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CONSTRUCTION MANAGEMENT FOR ENTREPRENEURS , OWNERS AND BUILDERS AND PROFESSIONALS BHADANIS (PART 8)


It is important to double-check expenditure claims to ensure that the costs of the items are accurate, that the receipts are included, and that the charges have been appropriately cost-coded.

Vehicle claims must be examined to confirm that the car has only been put to authorised private and corporate usage.

Deposits are recovered

Deposits are frequently paid by contractors for lodging, services, licences, and perhaps even equipment rental. To allow their recovery after the project's conclusion, these deposits should be scheduled. It's necessary for workers closing the project to be aware of whose deposits need to be recovered and who they should contact to make arrangements for their payment because it's common for the persons who authorised the payment of the deposits to depart the project before it's finished.

Prepare the resource release.

Resources including staff, employees, and equipment must be relocated off site when projects draw to a close. This needs to be done in a planned, regulated manner to avoid having underused or unused resources in the project, which would increase expenses. But it must also be carried out in a way that allows the project to be finished as fast and effectively as feasible.


Although it is not very difficult to remove equipment that was rented from outside sources, the following steps should be taken to prevent further costs:

1. Make that the item has finished all the tasks it was intended to perform.

2. Date of the item's off-hire must be communicated to the provider in writing (giving them sufficient notice in accordance with the hire agreement - some items may require a week or more notice)

3. Plan a vehicle to remove the object

4. Make sure the item is clean and ready for pickup with all of its components and attachments.

5. Make sure that staff is informed of the collection date for the item 6. promptly inform the supplier if your intentions alter


Because it serves the company's interests to make sure that the equipment is used effectively, whether on the project or elsewhere, internal equipment is a little more complicated. The project must promptly inform the internal hire department and other projects that the item will be made accessible. Unfortunately, the majority of project managers only consider their project and not the firm as a whole, therefore they frequently put internal pieces of equipment out of service without warning.

Companies should keep track of the projects that their key plant and equipment are now working on, the anticipated release date, and the location to which it will be moved next. This makes it possible for other project managers to view what is available and determine whether they need the item. The tender department may also see what equipment is accessible through this timetable, which could influence the projects they tender for as well as their methods and costs. In order for this plan to be effective, it must be updated often, and project managers must give precise details about their requirements and the dates on which their equipment will be released.

When feasible, the project manager should make sure that similar pieces of externally rented equipment are released from their project before an internal piece of equipment if it does not have another project to go to.

The business should also keep a schedule of all of its employees, including their names, jobs, present projects, expected release dates, and projects to which they are expected to transfer. The tender department benefits from this timetable since they can know who is available for new projects.

Before releasing employees, project managers must let the human resources department and other project managers know what their qualifications are so they may be transferred to other projects.

The project will have to fire the employee if the firm doesn't have a role for them. It is crucial that this procedure is initiated as soon as possible to prevent individuals from taking a break from the project because it might take several weeks, depending on notice periods and union involvement.

When to end a relationship:

1. make sure the procedure is communicated to upper management and the human resources division.

2. Instruct the customer or the unions as necessary.

3. Make sure contract workers are let go before permanent ones 4. Make sure the procedure:

1. as permitted by law, the person's employment contract, and any labor-management agreements

2. a final resort if no other options exist on the project or within the organisation, including the possibility of reassigning the individual to another function.

3. fair

5. providing the required notification to the parties involved 6. be certain that the appropriate termination paperwork is created.

7. ensure sure the whole salary is computed, taking into account any and all bonuses, leave pay, and notice pay.


Wrongful termination has the ability to disrupt the project's labour relations and result in additional expenses like overtime compensation and legal fees.

limit weather-related losses

Storms, wind, and rain can damage the project, which slows construction and increases the cost of repairs.

By adopting the necessary safety procedures, such as:

1. Securing the workplace at the conclusion of the workday or in cases of impending bad weather

2. shielding machinery and commodities against wind and rain damage 3. To stop storm water flow, berms should be used to shield open excavations.

getting in there

4. planning and maintaining drainage to direct storm water away from the work location

5. relocating equipment from potentially flooded regions


It's vital to remember that storms may strike without notice and rivers can rise without warning. In one case, the water had risen substantially by the time we arrived back from the weekend, flooding our work areas and burying some of our equipment.

control how firm resources are used

Use of firm resources carelessly might incur significant expenditures. These expenses include the cost of employees utilising corporate vehicles for private trips, company internet access, or company phones for personal calls. Theft or accident-related damage to corporate cars, laptops, phones, and other assets might result in replacement or repair expenditures for projects. It's crucial that these assets aren't kept in circumstances where they might be stolen or damaged.

