Risk-Oriented Methodology for Contractor Management in the Construction of Optical Lines, Including Modeling of Crew Productivity and Logistics Delays in PERT/CPM Networks and Calibration of Contractual Incentives/Penalties

Mykola Gomzov
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Mykola Gomzov: Contractor at Spectrum, Fiber-Optic Deployment for Spectrum Customers, St Petersburg, FL, USA

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Abstract: Against the backdrop of the rapid expansion of the fiber-optic communication line (FOCL) market driven by the rollout of 5G networks and the scaling of FTTH access, construction projects operate under heightened uncertainty in which up to 80% of total costs are formed by labor expenditures. This work addresses the identified research gap, namely the absence of a formalized linkage between quantitative project risk assessment and the tuning of contractual parameters. The objective of the study is to develop and theoretically substantiate a risk-oriented methodology for managing contractor organizations that integrates stochastic optimization of the schedule with a procedure for calibrating incentives and sanctions in the contract. The methodological basis synthesizes tools of network planning (PERT/CPM), probabilistic modeling (Monte Carlo method), and the provisions of contract theory. The key result is an algorithm that translates variability in crew performance and logistics delays into a probabilistic distribution of project completion times (S-curve). Using this distribution, an approach is proposed for objectively setting target deadlines, as well as for economically sound calculation of bonuses for early completion and liquidated damages for schedule violations. The findings demonstrate that the proposed scheme enables a shift from a deterministic to a probabilistic management paradigm, increases implementation predictability, and aligns the economic incentives of the client and the contractor. The material is intended for project managers, engineers, and contract specialists in the telecommunications sector.

Keywords: incentive contracts; liquidated damages; labor productivity; logistics risks; contractor management; Monte Carlo method; CPM; PERT; fiber-optic communication lines (FOCL); risk management in construction (search for similar items in EconPapers)
Date: 2025-11-27
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Published in European Journal of Innovative Studies and Sustainability, 2025, 1 (6), pp.106-116. ⟨10.59324/ejiss.2025.1(6).09⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05712178

DOI: 10.59324/ejiss.2025.1(6).09

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