2009 AACE International Transactions

PS.05

Understanding Schedule
Change Management

Edward E. Douglas, III CCC PSP

ABSTRACT—Schedule change management refers to the process of managing any change

to the scope of work: or any deviation, performance trend or change to an approved or
baseline project control plan. Schedule change management helps ensure that the
schedule always addresses the requirements of both the project team and the customer.
During the course of the project, trends, disruptions, deviations and changes will be occur
and must be evaluated. The time related issues must be disposed of appropriately in the
schedule change management process and incorporated into the approved baseline
schedule. The Planning and Scheduling Professional’s (PSP) required knowledge and skills
to support the project management team successfully in the schedule change management
process will be discussed.

Keywords: Baseline, change, management, project, schedule, scope, and trends

A
project consists of a specific scope of work, a budget, a stated time period for
performance: and must be accomplished at an acceptable level of quality. Any or all
four of those elements can change during the life of a project. The project must have
a clear and complete definition of the project scope and quality, required resources and
estimated costs for the various tasks, along with a well developed project schedule. Without
these four elements in place, the climate for cooperative change and the effectiveness of the
schedule change process will be limited. The project team must establish the change
management environment before beginning the project. Communication between all
project participants: owner, architect, and the construction contractor are important for the
implementation of timely changes.

Numerous books and papers have been written about project change management. Yet a
large number of projects continue to be plagued by problems that are directly related to
ineffective management of changes. This paper will focus on the discussion of potential
impacts to the schedule and recommended practices for effective schedule change
management. Successful implementation of an effective schedule change management
process benefits both the project owner and the project team.

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Change Drivers
In order to understand how changes can influence or affect the project schedule it is
important to understand the various elements of project change and their potential impacts.
The causes of project changes are almost without limit and may include regulatory action,
management decisions, improvements in design definition, design changes, changed field
conditions, changes in requirements as imposed by the owner (additional inspections), force
majeure (catastrophic events or acts of God), contractor labor productivity deviations,
unforeseen cost escalation, etc”[5].

Of the four elements of project change: scope, quality, cost or schedule. The single element,
which most often results in an approved change to the project performance baseline, is
scope. According to Knutson and Bitz, scope changes are defined as “the additions,
modifications, or deletions made to the end product or service”. Project changes may
originate from “four sources: client driven, regulatory driven, externally driven, or internally
driven. These change drivers each have numerous subtypes” [5]. These may originate from
a stakeholder or client‘s changed requirements; design changes; technology changes
(equipment, materials, or expertise); business environment changes (driven by economics,
valuation of the dollar, or competitors products), or from personnel changes (such as a new
client or new project management).

Client change drivers may do the following:

• Alter the scope (end state or end product).

• Alter the cost of the project by increasing or decreasing total cost or periodic cost (for
example fiscal year funding). Or,
• Alter the schedule (project completion date or interim milestones) by either
advancing or delaying (usually for cost related reasons) the project dates.

Regulatory driven changes could originate from organizations having the authority to
mandate directives on the project. The most obvious of these regulatory drivers are federal,
state and local governments. Other regulators include institutional or quasi-governmental
regulators such as the American Society for Testing and Materials (ASTM), historical
preservation societies, and local regulators such as local zoning commissions or architectural
review boards. Corporate change can also be classified in the regulatory category. External
drivers include “changes that affect the project environment and are typically economic,
political, and social drivers” [5]. Internal change drivers are typically “forces within the
project which may include: difficulty meeting technical objectives, problems meeting the
project schedule, forecast costs that exceed the client funding, and resource demands that
cannot accommodate the cost or schedule baseline”[5]. Cost reduction changes that reduce
the project’s total cost may be because of a variety of reasons: better design definition,
reduced system requirements (that achieve the same performance objectives), improved
technology, as well as better definition of the project completion requirements than were
available in the original plan. Those cost reduction changes could result in less time
required to perform some of the activities in the schedule.

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The ability of the project to successfully deal with these change drivers is improved by the
establishment of viable trend and change control programs. These two programs are
summarized in this paper and were discussed in detail in earlier presentations by this author
[3, 4].

Schedule Planning and Development

The scope of the project must be well defined during the early planning phase. The
Construction Industry Institute (CII) recommends that the owner “freeze the scope as early
as possible in the design process” [2]. The project schedule must be developed to a level of
detail that defines the complete scope of project work. In addition to including the
complete scope of work, the schedule must meet the target project completion date. That
master baseline or control schedule should factor in special project conditions such as the
seasonal influence of weather, site access limitations, planned overtime or shift work, and
the availability of craft, material, and equipment, which could affect schedule performance.
The key phases of the project schedule should have clearly established target milestones
such as completion of design, key procurements and subcontracts as well as the target start
and completion of the various phases: construction, startup/ commissioning, demobilization
and project closeout.

