Project Finance and Cost Control Flashcards
What do you prepare a cashflow?
Base on the programme and contract sum or cost plan and follows the principles of an S curve
What is the purpose of a cashflow? Who produces one and how?
For client:
- To monitor progress against agreed programme
- To be able to monitor loan payments and withdrawing money from funder
- To manage resources
For contractor:
- To monitor subcontractor’s progress against subcontractors
- To manage resources
What are the factors contributing to cost control?
- Changes to original scope to a project
- Fluctuations on a project
- Loss and Expense claims
- Management of provisional sums
What is a prime cost sum?
Budget which should be expended on the supply only costs for materials or goods.
Can you tell me what the some of the risks on a project are?
- Ground conditions
Asbestos Containing material (for refurb project) - Site access
- Existing underground services
- Existing M&E services (for refurb projects)
What is risk allowance?
Contigency added to the base cost estimate for items that cannot be precisely predicted to arrive at the cost limit
What are provisional sums?
A provisional allowance made for an item of work that could not be determined at tender stage.
What is the different between a defined and undefined provisional sum?
- Defined provisional sum – works included in programme.
Undefined provisional sum – works not included in programme.
On your HRA Phase 4 Project – How about managing the provisional sum for the project?
I Record all PS in the cost report. Once a firm cost has been provided for the project. I assessed the cost and omitted the provisional sum and replace this with the firm cost.
How do would you asses a variation on a project?
I will look at the scope of works, and check that the quantities provide by the contractor are accurate. I will then check if there are any agreed rate that the contractor should be using. I will also check if there are any recent quotation obtain where I can benchmark the cost against. I will also review the breakdown to assess whether the contractor has allowed for elements with are above to what is required.
What is the purpose of cost reporting?
To record all known costs which can be accurately valued
To report all costs which are known and can be estimated at the date of the report
To forecast costs as can reasonably be foreseen at the date of the report
risk allowances necessary as can be reasonably foreseen at the date of the report.
What is cost control?
The process of valuing and managing changes. To ensure the project is delivered at the right price and to manage the final account
How would you prepare a final account?
- Check the contract procedures for final account including the timescales.
- Ensure to resolve all the variable costs (changes, loss and expense, liquidated damages, prime costs, dayworks, provisional sums).
- If there are any disputes which cant be resolved in any other way, the statutory obligation is to go to adjudication.
How to control costs pre and post contract?
PRE
- Cost Plans
- Value Management
- Cost Tracking
POST
- Cost Reports
- Valuations
- Variation
What would you advise your client if your behind on a cashflow?
- Behind on programme
- Resequencing of work
- Weather
- Sourcing of subbies
