The International Construction Measurement Standards (ICMS) is a new, high level international standard that aims to provide greater global consistency in classifying, defining, measuring, analysing and presenting construction costs. The Association of South African Quantity Surveyors (ASAQS) is working with a growing group of professional and not-for-profit organisations from around the world to develop and implement these standards for benchmarking, measuring and reporting construction project costs.

ASAQS EduTech Director, Karl Trusler, is representing the ASAQS in the ICMS coalition. He says that a global standard in cost reporting will benefit South African Quantity Surveyors, developers, and other professionals in the built environment in a number of ways.

Levelling the playing field for built environment professionals
“When there is global consistency in how the construction costs of a project are represented, investors and clients are able to compare apples with apples,” explains Trusler. “Through the introduction of a standardised cost reporting template, the ICMS is succeeding in creating a common language for the global built environment.”

“Regardless of where they are based, clients can use the ICMS as a guideline to determine where in the world they should develop their projects to achieve the best returns thanks to the consistency and benchmarking it provides. It has the potential to level the playing field globally,” says Trusler.

The way that construction project cost reporting has been presented to clients, developers and investors in the past can vary from country to country and even within countries. Adoption of the ICMS means that construction costs will be presented in the same way whether at a project, regional, state, national or international level.

“The stand-out benefit is that real comparisons of construction projects can be made, and these comparisons will guide more informed decision making. An increasing number of local Quantity Surveyors are becoming involved in projects across our borders into the rest of Africa and beyond. To become and remain globally relevant, they should seek to do their reporting in an internationally standardised way. The ICMS speaks to this need,” says Trusler.

Encouraging widespread adoption of a globally consistent standard
As the ASAQS representative to the coalition, Trusler is tasked with staying informed and connected on global developments related to the ICMS and providing feedback and suggestions from members to the coalition. When asked how widely the ICMS has been adopted in South Africa, Trusler explains that it is still very new and has not yet become the status quo.

“Like any initiative in the built environment, there are early adopters, but the majority of South African professionals in the built environment are waiting to see what the uptake will be. While the larger multidisciplinary practices may adopt the ICMS quicker, the majority of smaller practices in South Africa would be more cautious. Basically, all practices make use of some form of a cost reporting system so to become ICMS compliant, they would need to align their reports to the ICMS cost reporting template.”

The ASAQS plans to encourage the adoption of the ICMS through education.

“When people are informed and grasp the value of a concept, they become motivated, and before long through their own initiatives the concept gains momentum. Across the globe, the ICMS is beginning to gain momentum through the efforts of local organisations. Lobbying at government level is a priority because government adoption will go a long way towards cementing the ICMS as the national standard within countries,” concludes Trusler.

ENDS

MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za  

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There is a growing need among both public and private sector building owners and property developers to gain greater insight into what their buildings will actually cost them over their lifespan. The Association of South African Quantity Surveyors (ASAQS) is set to launch a new document that will guide professionals in the built environment on the importance of calculating the Life Cycle Cost of a building and how to calculate these costs.

“The production of this document is part of the ASAQS mandate to provide value back to our members by equipping them with resources that will enhance their service offering back to their clients,” explains Larry Feinberg, ASAQS Executive Director.

Life Cycle Costing (LCC) is the total costs of an asset over its entire operating life, including initial acquisition costs, and subsequent running costs. ASAQS EduTech Director, Karl Trusler, says that traditionally, the most important factor taken into account when considering the development of a project are the initial capital costs.

The running costs of a building over the long term, however, far outweigh the initial capital costs, which means that everyone from quantity surveyors and other professionals to building owners and developers should reconsider their approach to the materials and equipment they choose and the design decisions and construction methods they opt for.

A long-term approach to property assets
“Even though buildings are capable to remaining operational for 100 years and longer, service components and certain finishes and fittings within a building generally have a much shorter life span. Therefore, for the purpose of LCC calculations, a time period of 30 to 40 years for the design life of a building is recommended as there are few advantages in going beyond 40 years.”

