PROFESSIONAL STANDARDS FOR QUANTITY

SURVEYING & COST ENGINEERING

GLOBAL ISSUES & STRATEGIES
Dr. Peter Smith
University of Technology Sydney, International Cost Engineering Council
Sydney, Australia, [email protected]
ABSTRACT
This paper provides an overview of the various professional standards that have been
developed for the Quantity Surveying and Cost Engineering professions by various
countries and professional associations around the world. It then examines the issues
surrounding the lack of global standards for these professions and explores the
benefits of developing over-arching strategies to produce global standards. The paper
culminates with examples of current initiatives to develop such standards. The
research methodology underpinning this study comprises a literature review and
analysis of professional standards. The research results reveal a wide variety of
professional standards despite the fact that the fundamental principles and procedures
of quantity surveying and cost engineering practices are the same throughout the
world. The study will describe current initiatives to develop global standards and will
provide a case example of the proposed development of an International Construction
Measurement Standard (ICMS). The paper concludes with a range of
recommendations and strategies to help address these issues.
Keywords: Professional Standards, Certification, Quantity Surveying.
INTRODUCTION
The Quantity Surveying and Cost Engineering professions have developed a range of
national and regional professional standards over many years. However, the
professions lack over-arching global standards that have been typically been
developed for most other professional disciplines in the construction industry such as
Architecture, Engineering and Project Management. On a broader scale, most major
professional disciplines have global standards (accounting, business and the like).
The lack of global standards inhibits the development and identity of the Quantity
Surveying and Cost Engineering professions on a global scale. Given the increasingly
global nature of construction activity with an increasing number of contracting and
consulting firms and developers operating in multiple countries this problem
continues to build.
This paper will provide an overview of the main standards and
certification/registration programs that have been developed around the world. It will
identify the non-existence of global standards/programs and will then look at current
initiatives and strategies to address this problem.
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MEASUREMENT STANDARDS
The most common standards developed for the Quantity Surveying profession are
Standard Methods of Measurement for building work. Standard methods or
measurement are also commonly prepared in many countries for civil engineering
works.
Quantity Surveyors generally adopt a Standard Method of Measurement that has been
developed for their particular country, region or market sector. These standards are
commonly adapted by Quantity Surveyors to suit their particular measurement
approaches and or client/market requirements. An example is the adaptation of a
standard method of measurement to a more concise/abbreviated form.
However, the Cost Engineering approach generally allows contractors to base their
estimate on their individual methods of measurement and pricing this often forms a
distinct competitive advantage for contractors when bidding on projects. Whilst
standard methods of measurement are used by many cost engineers they are not as
widely used compared to the quantity surveying profession.
The first Standard Method of Measurement (SMM) of building works dates back to
1922. This was prepared by the Royal Institution of Chartered Surveyors (RICS) in
the United Kingdom. The RICS have subsequently developed numerous versions of
this standard. The RICS standards have been widely adopted by the quantity
profession in Commonwealth countries. Mills et al. (2006) found that the RICS
SMMs are the most widely used around the world for the building sector.
Nani et al. (2008) reported on research that has shown that the use of SMMs is
widespread. A global survey by the Building Cost Information Service (BCIS)
identified 32 different SMMs in various countries (RICS 2003) while Mills et al.
(2006) identified 44 SMMs used in 32 countries. This research also found that many
SMMs are amended versions of the RICS SMMs.
The RICS have recently undertaken a major overhaul of their most recent version
(SMM7) to address contemporary measurement issues. The following provides a
description of this initiative (RICS 2013). A measurement initiative steering group
was set up by the RICS to research the problems associated with the measurement of
building works at all stages of the design and construction process. The steering group
found that significant improvements where required and this led to the development
of a suite of documents covering all aspects of the measurement and description of a
building project called the RICS new rules of measurement (NRM).
The NRM is a suite of documents issued by the RICS Quantity Surveying and
Construction Professional Group. The rules have been written to provide a standard
set of measurement rules that are understandable by anyone involved in a construction
project. The rules provide essential guidance to all those involved in, as well as those
who wish to be better informed about, the cost management of construction projects.
Although the RICS new rules of measurement are principally based on UK practice,
the requirements for a coordinated set of rules and underlying philosophy behind each
volume have worldwide application. The specific methods are:
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NRM 1: Order of cost estimating and cost planning for capital building works
NRM 2: Detailed measurement for building works
NRM 3: Order of cost estimating and cost planning for building maintenance works
(RICS 2013)
There have also been measurement standards developed on a regional basis. This
includes a European Code of Measure developed by the European Council of
Construction Economists (CEEC 2015) and the Africa Standard Method of Measuring
Building Work developed by the Africa Association of Quantity Surveyors (AAQS
2015).
The Association for the Advancement of Cost Engineering International (AACE)
have developed a Total Cost Management Framework (TCM) that is being
increasingly used in many countries. The AACE are based in the United States but
have sections in many countries around the world. Whilst not strictly a measurement
standard it provides a standard for the whole cost management process.
Examples of other common measurement standards include:
Hong Kong Architectural Services Department- Standard Method Of Measurement
For Building Elements (2001)
Hong Kong Standard Method of Measurement for Civil Engineering Works, (1992)
UK Institution of Civil Engineers - CESMM4 Civil Engineering Standard Method of
Measurement (2012)
New Zealand Standard NZS 4202:1995 Standard method of measurement of
building works
Australian standard method of measurement of building works. - 5th ed., AIQS (rev
2012
COMPETENCY STANDARDS AND BEST PRACTICES
A variety of competency standards and practices have been developed for the project
cost management profession in various countries around the world. Nalewaik &
Bennett (2012) undertook an analysis of the main competency standards and best
practice guides that have been developed. The following provides a list of the main
