Category:618 Mobilization: Difference between revisions

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m Per CM, new guidance clarifies how REs should always have been administering payment for Mobilization according to the current spec
deleted link to EPG 103.2 per RR3958 (removing article 103.2)
 
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The percent selected should be applied to the project’s total cost (the cost that includes all items) when the estimate has been completed.  This figure will be more carefully analyzed and adjusted by Design.
The percent selected should be applied to the project’s total cost (the cost that includes all items) when the estimate has been completed.  This figure will be more carefully analyzed and adjusted by Design.


No standard plans are associated with mobilization, but the [http://www.modot.org/business/standards_and_specs/Sec0618.pdf  Mobilization standard spec] is included in the ''Missouri Standard Specification for Highway Construction''.
No standard plan is associated with mobilization, but the [https://www.modot.org/missouri-standard-specifications-highway-construction Sec 618 Mobilization standard spec] is included in the ''Missouri Standard Specification for Highway Construction''.
 
See [[103.2 Contract Bond for Sec 103.4|EPG 103.2 Contract Bond for Sec 103.4]] for guidance on how to adjust mobilization in order to reimburse the contractor for the cost of the contract bond and railroad liability insurance.


==Basis of Payment for Mobilization (Per Sec 618.2 Basis of Payment)==
==Basis of Payment for Mobilization (Per Sec 618.2 Basis of Payment)==


[http://www.modot.org/business/standards_and_specs/Sec0618.pdf Sec 618] describes how the RE should calculate progress payments for mobilization and when to make each payment. This specification is set up to pay the contractor incrementally for mobilization and also discourage excessive mobilization bids. Before calculating the amount of the mobilization payments, the RE should first verify whether the contractor wishes to exercise the option to receive immediate payment for the contract bond and/or railroad liability insurance.  This adjustment to mobilization should be made as stated in [[103.2 Contract Bond for Sec 103.4|EPG 103.2 Contract Bond for Sec 103.4]].
[https://www.modot.org/missouri-standard-specifications-highway-construction Sec 618] describes how the RE should calculate progress payments for mobilization and when to make each payment. This specification is set up to pay the contractor incrementally for mobilization and discourage excessive mobilization bids. The first payment is made at Notice to Proceed to account for advance start-up costs, including, but not limited to, items such as contract bond and railroad insurance; therefore, no additional reimbursements should be made.
 
The incremental mobilization payments will be the lesser of these two amounts.
 
:Amount 1: Adjust the mobilization down for contract bond and/or railroad liability insurance (when appropriate) then divide that adjusted price by four to determine the amount of the four equal payments.
 
:Amount 2: Multiply 2.5% times the original contract amount.
 
If Amount 2 is the lower amount any remaining mobilization after the four payments are made will not be paid until the final inspection (i.e. all corrections are complete and the project has been accepted for maintenance).
 
Examples are provided below for both scenarios. Refer to Sec 618 for direction on when to make each of the four partial payments.
 
'''Example 1'''
 
The contract amount is $1,400,000. Mobilization was bid at $100,000. The contract bond was $10,000 and the railroad insurance bond was $10,000.
 
The contract bond and railroad insurance is submitted and paid at the beginning of the project.  These amounts are deducted from mobilization.  Therefore, the original mobilization bid of $100,000 minus $20,000 ($10,000 for the railroad plus $10,000 for the contract bond) leaves a remainder of $80,000 for mobilization.


Partial payments are the lesser of 2.5 percent times the original contract price of $1,400,000, which is $35,000, or 25 percent of the remaining mobilization of $80,000, which is $20,000.  The smaller amount is $20,000 which will be used as the payment at the incremental completion percentages.
A contractor is allowed to bid any amount for mobilization, however, to discourage excessive mobilization bids, any mobilization bid amount over 10 percent of the contract amount will not be paid until the project is accepted for maintenance (i.e., after all work, corrections and exceptions are complete).


