Construction Industry Validation of Schedule Performance Measure

CPF-RGA 07-16 Topic Summary
CPF RGA 07 16

Overview

In 2016, CII and the Charles Pankow Foundation co-funded a research team that examined schedule performance measurement. This research built upon the theoretical foundations for a schedule performance measure (or index) developed in previous research. Specifically, the purpose was to: “. . . establish a ‘living’ schedule performance measure that will be comparable across project types and company sizes in the construction industry.”

This research was based on the Capital Asset Pricing Model, which helps investors understand whether a stock moves in the same direction as the rest of the market, and how volatile or risky it is compared to the market. The team extended this concept to construction project schedule systems (CPM networks). In practice, Schedule Beta helps describe an individual subcontractor’s deviation, risk, and/or performance as correlated to the collection of projects completed over a defined period of time.

The research summary and report are free of charge and available through the Charles Pankow Foundation site:

 

Key Findings and Implementation Tools

1 : The Meaning of Schedule Beta

The researchers applied the Schedule Beta calculation to 52 subcontracts and were able to capture Schedule Beta scores across several ranges, which indicate certain subcontractor traits and can be used to benchmark subcontractor performance.

Reference: (CPF-RGA 07-16)

2 : Potential Applicability of Schedule Beta

Schedule Beta can be used to benchmark subcontractor performance and aid in the selection of which ones to use, given the specific project parameters, goals, and needs. In practice, Schedule Beta can be implemented similar to the Experience Modification Rate (EMR) of a subcontractor, allowing performance to be measured over a period of years and used in evaluation of the subcontractor.

Reference: (CPF-RGA 07-16)
CPF-RGA 07-16

Key Performance Indicators

Improved schedule; Reduced/improved risk

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