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Advanced Measurement & Contract Administration
Introduction
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The assignment is based on the contract sum analysis of a Mid-Construction in the Liverpool location. The report includes costs assumed by the contractor. The completion of the final account report has occurred by using the post-contract scenario. All the adjustments are related to preliminaries, re-measured work, variation, and provisional sums. The calculations will be completed by following different contract laws in the UK.
Contract Sum Analysis on BCIS
The Analysis of the contract cost of the construction project is one of the vital factors for the development of the designing of the process with the employer of the contract and also with the contractor in some cases of the adjustment. The total cost of the contract project is evaluated by the GIFA 9,635m2 and it is multiplied by the rate per square meter on the basis of the location that is Liverpool for mid construction. The Average cost has been taken as an average cost of £ 2180 per square meter as per the GIFA (Costmodelling, 2022). According to the cost model, 68 % of the buildings in the Liverpool region are within the range of costs of about £1,350/m2 - £3,030/m2 whereas 95 % of the buildings in the same location are in the range £510/m2 - £3,880/m2 (Costmodelling, 2022). The said costs take the year 2000 as the base year with price index of 100. Therefore, an average cost of £ 2180 is taken for the determination of the total cost of the project. The total cost of the project is therefore calculated as £ 21004300.
The subheadings of the cost contract Analysis are a percentage of the total revised cost of the construction project that is substructure, superstructure, Finishes, Fittings and Furnishes, Services, External works and preliminaries. These revised costs were incurred as a result of increased cost in theses sub headings of the cost analysis. The total of the substructure costs amount to £ 30000 that amounts to 0.14 % of the revised cost with per unit cost of £ 3.11. Consequently, the cost of the superstructure amounts to £ 40000 that is 0.18 % of the total cost that is revised. Similarly, Finishes were 0.28 %, fittings were 0.04 %, services were 0.11 %, external works were 0.27 % and lastly the preliminaries were 0.01 % of the revised cost of the construction project. The total increase in the per square unit of the project was of £ 22.89 that was contributed by finishes for £ 6.23, fittings £ 0.83, services for 0.39 and the maximum cost has been revised for external works that makes up for £ 6 of the total re3vised cost of the construction. Therefore, the amount carried forward is £ 220580 with a total of £ 22.89 increase in per unit cost of the construction project.
Analysis of Contract Sum for the project based on BCIS CSA
The sum of the cost of the contract on the basis of valuation of the costs on Cost sum adjustment is evaluated by expressing the individual revised costs in proportion of the original total cost of the project (Rics.org, 2015). Therefore the cost of the variables or the elements of the revised cost are tabulated using the method of multiplying the percentage of share of the variables of cost with the initial total cost of the construction project (Rics.org, 2015). Therefore the costs derived for substructure are £ 28935, £ 38580 for superstructure, finishes worth £ 57870, fittings for £ 7744, services for £ 22138, external works for £ 55748 and preliminaries for £ 7000. These revised costs were incurred as a result of increased cost in theses sub headings of the cost analysis. The cost that is carried forward in this case amounts to £ 218062 with per unit of £ 22.63.
Final account summary
The summary of the final Account is a conclusion and integration of all the costs that are related to the construction contract along with various adjustments. The final account is a total of the amount that has been agreed upon to be paid by the employer to the contractor for the construction contract (Rics.org, 2016). The final Account has b even prepared using the cost of the inclusions of the other costs, losses, gains that are associated with the different headings and subheadings of the cost. The costs that are included and have been considered while preparing the final accounts are the summation of all the variable costs that are subject to change, prime costs, provisional costs, external costs and other related adjustments (Rics.org, 2016).
The Total Cost of the project is calculated as £ 21004300. The design fees for the designing of the construction project that is made to the architects and the engineers of the construction project. The total cost of the contract project is evaluated by the GIFA 9,635m2 and it is multiplied by the rate per square meter on the basis of the location that is Liverpool for mid construction. These are to be paid in installments on regular and pre defined dates at the particular stages of completion of the construction project (Designing buildings, 2020). The design fees that is to be paid is dependent on the size of the project, the scope of the services that are involved, location of the site of construction (Designing buildings, 2020). The cost price of the construction project is more that £ 50 million, the designing fees ps the architects of the project is calculated at an approximate rate of 4% (Designing buildings, 2020). Therefore, the cost of the design fees is tabulated as £ 21004300*4% that is £ 840172. The revised cost of the construction project is the cost that is derived after the consideration of the fact that the estimated amount of the costs has exceeded the original amount that has been sanctioned for the construction project by a percentage markup of about 5 % or more. The revised cost of the project is £ 21777258.24 that is more than 5 % of the original amount that was sanctioned by the employer for the construction project (Designing buildings, 2020). Therefore, the revised cost is the 100% of the costs that are incurred post the starting of the construction project. Therefore, the price per square meter of the project as per the revised cost is calculated by, dividing the total revised cost by the Gross internal floor area that is given as 9635, therefore the value of price per sq meter is 21777258.24/9635 that is £ 2260.
