1. Engineering Settlement
In pipeline installation projects, cost management is crucial during the construction phase, although it is challenging due to the dynamic nature of construction and unpredictable factors such as fluctuating material prices and policy changes. Key tasks include controlling project progress payments, managing change orders, and overseeing claim costs.
Engineering settlement involves the contractor submitting the necessary financial documents to the project owner according to contract requirements. The purpose is to cover the costs of materials and resources consumed during construction. Pipeline installation may require multiple settlements until the project is fully accepted.
In China, engineering settlements typically follow monthly, one-time, or segmented methods. Monthly settlements are common in construction and installation projects. Mid-month, the contractor may receive an advance payment of approximately 50% of the monthly workload. The final settlement is processed at the end of the month based on the verified progress.
Traditional 2D drawings often scatter cost data without clear breakdowns or summaries of quantities. BIM software addresses these issues effectively. For example, Luban cost estimation software imports rough cost files generated by quantity calculation tools and supports block diagram bidding. Using BIM models allows for component selection and detailed quantity or cost extraction, moving beyond the limitations of text-based traditional cost software.
Timely settlements enable precise procurement and material requisition aligned with the project schedule. By planning and managing funding, procurement, and labor, cost management can be optimized throughout the project lifecycle.
2. Engineering Change and Claim Management
Changes in pipeline installation projects are inevitable. While BIM technology can reduce the frequency of changes, it cannot eliminate them entirely. Therefore, it’s essential to carefully manage the cost and quantity fluctuations caused by these changes.
During construction, both parties collaborate using the same BIM model, integrating schedule and cost data. This approach allows monitoring costs and expenses over time and ensures that progress payments, milestones, and payment information are accurately tracked through 5D BIM models. This transparency helps prevent overpayments and delays, significantly reducing claims.
3. Final Settlement Upon Completion
The final settlement involves submitting all necessary economic documents by the owner during project handover and acceptance. This includes expenses incurred from preparation through completion and subsequent use. The owner evaluates the final project cost based on physical quantities, construction duration, financial metrics, and technical-economic indicators to determine the final settlement price. This is then compared with the contractor’s proposed final price.
By reviewing key data such as quantities and pricing, any discrepancies can be identified to maximize project benefits.
In practice, disputes often arise due to missing documentation, improper approvals, or insufficient information. Significant differences in material usage can delay verification, impacting delivery times and both parties involved.
BIM technology mitigates these issues by storing all physical and geometric project information within the model, including quantities, progress, components, manufacturers, and material prices. As the project advances, this data is continuously updated. The BIM database consolidates all information upon project completion, reflecting the true project status.
For large projects, using computer-assisted verification reduces the workload for budget personnel and improves accuracy by automating quantity checks, ultimately enhancing the reliability of cost calculations.
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