Contract and cost management

Once a contract is signed, cost is lost on paper before it is lost on site. Variations, price adjustment and extensions of time depend largely on how the contract is read.

This runs in two contract languages at once: in Turkey, Public Procurement Contracts Law No. 4735 and its annexes; abroad, FIDIC. The second was used on jobs such as Karbala Refinery, Najaf Hospital, and the Rostov and Erbil Sheraton hotels.

This page covers work while the contract runs: tying a claim to the numbers the moment it arises. Closing the account — final quantities, comparative estimate and the variation file — has its own page: Final accounts.

Scope

• Contract reading — analysing the contract and its annexes for cost.
• Variations — tying the claim to the contract clause and the numbers; the file itself is drawn up in the final account.
• Claims — tying price adjustment and new rate claims to the numbers.
• FIDIC contracts — claims, extensions of time and interim payment documents on Red and Yellow Book jobs, written in the contract's own language.
• Budget tracking — monitoring actuals and reporting variances.

Where we have done it

Motorways: Gebze–Orhangazi–İzmir, Northern Marmara and Menemen–Aliağa–Çandarlı. Buildings: the cardiovascular surgery block of Bursa Şevket Yılmaz Training and Research Hospital and the Arnavutköy School and Dormitory Project (24,000 m²).

What is different

Variance reports are built on measurement, not estimates: lines from the same job's quantities, payments and analyses come together in one table. The figure behind a claim letter can always be opened down to a single item.

For international work, see also cost management.