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Overbilling Examples

 

Are some of these situations occurring at your sites today? How would you know?
Below is a sampling of the findings and benefits our clients realized once Track Software and related contract management business processes have been implemented.
Category Type of Cost Savings Description Result Cost Savings
Labor Overbilling occurring daily at each site Contractors routinely leaving 5-15 minutes early every day but billing for a full day. Contractors overbilling Loss in Productivity Client 1 = $2.1M savings
Client 2 = $822K savings
Client 3 = $1.5M Savings
  Overbilling occurring daily at each site Contractors routinely badging out late (after schedule) and billing that time at the OT rate without approval from the owner. Contractors working unapproved OT and billing at the higher OT rate; Unapproved OT percentage 40%+ Reduced OT from 40% to <5% resulting in $2M/yr savings; Other client examples include:
Client 1 = 25.5% of unapproved OT
Client 2 = 11.5% of unapproved OT
  Use of schedules was not a common practice Contractors were not adhering to schedules.  This introduced unapproved overtime being charged.    POs were frequently being overspent will little visibility to why this was occurring and which vendors were billing more than estimated. Over Billing due to unapproved OT and lack of clarity of expected on site resources Eliminated $2.5M in overspending on PO's
  Unapproved Offsite Time Contractor resources were frequently leaving the site and charging hours to their jobs without the owner's approval.  The owner was paying for activity they had no line of sight to and couldn't confirm progress or even needed. Resulted in owner requiring contractors to  seek approval via Track for all off site work to be charged back to the owner and POs/WOs $800k uncovered in for a review of only 1 month's time
  Unapproved Travel Time Thirty (30) vendor resources were charging six (6) hours/week each for travel time to and from the site.  The contract did not allow for travel time to be charged. Resulted in 9000 unapproved hours of travel time per year $720K savings/yr
  The Rounding Phenomenon (Overbilling) The contractor bills the minimum billable increment of time at 1/2 hour and would round up in their favor.   Contractors were staying one minute past the hour so they could bill for an additional half hour each day. Over Billing $300k/yr
  Inconsistent lunch rules Contracts not clear if lunch is paid. Some contractors billed lunch, some contractors didn't.  30 minutes over billing occurring everyday for each resource.  $500K/yr
  Automation allowed a reduction contractor support resources Due to automating the service to cash process and integrating Track and their ERP system, the owner was able to reduce their daily count of time keepers by 80% Resulted in a repurpose of time keeper resources to other value added activities $2M/yr reduction in contractor support
Equipment 3rd Party Equipment Mark-up Owner removed 3rd party equipment markup out of contract; Contractor continued to bill markup for 8 months until Track was implemented and it was discovered. Over billing - Track was implemented and the owner discovered the situation and prevented it from going further $1M/yr
  Equipment Double Dipping Contractor was accidently billing pieces of equipment under two different PO's in one day.  Owner was paying for each piece of equipment twice daily. Double billing  
  Phantom Equipment Contractor was charging for equipment that was never on site. Owner addressed with vendor  
  Missed Equipment Discounts Contractor charged the higher weekly rates for equipment no matter how long the equipment was used because the contractor's billing system couldn't handle the lower monthly rates that were agreed to in the contract. Over Billing; This practice stopped once Track was implemented $1.2M/yr
  Equipment Double Billing The same piece of equipment was utilized on the day and night shift.  The contract had a daily rate and daily fuel surcharge  (24 hour period). The contractor billed the daily rate and surcharge twice each day. Over billing:  This was identified when Track was implemented  
Material Material Double Dipping Contractor billed for materials they are contractually obligated to provide, such as PPE, etc. Over Billing  
  Overbilling Owner was purchasing materials from a vendor that was adding a 10% markup that wasn't agreed to in the contract.  Owner was unaware that this was occurring for years with a nested contractor. Owner renegotiated contract and now supplies materials to vendors to avoid markups  
  Overbilling The contractor was including tax, freight and surcharges in the markup. Over Billing - Track was implemented and prevented the contractor from this practice  
  Unapproved Material purchases The contractor purchased many different types of materials (office supplies, bicycles, calibration equipment, etc.) without permission of the Owner and billed them (with markup). Over Billing - Track was implemented and all materials were reviewed before authorization. $100,000+