1.1 Background to the Study
A competent design team is crucial for any new building project according to Lee (2008:127). The quantity surveyor can be a very valuable addition to the design team for the client, giving expert advice on contractual and financial matters. The quantity surveyor will have the client’s interest as his number one priority and his services can be of great value to any person considering constructing a new building.
According to Bowles & Le Roux (1992:1) any person considering building or investing in construction projects needs expert advice from a quantity surveyor. No matter the size or complexity of a project, the quantity surveyor provides valuable advice through the various stages of the project. The Guide for Quantity Surveying Appointments (2006) states that “any client who is considering building any structure of any size, changing an existing structure or investing in construction projects no matter how simple or complex, needs the expert advice of a professional quantity surveyor for establishing budgets, cash flows, cost planning, cost management and obtaining value for money.”?
Construction projects differ from each other and every project has its own unique challenges. Construction projects are not standard products which have been designed and mass manufactured in a controlled environment. There is a lack of a relatively stable market price. This is due to monthly payments which are made as the work proceeds, before the project reaches completion. As a result of technological, financial and economical influences the methods adopted for construction work are varied and complex and the expert advice of a quantity surveyor should be obtained before the start of any project planning. This is the main reasons why there is a need for the services of a quantity surveyor. (Bowles & Le Roux, 1992:2)
The ordinary member of the general public has little knowledge or experience in the construction industry. However economically active individuals who can be seen as potential clients for residential construction projects are often reluctant to utilize the services of a professional quantity surveyor.
According to Lee (2008:123), a potential pitfall for the first-time homeowner is to utilize the services of a non-reputable contractor who is not affiliated to the National Home Builders Registration Council (NHBRC). Members of the general public who are not experienced in the construction industry can be subjected to un-ethical practices and this may lead to their exploitation. Due to the many problems caused by these un-ethical and non-reputable contractors to the homeowners and other property professionals, the South African government passed legislation in 2001 known as the Housing Consumers Protection Measures Act. The intention of this Act is to guard homeowners against non-reputable contractors who build to substandard quality and then refuse to be held responsible. (Lee, 2008:123)
One factor which may deter people from using the services of a quantity surveyor is the professional fees. According to research done by Cruywagen and Snyman (2005) professional quantity surveying services can be rendered as affordable in South Africa. The research shows that, due to the competitiveness of the market, it has become the norm for quantity surveyors to reduce professional fees.
Cruywagen and Snyman (2005), state that there is a distinct relationship between the profitability for the quantity surveyor and the value of a project. This means residential projects are not profitable as compared to big industrial developments, shopping centers etc. This may be the reason for the lack of marketing in the residential sector and why the general public is not aware of the quantity surveying profession.
The purpose of this study is to identify and understand the specific role of the professional quantity surveyor in the construction industry and to explain the significant effect a quantity surveyor can have on a construction project.
1.2 Problem Statement
The general public who is not involved in the construction industry is unaware of the quantity surveying profession and the functions the quantity surveyor perform and this lack of knowledge can lead to their exploitation if a quantity surveyor is not involved.
For the purpose of this study the following hypotheses are set out:
The general public is unaware of the quantity surveying profession and the services the profession provide.
Fees associated with the quantity surveyor may intimidate homeowners who are looking to complete a project with as little investment as possible, not realizing that the quantity surveyor can save you a substantial amount of money by providing you with expert advice on financial and contractual matters.
This study has four primary objectives. The objectives are to:
Outline the specific role of the quantity surveyor.
Realize the major effect a quantity surveyor can have on a building project
Make the general public aware of the quantity surveying profession and the functions the quantity surveyor performs.
To learn why the general public is reluctant to use the services of a quantity surveyor.
A qualitative research approach was follow for the purpose of this study. The researcher has conducted a comprehensive review of relevant literature on the topic. The focus has been on the quantity surveying profession and the services it provide.
Personal interviews have been conducted with professional quantity surveyors. To understand the broader picture members of the general public who recently became homeowners (of newly constructed buildings) was asked to complete a questionnaire. Attention has been given to whether or not the services of a quantity surveyor was utilized and if not, why?
The research is limited to the residential construction industry. The focus of the research is on the services of a professional quantity surveyor and not that of the contractor’s quantity surveyor. Member’s of the general public who was approached with questionnaires was limited to those who were recently involved with the construction of a residential building.
