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54R-07: Recovery Scheduling - As Applied in Engineering, Procurement, and Construction

54R-07: Recovery Scheduling - As Applied in Engineering, Procurement, and Construction
AACE International, November 19, 2010

Price: $0 (Member) / $100 (Non-Member)

This recommended practice (RP) for recovery scheduling is intended to provide a guideline, not to establish a standard. As a recommended practice of AACE International, this document provides guidelines for the project scheduler to create a professional recovery schedule or assess the reasonableness of a recovery schedule necessary due to a change of project status and progress that forecasts late completion.

This recommended practice provides guidelines to assist construction entities submitting the recovery schedule (the contractor) and the entity reviewing the recovery schedule submittal (the owner or client) to develop, analyze, and respond to the recovery schedule in a fair and reasonable manner. The use of the term “owner” also includes the work performed by their agents such as architect and/or construction manager. In this RP, the use of the term “contractor” does not indicate whether it is a prime contractor or subcontractor, as both are contractors and the issues may be applicable to either or both. Overall, these participants are responsible for the complete, accurate, and timely submittal, review and approval of the project recovery schedule in order to benefit the project as a whole.

Progress on a project does not always proceed as planned. Occasionally, the project schedule may indicate that the project is ‘behind schedule’ and based upon the current work plan, a late project completion is anticipated. This late completion may adversely affect the plans of the owner of the project. Given a situation where there are no existing contractual or other legal issues to the contrary, the contractor is normally entitled to complete late, provided that compensating damages (if any) are paid at the appropriate time to the owner. On the other hand, the owner is normally entitled to direct the contractor to recover lost time. The question of who is responsible for paying for any increased costs due to directed recovery efforts is beyond the scope of this RP.
Many contracts limit the amount of time that the project schedule may indicate as the current prediction of project completion beyond required substantial completion. Should the current schedule indicate that the project is behind an amount greater than the allowable time, the owner and/or its agents may direct the contractor to recover lost time and return the prediction of project completion to the needed date. In addition, the owner may decide to simply direct the contractor to recover lost time even if such a clause does not exist in the contract or that the specified limit has not been reached.
If the owner decides to demand a recovery schedule, care should be taken to ensure that the owner has not ignored, delayed, or rejected legitimate time extensions for lost time on a project, while demanding that the contractor recover lost time. When that lost time is due to excusable delays (resulting in the contractor earning the right to time extensions), whether compensable or not, the owner is at risk when requiring a recovery schedule. The issuance of legitimate time extensions on a project, provided in a timely manner and incorporated into the project schedule, will minimize the risk to an owner for potential constructive acceleration claims. See AACE International Recommended Practice No. 29R-03 Forensic Schedule Analysis for further information concerning these types of claims.

Once directed to recover lost time, the contractor is normally required to create and submit a schedule plan that describes how this recovery of time will be accomplished. We call this schedule a recovery schedule. Recovery schedules are an important aspect of timely project completion and this is a major reason that requirements for recovery schedules are included in most construction contracts for large projects. They are important as a planning tool as well as a vital medium of communication from the contractor to the owner about changes to be made to the schedule to bring the forecast for project completion back to an on-time, or at least acceptable, basis.

There is no industry established protocol for the best way to recover a schedule, and the different parties involved normally have different motivations driving their very different recommended solutions. This RP provides a structured approach that attempts to reduce construction time at the least cost and while minimizing claims opportunities. This approach contributes to teamwork, providing least cost solutions with reduced conflict, and suggestions to be used whether updating or reviewing a schedule.

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