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Systematic Approach for Determining Construction Contract Time: A Guidebook (2022)

Chapter: Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop

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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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Suggested Citation:"Chapter 6 - Post-Construction Contract Time Evaluation and Feedback Loop." National Academies of Sciences, Engineering, and Medicine. 2022. Systematic Approach for Determining Construction Contract Time: A Guidebook. Washington, DC: The National Academies Press. doi: 10.17226/26537.
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104 e FHWA (2014) recommends that DOTs periodically review internal procedures for determining contract time and include a comparison of actual construction time against the originally estimated contract time for completed projects to determine whether the proce- dures used resulted in appropriate contract time performance. is essential element for creating a continuous improvement feedback loop is an integral part of CTD processes. is chapter provides guidance on the eectiveness of CTD methodologies and the post-construction con- tract time feedback loop. 6.1 CTD Methodology Effectiveness and Metrics is section proposes metrics for evaluating the eectiveness of CTD methodologies and a general procedure DOTs can follow to adopt the metrics. 6.1.1 Metrics for Evaluating CTD Methodology Effectiveness A CTD methodology involves the dynamic combination of methods for PDE-based contract time and constraint-based contract time. Although the principle for the latter is basically the same for dierent DOTs (i.e., inuential factors and constraints), various methods exist for establishing the PDE. erefore, the main dierences among CTD methodologies arise from the choice of PDE method. Each PDE method has its advantages and limitations. Some examples are as follows: • Bar charts are a popular bottom-up method and are simple and easy to understand, but they do not show relationships between activities or indicate controlling activities of a project. • CPM overcomes the disadvantages of bar charts, but eective use of the method requires knowledge and experience on the part of schedulers, and it takes signicant time and eort to produce a reliable CPM schedule. • Top-down methods are time-ecient in establishing contract time when contract time devel- opers only need to nd the values of input variables to feed into a prediction model to output contract time, but the accuracy of the top-down approach depends on the quality and amount of historical data available for training a prediction model and the development and validation process of the model. Moreover, the top-down approach does not leverage the detailed infor- mation that is available in the nal design phase to produce construction contract time, and thus may ignore some unique characteristics of a new project that diers from the historical projects that were used to develop the prediction model, thereby reducing the accuracy of the model. Despite these advantages and disadvantages, the decision to use a specic method should be primarily placed on the accuracy of contract time that a method can oer. C H A P T E R   6 Post-Construction Contract Time Evaluation and Feedback Loop

Post-Construction Contract Time Evaluation and Feedback Loop 105   Measures for the Accuracy of Contract Time e accuracy of the contract time of a project can be evaluated by the percentage error (see Equation 1). A positive percentage error indicates that the project will likely take a longer time to complete than the original contract time determined by a CTD method, whereas a negative percentage error implies that the project will likely complete earlier than planned. Moreover, the absolute value of the percentage error shows how close the CTD is to the actual completion time. e smaller the absolute value is, the more accurate the CTD. Percentage error actual completion time original contract time actual completion time = − . (1) Signicantly, percentage errors are caused not only by the CTD process but also by the con- struction process (e.g., work beyond original contract requirements and additional work during construction). Most DOTs have a clause regarding extension of contract time in their standard specications. For example, the Colorado DOT regulates that “if an event, action, or factor beyond the control and fault of the Contractor causes an extension to the ultimate project completion date, an extension of contract time may be warranted” (Colorado DOT 2014). Any authorized time extensions should be added to the original contract time to form a modied contract time, and then the modied contract time should be compared with the actual comple- tion time. e modied contract time and modied percentage errors are given as follows (Equa- tion 2 and Equation 3): Modified contract time original contract time authorized time extensions= + . (2) Modified percentage error actual completion time modified contract time actual completion time = − . (3) For CTD that uses a top-down PDE method, the modied percentage error can be deter- mined based on the relationships between input variables and the output (i.e., contract time). Assume that f is a function used to nd contract time based on the values of input variables (i.e., X1, X2, . . . , Xp). e original contract time and modied contract time can be calculated based on Equation 4 and Equation 5, and the modied percentage error is then calculated by Equation 3. Original contract time f X X X X p( )= , , , . . . , . (4)1 2 3 Modified contract time f X X X Xu u u pu( )= , , , . . . , . (5)1 2 3 where X1u, X2u, X3u,. . . . , Xpu are the updated values of the input variables X1, X2, X3, . . . , Xp at the end of the construction phase. The Overall Accuracy of a CTD Method To nd the overall accuracy of a particular CTD method, the percentage errors or modied percentage errors of historical projects that use the method rst need to be calculated. Assume that there are ni past projects that use method Mi to determine contract time. Percentage errors of the projects are PEj ( j = 1 to ni), and the modied percentage errors of the projects are MPEj ( j = 1 to ni). The percentage error and modified percentage error of method Mi are established based on Equations 6 and 7. e absolute values in the equations are used to avoid the cancellation between negative and positive values. Percentage error of M PE n i jj n i i∑ = = (6)1

