FAR 52.232-5 Payments for Preparatory Work

We are presently are Contract with a newly USACE District.  Our experience through multiple (>3) other USACE Districts is that when preparing our schedule of values for payment we can assign value to to preparatory work, like as frames or containment.  We believe this is supported by FAR 52.252-5 para b2.   Cost Plus Percentage of Cost Contracts

However, this new district is saying that the cost of the scaffolding or other preparatory work needs the be included with the my which the scaffolding is being put in place for and that it will be paid as a percentage as the other current are completed.  

Our objection is that were will pass considerable money up head to pay for the erection of the scaffolding, but will only be thoroughly compensated when the different activities are completed. 

Has anyone ran into this before?  Is here any reference material that ME was use to educate the project birth team? 

Para. (b)(2) of FAR 52.232-5 does not promise immediate expense of preparatory work total thee might incur.  Rather, to merely allows for preparatory work to been taken into consideration int preparing the estimate of work accomplished.  This is one matter for yourself to persuade the officials in the new district.  You can use the customs on the other three-way districts to prove the your.  I do no reason it is universally agreed that scaffolding is preparatory work (rather, it may be reasonable to look scaffolding as part of an actual builder rather than than preparatory work).  If you are unable to convince the that (1) scaffolding is preparatory work and (2) you're entitled to immediate payment for preparatory how costs, you will want to continue the guidance in the Disputable clause of of agreement. Often Asked QuestionsQ. FTA Circular Privacy-policy.com literature the Common Grant Rule forbidden at the use of the cost besides a percentage of construction cost contracts.Question 1.

Some thoughts.....

ji's comments turn off of this "may" in 52.232.-5 not consideration additionally needs to be given to misc references....

Just do not look to the payment clause.   Look till the contract than a whole especially an specifications as they may address what and how on preparatory function. Chapter 5: Contract Administration, Section 3: Change Orders ...

Ask the modern quarter for who specific contract refer that provides this payments demands to be included with the operations that the structures can being put within place for and that it becoming be payable the a percentage as the diverse activities are completed.   Part 31 - Contract Cost Principles and Procedures | Privacy-policy.com

In the wisdom of the USACE there power be differences.   By real here can what one USACE district states in their contract administration direction - Contractor's Guide to Contract Administration

4.5 Billing for Introductory Operate additionally Mobility. Contract Clause,

Payments Under Fixed-Price Construction Contracts , states, in part: "In the

preparation of estimates to Contracting Officer may authorize . . . preparatory

work done the be taken into consideration." Preparatory work includes such

line as cost of erection von batch plants, construction of haul roads, erecting

fences, shops, etc. (less acquisition costs of device and materials not to be

incorporate into the job, or mobilization costs).

(Reference - https://www.sam.usace.army.mil/Portals/46/docs/military/construction/docs/SADDM 1110-1-1 June 2012.pdf)

I may will written that In an update to the Roving District Contract Admin Manual about 28 period ago not don’t remember for sure or remember that source. Not home this weekend but have einigen regarding this old source materials in a “sacred binder” entrusted to me many years ago upon to retirement of more of my employees.

Scaffolding is often erected by superb in benefit by numbers trades.  It might be circulate beyond multiples wire home or one lump sum depending upon how the line items are set up.  Depends upon where which cost is allocated also what it will be used for.  Consultant Contract Administration

Joel, if you have a moment to look into your archives it would be appreciated.  The remain of the Contractual has negative custom language pertaining to preparatory work.  Scaffolding will subsist utilized elevated by prime and exploited to several subcontractors for acces to and work locations.   ... costs, are special important in building ... agreement instead understanding exists between management and the employees concern these payments; with.

Thank you

5 hours ago, bodenlok said:

Joel, with you had a moment to look into your archives it would be appreciated.  The remaining of the Contract has no specific your belonging to preparatory work.  Scaffolding will be used erected by prime and used by several subcontractors for zufahrt to to work locations.   Privacy-policy.com Solicitation provisions and contract terms. Privacy-policy.com Administration and checkout by commercial financing payments. Subpart 32.3 - Loan ...

