Takt & CPM Contract Language

Purpose and Scheduling Philosophy

This Specification governs how the Project shall be planned, scheduled, controlled, reported, and recovered. It applies to all Work performed under the Agreement, including engineering, procurement, construction, pre-commissioning, commissioning, testing, startup, and closeout.

The scheduling system is a paired system. Takt Planning is the production system. The Critical Path Method (CPM) is the contractual as-built record. The two systems are designed to complement one another, not compete.

Roles of the Two Systems

Takt is the driver. The Project shall be planned, executed, controlled, and recovered from the Takt plan. Takt is the philosophy, the production engine, and the day-to-day plan that the field works from.
CPM is the record. The CPM Schedule shall be retained as a high-level summary of phases and non-repetitive sequences for contractual, reporting, forecasting, and Owner-coordination purposes. It serves as the as-built schedule of record. The legitimate uses of the CPM Schedule with the Owner are listed in Section 6.2; it shall not be used to drive field production, dictate sequence, allocate crews, or override Takt control.

Order of Precedence Among Schedules

In the event of a conflict between the Takt plans and the CPM Schedule with respect to the production sequece, means, methods, or pacing of the Work, the Takt plans shall govern field execution, and the CPM Schedule shall be updated to reflect the Takt plan. The Guaranteed Substantial Completion Date and Target Substantial Completion Date shall be controlled by the Agreement and may only be adjusted by Change Order.

Golden Rule

The Takt plan leads; CPM follows as an export.

Build and run the Project from Takt. Export to CPM weekly for contractual reporting and legal coverage. Do not invert this relationship.

Definitions

Buffer. A duration of time built into the schedule to absorb normal execution variation, not to absorb design or owner delays. Buffers are placed within wagons, sequences, and phases.

CPM Schedule. A high-level critical-path-method schedule that summarizes phases and non-repetitive sequences. Under this Specification, the CPM Schedule serves as the as-built record of the Project; it does not drive production.

The following definitions apply throughout this Specification. Capitalized terms not defined here have the meaning set forth in the Agreement.

Critical Flow Path. The longest path on the Project that represents the critical flow and dependency between phases with buffers. The path represents the series of Takt trains (Train of Trades) that must flow through the Project to complete it on time. This path does not trade-stack, does not overburden crews, and is never found without buffers. It is composed of a start date, line of balance, phase sequence, buffer, and interdependence tie.

Final Completion. The condition defined as such in the Agreement.

Guaranteed Substantial Completion Date. The date specified in the Agreement by which Substantial Completion must be achieved. Adjusted only by Change Order.

Interdependence Tie. A logical tie between phases that symbolizes a connection.

Intermediate Milestone. A date marking a key accomplishment with significance to the project team and Owner.

Line of Balance (LOB). The relationship between Takt time and the number of zones that defines the speed of trade flow and the rate of throughput for a phase. Where multiple trains exist, the LOB is set by the slowest or pace-setting train.

Macro-Level Takt Plan. The strategic Takt plan that establishes overall flow, rhythm, sequence, and zoning for the Project.

Non-Repetitive Sequence. A sequence of work that has only one zone.

Norm-Level Takt Plan. The detailed production plan derived from the Macro-Level Takt plan, including all work packages, zones, wagons, buffers, and trade flow.

NTP / LNTP. Notice to Proceed and Limited Notice to Proceed, as defined in the Agreement.

One-Process Flow (OPF). A trade working in one zone at a time, in a continuous train, with no parallel chaos and no context-switching beyond what the plan provides.

Path of Critical Flow. Synonymous with Critical Flow Path; preferred term for production analysis and time-impact review.

Phase. A group of a single Takt train or multiple Takt trains that run through the same zones.

Phase Sequence. The repetitive sequence in a phase that represents the workflow duration for the work.

Realized Flow Potential. The measured efficiency of a Takt phase. Required ranges are stated in the body of this Specification.

Recovery Schedule. A schedule prepared by Contractor under Section 5.5 to regain compliance with the Master Schedule.

Substantial Completion Date / Milestone. The date specified for temporary occupancy or beneficial use under the Agreement.

Takt. A production system based on rhythm, flow, leveled work, zoning, buffers, and respect for people. The Takt system is the production driver under this Specification.

Takt Time. The standard rhythm at which a Takt wagon advances from zone to zone.

Takt Train (Train of Trades). A coordinated sequence of trades that move zone-to-zone in rhythm, separated by appropriate distance.

Takt Wagon. A discrete unit of work executed within a single zone in one Takt time.

Trade Burdening. Asking a single trade or crew to cover more areas or tasks simultaneously than is reasonable. Prohibited under this Specification.

Trade Stacking. Forcing multiple trades to work in the same area at the same time. Prohibited under this Specification.

Work Breakdown Structure (WBS). The structural breakdown of the Work. Under this Specification, the WBS is location-based, not deliverable- or phase-based.

Zone. A leveled area of the Project sized so that work can be performed by a Takt wagon in one Takt time.

Article 5 — Commencement of Work, Project Schedule, and Scheduling Obligations

5.1 Commencement of Work

[As provided in the Agreement.]

5.2 Limited Notice to Proceed / Notice to Proceed

[As provided in the Agreement.]

5.3 Project Schedule

Contractor shall perform the Work in accordance with the Project Schedule. The Project Schedule consists of the Takt plans (Macro-level and Norm-level) and the CPM Schedule (as-built record), together with the Milestones, the Target Substantial Completion Date, and the Guaranteed Substantial Completion Date specified in the Agreement.

A. Target Substantial Completion Date

Listed in Attachment ___ is the Target Substantial Completion Date for ___. The Target Substantial Completion Date shall only be adjusted by Change Order as provided under this Agreement.