106 Systematic Approach for Determining Construction Contract Time: A Guidebook ∑ = = (7)1Modified percentage error of M MPE n i jj n i i ese overall percentage errors are then used to make comparisons among dierent CTD methods. 6.1.2 Generic Procedure for Evaluating CTD Methodology Effectiveness A generic procedure for evaluating CTD methodology eectiveness is shown in Figure 6-1 and summarized in detail in the following steps: • Step 1: Collect historical data for evaluation. Data on past projects are needed for the evaluation. Each historical project needs to have information regarding the original contract time, the authorized time extension (if it exists), the actual contract time, the post-construction updated values of input variables (if top- down methods were used), and the method used for CTD. • Step 2: Calculate the percentage error and the modied percentage error for each project in the historical data. Equations 1 to 5 are used to calculate the percentage error and the modied percentage error for each project in the historical data. • Step 3: Calculate the percentage error and the modied percentage error for each CTD method. Historical projects are divided into dierent groups. Each group corresponds to a CTD method (i.e., a combination of a PDE method and a method for constraint-based contract time). e percentage error and the modied percentage error are calculated for each CTD method using Equations 6 and 7. • Step 4: Compare the errors of dierent CTD methods. e calculated errors from Step 3 are used to compare dierent CTD methods. Collect Historical Data Used CTD Methods Time-related Information ST EP 1 Calculate Errors for Each Past Project Percentage Error Modified Percentage ErrorST EP 2 Calculate Average Errors for Each CTD Method Average Percentage Error Mean of Modified ErrorsST EP 3 Compare the Errors of CTD MethodsST EP 4 Procedure Influential Factors/Major Components/Options Figure 6-1. Generic procedure for evaluating CTD methodology effectiveness.

Post-Construction Contract Time Evaluation and Feedback Loop 107   6.2 Post-Construction Contract Time Feedback Loop e highway construction sector is oen regarded as an experience-based industry because most decisions in this sector, including establishing the contract time of a project, are typi- cally made based on professional experience and engineering judgment on readily available information. However, despite its heavy reliance on experiential knowledge, the sector doesn’t always have ecient knowledge management and transfer. Many DOTs have recognized this issue and started to implement feedback activities such as post-construction review in the hope that LLs captured from each project will promote organizational learning and continuously improve the business processes. Interviews with multiple DOTs have revealed that the majority of them conduct post-construction review (PCR) meetings (though the level of implementation diers between DOTs). However, these interviews also revealed limited information on how those LLs are being fed back into the decision-making process in the future. Moreover, several DOTs also reported that they do not have any database that may facilitate learning between projects and among people. is lack of a formalized feedback procedure and the lack of critical infrastructure suggest that the feedback loop is most likely not complete. In fact, these ndings concur with the consensus from the literature that improvements are needed to ensure the sharing and dissemination of knowledge gained from projects. In addition, although schedule is considered one of the components of the “iron triangle” of a construction project (i.e., cost, time, and quality), contract time evaluation typically constitutes only a small portion of the PCR process and is often discussed together with other issues. is chapter provides guidance on a systematic evaluation and feedback loop, with an empha- sis on construction contract time. 6.2.1 Contract Time Feedback Loop Broadly speaking, the learning outcome from a construction project can be categorized into two types, database data and LLs (see Table 6-1). Figure 6-2 depicts how various examples of these two types of information can be gathered and fed back to the CTD process. 6.2.2 Stepwise Procedure for an Effective LLs Program While most DOTs understand the importance of capturing LLs, they are all at dierent levels of LLs utilization. Some do not routinely capture LLs due to time and/or resource constraints. Database Data Lessons Learned (LLs) • Project information that can be stored in a database • Typically location (i.e., district) specific • A continuous data collection process (i.e., gather data as they are being generated) occurs in different stages of project delivery process • Use of electronic databases is recommended to allow for easy retrieval and analysis in the future • General knowledge that every unit within the organization can take advantage of • Typically collected during PCR Table 6-1. Two different types of learning outcomes from a construction project.

