MI – May 2022 – L1 – SB – Q2a – Costing Methods

Identifying problems associated with site and contract work and ways to mitigate them.

Question

State THREE problems associated with site and contract work and list TWO ways to mitigate against them.

Answer

Problems associated with site and contract work:
- Pilferage of materials, tools, and fuel: There is a risk of theft and unauthorized use of resources at construction sites due to the large number of people and equipment involved.
- Unauthorized use of equipment and vehicles: On-site machinery and vehicles may be used without proper authorization, leading to wear and tear or unplanned expenses.
- Wasteful use of materials: Inefficiencies in handling materials can lead to wastage, which impacts the cost control and profitability of the contract.
Ways to mitigate these problems:
- Effective site security and management: Implement strong security protocols and assign competent site managers to oversee operations and prevent pilferage.
- Clear documentation and tracking: Maintain proper records of equipment usage and material consumption, and ensure regular inventory checks to avoid unauthorized usage and waste.