“The initial capital investment is only the tip of the iceberg when considering the Total Life Cycle Cost of a project. It’s the part we all see, but what we do not always see is the much larger portion of the costs that will be spent on maintaining the building over its lifespan,” says Trusler. “Instead of presenting clients with a cost report indicating the initial cost of erecting a building only, what is needed is a way to show clients what type of costs they are likely to incur to maintain a building over an extended period of time. The new LCC document will equip people with the ‘why’ and ‘how’ to go about doing this.”

The document, which will be launched during the gala evening of the 10th South African Council for the Quantity Surveying Professions International Research Conference on 1 October 2018, is the product of years of research and work. The three main contributors of the document are Dr Hoffie Cruywagen of the University of Pretoria's Department of Construction Economics, Dr Deen Letchmiah, Chairperson of the Board of Directors of LDM Consulting and President of the SACQSP, and Danie Hoffman, a Board Member of the ASAQS.

“The first half of the document provides background and insights on what LCC is. It offers an academically-researched build-up to the second part of the document, which looks at LCC exercises and practical examples on how to go about providing clients with LCC analysis,” says Trusler.

Lifecycle costing to become the norm
Internationally, LCC is being seen as a means to promote green and sustainable infrastructure procurement for the public sector, and for good reason.

“When you consider the long-term use of public buildings and infrastructure, it makes sense for a complete Life Cycle Cost analysis to be undertaken on proposed developments. This information provides the means to make decisions that will ensure sustainable public sector procurement. In the private sector, developers with a long-term view for their property investments should be interested in these figures for similar reasons. The new LCC document will guide professionals on best practices and the practical application of LCC,” concludes Trusler.

The new ASAQS Guide to Life Cycle Costing 2018 document is available at https://www.asaqs.co.za/store/ViewProduct.aspx?ID=12341793

ENDS

MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za  

For more information on ASAQS please visit:
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Quantity Surveyors are aiming to play a crucial role in getting “frozen” infrastructure development projects back on track. “Municipal managers and classically trained accountants are currently expected to deliver complex projects,” says Larry Feinberg, Executive Director of the Association of South African Quantity Surveyors (ASAQS). “Not only is this expectation unfair on them without them having received the proper training; it’s also part of the reason why some large infrastructure development projects have been suspended or have ground to a halt.”

According to Feinberg the ASAQS has been in talks with senior government officials and other industry bodies to create solutions that can assist with training and professional support to those charged with delivering these projects.

“Training on the use of standards documentation is but one of the areas where Professional Quantity Surveyors can be of assistance,” explains Feinberg. “Deploying Professional Quantity Surveyors to upper echelons in government is one of the mechanisms that can be used to good effect to educate officials on good governance in procurement, bidding and tendering processes, and the complex process of managing the construction process from a cost control point of view.”

The “Send Me” call made by President Ramaphosa during his State of the Nation address earlier this year has resonated with many and sparked collaborative action across many economic sectors. Feinberg hopes that this call can be used as a basis for professionals in the built environment to bridge focus areas that traditionally operate in and create solutions that serve the best interest of the public and the fiscus.

“Our interactions on several discussion platforms are focused on how to bridge the gap between what Thuma Mina means for the public sector and how our members can assist,” says Feinberg. The ASAQS has consistently promoted the role of a Quantity Surveyors as one that plays a significant part in curbing instances of fraud and wasteful expenditure.

“The time for behaviours that – intentionally or unintentionally – resist collaboration is over,” says Feinberg. “It is now time for all of us to share knowledge and expertise, so we can collectively respond to the President’s call.”

The report of irregular expenditure on the on Winnie Madikizela-Mandela Brandfort is concerning, but commonplace. The Association of South African Quantity Surveyors (ASAQS) says this will only change if the right mix of professionals are appointed at the tender phase of infrastructure projects.

The report by News24 states that “the quantity surveyor's report found fruitless expenditure of R593 622 "with regard to the Winnie Mandela House Project".”

“The appointment of a Quantity Surveyor to calculate and oversee projects should not be an afterthought when budget allows,” warns Larry Feinberg, Executive Director of the ASAQS. “We strongly recommend that the appointment of a Professional Quantity Surveyor becomes part of the legislated tender process.”

A Quantity Surveyor (QS) is best placed to identify deviations from original tenders in terms of both scope and pricing. As such, they act as the client’s watchdog. In the case of public projects, the client is ultimately the taxpayer.