Figure 6-2. Contract time feedback loop along the project delivery process.

Post-Construction Contract Time Evaluation and Feedback Loop 109   Some capture LLs at the end of a project but seem to never do anything with them. Some do store these LLs, but the lessons are scattered across numerous project folders, and no easy means of retrieving the lessons exist. is section presents a systematic process to establish an eective LLs program for CTD-related knowledge. Figure 6-3 graphically represents the main steps required to develop an eective LLs program, while Figure 6-4 and the pages that follow oer a more detailed look into the sub-steps or elements involved in performing each step. Figure 6-3. Process for an effective LLs program. Figure 6-4. Sub-steps/elements involved in each step in developing an effective LLs program.

110 Systematic Approach for Determining Construction Contract Time: A Guidebook Step 1: Collect. The collection of learning opportunities should not be limited to occur at the end of a project. Instead, a LLs session should be conducted at different time frames based on the criticality and complexity of project. This process is especially true for large projects with a long contract time. Because of the elapsed time, project members may forget some things they have learned, or project members assigned to the project in the early phase may no longer be part of the project during the later phase. Step 1—Collect Conduct LLs session. The focus of this session should be on identifying the successes and/or failures in estimating and administering contract time, as well as recommendations to improve the CTD accuracy for future projects. Consistent collection effort. All original LLs should be collected utilizing consistent process and forms. Consistency of input information enables quicker identification of reoccurring issues and proactive solutions. • Use Post-Construction Contract Time Evaluation Checklist (see Appendix). Assign keywords. Identify keywords for each lesson. Keywords are ultimately the determinants of success in utilizing LLs and are essential for easy retrieval. Continuous data collection. For database data (e.g., weather data, productivity data, etc.), the collection effort should happen throughout the project duration. This step will significantly reduce the workload at the end of a project and free up more time to discuss more pressing matters regarding contract time. Conduct LL session Continuous data collection Consistent collection effort Assign keywords

Post-Construction Contract Time Evaluation and Feedback Loop 111   Step 1—Collect The methods and tools used in this step. (A) The Post-Construction Contract Time Evaluation Checklist is a tool developed to facilitate and to streamline the LLs collection process. It serves two purposes: It acts as a standard template to ensure consistency in documenting LLs and the level of detail provided. It serves as a preliminary agenda for the PCR facilitator to lead the discussion about contract time performance and related issues. A unique feature of this tool is that its contents have been categorized into different contract time influential factors. The benefits of adopting this categorization method are threefold: It provides a meaningful yet intuitive classification system for CTD-related knowledge. The use of influential factors as categories will ensure key information is not missed during evaluation and will help to focus the discussion on contract time. Each LL can be assigned one or more influential factors to allow for easy retrieval of the LL in the future. (B) Post-Construction Review is a common way for DOTs to collect LLs. However, the supposed benefits of PCR can only be realized when it is conducted in an organized, purposeful, and effective manner. Following are some recommended guidelines when conducting PCR: i. Reflect on: a. How the actual project duration is affected by various important influential factors. b. How these factors can be addressed or leveraged in future projects. ii. All LLs, positive or negative, should be discussed and properly documented. iii. Use a trained facilitator to lead the PCR. iv. Before the meeting, organizer(s) should make it clear to all PCR attendees that: a. Honest comments are highly appreciated. b. PCR is not a blame apportion process. c. PCR is an opportunity for every attendee to learn together as a team.

