General Requirements Payment Procedures

GENERAL REQUIREMENTS PAYMENT PROCEDURES

Section 01290 - 2

Page 4 of __

SECTION 01290 - 2

PAYMENT PROCEDURES for projects with cost-loaded schedule requirements

PART 1 -  GENERAL

1.01  SUMMARY

.A  This Section includes:

.1  Part 1 - General

.a  1.01 - Summary

.b  1.02 - Related Documents And Sections

.c  1.03 – Definitions

.d  1.04 – Cost Breakdown

.e  1.05 – Payment for Materials On-hand

.f  1.06 – Applications for Payment

.g  1.07 - Payment Application Form and Submission

.h  1.08 – Administrative Submittals Required With Payment Applications

.2  Part 2 – Products (Not Used)

.3  Part 3 – Execution (Not Used)

.4  Part 4 – Forms

.a  Cost Breakdown Form 01290 - 2 F-1

1.02  RELATED DOCUMENTS AND SECTIONS

.A  Document 00700.8, “Payments”

.B  Section 01320, “Construction Progress Documentation”

.C  Section 01450, “Contractor’s Quality Control (QC) System”

1.03  DEFINITIONS

.A  Materials On Hand - Acceptable materials procured and delivered to the Project Site and suitably protected but not yet used in the Project, and at sole discretion of the Owner’s Authorized Representative, acceptable materials stored at off-site locations. All off-site storage must be in secured facilities with insurance coverages acceptable to Owner. Contractor’s surety must consent in writing to Contractor’s request for payment for materials stored off-site.

1.04  COST BREAKDOWN

.A  If a Cost-Loaded CPM schedule is required by this Contract (Section 01320), coordinate preparation of the Cost Breakdown with preparation of the Contractor’s Baseline Schedule. The Cost Breakdown must cover and be crossreferenced to the activities on the Official Progress Schedule. The Cost Breakdown will be used in coordination with the Official Progress Schedule and as a basis for progress payments. The Cost Breakdown must differentiate costs of labor, materials, equipment, supplies, overhead (including general conditions costs), and profit.

.1  Correlate line items in the Cost Breakdown with other required administrative forms and schedules including payment request forms.

.2  Submit the Cost Breakdown to the Owner as required in Section 01320, “Construction Progress Documentation.”

.B  The Cost Breakdown must differentiate costs of labor, materials, equipment, supplies, overhead (including general conditions costs), and profit.

.C  Mobilization cost and payment thereof is governed by Document 00700.8.02.C, “Mobilization Costs.” Separate mobilization costs must not be shown on the Cost Breakdown. (See Document 00700.1.01.B. for definition of Mobilization.)

.D  Except as Directed by the Owner, Submittal activities, Shop Drawing activities, and other similar general conditions administrative or engineering activities must not be cost loaded.

.E  Submit Cost Breakdown information, as appropriate, for each activity on the Official Progress Schedule. Costs must be broken down, organized and formatted as shown on Cost Breakdown Form 01290 - 2 F-1 at the end of Section 01290 - 2 , “Payment Procedures.” The Contractor may use Form 01290 - 2 -F1 or any other form acceptable to the Owner’s Project Manager that provides the required breakdown of values for each activity.

.F  Each Subcontractor’s activities must be separately identified on Cost Breakdown Form 01290 - 2 F-1. The sum of the labor, materials, equipment, overhead and profit values for the Work of each Subcontractor identified on the Cost Breakdown Form must equal the value of the Subcontract between the Contractor and the Subcontractor indicated.

.G  The sum of the values of the Contractor’s activities on Cost Breakdown Form plus the sum of the values of the Subcontractors activities on the Cost Breakdown Form 01290 - 2 F-1 must equal the Contract Sum for the Project.

.H  Overhead (including general requirements costs), and profit must be proportionally prorated over all cost loaded activities as a fixed percentage of the value of each activity.

.I  A Cost Breakdown may be rejected if in Owner's opinion any item is unbalanced.

.J  After the County accepts the Contractor’s Cost Breakdown, the Contractor cannot change the Cost Breakdown values without the express written approval of the Owner’s Project Manager.

.K  The Cost Breakdown will be used in coordination with the Official Progress Schedule as the basis for progress payments.

1.05  PAYMENT FOR MATERIALS ON HAND

.A  Materials On Hand must be collected together and separated from other materials and clearly identified as property of Owner and must be accessible to Owner at all reasonable times for examination or other legal purposes.

.B  For Materials On Hand to be considered for payment Contractor must request payment for them on Owner furnished or Owner Approved forms including accompanying documentation as required by Owner. Contractor must submit four (4) copies to Owner not later than ten (10) Days prior to the end of the payment application period. All accompanying documentation required by the Owner including evidence of purchase (and warehouse receipt when required) must be attached to the original. The Contractor must certify in writing that the subject materials meet the requirements of the Contract Documents.

.C  The Contractor must submit and the Owner must have accepted all shop drawings and submittals for the Materials On Hand prior to the Contractor’s request for payment for said Materials On Hand.

