TRADITIONAL & MODERN QUANTITY SURVEYING PRACTICE

by

Upali Fernando
MRICS,MCIOB,MAcostE,ACIArb,MASI,AIQS(SL)
(Chartered Quantity Surveyor, Cost Consultant, Independent Adjudicator and Charted Builder)

Managing Consultant WANFERND CONSULTING Construction Consultant Specialized in Quantity Surveying, Project Management and Claims and Contract Administration

http://www.wanferndconsulting.com info@wanferndconsulting.com

Origin of Quantity Surveying

Origin of Quantity Surveying dated back to ancient Egyptian civilization who used to dedicate personnel to carry out estimates and costing for their magnificent structures and buildings (such as pyramids). Quantity Surveying developed in to a occupation during 17th century for the restoration of London after the Great Fire. In 1836 the Quantity Surveying profession received a recognition when the new Houses of Parliament of Great Britain, designed by Sir Charles Barry, became the first major public contract to be fully measured and tendered using detailed bill of quantities for financial accountability

Traditional Quantity Surveying (QS)

In olden days the duties of a Quantity Surveyor were limited to ;

Measuring quantities or surveying quantities for proposed construction works to arrive the value of the proposed works, and; Measuring quantities or surveying quantities to arrive the value of the completed works.

Evolution of the Quantity Surveying Profession

The original responsibilities of a Quantity Surveyor has been extensively evolved and currently the Quantity Surveyor has to undertake not only the conventional Quantity Surveying work but to perform overall cost management role in the construction industry. Therefore, the term Quantity Surveyor is evolving in to terms such as Construction Cost Directors/Construction Cost Managers.

Evolution of the Quantity Surveying Profession

The traditional role of a QS, which is still practice in small to medium size projects, can be describe as measure and value system. At the outset, the QS shall make approximate estimates of the initial cost of the building are prepared by using single price method of estimating. If the cost is acceptable to the client then the design was developed by the architects. Subsequently, the QS would produce Bill of Quantities (BOQ) for tendering purpose. The work will be measured for progress payments. Final account will be prepared on the basis of tender documentation ( See Figure 1 in the next slide).

Traditional Quantity Surveying (QS) Contd.

Some of the salient responsibilities of the Quantity Surveyor

Preliminary cost advise (approximate estimates) Life Cycle Cost Cost Benefit Analysis Cost Modeling
At the very inception of a construction project , the prospective employer required to known what will be the budget /approximate estimate for the prospective project and other cost impacts to get a decision whether to go ahead or to amend the scope or to put-onhold or cancel the project.

The Quantity Surveyor with his vast knowledge in construction cost and also considering the present day market conditions and changes in social, political and economic condition will make cost prediction. Eic.
Refer COST STUDIES module for further details

Some of the salient responsibilities of the Quantity Surveyor

Cost Planning Pre Contract Cost Controlling

If the predicted approximate estimate is within the limit of his budget and considering other factors the employer/client may request the engineer/architect to proceed in developing the required drawings and other tender documents. During this period the Quantity Surveyor has to carry out a vital duty of cost planning and pre contract cost controlling.

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Cost Planning
The following techniques are used when performing cost planning; Elemental cost planning Comparative cost planning Cost plan in use
Refer COST STUDIES module for further details

1. 2. 3.

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Advise on suitable Form of Contract

The following are some of the leading form of contracts;
Joint Contract Tribunal Form of Contracts (JCT Form of Contracts)

Federation Internationale Dse Ingenieurs Counseils Form of Contracts ( FIDIC Form of Contracts )
New Engineering Contracts (NEC) Form of Contracts of Institute of Construction Training and Development, Sri Lanka (ICTAD Forms)

SCA/1,SBD/01 ( for works valued between Rs.10 million to Rs. 100 million) SBD/02 (for works valued over Rs. 100 million) SBD/03 (for works valued up to Rs. 10 million)

SBD/04 (for Design & Build Contracts)

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Advise on suitable procurement method

The following are some of the leading procurement methods; Traditional method Design and Build Management Contracting Construction Management Concession Contracts (E.g.- B.O.T, B.O.O.T,)

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Measurement and Quantification leading to preparation of Bill of Quantities (BOQ)

The BOQ is a document which consisting of a list of adequately described work items along with the accurate quantities with related units or money allocation displayed under different trades in accepted sequences to indicate the entire scope of works of a project. The BOQ will have to be prepared by a Quantity Surveyor in accordance with the rules and recommendations laid down in one of the reputed Standard Method of Measurement.

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Measurement and Quantification leading to preparation of Bill of Quantities (BOQ) Contd .

