a project schedule and providing no feedback to the contractor for any reason whatsoever leaves the owner exposed to the contractor’s expectations memorialized in this primary communication and contractual tool. The risk of completing a project on time without owner involvement or a schedule is very high, as recognized by inference in some studies, such as a 2011 study showing that the “most serious risks to project success” are led by “changes in schedule” by 49% of respondents surveyed. [6] Other studies, while not directly addressing approval of schedule, speak to the value of the detailed review of the schedule by the project team, noting in one study, “demonstrated less cost growth.” [4]

In addition, the owner takes on some measure of liability from failing to engage with the baseline schedule, as determined in the “Stanley Miller Construction Co. v. State” case, where the trial court held that an owner breached a construction contract because the baseline schedule was “both logically flawed and hopelessly incomplete” when it included inaccurate float forcing the contractor to spend more labor and equipment than planned to meet project deadlines.

Rejection Options
When the owner specifications require review and approval and the submittal does not meet the minimum requirements, the schedule submittal should be rejected. Rejection options vary according to how closely the submission meets the requirements. The owner or program/construction manager reviewing team evaluates the submission and determines if it considers the contractor’s schedule submission inadmissible, which may be due to a number of issues. Here are the most common rejection options.

Contractual Noncompliance
Contractual noncompliance occurs when the contractor’s schedule does not comply with contract requirements. It could be as simple as an oversight by the contractor’s scheduling team in not reviewing the contract prior to submitting the baseline schedule or it could be as complicated (and political) as the contractor using different requirements and refusing to deviate from them. It is not uncommon for the contract to require a schedule to be loaded with activity-based costs, and this is one of the sources for noncompliance when the contractor fails to load costs.

Occasionally, the noncompliance is due to a failure to meet the phasing specified, incorrect notice to proceed or milestone dates, or missing owner or third-party activities. All parties need to ensure alignment of the schedule and the contract and negotiate a reasonable plan forward as quickly as possible. The goal should be to move away from rejecting a baseline schedule (with a risk of contributing to a project completion delay) and toward a common ground approach of collaborating with the contractor to gain approval. If practical, the owner might decide it makes sense to modify the contract to accommodate reasonable needs by the contractor. More commonly, the contractor will adjust and try to align the developing schedule with the contract requirements in order to gain early approval of the baseline from the owner and team.

There are commonly three categories of reasons for rejecting a schedule submission; technical noncompliance, outdated information, and inappropriateness.

Technical Noncompliance
Most construction contracts spell out the technical details required for the baseline schedule to be accepted for review. Since the baseline is one of the first schedule submissions by the contractor and often required within a short period of time, there is an elevated risk that the contractor will fail to comply with a technical requirement. It could be a simple misunderstanding or lack of knowledge by the contractor. One such misunderstanding might be incorrect software or version of a software used as the scheduling tool by the contractor to which the owner does not have access. Another reason for technical noncompliance might be a failure to involve the appropriate trade contractors in developing the schedule, leading to problems in sequencing or alignment with deliveries. Other significant reasons include failure to meet contract requirements to load costs or resources into the schedule. Understanding the technical specifications and making sure that all the stakeholders are involved in the development and review of the submitted documents is key for a successful baseline project schedule.

Inclusion of Information Not Available at Contract Award
Sometimes it happens that the baseline project schedule is submitted right after a major change or delay has occurred in the project. Anything that affects scope, budget and time would affect the schedule, but the baseline schedule is a model of the contract scope of work and cannot be used to include work not in scope. It may happen that some changes might be on the critical path and therefore affect time of completion for the overall project, but the baseline schedule should still not include non-contract work. However, this is certainly support for the intention to get an approved schedule in place as soon as possible after NTP.

Occasionally, a contractor will include information as part of the baseline schedule which more properly should be handled in a change management effort, or the owner may encourage the same approach. But when the schedule contains changed conditions in the baseline submission, it tends to confuse the definition of original scope of work. Any changes necessary due to new or changed field conditions or requirements should be clearly identified and discussed as changes and not included in the baseline schedule. These changes should, however, be resolved as an updated schedule or time impact analysis as quickly as possible after baseline schedule is approved.

Schedule Not Appropriate
If the submitted baseline schedule does not fit the standards based on industry best practices –even though the contract might not spell them out – a knowledgeable scheduling professional can identify schedules that should not even be considered for review. This could be for missing scope of work, lack of detail, missing or inappropriate logic, schedule development problems such as activity names not clear or duplicated, or even something like the schedule is in a foreign language. Other reasons for rejection include under- or over-development of trade work, high proportion of owner-responsible work that appears to be “forced” onto the critical or near-critical path, just the failure of the schedule to appropriately model the contractor’s means and methods to build the project. This type of failure in the schedule will require the owner reject a baseline submission, and the rejection, just as with any submittal, should be returned as soon as possible to minimize the time for resubmission.

