Project Finance

Question 1

What is loss and expense ?

Answer 1

A contractors claim for loss and expense at the same time as an extension of time. It is the money required for delay and disruption, inefficient working and/or employing more resources.

Question 2

“What are common heads of loss and expense?

What are common heads of Claims? (HASAN)
“

Answer 2

“1. Additional cost: inflation, additional work, prolongation
2. Site office overhead / Prelims
3. Head office overhead: formulas?
4. Disruption
5. Loss of profit/business opportunity
6. Finance charges”

Question 3

“What are the Claims particulars ?
“

Answer 3

“1. Notices, preconditions, timebars, EWN
2. Contractual entitlement
3. Cause and effect
4. Records of costs incurred”

Question 4

How to avoid claims ?

Answer 4

“1. Balanced risk allocation.
2. Enough design info and specs.
3. Good faith and partnering.
4. Right procurment route for level of design maturity.
5. Clear contract documents without ambiguities.
6. Challenge baseline program at earliest.
“

Question 5

“Having advised the client and established the change control procedure on Project X, how was this then implemented?

How do you implement change control procedure? (HASAN)

How do you manage Change? (HASAN)”

Answer 5

”- Communicate Procedure as narrative and flow chart to the team and explain in a meeting. Include in PEP.
- Change control forms issued to the team.
- Setting regular change control meetings with the team.
- Maintain Register/tracker of change control.
- Ensure adherence to procedure before costing and send to client for approval.
- Ensure full impact of change captured and instruction issued after client signature only.”

Question 6

“Your final assessment record states that you established the cost reporting protocol on project X. What approach did you take to this?

How to establish cost reporting protocol? (HASAN)”

Answer 6

”- Consider Procurement route,
- Report content and format,
- Frequency and timing/cut-off date of issue,
- Distribution list and means of issue,
- Interface with Client Finance team,
- Additional requirements by stakeholders/funders”

Question 7

“Key issues to consider when designing change control procedures?

I see from your summary of experience that you advised the client and implemented a change control procedure on your project X. Can you tell me the key issues you considered in advising the client upon the procedure to be adopted?

How do you establish/design change control procedure? (HASAN)”

Answer 7

“1. Project procurement route and impact during design and construction
2. identify key decision makers to approve changes
3. Client’s priorities from monitoring change?
4. change control procedure process and forms
5. evaluation and measuring change
6. costs to include in evaluating change, finance, professional fees, vat
7. responsibility and communication matrices for raising changes
8. the contract mechanism to administer the change control management system.
“

Question 8

“What measures can be taken to effectively control costs during the construction phase of a project?

Post-contract cost control tools? (Hasan)”

Answer 8

“Regular cost reporting which is also forward looking
Proactive risk and contingency management
Implementing a robust change control process
Management of provisional sums within budget
Final Account”

Question 9

What is RIBA Plan of Work stages? (2013), for 2020 change developed design by spatial coordination

Answer 9

“Stage 00 – Strategic Definition
Stage 01 – Preparation and Brief
Stage 02 – Concept Design
Stage 03 – Developed Design
Stage 04 – Technical Design
Stage 05 – Construction
Stage 06 – Handover and Close Out
Stage 07 – In Use
“

Question 10

What is Cost control? and Procedures you undertake to cost control?

Answer 10

“Process of controlling costs of activity, process or company. includes procedures to:
1) detect variance between budgeted and actual cost.
2) detect cause of cost variance.
3) Corrective measure to re-align actual cost with budget.
“

Question 11

What are the cost control tools?

Answer 11

“Pre-Contract: Cost Plan, PTE
Post-Contract:
1. Cost Report,
2. Risk Management
3. Provisional Sum
4. Change Control
5. Final Account”

Question 12

Finance control? What is it about?

Answer 12

“Financial management of activities to achieve desired ROI. Involves:
1) Capital investment of project,
2) Professional/legal fees,
3) Finance charges,
4) Lifecycle cost (operation and maintenance).
“

Question 13

Finance Control tools?

