Cost and Time Savings Clause Samples
The Cost and Time Savings clause establishes mechanisms for reducing expenses and shortening project timelines during the execution of a contract. Typically, this clause allows either party to propose methods, materials, or processes that could lower costs or accelerate completion, subject to approval by the other party or a project manager. Its core practical function is to incentivize efficiency and innovation, ensuring that both parties can benefit from improvements while maintaining project quality and compliance.
Cost and Time Savings. With preventative maintenance as the target for using FPVS, there is a substantial savings in both cost and time by delaying major improvements to assets and efficiently putting programmed resources to use. Additionally, by bundling many routes into one contract with a guaranteed price, MoDOT has realized lower bids on many of the projects compared other projects in the same area delivered traditionally. Using this method also provides the ability to get under contract efficiently and mitigate market fluctuations in real time.
Cost and Time Savings. The result in the acceptance of the ATC’s and subsequent change order can be found in the attachments. The Program Budget was exceeded, however due to the ability to utilize this Alternative Construction Method, the Department was able to award the Project. Overall, the use of the ATC process in FY 2020 resulted in a savings of over $6 million according to the bidding documents. • Although this project worked out well from a cost savings standpoint, this project may have been a great candidate for a CMGC process or Progressive Design-Build. Additional value may have been realized during the procurement with one of these procurementmethods. • We would suggest a detailed risk assessment be performed on ATCs to identify and assign risk to the appropriate party (MoDOT or Contractor). If this is done early, there could be more interest in the ATC process. • Contractors need to know the risks they are assuming for using an approved ATC. Make it clear that the contractor can rely on MoDOT’s estimated quantities for areas of the project or bid items that are not touched by the ATC. A contractor will price risk for quantities their engineer and the contractor’s staff did not develop in relation to the ATC. Make this clear in the Guidelines and Procedures Document. • The program budget was very dated and not even close to Contractors base plan estimate. This led to a concern whether the project would be awarded if more than 10% over the budget, even with ATC savings. • Hiring a design firm to assist is costly. If the low bid is not awarded that is a sunk cost that is hard to recoup. • Starting the process with a complete set of plans requiring no additional edits and a well thought out Guidelines and Procedures document would allow for streamlining of the process. • If updates to the base plan set are needed, have those completed before the ATC process starts. Limit changes late in the process, particularly with any planquantities. • Limiting ATCs to three means one of two things will happen. 1) MoDOT will not realize all the potential financial benefits of the ATC process or 2) Smaller ATCs are bundled which can be confusing as it relates to the projected savings and bid submittal. Procurement Phase Evaluation for the I-49 Missouri-Arkansas Connector Special Experimental Project No. 14 (SEP-14) ATCs – Alternative Technical Concepts Missouri Department of Transportation Initial Report: SEP-14 Procurement Phase ATC Contract for: Job Number J7P0601, I-49 Missouri-Arka...