Update 15 published December 2003 Update 14 published September 2003 Update 13 published May 2003 Update 12 published January 2003 Update 11 published October 2002 Update 10 published August 2002 Update 9 published December 2001 Update 8 published October 2001 Update 7 published July 2001 Update 6 published December 2000 Update 5 published October 2000 Update 4 published May 2000 Update 3 published December 1999 Update 2 published October 1999 Update 1 published April 1999

Please note: References to the masculine include, where appropriate, the feminine. Extracts from Parry’s Valuation and Conversion Tables, A W Davidson (1989), (Estates Gazette) reproduced by permission of the College of Estate Management which owns the copyright. Appendix A, Section 2.3 is reproduced from the Building Cost Information Service publication, Standard Form of Cost Analysis: Principles, Instructions and Definitions (1969). Published by RICS Business Services Limited a wholly owned subsidiary of The Royal Institution of Chartered Surveyors under the RICS Books imprint Surveyor Court Westwood Business Park Coventry CV4 8JE UK No responsibility for loss occasioned to any person acting or refraining from action as a result of the material included in this publication can be accepted by the author or publisher. ISBN 0 85406 865 1 © RICS Business Services Limited (RBS) December 2003. Copyright in all or part of this publication rests with RBS, and save by prior consent of RBS, no part or parts shall be reproduced by any means electronic, mechanical, photocopying, recording or otherwise, now known or to be devised. Typeset and printed by Q3 Print Project Management Ltd, Loughborough.

1998 FOREWORD
Knowledge is of two kinds: we know a subject ourselves, or we know where we can find information upon it.
Samuel Johnson (1709–1784)

The fact that our profession serves a changing world increases the need for it to rely on well thought-out and reliable practices and procedures. Events move at an ever-increasing pace, imposing a requirement for quicker response times. Modern communication methods such as facsimile and now e-mail result in the need for information to be available almost instantly. This is made more difficult by an industry growing in complexity and which is subject to increasing customer expectations in terms of service and quality. The RICS has published this Surveyors’ Construction Handbook to help surveyors meet these needs. It is intended to become an important source of reliable information and guidance to all Chartered Surveyors who practise in construction. Much of the excellent information produced by the divisions in the past has now been updated for inclusion. Other material not yet revised will be added. The whole will be regularly reviewed and updated as necessary. RICS practice panels are continuing to produce information for inclusion to make it a useful construction reference document. We hope that this Handbook will become an invaluable aid to your day-to-day activities.

Christopher Powell, FRICS
PRESID ENT, QUANTITY SURVEYORS DIVISION, 1997–98

Trevor Mole, FRICS
PRESID ENT, BUILDING SURVEYORS DIVISIO N, 1997–98

ACKNOWLEDGEMENTS
Professor Roy Morledge, Professor of Construction Procurement at The Nottingham Trent University, for contributing the text of Part 3, Section 1. Major D.R. Bassett, Royal Engineers, for his contribution to the research underpinning the construction time charts in Part 3, Section 1; Central Unit for Procurement, HM Treasury (now Office for Government Commerce), for permission to use CUP guides extensively in the drafting of Part 1, Section 1 and Part 3, Section 1. Alan Turner, JP FRICS ACIArb, author of Building Procurement, for permission to use a number of the diagrams from his text in Part 3, Section 1.

CONTENTS
Foreword Acknowledgements List of Abbreviations Introduction
A B C D E F Aim and Scope of this Handbook Arrangement of Content Status of Content Currency of References Invitation Subscription Service 1 1 1 2 3 3 3

Part 1: The Client
Section 1.1: The Client’s Requirements and Roles
1.1.1 Establishing the Client’s Objectives 1.1.2 The Role for Independent Advice 1.1.3 Project Brief 1.1.4 The Client’s Role 1.1.5 The Client’s Responsibilities 1.1.6 Appointment of Project Manager (where appropriate) 1.1.7 Appointment of Consultants 1.1.8 Appointment of Constructors Appendix A: Further Reading 1 1 3 3 4 6 8 8 9 1

Section 1.2: Value Engineering

1 Introduction 1 1.2.1 Why Value Engineering? 2 1.2.2 Applicability 2 1.2.3 At What Stage Should Value Engineering be Carried Out? 3 1.2.4 Who Should Carry Out Value Engineering? 4 1.2.5 How Long Should It Last? 5 1.2.6 Preparing for a Value Engineering Workshop 5 1.2.7 Functional Analysis of Design Relative to the Client’s Requirements 5 1.2.8 Pricing the FAST Diagram 8 1.2.9 Presenting a Design Solution to a Value Engineering Workshop 8 1.2.10 The Workshop 8 1.2.11 Assessing the Value of the Workshop 9 1.2.12 Implementing the Results 10 1.2.13 Feedback from Post-Occupancy Evaluation 10 Appendix A: Health Centre Value Tree 1 Appendix B: Typical Example of a Value Engineering Process 1 Appendix C: Further Reading 1

