Farjad HasanProject Controls & Risk Manager| Bin Quraya Company Ltd.Saudi Arabia
How a contractor can charge for the acceleration fees (for direct manhours) for expediting the project since material quantities are not changing? Saving Changes...
Always start with the contract and terms and conditions around changes. On the surface, this sounds like a contract change which could result in a shift in payments earlier resulting from quicker utilization of labor and completion of milestones.
Kiron
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1 reply by Farjad Hasan
Jan 07, 2022 1:27 AM
Farjad Hasan
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Thanks, yes it is contractual ammendment made to utilize labor earlier for earlier completion.
Farjad,
Please could you clarify the reason for the acceleration? Is it for the acceleration of the delivery of material or installation? Because you can accelerate both even whether the number of materials increases or not.
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1 reply by Farjad Hasan
Jan 07, 2022 1:30 AM
Farjad Hasan
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Reason for the earlier completion of project, material expediting and earlier arrangement of resouces get invoived in acceleration of project . Number of material do not necessarily increase but expedited deliveries are done.Thanks
Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
Hi Farjad,
the amount of material is one cost driver, how it is handled and used is another. If your contract specifies how you are doing things (e.g. in which timeframe), you may have a cause to raise a change request. If not, if acceleration is demanded by the customer, you can argue that the pre-acceleration speed is indeed what you offered implicitly and the demands is a change to that.
Thomas
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1 reply by Farjad Hasan
Jan 07, 2022 1:33 AM
Farjad Hasan
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Thanks
Saving Changes...
Peter RapinSubject Matter Expect; Project Delivery| Independent ConsultantOntario, Canada
I'm not sure what you mean by "acceleration fees"? If there is a change in the contract conditions driven by the Owner/Client then the Contractor should ask for a Change Request, followed by a proposal or offer to achieve this change leading to a Change Order, all in compliance with the current contract terms and conditions.
Typically one party to a contract cannot unilaterally change the conditions of the contract, the change has to be mutually agreed. If the Owner refuses to go this route you may be in a refusal to comply or a contract claim situation.
Either way the contractor will be required to:
1) notify Owner in a timely manner consistent with the contract
2) show the impact of the alleged change
3) prove entitlement under the contract
4) establish the damages caused by the impact.
Note that unless the change is considered a fundamental change, thus an Owner breach of contract, the contractor cannot abandon the work. The initial contract conditions continue to apply until the Change is agreed by both parties.
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1 reply by Farjad Hasan
Jan 07, 2022 1:35 AM
Farjad Hasan
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Acceleration fees is when you charge project owner for the accelerated completion of project with respect to contractural completion. I agree with the step you mentioned for contractual change situation. Thanks
Saving Changes...
Farjad HasanProject Controls & Risk Manager| Bin Quraya Company Ltd.Saudi Arabia
Aug 25, 2021 7:39 AM
Replying to Kiron Bondale
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Farjad -
Always start with the contract and terms and conditions around changes. On the surface, this sounds like a contract change which could result in a shift in payments earlier resulting from quicker utilization of labor and completion of milestones.
Kiron
Thanks, yes it is contractual ammendment made to utilize labor earlier for earlier completion. Saving Changes...
Farjad HasanProject Controls & Risk Manager| Bin Quraya Company Ltd.Saudi Arabia
Aug 25, 2021 7:51 AM
Replying to Abolfazl Yousefi Darestani
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Kiron made a good point. Moreover, material may or may NOT have to do with labor!
Yes material expediting also gets involved in it. Thanks Saving Changes...
Farjad HasanProject Controls & Risk Manager| Bin Quraya Company Ltd.Saudi Arabia
Aug 25, 2021 12:21 PM
Replying to Elena Sandoval
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Farjad,
Please could you clarify the reason for the acceleration? Is it for the acceleration of the delivery of material or installation? Because you can accelerate both even whether the number of materials increases or not.
Reason for the earlier completion of project, material expediting and earlier arrangement of resouces get invoived in acceleration of project . Number of material do not necessarily increase but expedited deliveries are done.Thanks Saving Changes...
Farjad HasanProject Controls & Risk Manager| Bin Quraya Company Ltd.Saudi Arabia
Aug 25, 2021 1:38 PM
Replying to Thomas Walenta
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Hi Farjad,
the amount of material is one cost driver, how it is handled and used is another. If your contract specifies how you are doing things (e.g. in which timeframe), you may have a cause to raise a change request. If not, if acceleration is demanded by the customer, you can argue that the pre-acceleration speed is indeed what you offered implicitly and the demands is a change to that.
Thomas
Thanks Saving Changes...
Farjad HasanProject Controls & Risk Manager| Bin Quraya Company Ltd.Saudi Arabia
Aug 26, 2021 11:26 AM
Replying to Peter Rapin
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I'm not sure what you mean by "acceleration fees"? If there is a change in the contract conditions driven by the Owner/Client then the Contractor should ask for a Change Request, followed by a proposal or offer to achieve this change leading to a Change Order, all in compliance with the current contract terms and conditions.
Typically one party to a contract cannot unilaterally change the conditions of the contract, the change has to be mutually agreed. If the Owner refuses to go this route you may be in a refusal to comply or a contract claim situation.
Either way the contractor will be required to:
1) notify Owner in a timely manner consistent with the contract
2) show the impact of the alleged change
3) prove entitlement under the contract
4) establish the damages caused by the impact.
Note that unless the change is considered a fundamental change, thus an Owner breach of contract, the contractor cannot abandon the work. The initial contract conditions continue to apply until the Change is agreed by both parties.
Acceleration fees is when you charge project owner for the accelerated completion of project with respect to contractural completion. I agree with the step you mentioned for contractual change situation. Thanks Saving Changes...
