Project Finance Flashcards
(22 cards)
Q. What does proactive cost control mean to you?
o Agreeing all changes and cost implications as soon as possible Not instructing first without an agreed cost where possible o Ensuring that I input estimates to my cost reports where possible, before costs submitted by the contractor. o Making sure my clients are aware of the commercial impact of changes.
Q. You state that you have an agreed time to review variations submitted by the main contractor. Why is this in place?
o This was in place to ensure that changes were controlled effectively, and each party was aware of their allowed timescales o Ultimately reducing the risk of conflicts in relation to delays and changes.
Q. Can you tell me how you could build up a variation that a client would like to instruct into the contract?
o First principles o Priced on labour o Materials o On costs o Or if similar works have been completed before, for example benches on my Quad project, then benchmarked data can be used.
Q. When you complete your valuations, what is not subject to retention?
o L&E o PCSA
Q. How do you create a cashflow?
o Taking the construction programme and pricing document used o Drawing down from the pricing document across the programme of works o Should then represent a standard S curve
Q. What does this tell your client?
o Shows my clients how much is likely to be paid to the contractor each month o Also shows them how the contractor is performing against the contracted cashflow.
Q. What other reason may a cashflow forecast be in front or behind the actual applications, such as on Quad three, and what could you advise your client?
o It is an estimate, it is not going to be exact! o Lots of instructions o Unseen issues, for example, ground issues.
Q. On Dorking halls, if the contractor did not issue a valuation, what would you do?
o I was named under the contract as this was a Standard Building Contract o Meaning that I was entitled to still go and complete my valuation of the works, for submission to the CA.
Q. How have you produced a cashflow for a project you have worked on?
o Typically, I do not produce the cashflow for my projects, instead I will review the contractors cashflows o However, if I did, I would use the programme of works and the pricing document in the contract. o I would then complete a drawdown of the works across the programme to give a forecasted cashflow
Q. Any other methods of producing a cashflow?
o Standard S curve formula could be used
Q. Why are cashflows so important?
o Can be used to track the progress of the contractor against their forecast o Shows the client how much they need to be prepared to pay each month For come clients they need to let their funders know months in advance.
Q. What is an interim valuation?
o An interim valuation is a formal assessment of the value of work completed at a specific point in time o An interim payment is a payment based on the Alternative that has been chosen (always Alternative B in my experience) o Stating that works will be valued and interim payments issued at monthly intervals, as the work progresses
Q. What are the payment terms on your project?
o Final date for payment = 28 days from the DD
Q. What is the process if the contractor doesn’t agree with your recommendation?
o Before issuing a valuation, I always ensure to get agreement from the contractor o Should a contractor disagree then I would discuss this with them formally to understand why and ask on what ground they are disagreeing with my application o Ultimately, I would do my best to agree this with them and negotiate (so as to not unfairly hold payments)
Q. How have you valued materials off site?
o Check the materials are listed under the contract o Complete my off-site visit o Check the quantity, storage, insurance and labelling of the materials off-site o Receive vesting certificates from the contractor. o Include them in my valuation
Q. Can you tell me about the change control process on a project of your choice?
o Contractor submitted costs / programme impacts for a change o As the QS I have 5 days to review before issuing to the EA o They then have 5 days to instruct or not instruct the works
Q. Can you explain what you mean by proactive post contract cost control?
o Proactive control covers several different things Having a clear change control process Establishing a change control tracker Establishing all changes are agreed where possible before instructing Including in the cost reports when issuing to clients
Q. Example of an anticipated variation you have priced?
o A recent example would be on Quad Three o Benches for the wider Quad Landscape o I used rates previously obtained from Quad 2 to inform my assessment in lieu of costs provided by the contractor
Q. On GE3b talk me through your cost report format?
o Dashboard o Executive Summary o Movement in month o Anticipated changes o Instructed changes o Provisional Sums o Cashflow o Valuation overview
Q. On Dorking halls what was included in final account statement?
o Contract Sum o Adjustment of provisional sums o Adjustment for changes / variations o Adjustment for PC sums o Adjustment for fluctuations o Adjustment for contractual claims o Final contract value
Q. Talk me through contractual process for agreeing?
o Under a design and build contract o The contractor must submit their final account within 3 months of practical completion of the works o A 2 month extension is then provided if it has not been received o If not received then the employer can issue an “Employers Final Statement” o The due date for the final payment will then be one month after whichever of the following occurs last: The end of the rectification period Date stated in the notice of making good The date stated on the final account statement
Q. Process for agreeing?
o Ideally a rolling final account will be in place, making the negotiation easier o If this has not happened, then I would negotiate any outstanding items with the contractor alongside their statement for their final account and agree where applicable
