Hello, We are carrying out a contract. The material on one activity has to be laid slightly thinner in minor areas due to obstructions, however the activity is still carried out. The PM has raised a PMI to allow the material to be laid thinner over these areas and ask for a negative CE / quotation for the material not used, to reduce it from the forecast Cost. Is this correct?
J,
The Project Manager is not at liberty to “ask” for a negative CE. The Project Manager can instruct the Contractor to issue a quotation. When you prepare the quotation it may prove to be cost positive or cost negative. I suggest that in this situation if it proves to be cost positive, or neutral, then a detailed explanation is submitted with the quotation.
I suppose it depends on what material you are referring to and in what circumstances it is being laid. Having spent many years in the Asphalt contracting industry I am aware that road materials still have to be laid to the same final tolerance so whether (say) a surface course is laid at 35mm deep or 32mm deep the same work is required to de/mobilise and additional work may be required for adherence to tolerance within the thinner layer. If the layer now varies in thickness “due to obstructions” then additional work may be required to prevent differential compaction. Similarly if road surfacing layers are reduced in thickness there comes a point when the material has to change (smaller aggregate size) to meet the relevant Highways Spec and practicalities of laying. As a rule of thumb, materials with smaller aggregate size is more expensive. Another thing to consider is if the reduced quantities, “due to obstructions” may lead to additional waste.
Therefore a full analysis is required to see if a small reduction in volume is more than offset in the cost of additional effort and / or change in materials and / or increased waste. If this is the case then the CE may still be for additional cost and even additional time. It can prove difficult to “educate” the Project Manager in such matters.
Hello Neil,
Thanks very much for responding so quickly. Yes, you are correct, it is an asphalt contract. On a phase we came across solid concrete strip which the miller wont deal with. The client originally wanted 110mm of AC20 but on these areas above the concrete. He has given a PMI to allow 60 - 70mm of AC20. So there is no change in the works apart from small reduction in AC20. Sounds like we should give a cost negative CE ? As we are requested to survey each layer ( Existing ,Mill, binder & surface level) we could work it from this allowing for tolerances and waste. We could also include our time for compiling the CE? " Educate" has been very difficult for may years!
Thanks Again
J,
It sounds as if the fixed costs for your planer have stayed the same, but measured volume has gone down, so the unit cost has gone up. Any damage costs to the planer when it “found” the concrete?
If I understand correctly there are now two operations (1) regulate with AC20 on the cleaned & bond-coated concrete strip at 60mm to 70mm deep, at lower productivity (hand or machine lay?) with associated haulage standing time and (2) lay AC20 to a smaller area at 110mm, likely therefore also now at lower outputs. Therefore you have a saving of 40mm to 50mm over a portion of the works, but increased prep and laying costs for all of the works.
Once you evaluate the Adds and the Omits the arithmetic will dictate if your quotation is positive or negative.
The key point here, for this forum, is that the Project Manager has no authority to ask (or instruct) you to issue a negative CEQ.
Thanks again. No miller damage & it is machine lay.