SAP Implementation Project

Role of Quantity Surveying Department

Presented by : Anthony L. Almeida , Head of Quantity Survey Dept) (BPO) Roshan De Silva ,Project Quantity Surveyor, Dubal Projects- (CTM)

Quantity Survey Department

Quantity Survey (Q.S.) Department is part of commercial department without involving estimation, since estimation is a separate department.

Project Quantity Surveyors. Managing Director General Manager Commercial Head of Quantity Survey Dept. Contract Executives.

Once the job is awarded, then Q.S. Dept. comes into the picture, as they are the revenue point. The budget, signed by Managing Director, is prepared and released by Estimation Department. QS Department shares the budget with Accounts department, as the Accounts department interacts with Head, Quantity Survey Dept. for closing of accounts. Controlling of budget is mainly done in Purchase Dept.. Q.S. Dept. and Accounts Dept. jointly sits at the end of every month to close accounts, to check the revenue generated against the cost incurred. This exercise helps to monitor the progress of the project, commercially, thus, enabling the Q.S. Dept. to inform the concerned Project Managers, for any cost overruns for their corrective measures.

Role of the Quantity Surveying Dept.

1. First and foremost, any tender taken up by the Estimation Dept., if it calls for a Tender Bond is forwarded to the Q.S. Dept. to take care, i.e. applying and receiving the same from the Accounts Dept.. In case the tender is a major one, the Head, Quantity Survey Dept. prepares a detailed cash flow to our bankers to obtain the Tender Bond. Once the original Tender Bond is received, the same is provided to the Head, Estimation Dept. 2. Once a contract is awarded, depending on the documents available (LOI / unsigned Contract Document), the same is scrutinized to check the bond requirement (i.e. Performance Bond, Advance Payment Bond, Retention Bond/Warranty Bond, etc.). If any bond is required, the same is applied and the application is sent to the Accounts Dept. to get the bond from our bankers. In case the project is a major one and requires facilities from our bankers, Head, Quantity Survey Dept. prepares a detailed cash flow for our bankers. Upon receipt of the original bond(s) the same is submitted along with a covering letter to our Client.

Role of the Quantity Surveying Dept. (Contd..)

The Contract document is further scrutinized to understand the payment terms, whether progress / milestone, etc.. Milestone payment is nothing but once a particular milestone is completed, the revenue may be recognized by way of a Milestone invoice raised after the go ahead from the respective Project Managers / instruction from Project Q.S.

Role of the Quantity Surveying Dept. (Contd..) Example

Payment Terms (Milestone Basis) Payment Terms (Progressive Basis)

Role of the Quantity Surveying Dept. (Contd..)

The contract document is further scrutinized by individual Project Q.S.s of the various projects to prepare the invoicing formats in consultation with the Head, Quantity Survey Dept. as per client requirement. They review the contract through Q.S. point of view and see what are the things required, as every Client requirement is different. Q.S. plays a major role in recognizing the revenue, whether it is on initial project (original contract value) or project related variations ( positives / negatives ).

Role of the Quantity Surveying Dept. (Contd..) What do you mean by a variation

By variation, we mean, any change in the original scope by way of additions / deletions, design / engineering change, an entirely new item, etc., is identified by the Q.S. Dept. with the help of Project Manager and properly substantiated with suppliers quotations, our LPOs and suppliers invoices and consolidated and presented to the Client as a Variation Request / Claim.

Role of the Quantity Surveying Dept. (Contd..)

Dubal Projects

Example (Variation Request / Claim)

Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..) Example (Variation Order Issued by the Client)

Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..)

3. Since the format of invoices keeps on changing as per the Client / Customers requirement, it is easy to maintain the same in Microsoft Excel so that changes can be done as and when required. Depending on the information received from various sites, from Project Q.S.s / Project Managers, for invoicing, which is end of the month / beginning of the following month, a Progress Payment Application / Invoice is raised and submitted to Client.

Role of the Quantity Surveying Dept. (Contd..)

A Progress Payment Application (invoice) is submitted when the invoicing is to be done at the end of every month based on the actual progress achieved. This gives the Client a clear understanding of the progress achieved, commercially, at any point in time. He can see / pick the order value, the gross invoicing achieved during a particular month, the net payable, the amount already paid / the balance to be paid, etc., e.g. Progress Payment Application submitted to DUBAL. In the case of some of our overseas Clients, they prefer to have a standalone invoice which gives them the amount to be paid as of that invoice. In such cases, we attach the Progress Payment Application as a backup for them, to enable them to reconcile the accounts easily, e.g. Invoice submitted to M/s. Sojitz Corporation.

Role of the Quantity Surveying Dept. (Contd..)