A reasonable approach to recognizing this type of problem is maintaining the purpose of the schedule, to model the contractor’s plan to achieve the contract goals. A good model, built with industry recognized good CPM scheduling practices, should ensure an appropriate baseline schedule.

Benefits to Owner for Approval and Reconciliation of Comments
There are numerous benefits to the owner in achieving early approval of the baseline schedule. With the approved baseline in place and available for updating and analysis, the project is managed by the schedule from the earliest date. This dramatically reduces the risk of early delays that cannot be analyzed without a schedule, and it provides a monitoring tool that helps keep the project on track while providing a basis against which to analyze any contractor caused delays.

The schedule review is the owner’s opportunity to improve the quality of the schedule for performance monitoring and analysis, as well as protecting the owner from project failure and any associated owner risks. It is the best approach for providing comments necessary for the contractor to address deficiencies by revising the schedule. The quicker the comments are provided to the contractor after schedule submission, the sooner the contractor can address the comments. Since the schedule is most commonly on a monthly cycle, if the comments are not received by the contractor early enough to revise prior to the subsequent month’s schedule update process starts, the next update will still contain the same problems and risks.

Risks to Owner for Other than Approval
Rejection is certainly a risk to the project and owner (as shown in the legal citation in the Review and Response Options section above), and repeated rejections tend to erode the relationship between the contractor and owner. As noted in a paper related to baseline approval, “These rejections cause production to be severely affected, inflicts stress on the contractor’s project management team, and places the contractor in an untenable situation.” [8]

Approved as noted is a reasonable and preferred compromise if the contractor is required to make corrections according to the notes or comments, and prevents the lag in schedule approval that happens with rejection. The “as noted” stipulation refers to the review comments supplied, and best practice is for the owner to carefully consider the list of problems with the schedule and split them into two categories. These categories are minor best practice improvement suggestions and secondly deficiencies that would render the schedule less valuable or even risky for the owner.

The deficiencies are listed in the comments that carry the understanding that, if the contractor corrects them satisfactorily, the owner will approve the submission. The other items on the list that amount to best practice suggestions are issues that, even if not fixed, will not cause the schedule to calculate incorrectly or position the schedule so it can easily develop into claims. If the contractor properly corrects the deficiencies, the schedule can be approved.

Approval and Project Delivery Methods
The project delivery method has an effect on the ability to recommend approval since some methods allow work to start without a full schedule in place. With (design-bid-build), it is common to require full schedule approval before construction starts since the contractor has the approved drawings showing full scope. With DB (design-build), PPP or P3 (public-private-partnership), and EPC (engineering, procurement, and construction) project delivery, the contractor takes over the design at some fairly low level of scope definition, so the project is not fully designed. In these delivery methods, there must be consideration from both parties to get an approved schedule in place as soon as possible, and a multi-part submission is often the answer. As noted in a paper by Colbert and Forbes, “the CPM Schedule goes through multiple stages – similar to a rolling wave approach.” [3] This provides a detailed schedule for early work with the balance of the work summarized, and then another submission where that summarized work is detailed.

Multi-prime contracts will often have a variety of project delivery methods employed, and CMAR (construction manager at risk or CM@Risk) project delivery requires the CMAR to engage with the development and monitoring of scope definition during design. With CMAR delivery, the submitted schedule should already be developed and coordinated with design to meet the requirements and provide high value. By the time the schedule is ready for baseline schedule approval, it should include the full scope of work with a good explanation of the contractor’s means and methods. Approval should be straightforward unless the CMAR has not fulfilled their role in the stage-gate process of updating and expanding the schedule as the design matures and scope is further developed.

Combining Time and Cost in a Schedule
When the schedule is loaded with costs, it can be an additional complication to submit and approve these schedules, but it is in the stakeholders’ best interests to cooperate and resolve it quickly. The additional complexity of using cost-loaded schedules is due to the differences in the level of granularity needed in the schedules between cost and time. Cost, which is normally invoiced monthly, can often be carried at a higher level than the daily/weekly work activities necessary to monitor performance. This can lead to reduced detail in the schedule if the cost input drives development or perhaps a need to add cost-only activities in the schedule.

The authors have found that if the contractor informs the subcontractors and suppliers that the schedule will be cost-loaded when developing the schedule; then the sequencing and depth of detail from the subcontractors and suppliers will be better and more appropriate. This is due to their need to ensure the ability to bill against their sequencing delivery and installation. For example, without recognition of cost loading, a structure steel fabricator/erector on a passenger cruise terminal provided a very shallow set of activities to cover erection of columns, setting of beams, plumbing/locking in, setting bar joists, and welding deck. However, once the requirement for cost loading was communicated, the same subcontractor supplied activities for six sequences, each with their own columns, beams, bar joists, and deck, in order to ensure that they could bill for each sequence. This addition made the project schedule much better for analysis and monitoring and helped ensure on-time completion.

