Ghost Schedules - What, Why & What'S The Risk?

CONSTRUCTIONUse by ContractorsAs mentioned earlier contractors maycreate and maintain Ghost Schedules whenowners refuse to approve the contractor’searly completion schedules. Although acontractor’s intent may have been to finishearly, the possibility of using a GhostSchedule does not mean that all contractorsemploy them when early completionschedules are rejected, whether properlyor not. Another way to create an earlycompletion schedule is for the contractor tocreate interim milestone dates with earlierdates which have the effect of drivingan early completion date for substantialcompletion or final completion, whicheverdate alleviates the imposition of liquidateddamages. Alternatively, if the contract has aseries of embedded interim milestones thenthe contractor can achieve the same resultsimply showing these dates earlier thancalled for in the contract.At other times, a contractor who is actuallyahead of schedule part way through theproject may face an owner or CM whotakes the attitude that “ we will notaccept a schedule showing anything otherthan on time completion.” In such a case,a contractor may prepare and maintain aGhost Schedule to document when theywould have completed the project.When faced with these situationscontractors decide whether to create andcontinually update a Ghost Schedule forthe remainder of the project. The contractormust also decide on the purpose and theuse of the Ghost Schedule. If an ownerformally rejects the contractor’s plannedearly completion schedule, the contractor isgenerally required to prepare a schedule tomatch the contractual completion date(s)in order to submit an approvable projectschedule and gain acceptance or approvalby the owner. At the end of the project, in4CONSTRUCTIONMARCH 2015order to file and prevail on a delayed earlycompletion claim, the contractor mustprove their intent to complete work early tothe trier of fact.“ contractor intent is the factoron which most early completionclaims turn. Operative facts, asopposed to simple expressionsof intent, are the focal point inan analysis of the contractor’sintent.”4Thus, if the contractor still wants to use aGhost Schedule to pursue early completionafter owner rejection, assuming it is notprohibited by the contract, the contractorwill need to maintain both the projectschedule showing on time completionand its Ghost Schedule reflecting earlycompletion. However, the contractor willhave to plan and execute its work per theearly completion schedule in order to finishearly. The contractor must maintain theearly completion schedule to demonstratethat it planned early completion and thenimplement its Ghost Schedule to actuallyachieve early completion.A Ghost Schedule may be used to proveowner delay against its early completionschedule. On the other hand an ownermay take the position that a contractor’searly completion schedule simply createdschedule contingency or float even thoughthe contractor was actively pursuing itsearly completion schedule. And, if thecontract contains a Joint Ownership ofFloat clause owners may contend that eventhough the contractor created float, theowner has the same right to that float as thecontractor on a first come, first serve basis.If the owner delays the contractor’s earlycompletion schedule the contractor may beable to use its early completion schedule toprove delay and recover extended generalconditions instead of absorbing these costs.Thomas H. Gourday, Jr., Constructive Acceleration and Concurrent Delay: Is There a “Middle Ground”?, 39 Pub. Contr. L. J. 23, Winter 2010,citing Skyline Painting, Inc., ENGBCA No. 5810, 93-3 BCA P 26,041 at 129,459.6

