At what point during the course of the Subcontract is the pain/gain assessment made, and at what point is it paid? Is the defined cost paid upon application for payment (eg. each month) and then the gain share paid upon Completion? … Or is this the calculation of the Total of the Prices, less the Price of Works Done to Date assessed at each payment application (or on completion of the activity on the activity schedule), and then a balancing payment made upon Completion?
1 Like
The assessment of the share amount should be ‘informally’ carried out from day 1, by the Contractor, as they would need to monitor the financial performance to include these amounts in project forecast reports.
This ‘informal’ calculation would not be included in any payment assessment, however, until Completion of the whole of the works when a ‘formal’ preliminary assessment is made and included in the subsequent payment certificate (notice),
The share calculation is a ‘global’ assessment that is unrelated to specific activities but based upon the difference between the PWDD and the TotP, as you have said.
A final assessment is subsequently made using the final PWDD and final TotP, with any ‘balancing amount’ included in a final payment assessment.
The Project Manager makes a preliminary assessment at Completion, which is then included in the next amount due the following period. There is a final assessment made within the final total of the Prices - which will be made at the end of the Defect Date where all the final costs will know be known.