The first monthly report: what to show when the project is one month old
The first pay application has been certified. Mobilization is billed, the site fence is up, the excavation has started. There is no buyout to speak of, no change orders, no contingency draws. The owner's representative has to produce the first monthly report, and the temptation is to make it a page long, because there is a page of things to say.
The first report should be the full format, with most sections nearly empty. The board will read this format for two years. A report that starts short and grows will teach them that a long report means trouble. One that starts at its full length teaches them where to look.
The baseline, restated once
The first report is the only one where the baseline is news. It should carry the GMP with its breakdown, the contractor's contingency at its opening value, the owner's contingency at its opening value, the allowances by name, the fee basis, the savings split and the completion date. On a fictional $33 million elementary school, that is a page, and every later report will show the same figures as the frozen column beside the current one.
It should also say where the figures came from: the amendment dated a certain day, the schedule of values accepted on another. The board will never ask. The auditor might.
The sections that are empty
The change order register has no entries. The report should show the section anyway, with the count at zero, the notice period from the contract stated in days, and the classification the register will use: owner scope, design gap, unforeseen condition, coordination. A board that has seen the empty table knows what the full one means.
The contingency section shows both funds at their opening balances with no draws, and the rule for each: who approves a contractor draw, who approves an owner draw and above what amount the board itself decides. The buyout section shows the packages to be bought with their GMP lines and no awards, which is the first time the board has seen the trade breakdown as a list. The allowance section shows each allowance with its value, its definition in a sentence and its expected reconciliation date.
The anticipated final cost at month one
The projection at month one is the GMP. The report should say so, and should say what will move it: executed changes, pending changes weighted, allowance adjustments, and the projected use of the owner's contingency. Showing the formula when every term is zero is the cheapest explanation the board will ever get.
The pay application, read
The one section with content is the pay application. Mobilization, general conditions for the first month, the first excavation billing. The report should show the schedule of values with percent complete by line, and should say, in a sentence, that the representative compared the percentages with the site and found them plausible, or found a line that was not. The first application is usually the one that sets the general conditions billing pattern, and it is worth noting whether the monthly amount matches the GMP line divided by the schedule's months.
What the report promises
The first report also states, once, what the board can expect: the report on a fixed day each month, the same sections in the same order, a stored copy of each month kept as it was, and a one page summary at the front for the members who will read only that. It is a small contract with the reader. The reports that follow will be judged against it, and a representative who keeps it will find the bad month, when it comes, easier to report, because the board will be reading a format it trusts.
The next eleven
Nothing about the second report should differ from the first except the numbers. The sections fill: three change orders, two contingency draws, six packages bought. The frozen column stays. The board reads the movement in each section against the baseline beside it, and by the sixth report they are reading it in five minutes, which is what the first report was for.
What to do this month
- Use the full format in the first report, with every section present and most of them at zero.
- State the baseline with its sources: the amendment date, the schedule of values acceptance date.
- Show the classification the register will use and the approval rules for each fund while they are still theory.
- State the reporting day, the fixed section order and that each month is stored as it was.
Questions on this
Why not a one page first report?
Because the format is what the board learns. A report that starts at one page and grows tells them length means trouble. One that starts full tells them where each thing will be.
What is the projection at month one?
The GMP. The report should say so and show the terms that will move it, all currently zero: executed changes, weighted pending changes, allowance adjustments and owner contingency use.
What should the first pay application section say?
The schedule of values with percent complete by line, whether the percentages matched the site, and whether the general conditions billing matches the GMP line spread over the schedule.
In the product
Monthly owner report, GMP baseline, Payment applications. Free tool: Pre-GMP Readiness Score.
Keep reading
Earlier: Shared savings when the GMP was amended: which ceiling the split is measured against. Later: Open change orders in the forecast: weighting what is not yet signed. All articles on owner reporting.
See the baseline on a contract like yours.
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