By Lalith Rathnayake
Determination of cost of the intended finish product is vital in any industry. Fundamentally wrong costing would lead to serious repercussions in a business. Any Quantity Surveyor who is entrusted of managing cost estimating, irrespective of which organization (Client, Contractor or Consultant) he/she is engaged, should have this “business sense”. In case of a public client it is much more important to be accountable for estimates prepared. The procurement manual section 8.13.4 is self explanatory on this and abstract of same is shown below.
“To minimize variations due to inaccurate quantities or omissions in the BOQ it is recommended that before start of preparation of bidding documents PE should obtain a certificate from the persons who have prepared the BOQ that a second person has checked the BOQ for its accuracy and completeness. It is also highly recommended that when “Type” structures or buildings are constructed to compare the BOQ with the final measurements made to such“Type” structure or building before finalizing BOQ”.
It is very appropriate to note that checking / audit by a second person for both accuracy and completeness of what has been done is recognized as per the above. Why not the same is entrusted to a professional Quantity Surveyor who is properly trained to do that? Professional Quantity Surveyor will know that the checking of all other bid or tender documents including Standard Method of Measurement and pricing preambles is required to ensure accuracy and completeness of Bills of Quantities (BOQ).
In construction industry accurate cost estimating is not that easy due to its unique characteristics such as “the cost of the product is determined prior to any production is taken place based on set of information issued by many others and assumptions.” The ill-advised cost or wrong cost advice could lead to stoppage or suspension of projects due to lack of funds and it is not uncommon of such incidents and experiences locally and overseas. The costing is not just a process of filling blanks or mere update of a pre prepared elemental or other break down format but it requires knowledge in applicable techniques, methods, technology, risk analysis, provisioning, business decisions with relevant aspects of construction economics.
In modern state of affairs cost is committed in early stage of design. Hence it is imperative that historical cost data available shall be wisely used by a professional Quantity Surveyor in preparation of cost plans and updating same. The very first budgeted amount committed will be remembered by investors, donor agencies or public until completion. In public tenders now the estimated cost / price is published in the tender notice itself. Demand for “due diligence study” by an independent party due to public complains of over spending might not be far away. Public sector may have to be mindful in this regard.
It is a known fact that to secure projects lower cost estimates are provided to clients with the intensions of getting client committed to the project first and then increase the budget during construction letting clients to face serious financial difficulties. Investors should be aware of such wrong advises by errant practitioners in the industry and to get project estimates from professional Quantity Surveyors.
This kind of wrong advises are very common in personalized housing projects where probably all the saving of a person in middle income range spends for his house with some loan facilities from banks. When he finds the cost is much more than what is advised it will be too late and could be a life time sentence for distress due to getting advice from persons who are not professionally qualified Quantity Surveyors. Even in large housing projects during Tsunami Reconstruction programs such wrong advises were seen and in impending housing programs also such unrealistic estimates would be a possibility.
Under the circumstances one could say the costing has become more vital than any other aspect and that the project success is pivotal on its initial cost estimate. Thus estimating has to be done by skilled and trained professional Quantity Surveyors in the project team.
When it comes to pricing of BOQ by a contractor or consultant the accuracy of pricing is crucial. Unlike in estimating with historical cost data the Quantity Surveyor should have a fair knowledge on the risks apportionment, obligations of parties, method of construction, temporary works, quality specified, product data, prices, buildability, overhead calculations etc. Reading through the Bills of Quantity description is insufficient to price but should have gathered all pricing information from tender or bid documents and standard documents referred therein such as Standard Method of Measurement, Specification and the like. On the other hand document drafter has to prepare proper documents communicating such information clearly with minimum discrepancies and drafting errors.
Without the knowledge in interpretation of tender or bid documents, measurement methods, construction technology, industry practices and the like estimating could be a difficult task. A professional Quantity Surveyor is supposed to have this overall knowledge though not supposed to be an expert in designs or engineering. However, he / she should be an expert in documentation with necessary contractual and cost management knowledge. Further the professional Quantity Surveyor should have good knowledge in information communication and technology with disciplined software use and presentation skills.
Therefore, producing a Quantity Surveyor of modern day probably with the knowledge of sustainability and green costing is not an easy task. Therefore, producing “quick made” Quantity Surveyors to cater for demand in middle-east or locally with short courses would not have helped the profession or industry but will promote fake practices.
The Institute of Quantity Surveyors therefore implements a very stringent accreditation process of educational institutes, systematic Assessment of Professional Competence (APC), membership routes and managing a college of Quantity Surveying in its commitment to maintain well known Sri “Lankan Quantity Surveyor” brand.
You will recognize that professional Quantity Surveyor is the most appropriate person to prepare documentation, cost plans, preliminary project estimates, BOQ and estimates and unfortunately both our public sector and banking sector are yet to use this human capital available in Sri Lanka though utilized and well recognized in other countries.
About the Author:
Ch.QS. Lalith Rathnayake (Membership No. 0270)
B.Sc (QS) Hons, F.I.Q.S.SL