These implementation notes are designed to assist new users in making the best use of our software packages PROBID, PROBILL, PROVAL, PROCOST and PROPLAN.
A standard set of basic cost types (LABOUR, EQUIPMENT etc.), and their order and descriptions, should be mandated for the company - or for each division, if divisions undertake different types of work. "One off" projects may warrant additional cost types (e.g. FOREIGN CURRENCY) but the basic structure should always be present. (If you have different cost definitions for different types of work these should be saved in named customisation files for quick access).
Resource & Set Coding
A standard coding scheme should be laid down for both RESOURCES and SETS. PROBID allows you to use masking in manipulating and filtering data. Systems that make extensive use of masking are always more effective if a well thought out coding scheme is used where each character has independent significance. (Usually, the first character of the RESOURCE code should indicate the cost type). This coding scheme should allow company standard codes to be extended within branches. (The resource costs may, of course, vary between branches even when they are using the same codes).
If SETS have matching resources (e.g. standard labour or crew times combined with a material resource to form a simple SET) then the codes should be the same except for the first character.
The names - and directory organisation - of LIBRARY FILES should be planned and standardised. Libraries can be separated into those under the control of the Chief Estimator (standard OVERHEAD lists, Company PLANT, salaried STAFF costs, template CREW and ASSEMBLY definitions, etc. - which he can make READ-ONLY so that other users may "borrow" but not change) - and those created and used by one or a few estimators. Initially, it is only important to plan the structure - the creation of the libraries will follow naturally as estimates are prepared.
User Defined Lists
Use the facility to create USER DEFINED LISTS to develop lists of OWNERS, COSTCODES, SUPPLIERS, etc. to save typing this material for each estimate.
Use the PURCHASE ORDER reports - even before Suppliers and Subcontractors are known - to create "shopping lists" with which the Purchasing Department can obtain supply and sub quotes. This saves time for all parties involved.
Familiarity with the System
One of the most important advantages of resource based computerised estimating is that you can focus on fewer - but more important - check points during both estimate development and tender review. While it is obvious that the estimator must be familiar with the system, it is equally important that management involved in the tender review understands the reports and the underlying model used by the system.
The preparation of Progress Certificates is a conceptually simple procedure. However, in practice, it can become quite involved because of the varying forms of contract- and differing situations- that have to be accommodated on real contracts. PROBILL gives the Project Manager a powerful and practical tool that will remove or automate much of the drudgery and tedium involved in the management of these contractual payments. Its power will be enhanced to the extent that the user is aware of the practicalities of Contract Billing. Some suggestions for the effective, practical use of PROBILL follow.
Group & Section Structure
Usually the group and section structure of the contract pay items is dictated by the contract document. If the contract has a two or three level hierarchy, it is sensible to follow that arrangement in assigning groups and sections within PROBILL. For example, some contracts are divided into Bills that are, in turn, subdivided by trade. The same structure may be used within PROBILL with groups representing Bills and the sections reflecting the trade division. Separate groups should always be used for Variations, Deductions, Materials on Site, Rise & Fall and other post- award additions to the list of pay items.
When group, section, and item codes are being assigned, their sorting order must be considered. Characters are position significant and their ASCII value fixes their ranking. For the common characters, this order is:-
It is usual to have the original contract items appear in the first group - or groups. Escalation is usually the last group. Pre-planning of the group codes is vital to ensure that groups sort in an appropriate way. If the coding of groups, sections, or items turns out to be unsuitable, change it through the Utility menu. (Of course, you can choose not to sort reports- but then group and section subtotals will not be given.)