Answer 13

Financial statements (budget, income, balance, cashflow, equity)

Question 14

Cost Monitoring?

Answer 14

Proactive continuous monitor of cost impact o: changes and risks, and, items in design, and instructions.

Question 15

Provisional Sum ?

Answer 15

“NRM2: Sum of money set aside to carry out work that cannot be described and given in quantified items (in accordance with the tabulated rules of measurement). Types: defined and undefined.
Defined: Nature of work, quantity indicate scope and extent, How and where to be fixed to building, Restrictions/limitations.
“

Question 16

Impact of defined and undefined provisional sum?

Answer 16

Defined PS allow Contractor to Price for PS in time related Preliminaries and allow time in programme. Undefined contractor cannot price for Prelim and allow time in programme

Question 17

PC Rate/ Prime Cost Sum

Answer 17

NRM 2 definition is a sum of money included in a unit rate to be expended on materials or goods from suppliers (e.g. supply only ceramic wall tiles at £36.00/m2) no OHP

Question 18

I am client in Fidic RB 99. I want to fix specific floor finish what mechanism allow me to do so in contract?

Answer 18

PS, PC, or NSC?

Question 19

How do you administer the cost during the post contract stage?

Answer 19

”* Through cost report.
* Breakdown costs into elements then compare elemental actual cost against budgeted.
* then monitor and report variance, variance root cause, and possible corrective measures/source of fund, address any risk of cost-overrun after projection final contract amount.
* Example- Main works > Tower A, Podium, basement > Tower A Structural/MEP/Finishes > Tower A structural > Masonry, Concrete, Metal > Concrete

Question 20

What is change control management? Variation?

Answer 20

“Change control management: method to assess and manage changes in terms of scope, cost, and program to allow the client to make informed decision.
Variation: alternation to scope, size, quantity, quality, dimension of works or sequence of events”

Question 21

What is Cardinal Change? why its important?

Answer 21

Major change over and beyond project scope of work. provide relief to contractors in some juridiction from being bound to change instruction not relevant to scope of work.

Question 22

Reasons for Variations ?

Answer 22

“client instructions, design error/omission, site conditions.
Driven by: technological, VE, cost saving, revised drawing, social, environmental, regulations/legal, aesthetics, unforseen issues”

Question 23

What is BIM? How it benefits Change control management?

Answer 23

“BIM: Process for creating and managing information on a construction project across its life cycle.

BIM benefits: Reduce waste and improve efficiency
enable swift assessment of alternative design proposals
Help visualize changes”

Question 24

PEP?

Answer 24

Project execution plan (PEP): An overarching document that provides the framework to execute, monitor, and assess and control the project.

Question 25

Scope creep?

Answer 25

unauthorized/controlled changes to project scope without considerations for implications on time, budget, resources, and final deliverables.

Question 26

What are change control forms?

Answer 26

RFC, ARF, EI, AVI

Question 27

"What do you include in RFC document? Where you have initiated a change yourself, can you tell me the information that you included on the Change Proposal (RFC) prior to presenting to the client?"

Answer 27

"- Change description and reason - cost impact - time/program impact ( coordinated with planning ) - functionality/quality impact (coordinated with design team) - attach relevant drawings and specs - impact on professional fees - Source of funding (budget contigency, Provisional Sum, additional fund) - Date required for approval - consequence of late approval/rejection - relevant risks "

Question 28

How do you establish/design change control procedure? (HASAN)

Answer 28

"1. Procurement route? How it will impact 2. Contract Change Mechanism 3. Process and forms 4. Client priorities 5. Key decision makers, approvers 6. Responsibility and communication matrices 7. Costs to include, finance, vat, etc.. 8. Evaluation and assessment"

Question 29

"How have you managed Change procedure in your project? How have you implemented change control procedure?"

Answer 29

"1. Process Flow chart 2. Meetings 3. Register/log. 4. Scope control of Contract and previous variations. 5. KPIs for turnaround of documents and ensure instructions issued only after Client's sign."

