Your company has been awarded the contract for new foundation to the engineering

Question

Your company has been awarded the contract for new foundation to the engineering building and you have been assigned as the project executive. The contract has a value of $22,000,000. The estimate and anticipated schedule durations are as follows: Budget ($) Start Date End date Mobilization (front loaded OH & P) 100,000 may, 2015 may, 2015 General condition 1,100,000 may, 2015 apr, 2016 Excavation and Utilities 1,800,000 may, 2015 july, 2015 Site work 500,000 mar, 2016 apr, 2016 C.I.P concrete foundations 1,400,000 jun, 2015 oct, 2015 C.I.P concrete flatworks 900,000 dec, 2015 mar, 2016 Masonry 1,900,000 nov, 2015 feb, 2016 Structural steel 2,900,000 sep,2015 dec, 2015 Roofing 950,000 dec, 2015 feb, 2016 Glass and glazing 1,200,000 dec, 2015 feb, 2016 Interior Finishes 2,200,000 feb, 2016 apr, 2016 Fire proofing 375,000 feb, 2016 mar, 2016 Plumbing 850,000 jan, 2016 apr, 2016 HVAC 1,700,000 jan, 2016 apr, 2016 Electrical 3,000,000 jan, 2016 apr, 2016 Contractor overhead and profit 1,100,000 Bond (payable when invoiced) 25,000 Total 22,000,000 Your company will self-performed the concrete foundations, and flat work and the masonry work. For both disciplines your profit margin is 10% and your total labor cost is 50% of cost of work. Assume pay roll taxes are 10% of the labor cost and are paid in the month incurred. Union fringes and insurance cost are 30% of your total labor cost and are paid the following month. All material and equipment cost are paid the following month.  
Your total project management and supervision staff cost is 75% of your general condition cost. Employee benefits and insurance are 20% of labor cost. Your general condition cost are incurred equally each over the duration of the project. Non-labor general condition cost are paid the following month.  
All of the remaining work has been sub contracted. All sub contracts contain pay if paid language.  
Pay applications are due to the university at the end of the month and are paid the first of the second following month i..e payment for the may invoice would be made july 1st. All invoices are subjected to 10% retenton and payment of retetnion will be made 90 days after completion of the project. There will be no early redutcion in retainer.
Over head and profit is to be billed on a pro-rata basis based on the work in place each month.
Prepare a work sheet showing the monthly and cumulative cash flow for the project. To check your results , compute the total expected over rate and profit for the project. Your company has been awarded the contract for new foundation to the engineering building and you have been assigned as the project executive. The contract has a value of $22,000,000. The estimate and anticipated schedule durations are as follows: Budget ($) Start Date End date Mobilization (front loaded OH & P) 100,000 may, 2015 may, 2015 General condition 1,100,000 may, 2015 apr, 2016 Excavation and Utilities 1,800,000 may, 2015 july, 2015 Site work 500,000 mar, 2016 apr, 2016 C.I.P concrete foundations 1,400,000 jun, 2015 oct, 2015 C.I.P concrete flatworks 900,000 dec, 2015 mar, 2016 Masonry 1,900,000 nov, 2015 feb, 2016 Structural steel 2,900,000 sep,2015 dec, 2015 Roofing 950,000 dec, 2015 feb, 2016 Glass and glazing 1,200,000 dec, 2015 feb, 2016 Interior Finishes 2,200,000 feb, 2016 apr, 2016 Fire proofing 375,000 feb, 2016 mar, 2016 Plumbing 850,000 jan, 2016 apr, 2016 HVAC 1,700,000 jan, 2016 apr, 2016 Electrical 3,000,000 jan, 2016 apr, 2016 Contractor overhead and profit 1,100,000 Bond (payable when invoiced) 25,000 Total 22,000,000 Your company will self-performed the concrete foundations, and flat work and the masonry work. For both disciplines your profit margin is 10% and your total labor cost is 50% of cost of work. Assume pay roll taxes are 10% of the labor cost and are paid in the month incurred. Union fringes and insurance cost are 30% of your total labor cost and are paid the following month. All material and equipment cost are paid the following month.  
Your total project management and supervision staff cost is 75% of your general condition cost. Employee benefits and insurance are 20% of labor cost. Your general condition cost are incurred equally each over the duration of the project. Non-labor general condition cost are paid the following month.  
All of the remaining work has been sub contracted. All sub contracts contain pay if paid language.  
Pay applications are due to the university at the end of the month and are paid the first of the second following month i..e payment for the may invoice would be made july 1st. All invoices are subjected to 10% retenton and payment of retetnion will be made 90 days after completion of the project. There will be no early redutcion in retainer.
Over head and profit is to be billed on a pro-rata basis based on the work in place each month.
Prepare a work sheet showing the monthly and cumulative cash flow for the project. To check your results , compute the total expected over rate and profit for the project.

Explanation / Answer

PREPARATION OF CASH MANAGEMENT WORK SHEET PARTICULARS May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 TOTAL Mobilization 90000 10000 100000 Excavation and Utilities 540000 540000 540000 180000 1800000 Site work 225000 225000 50000 500000 Structural steel 652500 652500 652500 652500 290000 2900000 Roofing 285000 285000 285000 95000 950000 Glass and glazing 360000 360000 360000 120000 1200000 Interior Finishes 660000 660000 660000 220000 2200000 Fire proofing 168750 168750 37500 375000 Plumbing 255000 255000 255000 85000 850000 HVAC 510000 510000 510000 170000 1700000 Electrical 900000 900000 900000 300000 3000000 C.I.P concrete foundations 0 Material equipment 126000 126000 126000 126000 126000 630000 Labour cost tax 12600 12600 12600 12600 12600 63000 insurance 37800 37800 37800 37800 37800 189000 Labour cost 75600 75600 75600 75600 75600 378000 0 C.I.P concrete flatworks 0 Material equipment 101250 101250 101250 101250 405000 Labour cost tax 10125 10125 10125 10125 40500 insurance 30375 30375 30375 30375 121500 Labour cost 60750 60750 60750 60750 243000 0 Masonry 0 Material equipment 213750 213750 213750 213750 855000 Labour cost tax 21375 21375 21375 21375 85500 insurance 64125 64125 64125 64125 256500 Labour cost 128250 128250 128250 128250 513000 0 overhead 91667 91667 91667 91667 91667 91667 91667 91667 91666 91666 91666 91666 1100000 General condition 0             project mgt &sup cost 0 0 0 0 0

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