The researcher assumed that all data collected are accurate and all interviews and questionnaires conducted were answered truthfully.
THE QUANTITY SURVEYING PROFESSION
In this chapter all the literature on the related topic collected by the researcher will be reviewed. This review will include literature on the history of the quantity surveyor, the contractor’s quantity surveyor, competencies of a professional quantity surveyor, fees of the professional quantity surveyor, estimating and cost advice as well as the use of a bill of quantities. The core focus however will be to outline the specific functions of the professional quantity surveyor.
2.2 History of the quantity surveyor
According to the Association of South African Quantity Surveyors (2010), the quantity surveying profession started with the turn of the nineteenth century. The first recorded use of the term Quantity surveyor was in 1859. Before then the terms “measurer”?, “Custom surveyor”? or “surveyor”? were used.
At that time it was custom for the “surveyor”? to work for the master builders, measuring the completed work and often submitting biased final accounts to the building owners. As a result of this behavior it became the norm for building owners to enter into a contract and invite tenders before any work commenced. According to Bowles & Le Roux (1992:4), this gave rise to competition and builders tendering realized that they were spending an immense amount of time and effort measuring and calculating to arrive at a tender figure. In addition there was the added danger that the builders interpreted the architect’s drawings differently which would lead to inaccurate pricing and result in the tenders not being calculated on an uniform basis.
The builders realized that a “surveyor”? could be employed to act as an unbiased person to measure the quantities on their behalf. This insured that the builders tendered on the same basis whilst sharing the cost for the surveyor. Building owners were afraid of unethical practice between the builder’s and the surveyor and realized it would be to their personal advantage to appoint and compensate the quantity surveyor. This is how the independent professional quantity surveyor gained consultant status.
In South Africa the title “quantity surveyor”? is reserved under the Quantity Surveyors Act of 1970 for the sole use by those who had acquired the obligatory qualifications and experience stipulated under the Act. Furthermore, those persons must register with the South African Council for Quantity Surveyors before they can act as consultants to the general public (ASAQS, 2010)
2.3 Contractor’s quantity surveyor
The main difference between a professional quantity surveyor and a contractor’s quantity surveyor is that the latter is employed by the construction company and not by the client. Dent (1970:7) states that a contractor who undertakes big projects will need a quantity surveying staff. The contractor’s surveyor will represent the contractor and the contractor’s interest will be the main priority.
According to Cornick and Osbon (1994:108), the contractor’s quantity surveyor spends comparatively the same amount of time on cost planning, feasibility studies and tender appraisal as the professional quantity surveyor and significantly more on post-contract services but significantly less on preparing tender documentation. Project cost control is one function that requires equal efficiency by both surveyors, the contractor’s quantity surveyor on behalf of the contractor and the professional quantity surveyor on behalf of the client.
Cornick and Osbon (1994:109) identified seven main functions for the contractor’s quantity surveyor namely:
Valuation of work completed for payment from client and payment to subcontractor.
Determination of change due to variation from client or designer.
Subcontractor accounts to agree tender and actual costs.
Financial reporting for quarterly account forecasts.
Cost accounting for plant and material use by company.
Cost accounting for labour use by the company.
Client’s expectations of project cost control will increase as the clients and their cost advisers become more complex. The clients will be expecting the cost of their buildings to be reduced to match their budget. Therefore contractor’s quantity surveyor must strive to improving their cost controlling and accounting capabilities for the construction companies that they work for.
2.4 The professional quantity surveyor
According to Bowles & Le Roux (1992:3) “the quantity surveyor is a professional consultant appointed by the client who wishes to invest in property development.”? It is the quantity surveyor’s responsibility to advise the client, architect and engineer on all financial and contractual matters from the pre-tender stage right through to the completion of the project.
For the quantity surveyor to accomplish this role he must develop a comprehensive understanding of the various construction methods and have a transparent understanding of the different forms of contract and sub-contract agreements available in the construction industry. The quantity surveyor must be capable of advising on the cost of alternative construction methods and costs of different materials. An analytical approach must be adopted in finding beneficial solutions in the interest of the client.
