Contract Management & Change Control
Capital budgeting is a critical decision-making process that helps construction companies evaluate potential investments and allocate financial resources to the most profitable projects. In the construction industry, capital budgeting is an essential tool for managing long-term investments and ensuring the company’s financial stability.
Capital budgeting in construction companies involves evaluating the costs and benefits of various investment opportunities, such as building new facilities, upgrading existing infrastructure, or purchasing new equipment. It also involves estimating the expected cash flows from these investments over the investment’s lifespan and comparing them to the initial cost of the project.
One of the primary techniques used in capital budgeting is net present value (NPV) analysis, which takes into account the time value of money and estimates the project’s profitability by discounting future cash flows back to their present value. Another commonly used technique is internal rate of return (IRR), which estimates the project’s return on investment by calculating the discount rate that makes the project’s net present value equal to zero.
In addition to financial analysis, capital budgeting in construction companies also considers non-financial factors, such as environmental impact, social responsibility, and strategic alignment with the company’s goals.
Overall, effective capital budgeting is critical for construction companies to make informed investment decisions that contribute to their long-term success and sustainability. By evaluating potential investments and allocating resources to the most profitable projects, construction companies can ensure that they are maximizing their return on investment while also meeting their strategic objectives.
Contract Administration:
Cost Umbrella team has gained experience by providing professional expertise for all type of contract such as fixed price, design and build, lump sum turnkey, remeasured and cost-plus projects. In recent past projects, we have provided EPC services for some PPP projects and helped clients to establish the financial models. We understand that each project is different and procurement method needs to be innovative and efficient to deliver the best outcome for the client.
Invoice Management (IPC/IPS):
Cost Umbrella team is expert of preparing interim payment schedule and certificates following the stipulated contract conditions. We are well experienced in using different payment certificate templates in the construction industry defined by different consultants and client. Our team maintains well organized and updated payment logs which help the project stakeholders to generate the progress reports. Likewise, we do the sub-con invoicing and keep comprehensive record.
Dispute Management:
The growing demands of construction industry have given rise to more dispute, delay and consequently more claims. CU team provides services for contractual and technical disputes and recommend different arbitration and conciliation methods to solve the disputes. CU typically involves procedures such as mediation, adjudication, arbitration, or a combination. Large or complex projects may have additional tiered dispute resolution procedures , dispute resolution boards, steering committees and partnering meetings.
Value Management:
VE method is employed to improve the value of the project by examining the function of each item or element and the corresponding associated cost. Cost Umbrella worked on multibillion projects weighing the cost/benefit ratio and suggested our valuable clients best alternative construction solutions with significant cost reductions. CU team has technical exposure of highlighting the project components which can be lower in cost while keeping the same value and function of project.
Variation Orders / Project Claims:
A variation order is a written agreement to change the work from that agreed in the contract. In general, variation orders may involve change in scope, time, and material. Over the period, CU team has established an effective variation order procedure flowchart which is transparent and well defined. We provide our professional services for claim management whether issued by client or contractor.
Settlement of Final Account:
CU team has provided cost management services for all phases of project execution starting from initiation to the settlement of final account. We are expert in preparing final payment invoice by repeating whole cycle calculations. We provide services of preparing the final account and reporting against the last cost/financial report by engaging the stakeholders in final account meetings as per RICS defined standards.