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 AACE® International Recommended Practice No. 27R-03

SCHEDULE CLASSIFICATION SYSTEM

TCM Framework: 7.2 – Schedule Planning and Development

. Rev. November 12, 2010

Note: As AACE International Recommended Practices evolve over time, please refer to www.aacei.org for the latest
revisions.

Contributors:
Disclaimer: The opinions expressed by the authors and contributors to this recommended practice
are their own and do not necessarily reflect those of their employers, unless otherwise stated.

H. Lance Stephenson, CCC (Author) Michael R. Nosbisch, CCC PSP

Edward E. Douglas, III CCC PSP Kul B. Uppal, PE CEP
Dennis R. Hanks, PE CCE Phillip B. White, PSP
John K. Hollmann, PE CCE CEP David C. Wolfson
Angyan P. Jagathnarayanan

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 ®
AACE International Recommended Practice No. 27R-03
SCHEDULE CLASSIFICATION SYSTEM
TCM Framework: 7.2 – Schedule Planning and Development

November 12, 2010

PURPOSE

This recommended practice (RP) is intended to serve as a guideline, not a standard. As a recommended practice of
AACE International, the intent of the guideline is to improve the understanding and the communication among
stakeholders involved with preparing, evaluating, and using project schedules. Various enterprises often
misinterpret the quality and value of the information available to prepare schedules and the various methods
employed during the scheduling process. It is understood that each enterprise may have its own project scheduling
processes and terminology, and may classify schedules in their own particular ways. This guideline provides a
generic and generally acceptable classification system that can be used as a basis of comparison. If an enterprise or
organization has not formally documented its own schedule classification system, then this RP guideline can be
used to provide an acceptable basis.

This recommended practice introduces a schedule classification system, which provides the guidelines for applying
the general principles of schedule classification to project schedules. A schedule classification system maps the
phases and stages of scheduling with a generic maturity and quality matrix that can be applied across a wide
variety of industries. It is intended to be applied to any schedule in any industry, and across all stakeholders
including government and academia.

A separate recommended practice provides a guideline for describing the specific use of schedule levels to project
schedules. Schedule levels provide the details necessary to recognize the characteristics of each of the schedule
levels for the purposes of communicating, executing (controlling and monitoring) and reporting the specific details
of the project. Schedule levels consider reporting requirements for each of the stakeholders and the appropriate
amount of information necessary for effective communication and decisions.

This recommended practice has been developed such that it:

 Provides common understanding of the concepts involved with classifying project schedules regardless of
the type of enterprise or industry
 Fully defines and correlates the major characteristics used in classifying schedules so that enterprises may
determine how their practices compare to these guidelines
 Uses degree of project definition as the primary characteristic to categorize schedule classes
 Reflects generally accepted practices in the cost engineering profession

This classification guideline is intended to help those involved with project schedules to avoid misinterpretation of
the various classes of schedules and to avoid their misapplication and misrepresentation. Improving
communications about schedule classifications reduces business costs and project cycle times by avoiding
inappropriate business and financial decisions, actions, delays, or disputes caused by misunderstandings of
schedules and what they are expected to represent.

Schedule Classifications versus Schedule Levels

As indicated below, schedule classifications define to the team the required engineering definition and “degree of
completeness” needed for schedule development. Schedule levels establish the breakdown and amount of detail
required for communication and reporting. The following diagram (Figure 1) illustrates the two discrete ways that
schedules can be developed and/or presented.

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Figure 1 – Schedules: Classifications versus Levels

As identified in Figure 1, there is a clear delineation between the schedule classification index and schedule levels.
By establishing two separate and discrete functions, we can establish a basis for developing the project to the right
amount of detail with the right information for the right audience. The will assist in our ability to improve project
team communication, collaboration and effectiveness while achieving excellence in managing our projects and
resources.

INTRODUCTION

AACE International has developed and published two recommended practices related to cost estimate
[1]
classifications. RP 17R-97 provides the general guidelines and principles of the cost estimate classification
[2]
system. RP 18R-97 serves as an addendum for application in engineering, procurement and construction for the
process industries.

