Thursday, September 20, 2018

Traditional and Modern Quantity Surveying Practice

In this article, you will learn about traditional and modern quantity surveying practice. Also, you can get an idea about the responsibilities of a quantity surveyor. So be sure to bookmark this article to check out future posts to learn valuable information on the other sources as well.

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Also, you can share our valuable articles with other professionals. By the end of these articles, you will become familiar with traditional and modern quantity surveying practices and responsibilities of a quantity surveyor. In the future, I have to planned to publish an article related to contractual letter writing.

In the olden days the duties of a Quantity Surveyor were limited to,
a) measuring quantities or surveying quantities for proposed construction works to arrive at the value of the proposed works.
b) measuring quantities or surveying quantities to arrive at the value of the completed works.

This scope has been extensively evolved and currently, the Quantity Surveyor has to undertake not only the above conventional Quantity Surveying works but to perform overall cost management role in the Construction Industry. Now the term Quantity Survey is evolving as Construction Cost Directors/Construction Cost Managers in the Construction Industry. The history of the Quantity surveyor from the middle of the seventeenth century.

This traditional role, that is still practiced by some and especially by small to medium-sized projects can be briefly described as a measure and value system. Approximate estimates of the initial cost of the building are prepared using a single price method of estimating, and where this cost was acceptable to the client then the design was developed by the architect.

Subsequently, the Quantity surveyor would produce bills of quantities for tendering purposes, the work would be measured for progress payments and a final account prepared on the basis of the tender documentation.
traditional and modern quantity surveying practice
traditional and modern quantity surveying practice

Traditional Quantity Surveying Practice

1. Preliminary Cost Advice (approximate estimates).

2. Cost Planning/ Cost Controlling During Planning.

3. Procurement/ Standard Form Advice.

4. Measurement and Quantification Leading to Preparation of Bill of Quantities.

5. Preparation/ Compilation of Tender/ Contract Documents.

6. Tendering and Estimating.

7. Cost Control During Construction.

8. Interim Valuations and Payments.

9. Financial Statement, Discharge, and Final Accounts.

10. Settlements of Contractual Claims and Dispute Resolution.

11. Cost/ Value Reconciliation

1. Preliminary cost advice (approximate estimates), Life Cycle Cost, Cost-Benefit analysis, Cost modeling, etc.

At the very inception of a construction project, the prospective Employer required know to
what will be the budget/approximate estimate of the prospective project and other cost impacts;
to get a decision, whether to go ahead or to amend the scope or to post phone or cancel the project.

The Quantity Surveyor with his vast knowledge in construction cost and considering the present-day market conditions and changes in social, political, and economic conditions he will give his cost prediction.

2. Cost planning and Pre-contract cost controlling

If the predicted approximate estimate is within the limit of his purse and considering other factors the Employer will request the Engineer/Architect to proceed with the development of required drawings and other tender documents.

Read more: Cost Planning Process in Construction

During this period the Quantity Surveyor has to another vital duty called cost planning and pre-contract cost controlling. The following techniques are used when performing cost planning

1) Elemental cost planning
2) Comparative cost planning
3) Cost plan in use.

3. Advice on suitable Form of Contract and suitable Procurement Method.

The following are some of the Standard leading forms of contracts

* JCT form of contract (Joint Contract Tribunal).

* FIDIC form of contract (International form) (FederationInternationale Dse Ingenieurs Counseils.)

* NEC form of contract(New Engineering Contacts)

* ICTAD form of contract (Institute for Construction Training and Developments Sri Lanka)
SBD/01( Contract 10million to 100 million)
SBD/02(Contract over 100million)
SBD/03 (Contract up to 10million)
SBD/04 (For Design & Build Contracts)

Read more about: Brief Introduction About FIDIC Contracts | Form of Contract

Read more about: Definitions of Contractual Claim's | FIDIC Red Book

Read more about: Type of Form of Contract in Construction | FIDIC Books

The following are some of the leading procurement methods

* Traditional methods
* Design and build
* Management contracting
* Construction management
* Build, operate and transfer (B.O.T)

4. Measurement and quantification leading to the preparation of Bill of Quantities

The Bill of Quantities is a document which consisting of a list of adequately described work items along with the accurate quantities with related units or money allocations displayed under different trades in accepted sequence to indicate the entire scope of works of a project and 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 Measurements. SMM7, CESSM3, POMI, SLS573, etc.

a) To provide the uniform information of the quantities of work to enable tenders to be prepared
efficiently and accurately.

b) Help Employers/ Consultants for Apple to apple comparison of the Tender.

c) When a Contract has been entered into, to provide for use of the priced Bill of Quantities in the
valuation of work executed under the original scope, and to use as a based in valuing any future varied Works.

