Projects are those works that was assigned to a certain company for the actual implementation at a given area. The company, as a consultancy services in Quantity Surveying and project management locally and globally, had several projects located at different places in Tanzania., Where one of the projects in which it was a consultancy services was a Renovation of Sisal building at UDSM main campus, Extension of JCC in UDMS main campus.
In this project, all practical training students were taken to the
project to learn for some days. But also among of the project that I worked during
PT 03 at AQE Associated Ltd office as follows-;
ü Serengeti Media centre at Serengeti nation park
ü Extension of JCC in UDSM main campus
ü Njombe regional office block construction.
ü BoT at Msese project
ü Renovation of Sisal building at UDSM main
campus
WORKS PERFORMED IN THE
PRACTICAL TRAINING PERIOD.
The works performed
during the practical training;
ü Preparation
of Bidding Document
Measurement
and preparation o Bill of Quantities Preparation
of consultancy estimate (pricing of bills) Preparation
of full of bidding document Preparation
of preliminary estimate (For another project)
ü Preparation
of payment valuation
ü Preparation
of financial appraisals
ü Preparation
final account
ü Preparation
of financial proposals
ü Sorting out
of contractual claims
ü Site
inspection and re-measurement and renovation
METHODOLOGIES
Methodologies used while
learning was through-:
ü Practicing.
ü Literature
view.
ü Visualization
and observation.
ü Thoroughly
consultation with other professional team and cooperation from my fellow
students.
CHALLENGES
ü Modification of the
building design which sometimes confuses during setting out and it affects the
targeted time to accomplish the project
RECOMMENDATIONS
ü The
department in charge of the practical training should continue to assist
students to obtain nice places where should be able to gain a lot of knowledge.
MAIN JOB; TAKING-OFF
1. INTRODUCTION
Taking-off are a detailed measurement of
materials and labour needed to complete a construction project. They are
developed by an estimator during the preconstruction phase. These measurements
are used to format a bid on the scope of construction.
The
quantity “takeoff” is an important part of the cost estimate. It must be as
accurate as
possible
and should be based on all available engineering and design data.
We
taking off quantities in accordance with Standard Method of Measurement of East
Africa where by the units of measurement
are: cubic metres, square metres, linear metres and numbered items. In
addition, there are some items that are required to be recorded as items, which
are descriptions without a quantity, for example plunking and strutting and
dewatering.
The
taking off sheet consists of four columns which are times, dimensions, squaring
and description as explained below.
ü The
timesing column, which gives the factor of multiplication for the measurements
in the dimension column.
ü The
dimension column, where the measurements are set down as taken from the
drawings by starting with length(L) width(W) depth(D) accordingly.
ü The
squaring column, where the calculated total dimension after multiplication is
written.
ü The
description column, where the description of the work or item in relation to
the measurements is written as per SMM.
In
our office of AQS Associates Ltd we performed taking off of different buildings
of different categories such as single story for affordable semidetached houses
and multi storey buildings. It involved substructure, walling, roofing,
finishes, frame, door and windows, painting and decoration, external work
(including pavement, soak away pits, septic tanks and fencing)
We
performed this task using two methods which were:
ü By
using prepared taking off sheets (Manual)
ü By
using Microsoft Excel
The
taking off by using Microsoft excel is an improved method where by special
templates are prepared and make quick calculation such as addition, timesing,
multiplication, division and squaring compared to manual method.
Consider
example of Microsoft Excel taking off sheet in APPENDIX A1
1. OBJECTIVE
The
quantity “takeoff” is an important part of the cost estimate. It must be as
accurate as
possible
and should be based on all available engineering and design data.
2. TIME REQUIRED
The time required was eighty hours per day.
3. SKILLS AND MAN POWER
The activity involved the following
ü 2
Quantity surveyor
ü 5
students
4. MATERIALS, TOOLS AND
EQUIPMENT USED
ü Calculator –for calculation
ü Pen and Pencil-for writing
ü Computer system-for preparation of taking-off sheets
by using Microsoft excel
ü Note book-for taking note
ü Architectural and structural drawings-where
dimensions are taken from.