112 Systematic Approach for Determining Construction Contract Time: A Guidebook Step 2: Analyze. The main purpose of this step is to transform raw data into actionable recommendations. This process requires a systematic effort to examine the information that has been collected and understand why or what contributed to the need for improvement. Involvement of domain or subject matter experts in this step is highly recommended. The end state of this analysis process should be a well-defined list of recommendations or potential corrective actions that are ready to be disseminated/implemented. For better results, the person(s) tasked with the analysis of LLs should be positioned at a level within the agency that will enable the person to implement approved solutions. Step 2—Analyze Analyze information collected. Use different perspectives when looking at the Identify recommendations/corrective actions. data to fully understand the issue. An in-depth analysis should not only focus on what happened but why it happened. The root cause (or the critical success factor) needs to be identified so that strategic actions can be taken. Determine appropriate recommendations based on analysis results. Each recommendation should be: i. Actionable: A recommendation should specifically say what needs to be done and not just what effect needs to be achieved. ii. Realistic: Making recommendations that are not feasible may only hinder the learning process. Verify applicability. • Determine whether a lesson is relevant across many other projects, is unique to a particular department or project, or applies to the organization as a whole. • Identify similar projects that can most benefit from specific lessons. Analyze information collected Identify actions Verify applicability recommendations/ corrective

Post-Construction Contract Time Evaluation and Feedback Loop 113   Step 2—Analyze The methods and tools used in this step. I. Relevant metrics: • If it cannot be measured, it cannot be improved. • Utilize metric(s) discussed in the previous section to quantitatively measure the contract time performance of a project or a group of projects. II. Statistical analysis: • For numerical (e.g., database) data, it may be useful to conduct basic statistical analysis to discover insightful trends within the data. • Use graphical methods (e.g., charts and graphs) whenever possible. The intent is to tell a visual story of what is wrong and/or what is successful in the determination and administration of contract time. Use these graphical tools to visually demonstrate the frequency of observations, gaps in a capability, or needs for a particular solution.

114 Systematic Approach for Determining Construction Contract Time: A Guidebook Step 3: Archive. Archiving not only encompasses the storing aspect of data and/or lessons, it requires the stored information to be easily accessible and support the need for future projects. An effective dissemination will not be possible without proper archiving. Step 3—Archive Preservation of information. Develop centralized, digital repositories to store information, both raw and synthesized data. Easy access in the future. The searchability of a LLs database (or repository) will directly affect the success of the dissemination step. Information stored in repositories should be easily retrievable for users. This outcome can be achieved by: • Using standardized filing and naming conventions and protocols. • Tagging documents with the right metadata and keywords. • Providing a logical system for classifying information (e.g., categorization based on contract time influential factors). • A simple, user-friendly search interface. Support future projects. Unlock further improvement opportunities within the agency. The repository (and the information stored within) should support the ability to improve CTD processes. The more data available to users, the easier for them to identify useful trends or relationships that may improve the CTD performance and accuracy (e.g., improved production rates). Preservation of information Easy access in the future Support future projects

