Quantity surveyors facing white collar cold mafia is none other than a curse to national development efforts
Posted on July 19th, 2013

By Dr. Chandana Jayalath Chartered Quantity Surveyor

The name “ƒ”¹…”Quantity Surveyor’ conjures up a variety of different images amongst the masses. For some, the term quantity surveyor is an outmoded title from the past arguing that it certainly no longer accurately describes the specific role that is undertaken. Quantity surveyor is the cost and financial accountant in construction. Quantity surveyors are identified as building economists in Australia, contracts engineers in Egypt and cost engineers in Americas, for example. They work hand in hand with planning engineers in the case of delay impact analysis. They work with architects and engineers for value engineering assignments. The history is full of landmarks.

 Quantity surveyors are found in Britain prior to the Napoleonic Wars whose duties were simply to calculate the costs of construction inputs. The origins can be traced back to the ancient Egyptian civilization where estimates for their magnificent structures were given by some dedicated personnel. It developed into an occupation during the 17th century restoration of London after the Great Fire. In 1836 the profession entered its new age when the new Houses of Parliament of Great Britain, designed by Sir Charles Barry, became the first major public contract to be fully measured and tendered using detailed bills of quantities. Estimators were a recognized trade involved also in early stage estimating for the owner and lately estimating costs of inputs of the Master Builder. The first recorded instance of a bill of quantities produced by Henry Hunt is for the reconstruction of the palace of Westminister. Over the years through different centuries, the quantity surveying profession has emerged to be one of the most demanding in construction industry. In the eighties, it expanded its role; in nineties it changed its direction more towards management while in the new millennium, with many challenges from information technology requiring diversification of the service profile of the quantity surveyor. With the rapid development of IT, e-business and adoption of Building Information Modeling the profession has now taken new dimensions at a considerable pace.

 In general, the principal services that could be offered by any quantity surveying firm are preliminary cost advice, cost planning, advising on contractual methods, tender process administration, evaluating construction work, preparing and agreeing accounts for/with contractors, preparing expenditure statements for tax accounting purposes, periodic financial reporting, technical auditing, preparing/defending against construction contract claims, etc. From being a trade-based vocation, quantity surveying had developed into a full-fledged profession, with a clearly delineated line demarcating the role of other allied professions. The quantity surveyors, in its present day construction industry, uses his ability to analyze cost components of a construction project in a scientific way and apply the results of such analysis to a variety of financial and economic problems confronting the developer and the designer. Given the large amount of money associated with building projects, the value for money gained by using standardized building information, combined with budgetary control expertise has helped to make quantity surveying an important role within the construction industry. It has also been suggested that the role of the quantity surveyor has expanded over time beyond the main financial-based concerns in a traditional cost-value system to encompass not only knowledge of costs, values, labour and materials, but also to include contractual and legal matters, as well as being consultants on construction matters and being knowledgeable about developers, the government, contractors and general project management.

 Quantity surveyors must adopt effective cost control mechanisms so as to ensure that the project is delivered within the allocated budget. This has to be a serious concern as the size, quality and scope of the project and even to decide whether to go ahead with the project proposal is heavily influenced just by the ballpark figure established at the early cost advice. If the predicted cost is exceeded by the actual costs then the viability of the project may vanish, possibly leaving the client bankrupt, the building abandoned and resources wasted, disputes arisen. This is why the importance of deploying qualified quantity surveyors has become so significant than ever since in the history, predominantly in the state sector having large scale foreign funded projects where the funds are generally taken back “ƒ”¹…”home’ via loop hole engineering. It is the qualified quantity surveyor having the necessary tools and means to deal with the complexity of this exercise though the issues are becoming exacerbated by the ever changing technical, economic and socio-political environment.

 It is good that quantity surveyors have been invited by clients in their projects as this is known to be a complex process, requiring the analysis of numerous and interacting cost elements. Today, clients are demanding precise cost estimates and further evaluations on alternative design options. Here, an understanding of the implications of a construction project design decisions at an early stage ensures that best value is obtained for the money to be expended. These methods, however, cover a range of activities which may include value management, change management, claims management and cost management. The quantity surveyor facilitates the design process by systematic application of cost criteria so as to maintain a sensible and economic relationship between cost, quality, utility and appearance which thus helps in achieving the client’s requirements within the agreed budget. Indeed, this requires a harmonious co-habitation with the architect.

 Another important aspect that is badly neglected is the proper documentation that millions of money can go blindly wasted. The trend is that claims specialists are reported mobilize on international contracts even before construction commences, to locate loopholes in the documentation and look for lapses in the process of contract administration that will altogether facilitate “ƒ”¹…”juicy’ claims. This situation has jerked the entire domestic construction industry into awareness on the importance of good contract administration and the supreme importance of documentation. Problems arise when the provision for claim is abused, for example by allegedly tendering at low prices with the objective of profiting out of others’ mistakes and on the other hand by aggressively suppressing legitimate claims. Needless to say, the vicious circles generated by such exaggerated actions and reactions definitely add to the avoidable costs of construction.

