School Construction Photo

School Construction Photo
A job site photo of a school under construction


The content provided on this site and in the Posts is intended to be thought-provoking, educational, and - in some cases - entertaining. It is not intended as direction or recommendations for the design or construction of any specific building project. The information is provided in good faith but without assurance as to its completeness, accuracy, or suitability for any particular purpose. If you are considering using information provided on this site, you are responsible for verifying its appropriateness to your needs, and you assume all risk for its use.

Wednesday, November 4, 2009

Reviewing the Contractor's Application for Payment

On most public construction projects, the Architect reviews the Contractor's monthly Applications for Payment (a.k.a. "Requisitions") and certifies the amount to be paid to the Contractor for that month. If the Application is made on AIA Document G702, the front page includes the names of the Project, the Owner, the Contractor, and the Architect, an Application number, date(s) indicating the period covered by the Application, an overview accounting of the monetary status of the construction project, starting with the original contract sum and including a calculation of the Current Payment Due, considering change orders, the total amount completed and stored to date, Retainage to be withheld, and previous certificates for payment. The front page also includes a Change Order Summary, certification by the Contractor, conditions (terms) of certification by the Architect, and the amount certified. Continuation sheets should break down the contract sum and progress according to the approved Schedule of Values (see The Schedule of Values deserves close attention) and also include a detailed accounting of the status of work on approved Change Orders.

The Architect should review even the basic information on the front page before looking at the detailed information on the continuation sheets. It helps to have a copy of the previous month's Application in hand for comparison. Once you determine that the current month's Application is for the appropriate project (seriously), check the Original Contract Sum. In more than one instance, a contractor has changed the Original Contract Sum on an Application for Payment, resulting in an increase in payment without an approved Change Order. The Original Contract Sum should remain the same for the life of the Contract. Before turning to the continuation sheets, the Architect should apply the same scrutiny to the rest of the front page calculations and the wording of the certification. Different certification language may carry different liability.

Detailed information on the continuation sheets is typically generated as part of a "pencil requisition" process and in anticipation of work to be completed by the end of the month. The Architect needs to consider whether the final Application for the month represents work that was actually accomplished by the end of the month. If the Architect is aware that an anticipated material delivery did not occur, then the Architect should not certify payment for that. Likewise, if the Architect is aware that a specific work item was not completed, then the Architect should not certifiy payment as if the item had been completed. Necessary adjustments to the continuation sheets must be carried over to the front page and to the overall amount certified by the Architect for the period covered by the Application. It may be practical for the Contractor to make the necessary adjustments and then resubmit a corrected Application for the Architect's certification. If timely payment is an overriding concern, then the Architect may need to make the adjustments by annotating the Application, certifying a reduced amount, and notifying both the Owner and the Contractor of the reasons for the adjustments. (See also It takes timely money to make a project go )

Sunday, November 1, 2009

Manage Design Costs with Early Project Overtime

One of Mike's PM tips for managing design costs on a project: "If you know you are going to have to work overtime on a project," he said, "do it in the beginning. It costs less to do overtime when there are only one or two people working on a project." (See Purposeful chaos (the 2-minute design offense))

This makes a lot of sense when considering a project on a compressed time line. If you're trying to figure out how to get all the work done in a short period of time, the least attractive alternative is having an army of designers and drafters burning the midnight oil and generating design questions as the completion deadline approaches. Eleventh hour overtime can quickly burn through budgeted hours and fee dollars, and too many new or unanswered questions at that stage can lead to unplanned chaos.

It's also interesting to consider how this principle of early overtime might benefit progress and labor costs on a construction site. Early trades - like earthwork, concrete, and steel - set the stage for a larger work force, and trades can multiply as the project becomes ready for their work.