Preparation of final Accounts
The final accounts have been prepared using the data of the financial components in which the adjustments have been provided on the basis of the activities that took place throughout the year (Rics.org, 2015). The final Accounts have taken into account the adherence of the all the instructions of the contracts along with the other potential items of cost so that no item of cost are left out (Rics.org, 2015). The included sums consists of provisional sums, that are made up of defined sum for external works, having a particular date of delivery such that these are converted into fixed prices that includes omission of £ 40000 and addition of £92000 that consists of Hedge plant that is delivered in 2.5 m length for backfilling the materials that is excavated, water closets to the bathroom floors. The adjustment for prime costs are omitted for an amount of £ 210 ironmongery to the doors of the apartments of the third floor that is multiplied by the 25 such doors that is a total cost of £5250. The addition of the costs includes £ 7000, associated with the installation of Assay Ably ironmongery sets for which the adjustment has been made (Rics.org, 2015). These sums of costs are inclusive of the items for which the final specification was not vividly stated in the contractual stage. The designated area for the laying carpets is prescribed as £ 25 for every meter square. The difference in the prescribed rate and actual rate is adjusted through the sum of the contract. The architectural instructions are referred to the changes that have been agreed that are claimed as a variation of the architecture (Rics.org, 2015). The amount that is omitted is £ 112475 and the added amount is £ 137910. The claim of the contractor regarding the risks is a total addition of £ 550000 that is comprised of all the risks that are associated with the construction project that is claimed on the basis on the possible variations throughout the process and period of the construction project that is to be borne by the employer. A design and build contract involves the risks that are borne by the contractor and includes and is paid as an upfront amount being a part of the overall sum of the total cost of the project. The adjustment for contingencies id arrived at an addition of £ 150000 that is calculated on the basis of the events that could take place on the basis of the future contingencies in the construction project (Rics.org, 2015). Hence the toil amount that is to be omitted is calculated as £ 179725 and the sum to be added is £ 21941210. The contract sum is £ 21004300. Therefore the final accounts have been prepared after the adjustment of the risk allowances, variables of prime cost, provisional sums, architect instructions, claims of the contractor. The total of additions has been added to the total cost of the project whereas the amount of omissions has been subtracted (Rics.org, 2015). Therefore, the adjusted amount is “ £ 21004300 + £ 21941210 - £ 179725” that brings the adjusted sum of the construction project it £ 21761485 that is exclusive of the amount of VAT (Rics.org, 2015).
Detailed calculation and explanation
The calculation of rates and the total cost of the construction project can be calculated on the basis of the duties of the contractor and the maintenance of the cost. According to the extension of the expenses regarding the construction, the duties of the contractor are the main factors. As per words of Godunov et al. (2022) the duties and the responsibilities of the contractors can regulate several rules and regulations for the reduction of the expenses and the claim of the losses also. The claims regarding the losses of the construction can be easily gained with the help of the authentic maintenance of the paperwork and the rules also. On the other hand, Hofbauer, and Puts, (2020) described that the final accounts of the company can be easily demonstrated with the help of a detailed segmental cost calculation. The calculated outcomes of the Architect instructions, provisional sums, and the summation of the prime cost help to complete the representation of the final accounts. The segmental costs of the final accounts can be detailed as under.
Architect's Instruction Summary
According to the given information the calculations are done on the basis of the data collected from different sources of the construction database and with the help of the standard secondary data collection method. According to the word of GABRIELA and Irina-Elena, (2019) the data collection and the representation of the segmental data, the instruction scullery for the architects can be easily demonstrated. As per the calculation, it can be easily stated that the omission and the addition of the costs of the construction are easily mentioned. The omission of the pile caps has been recorded at £5000 but the addition of the caps has also been calculated at £ 6000. At the same time, the omission of ground floor layout charges has been calculated at £12000 and the addition regarding the same has been mentioned at £15000. The provisional sums are the main components of the instruction summary as it contains the biggest part of the cost. The omission has been mentioned at £62000 while for the development process it needs to increase at £ 92000. On the other hand, the general charges have also been recorded at £11800, £78000 and £8575 that need to be omitted and the addition of the same charges calculated at £8535, £9375 and £18345 respectively.