The Guide for Quantity Surveying Appointments (2006) states that a professional quantity surveyor will draw on extensive cost information obtained from client databases and experience from other projects for effective budget setting. “It is the quantity surveyor’s ongoing implementation of financial discipline in the areas of budget setting, alternative design option costing, cash flow predictions, final cost forecasting, management of variations including potential areas of dispute and timeous final account settlement, etc. that allows the maximum value for money requirement to be achieved.”?
2.4.1 Standard quantity surveying services
According to A Guide for Quantity Surveying Appointments (2006) the standard services that can be provided by a professional quantity surveyor are:
Financial viability studies and the initial budget planning prior to the detailed design to establish whether the project is feasible in terms of the client’s financial budget;
Preliminary cost studies and comparing alternative designs and materials in terms of operating and maintenance costs;
Monitoring the design as it evolves to ensure it stays within client’s budget;
Preparing tender documentation for pricing by contractors and advising on contractual arrangements;
Evaluating the submitted tenders and reporting on the suitability thereof;
Negotiating the contract sums with the individual contractors;
Preparing cash flow predictions;
Preparing cost reports at regular intervals;
Valuing construction work in progress;
Preparing the final account thus determining the final cost;
Settlement of the final costs with the contractor and sub-contractors.
Additional specialist services that many quantity surveyors are experienced in providing are:
Acting as project manager;
Acting as principle agent;
Consulting on property development;
Valuation of buildings for insurance purposes etc.;
Acting as an expert witness;
Advising on the settlement of disputes through mediation and arbitration.
Facilitating with fast track construction projects;
Providing services for projects in engineering, mining and petro-chemical industries.
It is recommended to employ the quantity surveyor’s full services as a professional consultant rather than in a technical/measurement role in order to utilize the quantity surveyor’s expertise to the best advantage.
2.4.2 Competencies of the professional quantity surveyor
Competencies can be defined as the ability a person should have in a given occupational area subject to external and internal factors like organization size, type, and age (Barret, 1992). (Holmes & Joyce, 1993) defined competence as “a description of an action, a mode of behavior or outcome that a person should be able to demonstrate, or the ability to transfer skills and knowledge to new situations within the occupational area.”?
In the construction industry the quantity surveyor can be seen as the economist and cost accountant, whose services facilitate the client to obtain the maximum value for the client’s investment. There are three aspects which reflect value for a client in the construction industry, namely cost, time and quantity. Quantity surveyors add value to the construction project performance by using the appropriate competencies. It is therefore important for an assessment of the quantity surveyors competencies in order to highlight the continuing relevance of their services in the construction industry (Nkado & Meyer, 2001:483).
The Royal Institution of Chartered Surveyors (RICS) set out the competencies required by professional quantity surveyors in three categories, namely basic -, core – and optional competencies. Table 1 below presents the competencies in three categories. Under the structure of the RICS the basic competencies are present in all construction professions, the core competencies primarily for quantity surveyors and the optional competencies are required for specialization in a specific field.
Table 1: Competencies set out by the RICS (Nkado & Meyer, 2001:484).
A Study conducted by Nkado and Meyer (2001:484) identified 23 defined competencies which apply to quantity surveyors in South Africa. A questionnaire was sent to randomly selected members of the ASAQS of a different demographic background. The questionnaire listed the 23 competencies in alphabetical order.
The respondents were asked to rate the importance of the competencies for a career as a professional quantity surveyor in South Africa at present, the importance in the future and the level of evidence of each competency in the quantity surveying profession. Rating worked on a scale of 1 to 5 with 1 being ‘not important’ and 5 being ‘very important’. The researchers ensured the respondents anonymity to attain an honest response.
Table 2: Competencies ratings (Nkado & Meyer, 2001:487).
Table 2 shows the ratings which have been converted to percentages for effective interpretation. It is interesting to note that three of the traditional core competencies are rated in the top five competencies required by quantity surveyors in South Africa at present, the three being procurement and financial management, economics of construction and construction contract practice. The results showed that management orientated competencies were rated of higher importance for future services while the highest importance for current services were technically orientated.
The five most important competencies required by quantity surveyors in South Africa at present are:
Computer literacy and information technology;
Procurement and financial management;
Economics of construction;
Construction contract practice;
The five most important competencies required by quantity surveyors in South Africa in the future are:
Computer literacy and information technology;
Procurement and financial management;
Economics of construction;
Competencies utilized by quantity surveyors with greatest efficiency in South Africa are:
Procurement and financial management;
Construction contract practice;
Economics of construction.