:1. When 5 percent of the original contract is completed ($1,400,000 times 5 percent = $70,000) a mobilization payment of $20,000 would be paid.
Contracts with a single project will generally have a single mobilization bid item. Contracts with multiple projects will generally have a separate mobilization bid item for each project. For the latter, the mobilization payment schedule should be applied to each project separately. If only one mobilization pay item is provided for a contract with multiple projects, the payment schedule shall be based upon contract completion percentages (if the projects have differing notice to proceed dates, the initial payment will be made at the earliest of those dates).
:2. When 10 percent of the original contract is completed ($1,400,000 times 10 percent = $140,000) an additional mobilization payment of $20,000 would be paid.
:3. When 25 percent of the original contract is completed ($1,400,000 times 25 percent = $350,000) an additional mobilization payment of $20,000 would be paid.
:4. When 50 percent of the original contract is completed ($1,400,000 times 50 percent = $700,000) the final mobilization payment of $20,000 would be paid.


'''Example 2'''
===Payment Schedule - Calculation of Percent Complete===


The contract amount is $2,000,000. Mobilization was bid at $500,000. The contract bond was $70,000 and the railroad insurance bond was $30,000.
The payment schedule is based on the total amount of completed pay items (shown as Total Posted Pay Items on the estimate) relative to the original contract amount. Contract incentives, material allowances, or other adjustments are not included in this percentage calculation. For contracts with a single project, the percent of contract complete shown on the payment estimate can be used as the threshold for triggering progress payments, except that, keep in mind this percentage is based on the adjusted contract amount. Therefore, if the contract has significant overruns, you will need to hand calculate the percent complete. Contracts with multiple projects and multiple mobilization pay items will require hand calculation of percent completion per project.


The contract bond and railroad insurance is submitted and paid at the beginning of the project. These amounts are deducted from mobilization.  Therefore, the original mobilization bid of $500,000 minus $100,000 ($30,000 for the railroad plus $70,000 for the contract bond) leaves an adjusted value of $400,000 for mobilization.
'''Example 1  Mobilization bid item is 10 percent or less of the original contract amount.'''
:Original Contract amount is $1,000,000 and Mobilization bid is $90,000:
:The mobilization bid amount is less than 10 percent, so no retainage is required.
:$90,000 is divided into four equal payments (25%) of $22,500.
:Payment 1 of $22,500 will be made at notice to proceed.
:Payment 2 of $22,500 will be made when 10% of the original contract amount is earned.
:Payment 3 of $22,500 will be made when 20% of the original contract amount is earned.
:Payment 4 of $22,500 (final payment) will be made when 30% of the original contract amount is earned.


Partial payments are the lesser of 2.5 percent times the original contract price of $2,000,000, which is $50,000, or 25 percent of the adjusted mobilization of $400,000, which is $100,000.  The lesser amount of $50,000 will be used as the payment at the incremental completion percentages.
'''Example 2 Mobilization bid item is greater than 10 percent of the original contract amount.'''
:Original Contract amount is $2,000,000 and Mobilization bid is $260,000:
:Ten percent of the original contract amount is $200,000 (2,000,000 x 10%).  The mobilization bid is $60,000 ($260,000 – $200,000) over the 10 percent threshold,
:The amount over the 10 percent threshold ($60,000) will not be paid until the project is accepted for maintenance.  The remaining $200,000 will be paid in four equal payments (25%) of $50,000.
:Payment 1 of $50,000 will be made on an estimate at notice to proceed.
:Payment 2 of $50,000 will be made when 10% of the original contract amount is earned.
:Payment 3 of $50,000 will be made when 20% of the original contract amount is earned.
:Payment 4 of $50,000 will be made when 30% of the original contract amount is earned.
:Payment 5 of $60,000 (retained amount) will be made when the project is accepted for maintenance.


:1. When 5 percent of the original contract is completed ($2,000,000 times 5 percent = $100,000) a mobilization payment of $50,000 would be paid.
==Additional Mobilization for Seeding==
:2. When 10 percent of the original contract is completed ($2,000,000 times 10 percent = $200,000) an additional mobilization payment of $50,000 would be paid.
Additional Mobilization for Seeding provides compensation for additional mobilization to perform temporary or permanent seeding beyond the initial occurrence, per Sec 806.50.2, and as required per terms of the SWPPP. Additional mobilization should be provided on projects where construction activities disturb an acre or more over the life of a project (see Sec 618.3).
:3. When 25 percent of the original contract is completed ($2,000,000 times 25 percent = $500,000) an additional mobilization payment of $50,000 would be paid.
:4. When 50 percent of the original contract is completed ($2,000,000 times 50 percent = $1,000,000) an additional mobilization payment of $50,000 would be paid.
:5. When the engineer has accepted the project for maintenance in accordance with Sec 105 the remaining mobilization amount of $200,000 would be paid.

