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.
Bars that are 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 client’s cost consultant must ensure that the pricing of the activity schedule is not unduly front-loaded and fairly reflects normal cash-flow curves associated with building projects.
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.
[edit] Related articles on Designing Buildings Wiki
- Acceleration of construction works.
- Accepted programme.
- Baseline programme.
- Conditions of contract.
- Construction contract.
- Contractor's working schedule.
- Gantt chart.
- How progress is agreed in construction.
- Interim payment.
- Line of balance (LOB).
- Milestones.
- NEC Option A: Priced contract with activity schedule.
- Off-site goods and materials.
- Preliminaries.
- Procurement route.
- Programme.
- Programme consultant.
- Progress in construction.
- Resource management.
- Schedule.
- Schedule performance index (SPI).
- Short period programme.
- Tender works programme.
- Time-location chart.
- Time management of construction projects.
- Topping out.
- Window and door schedules.
[edit] External references
Featured articles and news
Apprenticeship announcement by the Prime Minister
Welcomed but with call for more actionable detail.
Heat pump announcements, what homeowners need to know
An 'ultimate guide to heat pumps' from a heating company.
Construction contract awards reach £7.1bn in February
Their highest level in seven months.
The journey to sustainability in heritage
Research is the key to better understanding.
Heritage approaches to adaptation, mitigation and loss.
Bridging the gap between policy, finance and installation.
Development on brownfield land
Definition, background, policy and the latest consultation.
With the Design Framework for Building Services.
Retrofit of Buildings, a CIOB Technical Publication
Pertinent technical issues, measures and the roles involved.
ECA joins HSE campaign to support mental health
Working Minds’ five simple steps based on risk assessment.
Mental health in the construction industry
Mental health issues in brief with related articles.
Transitional arrangements, Building Control and the BSR.
For pre-October buildings with substantial progress by April.
Why quality counts in domestic ventilation systems
From products, to systems to the installation.
Empowering the Future with CIOB Academy
Lifelong learning, upscaling, and reskilling for the built environment.