The Quantity Surveyor

This post is an attempt to the introduction to what the essence of a contract is for the construction industry. It need not be a sacrosanct post, however it will provide you with the essentials that could help you understand the concept. What is a contract? A voluntary, deliberate, and legally binding agreement between two or more competent parties is a CONTRACT.  The highlighted terms in the above sentence are very essential in terms of the legality of the contract and the most important term by far is the word "competent", this is because if a party in the contract can prove that he is say an illiterate and was not in a position of understanding the terms and conditions for what he signed off then the Contract Document will be considered as void, thereby making the contract not legally binding.  It is also essential to have 1) an offer and 2) an acceptance , for the legal acceptance of the contract, hence if an offer and an acceptance are established as implied...

There are numerous definitions to the term Escalation, I would keep it simple and call it the change in the price of goods/services over a period. Here the period would generally refer to the period of the contract. How do you measure or ascertain Escalation? As for every process there are many ways of ascertaining escalation, here however I would be mentioning two methodologies (separate posts) which are common to the Indian market depending on the terms and conditions of the contract. The first method is when basic prices of material, fuel and/or labour are clearly indicated in the contract document. This is the simplest of the two mentioned here. And the calculation is direct and simple. What we do here is basically take the difference between the basic prices mentioned in the contract and the average monthly price of the element in consideration. The average monthly price needs to be a weighted average and not the direct average. This would also have to be mutually...

The past week has been very busy out here, since I wanted to cover the topic of Budgeting/Cost Planning at one go.. I hope I have achieved that. I do look forward to your suggestions and inputs on what I need to extensively focus on.. My next post would be scheduled for next week, since it would be on Escalation and I need sometime to structure the post with a few worksheets to share with you. Well, for the quick pointer on Quantity Take Off (QTO): I have found that it makes ones job easy if a detailed area statement is prepared before the start of the QTO. The following are a few advantages of it: While compiling the area statement, the QS will be going through the entire drawings set, this ensures that the scope defined in the drawings is glanced at. The area statement will always serve as a check point for most of your quantities, A detailed area statement should ideally capture the area and the perimeter of each floor along with the openings in the slab, the area of the...

I should have probably done this before I started with my post on Budget/Cost Plan, however I decided to keep this to the end since this is subjective, because the stages of budget are probably relevant to a large extent to the Developer of a project and the Consultant of the project. To a contractor, there would be a different work flow. So what I would do here is try to explain my understanding of the various stages of the budget and then maybe explain who the stages would serve a relevance to. The following would be IDEAL stages of budgeting:            Concept Stage : as the name conveys, concept i.e. an idea, a budget that could be given to the client when the project is still a concept or an idea. This would be a very basic budget with the least accuracy. It would work on the basis of just the land area and the use of the land. Most of the numbers that would reflect in this stage would be on the basis of bench-marking (please refer to m...

To start from where we left off in the previous post, here we will deal with the following: C - Contingencies  - which would involve provisional costs to be incorporated for any expected/unexpected deviations.            Contingencies are costs which we assume for certain changes that are anticipated, this is sometimes considered as a percentage of works or sometimes just as lump sum amounts.  Most of the time, these amounts are utilized only under specific approval. But depending on the stage* at which the budget/cost plan is being presented, percentages can be allotted for the heads of design, planning and construction.         * Stages of budgeting will be a separate post, since I don't prefer clouding more information              under each post. D - Escalation  - which involves provision for market fluctuations in material, labour and fuel costs.     ...

Today's post is in continuation to yesterday's post on Budget/Cost Plan. I would be explaining the first two costs involved in the formation of a budget/cost plan: A - Construction cost  - which would involve all physical costs involved in the construction of the project.         So what are these 'physical' costs? Physical costs are all direct construction costs involved in the completion of the building.  This will be essentially bare costs excluding all forms of over-heads, profits and/or taxes.  This would include all material, labour and plant with appropriate wastage incorporated. Ph ysical costs are arrived based on the quantities that have been calculated from the drawings.                       B - Indirect costs  - which would involve preliminary costs, consultant costs, legal costs, approval costs, mock up costs, marketing costs etc. If the budg...

It has been a while since I updated this space, one for the lack of intriguing questions and two for the lack of time. I am back with a very basic question which was posed to me, it is simple, though the complexities of understanding it's true constituents is not as simple. The question on hand today is, what is a BUDGET or a COST PLAN? I would identify a budget or a cost plan as a systematic list of all conceivable  project costs. I use the word conceivable here, since costs that are not conceivable will definitely not form part of a budget. A budget should be comprehensive to an extent to be able to capture all costs relating to the project, this includes but is not limited to the following: A - Construction cost - which would involve all physical costs involved in the construction of the project. B - Indirect costs - which would involve preliminary costs, consultant costs, legal costs, approval costs, mock up costs, marketing costs etc. If the budget is being made...