Personal Questions Flashcards
What are cashflow forecasts used for?
Obtaining loans and bank monitoring, contractor progress monitoring, managing cash within a business, forecasting business performance, stakeholder management, managing consultants resources
What is the purpose of cost reporting and what does it record?
Informs the client of the likely cost of the project and records all costs incurred at the date of the report, foreseen costs to be incurred and any risk allowances foreseen
What are the different factors that would affect the different outturn cost of cost reports?
Fixed, variable (Psums, pquants, prime costs, dayworks), variations (instructions, anticipated, L&E, fluctuations
How often should cost reporting be carried out?
Should be frequently updated, industry practice is monthly, but may be other project or client requirements
How do you ensure accuracy in your cost reporting?
Ensure that the early warning and compensation event cost impacts are as up to date as they can be
Cashflow forecast updated also
What was the usual process you followed to ensure this robustness and included all information the client required? What information did the client require?
I would sit down with the client in the first instance:
Explain the benefits of the cost report
Run through the standard template used
Ask if they want to include anything else
How did you produce the cashflow forecast?
Answer pre contract post contract ways
BHS
What were these compensation events?
How much had these forecasted amounts exceeded the budget by?
Could they not have been foreseen or factored in earlier?
RAF £30k
Cooling to existing stair core £20k
Existing layout £35k
Smaller ones relating to smaller items
Argue no, RAF was conditions that wouldnt have been foreseen, the other ones were scope changes done post contract
Did your cost reporting process change between these two projects, perhaps based on the different suites of contract?
Yes JCT would have contract sum, variable costs, variations
NEC would have Contract sum, early warning notices and comp events
BHS
Were there any other options that were considered other than omitting scope?
How did you know that there was a budget outside of the main contract?
Was there a chance that these works would cost more outside of the main contract given the nature of the situation?
Yes, you could look to increase funding/client contingency but with a public sector project with a fixed budget this would have been hard/impossible
Also could have looked to value engineer if it was early enough in the project.
The works for signange I knew could have been carried out by the end user team within their budget/funding, as it was an end user request to include.
They would cost more due to possible additional works being undertaken out of hours etc.
What were the key changes between NEC3 and 4?
Payment app - contractor had the option to issue payment app in NEC3 without a penalty if they do not, whereas in NEC4, it’ll be assessed as the previous months val (so 0) if they don’t issue payment app.
There optional period for escalation and negotiation of a potential dispute is now extended to 4 weeks. This is to be conducted prior to any formal dispute resolution.
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