This guideline is intended to provide a generic methodology for the classification of project schedules in any
industry. It is intended to be supplemented with recommended practices that will provide extensions and
additional detail for specific industries. This recommended practice will:

 Provide a classification methodology applicable across all industries

 Identify, cross-reference, benchmark, and empirically evaluate the multiple characteristics related to the
class of schedule

CLASSIFICATION METHODOLOGY

There are numerous characteristics that can be used to categorize schedule types. The most significant of these
are degree of project definition, end usage of the schedule and scheduling approach used. The time and effort
expended to prepare the schedule and expected accuracy range will not be discussed in this RP. It is recommended
that each company develop an approach based on their historical data, project type, and business rules. The

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primary characteristic used in this guideline to define the classification category is the degree of project definition;
other characteristics are secondary.

Categorizing schedules by degree of project definition is consistent with the AACE International philosophy of total
[4]
cost management (TCM), which is a quality-driven process applied during the entire project life cycle . The
discrete levels of project definition used for classifying schedules correspond to the typical phases and gates of
evaluation, authorization, and execution often used by project stakeholders during a project life cycle.

Five schedule classifications have been established. While the degree of project definition is a continuous
spectrum, it was determined from benchmarking industry practices that three to five discrete categories are
commonly used. Five categories are established in this guideline, as it is easier to simplify by combining categories
than it is to arbitrarily split a standard.

The schedule class designations are labeled Class 1, 2, 3, 4, and 5. A Class 5 schedule is based upon the lowest
degree of project definition, and a Class 1 schedule indicates full project definition and maturity. This arbitrary
countdown approach considers that scheduling is a process whereby successive schedules are prepared until a
final schedule closes the process.

Primary
Secondary Characteristic
Characteristic
DEGREE OF PROJECT
DEFINITION
SCHEDULE SCHEDULING METHODS
(Expressed as % of END USAGE
CLASS USED
complete definition)
[1]

Top down planning using

Class 5 0% to 2% Concept screening high level milestones and
key project events.

Top down planning using

high level milestones and
Class 4 1% to 15% Feasibility study
key project events. Semi-
detailed.

Budget, "Package" top down

Class 3 10% to 40% authorization, or planning using key events.
control Semi-detailed.

Bottom up planning.
Class 2 30% to 70% Control or bid/tender
Detailed.

Bottom up planning.
Class 1 70% to 100% Bid/tender
Detailed.

Table 1 – Generic Schedule Classification Matrix

[1] RP 18R-97[2] provides the range in percentages for each class.

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CHARACTERISTICS OF THE SCHEDULE CLASSES

As stated, the schedule class designations are labeled Class 1, 2, 3, 4, and 5. A Class 5 schedule is based upon the
lowest degree of project definition, and a Class 1 schedule is closest to full project definition and maturity. The
schedule classifications must be consistent with that of the scope of work, the design development and the cost
estimate.

The following are brief discussions of the various characteristics used in the schedule classification matrix. For the
secondary characteristics, the overall trend of how each characteristic varies with the degree of project definition
(the primary characteristic) is provided.

Degree of Project Definition (Primary Characteristic)

This characteristic is based upon percent complete of project definition (roughly corresponding to percent
complete of engineering). The degree of project definition defines maturity or the extent and types of input
information available to the scheduling process. Such inputs include project scope definition, requirements
documents, specifications, project plans, drawings, calculations, learnings from past projects, reconnaissance data,
and other information that must be developed to define the project. Although there are some deliverables that
would be common to almost all projects, each industry grouping or each project will have a typical set of
deliverables that are used to support the type of schedules used in that industry. The set of deliverables becomes
more definitive and complete as the degree of project definition progresses.

The availability of these deliverables is directly related to the degree of project definition achieved. The variations
in the deliverables required for a schedule are too broad to cover in detail here; however, it is important to
understand what drives the variations. Each industry group tends to focus on a defining project element that
drives the schedule maturity level. For instance, chemical industry projects are process equipment-centric. i.e., the
degree of project definition and subsequent schedule maturity level is significantly determined by how well the
equipment is defined. Architectural projects tend to be structure-centric. Software projects tend to be function-
centric and so on. Understanding these drivers puts the differences that may appear in the more detailed industry
addenda into perspective.

End Usage (Secondary Characteristic)

The various classes of schedules prepared for a project typically have different end uses or purposes. As the degree
of project definition increases, the end usage of a schedule typically progresses from strategic evaluation and
feasibility studies to support funding authorization and budgets for project control purposes to guiding project
execution activities. The end usage for a schedule should typically be the same as for the cost estimate classes.

