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Managing projectsFEATURESECTION

SCHEDULES OF QUANTITIES (SOQS) have existed in one form or another since the European industrial revolution of the 19th century.

Back then, it was common practice for quantity surveyors to measure the work after a project’s completion for use in making payments to workers.

project is almost as important as the work of laying that building’s foundation.

As well as listing material costs, an SOQ describes the individual items of work to make up a complete building, set out in sections either by trade, element or physical location.

As Dan McGuinness, a member of the New Zealand Institute of Quantity Surveyors, says, an SOQ provides a better, more consistent, platform for the market to tender projects and for the client to obtain accurate and competitive pricing.

‘Typically, because you are tendering projects at costs, scheduled projects can reduce up to 50% of the work involved in tendering, making them attractive in a busy market, particularly.

‘It takes a lot of obscurity out of the whole

Cost clarity assured

Preparing a schedule of quantities for commercial construction projects may seem like an added expense, but experts say this will be recovered

by the ability to have good cost control throughout the project.

BY MARILYN MOFFATT, EXECUTIVE DIRECTOR, NEW ZEALAND INSTITUTE OF QUANTITY SURVEYORS

Measures and itemisesNowadays, SOQs measure the physical content of a building, itemising the costs of materials, parts and labour during the tendering process.

Unfortunately, clients’ misunderstand-ings about the costs and benefits of an SOQ often stop them using this approach. This is despite the schedules playing an important part in New Zealand’s construction industry as a computer-based program reflecting NZS 4202:1995 Standard method of measurement of building works.

Provides better platform at tender stageIndustry experts say an SOQ is too important a process to ignore. It should be employed more often than not because correctly calculating the cost of a commercial building

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process, which certainly helps a lot of the subtrades who, in many instances, don’t have qualified quantity surveyors on their staff.’

Dan is well qualified to speak on such matters. He was the site manager on major Wellington projects such as Transpower House, Chews Lane and the Odlins Building redevelopment.

Useful tool for claims and variationsApart from the benefits at the tender stage, SOQs can be used as an important tool during construction in the progress claim and variation process.

They provide:● a cost database for future estimating● an absolute basis for the calculation of

consultants’ fees● consistency of tender pricing● readily available data for asset manage-

ment of the completed building● life cycle costing studies● maintenance schedules● general insurance costs● insurance replacement costs● a basis for quick and accurate preparation

of depreciation schedules.The certainty of progress payments offered by an SOQ provide the contractor and finan-ciers with the peace of mind that work is being carried out at fair and reasonable prices.

SOQ prices can therefore be used as a basis for comparing a contractor’s price with current market trends, providing the beginnings of a plan to determine likely risk factors.

This, in turn can help provide a sound foundation for valuation and variations. A variation, also known as a change order, is work added to or deleted from the original scope of work of a contract. A change order might diversify a new project to handle significant changes to the current project, altering the original contract amount and completion date.

Simplifies tendering processFrom a consulting quantity surveyor’s standpoint, an SOQ simplifies the tendering process, says Christchurch’s Rawlinsons Director, Julian Mace.

‘Frequently, principals ask for three or more tenderers to price a significant project without a schedule of quantities, looking to obtain the most competitive price they can,’ he says.

‘Each must measure the project them-selves, which is not only a costly use of contractor resource with no guarantee of a job but can lead to inconsistencies in the tender preparation.

‘Providing a schedule of quantities to tenderers will generate more interest and provide an accurate measure of the draw-ings and specification that has a number of benefits to the principal.

‘These include providing a check for design inconsistencies through the sched-uling process together with providing an invaluable document for processing of both contract variations and progress payments.’

Can pick up design inconsistenciesJeremy Shearer of Otago-based construc-tion consultancy practice Flanders Marlow, strongly advises people to get an SOQ.

The current President of the New Zealand Institute of Quantity Surveyors and a regis-tered quantity surveyor, Jeremy says an SOQ can reduce variation disputes, negotiation time and costs.

‘There is always potential for design errors to creep into the plans. SOQs can often pick up on inconsistencies, looking through the job as a whole and identifying not so clear plans before going to the market.’

While clients might believe schedules can be an additional project cost, industry experts hold opposing views that the prepa-ration cost of a schedule of quantities will be compensated with good cost control throughout the project.