By: Sami Soufi – VP Rail Sector Practice, Hill International

With the passing of the Infrastructure Investment and Jobs Act (IIJA), the U.S. construction industry has faced increased demand for engineering and construction services. Due to the scarcity of bidders, some contractors have been able to transfer schedule risks to owners. In response, owners may prefer to use alternative delivery (AD) procurement methods as a way to return some schedule risk to contractors. However, AD procurement is not a silver bullet for eliminating schedule risk.

Most AD procurements require fast-tracked schedules. For example, I formerly worked on an AD rail megaproject with an extremely aggressive schedule. On that project, the contractor planned to produce shop drawings and issue pre-final (90%) submittals for owner approval simultaneously. When the owner did not approve the pre-final submittal, the impact on the baseline schedule was hard to mitigate.

This is generally true of any fast-tracked project. Any resubmittals of design packages or permit applications will impact the schedule, contributing to delays and cost overruns that the owner will eventually share—even if the contact language is clear that the contractor is responsible! Plus, on projects with fast-tracked schedules, owner-requested scope changes after contract award are likely to contribute to additional delays and cost overruns.

These are just some examples of schedule risks on AD projects. So, how can project teams mitigate them?

There is not a single solution to mitigating schedule risk, and different types of AD procurement are associated with different risks. In my experience, however, a spirit of partnership can help achieve better schedule risk management and better outcomes on any project. When delays happen, all parties should wear their “project hats” vs. their own hats. They should work together as one team with one goal rather than exchange letters pointing fingers at one another. More specific tactics include:

• As project teams develop their baseline schedules, they can include a learning curve. This allows a project team to better manage expectations and execution. For example, local reviewing agencies have their own administrative preferences and technical requirements. By allowing time to become familiar with standards and preferences of authorities having jurisdiction, the project team can help ensure approvals the first time, prevent delays, and even expedite review and approval of work packages.
  
• To mitigate delays related to design submittals and permit applications, project teams can agree to expedited reviews and partner with approving agencies to develop process improvement plans (PIP). PIPs can help ensure engineering packages are complete prior to resubmittal and promote compliance with all plans and specifications during construction, helping prevent delays related to rework.
  
• To maintain a realistic schedule throughout the project and to avoid scope creep, I recommend that owners and contractors price any owner-requested changes using time and materials (T&M) even if their contracts allow for such changes. More importantly, the owner should not include these changes in the project’s substantial completion date. This will help ensure that substantial completion is achievable as originally scheduled for the project.

By sharing scheduling risks on projects procured via AD procurement methods, cultivating partnership on their project teams, and leveraging the tactics listed above, owners can reduce the risk of schedule delays, avoid the need for enforcing liquidated damages, and deliver our crucial infrastructure projects on time and within budget.

Contact samisoufi@hillintl.com to learn more.