Project Plan
It is important to establish the baseline or control schedule in order to provide a target for
determining schedule performance variances. The project execution plan (PEP) includes a
narrative of the defined project scope plus the baseline or control schedule as well as
quantified resources and costs for the project. The project baseline schedule “is a roadmap
for achieving project objectives” and serves a variety of purposes including:

• “Describes time phased requirements to complete the project.

• Provides data to monitor performance against the approved baseline.
• Allows the project to assess impacts, balance resources and implement corrective
actions. And
• Is used to identify actions that will return project performance to the baseline” [5].

Contract Basis for Changes

The Construction Industry Institute (CII) cautions that “changes on an engineering and
construction project can be expected, but those (parties) directing the change must
understand the potential for schedule and cost consequences of those changes” [2]. “The
overall change process must be managed efficiently during all stages: from conceptual
planning and design, procurement bid/ award, and construction execution.” [5] The earlier
that a project establishes the change process, the more likely the project will be able to
effectively manage the impacts of those changes. Recognizing that change will be necessary
in every project due to a variety of conditions, the construction contract must include
provisions for managing and controlling project changes effectively.

“The owner will have the right to order changes and the contractor will be required to carry
them out in return for an equitable adjustment in the contract price and time”

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Beyond including that standard contract language quoted above, the project owner and
contractor should establish a team approach with open communication regarding project
change management. The owner should identify the individual(s) with authority to direct
changes, and the CM/ contractor should identify to the owner those who have the authority
to receive changes. At the kickoff meeting when beginning the construction execution
phase, the owner and contractor representatives should discuss and agree upon the process
and procedures for administering changes. Soon after mobilization the contractor should
submit a schedule to the owner in critical path (CPM) format that is consistent with the
project scope of work to establish a baseline for future adjustments because of changes on
the project. To minimize design change impacts, CII suggests a “pencils down” time that is
“a milestone point beyond which all design development changes will be subject to
cost/schedule adjustments” [2]. Another recommendation intended to make both parties
more proactive in their planning is to have the owner and contractor “place original project
planning documents in escrow for reference relating to later changes” [2]. The contract
should specify that float is jointly owned, and then responsibly shared, by owner and
contractor so that available float may be used to accommodate schedule changes.

Change orders should be resolved in a timely manner as they occur and not deferred for
resolution at the end of a project. Timely submittal, review and agreement on change orders
often make the difference between success and failure of a project. All changes should be in
writing but there are exceptions to that rule. For example, if there is a field change
requirement involving an underground utility obstruction (differing site conditions)
stopping the normal construction sequence and delays the start of building construction that
could have significant cost and schedule impacts. To keep the project work activities
progressing, there should be provisions in the contract to verbally approve the priority “work
around” and agreement that the formal change directive would be finalized at a reasonable
future date. A contract changes clause that is fair and equitable will help the project
maintain momentum during the construction execution phase.

Change order formats may be varied but there are essential elements of information that will
be found in all change orders: What is the nature of the change? What additional materials
or equipment will be required? What will the change cost? Are there any cost reductions or
savings from this change? How will the change affect the construction schedule?

Managing Change During Construction

Implementation of changes during the construction phase diverts resources from the critical
path work efforts. The ability of the project to successfully manage these changes is
improved with the establishment of a viable trend program for potential changes and a
change control program that supports the contract agreement. It is important that project
team members become knowledgeable of the project scope and execution plan so that they
will be aware of the potential impact of variances and changes.

The project master schedule should be developed to an appropriate level of detail to provide
a road map and a reasonable forecast of the sequence and duration of the various phases of

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the project. From the time that construction begins it should be recognized that project
work will proceed in a dynamic manner and there will be subsequent changes in both
durations and sequence of the construction work activities.

When a project change occurs, the CM or contractor must notify the project sponsor/ owner
promptly in order to allow the owner an opportunity to mitigate the impact of that change.
Within a reasonable time the contractor will prepare the change order request to capture all
cost and schedule impacts of the change. Relevant documents and supporting records, along
with a copy of the written change directive should be assembled and included as part of the
change order request (COR) package. The schedule proposed to implement the change (as
well as the current approved progress schedule) will be included in the change request
package for a “before and after” schedule comparison of the change impacts.

Normally the owner will issue a written notice acknowledging the pending change order so
that the contractor can continue work until the final change order is negotiated and
approved. The owner’s change directive may place a construction hold on the area of work
that is affected by the change so that extra work is not performed which would later need to
be removed or revised. Frequently there are requirements that the schedule change must
be approved or agreed to by the owner before the project master (or control) schedule is
revised. The schedule review and approval by the owner may take time that could disrupt
critical construction work. So unless issued a stop work order, the contractor should notify
the owner that work will proceed in accordance with the current approved contract scope
and schedule. CII also suggests that the contractor “complete the work as originally
specified and then going back and rework it with another crew. That approach, may appear
costly, but may actually be more cost-effective since it eliminates the productivity and
morale degradation effects on the first crew “[2].

