Early Work Activity

Most likely by check but could also be cash or credit card

Can you clarify your question?

Are you by chance referring to an AIA Schedule of Values?

Without more information, we can only assume.

I mean, normally, what is the Early work agreement between the contractor and the owner in terms of payment? Does the owner pay first before the early work starts? also,can somebody explain what is the meaning of commencement date in the engineering and supply contract for EPCM project?What are these activities for instance? can you differentiate between commencement date and effective date?

Payment would be made per the terms of the contract between the contractor and owner. This is usually in the form of "progress payments" made as the work progresses.

Advance payment is rarely the case

Without knowing what "EPCM" is I can not answer what the "activities" are but commencement date is typically the day the services/supply start.

Commencement Date = The day services/supply start.

Effective Date = The date the contract starts, the date the warranty starts, the date a special contractual commitment takes effect, the date a contractors representative must be present on the job site, ect, ect, ect.

Is it necessary to have an early work activity? what does it constitutes? May i know also the purpose of Early work activities.

Thanks a lot Sir!

In the building construction business, it is common for a contractor to get some money up front. This is known as 'Mobilization' on the schedule of values.

The contractor has a lot of expense in setting up the jobsite: moving trailers, insurance payments, phone, FAX, computer, supervisory manpower, vehicles and machines, fencing, portable toilets, security lighting, water and sewer, power...

It is not uncommon for a contractor to load this mobilization fee a little, taking some of his calculated profit for the project. This practice is generally allowed, unless the amount requested is quite unreasonable.

Doorman you are correct!

Private contractors dealing with private owners DO typically get a down payment (or pre-paid) for a percentage of a given contract.

I am primarily involved in the commercial/industrial trades and dealing with municipal and governmental entities. We are NEVER pre-paid for anything.

My bad for assuming vindicated's questions were intended toward the commercial/industrial trades

Well, I am guessing this is what he is asking about.

As you say, heavy industrial construction is different; if it aint installed, you won't get paid for it... don't even ask! Savvy contractors know this all too well, and will add a few percentage points to their price, because they must finance portions of the overall project.

A common thing for commercial projects (schools, hospitals, airports, and the like) is getting paid for material purchased for the job, but not yet delivered or installed. If I provide proof of insurance and secure storage, and provide them a conditional lien release for material stored, I can usually get paid for the stuff (most of it anyway).

YUP, same here.

Depending on the project, we go 10/0 to 10/10 profit and overhead on the bid.

Change orders can be up to a straight 35% across the board to make up for some of the financing.

Are you referring to advance payment? Is there any case in which the advance payment is done 1 month after the start of effective date? if so, who will borne the payment for the Early work activity? is it the Contractor?

In the USA, a common practice is to deliver an invoice with the schedule of values to the architect. This progress invoice is a part of the entire stipulated sum, and is not extra. The contractor is given a 'Start Date', and usually mobilizes (moves in) within a few days of the start date, not a problem. The first progress invoice (already handed in) takes about a month to be reviewed and approved by the architect, reviewed and approved by the lawyers, and reviewed by the owner (who is paying the invoices), and then a check issued. The contractor pays all of the varied first tier subcontractors.

Are we answering the wrong questions, or is this what you are asking about?

Early work activity can be any work that can be done ahead of the start of the construction schedule/project in which your trade will not interfere with or need the support of other trades.

For example, installing empty feeder conduits in a mechanical space, installing temporary electric service to construction trailers, installing temporary service drops for construction equipment, installing temporary construction lighting, ect, ect, ect.