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When operating under a cost-plus contract, the application for payment prepared by the contractor is either a monthly estimate of work done (Form 6) or a detailed statement of actual expenditures plus the contractor's earned fee. This detailed statement is prepared from the records of the accounting department and is an itemized tabulation of all expenditures for labor, materials, services, etc. These statements are checked by the architect's or owner's representative at the job.

Whether these statements should include only disbursements that have been made or should include unpaid items as well, is determined by the terms of the contract. Where the contract permits a statement to include both paid and unpaid obligations, a further provision should be made in the contract requiring the contractor to submit receipted invoices and other evidences of disbursement equal to the total sum paid him, before he can receive any further payment.

Elements of a Contract

The principal elements which enter into the cost of work and represent the component parts of a construction contract

are:

1. Payrolls of mechanics and laborers.

2. Cost of materials.

3. Cost of work sublet to subcontractors.

4. Service charges, including hauling, surveys, test, insurance, commissary bills, stable and motor truck bills, etc.

5. Disbursements for job overhead, representing the cost of supervision, the maintenance of a field office, etc.

6. Charges for construction equipment.

The contractor's fee is added to the sum of these costs to arrive at the total of the contract.

CHAPTER III

THE CONTRACTOR AND HIS FIELD FORCES

Field Organization

The first step in the actual construction of the work is the organization of the field force. This force on a large operation consists of the superintendent, the timekeeper, the material clerk, the production clerk, civil engineers, rodmen, watchmen, and foremen. On operations conducted at a distance from villages or cities, it is generally necessary to provide bunk-houses and commissaries and to maintain either teams and stables, or motor trucks and garages.

THE SUPERINTENDENT. The superintendent is charged with the duty of seeing that all work performed at the site is in accordance with the architect's plans and specifications, that the foremen do not employ an unnecessary number of mechanics and laborers, that the workmen do their work economically and efficiently, and that such progress is maintained in construction as will guarantee the completion of the work within contract time. The superintendent must also solve the minor structural problems which arise during construction. About others, he consults the contractor's chief engineer.

THE TIMEKEEPER. The timekeeper is responsible for ascertaining the correct number of hours worked by the mechanics and laborers and for accurately recording the hours earned on the payroll sheets. He must see that all workmen are paid the wages they have earned. He is also responsible for collection of sums due from workmen whenever commissaries or bunk-houses are maintained.

THE MATERIAL CLERK. The material clerk is responsible for having materials and supplies delivered to the job at such times and in such quantities as is necessary to keep the workmen fully occupied. He must prevent reduced and inadequate supplies which cause labor to lose time.

The clerk must check the quantity and the character of the material as and when delivered by dealers, record these deliveries, and report them to the main office. He must not allow any material to pass out of the possession of the contractor without obtaining a receipt there for, and must see that the party to whom the material has been given is charged with it. Such receipts are usually taken on shipping lists. In preparing the charge the material clerk is only concerned with reporting the quantity and character of materials given and forwarding the receipt taken. He is not interested in the value of the material. Prices should be placed on this material only by the contractor's office.

The material clerk does not generally report the material delivered by subcontractors when they are supplying material for a fixed sum "in accordance with plans and specifications." The subcontractor's obligation is to furnish the necessary material to leave his work in a completed state. The material clerk may make an approximate check of total material delivered merely for the purpose of making progress payments to the subcontractor from time to time.

THE CIVIL ENGINEERS AND RODMEN. The civil engineers and rodmen furnish whatever surveying services are required on the job, giving lines and levels to the foremen and mechanics whenever needed. They remain on the job for only a limited period, leaving when all surveying work has been completed.

THE PRODUCTION CLERK. The production clerk acts as an aid to the superintendent in studying the cost of executing

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