CONSTRUCTIONWithout its Ghost Schedule, the contractormay not be able to prove a delay to itsearly completion since the project schedulewould not reflect any delay until the earlycompletion allowance was exhausted.Another use of Ghost Schedules bycontractors is when the owner and thecontractor disagree over the execution of,or updates to, the project schedule. Whilethe owner may insist that the approvedproject schedule be updated and submittedas the owner sees the project, thecontractor could submit another versionof the project schedule reflecting potentialproblems and delays that it has alreadyincurred or expects to incur. Thus, thecontractor maintains the project scheduleand a Ghost Schedule.A third use of a Ghost Schedule is whenthe contractor is attempting to finishearlier than the project schedule but didnot inform the owner. In this case, theplanned but unrevealed early completionhelps establish the contractor’s schedulecontingency.5 When a contractor issuesan early completion schedule that isaccepted by the owner, the owner mayrevise the contract completion date viachange order or contract modification,thereby binding the contractor to theearlier date. When a contractor is trying tofinish early but is unwilling to accept therisk of a contractually enforceable earlycompletion date, a contractor may use aGhost Schedule to drive the actual work, allthe while submitting and updating a projectschedule based on the full duration of timeallowed under the contract. However, acontractor who plans to complete workearly but decides not to tell the owner bysubmitting a planned early completionschedule may be needlessly increasing theirown risk. As noted by one author,CONSTRUCTIONMARCH 2015“The contractor need not notifythe Government of its intentto complete the work early,although providing notice evincesa contemporaneous intention tocomplete early, as well as advisingthe Government of the proposedearly completion, enabling theGovernment to seek to minimizeany actions the might interferewith the contractor.”6Ghost Schedules may also be usedas production or target schedules. Aproduction schedule includes activitydurations and associated production rates(i.e., quantity/work day, quantity/manhours,etc.) that contractors and subcontractorsmust achieve in order to meet an earlycompletion schedule. A productionschedule can be used several ways. First, theproduction schedule can be the supportingdetails of an early completion schedule(approved or not). Second, the productionschedule can be used as a more aggressiveschedule than the project schedule, or ascontingency against the project schedule,particularly on projects with high liquidateddamages or other risks. Third, a productionschedule may be employed on the site topush subcontractors and suppliers to meetactivity early start and finish dates in orderto beat the project schedule date. Usingthe production schedule to try to beat theproject schedule will most likely create floaton the project schedule and provide thecontractor with more flexibility inmanaging its resources.Use by SubcontractorsAs projects have become more complexand subcontractors have updated theirinternal project controls, it has becomecommon for subcontractors to maintain5The authors have, on occasion, worked on projects with contractor clients who have a company policy that all Baseline Schedules will have“x%” schedule contingency in order to protect the project against unforeseen events. Such a policy almost demands an unrevealed earlycompletion schedule be created and used to manage the project in order to comply.6Thomas H. Gourday, Jr., Constructive Acceleration and Concurrent Delay: Is There a “Middle Ground”?, 39 Pub. Contr. L. J. 23, Winter 2010,citing Oneida Construction, Inc./David Boland, Inc., ASBCA No. 44194, 94-3 BCA P 27,237 at 135,727.7

CONSTRUCTIONtheir own schedules, but not necessarilyshare them with contractors or advisethem of their existence. Regardless ofdisclosure, the subcontractor’s schedulecould be considered a form of a GhostSchedule, although it may not be thoughtof that way by the contractor or othersubcontractors. Since there are typicallymany subcontractors on a project, thepossibility exists for multiple GhostSchedules on a single project. Contractorsdo not always share the electronic versionof the project schedule with subcontractors,instead choosing to give the subcontractorshard copy printouts of the overall schedule,current critical path and/or three-weeklook ahead schedules from the overallschedule for short and long term planningat the weekly subcontractor meetings. Asa result, subcontractors often maintain andupdate their own schedules of their scopeof work and try to mimic the restraintson their work from the overall schedule.Subcontractors also use their GhostSchedules for their own early completionor manpower leveling (regardless ofwhether the contractor is pursuing anearly completion), and identificationand submittal of a delay or impact claim.Subcontractor Ghost Schedules record andbecome the subcontractor’s as-built historyof the job.Use by OwnersThe most common circumstance underwhich an owner creates and uses aGhost Schedule is when they, or theirrepresentatives, become convinced thatthe contractor’s schedule updates areinaccurate and unusable. In that case,the owner may create and maintain a“more accurate” Ghost Schedule basedon the project schedule with the “properadjustments” observed by the owner’s staffor representatives in the field to “moreaccurately reflect” the status of the projectand future projections. The potentialproblem resulting from this situation is7CONSTRUCTIONMARCH 2015that once the owner or its representativehas “adjusted” the schedule “properly” theowner tends to use the Ghost Scheduleto make time related decisions on theproject, thereby creating the possibilityof a contractor claim.On the other hand, some owners may havea Ghost Schedule from the outset of theproject even if the contractor is submittingaccurate monthly updates. As projectcontrols and owner oversight continuesto grow, owners often have their ownschedulers assigned to the project, eitheronsite or offsite. Owners may create aGhost Schedule of the project schedulefrom the outset as a means to track andanalyze the project schedule independently.As the design is often not complete at thetime construction begins (and is normallycompleted through the submittal process)and the contractor schedule has beenapproved, the owner may use its GhostSchedule to determine the potentialimpact of design changes, either a scopeaddition that may extend the project or ascope deletion that may reduce the projectduration. Such analyses would take placebefore the owner issues the change orderto the contractor. The owner could also useits Ghost Schedule to analyze the benefit,or detriment, of expediting or deferringthe delivery of owner furnished/contractorinstalled (“OFCI”) equipment in variouscombinations. Essentially, the owner is freeto use its Ghost Schedule to test a varietyof “what if” scenarios before bringing thechanges to the contractor and possiblydisrupting the current project.Are Ghost Schedules Legal?To date, there appears to be minimalcase law dealing with the use of GhostSchedules. A significant case concerningGhost Schedules and their use is JacksonConstruction, Inc. v. United States.7 In thiscase, the U.S. Court of Federal ClaimsJackson Construction Co., Inc. v. The United States, 62 Fed. Cl. 84; 2004 U.S. Claims.8

