Regarding progress tracking issues
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Hello, fellow sailors! All materials for my project are purchased by the owner, while the construction contractor is responsible for their fabrication and installation. Today, I received an application from the construction contractor for payment of the project progress funds. The process piping inside has only been prefabricated and not installed yet. Even before the equipment attached to the pipes arrived, the construction party submitted a quote based on the length specified in the drawings. As the supervisor, in order to protect the interests of the owner, ensure that the construction progress keeps pace with the disbursement of payment amounts, and also guarantee that such payments meet the working capital needs of the construction contractor for its operations. For process pipelines that have been prefabricated but not yet installed, how should signature approval be given based on the proportion of the work volume? How is it calculated according to general practice? Please help, thank you!
This post was last edited by CHANGBAISHI on 2020-7-10 at 17:06. It’s just for discussion and for reference only. I don’t understand. Since Party A is responsible for purchasing the materials and Party B is in charge of prefabrication, it means that only the prefabricated parts can be calculated based on the tonnage processed, right? It doesn’t seem to involve anything else. For ordinary prefabricated pipes, it’s just the labor cost. If calculated based on the overall proportion of the project costs, that is, labor costs, plus some costs for lifting equipment. The most important things should be saved for last. To avoid overdrafting. For each node, the associated costs are determined based on the category to which it belongs – such as labor costs, the cost of equipment delivery, the cost of installation, and warranty-related expenses must also be taken into account. ) Once it’s clearly divided, it can be controlled. For projects like this, people prefer to have them installed in place. No one likes doing prefabrication work. Generally, the contractual terms in this regard should be clear.
The cost of pipelines is calculated based on the length in meters, as well as the number of fittings and valves installed; this includes both the cost of the work itself and the labor costs.
Party A and Party B need to agree on a predetermined payment ratio. Based on the owner’s description, the equipment that Party A is supposed to provide has not yet arrived. Party A should pay Party B for the work related to the prefabricated pipes; it is not appropriate to wait until installation is complete before making the payment, as this would be unfavorable for Party B, especially considering matters such as migrant workers’ wages
What about the paint? Is the pipe painted before it is prefabricated?
The paint is prepared by the construction unit at the prefabrication site, and a separate request for payment for the paint is submitted.
I also took into account the issue of labor costs for prefabricated welding; if the payment for the work is not made on schedule, the construction party might have to cover those labor costs out of its own pocket, which would be detrimental to the progress of the construction. If I pay the full amount according to the specifications in the drawings, I’m worried about cost overruns, which would hinder progress control. The main reason for the current lack of progress is a shortage of materials, equipment, and working space; civil construction is lagging behind, as is the steel structure work. Only 50% of the pipes and valves have arrived, and the installation conditions on site are poor; when it rains, there is water and mud everywhere. There is no proper positioning for lifting, and many factors have an impact.
It’s definitely incorrect to prepare a budget by measuring according to the drawings, especially when it comes only to prefabrication. Taking into account labor costs along with machinery costs, and considering the costs related to project progress, it should be noted that the client will also make payments in proportion to the progress budget, usually ranging from 60% to 80%.
Yes. Let’s hand it over to the property owner for review!