Claim Presentation Rev 03 FINAL

PowerPoint Presentation

SAG Mill Mechanical ProjectClaim Analysis

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Group 7:Ali Zahedi AnarakiRabih AtayaRachid TawilHossein KhodaverdipoursarbandiSeyed Mohammadsadegh Tabatabaei

Project overview

Scope of work

Major problems

Delay analysis

Damage quantification

Productivity analysis

Claim summary

Conclusion

QuestionsProject overviewScope of workMajor ProblemsDelay analysisProductivity analysisDamage QuantificationClaim SummaryConclusionQuestions Outline2

ContentBackground informationSummaryPersonal resources and goalsThe product or serviceThe marketSale and marketing planManagement & organisationDevelopment of the businessBudgetsFinancial requirementsAppendices

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Questions Project overview3The project is an upgrade of an existing mill plant. Mechanical Contract: Erection of mechanical equipment and installation of piping for the New SAG MILL.Mechanical Contract is Lump-sum with a total value of $2,549,130

The Contractor selected based on:lowest bidProposal technically acceptableSatisfied all terms of the Contract

Key Dates and Events:April 30th 1990 Scheduled Start DateMay 3rd, 1990 Actual Start DateAugust 31st 1990 Scheduled Finish DateDecember 19th 1990 Actual Finish Date

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Project overview

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Questions Scope of work4The contract identifies six main physical areas for the mechanical equipment erection. Piping work which occurs in all of these areas, identified as a seventh "area. The areas, and the relative volume of the labor shown in the bar chart:

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Questions Scope of work5Work IncludedUnloading and Transportation of Equipment to installation siteInstallation of 107 Equipment in 6 Areas of the ProjectIncluding removal of old equipment to be replacedSupply and Installation of Piping in all AreasMiscellaneous Works and Installations for the completion and commissioning of the Installed Equipment.

Work ExcludedSupply of Mechanical Equipment. Civil and Structural worksEquipment Installation Procedures and Engineering Plans

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QuestionsMajor Problems6Equipment DeliveryAccording to the projects schedule:39 pieces on site at the beginning of work. 24 units on site in May 1990.41 pieces on site in June 1190. 3 pieces on site in early July 1990.

On average, equipment delivery was 3 months later than the agreed contractual delivery dates.

The longest delay in equipment delivery was for a component of the Sag Mill at 194 days and the Ball Mill Pinion Shaft at 193 days.

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QuestionsMajor Problems7Defective Equipment

Several equipment were supplied with deficiencies. Examples:Minor deficiency: faulty welds on Conveyor AssemblyMajor deficiency: Overcast discharge head sections in the Ball MillOut of 107 delivered Equipment, 30 had some sort of deficiency.

Civil & Structural Deficiencies:Works by others were delivered with construction errors on many occasions, namely the Anchorages of the Sole Plates.

Lost Time on the execution of the works:Identifying problemsCoordinating solutions with the EngineerExecuting the corrective actions

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QuestionsMajor Problems8Drawing Revisions

Out of 374 drawings issued to the Contractor:Only 93 were issued with final revision prior to start of the works 75% of drawings were issued or revised after start of the works17% of drawings were issued to the Contractor in November 1990

Effect on the work:Change OrdersReworkLoss of Productivity Works on hold or change in work method

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QuestionsMajor Problems9AccessAccess to work area was not ready for the Mechanical Contractor on many occasions, the most significant are summarized below:

Civil and Structures contractors were late on delivering installation areas or works required by the Mechanical Contractor. Delays were carried on by the Mechanical Contractor. Co-activity in work areas was not properly managed by the Engineer.

