The Schedule Basis Memorandum: A Key Supporting Document Needed for CPM Scheduling

This is the first blog post in a six-part series about the schedule basis memorandum. This post defines the schedule basis memorandum and discusses its key purpose for CPM scheduling. The second post in the series identifies information to include in the document, and the third post identifies considerations for common risks that may cause delay on large and complex EPC projects. 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.

Introduction
A key tool used in project time management is the Critical Path Method (CPM) schedule. For large and complex Engineering, Procurement, and Construction (EPC) projects, the success or failure of project time management processes directly depends on the validity of the CPM schedule model.

It is important for the CPM schedule model to be reasonable, accurate, supportable, and sufficiently detailed to provide the project management team with a reliable tool to appropriately plan, monitor, and make critical project decisions. No matter what level of schedule detail (i.e., Level 1, Level 2, or Level 3), the supporting documentation of any CPM schedule should include a thorough schedule basis memorandum.

However, it is common for a contractor’s schedule basis memorandum to be too vague, lacking the appropriate detail needed to effectively communicate the assumptions and rationales utilized to develop the CPM schedule file. In many cases, no documented schedule basis memorandum exists. In such cases, the schedule basis assumptions can only be reconstructed from the collective and often incomplete memories of the project team members involved in preparing the CPM schedule—which is not good scheduling practice.

This blog post discusses general topics that are needed in a schedule basis memorandum, including the consideration of typical causes of delays that often occur on large and complex EPC projects.

The Schedule Basis Memorandum Defined
The schedule basis memorandum is broadly defined as a written document that describes, explains, and details how a CPM schedule was developed at a specific point in time. It is usually included or referenced within the schedule management portion of a Project Execution Plan (PEP) by the contractor or by the owner. For small projects, with limited size, scope, and complexity, a schedule basis document could be presented in a simple, one-page, bulleted format or a small number of presentation slides.

For large and complex EPC projects, the schedule basis is usually detailed in a multi-section report along with supporting tables, attachments, and exhibits. A key purpose of the schedule basis memorandum is to document detailed assumptions, exclusions, and/or qualifications known at the time that the project schedule is developed.

The schedule basis memorandum is typically prepared during the baseline schedule development phase, but the schedule basis documentation should be considered to be a living document to be updated periodically throughout a project’s lifecycle when conditions are warranted (e.g., re-baseline schedule development, recovery schedule development, change order impacts, extensions of time). In general, it is recommended to include sufficient detail in the schedule basis memorandum.

Greater detail documenting what is known and what is not known at the time the schedule basis is developed provides better visibility of potential schedule issues and risks. A detailed schedule basis memorandum provides crucial information to key stakeholders and project participants, especially if changes alter the original schedule basis plan or the original project baseline schedule becomes delayed.

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