standards and guides that were found:
International
International Project Management Association (2006) - IPMA Competence Baseline
Version
United States
AACE International (2006) - Recommended Practice 11R-88: Required Skills and
Knowledge of a Cost Engineer
AACE International (2007) - Skills & Knowledge of Cost Engineering
American Society for the Advancement of Project Management (2008) - USA
National Competence Baseline v2.0.
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United Kingdom
The Association of Cost Engineers (2004) - National Occupational Standards for
Building Control
The Association of Cost Engineers. (2006). National Occupational Standards for
Project Control Support
Chartered Institution of Civil Engineering Surveyors (2011) - Commercial
Management Competencies - Project Management.
Chartered Institution of Civil Engineering Surveyors (2011) - Technical Member
Competencies - Cost Engineering.
Chartered Institution of Civil Engineering Surveyors (2011) Technical Member
Competencies - Estimating.
Chartered Institution of Civil Engineering Surveyors. (2011). Technical Member
Competencies - Quantity Surveying.
Royal Institution of Chartered Surveyors. (2011). Quantity Surveying and
Construction - Assessment of Professional Competence.
Australia
The Australian Institute of Quantity Surveyors (1997). National Competency
Standards for Quantity Surveyors Construction Economists.
Global Alliance for Project Performance Standards (2007). A Framework for
Performance Based Competency Standards for Global Level 1 and 2 Project
Managers.
Australian Institute of Project Management (2010) - Professional Competency
Standards for Project Management - Part C (CPPM)
South Africa
The South African Council for the Quantity Surveying Profession. (2013). SACQSP
Skills Modules.
Asia-Pacific
Pacific Association of Quantity Surveyors - (2001) - Competency Standards for
Quantity Surveyors in the Asia-Pacific Region.
All of these competency standards and guidelines provide a strong foundation for the
potential development of global competency standards.
GENERAL STRATEGIES FOR DEVELOPMENT
Global Professional Standards
The profession needs to develop common global standards, common bodies of
knowledge and standard definitions/terminology. These standards could provide an
over-arching platform that could then be adapted to suit local and regional
requirements. Large global entities typically require International Standards,
International Certification and International Accreditation. Excellent standards
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already exist in many parts of the world (such as the AACE Total Cost Management
Framework and the PAQS Competency Standards). These could form the foundation
for the development of global standards.
However a major challenge is developing global standard that incorporate the
different approaches used by quantity surveyors and cost engineers. This may require
minimum standards that can then be adapted to suit the particular requirements in
various countries, regions and market sectors.
ISO Cost Management Standard
A global ISO Cost Management Standard would provide significant recognition for
the profession and would provide the basis for institutionalising the benchmarks for
the profession based on mutually recognised international standards and best
practices. The global project management community embarked on the development
of an ISO Project Management Standard in 2007 and the ISO 21500:2012 Guidance
on Project Management was finally published in September 2012. The process is not
simple as demonstrated by the 5 years of development and this is only the first stage
in developing a suite of portfolio, program and project management standards. A new
ISO technical committee TC258 has been established to develop a functional set of
integrated standards to improve project management on a global scale (Weaver 2012).
The Quantity Surveying and Cost Engineering professions have much to learn from
this project management standard.
CURRENT STRATEGY FOR DEVELOPMENT
International Construction Measurement Standard (ICMS)
The International Cost Engineering Council (ICEC), the RICS, the European Council
of Construction Economists (CEEC) and other professional associations are in the
early stages of discussion for the development of a global International Construction
Measurement Standard (ICMS). The purpose is to develop international standards
through input and ownership by professional cost management associations around
the world that are recognized by world bodies and national governments.
Construction is an increasingly globally mobile industry, where investments in, and
the implementation of, projects is carried out on an international basis. At a macro
level, there is no consistent way to measure construction activity in national accounts.
For example, the United Nations produces a list of standard activities for construction
(the International Standard Industrial Classification - ISIC). The categories, however,
are not complete and there is a need to revise them to reflect modern needs and
practice. Government statistical agencies and industry commentators require
improvements in the official definitions of construction and the way data is presented.
Definitions and measurement of construction activity and cost vary widely. This is not
only a concern in global and national accounting, but also on the demand (investment)
and supply (consultants and contractors) side of the industry. This lack of
comparability and consistency affects certainty, and therefore investment in,
construction.
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At a micro level, surveys of construction cost managers carried out by the RICS and
the CEEC have shown that:
- approximately 50% of 40 countries responding did not claim any published
standard elemental classification of building parts
- in the absence of locally agreed standards, professionals frequently adopt foreign
standards or ad hoc in-house developed standards;
- there is no common way of expressing cost per m2, both in terms of the cost
definition and the floor area, and
- there are many countries where the quality of cost information, and data
classification, falls short of what local professionals might wish. (Muse 2015)
Data is recognized as the fourth factor of production (Ong 2012). It is therefore
necessary that data is measured, collected, managed and harnessed in a way that
maximizes the efficiency of production. International construction measurement
standards (ICMS) may offer the greatest benefit by increasing the quality of
comparable data used to inform decisions on international expenditure, production
and investment. In an increasingly global market investors search for, and have
exposure to greater opportunities for international investment in construction
development projects.
Investors are often faced with limited capital funds, or the capacity to invest in only
one project on a given site meaning that projects are mutually exclusive. Where only
one project may be chosen as an investment vehicle, it is essential to choose the
project whose value exceeds the cost of inputs used by the greatest amount. This
decision making process requires investment options (in this case development
projects) to be measured, scored, and ranked (Harvey & Jowsey 2006).
From a purely monetary perspective, an investors decision-making around scoring,
ranking and selecting a particular investment project, will be broadly based around the
following considerations:
a)
b)
c)
d)
e)