Individual expenses are frequently low, but cumulative costs in businesses with a big worker complement can be considerable.

Some businesses have restrictions on how far employees may go in corporate cars or how much time they can spend on their mobile phones in a given month. However, use might fluctuate between projects, therefore these limitations might need to be updated often.

One business I worked for gave project managers and directors a list of the company's expenses for cars, cell phones, and internet service that was organised from most to lowest and included the person's name, the asset number, and the name of the project. The excessive asset users could then be quickly identified, and the serial offenders could be identified by looking at the prior month's listings.

Employee buy-in through communication

Cost management and monitoring cannot be placed only in the hands of project managers or contract administrators. Instead, it is something that all project personnel should be aware of so that cost-cutting measures may be taken. It's crucial that Supervisors are informed when their division is losing money and what has to be done to make things right.

Summary

It is simple to boost the company's profitability by cutting costs. Costs can be decreased in the following ways:

1. smarter work

2. cautious project planning

3. putting in place the most appropriate and effective timetable to satisfy the client's needs

4. ensuring that the workspace is accessible 5. doing the task safely

6. getting many estimates in a procedure where the provider is completely aware of the work requirements

7. reviewing these estimates to make sure they have all the expenses and goods permitted for

8. issuing precise, unambiguous directives and contracts to suppliers and subcontractors 9. overseeing subcontractors to make sure they complete their tasks in

as stipulated in their contract

10. making sure the proper supplies are ordered in the right amount, that the project is prepared to accept them, and that the materials are delivered on schedule.

11. looking at alternate materials that could be less expensive, simpler to install, or more easily transported

12. examining potential other designs to increase the project's constructability

13. scheduling deliveries, finding acceptable transportation for supplies and equipment, and

14. taking into account other transportation methods

15. frequently comparing the provided materials to the billed customer goods and examining any inconsistencies

16. maximising the productivity of both labour and equipment

17. ensuring that discipline and labour laws are applied consistently, fairly, and within the bounds of the law throughout the whole organisation

18. paying employees honestly

19. regulating and restricting the quantity of overtime put in 20. preventing damage to equipment and property 21. removing equipment from the rental pool when it is no longer needed 22. paying for rented equipment at the appropriate prices and hours

23. Negotiating reduced costs, improved terms, and payment schedules for supplies and equipment



24. Making sure that projects adhere to laws and traffic regulations to avoid paying penalties

25. avoiding theft

26. recognising and avoiding potential issues

27. organising service installation and making sure it is done properly, both during installation and testing

28. preventing harm to new or existing services 29. safeguarding both new and current work

30. ensuring that buildings are planned and built in the appropriate locations 31. following the most recent sketches

32. ensuring that all output and input meet the necessary quality standards and specifications and that the appropriate quality systems are in place

33. Organizing the project close-out to make sure all structures are finished and all documentation is presented as per the client's specifications

34. recovering deposits at the project's 35 conclusion. preparing to demobilise resources

36. controlling the utilisation of corporate resources to increase their efficient usage 37. ensuring that all employees understand how crucial it is to prevent wasteful

costs




Module 7: Increasing Sales



Making sure that the customer pays for all work done and that they do so as soon as possible after it is finished is the greatest method to guarantee that projects are profitable. Although it might seem simple, I've discovered that many project managers, project directors, and company owners struggle to provide interim values on time, reach an agreement on the final accounting with the client, or submit modifications that are accurate and compliant with the contract.

Periodic valuations

Valuations must be delivered on time or before the deadline, addressed to the proper party, adhere to the terms of the contract, and contain all necessary calculations and supporting paperwork. The contractor's cash flow may be impacted if the wrong submission causes them to be paid late, perhaps even the following month.

The project manager must be aware of the valuation's underlying assumptions, which might include:

1. calculating the actual work that was done in the month

2. comparing the progress to the contract's timeline and then claiming the completion rate

3. declaring the worth of a milestone once it has been reached




The projects should, wherever feasible, maximise the income stated in the monthly appraisals by:

1. confirming that all work has been claimed 2. wherever feasible, exaggerate

3. making sure milestones are reached so they may be included to the payout 4. extending the valuation date to the end of the month

5. ensuring that claims and variations are filed, reviewed, and claimed as soon as possible

6. Where appropriate, claiming for unfixed materials

7. Claim as much of the preliminary or indirect expenditures as you can


Keep in mind that it's preferable for the contractor to have the funds in their own bank account rather than the client's. Make sure, nevertheless, that the over-claims in the value are not included in the income utilised to compile the cost reports.

