RICS Guidance Note on Cost Reporting

Question 1

What would you include in a lump sum contract cost report?

Answer 1

Lump sum contracts
* contract sum
* adjustment of variable costs
* adjustment of variations
* adjustment of fluctuations
* claims for loss and/or expense; and
* adjustment of risk allowances.

Question 2

What are variable costs?

Answer 2

Costs can change.
* Undefined provisional sums
* Defined provisional sums
* Prime cost sums
* Daywork allowances
*
*

Question 3

How do you manage provisional sums as a QS?

Answer 3

Include the full cost of the PS within the cost report at first instance. Once the provisional sum is firmed, omit the PS within the Cost report and replace it with the firm cost.

Question 4

How are provisional sums expended?

Answer 4

The Contract Administrator or EA issued an instruction for expenditure.
Where a contract includes a PS, the final amount payable will be adjusted (PS is omitted and replaced by actual cost)

Question 5

What is a provisional sum?

Answer 5

An allowance or estimate included within the contract sum that:

Is not sufficiently defined to allow for accurate costing
Work that the employer may or may not want the work to be carried out