Schedule Risk Assessments (SRA)

Maximizing the Value of Schedule Risk Assessments (SRAs)

By / / , , , , , , , ,
, , , , , , , ,

Quick Summary

  • SRAs are only as valuable as the intent and quality behind them. Treating them as a check-the-box compliance requirement produces meaningless results that get filed away and never used.
  • Real-world examples show how cost pressure and last-minute guidance changes at kickoff can derail an SRA, leaving project teams with outputs no one trusts or acts on.
  • Focusing three-point estimates on tasks that drive critical and near-critical paths delivers real insight without the prohibitive cost of analyzing every task in a large IMS.
  • Documented assumptions for selected tasks produce derived duration factors that are far more accurate than gut-feel percentages, and the difference shows up directly in the SRA results.

A previous blog, Schedule Risk Assessment Fundamentals, highlighted that when properly used, schedule risk assessments (SRAs) are a powerful management tool that can contribute to project success. It does, however, require a high-quality integrated master schedule (IMS) that is integrated with a disciplined risk management process. When conducted with the intention to gain a realistic view of schedule outcomes and risk drivers, it provides management with additional insight and an early warning indicator of potential threats to meeting schedule objectives.

The Challenge with Conducting SRAs

Schedule risk assessments are frequently a topic of discussion in project management circles and sometimes for the wrong reason. A well-run SRA can provide the confidence levels for achieving different schedule end dates as well as valuable insight into the IMS. However, the SRA is particularly susceptible to the “garbage in – garbage out” (GIGO) principle.

H&A consultants have recently observed discussions that indicate SRAs are not being properly performed or used to help manage projects. Some of these observations reinforce the GIGO principle.

One H&A senior consultant sat in on a meeting with the government program manager for a large project where the consultant, having worked on the just-completed SRA, asked the government program manager what they would do with the results. The amazingly honest answer was, “Sadly, it will just be filed. It is seen as a check-the-box thing we have to do.”

Using the results of the SRA to stuff the drawer might not be as wild a response as it seems. Too many times, we see the SRA being done in a perfunctory manner using inputs that will not yield useful management information and insight. One way people are cutting corners on the SRA is by applying global factors to the existing duration estimates and running the simulation with those durations. Applying a formula across the board is not the same as analysis. Yes, the SRA can be done so poorly it is meaningless. This is especially true if the applied factors are not realistic.

An Example of What to Avoid

One of our consultants observed that in one case the best of intentions were thwarted in the SRA by cost pressures and lack of management commitment. The manager of the SRA provided a form to each CAM for them to provide the best case, worst case, and most likely case duration estimates and provide written explanations for all three cases. The instructions were for the CAMs to use the form for every incomplete task and future task.

There were about 10,000 such tasks distributed among 70 or so CAMs. On average, that would be 140+ tasks for each CAM. Doing three-point estimates for 140 tasks would be a large expense and consume a lot of valuable time, without even mentioning the cost.

The government program manager, who pays the bills, was present at the kickoff meeting for the SRA and intervened immediately when he heard the directions being provided. He stated that he would not pay for all that effort; it would be too costly. Unfortunately, there was no probing to find out what would be reasonable to this manager in terms of details for the SRA.

Instructions for this SRA were revised on-the-fly and the SRA was done. It was done poorly; in some parts due to the disruption at the kickoff meeting and the poor guidance. The intervention of the government program manager had left the impression that the SRA “was not worth it.” That impression was wrong.

The idea of documenting the three-point estimates is a good one, but too time-consuming to be applied to every task. There are valid options that can still benefit from this detailed look at the durations, yet avoid the significant expense of analyzing all the tasks.

A Better Approach

One approach is to do a detailed analysis of the three-point estimates for specific selected tasks that reduces the number of tasks that require detailed manual estimation. The focus should be on the tasks that provide insight into the part of the IMS most likely to cause the end date or a major event date to change. Examples include those tasks that are:

  1. On one or more of the top number of critical paths.
  2. On the path to the next major event (these tasks can be found using the driving path approach).
  3. Known to be or assumed to be prone to duration risk.
  4. Known to require scarce resources that may have limited availability.
  5. Believed to be drivers of duration risk for other reasons.