While there are common end uses for schedules, that usage is often relative to the different stakeholders’ identity.
For instance, an owner company may use a given class of schedule to support project funding, while a contractor
may use the same class of schedule to support a contract bid or tender. It is not at all uncommon to find
stakeholders categorizing their schedules by usage-related headings such as “budget”, “study”, or “bid”.
Depending on the stakeholder’s perspective and needs, it is important to understand that these may actually be all
the same class of schedule (based on the primary characteristic of degree of project definition achieved).

Owners may use Class 5 to Class 3 schedules to manage their respective projects, whereas the contractor will
provide the Class 2 and/or Class 1 schedules for each of their respective contracts. This does not preclude the
owner nor the contractor from developing Class 5 to Class 1 schedules at any given time. At the preparation of

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each schedule one should take advantage of all the engineering definition available. The schedule classifications
are not precluded by contract type (lump sum, cost plus, or unit price, etc), nor project size.

Scheduling Methods Used (Secondary Characteristic)

Scheduling methods for the purposes of development and presentation fall into two broad categories: bar charts,
and network logic diagrams. With bar charts (e.g. Gantt charts) activities or phases are expressed as bars with the
end points representing start and end dates. In logic diagrams, interrelationships between activities are added. As
the degree of project definition increases, the scheduling methodology tends to transition from development of
bar charts to network logic diagrams. The processes used to produce the final schedule may vary; there are
numerous methods on how to develop the schedule and determine the schedule completion date.

RELATIONSHIPS AND VARIATIONS OF CHARACTERISTICS

There are complex relationships that may be exhibited among the schedule characteristics within the schedule
classifications. The overall trend of how the secondary characteristics vary with the degree of project definition
was discussed above. This section explores those trends in more detail.

The degree of project definition is the driver for the other secondary characteristics. Typically, all of the secondary
characteristics have the degree of project definition as a primary determinant. While the other characteristics are
important to categorization, they lack complete consensus. Typically, there are commonalties in the secondary
characteristics between one schedule and the next, but in any given situation there may be wide variations in
usage, scheduling method, accuracy, and planning effort.

Characteristics such as accuracy and schedule planning effort can vary markedly between industries and even from
scheduler to scheduler within a given industry. The execution style of an enterprise, the type of work to be
executed, and the team executing the work also creates variability in determining accuracy and amount of effort to
prepare.

The schedule and cost estimate should correlate at the appropriate amount of detail. The cost estimate class and
the schedule class are both defined by the primary characteristic: the degree of project definition.

SCHEDULE CLASSIFICATION MATRIX

One important aspect of developing the schedule is to ensure that the correct degree of project definition is
provided so that the project team can execute the project with efficiency and effectiveness. In order to complete
this task, the project team needs to understand the requirements necessary for providing the appropriate degree
of project definition.

The schedule classification matrix was developed to ensure that the relationship between the schedule and
estimate classes would establish consistency and clarity. In order to ensure this, the characteristics of schedule
[1]
classifications are aligned with RP 17R-97: Cost Estimate Classification System . Similar to the cost estimate
classification system, five schedule classes are identified.

Tables 2a to 2e provide information to recognize the characteristics of each schedule class. The schedule classes
(Classes 1 to 5) are defined by the following characteristics:

 Degree of project definition

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 End usage
 Scheduling methods used

Class 5 Schedule
Description: End Usage:
Class 5 schedules are generally prepared based on very Class 5 schedules are prepared for any number of
limited information, and subsequently have wide strategic business planning purposes, such as but not
accuracy ranges. limited to: market studies, assessment of initial viability,
evaluation of alternative schemes, project screening,
The Class 5 schedule is considered a preliminary project location studies, evaluation of resource needs
document, usually presented in either Gantt (bar chart) and budgeting, long range capital planning, etc.
or table form. The class 5 schedule should have, as a
minimum, a single summary bar per stage with major Scheduling Methods Used:
project milestones identified. Gantt, bar chart, milestone / activity table

Degree of Project Definition Required: 0% to 2% Top down planning using high level milestones and key
project events.
Table 2a – Class 5 Schedule

