COST PLANNING AND ESTIMATION

Course outline Overview of Cost Planning Cost Planning Techniques Approximate Estimating Elemental Method Cost Planning at Various Stages of Design Resource Analysis Cash Flow Valuation Final Accounts

Teaching Scheme DATE CHAPTER 1. Overview of Cost Planning 2. Cost Planning Techniques 3. Approximate Estimating 4. Elemental Method 5. Cost Planning at Various Stages of Design 6. Resource Analysis 7. Cash Flow 8. Valuation 9. Final Accounts Exam

7. Cash Flow 7.1 Introduction 7.2 Pre-Tender Forecasts 7.3 Cashflow Calculations for the Client 7.4 Pre-Tender Cashflow Forecasts for the Contractor

7.1 Introduction Essential to make a reasonably reliable forecast of the likely flow of expenditure. Why? To be able to anticipate cash flow requirement and to be able to arrange for finance to be available accordingly.

7.3 Cashflow Calculations for the Client

7.3 Cashflow Calculations for the Client The total cost of Contract is being broken down into monthly amounts over the period allocated to each item, which then be tabulated or plotted on a graph. A graph plotted from such data is usually referred to as an “S-curve” graph because of the shape of the graph.

8. Valuation 8.1 Interim Valuations 8.2 Measuring Work Item by Item 8.3 Preliminaries 8.4 Variations 8.5 Provisional Items 8.6 Materials On and Off Site 8.7 Sub-Contractors 8.8 Conclusion

8.1 Interim Valuations To ensure that the Contractor is paid regularly and in full for work carried out on site. All Standard Forms of Contract include provisions for periodic or “interim” payments to be made, which stipulate the requirements and timelines. Issuance of Payment Certificates must adhere strictly to the Contract. Could be regular monthly certificates or stage payments. Stage payments refer to payments to be made when certain defined stages have been completed.

8.1 Interim Valuations General procedure The total value of Works completed and the value of unfixed materials and goods delivered on the site deducting the total of previous payments, leaving a balance due for payment. Total value of Works completed and the value of unfixed materials and goods delivered on the site as of end of January 2016 $100,000.00 Deducting Total of previous payments ($40,000.00) Balance due for payment $60,000.00

8.2 Measuring Work Item by Item Ref Item Total Quantity Total Works Previously Paid (A) Total Works Completed this month (B) Total Works Completed (C) = (A) + (B) 2/17 Timber Doors 5 nos. 4 nos. (4/5 x 100%) = 80% 1 no. (1/5 x 100%) =20% 4 nos. + 1 no = 5 nos 80% + 20% = 100%

8.3 Preliminaries S/N DESCRIPTION CONTRACT BREAKDOWN (S$) INITIAL COST RECURRING COST - 18 MONTHS FINAL COST AMOUNT ALLOCATE NO OF MTH % S$   22 Setting out and existing levels 100.00 30% 30.00 70% 70.00 18 - 23 Survey of existing services 29 Hoardings 60% 10% 31 Protective barriers, screens, etc 5% 90% 32 Signboard 33 Site office 35 Scaffolding for all trades 100% 36 Water and chilled water for the works 37 Temporary lighting and power 38 Provision of bulk bins and dumping of debris and waste, etc 40 Inspection of sewers and checking of levels 43 Maintenance during construction 45 Site management team 57 Cleaning up and reinstatement of works on completion 50% 84 Pre & post construction conditions surveys Total Value of Work Completed c/f to Summary : 200.00 130.00

8.4 Variations Public Sector Standard Conditions of Contract for Construction Works 2014, Seventh edition

8.4 Variations Public Sector Standard Conditions of Contract for Construction Works 2014, Seventh edition

8.5 Provisional Items Public Sector Standard Conditions of Contract for Construction Works 2014, Seventh edition

8.6 Materials On and Off Site the value of materials, Plant and goods delivered by the Contractor on the Site for incorporation in the Permanent Works but not incorporated in such Works the value of unused materials or goods not delivered to the Site

8.7 Sub-Contractors The Security Of Payment (SOP) Act came into operation on 1st April 2005. The Act seeks to improve cash-flow in the construction industry by giving parties the right to seek progress payment for work done, and providing fast and low-cost adjudication to resolve payment disputes. Section 9 of the Act:-