Customer wanted to reprioritize activities and move them up the schedule. This will result in some tasks being carried out in parallel. To avoid over-allocating my resources, we have recommended to add one more resource and since this is a change from our original approved schedule and activities, we will charge the customer the additional resource. However, they are telling us that it shouldn’t be the case, as basically we have the same scope and the overall project schedule will actually now be ahead by 8 calendar days due to the parallel activities. Since I’m quite new with PM, I can’t explain why this is not the case. What are the factors considered here and why shouldn’t the 8 days be considered as ‘saving’ and should instead be used to cover the cost of the additional resource as our customer is telling us? My lead consultant is telling me about risks, opportunity costs, contingency, etc. but it’s not very clear to me. This is a fixed engagement btw, not T&M.

Edit

To answer the question by nvogel: type of project, it is not software development. This is a service management project. The original plan is to run the activities/phases sequentially, but the customer wanted to prioritize activities in phase 2 to align another project with the results of our project. Now, this alignment is something that was not communicated during the RFP and bidding process. We can't pause phase 1 completely as phase 2 activities are dependent on some outputs from phase 1 thus, phase 2 will start when about 50% of Phase 1 has been completed. This will mean that my resources will have to do 2-3 tasks in parallel and to avoid the severe over-allocation, we will now add 1 resource. Still, the current resources will still have to work on 2 parallel activities.

Customer wanted to re-prioritize activities and move them up the schedule. This will result in some tasks being carried out in parallel. To avoid over-allocating my resources, we have recommended to add one more resource and since this is a change from our original approved schedule and activities, we will charge the customer the additional resource.

However, they are telling us that it shouldn't be the case, since basically we have the same scope and the overall project schedule will actually now be ahead by 8 calendar days due to the parallel activities. Since I’m quite new with PM, I can't explain why this is not the case.

This is a service management project, not software development. The original plan is to run the activities/phases sequentially, but the customer wanted to prioritize activities in phase 2 to align another project with the results of our project. Now, this alignment is something that was not communicated during the RFP and bidding process. 

We can't pause phase 1 completely as phase 2 activities are dependent on some outputs from phase 1 thus, phase 2 will start when about 50% of Phase 1 has been completed. This will mean that my resources will have to do 2-3 tasks in parallel and to avoid the severe over-allocation, we will now add 1 resource. Still, the current resources will still have to work on 2 parallel activities.

What are the factors considered here and why shouldn’t the 8 days be considered as ‘saving’ and should instead be used to cover the cost of the additional resource as our customer is telling us?

My lead consultant is telling me about risks, opportunity costs, contingency, etc. but it’s not very clear to me. This is a fixed engagement btw, not T&M.

Customer wanted to reprioritize activities and move them up the schedule. This will result in some tasks being carried out in parallel. To avoid over-allocating my resources, we have recommended to add one more resource and since this is a change from our original approved schedule and activities, we will charge the customer the additional resource. However, they are telling us that it shouldn’t be the case, as basically we have the same scope and the overall project schedule will actually now be ahead by 8 calendar days due to the parallel activities. Since I’m quite new with PM, I can’t explain why this is not the case. What are the factors considered here and why shouldn’t the 8 days be considered as ‘saving’ and should instead be used to cover the cost of the additional resource as our customer is telling us? My lead consultant is telling me about risks, opportunity costs, contingency, etc. but it’s not very clear to me. This is a fixed engagement btw, not T&M.

Customer wanted to reprioritize activities and move them up the schedule. This will result in some tasks being carried out in parallel. To avoid over-allocating my resources, we have recommended to add one more resource and since this is a change from our original approved schedule and activities, we will charge the customer the additional resource. However, they are telling us that it shouldn’t be the case, as basically we have the same scope and the overall project schedule will actually now be ahead by 8 calendar days due to the parallel activities. Since I’m quite new with PM, I can’t explain why this is not the case. What are the factors considered here and why shouldn’t the 8 days be considered as ‘saving’ and should instead be used to cover the cost of the additional resource as our customer is telling us? My lead consultant is telling me about risks, opportunity costs, contingency, etc. but it’s not very clear to me. This is a fixed engagement btw, not T&M.

Edit

To answer the question by nvogel: type of project, it is not software development. This is a service management project. The original plan is to run the activities/phases sequentially, but the customer wanted to prioritize activities in phase 2 to align another project with the results of our project. Now, this alignment is something that was not communicated during the RFP and bidding process. We can't pause phase 1 completely as phase 2 activities are dependent on some outputs from phase 1 thus, phase 2 will start when about 50% of Phase 1 has been completed. This will mean that my resources will have to do 2-3 tasks in parallel and to avoid the severe over-allocation, we will now add 1 resource. Still, the current resources will still have to work on 2 parallel activities.