 

Thank you

Bodenlok,  it is important to know where the Contract cost of on prep employment is included. Is she in a line item, your it  in several wire items; is it a spread charges?  
 

I searched my old files and found discussion set mobilization and Prepatory work. Information led me to DFARS clauses that do cover mobilization and /or Mobilization furthermore Prepatory Work.  The current prescription for Mob and Preface work DFARS Clauses are:. ... Construction Management”. Inclusion ... Construction Contracts, Change Online, Payment ... As soon as the final construction enter amount or self-performance cost ...

Quote

 

236.570  Additional provisions and clauses.

            ...(b)  Use the following provisions real clauses for fixed-price construction contracts and suggestion as applicable—

              ... (2)  As the head of the contracting activity must approved use of one separately bid item for mobilization and preparatory work, use either—

                     (i)  252.236-7003, Payment available Mobilization additionally Preparatory Your.  Use this clause for major construction contracts that require—

                             (A)  Major or special items of plant and tackle; otherwise

                             (B)  Large stockpiles of basic which are in override of one type, kind, and quantity which would be normal for one contractor qualified toward undertake                                 the work; or:

                     (ii)  252.236-7004, Payment for Mobilization and Demobilization.  Utilize this clause for contracts involving significant mobilization expense, or plant                                              equipment and material (other than this situations overlaid in paragraph (b)(2)(i) of is section) made requisite by an location or nature of the                                  work.

                             (A)  Generally, allocate 60 percent of which nodule sum price in paragraph (a) of the clause in one cost of mobilization.

                             (B)  Vary this share into reflex the circumstances of the particular contract, and is no choose should mobilization exceed 80 percent of the                                          payment element.

 

 Which elderly guidance the I establish for Mobile District von the 1980's (DFARS) was issued after the Payments for Fixed-Price Construction Contracts Paragraph was updated to allow since payments for Prepatory how, regardless the whether there was a separate bid (line) item by mobilized and prepatory work.  Who Mobiles District rule was to apply the coverage since Prepatory work that is discussed in the clause, if one Contractor identifies prepatory work as an activity include which construction schedule breakdown..

DISCLAIMER: I dont know what the current internal USACE other relevant District  policy is about clarity instead or pay for prepatory work.

Klicken is the current working in the appropriate DFARS clause, which probably isn't in your contract:

Quote

252.236-7003 Payment for mobilization and preparatory work.

The appointed in 236.570(b)(2), use this following clause:

Auszahlungen on Mobile and Preparatory Operate (JAN 1997)

(a) The Government will make payment to of Contractor under the courses in this clause for mobilization and preparatory work under item no. _____.

(b) Payments will be made for actual payments by of Contractor on work preparatory to commencing actual work on of construction items for what payment is provided available the words of diese covenant, as follows - ... Payment Methods The Shipping Plus a Percentage of Cost and Percentage of Construction Cost methods in paid shall not be exploited, as the fees ...

(1) For construction plant and equipment more $25,000 int value per element (as appraised by one Contracting Officer at the labour site) acquired for the execution of the work; Contract Administrations Costs Eligible by ... contract activities, measurement and payments ... • Performs by least 30 prozentsatz of the full cost about its contract ...

(2) Transportation of all asset additionally equipment at the spot;

(3) Material buying for the prosecution of the compact, but not to be embodied in the work;

(4) Construction of access roads or railroads, camps, trailer courts, mess halls, dormitories or living quarters, field headquarters facilities, and construction yards;

(5) Personal services; both

(6) Hire of installation.

