Schedule Compression and Time-Cost Trade-Off - Construction Project Scheduling and Control - page 212

On January 17, 1994, a 6.7-magnitude earthquake caused heavy damage and many
casualties in Northridge, California. The immediate major concern for Caltrans (the
California Department of Transportation) was reopening the public highways in one of
the busiest areas in the United States . 1 Part of the damaged highways was two sections
of Interstate 10 in Santa Monica. C. C. Meyers, Inc., of Rancho Cordova, California,
was awarded the contract to repair these sections. C. C. Meyers' bid of $14.7 million was
significantly less than the Caltrans engineer's $22.3 million estimate. The contract gave
the contractor 140 days to finish the project and included a liquidated damages 2 clause
of $200,000 for each day of delay and a similar bonus amount for each day finished
early. The contractor finished the project in only 66 days, 74 days ahead of the stipulated
deadline. This early finish was possible because the project was fast-tracked. In addition,
C. C. Meyers worked around the clock, putting large amounts of resources into the project,
making this project the focus of the company. Excellent cooperation between Caltrans and
the contractor also helped. Caltrans did its part to help push the project, assigning 10
engineers on the day shift and 4 on call at night to inspect work and answer questions .
In the process of expediting the schedule, C. C. Meyers may have gone over the original
budget, but with about a $14.8 million bonus, the company was certainly ahead of the
game. Despite the large bonus paid, Caltrans seemed pleased with the results. The public's
convenience was well worth the effort and the money. Caltrans and C. C. Meyers both
believe that despite the schedule compression, work quality was not compromised .
INTRODUCTION
Construction projects almost always have finish deadlines assigned by the owner and
stipulated in the contract. Some of these projects have strict deadlines that do not allow
for any slippage. An example of such a project is the facilities built for the Olympic
Games or international exhibits or conferences. Any slippage in the schedule in such a
case could literally mean a disaster: an international embarrassment and a loss of large
sums of money. Other, mostly public, projects have strict deadlines because of the
interest of, or convenience to, the general public. An example is a highway, a school,
or a water treatment plant. Any delay in such a project might not be assessed by a
monetary amount; however, the consequences would still be severe. Other projects
might have deadlines that are rigid, but a slippage would not result in such disastrous
outcomes. An example of such projects is a hotel or a shopping center for a certain
tourist or shopping season. Finishing late in this case would mean a loss of revenue
for the season. Still other projects, not tied to a specific event or season, might have
“normal” finish dates, which would mean that the contractor could work at a “normal”
pace. In most cases, a normal schedule means 5 days per week, 8 hours a day, but the
schedule depends on the contract. Slipping a few days or weeks in this case may be
acceptable to the owner and may not cause serious consequences.
1 The next major concern for Caltrans was retrofitting bridges and other structures to be earthquake resistant.
2 Liquidated damages are a stipulation in a contract of a monetary amount that must be paid by the contractor
if the contractor fails to satisfactorily complete the project by the contract finish date. They are discussed in
more detail in Chapter 13.