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(RISK-2596) Backward-Looking Schedule Risk Analysis - Determining Acceptable Variability in Project Start

Level: Advanced
Author(s): Molly Donovan; Samuel Steiman, PE
Venue: 2017 AACE International Annual Meeting, Orlando, FL

Abstract: Typical schedule risk analyses are “forward-looking” to provide confidence levels in finish dates when the project start date is defined. But what if the finish date is mandated and there is uncertainty in the project start? This paper documents a unique “backward-looking” application of schedule risk analysis for a combined-cycle natural gas power plant where the owner performs commissioning following the hand-off of system turnover packages (TOPs) from the EPC contractor. The owner had concerns that the TOP delivery dates were uncertain and the liquidated damage dates for the TOPs were insufficient to protect the schedule contingency required for commissioning and start-up. This probabilistic model of the integrated schedule considered uncertainty in the EPC TOP dates, as well as the owner’s commissioning activities. Through various sensitivity runs, the analysis identified the most critical TOPs driving the commercial operation date to focus negotiation efforts with the EPC, and identified areas within the commissioning schedule where mitigation efforts would be most impactful. The owner’s initiative to explore creative “backward-looking” analyses proved valuable in protecting contingency.