Measurement and Payment

Construction Progress Payments Contractor gives a bill for progress to RPR Outlines what bill is for Give details as needed (quantities) RPR reviews Approves (sends to owner) or disapproves (calls contractor) Contractor gets paid

Approval of Payment Requests RPR responsible for checking quantities and costs Quantity take off Inventory of equipment and materials on site but not used Field measure work completed or claimed Construction Cost Estimate of all completed work Audit of Invoices and costs Review of claims for extra work and completed change orders Check of retention amount Check method used for profit and overhead, material costs for estra work or change orders

Basis for Payment Amounts Accuracy of field measurements determined by contract type Lump sum contracts do not need accurate field measurements Cost plus or Unit price contracts need very accurate field measurements Pg 432

Schedule of Values v. Cost loaded CPM Schedule Unit Price Contracts Do not call for Cost Loaded CPM Schedule Conflicts with line items on unit price sheet Do not call for schedule of Values A breakdown of all line items is submitted w/ contractor’s bid and is binding throughout job

Lump Sum Contracts with Cost Loaded CPM Do not ask for Schedule of Values – cost loaded CPM is equal Request Cost loaded CPM be submitted before first pay period ends Lump Sum Contracts w/o Cost loaded CPM Do not ask for a cost loaded CPM schedule Do not ask for a bid breakdown Request a schedule of values before starting work on project

Evaluation of Contractor’s Payment Requests Contractor submits request for payment at a prearranged date each month for previous month’s work Lump sum contract – payment based on a fair estimate of work completed plus overhead and profit Unit Price Contracts – contractor gets paid based on quantity used – RPR must have accurate field measurements +/- 25 % is okay more or less allows for renegotiations by either party

Equipment And Materials delivered but not used Contractor brings stuff on site early May try to bill owner since stuff is on site Contractor only paid when stuff is used Includes materials used but not completed – pipe not paid for until covered and tested Unit price contracts are usually for installed in place materials – on site is not in place Can make exceptions for long lead items which arrive on site early

Force Account Daywork or for any type of cost plus payment In US associated with extra work and change orders May be used to pay contractor when it is difficult to provide adequate measurements or estimate cost of certain items of work Should be last choice when setting up items for payment

Force Account Change order is a must Force account payments not authorized for supers. Allowances for supers is in contractors O&P. Foremen working full time on item would be covered by account PM has authority to direct every aspect of force account work

PM and Contractor must agree on Labor Classification and approximate N of workers, wage rates, travel allowance, subsistence, are foremen included Equipment Types to be used including size, rating, capacity, which indicate that item can do work required, owned or leased, cost per hour for use Materials Cost and freight charges, purchased for project or from contractor’s stock

PM prepares lists of equipment and labor classifications actually used and corresponding rates Equipment list includes complete nomenclature of the equipment to establish rental rate from a Rental Rate Book Labor list includes labor classification and composite hourly rate (basic wage + added costs listed in DOT standard specs)

Payments for Extra Work and Change Orders Usually laid out in Contract Common is cost plus with a reasonable allowance for O&P State agencies may allow 15, 20, 24,33 % on labor and then 15% on equipment, 15% on materials 5% on primary subs (not subs subs)

RPR must evaluate all change orders and requests for payment of extra work RPR should consult PM or owner to determine the exact terms of the agreement that cover extra work RPR keeps daily record of extra work performed and materials used