Chap 11 - Measurement and Payment Flashcards
The documents that establish the rights, responsibilities, and duties of the parties regarding measurement and payment are:
- (AIA) A201, General Conditions of the Contract for Construction
- (EJCDC) C-700, Standard General Conditions of the Construction Contract
- AIA B101, Standard Form of Agreement Between Owner and Architect
- EJCDC E-500, Standard Form of Agreement Between Owner and Engineer for Professional Services
CAPG Cap 11 Intro
Most contracts require that a ______________be submitted to the A/E for approval prior to the first application for payment.
…. schedule of values
CAPG 11.1
As a prerequisite for payment, the contractor may be required to submit _____________ . (4 things)
- updated construction progress schedule,
- test reports,
- material certifications, and
- other accompanying information
CAPG 11.1
Name three common payment intervals:
- Periodic Progress Payments
- Provisional Payments
- Single Payment
CAPG 11.2
What are Provisional Payments?
…. Provisional payments are predetermined partial amounts of the total contract sum tied to the attainment of identifiable milestones.
CAPG 11.2
Provisional Payments are often used with what type of project?
…. design-build projects.
CAPG 11.2
The contract sum may be established by a combination of base bid items, as well as: (3 items)
- unit prices
- allowances, and
- alternates
CAPG 11.3
The basis of payment is identified in the contract documents. Name three bases of payment:
- Stipulated Sum
- Unit Price
- Cost-Plus Fee
CAPG 11.3
The contract requires that values of the various portions of the work be established before the first application for payment. This is accomplished how?
…by the contractor preparing and submitting a schedule of values which breaks down the contract amount into definable line items with corresponding dollar amounts. CAPG 11.3
The cost-plus fee basis of payment is also referred to as:
….the time and material basis of compensation
CAPG 11.3
As the term cost-plus implies, the contractor is reimbursed the contractor’s actual cost of labor, equipment, and material, plus a predetermined fixed fee, or percentage of costs, for:
…. overhead and profit.
CAPG 10.3
Regarding Pay-apps, the A/E’s certification is based only on his knowledge, information, and belief that: (2 things)
- the work has progressed to the point indicated
- the quality of work conforms to the requirements of the contract documents
CAPG 10.4
Regarding Pay-apps, the A/E’s certification does not mean that the A/E:
- Made exhaustive on-site inspections
- Reviewed construction means, methods, sequences, or procedures
- Reviewed requisitions of subcontractors or suppliers
- Determined the disposition of previously certified payments
CAPG 10.4
Contract documents addressing payment usually include the following:
- Agreement
- General Conditions
- Supplementary Conditions
- Division 01—General Requirements, Section 01 20 00—Price and Payment Procedures
CAPG 10.4
On complex projects, the schedule of values could be organized using ____________
…. UniFormat™ or MasterFormat® classification system.
CAPG 10.6
When is the schedule of values usually secured? (two items)
… after award of the contract and before processing of the first progress payment.
CAPG 10.6
Two commonly used application forms for payment are:
- AIA G702, Application and Certificate for Payment
- EJCDC C-620, Contractor’s Application for Payment
CAPG 11.7.1
Regarding Pay-Apps, the A/E certifies only the amount having a sound contractual basis for payment, and when there is a disagreement, (does what)?
….provides both parties with a written explanation of the reasons for withholding certification of all or part of the payment.
CAPG 11.7.3
If the owner is informed of a judgment against the contractor or the existence of a lien, what happens? (2 things)
- appropriate amounts are withheld, as provided for under the general conditions
- the amounts dispersed as required by law and recommended by the owner’s legal counsel
CAPG 11.8
T/F: The conditions of the contract usually stipulate that progress payments (approval by owner and acceptance by Contractor) constitute acceptance of the work.
FALSE:
CAPG 11.8
T/F: The conditions of the contract make provision for the owner to reject work and adjust payment accordingly any time up to final acceptance.
TRUE:
CAPG 11.8
Retainage is designed to protect the owner against: (2 things)
- errors in estimating the value of work completed
- third-party claims against the contractor
CAPG 11.9
Excessive withholding of payment can be deemed as nonpayment and result in _________
….the contractor’s exercising of his right to stop work.
CAPG 11.10
If the A/E determines that payments should be withheld, AIA general conditions require _________
….the architect to notify the owner and contractor in writing.