B. Guaranteed Substantial Completion Date

Contractor shall achieve Substantial Completion of ___ no later than the date specified in Attachment ___ (the “Guaranteed Substantial Completion Date”). The Guaranteed Substantial Completion Date shall only be adjusted by Change Order as provided under this Agreement. [Substantial Completion requirements to be enumerated in Attachment ___.]

C. Final Completion

Contractor shall achieve Final Completion no later than ___ (___) Days after achieving Substantial Completion of ___, or as soon as reasonably practicable thereafter if the Parties mutually agree (both acting reasonably).

5.4 Schedule Submissions

The Project shall be planned and executed from a Takt-based system. Submissions are sequenced as follows:

A. Macro-Level Takt Plan (Initial Master Schedule)

Within fifteen (15) Days after NTP is issued in accordance with Section 5.2B, Contractor shall prepare and submit to Owner for its review the Macro-Level Takt Plan for the Work. The Macro-Level Takt Plan shall identify the Critical Flow Path through the phases of ___ and shall include a reasonable sequence of work and a line of balance with a Realized Flow Potential between thirty percent (30%) and fifty percent (50%). The Macro-Level Takt Plan shall be the initial Master Schedule and shall govern Contractor’s Work until the Norm-Level Takt Plan is reviewed by Owner.

B. Norm-Level Takt Plan (Production Master Schedule)

No later than thirty (30) Days after NTP is issued in accordance with Section 5.2B, Contractor shall submit to Owner for its review the complete Norm-Level Takt Plan, which shall be detailed to include all work packages for the Project (including engineering, procurement, construction, pre-commissioning, commissioning, testing, and startup). Upon Owner’s review, the Norm-Level Takt Plan becomes the Master Schedule and governs all production activities. The Macro-Level Takt Plan continues as the strategic reference.

C. CPM As-Built Schedule

Concurrent with the Norm-Level Takt Plan submission, Contractor shall stand up the CPM Schedule as the contractual as-built record. The CPM Schedule shall be derived from and aligned with the Takt plans through a location-based WBS. The CPM Schedule shall be exported and updated weekly from the Takt plans, and it shall not be used to drive field production. The CPM Schedule shall summarize phases and non-repetitive sequences only and shall comply with the requirements of Section 8.5 of this Specification and Section 8.4 of Attachment A.

D. Software

The CPM Schedule shall be prepared using Primavera Project Planner, Microsoft Project, or Asta. Takt plans shall be prepared and maintained in a Takt-capable production tool consistent with the standards published at taktguide.com. Each Schedule shall be provided to Owner in its native electronic format and in print.

E. The Master Schedule

The Macro-Level Takt Plan, the Norm-Level Takt Plan, and any approved revisions thereto are each referred to as “the Master Schedule” for the period in which they govern. Each shall comply with the requirements of this Section 5.4 and Section 8 of this Specification.

5.3 Project Schedule

If, at any time during the prosecution of the Work, (i) the Monthly Progress Report shows that any phase or sequence on the Critical Flow Path is ten (10) or more Days behind schedule, or Contractor fails to provide a Monthly Progress Report in compliance with the requirements of this Agreement and Owner reasonably determines that any sequence or phase on the Critical Flow Path is ten (10) or more Days behind schedule, and (ii) Contractor or any of its Subcontractors or Sub-subcontractors are in Owner’s reasonable judgment responsible for such delay, Owner may, in addition to any other remedies that it may have under this Agreement, require that Contractor prepare a Recovery Schedule explaining and displaying how it intends to regain compliance with the Master Schedule.

Within ten (10) Business Days after the determination by Owner of the requirement for a Recovery Schedule, Contractor shall prepare the Recovery Schedule and submit it to Owner for its review. The Recovery Schedule shall:

1. Represent Contractor's best judgment as to how it shall regain compliance with the Master Schedule;
2. Be prepared in accordance with current industry best practices and the Takt Production Standards in Section 5 of this Specification;
3. Have a level of detail sufficient for Contractor to direct, manage, and perform the Work;
4. Incorporate a plan that is achievable with current regional and industry resources without unduly burdening crews with trade stacking or excessive acceleration; and
5. Address Recovery first through Takt-based mitigation methods listed in Section 5 of this Specification (Adjust zones; adjust Takt time; adjust work packaging; adjust sequence; level labor; optimize trade processes; etc.) before any consideration of crashing, mandatory overtime, or extended workdays.

The plan shall cover the period reasonably necessary to regain compliance with the Master Schedule. Contractor shall address all comments received from Owner during Owner’s review of the Recovery Schedule and shall provide a written statement describing why any of Owner’s comments or proposed changes were not implemented.

Owner-accepted comments or proposed changes that Contractor implements shall be reflected in the revised Recovery Schedule. The revised Recovery Schedule shall then be the schedule which Contractor shall use in planning, organizing, directing, coordinating, performing, and executing the Work (including all activities of Subcontractors and Sub-subcontractors) to regain compliance with the Master Schedule. The CPM Schedule shall be updated to reflect the revised Recovery Schedule on its next weekly export.

The cost of preparing and executing the Recovery Schedule shall be at Contractor’s sole cost and expense; provided, however, that if the preparation of a Recovery Schedule is combined with a request by Owner for a Change Order and the cost of preparing the Change Order for such request (excluding any costs associated with recovery) exceeds Thirty Thousand U.S. Dollars (U.S. $30,000), then Contractor is entitled to reimbursement for such preparation costs in accordance with Section ___.

Owner’s review and comments regarding the Recovery Schedule shall not relieve Contractor of any obligations for performance of the Work, change the Target Substantial Completion Date or Guaranteed Substantial Completion Date, or be construed to establish the reasonableness of the Recovery Schedule.

