KEY TAKEAWAYS

• There are different strategies and processes for managing disruption through the project life cycle.
• The set up phase of the project provides opportunities to ensure the tools are in place to manage and mitigate disruption.

INTRODUCTION

In Part 1 of this series of articles in disruption, I provided a general introduction to disruption and how it can be managed in the pre-contract stage of a Project.

This second article delves into the project set up phase and the tools/systems that can be used to maximise the project team’s ability to manage disruption and establish the groundwork for relief claims.

PART 1 REFRESHER

In Part 1, I established that disruption is generally a loss in productivity and can arise from a range of circumstances. Disruption can be managed in various ways through the life cycle of a project from the pre-contract phase through to delivery itself.

Part 1 focused on managing disruption in the pre-contract phase and simple processes that can be undertaken to change the risk profile within a contract and ensure provisions are in place to account for disruption.

To revisit Part 1, please click the following link.

SETTING UP FOR DISRUPTION – THE PROJECT SETUP PHASE

Project Setup Phase

After execution of a contract, there are many ways to ensure the project is set up to manage disruption. One simple check is to update the pre-contractual risk review including contractual risk ownership and any specific contractual obligations based on the final form of the agreed contract. This process will allow:

• identification of any new potential sources of disruption; and
• a shortlist of key risks to be developed – typically based on probability and consequence severity

Particular focus should then go towards ensuring that the key project systems are in place and suitable to manage these key risks.

The nature of the systems used to manage the risk of disruption will always vary between projects based on their specific circumstances. We have provided some examples below that in our view are fundamental to any major project.

Basis of Schedule and Program

Generally, after contract execution, there is a requirement to agree a baseline program with the client for the works. Even if this is not a requirement of the contract, a baseline program should still be developed and put forward to the client.

A key part of this process is developing a basis of schedule document that explains the planned progress and productivity rates that inform the program. Developing this document at the start of a project (and reaching an agreement with the client) ensures there is a baseline in place to measure against when disruption arises.

Programs themselves can vary widely in terms of their content and complexity. While programs are traditionally used to support delay related analyses and claims, they can also be an important supporting tool for demonstrating the impacts of disruptive events. As such, it is important to ensure that the inputs, logic links and resourcing incorporated into the program set this framework in place.

Labour and Progress Tracking

Labour tracking – most major projects will incorporate a form of detailed labour hour tracking for timesheeting and project controls. However, in our experience, most contractors miss an opportunity to tailor these systems to record and measure disruptive effects. There are various ways to achieve this such as establishing at the outset specific cost codes to track disruptive events and ensuring there is an appropriate level of subcategorisation in the cost codes (i.e. labour can be tracked by different areas and activities). If key packages are to be subcontracted, consider introducing mandatory requirements around labour tracking and reporting to ensure this information is properly recorded and aligns with your own reporting system.

Progress tracking – the method by which key project metrics are tracked is incredibly important to assess both progress and productivity. The starting point for this is generating an accurate bill of quantities (BOQ) that interlinks with your labour tracking tool and program (including the basis of schedule). Whether tracking earned hours or installed quantities, it is imperative that the system provides a contemporaneous record (ideally daily) of works undertaken at a level that can be simply linked to the labour data.

The availability of accurate labour and progress data is mandatory in any disruption claim for lost productivity.

Daily Diary / Record System

Daily / site diary system – every project includes some form of daily monitoring or diary system, ranging from the handwritten entries by individual supervisors to an electronic report that is contributed to by the wider project team. Whichever format is being utilised – the key question that must be asked is will the system act as an effective tool for capturing both the cause and the effect of disruption. The diary system should be tailored to the specific disruptive events that you are aiming to manage. Introducing mandatory inputs or specific prompts to the system may make the difference in supporting a claim for disruption.

Also consider what additional measures can be used to supplement your daily record keeping system. It is common practice now to install timelapse camera on projects to monitor works on site, and these can be invaluable in demonstrating ongoing disruption. Another example is GPS, which can be used to monitor and record movements of personnel and plant on large scale projects.

Training

Finally, it is of the utmost importance that the project team is made aware of the risks around disruption and properly trained in the various project systems. This is to ensure the wider team can recognise as early as possible when disruption arises and record it in a manner that will best support a claim. Proper familiarisation with these systems will also allow the team to recognise when modifications to these systems are required to ensure disruption continues to be managed effectively.

CASE STUDIES & EXAMPLES

This section provides an example case study of how disruption affected a project that Calibrate was involved with and the importance of measures that were put in place during the project setup phase.

Infrastructure Project – Bridge Construction

On this project, Calibrate assisted a specialist subcontractor who was responsible for construction of a cantilevered concrete bridge in a regional area of NSW. During the project setup phase, the subcontractor ensured systems were in place to track daily labour by key trades and the progress of key metrics such as concrete pours and reinforcement installation.

The Covid-19 pandemic emerged mid-way through the project and regional and state lockdowns significantly impacted the availability and reliability of certain trades across the project. In the subcontractor’s case, it saw a dramatic attrition in formwork trades.

Using the labour tracker maintained by the subcontractor, Calibrate was able to clearly prove that the attrition of formworkers was linked to the progressive introduction of stricter regional and border restrictions. Using the progress tool, the attrition of formwork trades was then linked a noticeable drop in steelfixing productivity.

On this basis a claim was put forward for the loss in steelfixing productivity caused by the Covid-19 pandemic and the subcontractor was able to negotiate a successful commercial outcome.

CONCLUSION

The implementation of systems and processes during the project setup phase lay the groundwork for the management of disruption. Tools that accurately measure labour and progress are fundamental to demonstrating the effects of disruption and proving a loss in productivity.

The next articles in this series will outline the approaches to managing disruption through the project delivery phase with a focus on the types of records required to substantiate a disruption claim.

To learn more about these findings, please contact the author, Brendan Spratt, or the Calibrate office at info@calibrateconsulting.com.au or call +61 9188 7444.

Whilst we take every care to ensure the accuracy of this information at the time of publication, the content is not intended to deal with all aspects of the subject referred to, should not be relied upon and does not constitute advice of any kind. This publication is protected by copyright © 2024 Calibrate Consulting Pty Ltd