A simple example will help to understand why documenting the three-point estimates for some tasks is basic to achieving a useful SRA. If you, acting as a CAM, were asked to estimate the time required to drive 10 miles from your home to work by car in a hypothetical town, you would want to understand the scope of the effort. A drive of 10 miles through the countryside, or on a freeway, or on city streets can be very different.

stylized road map of confusing roads

Some help with the assumptions could improve your estimate. If you were told that the first 5 miles of the drive was in town, where the speed limit is 25 mph with the potential for red lights along the way, and the last 5 miles is on the freeway, where the speed limit is 60 mph, this would help you produce a better estimate.

In fact, you will get a better estimate by understanding the scope, the assumptions, the risks, and so on. When doing the three-point estimate, you would employ a process that includes these steps that consider:

  1. The nature of the task. What exactly is to be done in the task?
  2. Past experience. Have we done this or similar work before?
  3. Capabilities. For example, can you drive, does your car work well, can you go up to 60 mph in your car, do you have gas, and are you equipped for potential weather?
  4. Assumptions. How many traffic lights are there along the way? How long would you wait at a red light? What time of year is it? What day of the week? What time of day?
  5. The risks. Are there possible road issues, such as construction? How about traffic issues? Accidents?

Now, suppose you were required to document your estimated durations. Using the assumption details from above, you might end up with this:

Case Duration Assumptions
Best 17 minutes A dry day, early in the morning before traffic, you have all green lights, and you obey the speed limit.
Most Likely 23 minutes The road is fine, first 5 miles is at 25 mph. Only 2 red lights with a wait time of 2 minutes each, and 7 minutes for freeway travel at 45 mph.
Worst Case 32 minutes The road is slippery and you can only travel at 20 mph. You must stop at 3 red lights and sit for 2 minutes each. You have one unexpected stop for 4 minutes because of other drivers. Also, the freeway speed is only 45 mph.

You now have a set of durations you can use in the SRA. You also have the details needed for explaining the duration estimate. Additionally, there is enough information to be able to change the estimates if presented with new facts or revised assumptions. For example, perhaps the project’s period of performance moves to the right and the work will now be performed in the winter. You can adjust your estimates for winter weather impacts.

You also have enough information to be able to derive factors to be used in formulae to generate three-point estimates for other tasks. Be careful to make sure you only use the information to generate a factor on similar work. In this case, the factors would be -26% and +39%. Those are derived factors. For comparison, a common “gut feel” reaction to the question of what factors should be used is usually more like minus 5% and plus 10%. Using derived factors versus a “gut feel” will yield significant differences in the SRA and the value of the results.

Recommendations to Increase the Value of an SRA

Begin with the intention to treat the SRA as the important and valuable tool it is. Choose to change the approach from a “check-the-box” or compliance mentality into a straightforward process that helps to produce a more realistic and executable IMS. No one likes schedule or resulting cost surprises as discussed in another blog, Maintaining a Credible Estimate at Completion (EAC), that also addresses why a credible forecast completion date is equally important. Here are a few suggestions to improve your approach to conducting SRAs:

  1. Provide clear, specific directions to project personnel on what is expected. Highlight why the SRA is an important step.
  2. Verify a quality IMS has been established.
  3. Validate the risk information.
  4. Do focused analysis of discrete tasks on a given number of critical and near-critical paths and document the rationale for the best/worst/most-likely case durations.
  5. Do focused analysis on driving path tasks if not on the critical paths.
  6. Do focused analysis on known risks.
  7. Use realistic factors derived from reality when applying factors to the larger body of IMS tasks.

Taking Action

Producing a quality IMS takes skilled master schedulers that understand the management and predictive value of a well-constructed schedule. The next step up to improve the realism of the IMS is to conduct an SRA when it makes sense. Examples include conducting an SRA as part of the process to establish the baseline schedule, when there is major change, or before a major event such as a Critical Design Review (CDR).