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Part 2: Construction Design and Economics
Section 2.1: Pre-contract Cost Planning and Cost Management
Introduction 2.1.1 Pre-contract Cost Planning and Cost Management 2.1.2 Preliminary Cost Studies and Feasibility Studies 2.1.3 Budget 2.1.4 The Cost Plan at Outline Proposals Stage 2.1.5 The Cost Plan at Scheme Design Stage 2.1.6 Cost Checking 2.1.7 Action after Receipt of Tenders Appendix A: Sources of Cost Information Appendix B: Format of Budget and Cost Plans Appendix C: Element Unit Quantities Generation for Hypothetical Buildings Appendix D: Further Reading 1 1 2 4 4 8 11 13 14 1 1 1 1 1 1 1 5 10 14 15 1 1 1 1 1 1 1 1 1 1 2 1 1 1 2 3 3 5 6 8 1 1

Section 2.2: Life Cycle Costing
Introduction 2.2.1 The Client Context 2.2.2 The Life Cycle Costing Calculation 2.2.3 Tax Allowances, Incentives and Business Rates 2.2.4 Data Sources 2.2.5 Worked Examples Appendix A: Residual Values Appendix B: Obsolescence Appendix C: Costs And Values Appendix D: Glossary of Terms for Taxation Appendix E: Examples of Items of Expenditure Likely to Attract Taxation Allowances Appendix F: Further Reading

Section 2.3: Elements for Buildings
Introduction 2.3.1 Elements 2.3.2 Elemental Cost Analysis 2.3.3 Other Uses Appendix A: BCIS Standard Elements

Section 2.4: Design and Build - Guidance for Employer’s Agents
Introduction 2.4.1 Background 2.4.2 Contract Documentation 2.4.3 Additional Services 2.4.4 Employer’s Requirements and Contractor’s Proposals (including contract sum analysis) 2.4.5 Design and Build Variants 2.4.6 Novation Appendix A: Potential Services Associated with the Role of Employer’s Agent Appendix B: Employer’s Requirements/Contractor’s Proposal Checklist

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Section 2.5: The Chartered Surveyor as Lead Consultant
2.5.1 2.5.2 2.5.3 2.5.4 Introduction Definitions: The Difference Between a Project Manager and Lead Consultant Benefits of Appointing a Chartered Surveyor as Lead Consultant Issues to Consider before Undertaking the Role Schedule of Lead Consultant Duties

1 1 1 2 3 3 1 1 2 3 4 7 8 9 11 1 1

Section 2.6 Defining Sustainable Construction
Introduction 2.6.1 Technology Swaps 2.6.2 How Can the Environment and Sustainability be Valued? 2.6.3 How Does This Effect the Construction Industry? 2.6.4 Green Building Materials 2.6.5 Whole Building Sustainability 2.6.6 The Government Line 2.6.7 What Might the Future Hold Appendix A: Embodied Energy Content of Building Material Appendix B: Useful Addresses

Part 3: Construction Planning and Procurement
Section 3.1: Developing an Appropriate Building Procurement Strategy
Introduction 3.1.1 The Client’s Role 3.1.2 Procurement Strategy 3.1.3 Selection of Most Appropriate Procurement Strategy 3.1.4 Implementation Appendix A: Procurement Options 1 1 2 12 25 29 1 1 1 3 11 19 34 1

Section 3.2: Building Services Procurement
Introduction 3.2.1 Appointing the Building Services Designer 3.2.2 Design Coordination 3.2.3 Appointing a Building Services Contractor 3.2.4 Tender Documents Appendix A: Typical Example

Part 4: Construction Administration and Management
Section 4.1: The Problems of Practical Completion
Introduction 4.1.1 What Happens in Practice 4.1.2 Standard Form Approaches 4.1.3 Effects of Practical Completion 4.1.4 Methods for Dealing with Practical Completion 4.1.5 Definitions 4.1.6 Subsidiary Issues Appendix A: General Objectives to be Achieved at Practical Completion for Small to Medium-sized Building Projects Appendix B: Table of Cases Appendix C: Further Reading 1 1 1 3 13 14 16 20 1 1 1

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Section 4.2: Ascertaining the Amount of Loss and Expense Incurred in Building Projects
Introduction 4.2.1 General Principles 4.2.2 Definitions 4.2.3 Entitlement 4.2.4 Ascertainment 4.2.5 Admissible Items 4.2.6 Inadmissible Items Appendix A: Ascertaining the Cost of Running a Site Appendix B: Disruption Appendix C: Ascertaining the Cost of Head Office Overheads Appendix D: Checklist of Items for which Loss and/or Expense are Allowed Appendix E: Checklist of Steps Required when Considering Submissions by Contractor Appendix F: Further Reading