Latest revision as of 10:58, 19 November 2024

Mobilization includes the movement and preparation of facilities, equipment, supplies and personnel for work on the project. Mobilization costs are included on every project and may be estimated at

  • 4% to 5% for pavement surfacing (resurfacing, seal coat, UBAWS, etc.),
  • 5% to 6% for grading and turn-key projects,
  • 7% to 8% for bridge projects and
  • up to 10% for miscellaneous projects.

The percent selected should be applied to the project’s total cost (the cost that includes all items) when the estimate has been completed. This figure will be more carefully analyzed and adjusted by Design.

No standard plan is associated with mobilization, but the Sec 618 Mobilization standard spec is included in the Missouri Standard Specification for Highway Construction.

Basis of Payment for Mobilization (Per Sec 618.2 Basis of Payment)

Sec 618 describes how the RE should calculate progress payments for mobilization and when to make each payment. This specification is set up to pay the contractor incrementally for mobilization and discourage excessive mobilization bids. The first payment is made at Notice to Proceed to account for advance start-up costs, including, but not limited to, items such as contract bond and railroad insurance; therefore, no additional reimbursements should be made.

A contractor is allowed to bid any amount for mobilization, however, to discourage excessive mobilization bids, any mobilization bid amount over 10 percent of the contract amount will not be paid until the project is accepted for maintenance (i.e., after all work, corrections and exceptions are complete).

Contracts with a single project will generally have a single mobilization bid item. Contracts with multiple projects will generally have a separate mobilization bid item for each project. For the latter, the mobilization payment schedule should be applied to each project separately. If only one mobilization pay item is provided for a contract with multiple projects, the payment schedule shall be based upon contract completion percentages (if the projects have differing notice to proceed dates, the initial payment will be made at the earliest of those dates).

Payment Schedule - Calculation of Percent Complete

The payment schedule is based on the total amount of completed pay items (shown as Total Posted Pay Items on the estimate) relative to the original contract amount. Contract incentives, material allowances, or other adjustments are not included in this percentage calculation. For contracts with a single project, the percent of contract complete shown on the payment estimate can be used as the threshold for triggering progress payments, except that, keep in mind this percentage is based on the adjusted contract amount. Therefore, if the contract has significant overruns, you will need to hand calculate the percent complete. Contracts with multiple projects and multiple mobilization pay items will require hand calculation of percent completion per project.

Example 1 Mobilization bid item is 10 percent or less of the original contract amount.

Original Contract amount is $1,000,000 and Mobilization bid is $90,000:
The mobilization bid amount is less than 10 percent, so no retainage is required.
$90,000 is divided into four equal payments (25%) of $22,500.
Payment 1 of $22,500 will be made at notice to proceed.
Payment 2 of $22,500 will be made when 10% of the original contract amount is earned.
Payment 3 of $22,500 will be made when 20% of the original contract amount is earned.
Payment 4 of $22,500 (final payment) will be made when 30% of the original contract amount is earned.

Example 2 Mobilization bid item is greater than 10 percent of the original contract amount.

Original Contract amount is $2,000,000 and Mobilization bid is $260,000:
Ten percent of the original contract amount is $200,000 (2,000,000 x 10%). The mobilization bid is $60,000 ($260,000 – $200,000) over the 10 percent threshold,
The amount over the 10 percent threshold ($60,000) will not be paid until the project is accepted for maintenance. The remaining $200,000 will be paid in four equal payments (25%) of $50,000.
Payment 1 of $50,000 will be made on an estimate at notice to proceed.
Payment 2 of $50,000 will be made when 10% of the original contract amount is earned.
Payment 3 of $50,000 will be made when 20% of the original contract amount is earned.
Payment 4 of $50,000 will be made when 30% of the original contract amount is earned.
Payment 5 of $60,000 (retained amount) will be made when the project is accepted for maintenance.

Additional Mobilization for Seeding

Additional Mobilization for Seeding provides compensation for additional mobilization to perform temporary or permanent seeding beyond the initial occurrence, per Sec 806.50.2, and as required per terms of the SWPPP. Additional mobilization should be provided on projects where construction activities disturb an acre or more over the life of a project (see Sec 618.3).

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