EXPENDITURE PLANNING AND CONTROL Essay Example | Topics and Well Written Essays - 1750 words

EXPENDITURE PLANNING AND CONTROL - Essay Example Conclusion......................................................................................13 Appendix A: Time and Cost Calculation................................................15 Appendix B: Preliminaries cost due to the Prolongation of the Works. 15 References 16 Bibliography 17 Expenditure Planning and Control – Assignment 1 I. Introduction I have been instructed by the main contractor (‘the Contractor’) to prepare a report in relation to a construction project which has experienced significant problems from the get go, which have resulted in delay and disruptions during the course of the Works. These delays and disruptions have inevitably affected the Contractor’s ability to complete the work in a timely fashion. This report provides an independent assessment of the surrounding particulars and contract documentation with a view to resolving the matter. I have specifically been instructed to include in the report the following points: an analysis of the delays; extension of time (‘EOT’); liquidated damages; valuation of work and claims for loss and / or expense. Generally speaking, I am instructed to provide my opinion in relation to the parties’ rights and obligations under the contract. The report begins by outlining in brief the ‘Background Facts’ and issues which arose (see section II). Section III of the report provides an ‘Analysis of the Issues’. Under this section, each problem is addressed in chronological order. The ‘Procedural Issues’ are set out at section IV. Section V addresses the ‘Methods of Quantification’. Finally, section VI is the Conclusion. II. Background Facts The contract was entered into by the parties for the construction of an extension to a cancer centre at a hospital in the north east (‘the project’). The project can be more specifically summarised as the construction of an extension and some refurbishment work t o the cancer unit. The standard form construction contract used for the works is the JCT Standard Building Contract with Quantities (SBC/Q) (‘JCT05’) with sectional completion. This form of contract is generally used where the works have been designed / detailed by or on behalf of the Employer. The contract documentation is comprised of the JCT05 contract, contract drawing and the bill of quantities. The Contract Sum for the Works was set at ?4,000,000 under a firm price contract; otherwise known as a fixed price contract. The Contractor was to be paid monthly with 3% of the Contract Sum being retained by the Employer until completion. The duration of the contract was 34 weeks with a start date scheduled for 1st February 2008. The Works were to be executed whilst the neighbouring hospital buildings were to be occupied. It was specifically mentioned in the Preliminaries, however, that the Works were to be carried out with ‘as little disruption as possible to the da y to day working of the hospital’. Albeit, contractors were advised to visit the site at the pre-tendering stage in order to assess the conditions which could potentially impede the execution of the Works (see the Preliminaries). Furthermore, there is only one site entrance, which is situated along a busy road and is also on a ‘blind corner’, which requires careful supervision at the time of site deliveries. The following issues arose on site soon after the works commenced: Relevant Issues i) A delay of six weeks resulted after site conditions were found to be of poor quality which demanded that the foundations be redesigned; ii) A further five