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Earning Progress Credit for Deliverable

11 replies [Last post]
Jithin Kambhikanam
User offline. Last seen 2 weeks 4 days ago. Offline

Hello Everyone,

I am working in Oil and Gas Sector on the Main Contractor Side. The senario here is we have a Contract with Cleint which says the Client Review period is 5 Calendar Days after Issue of Deliverable.

If the Client didnt respond back in 5 days I take the Deliverbale to be approved and take the full credit. The Example is below,

 

StartIDCIssue for ApprovalComments from ClientReissueApproved for IFC
5%30%30%20%10%5%

So is it Ok to take the credit after the review period if the Client has not responded or should I wait till the Client responds to take the credit. Some times the Client takes 1 Month to respond.

What is your view on this ?

Regards

Jithin

Replies

Jithin Kambhikanam
User offline. Last seen 2 weeks 4 days ago. Offline

Hi John,

 

The Contract says that the review period is 5 days if has passed that duration it would be considered as deemed approved.

So I think we can take credit but as you said if the Client comes up with a comment at a latter stage we can issue a variation order and show the impact on other deliverable.

 

Regards

Jithin

 

John Hanney
User offline. Last seen 7 weeks 5 days ago. Offline
Joined: 28 Feb 2002
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Is the contract worded if the client doesn’t reply with in the 5 days it is deemed approved? If it is then take the credit as it is approved. If the client then comes back with comments / revisions these are then variations to be costed and incorporated into the programme as required.

If the contract is silent on the approval then as soon as the dead line has passed you need to advise him he is delaying the programme and will be liable for delays to the project and or disruption / acceleration costs. 

Trevor Rabey
User offline. Last seen 7 weeks 6 days ago. Offline
Joined: 29 Nov 2005
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Critical Path Method 101. If the approval is on the critical path, and actually (ie actual = real) takes 10 days instead of the 5 esitimated then all of the successors and all of their successors have to wait (ie they get re-scheduled), and then the forecast overall finish date is 5 days later. If the approval is not on the critical path and has lots of float, then the effect of taking 10 days may be trivial because all of the successors and all of their successors have to wait, but it just consumes float. Not good, but not catastrophic, and manageable. This is exactly why you have the software, not so you can BS the client, but so you can distinguish between so-so consequences of actuality and really serious consequences of actuality. It's not there so you can "score" credit and cook the numbers to look good, especially if things are not good. Denial isn't just a river in Africa, you know.

Jithin Kambhikanam
User offline. Last seen 2 weeks 4 days ago. Offline

Hi Trevor,

What you said is right "You can go only when it is Green.

Actually the Project is a Fast Track one. As it is a Fasttrrack Project we have put some Criteria in Contract to meet the Project end date and one of them is the review period of delvierable which is 5 days.

So I was asked to take the credit if we have lapsed the review period.

 

Regards

 

Jithin

 

Trevor Rabey
User offline. Last seen 7 weeks 6 days ago. Offline
Joined: 29 Nov 2005
Posts: 527
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You can"t "take credit" for it. It didn't happen yet. You can't take credit for 5 days elapsing. You didn't make 5 days elapse. The universe did that.

If you estimate that it takes 1 day to lay 1000 bricks but only lay 500 bricks after one day, you can't "take credit" for laying 1000 bricks at the end of the day, because you didn't lay 1000 bricks. If it takes 2 days to lay 1000 bricks, you can "take credit" for it at the end of day 2.

I don't know the road rules in your country, but here, if you come to a red traffic light which you think should stay red for 30 seconds, you don't just proceed to drive into the intersection after 30 seconds if it is still red. You wait until it is green.

Your client may take whatever he likes to approve your drawings, then the successors of that approval will just have to wait.

Kylie Gorham
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Joined: 22 Oct 2017
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While "it doesn't look for good in the schedule to see that a deliverable is not reviewed for months", it is often how schedules do look in parts and from time to time. 

The greater concern to my mind is not about taking credit, it is about the impact of the failure of the client to close the review. This is why escalation of the open action to the client is important, and the most effective method to get their action is to notify them of impact, especially where the impact has cost or time implications. 

If there are no cost or time implications from the failure to complete the review, then perhaps the schedule has included the task too early in time. 

The credit on its own is only important if it allows you to claim payment. Nonetheless, I assume if you have an agreed definition of stage gates for progress measurement, then contractually you probably have a defined remedy for failure by the client to complete their tasks. Its usually toothless until there is a cost or delivery implication. 

Kylie
Jithin Kambhikanam
User offline. Last seen 2 weeks 4 days ago. Offline

HI Zoltan,

 

So you think that it would be good to remind the Client that the deliverables are outstanding there review before taking the credit (Even if the Contract says the review period is 5 days).

What I used to do is after the Review Period if not responded will take the credit and if the Client responds with a comemnt then I will mark my Progress Measurement Register with those and follow up with the Dicipline engineers to Close it out. 

What if this is the scenario,

What if the client was reminded and still there is no reponse ?

The thing is I do put 1 Activity as Engineeigng deliverblae say like "Tank Foundation Drawing" and 22 Days duration which includes "Start + IDC + Issue to Company for Comments + Comments from Client + Reissue to Client + Approval for Contstution form Client and the review Cycle is 5 Days. I dont like to show in schedule that the activity has taken 45 Days duration because of Delay in Client approval.

 

Regards

Jithin

Zoltan Palffy
User offline. Last seen 21 hours 14 min ago. Offline
Joined: 13 Jul 2009
Posts: 2076

you said "it doesnt look good in schuele to see that a deliverable is not reviewd for months" thats the WHOLE POINT of the schedule to bring things like this to ahead and get people to focus on those items to get them done. You are artifically manuliplating the schedule when you take credit for something not yet completed. 

It is what it is nothing more nothing less. Tell it like it is 

Anoon Iimos
User offline. Last seen 2 hours 50 min ago. Offline
Joined: 22 Sep 2006
Posts: 1307

I for one believe that it's difficult to measure progress for detailed engineering / design (or producing drawings for construction), as you can never use an unfinished drawing or design in construction until it is issued or stamped and approved for construction (in principle).

So why bother with inventing corresponding percentage progress for the production of detailed engineering drawings?

Putting 50% or 80% for a certain drawing issued for comments and/or approval is meaningless! What if the comment of the reviewer is to change everything on it? So you will go back to 0%? 

Suggest to consider your drawings issued for review, comments and or approval as 100% (from your point of view as a contractor). This way I guess your client or reviewer will do their responsibility promptly, otherwise (if they're lazy), then perhaps they might stamped it IFC or AFC immediately (which of course very good for you!).

Just my opinion (and I don't mean to take it seriously). 

 

 

Jithin Kambhikanam
User offline. Last seen 2 weeks 4 days ago. Offline

Hi Zoltan,

But what if even after reminding the Client still it takes a 15 days. So you lose the progress and time right just because the response takes time.

What I do is even if I take the credit I keep the log updated whenever I get comments or approval, so as to know that even if I have taken the credit I have a comment on it.

It doesnt look good in schuele to see that a deliverable is not reviewd for months, like actually the duration of that deliverable with response time would have been 10 days, but just because the response is delaeyd the activity has a duration like 45 days.

 

So even if we take the credit wouldnt it be good that we note it down somewhere so as to know that we did get the comment.

 

Regards

Jithin

Zoltan Palffy
User offline. Last seen 21 hours 14 min ago. Offline
Joined: 13 Jul 2009
Posts: 2076

you cant take credit for it. What is it comes back rejected ? Also your actuals will not accurately reflect what is happening. Bird dog the Clinet instead and create a priority list of what needs to be reviewed.