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Recommended Construction Schedule Clauses for Contractual Agreements

 

The construction industry is currently in a dynamic state as it reacts to the impacts of COVID-19. The industry is working on planning to manage all of the future implications that seemingly reveal themselves every day. No matter what the new world may look like, two things will remain the same:

  1. Contracts will be the most important vehicle for managing risk prior to the start of a Project.
  2. Schedules will be the most important vehicle for managing risks throughout the construction industry. 

We have found schedule management is at the core of major construction disputes, yet contractual language on this point has traditionally been bare bones. In response to this gap in the industry’s approach to schedule management, we offer the below overview of an enhanced approach to contractual clauses related to construction scheduling and project controls.

We validated our experience with such language using Document Crunch’s AI tool, and more specifically its “Technical Scheduling Requirements” algorithm, in order to vet several hundred examples of this type of language in pre-existing contracts. The use of this AI tool reinforced our experience and opinion:  the vast majority of scheduling provisions contain generic language that a schedule should be created and updated periodically.

In light of the traditional and generic approach to scheduling clauses, the basis of the below recommendations is to add more detail to this framework. The idea is that establishing the requisite best practices and detailed requirements will hold the parties accountable to a framework that will create more certainty throughout a project. The rationale behind these clauses is that a strong schedule process exists with visibility into the schedule data in a manner that ensures that the schedule data is of the highest quality and made available on a frequent enough basis.

 

The Basic Schedule Clause & What’s Missing:

 

3.10 Contractor Construction and Submittal Schedules

  • 3.10.1 The Contractor, promptly after being awarded the Contract, shall submit for the Owner’s and Architect’s information a Contractor’s construction schedule for the Work. The schedule shall contain detail appropriate for the Project, including (1) the date of commencement of the Work, interim schedule milestone dates, and the date of Substantial Completion; (2) an apportionment of the Work by construction activity; and (3) the time required for completion of each portion of the Work. The schedule shall provide for the orderly progression of the Work to completion and shall not exceed time limits current under the Contract Documents. The schedule shall be revised at appropriate intervals as required by the conditions of the Work and Project.

The above clause is the standard clause in the AIA 201.  And, as Document Crunch proves, it is by and large the basic substantive clause, produced in various formats, across the vast majority of contracts that we have encountered.  It is a great starting point; however, as it stands, it is not sufficient to ultimately achieve success.  

What is missing in this standard type of clause are parameters regarding the methodologies that shall be utilized to build the schedule: how the schedule should be prepared; how–and specifically when–the schedule should be delivered; and schedule approval considerations.  Defining schedule parameters reduces confusion and puts all stakeholders on a level playing field regarding the project schedule development, format, updating, submission and approval, and delay notification. 

Members of SmartPM™ and Document Crunch™ have teamed together to develop recommended additional clauses related to Schedule Development, Formatting, Updating, and Reporting. 

 

To download the entire White Paper, please submit the form below.

 

ABOUT SMARTPM:

 

SmartPM™ is committed to serving and supporting the construction industry by simplifying schedule information and analysis to a level that all parties can understand in an automated fashion. SmartPM™ eliminates confusion regarding the project schedule and performance resulting in fewer arguments and more team collaboration through the use of automated project controls. 

 

ABOUT DOCUMENT CRUNCH:

 

Document Crunch™ harnesses state-of-the-art artificial intelligence technology and leverages it to reduce cost, increase speed, and improve the overall quality of contract and policy reviews. For each document type offered, Document Crunch is trained to quickly identify what Industry Curators and Advisors believe are the most important provisions for review, as well as key insights and rationale, and sample contract provisions and other language, putting the power of their collective experience in the user’s hands.

Download SmartPM Recommended Schedule Clauses- Part 1

Author: Michael Pink

Mike Pink is the CEO of SmartPM. With over 20 years of construction analytics experience, his passion lies in transforming the industry through data.

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