INTERIM PROGRESS CLAIM ISSUES:

FROM SCHEDULING PERSPECTIVE

SPEAKER: IR. WAN IBRAHIM BIN WAN YUSOFF
SPEAKER’S BACKGROUND
 Ir. Wan Ibrahim Wan Yusoff, RPD, CCPD
 Academic & Professional Qualification
 Dip. In Civil Engineering (ITM)
 BSc (Hons) In Civil Engineering (Strathclyde, UK)
 Master Project Management (UTM)
 HRDF Certified Trainer
 Work experience
 Building structure designer (7 year)
https://pengurusanprojek.com
 Resident engineer (12 year)
https://coachirwan.com
 Project manager (15 year)
011-5657 6070  Training manager (2 year)

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THINGS TO BE COVERED

1. What are the issues?

2. Impacts of the issues on projects’ implementation
3. Suggested solutions to the issues

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1. WHAT ARE THE ISSUES?

 Disputes over calculation of progress

 Late and under payment
 Big difference between financial and physical progress

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DISPUTES OVER CALCULATION OF PROGRESS

i. Claims made based on required payment amount

- Claim differ from the actual value of work done
- Increase claim amount in anticipation SO/QS will deduct the payment

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DISPUTES OVER CALCULATION OF PROGRESS

ii. No agreed methods of measuring progress of work

Examples, how to measure:
- Lump sum items
- Items which do not has enough details
- Items not included in BQ but included in scope of work

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DISPUTES OVER CALCULATION OF PROGRESS

iii. Claim made for Variation Order (VO) works

- Insufficient documentation for progress tracking
- Insufficient information and poor documentation on work progress

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LATE AND UNDER PAYMENT

i. Insufficient supporting documents

- Contractual: Updated BQ, partial as-built drawing, quality test reports, etc.
- Scheduling: Insufficient information and poor documentation on work
progress

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LATE AND UNDER PAYMENT

ii. Poor project financial management

- Cash flow problem because lack of management capacity
- Poor cash flow because lack of proper process implementation

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BIG DIFFERENCE BETWEEN FINANCIAL AND
PHYSICAL PROGRESS

i. Different understanding of financial & physical progress

- Financial progress – value of all works under the scope; Physical progress –
value of physical works only
- Financial progress – amount of payment made; Physical progress – value of
all works
- Financial progress – value of all works; Physical progress – amount of effort
for execution of all works

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BIG DIFFERENCE BETWEEN FINANCIAL AND
PHYSICAL PROGRESS

ii. Have impression that over or underpayments have been made

- Overpayment when financial progress is higher than physical progress
- Underpayment when financial progress is lower than physical progress

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BIG DIFFERENCE BETWEEN FINANCIAL AND
PHYSICAL PROGRESS

iii. Feel that it did not reflect the actual progress on site
- Has physical progress even though the physical works have not yet started
- High physical progress but very low financial progress

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2. IMPACTS OF THE ISSUES ON PROJECTS’
IMPLEMENTATION

 Create cash flow problems

 Slow progress and delay in completion
 Create stress on the contractors

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CREATE CASH FLOW PROBLEMS

i. Delayed progress payment will have domino effects

ii. May affect the financial status of the contractor

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SLOW PROGRESS AND DELAY IN COMPLETION

i. Contractor’s failure of getting regular and timely payment could

result in slow progress.
ii. Cash flow problems can affect the overall progress of works and
delays completion.

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CREATE STRESS ON THE CONTRACTOR

i. Affect the contractor's reputation

ii. Profitability of the project reduced

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3. SUGGESTED SOLUTION TO THE ISSUES
DISPUTES OVER CALCULATION OF PROGRESS

i. Claims made based on required payment amount

o Use work program to generate project cash flow projection and budget
- Know how much progress payment to expect each month
- Know how much money required each month for the construction works

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DISPUTES OVER CALCULATION OF PROGRESS

ii. Agree on methods to calculate progress

- Physical works: Fixed formula, weighted milestone and percent complete
- Non-physical works: Apportion effort and level of effort

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DISPUTES OVER CALCULATION OF PROGRESS

iii. Have a proper guide on how to include VO works in schedule and

track their progress
- How to list the activities it in the schedule?
- Introduction of new activity will affect the values of financial and physical
progress
- Method to be used to calculate the progress

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LATE AND UNDER PAYMENT

i. Insufficient supporting documents

- Use of progress reports generated using project management software
- Weekly review and verification of progress reporting or measurement

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LATE AND UNDER PAYMENT

ii. Poor project financial management

- Use PMS to generate project cashflow projection at every stage of project
implementation
- Allocation and disbursement of fund made according to cash flow projection
- Monitor the use of allocated fund and make necessary adjustment

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BIG DIFFERENCE BETWEEN FINANCIAL AND
PHYSICAL PROGRESS

i. Different understanding of financial & physical progress

o Agree to use only one common definition of progress, such as:
- Financial progress – value of all works
- Physical progress – amount of effort for execution of all works

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BIG DIFFERENCE BETWEEN FINANCIAL AND
PHYSICAL PROGRESS

ii. Have impression that over or underpayments have been made

- There is no direct correlation between financial progress and physical
progress
- Use definition discussed earlier

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BIG DIFFERENCE BETWEEN FINANCIAL AND
PHYSICAL PROGRESS

iii. Has physical progress even though the physical works have not yet
started
o Reduce weightage of non-tangible tasks on physical progress by:
- Set tasks that happen at a regular basis as recurring tasks
- Group similar non-tangible tasks into one group

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BIG DIFFERENCE BETWEEN FINANCIAL AND
PHYSICAL PROGRESS

iv. High physical progress but very low financial progress

o Reduce weightage of non-tangible tasks on physical progress
o Increase weightage of tangible tasks on physical progress by:
- Breakdown physical works WBS level further down

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How can I help you? Please contact:
WhatsApp: +6011 5657 6070
Website: https://coachirwan.com