5. Preparation/Compilation of Tender/Contract documents/ Tender (Bid) Documents

Tender(Bid) Documents
ලංසු ලේඛන වල අන්තර්ගතය පහත පරිදි වේ.

1) Invitation for bids (Tender notice) - IFB

2) Instruction to tenders/bidders - ITB

3) Form of tender

4) General Conditions of Contract

5) Special Conditions of Contract

6) Form of contract

7) General Specifications of work

8) Special Specifications of work

9) Tender Drawings

10) Pricing Preambles

11) Bill of Quantities/Schedule of Rates

12) Specimen Standard Forms (Bonds & Guarantees)

Preparation of Contract Documents (කොන්ත්‍රාත් ලේඛන පිළියෙල කිරීම)

• 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)

The number and the nature of the contract documents will depend on the tender documents. They may be some or all of the following.

• Letter of Acceptance ආරාධනා ලිපිය
Letter of Acceptance consists of starting date, date of providing performance bond, date of taking over the site & contract sum. Normally starting date will be 14 days from the letter of acceptance.

• The Agreement
Which is the actual contract which the parties sign?

Conditions of Contract ගිවිසුම් කොන්දේසි
Which set out the obligations & rights of the parties & detail the conditions under which the contract is to be carried out.

• Memorandum of understanding (if any)
After opening the bids & before signing the contract any dispute arises between two parties a statement called Memorandum of Understanding (MOU) should be signed, stating the new condition.

• Bills of Quantities ප්‍රමාණ බිල් පත්‍රය
Any errors in the bills must be corrected & any necessary adjustments to rates & prices must be clearly & neatly marked.

• Specifications පිරිවිතර
Specification means a description of the quality of materials & the standards of workmanship. Where the specification is a contract document, all that is necessary is to endorse on the reverse of the last page the words “This is the Specification referred to in the Contract” with spaces for the signatures.

• Drawings සැළසුම්
Each of the drawings endorsed either “This is a Contract drawing” or some similar statement. Many firms have rubber stamps for this purpose.

• Contract Data කොන්ත්‍රාත් දත්ත
If anyone of the conditions changed it is stated under this section.

6. Tendering & Estimating

All Quantity Surveyors are essential to be Estimators. But all Estimators are not essential to be Quantity Surveyors.
Estimating and Tendering | Cost of Construction Project

Calling tenders, Opening tenders, tender evaluation based on the predetermined estimate, Preparing reports on tenders are to be done by the architect’s/contract administrator’s quantity surveyor where estimating and converting scientifically prepared estimate to tender after considering various factor’s (site-visits reports, capacity, amount of provisional sums, professional team, etc.) by the contractor’s quantity surveyor.

7. Cost control during construction

During the construction period, the Quantity Surveyor 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 options, etc. (Cost Report to the Employer by predicting the anticipated final account)

During the construction period the Contractor’s Quantity Surveyor 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)

8. Interim valuations and payments

After establishing the Contract the Contractors’ are entitled to claim the value of work executed and other values such as Materials on Site, Variations, Adjustments of Provisional Sums, Cost fluctuations, Claims, Recovery of Advance Payments, Liquidated damages as stipulated in the Contract.

Hence the Contractor’s Quantity Surveyor has to prepare and the Architect’s /Contract Administrator’s Quantity Surveyor has to certify.

9. Financial statements, Discharge and Final Accounts

Providing financial statement as various stages during the construction period as specified in the contract and agreeing all work done under the original scope, variation orders, provisional sums, fluctuation claims (if any) and other all general claims the quantity surveyor is completing the final accounts and obtain the Contractor’s agreement and the statement of discharge.

10. Settlements of contractual claims and dispute resolution

Giving notices, contemporary records, disruption claims, Extension of Time claims, amicable settlements to be done. Dispute resolution activities also to be handled.

Read more: Common Factors for Construction Dispute
Read more: Alternative Dispute Resolution | Dispute Resolution Method

11. Cost/ Value Reconciliation

Application of Cost Value Reconciliation

The application of cost value reconciliation in the subcontracting construction industry is considered an important part of cost management for the financial control of construction projects. However, despite its uses, it is often not widely used by subcontracting organizations. This is generally due to the perceived resource requirements .the cost and technical skills necessary to incorporate the technique into small and medium-size subcontractors.

Cost Reconciliation Shows
• Profit/loss on each individual contract on a monthly basis.

• Profit/loss for the current accounting period

• Current cash position of the company

• Details of overhead recovery on individual contracts

This will enable the company to;
• Identify any action and reduce cost liabilities on a monthly basis

• Plan company expenditure

• Monitor and adjust estimating rates based on profit/loss reporting.