It is evident that management orientated competencies will grow in importance and will replace the traditional technically orientated competencies as the core competencies of the quantity surveyor (Nkado & Meyer,2001:490).
2.4.3 Professional quantity surveying fees
The fees charged by professional quantity surveyors are proportionate with the work done for the client and according to A Guide for Quantity Surveying Appointments 2006 there are 5 options available:
A time charge;
A percentage fee based on a tariff recommended by The South African Council for the Quantity Surveying Profession (see Table 3);
An agreed percentage of the contract value;
A lump-sum fee;
Any other fee arranged between the quantity surveyor and the client.
22.214.171.124 Time Charges
The following recommended hourly time charges for the private sector were approved by The South African Council for the Quantity Surveying Profession with effect from 1 January 2010 (SACQSP, 2010). (All rates are exclusive of VAT.)
Not exceeding 5 years experience R 700-00
Exceeding 5 years and not exceeding 10 years experience R 1 250-00
Exceeding 10 years experience R 1 750-00
Specialist work R 2 190-00
126.96.36.199 Percentage fees
By using table 3 a basic fee will be determined and multiplied by the appropriate percentage (Table 4, 5 & 6). The basic fee shall be calculated on the value for fee purposes (see table 3).
Table 3: Basic fee (SACQSP, 2010)
Table 4: Appropriate percentages for building work (SACQSP, 2010)
Table 5: Appropriate percentages for engineering work (SACQSP, 2010)
Table 6. Appropriate percentages for management services (SACQSP, 2010)
Once the primary charge (table 3) is established, the amount is multiplied by the appropriate percentage. In addition to this there will be a marginal rate which would be added to the primary charge. The gross amount will be payable to the quantity surveyor as the professional fees.
2.5 Estimating and cost advice
Aibinu and Pasco (2008:1258) states: “Pre-tender cost estimation (or early stage cost estimation) is the forecasting of the cost of a project during the planning and design stage.”?
Research done by Trost and Oberlender (2003) identified 11 factors that play a role in the precision of estimates of which the 5 most important are:
Estimator team experience and cost information;
Time spent on preparation of estimate;
The current labour and bidding climate.
According to Bennett, Morrison and Stevens (1981) estimating is the main function of cost planning services provided by the quantity surveyor. They conclude that cost planning is unsuccessful without decent estimating. Morrison (1984:57) states that quantity surveyors have developed different methods for estimating to deal with the large variety of projects and designs. These different methods differ in detail with some estimates being very thorough, for instance a priced bill of quantities. Other may be very simple and only entail a simple lump sum estimate. All other factors being equal, the estimate’s accuracy will increase as the detail and time spent in preparing the estimate increases.
2.5.1 Clients brief
The client, architect (design team) and the quantity surveyor are the most important members in the in the project briefing process. According to research done (Bowen, Pearl, Nkado & Edwards, n.d.) it is vital to have an efficient client brief if the client is to reach his objectives with regard to the time, cost and quality of the project.
Insufficient briefing of the design team by the client can lead to major frustration and unhappiness for the client. The brief procedure is the process where the client explains and spells out the objectives and requirements of a project (Bowen et al., n.d.). Bowen (1993) states that: “The purpose of this stage is for the clients to communicate to the design team and specialist consultants their needs and objectives in initiating the project.”?
For the client to be satisfied, the design of the building must fulfill the client’s needs with regards to the technical aspects and quality standards. In addition to this the project must be completed within the budget and on time (Seymour & Louw, 1990). In order to achieve this, a detailed and complete client brief is necessary to eliminate as many uncertainties as possible.
2.5.2 Feasibility studies
After the briefing process, the quantity surveyor will do a feasibility study. The outcome of the feasibility study helps the client to decide whether to go ahead with the project. A feasibility study is conducted to ascertain whether a project idea is economically viable (Hofstrand & Clause, n.d.). It is the quantity surveyors responsibility to make recommendations to the client on the viability of the project and give professional advice on any alternatives.
The feasibility study involves economical and technical investigations that allow the client to decide whether to proceed with the project (Association of South African Quantity Surveyors, 2010). According to Hofstrand & Clause (n.d.) a feasibility study:
Identifies reasons not to proceed.
