The Schedule Basis Memorandum: Camp Services Considerations

This is the sixth blog post in a six-part series about the schedule basis memorandum. The first post defines the schedule basis memorandum and discusses its key purpose for CPM scheduling, and the second post identifies information to include in the document. The third post identifies considerations for common risks that may cause delay on large and complex EPC projects, and the fourth post focuses on three of those risks: competing project considerations, owner review comments, and weather considerations. The fifth post discusses common risks associated with labor camp size considerations, and the sixth post discusses labor camp catering and other service risks.

Camp Catering and Other Service Considerations
Camp size increases after the initial design and construction of the camps involve more than just adding beds in housing units. The personnel occupying the beds require the same services as the base loading personnel for which the camps were originally sized. Cooking, catering, laundry, potable water supply, sewage treatment, and recreational facilities are often bottlenecks when camp sizes need to be increased during a project. If the camps are undersized, the most likely outcome will be an overall project delay that keeps construction, pre-commissioning, commissioning, and start-up personnel on site for longer than originally planned. Delays in de-staffing labor camps will likely lead directly to increases in catering and similar costs. Typically, the EPC contractor is responsible for the following risks:

• Increases to catering and other service costs due to the contractor’s estimating errors prior to contract award.
• Increases in labor and supervision resulting from lower than planned productivity due to the contractor’s estimating errors and/or performance problems.
• Growth in catering and other service quantities attributable to the contractor’s delays.

In consideration of the above, the schedule basis memorandum should be utilized to document the initial rationale regarding assumptions, allowances, or exclusions included in the contractor’s baseline or updated schedule file. It is recommended that both the contractor and owner jointly review and adjust the schedule basis for camp catering and other service considerations.

Conclusions
The schedule basis memorandum is broadly defined as a written document that describes, explains, and details how the CPM schedule was developed at a specific point in time. The quality and reliability of the CPM schedule is directly tied to the thoroughness and completeness of the schedule basis memorandum, which documents the planning rationales, assumptions, allowances, and exclusions. The schedule basis memorandum is a living document that may need updating from time to time during a project’s lifecycle when conditions are warranted.

It is not unusual, however, for a contractor to prepare and submit an overly general or vague schedule basis memorandum that does not provide an adequate level of detail or supporting rationale necessary to fully understand how the CPM schedule was developed. In extreme cases, a contractor may not prepare any form of written schedule basis in support of its CPM schedule. If a CPM schedule lacks a well-organized and documented schedule basis, then it is possible that legitimate changes to the initial schedule basis plan may be lost and construed as contractor scheduling deficiencies resulting in disputes that could have been avoided.

Large and complex EPC projects contain several inherent risks that can negatively affect project success. Notable issues include overly optimistic labor productivity factors, competing projects, owner review and approval issues, inclement weather considerations, and camp size and camp services issues. It is recommended that the EPC contractor and owner thoroughly analyze these issues and document the results in the schedule basis memorandum. The success or failure of the time management of large and complex EPC projects may depend on the quality and detail of the supporting documentation contained in the schedule basis memorandum.

ADDITIONAL RESOURCES

Blog

Discover industry insights on construction disputes and claims, project management, risk analysis, and more.

MORE

Articles

Articles by our engineering and construction claims experts cover topics ranging from acceleration to why claims occur.

MORE

Publications

We are committed to sharing industry knowledge through publication of our books and presentations.

MORE