1 1 1 4 4 7 9 13 1 1 1 1 1 1

Section 4.3: The Management of Risk

1 Introduction 1 4.3.1 Definitions 2 4.3.2 The Rationale for Risk Management in the Construction Process 2 4.3.3 The Risk Management Process 5 4.3.4 Summary 14 Appendix A: Further Reading 1 Introduction 4.4.1 Valuations 4.4.2 Assumptions 4.4.3 Valuation Under a JCT Contract: Background 4.4.4 Recommended Action at the Start of a Contract 4.4.5 Communications 4.4.6 Approach 4.4.7 Content of a Valuation 4.4.8 Administration 4.4.9 Special Situations 4.4.10 Other Contract Terms (relative to valuations) 4.4.11 Valuations Under Other Forms of Contract Appendix A: Further Reading Appendix B: JCT Definition of ‘Reasonable Proof’ Appendix C: Example of Priced Activity Schedule 1 1 1 2 3 4 5 6 8 15 16 17 18 1 1 1 1 1 2 2 3 4 5 6 7 12 13

Section 4.4: Valuations for Interim Certificates

Section 4.5: Extension of Time
4.5.1 4.5.2 4.5.3 4.5.4 4.5.5 4.5.6 4.5.7 4.5.8 4.5.9
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Introduction Extension of Time Clauses Assumptions Extension of Time Under a JCT Contract Notice by the Contractor of Delay to Progress The Award of an Extension of Time during the Contract Period and Before the Completion Date The Award of an Extension of Time after the Completion Date Relevant Events Concurrent Delays Consequential Entitlement
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4.5.10 Administration 4.5.11 Extension of Time under an ICE Contract 4.5.12 Extension of Time under a GC Works Contract Appendix A: Further Reading

13 14 14 1

Part 5: Additional Guidance and Information
Section 5.1: Surveying Safely Section 5.2: Construction (Design and Management) Information
5.2.1 Schedule of Sources of Useful CDM Information 1 1 2 1 1 1 2 4 1 1 1 2 2 1 1 2 3 3 4 4 5 6 20 1 1 1 1

Section 5.3: Built environment group roles and information Section 5.4: Building Cost Information Service
5.4.3 BCIS Online 5.4.4 Other BCIS Publications and Services 5.4.5 Further details

Section 5.5: Building Occupancy Cost Information (BMI)
5.5.2 5.5.3 5.5.4 5.5.5 BMI Quarterly Cost Briefing Building Maintenance Price Book Special Reports for Benchmarking News, Digests and Reports

Section 5.6: Electronic document storage – legal admissibility
Introduction 5.6.1 Code of Practice – DISC PD 0008: 1999 5.6.2 Weight of evidence and document destruction 5.6.3 Authenticity 5.6.4 Photocopies, microfilm and image processing 5.6.5 Document storage 5.6.6 Storage and access procedures 5.6.7 Format of the Code of Practice 5.6.8 Conclusion Appendix A: Specimen form for recording scanning information Appendix B: Specimen form for recording retrieval Appendix C: References

Index

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Transport and the Regions (formerly the DoE) Document Management System Domestic Sub-Contract European Commission European Union Functional Analysis Systems Technique Federation of Civil Engineering Contractors Gross National Product House Builders’ Federation Her Majesty’s Stationery Office (now known as The Stationery Office) Health and Safety Executive Institution of Chemical Engineers Institution of Civil Engineers Information and Document Management Association Abbreviations (10/02) Page 1 .LIST OF ABBREVIATIONS ABE ABI ACA ACE AQL BCIS BEC BMI BRE BRECSU BREEAM BSI BSRIA BWIC CA CAWS CDM CD-R CECA CIB CIBSE CIC CIRIA CITES CCT CSM DBFO DoE DETR DMS DOM EC EU FAST FCEC GNP HBF HMSO HSE IChemE ICE IDMA The Surveyors’ Construction Handbook Association of Building Engineers Association of British Insurers Association of Consultant Architects Association of Consulting Engineers Acceptable quality level Building Cost Information Service Building Employers’ Confederation Building Maintenance Information Building Research Establishment Building Research Energy Conservation Support Unit Building Research Establishment Environmental Assessment Method Building Standards’ Institution Building Services Research and Information Association Builder’s Work in Connection Contract Administrator Common Arrangement of Works Section for Building Works Construction (Design and Management) Compact disc recordable Civil Engineering Contractors’ Association Construction Industry Board Chartered Institution of Building Services Engineers Construction Industry Council Construction Industry Research and Information Association Control in Trade of Endangered Species Compulsory Competitive Tendering Chartered Surveyors Monthly Design Build Fund and Operate Department of the Environment (now known as the DETR) Department of the Environment.