Owner Limitations on Recovery Direction

Owner shall not direct a recovery to the Master Schedule that creates any of the following conditions, and Contractor shall not implement a Recovery Schedule that creates any of them:

Fatigue from work conditions;
Workers being forced to work beyond their training;
Workers working with a lack of needed resources;
Workers having a lack of breaks;
Work having a lack of buffers within wagons, sequences, and phases;
Workers being pushed;
Workers going too fast;
Workers working excessive overtime;
Workers having too many areas to work in; or
Trade stacking or trade burdening of any kind.

5.6 Acceleration and Acceleration Schedule

A. Confirmed Acceleration Directive

Even if the Work is otherwise in compliance with the Master Schedule, Owner may, at any time, direct Contractor in writing to advance the Target Substantial Completion Date or the Guaranteed Substantial Completion Date, or both; provided, however, that such directive shall be reasonable, and Contractor shall have agreed in writing that such acceleration is commercially and technically feasible. In the event of such agreement, the directive shall be a “Confirmed Acceleration Directive” and shall be set forth in a Change Order. In no event shall Owner have the right to issue a unilateral acceleration directive requiring Contractor to achieve Substantial Completion of ___ prior to the original Guaranteed Substantial Completion Date specified in this Agreement as of the Contract Date.

In the event of a Confirmed Acceleration Directive, Owner shall pay Contractor for the documented costs plus fees attributable to such acceleration, and appropriate incentives, if any, shall be mutually agreed upon by the Parties with respect to such early proposed completion and set forth in the Change Order. Such costs may include any shift differential, premium, or overtime payments to workers or field supervisors and other employees of Contractor dedicated to the Work on a full-time basis actually incurred over and above Contractor’s normal rates, and overtime charges for Construction Equipment. Any adjustment to the Contract Price or any other Changed Criteria necessitated by such acceleration of the Work shall be implemented by Change Order.

B. Acceleration Schedule

Upon execution of the Change Order, Contractor shall immediately commence and diligently perform the acceleration of the Work and shall prepare an Acceleration Schedule to explain and display how it intends to accelerate the Work and how that acceleration will affect the Critical Flow Path of the Master Schedule. With respect to the Acceleration Schedule:

6. No later than the tenth (10th) Business Day after execution of the Change Order with respect to the Confirmed Acceleration Directive, Contractor shall prepare the Acceleration Schedule and submit it to Owner for its review. The Acceleration Schedule shall represent Contractor's best judgment as to how it shall satisfy the Confirmed Acceleration Directive. It shall be prepared in the Takt formats, with the CPM Schedule exported to reflect the same, and to a level of detail consistent with the Master Schedule.
7. On the tenth (10th) Business Day after execution of the Change Order (or such longer time as specified in writing by Owner), Contractor shall participate in a conference with Owner and any other Person Owner reasonably designates (including Subcontractors and Sub-subcontractors) to review and evaluate the Acceleration Schedule. Any revisions necessary as a result of this review shall be resubmitted as soon as reasonably practicable or as mutually agreed by the Parties.
8. The revised Acceleration Schedule shall then be the schedule which Contractor shall use in planning, organizing, directing, coordinating, performing, and executing that portion of the Work that is affected by such acceleration, with the existing Master Schedule governing all other Work.

Owner’s review of the Acceleration Schedule shall not constitute an independent evaluation or determination by Owner of the workability, feasibility, or reasonableness of that schedule.

C. Limitations

All Acceleration Schedules remain subject to the Owner Limitations on Recovery Direction in Section 5.5 and the prohibited practices listed in Section 6 of this Specification. Acceleration shall be achieved through Takt-based methods (zone adjustment, work packaging, parallel trains supported by additional resources, etc.) before any reliance on crashing, mandatory overtime, or extended workdays.

Article 8 — Project Controls

8.1 General

Contractor shall plan and program the Work and its resource requirements in accordance with the requirements of the Project Schedule. The production engine for the Project is the Takt plan; the CPM Schedule is the contractual as-built record. All planning, control, and reporting under this Article 8 shall reflect that hierarchy.

8.2 Project Controls Plan

Contractor shall produce a detailed Project Controls Plan for review by Owner within sixty (60) Days after Notice to Proceed. Owner will provide comments within ten (10) Business Days. The Project Controls Plan shall detail the procedures to be used by Contractor to maintain scheduling, control, progress measurement, Change Order control, and reporting of all activities required to ensure that Substantial Completion of ___ is achieved by the Guaranteed Substantial Completion Date. The Project Controls Plan shall describe, at minimum:

How the Macro-Level and Norm-Level Takt plans will be created, maintained, and updated;
How the CPM Schedule will be exported from the Takt plans on a weekly basis and maintained as the as-built record;
How the Pull Plans, Six-Week Lookaheads, Weekly Work Plans, and Day Plans cascade from the Takt plans;
How daily Zone Control Walks will be conducted and how field as-built data will flow back into the Takt plans;
How constraints, roadblocks, and delays will be identified, escalated, and resolved using the Problem-Solving Matrix; and
How the 14-point DCMA checklist and the QC requirements of this Specification will be applied to each weekly CPM export.

8.3 Program Reporting — Planning Network

The Work shall be planned, managed, monitored, and controlled by use of an integrated Takt production network derived from a location-based WBS. Detailed scheduling shall be performed in the Takt system. The CPM Schedule shall summarize phases and non-repetitive sequences only and shall not be used to perform detailed scheduling.

