Practice Problem2005

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THE HONG KONG INSTITUTE OF SURVEYORS

QUANTITY SURVEYING DIVISION

ASSESSMENT OF PROFESSIONAL COMPETENCE

FINAL ASSESSMENT – AUTUMN 2005

PRACTICE PROBLEM

Thursday, 15th September, 2005


P P

Page 1 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

NOTES TO CANDIDATES
U

A. Headings to questions are for ease of identification only and do not form part of
the questions.

B. The number of main questions is as follows:

(1) First day – Two main questions worth 25 marks each.


U U

(2) Second day – Two main questions worth 25 marks each.


U U

C. All Main Questions and Sub-Questions are compulsory.

D. The total mark is 100. The overall pass mark is 55. Marks will be assessed to
fractions of one unit.

E. Refer also to INSTRUCTIONS TO CANDIDATES which were issued to you in


advance.

FIVE COMMON CRITERIA


U

Candidates are expected to illustrate a reasonable level of professional competence


against five common criteria outlined below, sufficient for the Assessors to answer the
question “Would I employ this person as a qualified Professional Surveyor?”.
However, it should be recognized that not all these criteria apply to every problem,
nor do they carry equal weight.

1. Perception: A full understanding of the problem posed, evidenced


by a response to each item in the question. Candidates should also
show foresight by anticipating additional problems not specifically
mentioned.
2. Imagination: The assumption of essential supplementary information
so as to provide a full response, also the use of imaginary telephone
inquiries, quotations, notes, etc.
3. Technical skills: The correct use of measurement principles, prices,
discount factors, etc. The use of appropriate short cuts, rounding off of
figures, etc. to suit the scale of the problem. The provision of analysis to
a depth appropriate to the stage reached by Candidates and the time
constraints imposed on Candidates.
4. Judgment: The provision of sound professional advice
indicative of professional knowledge and experience gained by
Candidates. The advice should be firm and unhesitating, except where
suitable caveats are essential.
5. Communication: Free of ambiguity, clear expression and an
absence of irrelevant or inappropriate technical details, particularly when
provided to a lay client. Correct syntax and good professional style in
letters and reports are important. Candidates should clearly convey their
interpretations and proposals.

Page 2 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 1
U U (total 25 marks)

In this question you are to assume the respective roles as described in each part of
the question.
The project involves a residential development estimated to cost $300M, and with a
contract period of 30 months.

Part A – Preliminaries
U U

You are the project quantity surveyor of the consultant QS for the project. In the
analysis of tenders for the superstructure submitted last month, your assistant QS
has compiled the attached table comparing the allowances by the lowest three
tenderers for the various preliminaries items in the tender.

Upon receiving the comparison, the Employer’s project manager has asked for your
advice on the following:

1.A1) For item 16.0, the second lowest tenderer didn’t price anything for
insurances and bond. How should this issue and other un-priced items be
dealt with? (2 marks)

1.A2) For item 14.05, there is a vast difference between the lowest tenderer’s
allowance and those of the other two. What would be a reasonable
allowance and how should it be assessed? (2 marks)

1.A3) Adequate site management by the Main Contractor is the project manager’s
key concern for this project. Without referring to the details in the tender
documents and before asking the tenderers, what is your preliminary advice
and comments on the allowances by the respective tenderers on this issue?
What approach would you take to come up with your comments?
(2 marks)
1.A4) For item 18.02 – hoarding, the allowance by the lowest tenderer is obviously
an overpricing, considering the existing hoarding is already provided under
the previous foundation contract. What is the likely exposure to the
Employer in this regard and what measures should be taken to protect the
Employer’s interest? (2 marks)

Page 3 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 1 (Cont’d)
U

Part A (Cont’d)
U

PROPOSED RESIDENTIAL DEVELOPMENT AT I. L. XYZ


U U

U MAIN CONTRACT U

U A COMPARISON OF THE AMOUNTS ALLOWED BY THE THREE LOWEST TENDERERS U

U FOR PRELIMINARIES (Note: Only those items priced by the tenderers are listed out) U

Description
A B C
U U

U U U U U U

HK$ HK$ HK$

5.0 CONDITIONS OF CONTRACT

5.03 Amendments to the Standard Conditions of


Contract

Clause 8 - Foreman-in-Charge 10,369,809.78

Clause 18 - Injury to Person and Property and


Employer's Indemnity,

Clause 19 - Insurance against Injury to Persons


and Property and 2,870,000.00

Clause 20 - Insurance of the Works against Fire,


etc.

