how to add the advanced payment to your schedule and link it?

introduction

Advanced Payment is a very common payment term in construction projects. However, sometimes it is confusing for planning engineers to reserve their company rights in case the project owner delays the advanced payment.

How to add it to the schedule to impact the project schedule in case of delays? Also how to convince the client to approve a schedule that includes the advanced payment and finally, how to link the advanced payment to the relevant activities in the schedule with decent logic?

Let us create the best scenario to add the advanced payment to our schedule and link it to the relevant activities. The following is the materials procurement for our sample project, please read it and then go to the next paragraph.

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As we can see from the picture above, we have 7 materials in our sample schedule. Only three of them are long lead (important, expensive, and take a long time for procurement) materials and four materials are not long lead. Now the question is, if I want to link the advanced payment, what I should see next? Yes exactly, the construction schedule is in the following picture.

To have a realistic schedule, Materials Submittals should be linked to Materials Approvals, Materials Approvals linked to Materials Procurement, Materials Procurement linked to Materials delivery, and Finally the materials delivery linked to activities construction.

As you can see from the picture above, materials are linked together and linked to the relevant activities which gives us reasonable floats in our schedule.

Now, where to add the advanced payment? and how to link it to the materials.

As you can see from the picture above, you should have a special section for General Requirements which contains the project’s important milestones.

The best scenario in my opinion to add the advanced payment and get your schedule approved without any issues is by doing the following steps:

1- Create an activity for the contractor to prepare the advanced payment Guarantee letter and be sure there is a certain duration in your contract to be the same.

2- Add a milestone that is linked to the contractor activity” Prepare the advanced payment Guarantee letter” with proper lag or as per your contract.

3- Now link the advanced payment milestone by the client to the procurement start of the long lead materials and be sure that there is a float (in our sample project we allowed 13 days float).

4- Remember, the float will make the client comfortable, but it will not harm you as a contractor if you delay the issuance of the advanced payment Guarantee letter, and in that case, you as a contractor will get the benefit of the float because the project float who burn it first get it.

5- You showed your client the good intention that the delays of advanced payment will not hold the whole project, but at the same time will protect your company’s rights.

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