Project Finance Flashcards
What does “controlling change” mean to you?
Having an active engagement with all parties to agree variations as early as possible and to be aware and monitor change.
What is the final account process under SBC?
No later than 6 months after Practical Completion certificate, the Contractor shall provide the Architect / CA with all document necessary for the adjustment to the Contract Sum.
Not later than 3 months after receipt of this, the QS shall prepare a statement showing all adjustments made to the Contract Sum.
If the Contractor fails to provide their assessment of adjustments to the Contract Sum after 6 months, the CA may at any time give the Contractor one months notice requiring their supply.
If the Contractor fails to supply this, the the CA may issue their own assessment.
What is the final account process under D&B?
Under a JCT D&B Contract, the Contractor has to issue their final statement within 3 months of practical completion.
The Client then may issue a notice on or after the the those 3 months, stating that failure to provide their final statement within 2 months then the Client will issue their own.
What are the 4 types of cost report under the RICS practice info on cost reporting?
- Programme
- Project
- Detailed
- Construction
What are 7 typical cost adjustments in a cost report?
- Provisional Sums
- Prime Costs
- Instructions
- Anticipated Instructions
- Claims
- Anticipated Claims
- Fluctuations
What are the 4 methods of risk assessment?
- Percentage Addition
- Simple
- Probabilistic
- Monte Carlo
Why were your cost reports done on a monthly basis?
In line with RICS practice information.
Also suits the project.
When can’t you pay for materials on-site?
When the materials have been procured too early for the project, and there is a risk for them to be damaged / lost.
You say you provided your Client with visual representations of prov sum expenditure and a percentage of amount spent against the programme. Why?
I inputted a graph of the amount of work completed on site vs the programme. This is so I could advise my Client of Contractor progress on site.
Prov sums was so I could advise my Client of the value of the Contract that was at risk.
When reviewing change quotations, why did you use Contract rates?
I followed the JCT valuation rules.
What would you do if you couldn’t use benchmarked data for works of a similar nature?
First and foremost, I would assess change (if measurable works) using CSA rates. If they weren’t applicable, I would use Star Rates or Contractor Quotations, otherwise I would use benchmarked data.
If none of these were available, I would use day works.
When would you look to resolve and close out prov sums?
ASAP.
What if you wanted to value materials off-site that weren’t listed in the Contract?
They would need to be instructed as a listed item.
How did you ensure the correct monies where being accurately monitored and tracked between the different projects?
I held a meeting with the QS’s running each section of the project and the Client from each section, where we would go through the different instructions and determine which costs required a transfer.
I would also have a weekly meeting with the QS’s to ensure these transfers were recorded in our cost reports.
What should be prepared to document the final account, and what should be included?
Statement of final account.
It details the contract sum, provisional sum adjustments, additions and omissions and the final account.
It needs to be signed by both the Contractor and Client.
The Gleeds final account says that the amount is “full and final” and “should not prevent the Contractor from complying with their obligations under this Construction Contract”.
What does the practice information say regarding cost reports and contract type?
You should adjust your cost report based on the Contract type.
For example, if you’re working on a remeasurement contract you should show the forecasted and agreed adjustments to the quantities.
What is the latest revision of the RICS Practice info on cost reporting?
1st Edition, 2015.
What is an s-curve?
A method for calculating cash-flow.
On CB, how did the expenditure compare against the programme completion, and what did this demonstrate?
The Contractor was behind on expenditure against the programme completion, which meant that the Contractor could be in delay.
How did your change control register assist you with the final account?
Closing out of variations in a timely manner and being able to provide a status on all changes.
For example, if an instruction was issued as “cost to be agreed”, I was aware the Contractor needed to issue a quote, it allowed me to maintain an awareness of this and to actively monitor change.
What are the two types of prov sum?
Defined and undefined.
What is the process for instructing provisional sums?
- Omitting the prov sum and instructing the value.
- Instructing the adjustment of a provisional sum.
On the confidential project, can you tell me why you told your Client what they needed to see in the cost report?
I advised my Client what they needed to see in the cost report to allow closer monitoring of budgets.
In this project, all sections (ie East Wing, South Wing, Project Infrastructure) was allocated their own budgets stemmed from the project wide budget. I advised my Client what amendments needed to be made to the individual section reports (east wing, north wing etc) to allow closer and more accurate monitoring of the programme wide budget.
How is this good client care?
It’s good Client Care because I used my knowledge and experience to advise my Client on what improvements could be made to their reports, as it was in their best interest that the monies were allocated correctly.
What could a contractor being behind cashflow show?
It could mean that they are in delay, though I am aware that is not always the case.
So the Contractor is behind on cashflow. Apart from the public funding issue, what else did you advise your Client on Contractor performance?
The Contractor was behind on cashflow because there were issues with the Client’s design.
I advised my Client that this would constitute a relevant matter, and that they would need to prepare financially for future claims. I would also assist with with reviewing the design and seeing if there were any potential savings that could be created.