Change Management During Project Closeout

Research by CII has shown that “projects have a declining ability to recover lost schedule
(and costs) in their later stages.” Therefore, both the timing and cumulative impact of
changes cannot be ignored by the project. The cumulative impact of change orders is an
important consideration which can result in disruption of work on the project. During the
project closeout phase any outstanding change orders and potential change orders must be
resolved promptly. Subcontractor and vendor claims must be resolved to avoid impacts on
the owner’s planned usage of the project. It is imperative for the owner and the CM/
contractor both to be proactive in this close out phase to avoid claims or surprises at some
future date. Upon completion of the project, the project scheduler should verify that the as-
built schedule reflects accurate completion dates of the schedule activities. Accurate data
collection and evaluation of the project schedule execution experiences can be beneficial
for planning future projects.

Trend Program – A Change Management Tool

Project controls employs the trend program as an early warning system. A trend “is any real
or perceived change in project scope, cost or schedule that causes an addition or reduction
to the project baseline estimate including corrections for scope/ estimate omissions.” [1]

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The trend program is an integral part of the project controls program and it supplements,
but is not a substitute for the change management program. A formal trend program is
normally implemented on larger projects and programs to provide systematic
documentation of both the favorable or unfavorable changes in project scope, quality, cost,
schedule, or overall execution of the project. It is important to remember that the
responsibility to initiate the trends belongs with the project team members. The key project
controls responsibilities are to coordinate and administer the implementation of the trend
program by development of the trend program procedure, conducting regularly planned
trend meetings, and maintaining the project trend database or trend log.

The PSP And Schedule Change Management

Schedule change management is the process of managing any change to the schedule as a
result of a deviation, performance trend or change to an approved scope of work for a work
package or baseline project control plan. The Planning and Scheduling Professional’s
(PSPs) role is to assist project management with the schedule management process: assuring
that the process for schedule baseline control is established for regular progress updates;
systematic schedule input/ output; standard schedule reports/ deliverables, implementing
the schedule change management process; and maintaining the integrated project schedule
so that the project can be executed in the most efficient manner possible.

The Planning and Scheduling Professional (PSP) has certain rules to follow so that the
schedule integrity will not be violated. Those rules include the following.

• Revise the approved baseline schedule only as directed by project management and
ensure that schedule changes are communicated to all project team members.
• Revise the approved baseline schedule only when an approved change order
indicates a change in scope that affects activity or project durations.
• Provide schedule-related recommendations to project management on strategies to
recover from schedule delays. And,
• Retain time-phased (electronic and hardcopy) copies of the as-built (as- completed)
progress schedules for the project historical record.

The PSP must be sure that the schedule change management process complies with the
contract time limits for notification, as well as the format for a schedule change submittal
such as a schedule fragnet. A time impact analysis (TIA) or a schedule change narrative may
be required to be included in the change order request package.

To perform their work the PSP needs to be knowledgeable and skilled in a variety of
scheduling topics that are outlined in AACE International Recommended Practice 14R-
90. Topics related to schedule change management include the following.

• Performing schedule trend or variance analysis as applied to changes

• Performing a contemporaneous time impact analysis (TIA)
• Initiate and recommend schedule corrective actions when needed.

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• Understand the difference between schedule acceleration and schedule recovery.

• Understand the importance of maintaining the current project working schedule
while developing the changes to the baseline/ control schedule.
• Recording, reporting, and incorporating changes in the project control schedule
IAW project change control procedures.
• Manage schedule contingency:
• Understanding the methods for managing schedule contingency. And,
• Understanding the various ways to assess the need for schedule contingency on work
in progress.

If the project has established a schedule contingency, the use of that contingency should be
handled in strict compliance with the change management procedure.

Time Impact Analysis

When a project experiences an impact to a contract milestone or the planned project
completion date, it is often necessary to perform a TIA. Preferably this TIA is done prior to
the impact of that change event to resolve the schedule issues as quickly and
contemporaneously as possible. To move the project work forward, the resolution of final
costs related to the change impact should be considered a separate issue from the schedule.
The cost negotiation and resolution can be accomplished at some future date agreeable to
both parties. It is important to remember that the analysis and implementation of schedule
changes cannot be left solely to the project scheduler: The project team must all be involved
to assure that all elements impacted by the change are considered in the revised schedule.
AACE International Recommended Practice 52R-06 outlines the process for performing a
prospective or contemporaneous TIA.