CONSTRUCTIONstated that a contractor is under noobligation to advise owners of its plannedearly completion. The Court stated:“The contractor is not required tonotify the Government of its intentto finish early as ‘it would seem tomake little difference whether ornot the parties contemplated anearly completion’ .”8The Court added an important qualifierto its finding:“The record, however, mustcontain concrete evidence ofthe contractor’s intent, suchas bid, estimate, or any othercontemporaneous documentationof its planned early completion.”9An as-planned or Baseline Scheduleshowing an early completion datewould logically be a part of the“contemporaneous documentation of itsplanned early completion” noted above.Another author commented in this regardin the following manner:“ the contractor must show thatthe early completion schedulealleged by the contractor wasfeasible, and performance inaccordance with the contractor’sproposed schedule would haveled to early completion, absentunreasonable governmentcaused delay.”10The Court also commented on the notice ofearly completion as an element of proof in adelayed early completion claims situation:“Notice to the Government, whilenot required, may be sufficientevidence of intent.”11As numerous papers have been writtenabout notice of early completion schedulesover the years, it seems unnecessary tocomment further.12Other cases that refer to Ghost Schedulesor related issues include the Appeal ofBlackhawk Heating & Plumbing13, E.C. Ernst,Inc. v. Koppers Company, Inc.14, and TitanPacific Construction Corp. v. United States.15In the Appeal of Blackhawk Heating &Plumbing, the General Services Board ofContract Appeals (“GSBCA”) cited WRBCorporation v. U.S.16 wherein that theCourt struck down the plaintiff’s totaltime argument because of its lack of proofof Government delay coupled with theunreliability of both its initial bid estimateand its overhead cost figures. The Court’slanguage in dealing with one ofplaintiff’s breach of contract claimsmakes this apparent:“On its unnumbered claimfor overhead and interestcosts incurred because of theGovernment’s delays, theplaintiff urges that its recoveryshould be the difference between8Wickham Contracting Co. v. United States, 12 F.3d 1574, 1582 (Fed. Cir. 1994) quoting Metropolitan Paving Co. v. United States 163 Ct. Cl.420, 423, 325, F.2d 241, 242-43 (1963); accord Weaver-Bailey Contractors, Inc. v. United States 24 Cl. Ct at 578-79.9Wickham, 12 F.3d at 1582.10 Thomas H. Gourday, Jr., Constructive Acceleration and Concurrent Delay: Is There a “Middle Ground”?, 39 Pub. Contr. L. J. 23, Winter 2010,citing Interstate General Government Contractors v. West, 12 F.3d 1053, 1058-59 (Fed. Cir. 1993).11 Wickham, 12 F.3d at 1582.12 See, for example, James G. Zack, Jr., Early Completion Schedules: The Newest Form of Contingency Bidding, Stratagem, Spring, 1985;Evans M. Barba, Government Contract “Early Completion” Delay Claims, Construction Briefings – Second Series, Federal Publications,Inc., No. 92-12, November 1992; and Roy Mendelsohn, Early Completion Schedules: The Promises & Pitfalls, Journal of Management inEngineering, Vol. 10, No.1, American Society of Civil Engineers, January/February 1994.13 Appeal of Blackhawk Heating & Plumbing v. United States, 76-1 BCA P 11649, GSBCA No. 2432, 1975 WL 1482 (G.S.B.C.A.).14 E.C. Ernst, Inc. v. Koppers Company, Inc., 520 F. Supp.830.15 Appeals of Titan Pacific Construction Corporation, 87-1 BCA P 19626, ASBCA No. 24148, ASBCA No. 24616, ASBCA BCA No. 21692, 1987WL 40610 (A.S.B.C.A.).16 WRB Corporation v. U.S., 183 Ct. Cl. 409, 427 (1968).CONSTRUCTIONMARCH 20159