Clause 31 - Surety Bond 1,000,000.00

6.0 TENDER, DRAWINGS AND SPECIFICATION

6.10 Drawings etc. at Site 30,000.00 50,000.00

6.13 Main Contractor's Management Team 5,000,000.00

7.0 MATERIALS AND WORKMANSHIP

7.04 Samples 30,000.00

7.05 Testing of materials 513,480.00 50,000.00 120,000.00

9.0 PROGRAMME AND REPORTS

9.03 Progress Photograph 20,000.00

c/f c/f c/f

Page 4 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 1 (Cont’d)
U

Part A (Cont’d)
U U

U PROPOSED RESIDENTIAL DEVELOPMENT AAT I.L. XYZ U

U MAIN CONTRACT U

U A COMPARISON OF THE AMOUNTS ALLOWED BY THE THREE LOWEST TENDERERS U

U FOR PRELIMINARIES (CONT'D) U

Description
A B C
U U

U U U U U U

HK$ HK$ HK$

b/f b/f b/f


12.0 WORKS BY PUBLIC AUTHORITIES

12.0 Work by Public Authorities 300,000.00

13.0 OVERALL CO-ORDINATION RESPONSIBILITIES OF THE MAIN


CONTRACTOR

13.0 Overall co-ordination responsibilities of the Main 739,500.00 298,550.00


Contractor

14.0 STATUTORY OBLIGATIONS

14.02 Notices, Fees and Charges 1,800,000.00

14.04 Safety precautions 1,000,000.00 20,000.00

14.05 Industrial Training and Pneumoconiosis Levies 300,000.00 1,500,000.00 1,732,900.00

14.06 Noise Control 20,000.00

15.0 PROTECTION OF PUBLIC PROPERTY, ETC.

15.01 Protection of public 600,000.00

15.14 Environmental Protective Measures 2,500,000.00 150,000.00 210,000.00

16.0 INSURANCE AND SURETY

16.01 Employees' Compensation Insurance 3,339,000.00 3,821,872.00

16.03 Main Contractor to give notice of injury 100,000.00

16.04 Surety bond 787,500.00 798,000.00

c/f c/f c/f

Page 5 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 1 (Cont’d)
U

Part A (Cont’d)
U U

PROPOSED RESIDENTIAL DEVELOPMENT AT I.L. XYZ


U U

U MAIN CONTRACT U

U A COMPARISON OF THE AMOUNTS ALLOWED BY THE THREE LOWEST TENDERERS U

U FOR PRELIMINARIES (CONT'D) U

Description
A B C
U U

U U U U U U

HK$ HK$ HK$

b/f b/f b/f


17.0 GENERAL OBLIGATIONS

17.02 Labour 3,500,000.00 3,500,000.00 14,540,043.10

17.03 Foreman-in-charge 3,700,000.00

17.06 Watching 675,000.00 702,000.00

17.07 Protection and cleaning of all trades 1,296,000.00

17.09 Fire protection 55,874.00 10,000.00 317,600.00

17.10 Clearing away rubbish during the progress of the 2,000,000.00 1,898,671.00
works

17.12 Setting out 1,600,000.00 2,000,000.00 3,612,000.00

17.18 Watching and security 500,000.00

18.0 TEMPORARY WORKS

18.01 Plant, tools, etc. and scaffolding 4,458,633.37 6,000,000.00 6,283,491.00

18.02 Hoardings, fencing, etc. 5,000,000.00 120,000.00 93,042.00

18.03 Main Contractor's storage sheds, workshops and 433,000.00 600,000.00 506,710.00
offices

18.04 Office for Architect, Site Engineer and Clerk of 300,000.00 200,000.00 212,220.00
Works

18.05 Temporary latrines 548,171.43 50,000.00 276,380.00

18.07 Temporary supports 476,730.80 1,300,000.00

18.08 Telephones and facsimile machine 244,000.00 114,000.00

c/f c/f c/f

Page 6 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 1 (Cont’d)
U

Part A (Cont’d)
U U

PROPOSED RESIDENTIAL DEVELOPMENT AT I.L.XYZ


U U

U MAIN CONTRACT U

