*Essential/ Common (*# = updated, or # = add) Flashcards
Latest RICS news re Covid-19?*
150 redundant jobs/ company restructuring
COVID-19 Recovery Business Plan 2020-21
AGM taking place online this time (20 Nov)
Note:
email from CEO Sean Tompkins on 24/9/20
Business Planning:
What’s a SWOT analysis?*
SOE
Strengths (int)
Weaknesses (int)
Opportunities (ext)
Threats (ext)
Note:
- Situational analysis
- Microeconomic
Conflict Avoidance, Mgmt + Dispute Res Procedures:
Three Pillars of Dispute Resolution?*
N M Adj
- Negotiation
- mediation/conciliation (3rd party)
- adjudication (3rd party binding)
Why was the DD cost plan based on incomplete SD information, why not DD for all?*
Client request to expediate award of MW to commence structural works
This accelerated start on-site. (compared to waiting full full design)
Note:
- Structural was designed first (leads coordination). Arch, MEP, landscape, etc to follow (overlap design and construction)
- I appreciate that ideally DD should be sufficient across all packages, then no need for PS can tender all in MW package
Contract Practice:
FIDIC Red 99 - Can you narrate the final account payment process?*
Contract provisions
[post DNP/DLP, and post Performance Certificate]
MC submits draft final statement to Eng (Scl. 14.11)
Eng reviews <28 days
Once approved, MC submits Final Statement and Discharge to Eng (Scl. 14.11 + 14.12)
Eng reviews <28 days
Eng issues Final Payment Certificate (Scl. 14.13)
Employer pays <56 days (Scl. 14.7)
Opt C - VE:
Examples of VE in Tower B?*
expensive marble floor for a lower cost marble floor (e.g. Europe quarry to China) AED 3m
12mm to 10mm thick low iron glazing (balustrades, partitions)
cementitious ceiling boards to gypsum
Note:
- carpets to lower quality (similar look)
- In other packages, for example the Misc Metalwork, VE for hot dip galv ladders in BOH areas, from SS spec (as not seen)
Quantification + Costing:
What’s a defined PS?
What’s an undefined PS?*
Defined - MC allowed for programme and prelims
Undefined - MC entitled to prelims and EOT if PS causes delay e.g. opening up brownfield ground
Notes:
Included in the Contract for unpriceable works, and works that may not be required, and not sufficiently designed for firm tender price
Valued in similar manner to Variation, MC will prove costs from 3+ subbies and apply agreed mark-up
Procurement + Tendering:
What Contract amendments/departures are typically requested by Main Contractors?*
interview
Payment terms (scl. 14) - Retention, LD’s, Advance Payment
Contractual terms - termination for convenience (OZ), insert corona in force majeure
Performance bonds (scl. 4.2) - perhaps security cheque or PCG instead
Completion date (project duration)
Note:
Contract queries on commencement, delay, suspension (scl. 8)
Business Planning:
What might you expect in a business plan?*
5 year plan
Formal statement of business goals, why they are attainable and strategy to achieve
Budgeting/ financing
Company targets - short and long term
Market forecast/ analysis (SWOT, PESTLE)
Note:
- Feedback/ KPI’s
- New Clients
- Key risks
- Plan B - corrective action plan
- Resources plan - requirements, allocation/ utilisation, % overhead (admin, HR)
- Review of previous 5 years
- Strategy to achieve measurable goals
Sustainability:
What sustainability targets/ environmental assessments on OZ?*
SOE
LEED v3 Gold (achieved)
Professional statement – Rules of conduct for firms 2020. Example of some of the 15 rules?*
SOE
Rule 2 Communication - keep RICS up to date with contact details.
Rule 5 Service - Professional and timely
Rule 7 Complaints handling procedure in place.
Rule 8 Handling Clients money.
Rule 9 PII
Rule 11 Solvency – bankruptcy not permitted.
Rule 12 Locum agreements.
Rule 15 Cooperation with RICS
Contract Practice:
Key differences between OZ and FIDIC Red 99?*#
Adverse weather
- FIDIC is EOT for adverse climatic conditions.
- OZ rainfall excluded (must be unforeseeable and Contractor unable to make provision for)
Termination
- OZ is for convenience with no valid reason required.
- FIDIC Employer cannot appoint another MC
Force Majeure - Duty to minimise delay
- FIDIC is equal responsibility
- OZ is Contractor responsibility
Your Employer is unhappy with the MC, and asks whether they can terminate them to get another Contractor in. They suggest citing Covid-19 as the reason for termination - what would you advise?*
Covid-19 is not a valid reason for termination.
Note:
FIDIC is 14d notice for valid reasons such as
- non compliance
- abandonment
- failure to commence works without reasonable excuse
- MC subcontracts works without agreement
FIDIC is immediate termination for valid reasons such as
- bankrupt/ insolvency
- bribery
OZ has Termination for Convenience
Project Financial Control + Reporting:
What is the purpose of a cost report?*
SOE “I am aware.. cost report provides..”
SOE “I produce the monthly CR”
Regularly monitor and manage known cost throughout the project
Rolling final account - to inform Client of forecasted total project cost (incl. budget concern)
Procurement + Tendering:
What’s a domestic subcontractor?*
Employed directly by MC, on private agreement
Note:
Like OZ
Sustainability:
What do we mean by sustainable development?*
SOE
Brundtland - Meet needs of present, without compromising ability of future generations to meet theirs
Note:
- remember chronologically, meet today, compromise tomorrow
- environment protection
- resources (prudent use, local source)
Did you complete any intermediate estimates as the design developed? If so, explain what happened?*
No, PM did not request pricing of any developing Spec materials, or any intermediate packages for costing
Client was offered this service on cost+ but declined to provide the resource
Notes:
- No, IFT spec and dwg only release post- Cost plan
- Quality was overriding factor
- this is multi-faceted rather than a resi tower
Project Financial Control + Reporting:
Why would a cash flow be behind the target cash flow?*
Site conditions
Adverse weather
Re-sequencing of works (perhaps due to procurement of sub-contractor)
Materials being stored off site (and not claimed for)
Project progressing slower than anticipated
Materials not being delivered on time
Cash flow not being accurate in the first place
The 5 Principles of Better Regulation are?*
PACTT Proportionality Accountability Consistency Targeting Transparency
Notes:
- Proportionality - Regulations to suit size/ risk footprint. Taking on Clients money
- Accountability - Regulators decisions subject to public scrutiny
- Consistency - Regulations across the disciplines
- Targeting - Monitoring e.g. samples for not doing CPD. Using resource to target high profile issues
- Transparency - e.g. CPD can be fined, even expelled
- Classified as ‘Gold Standard’
- Relates to the regulator, not how we as members or firms should conduct ourselves
Procurement + Tendering:
Advise on typical qualifications and exclusions included within a Main Work tender return?*
SOE
Remeasurable offer
Ground conditions
Payment terms
- 30day not B2B
- LD’s
- advance payment %
- retention
Time for Completion date
Exclusions within BQ
PII indemnity level coverage required
Note:
VAT
What could be the impact of Arabtec going into liquidation and dissolution be on the industry?*
Unemployment
supply chain into liquidation
Impact on subsidiaries (Depa)
Increase in cost of Performance Bond’s - as Employers are calling bonds
Note:
Contractors more risk adverse (loss of market confidence)
Risk Management:
Define what is a risk?*
Uncertain event or circumstance,
Potential to effect project
Notes:
NRM definition “the likelihood of an event or failure occurring and its consequences or impact”
re Covid, the Employer asks advice on termination as they are experiencing cash flow issues and they want to stop works - is the Employer entitled to terminate under FIDIC 99 and what is the process of termination?*
FIDIC has Employer’s Entitlement to Termination (Scl. 15.5)
- Cannot complete works himself or with another MC (OZ he can)
Takes effect 28 day after
- Employer returns Performance Bond
- MC will cease works, return materials paid for, leave site
- MC paid for Works done (likely quantum meruit)
Note:
- consider Suspension if short time cash flow issue
- OZ only when required, Employer will need to appoint another MC to complete - timely and costly
Construction Tech + Environmental Services:
Benefits of concrete?*
vs. steel
Inherent fire protection
Can build higher
Good thermal and acoustic properties
Note:
- Strong under compaction
- Less floor-to-floor required (service penetrations through beams)
- Cheaper (UAE labour cost)
What is the RICS draft professional statement - Rules of Conduct Consultation about?*
(email from CEO Sean Tompkins on 26/10/20)
invites feedback on sustainability and respect into our rules, by 7 December
Aiming for one single document, creating a clearer set of Rules.
Note:
The consultation addresses some of the issues identified by our future of the profession research and we want you to help shape how we deliver a new clearer framework.
What are the 5 Global and Ethical standards?*
SOE
STIRR
Service - always provide a high standard of.
Trust - act in a way that promotes trust in the profession.
Integrity - act with.
Respect - treat others with.
Responsibility - take responsibility
What are the contractual provisions under FIDIC Red 99/ OZ regarding Covid-19?*
(same for simplicity)
1 Notice of FM <14days (Scl. 19.2)
2 Consequence of FM (Scl. 19.4)
= Contractor’s Claim (Scl 20.1) for..
3 EOT (Scl 8.4 (d) “epidemic”)
4 cost under (Scl 20.1)
Note:
- OZ is same for simplicity
- only duty to minimise delay with Contractor (rather than Each party)
Conflict Avoidance, Mgmt + Dispute Res Procedures:
Dispute resolution stages on OZ?*#
SOE
Written notice - within 28 days of becoming aware
Negotiation
Dispute Committee (already appointed) - meet within 10 days, agreement in 40 days
Arbitration (DIAC) - file and go to Arb after 56 days
Note:
- Negotiation
- OZ Cl. 32 dispute resolution
Quantification + Costing:
IPC Interim payment certificate/valuations - typical contents?*
SOE “I carried out monthly enabling works on A4”
1 BQ Prelims (demobilisation, mob, time, work) progress
2 BQ Measured work progress
3 Variations
4 Materials on + off site
5 Deductions (Client, PM withholding monies), NCR
6 Payment terms - retention, AP recovery
7 less previously paid
Notes:
- as set out in contract
- add Prelims, measured works, MOS
- ddt Advance payment recovery, retention, ddts, previously paid
Quantification + Costing:
Prerequisite for making an Advance payment?*
SOE “I advised Client 30% AP for kitchen equipment”
Contract in place (AP% stated in Appendix)
Performance Bond in place
Adv Payment Bond (if required)
Recovery agreement (either IPC or milestone)
Accounting Principles + Procedures:
When receive audited accounts from Tenderers, how did I assess these?*
I didn’t, not in scope of services
Also MC responsibility as part of prequal
Note:
PM also has third party accountant - Deloitte
Is the Employer entitled to terminate an insolvent Contractor (Arabtec) on projects - according to FIDIC Red 99?*
Yes
Notes:
- Cl. 15 Termination by Employer
- Scl. 15.2(e) entitled to terminate if Contractor becomes bankrupt or insolvent.
- OZ contract same - Scl. 30.3 Immediate termination
Procurement + Tendering:
What procurement routes available?*
Traditional
D+B
Management Contracting
Construction Management
Note:
- Serial/ Measured Term - typically 3-5 years
- Turn key/ EPC
- Partnering
- PFI/ PPP
Quantification + Costing:
Advise on the benefits of POMI and what it is used for?*
SOE
Tender analysis
For market consistency and familiarity
Standard method of measure - rules based e.g. bulkheads >500m measured in m2
What are the contractual provisions under FIDIC Red 99 regarding Covid-19?*
(OZ same for simplicity)
Force M defined as “beyond party’s control” at time of entering contract (Scl 19.1)
MC to provide notice of FM <14days (Scl. 19.2)
[Consequence of FM (Scl. 19.4) = Contractor’s Claim (Scl 20.1) for..]
- EOT (Scl 8.4(d) “epidemic”)
- cost under (Scl 20.1)
Note:
- OZ is same for simplicity
- only duty to minimise delay with Contractor (rather than Each party)
- Cost assessed on case-by-case basis e.g. if façade being made in China in January causing delay to manufacturing, then would likely be time and disruption if on critical path.
Didn’t you have time to do a PTE after the tender docs were issued, prior to the tender return date 6 weeks later?*
Would of took me several weeks, at expense of other packages being procured
However, would of only shown cost overrun estimate. No time for redesign. Delay procurement.
So better to tender, confirm cost overrun, then have VE expertise on board to streamline process.
Note:
If IFT and Contractor BQ ready, I can and did PTE some packages
Risk Management:
What should the project contingency allowance be based on?*
/What is Simple method of assessment method
for calculating a risk allowance on a project?
On a project specific risk register..
Likelihood x most likely price (min, max, most likely).
contingency = sum total of ‘likely’
Note:
Rather than % driven
Professional statements –
Rules of conduct for members 2020 (9x)
Rules of conduct for firms 2020 (15x)
Example of some of the rules common to both?*
Rule 2 Communication - keep RICS up to date with contact details.
Rule 5 Service – professional and timely.
Rule 6 CPD provided/ undertake 20hrs.
Notes:
- Rule 1 Interpretation (MRICS, AssocRICS)
- Rule 3 Prof/ ethical behaviours
- Rule 4 Competence
- Rule 7+11 Solvency
- Rule 9+15 Cooperation
PII Run-off cover - how long are you required to have run-off cover in place for in the UK and the UAE?*
(interview)
UK minimum of 6 years
UAE minimum of 10 years (as that’s the liability period)
Are there any recent changes in legislation re Covid-19 - e.g. ways to incentivise/protect firms*
Any recent legislation changes in UAE I am aware of?
revised Bankruptcy Law - now offers 12m company protection from bankruptcy in event of “emergency situations” such as Covid.
new Dubai Building Code - one-stop-shop for obtaining approvals
Notes:
- approvals from licensing agencies and departments (faster and reduce costs by streamlining)
- DIFC enacts new Data Protection Law - Aims to closely aligned with the EU’s GDPR
Project Financial Control + Reporting:
What is a Rolling Final Account?*
The project total project cost (in CR) - outturn cost
Includes
- contract sum
- variation
- PS adjustments
- EOT costs
Design Economics + Cost Planning:
Some differences between VE + VM?*
VM
- proactive (early right decision)
- identify important to Client (e.g. gold hotel room)
- workshops
- more pre-contract
VE
- reactive (when over budget)
- more post-contract (can be pre- though)
Note:
- both may cost more, but provide better value (e.g. last longer LCC)
Project Financial Control + Reporting:
What info is required to prepare a cash flow forecast?*
Contract Sum
Programme (inclusive of any EOT)
Period payment mechanism (IPC, milestone, stage, activity)
Contract/ payment terms (retention, advance payment + recovery)
Notes:
- if programme is not cost loaded, then QS to attribute works activity costs to programme (to show when cost will be incurred)
Why not wait for full design for Tower B ID?*
Client eager to early appointment of Contractor, and commence structural works
PS used to overlap design and construction.
Note:
- I appreciate it is best practice to await full design
- “General construction process i.e. certain packages always lag behind, for example, there’s little point developing ID to DD until structure is frozen. That’s why you’ll find nearly always, ID, MEP and landscaping are less developed and often end up being provisional sums”
Procurement + PS:
Why was the DD cost plan based on incomplete SD information, why not DD for all?*
Client request to expediate award of MW to commence structural works
This accelerated start on-site.
Structural was designed first (leads coordination). Arch, MEP, landscape, etc to follow (overlap design and construction)
Note:
I appreciate that ideally DD should be sufficient across all packages, then no need for PS can tender all in MW package
Design Economics + Cost Planning:
Difference between WLC + LCC?*
SOE
WLC is broader (think Link bridge)
- non-constructive (land acquisition, taxes, fees)
- income/revenue generation (as advised by others)
- plus LCC
LCC (like buying and running a car costs)
- construction, operational, maintenance/replacement, and demolition
For a company’s PII policy to comply with RICS PI Insurance May 2020 (v7) professional statement,
What standards must it meet/ what it provides info on?*
Cover meets Standards + Regulatory Board standard
Retroactive run-off cover for min 6 years
min level of indemnity cover £250k, £500k, £1m (based on firm’s previous year turnover)
Policy wording is written on a full civil liability basis
Any one claim or aggregate plus unlimited round the clock reinstatement basis.
Note:
- Be fully retroactive ‘claims made’ basis, ensuring all former work is covered on new policy
- Underwritten by a listed insurer
- Cover past and present employees
Contract Practice:
You “generally request tenderer to comply with CoSC.” What are some of your CoSC?*
SOE
Contractual terms - termination for convenience, 12m DLP
Bonds (Performance Security, Advance Payment)
Insurances (PII, Workmen’s comp)
Payment terms
Note:
Payment terms
- 10% Advance Payment - recovered through IPC
- 10% Delay Damages cap. Charged at 0.5% per week
- Mark-ups for 5% Variations and 4% PS
- 10% Retention - released 2.5% on TOC, 2.5% on draft final acct, and 5% on Final Payment Certificate
Communication + Negotiation:
Give an example of rate negotiation I was involved in with a Subcontractor’s variation. What steps were taken to ensure Client value?*
External signage VO with proscape.
1 I reviewed their 5 quotes for material supply
2 I estimated from my first principles
3 Later used benchmarking (once received)
4 Agreed a fair rate
Note for IPC’s (not VO’S):
Consultants valuation stands for purpose of payment
Accounting Principles + Procedures:
4x main ratio analysis used to assess a companies financial strength?*
P L F G
Profitability - in relation to turnover
Liquidity - ability to meet current obligations due
Financial - return on capital employed (ROCE)
Gearing - loan exposure debt divided by equity
Project Financial Control + Reporting:
What’s the purpose of a cash flow/ what is it used for?*
SOE
Shows net cash position
Inform Client/stakeholders when payments are due
To obtains project financing
Note:
Monitoring income and expenditure can illustrate
- Project is ahead/ behind the programme
- Contractors are experiencing financial difficulty
Accounting Principles + Procedures:
What is insolvency?*
SOE
state of economic distress
Inability to pay debts/ cash flow issues
Forewarning that may intend to file for bankruptcy
Note:
2 forms of
- cash flow insolvency - inability to pay debts due
- balance sheet insolvency - negative net assets, debts exceed assets
- You can be insolvent without being bankrupt, but you can’t be bankrupt without being insolvent
Construction Tech + Environmental Services:
Benefits of steel?*
vs. concrete
Fast programme (OSM + installation)
Lightweight (less substructure cost)
Larger spans (tensile strength)
Note:
- recyclable
PII - What are the minimum limits of indemnity coverage required?*
> £100,000 turnover = min. £250,000 indemnity
£100,001 to £200,000 = min. £500,000
£200,001+ = min. £1,000,000 indemnity
Note:
For new firms its an estimate
Quantification + Costing:
There’s an item on drawing but no rate in the BQ, how to assess?*
Reasonable assessments for new works
- star rates,
- 3+ quotes
- first principles
- benchmarking
- apply agreed mark-up
Communication + Negotiation:
How do you conduct a negotiation in your work?*
(prep + during)
/ How do you negotiate and agree a valuation/ final account?
(interview)
SOE
Prep
- Establish each others objectives
- Know non-negotiable items
- Know bottom line
- competitive or principles based
- collect data, review contract
- Strategise
During
- use agenda
- find areas of compromise - narrow differences
- Record/sign/agree - a clear, firm decision
Notes on the actual process:
- Once formally received, via PM
- Review FA against BQ works complete,
- Request substantiation (if required)
- Negotiate and agree fair/correct value
Contract Practice:
What’s Disruption?*
drop in productivity due to interruption, reducing the rate of efficiency.
Note
e. g. imagine a linear project (such as a road/ rail project)
- when MC faces obstruction at a particular location, it may be able to continue works at a different location
- so MC would move the resources to new location
- that particular obstruction (most probably) won’t provide an entitlement for an EOT but it certainly will give an entitlement to disruption
Design Economics + Cost Planning:
Name some design efficiency ratios?*
SOE
Wall: floor - cheaper with lower walls
Net: gross floor area (net internal area)
Facade: concrete/ glass/ aluminium
Storey heights
Note:
- Wall: floor - (External wall area 40m2, divided by GIA 100m2) = 0.4 W:F
- Net: gross - Can determine the project validity, whether income meet Client requirement
Professional statement – Rules of conduct for members 2020. Example of some of the 9 rules?*
SOE
Rule 2 Communication - keep RICS up to date with contact details.
Rule 5 Service – professional and timely.
Rule 6 CPD hours requirement.
Rule 7 Solvency – bankruptcy will lose membership
Rule 9 Cooperation with RICS
Conflict Avoidance, Mgmt + Dispute Res Procedures:
Typical ADR stages in UAE?*
SOE
[Written notice <28 days of becoming aware]
Negotiation (if there is intervention by neutral 3rd party)
mediate/conciliate
DAAB (for binding expert decision FIDIC)
Arbitration
Note:
- first and foremost ADR and dispute resolution, as set out in contract
- Cl. 20 Claims, disputes and arbitration
Contract Practice:
What’s Prolongation?*
‘extension of the duration of something’
Actual time related (of prelims costs) - task related is paid in BQ
Note:
- Caused by EOT (delays such as possession of site, late instructions)
Risk Management:
According to NRM1, how to calculate risk allowance, at cost planning stages?*
Base cost x % allow for Design development risk
+
Base cost x % allow for Construction risk
+
Base cost x % allow for Employer change risk
+
Base cost x % allow for Employer other risk
Note:
Base cost = works + design fees + developer fees
e.g. Base cost x % allow for Design development risk
AED 10m x 2% = AED 200,000
Risk Management:
How to cost the project risk/ contingency?*
(interview)
What is Simple method of assessment method
for calculating a risk allowance on a project?
