Schedule Slip Hidden in a Monthly Update
An owner's construction manager receives a monthly schedule update on a $65M hospital addition. The contractor reports 62% complete against a planned 68%, a slip of six points, but the critical path shows only 10 days of float consumption and the projected completion date is unchanged. The CM notices that the contractor re-baselined the schedule two months ago without owner approval, moving 40 activities from the critical path to near-critical. The earned value data shows CPI of 0.91 and SPI of 0.88. The owner has a fixed opening date tied to licensing, and any delay beyond 45 days triggers liquidated damages of $8,000 per day. The contractor's narrative says the project is "tracking to plan."
1. Assess the reliability of the contractor's schedule report. What is the CM's evidence that the report is misleading?
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The report is internally inconsistent, and the CM has concrete evidence to challenge it.
- Progress versus critical path: a six-point slip with only 10 days of float consumed is implausible on a project of this size unless the work was resequenced. The resequencing is the explanation: the unapproved re-baseline moved 40 activities off the critical path, so the critical path no longer reflects the work that is actually late.
- Earned value contradicts the narrative: SPI of 0.88 means the project has earned 88 cents of planned value per dollar of schedule, which is a material slip. CPI of 0.91 means cost is also overrunning, which often precedes further schedule loss because the contractor will run short of cash or labor.
- Unauthorized re-baseline: moving activities off the critical path without owner approval is a change to the measurement baseline. It makes the "unchanged completion date" meaningless because the baseline itself moved.
- "Tracking to plan" is unsupported: it conflicts with the contractor's own EV data and progress figures.
The CM should treat the schedule as unreliable until the re-baseline is reversed or approved and the critical path is re-derived from actual logic.
2. The owner asks whether to accept the schedule as reported and wait another month. What should the CM recommend, and what concrete actions should follow?
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Do not accept it and do not wait. Each month of delay costs the owner up to $240,000 in liquidated damages exposure and risks the licensing date, which is worth far more than the LDs. Waiting also lets the contractor build a record that the owner acquiesced to the re-baseline.
Concrete actions:
- Reject the update in writing within the contract's review period. State that the re-baseline is unapproved and that the report is not accepted as a valid schedule update.
- Require a corrected schedule within 10 business days, restoring the approved baseline logic and showing the true critical path, with a fragnet for every activity more than 5 days late.
- Hold a recovery workshop with the contractor's scheduler and superintendent. Ask for a time-impact analysis and a recovery plan that identifies the specific acceleration, overtime, or resequencing needed to hold the opening date.
- Run an independent schedule check. Have the CM or a third-party scheduler review the logic and durations, because the contractor's own data is now suspect.
- Preserve rights. Send a formal notice reserving the owner's rights on LDs and on any claim, and document every owner decision so the owner is not later blamed for delay.
- Escalate commercially. If the contractor will not produce a credible recovery plan, raise it to the contractor's surety and senior management before the slip becomes unrecoverable.