Question 30

"What is change control mechanism in your project? Talk about FIDIC 99 Change procedure?"

Answer 30

"Cost conultant raise RFC to Engineer. If Engineer/Client approve then: Route-1 13.1 ARF prepared by QS based on estimation no proposal, This is for direct intiaitng VO Engineer instructs or request Contractor (via EI or RFP under 13.1) to perform VO without waiting contractor proposal, Contractor bound to do VO before submiting proposal. Fast start. Contractor bound unless cannot readily obtain goods send notice to Eng. Right to vary: Engineer Intiate Variation by EI or RFP under 13.1, Contractor bound to perfom VO without dealy unless give notice cannot readily obtain GOODS (Engineer must repsond by confirm, vary, or cancel). Route-2 13.3 Engineer submit RFP, Contractor respond with RFP or reasons why cannot comply, QS do ARF based on RFP, if Engineer approve ARF and Proposal issue EI, or Engineer dissapprove with comment. (Route -2 EI issued after Proposal approval). Variation procedure: Engineer intiate RFP, Contractor respond as soon as practicable either reasons for not complying or with proposal include 1) proposed work decription and duration 2) modification to programe/time for completion, 3) evaluation proposal. Engineer then respond by apporve or disapproval with comment. In both routes final value AVI assessed and agreed after assessement of varied works. Mesurment and evaluation under Clause 12. Route-3 13.6 Dayworks - FASTEST/incidnet/minor, For minor works and incidental in nature. If no dayworks schedule in appendix to tender this clause not valid. Engineer may instruct under this subclause. Contractor submit quotation before ordering goods for approval, and for payment submit invoice/receipts. everyday contractor submit records (3Ms) of previous day, Contract must submit priced statement of 3ms records before inserting in application for interim payment 14.3 13.2 Value Engineering: Contractor at any time may submit proposal for VE, if accelerate work, reduce cost, improve effiecncy, other benefit to client. FIDIC provide incetive to contractor by 50% of cost saving of such excercise subject to engineer approval and considering quality and operational requirements. 13.5 Provisional Sum: No details for defined and undefined in fidic and no details for impact on prgramme. Provisional sum can be expended only by Engineer, Through instruction VO (13.1), or Nominated Subcontractor (5). Price adjusted by Engineer based on actual cost of contractor + OHP from BOQ/Schedule or Appendix to tender. 13.7 Adjustment Change in Legislation: Contractor entitled for Time and Cost for change in laws after basedate. should submit claim notice 20.1 13.4 and 13.8?"

Question 31

When contractor entitled for new rate?

Answer 31

"12.3 (b) Test When works instructed as VO under 13 and no specified rate, and no similar item in contract because work performed under different circumstances OR12.3(a) test for measured works if all 4 below are met 1. When change in QTY > 10%, AND 2. Change in Qty x rate > 0.01% Accepted Contract Amount AND 3. Change in QTY changes cost per unit > 1%, AND 4. Items not specified as fixed rate."

Question 32

What is Basedate?

Answer 32

28 days before last day for tender submission

Question 33

If Contractor submit VE proposal and its contain elements designed by Contractor at his own Cost What is your advise?

Answer 33

Must have PII for CDP

Question 34

If you are a Contractor and received verbal instruction by Engineer what you will do?

Answer 34

Must I write within 2 working day to Engineer to confirm in writing the verbal instruction, if no respond from Engineer within 2 working days then my writing to engineer is the written instruction.

Question 35

When Engineer right to issue VO cease?

Answer 35

After TOC

Question 36

do you know significance of TOC? what you advise your client before TOC issued?

Answer 36

"1. Engineer right to vary cease 2. DLP begin 3. First half or 40% Retention release 4. Delay damages cease 5, Insurance and works protection transfer to client 6. Performance bond may decrease by 50%"

Question 37

What is Value Engineering? and Value Management ?

