Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Jordan Cornish APC > Financial Control / Cost Reporting > Flashcards

Financial Control / Cost Reporting Flashcards

1
Q

What are the different types of contingency?

A

Design - % if the concept budget allowed for design changes
Construction - % of the concept budget allowed for unforeseen changes during construction
Project – Design Contingency + Construction Contingency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Why would a cashflow be below the target cash flow?

A 
Site conditions
Adverse weather
Resequencing of works
Materials being stored off site (and not claimed for)
Project behind programme
Materials not being delivered on time
Cashflow not accurate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a provisional sum?

A

Money included in the contract for work that cannot be fully defined at time of tender or work that is not sure if required (i.e. hazardous excavation)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the difference between a defined and undefined provisional sum?

A

Defined – A provisional sum of which an allowance is carried for programme and prelims
Undefined – No allowance for programme or prelims is allowed for within the contract sum

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a final account?

A

A fair valuation of all works undertaken by the contractor

Includes all variations, provisional sums and loss and expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are risks on construction projects?

A

External risks – economic, legal, political
Procurement risks
Choice of contract
Financial risks – exchange rate, funding
Site risks – occupied site, planning difficulties, unforeseen problems – ground conditions
Client risks – inappropriate consultant team, poor brief / coordination, incomplete design
Construction and delivery risks – weather, constructability, H&S

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the risks in NRM?

A

Employers change risks
Employers other risks
Construction risks
Design development risks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the purpose of a Cost Report?

A

Monitor and manage cost throughout the project

Inform client on actual project cost against the budget

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What would you include in a Cost Report?

A 
Executive Summary
Cost Summary
Report Basis
Contingency / risk Analysis
Cash Flow
Forecast Final account - VIP
Variations to date
Pending variations
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What can a cash flow show?

A

If a project is running ahead / behind of programme
Project is failing
Contractors are experiencing problems / possible liquidation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

The cost report compares actual cost against the budget, what is the budget?

A

Cost of work under the construction contract
Cost of work not under the construction contract (client advised) – contingency
NRM defines it as the PTE

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How do you agree a variation?

A

Use a contract rate / similar BOQ item
Use a star rate – based on experience of what is far and reasonable
Use dayworks – Prime Cost + Labour + Plant + % addition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Should VAT be included within a cost report and why?

A

No, I am not qualified to advise on the VAT included on various items

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the different payment mechanisms?

A

Stage payment
Milestone payments
Payment against activity schedule
Valuation of works done on site to date

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How do the different payment mechanisms effect cashflow forecasting?

A

Level of predictability varies according to the payment mechanism
Stage payments – high predictability, low accuracy of work done
Milestone payments – high predictability, low accuracy of work done
Payment against activity schedule – okay predictability, okay accuracy of work done
Valuation of works done on site to date – Lowest predictability, high accuracy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is a cashflow used for?

A

Monitor incoming and outgoing of cash on the construction project
Inform the client on when payments are required
Inform client / lender of when to release funds
Obtaining loans and bank monitoring
Contractor progress monitoring
Managing cash within a business
Forecasting business performance
Stakeholder management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

How would you agree a Post Contract variation?

A

Variations are modifications to the design, quantity or quality of the work.

  1. Use a contract rate if there is a bill item of a similar nature
  2. Use a star rate based on experience of what is fair and reasonable
  3. Use dayworks – Prime Cost + Labour + Plant + % Additions
18
Q

What law refers to the right to interim, period or stage payments?

A

Construction Act 1996 and 2009

19
Q

What does the construction act require?

A

The right to payment
Contractors provide a mechanism to determine when payment becomes due and when
Requires the payer gives the payee early notice of the amount they intend to pay them
The payee may suspend performance where a sum due is not paid in full
Banning paid when paid clauses
Gives a statutory right to adjudication

20
Q

What are the different ways of producing a cashflow forecast?

A

Pre-contract – S-curve formula – AECOM produce their own

Post-contract – use a contractor’s programme and CSA + seek input from the contractor

21
Q

If a contractor’s payment application is lower than forecast cashflow what may this mean?