Since, majority of our projects are on re-measureable basis, site work progress has to be measured based on actual work done, which is recorded through IRs (Inspection Requests) / ISRs (Inspection Survey Requests) depending on Clients requirement. In addition to site work progress, Materials delivered to site during the month for the project are regularized by submitting the Material Inspection Request by our QA/QC Engineer to Client. Once these materials are inspected and approved by Client, the same will be included by the respective Project Q.S.s in their monthly Progress Payment Applications to Client. There are cases where invoices are raised during the month. invoices are generally one time standalone invoices. These

Role of the Quantity Surveying Dept. (Contd..) Example (Invoice)

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Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..)

Dubal Projects

Example (Progress Payment Application)

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Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..) Example (Re-measurable basis Payment Application)
Sorouh

Formats can be provided upon request.

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Role of the Quantity Surveying Dept. (Contd..) Example (Material Inspection Request, Inspection Request)

Inspection Requests may vary depending on the Clients requirement

Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..) Example (standalone invoice)

Sojitz Corporation

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Click on the table for a detailed view

Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..)

4. Once any invoice is raised, it is entered into various schedules [ Job Card (maintained for individual projects), Statement of Invoicing (for that particular month), Statement of Invoicing / Payments (cumulative), etc. ]. This Job Card is then circulated to all the concerned Project Managers, Project Q.S.s & Accounts Dept.. The respective Project Q.S.s follow ups with the Client for the certification of the submitted invoices. Once the Payment Certificate is issued by Client, the same is forwarded from the various Project Q.S.s to the Head, Quantity Survey Dept.. Upon receipt of the Payment Certificate, the same is updated into the Job Card and immediately circulated to all the concerned Project Managers, Project Q.S.s & Accounts Dept. and payment follow up begins.

Role of the Quantity Surveying Dept. (Contd..) Example (Statement of Invoicing / Job Card)

Click on the table for a detailed view

Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..) Example (Payment Certificate from Client)

Click on the table for a detailed view

Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..)

5. At the beginning of the month the List of Payments Received / Expected during the month is updated by Head, Quantity Survey Dept. and sent to Accounts Dept.. Collection of funds from our various Clients is also done by Q.S. Dept.. Accounts Dept. depends on the Q.S. Dept. for funds. 6. The Quantity Survey Dept. also maintains a complete schedule of all the bonds (i.e. Tender Bonds, Performance Bonds, Advance Payment Bonds & Retention/Warranty Bonds) issued to our various Clients in order for us to call back at the time of expiry. 7. Subcontractor Bonds issued in our favour are maintained by the Head, Quantity Survey Dept.. Also, all major equipment supplier / subcontractor invoices along with labour supply invoices are certified by Head, Quantity Survey Dept..

Role of the Quantity Surveying Dept. (Contd..) Example (Payment Certificate to Sub Contractor)

Formats can be provided upon request.

Role of the Quantity Surveying Dept. (Contd..)

8. Budgeting (Revenue / Cost) for the New Year is done by Head, Quantity Survey Dept. to establish the turnover, net profit, etc.. This is normally done by end of November and beginning of December. Once finalized, the budget is presented to the Managing Director by mid of December, so as to set the target and preplan for the New Year. This budget is further monitored throughout the year by periodic updates / revisions. The updates / revisions are circulated among the Divisional Managers and Project Managers for implementation, so that the set targets are achieved. 9. Respective Project Q.S.s are expected to settle the Final Account with Project Managers full involvement, in consultation with the Head, Quantity Survey Dept.. This procedure generally goes on for several months maybe years as the same is a very tedious job wherein all additions / deletions, positive / negative variations, Extension Of Time (EOT) claim, etc. have to be dealt with and closed completely. In some cases, Clients insist on seeing the Proof of Payment as well.

Role of the Quantity Surveying Dept. (Contd..) Example (Extension of Time (EOT Claim))

Formats can be provided upon request.

QS Department Role Summarized

PreContract.
Estimation Dept
OriginalTenderBondProvidedto Estimationdept RequestreceivedforTenderBond ApplyingTenderbond

Quantity Survey Dept

ReceivingTenderbond

Finance Dept

PostContact
Estimation Dept
LOA/ContractDocument Payments PaymentUpdates

Quantity Surveying Dept

Submissionofbonds

Finance Dept
Payments

ApplicationforBonds ReceivingBonds

Bonds (APG/PG etc)

Client / Main Cont.

Variations.
Invoicing (Prg/MS/SA)

SubmissionofVariations ApprovalofVariations(VO) Submission/FollowuponPC&Payment ReceiptofPC/Payments

Sub Contractor

SubmissionofSCInv. IssuanceofSCPC.

Sub Contract PC Final account / Close-outs EOT Final Variations

Submission/FollowuponPC&Payment ReceiptofPC/Payments

End of Presentation.

Q&A
Thank You.