- 5/4/2022: Split from Post Contract.
- 3/4/2020: Created.
Advise on estimated costs of potential changes to the Contract Sum
- Design changes may be proposed during the course of construction.
- The Employer may like to know the estimated costs before approving to make the design changes.
- QS estimates the costs based on the Architect’s or Engineer’s design.
- The design may not be complete for estimating at the earliest time for quick decision making.
- Whether the design is complete or not, approximate estimating using approximate quantities and composite rates should be adopted to shorten the time to do the estimate.
- It is possible that the design may eventually not be adopted or may be further modified.
- It will be a waste of time if the estimate is prepared in great details like valuing a variation formally but is not really so accurate that at the end of day the estimate cannot be used as the formal valuation.
- Buffer for agreement with the Contractor should be allowed.
- AI pre-approval forms may need to be signed before an Architect’s instruction is authorized to be issued for the proposed changes.
- The Contractor may also raise claims, which require QS to report to the Employer the probable costs of those claims.
Prepare Financial Reports at regular intervals
- QS needs to prepare Financial Reports at regular intervals (usually monthly) to report on the latest situation of all the possible adjustments to the Contract Sum.
- The reports serve as a register of instructions issued, potential variations, claims received, etc.
- The reports should have columns to show the latest of each of the following:
- amounts estimated by QS – with buffer for budgetary purposes; not known to the Contractor; can be viewed as the maximum payable
- changes since the last report
- amounts claimed by the Contractor
- amounts assessed by QS – formal amount notified to the Contractor; can be viewed as the minimum payable
- difference from amounts claimed
- The reports should also show the status of the items, such as:
- tentative based on claim
- estimated (some measurement)
- no cost effects
- assessed (detailed)
Prepare cash flow tables
- QS may be required to prepare cash flow tables regularly or ad-hoc to indicate the likely amounts of payments required to be made by the Employer so that he may prepare for funding.
- Care should be made to adjust for the difference between the time of progress and the time of actual payment.
- A comparison between the cash flow graph prepared based on the baseline master programme and the latest actual flow graph can be a good visual indication of whether the progress is ahead or behind the programme (measured by the value of the Works).