Resource-loaded schedules are often touted as essential tools for project transparency, but in practice, they can expose contractors to risk rather than clarity. They can also arm owners with tools to discredit future claims.
With years of experience advising on EPC and lump sum contracts, we have seen firsthand how poorly executed resource loading can lead to misinterpretation, liability, and strained owner-contractor relationships
Planning to Build or Planning to Claim
It is common that owners obligate Contractors to provide resource-loaded baseline and progress update schedules. A Google search with the help of AI will tell you that resource loading supports the owner as it “provides a clearer picture of project timelines, resource allocation, and potential cost impacts.” But is this true? Especially considering that the contractor has full autonomy over means and methods, providing milestones are achieved. The AACE states that,” schedules that are resource-loaded put a burden on both the contractor and the owner because the owner may have to maintain independent records to confirm the loading. If resource loading is included in the baseline schedule, the reviewer should analyze it, and it must be reasonable.
Generally, contractors must submit a baseline schedule for approval after contract award. This baseline then becomes part of the contractor’s project execution plan and is the standard by which project performance is measured. The schedule should reflect the contractor’s intent to achieve project completion while integrating all contractual scope and requirements. Therefore, if the contractor shows on their progress update that they are unable to achieve the labour force as per the resource-loaded baseline schedule, the owner may consider them to be in delay, or that a delay is forthcoming, and this may not necessarily be the case.
Often, contractors don’t know how to correctly resource load a schedule; therefore, what is noted on the baseline schedule is a mathematical exercise and not a planning exercise. This scenario compounds if a pattern of lower-than-planned labour emerges over several reporting periods. The owner can also use it to demonstrate that the contractor was unable to plan or create credible forecasts.
Previously, I worked on a lump sum utilities project in an advisory capacity where the contractor had been delayed by approximately 2 years due to permitting and design issues (owner responsibilities). After 2 years, there was still no agreed baseline in place, and given the number of delays, the contractor could not accurately forecast a completion date. The owner requested a fully resourced loaded baseline schedule. I advised the contractor that this should not be required for a lump sum project, was not stipulated in the original contract and that providing one might ‘show all our cards’.
Even though the project was delayed, the contractor was still very much in the honeymoon phase and wanted to appease the owner to win future work. The contractor also did not have full awareness of their capabilities. They were unable to identify the resources needed for each activity but could approximate the total number of resources to complete the project. In this case, the contractor chose to divide the total resources over the entire project with a reduction of resources for mobilization and demobilization, effectively showing a linear distribution of resources on the baseline regardless of activities that were being executed.
This was not a genuine reflection of the planned work, but it would pacify the owner that a resource-loaded baseline schedule was submitted. I was concerned that the owner was looking for ammunition to blame the contractor for future delays, given that their resources would never actually match those in the agreed baseline. There were already 2 years of delay attributable to the owner, and it looked like there might be further future delays. Still, these could be classed as concurrent between the owner (design) and contractor (unable to achieve the planned workforce).
A resource-loaded schedule is unlikely to support the owner in any progress assessment, but it might be held against the contractor if progress is not achieved for the “couldn’t get labour” reason, even if you are impacted by other delays.
Consideration should also be given to the software being utilized for the project schedule as this may impact the forensic analysis. Generally, the gold standard is Primavera P6. Microsoft Project Professional is also a popular tool among smaller contractors, but it is limited in capability and often does not stand up well to forensic scrutiny. The contractor (and owner) must also consider the guidelines for resource loading, some of these items are noted below:
Will both hours and quantities be entered?
Will labour and equipment resources be entered?
Will the quantities be entered 1:1 with the quantities in the bid/estimate, or will they be entered summarized by crews?
Will each activity in the schedule contain resources, or will there be a summary/level-of-effort/hammock-type activity containing resources to cover a group of activities?
Is there another system being used to track progress, hours, quantities that needs to be aligned with the schedule resources?
Will resources be aligned with the cost coding used on the project?
I am in no way saying that resource-loaded schedules are not valuable for the owner. The point I am making is that very few contractors know how to do it correctly, and this can open them up to liability if they are working with an astute owner. One example where resource loading is useful for both the owner and contractor is its use on unit price contracts. These projects are generally linear with repetitive activities; therefore, resource loading gives the owner visibility on the contractor’s performance and cost alignment.
I offer the following advice relating to resource loading:
For the Contractor:
Only submit resource loaded schedules if it is in line with your contract type or when contractor is obligated to do so in the contract.
Have an honest awareness of your own capabilities, if you are unable to resource load a schedule correctly, then seek the assistance of someone with expertise. Once a resource loaded schedule is submitted actual resources will be measured against this submission.
For the Owner:
Ask yourself if:
This is necessary,
You understand the resourcing,
You can verify these resources on a regular basis and
What is your plan in the event the resources don’t match the baseline. How will you address this with the contractor?
You may create more work for yourself, particularly if the reports are not understood, it may also cause continued disagreement between the parties.
The contractor has demonstrated that they have a plan to execute the work that includes their intention to resource the project.
In conclusion, a resource-loaded schedule is a key planning tool that requires skilled and knowledgeable input to be created and used accurately. At best, it provides the contractor and owner with a baseline and periodic updates of the progress and cost of the work. At worst, it serves little purpose, only to demonstrate the contractor’s inability to plan, resulting in blame for any delays on the contractor for not providing the required labour force.
- https://www.hsecontractors.com/blog/6-benefits-of-cost-loading-in-your-construction-cpm-schedule-vs-a-regular-baseline-schedule/#:~:text=In%20conclusion%2C%20cost%2Dloading%20schedules,like%20large%20public%2Dprivate%20partnerships.
https://www.procore.com/library/cost-loaded-construction-schedule
https://gobridgit.com/blog/understanding-resource-loading-in-construction/#:~:text=Why%20is%20resource%20loading%20so,over%20(or%20under)%20utilization. - 2. AACE – 78R-13: Original Baseline Schedule Review, Resource Levelled Schedules, pg 19 of 21
- AACE – 78R-13: Original Baseline Schedule Review, Overview, pg 2 of 19
