1. Measurement and Payment

2. 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

3. 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

4. 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
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5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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)

13. 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)

14. 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