I’m a planner used to working under Option A where the activity schedule is taken from and correlates to the programme.
I understand that payment is assessed differntly under Option C, but how is the activity schedule created and what purpose does it serve?
For option C the activity schedule is of limited benefit. As you know, with option A the Contractor is paid at the payment intervals any activities that are completed on their activity schedule. However with option C the Contractor is paid Defined Cost (in simple terms actual cost incurred at that point plus fee) not paid in relation to the activity schedule. The activity schedule is merely the total of the Prices at tender stage, i.e. the Contractors offer all be it the target price rather than a fixed price. If the Contractor comes under the target they share the under-spend with the Employer at the ratio stated in Contract Data part 1, and if they have gone over then they share the “pain” at the ratio stated in CD1.
Therefore the activity schedule is only used to ascertain the total of the Prices. Any implemented compensation events need to be added to the activity schedule whether they be additions or omissions so that it reflects the revised target at any point in time - and that is about its only use. There is still the requirement within clause 31.4 to demonstrate how items on the activity schedule relate to the items on the programme, but in practical terms not as important as it is for option A.
Everything that Glenn says is correct and … …
An additional use is of the Activity Schedule under option C is to compare planned expenditure against actual expenditure by using, for instance, Earned Value analysis.
Thanks very much Glenn and Jon, I suspected as much but wasn’t sure!