It is not an easy task to distill the steps to conduct a value-added SRA into a well-defined and useful process. H&A master schedulers and risk subject matter experts often work with clients to establish a pragmatic SRA process. They also train and mentor project teams on how to use the SRA outputs to produce realistic schedules with a higher probability of success. Call us today to get started.

Maximizing the Value of Schedule Risk Assessments (SRAs) Read Post »

Schedule Risk Assessment Fundamentals

By /
Schedule Risk Assessment Fundamentals

Quick Summary

  • Schedule Risk Assessments (SRAs) use Monte Carlo simulations to model schedule uncertainty, providing probability-based insights into meeting project completion dates and risk drivers.
  • SRAs enhance decision-making by quantifying outcomes (e.g., likelihood of meeting objectives), supporting risk prioritization, scenario analysis, and proactive schedule management for complex projects.
  • Effectiveness depends on quality inputs: well-constructed network schedules and well-defined risks.

Why perform a schedule risk assessment (SRA)? 

SRAs are critical in understanding the likelihood of meeting baseline or forecasted completion dates as well as identifying which risks to focus on for protecting the project schedule. 

An SRA is a Monte Carlo based simulation of the schedule using the existing logic but with different duration inputs in repeated “walk-throughs” of the schedule. In each run through of the schedule a different duration may be used for every task therefore the end date is usually different. When enough simulations are performed, a picture emerges of the distribution of potential outcomes from the shortest, to the longest, and to all those in-between. 

A simple way to think of this is to imagine driving to the grocery store on the same route a thousand times. Sometimes it may be rainy or snowy or maybe even clear and dry. There may be accidents, road work, traffic lights, or other issues. Each trip can have a different duration but overall, with enough trips, we will end up with good picture of how much time we should plan for the trip. We can even have different plans for different conditions.

Of course, you do not have the luxury of performing your project a thousand times. You get one opportunity. But an SRA can help you understand what the journey through your project can look like through simulation.

Performing SRAs and managing the project based on the results can provide project managers with powerful tools to successfully meet project objectives. SRAs are a discipline that supports critical risk and schedule decision making.

Projects are often long durations of five years or more, involve one-of-a-kind systems, facilities, or integrations, and have numerous constraints ranging from security, regulatory, to environmental. In addition, these projects have oversight from organizations such as the Government Accountability Office (GAO), Office of Management and Budget (OMB), and even Congress with expectations set to meet internal milestone commitments such as critical decisions (CDs) and initial operational capabilities (IOCs). While this is a subset of the many challenges facing these projects, they all rely on project managers and the project team meeting schedule commitments.

Purposes of the SRA

The main purposes of the SRA are twofold: 1) to understand the schedule and 2) to understand the probability of achieving the end date in the schedule. 

In a recent H&A workshop a very high-level executive in one of the large government agencies said of the SRA, “I don’t do it, but I receive the “P” numbers.” What she meant was that she receives the result in terms of the probability numbers developed in the SRA. She is informed of the probability of achieving the schedule as part of the program status review.

Understanding the SRA

In simple terms, an SRA is a structured probabilistic analysis by simulation of a project’s schedule that quantifies the likelihood of meeting critical dates. Initially the SRA focuses on the baseline and the probability of achieving the baselined dates. Once progress has been added to the schedule, the emphasis shifts to the current or working schedule and away from the baseline. The SRA uses the latest available information.

Uncertainty can exist in the schedule in terms of duration uncertainty, unplanned events, merge bias, and other such factors. The SRA tries to account for duration uncertainty by using a three-point approach to the task durations. The owners of the tasks are challenged to provide best case, most likely case, and worst-case durations for use in simulating the schedule. 

