3.3 Project finance, Reporting & Quantification

Question 1

What is the NRM?

Answer 1

New Rules of Measurement
-NRM 1 - Order of cost estimating and cost planning for capital building works
-NRM 2 - Detailed measurement for building works.
-NRM 3 - Order of cost estimating and cost planning for building maintenance works

Question 2

Why is it important to measure according to industry standards?

Answer 2

Consistency and accuracy
Minimise dispute as they are standardised

Question 3

Tell me about NRM2?

Answer 3

Gives guidance on preparation of BoQ and schedules of works.

Question 4

What is an Order of Cost Estimate?

Answer 4

Defined in NRM1 as estimate based on similar projects.

Question 5

What is the difference between an order of cost estimate and a cost plan?

Answer 5

Estimate provides a likely cost based on employer’s requirements. Cost plan is based on drawings with elemental breakdown of cost.

Question 6

What are the RIBA Stages of Work?

Answer 6

Stage 0 - Strategic Definition
Stage 1 - Preparation and Brief
Stage 2 - Concept Design
Stage 3 - Spatial Design
Stage 4 - Technical Design
Stage 5 - Construction and Manufacturing
Stage 6 - Handover
Stage 7 - Use

Question 7

What is SMM7?

Answer 7

Standard method of measurement 7th edition which was published by RICS in 1922 but it was superseded by NRM2.

Question 8

What are the sources for cost information?

Answer 8

-BCIS
-Pricing books such as Spon’s
-Pricing information from previous schemes
-In-house cost models
-Speaking to subcontractors and suppliers

Question 9

Key reasons for cost overruns on projects?

Answer 9

-Unrealistic cost estimates
-Ambiguous briefs or changes
-Inadequate risk allowances
-Poor design
-Poor tender review
-Inflation
-External factors (pandemics, recession…)

Question 10

Examples of pricing documents?

Answer 10

-BoQ
-Schedule of rates
-Schedule of work
-Priced activity schedule
-Contract sum analysis

Question 11

Examples of pricing options for construction contracts?

Answer 11

-Lump sum
-Cost-plus
-Remeasurement
-Target cost

Question 12

What the main elements of an interim valuation?

Answer 12

-Prelims
-Measured work
-Variations/CEs
-Materials
-Retention
-Fees
-OH&P

Question 13

What happens if you fail to pay the contractor on time?

Answer 13

May be entitled to interest
May exercise their right to suspend works

Question 14

What is a payless notice?

Answer 14

This the paying party the right to pay less than previously notified.

Question 15

What is a payment timeline?

Answer 15

19 day payment terms is Due date to final payment date. Payment notice must be no more than 5 days from due date.

Question 16

What are the components of a final account?

Answer 16

-Summary
-Measured work
-CEs
-Delay damages
-Retention
-Fees
-OH&P

Question 17

Reporting - Level 2 example?

Answer 17

Weekly staff time tracker.

Question 18

Reporting - Level 3 example?

Answer 18

CTC and CVR on RAF M. Save costs with the implementation of Cemar and remove the data admin personnel.

Question 19

Quantification - Level 2 example?

Answer 19

On Cov AQP bill production for surfacing or activity schedule for VRS.
Quotation requested for plane and relay. How I complied quote.

Question 20

Quantification - Level 3 example?

Answer 20

Advised on staged payments on RAFM.