301224 Contract Administration Assessment 3 – Western Sydney University Australia.

Subject Code & Title : 301224 Contract Administration
Weighting: 40%
Word limit of the report: 2500 words with +-10% deviation (excluding the appendices)
Submission requirements of the report: Individual report submit online via vUWS to the respective campus’s Assessment 2 Turnitin Link (if you are enrolled at Parramatta Campus, submit to Parramatta Campus Link, if you are enrolled at Kings wood Campus, submit to Kings wood Link. Do not submit to both Links)
301224 Contract Administration Assessment 3 – Western Sydney University Australia.

301224 Contract Administration Assessment 3 - Western Sydney University Australia.

Assuming that you are a Contract Administrator working for a Contractor, produce a report addressing the following Tasks:

Task 1:
1.1 Research and find out a case study building that failed due to various defects. Based on the case study information available, develop the scenario to discuss reasons for the building failure. You may make reasonable assumptions where required.
2.2 Based on the case study of Task 1.1, discuss how such failures could have avoided through quality compliance as per the contract. Refer to the relevant quality compliance aspects in AS4000-1997 support your discussion.

Task 2:
2.1 Explain why cash flow forecast is important for construction companies.
2.2 A contractor’s cash flow forecast for a project is given below. Discuss your observations while proposing the possible strategies to manage the negative cash flow.

Report structure: Please follow a general report structure with a title page, brief introduction, the tasks as detailed above, conclusion, references, and any appendices.

Late submissions: A late submission without approval for an extension will be penalised by 10 per cent per calendar day up to 10 days (see Learning Guide). Extensions will only be considered under approved
Special Considerations.

301224 Contract Administration Assessment 3 - Western Sydney University Australia.

Task 2: Cash flow Forecast
• 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.
• Defects Liability Period is 06 months.
• Retention value is 10% from each interim payment to a maximum of 6% of the contract sum – $9M
o Half released at the practical completion – $4.5M
o Other half released at the end of defects liability period – $4.5M

• An advance payment (10% of contract sum) is made on three installments as follows:
o 2.5% at the beginning of the project – $3.75M
o 2.55% at the end of first month – $3.75M
o 5% at the end of second month – $7.5M

301224 Contract Administration Assessment 3 – Western Sydney University Australia.

• 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

• Assume one-month period for payment verification and certification

Table 1: Cumulative value, cost, income and cash flow

Task 2: Cash flow Forecast

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