Case Study Flashcards
(27 cards)
Were there any specific reasons why the GC cost exceeded the budget?
Yes, there were specific reasons for the GC cost exceeding the budget. It was mostly due to escalation and lessons learned.
How was the budget for the project set?
The budget for the scheme was set based on various factors and data sources.
What sources of data were used to set the budget?
The budget was set using historical data, market analysis, and project estimates.
What type of contract is AIA – A102 GMP?
AIA – A102 GMP is a cost of work plus fee with guaranteed maximum price contract. It usually has a Not To Exceed Provision (NTE)
Is there a gain share mechanism associated with the contract type?
No, the AIA A102 contracts, specifically the 2017 version, do not have a standard gain share mechanism. While the A102-2017 uses a “cost-of-the-work plus a fee” payment method, it does not include provisions for profit sharing, bonuses, or other discretionary payments to the contractor unless specifically approved by the owner.
What is the gain share mechanism?
The gain share mechanism allows for sharing savings between the contractor and the owner.
Please explain the reporting protocols that you set up?
Reporting protocols included regular updates, financial reports, and progress meetings.
Please highlight one of the key risks that you managed / mitigated?
One key risk managed was the potential for cost overruns. I mitigated it by using Substation Funds.
What are the different risk mitigation strategies that you are aware of?
Risk mitigation strategies include risk avoidance, risk transfer, and risk reduction.
What factors contributed to the ‘market escalation’?
Factors included supply chain disruptions, increased demand, and inflation.
Why did these factors cause rising prices?
These factors caused rising prices due to increased costs of materials and labor.
Could anything have been done to foresee these issues?
Yes, proactive market analysis and risk assessments could have helped foresee these issues.
Who were the key stakeholders on this project?
Key stakeholders included the project owner, contractors, and regulatory agencies.
How did you prepare cashflow forecasts on this project?
Cashflow forecasts were prepared using project timelines and expected expenditures.
What factors did you need to consider when preparing cashflow forecasts?
Factors included project milestones, payment schedules, and resource allocation.
What was one of the ‘lessons learned’ from Phase 1 that was factored into the pricing of Phase 2?
One lesson learned was winterization. We had allowances for keeping the building warm and insulated during the waiter months.
What are ‘ROM’ allowances?
ROM allowances are rough order of magnitude allowances for estimating costs.
What steps did you take to verify that additional costs were valid and reasonable?
Verification steps included reviewing invoices and comparing with industry standards. I also looked at similar sized projects in my area and based them on a $/MW.
Why were costs included in the budget for the substation when it wasn’t needed?
Costs were included as a precautionary measure for potential future needs.
What steps did you take to establish that costs for the substation could be transferred?
Steps included reviewing contractual terms and assessing project requirements.
I conducted a power study on the Building Management System.
I also held a meeting with the Finance Director to gain approval prior to transferring.
What steps were taken to review the GMP from the GC?
Steps included detailed analysis of submitted costs and comparison with budget.
I also compared similar sized DC projects in the area based on a $/MW for each trade.
I reviewed the GC/GR rates and analyzed them for fairness, using RS Means.
How much contingency was the GC holding?
The GC was holding $3M which was roughly 2%.
We split the contingency in half and gave back 1%.
The GC had substantial contingency of $1.5 million along with $11M in Allowances and various Cost-To-Complete money held.
What value of GC contingency would you typically expect to see on projects such as this?
Typically, a GC contingency of 5-10% is expected on such projects.
However, with the Allowances and Cost-To-Complete Logs, the risks had been accounted for so we reduced to 2%.
We usually hold a design contingency, but the design was fully complete at this phase, so that was excluded also.
Please provide some examples of the VE opportunities that were taken forward?
Examples include material substitutions and design modifications.
