Claim Case Study
Submitted By:
Hossein Abaeian 7119852
Waad Alghazi 6697658
INTRODUCTION
The project includes the erection of mechanical equipment and installs piping included in the SAG MILL MECHANICAL contract. The history of the project is summarized as the following:
Summary of Contract:
Name of the contract: SAG MILL MECHANICAL contract
Project start date: 30 April, 1990
Actual Project start date: 3 May, 1990
Project planned finishing date: 31 August, 1990
Actual Project finishing date: 14 December, 1990
Type of the contract: Lump Sum
Total amount of contract: $2,549,130
On January 31st 1990, owner invites the contractor for bidders list for SAG mill mechanical contract. Contractor qualifies for the project at the plant. Proposal request for SAG mill mechanical contract was issued by the owner on the 19th of March 1990. Contractor submitted the proposal on the 17th of April 1990. Between 17th of April 1990 and May 3rd, 1990 owner and contractor exchanged correspondence relative to the proposal and participated in bid clarification meeting. On May 3rd 1990 the owner granted the contractor the SAG mill mechanical contract for $2,549,130. The contract duration time March 1990 to August 1990 (20 weeks). Upon the award of the contract the contractor mobilized its forces to the project site immediately. However the contractor was prevented to execute the work as settled with the contract. The claim is conducted because of several reasons. One the contractor was not able to access the work areas as planned date. Second, late delivery of equipment and some of the equipment were delivered damaged or with deficiencies. Third, construction drawings, vendor drawings and revisions of drawings were submitted late. These changes were imposed upon Contractor without the prior issue of a Change Order. These problems impacted the time, productivity and cost of construction. The engineer advised the contractor to complete the contract without deficiencies by 13th of December 1990. Refer to the history and key communication summary between the owner/engineer and contractor.
Picture bellow shows the work breakdown structure of the project:
SCOPE ANALYSIS:
The mechanical equipment erection work in the contract was divided into six main physical areas of the site excluding the piping. The piping work was spread out over all the areas and is considered as the 7th area. The six areas with the relative volume of labour content are described briefly.
CHANGES TO THE CONTRACT:
The changes made to the contract are divided into 5 main categories as described below:
1. Changes in information regarding delivery of equipment (shell delivery changed from June to July, then to the end of August), changes of equipment delivery dates varied between one and six months later than the specified delivery dates (most of which the contractor was not notified of)
2. Changes of the erection work caused by change in delivery of equipment
3. Changes in access for unloading equipment and erection work due to late completion of work to be performed by owner’s forces or other contractors
4. Changes to the methods specified (to ease the effects of lack of access and late deliveries and to correct defects on equipment supplied by owner)
5. Changes in the scope of work to be performed (including changes and revisions in the designs done after the contract was awarded and correctional work)
MAN-HOUR:
In the case of actual man-hours spent on site, they have been divided to two main sections:
1. Man-hours spent on the works assigned in the original contract
2. Man-hours spent on the extra work added to the original contract afterwards The two man-hour sections are further divided into three subsections that include the premium hours, regular hours and shift differential hours. In order to calculate the total man-hour value of the project, the labour cost was assumed to be $40/hour for the regular hours and $50/hour for the shift differential and extra-work hours.By subtracting the amount of earned man-hours in the billing file from the amount of actual man-hours, the claim balance for the man-hour section is found.
CHANGE ORDERS:
The original contract was signed based on the given drawings at the time, and the contract price that was used for bidding was found through studying the drawings and determining the required scope for the project. Afterwards, some changes to the project schedule were made due to changes in the scope of the work and the occurrence of several delays. These changes caused major loss in productivity, which needs to be added to the claim. Based on the communication between the owner/engineer and the contractor some of the drawings had to be redrawn or revised, adding more value to the claim requested. Also, several change orders were issued due to delays and changes made, which had been calculated and provided to the engineer. The total loss in productivity due to the points mentioned above is estimated based on the Charles Leonard method by using the Charles Leonard charts. To find the effect of changes on the productivity, the costs of change orders and reissuing of drawings were added and divided by the contract price. From the charts, using the line with two major causes for drawings and change orders, the amount due to loss in productivity is determined.
