Okay, in this module we're going to discuss post contract within the overall construction phase. We're going to discuss post contract, cost reporting, change orders, and communication and meetings. Post contract, this is the time from signing of the contract until the final building certificate. So at this stage construction has actually commenced. You've covered all of your design stages, you've gone through procurements. You've negotiated and agreed the contract, it's now signed. You're now entering the construction phase. So this is referred to as post-contract. Successful projects are delivered to required quality standards, on time and within budget. Control of cost during construction, as discussed earlier, happens at the construction phase. We've already done the planning phase, we've already done the design phase, we've done the procurement phase. We're now in the construction phase. So you need essential cost control throughout this to ensure the project is delivered on time and to budget and to the quality that is required. What's involved within post-contract? You're going to be monitoring the status of the project to update the project costs and managing changes to the cost baseline. You'll be providing the means to recognize variance from the plan in order to take corrective action and minimize risk. Effective cost control will require the following actions to taken. You need to be managing interim valuations and certificates for payments, cash flow control and forecasts through budgetary control. So it's adjusting the cash flow plan to reflect alterations in the target cost, the master schedule or the forecast. It also covers financial statements showing the current and expected final costs for the project. That's reviewing contingency and risks, allowances, intervals, and reporting the assessments. Regularly updating and reissuing the cost plan and variation orders or change controls causing any alterations to the brief. Lastly, final accounting, the agreement of the final certificate and the settlement of the claims. So, that wraps up the main components of post contract and the role of a cost estimator or cost manager. One of the most important cost control actions is submitting regular, monthly in general, up-to-date and accurate cost reports. To keep the client well informed of the current budgetary and cost situation of the project. Typically within a cost report, and we're going to show you an example shortly, you would have a cash flow. A typical good cash flow would follow an S curve, which Ibrahim discussed earlier in his module. And you can see here on the screen a typical S curve will track expenditure over time. And ideally you want to see that S curve,you don't want anything aggressive, going straight up. You want a nice accelerated start flowing through the project. It will be mapped against the schedule, so milestones and dates that you expect the project to be having its particular expenditure, right through to the end of the project. Why use an S curve in cost reporting? We use it as a cumulative project cost plotted against time. It's used as a desired forecast of cash flow, it's a historical record for performance checking and allows the user to quickly identify growth, slippage, and potential problems. It's really used as a health check for the project Okay, I'm now going to give you an example of a cost report. You want it to be clear, simple, but covers all the information needed by the project team. You want it to be able to be used by the project manager, the architects, the engineers, the client, everyone involved. So it needs to be really user-friendly. So typical monthly cost report, you'd have your front page which would go straight into your content page. So you can see here this is what a typical cost report would cover. You'd have your executive summary, which will summarize the project for that particular month. It will tell you where the project's at and it will give you a general health check of the project. The next section will be the report summary going into a bit more detail of the cost, we'll show you in a minute. But it'll summarize the actual costs, whereas executive summary is an overall cost report summary. This then leads through to your cash flow. As discussed earlier, you want it to be an S curve so the project is on track. But generally the cash flow's really important to the user to understand, so far what they spent to date, what they spent in that month. What they forecast the expenditure for the following months to leading it to close of the actual construction project. You track your forecast cash flow against actual. And it'll give the overall project and the cost manager an idea of the health, whether the product's on track, cost-wise, and really it is a useful tool for the entire project team. Next you got change control, so this is really important that this cost report captures your change control. You need to make sure everyone's on the same page. You need to make sure the builder or the contractor on site is issuing any change. It's being logged effectively, it's being assessed and it's being reported whether it's been approved or not approved. So this is a very key part to the document, because it's going to affect your overall budget and it's going to affect your expenditure per month. You then go into your more detailed part of your cost report. This sometimes can throw certain people off who aren't from a cost background. You go into the real nitty gritty, the detail of the actual estimate of the locked-in contract value. And it will tell you every component of what's been spent so far, what is left in the budget, and the full cost to complete. Now, this is just an example cost report. Everyone does a slightly different cost report. It's always project-specific, client-specific, team-specific. It relies on a lot of things, but I'm trying to give you a flavor of a typical cost report. So in this cost report, we also have a funding tracker. So this is not always required, but for certain projects it's good to show funding that's been allocated to the project. And some projects, funding is released early at the start. And it might be the full lot, so it's quite simple to track it. But on a lot of projects, funding's released over time. And it's essential then in your cost report, you track when it was released, the particular month it's been released. What's remaining to fund the project, and even when the remaining funding allocations will come out. Your next stage is your provisional sums. So just when contracts have been signed and you've got your contract value, you will have a certain number of provisional sums. You might not, but typically you will have provisional sums. So these will cover items that not quite enough information was known at the time, the design was not quite there. The client maybe wasn't 100% sure on what they wanted. So you put in an allocation of money, it's a provisional sum, a provisional allowance. It's fine to have these in a contract value, it's quite normal. So this report therefore, we're capturing the provisional sum. So if we've got $100,000 in for bespoke doors, and they weren't quite sure the particular doors they wanted. It would show how much is drawing down against that, and for this cost report it might be $60,000 against the $100,000. So, it tracks that, and that all feeds into your contract value. Okay, we've also then, the last two sections. Section eight, we've got a risks and opportunities register. Now, first of all, this covers your risks, this would be a risk register. And that will track risks that you've identified from the start of a project and track them throughout the project. And how they are dealing and how they affect cost. We also have an opportunities register. And that looks at risk we see ahead of what could come up and could affect the project. It all ties in with change control as well and your contingency. Now again, depending on the particular project you're working on, you may have a procurement schedule as well. So the procurement, obviously we've discussed in the earlier module. This procurement part tracks everything that's been procured on the project. You'll have a procurement list, it will explain when the particular item was ordered, the value of it, and where that's drawn down against the overall project value. So let's go in a bit deeper into the cost report itself. Again, style and format can be up to the project and the team. At Turner and Townsend, we like to have it very clear like this, so it gives you a quick snapshot summary. And we have certain clients who don't have time to go into the detail of this cost report, so this page is key to them. They need to be able to have a quick look at that as they're running into their meeting. And they can see exactly what they need to see. So here we've got your current budget, which is the actual contract value that was locked in at signing the contracts. So that's your budget, that's your control budget, and that's what this full report will always follow, to capture whether it's on track or not. Your next column, you've got current forecast. So really you want that to be the same as the current budget, but it does differ, if you've got certain situations, certain reasons for the forecast going slightly off budget. Here, we've got cost per rentable square foot. This column, again, not always needed. It just gives an idea of, again a snapshot, of what this project's costing per square foot. So, you issue a cost report every month. And obviously your first month there will be nothing prior to that but the purpose of the next column is your previous forecast. So you're just tracking the difference between each month, each forecast. Next column is quite important, it's your movement in the period. Now if you're doing your job well, you will know there's movement in the periods. You will know that there's been movement from the previous month or the month before that and that's quite typical. And that just reports it there in that column. So it's any change in cost in that particular period. Your next column, that just tells you the variances in the budget. So that's the difference between, you have movement in your period and your previous forecast. Your last column is invoice to date. So that's what your overall contractor has invoiced you to date, drawing down against your budget. And you'll see here, we've got some of the hard costs at the top of the project, in the bar chart, and soft costs at the bottom. And we're really tracking there, the darker blue, your current budget against current forcast. We're also showing to the right of it a pie chart, which is all to do with invoicing. So it's showing the total expected invoice value, or the project budget. How much has been invoiced to date and, how much we expect to overall invoice, which is your net invoice. So you can see, for this cost report, it's a small portion so far.
