Commercial Management - Level 2 Flashcards
How was COWD calculated?
Capturing all of the actual project expendiutre and any oustanding accruals.
Accruals were calculated based on known cost that have not hit the project. Such as:
Any intenral labour expecting to book to the project in the period.
Certified payments that have not yet been paid.
Completed works where the application for payment had not yet been received.
Possessions and isolations.
How did you calculate cost to completion?
Internally Delivered Works:
Take the orignal cost estimate with the work schedule and forecast all remaining shifts and confirm cost in the estimate are still accurate or update if necessary.
Also requires liasing with the supervisors and works delivery manager to ensure works are going ahead as planned.
Externally Delivered Works:
Calculate and forecast the cost of all the internal labour requirments.
Ensure that contractors are supplying the contractually required cost reports which includes their forecasts and cost to completion.
What sort of backup was required?
Applications for payment
Payment Certificates
Timesheets
Delivery Notes for materials and plant.
What is an audit and why are they required?
An audit is a check of financial accounts.
Ensures reporting is being conducted in line with legislation.
What would you do if you discovered a large period under or overspend in comparison to your forecast?
Make the Client aware of this immediately.
Then determine if this was a geniune forecasting variance and not as a reuslt of errors in my calculations.
If it was as a reuslt of errors in my calculations, ensure I understand what I did wrong to ensure the erorr does not repeat itself.
Consider the impact of the variance on the Client’s cashflow, is additonal funding required or does funding need to be moved.
If its an underspend, is the programme of works recoverable or is completion going to be delayed and therefore a change control required?
What is the purpose of CVR’s?
Meausres commercial performance of a project by monitoring actual cost v budget cost.
Highlights whether the project is under or over budget.
Once you discoverd the cost of RRV’s had increase, what actions did you take?
Informed the Client.
Calculated the impact of the cost increase and revised my forecast and cost to complete accordingly.
Making the Client aware, I drew down from contingency the cost increase.
How much was the RRV cost increase and how was this calculated?
Updated quotes were requested from the supplier, with the cost increasing by £180 a shift.
What was the overall RRV cost increase impact?
This impacted 95 shifts in total meaning the total cost impact was £17,100
What had caused the cost increase?
Slight change in our requirements.
What are unit rates?
Data on the cost of constructing a specific item/element of work.
Why is collecting unit rate data important to an orginisation like Network Rail?
Allows the performance against NR’s benchmark/target unit rate to be monitored.
Collecting such data feeds into NR’s benchmarking data.
NR undertake the same type of works repetatively so having unit rate data aids in business case development and funding allocations.
What is Value?
Value is a ratio between inputs (cost and time) and outputs.
Value will change dependent on individual/party.
What is earned value management?
Measuring the performance of the work.
- Cost Performance Index = Earned Value / Actual Cost
- Earned Value = % Complete * Cost
- Schedule Performance Index = Earned Value / Planned Value
- An index greater than 1 shows value is being delivered and the project is on track.