Area # 0 – General
Unpaid Man-hours:
Item # / Item Description / Detail / Estimated Man-hours / Earned Man-hours / Unpaid Man-hours1 / Mobilization / Mobilization -LABOUR / 80 / 80 / 0
72 / Demobilization / Demobilization - LABOUR / 40 / 40 / 0
Total Unpaid Man-hours / 0
Extra Man-hours:
Item # / Item Description / Regular Man-hours / Premium Man-hours1 / Mobilization / 1,211 / 84.75
72 / Demobilization / 0 / 0
TOTAL / 1,211 / 84.75
Delay Analysis:
As-Planned Dates
Item # / Item Description / Detail / Planned Start Date / Planned Finish Date1 / Mobilization / Mobilization – LABOUR / 30 APR 1990 / 04 MAY 1990
72 / Demobilization / Demobilization - LABOUR / 31 DEC 1990 / 31 AUG 1990
As-Built Dates
Item # / Item Description / Detail / Actual Start Date / Actual Finish Date1 / Mobilization / Mobilization – LABOUR / 07 MAY 1990 / 16 MAY 1990
72 / Demobilization / Demobilization - LABOUR / 14 DEC 1990 / 14 DEC 1990
As-Planned vs As-Built Schedule (Area_0)
Delay: 3.50 M
Change Orders:
· Number of Change orders: 19
· Total Number of Orders: 62
Area # 1 – Crusher Building
This area includes an existing building housing the storage bin for the CLARABELLE MILL that receives the ore directly from the mine. By means of apron feeders the ore is extracted from the base of the bin which is fed to the conveyors. The conveyors then transport the ore to a series of cone crushers in the building, where it is reduced in size and is then fed elsewhere in the mill for further processing. There are 6 apron feeders at the base of the bin; where each apron feeder feeds its own conveyor belt. The purpose of the work in this area is to redirect some of the ore of this bin to the new SAG mill using only 2 of the apron feeders. This is done by taking 2 apron feeders out of service, removing the conveyor and installing new ones and hence modifying the apron feeders to ensemble the direction and capacity of the new conveyors.
Scope Of Work:
1. Remove the existing belt conveyors 1 and 2 (which take the ore from apron feeder1)
2. Remove the existing belt conveyor 9 (which takes the ore from apron feeder 6)
3. Remove the existing drive (gear box and couplings), motor and base plate for apron feeders 1 and 6
4. Break out the existing concrete bases for the drive, motor and base plate for apron feeders 1 and 6
5. Form and pour new concrete bases for the drives and motors for apron feeders 1 and 6
6. Install, align and couple the new drives and motors
7. Modify existing chute work for apron feeders 1 and 6.
Unpaid Man-hours:
Item # / Item Description / Detail / Estimated Man-hours / Earned Man-hours / Unpaid Man-hours2 / Remove existing conveyors / Remove existing conveyor / 847 / 847 / 0
11 / Modify existing feeders plate work & concrete pads / Pour crusher pads / 112 / 112 / 0
Modify existing feeders / 343 / 326 / 17
Modify existing plate work / 87 / 83 / 4
Total Unpaid Man-hours / 21
Extra Man-hours:
Item # / Item Description / Regular Man-hours / Premium Man-hours2 / Remove existing conveyors / 0 / 0
11 / Modify existing feeders plate work & concrete pads / 296 / 97.50
Total / 296 / 97.50
Late Equipment Delivery Dates:
Item # / Item Description / Equipment # / Contract Date / Actual Delivery Date / Delay Time2 / Remove existing conveyors / N/A / N/A / N/A / N/A
11 / Modify existing feeders plate work & concrete pads / 24-FDR-001 / 15 JUN 1990 / 18 SEP 1990 / 3m +3days
24-FDR-006 / 15 JUN 1990 / 18 SEP 1990 / 3m +3days
Delay Analysis:
As-Planned Dates
Item # / Item Description / Detail / Planned Start Date / Planned Finish Date2 / Remove existing conveyors / Remove existing conveyor / 09 JUL 1990 / 31 JUL 1990
11 / Modify existing feeders plate work & concrete pads / Modify existing feeders / 30 JUL 1990 / 13 AUG 1990
Modify existing plate work / 09 JUL 1990 / 20 JUL 1990
As-Built Dates
Item # / Item Description / Detail / Actual Start Date / Actual Finish Date2 / Remove existing conveyors / Remove existing conveyor / 04 SEP 1990
05 NOV 190 / 28 SEP 1990
30 NOV 1990
11 / Modify existing feeders plate work & concrete pads / Modify existing feeders / 10 SEP 1990
07 NOV 1990 / 28 SEP 1990
30 NOV 1990
Modify existing plate work / 10 SEP 1990 / 30 NOV 1990
As-Planned vs As-Built Schedule (Area_1)
Delay: 3.71
Changes and causes & Effects Relationship:
Cause / Effect / RelationshipLate delivery of equipment (chute, motors, drives) / Modification of feeders is delayed / Feeders cannot be modified without the equipment
Requirement to salvage conveyors / Removal of the existing conveyor is delayed / Conveyors salvaged instead of scrapped
Access problems to conveyors / Late access to work area / Lack of access during extra work on feeder #6 by others
Extra work due to modifications / Delay to feeder #1 pending structural steel work by others / Extra work on structural steel supports to feeder #6 & #1
Impact Analysis: (Refer to Daily Site Report)
Late Delivery of Equipment: Row code number: 197
Requirement to Salvage Conveyors: Row code number: 192 to 196, 198 to 201
Access Problem to Conveyors: Row code number: 190 to 191
Extra Work due to Modifications: Row code number: 192 to 196, 198 t0 201
Change Orders:
· Number of Change orders: 12
· Total Number of Orders: 90
Area # 2 – Conveyors
The new SAG mill is housed in the mill building. The ore is transported from the Crusher Building to the mill building through the Coarse Ore Silo. Ore transportation is done by 2 exterior conveyors: the ore silo feed conveyor and the SAG mill feed conveyor.
