A year of pandemic has taught contractors to take nothing for granted

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For federal contractors, the pandemic has shown just how far off course normal procedures and government relations can get pushed. Few conditions can wreck a contract and a performance rating more than a project that gets too far off schedule. For some post-pandemic world advice for preventing that, Federal Drive with Tom Temin turned to Jenner & Block partner Matt Haws.

Interview transcript:

Tom Temin: Mr. Haws, good to have you on.

Matt Haws: Thanks, Tom.

Tom Temin: So you’ve written extensively about how to keep projects on schedule because schedules do slip almost axiomatically in federal contracts. Very often, it’s because of change orders by the government. But there’s a lot contractors can do to keep things under control. Tell us what some of them are.

Matt Haws: Yeah, so you’re right. Government contracting is hard. The government is typically buying some of the most complicated technologies, huge supercomputers, nuclear submarines, fighter jets. And so project management and scheduling requires a lot more than a pen and paper. Certainly, this has been true in recent times, you’ve got very big contracts, and you’ve got huge change events in the world, like the COVID-19 pandemic. So one of the things that contractors do is they use robust scheduling software to track each individual item of work, how long it’s going to take, and its relationship to other items of work. And so in our articles, we talk a lot about that software and how it can be used to efficiently manage the contract, but also to identify changes that may happen and to evaluate the effect of those changes.

Tom Temin: Yes, so these software, so often, these types of packages can create a lot of work, just to keep them informed with the information that people get. So how do you make sure that everybody in the organization is using it in the right way, because software is never quite what it’s cracked up to be?

Matt Haws: Absolutely. I’m a lawyer, Tom, and so this software requires expertise and knowledge, certainly well beyond what I have. And most of your big contractors have scheduling experts who spend their entire time building these project schedules and managing these project schedules. It takes real expertise. And we often work with forensic schedule consultants in the private sector, who can help companies with that scheduling software. But there is a lot of effort certainly upfront to build a robust project schedule using the scheduling software. So a lot of your listeners are going to be familiar with at least the output of this scheduling software, what’s called a Gantt chart. That’s that chart that has a chronology going from left to right, month by month, and year by year and then different activities from top to bottom. And each activity gets a block, typically a colored rectangle, that shows how much time that activity is planned to take. And then each of those blocks are connected to other blocks based on the logical sequence of that work. So if I was going to build a peanut butter and jelly sandwich, pretty simple task, not a lot of steps. But I know that some of those steps have to happen before others, I have to buy the bread before I can start making the sandwich. And if I don’t, I’m not going to get a sandwich. Other tasks could be more flexible, I can take out the knife before I take out the peanut butter. All of that, of course, is much more complicated when you’re building an aircraft or a nuclear submarine. But it’s the same basic process of identifying each discrete task, and linking it to other tasks. That creates, as you said, a really, really complicated robust software program with a lot of data in it. And that data can provide real tools for government contractors and the government to understand what’s planned to happen on the project and how it changed to one part of it, could affect other portions of the project, and ultimately, the entire project, the duration of the project, what we call the critical path, which is the longest sequence of related events.

Tom Temin: We’re speaking with Matt Haws, he’s a partner at the law firm Jenner & Block. And can the data and the output of these types of programs tell you why something got off track so that you can at least have a case for fixing it?

Matt Haws: Sure. So I mentioned those linkages within the software program. And one of the powerful uses of those linkages is for when things go off track. When you have a change on a contract. Maybe the government decides that instead of the old radar, they want a new radar. And that radar requires a different installation process on, say the ship, you can actually go in and create a new activity within your schedule. Doing that will then require you to think about the linkages of that change. So that different radar system that requires a different set of bolts will then connect to your procurement of those bolts. And using the robust connections within a project scheduling software, you can start to figure out the effect of those changes. You can certainly do this backwards as well, if you know that an expected duration of a task took longer, you can use those linkages to go back and figure out what changed from your original expectation, or what we call the baseline schedule.

Tom Temin: Well, the question then arises, how often or how possible is it for the government and the contractor to be working off the same base of data, if you will, the same type of program, so that they can collaborate when requirements change, or something happens that could affect the schedule, because it’s not just the contractors issue alone.

Matt Haws: That’s right, we’re all ultimately on the same team. And we have the same goal, which is to produce these complicated systems in a timely and reasonable economical manner. And so it is best when the government and the contractor are working closely throughout the entire process. And looking at the same schedule. From the very beginning. I was involved in one matter where the government and the contractor on a very complicated construction project actually sat down, you could do this in the pre-pandemic days, they sat down in a conference room for a week. And they took this huge project schedule, hundreds and hundreds of pages, and they went through it page by page together to make sure that everyone was on the same page about what was going to be done and when. And that really allowed for a baseline level of understanding and communication on that project. Of course, things are going to happen on pretty much every complicated government contract. You mentioned, the government may want to make a change, they have that right under government contracts. But there may be unexpected events, maybe the installation method that the government had prescribed doesn’t actually work, because the ship, for example, was in a different port around the world and something needed to be fixed. And that port worker fixed it in a different way than we would here in America. And no one ever wrote that down. Well, that’s an unexpected condition that also needs to be identified. And then of course, most recently, we’ve seen with COVID-19, a whole bunch of changes to the planned performance on the schedule. That baseline schedule that we’ve all walked through together, has now been disrupted by the fact that we can no longer work in person, the same way that we used to. Our supply chains are being disrupted. So all of that needs to be communicated between the government and the contractor. And one way to do that is through project schedule updates. A lot of contracts require project schedule updates periodically. And those are a great opportunity to capture all of these change activities that we discussed, and to communicate them clearly so that the government and the contractor can be on the same page and can address these changes.

Tom Temin: And it sounds like this type of information could protect the contractor, should the government decide to get nasty about changes, which they sometimes do also, but at least there would be evidence as to “well, you did this and we did this and here’s what happened,” and could maybe hit off litigation or protect you in the case of litigation?

Matt Haws: Absolutely. Unfortunately, things don’t always work out in the course of discussions on the project. And sometimes the government and the contractor can’t agree about what happened. And creating this sort of a record can really unpack the complexity of that change on the contract, and make it clear how a seemingly simple event, maybe the fact that a part could not get from a distributor, due to the COVID-19 pandemic had a ripple effect through the schedule. And because it’s hard to do that in our head, using the scheduling software with all of its linkages can demonstrate how the assumption that task B would take 10 days, all of a sudden became 60 days, because a required task before that event never occurred.

Tom Temin: If I’m Huntington Ingalls shipbuilding yard, or I’m Lockheed or I’m Northrop Grumman, I probably have that kind of scheduling software. I probably had something similar in the 1930s for that matter, but what about the small contractors? Can they get themselves to this capability at reasonable cost and effort?

Matt Haws: So there is a certain amount of scale required for some of the project management software. But the same concepts translate down to much smaller contractors, and much smaller projects. Clearly identifying upfront what tasks you expect to perform, what duration you expect those tasks to take, and what requirements there are, before you can do that task can accomplish a lot of the same goal of making clear the expectations of the government and of the contractor about what each side is going to do and when and allowing you to identify when something is different than what you expected.

Tom Temin: Yeah, there’s probably a cloud version you can get for a cheap few dollars a month for something like this, I imagine.

Matt Haws: Everything is moving towards the cloud and that’ll help all contractors do this much more effectively and cheaply. One of the challenges over the years has just been the size of these scheduling files with all of that data we’ve discussed. And they’ve traditionally taken up so much storage capability that contractors have had to overwrite prior versions in order to not overwhelm their computers. And so as data storage capacity changes, we’re definitely seeing improvements in the ability to maintain native versions of these schedules, make them more accessible to other people, subcontractors and the government and keep everybody on the same page.

Tom Temin: Matt Haws is a partner at the law firm Jenner & Block. Thanks so much for joining me.

Matt Haws: It was a real pleasure, Tom.

Tom Temin: We’ll post this interview at FederalNewsNetwork.com/FederalDrive. Hear the Federal Drive on your schedule. Subscribe at Apple Podcasts or wherever you get your shows.

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