The SRA uses the project’s schedule logic as well as uncertainty assigned to activities along with the project’s risk register to produce probabilistic outcomes. A probabilistic analysis is a way of understanding outcomes when the future is uncertain. Instead of assuming there is only one single outcome for the schedule, probabilistic analysis takes variation into account based on durations, risks, and other events through simulation. This simulation is then repeated hundreds, sometimes thousands of times to produce statistical analysis that defines what the range of results could be. This statistical analysis will reveal, based on inputs to the model, a distribution of possible outcomes with confidence intervals expressed like this:

  • There is a 50% chance of finishing the project by this date, or
  • There is an 80% chance of meeting this milestone.

The SRA can be used to evaluate an entire project schedule or a subset of the schedule which may be a specific milestone, deliverable, or even a single work package. The scope of the SRA depends upon what part or whole of the schedule you would like to examine based on application needs. 

For this reason, SRAs are useful for project managers, control account managers (CAMs), schedulers, risk managers, and other key stakeholders. Stakeholders can use SRAs to meet compliance requirements, run “what-if” scenarios, or provide inputs into vendor selections and vendor performance management decisions. While the SRA is an excellent management decision tool, it should not be used to provide a static critical path review. It should never be used to create a deterministic “best-case” schedule, and it should not be dependent upon a specific software tool.

One important output of the SRA is commonly called the “Tornado Chart” because of the shape of the data provided. This analysis identifies the number of times a task acts as a driver in the outcome of the schedule. If a task is often driving the outcome, it should be considered carefully. Potential other approaches should be considered or at least a detailed review of the durations of the task should be performed.

Foundations

The SRA will only be as credible as the schedule it evaluates and the integrity of the risk information that is applied. Prior to the execution of a successful SRA, the schedule integrity should meet established quality standards. 

The DCMA EVMS Compliance Metrics (DECM) specific to schedule data provides a widely accepted benchmark for evaluating integrated master schedule (IMS) health. The NDIA Integrated Program Management Division (IPMD) Planning and Scheduling Excellence Guide (PASEG) includes a section on performing schedule health assessments with a list of often used metrics. Some project teams may customize their IMS quality metrics based on their established and approved EVMS documentation. Areas typically evaluated include logic integrity, critical path integrity, schedule realism, and data quality.

Logic integrity includes the proper use of predecessors and successors with minimal usage of leads and lags and a clear path from start to finish. Critical path integrity ensures that there is an understood set of critical and near-critical paths with logical drivers of key milestones and avoidance of excessive float. Standards for schedule realism include reasonably short activity durations and a limited use of constraints. Data quality requires valid dates, calendars and status updates. All these elements are covered in the generally accepted schedule quality metrics and most SRA tools will validate the schedule as well ensure that the schedule quality is adequate to perform a successful SRA.

Equally important to the SRA is the risk information. Risks should be identified and clearly characterized; their association with the schedule should be mapped. When feasible, mitigation plans should be incorporated into the schedule along with any variations they may have. The identified risks should succinctly state the event, and the cause and effect of the risk. Each risk should be characterized by its probability of occurring and the impact to the schedule if it were to occur. This characterization should be grounded in credible assumptions, usually based on the project’s rubrics for scoring likelihood and impact.

Input of risk events into the schedule provides additional realism. In terms of the simulation there will be times when the risk event happens and times when it does not with different durations as well.

Once quality schedule and risk information is validated, these inputs are imported into the probabilistic tool used by the project team. Since probabilistic analysis is based on the Monte Carlo methodology which uses statistical math, any tool that accommodates schedule and risk inputs should be sufficient. 

Frequency of SRA Application

SRAs can be expensive when time is taken to do the best case, most likely, and worst-case duration analysis by the CAMs. The cost is a limiting factor in the use of the SRA. It is most common for SRAs to be performed:

  1. At the time of baselining to understand the baseline schedule and the probability of success.
  2. When a major change is made to the project schedule.
  3. Before a major event such as the Critical Design Review (CDR) where the nature of the effort changes from design to build and the team wants to understand the probability of success for the remaining effort.

Do not accept a contract that requires performing the SRA when requested by the customer. That is too open ended of a requirement and does not allow you to estimate the cost or control the cost. A contract should specify the number of SRAs to be included so that any additional SRAs can be treated as a compensated change.

