Construction Cost Estimate.
This is done on the basis of an elemental estimate, quantifying the entire scope of work as represented on the drawings issued by the architect.
We aim to ensure that all unforeseen issues are catered for by employing our experience of the construction industry and our specialized knowledge of estimates, to cater for the full scope of works, without overloading the costs. There is a fine line between catering for all eventualities and providing for the necessary eventualities, that will be required by the project and we believe that we have mastered the science of this art at Prodigious.
Total Budget Compilation.
There are more costs to building work than just the cost of the construction. Due to the inflation and cost increases and the time delay in construction periods, it would be very difficult for contractors to give clients a competitive price and fix it for the full construction period on all components. We have scientifically researched data that we use to calculate the approximate allowance required, that needs to be held in abeyance for an escalation fund to provide for these cost increases, especially at the end of a contract. There are also costs for example, plan approval costs, NHBRC registration fees, professional fees, etc. that we compile in a Total Project Cost to ensure the client has a full financial picture of their construction project.
Our viability studies have been refined down to a fine art. It covers all Capex costs, but appropriate for each development to ensure a correct viability study that gives an accurate projection of the project return.
To ensure accuracy, each item is calculated in detail, including all professional fees (in accordance with the respective fee scale), agent commissions in line with SAPOA guidelines and actual projected cash flows to ensure accurate finance charge calculations over the life span of the project. Further analyses creates the tools to manage, analyse and apply corrective measures in the correct areas to give an optimum return.
Compiling and Issuing Tender Documents.
We provide documentation that levels the playing field for all contractors to ensure everyone gives the client the exact same price for comparison.
Part of this documentation stipulates the terms and conditions under which the client will require the contractor to execute their works, in order that there are no hidden costs for both client and contractor.
Contract Documentation for signature.
We cannot emphasize the importance of the drawing up of a proper contract between the client and the contractor enough.
Many clients sign a one sided contract that is drawn up to the terms and conditions of the contractor which leaves the client exposed in many cases. For instance: What recourse do you have when the builder does not finish your contract when promised? Who is liable when a member of public gets injured on the construction site? Who carries the risk if the building burns down during construction due to human error?
Or the whole building burns down during construction due to open flames or other human errors – who carries the risk? We use a South African Form of Contract that has been agreed upon between the Member Bodies of Architects, Quantity Surveyors, Engineers and Contractors that protects both parties rights and obligations, to adjudicate these types of claims.
Procurement of Subcontract Tenders.
All the work during the construction of the project is not performed by one company and the process of obtaining competitive prices requires that all subcontractors price on exactly the same scope of works, under the same terms and conditions, but subject to entering into a contract with the Main Contractor and not with you. Again we provide this information as an on-going process, because your project has not been detailed to the last nut and bolt at the time of commencement of the project.
Monthly Cost Reports.
This is an invaluable Financial Management tool to ensure that we maintain to the agreed budget, so that, should there be changes, we can project what our end goal and final cost will be.
Cash Flow Reports.
We calculate the expected cash flow of the contract using a theoretical calculation in addition to a project program exponentiation.
The mean average between these 2 systems gives a fairly accurate projection of building costs, professional fees and other general costs to give the client a clear picture of how cash outflows will occur during the course of the project. This calculation is revised on a monthly basis to ensure the information remains accurate with any changes in the project.
Interim Payments and Reconciliation Statements.
The basis of the contract is to ensure that the client only pays for work as it is completed and for materials that are physically on site and over which the client has control.
This is to ensure that the client does not subsidize other projects or is worse off, should the contractor get into financial difficulties and thereby is forced to use other contractors to complete the work. There are also guarantees in place that give the client the assurance that the contractor will complete the work as agreed.
As the project reaches various stages of completion, the client’s risk that the project will not be completed reduces and subsequently these risk insurances have to be reduced. When a client pays for material that is bought for the project that is not built in, the client must ensure that ownership of these materials are carried over to himself on payment. A documented paper trail is followed for this purpose to ensure minimal risk, and documentation forms part of our interim payment preparation.
Contract Administration during the Construction Phase.
The day to day administration of the contract, such as keeping signed contract documents for all contracts and sub-contracts, contract correspondence, assessing revised drawings for cost variations, re-measure of provisional work, etc.
Cost Control and Management during the Construction Phase.
Assessing revised or new drawings as they are issued for cost variations, value engineering new work for best cost benefits, track changes and variation orders as issued.
Management of Variations.
Not all variation orders have costs implications and some may have no alteration in the scope of work. However, there may be Variations are assessed for cost and time implication. These cost implications that need to be costed and agreed upon as the contract progresses, to ensure that one is always aware of the final contract value. In addition, this entails the management of the construction contingency with the input from the client.
Principal and Sub-Contract Final Accounts.
All the contracts are required to be wrapped up financially, ensuring all work in the scope of work has eventually been executed and all additional work has been accounted for, in order for the client and contractor to finalize the contract and release all guarantees back to the contractor.