U A COMPARISON OF THE AMOUNTS ALLOWED BY THE THREE LOWEST TENDERERS U

U FOR PRELIMINARIES (CONT'D) U

Description
A B C
U U

U U U U U U

HK$ HK$ HK$

b/f b/f b/f


18.09 Water for the Works 366,956.00 400,000.00 322,680.00

18.10 Lighting and power 1,417,000.00 1,400,000.00 1,284,400.00

18.13 Name board 80,000.00 33,200.00

18.14 Computer System 100,000.00

Total 36,164,845.60 34,179,809.78 42,253,759.10

Tendered Amount
280,800,000.00 300,500,000.00 303,800,000.00

Page 7 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 1 (Cont’d)
U

Part B – Employer’s supplied materials


U

The Employer intends to order and purchase direct from an overseas tile
manufacturer specially kilned tiles with unique colour and surface features as
cladding to the external walls of the podium and lowest 3 floors of the residential
towers. Such tiles are to be handed over to and installed by the Main Contractor as
part of the main contract works. As his consultant QS, he asked for your advice on
any issues that should be addressed in the supply contract and in the Main Contract
tender documents to protect the Employer’s interests. (5 marks)

Part C – Main Contractor’s in-house rules


U

You are a quantity surveyor working in a fire services contracting company. Your
company has recently been nominated by the Employer under an Architect’s
instruction to the Main Contractor for a Nominated Sub-contract to carry out the fire
services works in the residential development project. Yesterday, your boss received
the following letter from the Main Contractor about their in-house rules.

After discussion with your boss, you are asked to

1.C1) write a memo to advise him on your company’s position; (4 marks)

1.C2) draft a letter in reply to the Main Contractor’s letter (2 marks)

Page 8 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 1 (Cont’d)
U U

Part C (Cont’d)
U U

Letter from the Main Contractor to Fire Services Contractor


U

11th September, 2005


P P

To: Mr. FS Contractor


U

Re : Residential Building at IL XYZ, Hong Kong


U

Fire Services Nominated Sub-Contract


U

We refer to the Architect’s Instruction to us nominating your company to be our


Nominated Fire Services Subcontractor. As your Main Contractor, we would advise
that the following terms and conditions shall be incorporated into the captioned
Nominated Sub-Contract:-

(1) You shall strictly comply with our in-house rules as per the enclosed Appendix.

(2) This letter together with the enclosed Appendix shall form part of the Nominated
Sub-Contract which is to be entered into between you and us. No claims for
extra cost and time shall be entertained for full compliance with the same

(3) In case of any discrepancy, inconsistency or contradiction amongst the terms


and/or conditions contained within this letter and other Sub-Contract
Documents, the more stringent requirements shall prevail and take precedence.

Please confirm to us that you understand and agree to the above terms and conditions
within the next 7 days.

