Contract Administration Server Automating Payment Calculations
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Solution Overview
Problem
The administration of construction contracts is inefficient due to manual data entry and lack of effective communication among contracting parties, leading to complex tracking of project progress, payment requests, and change orders.
Innovation Solution
A computer-based method where all parties access a common server over a data network to provide contract schedules and request payments based on performance, using a system that stores and compares performance data with schedules of values to determine payment amounts, and facilitates change order approvals.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If manual data entry and tracking are used for contract administration, then simplicity of operation is maintained, but productivity and accuracy of payment tracking deteriorate
Solution Approach 1:
The patent replaces manual mechanical data entry and tracking processes with an automated electronic system. The server-based platform automatically receives performance data, compares it with schedules of values, calculates payment amounts, and communicates with all parties electronically, eliminating the need for manual intervention in these repetitive tasks.
Solution Approach 2:
The system enables self-service operation where the contract administration system automatically performs its own functions without requiring manual data entry or tracking intervention. The automated comparison of performance data against schedules of values and subsequent payment calculations occur without human involvement in the core processing operations.
2Measurement precision
If automated server-based data exchange is implemented, then productivity and accuracy of payment tracking improve, but device complexity and initial setup requirements worsen
Solution Approach 1:
The server-based system serves multiple functions simultaneously: it stores contract data, receives performance data from subcontractors, compares performance with schedules of values, calculates payment amounts, and communicates with all parties. This multi-functionality consolidates what would otherwise require multiple separate systems into a single integrated platform.
Solution Approach 2:
The server acts as an intermediary between all contracting parties, receiving data from subcontractors, processing it through automated comparisons, and distributing calculated payments. This central intermediary handles the complexity of data exchange and calculation, shielding individual parties from the system's operational complexity while maintaining high accuracy.
3Productivity
If manual tracking of project progress and payments is used, then ease of operation is maintained, but loss of time in payment processing increases
Solution Approach 1:
The system performs preliminary actions by pre-establishing schedules of values that outline the expected performance and payment structure before the contract executes. When performance data is received, the system automatically compares it against these pre-established schedules, enabling rapid payment calculation without requiring complex real-time analysis during payment processing.
Solution Approach 2:
The patent replaces manual tracking and calculation processes with automated electronic systems that instantly compare performance data against schedules of values and calculate payment amounts, eliminating the time-consuming manual procedures while maintaining operational simplicity for users.
4Measurement precision
If comprehensive tracking of subcontractor performance is implemented, then measurement precision of project progress improves, but device complexity and data management requirements worsen
Solution Approach 1:
The system segments the contract into distinct schedules of values that categorize different aspects of performance and payment. This segmentation allows the system to manage complex data by organizing it into structured, manageable units that can be automatically processed and compared, reducing the complexity of handling comprehensive performance tracking data.
Solution Approach 2:
The server-based platform performs multiple functions related to data management: storing contract information, receiving performance data, comparing performance with schedules, calculating payments, and communicating with all parties. This multi-functionality consolidates data management tasks into a single system, reducing overall complexity despite comprehensive tracking capabilities.
Data Source
AI summary
A computer-based method for administering performance of a contract uses a server accessible by multiple performing parties through a data network, such as the Internet. The method includes receiving performance data at the server from at least one of the performing parties through the data network. The performance data indicates an amount of work performed under the contract by the performing party, and may further include an amount of materials stored. A payment amount is determined based on the performance data. A schedule of values associated with performance of the contract may be initially stored, so that determining the payment amount is further based on comparing the performance data with the schedule of values. The payment amount is sent from the server to other performing parties through the data network. The other performing parties may be notified by an email indicating, for example, that the payment amount has been approved.