Haringey Hubs

Question 1

What sort of ‘covering information’ did you send when issuing out the cost reports?

Answer 1

Why I have produced the Report;
general overview of what it contains;
key points I want to get across (big changes from previous);
Summary of financial position.

Question 2

What is an ‘informal meeting’?

Answer 2

Meeting not formally ‘minuted’ but might have an agenda with clarifiations and actions to follow which will be confirmed in later correspondence.

Question 3

What sort of ‘clarifications’ did the client require?

Answer 3

Main reasons behind the change in anticipated final account;
reasons for change in general contingency; costs apportioned to claims;
cash flow forecast and progress on site;

Question 4

What was the process involved in ‘issuing the contract for signing’?

Answer 4

Consolidation of tender documents
Inclusion of contractor’s submission
Incorporation of clarifications and adjustments
Compilation in electronic format, except for JCT Contract and covering letter
Duplicate package for signing and forwarding to client

Question 5

Why was the JCT Intermediate used for this project?

Answer 5

JCT Intermediate used because the contract sum was below a million,
duration less than a year, a
works were relatively straightfoward,
design input was not required and client wanted control of design post contract.

Question 6

What were the ‘Employer’s Requirements’?

Answer 6

Drawings and Specs;
Client Working Policies;
PCI;
CDP Requirements;
Preliminaries; Scope of Work;
Qualitative Assessment.

Question 7

What are ‘Contract Particulars’?
Can you name some of the Particulars for this project?

Answer 7

The Contract Particulars specify key contract details, while Articles and Recitals provide general clauses and preamble information, respectively.

start and completion dates; ;
rectification 12 months;
Retention 5%;
bond not required;
public liability £10M;
liability of employer £10M;
Works Insurance option C; PII £2M (expiry 12 years);
Adjudicator (RICS nominated);
Arbitrator (RICS nominated).

Question 8

What was the rate of ‘Liquidated Damages’? How did the Client calculate this figure?

Answer 8

LADs £1,663.39/week

Client used a standard formula designed for their projects based on contract sum and associated Finance and Professional Costs.

Question 9

What ‘all cost information’ did the Cost Report contain?

Answer 9

Contents Page;
Executive Summary;
Authorised Expenditure;
General Sumary;
Prime Cost and Provisional Sums;
Contract Variations;
Anticipated Variations;
Lodged/Anticipated Claims;
Cash Flow Forecast

Question 10

What were the ‘variation items’?

Answer 10

numerous (circa 200) eg omissions/additions of:
decorations and/or floor finishes (all communal areas);
wc overhauls;
internal door replacements;
etc

Question 11

How did you include costs for ‘anticipated variations’ and why were they ‘anticipated’?

Answer 11

Variations identified as required but had not yet obtained authorisation to proceed

Based on contract rates for estimation purposes until such time as the contractor submitted ‘open book’ costs, where an adjustment would be made.

Question 12

What were the ‘PSUMs’?

Answer 12

Asbestos removal works only.

Question 13

How were the PSUMs quantified originally?

Answer 13

Asbestos Management Survey Report identifying areas of likely asbestos; when comparing this with the scope of works, the extent of possible asbestos in these areas was quantified and costs estimated - these then formed the PSUM allowance for asbestos removal.

Question 14

What were the ‘Contingencies’ for?

Answer 14

Unknown works that might arise

Question 15

How were these quantified?

Answer 15

The client had a policy for including a percentage for unknown/unidentified risk - based on a percentage of the construction works, circa 10%.

Question 16

How does the anticipated account figure ‘enable the client to make informed decisions’?

Answer 16

Budget comparison: Checks project costs against budgeted values.
Client insight: Informs client of cost savings or additional funds needed.
Progress assessment: Compares contract progress with pre-contract predictions.
Financial decisions: Helps client decide on financial commitments and authorize or reject variations.
Prioritization: Guides action to prioritize works for maximum value.

Question 17

What sort of decisions did they make?

Answer 17

The works would have exceeded the budget and consequently the client decided to: prioritize residential communal areas and omit works to management areas;
a VE exercise was also undertaken with the omission of decoration to certain corridors and addition of cleaning instead;

Question 18

How did you ‘highlight changes’ from the previous report?

Answer 18

The Cost Report included an Executive Summary giving an overview together with a section at the bottom ‘Key Report Analysis’ - this is where I highlighted the reasons behind change and the main changes.

Question 19

How did you ‘prioritise larger value variations items’ for attention?

Answer 19

In the ‘Key Report Analysis’ section of the Executive Summary

Question 20

How was the valuation submission document ‘based on the pricing document?

Answer 20

Adapting the Pricing Document by adding additional tabs (Claim Summary; Instructions; claims) and additional columns (% progress; gross claim; change from previous claim; net claim).

Question 21

What was the general process of these ‘joint site inspections’?

Answer 21

Valuation review: Identify additional contract and instructed works claimed for.
On-site meeting: Meet contractor QS, walk through works, agree on % completion for each schedule item.
Materials inspection: Check for labeled, stored, and protected materials delivered according to program.

Question 22

How did you ‘adjust’ the claim/format of the adjustment?

Answer 22

Adjustment - % of progress;
quantity of materials on site;
calculation/rate errors;
confirming that variation costs were those agreed.

Question 23

How did you ‘receive’ variation cost submissions/what was the process?

Answer 23

Variations awareness: Notified through anticipated variations register, progress meetings, correspondences, or contractor.
Update anticipated final account: Budget cost included.
Contractor submission: Based on contract rates, dayworks, quotes, or combination.
Cost negotiation: Changed from contract conditions to open-book.
Agreed costs: Formed solid basis, remaining variations finalized promptly.

Question 24

How did you determine that ‘costs were correct’?

Answer 24

Basis alignment: Ensuring adherence to valuation rules, correct quantities, and specifications.
Quote comparison: Seeking three suppliers for value-for-money assessment.
Quote requirements: Detailed breakdown, cost breakdown, any qualifications.
Cost agreement: Informing contract administrator, considering instruction issuance.

Question 25

Why ‘advise Client weekly on cost implications’ of the works?

Answer 25

Budget awareness: Recognizing client’s financial constraints.
Regular updates: Necessary due to numerous variations from initial scope errors.
AFA fluctuations: Client informed due to frequent changes.

Question 26

What are ‘cashflows’?

Answer 26

Cash Flow Forecast: identifies the anticipated claim for works for the course of the project on a monthly basis.

Question 27

What was the cash flow for this project?

Answer 27

Monthly expenditure tracking: Monitored against 27-week program.
Initial expenditure: Approximately £760k.
‘S’ curve profile: Reflects cumulative expenditure.
Expenditure alignment: With program’s installation timeline.

Question 28

Why did the cost report ‘lead to a value engineering exercise’?

Answer 28

Anticipated final account: Exceeds budget.
Uninstructed variations: Significant.
Priority: Upgrading residential communal areas.
Focus: Meeting client’s goals.

Question 29

What is ‘value engineering’?

Answer 29

Cost-effectiveness without compromising quality.

Question 30

What value engineering was proposed and the cost saving?

Answer 30

Works in corridors could remain by instead of renewing flooring and decoration, these could be cleaned instead. The cost saving was circa £30k (corridors).

Question 31

Why is disclosing a tenderer’s position confidential?

Answer 31

It is a condition of the tendering procedures that this information is not disclosed and should remain confidentail until after the tender analysis has concluded.

Question 32

Why would this compromise the tendering process?

Answer 32

They will have additional information to act upon and could develop strategies to gain award such as submitting/accepting lower costs

Rule nr 1: Act with honesty and integrity and comply with their obligations, including obligations to RICS.

Question 33

What is ‘fairness’?

Answer 33

Treating others equally and according to the rules; showing no bias or favouritism; being impartial;

Question 34

How many ‘variations’ were there at the end of the project?

Answer 34

Circa 200

Question 35

What are ‘variations’?

Answer 35

Alterations or modifications to the design, quality or quantity of the contract works or to the site access or working conditions.

Question 36

What were the final costs for all the variations?

Answer 36

A net negative of £50k (including the omissions for PSUMs and Contingency (£125k combined total) (excluding claims - these have not yet been finalised (insolvency!))
£760 less £75k contingency, less £50k asbestos,

Question 37

Why were ‘scope reviews’ being undertaken?

Answer 37

They were being undertaken because the original surveys were meant to be ‘high level’ broad scope surveys of recommended works. The validation surveys were to pick up the finer details.

Question 38

What was the process of this/how were they carried out? How were you notified of the results of the ‘scope reviews’?

Answer 38

The findings of the scope reviews were added to a register and forwarded to the contrator and myself as anticipated variations.

Question 39

Were ‘weekly updates’ required?

Answer 39

Costs increasing through variations at a regular pace; client informed to make decisions on future actions; strategic management

Question 40

What was discussed and what ‘actions’ were taken at these reviews?

Answer 40

Increase in costs from previous catchup; comparison with budget;
remaining contingency;
large item costs since last catchup; anticipated cost impacts since last catchup; proceed with variations or not;
prioritisation of works if necessary and adjustments to AFA accordingly to stay in budget.
Able to take action before things get out of control;
plan ahead;
prioritize works and not proceed with certain variations prior to going over budget.

Question 41

Why were the costs ‘frequently changing’?

Answer 41

This was because there were significant number of variations issued on this project due to an erroneous original scope of works survey.

Question 42

What ‘potential risks’ were there that were discussed at these reviews?

Answer 42

Further variations taking the contract sum over budget;
Variation items still not firmed up.
Risk scope of works may have to be sacrificed;
Risk VE may not achieve savings.

Question 43

How did the ‘PSUM Allowances firm up’?

Answer 43

Asbestos removal works;
omissions were Instructed;
Contractor procured an asbestos R&D survey identifying works required;
supplier quotes submitted,
Instructed for works to be carried out at agreed price.

Question 44

How were variations authorised on a ‘priority basis’?

Answer 44

Ensure properties meet standards for 5 years.
Focus on resident-used areas.
Remove management areas.
Prioritize areas nearing due status.