Yours faithfully,

Mr. Main Contractor

Encl. (only Schedule of Fines for Safety is enclosed in this question)

Page 9 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

Appendix to Main Contractor’s letter


U

Main Contractor’s In-house Rules


U

Schedule of Fines for Safety


U

The Sub-contractor has acknowledged that any breach by him of the provisions of this Schedule may
result in the imposition of fines by the Main Contractor and all such fines were agreed to be within the
contemplation of the parties as being probable results of any such breach by the Sub-contractor. The
aforementioned fines are :-
No. Description
U U First Time Repeat
(HK$) (HK$)
1.0 Safety Administration
U U

1.1 Fail to appoint safety supervisor 10,000 10,000/month


1.2 Fail to appoint safety coordinator 10,000 10,000/month
1.3 Fail to submit statutory Forms or Certificates
1.3.1 Boiler & Pressure Form 2 1,000 2,000
1.3.2 Construction Sites (Safety) Regulations Form 1 1,000 2,000
1.3.3 Construction Sites (Safety) Regulations Form 2 1,000 2,000
1.3.4 Other documents required for fulfilling statutory or 2,000 5,000
contractual requirements
1.4 Not attending internal safety meetings / inspections 3,000 5,000
1.5 Not attending safety meetings / inspection with the Engineer 5,000 10,000
or Government Officer when required
1.6 Not taking rectification action as a result of Management 3,000 5,000
Safety Patrol
1.7 Not taking rectification action as a result of inspection by 10,000 20,000
Government Officers
1.8 Fail to submit / update labour register 3,000 5,000
1.9 Fail to follow accident / dangerous occurrence reporting 5,000 10,000
procedure
2.0 Safety Training
U U

2.1 Fail to ensure that employees attend Green Card / Induction 3,000 5,000
training
2.2 Fail to ensure that employees attend training other than 2,000 3,000
Green Card / Induction
2.3 Fail to submit / update training record 2,000 3,000
3.0 Personal Protection
U U

3.1 Using of substandard personal protective equipment on site 1,000 5,000


3.2 Fail to ensure correct use of personal protective equipment 500 1,000
including but not limited to safety helmet, safety footwear,
eye protector, ear protector, respirators, gloves, reflective
vest, life jacket etc.
3.3 Fail to ensure correct use of fall arresting equipment 1.000 5.000
3.4 Fail to submit “PPE Acknowledgement Form” 500 1.000
4.0 Site Safety condition
Every single non-compliance with statutory or contractual or Warning 1st time 500
P P

in-house safety rules that is proved by photo 2nd time 1,000


P P

& subsequent
times 5,000
Page 10 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 1 (Cont’d)
U U

Part D – Completion Certificate


U U

The project is approaching completion. In early July 2005, the Main Contractor has
encountered his own delay to the Works due to defects rectification required by the
Architect as a result of hairline cracks appearing in the plaster and paint in the typical
lobbies. The Main Contractor anticipates that the original Works could only be
completed by end September 2005. At the same time in July 2005, he has also
submitted an extension of time claim of 60 days in total for the delay due to the
Architect’s late instructions for the following items, which are amongst the last items in
his programme before completion.

(a) Court surfacing of sports ground


(b) Finishing works at entrance lobbies
(c) Paving materials to external areas
(d) Timber flooring inside flats
(e) A/C units inside flats

Such EOT claim, if granted, would have the effect of extending the original date for
completion from 31st August 2005 to end October 2005, thereby enabling him to
P P

complete the original Works, including the above items, without any delay.

On receiving the claim, however, the Architect did not grant EOT to the Main
Contractor. Instead, in early September 2005, he issued a Certificate of Practical
Completion to the Main Contractor certifying that the Works were practically
completed on 31st August 2005 and listing the above items which were still not
P P

completed, plus un-completed plaster and paint rectification works in the Main
Contract as outstanding works and defects. Accordingly, the EOT claim in respect of
the Architect’s late instruction for the above items has also been rejected by the
Architect.

1.D1) As a quantity surveyor working for the Main Contractor, you are asked by your
boss to give an appraisal of the situation and comment on the validity of the
said Certificate of Practical Completion. (4 marks)

1.D2) The Main Contractor has another public residential building project in hand.
The boss of the Main Contractor is also concerned about the implication to the
validity of the Certificate of Substantial Completion if the Architect of that public
residential building project also deals with the matters of extension of time and
the completion date in the same way as this private residential building project.

