Referral Report

Question 1

Definition of disallowed costs

Answer 1

11.2 (25) Disallowed Cost is cost which the Project Manager decides
* Cost not justified by records
* Cost that should not have been paid to a Subcontractor
* Failure to follow a procurement procedure
* Failure to give an Early Warning
* Failure to correct defects after Completion
* Resources not used to Provide the Works

Question 2

Ensuring cost certainty under an Option C contract

Answer 2

Transparent Defined Cost
Risk Sharing and Collaborative
Regular cost reporting
Effective use of EWN System
Guaranteed Maximum Price

Question 3

How is risk apportioned under an NEC Option C contract?

Answer 3

Target Cost means any savings and overspends are shared between both parties
As such, it is in the best interest of both parties to work collaboratively to manage risk
Risk can be managed contractually through:
Cost
- Upper and Lower Limits
Time
- Bonus for Early Completion
- Delay Damages for late completion
Quality is Contractor risk, as have to comply with UU Specs. However Contractor gets paid for rectifying defects prior to completion. Not after.
Not specifically NEC Option C, however Employer risks are stated within Clause 80 and CD1, Contractor all other risks are carried by Contractor

Question 4

What actions would be carried out if there was the suspicion of the Subcontractor being at risk of insolvency?

Answer 4

As it’s only suspicion, I would run a D&B report on the Subcontractor and hold discussions with Client

Question 5

Key elements of a business plan?

Answer 5

A Business Plan is a formal document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals
It should include:
- Executive Summary
- Business Strategy
- Business Plan
- Marketing and Competitor Analysis
- Organogram
- Financial Summary

Question 6

Which piece of legalisation does the Data Protection Act 2018 incorporate into UK law?

Answer 6

General Data Protection Regulations

Question 7

Regulations/Legislation that sets out how companies need to manage data they hold?

Answer 7

General Data Protection Regulations

Question 8

Legislation that supports GDPR?

Answer 8

Data Protection Act 2018

Question 9

Advice which would be provided to the client on MEICA budget sheet/cost report

Answer 9

Risks - Inflation, change in laws/regs
Any omissions from tender - Overall packages or within each package
Opportunities - Discount/buying gain due to purchase across the framework
Design Changes - Result of this on each package

Question 10

How was the MEICA budget sheet presented to the Client?

Answer 10

IT was an excel document, which consisted of:
- Summary Page - Every Package on and the delta between tender and latest estimate
- Then each tab consisted of a different package, which detailed the risks, omissions, opportunities & design changes
- Option E with Client, therefore enables them to review and query anything, suggest mitigation strategies

Question 11

Modern methods of construction?

Answer 11

Pre-cast panels
DfMA Solutions
Modular construction
3D Printing Construction

In the water industry - OSEC

Question 12

How was the advice presented to the Client?

Answer 12

I produced a presentation, which was structed in a clear and organised manner:
- Overview of the
- Information on each methodology
- Comparison of both on:
Cost
Programme
H&S
Sustainability
Quality
- Conclusion incl my recommendation

Question 13

Advice you would give to someone who was rejecting Early Warnings

Answer 13

Early Warnings are used as a risk management tool and not part of the change management process

Question 14

Things to consider when advising that the ground conditions risk should not be passed on to the subcontractors

Answer 14

Cost - Inflated prices to deal with the unknown
Programme - Extended programme due to the unknown
Improper management of the risk - can lead to further delays, H&S problems
Quality - lack of experience in managing the risk, could lead to poor techniques

Question 15

Tender Recommendation Report Example?

Answer 15

Oswestry WTW - Clean Water Pipework
Introduction of package
- Required within the EWI to provide new pipework from 1st Stage RGF to the 2nd Stage RGF and ISPS
Procurement Strategy
- Competitively tendered to ensure the best value
- Single Stage Selective Tendering
- Bidder list, ADP approved, UU approved Cl 26, Internal Supplier 360 Scoring
Tendering Summary
- Date received, all compliant
- Comment on mid-tender meetings
Commercial Compliance
- All agreed to Z Clauses
- Some contractors wanted amended X Clauses (X18 to be included)
- All agreed to Payment Terms
- All held sufficient Insurances
Technical Compliance
- Ensured I included Design/Engineers Comments
- All complied with Specs
- FAT/Quality procedures
Programme Compliance
- All provided tender programmes
- Some couldn’t meet the Cl32 dates
- All provided organograms and resource charts
H&S Records
- No RIDDOR’s
D&B
- Two Contractors were showing moderate or high risk of failure
Recommendation based on the above
Cost v Budget
Risk & Opportunities
- Tight programme, working around others, ensure no delays to access
+ Subby’s could work weekend/nights to reduce programme risk

Question 16

Different tendering methods?

Answer 16

Open tendering - Post online for anyone to tender
Single Selective tendering - Approach a selected list of tenders
Two Stage Selective tendering - Subby appointed to develop design and buildability
Negotiated - Single source negotiations with once supplier

Question 17

Was single sourcing a risk? Best value? Other methods considered?

Answer 17

The risks of not single sourcing outweighed the risks of single sourcing:
- Very low risk of supplier going into liquidation, £29b turnover, very strong D&B
- Risk of uncompetitive - Supplier outsources design to India, cheaper than any competitors. Proven competitive across the framework
- Risk of multiple SCADA systems not integrating - Massive programme and cost risk, NEC Option E, therefore Client risk as well
- UU have a list of SI Framework Suppliers - Only one FW Supplier had the resource capabilities to deliver the whole project themselves, without a detrimental impact across UU

Question 18

What to consider when advising which NEC Main Option is best suited for a subcontract package

Answer 18

Scope - If scope and design is defined, lump sum (Option A/B) is the most suitable
Risk - If scope is undefined, however Contractor insists Lump Sum (Option A/B) then the subcontractor will increase their risk provision, which could lead to inefficient spend by the Contractor
Subcontractor Capabilities - Reimbursable (Option E) requires the subcontractor to be open book. Some subcontractors may not have the capabilities to do this
Resource - If cost reimbursable/ measurable contracts are used, the costs of administering the subcontract can be high because skilled resources from the Contractor and subcontractor must be allocated to prepare the remeasure and agree it

Question 19

Downsides of undertaking weekly cost reporting

Answer 19

Data not available automatically on our system
Therefore very time intensive, requiring the use of Allocation Sheets and Sign in Reports
More likely to experience human error
If the weekly reports don’t match the end of month reports, then this can lead to twice even more work

Question 20

Risk around only reporting on labour, plant and materials and how they were factored into reporting

Answer 20

Staff, Design & Subcontract was reported on monthly

Question 21

Negatives to using hydrogen as a fuel source

Answer 21

Storage cylinders taking up additional space on site
Hydrogen is a highly flammable fuel source, has to be managed correctly on site
Grey Hydrogen uses fossil fuel sources, therefore not sustainable