Conclusion

When grounded in a high-quality IMS and integrated with disciplined risk management, SRAs provide stakeholders with a realistic view of schedule outcomes and the risk drivers. While often thought of as a compliance requirement, the SRA provides management decision insights and is useful in understanding, as an early warning indicator, any threats to meeting schedule objectives. When properly used, the SRA is a powerful management tool that can contribute to project success.Interested in learning more? H&A master schedulers and risk subject matter experts often assist clients with establishing their SRA process and mentoring project teams to use the SRA outputs to create more realistic schedules with a higher probability of success. Call us today to get started.

Schedule Risk Assessment Fundamentals Read Post »

How Integrated Baseline Reviews (IBRs) Contribute to Project Success

By / / , , , ,
, , , ,

What is an Integrated Baseline Review or IBR?

An IBR is a formal review of a contractor’s performance measurement baseline (PMB) a customer conducts shortly after contract award or other project events to gain confidence in the contractor’s ability to deliver and meet contract objectives. Conducting an IBR helps to assure there is mutual agreement on the scope of work, schedule, resource requirements, and budget to meet the customer’s needs. It also assures there is a mutual understanding of the project’s risks and opportunities as well as how they will be managed.

Conducting an IBR is often a contractual requirement along with the requirement to implement an earned value management system (EVMS). Contractual documents specify the time frame for when the IBR must occur after contract award. This is typically within 90 to 180 calendar days. A customer may also conduct an IBR at critical milestones, funding gates, when transitioning to another project phase, or when significant changes are incorporated into a PMB.

What an IBR is Not

An IBR is not an EVMS compliance review. The intent of an IBR is not to devolve into a review of the contractor’s EVMS and whether it complies with the EIA-748 Standard for EVMS guidelines. That said, the contractor must be able to demonstrate they have a disciplined project control system in place. The contractor should be able to demonstrate to the customer that the project’s scope of work is properly planned, scheduled, resourced, budgeted, authorized, and managed using their project control system.

What are the benefits of conducting an IBR?

Conducting an IBR contributes to successful project execution because it helps to ensure a realistic PMB has been established.

IBRs provide the opportunity for the contractor and customer to verify:

  • There is shared understanding of the scope of work, technical requirements, and accomplishment criteria. As the work breakdown structure (WBS) is decomposed into manageable product-orientated work elements, it provides a common frame of reference for communication between the contractor and customer. The WBS dictionary should capture the technical requirements that must be met as well as expected deliverables and outcomes. The contractor must have a clear understanding of customer’s needs, assumptions, and expectations to be able to create a realistic schedule and budget plan. The IBR provides the opportunity for the contractor to verify the scope of work details with the customer before the project execution phase begins. In instances where the technical requirements evolve over time as work progresses, rolling wave planning is often used to detail plan the current work effort with more macro planning for future work effort to ensure the entire scope of work is included.
  • An executable PMB has been established for the entire contractual scope of work. The PMB should accurately reflect how the contractor plans to accomplish the work within the contractual period of performance and negotiated contract cost. The customer’s funding profile may also determine the timing of activities and when resources are required. The schedule and budget should be in alignment. The budget time phasing should reflect the schedule activities and resource requirements. It is also useful to verify appropriate earned value methods and techniques have been selected for the work packages to assure objective and meaningful project performance can be measured and reported as work progresses.
  • The required resources have been identified and assigned to the project. This contributes to producing an executable schedule and budget plan. The staffing plan should accurately reflect the sequence of work and skill mix as well as resource availability and demand to accomplish the project’s objectives. Flat loading labor hours may not accurately reflect common challenges of ramping up resources after contract award or the availability of critical resources for specific tasks. Other resource factors include the timing or availability of critical or high value materials as well as subcontractors responsible for performing work or providing services.
  • Project technical, schedule, and cost risks/opportunities have been identified and assessed. This also contributes to producing an executable schedule and budget plan. Where possible, risk mitigation actions have been incorporated into the PMB to reduce known risks to an acceptable level. For example, the timing or duration of activities as well as resource requirements may need to be adjusted. Schedule margin activities may be incorporated into the integrated master schedule (IMS). It also provides fact-based information to determine the amount of management reserve set aside to handle realized risks. This is often the most valuable component of the IBR. It is essential all parties have an understanding of the identified risks or opportunities, potential impact if they are realized, and risk mitigation or opportunity capture plans.

