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FLOAT AS IT RELATES TO TIME AND COMPENSATION

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Fri, 2009-09-11 08:12

Rafael Davila

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I just found the following statements in the WIKI area under the Title Delay & Disruption Protocol.

FLOAT AS IT RELATES TO TIME

Extensions of time will only be granted to the extent that the Employer Delay is predicted to reduce the total float on the activity path to below zero. This may differ if express provisions in the contract are to the contrary.

FLOAT AS IT RELATES TO COMPENSATION

The Contractor is entitled to compensation where the Employer’s Delay has prevented him from completing to the Contractor’s planned completion date (a date earlier than the contract completion date), provided the Employer was aware of the Contractor’s intended earlier completion date before the parties entered into the Contract and that the earlier completion date was realistic and achievable.

I undestand the above statements to deny the Contractor’s right to finish early. If the schedule predicts completion ahead of schedule then there will be positive float and only the portion that falls into the negative will entitle the contractor for an extension of time?

Does that means that your job has to be late or just in time to be entitled to EOT. What if the contractor latter gets into red and needs the time stolen from him when the Owner delayed the job without any EOT.

I had the impression the Contractor’s own delays were the responsibility of the Contractor’s usually settled through liquidated damages and that the Owner’s caused delays were the responsibility of the Owner settled through EOT’s with regard to time while with regard to money only the portion not in concurrence with Contractor’s own delays. I thought you got to keep on the record the Owner caused delays through EOT’s to be compared at the end with your final project delivery date; this to account for your own delays and the balance would be the award.

The above statement seems to me like an exculpatory clause embedded into the interpretation of the protocol.

Please clarify my doubts.

Best Regards,
Rafael

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Thu, 2010-11-04 04:35

simon elderfield

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Shahul,

I have been playing around with this one for years! - Which ever way you look at it erosion of float is a shift of risk - I am close to [ but not there yet] developing a simple robust algorithm that can be applied to eroded units of float on construction works [ well building works at the very least] that could be used as a recognised schedule of rates for recovery by offending parties [ who ever they may be].

If you are interested, as I progress my work I am happy to share results.

Wed, 2009-10-28 08:58

Andrew Flowerdew

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Rafael,

Depends on what the clause says exactly.

In the UK these days I think it would have to spell out clearly and unambiguously that there was no right to claim for critical delay, non critical delay and all associated disruption, loss and expense, etc, etc before it would totally bar the contractor’s right to claim anything.

There would probably be a loop hole somewhere that would allow a claim for something.

e.g Disruption is the loss of productivity associated predominantly with non critical delay - it’s not the delay itself, but an effect of.

So a clause saying you can’t claim for non critical delay may not bar you from claiming for disruption - this is the sort of case where every word in a clause counts or more often, every word not in a clause counts!!!!!!!!!

Wed, 2009-10-28 08:48

Rafael Davila

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Andrew,

Can you claim for Disruption when the Owner delays your job and your contract has Non-Delay exculpatory clauses?

I believe somewhere, long ago, I read some judges in the USA were accepting disruption under the presence of non-delay claims. Maybe I misunderstood and would like your opinion on this matter.

Best regards,
Rafael

Wed, 2009-10-28 08:14

Andrew Flowerdew

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Billy,

The late start and finish dates of an activity will determine how much float, (free and total), an activity has.

The normal question that you have to answer in a delay anlaysis is did a delay to this activity cause a delay to completion?

Just because an activity didn’t start on its early start date doesn’t mean it caused delay to completion - the delay in starting the activity merely uses up it’s free float.

This may lead to disruption but not a delay to completion and therefore usually no entitlement to an EoT or prolongation.

As for manipulation of programmes:

see post #8

http://www.planningplanet.com/forum/forum_post.asp?fid=1&Cat=7&Top=65621...

Wed, 2009-10-28 07:08

Andrew Flowerdew

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Trevor,

I don’t think anyone would say the as-planned section of a programme is anything other than an estimate BUT:

It is usually the main and sometimes only record of the contractor’s planned intent at the time. If other documents exist such as progress meeting minutes that clearly are at odds with what the programme says, then it is acceptable to change the programme to reflect reality when doing a delay analysis.

All comes down to records, records and records - when the only record that exists is the programme, that’s the one you have to use because that’s the only one you’ve got.

If you want a delay analysis to reflect reality, then record that reality in sufficient detail so that the record can be used later if required.

