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Topics: Construction, PMO, Scheduling
Do You Know the Entire Contract – Part 6
Critical Components in General Conditions - Performance Schedule

This is 6th in a series of discussions that is intended to prompt Project Teams to be aware of the entire contract document, including Information For Bidders (IFB), General Conditions/Terms and Conditions (GCs) and the Technical Requirements [Specifications and Drawings.]

It is important the Buyer’s Project Manager, Contracting Officer, technical representatives and PM support services (scheduler and estimator) verify content or provide input that ensures the contract is complete and executable within the Buyer’s organizational assets and business processes.

General Conditions (GCs)contain the contains legal and contractual requirements, including section relating schedule, payments, damages/incentives, insurance, changes, and sometimes forgotten legal and fiduciary reports. The GCs are equally important to the Buyer’s/Seller’s Project Managers, Contracting Officer, Financial Administrators and Legal representative.

GC – Performance Schedule: Expressed in calendar days, the performance schedule in a list of Milestones and Calendar Days After Award (CDAA). The milestones typically include: A) Notice To Proceed. B) Substantial Completion. C) Contract Completion. However, due to phasing of work and other project interfaces, the Buyer may specify other milestones and CDAA critical form maintaining specific progress in relations to other project contracts or interdependencies.

Notice To Proceed is commonly related to the Buyer granting Seller permission to enter the property after certain requirements are satisfied such as insurance, quality plan, safety plan, key personnel, and mobilization plan. At this time, the Seller will establish a secure work zone that is under their control and include the actual construction area, material storage area, temporary project office and employee facilities, and parking areas for employees, visitors and construction vehicles.

Buyer’s may also list intermediate milestones for defined and distinct elements of the work. This is intended to assure the Seller schedules, executes and completes work in a specified order and relative time frames. Depending on the contract type, Buyer’s industry, and as recommended by the Engineer-Of-Record, intermediate milestones may include: A) Complete design submittals. B) Complete product/construction submittals. C) Complete prototype testing. D) Complete Work Element 1. E) Complete Work Element 2.

TIP: Milestones on the performance schedule should be correlated with the payment requirements. If Milestone payments are specified, the Milestones in the schedule should be consistent.

TIP: Milestones should be correlated with the staging and phasing requirements in the contract specifications and drawings.

TIP: Milestones should be reasonable with a high confidence for realization. If not, the Buyer will risk delays in the process to contract award and in work progress after contract award.

TIP: Milestone list should be complemented with a definition so the Buyer and Seller equally understand the requirement and criteria for completion.

TIP: Amount of Milestones should be balanced and avoid limiting the Seller’s flexibility in scheduling, managing and performing the work.
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Thank you for sharing. By the way the completion date can be considered as the day of overall substantial completion. Contract completion might be complicated since the contract usually includes a certain amount of the warranty period or defect liability period, and procedures to settle pending claims or legal issues etc., if any, even though the project has been substantially completed and final deliverables have been handed over to the Buyer(Client).
Interesting, thanks for sharing...
Sungjoon

Thanks for your input. All the more reason to ensure clarify by providing a definition of each milestone in the contract. From my experience, contract completion is the culmination of punchlist completed, demobilization and site restoration completed, final inspection accepted, final contract changes processed, final contract amount established, and receipt of certificates for release of liens.

Henry

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