Why it is important to verify these details during an IBR?

A realistic schedule and budget plan helps to prevent cost overrun surprises because of technical, schedule, or budget challenges. The better the up-front planning, the less the likelihood of a cost overrun during project execution. It also increases credibility with the customer. The contractor can demonstrate their ability to deliver to the customer needs and manage the work effectively.

Benefits of Preparing for an IBR

Establishing a project’s PMB is a significant and often formal event as it signals the transition from the planning to execution phase. It represents the culmination of the integrated planning, scheduling, budgeting, work authorization, and risk/opportunity management processes.

A common best practice is to conduct an internal baseline review regardless of whether a formal IBR with the customer is required prior to setting the PMB. Implementing a standard process to conduct an internal review of the complete set of project data and artifacts with the project personnel assures an executable schedule and budget plan has been established to accomplish the contractual scope of work within the contractual period of performance and negotiated contract cost in alignment with the contract’s funding profile.

These internal reviews help to ensure there is a common understanding of the scope of work, major project events, planned sequence of work, schedule of deliverables, resource requirements, time phased budget, funding profile, and project risks/opportunities. It also provides an opportunity to verify the quality of the integrated schedule and cost data as well as top down and bottom up traceability. 

Need help preparing for an IBR?

A common earned value consulting service H&A provides is conducting a mock IBR with project personnel to prepare for the formal customer IBR. The objective is to conduct a thorough assessment of the project’s PMB to verify it reflects the entire contractual scope of work and technical requirements as well as identified technical, schedule, cost, or resource risks that may impact the ability to execute the work as planned. This provides an opportunity to correct any issues with the PMB prior to the IBR event.

Another standard earned value consulting service we offer is conducting IBR training for project team members. H&A earned value consultants can help you to establish a standard internal process to verify an executable PMB is in place for a given project. Once again, the objective is to prevent cost growth surprises and management is aware of the project’s risks and opportunities that may impact profit margins. 

Call us today at (714) 685-1730 to get started. 

How Integrated Baseline Reviews (IBRs) Contribute to Project Success Read Post »

Using Schedule Margin to Increase the Accuracy of Forecast Completion Dates

By / / , ,
, ,
Header Image with geometric background that says Schedule Margin - Increase the Accuracy of Forecast Completion Dates

As part of our project scheduling workshops, hands-on Oracle Primavera P6 or Microsoft Project (MSP) workshops, or scheduling support assignments, we often assist clients with establishing their scheduling best practices. One of the techniques we cover in our EVM training workshops or help incorporate into our client’s scheduling process and procedures is the use of schedule margin as a means to handle schedule risks on a project. The proper use of schedule margin as well as making it a part of a project’s risk and opportunity management process can help to increase the accuracy of an integrated master schedule (IMS) to forecast milestone or project completion dates. 

What is Schedule Margin?

The NDIA Planning and Scheduling Excellence Guide (PASEG) Version 4.0 dated August 2019, defines schedule margin as “an optional technique used for insight and management of schedule risks.” Schedule margin is a period of time that is identified in the project’s plan for risk mitigation where an internal target date is set prior to a commitment date such a major project milestone or deliverable. Schedule margin is a defined task in the integrated master schedule (IMS) with logic ties (the immediate predecessor task) to a project finish milestone or intermediate decision point/milestone.

The placement and duration of the schedule margin task is based on a risk management assessment that may include a probabilistic three-point Schedule Risk Assessment (SRA). It may also be driven by schedule incentives, stakeholders needs, subcontractor interfaces, customer provided inputs, tightening of range estimates to single point estimates, or other influences.  