Final Accounts for the Architect's Instructions
The Architect's Instructions have been recorded on the basis of the mentioned commission and the addiction of the costs of the constructions. According to the calculation, the data for the requirements 7,8 and 9 have been done in this section.
Total omission and the Addition have been recorded at 28225 and 36255 respectively. According to the changes in the data the addition of the elements has been done, as a result, three segregations have been done. As per the words of Sadkowski, (2019) the cost of omission has been recorded at £11850, £78000 and £8575 respectively. On the other hand, the addition of the mentioned cist has been recorded at £8535, £9375, and £18345 respectively. According to the recording of all required costs, the net changes in the addition of the construction cost have been reflected at £8030 with the help of the table.
Provisional Sums
Provisional sums are the adjustments of the requirements of the flooring, external works, and the supply and installation of the Vinny floors.
The table is a clear reflection of the provisional sums of changing some costs and the renovation of the floors. According to viewpoint of Turgescent, et al, (2018) the table, the change of the bathroom fit out stands at £10000 as the reduction and the addition have been recorded at £15000 and £25000. At the same time, the changes in the external works have been measured also at £15000. The main reason for the increase in the cost is the addition of £55000. Apart from this the supply and the installation of the Vinny floors require an extra installation charge of £5000 as the Addison have increased by the same value of the modification. According to the summation of the reduction of the cost of the mentioned sectors, the total reduction has been measured at £62000 and its opposites the total edition have been recorded at £92000 creating the difference of £30000 increase in the total cost of the construction.
Adjustment of the Prime Cost
The changes in the prime cost have been measured based on the changes in the doors of the thyroid floor of the construction building. The changes in the doors creates an increase in the total prime cost of construction.
Accordion to the word of Kuhn (2020) the prime cost is the base cost of any product or any construction site as it consists of the direct materials and the direct expenses. Therefore, the changes in the doors of the building affect the prime cost of the construction building. According to the table, the changes in the prime cost have been recorded at £1750. The main reason for the changes in the total cost is the changes of the 25 doors that cost £ 210 each. The addition in exchange of the doors has been recorded as £7000 for the implementation of the Assay Ably ironmongery sets. The changes have been made except the riser and the cubicle doors.
Contractors' Claim Assessment on the Claim Table
The Claim Table is nothing but the recording of the claims regarding the construction process and the loss incurred by the contractors. According to the recording of all data of the claim, the contractor can easily claim his compensation. The table shows that the claim of the contractor has been recorded in five parts. The mentioned five parts of the claim are Body injury claim, Property damage, workmen compensation claim, motors claim and the claims of the tools and their equipment.
According to the table, the contractors can claim them on the Body injury as the worker can easily get hurt and also can be dead on the construction sites. Therefore, claims can be easily made on the basis of personal damage. The property damage can easily take place because of the natural damage and the internal accidents. The worker's compensation claim can be issued on the basis of the benefits of tea workers. As per the opinion of König, et al. (2020) the auto claims can happen on the basis of the damage, the depiction of the motors on the basis of the engagements in the construction works, and the damages incurred in the construction works can be the main reason for the claim. Moreover, the claim for the tools and the equipment can be done on the basis of the value reduction and the depreciation of the assets regarding the construction-based work. Therefore, the claims can be done on the basis of the expected claim period of 4, 5, 2, 1, and 6 weeks respectively for the mentioned claim sections. On the other hand, the actual Prolongation claim differs from the expected time of claims. The actual claim period has been assumed at 5, 6, 5, 3, and 7 weeks.
Claim Justification
The claim justification is the recording of the actuarial reasons for the separated claim of the mentioned elements. According to the recording of the justifications or the reason for the claim, it can be easily stated that contractors can easily claim his compensation easily.
The table clearly shows the main reason for the claims. The claim regarding the Body injury can be easily done on the basis of the physical damages that happened in the construction suits to the workers. Therefore viewpoint of Zaroudiet al, (2022) have clearly mentioned that the claim can be done on the basis of the insurance of the workers. The Property damages claim can be taken into account with the help of the damages to the property because of the construction process. Therefore, damages of the property can easily be overcome by the claim. Similarly, the claim regarding the vehicles can be easily done as the vehicles can be damaged on the basis of the engagements of the works and the construction process. Therefore, the depreciation and the breakage need to be overcome with the help of the claims. The workmen's compensation Claim can be the insurance of the workers regarding the risk and the damages taken by them during their work time.