5. PROCEDURES
ü Crosscheck
the architectural and structural drawings in order to be familiar with the
design,
ü Writing
taking off list,
ü Taking-off
quantities,
ü Writing
a queries list discovered during taking off some quantities,
ü Report
queries
6. INFLUENCE OF ENVIRONMENT.
The influence of the
weather was positive to the progress of the work, no any condition which could
compromise the work.
7. SAFETY PRECAUTIONS.
During working on this activity several safety precautions were
considered including,
ü Protect laptop
ü Protect computer system and its software
8. CONCLUSION AND
RECOMMENDATION
We acquired to get more improvement
on using different techniques that lead to attain the required products.
MAIN
JOB: PREPARATION OF BOQ
1. INTRODUCTION
A
BOQ’s is a document that lists and itemizes an estimate of how much material is
needed, as well as manpower, equipment, profit needed to complete a
construction project. Bill of quantities is prepared after taking-off well
detailed drawing with its specification as per SMM and BOQ its used as a
checklist for material, equipment, items and labour to be used during and after
construction project processes.
There
are different types of BOQ such as elemental, operational, annotated and
trade/traditional bill of quantity.
In
our office we prepared elemental BOQ. That bill consists of different parts
such as preliminaries, measured work, day work, Prime cost and Provisional Sum
and basic price list.
During
our preparation of BOQ, we build up the rate of the different items that
involved the consideration of the material cost, labour cost, transportation
cost, wastage and profit and overhead. Consider example in APPENDIX A2
This
practical training led us to gain quick preparation of BOQ compared to before
and we became more familiar with Microsoft Excel.
2. OBJECTIVE
ü The
prime purpose of BOQ is to enable all contractors tendering for a contract to
price on exactly the same information. Subsequent to this, it is widely used
for post-tender work such as: material scheduling; and cost planning.
ü Also
due to the re-work involved in post-tender use of the BoQ `the extent of use`
of the BOQ is important.
ü Assist
with the agreement of the contract sum with the successful tender.
ü Provide
a schedule of rate assisting with the valuation of variations.
ü Provide
a basis for the valuation of interim payments.
ü Provide
a basis for the preparation of the final account.
3. TIME
REQUIRED
Time
required was eighty hours per day
4. SKILLS
AND MANPOWER
The
activity involved the following
ü 2 Quantity
surveyor
ü 5 students
5. MATERIALS,
TOOLS AND EQUIPMENT USED
ü Calculator
–for calculation
ü Pen
and Pencil-for writing
ü Computer
system-for preparation of BOQ by using Microsoft excel
ü Note
book-for taking note
ü Taking-off
quantities sheets
ü Abstract
sheets
6. PROCEDURES
ü Preparing
taking-off quantities sheets
ü Preparing
abstract sheets by using taking-off quantities
ü Preparing
BOQ by using Microsoft excel and fill the quantities from the abstract sheet
with respect.
7. INFLUENCE
OF ENVIRONMENT.
The influence of the weather was
positive to the progress of the work, no any condition which could compromise
the work.
8. SAFETY
PRECAUTIONS.
During
working on this activity several safety precautions were considered including,
ü Protect laptop
ü Protect
computer system and its software
9. CONCLUSION
AND RECOMMENDATION
In order to help for avoids any
ambiguities or misunderstanding and so help to avoid disputes arising through
different interpretations of what has been priced.
It is very important that Bills of
Quantity are should prepared according to a standard, widely recognized
methodology.
The BoQ should identify the
different kinds of work required, but should not specify them as this can lead
to confusion between information in the BoQ and information in the
specification itself.
1. INTRODUCTION
This is the work done by the consultant so as to value the work that is claimed
by the contractor to be paid. Sometimes some of the consultant may complete the
particular element and claim the amount that is greater than work done or he
may claim the payment for the work that not yet performed (but this depend on
the contract because some contract allows the claim for the anticipated work to
be done)
The
quantity surveyor from consultant’s side have to satisfy himself as do these
respective percentages of work done are as performed. He may change percentage
accordingly. It is not must that the amount claimed has to be paid as it is but
depend on the final amount obtained by the consultant’s quantity surveyor.
There
is different format that are used in performing valuation depend on the
companies’ choice. Some of them include item, description, contract quantity,
unit, previous quantity, current quantity, total quantity done, remaining
quantity, percentage done, rate and amount.
Consider
example in APPENDIX A3
We
performed as work for the project of affordable houses for different units and
different locations.
