Gauging Percent Completion on a large Job

[mull982]

I am currently involved in a fairly large project involving the construction of a new cement plant. The electrical portion of the project comes in at about 12 million dollars for the electrical subcontractor. Thier contract is set up as such that they bill the general contractor who turns around and bills us montly based on monthly progrees payments for work completed. Every month they issue a value for the total percent of electrical work completed for the project and expect to be paid up to that certain percantage of thier overall contract.

I have been asked by the project manager to verify tha the percentage that they are claiming they have complete everymonth is accurate for the work that is actually completed in the field. I'm trying to come up with an accurate way of gauging the work completed to this point and wanted to see how others have done this similar task for such large projects.

Do you break the electrical portion down into different aspects (underground routing, equipment installation, overhead conduit, cables pulled, testing & QA/QC). This way each of these will be weighted to a certain percentage of the overall job and each can be assigned overall values with sum to the overall completion percentage.

The other possibility I thought of was breaking each area of the plant into section and assigning each complete section a weighted percentage adding to the overall completion percentage.

I'm just trying to come up with a methodical way of arriving at an accurate fair value to use for this project and ones in the future.

 

[Pierre C Belarge]

I would first approach the EC. It may help in your relationship on the job and put both of you in the same ballpark. You may be surprised by the results.
Most ECs who work on projects of this size have a timeline/completion percentage of work already drawn up so they know where they are.


P.S.
I am inspecting a large project similar in price to your job. I go to the job trailers and they have timelines hanging up all over the trailers...just a thought.

 

[petersonra]

There are two ways this is normally handled. One is for the EC to tell you how far along the thing is by their internal calculations. The second is for some external means of doing this calculation. Since you did not do the second as part of the project spec, I think you are trapped into accepting the EC's determination.

 

[masterinbama]

On a project that size I would think that the payment schedule would have been set up front(at contract signing). That being said if it was not then it needs to be done on a valuation basis. The EC may have billed up front for mobilization and fixed materials. These costs will include but are not limited to temporary power, on site office space, long lead items such as Switchgear, panelboards and lighting. I have billed projects for 30% of their total without setting foot on the job. It is often difficult to look over a project in progress and put a value on it without looking at actual dollars spent by the contractor. The contractor may have you billed at 50% but in looking over the site it's hard to see, because he might have 5 million dollars worth of switchgear,PLC cabinets ,conduit,fittings and wire stored out of sight. I would sit with the EC and they will more than likely have a breakdown of actual money spent to date.

 

[bradleyelectric]

Ask the contractor for his schedule of values. Each portion of the job should be worth a certain amount and should show how far each section is completed.

 

[480sparky]

Percentage may not be the only factor involved. Payments may be keyed to inspections, as well as delivery of certain items.

If some material is on-site, the EC may bill for it at that point, whether it's installed or not. Common items may be light fixtures..... er..... sorry..... luminaires, switch gear, light poles, or other similar high-dollar items

 

[Fulthrotl]

I would first approach the EC. It may help in your relationship on the job and put both of you in the same ballpark. You may be surprised by the results.
Most ECs who work on projects of this size have a timeline/completion percentage of work already drawn up so they know where they are.


P.S.
I am inspecting a large project similar in price to your job. I go to the job trailers and they have timelines hanging up all over the trailers...just a thought.

most large work is scheduled, usually in primavera. now, most EC's
are not gonna give out their internal P3 files to anyone outside the
company, but a continuing and open relationship with the GF pushing
the job would be where i'd start. he's your link to where the job is
really at. he can tell you where the job is really at, him and his
scheduler.

the last large job i did work as a project manager on was about $30m,
and the company used primavera for critical path management, and
timberline for cost accounting. i had a macro that ran in excel that i
could ping the database with, and dump the whole job into a spreadsheet,
and filter the data any way i wanted to. it was incredibly accurate to
do it that way, and i discovered several seepages of money that the
reports weren't finding. if the backhoe operator used and extra foot
of toilet paper on his morning potty break, it showed up.