As a quantity surveyor working for the Main Contractor, you are required by
your boss to advise him your view on his areas of concern. Please write a
memo as per his request. (2 marks)

Page 11 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE FIRST DAY - 10:00 am to 2:00 pm, Thursday, 15 September, 2005

QUESTION 2
U U (total 25 marks)

You are working as an in-house quantity surveyor within the Development and
Projects Department of a hotel group which operates more than forty 4-star hotels in
different countries throughout Asia.

Part A – Factors affecting cost


U

Yesterday the General Manager questioned the manager of your Department as to


why the construction unit costs per m2 of construction floor area of high-rise hotels in
different countries are quite different from one another, given the quality standard of
these hotels are all very similar.

2.A1) The General Manager wishes to know the various contributing factors in
different localities affecting plant, labour and material which in turn contribute to
the varying construction costs. Your manager asks you for an internal memo to
be drafted for his reply to the General Manager. (7 marks)

2.A2) After reading your memo, the General Manager wants you to advise him of any
other major contributing factors, including but not limited to those project
specific ones and location-related ones which affect construction unit costs.
(7 marks)

Part B – Electronic tendering


U U

Electronic tendering and dissemination of tenders for procurement of construction


contracts had been cultivated locally by developers/government for some time,
though their wide application in the industry is yet to be developed. The new manager
of the Development and Projects Department from overseas is now considering
establishing an electronic tendering and dissemination system for the hotel chain’s
forthcoming local hotel projects involving construction of hotels and procurement of
FF&E items from overseas suppliers. He asked for your advice on the prerequisites
for such a system to be implemented successfully, and any reasons why the use of
such system in the local building industry is currently uncommon. Draft a reply letter
to the manager. (6 marks)

Part C – I.T. tools


U

Your manager is studying the viability of installing an electronic web-based project


management system for implementation by the project team comprising in-house
project manager and QS, external consultants including Architect, Engineers and
consultant QS, and the contractors in the forthcoming local hotel projects. He asked
for your advice on the implications of such system upon the functions of the QS,
including in-house, consultant’s practices and in the contractor’s establishment.
(5 marks)

** END OF PAPER **
Page 12 of 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION

ASSESSMENT OF PROFESSIONAL COMPETENCE

FINAL ASSESSMENT – AUTUMN 2005

PRACTICE PROBLEM

Friday, 16th September, 2005

Page 1 of 7
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE SECOND DAY - 10:00 am to 2:00 pm, Friday, 16 September, 2005

NOTES TO CANDIDATES

A. Headings to questions are for ease of identification only and do not form part of the
questions.

B. The number of main questions is as follows:

(1) First day – Two main questions worth 25 marks each.

(2) Second day – Two main questions worth 25 marks each.

C. All Main Questions and Sub-Questions are compulsory.

D. The total mark is 100. The overall pass mark is 55. Marks will be assessed to fractions
of one unit.

E. Refer also to INSTRUCTIONS TO CANDIDATES which were issued to you in


advance.

FIVE COMMON CRITERIA

Candidates are expected to illustrate a reasonable level of professional competence


against five common criteria outlined below, sufficient for the Assessors to answer the
question “Would I employ this person as a qualified Professional Surveyor?”. However,
it should be recognized that not all these criteria apply to every problem, nor do they carry
equal weight.

1. Perception: A full understanding of the problem posed, evidenced by a


response to each item in the question. Candidates should also show
foresight by anticipating additional problems not specifically mentioned.

2. Imagination: The assumption of essential supplementary information so


as to provide a full response, also the use of imaginary telephone inquiries,
quotations, notes, etc.

3. Technical skills: The correct use of measurement principles, prices,


discount factors, etc. The use of appropriate short cuts, rounding off of
figures, etc. to suit the scale of the problem. The provision of analysis to a
depth appropriate to the stage reached by Candidates and the time
constraints imposed on Candidates.

4. Judgment: The provision of sound professional advice indicative of


professional knowledge and experience gained by Candidates. The advice
should be firm and unhesitating, except where suitable caveats are
essential.

