QSs accused of encouraging claims through contingencies

QSs have been slammed for encouraging claims through their approach to procurement and use of contingency figures.

Don Ward, deputy chief executive of industry body Constructing Excellence in the Built Environment, said that during the tender process cost consultants play a “ridiculous game of poker where they never reveal what their budget is”.

This attack comes only a week after the profession was criticised by Steve Hindley, chairman of Southwest contractors Midas, who claimed some QSs were still living in the Dark Ages.

Ward, voicing his criticisms of the profession at a recent clients’ convention held by QS News’ sister title Building, argued that QSs know what a job should cost because they work it out for themselves.

“Then they go to the market and ask for tenders, which often come in much lower than the true cost,” he continued. “The quantity surveyor knows full well that the contractor can’t keep within that budget, so they add on a contingency figure.”

Ward said that QSs should reveal their hand and publish what they think the job will cost in the invitation to tender. “Instead of setting up the process to encourage claims, it should encourage savings,” he stated.

The process would begin by taking the amount of money the client can afford to spend and asking contractors what they can do within the budget. “The focus would be on getting the best quality for your money rather than finding the cheapest price. But QSs are not good at understanding quality, because it's not easily quantifiable. It’s easier to work out the quantities and come up with a figure.”

Ward conceded that the practices he criticised were not everywhere, but maintained that a “significant part of the industry does this”. The worst culprits were those in the utilities sector – “because of the way the sector is regulated they have very tight budgets, so it would be easy for them to specify how much they were willing to spend early on”.

During tenders, cost consultants play a ridiculous game of poker where they never reveal what their budget is

Don Ward, chairman, CETBE

He added that if a job came in below budget, the money saved could be split between the client, contractor and QS.

Morgan denies problem

Launce Morgan, chairman of the construction faculty at the RICS, rebutted Ward’s criticisms and claimed the profession had a positive impact on the construction industry. “I don’t see that there is a problem in what QSs are doing,” he said. “QSs do some form of estimate to see if the client can afford to have the work done in the first place, but this is just a basic exercise.

“I believe that QSs have been effective in achieving the best value for money for clients and we would argue that our fees have been too low.”

Morgan also said that QSs play a vital role in safeguarding against unfair contracts.

“The construction industry has been accused of being adversarial, with contractors being made to bid very competitively. The way to take out the risk for everybody is to make the bid very, very clear. This is where chartered QSs are so useful, because they use standard contracts and forms of measuring quantities.”