36 Tutorial Questions Create an organizational chart to illustrate the methods the contractor uses to control construction costs from the time of the RFP to project completion. Provide short written notes that can be used in conjunction with your organizational chart to explain how processes work. 21 Cost control under the contractThe following is a list of typical items that could be included in such a report and serve as a basis for assessing a contractor`s gross income for a particular project. The amount of the order Gross value of the work previously certified, detailed in the „external“ intermediate evaluation certificate Gross value of the work performed so far according to the „internal“ evaluation Differences between the gross value of the work contained in the preliminary evaluation certificate and the internal audited gross evaluation of the work performed; this requires an explanation in the attached report to the TRC. The amount of the order Gross value of the work previously certified, detailed in the „external“ intermediate evaluation certificate Gross value of the work performed so far according to the „internal“ evaluation Differences between the gross value of the work contained in the preliminary evaluation certificate and the internal audited gross evaluation of the work performed; this requires an explanation in the attached report to the TRC. 29 Control of post-contractual costsIncremental costs The contractor`s quantity surveyor may also take into account in the TRC additional costs due to labour and material shortages, in particular if labour from another area has been called in or if materials have been imported from abroad to overcome bottlenecks. Overhead as with labour, most of these costs can be easily recovered if the tender directories have been computer-assisted or analysed manually to allow these figures to be abstracted. When assessing overhead costs, all headquarters overheads as well as site overhead costs related to the project should be taken into account. Residual values are also an aspect that must be taken into account.
Additional costs The contractor`s quantity surveyor may also take into account the additional costs in the CVR due to lack of work and materials, especially if workers have been recruited further away or if materials have been imported from abroad to overcome bottlenecks. Overhead as with labour, most of these costs can be easily recovered if the tender directories have been computer-assisted or analysed manually to allow these figures to be abstracted. When assessing overhead costs, all headquarters overheads as well as site overhead costs related to the project should be taken into account. Residual values are also an aspect that must be taken into account. CONTRACT CALCULATION Contract costing is the specific order calculation that applies when the work is performed according to the customer`s requirements and 18 Cost control by contractWhat is included in CVR? The first part of a TRC should contain the data from the interim evaluation and the TRC. For the CVR to be relevant, it must include details about the contract data, the initial offer and the expected final invoice amounts. It should also indicate the date on which the costs were assessed so that a review of the valuation date is possible. Good practice suggests that a copy of the architect`s preliminary assessment certificate should be kept in the contractor`s quantitative appraiser`s office. This is used to verify both the date of the interim assessment and the amount of holdback held; These should refer to the date of the TRC indicated at the top of the Annex.
Where the data of the interim assessment certificate and the TRC differ, an explanation explaining the difference must be provided. A typical cost-value match (CVR) can be seen in Walker and Wilkie1 on page 81, and the layout of the forms used for cost-value reconciliation can vary greatly from contractor to contractor, but they usually contain information as described below. The first part of a TRC should contain the data from the interim evaluation and the TRC. For the CVR to be relevant, it must include details about the contract data, the initial offer and the expected final invoice amounts. It should also indicate the date on which the costs were assessed so that a review of the valuation date is possible. Good practice suggests that a copy of the architect`s preliminary assessment certificate should be kept in the contractor`s quantitative appraiser`s office. This is used to verify both the date of the interim assessment and the amount of holdback held; These should refer to the date of the TRC indicated at the top of the Annex. Where the data of the interim assessment certificate and the TRC differ, an explanation explaining the difference must be provided. 23 Cost control in the context of the contract, gross value analysis Any analysis of the gross value of the work performed by the contractor shall include a breakdown of the value between the works of the main contractor listed in the invoices and the works of the designated and national subcontractors, which are evaluated in accordance with their tenders. The difference between the two indicates the financial efficiency of the subcontractor`s work.19 Cost control by contractWhat is included in the CVR? The analysis of the value of a CVR can be facilitated by an analysis of all the invoice elements claimed, broken down by their respective headings labour, subcontractor, factory, materials, overhead and profit. This analysis can be used as part of constructing a number to represent the gross value of the work done so far.
If the idea of a comparison of cost and value, as contained in a CVR, is taken in its most literal sense, then it is clear that all the details related to cost and value must be brought together to obtain a meaningful comparison. The analysis of the value of a CVR can be facilitated by an analysis of all the invoice elements claimed, broken down by their respective headings labour, subcontractor, factory, materials, overhead and profit. This analysis can be used as part of constructing a number to represent the gross value of the work done so far. If the idea of a comparison of cost and value, as contained in a CVR, is taken in its most literal sense, then it is clear that all the details related to cost and value must be brought together to obtain a meaningful comparison. 11 Cost control according to the contractThe performance of a company The budget is fixed and not adjusted, but it must be regularly reviewed and forecasts revised. During the forecast, the initial budget is reassessed; Each project is verified as it was at the time of the initial budget. The initial budget and revised forecasts are used to monitor the company`s performance. The budget was fixed and would not be adjusted, but it should be reviewed regularly and revised estimates should be made. During the forecast, the initial budget is reassessed; Each project is verified as it was at the time of the initial budget. The initial budget and revised forecasts are used to monitor the company`s performance. The following section discusses in detail how the performance of individual projects is monitored on a monthly basis through cost-benefit comparisons or reconciliations. Cost-benefit reconciliation data are used in the preparation of revised estimates.
The data used for the revisions can be divided into three main headings, which are divided as follows in Figure 10.1 of Walker and Wilkie1. 14 Post-Contractual Cost ControlCost Value Comparisons During the project, revenues and expenses are analyzed on a monthly basis and this cost and value assessment is compared to the initial analysis and expected performance. This comparison is often referred to as a cost-benefit match; An equally appropriate term for this would be a profit and loss account.. .
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