8.4 Takt Schedule Requirements

The Takt plans (Macro-Level and Norm-Level) shall together comprise the Master Schedule. The Norm-Level Takt Plan shall:

9. Include separate activities for each significant portion of the Work, including activities for mobilization, engineering, procurement, construction, commissioning, startup, testing, closeout, and demobilization;
10. Show the duration, start dates, and finish dates for each activity, and where applicable for each Takt wagon;
11. Show activity description and responsible Person (i.e., Contractor, Subcontractor, or Sub-subcontractor) for each activity and wagon;
12. Reflect logical relationships between activities with reasonable durations, and show an uninterrupted trade flow from LNTP through NTP, to Substantial Completion of ___ and Final Completion of ___;
13. Be consistent with the Project Schedule, including LNTP, NTP, and the Guaranteed Substantial Completion Date for ___;
14. Be based on a location-based WBS, with the Project broken into properly leveled zones;
15. Have zones proportioned according to the proper phase of the Project and within the Macro or Norm level range as measured by Realized Flow Potential;
16. Detail every repetitive sequence in a Takt phase with a stagger, trade flow, and staggered finish;
17. Include appropriate buffers within each Takt phase to manage the risks and anticipated execution variation for that phase;
18. Comply with the Efficiency, Value, and Stability parametric;
19. Represent Contractor's best judgment as to how it shall complete the Work in compliance with the Project Schedule; and
20. Comply with all key requirements published at taktguide.com and with the Takt Production Standards in Section 5 of this Specification.

8.5 CPM As-Built Schedule Requirements

Contractor shall produce a CPM Schedule in accordance with Section 5.4 of the Agreement. The CPM Schedule serves as the contractual as-built record and will be the contractual reference schedule for the duration of the Project unless revised by Change Order approved by Owner. The CPM Schedule shall be the Project’s reporting network detailing phases to be completed in a logical sequence, summarized only to the level of Takt phases and non-repetitive sequences (unless the CPM schedule replicates the Takt phase exactly), in order to provide a Critical Flow Path the Project team can review.

The identification of key activities and restraints, interdependencies, interrelationships, and resources required to control the Project shall be done in the Takt control system and Takt layouts. The CPM Schedule shall:

21. Be consistent with the Project Schedule, including LNTP, NTP, and the Guaranteed Substantial Completion Date for ___;
22. Be exported and updated weekly from the current Takt plans, with each export complying with the 14-point DCMA checklist and the QC standards in this Specification;
23. Be a detailed graphic representation of all significant aspects of the Work showing Contractor's plans for performance of the Work at the phase and non-repetitive sequence level;
24. Comply with current industry best practices per taktguide.com;
25. Summarize at the level of Takt phases and non-repetitive sequences sufficient for Owner to monitor the progress of the Work;
26. Indicate all Milestones to be used for progress payments. The initial CPM Schedule shall reflect the dates on the original Milestones progress payment schedule. Thereafter, at least once each quarter, Milestones shall be re-scheduled in the CPM Schedule, if necessary, to reflect current Schedule progress and updated projected Milestone dates. New Change Order Milestones, if any, shall be incorporated into the CPM Schedule at the quarterly update;
27. Include start dates, intermediate milestones, and finish milestones;
28. Include phase summaries, sequence summaries within phases, or replicate the Takt plans for each phase, in addition to non-repetitive sequences that tie into the overall network;
29. Enable the team to track and monitor the Critical Flow Path from the start of the Project to the end;
30. Trigger the creation of a Recovery Schedule per Section 5.5 if overall project float is behind ten (10) days or more, or if any phase or non-repetitive sequence is behind ten (10) days or more;
31. Identify Critical Flow Path work for which additional time and cost are to be provided for delays not within Contractor's responsibility, as listed in the Agreement; and
32. Be created with a Location-Based WBS, never a deliverable-based or phase-based WBS.
32. Be created with a Location-Based WBS, never a deliverable-based or phase-based WBS.

The CPM Schedule shall not be used to drive production, dictate sequence, or override the Takt plans. The Section 6 prohibitions of this Specification apply to all CPM activity.

8.6 Progress Measurement

Contractor shall, until Substantial Completion of ___, develop and maintain systems and procedures for the measurement of progress against the Master Schedule (Takt plans). The Contractor shall measure progress based on actual Work completed in zones and wagons, captured through daily Zone Control Walks, and reflected in the weekly Takt update and weekly CPM export.

8.7 Meetings; Weekly Progress Meetings; Minutes

Periodic meetings shall be held as required for the purpose of keeping Owner fully informed of all aspects of the Work, and for reviewing execution plans, technical and financial concerns, progress status and scheduling of the Work, remedial actions, quality concerns, safety concerns, interfaces, and Owner and Contractor plans for resolving issues.

Commencing with LNTP, weekly progress meetings will be held between Owner’s Representative or his designee, and any other Persons designated by Owner, and Contractor’s Key Personnel at the appropriate Stage 3 Site location, or as agreed by the Parties, Owner or Contractor home office. Owner and Contractor shall agree on dates, standardized reports, and agenda for such meetings well in advance as the Work demands.

Minutes of all progress-related meetings (including weekly and monthly progress meetings) shall be prepared by Contractor (unless otherwise agreed by Owner) and sent to Owner in electronic format within five (5) Business Days following the meeting. The contents of the minutes shall be subject to review at the next weekly progress meeting. The format for the preparation of the minutes shall be mutually agreed at the first meeting. Minutes shall, at a minimum, include decisions made, action items with responsibilities and dates, and the results of assigned actions outlined in the previous minutes, and shall be distributed to all attendees, Owner Representative, and in accordance with the document distribution matrix to be developed during the Project execution.