Modern Quantity Surveying Practice

1. Investment appraisal.

2. Advice on cost limits and budgets.

3. Whole life costing.

4. Value Engineering.

5. Risk analysis.

6. Insolvency services.

7. Cost engineering services.

8. Subcontract administration.

9. Technical auditing.

10. Project Management.

11. Facilities management.

12. Advice on contractual disputes.

13. Employers agent.

14. Sustainable Construction

1. 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 cost of obtaining funds.

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).

2. Advice on cost limits and budgets.

There is one thing that is definite, if you are entering into a realty investment that involves construction, you need a well-defined budget. You do not want to be ballparking the figures particularly if you are going to be arranging financing to carry out the construction.

It is imperative that you know your construction budget limits. If you don’t then you could end up with a building partially finished, with no money to carry on and end up in a most disastrous financial situation.

3. 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.

4. Value Engineering

Value Engineering can be defined as an organized approach to providing the necessary functions at the lowest cost From the beginning the concept of value engineering was seen to be 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.

5. Risk analysis

No construction project is risk-free. Risk can be managed, minimized, shared, transferred or accepted. The Quantity Surveyor should advise on risk in construction and take steps to manage the risk at minimum cost.

6. Insolvency services

The construction industry is responsible for more than its fair share of bankruptcies and liquidations. Limited liability companies become insolvent and then go into liquidation. The Quantity Surveyor’s expert knowledge in cost, he will help to perform the insolvency services.

7. Cost engineering services

Cost engineering is an area of engineering practice concerned with the "application of scientific principles and techniques to problems of 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 focused on a particular industry (e.g., engineering and construction, manufacturing, information technology, etc.); or asset type (e.g., chemical process, buildings, software, etc.).

8. Subcontract administration

The Contractors’ Quantity Surveyor should have the ability to select, control, and manage their subcontractors.
Making a proper letter of invitation to obtain a proper quotation
> Evaluation
> Sub-contract agreement
> Certifying valuations
> Final accounts
> Discharge

9. Technical auditing

A technical audit is an audit performed by an auditor, Engineer, or subject matter expertly who evaluates deficiencies or areas of improvement in a process, system, or proposal Technical audit covers the technical aspect of the project implemented in the organization.

Quantity Surveyor can carry out Contractual or financial audit or both.

Audit of Construction Projects

Construction projects cover many aspects. However, the technical audit may be limited to specific aspects that may be relevant. Relevant aspects are as follows:

• Organizing Construction Project Management.

• Process of Design and Construction.

• Utilization of Resources.

• Project Cost.

• Method of Contracting and Pricing.

• Planning and Scheduling Procedure.

• Project Control and Monitoring.

• Cost Control and Accounting.

• Quality Control and Safety Procedure.

• Project Usage and Management Organization.

Objectives of Audit

• Implementation is as per Approved Client Guidelines and Industry Standards.

• Ascertain Causes of Claims, Delays and Changes, and their Financial Implications.

• Identify Fraud Situations & Possibilities and suggest Preventive Measures.

• Examine Justification, Accuracy & Suggest Alternatives to Minimize their Costs.

• Recoveries from Third Parties, where applicable.

10. Project Management

Defines project management as "the application of knowledge, skills, tools and techniques to a broad range of activities in order to meet the requirements of a particular project."

The overall planning coordination and control of a project from inception to completion aimed at meeting a client’s requirement in order to produce a functionally and financially viable project that will be complete on time within authorized cost and to the required quality standards.

Project management processes fall into five groups:

• Initiating
•Monitoring and Controlling

11. Facility Management (FM)

One of the simplest and most direct definitions of facilities management is that given 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.

12. Advice on contractual disputes

Due to the specialist knowledge in contract conditions, his advice is requested to solve contractual disputes.

13. Employer’s Agent

Services of quantity surveyors are requested by the Employers to act as the Employer’s `Agent considering quantity surveyors knowledge in various disciplines related to construction industry especially related to construction cost.

14. Sustainable Construction

‘ The ways in which built assets are procured and erected, used and operated, maintained and repaired, modernized and rehabilitated and reused or demolished and recycled constitutes the complete life cycle of sustainable construction activities.’

What is sustainable construction?

Sustainable construction aims at reducing the environmental impact of a building over its entire lifetime while optimizing its economic viability and the comfort and safety of its occupants.

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  1. Very valueble article for new comers.... I learned lot from it... thnx

    1. Thank you,
      Please be kind to share with others.

  2. Really helpful article
    For a undergraduate Quantity surveyor like me

    1. Thank you,
      Please be kind to share with other professionals.

  3. thanks for lovely comments keep sharing.