Even the British QS will blanche in the face of the requirement to produce a full SMETA.
This is a real bill of quantities. Broken down into elemental volumes, each room is detailed in individual items for each trade. For example, concrete is broken down into its constituent parts (cement, sand, aggregate, reinforcement and water). The bill is created by measuring fully detailed working drawings, bar bending and ironmongery schedules, and so on. Each item is quantified in terms of labour, materials and plant. Each item is priced, using rates from a Soviet version of Spons, available in multiple volumes, with regional indices, and last published by Gosstroi (the equivalent of BS) in 1984. Laborious completion of a full SMETA can take months, resulting in a volume of paper that would cover a large conference table in a foot-deep pile. The more rooms in the building, the larger the volume of paper.
The SMETA system was a creation of the command economy of the Soviet Union. State Central Planning (Gosplan) required that all projects identify the quantity of labour, plant and materials of each and every type. The SMETAs for all projects in each region within the five-year plan were totalled, and using this composite information, Gosplan could place orders with construction materials and plant production factories and state contractors.
This monolithic task yields a wide variety of results. Having worked in Russia for a decade, Bovis Lend Lease has had numerous projects where Western-style construction cost plans can be compared with Russian SMETAs.
For example, on one small-scale Moscow project, our estimate, based on the Western model, came to £840,000. Four different independent Smetchiks came up with four different SMETAs, which ranged in value from £280,000 up to £1.4m. The project was ultimately completed for £840,000. On another multiple site project, the off-site utilities SMETA came to £6300 per site. Actual costs averaged £80,000 per site. On a larger project, the SMETA estimate of £105m compared with a well-founded Western-style estimate of £265m.
In fact, on Bovis Lend Lease's many projects in Russia, we have never found one SMETA which has been remotely close to market costs.
In Britain, we might rail against the need for full bills of quantities, but in Russia, a ‘SMETA’ is still mandatory on all government projects
Part of the reason for the huge errors in the SMETA system is that the rates were last published in 1984, when the rouble was 30,000 times more valuable than today. Instead of updating these rates, the publisher, Gosstroi, publishes monthly indices of inflation for each category of rate, resulting in a current composite rate on a typical project of more than 5000.
So why do SMETAs continue to be produced? Not only are they mandatory on all government projects, but they are also a requirement of local authorities, which approve the "design assignment", the first stage in the detailed planning permission process.
The Smetchik grinds through the laborious SMETA process in the knowledge that once complete it will be filed and never used again. This is because even in the Soviet Union, the state contractors charged what it cost them, not what was estimated. And because it can only be produced from full working drawings, a SMETA cannot be used for conceptual cost planning.
The best that it can be used for is to replace the contractors' estimating departments (non-existent in the traditional state contractor's organisation), allowing competing contractors to offer "discounts" on the client-produced SMETA.
Sadly, too many Russian clients cling to the SMETA system, feeling it can be used for negotiation purposes, but ignoring the need for proper cost planning and change control.
That is why Russian government projects usually complete for many multiples of the original SMETA estimate. Fortunately, international project managers, like Bovis, are steadily persuading local clients of the merits of their plan-monitor-control approach.
Peter Titus is country manager at Bovis Lend Lease Moscow.