Being successful in a dispute doesn’t always depend on what happened, it depends on what you can reasonably prove happened - which can be a subtle but important difference.

Wed, 2009-10-28 03:48

Billy Chippers

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Trevor,
I agree that one small, simple, change to durations or links can alter the critical path.
The question I am labouring to ask clearly is:- why do we bother publishing or paying any heed to late start and finish dates when they are so subjective and easily manipulated.
In delay analysis why not just concentrate on the early start and finish dates because those are when the Contractor wanted to do the work?
Im sorry my points have not been expressed well but I seem to be going round in circles
Billy

Tue, 2009-10-27 22:37

Trevor Rabey

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Billy,
There is really no such thing as a 100% correct program or project plan, or whatever we are calling it.
The best that can be hoped for is that it is a reasonable model of reality, and is generally agreeable to all the parties concerned, and at least feasible. If it hasn’t happened yet then it’s all an estimate.
Use of the plan for delay analysis, EOT, forensics, compensation etc tends to imply an assumption that the durations and predecessor/successor links that make up the model are somehow some sort of a fact, or a promise, rather than just an estimate. Since everything hangs on this assumption, which is clearly wrong, it is the weakest link in the typical cause-and-effect arguments.

For example, if you estimate that a task will take 10 days, it’s on the critical path your boss (or client) might disagree with your estimate and say he thinks it will take 9 days. So that estimate gets changed and then the whole critical path shifts to a whole different bunch of tasks. Who is to say who is "correct"?

Tue, 2009-10-27 21:50

Billy Chippers

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Trevor,
Thanks for your reply,
Both you and Mike agree on the answer to my question. Mike rarely uses the "late" dates and you question the durations and links that generate the float and/or late date dates implying they need to be tested before they can be trusted.
I agree.

How can we ever be sure that all the durations and links (that generate the late start and finish dates) are present and correct? Aren’t the only the set of dates worth bothering about the early ones? These are the dates the planner thinks about the most as they position the activities one to another.
Billy

Mon, 2009-10-26 22:57

Trevor Rabey

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Billy,
What can you trust?
Why ask the question about the late dates?
Can you trust the early start and finish dates as "truly representing an achievable schedule"?
We always hope that the truth lies somewhere in between.

Can you trust the duration estimates?
Can you trust the predecessor/successor links?
If these are all absolutely "correct", then you can rely on the float being absolutely "correct", because float is derived from the network which is made of duration estimates and predecessor/successor links.
You can make float as large or small as you like by doing whatever you want, or whatever is necessary with the duration estimates and predecessor/successor links.

Mon, 2009-10-26 21:31

#10

Billy Chippers

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Hi Mike,
I suppose what Im asking is if you are asked to use a large network in a claim situation, how much reliance would you put in the float being correct?
Could you trust the late start and finish dates as truly representing an achievable schedule?
Billy

Mon, 2009-10-26 11:12

#11

Mike Testro

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Hi Billy

Welcome to PP.

I assume you are referring to ALAP as against ASAP positioning of tasks within the float band.

Use of ASAP give a more realistic visual presentation where any available float is waiting to be used up if a task is delayed.

I only use ALAP when applied to design and/or procurement when the deadline date is the main issue and even Architects can understand it.

Best regards

Mike Testro

Mon, 2009-10-26 11:00

#12

Billy Chippers

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Can anyone explain the downsides of using late start and finish dates rather than early start and finish dates?

Thu, 2009-09-17 19:35

#13

Andrew Flowerdew

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Rafael,

Lol, 30 additional years, won’t take you that long.

If you like the legal side of things then do a specialist construction law course. Alot of hard work, (that really can’t be understated), but worth every minute. Opens the doors to becoming an arbitrator, etc, etc.

Buffers are not new but there use probably is. The NEC contract, (yes, that one again), tells the contractor to put in a buffer for certain risk allowances. It’s the only one I’ve come accross that does though.

Would be interested to see what the response in the US is to trying it. I can guess but.....

Thu, 2009-09-17 18:59

#14

Rafael Davila

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Andrew,

"If the contractor wants to show a planned earlier finish date to gain a buffer, then he should show that buffer on the programme, that way he can probably claim the terminal float - then it’s not an early finish but a EoT argument again if he’s delayed."

Buffers is a concept I have never tried before, it was in PP where I learned about its value and potential, never before I paid attention to it, I am anxious to try it here to see what response I get, needless to say I like the idea.

