1. Infrastructure Cost Mitigation
Improving Procurement of Cost Management & Estimation Services
November 7, 2017

2. Improving Procurement of Cost Management & Estimation Presentation Outline
Introduction
What is a Professional Quantity Surveyor (PQS)?
Promoting Independent Consulting QS
CACQS Canadian Association of Consulting Quantity Surveyors
Cost Management and Estimation – types of QS services in infrastructure
Cost Estimates and Plans – ‘class’ of cost esimates for varying design stages / levels of cost certainty
Cost Management during construction – improving cost mitigation & levels of cost certainty
CACQS Audit on procurement of Consulting QS by public bodies
Audit Results &
Recommended Improvements

3. Improving Procurement of Cost Management & Estimation Introduction
Donny Afonso BSc (Quantity Surveying)
Accreditions:
PQS Professional Quantity Surveyor, and
MRICS Member of Royal Institute of Charter Surveyors
20 years in construction and infrastructure industry. Generally as:
consulting QS Quantity Surveyor,
project manager (client representative), and
Lender’s Technical Advisor
Principal of Pelican Woodcliff Inc
Consultant QS firm in Richmond Hill, ON, operating for 20 years
Involved in CACQS Canadian Association of Consulting Quantity Surveyors:
Since 2012
Currently a Board Director and Secretary

4. Improving Procurement of Cost Management & Estimation What is a Professional Quantity Surveyor (PQS)?
QS Quantity Surveyors
building and infrastructure cost specialists
Measure value of construction from concept to completion
PQS Professional Quantity Surveying
Accreditation issued by CIQS Canadian Institute of Quantity Surveyors
Tested and proved to be meet CIQS membership requirements, and
CIQS membership is to be kept current with annual CPD requirements
QS Services with the following objectives in mind
Cost Planning and Control - Help owners & design professionals plan for and control the costs of their building and infrastructure work
Financial Success - Play a critical role in ensuring achievment of the financial goals of building and infrastructure capital development projects

5. Improving Procurement of Cost Management & Estimation What is a Professional Quantity Surveyor (PQS) (Cont’d)?
QS Tools and techniques embody the following principles:
Initial Cost Planning - Provide frame of reference containing realistic first estimate and plan how this will be spent,
Cost Control Mechanism - Provide control mechanism that allows feedback or checking against the approved initial cost plan as work proceeds, and
Procedure for Cost Mitigation - A clearly defined procedure for taking remedial action as the project proceeds

6. Improving Procurement of Cost Management & Estimation Promoting Independent Consulting QS
History of CACQS Canadian Association of Consulting Quantity Surveyors
Association launched 2012 (in currrent form)
Senior representatives of consulting firms offering independent QS services
Member Firms need at least one director with PQS accreditation (or similar)
Mission of CACQS
to advance the consulting QS Quantity Surveyor industry in Canada
Memorandum of understanding with other QS organisations
CIQS Canadian Institute of Quantity Surveyors
RICS Royal Institute of Chartered Surveyors
Based on tri-party Agreement dated June 16, 2016 CACQS, CIQS and RICS collectively agree to advance QS quantity surveying in Canada
CACQS Best Practice Guide 2016 – best practice for various QS services
Membership By-Law (March 28, 2017) emphasizing QS ‘independence’

7. Improving Procurement of Cost Management & Estimation Cost Management and Estimation – types of QS services in infrastructure
Numerous QS services but main roles on building and infrastructure projects are:
Cost estimation and planning
Provide initial Cost Estimate or Cost Plan
Provide updates to Cost Estimates or Cost Plan at various design stages
Cost control, Change Order Reviews
Assess that changes to Contract Price are reasonable and are ‘at market’
Cost control, Payment Certification
Assess that requested payments for Work in Place are reasonable based on work performed
(see CACQS Best Practice Guide for details of these and other QS services)

8. Improving Procurement of Cost Management & Estimation Cost Estimates and Plans – ‘class’ of cost esimates for varying design stages / levels of cost certainty
What is the capital budget?
The following are various capital cost components:

9. The Objective is to Balance Budget and Scope :
Improving Procurement of Cost Management & Estimation Cost Estimates and Plans – ‘class’ of cost esimates for varying design stages / levels of cost certainty (Cont’d)
The Objective is to Balance Budget and Scope :
Need – a predetermined Goal
Scope – Elements necessary to achieve Goal
Budget – Amount of money dedicated and approved by the Authority having Jurisdiction to achieve a Predetermined Goal

10. Improving Procurement of Cost Management & Estimation Cost Estimates and Plans – ‘class’ of cost esimates for varying design stages / levels of cost certainty (Cont’d)
Cost estimates - a ‘snapshot’ at particular point in time of probable cost of a project based on available information
cannot be better than the info provided & cannot make up for deficiency in that info.
Cost Estimates or Cost Plans are done in 4 classes;
Class D to Class A (with Class A being highest precision, highest level of effort)
Class of estimates & attributes:
Source: ‘Estimate Classes: An explanation’ in Construction Economist dated June 2002.

11. Improving Procurement of Cost Management & Estimation Cost Management during construction – improving cost mitigation & levels of cost certainty
Cost estimates - a ‘snapshot’ at particular point in time of probable cost of a project based on available information - Iterative process up until contract award
QS Services for Cost Control during construction:
change order review – Assess changes to Contract Price - reasonable & ‘at market’?
payment certification - Assess requested payments for Work in Place - reasonable based on work performed?
Stages of Cost Management & Estimation:

12. Improving Procurement of Cost Management & Estimation CACQS Audit on Procurement of Consulting QS by public bodies
CACQS’ emphasizing ‘independence’ of QS services:
CACQS By-law in March 2017
QS being independent considered the Best Practice to avoid Conflict of Interest.
CACQS considers it Best Practice to have:
Consulting QS independent of Project’s:
Construction,
Design, and
Equity
Consulting QS engaged by Owner directly
More efficient way to engage QS services. Especially when cost mitigation, value engineering etc are necessary
CACQS also wanted ‘health check’ performed on industry’s approach to procuring QS Services – do RFP list ‘PQS’ as accreditation requirement?
PQS is deemed an appropriate accreditation requirement for QS Services

13. Improving Procurement of Cost Management & Estimation CACQS Audit on Procurement of Consulting QS by public bodies (Cont’d)
Audit was done in collaboration with member firms. Review of random sample - of RFPs that QS firms responded to in 2016 and 2017.
Review of 112 random RFPs. Picked to include sample of various Canadian regions, various levels of government, and various public bodies.
Albeit a small sample, it would hopefully indicate market trends.
The following were the Audit results:
CACQS conclusion
Generally not reflective of Best Practice approach
Procurement of QS services could be improved
Tested Requirement
# of RFPs meeting requirement
% of Total RFPs
QS required to have PQS accreditation 20
18%
QS directly engaged by Owner 18
16%
Both QS required to have PQS and directly engaged by Owner 6 5%

14. Improving Procurement of Cost Management & Estimation CACQS Audit on Procurement of Consulting QS by public bodies (Cont’d)
Next Steps?
QS organisations (including CACQS) to support public body procurement teams
on Best Practice for engaging cost management and estimation
Industry to consider some standard procurement approach
to engaging consulting QS firms
CACQS to repeat Audit
more current RFPs and with increased sample size.
To measure and report on current RFP practices.
Thank You – Questions?