Quantity Surveying: Cost Management in Construction

• Quantity surveying encompasses managing and controlling construction project costs.
• Quantity surveyors are also known as cost managers or construction cost consultants.
• They are essential for ensuring projects stay within budget.
• Quantity surveyors manage all costs relating to building and civil engineering projects, from initial calculations to the final figures.

Core Functions

• Cost planning involves establishing a budget based on client requirements and market conditions.
• Procurement advice involves advising on appropriate procurement strategies and contract types.
• Cost control includes monitoring project costs, identifying potential overruns, and implementing corrective actions.
• Contract administration manages the financial aspects of construction contracts, including valuations, payments, and variations.
• Risk management includes identifying and assessing potential cost risks and developing mitigation strategies.

Key Responsibilities

• Preparing cost estimates and budgets is a key responsibility.
• Preparing bills of quantities (BoQ) is essential.
• Monitoring and controlling project costs is crucial.
• Managing contract variations is necessary.
• Valuing completed work and arranging payments
• Providing advice on cost-related matters is important.
• Negotiating with contractors and suppliers is a key task.
• Preparing final accounts is a concluding responsibility.

Skills and Competencies

• Strong numeracy and analytical skills are essential.
• Excellent communication and negotiation skills are required.
• In-depth knowledge of construction methods and materials is vital.
• Understanding of contract law and procurement processes is necessary.
• Ability to use cost management software and tools is important.
• Attention to detail and accuracy is a must.
• Problem-solving and decision-making abilities are crucial.

Bills of Quantities (BoQ)

• A bill of quantities (BoQ) is prepared by a quantity surveyor.
• It lists quantities of materials, labor, and other items for a construction project.
• It provides a standard basis for tendering, allowing contractors to price works accurately.
• The BoQ is organized by trade or work section.
• Each item is described in detail, including its quantity, unit of measurement, and description of the work
• It ensures all contractors bid on the same scope of work, making it easier to compare prices.
• The BoQ is used for valuation of work completed, variations, and final account preparation.

Cost Estimation Techniques

• Preliminary Estimates are used early in a project to provide a rough order of magnitude estimate based on limited information.
• Detailed Estimates are prepared using detailed design information, including drawings, specifications, and BoQs.
• Resource Costing involves pricing each item in the BoQ by analyzing the resources required, such as labor, materials, and equipment.
• Parametric Estimating uses statistical relationships between historical data and project parameters to predict costs.
• Analytical Estimating is a methodical breakdown of the project into work packages and estimating costs that includes direct costs, indirect costs and profit margins.

Cost Control Methods

• Regular Cost Reporting produces cost reports that track actual costs against the budget and forecast final costs.
• Value Engineering identifies opportunities to reduce costs without compromising the project's functionality or quality.
• Variation Management manages contract variations effectively to minimize their impact on project costs.
• Earned Value Management (EVM) is a technique used to measure project performance. EVM compares the planned value of work with the actual work completed and the actual costs incurred.
• Life Cycle Costing assesses the total cost of ownership of a building or asset, including initial costs, operating costs, maintenance costs, and replacement costs.
• Benchmarking compares project costs with similar projects to identify potential cost savings and improve cost performance.

Contract Administration

• Interim Valuations involve assessing the value of work completed by the contractor and issuing interim payment certificates.
• Variation Orders involve evaluating and pricing variations to the contract scope of work.
• Payment Certificates involve issuing payment certificates to the contractor based on the value of work completed and any variations.
• Final Account Preparation involves preparing the final account for the project, which reconciles all payments made to the contractor and any outstanding amounts.
• Dispute Resolution involves assisting in the resolution of any cost-related disputes between the client and the contractor.

Software and Tools

• Cost Management Software is used for cost estimating, cost control, and contract administration, examples include CostX, Bluebeam Revu and Glodon.
• Building Information Modeling (BIM) is used to create digital models of buildings and infrastructure. BIM can be used for cost estimation, quantity takeoff, and clash detection.
• Measurement Software is used to measure quantities from drawings and BIM models.

Professional Bodies

• Royal Institution of Chartered Surveyors (RICS) is a global professional body for quantity surveyors and other property professionals.
• Australian Institute of Quantity Surveyors (AIQS) is the professional body for quantity surveyors in Australia.

Ethical Considerations

• Quantity surveyors must adhere to a code of ethics that emphasizes integrity, objectivity, and impartiality.
• They must avoid conflicts of interest and act in the best interests of their clients.
• Confidentiality means maintaining the confidentiality of client information.
• Competence means providing services only in areas where surveyors have the necessary skills and experience.

Future Trends

• Increased use of technology, such as BIM, AI, and machine learning, is expected.
• Greater emphasis on sustainability and life cycle costing is anticipated.
• Growing demand for cost management services in emerging markets is projected.
• Focus on collaborative working and integrated project delivery is likely.
• Data analytics and predictive modeling for cost forecasting and risk management will increase.

Quantity surveyors manage construction project costs. They handle budgeting, cost control, and contract administration. Their expertise ensures projects stay within budget by offering procurement advice and managing financial risks.