Lawrence

Welcome to the debate, for your knowledge Andrew is an adjudicator, I have a lot of respect for him, no way in 30 additional years doing what I do I will experience what he does in a single month. He is keeping the debate at a low technical level for my understanding. At times we agree, at times we do not, but in my defeats I get stronger.

Best regards,
Rafael

Thu, 2009-09-17 18:03

#15

Andrew Flowerdew

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Rafael,

It’s quite simple, if you set the contract completion date at the planned earlier completion date then any non contractor liability delay is a straight forward EoT event and the arguments over early finish and its associated compensation are redundant.

If the contractor wants to show a planned earlier finish date to gain a buffer, then he should show that buffer on the programme, that way he can probably claim the terminal float - then its not an early finish but a EoT argument again if he’s delayed.

Thu, 2009-09-17 16:41

#16

Lawrence Cuozzo

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I agree that this is a never-ending discussion, but lets’s be fair regarding the above-referenced sampling. If you divide the responses among schedulers that work for the owner, you will get a higher percentage of those that say they own the float or that it should be "shared". Schedulers who work for contractors will overwhelmingly say that THEY own the float. Just my two cents based on what I have experienced.

Thu, 2009-09-17 12:51

#17

Rafael Davila

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Andrew

If a Contractor do not believes he can finish early he should not bid the job, unless he adds in his number an allowance to pay for possible liquidated damages. The difference between his early estimate and the contractual date is his risk, is his buffer. He knows it is impossible to predict the future. What are you proposing, that the Contractor shall give you for free his buffer?

The Owner forces the Contractor to lie about his plan by not allowing him to show early finish and use float as a buffer in his baseline or otherwise he will steal away his buffer. He cannot tell the Owner he can finish early or at least that float is to be used as a buffer. He has no other option than to disguise as much float as he can.

When he submit his Bid he places a value on his risk, he has no way to predict how much risk is to allocate for the Owner’s intervention, especially if unlimited by exculpatory clauses, in today’s competitive world his allocation for the Owner’s intervention is zero.

Don’t tell me that if it is your fault it will still be my responsibility. If it is tail you win if heads I lose, is this how it works?

Sorry, this will be the never-ending story, I still believe it too much biased in favor of the Owner.

From PP Survey:

Question: Float in the Contractors Approved / Contract Programme - who does it belong to?

1 The Contractor 603 ( 60.1 %)
2 The Employer / Client 197 ( 19.6 %)
3 Whoever used it first 173 ( 17.2 %)
4 Not Sure 30 ( 3.0 %)

PP members have a lot of common sense, probably only those who answered no.3 were biased from a learned response. The correct answer is missing, should be depending on the contract, if not specified then to whoever reaches it first. I believe our courts are wrong with regard to the second part, just take a look at what a sample feels on how it should be, I am not alone, it is a ratio of 3 to 1 in agreement with my opinion.

Best regards,
Rafael

Wed, 2009-09-16 18:57

#18

Andrew Flowerdew

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Rafael,

The answer to early completion is simple - if at tender stage both parties believe that early completion is possible, change the contract completion date to the early finish date.

Sadly rarely happens and is one reason that the contractors claim has to be viewed with caution - if the contractor truly believed he could finish early, why didn’t he suggest it?

Or, if both parties believed it could happen, why didn’t they do it?

But as you point out in your last post, reality is that commercial decisions will often rule the day, not always the contract.

Wed, 2009-09-16 08:41

#19

Rafael Davila

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Andrew

The expense of going into court to claim Extended Overhead when you finish early even when the right to finish early is recognized in our jurisprudence is not worth it; especially at the volume of work we do, none a mega project. In our jobs finishing ahead is rare and limited in time, maybe a month or two at the most, the same goes when delayed by the Owner by merely one or two months, but contrary to early finish which is very limited in time and cost, the delays over contractual date can be very significant.

Yes I understand it all goes down to the contract, precisely this is why I would oppose to the 2002 SCL Protocol being adopted into any contract. Although fortunately it has no impact into our jurisdiction,the understanding of why the 2002 SCL Protocol is good to know, it just did not came out without any good reasoning.

EOT’s you always got to fight for them in the prospective, a contractual requirement common in our contracts, before future happens and the job finishes, even when your schedule predicts you will finish ahead, you never know if you will need in the future the time you saved. The possibility this saving might be stolen from you is unacceptable to me, being penalized for your schedule when showing you are getting ahead is no good, is contradictory, the 2002 SCL Protocol opens up this possibility.