8.8 Monthly Progress Reports

Commencing with LNTP, Contractor shall provide a written Monthly Progress Report to Owner no later than ten (10) Days after the end of each Month. The Monthly Progress Report shall cover activities up through the preceding Month and shall be provided in MS Word format. Contractor shall provide Owner with the number of copies of such reports and shall arrange for the distribution thereof as Owner may reasonably request. Commencing with LNTP, a progress meeting shall be held each Month by Contractor at the Stage 3 Site or at an alternate site mutually agreeable to Owner and Contractor, at a mutually agreeable time, for the purpose of reviewing the Monthly Progress Report.

The Monthly Progress Report shall include, at a minimum:

33. Narrative summary of progress;
34. A description, as compared with the Project Schedule (Master Schedule and CPM as-built export), of engineering, procurement, construction, commissioning, and testing status, including actual percentage complete versus planned percentage complete, document status, significant activities accomplished during the reporting Month, significant activities planned for the current Month, and current estimated dates on which Substantial Completion of ___ shall be achieved;
35. Summary of Milestones planned and actually completed during the covered Month;
36. Change Orders pending and approved;
37. Description of any problems (including any occurrence of which Contractor is aware that could reasonably be expected to increase the cost of the Project or delay Substantial Completion beyond the Substantial Completion Date) and a summary of plans for resolution;
38. A description of the status of the Contractor's Permits, including the dates of Contractor's applications submitted or to be submitted and the anticipated dates of actions by Governmental Instrumentalities with respect to such Permits;
39. A description of reportable environmental, health, and safety incidents as well as any unplanned related impacts, events, accidents, reported near misses, or issues that occurred during the reporting period;
40. A description of all safety and security issues;
41. A description of quality assurance activities;
42. Progress photos showing representative portions of the Stage 3 Site and the Work, including completed Milestones, with a description of the photograph and the date taken; and
43. All applicable information reasonably required by ___ and other Governmental Instrumentalities as identified in Section 9.0.

8.9 Quarterly Executive Progress Reports

Commencing at LNTP, within fifteen (15) Days after the end of each quarter, Contractor shall provide Owner an Executive Progress Report suitable for presentation to Owner’s executive management and shareholders, in a form reasonably acceptable to Owner. These reports will be presented to Owner and discussed at a progress meeting to be held between Contractor Key Personnel and Owner Representative or his designee, and any other Persons designated by Owner, every three (3) Months. The Executive Progress Report shall include:

8.10 Contractor Deliverables

[As provided in the Agreement.]

Takt Production Standards

All planning and execution under this Specification shall conform to the Takt Production Standards in this Section. These standards apply to the Macro-Level Takt Plan, the Norm-Level Takt Plan, all Pull Plans, Lookaheads, Weekly Work Plans, Day Plans, and any Recovery or Acceleration Schedule.

5.1 Takt Rules of Flow (Production Planning)

Contractor shall plan and operate every phase in accordance with the following Rules of Flow:

Always maintain diagonal trade flow in a time-by-location format.
Do not irresponsibly dissolve logic ties — use real data and adjust ties.
Do not shorten durations without permission. Enable shorter in-zone cycle time through advanced design, pre-fabrication, delivery, logistics, and preparation.
Do not trade-stack or trade-burden.
Always work in One-Process Flow (OPF).
Always pre-kit work — do not start work unless it can be finished. Drawings, materials, tools, labor, information, and access must be confirmed in place before release.
Always use buffers in the production plan.
Always have a workable backlog for swing capacity.
Never fix and freeze the plan to align with a baseline.
Always analyze the Path of Critical Flow, not a critical path. The Path of Critical Flow includes activity, duration, logic tie, sequence, line of balance, and buffer.
Always work the trades in a train going the same speed and an appropriate distance apart.
Flow by fixing problems — do not push trades to work faster.
Always align Work-In-Progress (WIP) to capacity.

5.2 Takt Controls

In addition to the Rules of Flow, Contractor shall implement the following Takt Controls:

48. The entire Project shall be broken into properly leveled zones.
49. The entire Project shall have zones proportioned according to the proper phase and within the Macro or Norm level range as measured by Realized Flow Potential.
50. All repetitive sequences shall be detailed in a Takt phase with a stagger, trade flow, and staggered finish.
51. Each Takt phase shall have appropriate buffers to cover and manage the risks and anticipated delays for the phase.
52. Takt phases shall comply with the Efficiency, Value, and Stability parametric.
53. Takt phases shall be monitored daily for constraints, and constraints shall be adjusted and reflected on the Takt plan to keep trades:
53. Takt phases shall be monitored daily for constraints, and constraints shall be adjusted and reflected on the Takt plan to keep trades:

Working the SAME long-term plan;
Going the SAME direction;
Moving in the SAME sequence;
Providing the SAME amount of value (energy or effort) to each zone;
Doing the SAME amount of work or value in each zone;
Going the SAME speed at the SAME distance apart;
Receiving all needed resources to perform the work on time;
Being on the SAME team;
Working toward the SAME short-interval plan;
Giving the SAME level of respect and input as general; and
Flowing without stops and restarts.

5.3 Constraint and Slow-Progress Response Hierarchy

If constraints are slowing the progress of the Project, the following solutions shall be considered before adding labor, money, or materials above needed levels. They shall be considered in order:

54. Adjust Takt zones;
55. Adjust Takt time;
56. Adjust work packaging (how work is grouped by zone);
57. Adjust the work sequence;
58. Level labor counts and slightly adjust crew composition;
59. Optimize trade processes to be efficient;
60. Optimize zone configuration for ideal flow;
61. Adjust the number of zones per Little's Law;
62. Increase labor productivity by increasing capability;
63. Reduce variation;
64. Align the plan to focus more on one-process flow;
65. Improve standard work; and
66. Adjust the site configuration.

