2 - Project Finance

Question 1

What are the different types of Cost Report?

Answer 1

1) Elemental
2) Construction
3) Project
4) Programme

Question 2

Explain an S-Curve

Answer 2

• Plots COWD against time
• As you go through the project, an S-Curve is formed
• Can analyse project performance by reviewing if you are in front of or behind the curve
• HOWEVER - It can mean that maybe the costs were front loaded, or that the works are over-priced.

Question 3

What is Cost Control?

Answer 3

The processes and procedures to align and manage cost in line with the Cost Plan

Question 4

What is a Cost Plan?

Answer 4

The overarching plan of the project costs over time. An evolving document that grows in accuracy and scope.

Question 5

What informs the early stages of a cost plan?

Answer 5

• Initial appraisal through feasibility study

- Ballpark/OOM estimates

Question 6

What informs the middle stage of a cost plan?

Answer 6

• PTE

- Quants taken from design

Question 7

What informs the final stages of a cost plan?

Answer 7

• CSA and Contract Sum

- Final account

Question 8

Under NEC, what is Defined Cost?

Answer 8

The costs permitted under the Contract that are incurred/expended by the Contractor

Question 9

What is the Schedule of Cost Components?

Answer 9

The set list of categories of Defined Costs that form the total of the prices. These are:

1. People
2. Equipment
3. Plant and materials
4. Charges
5. Manufacture
6. Design
7. Insurance

Question 10

When are the Shorter Schedule of Cost Components used?

Answer 10

On options A and B for CEs. Can be used on C&D if the PM agrees.

Question 11

What are Disallowed costs?

Answer 11

Costs that are incurred by the Contractor that they are not entitled to payment such as:

• Amounts not justified by records
• Amounts paid for something else not part of the project
• Errors or mistakes in payment to others

Question 12

What cost measurement methods are there?

Answer 12

• NRM1 - Order of cost planning for building works
• NRM2 - Detailed measurement of buildings works
• NRM3 - Order of cost and measurement of Maintenance Works
• ICMS - International Construction Measurement Standards
• RMM - Rail Method of Measurement

Question 13

What was the Standard Method of Measurement replaced by?

Answer 13

NRM2

Question 14

What affects an Outturn Cost?

Answer 14

Fixed costs - The works undertaken

Variable - Changes, prov sums etc.

Question 15

What is the Price of Work Done to Date?

Answer 15

Defined cost the contractor will have spent before the next assessment date, which includes CEs, plus their fee