Project Finance Flashcards
(31 cards)
What is the difference between value engineering and value management?
Value engineering - Retrospective
Value Management - Proactive.
How would typically control cost through a project?
- Appoint QS.
- Proactive value management approach
- Regular reporting
How do cost estimates assist with the control of cost through a project?
- Provide an estimate of cost at key junctures
- Allow client to understand cost against budget
- Allow for further decisions to be contextualised against estimate and budget.
What are preliminaries?
Costs that are essential for the completion of a project, but aren’t reflected in the finished build
Could you please provide an example of preliminary costs?
- Temporary lighting
- Labour cost
- Site insurance
- Welfare
What is overheads and profit?
- Cost for contractor to make profit and pay bills.
What is typically the OH&P percentage on jobs you are involved with?
- 3 - 7.5%
Who typically manages the professional team fees for the projects you are involved with?
Project Manager
What is the current cost of construction inflation?
4.2% as of June 2023.
What is a cashflow forecast?
- Table
-Shows expected valuation amounts for the project. - Generally calculated monthly.
What shape is a cashflow forecast for a fit-out project
- S graph
What is the shape of a cash flow forecast for a Cat A Refurb?
- Bell curve.
What are some key elements of the RICS cost reporting guidance note?
- Purpose of cost reporting
- Treatment of variations
- Risk allowance management
What is contingency?
A sum held within a clients budget to pay for any discoverable / change when on site.
What percentage contingency do you typically have on a project?
Changes through the deign stages but typically 7.5%
What is a defined provisional sum?
- Described in sufficient detail
- Contract makes a prelim allowance.
- Allowed for within programme.
What is an undefined provisional sum?
- Insufficient detail
- Not allowed for within programme or prelims.
What is CIS?
Construction industry scheme, main contractor pays subbies tax directly to HMRC.
Any contractor or client that spends over £3m a year on construction works needs to be registered.
on Cat A Finsbury Circus, why did your architect not raise earlier their concerns on the soffit quality?
- Raised early at Stage 3.
- Question from me following similar issue on another job.
What remedial works were required to be undertaken to the soffit?
- Infills
- Strip out over existing fixings
How did the QS determine a suitable budget figure for the remedial works to the soffit?
- Benchmarking
- Engaging with a sub-contractor.
What is a provisional sum
A sum within the contract to account for works where not enough information is provided to provide a firm sum.
When expending against the provisional sum, how did you ensure these works were being costed fairly?
- Contractor priced a survey of the infills required.
- QS reviewed against cost
- Three sub-contractor quotes receieved.
Could you please outline some ways in which valuations can be undertaken on projects?
- Against works progress on site.
- Stage payments (agreed at outset)
- Milestone payments