Large Bills of Quantities
Some Bills of Quantities (BOQ's) on Lump Sum building projects are so large- often over 5000 individual items- that they are only useful for the assessment of variations. It may be impractical to use them as a basis for Progress Certificates. A summary of the individual items may have to be used instead. Often these summary items correspond to a breakdown into subcontract packages. To minimize typing when large BOQ's are being entered into PROBILL, you may be able to use the cloning option in the Utility menu. If the number of items is significantly more than 2000, the total BOQ should be split into several separate "contracts"- perhaps corresponding to major divisions of the contract BOQ. The number of items in a complex contract will typically increase by 50% to 100% during the lifetime of the contract.
Materials on Site
Many contracts require that progress payment be made for Materials on Site - or offsite fabrication work- but fail to provide specific pay items. Payment can be made by certifying a percentage of the appropriate pay item- or approving some artificial "quantity" against the item. However, it is better practice to isolate the payment in a Materials on Site group and set up temporary items. These items should have zero contract quantity, and a unit rate and measure unit appropriate to the quantification of the material, (Tonnes for steel, LM for pipe, 1000's for bricks, etc.). If the retention on Materials on Site is not the same as the general retention percentage, the unit rate can be adjusted appropriately to produce the required effect.
Variations should be allocated their own group so they are clearly isolated and subtotaled separately from original contract items. If a variation is itself composed of several individual items it may be set up as a section within the Variations Group. If a formal procedure for the handling of variations is established- or required by the contract - it is almost inevitable that some variations - or potential variations - will be "pending" approval at any given stage. It is in the interest of both parties to the contract that potential variations, contractual claims, and other monetary disputes be identified and listed as soon as they arise. Contractual claims and pending variations (perhaps identified by the Client's "Work Order" or Contractor's "Notification of Intent to Claim" number) should be allocated their own Group. Progress quantities can be agreed by both parties and shown on certificates "without prejudice" to agreement on the merit or quantum of the variation. The "Pending" group becomes a check list of unresolved issues that both parties are obliged to address at regular intervals. The quantities should be agreed as the work progresses, even if the variation is in dispute. Unit rates may be set to zero until the variation is approved for payment. The unit rates can then be entered and the Group code changed to "move" the items into the Approved Variations group. This approach to Variations Management ensures that disputes are flagged immediately, tracked currently and not forgotten until contract end- avoiding unnecessary cost and frustration to both parties.
The percentage retention rate on a contract often decreases when substantial or "practical" completion is reached. You should change the retention rate to reflect this condition. The release of all retention is made automatically when the Final Certificate is produced. If a maximum retention is specified, it is usually as a proportion of the original contract value or of the final contract value. PROBILL uses the approved contract value if this is entered as part of the contract details. Otherwise, it uses the projected final contract value to set the maximum. Therefore, if you wish the maximum retention to be calculated from final values, you should leave the approved contract value blank.
The MEASURE INPUT document should be used as a "work-sheet" or "turnaround" document for the agreement of progress quantities. Because it focuses on quantities- without showing monetary amounts- it is typically easier to obtain objective agreement on correct- and fair- progress quantities. Field measurements and quantity agreement can even be completed by staff who do not have access to the contract rates. Both parties can initial the document to signify their agreement to the progress quantities. The entry of those quantities and the production of a Progress Payment Certificate is then routine. Figures may be recorded on a cumulative or period basis. Unchanged items should just be ticked in the measure column indicating that the quantity has been reviewed and the cumulative figure is correct- but unchanged. These items should not be accessed and re-recorded as this "date-stamps" the item with both the new billing date and a new record changed date.
In the Contract Details screen you can specify that extended amounts are to be rounded to the nearest "Cent" or "Dollar". If you select Dollar rounding amounts will not show the cents -83,248.72 will not only be rounded to 83,249 but will also be printed as 83,249 Progress Payment Certificates. Before preparing certificates this way, ensure that this is acceptable practice in your organisation and industry. (It is not, for example, acceptable in many international contracts.)
To ensure that escalation is correctly calculated, correct billings are prepared and the consolidation of the period figures is done at the correct time, a progress procedure along the following lines should be adopted:-
PROCON CONSTRUCTION SYSTEMS