Class 4 Schedule
Description: End Usage:
Class 4 schedules are generally prepared based on Class 4 schedules are prepared for a number of
limited information and subsequently have fairly wide purposes, such as but not limited to: detailed strategic
accuracy ranges. They are typically used for project planning, business development, project screening at
screening, determination of "do-ability", concept more developed stages, alternate scheme analysis,
evaluation, and to support preliminary budget approval. confirmation of "do-ability", economic and / or
technical feasibility, and to support preliminary budget
The Class 4 schedule is usually presented in either Gantt approval or approval to proceed to next stage.
(bar chart) or table form. The Class 4 schedule should
define the high level deliverables for each specific stage It is recommended that the Class 4 schedule be
going forward (since the previous stage has passed). reconciled to the Class 5 schedule to reflect the changes
This document should also provide an understanding or variations identified as a result of more project
regarding the timing of key events, such as independent definition and design. This will provide an
project reviews, committee approvals, as well as understanding of the changes from one schedule to the
determining the timing of funding approvals. A high next.
level WBS may be established at this time.
Scheduling Methods Used:
Degree of Project Definition Required: 1% to 15% Gantt, bar chart, milestone / activity table

Top down planning using high level milestones and key

project events. Semi-detailed.
Table 2b – Class 4 Schedule

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Class 3 Schedule
Description: End Usage:
Class 3 schedules are generally prepared to form the Class 3 schedules are typically prepared to support full
basis of execution for budget authorization, project funding requests, and become the first of the
appropriation, and / or funding. As such, they typically project phase "control schedules" against which all start
form the initial control schedule against which all actual and completion dates and resources will be monitored
dates and resources will be monitored. for variations to the schedule. They are used as the
project schedule until replaced by more detailed
The Class 3 schedule should be a resource loaded, logic- schedules.
driven schedule developed using the precedence
diagramming method (PDM). The schedule should be It is recommended that the Class 3 schedule be
developed using relationships that support the overall reconciled to the Class 4 schedule to reflect the changes
true representation of the execution of the project or variations identified as a result of more project
(with respect to start to start and finish to finish definition and design.
relationships with lags). The amount of detail should
define, as a minimum, the work package (WP) level (or
similar deliverable) per process type/unit and any Scheduling Methods Used:
intermediate key steps necessary to determine the PDM, PERT, Gantt / bar charts
execution path. (The WP rolls up into the predefined
WBS.) In some circumstances, where there is a high “Package” top down planning using key events. Semi-
degree of parallel activities, the critical nature of the detailed.
project, or the extreme complexity and/or size of the
project, it may be warranted to provide further detail of
the schedule to assist in the control of the project.

Degree of Project Definition Required: 10% to 40%

Table 2c – Class 3 Schedule

Class 2 Schedule
Description: End Usage:
Class 2 schedules are generally prepared to form a Class 2 schedules are typically prepared as the detailed
detailed control baseline against which all project work control baseline against which all actual start and
is monitored in terms of task starts and completions completion dates and resources will now be monitored
and progress control. for variations to the schedule, and form a part of the
change/variation control program.
The Class 2 schedule is a detailed resource loaded,
logic-driven schedule that should be developed using It is recommended that the Class 2 schedule be
the critical path method (CPM) process. The amount of reconciled to the Class 3 schedule to reflect the changes
detail should define as a minimum, the required or variations identified as a result of more project
deliverables per contract per work package (WP). The definition and design.
schedule should further define any additional steps
necessary to determine the critical path of the project Scheduling Methods Used:
necessary for the appropriate degree of control. Gantt / bar charts, PDM, PERT

Degree of Project Definition Required: 30% to 70% Bottom up planning. Detailed.

Table 2d – Class 2 Schedule

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Class 1 Schedule
Description: End Usage:
Class 1 schedules are generally prepared for discrete Class 1 schedules are typically prepared to form the
parts or sections of the total project rather than current control schedule to be used as the final control
generating this amount of detail for the entire project. baseline against which all actual start and completion
The updated schedule is often referred to as the current dates and resources will now be monitored for
control schedule and becomes the new baseline for the variations to the schedule, and form a part of the
cost/schedule control of the project. change/variation control program. They may be used to
evaluate bid-schedule checking, to support
The Class 1 schedule may be a detailed, resource vendor/contractor negotiations, or claim evaluations
loaded, logic-driven schedule and is considered a and dispute resolution.
"production schedule" used for establishing daily or
weekly work requirements. It is recommended that the Class 1 schedule be
reconciled to the Class 2 schedule to reflect the changes
Degree of Project Definition Required: 70% to 100% or variations identified as a result of more project
definition and design.