First is the ore silo feed conveyor that has a total length of 560 feet. This conveyor starts at the upper level of the crusher building. About 124 feet long of the conveyor section is included in the crusher building. At around 41 feet above the ground, the conveyor leaves the building with length of approximately 436 feet. Then continues upwards to an elevation of about 118 feet above ground elevation where it ties in at the top of a second ore storage bin. This second bin is referred to as the "Coarse Ore Silo".
The second conveyor, the SAG mill feed conveyor, originates at the base of the Coarse ore silo (85 feet) and continues into the new mill building (45 feet) where it discharges into the SAG mill. About 95 feet of this conveyor is outside and is fully enclosed in a steel structure.
Scope Of Work:
1. Off-load the conveyors, drives and accessories from railcars at the designated rail delivery point about 6 miles from the site;
2. Transport to site;
3. Assemble the bents;
4. Erect the bents;
5. Erect the conveyor galleries;
6. Complete assembly of conveyors;
7. Install drives, motors and chutes;
8. Install conveyor belts.
Unpaid Man-hours:
Item # / Item Description / Detail / Estimated Man-hours / Earned Man-hours / Unpaid Man-hours7 & 20 / Install ore silo feed conveyor / Install conveyor belting / Install ore silo feed conveyor & associated equipment / 1,615 / 1,534 / 81
18 / Install pebble conveyor – sag / Install pebble conveyor – sag / 503 / 503 / 0
19 / Install sag mill feed conveyor / Install sag mill feed conveyor / 935 / 935 / 0
Total Unpaid Man-hours / 81
Extra Man-hours:
Item # / Item Description / Regular Man-hours / Premium Man-hours7 / Install ore silo feed conveyor / 1167 / 262.5
18 / Install pebble conveyor – sag / 132 / 13
19 / Install sag mill feed conveyor / 259 / 39
20 / Install conveyor belting / 0 / 0
Total / 1558 / 314.5
Late Equipment Delivery Dates:
Item # / Item Description / Equipment # / Contract Date / Actual Delivery Date / Delay Time7 / Install ore silo feed conveyor / 24-BC-101 / 1 MAY 1990 / 24 AUG 1990 / 115 Days
24-BC-101BLT / 1 JUL 1990 / 22 AUG 1990 / 52 Days
24-BC-101M / 28 MAY 1990 / 17 JUL 1990 / 50 Days
18 / Install pebble conveyor – sag / 33-BC-102 / 1 JUN 1990 / 18 OCT 1990 / 139 Days
33-BC-102BLT / 1 JUL 1990 / 22 AUG 1990 / 52 Days
33-BC-102M / 15 JUN 1990 / 17 JUL 1990 / 32 Days
33-CH-109 / 15 MAY 1990 / 10 JUL 1990 / 56 Days
19 / Install sag mill feed conveyor / 33-BC-101 / 1 MAY 1990 / 8 NOV 1990 / 191 Days
33-BC-101M / 30 JUN 1990 / 17 JUL 1990 / 17 Days
33-CH-105 / 1 MAY 1990 / 10 JUL 1990 / 70 Days
800-BC-101BLT / 1 JUL 1990 / 24 JUL 1990 / 23 Days
20 / Install conveyor belting / 33-BC-101BLT / 1 JUL 1990 / 22 AUG 1990 / 1 M + 23 Days
Delay Analysis: