Limits on Increase in Estimated Quantities

[Scott2]

If you have unit priced CLINs with estimated quantities on a construction contract, with a VEQ clause, do you know if there is any limitation on the ability to increase an individual CLIN quantity to respond to actual requirements in the field? I don't believe there is, but my CO is expressing concern because the awarded estimated quantity was 24 CY of aggregate, and we need to increase it to about 1200 CY. Other CLINs will not be used as much as estimated and there will be no increase to the total contract price of the contract. Thanks for the help.

[Bailers]

If you have unit priced CLINs with estimated quantities on a construction contract, with a VEQ clause, do you know if there is any limitation on the ability to increase an individual CLIN quantity to respond to actual requirements in the field? I don't believe there is, but my CO is expressing concern because the awarded estimated quantity was 24 CY of aggregate, and we need to increase it to about 1200 CY. Other CLINs will not be used as much as estimated and there will be no increase to the total contract price of the contract. Thanks for the help.

The large increase is a concern... going from 24 CY to 1200 CY sounds like a major change in scope even if other CLINs are being reduced. Putting aside the issue of can you do this, I'd be inclined to rebid it if possible simply to see if you can get better pricing from the economy of scale.

[Scott2]

I should have added that we have agreement from the contractor to renegotiate IAW the VEQ clause for bulk application vs. spot repairs (this is for road repairs). He's agreed to use Means Cost Guide as a basis for revised pricing.

[joel hoffman]

I should have added that we have agreement from the contractor to renegotiate IAW the VEQ clause for bulk application vs. spot repairs (this is for road repairs). He's agreed to use Means Cost Guide as a basis for revised pricing.

The VEQ clause is not applicable to changes in the work specified in the statement of work. The VEQ clause is intended for use when the nature of the specified scope of work doesn't change but the estimated quantities are inaccurate.

If the unit priced line item is described for "spot repair work" and you are changing the nature of the specific work to wide area application (i.e., the method of installation is essentially different), then it would seem to me that you need to negotiate a unit price for a new CLIN for the actual work to be done, pursuant to the Changes clause - assuming that the work is within the original scope of the contract (road repairs).

[Scott2]

The VEQ clause is not applicable to changes in the work specified in the statement of work. The VEQ clause is intended for use when the nature of the specified scope of work doesn't change but the estimated quantities are inaccurate.

If the unit priced line item is described for "spot repair work" and you are changing the nature of the specific work to wide area application (i.e., the method of installation is essentially different), then it would seem to me that you need to negotiate a unit price for a new CLIN for the actual work to be done, pursuant to the Changes clause - assuming that the work is within the original scope of the contract (road repairs).

Thanks, Joel. That very helpful.

[Guest Vern Edwards]

Joel:

What do you think about the use of the Means guide as a basis for pricing?

[joel hoffman]

Joel:

What do you think about the use of the Means guide as a basis for pricing?

Scott2, you are welcome.

Vern, Means is a starting point for estimating if you don't have any better information on how the work would actually be done for new work or actually was done when pricing an after-the-fact mod on the job. However, I don't generally just use the numbers in the tables without adjusting for expected or actual conditions, labor rates, equipment makeup and rates, material prices, , overheads, self-performed or subbed work, etc.

The Means guide usually has detailed information about the crew makeup, type of equipment being used, material prices and provides average productivity rates, as reported to Means. It might or might not represent the actual conditions and technical approach employed or to be employed.

For small mods for new work, it probably wouldn't matter a whole lot whether or not you go into detail to substitute actual wage rates, actual material costs and actual equipment rental/ownership costs into the equations used in the Guide. However, you'd want to, at the least, use some more representative rates for markups.

For work on an existing job, the adjustment is supposed to be based upon the estimated (future) or actual cost to the contractor versus unchanged work. So, we might theoretically know much of the actual equipment being used, the actual crew makeup, material costs, overhead rates, bond rates, etc.

Means actually developed the USACE's Estimating programs many years ago. "MCACES Gold" alllowed the estimator to customize the labor, equipment, material, OH, bonds, etc.

For anything other than a minor amount of work, using Means without adjusting for realistic expected or actual labor and equipment rates and often for equipment or material rates is only reasonably accurate for Rough Order of Magnitude estimating purposes to make go/no go decisions to proceed with a proposed change, obtaining funding, etc. Then, I'd probably want a more accurately developed estimate to help prepare for negotiations.

[Guest Vern Edwards]

GREAT information! Thanks, Joel.