(Reported by Sr Eric Y.C.Ting; a Quantity Surveyor; Member of the Hong Kong Institute of Surveyors)
Cost overruns in several major infrastructure projects have recently aroused much public concerns. The reported cost overruns ranged from a few billions to over ten billion dollars which prompted the industry to explore ways to resolve the problem which include the introduction of independent cost consultants to enhance the cost control of construction projects.
Being a Quantity Surveyor, construction cost control is always one of my major duties. Quantity Surveyors are professionals with expert knowledge on construction cost and contract administration. Yet, it may also be correct to say that the public may know not much about the roles of Quantity Surveyors.
Regarding the public concerns on cost control and the role of Quantity Surveyor, I am eager to know more about how Quantity Surveyors can take part and respond to the community needs. I am glad to have a chance to talk to Sr Paul K.L. Wong, who is the chairman of Quantity Surveying Division of the Hong Kong Institute of Surveyors (HKIS).
Independent Cost Consultancy
“Cost budgeting and control is inextricably linked with the value of Quantity Surveyors,” said Paul “Quantity surveying consultants advise their clients on construction budget and implement project cost controls. Quantity Surveyors in contractors play an important role in pricing the tenders, valuation of variations and controlling project costs. Quantity Surveyors have a significant role to play in both consultancies and contracting firms.”
About the need of independent cost consultants, according to Paul, if project design and cost control are carried out by the same party, it is uneasy to strike a balance among the issues of cost, buildability and quality. Design may be adopted without fully realizing the cost implications. Paul further said that there may be conflicting role of the Project Manager/Contract Administrator if he is empowered to give instructions while he is also the one to accept/ascertain/reject contractor’s quotations/assessments of variations and monetary claims. As such, the ascertainments may not be seen to be conducted independently and fairly. Questions on impartiality and accountability might therefore arise. Paul suggested that valuation of payment and ascertainment of costs of variations, monetary claims and all other financial matters should be handled by independent cost consultants. A check and balance between a separated design and cost control team would be well placed to identify any potential risk and ensure the design is cost efficient which meets the budget. In conclusion, a proper check and balance mechanism is vital for construction projects.
“Quantity Surveyors are in a good position to be the independent cost consultants. The reason why Quantity Surveyors are usually regarded as the gatekeepers of construction cost is that they are well acquainted with various cost data and they are familiar with the practice of construction industry. They can make use of the cost data and apply necessary adjustments to provide a cost estimate based on the information available at the various stages of construction. They can also act as a liaising agent and communicate effectively with other project team members.” said Paul
He explained that the consultancy fee of Quantity Surveyors would constitute a fraction of the total construction cost. However, the cost saving or benefit in return are far more than that. Apart from cost budgeting and cost control, Quantity Surveyors also play an active part in offering contractual advice, project planning, tendering, value engineering and also be engaged by clients to resolve disputes in construction projects.
“Some people may think that Quantity Surveying is only about measurement, this is totally wrong.”
Publication of Standard Form of Contract for Maintenance and Renovation Works
In view of the recent trend of increasing number of maintenance and renovation work in Hong Kong, the HKIS published the Standard Form of Contract for Maintenance and Renovation Works in 2013.
“Contract documentations usually give people an impression of having highly legal jargons which are difficult to understand for the laymen. Yet, a well-prepared contract is indispensable for safeguarding the interest of the parties and to avoid any misunderstanding. This standard form of contract is specially designed for this purpose.” Paul explained.
This standard form of contract is user-friendly and specially designed for the use by the public at large. In considering the nature of the maintenance and renovation works, it eliminates those conditions which are mostly suitable for new development and incorporates tailor-made terms for maintenance and renovation works. It aims to clearly set out the rights and obligations of the parties thereby avoiding disputes.
“As a professional institute in Hong Kong, the HKIS has long been committed to the local community. While we can act as a cost consultancy for construction works, contract administration is also one of our roles. The compilation of this standard form of contract is just one of the many examples that the quantity surveying profession can apply our professional knowledge in responding to the need of the community.” Paul said.
Quantity Surveying Industry
About the Quantity Surveying industry, Paul shared with me that the profession is facing a situation of high demand for Quantity Surveyors. There are a number of reasons for such a scarcity and one of them is the strong demand of Quantity Surveyors in Mainland China and Macau. As a result, some of the Quantity Surveyors may choose to work in other cities rather than staying in Hong Kong.
He expressed that currently there are around 2,800 qualified Quantity Surveyors with Corporate Membership in the HKIS. There are around 6,000 quantity surveyors, both professional and technician grade, practicing in the industry. Nevertheless, it is anticipated that the situation of high demand for Quantity Surveyors would last for a few years. As number of the graduates of Surveying related courses cannot meet the industry’s demand, some construction firms may have to consider candidates from non-surveying backgrounds.
Then, what kind of character should a Quantity Surveyor possess? Paul made use of a motto written in his office and shared with me. “As a Quantity Surveyor, we have to observe two principles, one is Impartiality (公平) and the other is Truth (真理).”
“Impartiality, as a Quantity Surveyor, our job is to offer our professional advice to our clients or to the management. We formulate our opinions based on our judgment and experience and should try our best to avoid bias perception. Moreover, instead of forming opinions according to the preference of a party, we should be impartial and focus on the facts. We are honoring our professionalism in offering our advice.”
“Regarding the Truth, it is the duty of Quantity Surveyors to identify the “true” cost of construction projects. By valuing the variations, ascertaining the claims, carrying out contract sum adjustments and re-measurements, we act cautiously and try to evaluate the “true” final contract sum. Also, we present the true picture of a project in terms of contractual and cost issues. The Truth is closely related to the duty of a Quantity Surveyor.”