About ownership of float I do not agree it should belong to whoever reaches it first as is usually the case in our jurisdiction. If the Contractor is required to finish by a specific date then the Owner shall not get into his way, I am against any exculpatory clause, this is why in some US states there is some legislation against their use in Construction Contracts. If the Owner foresees there will be delays by his actions he should use other type of contracts more adequate under these conditions, a Cost plus Fixed Fee might be an option. Ownership of float is not a commodity you can trade as many pretend, this is another concept I have never been able to swallow. To me it is just another exculpatory clause. This is an issue we can be discussing for years without reaching to an agreement.

Best regards,
Rafael

Tue, 2009-09-15 19:48

#20

Andrew Flowerdew

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Rafael,

"I would like you to think of the implications this have when a Contractor requests an EOT prior to finishing the job and at the time the schedule predicts early finish and finds latter he in trouble."

All comes down to that little subject of who owns the float, sadly that comes down to the contract wording and often the definition of what conditions have to be met to give rise to an EoT - ge, has to be a delay to the contractual completion date.

"I know of no contractor that would claim extended overhead when finishing ahead even if entitled to do so."

I do, don’t think EoT clauses, think loss and expense or similar clauses.

Sat, 2009-09-12 14:04

#21

Shah. HB

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Many thanks Mr.Rafael and thanks to Mr.Mike too .I recived nice messgae from you

Sat, 2009-09-12 11:14

#22

Rafael Davila

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To all

I do not believe a Protocol shall use Float as a mean of determining EOT’s. Float can be defined in many ways and I don’t know of any of the major available software that considers resource critical activities into their computation for float.

Phantom Float

Without resources no construction job can be done, these are usually limited. Not taking into account the effect of limited resources into the analysis is in error.

Protocols shall be based on the impact. If we are talking about an extension of time it shall refer to the impact on the predicted duration of the job. The primary problem is developing proof that establishes the causal link between the owners caused delay(s) and its impact on job duration and the contractor’s increased costs, float is not necessarily to provide us with the answer.

Shahul

It never took off the air enough to gain acceptance and widespread use. Shall read ... never took off the ground ... Sorry I was thinking in our spanish term, something like "never flew".

Best regards,
Rafael

Sat, 2009-09-12 09:55

#23

Rafael Davila

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Andrew,

I believe you have well established the UK common law regarding the contractor right to finish early is 180 deg to the opposite of our jurisprudence, this is the way it is and as such we got to know. Similar to the UK contractual conditions might be written in a way as to give / take away from the Contractor the right or lack of it to finish early in the absence of a clause that clearly says the contrary.

I would like you to think of the implications this have when a Contractor requests an EOT prior to finishing the job and at the time the schedule predicts early finish and finds latter he in trouble. I know of no contractor that would claim extended overhead when finishing ahead even if entitled to do so.

Fortunately in the US exculpatory clauses, although accepted by common law, are starting to be limited in some states through legislation against its use in Construction Contracts.

I also want express again, a thousand times my thanks for your time and guidance into my understanding (I had none) on the issue of concurrency and how it relates to EOT and cost. The same goes for this issue, I have high appreciation for your knowledge.

Best regards,
Rafael

Sat, 2009-09-12 09:22

#24

Rafael Davila

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Shahul

There is a methodology for what you are asking known as Time-Cost-trade-off, the following link can provide you with an introduction on the theory.

http://www.netmba.com/operations/project/time-cost/

This is an old issue some software in the 70’s had the capability to deal with. I believe it to be too theoretical to be of much use, and question its outcome as might not be able to account for other factors that might prove at some point more efficient such as a change in logic. It never took off the air enough to gain acceptance and widespread use.

Usually we focus exclusively on reduction of activity durations along the critical and near critical paths and overlook the issue brought by Mike, a change in logic might do it. Even when you increase the availability of resources within practical limits you might not be able to solve the problem.

It is common to use logic to manually resolve issues on resources availability by using what is known in our jargon as “soft relationships”. Some “experts” are against the use of these “soft relationships” as it hides true relationships and favor the exclusive use of resource leveling techniques for these purposes. Others don’t like the use of resource leveling algorithms as some are unpredictable and resource leveling might hide some activities (resource critical) within the Critical Path.

Usually I use the latter at the request of the Contractor; more often than not, we control resource requirements by using soft logic. This is why the functionality of Asta Powerproject to allow you to identify these through the use of a label or category is a must have not available in my software, so you can identify these and make logic adjustments.

