Subject Code & Title :- 301224 Contract Administration
Assignment Type :- Assessment 3
Weighting :- 40%
Word limit of the report :- 2500 words with +-10% deviation (excluding the appendices)
Assuming that you are a Contract Administrator working for a Contractor produce a report addressing the following Tasks:
301224 Contract Administration Assessment
Task 1 :-
1.1 Research and find out a case study building that failed due to various defects.
Based on the case study information available develop the scenario to discuss reasons for the building failure. You may make reasonable assumptions where required.
1.2 Based on the case study of Task 1.1, discuss how such failures could have avoided through quality compliance as per the contract. Refer to the relevant quality compliance aspects in AS4000-1997 support your discussion.
Task 2 :-
2.1 Explain why cashflow forecast is important for construction companies.
2.2 A contractor’s cashflow forecast for a project is given below. Discuss your observations while proposing the possible strategies to manage the negative cashflow.
Report structure :- Please follow a general report structure with a title page brief introduction the tasks as detailed above conclusion references and any appendices.
Task 2: Cashflow Forecast :-
• A building project having a contract sum of $150 million and contract duration of 12 months with 6 months defects liability period awarded to a company.
• Defects Liability Period is 06 months.
• Retention value is 10% from each interim payment to a maximum of 6% of the contract sum – $9M
o Half released at the practical completion – $4.5M
o Other half released at the end of defects liability period – $4.5M
• An advance payment (10% of contract sum) is made on three installments as follows:
o 2.5% at the beginning of the project – $3.75M
o 2.55% at the end of first month – $3.75M
o 5% at the end of second month – $7.5M
• Advance recovery start after 40% of the value of work completed. The total advance to be recovered before 80% of the value of work completed – Between 5th and 9th months
• Assume one-month period for payment verification and certification
Table 1: Cumulative value cost income and cashflow
Task 2: Cashflow Forecast