1. A contractor's quotation for $1,500,000 includes $ 250,000 as prelims. This project is to be completed within 5 months. Having worked for 2 months, the contractor submits the first bill for $175,000.00. Using this scenario as an example,

(a) reason out which method should be used for valuing prelims (i.e. time related or value related);

(b) compute the amount you would certify;

(c) explain how such ambiguities be avoided; and

(d) note a strategy that can be brought to bear to incentivize/penalize slow financial progress other than liquidated damages

2. Prepare a detailed procurement plan for the following situation. Make reasonable assumptions clearly stating what these assumptions are:

A client wishes to refurbish a large hotel during the off-season (June to October). A decision has been made to manage this project using in-house staff. One of the main jobs involves re-tiling 60 toilets. The client has decided to use a number ofsmall contractors on a labour only basis. Prepare a procurement program for this project. Assume that the Project Manager has to submit all quotations to the Managing Director for approval.

3. A government department has a practice of specifying the monetary value of the tender bond by basing it on a certain percentage of the estimated cost. For example, if the estimated price is 100,000, the tender bond isset at 3,000. Likewise, if the estimated price is 1,000,000, the bid bond is set at 30,000. During an informal social chat at a pub, the procurement office who works at the said government department discusses the percentage they hold on tender bonds in response to a question raised by one of his friends. You are not a friend of the procurement officer. What problems can arise in relation to Tender Conditions? Base your judgment on focusing on a known set of tender conditions.

4. A client is interested in constructing a five storey office building (ground and five upper floors). He has requested you to provide a P90 estimate. Designs are at the preliminary stage. The internal floor areas for each floor (from ground to top floor) is approximately 1500, 1500, 1250, 1000, 1000, and 750 sq.m. respectively. The ground floor is to be laid with expensive granite slabs.

Ground conditions are poor requiring piling. A similar building close to the proposed site was constructed in 2010 for $ 20M with a total floor area of 10,000 sq.m. but ground conditions were good. Prepare an estimate to completion taking into account of all costs assuming that the building would take 3 years to complete from now. Assume any information not given. Use format given in course book.

5. Evaluate the decision to tender given the following information: Line of credit from bank $2M (total)

Budgeted turnover (first six months): $75M (as per business plan)

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6

Forecast monthly TO of current projects - Workload($) 5M 15M 20M 20M 10M 5M

Cumulative cash flow forecast ($) +1M -0.5M -1M -1M -1.2M -0.9M

Forecast monthly TO of project to be tendered approx. value $21M 2M 3M 5M 5M 4M 2M

Bid project cumulative cash flow ($) - 0.5M -0.75M -1M X + 0.5M +0.5M

Bond balance sheet ($) 0.5M 0.75M 0.5M 1.5M 0.25M 0.25M

TO - Turnover

Note: Take the value of 'X' (month 4 for bid project) as follows:

If your surname starts with:

A to E, take as 0

F to J, take as -0.5

K to O, take as +0.5

P to T, take as -1.0

U to Z, take as +1.0

6. A value espoused by a contracting organization is 'ethical construction'. In response to a tender submission, you have been asked by your manager to provide a paragraph on this issue. List five practices that may impress a prospective client demonstrating similar values. Page 3 of 4

7. Prepare a payment claim given the following information: The payment claim is made under theBCIPA 2004. The contract does not provide for payment of materials on site. Landscape work hasn't started. Take retentions at 10% with a ceiling of 5% of Base Contract Sum. Take value of variations completed are as follows:

If your surname starts with:

A to E, take as 10,000

F to J, take as 12,000

K to O, take as 15,000

P to T, take as 17,000

U to Z, take as 20,000

Payments received to date 10,000 (excluding GST) Priced Quotation Payment Claim 2: Details

Price % complete Value of work done Excavations 10,000.00 Excavations 80

Concrete Work 35,000.00 Concrete Work 80

Metal Windows and Doors 15,000.00 Metal Windows and Doors 60

Electrical 10,000.00 Electrical 40 Painting 30,000.00 Painting 0 Base Contract 100,000.00 Base contract

Prime cost sum for electrical fittings 4000.00

As per receipts submitted but overheads and profits add 4,500.00

Provisional sum for landscape work 6,000.00

Contingency Sum 10,000.00

Materials at site 5,000.00

Contract Price 120,000.00

Add: GST 10% 12,000.00

Contract Price

including GST 132,000.00Page 4 of 4

8. Given the following, calculate the SQP for each of the tenders and the adjusted evaluation price:

a. Number of tenderers - 3 (X,Y, Z)

b. NPA grade range - 8

c. NPA for tenderers X, Y & Z are 8, 4, and 0

d. Base estimate is $ 100,000

e. Tender prices of X, Y, Z are $ 110,000, $120,000, $ 130,000

9. 'Most companies use cost-plus pricing - is this because it is better, or the most convenient? If most companies use cost-plus pricing, you'd think it must be the best method. After all, if a firm doesn't cover its costs with its price, it is out of business. So isn't cost-plus pricing the only method that will ensure long-term prosperity of the company?' Respond using not more than a page.

10. In what ways can a contractor demonstrate 'value for money'? List five ways