A Delay Liquidated Damages (DLD) Mitigation Model based on Earned Schedule (ES) and Earned Value Management System (EVMS) concepts

A Delay Liquidated Damages (DLD) Mitigation Model based on Earned Schedule (ES) and Earned Value Management System (EVMS) concepts So-Won Choi, Eul-Bum Lee Pages 374-380 (2024 Proceedings of the 41st ISARC, Lille, France, ISBN 978-0-6458322-1-1, ISSN 2413-5844) Abstract: After a slowdown in growth following COVID-19, the global engineering, procurement, and construction (EPC) market has been recovering and experiencing sustained growth since 2021. Nevertheless, the profit margins in the global EPC plant industry continue to decline. This study proposes the earned schedule-delay liquidated damages (ES-DLD) model that integrates the ES concept into the earned value management system (EVMS) to manage project schedules and DLD risks. The model was developed and tested using the project data from the Korean 'P' construction company. The result of applying the model to a single critical path of the Hanoi project was to shorten 12 days, saving $450K compared to the total DLD of $3.6M. Ten days of acceleration were found to be optimal in assessing multiple critical paths, reducing the potential loss by $746K among the total DLD of $3.6M. The model is expected to contribute to lowering DLD risks by accurately predicting project schedule delays through quantitative forecasting during the project execution Keywords: Engineering, procurement, and construction (EPC) Projects; ES-DLD Mitigation Model; Delay Liquidated Damages (DLD); EVMS; Earned Schedule; Critical Path Method; Resource Levelling; Schedule Risk Management; Project Management System DOI: https://doi.org/10.22260/ISARC2024/0049 Download fulltext Download BibTex Download Endnote (RIS) TeX Import to Mendeley