Answer 37

"Definition: VE: Systematic approach to deliver the required function at required quality with least cost. or increase Performance for same cost. VM: Proactive multi-disciplinary approach performed at strategic definition of the project to define what value means to all stakeholders and maximize value for money. Why: VM To for strategic decisions (right project for objectives). VE: Right delivery strategy for performance/function. When: VM Proactive at earliest to maximize value VE preferable at outset put usually reactive Report to VM report to Client/stakeholders VE report to project technical team"

Question 38

Cost reduction vs VE?

Answer 38

"Value engineering: Maintain same performance with less costl alternatives OR increase performance with the same cost, sometimes it will increase overall cost put performance cost ration will be more than before. Cost reduction: cutting costs by reducing quantum or performance requirements of the works."

Question 39

Value engineering steps?

Answer 39

"1. Info 2. Function Analysis 3. Creative Thinking 4. Evaluation 5. Development 6. Implementation "

Question 40

Value Engineering techniques

Answer 40

1. Function analysis i.e. value tree and mind map, 2. FAST diagram, 3. Function performance specification, 4. weighing and evaluation

Question 41

VE report contents

Answer 41

"1. executive summary 2. shortlist options considered 3. Value assessment of options 4. Conclusion and recommendation 5. Appendices."

Question 42

How would you advise the client on which items to be value engineered? items cannot be value engineered?

Answer 42

"Value engineer: Slabs systems, Pavement system, Building envelope, HVAC System. Not to value engineer: Steel requirement, concrete grade, other structural requirements"

Question 43

If the cost is already exceeding the budget during post contract stage and the Employer cannot find additional finance how you would advise him?

Answer 43

"Value Engineer / Re-design Consider omission of some works and agree with same contractor to re-schedule as phase 2 when funds can be obtained. Partnership/alliance/JV with funders/developers or existing contractor. Consider mortgage loan by mortgaging what have been built so far. Terminate the contract.

Question 44

What is the report the consultant / client required to control the cost

Answer 44

the cost planning in the pre contract and the cost report in the post-contract

Question 45

What is the report the contractor required to control the cost

Answer 45

CRV and CTC

Question 46

what is the cost control ?

Answer 46

The process of controlling costs associated with an activity, process or company. Cost control typically includes

Question 47

What is the Financial control?

Answer 47

Management control of financial activities aimed at achieving desired return on investment. Managers use financial statements (a budget being the primary one), operating ratios, and other financial tools to exercise financial control.

Question 48

what is the procedures to cost control

Answer 48

"(1) Investigative procedures to detect variance of actual costs from budgeted costs, (2) Diagnostic procedures to ascertain the cause(s) of variance, and (3) Corrective procedures to effect re-alignment between actual and budgeted costs."

Question 49

What is monthly cost report

Answer 49

It is a report prepared by the Engineer/ Consultant QS in order to report the financial status of the report at the end of a particular month.

Question 50

What is the purpose of Cost report?

Answer 50

"1-Identify the changes to original budget / cost over runs. 2-Identify the possible/potential changes to the contract price. 3-Forecast the final contract price. 4-Identify the changes in the particular period. 5-Employer can identify anticipated final contract price, he can arrange finance Identify the changes in the particular period. 6-cost saving proposals."

Question 51

What is the information mentioned in the monthly cost report ?

Answer 51

"1- Description of the project / project name and brief of the project 2- Employer information 3- Consultant information 4- Reporting Date 5- Budget: is an estimate of planned future expenditure. 6- Budget Transfer: fund move from one project to another or one element of work to another. 7- Employer change: control the budget by CCM 8- Current Budget: financial plan for a defined period 9- Accepted contract amount 10- Approved variations and claims 11- Pending variations and claims 12- Potential variations and claims 13- Forecasted final amount 14- Certificated amount 15- Previous payments 16- Any risk and opportunity 17- Cash flow forecast

Question 52

How do you administer the cost during the post contract stage?

Answer 52

"i will adminstrate it In elements level .then I'll compare the actual cost against the budget allocation. If there is any changes/ Variations/ anticipated VOs then I'll incorporate them. Then if there is any changes I'll monitor/ report through cost reports."

