By N.H. Thilakarathne BSc (QS) Hons, PGDip (PM), AIQSSL, MRICS

About the Author:

N.H. Thilakarathne is a Chartered Quantity Surveyor having two decades of experience in the construction industry of Sri Lanka, Malaysia and the State of Qatar. He is currently working for Northcroft Middle East L.L.C. – Qatar as Managing Quantity Surveyor. He is also a former visiting lecturer of the Technical Colleges of Sri Lanka.

“These Articles are designed to provide information in regard to the subject matter. They are not to be regarded as providing opinion or advice for any individual case”

People make thousands of decisions in their personal and professional life. The success or non-success of the same is determined by their outcomes. Possessing the right decision and having the determination to follow it up with the right action is essential for the success of any process. Good decision-making is dependent upon several factors. Knowledge is one of the paramount factors. Many people have the right knowledge but many people do not use that knowledge in making decisions and taking actions. Therefore, knowledge alone is inadequate. Knowledge needs to accompany other personal values and competencies. These are, self-confidence, positive thinking, acting according to one’s own conscience, fairness, boldness, open mindedness, etc. If someone has knowledge along with these competencies, then he or she will allow that knowledge to influence their decisions. If they are not thus competent, then he or she will learn to ignore the help provided by his or her knowledge at key times and merely accept influences coming from others. Even though they have experiential knowledge, they cannot or are unwilling to apply it to their lives. It may be a cause of lack of success in life at a later stage.

The rest of this article mainly focuses on the reasons for certain malfunctions in the practice and knowledge of the principles that Quantity Surveyors need to have in order to identify and overcome such malfunctions. I believe that most of them have that knowledge but some of them do not use that knowledge to make the right decisions and implementations. Therefore, the general scenario described in the previous paragraph also applies to the Quantity Surveyors’ professional lives.

A strong well designed foundation is required for a stable building. If the foundation is weak whilst the rest of the building is built strongly and aesthetically, ultimately, the whole building is unsound. This is because the rest of the elements are built on the foundation which is the paramount element. Quantity Surveyors produce many kinds of documents during their service period of a project. These documents are based on certain standards, principles and information. Therefore, adopting such standards, principles and information correctly in the documents is a vital requirement, which is like creating a strong well-designed foundation for construction of a stable building. If the Quantity Surveyor fails to do so, his documents may mislead or create disputes among the parties who are involved in the project. It may be a cause for the lack of success of an entire project.

The malfunctions occurring frequently in the documents, which I have identified during last two decades of my career, have been caused by the following behaviour traits of the parties to the Contract and Project.

• Use of Standard documents which are not applicable to a particular region or project

• Ignoring the close relationships between the Standard documents to be used

• Efforts towards the transfer of all risks to the Contractor rather than aiming to minimise possible project risks at pre-Contract stage

• Inability to differentiate between the Contract and Contract Administration

• Less effort towards dispute avoidance but more efforts towards dispute resolution

• Ignoring the principles of Contract law, general calculations, etc.

• Quoting always what one knows even though it may not be relevant to the Contract under consideration

• Use of terms which are not relevant to the Contract in question.

• Underestimating certain functions

1) Use of Standard documents which are not applicable to a particular region or project

Standard documents (Standard Form of Contract, Standard Method of Measurement, etc.) are published by International organizations (e.g. FIDIC–International Federation of Consulting Engineers) in line with global setup. Local organizations also produce their Standards in line with the local setup (Country law, the level of own industries, customs, etc.).

What are the factors to be considered when you are selecting a Standard Form of Contract for your project tender documentations?

• Selected procurement system

• Availability of local Standard Form of Contract which suits the selected procurement system

• International Standard Form of Contract (if there is no local Standard Form of Contract)

• Required deviations to the International Standard Form of Contract to accommodate the required provisions of the country law, customs, local market conditions, stakeholders’ requirements, etc.

• Other standard documents to be used according to the selected Form of Contract

2) Ignoring close relationships between the Standard documents to be used

Since there are close relationships between certain Standard documents, it may not be able to isolate one standard document from another. Certain Standard Forms of Contract refer to the Standard Method of Measurement (SMM) to be used with the same. If there is no negative impact, you may change it in the Part 2 (Conditions of particular application) in order to use the preferred SMM for your project. However, if your local industry uses a standard document for building up unit rates, you may also have to consider the impact of the same, before changing the SMM as stated above. According to the Standard Method of Measurement of Building Works Seventh Edition, 1988 (SMM7) published by the Royal Institution of Chartered Surveyors (RICS) and The Building Employers Confederation (BEC), working space is not measured when you are measuring excavation works. You have to consider it when you are preparing a unit rate for excavation works. But if you use Standard Method of Measurement of Building Works published by Ministry of Public Works of Qatar, you have to consider working space for measurements and exclude from the unit rate. Since you use Contract BOQ rates for valuation of variations, variation works also should be measured according to the SMM used for preparation of Contract BOQ. Therefore, it is clear that if you ignore these relationships, it may be a cause of possible miscalculations, leading inevitably to disputes.

3) Efforts towards the transfer of all risks to the Contractor rather than aiming to minimise possible project risks at pre-Contract stage

Possible risks are usually transferred to the Contractor by incorporating special Clauses into the Conditions of Contract, which may create ambiguity in the documents if they are not well drafted.

However, if you could minimize possible risks to the Contractor by providing realistic information at the tender stage, Employer would receive optimum prices from the Tenderers. If you failed to do so, they might include a high risk factor into their tender price. Then, an expected risk actually raised or not, the employer has to pay for it.

4) Inability to differentiate between the Contract and Contract Administration

Contract Administration is a process which operates a Contract existing between parties.

If you try to include all intended processes into the Contract, it may create practical difficulties at the implementation stage.

5) Less effort towards dispute avoidance but more efforts towards dispute resolution

Any Quantity Surveyor has an opportunity to be involved with dispute avoidance at the level of their practice. An opportunity to be involved with an Alternative Dispute Resolution (ADR) system is limited only to specialised and experienced Quantity Surveyors. Therefore, if practitioners of all levels make more effort towards avoiding disputes, malfunctions in the documentation can be minimized. You have to foresee possible problems in advance.

6) Ignoring the principles of Contract law, general calculations, etc

It is observed that certain principles have been forgotten in various relevant documents.

Examples:

• Letter of Acceptance contains new conditions. Then, it is not a Letter of Acceptance but a letter of counter offer.

• Calculation of the date for completion of the Works: Commencement date + period for the completion of the Works -1. In the most case, -1 is forgotten.

7) Quoting always what one knows even though it may not be relevant to the Contract under consideration

This is an addictive behavior which can generally be seen at Post Contract stage. When issues arise, some team members try to find solutions based upon what they know and not through the provisions of the prevailing Contract. They do not use the terms of the prevailing Contract.

8) Underestimating certain functions

Since most Quantity Surveyors’ financial documentation is based upon quantities of Works and their unit rates, Quantity Surveyors, Managers and the Building Team should give due consideration to the function of taking off quantities and building up unit rates. Accuracy is dependent upon the quality and quantity of resources used.

If you are competent with the knowledge and competencies described earlier, you may avoid possible malfunctions in your practice due to potential influences coming from others who exhibit the above behaviour.