Variations

Most contracts will differ from the works that were originally proposed and evolve over time. Contractors are responsible for making sure they get compensated for all extra labour. Variations may occur for the following reasons:

1. expanded range

2. The document contains mistakes and omissions 3. alterations to drawings

4. delays because: 1. late entry

2. incomplete data or drawings

3. the customer altering the finished product 4. unexpected weather events

5. unexpected project circumstances

6. contractors or employees of the client obstructing or restricting access

7. the client's services not being available, not being enough, not being delivered by the deadline, or not being delivered on time

8. the equipment or supplies given by the client being late, arriving in inadequate amounts, or being of poor quality

5. modifications to standards

6. modifications to the workplace, such as:

1. unanticipated ground conditions, such rock 2. encountering dangerous substances

3. uncovering of artefacts

4. unexpected subterranean water presence 7. modifications to the terms of contracts or business

8. the client asking for the timeline to be hastened, postponing, or modifying milestone dates

9. Drawing mistakes and issues with drawing coordination 10. alterations to the legislation in the state or nation

11. the damage to finished work by the client or their contractors




The contract and tender documents, as well as any connected communication, must be read carefully and understood. The contractor must frequently check construction drawings and specifications against those released during the tendering process to make sure they haven't altered.

Continue to enquire about:

1. "Are we building what we requested in our bid? ’



2. Are the site conditions what were anticipated at the tendering stage? ’

3. Has the client complied with all of the terms of the agreement? ’




Sometimes the variation is as straightforward as submitting a revised rate for a good or service because the item's description that was used to determine the tender price has changed, for instance because:

1. Dimensions or height have changed 2. The amount has altered

3. The requirements are vary.




Any modifications must be communicated to the customer as soon as the contractor learns of them, but most definitely within the timeframe stipulated in the contract. Contractors that don't comply risk losing their claim rights.

The contractor must make sure the individual producing the variation has the skills and training necessary to prepare the claim. Consult with industry experts inside the firm or from outside suppliers if there is any uncertainty regarding the claim's veracity or what information should be provided. The money that may be made from a skillfully designed and executed claim is sometimes significantly greater than the expense of receiving professional guidance.

putting together and sending variants and claims

Variations and claims must include at the very least: 1. a synopsis of the incident

2. the reason

3. the occasion's date 4. impact of the incident

5. measures done to lessen the effects

6. the effects of the event on time and money

7. the supplemental materials that are attached, or consult supplemental materials referencing:

1. contract provision number two appropriate drawing numbers

3. The relevant schedule items are listed as 4. correspondence about the occasion 5. the necessary requirements


This supporting documents must be pertinent, substantiate the claim, and not be in conflict (any contradictions need to be explained).


The requisite claim is:

1. filed within the window of time allowed by the contract 2. targeted to the right individual

3. mailed to the appropriate address




All calculations and timetables should be taken into account when calculating the event's impact. The claim schedule should reference the authorised contract timetable. Calculations should reference where the data and numbers originated from and how they were put together, and they should be reviewed for arithmetic mistakes.

It should be highlighted that claims must be carefully considered to guarantee that all potential expenses have been taken into account. It's extremely challenging, if not impossible, to file a new claim later on asking for extra money. If at all feasible, review the claim with the appropriate employees to get their thoughts and see if they can identify any additional expenses or business prospects that may have gone unnoticed.

Cost differences

Variations must to consist of: 1. labour expenses, such as:

1. basic salaries 2. overtime

3. unproductive time spent on things like paid breaks, travel, preparing for danger assessments and inductions, and so forth

4. allowances

5. Legislative fees, such as those for training

6. compensation for time off, bonuses, sick days, pensions, and so forth 7. individual protective gear

8. little personal tools

9. accommodate (if necessary) 10. travel (when required) (where necessary)

2. material expenses, such as:

1. the cost of the raw materials

2. the material is transported to location 3. handling and unloading

4. packaging and defence

5. quality controls and evaluations

6. waste brought on by breaks and cutting

7. cutting (unless the labour cost already includes this) 8. fixings

9. 10 royalties insurances

11. taxes and duties 3. equipment such as:

1. hiring fees

2. Ineffective time

3. cost of mobilisation and demobilisation 4. insurances

5. lubricants and fuels

6. Wearing components include drill and moil points, as well as cutting edges. maintenance

8. fuel and service vehicles that provide support 9. auxiliary materials and accessories

4. destroying existing buildings, including:

1. transportation and loading of garbage



2. temporary bracing and supports 3. dump charges

5. expenses related to management and supervision, such as: 1. the minimum wage

2. allowances

3. bonus money for time off

4. Transportation and lodging 5. mobile phones and computers

6. Planners and contract administrators who work remotely 7. insurances and sureties for projects

8. fees for permits

9. earnings and expenses 10. access devices

11. offices and infrastructure 12. extra protection

13. safeguarding finished and existing constructions 14. extra expenditures for sketching and design

15. Costs incurred by subcontractors, including the contractor's markup




It's also critical to evaluate how the change will affect the timetable because it could:

1. the lengthening of the project's total timeline

2. the alteration preventing or holding up other works

3. the variance affecting the completion dates of other projects by requesting resources from them




assistance with claims for subcontractors

When it comes to filing and putting together variants, some subcontractors lack sophistication. In most cases, it is in the contractor's best interests to support subcontractors with these claims when these variances are caused by changes or additional work required by the customer because:

1. The likelihood that the subcontractor will be successful rises with increased income, which also makes them happier, more equipped to deliver excellent service, and less inclined to make claims against the contractor.

2. The contractor often receives additional profit from the subcontractor's claim.




Site guidelines

Clients sometimes ask contractors to conduct extra work or make changes to recently finished work. Many of these demands are spoken verbally. Contractors are required to make sure that instructions:

1. are written down

2. are signed by the client's authorised representative 3. are distinct and unmistakable

4. are only accepted by the authorised representative of the contractor.

5. Permit the contractor to make a claim for additional expenses or time incurred as a result of the direction

6. have language that the contractor will accept


Sometimes instructions' language is unclear, giving the impression that a part of work is being redone due to the contractor's negligence or bad job. The client's Contract Administrator may be reluctant to pay the contractor for the extra work when the contractor files a modification because it seems from the instruction that the work is the result of a failure on the contractor's part.

Clients frequently utilise their usual site instruction form, which states that there won't be any additional fees or delays for the lesson. Since the contractor is typically not yet in a position to fully comprehend the ramifications of the order, these provisions should be removed.

Normally, the contractor should estimate a site instruction before beginning the work.

Delays

Rarely are all of the delays' costs taken into account. Following the delay, there could be: the extension of the contract's timeframe, which implies that the contractor will

on the premises longer than permitted and pays extra fees for: 1. onsite amenities

2. salaries and related expenses for the staff

3. bonds, sureties, and insurances being extended 4. equipment

2. the ineffective and fruitless use of staff and resources, which: 1. not at all usable

2. merely partially utilised

3. the project entering a season with unfavourable weather conditions that was not anticipated in the schedule or the tender, leading to additional delays and inefficiencies.

4. the interim rise in material prices

5. the activity taking place while other contractors are working nearby, which then has a negative effect on productivity

6. an action being carried out out of order, which could lead to: 1. when it's finished, access will be restricted

2. the work area becoming crowded as a result of other simultaneous activities

3. The lack of continuity of work for specialised equipment, subcontractors, or personnel forces them to return to the job site later, incurring additional mobilisation costs. In some cases, the equipment or subcontractors may also not be available when they are needed again, which could cause further delays.

4. damage to previously completed works

7. Because the site isn't ready to use the materials, the materials that have been ordered must be stored, resulting in storage costs, double handling, and the risk of damage and theft that goes along with it.

8. cash flow disruption brought on by the project's extended end date, which delays the release of retentions and securities

9. When subcontractors are late, they claim delay costs.


Many of these expenses are challenging to illustrate and support for the client. Clients frequently lack understanding of the effects of their actions. The contractor should take all reasonable measures to ensure that the client provides access and information in accordance with the project's schedule requirements.



is not postponed.

Acceleration

Unfortunately, contractors frequently end up spending more money and time on a project than was authorised during the tendering process. This is frequently because

1. the expansion of the work's scope

2. the client's late provision of information, drawings, or access 3. a customer who needs earlier access or completion

4. the client's contractors or employees causing the contractor to be late


By refusing to accept the contractor's revised schedule that takes these factors into account, the client frequently forces the contractor to expedite the work. This is obviously unacceptable, and while the contractor has a duty to make an effort to accommodate the client, the client also has a duty to accept responsibility for any changes or delays brought on by their actions, as well as to pay the contractor for the expenses incurred in reducing delays and achieving earlier completion dates.

Before the contractor incurs the additional costs of acceleration, it is preferable to reach an agreement on any acceleration claim with the client.

The contractor must document their right to an extension of time by adding the delays to the approved contract schedule. Once the entitlement has been determined, the contractor can look into reducing the timeline to accommodate the client's updated details and due dates. The contractor is then required to determine the effects of the new accelerated schedule on the work and what additional resources are needed to meet the new schedule.

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