Question 53

What are the objectives of financial control & Reporting?

Answer 53

"(1) To manage project costs within the approved limits. (2) To provide a 'decision support' advice for use by the Client/Employer. (3) To provide the Client/ Employer better value for money. 4) To develop the financial information relating to the project in agreed stages against which change can be controlled and regularly monitored. (5) To achieve balance of expenditure over various elements of the building."

Question 54

What is being controlled in financial control?

Answer 54

"(1) Capital Cost of the Project. (2) Professional Fees. (3) Finance Charges, loss of interest on capital used to finance the project.(4) Running cost of the building. (5) Cost of refurbishment, alteration and disposal"

Question 55

Examples of tools used for Cost Control Process ?

Answer 55

"CCS (Construction Candy Software) Build Smart Microsoft Excel "

Question 56

What are the qualities of a good report?

Answer 56

"Easily understandable by the Employer (or the relevant party). Overall view should be given of the project. (Past, present, deviations of data)."

Question 57

How do you establish a cost reporting protocol?

Answer 57

"1-Depends on the Procurement Method. 2-Depends on who do you report to. 3-Content and format of the cost report. 4-Method of presentation of report. 5-Timing and frequency of issue of report. 6-Distribution list and means of issue. 7-Interfaces with other parties, such as the contractor and client’s finance team. 8-Any additional requirements of stakeholders, such as funders"

Question 58

What is IFRS?

Answer 58

International Financial Reporting Standards (IFRS) are designed as a common global language for business affairs so that company accounts are understandable and comparable across international boundaries.

Question 59

What is Risk ?

Answer 59

As per the RICS Guidance Notes on Management of Risk, an uncertainity of outcome (whether positive or negative threat). It is the chance of an event and its consequences

Question 60

How is Risk measured ?

Answer 60

Risk is measured in terms of a combination of the consequences of an event and their likelihood.

Question 61

What is Risk Management?

Answer 61

Risk management is the proactive exercise of identifying, assessing and controlling financial, legal, strategic and security risks to an organization's capital and earnings. Its recognised concerning with both opportunities and threats

Question 62

Classify the risks under NRM1?

Answer 62

"1) Design Development Risk (3rd party risks, changes in estimate, design risks, risk of delay in tendering, environmental, legal, procurement route, undeveloped design 2) Construction Risks ( Mainly site conditions related but not limited to such as delay by statuary undertakers, existing underground issues, exisiting buildings/occupants, etc) 3) Employer's Change Risk (Cover design, construction and includes employer oriented changes) 4) Employer's Other Risk (Allowance for early handover, funds management, Liquidated Damages, Partial Taking Over Certificate works, etc) Risk Allowance: Under NRM1 an amount set aside as a precaution against uncertain outcomes"

Question 63

If u identify risk in your project how will perform risk management with that?

Answer 63

First, identify the type of risks and their source classify the risk parameters with their effects Would perform Risk Analysis (Evaluate and assess the impact of risks) Risk Attitude (How it affects the company/individual) Risk Response/Mitigation Strategy (Risk Avoidance, Risk Reduction, Risk Acceptance, Risk Sharing, Risk Transfer)

Question 64

What are the risks encountered in the cost planning??

Answer 64

Internal Cost Risks : Incorrect budget forecast, Delay in delivery of work, Outsource of Contractor, Not checking the site and soil conditions External Cost Risks: Change in the material price, Banking fees and charges amendments, Working regulations change

Question 65

As you are commercial manager how will you manage the financial risk in your firm?

Answer 65

"Allocate Contingency/Risk Allowance Prioritize. Buy Insurance. Limit Liability. Implement a Quality Assurance Program. Limit High-Risk Clients. Control Growth. Appoint a Risk Management Team."

Question 66

What is meant by interrelationship of risks?

Answer 66

They are also known as consequential risks.

Question 67

How does risk impact on procurement strategy?