5.4 Train and Material Discipline

If constraints are slowing the progress of the Project, the following solutions shall be considered before adding labor, money, or materials above needed levels. They shall be considered in order:

5.4 Train and Material Discipline

Delays shall be considered when (i) added variation is experienced on the Project due to Owner changes and delays, or (ii) the project team is overburdened due to Owner changes and delays. Delays shall be absorbed using the following methods if possible. If they are not possible, an extension shall be considered by Owner:

70. Stop the Takt phase and swing to workable backlog;
71. Stop the Takt phase, wait, and prepare;
72. Pull the delayed work out of the Takt plan and onto a separate Pull Plan or scrum board;
73. Pull the car out of the Takt train and onto its own Takt time;
74. Recover within the wagon or boxcar;
75. Swarm the delay with swing capacity; or
76. Delay an individual train (carefully, to avoid trade stacking).

5.6 Norm-Level Takt Plan — Prohibited Defaults

The Norm-Level Takt Plan shall not:

CPM As-Built Standards

The CPM Schedule serves the Project as a contractual as-built record. It is generated by export from the Takt plans and shall conform to the affirmative requirements and prohibitions in this Section.

6.1 Affirmative Requirements

In addition to the requirements of Section 8.5, the CPM Schedule shall:

79. Include start dates, intermediate milestones, and finish milestones;
80. Include phase summaries, sequence summaries within phases, or replicate the Takt plans for each phase, in addition to non-repetitive sequences that tie into the overall network;
81. Enable the team to track and monitor the Critical Flow Path from the start of the Project to the end;
82. Trigger the creation of a Recovery Schedule when overall project float is behind ten (10) Days or more, or when any phase or non-repetitive sequence is behind ten (10) Days or more;
83. Identify on the Critical Flow Path the work for which additional time and cost are to be provided for delays not within Contractor's responsibility, as listed in the Agreement; and
84. Be created with a Location-Based WBS.

6.2 Legitimate Uses of CPM with the Owner

The CPM Schedule remains a reasonable Owner-facing administrative, reporting, forecasting, and coordination tool. It is not the system that drives field production. The thread tying the legitimate uses below together is that each one is about communicating, forecasting, documenting, or coordinating with the Owner — not about driving the day-to-day production of the Work. The uses listed in this Section 6.2 are permitted; nothing in this Section 6.2 shall be construed to authorize any practice prohibited under Section 6.3 or Section 6.4.

A. Communication and Transparency with the Owner

1. Show slippage against agreed-upon milestones. The CPM Schedule may be used to surface variance from the baseline as a transparency tool. It shall not be used as a blame instrument or a recovery trigger separate from the Section 5.5 process.
2. Communicate major milestones to the Owner. Substantial Completion, Owner move-in, FF&E start, commissioning, and other Owner-relevant dates may be reported in CPM format, which is a format Owners are typically already trained to read.
3. Compare actuals to baseline at the milestone level. High-level reporting against the contractual baseline is a permitted use, provided the comparison stays at the milestone level and is not used to discipline the field or to override the Takt plan.

B. Forecasting and Analysis

C. Contract and Compliance

6. Satisfy contractual reporting requirements. Where the Agreement requires a CPM-format schedule and periodic updates, the CPM Schedule may be used to meet those obligations.
7. Establish and document the contractual completion date and interim milestones. These are the Owner-facing time commitments and may be carried in CPM format if the Agreement so requires.
8. Document delay impacts. Time Impact Analyses and fragnets prepared in CPM format are an appropriate vehicle for negotiating Change Orders tied to delay events, in accordance with Section 9 of this Specification.

D. Coordination with Owner-Furnished Items and Owner Deliverables

9. Coordinate Owner-furnished items and Owner deliverables. Permits, design releases, Owner-procured equipment, third-party inspections, and other Owner responsibilities may be tracked against the construction sequence in the CPM Schedule.
10. Document as-built long-lead procurement. Equipment, materials, and systems with extended lead times may be recorded against actual delivery dates in the CPM Schedule as a documentation and reporting record. The CPM Schedule shall not be used as a forward-driving coordination tool for procurement; procurement coordination remains a Takt function.
11. Support cash flow and draw schedule planning. Time-phased cost loading on the CPM Schedule is a permitted basis for projecting Owner draws and managing Project cash flow.

E. Documentation

The Boundary

CPM serves the Owner relationship; the production system serves the build.

The moment the CPM Schedule begins to dictate early-start dates to the trades, allocate crews, drive crashing decisions, or override the field plan, it has crossed back into the territory governed by Section 6.3 and Section 6.4. Field production shall be planned and executed in a flow-based system (Takt and Last Planner®). The CPM Schedule serves the Owner relationship and supports the uses in this Section 6.2.

6.3 Prohibited Practices in the CPM Schedule

In the CPM Schedule, Contractor and Owner shall not:

85. Lock in the sequence to be followed by Contractor prescriptively;
86. Restrict Contractor from using phase buffers to control the Work and absorb delays;
87. Restrict the use of Takt planning or Takt control;
88. Create or identify a critical path that runs through detailed activities for the purpose of restricting Contractor from an approved Time Impact Analysis;
89. Build the schedule with a deliverable-based or phase-based WBS (the schedule shall use a Location-Based WBS); or
90. Force trade stacking, trade burdening, or unreasonable acceleration in the form of overtime or extended workdays. In short, the schedule shall not push people for the recovery of the schedule.

6.4 What the Schedule Will Not Do — General Prohibitions

In addition to the prohibitions in Section 6.3, the following practices are prohibited under any schedule developed or maintained for this Project. These prohibitions protect flow, quality, safety, budget, and the people executing the Work.

