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Old 02-15-2013, 10:23 AM
kentuckytroutbum kentuckytroutbum is offline
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Join Date: Dec 2008
Posts: 429

Actually its not unusual in the architecture, engineering, and construction industry to offer bonuses to contractors for finishing a project ahead of schedule. On the surface it sounds like a good deal, but in many ways its not. The contractor has to figure out what additional resources he needs for manpower, equipment, materials. Does the material suppliers have the materials on hand, and can they deliver them when needed? Will he have to pay overtime or shift differential pay to have his workers and subcontractors there when he needs them? What about equipment? Does he need 3 bulldozers instead of two? What is the cost?

In many cases, the bonus does not cover the additional cost that the contractor incurs. Does he decline to accelerate the schedule? If he agrees, is he eating the cost in the name of good relations, and future projects? These are tough decisions that he must make.

Granted, contractors build "float" into their timelines to cover unforseen events such as delivery of materials, bad weather, delays, etc. Can the owner pay the contractor in a compressed timeframe?. Sometimes, for state agencies this is difficult. But the float is usually minimal.And it is built in to avoid unreasonable expectations on everyone's part on the delivery of the project.


Last edited by kentuckytroutbum; 02-15-2013 at 10:50 AM..
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