Quantification & Costing

Question 1

What methods of measurement are you aware of?

Answer 1

IPMS - Offices, Resi & Retail.
RICS Code of Measurement Practice - 6th Ed 2015 - GEA/GIA/NIA - all other buildings.
ICMS - set of measurement rules that result in a single methodology for reporting, grouping and classifying construction project costs. Basis of NRM.
NRM 1, 2 & 3 (2021) - 2021 update to align with ICMS & RIBA PoW 2020
CESMM - Civil Engineering Standard Method of Measurement.

Question 2

What is NRM?

Answer 2

New Rules of Measurement.
Books published by the RICS to provide a set of measurement rules for estimating / cost planning / procurement for construction projects.

Question 3

What is NRM 1?

Answer 3

Order of cost estimating and cost planning for capital building works.

Question 4

What is NRM 2?

Answer 4

Detailed measurement for building works.

Question 5

What is NRM 3?

Answer 5

Order of cost estimating and cost planning for building maintenance works.

Question 6

What are the sections of NRM?

Answer 6

0 - Facilitating Works
1 - Substructure
2 - Superstructure
3 - Internal Finishes
4 - Fittings Finishes and Equipment
5 - Services
6 - Prefabricated Buildings and Building Units
7 - Work to Existing Buildings
8 - External Works
9 - Main Contractor’s Prelims
10 -Main Contractor’s Overhead and Profit
11 - Project / Design Team Fees
12 - Other Development / Project Costs
13 - Risks
14 - Inflation

Question 7

What is ICMS?

Answer 7

International Cost Management Standards.
Provide a framework for cost and carbon management in construction from concept to completion.

Question 8

What are RPI and CPI?

Answer 8

Retail Price Index and Consumer Price Index.
Government’s preferred measures of inflation.

Question 9

Why is it important to measure the works according to industry standards and best practice?

Answer 9

To provide consistency and greater accuracy of pricing.
To ensure all parties price on the same basis and reduce risk of dispute.

Question 10

How can Benchmarking assist Value Engineering?

Answer 10

It can inform the spread of cost among construction elements so you can identify if something is ‘high’.

Question 11

What is GIA?

Answer 11

Gross Internal Floor Area:-
Area of a building measured to the internal face of the perimeter walls at each floor level.

Question 12

What is NIA?

Answer 12

Net Internal Area:-
The usable area within a building measured to the internal face of the perimeter walls at each floor level.

Question 13

Can you name some of the pricing documents we might use?

Answer 13

Bill of quantities (BoQ).
Schedule of rates (SoR).
Schedule of works (SoW).
Activity schedule.

Question 14

Can you name some of the pricing options for construction contracts?

Answer 14

Lump sum.
Cost-plus.
Remeasurement.
Target cost.
Guaranteed maximum price.

Question 15

What is meant by the abbreviation GEA?

Answer 15

Gross External Area.
This is the area of the building measured externally at each floor level.

Question 16

What is a lump sum contract?

Answer 16

Provides for payment of a set amount.
The fixed price is determined by a contractor by estimating their cost to provide the work and then add OH&P.

Question 17

What are the advantages of a lump sum contract?

Answer 17

The contractor takes on the pricing risk but stands to benefit from the increased profit.
Cost certainty for the employer.

Question 18

What are the disadvantages of a lump sum contract?

Answer 18

Presents a higher risk to the contractor. If the contractor underestimates their cost hen the profit margin decreases.
Contractor may therefore increase their tender price.

Question 19

What is a cost-plus contract?

Answer 19

Otherwise known as a cost reimbursable.
Pays the contractor for the actual costs incurred, plus a pre agreed percentage for profit.

Question 20

What are the advantages of a cost-plus contract?

Answer 20

Since they contract is flexible in nature, the initial bid isn’t as detrimental as they are with lump sum.
Allow employers to make design changes along the way.

Question 21

What are the disadvantages of a cost-plus contract?

Answer 21

The final contract price is uncertain until the end of the contract.
Contractor may include higher costs to increase profit.

Question 22

When may a cost-plus contract be appropriate?

Answer 22

When the scope of work has not been properly defined.
When there is emergency work to be undertaken.

Question 23

What is a remeasurement contract?

Answer 23

Works are carried out based on approximate quantities.
The actual quantities of work carried out are measured and the tendered rates are applied.
The contractor is paid for the actual work they have done.

Question 24

What are the advantages of a remeasurement contract?

Answer 24

Since the work is tendered on approximate quantities, the contractors will submit competitive tenders.
The contractors risk is fairly low.

Question 25

What are the disadvantages of a remeasurement contract?

Answer 25

There is less cost certainty until the project is complete.
Risk for the employer is higher.

Question 26

What is a target price contract?

Answer 26

Target cost is set early in the project, upon completion the cost savings are shared between the contractor and employer.
This is based on the pre agreed %, often referred to as pain and gain.

Question 27

What are the advantages of a target price contract?

Answer 27

Contractor and employer incentivised to reduce costs.
Encourages risk sharing.

Question 28

What are the disadvantages of a target price contract?

Answer 28

Employer and contractor need to share pain and gain, this exposes the employer to greater risk.

Question 29

What are the target cost contracts under NEC?

Answer 29

Option C - Target Cost with Activity Schedule
Option D - Target Cost with BoQ

Question 30

What is guaranteed maximum price contract?

Answer 30

GMP sets the limit that the employer will pay their contractor, regardless of actual costs incurred.
If the actual cost is higher, then the contractor has to bear the cost.
If the actual cost is lower, the contract will state which party will benefit from the savings. Usually split using a pre agreed %.
No adjustment of tender price unless design changes are requested by the client.

Question 31

What are the advantages of a guaranteed maximum price contract?

Answer 31

Establishes the employers maximum financial commitment.
Both contractor and employer have potential to benefit from the savings.

Question 32

What are the disadvantages of a guaranteed maximum price contract?

Answer 32

The contractor will have to share any savings, whilst taking the risk on cost overrun.

Question 33

What are contractor preliminaries?

Answer 33

Typically items which are necessary for the contractor to complete the works, but will not actually become part of the works, for example:
Management and staff.
Site setup.
Temporary services.
Insurances.

Question 34

What is the difference between fixed and time related prelims?

Answer 34

Fixed are one off costs.
Time related are dependent on duration.

Question 35

What is a BoQ?

Answer 35

BoQ provides an accurate picture of the scope of works and provides a common and consistent basis for pricing.
Based on a developed design and specification.

Question 36

What is Simpsons Rule?

Answer 36

Simpsons is a mathematical formula for approximating the area under a curve over a given interval.

Question 37

Why would you use a BoQ instead of a SoW?

Answer 37

Simplifies the tender process because tendering contractors will be pricing the same information. Simplifies the tender analysis.

Question 38

What are the advantages of a BoQ?

Answer 38

Ideal for post contract cost control.
Simplified tender analysis.
Very detailed.
All tenderers are pricing the same information.

Question 39

What are the disadvantages of a BoQ?

Answer 39

Expensive and time consuming to produce.
Potential for errors in measurement.

Question 40

What is a Preamble?

Answer 40

A preamble is an explanation of a document that is commonly found in contracts, specifications and bills of quantities.
It can help with the interpretation of the document.

Question 41

What are advanced payments?

Answer 41

Payments issued to the contractor in advance of completing works.
The usual rationale is to assist with cash flow.

Question 42

What are the key disadvantages of advanced payments?

Answer 42

There may be a commercial risk to the employer.
Payment will affect the employers cash flow.
Could be concern the contractor is unable to fund the expenditure.

Question 43

If the employer is happy to proceed with the advanced payment, what could be put in place to protect the employer’s commercial risk?

Answer 43

An advanced payment bond.

Question 44

What is an interim valuation?

Answer 44

A document put forward by the contractor which contains their progress against each of the work elements.

Question 45

What are the main elements of an interim valuation?

Answer 45

Prelims
Measured work
Variations
EoT costs
Materials on site
Materials off site
Prov sums
Retention
Fees
OH&P

Question 46

How would you assess the interim valuation?

Answer 46

Normally involves the QS visiting site and checking the works by visual inspection.

Question 47

What are the implications of over or under valuing the works?

Answer 47

Could create unreasonable financial problems for either employer or contractor. Low valuation puts the contractor at risk, whereas a high puts the client at risk.

Question 48

What current challenges is Covid and/or Brexit bringing to Quantification & Costing?

Answer 48

More work forced online - implications in understanding how software works, calibration of scales, check measures.
Fluctuation material rates - historic data not reliable.

Question 49

What information is typically shown on a payment certificate?

Answer 49

Date of certificate
Contract date
Key payment dates
Employer, contractor, CA details
Site address and project number
Contract sum
Gross value
Retention
Cumulative value of previous payments
Amount due (excluding VAT)
CA signature

Question 50

What happens if the employer fails to pay the amount due?

Answer 50

The employer will be liable for interest on the amount due.
Contractor could exercise their right to suspend the works.

Question 51

What is a pay less notice?

Answer 51

Purpose is to give the paying party the right to pay less or withhold all of the sum.

Question 52

What happens if the employer forgets to issue a pay less notice?

Answer 52

They are contractually obliged to pay the notified sum.

Question 53

Can you explain the payment timeline for the JCT D&B 16?

Answer 53

Contractor required to make interim application before interim valuation date.
Interim valuation date is 7 days prior to due date.
Payment notice issued by the employer no later than 5 days following due date.
14 days after the due date is the final date for payment.
A pay less notice may be issued no later than 5 days before the final date for payment.

Question 54

Can you explain the payment timeline for the NEC3 ECC?

Answer 54

Payment process the same as JCT.
With the exception that a pay less notice may be issued no later than 7 days before the final date for payment.

Question 55

What is a final account?

Answer 55

Conclusion of the contract sum and signifies the agreed amount that the employer will pay the contarctor.

Question 56

What is included within a final account?

Answer 56

Summary
Measured work
Variations/CE’s
Adjusted Prov sums
Claims
Total of all previous payments
Delay damages
Retention
Fees
OH&P
Original contract sum
Final account sum

Question 57

L1 - Why do quantities need to be measured in a uniform way?

Answer 57

NRM2 provides a uniform basis for measuring and describing building works. This allows for standardisation throughout the industry and a way of measurement that is consistent and understood by all.

Question 58

L1 - What are the different methods of measurement?

Answer 58

IPMS - Offices, Resi & Retail.
RICS Code of Measurement Practice - 6th Ed 2015 - GEA/GIA/NIA - all other buildings.
ICMS - International framework for measurement - basis of NRM.
NRM 1, 2 & 3 (2021) - 2021 update to align with ICMS & RIBA PoW 2020
CESMM - Civil Engineering Standard Method of Measurement.

Question 59

L1 - Can tell me what is your understanding of RICS code of Measuring Practice?

Answer 59

Allows for the accurate measurement, the calculation of the sizes (areas and volumes) and the description of land and buildings.

Question 60

L1 - When would the RICS Code of Measuring Practice be used in your day to day employment?

Answer 60

It would be used to understand and define how GEA, GIA and NIA are measured.

Question 61

L1 - GEA, GIA and NIA how are they each measured?

Answer 61

GEA - The area of a building measured externally at each floor level.
GIA - Measured to the internal face of the perimeter walls at each floor level.
NIA - Usable area within a building measured to the internal face of the perimeter walls at each floor
level.

Question 62

L1 - What new standards have been introduced (ICMS)?

Answer 62

There have been new standards introduced under ICMS3 that cover carbon emissions, including ways that can contribute positively to decarbonising the construction sector. It will provide a globally consistent method for carbon life cycle reporting across construction projects.

Question 63

L1 - Will the Employer’s Requirements be available at cost plan stage?

Answer 63

Most employer’s that I have worked with have a standard set of employer’s requirements which are amended from project to project. Therefore I would think that they could be made available at cost plan stage to provide guidance. I would think that these would change throughout the cost planning stage up until tender.

Question 64

L1 - Which method of measurement would you consider is the most appropriate for measuring civil engineering works?

Answer 64

CESMM

Question 65

L1 - In the document suite the New Rules of Measurement (NRM) what are the key differences between NRM 1 and NRM 2?

Answer 65

NRM1 is the Order of cost estimating and cost planning for capital building works.
NRM2 is the detailed measurement of building works.

Question 66

L1 - What is the purpose of NRM 3?

Answer 66

NRM3 is the Order of cost estimating and cost planning for building maintenance works.

Question 67

L1 - How do British Standards affect the measurement of construction works?

Answer 67

Adhere to the standards and codes of measurement. Ensure that drawings are compliant with the British standards. Anything that is blatantly wrong, inform the Architect.

Question 68

L1 - How do the Building Regulations affect the measurement of construction works?

Answer 68

Adhere to the standards and codes of measurement. Ensure that drawings are compliant with the British standards. Anything that is blatantly wrong, inform the Architect.

Question 69

L1 - What is your understanding of the shorter schedule of cost components?

Answer 69

The shorter schedule of cost components is always used to assess compensation events for NEC Options A & B. Can be used to assess options C & D if agreed with the PM and contractor.
Simply a list of categories of costs that the Contractor can recover directly

Question 70

L1 - What current challenges is Covid and/or Brexit bringing to Quantification & Costing?

Answer 70

More work forced online - implications in understanding how software works, calibration of scales, check measures.
Fluctuation material rates - historic data not reliable.

Question 71

L2 - Wythenshawe – explain why you used the measurement software for the variations and contractor measurement checks.

Answer 71

I wanted to check that the quantities they had proposed were correct. I did my own measurement check to substantiate this.

Question 72

L2 - InnKeeper - when the sanitaryware was changed from retain to replace were there any issues that you encountered with agreeing the changes with the contractor?

Answer 72

No, there were no issues with agreeing changes with the contractor. The Inn Keeper schemes work on the basis of agreed schedules.

Question 73

L2 - Please explain when using Spons or BCIS or in house data what adjustments you may consider and why?

Answer 73

I may include for time, location or inflation factors.

Question 74

L2 - What should a daywork rate include?

Answer 74

Prime cost = labour + materials + plant + % additions

Question 75

L2 - Can you advise where you may have created an across the trades complete bill of quantities?

Answer 75

Whilst working on St Wilfrid’s I worked alongside my Senior QS to deliver a bill of quantities for a school project.

Question 76

L2 - Explain the process of completing a take off, what would you have to consider?

Answer 76

A takeoff refers to detailed measurement of construction works to produce a bill of quantities.
You have to consider the method of measurement that you are to use and follow the guidance. The most up to date method of measurement is NRM2.
NRM2 is read in conjunction with the drawings and specifications.
Where there may be uncertainty about some elements, they may be entered onto a query sheet that can be issued to the appropriate members of the consultant team for clarification.
Consider whether some elements may be CDP and would be the responsibility of the contractor to measure and price.

Question 77

L3 - Kenilworth – how did you give your advice on the project costs and demonstrate value for money?

Answer 77

I advised the client that I had reviewed the works and that the works claimed for had been completed. I had also assessed the variations and these had been priced using agreed rates. This, along with the project costs being below the clients budget allowed me to confirm with the client that we had achieved value for money.

Question 78

L3 - Alberton – please explain what you had done to construct the cost plan.

Answer 78

I had measured the individual items under the NRM sub elements to produce an elemental cost plan. This displayed measured elements item by item.

Question 79

L3 - You advised the client that you had made assumptions on costs for the finishes. How did you compare this scheme to previous projects so that you knew that you had a fair comparison and your advice was sound?

Answer 79

One of my colleagues had been working on a project in Manchester that also had sauna and steam room facilities. This project was further progressed and therefore the design was more detailed. They had finishing information and it was this that I presented to the client as a proposal.

I applied any relevant uplifts for inflation and time.

Question 80

L3 - Are you able to explain where you have been involved in and advised on the negotiation of a complete contract sum?

Answer 80

On the Kenilworth project I was responsible for managing costings throughout the entirety of the project. I produced a schedule of works with agreed rates and proposed this to the contractor. The contract sum was agreed following discussions. I was also responsible for agreeing the final account, providing my assessment and coming to an agreement that both parties were happy with.

Question 81

L3 - Are you able to explain where you have been involved in and advised on the negotiation of a significant final account?

Answer 81

On the Kenilworth I was responsible for negotiating and agreeing the final account with the contractor. I reviewed the contractors account and provided my assessment on costs. I made some amendments and agreed the final account with the contractor.

Question 82

L3 - Where have you been involved in quantification and costing of a services element of a project?

Answer 82

On Alberton House I was responsible for reviewing the costs of an AHU against an FCU. I received costs back from approved suppliers and presented the cost options to the client.

Question 83

What are the different IPMS categories?

Answer 83

IPMS1 - Universal Standard that applies to all building classes. Used for measuring the area of a building including the external walls.
IPMS2 - Offices. Used for measuring the interior area and categorising the use of space in an office building.
IPMS3 - Offices. Measuring the occupation of floor areas in exclusive use.

Question 84

How do IPMS and ICMS differ to NRM?

Answer 84

NRM is focused on measurement for commercial and construction purposes.
IPMS and ICMS are relevant for all surveying disciplines.