About time, too: Building Magazine Column, March 2009
27 March 2009
By Richard Steer
In a world dominated by the downturn, billion-pound bailouts and quantitative easing, let nobody argue that today’s QS is anything less than fully engaged in helping find solutions to the woes of our industry. The greatest example of this is the advent of the latest QS Rules of Measurement – something that I am reliably informed will have a similar impact on the world of the cost manager as the discovery of penicillin had for clinicians.
The current rules of measurement date back to a time when the nearest you got to a hard disk was a 78rpm record. But now even the super-conservative world of quantity surveying has finally realised that it was about time for a complete rewrite. Hence the task of sorting out the problem was given to the accurately, if not imaginatively, named “RICS Quantity Surveying and Construction Professional Group ‘Measurement Initiative’ Steering Group” or to use its more snappy abbreviated form, the RICSQSCPGMISG.
To look at the challenge facing us you need to cast your mind back to 1922, when the original rules were drafted to advise cost managers on how to measure building work items for inclusion in bills of quantities, which in turn were used to obtain a tender price for a building project. This document is known as the standard method of measurement, or SMM7. To complicate things further there is another guide called the BCIS Standard Form of Cost Analysis, which is used to analyse tender prices. Here the first edition dates back to 1961, with the last update published in 2008.
Owing to modern procurement methods, neither publication really does the job and both are open to interpretation. The rules for cost estimating and cost planning have never been produced by the RICS (or anybody else) – hence the need for QSs to adapt rules that were never designed for measuring, estimating or cost planning.
To put all this into context, prior to the publication of the new rules, as a profession we have been working with guidelines that were either poorly written, hopelessly out of date, open to misinterpretation, or non-existent. It is not surprising that this has made things difficult for clients and others working on a project who struggle to understand fully what is included or excluded in the cost estimates, limits or targets advised by the cost managers.
The new rules of measurement are designed to be more user and client friendly and, more importantly, in step with today’s market. Admittedly when I first looked at the people appointed by the RICS to initiate the revamp I was a little dismayed. With the exception of one fellow partner, whom I know to be a working QS, there seemed to be a plethora of academics and senior members of the industry, all well qualified but whom I suspected to have not been near a bill of quantities for many years.
However, upon reading the new rules the first thing that attracted my approval was that the principles were applicable all over the world, which is essential in today’s global economy. The rules for cost estimating and cost planning not only provide guidance on the measurement of building works for preparing cost estimates and cost plans, they also advise on aspects which were previously ignored like preliminaries, overheads and profit, risk allowances and inflation. Other things that are really important in giving the client the basic tools to operate their business are also included, such as consultancy charges, how much it costs to buy land and property, fees and costs, planning contributions, even marketing budgets and the price of finance. Many of these things were completely unheard of in the twenties and it shows how much the QS profession now rubs shoulders with all members of the construction team. It is not just about counting things. So the new rules may go some way to help explain the modern role of the cost manager in the construction process.
At a time when many in our industry are fighting for survival, I can understand how a new set of rules for QSs may not be regarded as being everyone’s top priority. But it really is important that an issue that has been swept under the carpet for decades has finally been grasped. And when it comes to the upturn it is all about survival of the most able. These rules will help the professions communicate more effectively – using a common language for a change. This isn’t quite the utopia envisaged by John Egan & Co but it will help.
First Published in Building Magazine, see link below.