You are an Assistant Project Manager working for Aecom. Your manager has asked you to create a process chart (flowchart) of the various activities involved at the handover phase of a building
contract. Your manager has given you the following notes:
The process starts when the PM agrees with the contractor a provisional date for the practical completion meeting. This usually happens approximately 4 weeks before to allow the contractor time to
prepare his final programme to complete the works. The agreement of this date starts a series of other key activities: a. The Quantity Surveyor starts to plan the completion date for the final
account with the contractor
b. the contractor starts to identify defects and get these repaired by the sub- contractors at the first opportunity
c. the services engineers start to plan the commissioning programme
Two weeks before the practical completion date, the Architect, Engineer, PM and contractor inspect the works that have been completed to identify any outstanding snagging. The Architect produces a
list of snags and issues to the contractor. Approximately 10 days before practical completion, the services are started up to allow the cooling and ventilation systems to be balanced and tested. At
the practical completion meeting, a full site inspection takes place. Previous snagging is checked and new snags are identified. If snags are outstanding, the snagging list is updated by the
Architect and a new date is agreed to hold another site inspection. If there are no snags, the PM prepares a draft of the certificate. After the practical completion meeting, the PM meets with the
Facilities Manager who reviews the state of the building. If it is sound, the Facilities Manager (FM) agrees to take the building and the PM can issue the Certificate of Practical Completion
thereby passing responsibility of the site to the FM company. If it is not sound, any defects are added to the Architects snag list and checked at the next site inspection. Upon issue of the
Certificate of Practical Completion, the QS issues a certificate releasing half of the retention funds. Six weeks later, the QS meets with the contractor to agree the final account. Your flowchart
should be kept to a maximum of 20 boxes, show links for options at each stage and identify who does what activity.

Option 1: Freehold Property The freehold cost is £3 million. Legal fees are 2.5% of the freehold cost and the agents fees are 1.3%. Stamp duty is calculated based on 5% of the assumed ‘enable costs
for the first year (in this case the property manager has advised you should use £365/m2 per annum for this calculation). Business rates are assessed at £25,000 p.a. (in 2017) and you have been
asked to inflate this figure by 3% each year. To fit-out the branch, the QS advises that you should allow £1,650/m2 for the front of house and £1,000/m2 for the back of house. As it is a public
facing facility, the front of house part will require to be refurbished every 7 years and the back of house part every 14 years. The QS suggests that you should use the same rates /m2 but include
for construction inflation at 6% per annum. Professional fees are to be allowed at 11% of total construction costs. To clean the building and provide facilities management, the FM company charges
£125/m2 p.a. for the service. This is to be inflated by 4% per annum. An allowance for internal repairs is based on £5,000 in 2018 as a nominal sum to cover minor damage and from 2019, an allowance
of £50/m2 for front of house and £10/m2 for back of house with a 5% inflation per annum for all future years. However, when the offices are refurbished, the allowance that year will be nil (£0),
the year after £5,000 (with 5% inflation per annum since 2018) and thereafter the formula used for 2019 with inflation. Being a freehold property, after 20 years the property will still be owned by
Co-Op Bank and the property manager suggests that the value of commercial property in the area increases from the purchase price by 2.5% per annum. Option 2: Leasehold Property The property manager
is confident of negotiating a lease on good terms and believes the Landlord will agree to offer a £500,000 contribution to the cost of the fitting out of the branch and the period to the end of
2017 will be rent free. The following three years (2018 to 2020) the rent will be at £200/m2, rising 5% at 2021, then at the same rate until the next rise of 5% at 2025, then the same rate until
another 5% rise at 2028 with no further increases to the end of the 20 year lease. The Landlord’s Contribution will be offset against each years lease cost until exhausted. Agents fees are a lump
sum of £15,000 and the legal fees a lump sum of £40,000. Refurbishment costs, professional fees, stamp duty, business rates, FM costs, repair costs are the same costs and frequencies as option 1.
Being a leasehold property, the Bank does not own the building and therefore will not benefit in any rise in the property value over time. At the end of the lease you should allow a dilapidation
cost of £300/m2 (at 2017 rates increasing at 5% per annum) to reinstate the building back to the pre-let condition. Create a clear spreadsheet based on this information, showing the costs of each
option per annum and over the whole 20-year period. Produce a suitable graph that shows the total costs per annum. Marks are available for good layout design, formatting skills, use of variety of
formulas and charting.