Bonanza Residential Construction Project

Bonanza Residential Construction Project
Table of Contents
Introduction.......................................................................................................................2
Finance management........................................................................................................2
Contract Management.......................................................................................................2
Risk Management..............................................................................................................3
Conclusion........................................................................................................................4
References.........................................................................................................................4
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Bonanza Residential Construction Project
Introduction
A project of 10 stories building with 20 apartments, 20 car parks and 20 storage system has to
be built. The project has already has an approval for eight stories and additional approval has
to be taken from the council which would take 3 weeks to plan and 4 weeks for approval. 12
apartments are already sold and remaining eight have to be sold.
Finance management
Project manager would get $12,000,000 as project budget and $2500 per week of payment
and $10,000 incentives for every flat sold. It is expected that project manager would be able
to complete the project work in $10,000,000 and thus, make a profit of $2,000,000 and $2500
per week as well we $10,000 as incentives per 8 apartments that have to be sold.
The prices for the contractors and suppliers would be agreed upon between them and the
project management organization. A contract sum would be assured to them for the whole
project and a provisional sums would be allotted as allowance for specific project elements.
Interim payment certificates would be made to allow payment of these provisional sums
during interim deliveries of the project. Half of the contract amount would be retained and
remaining would be paid as provisional sum. The retained sum would be paid post
completion (Njie & David Langford, 2017).
Contract Management
The contracts would be needed between suppliers and construction contractor, project
manager and developer, and Developer and construction contractor. There would be three
types of contracts including fixed price contract, fixed price plus incentives, and unit price
contract (LEVELSET, 2019).
Supplier Contracts: For developer contracts with suppliers, unit price contracting approach
would be taken in which price for each unit of material would be fixed and the contract
would also mention the estimate of the amount of material that would be needed on the
project (Sarde, 2016).
Construction contract: As the duration of the project is fixed, the project manager knows
the duration for which the workers would be involved on the site for the construction work.
Hence, a fixed price contract would be made with the construction contracts (Hendrickson,
2008).
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