Entrepreneurship, Costing and Project Management
What the domain tests
Entrepreneurship, Costing and Project Management tests estimating, tendering, bill of quantities, preliminaries, overheads, profit, cash flow, programmes, contracts and VAT.
Core rules
- Direct costs include labour, materials, plant and subcontractors.
- Preliminaries cover site establishment, supervision, insurance, temporary works and similar project-wide costs.
- Overheads are business costs not tied to one project; profit is the return for risk and enterprise; contingency covers the unexpected.
- Build the tender price in a clear order and add VAT where applicable. Namibian VAT is 15%.
- A programme may use a Gantt chart or critical path; cash flow must match payments and expenses.
- Understand payment certificates, retention and contract instructions.
Worked example
Direct cost = 250,000. Preliminaries 10% = 25,000, giving 275,000. Overheads 8% = 22,000, giving 297,000. Profit 12% = 35,640, giving 332,640. Contingency 5% = 16,632, giving 349,272. VAT 15% = 52,391, giving a tender price of 401,663. Reasoning: percentages are applied sequentially to the increasing base, with VAT last.
Traps
- Confusing markup with margin.
- Forgetting preliminaries and overheads.
- Adding VAT before profit and contingency.
- Ignoring cash-flow timing.
- Pricing from an old or incomplete bill of quantities.