5. Communication: Free of ambiguity, clear expression and an absence of


irrelevant or inappropriate technical details, particularly when provided to a
lay client. Correct syntax and good professional style in letters and reports
are important. Candidates should clearly convey their interpretations and
proposals.

Page 2 of 7
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE SECOND DAY - 10:00 am to 2:00 pm, Friday, 16 September, 2005

QUESTION 3 (total 25 marks)

Part A – Employer’s financial difficulty

In the ninth month of an 18-month 3-phase renovation project of an existing 35-storey hotel
consisting of 600 rooms which is still in operation, the client was unable to honour one
payment certified by the Architect in accordance with the contract in which you are the
consultant QS. Your client has said he encountered a temporary shortage in funding.
However, he is confident that alternative funding will be available in three months.

The Client is seeking your advice on


3.A1) the contractual implication and other practical considerations of such shortage in
funding, and any possible impact to his project and the Main Contractor, and
(8 marks)
3.A2) the ways to minimize such impact given that the Client has a strong desire to
complete the project with the least disruption to the construction programme.
(4 marks)

Part B – Additional works

Late in the construction of an upscale serviced apartment development involving three


30-storey tower blocks, your Client has reacted to the quest for energy efficiency and
sustainability by proposing a scheme for incorporating a waste water filtration, processing
and recycling plant in an adjacent lot of land owned by him. For practical reasons, your
Client wants the construction of this plant to be carried out by the Main Contractor, and to
have the testing and commissioning to be carried out within 3 months after the practical
completion of the Main Contract works.

3.B1) Your Client asked you, as his consultant QS, for advice on how this plant can be
incorporated into the Main Contract to meet his requirements, and the contractual
implications and other issues that need to be dealt with. (9 marks)

3.B2) If the construction of this plant cannot be carried out by the existing Main Contractor,
what are the options available to the Client for achieving his scheme and what will be
the impacts to his project. (4 marks)

Page 3 of 7
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE SECOND DAY - 10:00 am to 2:00 pm, Friday, 16 September, 2005

QUESTION 4 (total 25 marks)

The Client has just received a Sale Proposal (copy attached) from an overseas shuttle
coaster manufacturer for the design and commissioning of an unprecedented indoor shuttle
coaster ride, which is intended to be installed in the large atrium area of a shopping mall.
The Client considers the ride is exactly what he needs for his theme shopping mall which is
now undergoing the last stage of detailed design. The shopping mall is anticipated to be
completed 18 months after award of Main Contract.

The Client wishes you to give him advice relating to the introduction of the shuttle coaster
into the project.

Part A – Supply Contract

As the consultant project quantity surveyor, you are required by your director to study the
Sale Proposal from the overseas manufacturer and comment on its comprehensiveness in
cost and scope coverage for the integration of a complete installation and operation of the
shuttle coaster within the building. Your director also asked for your view on any other
issues that the Client will need to be aware of in relation to the Sale Proposal if the Client
were to conclude the deal with the manufacturer. He asked for an internal memo to be
prepared for his further discussion with the Client. (8 marks)

The following documents are attached for reference.

1) Layout plan of the proposed theme shopping mall


2) “Sale Proposal” from the overseas Shuttle Coaster manufacturer

Part B – Associated costs

The Client noted your firm’s findings based on your memo to your director, and has asked
for your firm’s further advice on any other associated items with cost impact on the project.

Your director now asked you to list down, for discussion with you tomorrow, any
considerations including but not limited to additions or changes (temporary or permanent) to
the building design and the subsequent construction of the shopping mall to incorporate the
shuttle coaster, together with your recommended actions in order the relevant costs can be
ascertained. (8 marks)

Page 4 of 7
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE SECOND DAY - 10:00 am to 2:00 pm, Friday, 16 September, 2005

QUESTION 4 (Cont’d)

Part C – Pre-qualification

Due to the specialist nature, you have proposed to your Client selective tendering
arrangement for the on-site installation of the shuttle coaster. Your Client agreed to your
proposal and has asked you to prepare a list of pre-qualification criteria for selection of the
tenderers, together with a brief explanation of your criteria. (6 marks)

Part D- Payment terms

You were told by your boss that in the meeting with the Client, the Client has expressed his
worries on the payment terms as he was not familiar with doing business with overseas
vendors.

