Level 2 Questions - UBS Hayes (cash flows & cost reports)

Question 1

You mention 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.

Answer 1

1) Once I carried out the monthly interim valuation and the payment certificate issued by the CA

2) Update cost report
- amount certified to date
- anticipated final account

tbc…

Question 2

How did you produce a cash flow forecast on UBS?

Answer 2

• Obtain anticipated programme
• Look at activities within cost plan
• Schedule out activities and spread across programme
• Calculate cumulative total to get S-curve

Question 3

How would a loss and expense claim be handled?

Answer 3

• CA would receive claim for loss and expense
• Assess contract for relevant matters, ensure a relevant matter has occurred
• Assess heads of claim

Question 4

What risks were priced on UBS?

Answer 4

.

Question 5

What level of contingency was there on UBS?

Answer 5

Total contingency of £425,000

Question 6

How was the contingency managed on UBS?

Answer 6

.

Question 7

How was the final outturn cost on UBS controlled?

Answer 7

• Controlled by change control procedure and cost reporting
• Cost report captures incurred cost changes as well as potential / future cost changes (EWNs / anticipated instructions)
• Maintain a rolling final account

Question 8

What are variable costs?

Answer 8

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

Question 9

What was the process of agreeing final account on UBS?

Answer 9

.

Question 10

What was the change control process on UBS?

Answer 10

1) Weekly design team meetings held to discuss any variations, early warning and technical queries
2) CA would raise Change Request Form (CRF)
3) I would put a budget price on CRF
4) Commercial meeting held with client to review CRF and get sign off
5) CRF became CAI
6) Change control log and contingency updated
7) Firm price provided by the contractor
8) Negotiation and agreement of CAI

Question 11

What were some examples of change on UBS?

Answer 11

Total of 27 instructions on UBS

Examples include:

• change to cable size due to bending radius
• additional firestopping
• relocation of fire detection

Question 12

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

Answer 12

All costs which can be foreseen should be included within the contract

Onl

Question 13

What were the contents of your monthly cost report on UBS?

Answer 13

• Executive summary
• Headline summary dashboard
• Instructions to date / yet to be agreed / anticipated
• Early warnings
• Provisional sums
• Contingency spend
• Cash flow

Question 14

What was excluded from your monthly cost report?

Answer 14

.

Question 15

What did you convey in your executive summary / commentary?

Answer 15

Executive summary

• Contract sum
• Anticipated final account
• Instructions to date
• Amount certified to date
• Contingency spend to date

Question 16

Would you include contractors claims in your cost report? (Loss and expense)?

Answer 16

Yes, these would be included in the unapproved variations section until they are instructed

Question 17

Would you report liquidated damages in your cost report?

Answer 17

.

Question 18

How have you implemented change control in pre-contract stages?

Answer 18

• Order of cost estimates
• Cost plans
• Reconciliation documents
• Pre-contract change control tracker

Question 19

What is the purpose of a cash flow for a contractor and client?

Answer 19

Client

• To monitor progress
• To inform funders of draw downs
• To manage resources

Contractor

• To manage resources
• To monitor subcontractor’s progress

Question 20

If a client suggests there is an error in a cost report, how would you go about resolving the problem?

Answer 20

• Clarify what the error is and check myself
• If I find the error is correct, apologise to the client and rectify the error
• Re-issue the cost report
• Ensure the client is happy, inform them of my companies CHP if necessary

Question 21

What is the general risk allowance method?

Answer 21

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

Question 22

How did you deal with contractors claims in your cost report?

Answer 22

These were treated as unapproved change until the CA assesses the relevant events / matters and heads of claim

Question 23

How would you prepare a final account?

Answer 23

1) Check the contract procedures for final account including timescales
2) Ensure to resolve all variable costs with contractor
3) Come to an agreement on the final account

Question 24

What if final account cannot be agreed?

Answer 24

The statutory obligation is to go to adjudication

Question 25

How did you present the contingency spend on UBS?

Answer 25

I presented a line chart which plotted the contingency spend against each cost report issue

Total of 14nr cost reports issued, almost all contingency was used

£425,000 contingency pot