POST CONTRACT COST AND MANAGEMENT

  The first task should be to establish a unit rate per metre squared for the blockwork based upon the initial information provided for the bill item in regards to the bricklayer gang, the purchase price for the blocks and associated wastage as well as the 12% overhead and profit included. In doing this, pretend that no external unit rate has been provided. It is useful for students to assume that 10 blocks are required per metre squared. When you have done this, then you can compare the given unit rate with you calculated unit rate to determine whether or not the contractor is 'buying work' Buying work means contractor's rate is barely covering cost of 1 square metre of work without sufficient allowance for profit. When you have done this, then repeat this process of developing a unit rate based upon the revised conditions of higher pay demand by the gang and the reduced purchase price for blocks. TASK 1; CALCULATE ALLOWANCE TASK2; CALCULATE ALLOWANCE FOR VALUATION 2 HIGHLIGHTED IN RED BELOW TASK 3; CALCULATE COST TASK4;CALCULATE RECONCILATION ALLOWANCE AND COST VALUATION 2 TASK 5: PROJECT UNTIL COMPLETOIN PHOTO ILLISTRATION IS ATTACHED CW 2 – Post contract cost management You have recently been employed as the quantity surveyor for a large contracting organisation. You have been assigned to manage the financial aspects of the brickwork workpackage. The project is slightly behind programme and the site manager is concerned about the productivity of the bricklaying gangs. The commercial director is concerned that the estimating department are “buying” work and needs convincing otherwise. He also needs to assess the current and projected profitability of this workpackage and has asked you to investigate. Produce a report for the commercial director regarding the current and future financial position (include your calculations within the report), make recommendations for action for the estimator and site manager. Your report should include some discussion regarding the difficulties that companies face in designing feedback systems that support differing functions. The word count for the report should be limited to 3000 words (excluding references and appendices), however +/- 10% also acceptable. The data that you need is below. 110 mm fair faced blockwork, pointed both sides, in cement mortar (1:3) total area 10680 m2 The allowance bill build up indicates a 2.1 gang were priced at £16.50 and £10.00 respectively and the output of the gang (taken from the planners standards) was 20 blocks per hour per bricklayer. The materials allowance for the blocks was taken from a quotation by RG Brickwork, was £1850/1000 blocks, delivered to site, the estimator has included 10% for loss and damage to the materials. The commercial team decided to include an allowance of 12% for contribution to overheads and profit. The allowance for mortar and access scaffolding was included within the preliminaries based on the planners programme for the workpackage. The external rate for this blockwork is £ 29.64 /m2 Total £316,555 The second valuation for the work has been completed and the details are below. 480 m2 has been completed 530 m2 has been claimed 500 m2 has been paid. Analysis of the cost records indicate that the blocks have been bought for £1650/1000, the labour returns show that 120 hours have been recorded against this activity and due to labour shortages the gang rate has now increase to £50 per hour Marking Criteria (CW2) – 25% of module marks Weighting % Professional approach and presentation of the report • Correct use of Harvard referencing guidelines • Grammar and punctuation • Structure, clarity and readability 10% Discussion on current and future financial position of the company • Accuracy of calculation • Understanding the current and future financial position of the company • Actions for estimator and site manager 60% Discussion and conclusion • Challenges that the companies faces in designing feedback system 30% Total marks 100