You are instructed to advise the likely implications of the overseas manufacturer’s proposed
payment terms, and suggest any possible ways of improving them, for discussion with the
Client. (3 marks)

Page 5 of 7
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE SECOND DAY - 10:00 am to 2:00 pm, Friday, 16 September, 2005

* * * * * * * * SALE PROPOSAL * * * * * * * *

Ref. SP-09812/872-02 12 September 2005

ABC Property Development Limited


88th Floor
9999 Queen’s Road Central
Central
Hong Kong
Attention: Mr. Client

Dear Sirs,

Proposed Mega Mall Development, Hong Kong


Design, Manufacture, Delivery, Testing and Commissioning of Shuttle Coaster

We refer to your email enquiry of 2 September 2005 and have great pleasure to
introduce our Shuttle Coaster and sale proposal for your perusal.

The Shuttle Coaster is a state of the art entertainment vehicle specially made for dual
purposes: conveyance of pedestrian traffic and enjoyment of an elevated fun ride.

The Shuttle Coaster is our newest design and is especially suitable for installation within
an indoor facility with large spans and sufficient height. Our proposed design for your facility
is an overall riding distance of 950m and travelling height of 16.5m. The total travelling time
for one complete trip, based on our medium speed mode, is approximately 1 minute 30
seconds. Please see attached diagram SK-001 for the layout of the proposed route of the
Shuttle Coaster.

Our offer is for the design, manufacture, delivery, testing and commissioning of the
Shuttle Coaster. We guarantee that the assembly will be in full compliance with the current
applicable European standards for similar entertainment facilities.

The design will be for the complete Shuttle Coaster to achieve full operation. We have
proposed the structural support locations for the shuttle coaster on the facility in the
attached diagram. Modifications to the other installations in the facility are excluded from
this offer. We will, however, provide advice to your designers for coordination and any
modification that might be necessary for the safe installation and operation of the Shuttle
Coaster. …………. /2

Page 6 of 7
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
FINAL ASSESSMENT – AUTUMN 2005
PRACTICE PROBLEM
th
QUESTIONS FOR THE SECOND DAY - 10:00 am to 2:00 pm, Friday, 16 September, 2005

-2-
The technical data of the Shuttle Coaster will be provided to you in our coming meeting
with you in Hong Kong. In the presentation, we will also present an animation of the Shuttle
Coaster. Your building designers will be most welcome to discuss any technical issues with
us.

In addition to our standard conditions of sales, the following is a list of particular conditions
for this work:

1. Payment Terms
(a) 20% deposit upon acceptance of the Sale Proposal – By tele-transfer to our
designated overseas bank account
(b) 75% upon delivery of all components of the Shuttle Coaster – By Letter of Credit
(c) 5% upon the testing and commissioning of the installation to European
requirements – By tele-transfer to our designated overseas bank account

2. Delivery Time
Upon acceptance and signing of our purchase agreement:
(a) design of the works will be completed in 3 months;
(b) manufacture of the Shuttle Coaster will be completed in 3 months upon completion of
the design;
(c) delivery of all components by sea freight in 1 month ex-factory.

3. Price: CIF Hong Kong Port, EUR2,000,000.00 excluding all taxes, customs charges and
all other local charges demandable in the place of destination

We design for entertainment and we build for fun. The Shuttle Coaster will be one of the
largest indoor entertainment fun riding experiences of its kind in South-East Asia when
completed. We look forward to making it into a reality and we trust this will not only be an
added feature to compliment your shopping mall but also a focus of attraction as well.

Yours faithfully,
Fun Riding Entertainment Inc.

Marketing Director

** END OF PAPER **

Page 7 of 7

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