Post-Construction Contract Time Evaluation and Feedback Loop 115   Step 4: Disseminate. Knowledge dissemination is the most important element in completing the feedback loop because lessons are of little benefit unless they are distributed and used by people who will benefit from them. Besides routine distribution of LLs through a variety of communication media, dissemination also entails the implementation of action items identified during the analysis phase (i.e., Step 2), which include revision of a work process or additional training. The step of altering the agency’s current practice via official procedure of the central office is paramount in ensuring that the newly acquired knowledge will be shared by the entire agency in lieu of a localized improvement within the agency. Step 4—Disseminate Implement best practices/corrective actions. Perform those recommended action items identified from the analysis step. Make appropriate adjustments in the agency’s policy or procedure if necessary. For agencies that practice decentralized administration, ensure that the improvement occurs across all districts/units within the agency. “Push” method. This is the traditional perception of dissemination, in which lessons are automatically delivered, or “pushed” to a user. No effort is required from the user. “Pull” method. This active learning method requires users to manually search, or “pull,” relevant lessons from the LLs database. This outcome can be achieved by making it a requirement for the contract time developer to review LLs from past projects before finalizing the contract time estimate. “Push” method Implement best practices / corrective actions “Pull” method

116 Systematic Approach for Determining Construction Contract Time: A Guidebook Step 4—Disseminate The methods and tools used in this step. A. Examples of push method: • Disseminate lessons through: Website, newsletters, articles, reports, bulletins, handbooks, manuals, and more. Some of these publications (e.g., handbook, manual) may require a greater amount of time and effort to produce, but they serve as excellent historical documents that may be very beneficial in supporting future operations. • Hold periodic workshops on top LLs for sharing between projects. • Organize presentations by veteran schedulers on their own experiences. • Make all LLs available on a centralized database that is accessible by all personnel. B. Examples of pull method: • Make it mandatory for project participants to search for relevant LLs before contract time estimate is submitted for agency approval. • Perform research on collected data. C. Examples of corrective actions: • Revise current CTD procedure. • Additional training on using CPM software. • Develop automated tools to facilitate the CTD process (i.e., better production rate estimation). • Update CTD guideline/manual. • Encourage the use of CTD best practices. • Regularly update the production rate database.

Post-Construction Contract Time Evaluation and Feedback Loop 117   6.2.3 Additional Guidance on an Effective LLs Program Learn from Both Failures and Successes It is crucial to recognize that maximum learning potential is only attained when an orga- nization learns from both its failures and its successes. Most DOTs understand they are bound to repeat similar situations if they do not learn from their mistakes. However, some agencies may primarily focus on project failures and undesirable outcomes, unintentionally discouraging people from voicing their concerns and opinions. us, a facilitator plays an essential role in ensuring an equal amount of discussion between project failures and successes during a PCR meeting. By not leveraging on project successes, organizations lose the opportunities to imple- ment good processes and practices to successfully complete existing and future projects. Commitment from Senior Level Management e success of the LLs program hinges on the implementation of recommendations and corrective actions, which in most cases requires a certain amount of involvement and sup- port from senior-level leadership. is commitment is visible in regular performance (metric) review, action taken to implement best practices, and support to improve negative or reoccur- ring project trends. Without these continuous commitments from top management, no signi- cant organizational improvement can be expected. e signicance of the leadership involvement becomes even more pronounced in agencies that practice decentralized administration. In decentralized DOTs, organizational silos hinder knowledge exchange between units/districts/regions. To overcome this barrier, any learning outcomes should be turned into organizational policy that will be followed by every member of the organization. is practice means that the DOT’s central oce (or leaders) plays an essential role in facilitating the dissemination of knowledge across multiple districts, thereby resulting in agency-wide improvement. 6.3 References Colorado DOT (2014). CDOT Construction Manual. Colorado Department of Transportation. FHWA (2014). Contract Administration Core Curriculum Manual. FHWA-NHI-134077. Federal Highway Administration, Washington, D.C.

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Contract time affects the cost of construction, traffic disruption and public inconvenience, the economic impact of projects to the surrounding areas, and schedule risks.

The TRB National Cooperative Highway Research Program's NCHRP Research Report 979: Systematic Approach for Determining Construction Contract Time: A Guidebook provides state departments of transportation guidance for producing consistently credible, reliable, and defensible contract time estimates.

Supplemental to the report is NCHRP Web-Only Document 298: Developing a Systematic Approach for Determining Construction Contract Time, a spreadsheet-based Toolkit, a Technical Memorandum, and a Presentation.

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