3.4 Commercial Management

Question 1

How to proactively manage costs during construction?

Answer 1

Have a change control procedure
Monitor progress of design
Ensure payment timeline is followed
Cash flow forecasting
Regular cost reportingManage risk and contigencies
Agree Ces/variations as they come
Monitor and mitigate EWNs

Question 2

How can you protect your client from contractor insolvency?

Answer 2

PCG or bonds
Credit check
References
Hold retention
Collateral warranties

Question 3

CM - Level 2 example?

Answer 3

Tracking and reconciling staff costs on AQP into the CVR.

Question 4

CM - Level 3 example?

Answer 4

Advised on ways to increase margin and help cashflow.
- Utilising more experienced staff.
- Didn’t increase payment term.

Question 5

Why not increase payment terms? What were my payment terms?

Answer 5

Government schemes have prescribed maximum 28 day terms.
- Based our timescales on our main application.

Question 6

Is changing the staff not inflating the costs for your gain?

Answer 6

No, the Client favoured having experience and felt it would aid in programme and quality.
Final value was based on target so their is incentive to still remain below target.