Prosperno Interim Valuations (BOQ) for Cost Performance? Should you use client interim valuations (based on BOQ) for measuring a project's monthly cost performance? Swipe to find out more > D prospermo.com (p} noConcerns when using Interim Client Valuations (BOQ) for project cost performance measurement? © Selling Prices from BOQ against Actual Costs Interim valuations are selling prices & cannot be directly compared against costs since they contain profits, head-office overheads, risk allowances & adjustments. These might be unevenly distributed against each bill item. Therefore having a single ratio to arrive at the cost of the priced BOQ might be less meaningful for comparisons. © Preliminaries Cost vs Progress The Client BOQ might not include a full list of prelims, therefore several prelims might be combined or some prelims might be spread over many bill items. This leads to difficulties in recording progress and matching actual costs against the prelims BOQ items. D prospermo.com (p} noi t Concerns le when using Interim Client Valuations (BOQ) Da oa for project cost performance measurement? = © BOQ Front Loaded / Back Loaded The priced BOQ can be loaded against the actual cost disbursements. The progress calculated based on this loaded BOQ can be over / undervalued leading to an inaccurate performance comparison against the work done & actual costs. © Matching BOQ items with Actual Cost Records Many assumptions might be needed to match the actual costs (collected from an accounting or ERP system) with the Client Valuation. This questions the accuracy of the comparison & it might not give a breakdown comparison which is useful for decision making. D prospermo.com (p} noConcerns \ when using Interim Client Valuations (BOQ) Da oa for project cost performance measurement? © Pending Variation Orders Pending variation orders might not be included or partially included in the interim valuations, even though the progress is fully done and costed. Variation approvals generally take time, and therefore comparing valuation done to that point against costs would show losses. D prospermo.com (p} noCost Performance Measurement The client interim valuations can be used being mindful on the concerns & limitations. However is there a better technique to measure the project's periodic cost performance? Earned Value Management (EVM) Pprospermo.com——E————eOow~ What is EVM? “ Poo Earned Value Management Qa (EVM) is a project vy management technique to ome et cr project's current Somer T | expected performance in terms of scope, costs and a Per LyWhat's Next? Await the next post to learn about EVM explained simply with examples & calculations. Follow Prospermo for more insights on construction cost management & cost engineering topics. D prospermo.com (p} no~ Ee Prosperno Contact Us e@ 494 766 115 777 8 info@prospermo.com @ linkedin.com/company/prospermo @ re reeen O10