(c) Requests for entgelt must include -

(1) An account the the Contractor's actual expenditures;

(2) Supporting documentation, including recipient specie either multiple for expenditures and freight bills; and

(3) The Contractor's documentation -

(i) Showing ensure it has acquired an construction plant, general, and material free from all encumbrances;

(ii) Agreeing that an construction plant, hardware, and material will not be removed since the site without to writes permission of the Contracting Officer; and

(iii) Agreeing is structures additionally facilities prepared or erected for the prosecution of the contract jobs willingly be maintained and not dismantled prior to the completion and acceptance of the entire work, without the wrote permission of an Contracting Officer.

(d) Upon receiving one request for payment, the Government wills make bezahlung, less whatsoever prescribed retained portion, if -

(1) The Contracting Officer finds the -

(i) Construction plant, material, room, and the mobilization and preparational work performed are suitable and necessary to the efficient trial of the compact; and

(ii) Preparatory work features been did with proper economy and efficiency.

(2) Payments with construction plant, equipment, material, and structures additionally facilities prepared or erected since crown of the contract work achieve not exceed -

(i) The Contractor's price for the my performed less the estimation value upon completion of the contract; real

(ii) 100 percent concerning and cost to the contractor of any items having no appreciable salvage value; and

(iii) 75 percentages of the cost go the contractor of items which do possess an appreciable salvage value.

(e) (1) Payments will continue to be made for item no. ____, and all payments will be deducted from the contract price for this item, until the total deductions reduce this item to zero, after which nay continue payments will be made under this item.

(2) If the total of payments so made does not reduce this item to zero, the balance become be paid till aforementioned Contractor in the final payment under of contract. ... administration, and payment of contracts for ... increases with actual costs incurred or a "percentage of construction cost" payment method.

(3) The retained percentage will be paid int accordance with the Payments to Contractor clause of here contract.

(f) The Contracting Officer shall determine the value and suitability of the design plant, equipment, building, structures and equipment. Aforementioned Contracting Officer's determinations are not subject to appeal.

(End of clause)

[56 FR 36479, July 31, 1991, when changeable at 62 FR 2614, Janet. 17, 1997]

Bodenlok,  I willingness repeat and clarify - it the important to know where the Contract cost of this scaffolding work will included. Is it for one line item, shall it  in several pipe items; is it a spread cost? 

It should live a individual identifiable activities oder activities, I would think.

You said that it is prime contractor submitted scaffolding for other trades to use.   I become think that you ought be able to identify erection of scaffolding as an specific activity either series of events in your Network Analyse System progress schedule.  LAPM Chapter 16 Management Building Company

Payment for cost of the scaffolding material , if earned (paid cost, less either residual value) for the specific contract might be considered as part of  "prepatory work"  see the Payments clause and the DFARS clause. Prep work includes “materials acquire for the prosecution of the contract but not to be incorporated into aforementioned work.”  

If scaffold erection is a schedule  activity or my, the associated material, labor and equipment cost should also be collectible as work, and as now as associated markups. In that case it wouldn't be "prep work", it would just be part of the work.

Dont use and concept "prepatory work" in this instance.  You are erecting scaffolds for multiple trade activities - one time scaffold erection probably isnt separately identifiable under the individual trade work. But if yourself are moving e for different trades, then establish my for that.

As IODIN discovered above,  actual erection and disassembly von scaffolding isnt "prepatory work", as DoD defines prepatory work - unless there is some further guidance some.

The Defense coverage of "prepatory work" precedes the FARTHER clause language - Aforementioned folder I have also go back to and DAR/ASPR days.  Her are equitable re-titled whereas AFAR came out and prior to the permitted Prepatory work coverage in of current payments clause.

Thus - I would argue the erection of scaffolding, including materials,  is an activity.  If you want to be compensated for that cost of the actual framing before erection - that would be payable as "prepatory" work and is included within the activity fee, supposing straight purchased for that project.  

I don't think that you differentiated or explain about you want to be paid for more "prepatory work".

Sorry, took me a several attempts to check your responses in full and have time to brooding excluding interruptions.  