Cost Summary of the Claim
As per the opinion of Lubes and Furlong, (2022) the total cost of the claim of the construction can be easily recorded on the basis of the recording of the segmental costs regarding the claiming process. The table clearly shows that the total cost of the claim has been calculated at £550500. The main components of the total cost of the claim are the Cost relating to the head office overheads and profits and cost of the Site preliminaries.
The mentioned components have a valuation of £140000 and £120000 respectively. On the other hand, the other components have been evaluated at £115000 as Disruption costs, the cost of the financial charges has been calculated at £ 940000 and the cost of the preparation of the claim stands at £81000. Therefore, the claiming process of the contractors has taken a large amount that will be included in the total cost of the construction.
Claim prelims
Focusing on the above table of claim premise it has been found that the entire table has included four different variables such as clearance, cutting, deliveries, and matters. In that case, depending on the values of four variables the total cost has been figured out effectively and adequately by using appropriate formulas. However, the values are £50000, £30000, £12000, and £30000 for clearance, cutting, deliverance and materials effectively. Furthermore, according to the justification it has been recognized that the claims have been made on the basis of these four elements that have an impact on the total cost. According to the word of Kosher (2022) the main component of the calculation has been calculated at £50000. One of the main reasons for enlisting the items is the process of the main elements regarding the starting of the construction process. The cutting process is nothing but the digging of the soil for the base of the construction. The final outcome has been calculated for £122,000 which is great for maintaining effectiveness.
Cost of HOHP
The claim regarding Head office overheads and the profits of the construction process can be easily stated that the total cost of the HOHP process has been calculated at £140000.
The main elements regarding the valuation of the total cost of the HOHP are the office expenses, machines costs, equipment, and furniture. At the same time, the cost of the office expenses has been recorded as the highest among all costs. According to the word of Ahmed, et al (2019) the equipment and the cost of the equipment can also be the main factors regarding the claiming process as these elements are the foremost part of the office work and also for the generation of the profits. The elements of the cost of the office overheads and the profits are £50000 for the office expenses, £25000 for the machinery, £30000 for the equipment and £35000 for the furniture. These elements will lead the contractors to evaluate the total cost of the segmental cost of claims.
Claim of disruption
The cost of the claim can be evaluated on the basis of the verifying and the analysis of the segmental costs of the overheads. According to the accounting standards, disruption is the loss of productivity if the production regarding the execution of the duties and the regulations (Lorente et al. 2018). According to the disruption of the construction productivity, the total cost of the contractions can be evaluated on the basis of the calculator of the low-graded performance of the departments.
Table 1: Calculation Of the Disruption Cost
(source: self-developer)
The total disruption cost stands at £115500. The main components of the disruption have been measured at the Materials which stands at £35000. At the same time, the other elements of disruption are the goods, machinery, assets regarding the fixed assets, and the types of machinery of the construction work (Mensah et al. 2020). Therefore the table has represented the authentic value of the mentioned heads of the cost. The total disruption cost of the labor stands at £15000, and the cost of machinery stands at £12500. The disruption of the final product or the goods can be stated as £32000. At the same time, the valuation of the assets has been disrupted by £21000. According to the consideration of the all head of the4 disruption, the cost of the claim will be increased. Apart from this the value of the disruption can be reduced with the help of the proper maintenance of the assets. The reduction of the disruption will also decrease the total cost of the production and also increase the productivity of the construction sites.
Claim for Financial Charges
The claim for the financial charges for the damages are a summation of the amounts of documentation charges of £ 22500, filing charges of £ 2240, expenses for accruals amounting to £ 32500 and refreshments that have been ordered worth £ 15000. The total amount of claim that could be charged in the name of the financial expenses is a summation of all the charges that have been mentioned. This results to £ 94000. The financial charges that have been incurred are due to the adverse situations that have occurred during the period of the construction project related to the injuries that have been suffered by the employees and the workers, the delay in the completion of the project that arose due to the unfavorable weather conditions (Rics.org, 2015). This resulted in the delay of the procurement of the materials. The financial charges comprises of the amount that is spent by the contracted and that is added to the cost of the construction project due to documentation requirements for claiming the damages, providing and maintenance of sufficient documents to authorize such claim for the damages (Rics.org, 2015). The other financial charges were inclusive of the fees of the lawyers and other professionals who assisted the process of claiming for the damages (Rics.org, 2015). The accrual of the expenses was generated as a result of the financial expenses that were accrued in the previous accounting period. The amount of refreshments on the other hand amounted to 15000 for ordering refreshments for the legal professionals who aided the claim.
