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5/9/2016

3.3 Contract Price Information to Facilitate Evaluation of Changes - Road to Success - IPLOCA WIKI Collaboration Platform

3.3ContractPriceInformationtoFacilitateEvaluation
ofChanges
CreatedbyGuyHenley,lastmodifiedbyMustafaAbusalahonNov20,2014

Experienceshowsthatthemajorcostimpactofchangesonprojectsistheadditionalcostofteamsandresources
relatedtotheadditionaltimetheyspendonsiteeitherworkingwithfullrunningcostsorinstandbywithreduced
runningcosts.
Changestothebaseline/disruptions/stoppageshaveingeneraltwoconsequencesforaproject:
Thedurationofcertainactivitieswillbeextended
Theremightbeaneedformobilisingadditionalresourcestomitigateanoverallextensionofproject
duration
Inthissectionandinsection4thewordcostisunderstoodfromaclientspointofview:itmeansthepricepaid
bytheclienttothecontractorwhichincludesthecontractorsdirectandindirectcosts,itsoverheadsandprofit.
Therefore,inordertoallowbothclientandcontractorprojectmanagementteamstopromptlyevaluatethecost
impactsofchangesand/ordisruptionstoaproject,thecontractpriceshouldincludethebreakdownoftheweekly
costsofthemainworkingcrewsinoperation(includingenergy,sparepartsandconsumablesfortheequipment
andmachinesusedaswellaslabourandstaffcostsincludingfood,lodgingandtransport)andtheweeklycosts
ofthesiteoverheads(offices,stores,yardsetc.),aswellasthatofthemanagementoverheads,combinedwitha
scheduleofthecostsofthesameworkincrewsinstandby(whennoenergyandconsumablesformajor
equipmentisused),andofthecostsofpotentialmitigationmeasures(suchascostofmovingdifferentcrewsin
relationwithdistance).Allweeklycostswouldexcludethecostofincorporatedmaterialssincetheircostimpactis
quantityrelatedinsteadoftimerelated.
Examplesoftimerelatedcosts(weeklycosts)forapipelinecontracttogetherwithexamplesofevaluationoftime
andcostimpactsofstoppagesareattachedinAppendix4.2.1ExamplesofEvaluationofTimeandCostImpacts
ofFullStoppagesorofSlowdowns.
Inthecaseofcostplustypecontracts,theactualcostsplusfeesarecomparedatgivenintervalstoabillof
quantitiesoranactivityschedule,whichshouldincludesuchtimerelatedcostinformationasdescribedabove.
Inthecaseofbillofquantitiesoractivityscheduletypecontracts,thesetimerelatedcostsshouldbeincorporated
asbillitemsoractivityitemsinthepricingdocument.
Inthecaseoflumpsumcontracts,abreakdownofthesetimerelatedcostsshouldbeinanappendixattachedto
thetender.
Thistimerelatedcostinformation,togetherwiththefixedcostsformobilisationofteams,equipmentandfacilities
(whichgenerallyformpartofmostcontractsbutshouldalsobeincludedinthelumpsumtenders),areessential
managementtoolstoassesschanges.

Continuewith3.4ConsiderationsinDevelopingtheConditionsofContract
Backto3.2ProgrammingtheWork
Backto3.TheBaselineofaConstructionContract

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