The Schedule Basis Memorandum: Camp Sizing Risk Considerations

This is the fifth blog post in a six-part series about the schedule basis memorandum. The first post defines the schedule basis memorandum and discusses its key purpose for CPM scheduling, and the second post identifies information to include in the document. The third post identifies considerations for common risks that may cause delay on large and complex EPC projects, and the fourth post focuses on three of those risks: competing project considerations, owner review comments, and weather considerations. The fifth post discusses common risks associated with labor camp size considerations, and the sixth post discusses labor camp catering and other service risks.

Labor Camp Sizing and Services
When labor camps are required, they may become a significant factor in the success or failure of a project. If the camps are not sized correctly at the outset, the project completion date may slip due to camp accommodation limitations. Furthermore, any delays in constructing and achieving full occupancy of the camps may delay the effective start of construction work for permanent plant facilities because the labor camp and services are not ready.

The contract documents should identify the party responsible for estimating the size of the labor camp. In making the decision regarding the camp size, the EPC contractor must identify its total direct and indirect labor, supervision, and management team to be housed in onsite camps. Within its baseline CPM schedule file, the resource loading of the EPC contractor’s labor resources should identify the planned man-hour requirements for its work force, assuming that the schedule file is properly resource loaded. Additionally, the owner’s requirements for accommodation of its management and labor forces should be identified, including an allowance for potential growth in the owner’s personnel requirements.

When preparing a schedule basis for a large and complex EPC project that requires camps, the contractor and owner should pay close attention to camp sizing issues and supporting camp services.

Camp Sizing Considerations
Several variables affect the required size of a labor camp, including factors such as: equipment and material quantities, direct and indirect labor ratios, workforce productivity, early dates versus late dates, third-party accommodations, and contingencies for potential workforce increases. The following is a discussion of these issues:

• Quantities of Work to Be Installed. The starting point for camp sizing is an estimate of the quantities of equipment and materials to be installed, such as items of engineered equipment, meters of piping, cubic meters of concrete, number of instruments, tons of fabricated structural steel, etc. If estimated quantities are sufficiently accurate and fall within the contingencies used for the camp sizing calculations, then the camp size may not be subjected to impacts from underestimated or overestimated quantities.
  
  However, if the quantities of equipment and materials used to define labor requirements are severely understated, then the camp size will be similarly underestimated. If the camp size is too small to accommodate the required labor resources needed to install the quantities of materials within the specified durations in the schedule, it is highly likely that the project will become delayed. The schedule basis must identify and document its camp sizing assumptions based on known estimated quantities along with any contingency factors in support of the planned or remaining work activity durations of the CPM schedule.

• Ratio of Indirect Labor to Direct Labor. Definitions of indirect and direct labor vary among contractors. A portion of the labor hours that some contractors include in direct labor may be considered indirect labor hours by other contractors. The schedule basis should document the ratio of indirect labor to direct labor used for schedule development. To the extent that more indirect labor is required, the camp sizing considerations must include adequate accommodations for indirect labor resources that are needed to support direct labor. The schedule basis should document the assumptions for camp sizing regarding the ratio of indirect labor to direct labor.

• Productivity of the Workforce Used to Install the Estimated Quantities. The estimate of productivity at site is a critical factor in estimating the required size of the construction camps. Even if estimates of quantities and the required ratio of direct and indirect labor are correct, errors in estimating on-site productivity can lead to errors in camp size calculations.
  
  Contractor camp size estimates are more accurate when they are based on productivity estimates by craft rather than overall project average productivities. This is particularly important when considering that some crafts’ peak workloads occur earlier or later in the project than other craft peaks. For example, civil work is heavily front-end loaded. In contrast, instrumentation and electrical work is heavily back-end loaded.
  
  To the extent that the EPC contractor has historical productivity data by craft in the jobsite location, the estimates of camp size requirements should be based on individual craft productivities rather than on overall site average productivity. A productivity analysis that discusses the above should be a major section within the schedule basis document.

• Early Start vs. Late Start Manpower Loadings. The peak labor requirements are usually much higher when calculated on a late start basis from the CPM schedule than they would be if calculated on an early start basis. This could negatively alter the camp requirements if the EPC contractor decides to work toward the late dates in the CPM schedule. If an EPC contractor chooses to work toward late dates, it may become physically impossible to complete the work due to camp size limitations. It is recommended that a section in the schedule basis be devoted to analysis of potential camp size limitation problems due to early versus late dates.

• Numbers, Timing, and Durations of Third-Party Resources Requiring On-Site Accommodations. A difficult task in estimating the required camp size is forecasting the number, distribution over time, and durations of accommodations for third-party resources such as pre-commissioning, commissioning and start-up staff, and vendor service staff. These third parties are typically required toward the end of a project’s lifecycle. The schedule basis should include an accommodation plan for third-party personnel.
  
  This consideration may be planned on the basis that direct and indirect construction personnel will have de-staffed sufficiently by the time that the third parties are needed on site to avoid accommodation limitation. A detailed study of third-party personnel requirements is recommended for the schedule basis.

• Contingency for Increases in Base Personnel Requirements. A major unknown factor in camp sizing calculations is the allowance for camp size increases due to future changes that will add work scope to a project. Assuming that all original camp sizing assumptions and calculations were accurate, the camp will be undersized if changes occur that must be accomplished when the construction is at or near peak loading. The schedule basis should consider and provide a discussion and consideration of this potential issue.

Camp sizing calculations are complex for any construction project. However, accurately sizing the camp is a crucial factor in achieving success on a project. Errors in estimating one or more factors may have compounding impacts, and camp sizing can become a limiting factor in achieving on-time construction performance. On some projects, these issues can be mitigated by use of houseboats, floatels, and the like as emergency housing measures during peak staffing periods if the site is near a body of water, but the unit cost of these accommodations is higher than land-based camps.

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