Some have described schedule margin as management reserve for time. A simple example would be scheduling your drive to work. Should you easily get through the traffic lights and there are no issues, you can usually make it in 30 minutes. However, because of the “risks” associated with hitting more red lights and other issues, coupled with the penalty of being late, you might plan for the trip to take 45 minutes. Those additional 15 minutes are your schedule margin.

Note however, schedule margin is not a space filler to hide positive float, a schedule stash to cover slippage, or a method used to hold an event’s date. It is a way to incorporate risk into the schedule and improve the forecast accuracy. Some government customers have refined the definition and usage of schedule margin which can impact how you incorporate schedule margin in a given project’s IMS. We will address a couple of specific government customer requirements below.

Applying the Schedule Margin Technique

The customer and contractor project manager both have a vested interest in establishing and using schedule margin. During the development of the project’s requirements definition and planning, the customer will establish need dates. Based on these need dates, target dates for key decision points/milestones are established based on an assessment of risks and constraints. Depending on the complexity, life cycle phase, and risk, the targets may be stated as a single date or range of dates. These targets are provided in the request for proposal or as guidance to the internal project team. The contractor creates a plan and estimate based on their proposal process that includes a risk management assessment. The risks that impact the ability to achieve the target dates are included in the assessment and schedule margin tasks are identified as needed.

Upon award, the contractor creates a baseline IMS with defined schedule margin tasks. These schedule margin tasks are identified as schedule visibility tasks (SVTs) within the IMS. These SVTs are usually placed immediately prior to the decision point/milestone or project finish milestone. The schedule margin SVTs do not have associated resources, they represent a time reserve. Each SVT should be clearly labeled as Schedule Margin and defined. There should be linkage and traceability between the schedule margin SVTs and the risk management plan. The customer may also identify additional schedule margin beyond the contractor’s project target dates to reflect risk to the customer need dates.

As work progresses on the project, the assessment of risks and impact to schedule margin are evaluated. Performance is measured against the baseline targets and forecasts are provided. The risk management plan is also assessed, and mitigations adjusted as needed. These assessments provide input into determining whether the schedule margin requires an updated forecast. Any changes or consumption of the schedule margin should be documented and communicated.

Specific Contracting Requirements

Know your customer’s requirements! Customers may have specific requirements related to the creation, management, and reporting of the IMS. Within the IMS requirements, the customer may have included specific guidance for the use of schedule margin. Be sure you have considered all contract clauses, data item descriptions, and statement of work requirements when planning the project. Views into the Department of Defense (DoD) and Department of Energy (DOE) schedule margin requirements are provided below. Note: we are focusing on schedule margin for this discussion and purposely avoiding other IMS related topics.

Use of Schedule Margin on DoD Contracts

Schedule margin is an optional technique used for insight and management of schedule risks. It is represented by a task or tasks within the IMS with no assigned resources and is established as part of the baseline. In a DoD contractual environment, schedule margin:

  • Resides in both the baseline and forecast schedules.
  • Should be under the control of the contractor’s project manager.
  • Is only placed as the last task before key contractual events, significant logical integration/test milestones, end item deliverables, or contract completion.
  • Is associated with schedule risk as part of a formal risk management plan.

The duration of the schedule margin task should be based on risk in subsequent events and traceable to the risk management plan. Schedule margin may be directly or indirectly connected to discrete predecessor and successor activities and fall on critical paths. All schedule margin tasks should be clearly and consistently identifiable. Schedule margin tasks should be excluded (zero duration) when performing a Schedule Risk Assessment (SRA).

Significant changes to the status of schedule margin tasks and impacts to the project’s primary critical path, if any, should be discussed in the Integrated Program Management Report (IPMR) Format 5 or the Integrated Program Management Data and Analysis (IPMDAR) Performance Narrative Report.

Figure 1 is a conceptual diagram of applying a schedule margin task before the Preliminary Design Review (PDR) milestone.

Example of a Schedule Margin Task Before a Major Milestone
Figure 1: Example of a Schedule Margin Task Before a Major Milestone

Use of Schedule Margin on DOE Contracts

The DOE has provided more specific definitions for schedule margin. They have also defined the use of DOE owned schedule contingency to buffer the schedule against unforeseen events that could cause a delay. This is documented in the DOE Guide 413.3-24 for Planning and Scheduling.

