How Modern Methods of Construction can deliver greater Cost Certainty and Overall Value
A Quantity Surveyors Contribution
You can download the presentation bellow:
Author: Elia Gonzalez
#1 Understanding the tools for Cost management/control
Bill of Quantities / Tilbudslister”
| Almost more important than a good process for commercial management, are the tools implemented in the project to carry on this task. The most used tool for this purpose would be a standardized Bill of Quantities. The main purpose of a bill of quantities (BoQ) is to present a coordinated list of components/items, together with their identifying descriptions and quantities that encompass the building works, so that the tendering contractors are able to prepare tenders efficiently and accurately. Having a standardized BoQ will assure parity of tendering, as all bidders will base their offers on the same conditions and contents. For a quantity surveyor/cost manager, the BoQ becames a vital tool, as it will be used to manage and control the costs of the building project. Cost management and control uses include: |
- Pre-tender estimates;
- Post tender estimates;
- Cost planning;
- Pricing variations; and
- Interim valuations and payment.
How the perception of Quantity Surveyors in Danish construction has changed in the last years?
As Quantity Surveyors, we have experienced a change in the perception of our profession in the Danish construction industry. But… how will this continue changing in the coming years?
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In the video below, Ross Griffin, from KOSMOS (www.kosmosdk.com) talks in this video about how the perception of Quantity Surveying in Danish Construction has changed in the last years.
The contribution of Quantity Surveyors to more sustainable construction designs
KOSMOS is celebrating Green Friday every day. We have joined the movement of change and solution oriented deliveries. This week , we are promoting solutions that we offer to the construction industry, to achieve greener, cleaner, better environmentally performing and more sustainable solutions often discarded on projects due to their apparent capital cost, but what about the circular cost benefits.
There is a better way of doing things, and we are determined to assist with our professional knowledge to achieve this change in the industry.
So, how can we in KOSMOS help construction projects to make this turn? Quantity surveyors can bring their commercial knowledge to projects in order to:
Optimize the budget to allow sustainable solutions in the design
Having a solid idea of the actual project costs, allows to distribute the budget in a more optimal and efficient way. This brings the possibility of implementing green solutions, better environmental performance systems, sustainable and clean materials that would have otherwise been considered a luxury or a risk for the overall project economy due to its higher cost.
Estimate the cost of greener alternatives, to facilitate decision making
The potential time extension of the execution or the design when implementing new solutions can be assessed and estimated, so that a decision of whether or not taking those greener alternatives into the project can be taken based on facts and acknowledging the consequences. The values gained by circular economic investigations can have a great impact on the projects lifecycle and OPEX costs.
Prevent quality reduction and downgrading of sustainable design due to costs overruns
Better control of the project economy prevents cost overruns. A project with a solid economy won’t have surprises in the late stages, when cost reductions are mostly limited to reduction of quality, and replacing sustainable solutions for alternative less capitally expensive ones.
Analyse the life cycle of products
It is possible to determine the cost of more durable alternatives, and the return of investment of it. Having this analysis, it is possible to enlarge the life of the product chosen in the design, not focusing this choice purely on its initial capital costs. Incorporating alternative models of procurement can also reduce initial capital expenses and transfer these costs into the operations over a longer period through supply, maintain and replace contracts.
Cross-industry recycling
Looking at products and materials from cross-industry perspective. Waste in one industry or one project could be a supply source in other industry or project. This helps to reduce cost of disposal, supply, CO2 emission, and to optimize the lifespan of products.
6 advantages of having cost management on projects for total advisors
- Highly qualified specialist discipline focusing on economy.
- continues economy control of the design development.
- Value driven design development removing the risk for redesign.
- High quality structured estimates and report to the client showing clearly project change and development.
- Clear change, risk and economy process with full integration with design disciplines.
- Reduction of the risk for redesign due to not design within the budget frame work.
Data Collection and Benchmarking
DATA is one of the most valuable tools a company can have.
- It provides understanding of a specific case, by looking at previous cases.
- It gives security on decision making, looking at how similar cases turned out.
- It accelerates process and tasks, allowing the reuse of information rather than generating it over and over again.
Then, why are companies, specially in the construction industry, not collecting and storing all their data in a usable way?
It requires great effort, to assimilate data collection as a regular practice, to comprehend the value of that data, and to consider it not as a waste of time but the most valuable investment a company can make. Once this is decided upon and a strong standard is established to allow this process to be an automatic task, a company has a TREASURE!
Re-work
One of the most common reasons for project costs overruns we repeatedly encounter on projects during the design phases, are due to REWORK.
Rework may happen inevitably on small portions, however, we believe that major redesign can be avoided by having a good planning, in order to mitigate most of the following reasons:
- Late changes to scope from the client, when input and requirements are not clearly defined during the early stages of the project.
- Design inconsistencies, when disciplines (or members of the very same discipline) work individually on their design part, without performing consistent clash detection or a periodic interdisciplinary quality assurance review.
- Design errors not detected till late stages of the project, due to lack of investigation on elements crucial for the design critical path (focus on what will affect other disciplines design, and ensure those parts won’t require changes after they are complete).
- Project costs over budget, due to light, poor or nonexistent periodic control of the project cost estimates as the design develops.
- Output produced without taking into account the receiver´s needs, including over design project parts unnecessarily for the project outcome.
They all not only affect the project time schedule by causing delays, but they also have an impact on the overall project economy and the quality output.
6 advantages of having cost management on projects for client advisors
- Higher quality economic advice for clients.
- Completely alternative perspective in project setup, control and delivery.
- Continues project economy control and focus.
- Reduction of the risk of redesign or economy failure.
- More economy focused contracts with design teams and contractors.
- Complete commercial strategy for the project including project controls process thus offering high quality of service to clients.
6 advantages of having cost management on projects for developers
- A clear commercial strategy is implemented ensuring clear guidelines for managing the cost through the entire project life cycle.
- A clear risk management strategy with calculated risk and contingency allocations.
- Continues follow up and management of the project economy.
- High quality economic documentation and guidelines for the Client Advisor and Total Advisor to follow.
- A different perspective and knowledge base focusing 100% on economic impact.
- Procurement specialist focusing of valuable commercial information.
Commercial benefits of ensuring a good quality of the design when tendering
A good quality of the design when tendering, from a Commercial perspective, will:
- Reduce the contractor’s uncertainties and risk considered.
- Keep to a minimum changes during the construction period.
- Minimise the number of claims due to on-site decisions to deal with design deficiencies.
- Secure there is no missing scope on the tender offer.
- Strenth the project specific contract conditions between parties.