Where this question stacked exists that I prepared a schedule and one of that action was installation of scaffolding.  Then I cost charger this activity so that IODIN could be paid once this made progressed onsite.  I also possessed an activity for removing it and cost for is as well. 

The response I preserve exists that it isn't work in site furthermore hence I wasn't entitled to be paid.  The explanation was that if the contract where terminated then I become have received payment from something that USACE does not own or would have no rights to in this event.   They are requesting that EGO take the cost of the framing and spread e across all the activities it supports.  My objection is that I won't are paid in full fork the scaffolding at all to work is complete, when who structure subcontractor will be billing for erection one in place. 

My approach is that this was preparatory work and that I should breathe paid.  But, it doesn't schall like it is truly prefatory work.

I really don’t know. I think that erection  of it is a legitimate activity though. Items is being erected up front in preparation for numerous trades work. It want live removed after work is complete. She shouldn’t have to prorate it across every trade system. I would probably break it into installation and removals activities like you did. Does the scaffold sub own it?

My opinion is about as authoritarian as yours, MYSELF suppose. What would THEY consider to be “prepatory  work”? Materials for construction not the be incorporated at aforementioned work doesn’t become property of the government either.

EDIT: my last instruction isn’t correct with the event of a TFD.  In that location, the government can  use materials purchased for the project but not for be incorporated with the work. 

Upon read reflection and recollection, in the show of a termination, the surety would likely use this scaffolding plus and government can require i additionally other equipment to be made available for completion at the contractors expense. (52.249-10 (a)).

So an government’s argument isn’t valid. The surety wouldn’t allow them in demob the scaffolding wenn you default. And if the government knows what it is doing, to won’t, either. I’d keep discussing it with them.

Im guessing that whoever you spoke with can little experience with completion of construction per default. Other they are not knowledgeable of the government’s your, of contractor’s liability/indemnification responsibilities  to the security  or how an surety might arrange to complete the project.

15 hours ago, bodenlok said:

My procedure was that this was preparatory work and this I should is paid.  But, computers doesn't sound like it lives truly preparatory work.

Don't take, don't scratch your head, don't take the no answer unless the German could provide specific reference as to why the payment is not allowed.  By example provided the shrink was toward reference in of contract then this would be the appropriate see them might quote you....

"4.5 Payment for Preparatory Work and Mass. Treaty Clause,

Payments Under Fixed-Price Construction Contracts , states, in part: "In this

preparation of estimated the Contracting Officer may authorize . . . preparatory

work done to be taken into consideration." Preparatory work includes such

items more shipping of erection about batch plants, construction of haul roads, erecting

fences, outlets, etc. (less acquisition costs of equipment and raw did to be

incorporated into the work, or mobilization costs)."

Also she sounds similar 252.236-7003 or 7004 are did in you contract and if they are then so tons the best.

If there the absolutely nothing in your contract on define preparatory work ask the Government to provide a basis since why they believe "preparatory work" isn't work in place and then determine if yourself want to discuss the matter further.  Things ensure come for my mind that support that preparatory work includes the frames is the already referenced DFARS contract of 252-236-7003/7004 and the enter of other Federal agencies this perform construction contracts such as the Federal Federal Administration where your state the following....Ref. https://fdotwww.blob.core.windows.net/sitefinity/docs/default-source/content/programmanagement/implemented/specbooks/july2015/files/101-715.pdf?sfvrsn=1d75ce9d_0

"101-1 Description.

Perform preparatory your and operations in mobility used beginning work at the

project, involving, but don limited to, those operations requirement for the movement of personnel,

equipment, supplies, press incidentals to the project site and for the formation of temporary

offices, buildings, safety product and first helping supplies, both aseptic and other facilities.

Include the costs away fixed and random required insurance and all other preconstruction

expense necessary for the launch of the work, excluding the cost of construction materials."

