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Managing Mobilization Costs

by William W. Edgerton, P.E., Principal; Jacobs Associates, San Francisco, CA,
John T. MacDermott, P.E., Sr. Assoc.; Jacobs Associates, San Francisco, CA,


Serial Information: Civil Engineering—ASCE, 1997, Vol. 67, Issue 8, Pg. 54-56


Document Type: Feature article

Abstract:

Owners may not realize it, but contractors know that things don't get easier once a bid has been won. The next step is to mobilize equipment and materials for the project, which can be a huge expense. These expenses are usually factored into the bid, but they can be factored out if the owner advances the contractor enough money to get the project rolling. The savings can be well-worth the owner's trouble, especially on large, complicated projects that require special equipment. Money can be advanced in a number of ways, including: regular sums over time, by the amount a contractor has already spent or by the work the contractor has already completed. Of course, these methods all involve risk, but the owner can take steps to minimize his or her exposure, including: limiting the mobilization amount and paying only for work completed. Each owner must determine which method, if any, is appropriate to his or her business.

Subject Headings: Owners | Contracts and subcontracts | Project management | Equipment and machinery | Bids | Benefit cost ratios

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