COST ASSURANCE
The call for cost assurance has become more prominent in the construction industry due to the increased popularity of “open book” type contracts. Such contractual arrangements require contractors to accurately report costs to ensure that what is paid represents appropriate entitlement.
Cost assurance audits costs to provide assurance that the supplier is entitled to reimbursement. Contract administration processes are reviewed to identify any control issues and mitigation measures proposed to provide a more robust environment for cost assurance.
Services Provided
Our service provision is tailored to:-
- Ensure cost assurance is enabled through the contract
The Contract should prescribe the content and format of information that contractors should provide to substantiate their costs. - Ensure appropriate systems are in place to provide cost assurance
Project teams need to be supported with a set of processes and documentation to ensure a robust and consistent approach to auditing costs. - Review and test cost controls
A weak set of controls could mean Client organisations pay more than is entitled.
CONTRACT ASSURANCE
Contracts are the vehicles through which Client objectives are translated into delivered outcomes across organisations, projects and programmes. Poor contract management results in less effective, less efficient and commercially sub-optimal attainment of tangible outcomes. Those organisations, projects and programmes that utilise proven good practice processes can expect to optimise delivery.
Services Provided
Our service provision is tailored to:-
- Enable business objectives through contract strategy
- A strong contract strategy needs to align the supply chain with a Client’s business objectives.
- Align stakeholder and supplier engagement
- Stakeholders that engage with the strategy will understand the project risks and objectives to allow for more effective management as a result.
- Be transparent and explicit around governance
- Incorporating compliance with governance processes into the contract terms will aid an organisation in ensuring that partners do not work in a way that is contrary to these objectives.
- Instil an effective contract compilation and drafting process
- Contract drafting is critical because it is the tool for implementation of the contract strategy. A well-drafted contract can help position for success and will mitigate risk and it is critical that simplicity, clarity and consistency is maintained when compiling contracts.
- Obtain assurance to preserve commercial objectives
- It is vital to ensure that effective administration and change control processes are in place in order to achieve commercial objectives. Contracts must be understood, openly used and administered correctly to maintain commercial value.