So
the increment or omission of each item indicated with their respective amount.
2. OBJECTIVE
ü To
allows an interim payment or payment valuation to be made.
ü It
is a detailed breakdown.
ü To
make stage payments to contractor.
3. TIME
REQUIRED
The
time required was eight hours per day
4. SKILLS
AND MANPOWER
The
activity involved the following
ü 2 Quantity
surveyor
ü 5 students
5. MATERIALS,
TOOLS AND EQUIPMENT USED
ü Calculator
–for calculation
ü Pen
and Pencil-for writing
ü Computer
system-for preparation of sheets for quantities by using Microsoft excel
ü Note
book-for taking note
6. .
PROCEDURES
ü Visiting
the site
ü Checking
that the work has been carried out either by measurement or by visual
inspection.
ü Check
work packages
ü Check
variation
ü Check
special payments for off-site goods and materials
ü Check
acceleration cost
ü Check
specific adjustments for advanced payments, work not properly executed,
fluctuation, retention and so on
7. INFLUENCE
OF ENVIRONMENT.
The influence of the weather was
positive to the progress of the work, no any condition which could compromise
the work.
8. SAFETY
PRECAUTIONS.
During working on this activity
several safety precautions were considered including,
ü Protect laptop
ü Protect
computer system and it`s software
9. CONCLUSION
AND RECOMMENDATION
The valuation for interim
certificates should be made as accurately as is reasonably possible, and the
contractor is entitled under the terms of the contractor to the full value of
work executed on site, less a specified retention sum.
Also quantity surveyor should ensure
timely and full payment for work carried out on site
MAIN
JOB: PAYMENT VALUATION or CERTIFICATES
PREPARATION
OF PAYMENT VALUATION or CERTIFICATES
1. INTRODUCTION
Once
the valuation of the work is done and the required amount that have to be paid
to the contractor is determined by the consultant’s quantity surveyor, the
payment certificate is prepared, this certificate will consist of the
following:
Name
of contractor and consultant with their addresses, the contract sum, adjustment
of retention and advance payment, gross valuation, previous paid amount and
amount due for the payment to the contractor in number and words.
Consider
example in APPENDIX A4
Also
this certificate must be signed by the Architect. The copy of this certificate
shall be submitted to employer, contractor, consultant’s project manager,
architect, Qs and to the file.
2. OBJECTIVE
ü To
ensure the contractor is paid for work done at regular intervals.
ü To
be used in the great majority of building contracts as the contractor should
not have to finance complete works.
ü To
certify the quantity of work done to date, on which payment is made.
3. TIME
REQUIRED
The time required was eight hours per day
4. SKILLS
AND MANPOWER
The activity involved the following
ü 2 Quantity
surveyor
ü 5 students
5. MATERIALS,
TOOLS AND EQUIPMENT USED
ü Calculator
–for calculation
ü Pen
and Pencil-for writing
ü Computer
system-for preparation of sheets for quantities by using Microsoft excel
ü Note
book-for taking note
ü Interim
valuation of the constructed work.
ü BoQ
ü Periodic
payment
6. PROCEDURES
ü Timing
of payment claim
ü Amount
of interim payment
ü Check
components of interim payment such as; Preliminaries, measured works, Value of
variation, Value of day works, Value of unfixed materials, Value of contractual
claim Labour and materials price fluctuation, Retention and Value Added Tax
7. INFLUENCE
OF ENVIRONMENT.
The influence of the weather was
positive to the progress of the work, no any condition which could compromise
the work.
8. SAFETY
PRECAUTIONS.
During
working on this activity several safety precautions were considered including,
ü Protect laptop
ü Protect
computer system and it`s software
9. CONCLUSION
AND RECOMMENDATION
The
valuation for payment certificates should be made as accurately as is
reasonably possible, and the contractor is entitled under the terms of the
contractor to the full value of work executed on site, less a specified
retention sum.
Also
quantity surveyor should ensure timely and full payment for work carried out on
site.
MAIN
JOB: FINANCIAL APPRAISALS
PREPARATION
OF FINANCIAL APPRAISALS
1. INTRODUCTION
General
Financial Appraisal is a method used to evaluate the viability of a project by
assessing the value of net cash flows that result from its implementation.
Financial
Appraisals is the document that is prepared by the consultant’s QS so as to
determine the actual financial position at the existing time. It is used to
indicate if the project is below or above the budget at that time. How much
extra money is needed to be added by the client so as to finish the project. if
this document indicates that project is above the budget, the consultant’s QS
has to find different alternatives so as to end up the project within the
budget.
This
document is prepared after every three months or four months, etc depending on
the contract agreement.
Consider
example in APPENDIX A5
2. OBJECTIVES.
ü It
alerts the client on the financial position.
ü It
alerts quantity surveyor so as to come with alternatives for the remaining work
so as to avoid the project to run over the anticipated budget.
3. TIME
REQUIRED
The
time required was eight hours per day
4. SKILLS
AND MANPOWER
The
activity involved the following
ü 2 Quantity
surveyor
ü 5 students
5. MATERIALS,
TOOLS AND EQUIPMENT USED
ü Calculator
–for calculation
ü Pen
and Pencil-for writing
ü Computer
system-for preparation of sheets for quantities by using Microsoft excel
ü Note
book-for taking note
ü Stage
payments against calendar dates
ü Measurement
against
ü Activity
schedules
ü BoQ
6. PROCEDURES
|
Identify
the time horizon
|
|
Identify
the incremental cash inflows and outflows for
|
|
each
steps
|
|
Quantify
the costs
|
|
Identify
the partner and discount the cash flow
|
|
Sensitivity
analysis
|
|
Reporting
|
7. INFLUENCE
OF ENVIRONMENT.
The influence of the weather was
positive to the progress of the work, no any condition which could compromise
the work.
8. SAFETY
PRECAUTIONS.
During
working on this activity several safety precautions were considered including,
ü Protect laptop
ü Protect
computer system and it`s software
9. CONCLUSION
AND RECOMMENDATION
If
this document indicates that project is above the budget, the consultant’s QS
has to find different alternatives so as to end up the project within the
budget.
This
document is prepared after every three months or four months, etc depending on
the contract agreement.
MAIN
JOB: SCHEDULE OF MATERIAL
1. INTODUCTION
Schedule
of material is the schedule that shows the quantities of materials that needed
to be used in the particular projects. Some of schedule of materials involve
price of each item.
In
our office, we prepared schedule of materials of different items in such a way
that we quantify the amount of each component and item involved. Example for
the concrete, we quantify the amount for the sand, aggregates and cement. For
the block wall, amount for the blocks, sand and cement.
Finally,
we put their respective rate and amount for each item and component involved in
a particular work. Consider example in APPENDIX 6
2. OBJECTIVE
ü To
identify the materials needed in order to accomplish the construction project
ü Also
in preparation of the quantity, we provide allowances of wastage in percentage
depending on the nature of material.
3. TIME
REQUIRED
The
time required was eight hours per day
4. SKILLS
AND MANPOWER
The
activity involved the following
ü 2 Quantity
surveyor
ü 5 students
5. MATERIALS,
TOOLS AND EQUIPMENT USED
ü Calculator
–for calculation
ü Pen
and Pencil-for writing
ü Computer
system-for preparation of sheets for quantities by using Microsoft excel
ü Note
book-for taking note
6. PROCEDURES
ü Preparing
taking-off quantities sheets and Preparing BOQ
ü Identify
quantity of material required from BOQ
ü From
the total quantities of materials find number of trip or piece by consider
waste of the such kind of material
7. INFLUENCE
OF ENVIRONMENT.
The influence of the weather was
positive to the progress of the work, no any condition which could compromise
the work.
8. SAFETY
PRECAUTIONS.
During
working on this activity several safety precautions were considered including,
ü Protect laptop
ü Protect
computer system and it`s software
9. CONCLUSION
AND RECOMMENDATION
It
should have prepared from the quantities present in the BoQ
MAIN
JOB: FINAL ACCOUNT
1. INTRODUCTION
PREPARATION
FINAL ACCOUNT
Final
account is the document that is prepared by the consultant’s quantity surveyor
that states the actual amount used for the particular project. This is done at
the end of the project i.e. after defect liability period. This amount may
differ from the anticipated lump sum that indicated during the signing of the
contract.
This
document comprises of different items including the total amount of omission
and addition for different elements involved such as preliminaries, measured
work, contingency, PC and provisional sum. Also it includes the name and
addresses of the consultant and contractor, original anticipated contract sum,
etc. It can be presented using different format
This
document states the actual amount that used for the particular project, hence
the client is ought to pay that amount. This amount may be more or less than
anticipated value but it is the responsibility of the quantity surveyor to
ensure that the anticipated contract sum is not exceeded.
Consider
example in APPENDIX A7.
2. OBJECTIVE
ü To
state the actual amount that used for the particular project
3. TIME
REQUIRED
The
time required was eight hours per day
4. SKILLS
AND MANPOWER
The
activity involved the following
ü 2 Quantity
surveyor
ü 5 students
5. MATERIALS,
TOOLS AND EQUIPMENT USED
ü Calculator
–for calculation
ü Pen
and Pencil-for writing
ü Computer
system-for preparation of sheets for quantities by using Microsoft excel
ü Note
book-for taking note
ü Payment
valuation
6. PROCEDURES
|
Check
total amount of omission and addition for
|
|
different
elements involved such:
|
|
ü preliminaries
|
|
ü measured work
|
|
ü contingency
|
|
ü PC
|
|
ü provisional sum
|
|
Adjustments
for element mentioned above
|
|
Less
VAT from contract BOQ
|
7. INFLUENCE
OF ENVIRONMENT.
The influence of the weather was
positive to the progress of the work, no any condition which could compromise
the work.
8. SAFETY
PRECAUTIONS.
During
working on this activity several safety precautions were considered including,
ü Protect laptop
ü Protect
computer system and it`s software
9. CONCLUSION
AND RECOMMENDATION
We prepared this document just
theoretically as there was no any project that was at the finishing stage
MAIN
JOB: CASH FLOW PROJECTION FINAL ACCOUNT
1. INTRODUCTION
Cash
flow projection is the anticipation of the flow of the money for the entire
time of the project, it estimates how much shall be requiring to be used in
each month after adjustment of the retention and advance payment (if was taken
by the contractor)
This
prepared by the consultant’s quantity surveyor just before starting of the
project. This cash flow shall be updated accordingly.
Consider
example in APPENDIX A8
2. OBJECTIVE
ü This
is used to alert the client on the anticipated flow of the money for his/her
project
3. TIME
REQUIRED
The
time required was eight hours per day
4. SKILLS
AND MANPOWER
The
activity involved the following
ü 2 Quantity
surveyor
ü 5 students
5. MATERIALS,
TOOLS AND EQUIPMENT USED
ü Calculator
–for calculation
ü Pen
and Pencil-for writing
ü Computer
system-for preparation of sheets for quantities by using Microsoft excel
ü Note
book-for taking note
6. PROCEDURES
ü Preparing
taking-off quantities sheets and Preparing BOQ
ü Identify
quantity of material required from BOQ
ü From
the total quantities of materials find number of trip or piece by consider
waste of the such kind of material
7. INFLUENCE
OF ENVIRONMENT.
The influence of the weather was
positive to the progress of the work, no any condition which could compromise
the work.
8. SAFETY
PRECAUTIONS.
During
working on this activity several safety precautions were considered including,
ü Protect laptop
ü Protect
computer system and it`s software
PREPARATION OF PAYMENT VALUATIONS.
Preparing Interim Payment Valuation
for Construction Works.
An interim (stage) payment is a
payment on account of the compensation due to any party to a construction
contract that has a duration accordingly the contract, interim payments ease
the contractor`s cash flow, on the premise that project finance is cheaper for
the client than it is for individual contractors and the basis of the
contractor`s interim valuation (application for payment) will vary depending on
the type of contract being used.
Payment certificate in construction
is a document verified by an Architect, Engineer or owner of a construction
project that the noted work has been completed and is approved for payment by
the general contractor.
The effective administration of the
payment clause of a building contract is one of the most important tasks that
the contract administrator and consultant quantity surveyor perform during the
contract period. The importance of cash flow within the construction supply
chain is key to the smooth running of a contract. The Act’s primary purpose is
to ensure that contractors, and more particularly subcontractors, are paid
promptly, and in full, for work that they have carried out. The Act requires
construction contracts to provide an ‘adequate mechanism’ for calculating both
the timing of payments, and the amounts to be paid. If such a mechanism is not
included in the agreement; the procedures set out in the ‘Schedule’ to the Act
are deemed to apply. The default arrangements in the Schedule require
contractors to be paid within 30 calendar days of submitting a payment claim.
The default provisions in the Schedule apply to all subcontract payment
agreements, unless more favourable terms than those set out in the Schedule can
be secured. The Act also outlaws previous widespread payment practices such as
pay-when-paid conditions. The primary impact of the Act, therefore, may be
viewed as enshrining interim payments as the standard means of paying for
construction work in order to generate the vital cash flow required by the
supply chain.
There is no specific of an ‘adequate
mechanism’ for payment but it is supposed that a number of common approaches
would satisfy the requirements such as:
Ø regular
predetermined set periodic payments;
Ø Stage
payments, which are predetermined payments made following the completion of
specific sections of the work;
Ø detailed
interim valuations of the construction work in progress.
Stage payments
This approach pays agreed amounts of
money when certain stages of the work are finished. For example, on completion
of the substructure or when the building is weather-tight. This approach is
also simple to operate and does not overvalue the works. However, it does not
include for further work in progress and materials on site. Non-completion of
minor items of work within a stage could also hold up the payment for the
entire stage. (Hackett et al. 2007)
Timing of Payment Claims
The Contractor initiates the payment
process by submitting a detailed progress statement to the Architect, valuing
the work, including sub-contract work, completed at the payment claim date. On
most projects the task of checking the valuation will be carried out by the
Employer’s consultant quantity surveyor. This task must be attended to
promptly, as the Contract requires the Architect to issue a Certificate within
the timescale set out in the APPENDIX to the Contract. This default period for
‘turning around’ valuations is five working days.
Amounts of Interim Payments.
The Contract Clause sets out the
procedures for valuing the content of interim certificates; in brief this
covers the value of the work ‘duly’ (properly) executed and the materials
delivered since the previous valuation. Duly executed work includes elements
such as preliminaries, provisional work, prime cost work, works covered by
architect’s instructions, material and labour price fluctuation claims, and
loss and expense claims.
The payment comprises ‘the Contract
value of the Works properly executed’, plus an evaluation of unfixed materials,
and ‘Compensations Events’.
Commentary The consultant quantity
surveyor’s role is to check the contractor’s valuation and issue a certificate
recommendation to the contract administrator in accordance with the terms of
the particular contract. The quantity surveyor must make a fair valuation of
the work. While interim valuations are not conclusive, they must be a fair and
reasonable assessment of the value of work done. Care must be taken not to
over-value or under-value the work. Under-valuation reduces vital cash-flow to
which the Contractor is entitled. Over-valuation on the other hand risks the
Employer’s position in the event that the Contractor defaults and fails to
complete the Works. In this event the Employer may have to pay a completion
contractor for work and materials, for which the original contractor has
already been paid.
The QS must visit site to verify
that the work claimed for has actually been carried out, and that the
contractor’s application for payment is arithmetically correct. A general
appraisal should also be made as to the overall level of the valuation -
bearing in mind progress on site and the projected cash flow. The certificate
recommendation must also separately identify payments for nominated /
specialist sub-contractors.
It is common for the QS to disagree
with the Contractor’s valuation and adjust it, and in these instances, the
Architect must explain the differences specifying the reason or reasons for the
difference and the basis on which the amount certified for payment is
calculated. It should be noted that the Act`s requires the Employer to submit a
written response to a payment claim notice (a withholding notice or pay-less
notice) in order to contest a contractor’s payment claim.
Periods for Honouring Certificates.
The Employer’s primary contractual
duty is to pay the Contractor.
Under the Act`s Contract, as soon as
the Architect’s interim certificate is presented to the Employer, the Employer
must pay the Contractor within mentioned working days (unless another period is
stipulated in the APPENDIX). Failure by the Employer to pay on time entitles
the Contractor after mentioned working days to claim
Failure by the Employer to pay on a
certificate is a ground for the Contractor to threaten to suspend work, and
subsequently determine its employment under the building contract (subject to
notice). The Employer does not have the right to obstruct or interfere with the
issue of any Architect’s or Employer’s Representative’s certificates. The
Architect / Employer’s Representative should advise employers as to their
responsibility regarding honouring certificates before commencing construction.
Where the project is funded in whole or in part by grant aid, e.g. school
contracts, the Architect should advise the Employer as to the obligations to
honour certificates whether grants have been paid or not.
Retention
The Act`s Contract clauses set out
various procedures for dealing with retention money which is set aside in order
to rectify defective work. Retention is normally held as a percentage of the
value of the executed work and materials. The amount of the retention held may
be capped if a particular limit is stated in the APPENDIX. The insertion in the
APPENDIX states that the retained percentage is ‘not to exceed 10%’
The most common option for dealing
with retention is set out in clause This sub clause provides that retention is
held on ‘the value of the work and materials’ by the Employer during the
construction phase of the project. The retention is held on trust for the
Contractor by the Employer who is not obliged to invest this money. One moiety
(half) of the retention is released on Practical Completion of the Work. The other
half of the retention is released on foot of the Final Certificate.
.
In addition, sub-clause sets out a
further mechanism for dealing with the remaining retention held after the issue
of the Certificate of Practical Completion. Under this arrangement the
Contractor provides an approved retention bond which triggers the full release
of the remaining retention.
It should be noted that a number of
components of a valuation are not subject to retention. These include:
reimbursement of fluctuation claims, reimbursement of contractor’s loss and
expense claims, and payment for remedial work in connection with damage covered
by the Contractor’s all risks insurance Fees or charges legally demandable by
local and other authorities and similarly performance bonds where separately
identified would not be subject to retention.
3.3 Components of Interim Payments
The Quantity Surveyor should always
visit and walk around the site, accompanied by the Contractor’s Surveyor
whenever possible. He/she should also talk to the Clerk of Works (if one has
been appointed) or other design team members on site before starting the
valuation.
It is common for the Contractor’s
Quantity Surveyor and the Client’s Quantity Surveyor to discuss and agree these
interim valuations before they are forwarded to the Architect (Project manager)
for certification. The QS must separately identify the amounts included for
named specialists or nominated subcontractors work included within the interim
certificate recommendations.
Preliminaries
Preliminaries refers to the
contractor’s costs in running the building site. The ‘prelims’ refer to costs
which are necessary but do not form part of the completed building. These
represent the contractor’s site overheads and temporary costs and include
matters such as: site staff, security, hoarding, temporary roads, site
accommodation, insurance, plant, site cleaning and so on.
Items included in the preliminaries
may be fixed costs or time related costs and several items contain both fixed
price and time related cost components. Some preliminaries items such as the
provision of a bond, drying out the work, cleaning site on completion for
example, are fixed costs. Other items, such as the cost of site staff are
largely time-related and depend on the estimated length of time the staff will
spend on site. Other items, again, incur both fixed costs and time related
costs, for example scaffolding incurs erection costs (fixed cost), maintenance
(rental / time dependent costs) and final removal / striking costs.
In practice the preliminaries are
often valued pro-rata to the percentage of the building work which has been
carried out. This approach may, however, be unsatisfactory for contractors,
particularly on contracts with substantial start-up costs. Ideally an itemized
break-down of the prelims can be agreed prior to the start of the works. This
breakdown will ensure a greater degree of accuracy in the valuation of the
preliminaries and enable the contractor to promptly pay for ‘point’ costs as
they occur.
Measured work
This component involves valuing the
completed works on site. The simplest method is to visually assess the
estimated percentage of the work completed within each element of the pricing
document. For example, 50% of substructure and 30% of external walls and so on.
Although this produces a crude valuation it is a widely used technique. Where
greater accuracy is required the progress of the individual work items can be
measured on site. On Act`s contracts, provisionally measured work and the
expenditure of provisional sums must also be promptly re-measured, valued and
kept fully up to date as part of the measured works category.
Ashworth, Hogg and Higgs (2013)
comment regarding the need for accuracy, advising that ‘the surveyor should
appreciate that an interim valuation is merely a snapshot of the progress of
the works, which … change significantly within 24 hours of the assessment’.
They add that ‘It should be remembered that detailed measurement for valuation
purposes will likely have no further bearing beyond the interim payment in hand
and is therefore of passing value only.’
Nominated subcontractors and
suppliers work
On Act`s contracts nominated
subcontractors and suppliers are paid by the main contractor. The valuation of
each nominated subcontractor’s work is identified separately on both the
quantity surveyor’s recommendation and the architect’s certificate. The main
contractor is entitled to a pro rata proportion of the profit and special
attendance on the nominated account where these are priced in the tender.
On public works contracts, although
named specialists are considered to be ‘domestic subcontractors’ the value of
their work must be separately identified in the Employer’s Representative’s
certificate.
Value of variations / change orders
It is almost inevitable that there
will be design modifications and changes as the works progress. Variations
arise where the contract administrator issues a written instruction directing
the contractor to carry out additional or substituted work, or to omit work.
Verbal instructions should be confirmed promptly in order to authorise payment.
Variations should be measured and valued as soon as possible and should be
routinely agreed and signed off by the parties to the contract. It is common,
however for valuations to include on-account payments for some variations until
they are properly valued at a later stage.
Value of dayworks
Occasionally, it may not be
appropriate to use or adjust contract rates to value particular works and it
may be necessary to value these on a time and material basis. This approach is
referred to as dayworks. Dayworks involves the contractor recording the
resources used to perform the particular task; i.e. the hours worked by the
various operatives, craftsmen, labourers etc. and the plant and materials used.
All daywork sheets, should be properly priced in accordance with the contract
provisions, and approved by the contract administrator before they are paid.
Value of unfixed materials
As noted above, the Act`s contract,
generally entitles the Contractor to be paid for unfixed work materials
delivered to the site. Payment for materials stored off site, however, is at
the architect’s discretion and may be included in the valuation provided the
required safeguards have been fully satisfied.
Value of contractual claims.
The main contractor may be entitled
to additional payment for loss and or expense suffered as a direct result of
any delay or disruption to the works caused by the employer or the design
consultants. It is up to the contractor to prove the loss and expense to the
contract administrator’s satisfaction. Loss and expense claims are often
contentious and may take considerable time to resolve. Nevertheless, the
contract administrator must include a fair and reasonable valuation of the
contractor’s reimbursement claim in interim certificates pending final
agreement of the claim.
Loss and expense claims are not
subject to retention on Act`s contracts.
Labour and material price
fluctuations.
Claims for fluctuations in the price
of labour and materials are rare in practice, as this risk is typically
transferred to the contractor on private sector projects when finalising the
contract negotiations. The arrangement is achieved by striking out Clause of
the Act`s contract conditions. Where fluctuation claims are admissible under
the Act`s Form, the Contractor can apply for payment of increases in the
interim progress applications. The contract rates are deemed to be set at the
‘designated date’ set out in the APPENDIX. If wages, or the rates of ‘other
emoluments’ rise, the extra costs can be recovered. The prices of materials at
the time of the tender are deemed to be market prices and a list of such basic
prices may be required. If prices increase during the course of the contract
the increases are recoverable. If there is a substantial increase in the price
of any goods, the Contractor shall give notice in writing to the Architect
within a reasonable time of becoming aware of the of an increase. A percentage
addition of 7.5% is applied to labour accounts and 12.5% is applied to material
increases to cover the associated irrecoverable items and the cost of preparing
the account.
Fluctuation claims are not subject
to retention under the Act`s contract.
Retention
The client normally retains a
percentage of the gross valuation of the works, to cover the rectification of
defective work and ‘snags’.
Value added Tax
General construction work is subject
to VAT, which is currently 18%age
Previous payments to contractor
The sum due to the main contractor
is the gross valuation adjusted for retention (If it`s applicable) and VAT (If
it`s applicable) less amount previously paid.
ü Modification
of the building design which sometimes confuses during setting out and it
affects the targeted time to accomplish the project.
ü Some
activities that we did were not at current stage, just we did by theoretical
means such as:
Preparation of cash flow projection documents
Preparation of final account
ü The
department in charge of the practical training should continue to assist
students to obtain nice places where should be able to gain a lot of knowledge.
ü The
IT coordinators should find effective offices that have the active project
during the field period. This doesn’t mean that we did not have works to do. We
did a lot but some of our friends who did in some offices, they did only few
parts concerning with the office work.
ü The
programme of work (Microsoft project) should be taught practically to QS
students with associated assignments because sometimes contractor’s QS may be
ought to prepare and update the programme of work.
This Industrial Training for the
office work is very important as it makes the student to be knowledgeable and
competent for the actual practice done in construction. This helps us to know
in deep how the construction offices work.
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