Flashcards
Project Management Cost Headings
Cards in this deck (9)
- 1Name the 9 types of Cost Headings1) Preliminary Costs
2) Prime Costs Sums
3) Provisional Sums
4) Dayworks
5) Direct Payments
6) Measured Works
7) Fees
8) Contingencies
9) Tax - 2What are preliminary Costs?Preliminary items are project fixed overheads. These costs are incurred irrespective of productivity or output. Obvious examples, as men-
tioned above, are items such as site security, lighting and power, site accommodation, and contribution to head office. Preliminary items are usually
calculated as a time-based percentage of the works total - 3What are prime costs?Prime cost sums are sums that have been agreed (or provi-
sionally agreed) with specialist or nominated suppliers or subcontractors. In most projects there will be some items over which the client wants to retain
control. A client who does not wish to retain control over the selection of an item can simply describe it in the specification and allow the contractor to choose a supplier or installer. A client who does wish to retain control over the selection of an item can nominate a specified supplier or installer. - 4What are provisional costs?Provisional sums are estimated to cover work that is
foreseen but cannot be clearly defined or quantified at the outset. In other words
the project manager expects this work to be necessary but cannot say just how
much of the work will be necessary. The use of a provisional sum enables the contractor to reserve his or her position and not be held to a fixed price if the
extent of the work turns out to be greater than at first expected. - 5What are daywork costs?Dayworks or ‘day rate’ items are sums set aside to cover work that is wholly unforeseen and which, therefore, cannot be allowed for beforehand and cannot be built into any kind of programme of works. Most standard forms of contract stipulate that dayworks are limited top unforeseen works that are of a minor or incidental nature. A typical example of a daywork item would be reinstatement
work after fire damage. A client might require a contractor to carry out any nec-
essary reinstatement works covering a wide range of different work from electrical repairs to recycling damaged components. It is not possible to pre-
quantify this work or to say how long it will take. The work will be unplanned and highly disruptive. Dayworks, therefore, are often paid for per day (hence day
work) and at premium rates. - 6What are direct payments?Large projects often require the input of external bodies. These may be statutory bodies such as local authorities, or service bodies such as the local power company. Local authorities are sometimes required to inspect
design drawings or structural proposals, as in the case of building warrant and structural certificates in the UK. - 7What are measured works?Measured works form the backbone of a cost plan. They
describe the works and identify individual unit prices for carrying out individual
sections of work. In most forms of contract, they are subject to a periodic re-
measure that forms the basis for interim payments through the lifecycle of the contract. Measured works are usually shown in diagrammatic form in the project
drawings and are often quantified and measured in the project bills of quantities.
Measured works are often measured and presented according to a standardised
approach that is used throughout a particular industry - 8What are contingencies and reserves?Most projects will also include allowances for
contingencies in some form of reserve. Large and complex projects are re-
nowned for running over budget and the main reason for this is the failure to make allowance at the outset for unforeseen additional costs that are inevitable as a result of the highly unpredictable nature of project - 9What are fees cost?The cost plan contains headings for a number of different kinds of fees. Fees are usually payable for some kind of professional or specialist service
typical professional consultants might include the following:
project manager;
design consultant;
cost consultant;
risk management consultant;
health and safety consultant;
environmental compliance consultant
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- Project Management Flashcards on Project Management Cost Headings , created by Prashanth Martin on 19/08/2017.
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- Prashanth Martin
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