Holdfast Training Services Trial Blog

Safe in the knowledge that everyone will be too busy fawning after Mike’s baby…

I just reviewed the FtIG boiler project schedule, again. Now, on version 4, the contractor has lowered my expectations sufficiently that I am now focused only on the money. Their timings for installing pipe work are unrealistically short and everything appears to be on the critical path. These, though annoying, are their problem as the contractor is responsible to ensure there is no gap in service for hot water, heating or cooling within certain seasons.

So resigned to failure on the time side I have turned to look at the money. USACE pay for definable elements, rather than the alternative of paying for percentage complete on the whole job. From the pay reviews that I have conducted for the Waste Water Treatment Plant this appears to be a better form of holding the contractor to account for finishing up individual elements. By paying 98% of an element that isn’t quite finished it leaves a virtual snagging list in dollars. These are more likely to be completed by the next pay period rather than being forgotten until the end of the project, when especially if there is a staff turnover, they get swept under the rug. We will pay for stored materials but, it has to be a significant element, the contractor has to show ownership and we prefer if it at least in place. For this project the boilers and water heaters may come into this but certainly nothing else. Again, for the waste water treatment plant we have paid for stored materials for a $60k generator and a $130k pump set so that really sets the magnitude. I’d be interested to hear what everybody else’s clients’ are happy to pay for on that?

So what’s my issue with the FtIG values? I have two:

To me definable elements are like a product breakdown structure (PBS) and when it comes to pay time I want to be able to go to the element, look at it, tick a box and pay the contractor. This is not me being an idle box ticker rather ensuring that each element is well defined, and I assume this will help them with their sub-contractors. The FtIG programme has not been built from a PBS so I can foresee the arguments coming at pay time. The lesson from this is do a detailed PBS, even for a simple job, because it has ongoing utility beyond just being the start of a programme.

I remember Steve Payne hammering the PBS into us in phase 1 but this experience and if I had any doubt then it has gone. The issue of everything being definable is important too in order to communicate the plan to different people. I am, reasonably, sure that the sub contractor knows how to do this work, however they have not managed to communicate this effectively to the contractor who, in turn, has not managed to communicate it to me. I am sure this is a lot worse in the larger projects with more people involved.

Front loading. The contractor admitted before that the project was front loaded, we all laughed and I told him that we wouldn’t accept front loading. They went away and when version 2 came back it was worse rather than better. I am aware that the contractor requires cash flow. Working for the Federal Government cash flow is not a problem, however I need to ensure that if the contractor goes bankrupt that I still have the money left in the project budget to put the remainder of the contract back out for tender. The solution to us meeting a better agreement actually came from the contractor letting me loose on his values. I can’t pay them any less than the contract value, all I am doing is moving around what the money is tied to. I am sure there will still be more iterations required before we come to final agreement but it’s a start.

In terms of submittals, over here the Navy ask for a ‘schedule of values’ as well as a schedule (programme), but USACE ask for both as part of the same submittal: the schedule. I’d be interested to hear how others have seen this being asked for by clients? For checking on the client side I think breaking them out would be best.

Apologies for the lack of pictures, I have avoided putting the programme in as it is little changed from a couple of blogs ago, and looks pretty difficult to see on a computer screen.