A 
Poor site conditions
Adverse weather
Re-sequencing of works
Materials stored off site and not claimed for
Slower progress than expected
Late deliveries to site
Inaccurate forecast
22
Q

If a contractor’s payment application is higher than forecast cashflow what may this mean?

A 
Front loading
Ahead of programme
Re-sequencing of works
Materials on site too early
Materials off-site included in forecast
Variations
Distressed contractor – financial trouble
23
Q

Can procurement route affect cashflow forecast?

A

Yes
Traditional separates construction cost from design fees and risk
D&B includes design fees and risk within contract sum

24
Q

Why may a contractor re-sequence work?

A 
Recover time due to slow progress
Late procurement of sub-contractors
Accommodate employer variations
Site conditions
Adverse weather
25
Q

How are provisional sums dealt with in final account?

A

Provisional sum is included in the contract and then deducted, and the actual value added back in as a variation

26
Q

What would you include in a final account?

A 
Contract sum
Variations
Provisional sums
Loss and expense
Statement of final account
27
Q

How do JCT contracts define change?

A

Alteration, modification to the design, quality or quantity of the works

28
Q

Can a contractor refuse to provide a Schedule 2 quotation?

A

Yes, they must notify the EA within a defined period

Variation will be valued by the QS instead

29
Q

Can a contractor claim for the cost of preparing a schedule 2 quotation?

A

Yes, a fair and reasonable amount is due for the time even of not accepted

30
Q

Under JCT what constitutes a change of character (therefore a variation)?

A

Change in material
Change in fixing method
Change in background of other work

31
Q

Under JCT what may constitute a change of conditions (therefore a variation)?

A

Work carried out to a different depth
Seasonal variation of work compared to agreed programme
Work in completed areas (additional protection)
attendances

32
Q

What must you consider when valuing variations?

A

Effects on other work
If costs are being claimed within L&E claims that should reasonably be claimed as variations
Programme
OH&P

33
Q

What should be included within a change control procedure?

A 
Reasons for change
Who requested the change
Consequences of the change (time, cost, quality)
Proposals for mitigation
Risks associated with the change
Alternatives
Deadline for instruction
34
Q

How does Cost Planning aid financial control?

A

Breaks down the total project cost into works elements which can be used to create the package split
It gives a project budget

35
Q

Why is change control important?

A

Gives a method of highlighting potential changes when first recognised
Gives a format for assessing programme and cost implications so the client can make informed decisions on whether they want them instructed

36
Q

What was required to validate the contractor’s loss and expense claim?

A

L&E breakdown
Narrative
Supporting evidence / invoices
Delay notice / EOT request
Kier assessment of sub-contractors EOT claim
Evidence of Kier Ascertainment of s/c L&E
S/C Payment certificate and proof of payment

37
Q

What must be proved for a L&E to be granted?

A

That on a balance of probabilities, if the delay had not occurred, it would have secured work which would have resulted in a profit / contribution to head office overheads

38
Q

How can a contractor prove their L&E?

A

Emden Formula – calculates the actual head office OH&P as a percentage
(OH&P/100) x (CSA x (delay period / contract period)) (actual OH&P)
Hudson Formula – calculates the tender head office OH&P as a percentage
(OH&P/100) x (CSA x (delay period / contract period)) (OH&P submitted in the tender)

39
Q

What have you advised a client are the limitations of your cashflow?

A

It is only as accurate as the data it is based on
Changes in legislation may affect it
Any assumptions or exclusions that I may have made

40
Q

What is the Emden formula

A

calculates the actual head office OH&P as a percentage

OH&P/100) x (CSA x (delay period / contract period)) (actual OH&P

41
Q

What is the Hudson formula

A

Hudson Formula – calculates the tender head office OH&P as a percentage
(OH&P/100) x (CSA x (delay period / contract period)) (OH&P submitted in the tender)

Jordan Cornish APC (17 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions