Project Finance (Control & Reporting) Level 1 Flashcards
What is the structure of NRM 1: Order of Cost Estimating & Cost Planning for Capital Building Works?
- Part 1: General introduction
- Part 2: Measurement rules for order of cost estimate
- Part 3: Measurement rules for cost planning
- Part 4: Tabulated rules of measurement for elemental cost planning
- Appendices
What is the structure of NRM 2: Detailed Measurement for Building Works?
- Part 1: General introduction
- Part 2: Rules for detailed measurement for building works
- Part 3: Tabulated rules of measurement for building works
- Appendices
What is the structure of NRM 3: Order of Cost Estimating and Cost Planning for Building Maintenance Works?
- Part 1: General introduction
- Part 2: New rules of measurement for building maintenance works
- Part 3: Measurement rules for order of cost estimating (renewal and maintain)
- Part 4: Measurement rules for cost planning for renewal and maintain works
- Part 5: Calculation of annualised costs for renewal and maintain works
- Part 6: Tabulated rules of measurement for elemental cost planning
- Appendices
What is a provisional sum?
Generally an allowance or estimate included within the contract price for works that are:
- not sufficiently defined, designed or detailed to allow an accurate determination of its cost at the time the contract is entered and / or
- work that the employer may or may not wish to be carried out
How are provisional sums expended?
- the contract administrator (JCT) should issue an instruction for its expenditure
- where a contract includes a provisional sum, the final amount payable will be adjusted (the provisional sum is omitted and replaced with the actual cost of the work)
How are provisional sums dealt with within the final account?
- by the FA stage, the contract administrator will have issued instructions to expend all provisional sums
- the instruction will show an add and omit (add actual costs and omit the provisional sum)
What types of provisional sums are there?
- defined
-undefined
What is a defined provisional sum?
the contractor is deemed to have allowed for programming and preliminaries within the contract
What is an undefined provisional sum?
The contractor does not allow for planning, programming and preliminary implications. This means the contractor may be entitled to an extension of time and / or additional preliminaries when the actual works are undertaken
What are prime cost sums?
- only include for supply
- no installation or associated costs are accounted for
What is cash flow projection?
- a financial planning tool that shows the predicted flow of cash in and out of a project
- this is typically shown month by month, for the duration of the project
- when the construction phase is underway, the cash flow projection for contractor payments will typically form an S curve
What are the main types of cash flow projection?
- the cash flow projection of a company (i.e. a contractor or consultant), known as an organisational cash flow
- the cash flow projection of a particular construction contract or projects, known as project cash flow
What is the purpose of post-contract cost reporting?
- to provide an overview of the clients current financial commitment
- to inform the client of the likely out-turn cost of the project, including forecasting the out-turn cost as a variance against the budget
- to give the client an understanding of potential savings or additional monies required
Define the outturn cost.
The known cost at the end of a project
What are the 3 stages of a cost prediction system?
- Inputs - the values, attributes & quantities
- Process - the analysis & quantification
- Outputs - the cost prediction at each of the relevant stages