CAPG 11.10
Common conditions for the A/E to recommend withholding payments are:
- Damaged or nonconforming work
- Damaged property caused by the contractor
- Failure by the contractor to meet milestones or approved schedule
- Claims made against the owner on account of the contractor
- Liens filed in connection with nonpayment of subcontractors, suppliers, laborers, etc
- Failure to keep record documents up to date
- The cost of the owner doing cleanup
CAPG 11.10
If the owner exercises his right to withhold payment, the owner is required to _______ and to _______ .
….give the contractor a written notice stating the reason(s) for withholding payment, and ….provide the A/E with a copy of the notice.
CAPG 11.10
If there is a failure to make payment within the prescribed times, without cause under the contract conditions, the owner may be __________
….in material breach of contract.
CAPG 11.11
Should the contractor stop work due to nonpayment, the owner’s exposure to liability may include:
- the contractor’s cost of demobilization
- the cost of delay
- remobilization
CAPG 11.11
T/F: A lien is the legal right of a party, such as a subcontractor, to control the improved property of the owner or have it sold for payment of a claim.
TRUE:
CAPG 11.12
T/F: Mechanic’s liens generally do not apply to public projects.
TRUE: Contractors and suppliers are not allowed to lien public property.
CAPG 11.12.1
Because the mechanic’s lien right does not exist on public projects, most public projects require __________ .
….payment and performance bonds to provide unpaid parties with a remedy.
CAPG 11.12.1
The owner should require partial releases of mechanic’s lien with each _________ .
….with each payment made to the contractor. CAPG 11.12.1
At the time of final payment, final mechanic’s lien releases should be obtained not only from the contractor, but also:
….from, all subcontractors and material suppliers.
CAPG 11.12.1
Contract documents should require the contractor to furnish a release of liens with each application for payment. In addition, a requirement for ___________ usually exists.
…..consent of surety for final payment
CAPG 11.12.1
T/F: Issuance of final payment indicates final acceptance of the work.
TRUE:
CAPG 11.12.1
On acceptance of final payment, the contractor waives all claims (except those previously made in writing) against:
….either the owner or the A/E.
CAPG 11.12.1
The owner, in making final payment, also waives all claims, except:
- those arising from unsettled liens, and
- defective work appearing after final inspection.
CAPG 11.12.1
T/F: Liens on the project are to be released upon to issuance of final payment.
FALSE: Under provisions of the general conditions, final payment for the project is not made until the contractor can certify to the owner that liens have been released.
CAPG 11.12.1
Some jurisdictions have statutes that allow contractors, subcontractors, sub-subcontractors, and suppliers to assert claims on construction funds. These are called:
….Stop Notices.
CAPG 11.12.2
When a stop notice is served, the statutes typically require the Owner to:
….withhold that amount for the unpaid claimant. CAPG 11.12.2
T/F: To enforce a Stop Order, the claimant is generally required to file suit within a certain time period.
TRUE: If no suit is filed within the proper time period, the stop notice becomes invalid.
CAPG 11.12.2
Liquidated damages stated in the agreement are usually invoked when?
….when substantial completion is not achieved by the indicated date or within the indicated time.
CAPG 11.13
Liquidated damages, penalties, or bonuses are normally ___________ (when/how)
……deducted from or added to, the final payment.
CAPG 11.13
Absent a specific amount for liquidated damages, the owner can document and make a claim for:
….actual damages, (aka compensatory damages).
CAPG 11.13
If contract provisions exist for reduction of retainage, then the A/E must observe the project closeout procedures related to:
….consent of surety and lien waivers.
CAPG 11.14
Neither progress payments, nor acknowledgment of substantial completion, nor partial occupancy constitute acceptance of work _______________ .
….not completed according to the contract documents.
CAPG 11.14
Typical final change order items may include:
- Adjustments to unit price item quantities
- Adjustments to stipulated allowances
- Adjustments for liquidated damages or penalty/bonus clauses
- Adjustments for testing reimbursement when the owner employs the testing services and pays for only passing tests
- Adjustments for reimbursement of utilities
- Adjustments for reimbursement of the owner’s expense for additional A/E services
CAPG 11.15
Final acceptance of the work is indicated by:
….issuance of final payment.
CAPG 11.15
