21. Project Finance Flashcards
Can you provide some examples of effective control procedures?
Cost Reports
Cash flows
Provisional Sums
Value Engineering
What is a cost report?
A report that includes costs incurred at the time of the report, forecast of costs and risk allowances.
What is a cash flow?
This is a predicted forecast of the project expenditure.
What are provisional sums?
Provisional sums are items that are not defined in enough detail for tenderers to accurately price.
What is value engineering?
Value engineering is the process of reducing cost without significant compromise on quality or function.
What are the different types of provisional sums?
Defined - These are described in detail. The contractor is expected to have made allowance for them in programme, planning and pricing preliminaries.
Undefined - Less described. The contractor is not expected to have made allowance for them in programme, planning and pricing preliminaries.
Are you aware of any other provisional sums?
Provisional Quantities - Scope and specification is known but quantity is not.
Prime Cost - When the extent of works is known but the final specification is not.
Explain the JCT Standard Terms of Payment
-Contractor submits an application for payment before the Interim Valuation Date.
- Due date is 7 days thereafter
- Final date for payment is 14 days after the due date.
- The Contract Administrator has 5 days after the due date to issue the payment certificate.
- Client can issue a pay less notice a minimum of 5 days before the date of payment, setting out basis for its calculation.
What are the different types of VE?
- Omit sections of the works
- Reduce the scope of works
- Change the specification
What is the final account?
This is the conclusion of the contract sum. It signifies the agreed amount that the employer will pay the contractor.