The cost of land

Construction costs
Other development costs (fees, statutory and legislative costs etc.)
Developers profit
Value of the completed development

The relationship between these considerations may be considered as follows:

a+b+c+d=e
This paper is concerned only with item b) Construction costs, which may typically
account for 30% 40% of e) the value of the completed development.
At a regional level, i.e. where investors are ranking and appraising investment options
all within one region, the data used for ranking may or may not be measured to a
consistent standard. However, its likely that the data may at least be comparable
within any given region. By making reasonable assumptions based on knowledge of

the regional market, then leveling and manipulating the data a meaningful comparison
can be made to inform decision making.
For example, a Quantity Surveyor may be commissioned to appraise the construction
costs of a number of investment options on behalf of a client. When making an
appraisal, a surveyor would need to consider aspects that include but may not be
limited to the following:
-

Technical design (structure, services, finishes)

Specification (quality and performance of materials, finishes, equipment)
Contractors preliminaries
Design efficiency (net to gross area ratio, wall to floor ratio)
Construction start date and duration
Design and management fees
Legislative and statutory matters
Construction methodologies available
Construction technologies available
Location factors
Risk

The Quantity Surveyor may use historic data, forecasts and judgment to make
assumptions that will enable a meaningful comparison of the various schemes. In
regions that have nationally agreed standards, or recognized practices for measuring
construction costs each of the factors listed above could be measured on a comparable
basis.
The CEEC has done considerable work on measurement standards in Europe. By
comparing the various measurement standards of a number of European nations on a
single, common design scheme, the CEEC has highlighted the discrepancy in the
resulting costs generated by using the various standards that are available. The results
found a cost variance of almost 100%. This significant discrepancy was the result of
the various definitions of the measurement of quantities within each standard,
however it was also found that different national standards either included or excluded
various scope items within the standard.
For example, depending on the country, the following costs were included:
-

Building construction and external works (all countries)

Professional fees for planning (all countries except France)
Land costs (only Switzerland and Denmark)
The cost of finance (only Switzerland and Denmark)

The resulting comparison of costs /m2 were therefore highly misleading (Wright &
Stoy 2008) and as such would potentially lead to investment decisions being taken on
substantially inaccurate data regarding the construction costs of a development.
At a global level, there is no single standard of measurement for construction. Based
on the work by CEEC across Europe, it can be argued that a similar situation most
likely exists where inconsistent data leads to significant variations in the reporting of
construction costs between world regions. This inconsistency of data creates
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challenges to the investor who needs to make choices between international

investment options. Specifically, the status quo is that when comparing development
projects between different countries, there is no international standard that defines
what is included within a construction cost estimate, making cost comparisons
inefficient and/or inaccurate. At best, the investor can make reasonable assumptions
to make construction investment options more comparable to make informed
decisions. At worst, decisions are based on poor quality information and may lead to
significant losses for governments, businesses, institutions and/or investors.
The RICS, CEEC and ICEC are currently working on the development of a proposal
whereby globally collaborative standards in construction cost definition and
measurement are agreed through a coalition of relevant international professional
bodies.
While the aim is that the precise scope and detail of the standard will be agreed by the
coalition, the proposed objectives and outcomes will be to address the challenges
described above. Standard, internationally recognised, cost definitions will also assist
in data classification, analysis and subsequent prediction and particularly as BIM
develops worldwide.
It is also proposed that Non-Government Organisations (NGOs), industry and
businesses will be engaged in this process so that endorsement and recognition is
achieved if the standard is developed and published. Communication and
dissemination of the standard in local jurisdictions will be carried out by the relevant
coalition partners to embed global best practice and enhance and integrate the cost
management profession worldwide.
CONCLUSION
Whilst the Quantity Surveying and Cost Engineering professions lack global
standards in a range of areas it could be argued that the most scope for developing
such a standard lies in the fundamental core competency area of the professions measurement.
The international construction measurement standard proposal could provide the
catalyst for the development of a range of global standards for the profession. The
measurement standard itself may require the development of a suite of standards to
address different types of industry sectors (building works and civil works) and
different measurement stages (conceptual estimates, cost plans, estimates, life cycle
costs and the like). The challenge is to develop a global standard that incorporates
aspects of both Quantity Surveying and Cost Engineering approaches possibly a
minimum standard that can then be adapted to suit the particular requirements in
various countries, regions and market sectors.
More broadly, the Quantity Surveying and Cost Engineering professions need to
develop common global standards, common bodies of knowledge and standard
definitions/terminology. These standards could also provide an over-arching platform
that could then be adapted to suit local and regional requirements.

Ultimately, this would provide tremendous potential to unite the cost professions and
help develop a global professional identity similar to that enjoyed by Architects,
Engineers and Project Managers in the industry.
REFERENCES
AAQS (2015), Africa Association of Quantity Surveyors website, www.aaqs.org
(accessed February 2015)
CEEC (2015), European Council Of
www.ceecorg.eu (accessed February 2015)
Harvey, J. and Jowsey E.,
Macmillan).

Construction

Economists

website,

(2006). Urban Land Economics 6th Edition. (Palgrave

ICEC (2014), International Cost Engineering Council website, www.icoste.org

(accessed February 2015)
Mills, A, Lawther, P and Jones, D (2006) Standard Methods of Measurement - A
comparative study of national and regional publications. Australian Institute of
Quantity Suveyors and Royal Institution Chartered Surveyors.
Muse, A. (2015), The Proposed International Construction Cost Measurement
Standards (ICMS) The Problem & the Solution, RICS (unpublished working paper)
Nani1, G., Edwards, P., Adjei-Kumi1, T., Badu1, E. and Amoah1, P. (2008),
Customisation and desirable characteristics of a standard method of measurement for
building works in Ghana, The Australasian Journal of Construction Economics and
Building, Vol 8, No 2.
Ong, S.L. (2012), Competing in a Global Industry, RICS Construction Journal, AprilMay, p.5
Wright, M and Stoy, C (2008). The CEEC Code of Cost Planning, Introduction and
Practical
Application
[Online]
Available
from:
http://www.fig.net/pub/fig2008/papers/ts07j/ts07j_04_wright_stoy_3056.pdf
(Accessed February 2015)
Muse, A., Sullivan, J. and Smith, P. (2014), Improving certainty in construction: the
need for international standards, In the proceedings of the 2014 ICEC World
Congress, Milan, Italy, October
Nalewaik, A. and Bennett, N. (2012), Qualifications & Barriers to Professional
Recognition in Cost Engineering, ICEC 8th World Congress Proceedings, South
Africa, June 2012