AreaPlanned ActivityPlanned Access DateActual Access DateAccess Delay1ConveyorsJuly 7, 1990September 5, 1990603FeederJune 13, 1990June 22, 199094Mill ShellJuly 9, 1990July 12, 199035Cone CrusherJune 3, 1990July 6, 199033

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Questions Delay analysis10Chosen method : Impacted As-Planned

Steps done in this method :

Importing Primavera files for all areas and filter to Critical pathFind actual start and finish dates of all critical activities from daily log and Equipment deliveryInserting these dates into software month by month in order to cover all parallel delays and their impactsCalculating the difference between As-planned finish date of project and Impacted finish date of project by each activity in critical pathFinally, calculating all impacted days of delay

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Questions Delay analysis11

Project overview

Scope of work

Major problems

Delay analysis



Claim summary

Conclusion


Project overview

Scope of work

Major problems

Delay analysis



Claim summary

Conclusion


Project overview

Scope of work

Major problems

Delay analysis



Claim summary

Conclusion


Project overview

Scope of work

Major problems

Delay analysis



Claim summary

Conclusion


Project overview

Scope of work

Major problems

Delay analysis



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Conclusion

Questions Delay analysis16chronology of delaysactivitydelaytypeduration delaysImpact delays(working days)1CHUTES DELIVERED FOR FEEDER # 6EC042PEBBLE CONVEYOR DELIVEREDEC0293INSTALL PLATEWORK-SAGEC-59224REMOVE EXISTING CONVEYOR # 1EC-595MODIFY EXISTING MILL 3&4 (PART 2)EC-21126DEMOBILIZATION .EC03Owner is responsible for 79 working days of delay-8579

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Delay Analysis

Damage Quantification


Claim summary

Conclusion

Questions Damage Quantification17Change Orders

Approved-Unpaid Change Orders, totaling $504,662.00 :

Unapproved-Unpaid Change Orders, totaling $1,528,412.00 :

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Damage Quantification


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Questions Damage Quantification18Loss of Profit

Original Contract value, including Contractor profit, is $2,549,130. Terminated Contract value is $1,814,598.

According to Clause 6.3.3 of contract, the contractor has the right to claim the loss of profit for the difference between the contract price and the earned amount.

For a profit of 5% Profit loss = 5% x ($2,549,130 $1,814,598) = 5% x $734,532 Claimable profit loss = $36,727

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Questions Productivity analysis19Total Cost MethodModified Total Cost MethodMeasured MileIndustry Studies on change orders such as Leonard and Ibbs studies.

The total cost method

Claim amount = (incurred costs + Mark-up) - Received payment

Claim amount = [(64,506 hours x 1.05) 29,917] x $40/hour $1,512,600

Measured Mile Method

Claimable hours = Total Manhours - Total Normal Hours Hours claimed separately for changesClaimable hours = 34,367 hours Claimable amount = $1,374,680

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Questions Productivity analysis20AreaDuration(days)Earned Man-hoursSpent Man-hoursProductivityNormal Hours02161203,32427.7012111201,3682,6871.961,37822122,9727,4752.512,99431761,4053,0842.191,41541992,80415,9365.682,82551743,7156,5131.753,74361391,0041,8081.801,011715716,52916,6521.0116,6529226-18,672-0Total29,91776,14930,139

Table 1 : Loss of productivity estimation using measured mile method

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Questions Productivity analysis21Figure 1 : The effect of change orders on productivity for electrical and mechanical work by Charles A. Leonard

Leonard Study

12% change construction productivity = 0.75 loss of productivity = 25%Productivity loss hours = 64,506 hours x 0.25 = 16,127 hoursClaimable amount = 16,127 hours x $40/hour = $645,080

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Questions Productivity analysis22

Figure 2 : The effect of change orders on productivity by William Ibbs

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Questions Productivity analysis23MethodTotal Cost Measured Mile Leonard studyIbbs adapted studyClaimable hours37,81534,36723,86816,127Claimable amount$1,512,6001,374,680$954,720$645,080Productivity11.0137% loss of productivity25% loss of productivity

Table 2 : Comparison of available methods to measure the loss of productivity

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Questions Claim summary24

Summary of the claimed amounts for the contract dispute:

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Questions Conclusion25

A lump sum contract of $2,549,130 was awarded for the Sag mill mechanical project.

The Engineer terminated the contract with a total payment of $1,814,598.

The total claim amount of $2,847,946 is submitted by the Contractor.

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Conclusion

Questions Questions26

DescriptionAmount ($)

Unpaid approved changes504,662

Unpaid unapproved changes1,528,412

Loss of profit36,727

Indirect cost133,065

Loss of productivity645,080

Total2,847,946

Claim Presentation Rev 03 FINAL

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