Six Figure Consultant Podcast (Start or Scale Your Own Consultancy)

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In this episode, we explore into the second edition of RICS's "Appropriate Contract Selection," a must-have resource for professionals in the construction and infrastructure sectors. This comprehensive guide provides critical insights into selecting the right contract for every type of project, whether in the public or private sector. We will walk you through the key procurement routes commonly used in the UK, such as traditional, design and build, and management contracting, and discuss how these impact contract choice. You’ll also learn how to balance risks, streamline tendering processes, and ensure contracts align with project goals and timelines.

We’ll explore the practical applications of these contracts, including how to handle amendments, execute contracts, and consider factors like liability duration and jurisdictional requirements. Whether you're an employer looking to engage a main contractor, or a contractor managing sub-contracts, this episode is packed with actionable advice to help you avoid common pitfalls and ensure successful project delivery. Tune in to get expert advice on choosing the most effective contracts and strategies that can save you time, money, and resources in your next project.

In this episode we jump into the future of construction with our latest podcast, where we unpack the Pilot Version Standard—a game-changer in digital construction and sustainable building practices. Learn how this innovative framework is setting new benchmarks for efficiency, environmental responsibility, and project management. Whether you’re a construction professional or an industry enthusiast, discover how this standard is reshaping the way we build faster, smarter, and greener. Stay ahead of the curve and be part of the revolution!

In this episode, we dive deep into the world of construction contracts and retention with guidance from the Royal Institution of Chartered Surveyors (RICS). We'll explore the essential principles of retention, including the legal foundations, reasons for retention clauses, and how they function across different contract types like JCT, NEC, and FIDIC. Learn about common issues such as financing, insolvency, and defects rectification, and gain practical advice on applying retention clauses in real-world scenarios. Whether you're a contractor, project manager, or construction consultant, this episode is packed with insights to help you navigate and manage retention effectively in your projects.

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1. What is the main purpose of cost reporting in construction projects?

The primary purpose of cost reporting is to provide the client with clear and accurate information about the projected final cost of the construction project. This forecast, also known as the "outturn cost", can be presented as a direct figure or as a variance against the pre-determined budget.

2. What key factors influence the final construction cost (outturn cost)?

Several factors can impact the final project cost. These include:

3. How frequently should cost reports be prepared and issued?

While project-specific needs and client preferences can influence reporting frequency, the industry standard aligns with the typical monthly payment cycle. Therefore, monthly cost reporting is recommended to ensure the client remains informed about cost movements.

4. Why is it beneficial to have separate cost reports for different budget holders?

Dividing the cost report into sections for each budget holder (e.g., architect, structural engineer, services engineer) allows for clearer accountability and cost control. Each stakeholder can monitor their specific area of responsibility, making it easier to identify potential overruns or savings early on.

5. How should risk allowances be managed and reported throughout a project?

It's generally advisable to use specific risk allowances for identified potential cost risks rather than relying on a general contingency. As the project progresses and actual costs become clearer, the corresponding risk allowances should be reduced. Any remaining funds can be released to the client or allocated to other project needs.

6. What are some recommended ways to handle loss and expense claims from contractors within cost reporting?

Transparency is key. The cost report should clearly indicate the amount the contractor is claiming for loss and expense. If the quantity surveyor is tasked with assessing the validity of these claims, their findings should also be included. It's essential to communicate to the client that assessing loss and expense can be complex and may require detailed information from the contractor, potentially delaying a final assessment.

7. How should Value Added Tax (VAT) be addressed in cost reports?

To avoid confusion, cost reports should clearly state that all figures are exclusive of VAT. The specific VAT implications for a project are dependent on various factors related to the client, the project itself, and the prevailing tax regulations.

8. What is the significance of the quantity surveyor's presentation of the cost report to the client?

Direct communication is crucial for effective cost management. Simply sending a cost report via email or post can lead to misunderstandings. By presenting the report in person, the quantity surveyor can clearly explain cost fluctuations, potential risks, and opportunities for savings, leading to more informed decision-making by the client.

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