CONSTRUCTIONthe months it estimatedthe project would take andthe actual time consumed,multiplied by its monthly chargesfor interest and overhead. A‘total time’ approach is no lesssusceptible to inaccuracies thanthe total-cost theory.17 Plaintiff’spresentation does not support itsdependability here. There are atleast three weaknesses. We are notpersuaded that the quantum ofdelay arrived at through this modeof computation is attributableto the Government rather thanthe builder or its subcontractors.There is a serious conflict inthe evidence as to exactly whatthe plaintiff’s pre-bid estimatewas. The plaintiff’s calculation ofmonthly overhead and interest is,at best, disputable.”(Emphasis provided.)The Ghost Schedule being referred toin this case was the plaintiff’s scheduleshowing the estimated number of monthsit would take to complete the work of theproject. In this case, the Court did notbelieve that the pre-bid estimate reflectedthe Ghost Schedule.In E. C. Ernst, Inc. v. Koppers Company, Inc.,the trial judge indicated that the totalnumber of delay hours was overstatedbecause it was based on an erroneousestimate of how many hours it wouldhave taken Ernst to complete the projecthad no delay occurred. Again, the GhostSchedule being referred to is the scheduleallegedly showing the shortened durationand reduced manhours Ernst said they hadscheduled for this project.In Titan Pacific Construction Corp v. UnitedStates, the Court commented on TitanPacific’s schedule which they used attrial to attempt to prove Governmentcaused delays. The Court’s comments onthe reliability of this schedule leads oneto believe that the Court considered theschedule to be a Ghost Schedule:“ appellant’s “as-planned” CPMschedule indicated that Voudourisplanned to perform a number ofactivities involving the moisturesensitive soils during the “wetseason” including stripping topsoil, grading roads and turnouts,grading building sites, and tankexcavation Appellant contendsthat because of Governmentpressure and refusal to granttime extensions in the dry seasonbetween June and October forearthwork delays resulting fromadverse weather and unsuitablesoils conditions, Voudouris “movedaround from place to place in alargely unproductive operationlooking for suitable materials touse as fill,” attempted to accelerateits operation by expanding itsoperation to 10 hours per day,six days per week, using doubleshifts, and attempting to obtainadditional equipment.”Along these same lines:“Determination of the feasibility ofa contractor’s alleged acceleratedschedule is a question of fact. Therecord should indicate that theproposed schedule was reasonablegiven the existing conditions at thejob site, the method proposed bythe contractor, and the contractor’sactual operations.”18In performing the research for this report,the Forum realized how little case law existsconcerning Ghost Schedules. Given thelarge number of claims the authors havebeen involved in where a delayed early17 Referring to Laburnum Construction Corp. v. United States, 163 Ct. Cl. 339, 342–43, 325 F.2d 451, 453 (1963).18 Thomas H. Gourday, Jr., Constructive Acceleration and Concurrent Delay: Is There a “Middle Ground”?, 39 Pub. Contr. L. J. 23, Winter 2010,citing Lloyd H. Kessler, Inc., ASBCA No. 88-170-3 BCA P 23,802 at 119, 191.CONSTRUCTIONMARCH 201510

CONSTRUCTIONcompletion was alleged, the lack of case lawseems counterintuitive. However, this maybe the result of what the construction barrefers to as the “vanishing trial”. In regardto this issue, it is noted that:“In 1938, about 20% of federalcivil cases went to trial. By 1962,the percentage was down to 12%.By 2009, the

the term Ghost Schedule. It is prudent to discuss what a Ghost Schedule is not. A contractor's Ghost Schedule is not a schedule maintained in lieu of submitting a baseline schedule and schedule updates per the contract. Even if the contractor is using a Ghost Schedule, it still must comply with the contract's scheduling requirements. An .