Scheduling Methods Used:

Gantt / bar charts, PDM, PERT

Bottom up planning. Detailed.

Table 2e – Class 1 Schedule

Schedule preparation is highly dependent on the size of the project, the complexity, the information provided, the
planner/scheduler’s, as well as the team’s skills and knowledge, and the tools available at the time of preparation.
Depending on the project execution strategy, it may be necessary to integrate all schedules into a single master
schedule format.

Use of the schedule classification matrix provides a common understanding and guideline for classifying project
schedules, which will improve the project team’s ability to execute the project with efficiency and effectiveness.

OTHER CONSIDERATIONS – EXPECTED ACCURACY RANGE

The accuracy range of a schedule is dependent upon a number of characteristics of the schedule input information
and the scheduling process. The extent and maturity of the input information as measured by percentage
completion (and related to degree of project definition) is a highly-important determinant of accuracy. However,
there are factors besides the available input information that also greatly affect schedule accuracy measures.
Primary among these are the project technology and the quality of reference cost and scheduling data.

Project technology and complexity varies between industries and may affect schedule accuracy. Project technology
refers primarily to the programmatic or technical uniqueness and complexity. Having full maturity of the project
definition deliverables may be deceptive if they are based upon assumptions regarding uncertain technology.

For a first-of-a-kind project there is a lower level of confidence that the execution of the project will be successful
(all else being equal). There is generally a higher confidence for projects that repeat past practices. Projects for
which research and development are still under way at the time that the schedule is prepared are particularly
subject to low accuracy expectations. The complexity of project technology may have an order of magnitude (10 to
1) effect on the accuracy range.

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Quality of scheduling accuracy is also dependent on the quality of reference data and historical information. The
scheduling process typically employs a number of factors to adjust for market conditions, project location,
environmental considerations, and other schedule-specific conditions that are often uncertain and difficult to
assess. The accuracy of the schedule will be better when verified with empirical data.

Schedule accuracy will generally be correlated with schedule classification and the degree of project definition.
Specific accuracy ranges will typically vary by industry. The accuracy of any given schedule is not fixed or
determined by its classification category. Schedule accuracy must be evaluated on a schedule-by-schedule basis,
usually in conjunction with some form of risk analysis process.

REFERENCES

1. AACE International Recommended Practice 17R-97, Cost Estimate Classification System, AACE International,
Morgantown, WV, (latest revision).
2. AACE International Recommended Practice 18R-97 Cost Estimate Classification System – As Applied in
Engineering, Procurement, and Construction for the Process Industry, AACE International, Morgantown, WV,
(latest revision).
th
3. Amos, Dr. Scott J., PE, Editor, Skills & Knowledge of Cost Engineering, 5 Edition, AACE International,
Morgantown, WV, 2004
4. Hollmann, John K., PE CCE, Editor, Total Cost Management Framework: An Integrated Approach to Portfolio,
Program and Project Management, AACE International, Morgantown, WV, 2006.
rd
5. Lewis, James P., Project Planning, Scheduling and Control, 3 Edition, McGraw-Hill, New York, NY, 2006.
th
6. O’Brien, James J., Plotnick, Fredric L., CPM in Construction Management, 6 Edition, McGraw-Hill, New York,
NY, 2006
7. Stephenson, H. Lance, CCC, Schedule Management: Schedule Classifications vs. Levels, AACE International
Transactions, AACE International, Morgantown, WV, 2007.
8. AACE International Recommended Practice 10S-90, Cost Engineering Terminology, AACE International,
Morgantown, WV, (latest revision).

CONTRIBUTORS

Disclaimer: The opinions expressed by the authors and contributors to this recommended practice are their own
and do not necessarily reflect those of their employers, unless otherwise stated.

H. Lance Stephenson, CCC (Author)

Edward E. Douglas, III CCC PSP
Dennis R. Hanks, PE CCE
John K. Hollmann, PE CCE CEP
Angyan P. Jagathnarayanan
Michael R. Nosbisch, CCC PSP
Kul B. Uppal, PE CEP
Phillip B. White, PSP
David C. Wolfson

Copyright © AACE® International AACE® International Recommended Practices