The objective(s) of the preparation of the BOQ are; To provide the uniform information of the quantities of work as to enable tenders to be prepared efficiently and accurately When the parities have entered in to a Contract, the priced BOQ can be used in the valuation of works executed under the original scope, and; BOQ can also be used as basis to evaluate any future varied work arising out of the contract.

Preparation/compilation of Tender (Bid) Documents & Preparation of Contract Documents Tender(Bid) Documents

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Form of Tender (Bid) with Appendix

Form of Agreements ( the Agreement) Information and Instruction to Tenderers Particular Conditions of Contract (Part 2/contract Data)

General Conditions of Contract (Part 1)

Particular Specifications General Specifications Drawings

Bill of Quantities/Schedule of Rates

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Preparation of Contract Documents

Duly filled and signed above mentioned Tender Documents , PLUS Memorandum of Understanding/Letter of Intent (if any) Letter of Acceptance (ACCEPT) All pre-tender and post-tender correspondence (Prior to issuing Letter of Acceptance ) (Optional)

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Tendering and Estimating

All Quantity Surveyors are essential to be Estimators. But all estimators are not essential to be Quantity Surveyors.

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Tendering and Estimating (Contd.)

Calling tenders Opening tenders Tender evaluation based on predetermined estimates Preparing reports on tenders

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Cost Control during the Construction period

During the construction period the QS should advise the Architect/Contract Administrator , before issuing the Variation Orders, by preparing the variation accounts to predict the cost changes due to prospective variation orders and other required cost controlling works such as cost reports, comparative cost option etc. (Cost Report to the Employer by predicting the anticipating final account).

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Cost Control during the Construction period (Contd.)

During the construction period the Contracts QS should advise the Contractor by preparing; Cost proposals, Cost/value comparisons, Loss/profit predictions, Anticipated final value and anticipated final cost (Cost Reports to the Contractor)

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Interim Valuations and Payments

After entering in to a contract , the contractor is entitled to claim the value of the executed and other values such as material on site, variations, adjustments of the provisional sums, cost fluctuations, claims, recovery of advance payments, liquidated damages as per the provisions stipulated in the contract. Such value has to be presented in form of an application by the Contractors QS and which will be reviewed and granted by the Consultant QS.

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Financial Statements, Discharge and Final Account

Providing financial statements at various stages during the construction period as specified in the contract and agreeing all work done as per the original scope, variation orders, provisional sums, fluctuation claims (if any) and other all general claims

Some of the salient responsibilities of the Quantity Surveyor (Contd.)

Settlements of contractual claims and dispute resolution

Giving notices, Maintaining contemporary records and providing interim/detailed particulars, Preparation/(at times) assessment of disruption (EOT) claims , Amicable settlement

Modern Quantity Surveying Practice

Investment appraisal Advice on cost limits and budgets Whole life costing Value Engineering Risk Analysis

Insolvency Services
Cost Engineering Services Administration sub-contractors Technical Auditing Project Management Facilities Management Advice on Contractual Disputes Employers Agent

Modern Quantity Surveying Practice-(Contd.)

Investment Appraisal
One of the key areas of long-term decision-making that firms must tackle is that of investment; the need to commit funds by purchasing land, buildings, machinery and so on, in anticipation of being able to earn an income greater than the funds committed In order to handle these decisions, firms have to make an assessment of the size of the outflows and inflows of funds, the lifespan of the investment, the degree of risk attached and the costs of obtaining funds.

Modern Quantity Surveying Practice-(Contd.)

Investment Appraisal (contd.)

The main stages in the capital budgeting cycle can be summarized as follows; Forecasting investment needs Identifying project(s) to meet needs Appraising the alternatives Selecting the best alternatives Making the expenditure Monitoring project(s)

Modern Quantity Surveying Practice-(Contd.)

Advice on Cost Limits and Budgets

There is one this that is definite; that is if you are entering into a investment that involves construction, you need a well defined budget. You do not want to be ball parking the figures particularly if you are going to be arranging financing to carry out the construction. It is imperative that you know your construction budgets limits. If you dont then you could end up with building partially finished, with no money to carry on, and end up in a most disastrous financial situation.
Refer COST STUDIES module for further details

Modern Quantity Surveying Practice-(Contd.)

Whole Life Costing

Whole-life cost, or Life-Cycle Cost (LCC) refers to the total cost of ownership over the life of an asset. Also commonly referred to as cradle to grave or womb to tomb costs.

Refer COST STUDIES Module for further details

Modern Quantity Surveying Practice-(Contd.)

Value Engineering
Value Engineering can be defined as an organized approach to provide the necessary function at the lowest cost. From the beginning the concept of Value Engineering was seen to be a cost validation exercise, which did not affect the quality of the product. The straight omission of an enhancement or finish would not be considered as Value Engineering.

