Pipefitter Peak and a Permit Inspection at Risk
A 22-month LNG terminal expansion has a resource-loaded schedule. The monthly histogram peaks at 36 pipefitters in month 9, but the contractor can supply only 24. The scheduler levels within available float and shifts 1,200 pipefitter-hours from months 8-10 to months 11-13. This consumes all float on a noncritical pipe-rack activity and pushes its finish two weeks past a client permit inspection. The alternative is to crash three weeks at $18,000 per week; overtime gives a 15% wage premium but historical data show a 10% productivity loss. The critical path has 14 days of total float and runs through cryogenic piping, which needs the same pipefitters. The project manager wants to level the whole schedule to 24 fitters, accept the permit slip, and avoid overtime. The contract has a $25,000-per-day liquidated damages clause for late acceptance.
1. Evaluate the three options-leveling, crashing, and overtime-against the resource constraint, critical path, and contract terms. Which is defensible?
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Separate resource smoothing from resource leveling. Smoothing uses free float without changing the critical path; leveling can extend the critical path. Here, leveling the whole schedule to 24 fitters consumes all float on the pipe-rack activity and pushes its finish two weeks past the permit inspection. If the permit inspection is a contractual milestone or a hard predecessor to acceptance, that is not harmless float consumption; it can trigger the $25,000-per-day liquidated damages. The direct exposure for 14 days is $350,000, which dwarfs the $54,000 cost of three weeks of crashing ($18,000 x 3). Overtime is not automatically cheaper: a 15% wage premium plus 10% productivity loss raises the effective labor cost per earned hour by about 27.8% (1.15 / 0.90 = 1.278), so it must be applied selectively to critical-path work, not across the whole histogram. The defensible option is a hybrid: protect the permit inspection, level only activities with true free float, and use targeted overtime or crashing on the critical cryogenic piping to recover the resource peak. Do not level the critical path to 24 fitters without a recovery plan.
2. What data would you require before committing to leveling, and how would you verify that the permit inspection is truly a hard constraint?
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Before committing to leveling, require a resource histogram by craft and calendar; verified availability and commitments for the 24 fitters; duration and productivity assumptions; the permit inspection's contract status and logic; total and free float by activity; and a check for multiple calendars and overtime rules. Verify the permit by reading the contract milestone, the inspection's predecessor and successor logic, and the client's acceptance criteria. If the permit is a hard constraint, model it as a milestone with a finish-no-later date or as a contractual milestone, not as a soft note. Also test whether the 1,200 hours can be resequenced earlier or later without hitting the permit; if not, the float is not usable. Only after that can you decide whether leveling is feasible. Document whether the permit date is contractual or a client preference, because that changes the entitlement and the recovery strategy.
3. If the client rejects overtime, propose a hybrid schedule and explain its effect on the resource histogram and critical path.
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Hybrid schedule: keep 24 fitters on the critical cryogenic path; smooth noncritical pipe-rack work within its free float; resequence pipe-rack tasks that do not require the same fitters; and use a short second shift or weekend overtime for the permit-related work only. The resource histogram should show a peak at or below 24 in most months, with a controlled, documented exception for the permit window. The critical path should not be extended; if it is, add crashing or overtime to bring it back. Document the trade-off: overtime premium and productivity loss versus liquidated-damages exposure. Obtain client agreement on any permit date change before executing. If the client rejects overtime entirely, the fallback is to crash the critical procurement or piping activities and to resequence pipe-rack work so it does not compete for the same fitters during the permit window.