Cost of preparation of claim
The cost for the preparation of claim amounts to a total of £ 81000. This cost is a summation of documentation that amounted to £ 25000, legal charges of £ 30000 and hiring charges of £ 26000. The preparation of claim is a very crucial process in the event of claim of the construction project. A viable construction of the preparation of a cost statement that defines the cost that has been incurred and is eligible to be claimed is essential part of the process of claiming for damages as it ensures that the amount is claimed as per the clauses of the construction project and the GIFA.
Final Report
According to the final report of the contract, the sum that has been adjusted in accordance with the contract condition have £ £21,761,485.00. On the other hand, the sum of the total amount of start date on the interim certificate including the advance payment paid amounted to £ 19,802,951.3. The amount of balance due to the employer of the contractor is £ 1,958,533.65. There may be an issue date of 14the September 2021 and the contract has been made on 22 September 2020 (Maiyar, and Thakkar, 2019). Furthermore, the employer and the contractor have an agreement that has been based on the provisional assessment of the interim payment of the rate of 20%. Therefore, the VAT value amounted to £ 391,706.73. The final report has been prepared after the inclusions of all the adjustments in the total cost of the project construction. The description of the work has been constructed under the Construction contract law 2019 (Zwolak, S., 2018). The contract value is also included in the provision of the employer that has the certified amount. There may be the inclusion of the employer, contractor, project manager, structural engineer, and contract administration. There may be the all at the cost constructed under the contract Industry scheme on the basis of the VAT payable (Mensah et al. 2020). Therefore, there may be the employee's attention on the given necessity at the above payment of the wishes to the holder.
Breakdown structure
|
SL. NO. |
Details |
Duration |
Start |
Finish |
predecessors |
|
1 |
Prolongation costs |
29 |
22/09/2020 |
30/10/2020 |
|
|
2 |
Disruptions |
23 |
31/10/2020 |
23/12/2020 |
1 |
|
3 |
Collection of materials |
16 |
24/12/2020 |
16/01/2021 |
2 |
|
4 |
Finance charge on loss |
22 |
17/01/2021 |
24/02/2020 |
3 |
|
5 |
Expense expenditure |
14 |
15/02/2021 |
04/03/2021 |
4 |
|
6 |
Costs of preparing the claim |
40 |
10/03/2021 |
04/05/2021 |
5 |
|
7 |
wasted management time |
35 |
01/06/2021 |
21/07/2021 |
6 |
|
8 |
Inspection |
37 |
22/07/2021 |
07/08/2021 |
7 |
|
9 |
Completion of work |
20 |
08/08/2021 |
14/09/2021 |
8 |
Table: Head of the claim
(source: self-created)
Figure: Gantt Chart
(Source: self-created)
The prolongation costs for the construction project have a duration of 29 days that has a start date of 22/09/2020 to date of 30/10/2022. The prolonged costs are a result of the extension of the construction project as a result of which costs have been incurred related to the delay in time. The claim for the damages that have been incurred for the construction project is a result of the delay that was caused and such costs are associated with the prolonged costs of construction. The delay in the project has led the contractor to face a further cost related to the disruptions of 23 days from a period of 31/10/2020 to 23/12/2020. The duration of the procurement of raw materials for the construction project is a very vital process and it requires a duration of 16 days from 24/12/2020 to 16/01/2021. The charges for losses have been incurred in a period of 22 days, whereas the expense expenditure has resulted in the project being 14 days in the construction process. The cost of preparing the claim took a total of 40 days as a number of claims were to be addressed by the contractor (Circo, C.J., 2022). The inspection of the overall work was a process that required a total of 37 days for reviewing the project and identifying the costs for the process of adjustment. The adjustment was done by the addition of the requirements of the employer and the omission the costs that were extra. Therefore, the adjusted amount was evaluated in the final accounts. Hence the work that was completed as per the date that was initially, that is 14/09/2021. The Gantt chart that has been prepared highlights the work that has been done as per the timeline that was set initially for the construction project.
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