Schedule changes should be documented in the narrative schedule report and the schedule
activities affected by the change should be flagged or coded in the electronic CPM schedule
baseline along with the reference notation to the change order approval documentation.
Later in the project, if required these changed schedule activities can be retrieved to answer
questions regarding the change. Just as the monthly (periodic) progress updates are
electronically archived for future reference, schedules with major changes need to be
electronically archived. The revised and renumbered project baseline schedule (very similar
to design drawing revisions) helps maintain an audit trail of approved schedule revisions for
future reference. Minor schedule changes, which do not impact scope or contract
milestones should be handled as simply as “ABC.” The administrative baseline change
(ABC) system allows the project to make minor adjustments to the baseline schedule
without expending resources through a formal change control process. The ABC log is
retained along with the approved schedule change markup to document these changes.

Schedule Ownership
The type of contract agreement between the owner and the construction contractor
determines who “owns” the project schedule and how the schedule will be managed.
Whether the schedule is managed and controlled by the contractor or jointly with the

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owner, there are a variety of recommended scheduling practices that should be

implemented for better cooperation and project communication: establishing a schedule
control baseline; reporting schedule progress & schedule performance; schedule reviews,
critical path impact analysis, and schedule forecasting. Key schedule change management
topics include the following.

• level of detail to report upward to the owner;

• methods of reporting impacts and/ or delays;
• timing for incorporation of change orders;
• methods of highlighting schedule “issues;”
• float ownership and use; and,
• schedule contingency (i.e., for risk or adverse weather contingency).

C
onstruction changes are inevitable; however the successful management of those
changes can determine the success or failure of the project. Management of
changes for a construction project requires effective and timely actions during all
phases of the project from the early planning phase through the design, procurement,
construction, startup/ commissioning and project closeout. Schedule change management
is an important but often ignored element of the project change management process. Well
defined scope is important to the successful management of the schedule. The most
significant positive impacts of changes on schedule can be made early in the project.
Effective project communication enhances the project’s potential for successful
implementation of construction changes. The Planning and Scheduling Professional needs
to be knowledgeable and skilled in a variety of scheduling change management practices to
successfully support the project.

REFERENCES
1. Construction Industry Institute, Quantifying the Cumulative Impact of Change
Orders for Electrical and Mechanical Contractors, The University of Texas at Austin,
Austin Texas, CII Research Summary 158-1, October 2000.
2. Construction Industry Institute, The Impact of Changes on Construction Cost and
Schedule, CII Research Summary RS6-20, October 2000
3. Douglas, Edward E. Project Trends and Change Control, Presented at the 44th
Annual Meeting of AACE Int’l June 25 - 28, 2000.
4. Douglas, Edward E. Effective Management of Project Change Orders, presented at
the 47th Annual Meeting of AACE Int’l June 25, 2003
5. Knutson, Joan and Ira Bitz, Project Management. New York: AMACOM, 1991.

RECOMMENDED READING
1. Baker, S. and K. Baker. On Time/On Budget: A Step-by-Step Guide for Managing
Any Project. New Jersey: Prentice Hall, 1992.
2. Baker, S. and K. Baker. The Complete Idiot’s Guide to Project Management. New
York: Alpha Books, 1998.

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3. Civitello, Andrew M. Jr., Contractor’s Guide to Change Orders, 2nd Edition,

Prentice Hall, Paramus, New Jersey, BNI Publications Inc. 2002.
4. Construction Industry Institute, Quantitative Effects of Project Change Executive
Summary, CII Research Summary RS43-2, December 1994.
5. Dinsmore, Paul C., ed. Human Factors in Project Management. Revised ed. New
York: AMACOM, 1990.
6. Engineering and Physical Sciences Research Council, Managing Changes in
Construction Projects, Industry Report, 2008.
7. Jarnagan, Harry W., Transaction C.15. “The Project Trend Program,” AACE
International Transactions, Morgantown, West Virginia, 1993.
8. Pinnell, Steven S., How to Get Paid for Construction Changes, McGraw-Hill,
New York, New York 1998.
9. Trauner Consulting Services, Inc. Change Management Best Practices for the
Architecture, Engineering, and Construction Industry, Executive White Paper,
Primavera Systems Inc. June 2008

ABOUT THE AUTHOR

Edward E. Douglas, III CCC PSP, is the principal of ACTPMA,

LLC, a Long Island, New York-based construction management
consulting firm beginning it’s fifth year of business. ACTPMA stands
for Accurate, Complete, and Timely Project Management Assistance,
which focuses on helping projects start, execute and close out
successfully. He has over 29 years of practical experience on a wide
variety of commercial, public sector, state and US federal projects with
clients. He served as the chairman of the AACE International Planning
and Scheduling Committee from 2004 until 2008. He has made technical presentations,
seminars and training courses about construction project management and project controls
at both local sections and international conferences for more than 14 years. Ted resides with
his wife, Mary, on eastern Long Island and has three grown children and five grandchildren.

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