CPC40110 Assignment: Contractual Obligations and Progress Payments

This assignment analyzes a construction project scenario, addressing contractual obligations and payment structures. It begins with a response letter to a client, outlining the legal requirements under the Home Building Act 1989 and comparing lump sum and cost-plus contracts. A cost-plus construction contract is then developed, detailing project commencement, scope, and payment terms, including a progress payment schedule with milestones. The assignment also includes a prime cost schedule with pricing from Harvey Norman and calculations related to CPI and labor/material adjustments. Finally, it justifies the deposit amount based on project needs.

Running head: CPC40110 1
Civil Engineering
First Name Last Name
Institution

CPC40110 2
Table of Contents
Task 1..........................................................................................................................................................3
Task 2..........................................................................................................................................................4
Part a.......................................................................................................................................................4
Part b.......................................................................................................................................................6
Part c.......................................................................................................................................................6
Task 3..........................................................................................................................................................7
Part a.......................................................................................................................................................7
Part b.......................................................................................................................................................7
Task 4..........................................................................................................................................................8

CPC40110 3
Task 1
Mr./Mrs. Brown
1 Lake Road,
Toronto NSW
Dear Mr./ Mrs. Brown
RE: Response to previous inquiry in regard to your residential home development.
In response to the letter you sent to our offices, the company wishes to acknowledge the receipt
of the letter and hence respond accordingly to the inquiries so posed.
It is your legal obligation as a client to enter into a written legal agreement with the contractor as
stipulated in the Home building Act 1989 No 147, a regulatory legislation in the residential
building industry and related specialists in the New South Wales. Please note that at your request
we would provide our legal team at your disposal to explain the outlines of this act including the
minimum statutory rights of both parties including payments, deposit, insurance, etc matters as
applicable in residential development work. Here is the link to the legislation for your personal
review at the NSW government website.
(https://www.legislation.nsw.gov.au/#/view/act/1989/147/part2).
Two types of contracts are available in this scenario, namely; Home building Lump sum
contract, and Home building cost plus contract. Under lump sum contract, we will undertake the
project at fixed price agreed upon and wouldn’t allow any flexibilities in terms of design and
modifications along the way. On the other hand, cost plus contract would entail paying the
company cost plus fee which could either be fixed or determined as a percentage of costs.
Of the two, I think the cost-plus contract would be suitable as it allows for any changes on the
project along the way and considers your input as the project progresses. This will ensure that the
project is fully tailored to your needs and preferences in terms of design.
In regards to how much and time of payments shall be agreed upon based on the type of contract
you choose for the project and preparation of the project implementation schedule.
We are excited for this opportunity to deliver your home project and would welcome any more
inquiries without hesitation. We appreciate your cooperation.

CPC40110 4
Regards,
G.H
Task 2
Part a
Cost Plus Construction Contract
This contract is rendered on 12/04/2020 between {Client}, hereby
"Business," and {Contractor}, hereby "Contractor," concerning the 1 Lake
Road residential construction estate (hereafter "Estate").
The development will commence on 03/05/2020. The contractor shall
conclude the project no later than 8/11/2020.
The proposal must include / incorporate aspects such as:
 Excavation and formwork
 Concrete footings
 Drainage works
 Concrete slabs
 Frames and trusses
 Plumbing
 Door, window fixtures
 Masonry
 Tiling
 Waterproofing
 Paint works
The Client shall repay the Contractor for all direct costs of development
(such as labour, supplies, reports, risk analyses, sketches, royalties, fees)
and $745,000 indirect costs (including: payroll, {other}).
Progress payments

CPC40110 5
On the basis of payment approvals made to the owner's representative by
the contractor and the payment certificates given by the owner's agent to
the owner, the owner shall render progress payments to the contractor as
follows:
The monthly payment requests shall be disbursed to the owner within thirty
(30) days of the issuance of the Certificates of Payment by the agent of the
owner.
Ten percent (10 percent) of every contract approved sum shall be kept by
the Owner before final payment is made.
The Company will also pay 20% to the Contractor upon completion of the
Project.
The Company will pay for changes requested by the Contractor .
The Contractor shall have proper reporting on both direct and indirect
expenses. If the Contractor is unable to supply the paperwork, the Client
can challenge the costs.
The Contractor promises to be thorough, freely communicative, competent
and effective in the construction of this project.
(Company) (Date)
(Contractor) (Date)

CPC40110 6
Part b
Chosen 5 milestones for the progress payment schedule include;
Milestone Percent of the total lumpsum Progress payment
1. Finish concrete
footings
15% $111,750
2. Complete slab 25% $186,250
3. Finish brickwork 62% $461,900
4. Finish plaster
work
75% $558,750
5. Finish paint works 83% $618,250
Part c
Prime Cost Schedule
Pricing source: Harvey Norman (https://www.harveynorman.com.au/).
Item Quantity Cost $(include GST)
Prima II Close Coupled
Soft Close Toilet Suite
3 $320
Dorf El Toro Cross Basin
Set
5 $169
ADP Hampton 1200mm
Wall Hung Vanity with
Basin
1 $2049
Arcisan Slide Rail Shower
Set - Chrome
3 $179
Lido Chrome
Round Tile Grate 125mm
6 $45

CPC40110 7
(DN80 Outlet)
Osca Bevelled Edge
1200mm Mirrored Cabinet
2 $279
Vetro
Bath Screen
3 $179
Task 3
Part a
Answer 0.9%
Part b
CP1 % change calculations;
March 2017 =+0.8%x$165,665=+ $1325.32
August 2017=+0.8%x$220,880=+ $1767.04
September 2017=+1.9%x$386,542=+ $7344.298
October 2017=-0.3%x$205,850=-$ 617.55
November 2017=-0.3%x$773,085=- $2319.255
Labor adjustments
March 2017 =+45%x$165,665=$74549.25
August 2017=+45%x$220,880=$99396
September 2017=+45%x$386,542=$173943.9
October 2017=+45%x$205,850=$92632.5
November 2017=+45%x$773,085=$347888.25
Material adjustments
March 2017 =+55%x$165,665=$91115.75
August 2017=+55%x$220,880=$121484
September 2017=+55%x$386,542=$212598.1
October 2017=+55%x$205,850=$113217.5
November 2017=+55%x$773,085=$425196.75

CPC40110 8
Claim
No Month Claim
Value
CPI
Sector
CPI %
Change
Labour
Adjustment
Material
Adjustment
Progress
Claim
1 March
2017 $165,665.00 Housing +$1325.32 +$74549.25 +$91115.75 $166990.57
2 August
2017 $220,880.00 Housing +$1767.04 +$99396.00 +$121484.00 $1117247.04
3 September
2017 $386,542.00 Housing +$7344.30 +$173943.90 +$212598.10 $393886.30
4 October
2017 $205,850.00 Housing -$617.55 +$92632.50 +$113217.50 $205232
5 November
2017 $773,085.00 Housing -$2319.26 +$347888.25 +$425196.75 $770765.74
Task 4
The deposit amount is naturally high given the need for mobilization of resources, personnel to
ensure the project begins and continues within the proposed schedule. Given the site conditions
and mobility of needed equipment and manpower required at the beginning of the project, the
costs are reasonably high. We will be carrying out excavations up to 1 m depth and cart away
wastes from sites. Following the initial costs, extra capital will be related to significant
milestones — such as the completion of construction and foundation work, form work, drainage,
lighting, allying, and landscaping.
Additionally, filler material and compaction will be mechanized to suitable standard to achieve a
uniform grade and stable base for the building. Costs of materials and equipment therefore
makes the costs high during the first two progress payments. In this regard, compromise could