in the company that i worked for however, that level of specificity would
never be revealed to a customer's representative, and on today's market,
with people struggling to stay afloat, everybody want's to get every nickel
they can, as fast as they can, to cover their slow pays.

break points in the original contract should be clearly defined, however....
$ at signing
$ at switchgear delivery
$ at fixture delivery
$ at underground signed off
$ at...........

but the EC's general foreman and the primavera p3 driver are your keys
to the information you need.

randy

 

[Pierre C Belarge]

Randy

Thanks for the detailed information.




What kind of project was the #30 mil project?

 

[Fulthrotl]

Randy

Thanks for the detailed information.

What kind of project was the #30 mil project?

contractor was out of denver, co.

roads, sanitary sewers, fresh water, electrical, catv, phone, data distribution,
etc. for a 900 acre mixed use development in orange county.

the previous PM quit the week before i was hired, so i got to walk in
cold on something that was going 188 mph in a circle with one foot nailed
down.... it was an interesting experience, and about as much fun as pushing
a buick with four flat tires across a gravel parking lot.

none of the subs had been paid in two months, none of the paperwork
had been sorted, ever. it was all stacked neatly, in a pile, in a closet in
the job trailer. in chronological order. the beginning was at the bottom, the
end was at the top.

the previous PM had formally tendered his resignation when they found
his work vehicle in the company parking lot, with the keys, corporate nextel,
and company credit card on the front seat, nicely locked up on monday
morning.

 

[mull982]

Thanks for the input guys. Does anyone know of any recommended resource materail for gaining a better understanding of project managment including such cases as this? Any online resources or books?

 

[iwire]

Here often we have to provide a "schedule of values" to the GC long before the job starts to avoid this kind of problem.

 

[mull982]

Here often we have to provide a "schedule of values" to the GC long before the job starts to avoid this kind of problem.

When you refer to this "schedule of values" does this include the values of all purchased material and labor milestones? You then bill based upon the procurement of such equipment and the labor for each milestone?

 

[RHJohnson]

On the last project ($300 M power plant), as was normal for me, I show up after construction has been on site for a year. About a week later - at the end of the month - I was asked to walk the "systems" and approve the electrical contractors request for payment.

Several of the systems were already 90% paid, but only 75% finished! The first "system's" for me to commission were from the 230kv switchyard and on through to the 4kv loads, and the D.C. battery system. These are necessarily the first "system's" energized. Construction claimed it 90% finished the month before, and had done no further work on them, saying a few days of terminating was all that remained, and now wanted what would be another 5%.

Short story - they had to put a dozen guys on it for 2 weeks to try and make the completion schedule for those systems, 12 hour days, 7days a week. It was the start of winter, snowing and got down to - 20F... they had to build a hooch in the switchyard around the Sf6 breaker, heat it, and had electricians working there for almost a week.

Near the end of the project they were cutting every corner they could, since they still had a large payroll, probably 250 guy's, and were begging for additional money to finish. The construction company was let go early, were not even allowed to finish the punch list.

That job ended up over budget by millions, and the hurry up work they did, both mechanical and electrical, at the end was/is a problem today. As a matter of fact parties involved will be in court this June. It is estimated another 50 M is needed to correct all the deficiencies.

Remember, material is not the full cost of the job! On this job 99% of all equipment was on site when I arrived. The construction company doing the work was not experienced in this type of project, and should never have attempted it with the people they had. They had many engineers and staff, but not with the right experience. Field supervision was generally good, but they received incorrect marching orders. Yes, I was a thorn in their side and I am sure they hated me.

A year later they got another contract on a smaller power plant just 100 miles away. I couldn't believe that! In the end they were run off that project about 1/2 way through.

I hope this is some kind of worse case scenario that will help in what you should watch out for, but should not expect........