col 1. Risk name
col 2. % probability
x
col 3. likely cost
sum total = contingency
Note:
- Cost can be min, max, most likely
- Traditionally it was Contract sum %
- Refer Mgmt of Risk 2015 appendix B
Communication + Negotiation:
What are the types of negotiation, according to RICS?*
According to conflict avoidance guidance note there are two types according to RICS
Competitive
- offer low, aiming for low or mid-ground
Principles based
- focus on problem not people
- for the benefit of the project
- Develop a common ground
Note: The theoretical one which may be asked - Collaborating: win/win - Compromising: win some/lose some - Accommodating: lose/win - Competing: win/lose - Avoiding: no winners/no losers
RICS tool for managing/ making strategic decisions?*
SOE
RICS decision tree
You say due to time you issued the package without a PTE – in hindsight would it have been better to hold back on issuing the tender and get a PTE in place?*#
Ideally, if IFT received on time
- MC produce BQ, we PTE, redesign accordingly.
- MC adjust BQ, go to tender
However, IFT was late..
- MC produced BQ, then PTE or float tender
- No indication of cost overrun at this point
- PTE on Contractor’s BQ would take time and only show estimated cost overrun
- By floating tender we have actual market rates, and if cost overrun occurs, we can explore VE using subbie expertise/ proposals
Notes:
- Procurement delay of critical path package would be basis of EOT and prolongation (time-related prelim) costs
- Client not want to pay us to duplicate BQ on cost-plus, and then PTE.
- 11m EOT just awarded and Tower B only major front on works available
Describe your role on this package again?*
Ensure competitive price
FPLS
for full scope of works,
and mange the expenditure of PS budget
Sustainability:
Can you define sustainable construction - what are the three pillars?*
And the fourth?
SOE
S E E (the pillars)
Social, economic and environmental
4th = and cultural
Re covid, is your project delayed?
did we have any remedy under the contract to deal with the delay?*
No formal EOT and loss and expense awarded, as of yet, multiple claims team involved and no outcome decided yet
However,
- Dispute is ongoing
- Our contract is not clear on whether it is a force majeure event or not.
However,
- MC claim time under EOT 8.4(d) “epidemic”
- and loss and expense under Contractor’s Claim 20.1
Client Care:
In your SOE, you understand your “clients key objectives” on OZ - what are these again?*
Quality (flagship asset)
cost (expensive development, $bn)
Note: Time is important of course, but not prioritised in this limited triangle Trad = quality and cost D+B = time and cost MC/CM = time and quality
Design Economics + Cost Planning:
What is often excluded from a cost plan?*
Currency fluctuations (for overseas investors)
Loose FF+E and OS+E
Professional fees (soft costs)
VAT
Land costs
Revenue generated from asset
Note:
- Asbestos and remediation cost
- Section 106 (UK)
Professional indemnity insurance – What’s Run-off cover?*
Insurance for when a business, or individual stops operating
Provides continuing indemnity to cover costs that are associated with retroactive claim
Note:
Retroactive = paid on current run-off policy (rather than the expired policy from the date when advice was given)
Risk Management:
Elements and cost assessment of risk register?*
/ What is Simple method of assessment method
for calculating a risk allowance on a project?
SOE
Identify - Risk description,
Assess -
likelihood x severity = probability
probability x cost (min, max, most likely)
manage - who owns the risk
Contingency is total sum of priced risks
QS notes:
- Price each risk = ‘risk value’ (min, max, likely)
- Contingency is total sum of priced risks
Project Financial Control + Reporting:
You have received a Cash flow forecast from the Contractor. What are the checks you would make before forwarding to the Employer?*
costs distributed according to programme
front-end loading - package start dates are correct/ sequence of works correct
Payment type (IPC, milestone, stage, activity)
adjusted for payment terms according to CoC (advance payment/ payment terms/ retention)
Notes:
- awarded EOT’s included
- against cash flow forecast prepared during pre-contract
Procurement + Tendering:
Provide an overview of two-stage tendering?*
1st stage:
- tenderer prices concept dwgs, spec, prelims, SOR, OH+P, and design development
- “preferred” MC develops concept design (as part of design team), on PCSA
2nd stage:
- negotiated
- not obliged to appoint, MC paid for design on PCSA
Note:
- Benefit is early MC involvement for their buildability skills
- Closed tender, prequalified
Project Financial Control + Reporting:
Describe the change control process on OZ?*
SOE “we have a robust change ctrl..”