Indicate new opportunities.
Gives quality information for better decision making.
Assist in acquiring funding from banks and other investors.
2.6 Use of bill of quantities
After the quantity surveyor completes the elemental estimate the client will decide whether the project will go ahead or not. This decision is largely based on whether the estimate is within the client’s budget or not. If the estimate is within budget the client should instruct the architect to prepare detailed working drawings for construction. The quantity surveyor can start with the preparation of the bill of quantities once he has received these drawings (Bowles & Le Roux, 1992).
Davis, Love and Baccarini (2009:99) states that the bill of quantities has 2 main uses and these can be categorized under pre-contract and post-contract stage. In the pre-contract stage the bill of quantities aid contractors to prepare their tenders. In the post-contract stage the bill of quantities assists the quantity surveyor and the contractor in the valuation of the work in progress and work completed for payment purposes.
The bill of quantities is mainly used for tendering purposes. It enables contractors to prepare tenders using the same information which will lead to more accurate tender sums. The bill of quantities allow for a common basis on which the tenders can be compared. This brings about a competitive market (Kodikara, Thorpe & McCaffer, 1993:261).
According to Bowles and Le Roux (1992) the bill of quantities describes the nature of the building. It is a document which lists all the items that need to be completed for the construction of the building. These items required for the completion of the building is measured from drawings and specifications received from the architect and engineers. The total cost for the project will be the sum of all the individual items added together. When these items are priced there must be an allowance for the execution of each item as well as a realistic profit margin.
The information in the bill of quantities can be classified into three fundamental categories namely; preliminaries, preambles and bills. The preliminaries of a contract entail all requirements of the project which do not have a direct impact on the construction works.
The preliminaries of a contract may include health and safety requirements, access to and from site, accommodation for workforce, insurances required etc. Preambles define the standards of workmanship and materials to be used. The bills contain the measured items needed to complete the works and comprises of the description, units and quantities (Kodikara et al., 1993:261).
The bill of quantities, detailed construction drawings, engineering drawings and specifications will be issued to building contractors. These documents form part of the tender documentation. The tender documents enable contractors to submit a competitive tender for a project and aid them in determining an accurate price for the completion of the building. A practical time limit is set for the contractors to price the bill. All tenders should be handed in before the specified closing date.
According to Davis et al. (2009:103), the bill of quantities has various advantages to the parties involved in a project:
Database – It provides a cost database for future estimating
Fee calculation – It provides a conclusive basis for the calculation of professional fees
Asset management – It provide data for asset management of finished building, insurance, maintenance schedules etc.
Taxation – Provide basis for precise preparation of depreciation schedules as part of the asset management plan.
Accurate progress payments – It becomes a basis from which the interim payments can be evaluated. This insures work is done at a reasonable price and gives the contractor and client peace of mind that the contractor is not paid too much or too little for work completed.
Pricing of contract instructions – It provides a basis for the valuation of variations to the project.
Risk management – Prices from the contractor in the bill of quantities can be compared with current market related prices.
According to Davis et al. (2009:103), the major disadvantages of the bill of quantities are that the preparation is time consuming and it tends to increase cost.
It is clear from the above that the quantity surveyor can be a very valuable addition to the client’s professional team. Quantity surveyors in South Africa are competent professionals. From the inception stage of a project, right through to the final payment, the quantity surveyor will give expert advice on financial and contractual matters. The successful completion of a project can never be guaranteed due to the many uncontrollable factors in the construction industry. However having the services of a quantity surveyor at your disposal will greatly improve the chances of completing a project successfully and within budget.
In this chapter the data collection methods and the analysis of the data is explained. For the purpose of this study a qualitative research methodology was followed in order to test the hypotheses put forward. The research was conducted by way of a comprehensive literature review and collecting data through interviews and questionnaires. The research problem is mainly that the general public is unaware of the quantity surveying profession therefore data relating to the services that the quantity surveyor offer and the profession in general were required.
3.2 Collection of data
Books and journals on the related topic from local and international sources were used for the collection of data. All the data was collected before the field work started and was done over a two month period. Furthermore, primary data was collected through personal interviews and questionnaires.