The contractor is responsible for managing their schedule margin. It resides as a single task just prior to the contractor’s project completion milestone. The DOE program office is responsible for managing schedule contingency. Schedule contingency resides after the contractor’s project completion milestone and just prior to the Critical Decision (CD) 4 milestone (Approve Start of Operations or Project Completion).

The contractor’s schedule margin and the DOE schedule contingency are both established in conjunction with CD-2 (Approve Performance Baseline), but updates may occur in conjunction with changes. The schedule margin is set commensurate with the schedule risk calculated at a probability level typically between 70 and 90 percent. The SRA accounts for risk events assigned to the contractor and contractor activity duration uncertainty. Activity duration uncertainty is determined either through a three-point duration estimate or by confidence level (high, medium, or low).

Similar to schedule margin, the DOE owned schedule contingency is set commensurate with the schedule risk calculated at a probability level typically between 70 and 90 percent. This SRA accounts for risk events assigned to DOE and DOE activity duration uncertainty.

The IMS may depict these activities as SVTs. Figure 2 is a conceptual diagram that shows the application of the schedule margin task before the contractor’s completion milestone and the DOE schedule contingency before the project finish milestone.

Example of a Schedule Margin Task and DOE Schedule Contingency Task
Figure 2: Example of a Schedule Margin Task and DOE Schedule Contingency Task

Interested in incorporating the schedule margin technique into your scheduling best practices? Call us today at (714) 685-1730. We have experienced master schedulers familiar with a variety of scheduling tools that can help you incorporate industry best practices into your scheduling process and procedures. They also well versed in applying schedule risk analysis techniques that complements incorporating schedule margin tasks into an IMS.

Using Schedule Margin to Increase the Accuracy of Forecast Completion Dates Read Post »

Risk Analysis and Selective Controls

By / / , , ,
, , ,


This chapter looks at how risk is evaluated when developing an Earned Value Management System.

Video Contents

You can use the links below to jump to a specific part of the video.
0:00 – A Closer Look at Risk
0:25 – Risk Drives Other Concerns
0:59 – Types of Risk
1:19 – Risk Opportunities
1:38 – Risk Analysis and Selective Controls
1:54 – Balance Cost with Benefit

More EVMS Training

If you liked this video you can purchase the entire course below. This video is an excerpt from the Department of Defense (DOD) version of this eLearning module. We also offer the same course customized for the Department of Energy’s (DOE) specific Earned Value Management (EVM) implementation/requirements, as well as a version of the course customized for NASA’s EVM implementation/requirements.  

— Purchase This Course —
EVMS DOD Virtual Learning Lab

— Purchase the DOE Version of this Course —
EVMS DOE Virtual Learning Lab

— Purchase the NASA Version of this Course —
EVMS NASA Virtual Learning Lab

EVMS Document Matrix

Not sure what the different requirements are between the DOE and NASA? Can’t remember if Cost and Software Data Reporting (CSDR) is required for an NSA contract? Check out our easy to read Earned Value Management Systems Document Matrix

All Online Courses

All Online Courses Available from Humphreys & Associates

Earned Value Training

Other Posts in this Series

Risk Analysis and Selective Controls Read Post »

Video Release – Assessing Schedule Risk Using Deltek’s Acumen Risk 6.1 | Part 2 of 2

By / / , , , , , , , , , , ,
, , , , , , , , , , ,

The conclusion of our review of the foundational elements of performing a schedule risk assessment (SRA) using Acumen Risk 6.1

0:17 – Risk Exposure Chart
1:03 – Tornado Chart
2:14 – Parting Thoughts

Read the blog post at:

Assessing Schedule Risk Using Deltek’s Acumen Risk 6.1 | Part 2 of 2

Video Release – Assessing Schedule Risk Using Deltek’s Acumen Risk 6.1 | Part 2 of 2 Read Post »

Scroll to Top