CIPS L6M5

XYZ is a large construction organisation which is currently running five different projects. Below are details of each project including the type of contract and pricing mechanism used.

Project 1: This project is to build an apartment block and the company has responsibility for designing and constructing the building. Upon completion, ownership will pass to the client. Management have decided the pricing based on past experience of similar projects.

Project 2: The company will provide the facilities management to the building for 6 years following the completion of the construction work. Due to volatility in the industry, the budget is changing continuously over the years.

Project 3: XYZ has been involved in the project since an early stage, but does not hold the design risk for the construction of the building. The budget starts afresh at the beginning of each new accounting period.

Project 4: XYZ is responsible for the design and build of certain aspects of the construction. However, the client has also employed another company for other aspects. The client will take ownership from all companies involved upon completion. XYZ is paid when milestones are completed during the building phase.

Project 5: This is the construction of a new toll bridge which will be operated by XYZ for the first 6 years post construction. Pricing is based on the costs of raw materials and labour and a profit is added on top of this.

Complete the table below by listing the type of contract and pricing mechanism being used for each project; design and operate, design build operate and ownership, public private partnership, full turnkey, partial turnkey, management contracting, bottom up, top down, rolling, fixed fee, zero, activity.

Which of the following will you put into box 10?

Manchester City Council is looking to construct a new hospital and will be using a EPC style of contract. Which two of the following are the greatest risks to the Council?

In a fixed lump sum contract, this pricing mechanism doesn't allow for any changes in price. Is this statement TRUE?

KCJ Ltd is a public sector organisation which is looking to run 5 projects over the next financial year. Below are details of each project:

Project 1: The budget estimate of this project is calculated using an algorithm. The project lead is the founder of the organisation.

Project 2: The project lead is the Head of Research and Development, who has a PHD in Data Science. He has taken costing and budget information from similar projects conducted previously to decide on a budget for Project 2.

Project 3: The project is being led by a key stakeholder and involves creating a Bill of Materials. Costs will be worked out for each item required to complete the project and totalled together.

Project 4: The Project Leader has worked out the base cost, most likely cost and worst-case scenario for the project. His power comes from his ability to pull the plug on this project at any time.

Project 5: This project is being led by a well-liked member of the Board of Directors. He has selected a team who he gets on well with and has decided the budget based on his own research.

For each project, select the cost estimation method used and the source of power of the Project Leader. Complete the table below, some answers may be used twice: bottom up, 3-point estimate, parametric, analogous, expert judgement, top-down, positional (x2), personal (x2), expert, negative

Which of the following will you put into box 4?

Which of the following processes for managing change is the most passive?