An activity schedule is a list of the activities which the Contractor expects to carry out in completing his obligations under the contract. When it has been priced by the Contractor, the sum for each activity or each group of activities is the price to be paid by the Employer for that activity or group. The total of all the activities and groups is the Contractor’s price for providing the whole of the works. A contract based on an activity schedule is basically a lump sum contract. When preparing his tender the Contractor considers the full scope of works, breaks this down into a number of identifiable activities and then prices each activity. If the employer has a number of specific activities which he wishes the Contractor to price, then the employer may list these activities in the enquiry document. It is essential that the activity descriptions are clear and complete so the entire works are included within the overall activity descriptions and the work included within any one particular description can be readily identified. Since payment is normally based on completion of each activity or group, and not before, each activity description should define the measure to be adopted to confirm completion. This form of payment mechanism is adopted in many standard forms of contract, since it significantly reduces administration. It is used in particular in design and construct contracts, where the contractor has control over the definition of the project. It is also used in construct only contracts where the design has been completed before submission of the contractor’s price. The Engineering Construction Contract uses an activity schedule in Option A and Option C. The IChemE Red Book 3rd Edition uses a similar mechanism in Schedule 8 which under Clause 39.1 requires instalments to be paid on completion of defined tasks, when evidence of completion of each task has been provided. The FIDIC Yellow and Silver Books at Clause 14.4 allows payments to be made by instalments against a Schedule of Payments, which may be defined by reference to actual progress. This therefore would allow an activity schedule to be adopted.
BDAS specialise in: providing contract advice, resolving construction disputes, managing construction claims & adjudications and will give you competitive, independent advice tailored to your specific construction problems. If you could benefit from this please call Jon now on 07795 231 231 or email:Jon@BDASweb.com