Answer 67

The procurement strategy entails measuring the risks, benefits, Cost, Time, Quality constraints to conclude and establish procurement route. The procurement strategy should reflect the client objectives, which would include but are not limited to cost, time and quality risks from an early stage.

Question 68

What is the Difference Between Qualitative and Quantitative Risk Assessment ?

Answer 68

The purpose of Qualitative risk analysis is to prioritize the risks in terms of importance, without quantifying them where the assessment is subjective and carried out by an individual or group based on the likelihood that risk will occur and magnitude of its potential impact. Quantitative risk analysis is a numeric estimate of the overall effect of risk on the project objectives such as cost and schedule objectives. The results provide insight into the likelihood of project success and is used to develop contingency reserves.

Question 69

How do you measure risks in Qualitative and Quantitative Risk Assessments ?

Answer 69

In Qualitative risk analysis there are typically categorised using the scale between likelihoods and impacts. (Eg: Delphi) In Quantitative risk analysis there are methods like Central Limit Theorem, Monte Carlo Techniques, Fault Tree Analysis, Event Tree Analysis, Percentage Addition, Simple Method of Assessment, Probabilistic Method, Sensivity Analysis. (Eg: EMV)

Question 70

What are the reasons for quantification of risks?

Answer 70

Build a risk allowance that could be a part of project contingency Client needs to report upward within an organization or third party(Investors) Where project forms part of larger programme of projects To motivate people into following through management actions When Client is having capped funds When Client insists as the part of the procedure Where its desirable to link risk to contingency

Question 71

When to use probability tress to manage the risk?

Answer 71

A probability tree is a technique determining the overall risk associated with a series of related risks

Question 72

Who use risk register ?

Answer 72

Design Team and Main Contractor

Question 73

What you do when identified a major risk ?

Answer 73

Record the event in the risk register, Perform risk assessment workshop , Prepare Respond Mechanism, responsibility matrix, Monitor, review and update the status of risk

Question 74

How do you take into account the output of a risk management workshop?

Answer 74

"Allocate Contingency/Risk Allowance Take Insurance. Risk Allocation. Action Plan. Responsibility Matrix."

Question 75

How did you assess the risks on your project X?

Answer 75

I have identified risks through regular risk management meetings, and qualitatively assessed the risks outcome with the team. then I perform my analysis to advice about most favorable option to overcome those risks.

Question 76

What were the major risks identified on your project X?

Question 77

What is Cash flow ?

Answer 77

Report to show the cash in and out of the construction project during the project duration.

Question 78

Who is responsible for cashflow preparing? Contractor or Employer?

Answer 78

Both parties, the Contractor based on the programme submitted contractually and the Employer as per the payment terms

Question 79

Why Cash flow report is important for the client ?

Answer 79

"1- Allows Employer to gain an understanding of their financial commitments over the project duration 2- It acts as a check against valuations 3- can give early indication of financial difficulties 4- Help company remain solvent ( by knowing when the money will go out and when its required to have money in) Help client the plan expenditure."

Question 80

Why Cash flow report is important for the contractor ?

Answer 80

"He can have an idea of the cash in and out in project duration Identify possible negative cash flow situations to take the necessary precautions in advance."

Question 81

How do you identify the negative cashflow?

Answer 81

By preparing cash flow forecast.

Question 82

How do you prepare cash flow forecast ?

Answer 82

"There are three methods to prepare the cash flow forecast: 1- Assume a series of equal payments 2-Dividing the constrution period into three thirds (1/3), where the first third of project duration you require 1/4 of the total cost, for the second third you require half of the total cost for the last third you require the remaining quarter of the total cost. 3- Common used method which you need to Cost loaded programme, COCm material delivery programme and subcontractor and suppliers payments terms "

Question 83

What are the document required to prepare cash flow forecast?

Answer 83

"1- Cost loaded programme ( BOQ/Prics/Programme) 2- Condition of contract to check the payment terms 3- Material delivery programme Subcontractor and Suppliers payment terms"

Question 84

Can you brief how do you prepared Cash flow ?

