General Flashcards

1
Q

You mentioned you are responsible for cost reporting to the client. Please talk me through how you would produce a cost report and how this would be presented to the client.

A

Set up meeting to go through key client objectives. This would include:

benefits
timescales
packages to use
cashflow
arrangement of changes

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2
Q

How do you produce the cashflows on your project and why is this helpful to the client… What do they use it for?

A

I use the programme and the cost plan to determine each packages value and time taken. I then input this to software to establish the cashflow amounts.

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3
Q

How did you calculate loss and expense on QSL?

A

Relevant Matter has occured

Assess the heads of claims

Prolongation costs; finance charges; loss of profits; general disruption and wasted management time.

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4
Q

How is Final outturn cost controlled by cost reporting?

A

Outturn cost is controlled by the recognition of cost changes incurred and planned implementation of future cost changes.

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5
Q

What are variable costs?

A

Provisional sums
Risk
Loss and expense
Liquidated damages
Variations
Prime cost sums
Re-measurable contracts
Anticipated instructions
Fluctuations

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6
Q

What is good cost reporting?

A

Always accurately track cost and changes
Communicate changes effectively as and when required
Keep a rolling final account
Good cost report document to keep client informed
Good relationship with contractor

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7
Q

What is cost control?

A

The process of valuing and manging changes. To ensure the project is delivered at the right price.

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8
Q

Would you issue a final payment certificate?

A

You should never issue a final payment certificate as this would mean you cannot claim for latent defects.

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9
Q

When is the final account produced?

A

FOR JCT D&B: Contractor must submit information within 3 months of PC. If they do not, you will need to prepare this and give notice you will do it.

FOR JCT SBC: Contrcator has 6 months to provide documents and 3 months for CA/QS to ascertain

FOR NEC: No real final account as all CE’s should be agreed, however the final account is essentially the assessment of the final amount due

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10
Q

On your projects, why was it important that the contingency pot was only used for risks which there was no provision for?

A

This is because these risks already have a provision in the contract and using the contingency would not be necessary. All costs which can be foreseen should have a provision within the contract.

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11
Q

Are there any costs you would exclude from a cost report?

A

If it is a construction cost report i would exclude professional fees, 3rd party costs, land costs, agency costs, finance cost and legal fees.

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12
Q

On the basis that most clients don’t want to read a whole report, what do you convey in the Executive Summary?

A

JCT: Budget, forecast cost, risk, approved changes, unapproved canges, provisional sums, cashflow

Same for NEC but Comp events and Early Warnings over changes

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13
Q

Would you include contractor claims in your cost report? What about loss and expense and LDs?

A

Yes these would be listed under the unapproved variations until they have been approved.

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14
Q

How have you controlled costs in the design stages of a project?

A

Change control and showed differences using precontract cost trackers.
Order of Cost Estimates
Cost Plans

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15
Q

What is the purpose of a cashflow? Who produces one and how?

A

For client:

To monitor progress against agreed programme
To be able to monitor loan payments and withdrawing money from funder
To manage resources
For contractor:

To monitor subcontractor’s progress against subcontractors
To manage resources

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16
Q

What change control procedures have you implemented? For JCT

How did they work?

A

Agreement of CC procedure with client
EA raises Employer Change Request / Contractor notifies of change
EA requests quotation (to be submitted within 14 days)
Contractor submits cost
QS assess and agree
EA instructs

17
Q

What change control procedures have you implemented? For NEC

How did they work?

A

Use Sypro, contract admin tool, but also follow the compensation event process.

18
Q

If a client suggests there is an error in the Cost Report – how would you go about resolving the problem?

A

I would clarify what the error is with the client and then do an inspection of the error. If i find that the client is correct, I will apologize and rectify the error. I will also let the client know of my complaints handling procedure.

19
Q

What is the general risk allowance method?

A

The balance of remaining risk allowance should be maintained throughout the remainder of the project.

20
Q

How did you deal with contractor’s claims in your cost report?

A

These should be treated as unapproved changes until they have been assessed for scope and cost.

21
Q

How would you prepare a final account?

A

Check the contract procedures for final account including the timescales.
Ensure to resolve all the variable costs (changes, loss and expense, liquidated damages, prime costs, dayworks, provisional sums).
If there are any disputes which cant be resolved in any other way, the statutory obligation is to go to adjudication.

22
Q

What are the requirements for the FA on SBC and D&B?

A

6 months Con to submit
3 months to assess

If Contractor doesn’t QS to prepare

23
Q

Who has ownership of the contingency?

A

Although I manage the client contingency the client ultimately has ownership

24
Q

Would you use the contingency pot on variations?

A

I would always seek approval by the client in writing

25
Q

How to control costs pre and post contract?

A

PRE

Cost Plans
Value Management
Cost Tracking
POST

Cost Reports
Valuations

26
Q

What would you do if your client didn’t want a cost report?

A

Explain the benefits of a cost report

Carry out my own cost report to monitor costs for my own benefit

27
Q

What would you do if your project was over budget?

A

Seek cost saving exercises
Ask the Contractor to seek cost savings in design
Request additional funding

28
Q

What would you advise your client if your behind on a cashflow?

A

Behind on programme
Resequencing of work
Weather
Sourcing of subbies

29
Q

What if your contractor are overclaiming on their valuations and against their cashflow?

A

It could show:

poor cashflow of contractor
financial concerns to recoup cash

30
Q

How are unapproved changes (risks) dealt with?

A

Included in the Cost Report as “Anticipated Change” to reflect on the potential outturn cost

31
Q

How can you prepare a cashflow?

A

PRE
Programme vs Anticipated Cost (Cost Plan)

Post
Programme vs Contract value
Contractors cashflow

32
Q

What are the uses for a cashflow?

A

Help client understand drawdowns
Help track progress
Help contractors understand cash and to reinvest
Helps client to obtain loan and bank to monitor progress

33
Q

What are some appendices to your Cost Report?

A

Change control log

Risk log

34
Q

What is a PC Sum?

A

This is a cost included in the tender / pricing document for the supply only rate of a material

35
Q

What is in the Cost Reporting guidance note?

A

Purpose of CR
Contents of a CR
Establishing a budget
Reporting on contingencies
CR Example

36
Q

What is a defined provisional sum?

A

Means a sum of money set aside to carry out work that cannot be described and given in quantified items in accordance with the tabulated rules of measurement.

37
Q

What is an undefined provisional sum?

A

Means a sum provided for work that is not completely designed, but for which the information required for a defined provisional sum cannot be provided