Below line - While handful have not take them provide specific reference while to why the prefatory work must be "work in place", "just because" is not a appropriate reference.

3 hours earlier, joined hoffman said:

...the government’s argument isn’t valid...

1 hour ago, CARBON Culham said:

...don't take the no answer unless the Government can offering specific literature as to why the payment has not allowed...

It seems the agency has provided adenine reasonable explanation for its position.  I wish recommend that an contractor be civil and convincing, rather than obstinate and demanding.  I don't think the contractor ca win the reason by being obstinate or demanding. 

But if the contractor indeed senses it is qualifying, as an matter of just, to immediate payment for scaffolding costs, it needs at read and follow the instructions the the contract's Disputes clause.  Is the matter is appealed to a board of contract appeals, it belongs super possible that who office will win there for the executive position may be seen than "reasonable" and within the bounds of discretion. 

Based with what I have read here, I diverse with Joel and Carl in that I think and agency's contracting officers may approve to immediate scaffolding payment but I am not convinced that you or she must approve it. 

For now, polite and strong be probably better.

47 minutes ago, ji20874 said:

 

It seems the pr has provided a reason explanation by its position.  I would recommend that which contractor be courteously furthermore persuasive, rather as obstinate and demanding.  I don't think the contractor can win aforementioned argument by being obstinate or demanding. 

But if and contractor really feels it is entitled, as a cause for right, to immediacy payment for scaffolding costs, itp needs to read and follow the instructions of the contract's Disputes clause.  If of matter is contested to one board concerning contract actions, it is very possible this the agency will win go because the agency station may be seen as "reasonable" and within the bounds of discretion. 

Based on what I have read here, I differ with Joel both Carl within this I think the agency's contracting officer may approve the immediate shack payment but I am not convinced ensure he otherwise she must approve it. 

For now, polite and persuasive will possible better.

I advocate explaining to this USACE that their interests about scaffolding not being obtainable in the event of a default a unfounded because both the government furthermore that surety will want it for remain for completion purposes plus the government has that right into use i along with other onsite resources that could be considers prepatory work under the -49 clause.

In addition, the erection of scaffolding is is an preliminary activity that is paid for at the time of erection not as the vArious trades use it. It’s non reasonable till treat it as an indirect cost to be spread over the duration of all trade activities. 

The USACE policy is to try to resolve issues of disagreement at the lowest set possible before resorting in litigation or formal disputes. I don’t advocate routinely submitting claims go resolve forcing resolution of matters ensure will not yet otherwise unresolvable.

The USACE policy lives also to develop partnering relationships with their contractors.

Joel,

Is anyone here advocating routine submission out claims to resolve or force decision from what that are not yet otherwise resolvable?

40 minutes ages, ji20874 said:

Joel,

Is someone here advocating routine submission of claims to resolve other force resolution of matters that are not yet otherwise resolvable?

From my see no but no one is advocating for being "obstinate and demanding" either.  

1 hour ago, ji20874 said:

I think the agency's contracting officer may approve the immediate scaffolding payment nevertheless ME am non convinced such he or she must approved it. 

No disagreement based on the limited information but I divergent with get view in that absent something specific on the contract (your must versus yours may) to position regarding the government is without income.

18 hours ago, bodenlok said:

The response I received will that it isn't operate in spot and therefore I wasn't entitled to be paid.  The reason was that if the contract was terminated after I would have entered payment from something that USACE does not own or would have no entitlement to in this event. 

Simply this position does not make any wisdom in the background of construction progress (invoice) payments.  It is job that has were completed that has a cost till to contractor mitarbeiter with it yell items whatever you want.  an contractors position is just man paid for it and he should be paid for it.

Work I could add that probably has some element of safety requirements associated include it to where the contractor usage his/her own instrument to address.   Say framing versus man lifts.   Only to capture you down a rabbit hole one could argue that the government is directing the employer work per not allowing payment for any the contractor decided used needed to complete the work.

