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

  1. Highly qualified specialist discipline focusing on economy.
  2. continues economy control of the design development.
  3. Value driven design development removing the risk for redesign.
  4. High quality structured estimates and report to the client showing clearly project change and development.
  5. Clear change, risk and economy process with full integration with design disciplines.
  6. Reduction of the risk for redesign due to not design within the budget frame work.

Partnering Contracts

The discussion of Partnering Contracts is a high talking point in the Danish construction industry at the moment. Both Bygningsstyrelsen & Region H have both openly discussed there favorable view of using this type of contract on their projects in the future. While Partnering is, in our opinion, a far superior contract structure compared to any other in the industry, it takes a knowledge and a know-how from all stakeholders for it to be successful. Here are our top five needs before entering in to a partnering contract.

1 – It is vital that the main stakeholders leaders have a clear understanding of what partnering means and how a contract of this type is managed.

People will normally do what they are used to, so if the key people are coming from traditional contractual background it will be very difficulty for them to change their mindset and way of working.

2 – Partnering requires trust and trust is only achivable through transparency & openness.

Transparency generally relates to the commercial (economy) aspects of the contract. This is a vital aspect of partnering and it is important that the client gets the correct advice of how to set up the partnering contracts from experienced specialists.

3 – Clear processes in the contract to support the project delivery.

Partnering work great when everything is running smoothly but when the relationship is strained the only tool that left is the contract. If the contract is poor and poorly structured it will not support the strained relationship. Vital that the contract is clear, structured and instructive.

4 – The client needs a contract administrator on their side to assist in delivering the contract so from the offset the contract is used to deliver.

This will give all stakeholders a clear picture of how the client wishes to deliver. Again this contract administrator needs to have experience in partnering contract.

5 – Partnering works better when all stakeholders feel that they have an equal share of the risk and the return.

So incentivised agreements will always be preferred by stakeholders to feel more committed.

Finally,

the one weakness that partnering agreements will have in Denmark is around the commercials (economy). The understanding of good quality commercial documentation is quite poor and it leads to allot of issues between stakeholders and more often than not costs clients due to over paying. In order to have transparency in the commercials (economy) it is important to understand what is meant by transparency.

We are NOT talking about every nut and bolt but a level of detail that is sufficient to assess additional work. If you are only asking for a total price for foundations or ventilation systems you are going to be in trouble. You need the detail so that the commercials (economy) can be managed.

It is also important to have a clear picture of when to transfer elements of risk, or when you need a fixed price and a remeasure able or a cost plus element to the contract. These can be mixed, and I would advise should be mixed, depending on the project and risk profile.

If you would like to discuss this in more detail or have any questions please contact us.

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

  1. Higher quality economic advice for clients.
  2. Completely alternative perspective in project setup, control and delivery.
  3. Continues project economy control and focus.
  4. Reduction of the risk of redesign or economy failure.
  5. More economy focused contracts with design teams and contractors.
  6. 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

  1. A clear commercial strategy is implemented ensuring clear guidelines for managing the cost through the entire project life cycle.
  2. A clear risk management strategy with calculated risk and contingency allocations.
  3. Continues follow up and management of the project economy.
  4. High quality economic documentation and guidelines for the Client Advisor and Total Advisor to follow.
  5. A different perspective and knowledge base focusing 100% on economic impact.
  6. 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.

Price Lists / Regulerbare ydelser

#5 Understanding the tools for Cost management/control

The rates in the bill of quantities (BoQ), provide a basis for estimation of variations of work. Additional rates, received as part of the Price Lists, which should be part of the bill of quantities (BoQ), can also be used to calculate the prices of other components not specifically described in the BoQ.

These conditions should be specifically described as part of the tender special conditions, so that the process is clear for all parties when requesting extra work.

Post-tender estimate / Skøn efter udbuddet

#3 Understanding the tools for Cost management/control

The purpose of this estimate is to corroborate the funding level required to complete the building project by the developer, including rates adjustments, fees, as well as other development and project costs.

After all tender offers have been received and evaluated, it is possible to produce a Post-tender estimate, that will be based on the outcome of any negotiations with the final contractors, including rates and quantities adjustments, clarifications of scope and the like.

This estimate will take into account the actual known construction costs and any residual risks, and the uncertainties of market conditions became clear. This estimates are used as the control estimate during construction, as it defines the basis of all the works going forward and all updated agreed quantities.

All possible future variations will be checked against the post-tender estimate.