1 Anybody initiate/request change - (Emp, consultant, MC)
2 PM assessed
- time impact
- sign-off
3 QS estimate
- ARF (change narrative, cost summary, measurements, BQ/ star rates, mark-ups
4 Employer change approval - accept/ reject
5 VO issued to Contractor
6 AVVO - cost agreed between MC and QS
Notes -
Think of x example
Example of when I have demonstrated one of the 5 Global and Ethical Standards?*
SOE
Respect - all individuals on the project team
Responsibility and integrity - being consistent and fair with tenderers, not disclosing bid amounts
Notes:
Service - know comp boundaries and stick to scope
Procurement + PS:
Okay, so the ID was not developed since SD - what level of detail would you expect at DD?*
DD Specs, dwgs, door schedules
Enough to prepare a priced BQ (PTE) on
Enough to tender (not use PS)
Note:
- Detailed measurement of finishes (for schedules)
To start my own private practice, what do I need to consider and do?*
Refer to the Rules for the Registration of Firms 2020
Advise RICS that I am starting my own firm - biz name, etc
Understand insurances (employers liability, public liability, PI)
Policies in place - CHP, H+S, equal opportunities, training
Notes:
- inform of business name, nature, whether holding client money, CHP, point of contact, location, services offered
- refer professional statements such as;
- rules of registration for firms
- rules for use of RICS logo and designation
Health + Safety:
Surveying safely 2nd Ed - What does the guidance note provide guidance on?*
SOE
Details personal and corporate responsibilities
Assessing hazards
Fire safety
Visiting site
Occupational hygiene
Accounting Principles + Procedures:
How you would produce a cash flow forecast?*
interview
Programme
Costs (expenditure)
Advance payments, payment terms, retention, etc., all of which are part of the Conditions of Contract
Accounting Principles + Procedures:
What’s a Balance sheet?*
SOE
Current assets and liabilities
One-time snapshot of companies financial health
e.g. 31/03/19
Note:
[assets - liabilities = shareholder equity]
a common-size balance sheet reports money as % of assets, good for comparison with other firms, more confidential
Contract Practice:
What is necessary to form a contract? What makes a contract?*
Offer + Acceptance - Tender, contract amendments (acceptance is the one who signs/accepts)
Consideration - MC will build project for £m
Intention - Creates legal relations
Capacity - Parties must have legal capacity to enter into the contract
Legality - The object of the contract be lawful
Good faith and fair dealings (UAE)
Note:
The ‘Offer’ is often thought the FOT. But the ‘Offer’ should be the LOA, because that is signed/’Accepted’ by the Contractor
Risk Management:
How is risk managed on OZ?*
Contractor + PM maintains risk and opportunities register
Meets monthly (minimum) - to manage and close-out
Key events like excavation, lift link project, Covid
Opt C - VE:
Definition of Value Engineering?*
Obtain best value, without impacting
- quality/ aesthetics
- performance/ functionality
- may be cost increase (but last longer LCC)
Reactive - corrective decisions when over budget
Notes:
Consider WLC - may cost more if e.g. high performance vinyl over cheap as specified
Project Financial Control + Reporting:
Typical contents of a cost report?*
SOE “I produce the monthly CR”
1 Dashboard (contract sum, forecasted total, key movements, key issues, summaries, cost loaded programme)
2 Change Management status (Remeasure, Agreed + Anticipated VO, EW)
3 Prov Sums - adjusted as expended
4 Soft Cost
5 All payments (IPC, advance payments)
6 Cash flow
Note: also Claims (loss and expense values)
Risk Management:
NRM1 - four categories of risk?*
SOE
1 Design development risk
2 Construction risk
3 Employer change risk
4 Employer other risk
Notes:
- 1 Design changes in estimating data, planning and legal agreements, tendering delays
- 2 Site conditions, access, existing services, ground conditions
- 3 Changes in scope of work, brief, quality and time
- 4 Postponement, acceleration, availability of funds, unconventional tender action, special contract arrangements
Aside from Covid and wider global economic slowdown - why else might the Middle East economy be struggling?*
Lowest price competitive tendering,
unfair risk allocation
low profit margins
uncertain project pipeline
late payments (1yr average from work done to paid)
low oil price
Why no PTE for Tower B?*
Late receipt of IFT
MC produces BQ (Client not want to pay us to duplicate BQ and then price)
Had I been granted time to do PTE, could take 1m,
and would be my estimate of cost overrun,
and did not want to delay procurement
Go to market would prove cost overrun, and would have fit-out VE expertise
Note:
- No PTE for MW package but probably don’t mention that
- furthermore, no indication of cost overrun (as assume designed to budget)
Last article I read in Modus mag?*
USA cities in Covid recession
many workers left big cities to WFH via internet
many will not return to skyscrapers if WFH was successful for them
Note:
- modus online (rather than physical mag)
Risk Management:
NRM1 - name the 5x responses strategies?*
SOE
S T A R R Share, transfer - to most appropriate party, insure avoid, reduce - redesign, develop design retain - by Employer
Notes:
Risk owner is accountable should that risk occur
How has Covid 19 affected the construction industry?*
Project delays
Wider economic issues - insolvencies and redundancies
Impact on supply chains
Uncertainty
Design Economics + Cost Planning:
Typical contents of a cost plan*
5 Summary of Construction Costs
6 Reconciliation
8 Area Schedule
9 Marked up floor plans
10 Benchmarking Analysis
11 Basis - Assumptions + Exclusions (fluctuations, contingencies)
12 Risks + Opportunities
Notes: OZ DD cost plan components 1 Front Cover 2 QAQC sheet 3 Contents 4 Executive Summary - Reconciliation to previous Cost Plan e.g. Concept 7 Low Level – Elements - Reconciliation to Stage D 13 Measured Works Section
Risk Management:
What are quantitative risk analysis methods?*#
Applying a number to a risk (probability %, cost)
Simple method of assessment - price a register (min, max, likely)
Monte Carlo
Note:
- Central limit theorem
- % of cost plan (5% design and 8% construction)
- Quantify in terms of cost and time
Risk Management:
provide some examples of construction specific risks?*
Financing
Procurement delay
Employer change management
H+S
Note:
- Site - planning, environmental
- Poor Contractor selection
- Appropriate contract selectin
- Reputational
- PESTLE
Accounting Principles + Procedures:
What’s a Profit and loss account?*
SOE
Historic (e.g. last 3 years)
Shows income and expenditure for a project/ company
Note:
- Similar to a Balance Sheet but over a period of time, e.g. financial year
- Helps to justify a companies valuation
- helps Provide assurance against default for Clients and Contractors
What’s the Ethics Decision Tree? What are some of the considerations?*
SOE
Flow chart with considerations such as:
- Have you discussed with your boss?
- Is it legal?
- Would you be happy if your actions were made public?
Notes:
For making strategic decision making
What is the structure of RICS?*
1 Privy council (grants and award Royal Chtr)
2 Governing council (set direction. Manage obligations of Royal Chtr)
3 Regulatory tribunal
Boards + Committees
4 Boards - S+RB, Management
4 Committees - Audit, Nominations, Presidential
(under 4 Management Board)
5 World regional board
5 Committees - finance, remuneration
re Covid, the Employer asks advice on FIDIC Scl 8.8 Suspension of the Works - what is the process and what would you advise?*
- 8 Eng instructs - Contractor shall protect works against deterioration, loss or damage
- 9 MC to claim EOT and cost - under Scl 8.4 EOT and 20.1 Contractor’s Claim
- 10 MC entitled to value of works complete up to suspension
- 11 If over 84d, MC can request continue works. If not granted, MC can omit suspended works as variation, or terminate all works
Note:
instruction may not be supported by Force Majeure, as lacking the required contractual justification
Accounting Principles + Procedures:
When reviewing audited accounts, what are common red flags?*
SOE
Balance sheets
- poor cashflow, caused by issues on other projects
- Accounts receivable high AED outstanding
P+L accounts
- concerning recent historic performance
Procurement + Tendering:
what insurances are solicited for construction projects?*
interview
CAR (115% of current replacement value)
Workmen’s Compensation (AED 5m)
Employer’s Liability
Professional Indemnity for 10 years (USD 10m)
Contractor’s Plant and machinery
Notes:
- Motor Vehicle Third Party and Passenger Liability (AED 3.68m)
- Public Liability (AED 10m)
