Activity schedules in construction contracts
The term ‘activity schedule’ appears in contracts such as the NEC (New Engineering Contract) option A contract and in a number of standard lump sum contracts. In FIDIC contracts (Fédération Internationale des Ingénieurs-Conseils), it could be interpreted as fulfilling the requirements of the schedule of payments in a lump sum contract.
In essence it relates to a programme where each activity is allocated a price and interim payments are made against completion of each activity. Its advantage is that it simplifies the administration of the interim payment process.
The activity schedule on these types of project is submitted together with a contract programme as part of the tender. It is important that all the activities priced add up to the tender sum and that major sub-contractors participate in the allocation of prices against their programmed activities. This may include payments for off-site goods and materials.
The simplest way to prepare an activity schedule is to draw up a bar chart (gantt chart) which covers all the main activities required, separating each element of work that is sub-contracted. Some preliminaries such as site offices need a separate price bar for set up, operational use and dismantling activities. Other preliminaries such as staff and electrical consumption will be part of a constant bar. The bars longer than a month then have their bar line split by defining more accurately the piece of work completed in that period. A time-defined period is acceptable in the case of preliminaries. The price allocated to each total element of work is then proportionately split to match the more defined elements.
The contract conditions normally allow the contractor a short period of time after appointment to re-visit the activity schedule to expand its detail. In addition, during the course of the project the activity schedule can be adjusted to accommodate variations, extensions of time and compensation events.
The preparation of a monthly submission for interim payment is best achieved by the contractor's project manager walking the site with the client’s representative to agree progress in respect of completed activities. Here some judgement needs to be exercised by the client’s representative as to what is ‘complete’, otherwise, strictly speaking, on a 100% basis the contractor would suffer massive cash flow problems due to the withholding of payment.
Once the progress chart against the programme has been agreed it becomes a simple mathematical calculation of the relative prices to arrive at the valuation and its certification.
NB Within the NEC3 Engineering and Construction Contract (ECC), The 'accepted programme' shows how the activities on the activity schedule are programmed. The accepted programme and the activity schedule need not show exactly the same activities, but there should be correlation between them, and they should be kept up to date. See accepted programme for more information.
 Related articles on Designing Buildings Wiki
Featured articles and news
The origins, evolution and future of Level 3 BIM.
For new and returning Urban Design students, check out our article list divided up into the modules you'll be studying.
Report states that health of urban dwellers could be significantly improved by rethinking transport design.
The Kremlin, the centre of Russian power, includes some of the country's finest architecture.
Report launched outlining steps for a national infrastructure system that is efficient, sustainable, and delivers until 2050.
A review of Justin Bere's concise and well-presented introductory guide to Passive House.
This article describes in detail the tender process for a typical commercial construction contract.
What is energy storage, what are the different types and what is its future?
MAD Architects reveal their designs for a state-of-the-art concert hall in Beijing.
Take a look at BIG's designs for two twisting towers in New York City.
'The filing cabinet' which was labelled one of the best British buildings of the 21st century.