JS Project Finance Flashcards
What forms a cost report?
Talk through contents
Why is change control important?
Level 1
Change control ensures changes to scope or deliverables are recorded, evaluated and authrosied by the client
What is the importance of a cash flow forecast?
Checks budget
Forecast final account
Track progress against cashflow
What things do you need to consider when putting together a cash flow
Method of payment; staged, periodic, milestone
Type of contract; contract procedures such as timeframes for payment, payment schedules
Type of cash flow; project or construction
Retention - deduct as per the agreed contract and release after PC and DLP
Bank and public holidays
What does it show if a contractor’s cash flow is behind schedule?
Poor conditions on site
Adverse weather conditions
Slow progress on site
Inaccurate forecast
Re-sequencing of works
What does it show if a contractor’s cash flow is ahead of schedule?
Front loading
Variations
Ahead of programme
Materials off site earlier than expected
Contractor acclerating the works
What are provisional sums?
Allowances for works where the design or specification is unknown at the time of contract
What should a provisional sum have to be defined?
contractor has been provided sufficient detail to make allowance for them in their price and programme. This detail could include a certain level of design, an understanding of construction phasing, likely quantity and any specific restrictions are known.
BP Phase East
How did you identify risk items?
I had weekly risk meetings with the construction manager where we ran through a risk register. I took these items and included them within my risk section.
BP Phase East
Give me an example of a risk item within your project?
BP Phase East
Give me an example of a provisional sum in your cost report?
Henry Dickins
How did you initially calculate the cash flow and advise on the expenditure
I took the contractor’s cash flow they produce each month and and provide comments as to the monthly expenditure
Henry Dickins Court, Residential Refurbishment, London - Cash Flow
What did you advise?
My advise was that the contractor’s cash flow is a forecast and the actual monthly spend is usually different to the cash flow.
On this occasion the scaffolding erection was slightly behind programme due to slow progress.
Henry Dickins - Scope Omission
Why did you not VE the works?
There wasn’t really scope to VE, a lot of the works were refurbishment works, re pointing of brickwork, brickwork replacement, new double glazed windows and front secuirty doors, re tiling and waterproofing so there was minial scope to actually VE
Henry Dickins - Scope omission
What else did you advise other than works that could be omitted?
Amazon Pop - Final Account
What was your advise?
Amazon Pop - Final Account
Talk me through your final account and what your advice was to the client?
I advised what the changes had been since construction, including prov sums that had not be used and therefore omitted and any instructions.
Amazon Pop - Final Account
What was your advice on the final account?
Henry Dickins Cash Flow
Can you provide examples of common reasons why anticipated and actual cash flow positions may differ in construction projects, and how do you account for these factors in your reporting?
Ahead - Front loading, ahead of programme, variations, accelerating
Behind - weather, site conditions, unrealistic programming, re-sequence
Henry Dickins - Omissions
In terms of the instructions relating to the poor building conditions, can you tell me what you advised?
I advised that, due to the instructions taking the FA over budget, the remaining works were reviewed and some works that were not scope critical can be omitted to bring the project back to budget.
What factors did you consider when assessing the potential impact of omitting certain works on the overall quality and functionality of the project?
The residents had buy in as to what the scope was, so it was important that the works being omitted were not significant enough to cause complaints.
Also potential loss of profit claim from the contractor.
Henry Dickins - Omissions
How did you present your advice to your client?
Following the inital meeting, I produced a spreadsheet with the contract overspend, the items to omit to bring it back to budget and issued formally before setting up a meeting to run through
What are the JCT Standard Form ‘Valuation Rules’?
Contract Rates: where work is of similar ‘character’ to work in the original Contract Documents then the valuation of the variation shall be consistent with rates, prices or amounts of work in the proceed document.
Fair Rates and Prices: Where work is not of a similar ‘character’ then it should be valued at ‘fair rates and prices’.
Dayworks: Method of valuing work which cannot properly be valued by measurement.
Contractor’s quotations
What are the JCT timescales for submiting a Final Account - SBC
Contractor should submit by maximum 6 months
Final account should be agreed in 3 months following issue
Do you understand the difference between defined and undefined provisional sums?
Undefined - The cost allowances for works or services whose design specification and extent are not known at the date of contract.
Defined - The cost allowances for works or services whose design and specification are not known at the date of contract but the extent is sufficiently well known to allow for programming and management
What is Retention and why is Retention Important?
Retention is an pre agreed % allowance of work that is held back from the contractor by the client after each interim valuation, to cover the client for defects and non perforamnce by the contractor
