Project Finance Flashcards
What is a final account?
A statement agreed by the contractor and client stating the full and final amount of all project works including the contract and variable costs
What is generally excluded from a final account?
VAT
Interest in overdue payments
Liquidated damages
What is the final certification and what happens once issued?
Second certificate following end of defects liability period
Can be issued following certificate of making good
Triggers half retention
How would you deal with patent defects in a final account?
Ask the contractor to resolve
Engage another contractor to rectify at the contractors expense and deducted from the final account
Clearly sensitive which could lead to disputes
What is set-off or contra charge?
Where the employer recovers costs from contractor
Liquidated damages
How would you deal with a contra charge?
Through a pay less notice
How could you control construction costs during post contract?
- Effective cost reporting
- Managing provisional sums
- Change control
- Risk management
What is the difference between an employer and contractor cash flow?
- Employer cash flow will include costs for items outside the construction cost like design fees or other costs
What’s the benefit of a cash flow?
- Provides a cash profile across the project
