The role of the quantity surveyor is evolving due to changes in the industry and client needs. The traditional role of the QS, providing measurement and bills of quantities, is now waning. While the focus remains strongly on cost management, there has been a gradual extending of the scope of services offered by QS consultants.
The advancement of building technology (such as BIM), privatisation and global business challenges further propel changes in the quantity surveyor’s role.
Increasingly, clients value a ‘one stop’ solution – an integrated multi-disciplinary suite of management and consultancy services – which involves the QS working closely with all project stakeholders to deliver the best project outcome.
The modern QS’s diversified role now includes procurement, benchmarking, value and risk management, auditing and whole life costing.
Adding value at every stage
A typical development project is a complex process involving many stages. The quantity surveyor can provide a wealth of input and value throughout the development process, depending on the client’s needs.
A good QS can advise on:
> Market research
> Investment appraisal
> Choice of location
> Identification of site and detailed site survey
> Outline scheme and development appraisal
> Negotiation for site acquisition
> Site acquisition
> Design
> Planning consent
> Finance
> Detailed plans and specification
> Tender documentation
> Tender process
> Construction
> Occupation by owner or tenant
> Property management and maintenance
> Demolition and re-development.
Early QS involvement
A quantity surveyor can provide feasibility analysis, financial evaluation and market intelligence at the strategic and initial stages of the project. Having a quantity surveyor involved in the early stages can help ensure the principle of ‘driving design by cost’, without compromising the functional requirement, can be managed effectively for the client.
Professional cost planning from the earliest stages provides comfort to the client in terms of cost certainty. Rather than perform a cost planning and reconciliation exercise at the end of the design stage, the QS can be proactive, participating in design meetings, and challenging the architect’s design, particularly if the design exceeds the cost limit.
In some situations, it may be difficult to challenge the architect if the QS fails to indicate an alternative design solution, however, this feedback is integral to the design process and can help to avoid costly redesigning at a later stage.
Value Engineering for whole-of-life cost benefits
Developers often consider the whole life cost of their developments, to maximise the benefits of reducing maintenance costs, increasing lease income, and improving asset desirability and long term value. A good QS can provide value engineering services that consider not just the up front capital expenditure, but downstream opportunities for optimising value as well.
A quantity surveyor with up to date knowledge of the latest construction technology and building service practices can compare alternatives, offering advice on the best value long term. This is particularly useful when considering sustainable alternatives that save energy, water and other resources.
Aiding successful procurement
The process of procurement normally involves:
> the appointment of a consultant or a contractor for design;
> competitive tendering or negotiation;
> the establishment of pricing methodology;
> the use of traditional or alternative procurement; and
> what form of contract to adopt.
The quantity surveyor’s close coordination with the project manager leads to a benefit for the client and a successful procurement solution.
Most construction contracts used in New Zealand are based on a lump sum pricing method, whereas in many other countries re-measurement contracts are adopted. Both methods have advantages and disadvantages.
In some lump sum contracts, contractors may load a premium into the price for a portion of ‘risk’, whereas re-measurement contracts allow for fair and reasonable tender price returns. However, re-measurement contracts may result in increased resource requirements in preparing the bill of quantities and additional post contract management.
In a recent Christchurch project, we appraised the pros and cons of cost reimbursement contracts and recommended a Guaranteed Maximum Price (GMP) Contract model. This indicated the risks associated with the cost-plus-procurement route to the project stakeholders. As a result, the comprehensive procurement strategy report was adopted in part and became pivotal in ensuring a successful project outcome.
Advice on value and risk management
Quantity Surveyors can implement value and risk management in consultation with project managers. Given that contingency is calculated as a percentage of the overall project cost, an understanding of the risk management process can be critical to the outcome of a project. In most cases, the risk register is obtained by the quantity surveyor from the project manager, then costs are allocated for each risk based on priority. The sum of risk allowance is included as contingency in the cost plan and financial statement.
Effective cost management
During the post-contract stage, the quantity surveyor’s involvement includes:
> preparing the payment valuation;
> assessment of variations;
> provision of cash flow and anticipated final project costs; and
> agreement of the final account.
Most developers and investors pay more attention to cash flow because they use this statement as a budget control mechanism, as well as to monitor progress and performance. In large, multinational companies, incentives are often provided to client representatives based on cash flow commitment versus the actual cash flow achieved.
Benchmarking analysis
Benchmarking enables the client to compare specific project costs with other projects in their portfolio, which in turn helps them revisit their spending and improves spatial planning.
For accurate benchmarking, quantity surveyors must generate a database based on the completed project cost data and index it appropriately. If there are a series of phased developments in a framework project, clients are interested in where the cost has been booked and how much it has cost to build functional spaces such as offices, data centres, gyms, child care facilities etc.
The QS remains focused on the best cost solution
The quantity surveyor’s role is vital to the success of any development project. Because of the analytical approach taken by the quantity surveyor, the client can rely on assessments that may influence their decision at every stage of the project.
In order to provide a ‘best cost solution’ within an ever changing building landscape, quantity surveyors must continually upgrade their skills, including their knowledge of current construction technology and market price levels, and be ready to diversify their services in order to achieve an excellent outcome for their clients.
To find out more about our quantity surveying and cost consultancy services please call 0800 PRENDOS or email prendos@prendos.co.nz or fill in the form below:
