Pre-tender estimates are prepared immediately before calling the first tenders for construction.
This is the final cost-check undertaken by the cost manager before tender bids for the building project, or any part of the building project, are obtained.
Therefore, it is essential that the design has finalized, the project has been quality checked, and no more changes to the project material are done after the Quantity Surveyor begins the Tender estimate.
This way, the estimate is based on the very same conditions that the different contractors will base their own offers in the tender. This allows as well to prepare the basis for the tender analysis later on, and allows to compare side by side all offers received against the pre-estimate expected.
When a bill of quantities (BQ) is the basis of obtaining a tender price, the pre-tender estimates will be based on the BQ.
What people don’t realise – I think, there’s a misconception in the Industry is that BIM and the 3D-world will eventually remove the need for cost managers because it will be automated.
Cost estimating as a task being a very small part of what a cost manager does, in a project life cycle automation in the future will remove a certain proportion of that task – cost estimating not the cost managements role because what we don’t talk about, a lot actually in the Industry is that the quality of 3D information develops during the design life cycle.
At the first stage you have very little to nothing. Stage 2 you begin to have more information, more detail in the model.
But you cannot just use that information and calculate and estimate your design or your project or your proposals budget.
Because at that stage you probably only have 40-50% of design information.
So the cost manager – this is where they add value – while you have some design, you have a huge proportion that you need to estimate that’s not designed yet.
Likewise when we go to the detailed design stage, not one project in the world today has been designed in 3D 100%
And it wont be in the near future. It will be eventually when we begin to standardize but at the moment it wont be.
So even though we say that BIM extract quantities from your 3D model gives you your bill of quantities (or your tilbudsliste in Denmark), it does not.
Because actually we only model 80% of the building parts or the building components that are necessary to price or necessary to budget.
That’s something very important because what we see is this huge drive towards 5D, and 5D BIM is automated real-time cost updating. But how can you do that if you don’t have a model that’s 100%.
What you end up having, is 5D automated real-time partial cost updating.
Do you think it is possible to have a detailed cost calculation with quantities and unit prices in the early design stages?
Almost more important than a good process for commercial management, are the tools implemented in the project to carry on this task. The most used tool for this purpose would be a standardized Bill of Quantities.
The main purpose of a bill of quantities (BoQ) is to present a coordinated list of components/items, together with their identifying descriptions and quantities that encompass the building works, so that the tendering contractors are able to prepare tenders efficiently and accurately.
Having a standardized BoQ will assure parity of tendering, as all bidders will base their offers on the same conditions and contents.
For a quantity surveyor/cost manager, the BoQ becames a vital tool, as it will be used to manage and control the costs of the building project. Cost management and control uses include:
As Quantity Surveyors, we have experienced a change in the perception of our profession in the Danish construction industry. But… how will this continue changing in the coming years?
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In the video below, Ross Griffin, from KOSMOS (www.kosmosdk.com) talks in this video about how the perception of Quantity Surveying in Danish Construction has changed in the last years.
KOSMOS is celebrating Green Friday every day. We have joined the movement of change and solution oriented deliveries. This week , we are promoting solutions that we offer to the construction industry, to achieve greener, cleaner, better environmentally performing and more sustainable solutions often discarded on projects due to their apparent capital cost, but what about the circular cost benefits.
There is a better way of doing things, and we are determined to assist with our professional knowledge to achieve this change in the industry.
So, how can we in KOSMOS help construction projects to make this turn? Quantity surveyors can bring their commercial knowledge to projects in order to:
Optimize the budget to allow sustainable solutions in the design
Having a solid idea of the actual project costs, allows to distribute the budget in a more optimal and efficient way. This brings the possibility of implementing green solutions, better environmental performance systems, sustainable and clean materials that would have otherwise been considered a luxury or a risk for the overall project economy due to its higher cost.
Estimate the cost of greener alternatives, to facilitate decision making
The potential time extension of the execution or the design when implementing new solutions can be assessed and estimated, so that a decision of whether or not taking those greener alternatives into the project can be taken based on facts and acknowledging the consequences. The values gained by circular economic investigations can have a great impact on the projects lifecycle and OPEX costs.
Prevent quality reduction and downgrading of sustainable design due to costs overruns
Better control of the project economy prevents cost overruns. A project with a solid economy won’t have surprises in the late stages, when cost reductions are mostly limited to reduction of quality, and replacing sustainable solutions for alternative less capitally expensive ones.
Analyse the life cycle of products
It is possible to determine the cost of more durable alternatives, and the return of investment of it. Having this analysis, it is possible to enlarge the life of the product chosen in the design, not focusing this choice purely on its initial capital costs. Incorporating alternative models of procurement can also reduce initial capital expenses and transfer these costs into the operations over a longer period through supply, maintain and replace contracts.
Cross-industry recycling
Looking at products and materials from cross-industry perspective. Waste in one industry or one project could be a supply source in other industry or project. This helps to reduce cost of disposal, supply, CO2 emission, and to optimize the lifespan of products.
DATA is one of the most valuable tools a company can have.
It provides understanding of a specific case, by looking at previous cases.
It gives security on decision making, looking at how similar cases turned out.
It accelerates process and tasks, allowing the reuse of information rather than generating it over and over again.
Then, why are companies, specially in the construction industry, not collecting and storing all their data in a usable way?
It requires great effort, to assimilate data collection as a regular practice, to comprehend the value of that data, and to consider it not as a waste of time but the most valuable investment a company can make. Once this is decided upon and a strong standard is established to allow this process to be an automatic task, a company has a TREASURE!
One of the most common reasons for project costs overruns we repeatedly encounter on projects during the design phases, are due to REWORK. Rework may happen inevitably on small portions, however, we believe that major redesign can be avoided by having a good planning, in order to mitigate most of the following reasons:
Late changes to scope from the client, when input and requirements are not clearly defined during the early stages of the project.
Design inconsistencies, when disciplines (or members of the very same discipline) work individually on their design part, without performing consistent clash detection or a periodic interdisciplinary quality assurance review.
Design errors not detected till late stages of the project, due to lack of investigation on elements crucial for the design critical path (focus on what will affect other disciplines design, and ensure those parts won’t require changes after they are complete).
Project costs over budget, due to light, poor or nonexistent periodic control of the project cost estimates as the design develops.
Output produced without taking into account the receiver´s needs, including over design project parts unnecessarily for the project outcome.
They all not only affect the project time schedule by causing delays, but they also have an impact on the overall project economy and the quality output.