Developing a common work breakdown structure (WBS) between scheduling and estimating helps with the alignment of the cost and schedule activities. The cost loading can be performed at the work package level of the WBS rather than down at the more detailed activity level which is needed for schedule monitoring.

Following good guidelines for cost loading should simplify the complexity of this requirement and reduce the conflicts common when schedules need to be loaded with costs.

Recommendation
The best choice of the options for schedule review is the requirement of schedules to be reviewed and approved by the owner, supplying deficiencies in comments, and for the comments to be addressed by the contractor and resubmitted for final approval, with both processes performed timely. These steps will ensure deficiency corrections are completed for the next update, so there is a contractual agreement to promote the discussion of the quality of the schedule and provide high quality solutions. The preference is to approve, either in full, or as noted, working with the contractor to address any as-noted comments rather than to formally reject the submission. This ensures that the comments are addressed quickly and builds on the collaborative culture desired. Outright rejection of a baseline schedule should be avoided unless the schedule has so many problems that it cannot be approved without additional risk to the owner. One of the authors developed a paper on how to deal with a schedule submission that cannot be approved for use in this type of situation. The paper discusses an approach that is recommended for use to protect the project and owner when the schedule has too many deficiencies that the contractor refuses to correct, and notes, “It is in the best interests of any project to get an approved as-planned schedule in place as soon as possible to ensure that appropriate planning is done.” [1] That is still a vital point and worth effort to facilitate.

Conclusion
With the right approach and thorough but timely review of the contractor’s baseline schedule submission, it is possible and reasonable to agree to an approved schedule early in the project. Achieving this goal starts with a contract requirement to provide a timely baseline schedule, whether in a single or a two-step submission as necessary. The two-step submission is a useful requirement and the authors recommend the practice as a way to put in place a detailed and appropriate schedule early in the project so accurate performance monitoring and analysis can be provided.

The schedule review should be performed in a detailed, thorough manner, separately identifying deficiencies that must be corrected as well as good industry practices that can help the contractor improve their scheduling. However, these are two different categories and the reviewer must be careful to emphasize the need to correct deficiencies while not using non-deficient practices to delay schedule approval. It is important to require the contractor to address the schedule review comments and correct the deficiencies so the schedule will serve as the basis for completion predictions, performance monitoring and improvement, and analysis of delays. This process of the owner’s team identifying and commenting on deficiencies and the contractor reviewing and correcting them should be done as quickly as possible in order to avoid interrupting the schedule update cycle.

In addition, in keeping with the preferred collaborative culture on the project, both parties should operate in a transparent and open manner, and enter into negotiations when differences arise, allowing for a reasonable resolution in a timely approach. When the schedule just cannot be approved without imposing additional risk on the owner or project, the reviewer should embrace a process to protect the project from the risks, using industry publications that offer good processes. [8] With these efforts, an appropriate baseline schedule can be achieved as early as possible. Each of these elements are important in support of the goal for on-time completion.

REFERENCES

1. Carson, C. “Dealing with Contractors Schedules that Cannot be Approved,” Cost Engineering, Vol. September/October, pp. 4-16, 2013.
2. Carson, C. “Can a Contractor Use Baseline Durations in a Request for EOT?,” Project Control Academy Masterclass, Houston, 2019.
3. Colbert, J. and K. Forbes, “Understanding Risks in Design-Build Schedules,” in AACE International Technical Paper, Morgantown, 2019.
4. Griffith, D. “Scheduling Practices and Project Success,” in AACE International Transactions, Morgantown, 2005.
5. Lewis, J. Project Planning, Scheduling & Control, Probus Publishing Company, 1991.
6. McGraw Hill Construction, Mitigation of Risk in Construction, Smart Market Report, McGraw Hill Construction, 2011.
7. Uyttewaal, E. Forecast Scheduling with Microsoft Project 2010, Best Practices for Real-World Projects, ProjectPro Corporation, 2010, p. 693.
8. Zafar, Z. and D. Rasmussen, “Baseline Schedule Approval,” Cost Engineering, Vol. 43, No. 8, 2001.

ABOUT THE AUTHORS
Christopher W. Carson, CEP DRMP PSP FAACE, is with Arcadis U.S., Inc. He can be contacted by sending email to: Chris.Carson@Arcadis.com

Gino Napuri, EVP, is with Arcadis U.S., Inc. He can be contacted by sending email to: Gino.Napuri@Arcadis.com