Measurement and Payment Module #5 Prepared by Dr. Randy R. Rapp July 2005

2005, Randy R. Rapp2 Contractual Payment Lump-sum or fixed-price Unit-price Fixed-price with cost incentives Time and materials (T&M)

2005, Randy R. Rapp3 Progress Payments Typically monthly Contractor request maybe 10 days prior Lump-sum vs. unit-price verification Inspector role –Measure quantity and type of work –Claims for extra work and change orders –Calculate payment due, minus retention –Prepare and forward recommendation Lump-sum vs. unit-price payment basis

2005, Randy R. Rapp4 Conflicting Bases of Payments? Specification writer misunderstands? Lump-sum contract –Schedule of values OR –Cost-loaded critical path method (CPM) network Unit-price –Neither schedule of values NOR –Cost-loaded CPM

2005, Randy R. Rapp5 Payment Request Evaluation Lump-sum: completed work package –Discernable fraction thereof is usually OK –Consider change orders, if any Unit-price: quantity x unit-price –Measurement accuracy absolutely essential –Renegotiate unit-price, if quantity exceeds allowable variation (15% to 25%) Equipment and materials delivered but not yet installed –Maybe pay actual cost for long-lead, high-cost items –Only if contract specifically stipulates

2005, Randy R. Rapp6 Force Account Day work Measurement and Payment section OR Changes and Extra Work section “Reasonable” allowance for overhead and profit? Categories –Labor –Materials –Equipment Payment is full compensation for the work

2005, Randy R. Rapp7 Force Account (Cont’d) Labor –Trade classification wage rate and numbers –Foremen included, not general supervisors –Any allowances? Materials: cost and freight Equipment –DOT rates or Rental Rate Book –Active and standby times Markups (p.85)

2005, Randy R. Rapp8 Payment for Extra Work Often detailed in Supplementary General Conditions

2005, Randy R. Rapp9 Payment for Mobilization Lump-sum contracts –Not included as a bid item: likely inflated –Include as a calculated allowance in separate technical section, per contract requirements –Not a matter of Measurement and Payment Unit-price contracts –Properly in Measurement and Payment –Lump-sum amount stipulated in extended column

2005, Randy R. Rapp10 Partial Payments Partial waivers of lien (subs’ waivers maybe one payment behind prime contractor’s) Total cost pricing of change orders Forward pricing of change orders Retainage Liquidated damages

2005, Randy R. Rapp11 Field Measurement for Payment Pipeline lengths –Beware delivered vs. plan or in-place –If in-place, measure centerline on top Earth and rock volume –Bank vs. compacted –Weight vs. volume (survey profile prior to work) Curbs: top edge toward street Sewers: do not include manholes Fence: plan or top rail in-place

2005, Randy R. Rapp12 Field Measurement for Payment (Cont’d) Pavement –Areas or weights –Unit-prices for handwork vs. equipment Retaining walls –Inside vs. outside surface measurement –Calculate non-overlapping prism volumes

2005, Randy R. Rapp13 Final Payment Additional requirements 1.Pay all project debts 2.Submit receipts, releases, waivers of lien 3.Obtain consent of surety Besides retainage 1.Liquidated damages 2.Punch list work (1.5 to 2 times value) 3.Liens already filed Upon filing Notice of Completion or Substantial Completion –Sometimes time limitation to announce intent to file lien –Time limitation to actually file