One of the key issues in any public project is to ensure that the tender is awarded to the right contractor at the right price. The training undertaken by Quantity Surveyors allows them to manage the financial and legal processes of a project.

“Professional QSs are also bound by a code of conduct,” explains Feinberg. “If they are found to have contravened the code, they will lose their licence to practice as a QS.”

ENDS

MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za  

For more information on ASAQS please visit:
Website: www.asaqs.co.za
Facebook: The Association of South African Quantity Surveyors

The Nelson Mandela Bay municipality recently announced its plans to address its R11.5bn irregular expenditure.
 
“We are in full support of the appointment of a Quantity Surveyor as head of Demand Management,” says Larry Feinberg, Executive Director of the ASAQS – Association of South African Quantity Surveyors.
 
“The municipality got it spot on in stating its reason for going this route as “ensuring value for money in terms of the procurement process”.”
 
A Quantity Surveyor (QS) is best placed to identify deviations from original tenders in terms of both scope and pricing. As such, they act as the client’s watchdog. In the case of public projects the client is ultimately the taxpayer.
 
One of the key issues in any public project is to ensure that the tender is awarded to the right contractor at the right price. The training undertaken by Quantity Surveyors allows them to manage the financial and legal processes of a project.
 
“Professional QSs are also bound by a code of conduct,” explains Feinberg. “If they are found to have contravened the code, they will lose their licence to practice as a QS.”
 
ENDS

MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za  
 
For more information on ASAQS please visit:
Website: www.asaqs.co.za
Facebook: The Association of South African Quantity Surveyors

Reports of construction sector confidence plummeting to 17-year lows should not be the reason for investors and developers to lose complete faith in the industry, according to the Building and Property Economics Committee of the Association of South African Quantity Surveyors (ASAQS).

“Low confidence in the construction sector is cause for concern due to the impact on investment and risk,” says James Hanley, chairman of the Committee. “The built environment is however known for being cyclical, and these cycles last approximately three years.”

While sensible business planning and building up reserves in their practices is the standard recommendation during times of high confidence and investment, built environment professionals tend to be at the mercy of the market.

What is needed to smooth out the cycles is better governmental planning and longer term infrastructure commitments that enable the sector to respond and build capacity.

“If the past is anything to go by, the industry will start to improve soon,” says Hanley. “The construction industry normally lags the general industry by about 6 months, so improving conditions in the general economy tend to influence the cycle accordingly.”

It is however unwise for business to only wait for macro-economic and –political factors to turn favaourable rather than doing what it can to ensure future sustainability.

The Committee cautions against panic to reports of economic downturn and low investor confidence, and instead advises built environment professionals to make use of any surplus time they might have available to develop and broaden their skills.

While it might seem counterproductive to seemingly take time away from business development to strengthen or diversify the professional skill set, the focus should be on the long term sustainability of the professional team.

“By strengthening and diversifying their skills sets, built environment professionals will be better equipped to deal with disruptive changes that continue to challenge a variety of sectors,” says Hanley.

The Committee also warns agains aggressive fee discounting that adds additional pressure to professionals such as quantity surveyors. This practice not only threatens the livelihood of individuals, but undercuts the reputation of an entire sector as a severe reduction in fees can easily create a perception that is disproportionate to the real value of a service.  

“Fee discounting is at best a poor business decision, and at worst anti-competitive,” warns Hanley. “Professionals that portray low confidence in their own skills through a willingness to undercut standard industry fees are doing more damage to the sector than macro-environmental factors.”

Rather than reduce their fees to secure a sliver of a small pie, built environment professionals should rather increase their capability to showcase the value of their services.

“It will serve both professional and sector interests – by increasing the amount of work available to all – if built environment professionals are capable of creating an understanding among clients of the true short term savings and lifecycle value of incorporating professional fees in the budget of any infrastructure development or maintenance project.”

ENDS

MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za  

For more information on ASAQS please visit:
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The latest statistics released on the value of recorded building plans passed for the private sector in South Africa may indicate an economic shift to the south of the country, says Bert van den Heever, past president of the Association of South African Quantity Surveyors (ASAQS). Building plans passed are a strong indicator of the future health of the construction industry as a whole.