.D  The provisions allowing payment for Materials On Hand are intended to be applied to large items of equipment and construction materials of special manufacture or order for the Project.

.E  For Materials On Hand, stored off-site, Contractor must provide:

.1  Bill of Sale from the manufacturer for the materials stored off-site

.2  Warehouse receipt that is a complete list and inventory of materials manufactured, stored, and delivered to the storage site.

.3  Receipts for materials removed from the off-site storage facility and delivered to the Project site.

1.06  APPLICATIONS FOR PAYMENT

.A  The cut-off date (last day) for each progress payment is the last day of the month or as otherwise Directed by the Owner.

.B  The period of construction Work covered by each application for payment is the period beginning the first day of the payment application period and ending with the last day of the payment application period.

.C  Before the end of each payment application period, Contractor and Owner's Project Manager will jointly review Contractor's estimate of items of Work completed and acceptable Materials On Hand for which Contractor is requesting a progress payment. The joint review (job walk) will occur at the Project site.

.D  Prior to the joint review, Contractor must provide Owner with four (4) copies of a progress estimate worksheet showing each activity on the Official Progress Schedule that has been started but is not yet complete. The worksheet will be used during the joint review to document the actual physical percentage complete of each started but uncompleted activity.

.E  After the joint review, Contractor must prepare on Owner furnished or Owner Approved forms, a formal request for payment. Four (4) copies the formal request for payment must be submitted to the Owner no later than one day after the end of the payment period.

.F  With the submission of the formal request for payment, Contractor must provide four (4) copies of an updated Cost Breakdown, showing the total value, percentage completed, and earned value of each item. The updated Cost Breakdown must be submitted to Owner on Ownerfurnished or Owner Approved forms.

.G  The Contractor must submit a progress narrative report accompanying each payment application. The report must describe: general construction progress to-date; whether the project is on-schedule to meet the current contract completion date; If the project is behind schedule the report must describe factors that are causing delay; any anticipated delaying factors and their potential impact.

.H  Payment will be due to Contractor thirty (30) Days after receipt by Owner of a properly prepared progress payment request from the Contractor.

1.07  PAYMENT APPLICATION FORM AND SUBMISSION

.A  Use forms as furnished or Approved by the Owner.

.B  Complete every entry on form.

.C  All amounts billed must be submitted as whole dollar amounts.

.D  A person authorized to sign legal documents for Contractor must sign the formal payment application.

.E  The Owner will return incomplete applications “Returned Without Action.”

.F  Entries must match data on the Approved Cost Breakdown

.G  Include amounts of executed Change Orders as separate line items in the Cost Breakdown

.H  Submit the signed original and one (1) copy of each application for payment to the Owner by a method ensuring receipt by Owner within 24 hours.

1.08  ADMINISTRATIVE SUBMITTALS COINCIDING WITH PAYMENT APPLICATIONS

.A  Administrative actions and submittals that must coincide with submittal of each application for payment include the following:

.1  Certified Payroll (Must be submitted within 10 Days from payment period end date.)

.2  Updated (As-Built) Record Documents (Must be updated prior to payment period end date)

.3  Updated Official Progress Schedule (Must be submitted with request for Progress Payment)

.4  Earned Value statement based on Updated Official Progress Schedule and approved Cost Breakdown (Must be submitted with request for Progress Payment)

.5  Updated Procurement Status Log (Must be submitted with request for Progress Payment)

.6  Updated Submittal Log (Must be submitted with request for Progress Payment)

.7  Monthly Report, pursuant to paragraph 1.06 .G above (Must be submitted within 3 days from payment period end date.)

.B  Not Used

.C  Final payment application

.1  Submit, on forms furnished or Approved by the Owner, four (4) copies of a final application for payment with supporting documentation not previously submitted and accepted, including, but not limited, to the following:

.a  Evidence of completion of Project closeout requirements.

.b  Evidence that claims have been settled.

.c  Other documents as required by the Owner.

PART 2 -  PRODUCTS (Not Used)

PART 3 -  EXECUTION (Not Used)

PART 4 -  FORMS

COST BREAKDOWN FORM 01290 - 2 - F1

CONTRACTOR:

ADDRESS:

BID PACKAGE:

CONTRACT NUMBER:

CONTRACTOR/ SUBCONTRACTOR / *ACTIVITY NUMBER / ACTIVITY DESCRIPTION / LABOR
$ / MATERIAL
$ / EQUIPMENT
$ / **SUBCONTRACTOR
OVERHEAD &
PROFIT
@
FIXED % / **CONTRACTOR
OVERHEAD & PROFIT
@
FIXED %

*Activity Number from Official Progress Schedule

**Overhead (including general requirements costs), and profit must be proportionally prorated over all cost loaded activities as a fixed percentage of the value of each activity.

END OF SECTION 01290 - 2

01290 - 2 -4

FAF MASTER Project Manual Version 7.7– July, 2007