Modern Quantity Surveying Practice-(Contd.)

Risk Analysis
No construction project is risk free. Risk can be managed, minimized, shared, transferred or accepted. It cannot be ignored Sir Micheal Lathem
The Quantity Surveyors as obliged to give advise on the risk associated with construction projects. They should also take necessary steps to manage the risk at minimum costs.
Refer Production Organization Module for further details

Modern Quantity Surveying Practice-(Contd.)

Insolvency Services
The construction industry is responsible for more that its fair share of bankruptcies and liquidations.
Limited liability companies becomes insolvent and then go in to liquidation. The QSs expert knowledge in cost would help to perform the insolvency services.

Modern Quantity Surveying Practice-(Contd.)

Cost Engineering Services

Cost engineering is an area of engineering practice concerned with the application of scientific principles and techniques to find solutions for cost estimating, cost control, business planning and management science, profitability analysis, project management, and planning and scheduling. Cost engineering practitioners tend to be specialized in function (e.g.- cost estimating, planning and scheduling, etc.), focused on either the asset management or project control side of the process and also focused on a particular industry (e.g.-engineering and construction, manufacturing, information technology); or asset type (

Modern Quantity Surveying Practice-(Contd.)

Administering Sub-Contractors
The contractors QS should have the ability to select, control, and manage its subcontractor. This include; Making a proper letter of invitation to obtain proper quotation, Evaluation of the quotation Preparation of the sub-contract agreement Certifying payments/valuations Final Accounts Discharge

Modern Quantity Surveying Practice-(Contd.)

Technical Auditing
Compare the final account with contract bills Examine the records available Discuss aspects with relevant staff Examine the procedure used Prepare a report on the findings

Modern Quantity Surveying Practice-(Contd.)

Project Management
Currently potential investors prefer to have Quantity Surveying to handle project management service since cost factor is more prominent among the factors QUALITY, TIME and COST.

Modern Quantity Surveying Practice(Contd.)

Facility Management (FM)

One of the simplest and most direct definition of facilities management is that give by the Royal Institution of Chartered Quantity Surveyors, which states that FM involves the total management of all services that support the business of an organization and identifies the opportunity that this relatively new discipline provides to the Quantity Surveying Profession.

Modern Quantity Surveying Practice-(Contd.)

Advice on Contractual Disputes

Due to the specialist knowledge in the provisions of the contract QS advise is important to resolve contractual disputes.

Modern Quantity Surveying Practice-(Contd.)

The Employers Agent

Services of Quantity Surveyors are requested by the Employers to act as the Employers Agent considering their knowledge in various disciplines related construction industry specially with regards to the construction cost.

Ethics

Royal Institution of Charted Surveyors

Professional Regulation and Consumer Protection Department February 2000

Professional Ethics Guidance Note

Ethics & Values of a Quantity Surveyor

RICS has a set of central values it expects members to apply in their work. Following this set of values is one of the key features that defines the professionalism of all charted and technical surveyors. You must base all your actions and judgments on these core values.

Ethics & Values of a Quantity Surveyor (Contd.)

Core values
Act with integrity Never put your own gain above the welfare of your clients or others to whom you have a professional responsibility.
Respect their confidentiality at all times and always consider the wider interests of society in your judgments.

Ethics & Values of a Quantity Surveyor (Contd.)

Core values (Contd.)

Always be honest Be trustworthy in all that you do. Never deliberately mislead, whether by withholding or distorting information.

Ethics & Values of a Quantity Surveyor (Contd.)

Core values (Contd.)

Be open and transparent Share the full facts with your clients, making things as plain and tangible as possible.

Ethics & Values of a Quantity Surveyor (Contd.)

Core values (Contd.)

Be Accountable take full responsibility for your actions, and do not blame other if things go wrong.

Ethics & Values of a Quantity Surveyor (Contd.)

Core values (Contd.)

Act within your limitations Be aware of the limits of your competence and do not tempted to work beyond these. Never commit to more than you can deliver.

Ethics & Values of a Quantity Surveyor (Contd.)

Core values (Contd.)

Be objective at all times Give clear and appropriate advice. Never let sentiment or you own interests could your judgment.

Ethics & Values of a Quantity Surveyor (Contd.)

Core values (Contd.)

Always treat others with respect Never discriminate against others

Ethics & Values of a Quantity Surveyor (Contd.)

Core values (Contd.)

Set a good example Remember both your public and private behavior could affect your own , RICSs and other members reputation.

Ethics & Values of a Quantity Surveyor (Contd.)

Core values (Contd.)

Have the courage to make a stand Be prepared to act if you suspect a risk to safety or malpractice of any sort.

ANY QUESTIONS IN QS PRACTICE ?