Project Finance Control and Reporting Flashcards
How can costs be controlled during the design phases of a project?
Costs can be controlled during the design phases of a project through:
1) Regular review of the scope vs budget with Client and Design Team
2) Value engineering reviews & DTM’s
3) Developing and maintaining a risk register from conception
4) Regular communication between all key parties
5) Change control register
How can costs be controlled during the construction phases of a project?
1) Managing risk
2) Closing out of provisional sums asap
3) Close management of instructions and anticipated instructions.
4) Regular communication between all key parties.
5)
On Chelsea Barracks Phase 4 - Building 8, what provisional sums did you close out?
I closed out a provisional sum for the Contractor to install balcony dividers in the Lower Ground Floor apartments. I used contract rates where applicable, otherwise I used benchmarked data from the Building 6 contract and S&C contract and adjusted for inflation.
What are the timelines in JCT for agreeing a final account?
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 is the latest edition of the ‘Cost Reporting’ Practice Information?
1st Edition, 2015.
What are the 4 types of cost report?
1) Construction cost report (typical cost report)
2) Project cost report (includes overall costs for the project, such as construction cost, professional fees, third party costs, land costs etc)
3) Programme cost report (reports on programme management office costs and construction costs)
4) Detailed cost report - might break the cost report down elementally or by individual buildings.
How does contract strategy impact a cost report?
JCT fixed price lump sum vs a JCT cost re-imbursable / re-measurable.
On Chelsea Barracks, how did you present risks in your monthly cost report?
My Client wished for the risk section to only include items that were disputed between the Employer and Contractor. As such, I only included these items.
What is an example of a “disputed item” held within your cost report?
There was an instruction that the Contractor sought additional costs for. However, the Employer and CMT advised that the change was design development and the Contractor was not entitled to additional costs. I held the costs included within the Contractor’s quote within my risk section.
(The item was change from Mbus to Pulse)
How did you implement valuation rules on Chelsea Barracks?
The JCT valuation rules are a set of guidelines for
What are the JCT valuation rules?
The JCT valuation rules are a set of guidelines for valuing variations and interim payments.
They are assessed in measurable and non-measurable works.
If works are measurable, then you would measure and value the change in accordance with CSA rates or quotes from the market.
If works are non-measurable, day works shall be used.
What was included in your change control register? Is this a typical QS role?
Included within my change control register was:
1) Reference, description, cost, status, action / owner and comments.
I am aware this is not typically a QS role and is usually for the EA to control, however to proactively manage change and to ensure regular agreement of cost, I developed my own change control register.
What are the two methods for expending provisional sums?
1) Omit the provisional sum entirely, add the cost in the instructions.
2) Adjust the provisional sum to the value of the instruction.
What are the two methods for preparing a cashflow?
1) S curve
2) Programme / package breakdown
What could it suggest if the Contractor is behind on cashflow?
1) They’re in delay
2) They’re resequencing the works.
3) Cashflow was wrong.
What would your advice be if a Contractor was behind on cashflow?
I would advise the Client to prepare for delay and ask the CA / EA to conduct a thorough review.
Can you explain the issue that arose and your advice to your Client regarding the cost reporting template?
The issue that arose was that the standard cost reporting template made it difficult to track which funds had been allocated to the different instructions. I found a solution to this, and advised my Client what adaptations were required within the cost report so to assist with accurate tracking of the different budgets.
Can you explain the data presented in your graphs and how this advised the Client?
The data I included was a % value of the remaining budgets. I split this between what had actually been instructed and what monies were allocated to anticipated instructions.
If you and the contractor have different assessments of a change, what value do you include in your cost report?
Record my assessment but note in the comments the differences between the assessments.
When should you put your final account together?
From the very first instruction and have it updated throughout the project.
What is the timeline to agree final account under JCT SBC?
Contractor has 6 months to issue FA.
If they don’t, the CA should issue a one month reminder.
Upon receipt of the FA or the expiry of the above timeframe, the CA has 3 months to issue their assessment.
What edition is the Cost reporting practice information? And year?
1st Edition 2015
What are the 4 cost reports under the RICS practice information and give examples of what they include?
Construction - Just construction costs.
Programme - Shows costs against programme,
Project - Includes fees & client direct costs.
Detailed - Broken down into different sections such as by element.
What visual aids did you include for your Chelsea barracks cost report? And how did they align with the Client aims/requirements?
Cashflow
% spend of forecasted final account vs % programme completion.
% of provisional sums spent.
Why did you produce a change control register on Chelsea Barracks? Is that not the CA’s Job? Were you getting a fee for this?
Whilst I am aware it is typically the role of a CA/EA to produce a CCR, I think it is a very useful tool for me to keep track of all changes and actions to close instructions in a timely manner.
My time was allocated full time for Chelsea Barracks, so this was included within my fee.
For the confidential project, can you explain your advice to the Client? You say you advised them on the Gleeds standard template. Is this not just correcting a document that was poorly thought out at the beginning of the project?
My Client would use my project wide cost report and present this to their stakeholders. My advice to my Client was advising them what adaptations needed to be made to ensure accurate tracking of the different sources of funds.
The outcome of this was that I identified some instructions that were misallocated to the wrong funding sources, and meant that the budgets were more accurately managed going forward.
What can a contractor being behind cashflow indicate?
Poor original forecast
Delay
Resequencing
EoT
Please explain the advice you gave to your client about off site materials
1) Items need to be instructed as listed items in the Contract
2) Need to be ensured
3) Value of the materials is within the value of the “off-site bond” (if any).
4) Need to pay for transport / storage cost (contractor agreed to pay)
5) Vesting agreement
6) Clearly labelled as property of the Client and stored away from other materials