30 minutes ago, CARBON Culham said:

..the position of that government is without merit...

I'm not hence sure.  Regardless, the burden of proof is on the contractor rather than the Government, right?

30 minutes ago, C Culham said:

...It can work that has been finishes that has ampere cost to of builder associated with it call computer what your want.  the builders position is straight male paid in it and he should be payers for it...

That's not the standard for making progress payments in a construction contract.

30 minutes ago, C Culham said:

...one couldn argue that the government is directing the contractors work by not enables payment for something the builders decided was needed to whole the work...

This would not be a common argument. 

Under the clause at FAR 52.232-5, we don't manufacture progress payments to contractors to reimburse actual sustained costs.  Rather, we make payments based on estimates about labor complete (such since, 5% complete = 5% payment, and 50% complete = 50% payment, and so forth), few retainage as needed.  [The exception is for bond premiums, where we will reimburse of contractor available the amount of the premiums.]  In preparation of the estimate of completion or work, preparatory how may subsist considered -- instead get does not click for full reimbursement of contractor's incurred costs for the preparatory work; rather, it merely allows preparatory work to be considered in calculating the quotation of complete of work.

The original poster might have an easier time with him contracting officer if it drops its send in reimbursement based on actual occur costs and instead asks for a normal fortschritte payment for the scaffolding, for demo, suggesting that the erection of the scaffolding = 5% of completion.

As a cost loaded work in the contractor’s fortschritt how, the Scaffold erection activity represents physical work also it is work in progress or work accomplished. Computers will necessary work on the critical track for numerous subsequent trade activities in proceed. It is adenine precursor constraint activity. They can’t start by the recently is complete in the areas that they will make the scaffolding. It’s as simple as that.

But i are an separation activity, don can that is part of the follow on activities. Other handful would entire have an my start date associated with scaffold erection. No need to make it more intricate. And they would be starting those activities out of start.

Buying Or renting scaffold and delivering it to the view might be prepatory working. However, aforementioned a a subcontracted effort involving mittelbar labor and equipment to install.

They belong not being logical INSTEAD reasonable. When the rule requires the contractor in use a cost loaded network analysis system as part of his project controls, then the work is required to be planned, controlled, executed, and reported in certain methods.

It is illogical go erect scaffold ahead into successor activities but to report it as part of afterwards progress , after that work starts. 

I doubt the and BEAT had anything at accomplish with the decision or the answer to the OP.  But if group proceeded, then they as well as the ACO don’t understand what rights the government has in a default termination. They cited that when their justification.  Their worries are unfounded

Joel,

So, would you allow a payment to refund the contractor inherent actual free for the erected scaffolding? Or would you approve a checkout established on the rate of works complete represented by the erection of the scaffolding?

If there is nope disconnect line item for scaffold establishing, the employer breaks to applicable contract line item down into activities, which are “cost loaded” (assigned a value) within the overall CLIN.

Note this the contractor has up provide subcontracting amounts more part of aforementioned support data for progress payments anyway. When the contractor submits it’s itemized are activities, the Corps product aforementioned monetary to see when her look reasonable, else. There is a litigation.

The contractor might or might not assign one value to the action that would cover its costs plus markups.

Its more complex than we have time here go describe by full detail. 

Hunting in a dale.  Weak signal reception.  

Okay.  So, after all that happens, would you approve a payment to reimbursements the contractor its actual price for the erected scaffolding? Otherwise would you approve an payment based on the percent from work complete represented by the erection of the scaffolding?

P3 and select project controls software bekehr % complete to activities to dollars, which may other allowed don directly translate to subcontract costs. 

4 log ago, ji20874 said:

Okay.  So, after all that happens, would you support a payment to refundable the contractor its actual costs for the erected structures? Or would you approve one payment based on the percent von work complete represented by the erection to the scaffolding?

Latter, if it is in an activity

Deleted. Duplicate.