6

Saroj Kumar Singh, MRICS

Indispensable
roles of a

Commercial
Manager
in an infrastructure
project

SWIPE
 Prepares Cost Plan and
1 estimates

The commercial manager plays a crucial role

in the preparation of the cost plan. The cost
plan helps in understanding the financial
feasibility of a project and provides a
framework for investment planning.

Hence, through an understanding of

estimates, the commercial manager prepares
a cost plan for a project. The estimate must
be clear and consistent, which means there
should be consistency in structure, use of
rates, allowances, exclusions, etc.

Clarity should be there in terms of cost

planning language and nomenclature.

Saroj Kumar Singh, MRICS

2 Value Engineering

One of the main duties of a commercial

manager is to make sure a project is
profitable.
A commercial manager takes proactive
measures to implement value engineering in
a project to reduce the cost or increase the
value of the project.
Since value engineering requires technical
competencies and good knowledge of
material resources, quantity surveyors are
deputed as commercial managers on the
projects.
A good commercial manager implements
value engineering from the design stage of
the project when the implementation cost is
very low.

Saroj Kumar Singh, MRICS

3 Managing Supply Chain

The supply chain in a construction project

starts with selecting a supplier or
subcontractor for the procurement of goods
and services until the closure of final
accounts.

The process involves so many functions like

procurement, tendering, valuation, contract
administration, record keeping, and
settlement of final accounts without any
dispute.

Hence, a commercial manager performs all

these functions with due care and ensures
the overall profitability of the project.

Saroj Kumar Singh, MRICS

4 Valuing the work

It is a monetary assessment of the value of

work done at a specific point of time.

The commercial manager carries out the

valuation of work from time to time in order
to provide a claim for the interim payment.

The valuation also helps to forecast the final

cost, final accounts, and ongoing
profitability of the contract.

Hence, by valuing the work, a commercial

manager helps the management in
forecasting and overall cost control.

Saroj Kumar Singh, MRICS

5 Cost Value Analysis

Cost Value analysis in the most simpler term

is the Profit and loss statement for a project.
For Cost Value analysis the commercial
manager calculates the amount of work done
to date and the amount of cost incurred to
date .
He then compares it to arrive at the
conclusion of profitability or loss.
The
calculation is sometimes simply known as
the ‘cost value’:
an abbreviation of ‘cost/value comparison’
(CVC) or ‘cost/
value reconciliation’ (CVR)

Saroj Kumar Singh, MRICS

6 Commercial decision making

A commercial manager plays an important

role in taking commercial decisions for the
project throughout its life cycle.
The decisions are taken in response to the
risks and opportunities arising from the
project.

The decisions are also closely linked to

various value engineering solutions.
The most common commercial decisions
taken in a project by a commercial manager
are:
Decisions related to the procurement route;
decisions related to financing and funding;
decisions related to the utilisation of
resources and many others.

Saroj Kumar Singh, MRICS

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