+1
Hi from a relative IFS novice, however wondered whether IFS has the ability to deal with projects that are full cost reimbursable Target Outturn Cost (TOC) model?
As a company we are operating typically Lump Sum projects, however we are undertaking a program of projects with a defined cost margin that is not lost if there are cost-overruns.
Does IFS have the ability to deal with this?
Thank you,
Martin
Hi,
Not totally sure what the definition is for “Target Outturn Cost”
But if you mean a project that reimburses all its cost, usually with a defined markup to the customer, then yes that is a standard flow in IFS Projects, reimbursing time, expenses, used materials and Supplier invoices to a project customer.
Hope this helps a bit
Regards Erik
+1
Hi Erik,
Happy new year to you and thank you for your response!
Apologies ‘Target Outturn Cost’ is a lump sum upper limiting cost basically.
The projects that i refer are reimbursed on cost plus a 12% mark up. If the cost runs over that originally estimated in the Target Outtrun cost, then the monetary value of the 12% mark up on the costs remains and the additional costs will be recovered either as cost only or cost plus mark up, depending on whether the additional cost is justified as a change event/latent condition.
Therefore, the original total 12% mark up fee remains, as a monetary value however may reduce as a margin % against the overall costs for the project if the cost over runs are significant.
IFS in the format that we are operating doesn’t recognise this, i am having to input Contract Change Orders to recognise the increased cost and therefore the maintained monetary margin amount. Surely there is an easier way to operate this kind of reimbursable project within IFS.
Does the project need to be set up diffidently within IFS initially to operate/report this way??
thank you in advance and apologies if i have baffled you with too much detail!!
kind regards,
Martin
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