No matter what methods you use to solve your issues on resource availability don’t overlook the possibility of changing logic especially if you used soft logic to solve some issues.

Best regards,
Rafael

Sat, 2009-09-12 06:01

#25

Mike Testro

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Hi Shahul

If you are preparing an accelerated work programme it is beneficial to target your efforts on critical or near critical items.

There is no point in accelerating tasks with plenty of float.

When these are reduced by way of resource or work pattern adjustment the float on non critical activities will be reduced and may require similar acceleration measures.

This process should be repeated until the required targetted end date is acheivable.

The costs of the acceleration are readily calculated by comparison of the planned labour histogram and the acclerated one.

Best regards

Mike Testro

Sat, 2009-09-12 05:53

#26

Shah. HB

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Is there any approach to relate float to cost?
sometimes we crash schedule which result in cost shoot up.

Sat, 2009-09-12 05:27

#27

Andrew Flowerdew

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Rafael,

The contractor has the rigt to finish early - subject to certain conditions.

That first condition is that there was agreement between contractor and employer that he would finish early - alittle something more than just a submitted programme showing he was going to attempt too.

Fri, 2009-09-11 22:45

#28

Rafael Davila

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Andrew

Here in the USA the Contractor’s Right to finish Early is established by Common Law. This is a doctrine well known here to such extent that a Google search resulted in about 201,000 for a contractor’s right to finish early.

Today our courts favor prospective settlement of EOT and this is usually embedded in our contract clauses. If the contractor’s right to finish early is not recognized then he might be denied an EOT if the updated schedule at the time of his TIA predicts early completion. Latter-on the contractor might find unable to finish on time and be liable for liquidated damages without any consideration to the Owner caused delay as it was to be analyzed at the time of impact, when the schedule projected early completion.

Here the starting point is The Contractor has the right to finish early, entitled to both EoT and associated costs, not otherwise. The following links are a sample among the many Google hits.

Construction scheduling: preparation, liability, and claims Article 5.09

A CONTRACTOR’S RIGHT TO FINISH EARLY IN FEDERAL CONSTRUCTION PROJECTS

California Construction Law Article 4.13

Right to finish early

Best regard,
Rafael

Fri, 2009-09-11 19:38

#29

Andrew Flowerdew

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Rafael,

Actually each case needs assessing on its own merits.

Generally a programme is not a contract document, only an expression of the contractor’s intent and therefore not binding on the contractor if he doesn’t finish at an indicated earlier completion date. So the contractor hasn’t committed any breach of contract if he finishes later than the earlier planned completion date and the the Employer hasn’t breached the contract if he prevents him from finishing at the earlier date, (Employers obligation is not to prevent the contractor from complying with his contractual obligations, i.e. finishing at the contractual completion date). No express breach of contract, no express remedy under the contract.

But life’s not always that simple so there may be occassions when the contractor can claim prolongation, (held on site longer than he should have been), and associated costs. As always, contract wording and the particular circumstances will dictate. The starting point however is that there is no EoT or associated costs, then take it from there.

Fri, 2009-09-11 09:58

#30

Rafael Davila

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Mike

I know PP wiki is unreliable, but by posting unreliable information then it in some way makes PP a sponsor of unreliability. On the other hand when debating, perceptions are different different, here you see opposing views and you are always aware it is a debate.

If this is similar to the 2002 SCL Protocol then to the garbage with it. Preventing the Contractor to finish early and not granting him EOT’s as it happens might put him at unreasonable risk latter on. An agreement not allowing the contractor to recover extended overhead if he finishes early, that I can swallow, but no EOT, even if eventually proves to be academic if finishes early, no way.

Best regards,
Rafael

Fri, 2009-09-11 08:52

#31

Mike Testro

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Hi Rafael

Assuming the word protocol refers to the SCL protocol in 2002 I have already pointed out that the document is out of date.

Also it is only guidance notes and was never contractually binding and as far as I know has never been incororated into any contract form.

The whole discussion as to who owns the float is still fluid.

The procol came up with the concept that float belonged to the project on a 1st come 1st served basis which is reasonable under the JCT forms of contract.

In this environment the Contractor has no entitlement to finish early unless some sort of agreement to that effect was built into the contract.

If the client prevents the contractor from finishing early then thats just tough.

Under the NEC rules however use of the float is clearly spelt out and the Contractor can retain his own time risk buffer when the client causes delays.

And onother thing - never beleive anything you read in wiki - even PP wiki.

Best regards

Mike Testro

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