1. Demand Work-in-Progress that exceeds capacity. Releasing more work than the available crews, materials, supervision, and space can absorb causes overload, dropped quality, and safety risk. WIP shall be aligned to real capacity, with a buffer.
2. Trade-stack. Trade stacking — forcing multiple trades to work in the same area at the same time — creates congestion, safety hazards, interference between crews, and lost productivity. It is the equivalent of squeezing five people into a one-person space and is prohibited.
3. Trade-burden. Trade burdening — asking a single trade or crew to cover more areas or tasks simultaneously than is reasonable — stretches teams thin, drives travel time, increases variability and defects, and produces burnout. Scope shall be matched to capacity, not to the calendar.
4. Release work without a full kit. Activities shall not start before drawings, materials, tools, labor, information, and access are confirmed in place. Starting without a full kit guarantees mid-task stoppages and cascading downstream delays.
5. Crash activities to recover the schedule. Crashing — accelerating critical-path activities by piling on labor, equipment, or overtime — typically increases cost, reduces quality, raises safety exposure, and triggers a downward productivity spiral. Recovery shall be achieved through planning, not through bodies.
6. Strip out buffers or treat float as expendable. Variation is inevitable. Removing buffers makes the schedule brittle and turns ordinary issues into crises. Protective buffers shall be maintained and used deliberately, not erased to fabricate a tighter critical path.
7. Build the schedule in a silo. Schedules created without input from the superintendents, foremen, and trades who will execute the Work produce plans the field cannot follow. The people who build the Project shall participate in planning the Project.
8. Use the schedule as a weapon. The schedule shall not be wielded to pressure, blame, threaten, or accuse contractors and trades. It is a coordination tool, not a legal cudgel.
9. Open more work fronts than the team can supervise. Sprawl across too many active areas spreads supervision thin, fragments focus (focus drops to approximately 60% with three areas and approximately 25% with five), and prevents work from being finished cleanly.
10. Force constant multitasking and context switching. Pulling crews from area to area destroys momentum and costs 15–45 minutes per switch per worker. Sequences shall be planned for one-process flow, not parallel chaos.
11. Lock the baseline and refuse to adapt. A baseline that cannot be updated as field conditions change becomes a liability rather than a guide. The plan shall be updated when reality requires it; rigidity is not the same as discipline.
12. Default to “add more labor” as the first response to slippage. Adding crew without planning, training, onboarding, and capacity analysis usually slows the Project further. Capacity shall be increased intentionally and proactively — never as a reflex.
13. Push materials onsite ahead of need. Bringing materials too early creates excess inventory, drives motion and transportation waste, damages stored product, and starts a downward productivity spiral. Materials shall be pulled to align with installation.
14. Blame people for system failures. When projects struggle under CPM, the root cause is usually structural, not individual. The system shall be investigated before people are reassigned, replaced, or disciplined.

6.5 Quality Control of the CPM Export

Each weekly export from the Takt plans into the CPM Schedule shall comply with the 14-point DCMA checklist and the QC standards in this Specification. The CPM export, while not used for production, shall be defensible as the Project’s as-built schedule for contractual purposes.

The Deliverable Cycle and Update Cycle

7.1 Sequence of Deliverables

Always start with the Macro-Level Takt Plan. The Takt plan defines the overall flow, rhythm, and sequence of the Project. The CPM WBS shall be created to match and align with this Takt structure. The deliverable cycle integrates with the Last Planner® System as follows:

91. Macro-Level Takt Plan — establishes overall strategy and flow;
92. Pull Plan Milestones — break macro phases into detail;
93. Norm-Level Takt Plan — becomes the production plan for each phase;
94. Six-Week Lookahead — filters work for readiness and removes roadblocks;
95. Weekly Work Plan — defines commitments and handoffs; and
96. Day Plans — guide daily work in the field.

At each step, information flows back into the Takt plan, which is then exported weekly into the CPM Schedule for record-keeping.

7.2 The Update Cycle

Right Way

Start with the Macro-Level Takt Plan → Pull Plan to milestones → build the Norm-Level production plan → filter Lookaheads → create Weekly and Daily Work Plans. Daily Zone Control Walks ensure accountability. Weekly as-builts update the Takt plan. The CPM Schedule is exported weekly for contractual record.

Wrong Way (Prohibited)

Build the CPM Schedule first → Pull Plan from CPM → filter Lookahead from CPM → trades create weekly work plans against CPM → update CPM again. This sequence is prohibited under this Specification because it creates chaos and redundancy and inverts the proper relationship between the systems.

7.3 Field Capture and Roadblock Resolution

97. Daily Zone Control Walks. Superintendents and foremen walk zones, prepare ahead, and finish behind, capturing as-built progress.
98. Weekly Production Plan Update. Weekly as-builts update the Norm-Level Takt Plan.
99. Problem-Solving Matrix. Roadblocks shall be addressed systematically through the Problem-Solving Matrix.
100. Weekly CPM Export. Each week, the updated Takt plan is exported to CPM for contractual record.

Audience and Visibility Tiers

Visibility into the scheduling system shall be tiered as follows. This is for the protection of all parties and to ensure each audience receives information at the appropriate level of detail.

Owners

Conservative posture — receive the CPM Schedule and a written narrative.
Trustworthy and engaged posture — additionally receive the Macro-Level Takt Plan.

Superintendents and Trade Partners

Receive the full cascade: Macro Plan → Pull Plans → Lookaheads → Weekly Work Plans → Day Plans.

Field Teams

Work daily from Pull Plans, Lookaheads, and Weekly Work Plans, supported by Takt visuals.

Project Delays and Time Impact Analysis

Delays shall be processed through the Takt plans first; the CPM Schedule is updated to reflect the determination.

