A contractor submits a proposed progress payment schedule under a unit price contract. The construction manager notes the contractor's estimated quantities late in the schedule are significantly lower than the manager's estimate. What should the construction manager do next?

A contractor submits a proposed progress payment schedule under a unit price contract. The construction manager notes the contractor's estimated quantities late in the schedule are significantly lower than the manager's estimate. What should the construction manager do next?

• A. Recommend the owner make the first payment
• B. Discuss the discrepancy with the contractor
• C. Have the contractor submit a revised schedule
• D. Accept the schedule

Answer: (B)

In unit-price contracts, payments are based on actual quantities completed multiplied by the agreed unit prices. When the contractor’s proposed quantities for a progress payment are significantly lower than the construction manager’s estimates, the immediate and most appropriate step is to discuss the discrepancy with the contractor. This conversation clarifies how quantities were measured, what assumptions were used, and whether field conditions, changes in scope, or measurement methods account for the difference. Through this dialogue, the parties can reconcile the quantities, agree on a supported basis for payment, or determine if a revision to the schedule or a change order is warranted. Paying based on the lower, unreviewed quantities or accepting the schedule without discussion could lead to underpayment or disputes later. If clarity is achieved in the discussion but issues remain, a revised schedule with supporting documentation or a change-order process may follow.

In unit-price contracts, payments are based on actual quantities completed multiplied by the agreed unit prices. When the contractor’s proposed quantities for a progress payment are significantly lower than the construction manager’s estimates, the immediate and most appropriate step is to discuss the discrepancy with the contractor. This conversation clarifies how quantities were measured, what assumptions were used, and whether field conditions, changes in scope, or measurement methods account for the difference. Through this dialogue, the parties can reconcile the quantities, agree on a supported basis for payment, or determine if a revision to the schedule or a change order is warranted.

Paying based on the lower, unreviewed quantities or accepting the schedule without discussion could lead to underpayment or disputes later. If clarity is achieved in the discussion but issues remain, a revised schedule with supporting documentation or a change-order process may follow.