Interviews were conducted with quantity surveyors. The interviews were informal but due to the researcher’s relative lack of experience in conducting interviews the questions were well prepared. Questionnaires were used to obtain the necessary data from members of the general public who were recently involved in the construction of a residential building. The questionnaires consisted out of open ended questions and were administered in person. To maximize to accuracy of the response the questions were short and in unambiguous language (Leedy & Ormrod, 2005:190).
To insure the validity of the research an honest response is required. For this reason the names of individuals and the quantity surveying company approached for the research will be held confidential.
3.3 Data analysis
The qualitative data was organized, summarized and analyzed by the researcher in order to reach a conclusion and make recommendations. It should be noted that the sample is very small, but for the purpose of this study it is sufficient for the researcher to understand the problem at hand and reach a conclusion.
FINDINGS AND ANALYSIS
Primary data was collected through interviews and questionnaires as explained in the previous chapter. Ten individuals who were recently involved in a residential project were approached to complete the questionnaire. This chapter will discus the findings of the questionnaire and will incorporate the data collected from interviews with quantity surveyors.
4.1.1 Awareness of the quantity surveying profession
Figure 4.1 Indicate the awareness of the quantity surveying profession.
It was found that the large majority of the respondents were aware of the profession. However this does not necessarily mean they understand what the profession entails. An interesting observation was that the respondent, who was not aware of the quantity surveying profession, was the only respondent under 30 years of age.
4.1.2 Understanding of the quantity surveyor
The question was what the understanding of quantity surveyors was by the respondents. Three of the ten respondents had reasonable accurate explanations. According to the respondents the quantity surveyor is responsible for the financial aspects of a project. This include preparing estimates, giving cost advice on the design of building to ensure design remains within the clients budget, valuing of completed construction work, preparing cost reports and assisting with the settlement of the final account. It should be noted that two of the three respondents had utilized the services of a quantity surveyor when they were building their houses. Four respondents had a reasonable understanding of the quantity surveying profession but have never been involved in a project were a quantity surveyor was present. Two respondents had a very vague idea of the profession with one commenting “they count bricks”?.
Figure 4.2 illustrate the understanding of profession by respondents
Although nine out of ten indicated they are aware of the profession only tree could give an accurate description of the profession.
4.1.3 Employment of quantity surveyors
Only two form the ten respondents utilized the services of a quantity surveyor. In this sample that amounts to 20%. Considering the respondent’s relative lack of experience and knowledge of the construction industry this is a very low percentage.
188.8.131.52 Do you think the quantity surveyor was advantageous to the project?
This question was put forward to the respondents who made use of a quantity surveyor. The two individuals who made use of a quantity surveyor had very positive feed back. In the interest of confidentiality the two projects which had quantity surveyors involved, will be referred to as ‘project A’ and ‘project B’.
Project A was a large up market house with a contract sum of R 11 million. The client initially did not want to invest more than R 10 million. After receiving the design from the architect the quantity surveyor estimated the project will amount to R 13 million. The client received very valuable cost advice from the quantity surveyor and was able to reduce this amount R 11 million. In this case the client was able to save a substantial amount of money thanks to expert advice from a quantity surveyor.
Project B was a smaller residential house with a contract sum of R 6.5 million. With the commencement of the construction work the contractor had unforeseen difficulties with excavating hard rock in the foundations. This had cost and time implications. When the quantity surveyor prepared the estimate for the building he allowed for unforeseen factors in a contingency amount. This contingency amount was able to absorb the added costs incurred due the additional work in the foundations and time delay.
Although the professional fees for a quantity surveyor are expensive and may deter individuals from employing a quantity surveyor, it is likely to save the individual money. In both of the above cases the quantity surveyor was able to save the client money which exceeded the value of the professional fees the quantity surveyor received. The one respondent also noted that the valuations prepared by the quantity surveyor gave him peace of mind that he was not paying the contractor too much for work completed.
184.108.40.206 Why respondents did not make use of a quantity surveyor
Figure 4.3 illustrates why respondents did not utilized a quantity surveyor.
This figure illustrates that although the majority of the respondents where aware of the profession, they were unaware of the benefits of the quantity surveyor.
4.1.4 Completion of project within budget.
According to data from the questionnaires only four from the ten respondents indicated that their respective projects finished within budget. Two of these made use of the services of a quantity surveyor. This means only two from eight projects without a quantity surveyor finished within budget. That amounts to only 25% in this sample.
4.2 Quantity surveyors perspective
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