 It is not far wrong to say that Sri Lanka is becoming a gateway to claims. This is partly due to the fact that contract documents have been drafted in one sided language biased towards the client as a result of cut and paste exercise. Although they carry a taste of FIDIC, they are not real FIDIC but locally treated versions tilting the even allocation of risks. Anecdotally, contractors submit comparatively weak claims more as a basis for negotiation and frequently recover either an adequate portion of the claimed extension of time or an award of time without money, and the parties would still continue their working relationship. These claims are not formal claims but statements of events, usually in a story-type text format without showing the link between cause and effect. Consequently, whilst robust claims are not unheard, many contractors have become accustomed to “ƒ”¹…”thin’ submissions in the aim of facilitating negotiations. Furthermore, few have experienced at first hand the bruising reality of demonstrating entitlement at tribunal proceedings. Contractors, who submit weak claims for additional payment frequently, gift the engineer or employer with many of the reasons they so desperately need to justify a refusal to make reasonable awards, more so in the many instances where the employer has the final “ƒ”¹…”word’ on any determination by the engineer. This relative ease with which a negotiated settlement is made possible has given rise to a culture, where the parties are not much serious in the content of the claim. For instance, forensic delay analysis has been often limited to such a smart label where there is no fundamental analysis as to how concurrent impacts did affect the critical path. The concepts such as prevention, best effort, apportionment or dominance in any typical delay claim have fallen into less cared, despite of their applications World over. Frustratingly, the associated costs are not nearly as prohibitive as those that are wasted in failed “ƒ”¹…”punts’ with weak submissions.

 Once the client has decided to go ahead with the project; they are rightly impatient for a result. They are very often led to believe that their financial commitment is fully established at least at the award of the contract. Against this background, it must be bewildering for some clients to discover as sometimes is the case, that progress on site has lapsed and there appears little that can be done about the situation. The completion date and the final costs are impossible to predict and that the final settlement is arrived even after years of frustration than by strict evaluation. Many claims within this context end up as a horse deal but the consultants have no authority to horse trade.

 The practical problems that beset the contractor are that the potential loss and expense situations must be identified, established, quantified and valued. Furthermore, it should be in a form reasonably convincing the other party to accept the claim as valid and that the integral parts are claimable and are correctly valued. Although it is important to take cognizance and comply with the notice and detailed particular provisions expressed in the contract, this does not happen all the time and things have been usually passed onto the project completion. Amounts so accumulated due to claims pending resolution is usually a matter of final account. We experienced a huge financial claim related to recently complete southern expressway project.

 A claim has become a disguised form of blackmail each other covering their own mistakes in a coffee shop deal. What employers’ need to finish everything’ either by hook or crook, keeping the reality little aside, of course exceptions are there. Construction professionals have up until recently relied extensively on “ƒ”¹…”cheap and cheerful’ means of formulating and evaluating claims but such methods are scarcely cheap or cheerful as they understand that the old ways of dealing with claims are no longer fashionable with smart developers. Today, any typical construction project involves numerous parties, who must work in unison – though temporarily. Also, some of the problems that arise in the execution of the project are not foreseeable or, even if they are foreseeable, their magnitude may not be foreseeable. On account of the higher number of participants in a typical construction project, there are correspondingly a higher number of contract agreements concurrently in effect. The greater number of participants results in fragmentation of responsibilities in the supply chain. As it invariably involves parties having different requirements and perceptions, the tendency is always to have conflicts. What is deserved by the present day context in national development efforts is essentially a harmonious co-habitation of all the professionals involved in the construction circles; be them engineers, architects, accountants, quantity surveyors, project managers. What must not be then relaxed under whatsoever circumstances is the minimum competency standards set by each professional institute.    

 One important point to ponder! In old days, mothers gave birth to their children at home perhaps with the assistance of “ƒ”¹…”redi nenda’. We heard MBBS doctors at the early part of 1960s. Then Kolomba maha dostara in 1970s. Today, we get neurologists, neurosurgeons, neuro physicians. This is specialization “”…” a fact that we all have to accept. Therefore, it is high time we changed the mindset if we really want to harness the potentials of new sciences. Looking back at the manner in which the professions have been evolved, developed and established, there is a history of full of diversifications demanded by the genuine circumstances of the society. A recent past example is forensic delay analyst with a technical acumen and claims consultants with a legal background.

 In nutshell, professionals carry moral responsibilities to those held by the population in general and in society. This is because professionals are supposed to be capable of making and acting on informed decisions in situations that the general public cannot. They are trained to produce certain outcomes which take moral precedence over other functions of society. Leaving no “ƒ”¹…”moral precedence’ to other allied professionals is this saga that brings alertness on white-collar mafia spearheaded by few leading professionals in this country. Professional mafia is a crime committed by a person of respectability and high social status in the course of his occupation. Crimes of concealment and misrepresentation continue to victimize similarly situated professionals working in the same sector, just for power and profit, thus preventing entry and survival of the “ƒ”¹…”right man in the right job’. What is needed is a properly assorted blend of local professional approach to the issues that arise particularly in large scale national projects depending on foreign funds.

One Response to “Quantity surveyors facing white collar cold mafia is none other than a curse to national development efforts”

  1. mjaya Says:

    Every person has a profession,

    Farmers are professionals, tea pluckers are professionals, so are bus drivers, coconut pickers, janitors and garbage collectors. Prostitutes can consider themselves as the oldest professionals on the planet!

    The problem with Sri Lankan self proclaimed professionals (i.e. doctors, lawyers, engineers) is professional arrogance, thinking that they are the “one and only” important profession in the galaxy!

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