“The value of recorded building plans passed for the private sector – at current prices – decreased by 2,4% during January to August 2017 compared with the same period in 2016,” said Van den Heever. “Non-residential buildings fell by 14,3%, but additions and alterations rose by 7,4%.”

According to Van den Heever it is expected that people try to mitigate risk during uncertain economic times by rather spending money on fixing up existing property than splashing out on new builds

Although Gauteng remains the biggest contributor to the total value of building plans passed – with 37,5% of compared to the Western Cape's 25,1% – it also showed the largest negative swing when compared to last year's figures. The Western- and Eastern Cape however showed major increases in the value of projects at planning stage.

The value of plans passed in the Western Cape rose by 9,7% compared to a year ago, and the Eastern Cape's figures increased by a staggering 53,5%.

Deon van Zyl, chairman of the Western Cape Property Development Forum, cautions: "The reality is that our economic growth in the Western Cape is perhaps being driven more by semigration than by real new economic growth.”

“At a medium and long term perspective I am concerned about the slow pace of new Environmental Impact Assessment (EIA) applications at a Provincial level.  EIA applications tend to identify planned developments over five hectare in size as they trigger the National Environmental Management Act.  We are not seeing a growth in new applications."

"What is desperately needed is investment that will lead to job creation.  Property development remains a bell weather industry reflecting the economy at a point in time.  Investment is a direct response to confidence,” says Van Zyl. “The Provincial and local governments’ attempts to practice and reflect clean governance do assist in generating confidence in the Western Cape.  What we desperately need is confidence in the country."

Chris Steffen, ASAQS board member and director of Talani Quantity Surveyors in Cape Town says that although the migration to the Western Cape and shortage of housing has been driving growth, there are other factors such as the DAMS (Development Application and Management System) IT platform that could have played a role in the value of plans passed.

The DAMS IT platform allows for online plans submission and processing has created greater efficiency. In addition, a recent bylaw change saw officials held accountable and kept to timelines for plans approvals.

ENDS

MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za  

For more information on ASAQS please visit:
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Facebook: The Association of South African Quantity Surveyors

Improvements in the construction process as well as the function of a building can be achieved through a highly underrated process called value management.

The value management process is ideal to improve a project’s function, streamline the construction process, highlight potential future problems and reduce capital costs as well as operational expenses in all spheres of construction: civil, industrial, mining, and energy projects, to name a few.

“Value management is a broader view of the better-known term value engineering,” explains Chris de Wet, Value Management Advisor at the Association of Quantity Surveyors of South Africa (ASAQS). “It is a process that can determine whether a different way of designing, constructing, procuring and thinking is needed.”

The process includes a complete value analysis of all components as well as the consideration of alternative material and process selection. It should ultimately result in savings and operational efficiency that ensures the client derives the most financial value from a project.

Although it is not their exclusive domain, experienced and registered professional quantity surveyors are ideally suited to facilitate the value management process.

“During the facilitation process each professional team member should be given an opportunity to present their project objectives, design ideas, and assumptions,” says De Wet. “Active participation from all attendees – team members, stakeholders, outside specialists, and the client – is crucial to the success of the process.”

The person in the facilitating role should encourage collaboration by giving everyone time to question the objectives and assumptions that have been proposed, as well as to investigate the purpose and function of various building elements and alternatives.

Each proposal can be prioritised and then evaluated based on a number of variables, such as its performance enhancing capabilities, operational efficiency, material and labour costs, and so forth, without compromising on the performance or integrity of the building.

Value management principles are not being applied as often as they should due to tight deadlines and fast-tracked construction schedules, among others. A value management approach requires that a professionals commit extra time for the strategy and integrated analysis.

“When professionals in a project team can join forces, flesh out assumptions, propose alternatives and evaluate options based on different areas of expertise, the results can be very rewarding for the entire project and ultimately the client,” says De Wet.

“When implemented effectively, value management can not only save time and money, but also identify and resolve potential future problems before they arise. It also has the ability to create closer team work, better communication, co-ordination and delivery amongst the professional team.”

ENDS

MEDIA CONTACT: Juanita Vorster, 079 523 8374, juanita@thatpoint.co.za, www.atthatpoint.co.za  

For more information on ASAQS please visit:
Website: www.asaqs.co.za
Facebook: The Association of South African Quantity Surveyors