Answer 84

"1- Cost loaded programme ( BOQ/Prics/Programme) 2- Condition of contract to check the payment terms 3- Material delivery programme Subcontractor and Suppliers payment terms"

Question 85

What is negative cash flow ?

Answer 85

When the cash out is more than Cash in at particular time

Question 86

What are the reasons of the Contractor negative cash flow?

Answer 86

"1. Under estimate. 2. Site conditions 3. Adverse weather 4. re-sequencing of works(perhaps due to procurement ofsub-contractors) 5. Materials being stored off site(and not claimed for) 6. Project progressing slower than anticipated 7. Materials not being delivered on time, and 8. Cash flow not being accurate in the first place. 9.Payment delay. 10.Progress delay(Fixed cost have to pay). 11.Subcontractor payments not adjusted according to main contract terms."

Question 87

What are the reasons of the Employer negative cash flow?

Answer 87

It cant be negative cash flow for the Employer, because he is the one paying and Funding the construction work, there is no cash in.

Question 88

How do you manage the negative cash flow situation? How do you avoid negative cash flow ?

Answer 88

"1.Can ask for an advance payment from the client. 2. Letter of Credit 3. Negotiate with the Employer regarding Payment terms. 4. Negotiate with Subcontractors/ Suppliers regarding payment terms. (Credit terms)5. Can ask from the suppliers to give some concession to pay dues. 6. Inform financial department and arrange finance through other projects or through bank loans. 7. Can start some activities which give more value in the payment certificate."

Question 89

What are the reasons for being ahead of cash flow?

Answer 89

"1. Front-end loading 2. Contractor being ahead of programme by working faster than envisaged 3. Re-sequencing of works meaning that higher value works are carried out earlier 4. Materials being stock-piled on site far before they are required 5. Materials off site not taken into account when producing cash flow forecast 6. the inclusion of variations 7. Contractor purposely accelerating the works to complete earlier (and therefore expending less preliminaries) 8. Cash flow not being accurate in the first place"

Question 90

What is the difference between Cash flow and cash flow Estimate ?

Answer 90

"Cash Estimate is the cash flow proposed using program and its bar charts. It is so simple anddoes not address the real situation. For an instance, supply of materials/ Delivery/ Lead time The cash flow is based on real programme and cash out."

Question 91

What Adjustments do you do for cost estimate in preparing cash flow ?

Answer 91

"1- Adjustment as per payment terms 2- Advance payment and Advance payment recovery Adjustment for retention."

Question 92

What are the the 5M's management framework in construction ?

Answer 92

"1- Manpower 2- Machinery 3-Money 4- Management 5-Materials"

Question 93

What a final account is?

Answer 93

Financial statement of all adjustments to the contract sum that forms the total amount that the employer needs to pay

Question 94

Purpose of final account

Answer 94

"- To enable the final certification To be issued - Conclude the financial position of the project"

Question 95

What final accounts shows

Answer 95

"- Total adjusted contract sum - Total of all additions / omissions - Total of all previous payments made to the contractor in interim certificates"

Question 96

Process of getting final account agreed

Answer 96

"- Practical completion should be issued and the engineer should evaluate the work - Ones prepared, all details and supporting documents are sent to the contractor - any point of disagreement should be discussed and negotiated so that both parties should sign the summary of their agreement"

Question 97

Adjustment of the final account in FIDIC

Answer 97

"FIDIC states that 56 days after receiving the performance certificate the contractors submits their draft final account to the engineer."

Question 98

What is benchmarking

Answer 98

"Benchmarking is a process of continuously measuring and comparing business processes against other business process leaders to gain information to help improve performance. In other words, Benchmarking is the process of collecting and comparing data within an organisation or external to an organisation to identify the ‘best in class’"

Question 99

What is KPI

Answer 99

It is the indicator to measure the quality, performances or any other characteristics which is necessary for the specific works.

Question 100

Process of benchmarking

Answer 100

"- Data collection - Data comparision - Data analysis - Action - Repeat