Download e-book for kindle: A Probus Guide to Subcontract Project Management and by Quentin W. Fleming

By Quentin W. Fleming

ISBN-10: 1557382832

ISBN-13: 9781557382832

Covers the topic of growth funds in line with expenses incurred, as required via the Federal Acquisition law, a long way sub-part 32.5. The publication recommends protecting a linkage among all growth funds and the supplier's actual functionality on the way to reduce dangers.

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Additional resources for A Probus Guide to Subcontract Project Management and Control: Progress Payments

Sample text

Column (I) The Payment to the Supplier: Reflects the net amount of payments to the supplier witheach contractual delivery. In this case, when the supplier makes a delivery, they get the full unit value as displayed in column (G), less the 80 percent progress he-Award Activity 31 payment liquidation as depicted in column (H), for a 20 percent net value payment to the supplier. 1 million for it. But, because of prior progress payments, you have already "loaned" the supplier 80 percent of the costs incurred to produce the engine.

Note in this sample format that there are some seventeen discrete tasks listed on the chart, that each task listed must have an estimated weighted value, and that the sum of these weighted values must add up to 100 percent of the full subcontract price. This detail is needed so that the supplier can provide us with their estimated percentage of work completed each month. The tasks listed on any respondent's Gantt Chart will be different for each subcontract, depending upon the makeup of effort and the extent to which there is (nonrecurring) developmental work versus (recurring) production activity.

And, of course, the costs of the performance bonds may be ultimately passed on to the govemment. The use of performance bonds on progress payments is recommended only in those exceptional cases where there are extreme risks of loss to the prime contractor. As an alternative to the performance bond requirement, we believe that the close management of progress payments against the supplier's own cost projections, and the comparison of actual costs to the supplier's physical work performance, will be more than adequate to prevent a loss on a subcontract due to the possible cost risk of exposure, because of the over-funding of progress payments.

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A Probus Guide to Subcontract Project Management and Control: Progress Payments by Quentin W. Fleming

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