9.1 Process for Showing or Submitting a Delay

Start date;
Current date;
Substantial Completion date;
Phase sequences;
Phase buffers;
The phase Line of Balance; and
Interdependence ties.

102. Identify the impact of the delay on the Project by showing it in the schedule without trade stacking or trade burdening.
103. Determine whether the delay can be absorbed using the methods listed in Section 5.5 (Stop and swing; Stop, wait, and prepare; Pull onto separate Pull Plan or scrum; Pull car onto its own Takt time; Recover within wagon; Swarm with swing capacity; Carefully delay an individual train).
104. Determine whether the team can stack sequences and procure additional resources to complete the work without violating the Section 5 and Section 6 standards.
105. If all reasonable absorption strategies have been exhausted, prepare a Time Impact Analysis ('TIA') with the following components:

Summary of the impact;
Printout of the entire schedule (Takt plan and CPM export);
Window showing the impact and how it affects the end date;
Mitigation methods the project team has attempted;
Analysis of the Critical Flow Path;
Description of requested time and cost; and
List of all other known options to mitigate the problem.

9.2 Time Impact Analysis Review

The TIA review shall show the impact and the Critical Flow Path after the impact. Each of the following reviews shall be done to verify the Critical Flow Path past the delay:

106. A review of the dependence of the delay on successor activities, work packages, and wagons;
107. A review of the Line of Balance for all phases. The Realized Flow Potential percentage for all phases must be between forty-five percent (45%) and one hundred percent (100%) for the path to be considered optimized;
108. A review of all base sequences in all phases to ensure they have been coordinated, parallelized, and optimized for accurate durations;
109. A review of all phase buffer durations to ensure there is a logical relationship between the anticipated normal risks of the phase and the number of buffers for that phase. If there are more buffers than needed, they shall be removed for the path to be considered critical; and
110. If the connection between the start (or NTP) milestones, non-repetitive sequences, lines of balance, phase sequences, buffers, and interdependence ties to the Substantial Completion Milestone is confirmed reasonable and within the specified parameters, the delay shall be considered reasonable.

Project Scheduling Overview

The following narrative summarizes how the paired system operates:

Step 1 — CPM Manages Only Phases and Sequences

Where CPM is a contract requirement that cannot be negotiated, CPM is treated as a Level 2 schedule that summarizes phases and sequences only. CPM was originally designed to operate at this high level — to track the critical path through phases and sequences — and not to perform detailed production planning. The CPM may summarize phases or summarize sequences governed by Takt on a Takt rhythm.

Step 2 — CPM Summary Discipline

Phase and sequence summaries in the CPM Schedule shall include buffers, respect the Line of Balance of the phase, and maintain a rhythm that supports trade flow (or expressly confirm separate resources for any necessary stacking of activities). The CPM Schedule shall not show Level 3, 4, or 5 detail; it shall show only the summaries.

Step 3 — Takt Carries the Detail

The Takt plan shall show the sequences, zones, buffers, and trade flow within each phase, or shall represent a single sequence itself. The Project is built and run from Takt and is summarized in CPM (where required by contract). The Critical Flow Path identifies which phases and individual sequences are critical to the Project.

System Summary

Build and run the Project from the Takt plans. Export weekly into CPM for contractual reporting. Recover through Takt-based methods, never through pushing people. Treat CPM as the as-built record of the work, not the conductor of it.

Compliance Checklist

The following checklist summarizes the Contractor’s recurring scheduling obligations under this Specification. It is intended for use at submission, monthly review, and audit.

Trigger / Cadence	Required Action
Within 15 Days of NTP	Macro-Level Takt Plan submitted; LOB at Realized Flow Potential of 30–50%; Critical Flow Path identified.
Within 30 Days of NTP	Norm-Level Takt Plan submitted; all work packages included; Takt phases comply with Efficiency, Value, Stability parametric.
Within 60 Days of NTP	Project Controls Plan submitted, including Takt-to-CPM export procedure and DCMA QC procedure.
Daily	Zone Control Walks; constraints adjusted; trades flowing in train at same speed and distance apart; WIP aligned to capacity.
Weekly	Norm-Level Takt Plan updated from as-builts; CPM Schedule exported and DCMA-checked; Weekly Work Plan committed.
Monthly	Monthly Progress Report delivered within 10 Days of month end; progress measured from actual completed work in zones.
Quarterly	Executive Progress Report delivered within 15 Days of quarter end; CPM Milestones re-scheduled if necessary.
On Slippage ≥ 10 Days	Recovery Schedule prepared within 10 Business Days; recovery achieved through Takt-based methods first.
On Confirmed Acceleration Directive	Acceleration Schedule prepared within 10 Business Days; Takt-based acceleration before any reliance on overtime.
On Delay Claim	Time Impact Analysis prepared per Section 9; Critical Flow Path re-verified; LOB and buffers reviewed.

Closing Provisions

This Specification is to be read together with the Agreement. To the extent of any conflict between this Specification and a body provision of the Agreement, the body provision of the Agreement shall control unless this Specification expressly states otherwise. References to taktguide.com and to the Last Planner® System are to the public methodology of those systems as in effect on the Contract Date.

Source basis. Practices and definitions in Sections 5 and 6 are derived from the Takt Production System; from the prohibited-practices list adapted from Jason Schroeder, The 10 Myths of CPM: How the Critical Path Method Systematizes Disrespect for People (2025); from the companion guidance on the legitimate Owner-facing uses of CPM (which preserves CPM as a reporting, forecasting, and coordination tool while the Project is built from a flow-based plan); and from the Takt Rules of Flow for Production Planning published by Elevate Construction.