Service Departments
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Service Departments
– Estimating departments
• Decision to tender
– Factors
»
Current and future workload
»
Capacity of the estimating and planning department
»
Extent of risk
»
Likelihood of success
»
Availability of suppliers and subcontractors
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Supply chain prices
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Getting market cover
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Preliminaries
– Method related charges
• Time related
– Programme sequence
– Establishment and staff-major items
– Subject to commercial pressure to reduce
• Fixed
– e.g. enabling works
• Value related
– Attendances
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Measured items
– Who measures
• Responsibility for accuracy and completeness
• Linkage to drawings and specification
• Use of measured items for valuation
– Implications for packaging subcontract works
• Interfaces
• Attendances on subcontracts
• Design liability
• Drawing comparisons
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Estimate to tender
– Tender submission
• Single form, period of time open for, basis of tender
– Tender Margin
• Expressed as a percentage
• Commercial opportunity
• Strategy for recovery discussed at tender committee
meeting
• Formal record of reports
– Qualifications
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Final adjustments
• Bills called
• Front loading
• Back loading
• Rate loading
– Computer aided estimating systems
• Conquest
• Causeway
– Money moved within tender
• Production of allowance bills which act as
budgets for activities
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Costs, information and reports
– Definition: that expenditure which has been incurred in
the normal course of business in bringing the product or
service to its present condition and location (SAPP9, para
17)
– Cost reports
• Project level
• Supplier level
• Resource level
– Company wide accounting information systems
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Company Ledgers
– Definition: that expenditure which has been
incurred in the normal course of business in
bringing the product or service to its present
condition and location (SAPP9, para 17)
– Cost reports
• Project level
• Supplier level
• Resource level
– Company wide accounting information systems
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Costs, information and reports and
ledgers
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Ledgers and reports
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Information flows
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Cost information flows
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Costs reports
– Timing
• Cost cutoff
•
Cash cutoff
•
Accruals
– Work in progress
– Cumulative and period reporting
– Cost provisions
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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Costs report example
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
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