Payment Methods

There are three different Payment Methods:

  • Unit Price
  • Fixed Final Pay
  • Time and Expense

The Unit Price is the default Payment Method. This option multiplies the Unit Price to the Pay Quantity to calculate the Total Price.

The Fixed Final Pay method has two applications:

  • display contingency type pay items.
  • accurately calculate the over/under run pay items that are paid as if they were lump sum items.

Contingency type pay items is where the owner provided the pay item and entered their own value. This becomes part of the proposal where it may or may not be used. To identify this type of pay item, select the Fixed Final Pay method, as displayed in the following screen shot. Then, enter $10,000 for example.

If this were a real pay item, lock the $10,000 because it must be part of the proposal. However, then the issue is how to account for any costs, overhead, or profit to this Pay Item. Assuming you did not want to add any overhead and profit dollars to the $10,000, enter a plug source of $10,000 in the CBS. This offsets the Price of $10,000 but charges the $10,000 to a Cost Category that won't be used in any overhead of profit dollars. Now, the $10,000 is not markup.

 

The second application the Fixed Final Pay method has is to accurately calculate the over/under run pay items that are paid as if they were lump sum items. An issue occurs where a pay item is provided with a quantity, such as a Superstructure Bridge of 10,000 CY, and you must enter a Unit Price against the 10,000 CY.

However, the fine print says that this Pay Item can not be measured and can be paid as if it was a Lump Sum item, but your quantity takeoff convinced you that you use more or less than the 10,000 CY. Say your takeoff came to 12,000 CY and you entered the Forecast (TO) Quantity with the 12,000 CY.

Now the CBS is calculated on the 12,000 CY. Now normally in an over/run quantity, InEight Estimate can help you decide how best to price out these items. In this case, you cannot take advantage of this situation. The system converts that total cost based on the 12,000 CY. However, you divide by the 10,000 CY to give a different Unit Cost in the Pay Item and Proposal form. This way, when you get paid, you get the cost as developed in the CBS.

The following screen shot shows the situation where you have an overrun normally. In this example, you developed the CBS direct cost as $4.00 times 12000 CY for $48,000. (the system shows more accuracy). Notice the direct costs of $40,000 and the balanced unit of $5.51. This is the normal calculation if this was a true overrun pay item.

When you change the Payment Method to Fixed Final Pay, the CBS cost of $48,000 is now shown. Then when you price out the pay item, you get your $48,000 return.

Now for the Time and Expense payment method. This option is used with the Job Tracking form. Each resource type can enter a Billing rate. For Force Account/Time and Material/Time and Expense work, by changing the pay item to this method, the actual costs are entered in the Job Tracking form. Then there is an Excel report that lists the actual costs using the Billing rates, plus the profit entered in the Job Tracking tab in the Job Properties form.