301224 Contract Administration : Cashflow Forecast Installments

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301224 Contract Administration

Task :

Assessment 3 Outline

Task 2: Cashflow Forecast

1. 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.

2. Defects Liability Period is 06 months.

3. Retention value is 10% from each interim payment to a maximum of 6% of the contract sum -$9M

4. Half released at the practical completion – $4.5M

5. Other half released at the end of defects liability period – $4.5M

6. An advance payment (10% of contract sum) is made on three installments as follows:

7. 2.5% at the beginning of the project – $3.75M

8. 2.55% at the end of first month – $3.75M

9. 5% at the end of second month – $7.5M

10. 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

11. Assume one-month period for payment verification and certification

Assessment 3 Outline

Task 2: Cashflow Forecast

Assessment 3 Outline

Marking criteria:

Assessment 3 Outline

301224 Contract Administration

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