IFC JCT LCC LQ M&E MERA MW NEC NEDO NJCC NSC OMR PFI PSA RIBA RICS VAT WCD WORM WRC Intermediage Form of Contract Joint Contracts Tribunal Life Cycle Costing Limiting quality Mechanical and Electrical Multiple Estimate Risk Anaylsis Minor Works New Engineering Contract National Economics Development Office National Joint Consultative Committee for Building Nominated Sub-Contract Optical Mark Reading Private Finance Initiative Property Services Agency Royal Institute of British Architects Royal Institution of Chartered Surveyors Value Added Tax With Contractor’s Design Write-Once-Read-Many Water Research Centre Page 2 Abbreviations (10/02) The Surveyors’ Construction Handbook .

in principle. it is assumed that possession and necessary access to the site are available and. Trusts and their Trustees. So ‘construction’ does not embrace building surveys or building maintenance. ‘Construction’ in this Handbook means new construction. The first four Parts are as follows: Part 1: The Client seeks to help surveyors to work with clients. provides Additional Guidance and Information. and relevant information (including references to other useful material). The last Part. The Handbook does not cover project management services. although much of it is relevant to practice elsewhere. The first four Parts represent sequential phases of the construction process. Part 5. partners. The contents of this Handbook apply across the complete range of this definition unless otherwise stated. refurbishment works and alterations to the form of buildings. obtaining planning permission and building regulation approvals. Throughout the Handbook. ‘Client’ in this Handbook is used to include companies and their Directors or Officers. the Handbook is arranged in five Parts. The document is drafted on the basis of UK law and practice. or dispute resolution.I NTRODUCTION INTRODUCTION A Aim and Scope of this Handbook A1 The aim of this Handbook is to help both building and quantity surveyors to provide construction-related professional services effectively and efficiently. It should be appreciated that this Handbook does not attempt comprehensive coverage of necessary or good practice. the rights to construct the development and use the buildings when constructed. to which the numbered cross references in the Parts apply. not surveyors undertaking the role of the client’s representative who gives instructions to surveyors on behalf of the Client. It seeks to achieve this by providing guidance which reflects what is often good custom and practice. and also civil engineering works. It discusses the establishment of their construction objectives and constraints. Each part is followed by Further Reading. A2 A3 A4 A5 B Arrangement of Content B1 After sets of Definitions and Abbreviations which apply throughout. The Handbook is addressed to surveyors providing services to clients (as defined). managers and employees who may instruct a surveyor. leading to the The Surveyors’ Construction Handbook Introduction (4/98) Effective from 1/6/98 Page 1 B2 . conversion.

as the word implies advice to Members of the RICS on aspects of their profession. and cost-value relationships). Where recommended for specific professional tasks. i. note the following points. feasibility studies. the Court is likely to take account of the contents of any relevant guidance notes published by the RICS in deciding whether or not the surveyor had acted with reasonable competence. In the opinion of the RICS. and confirmation of the final design proposal. to the time the construction contract is placed. risk assessment. Any Appendices are situated at the end of each Part. B3 An Index follows Part 5. design and economics (including life-cycle costing. procedures which in the opinion of the RICS meet a high standard of professional competence. ‘Guidance’. It defines the client’s roles during the construction process. i. They should. procedures are intended to embody ‘best practice’. Members have the responsibility of deciding when it is appropriate to follow the guidance. C2 Page 2 Introduction (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook . Guidance and Information is integrated. all post-contract matters. Part 3 relates to Construction Planning and Procurement. the Member will not necessarily be exonerated merely because the recommendations were found in RICS Guidance. If the guidance has been followed in an appropriate case. and comments on the engagement of professionals involved in the construction process. a Member conforming to the practices recommended in this Note should have at least a partial defence to an allegation of negligence by virtue of having followed those practices. Should an allegation of professional negligence be made against a surveyor. However.e. Part 2: Construction Design and Economics covers development of the design concept. however. C Status of Content C1 For convenience. i. Members are not required to follow the advice and recommendations contained in such paragraphs. Part 4 covers Construction Administration and Management.e.e. Each paragraph is prefixed with a G or an I to indicate its status.I NTRODUCTION development of construction briefs.

it does not follow that a Member will be adjudged negligent if he has not followed the practices recommended in this Handbook. CV4 8JE. E Invitation RICS Books would welcome comments upon and suggestions for additions and amendments to this Handbook. readers should check current rulings and additions. the Court may require them to explain why they decided not to adopt a recommended practice. where Members depart from any practices recommended in this Handbook. relevant to professional competence to the extent that a surveyor should be up to date and should have informed himself of such information within a reasonable time of its promulgation. The function is not to recommend or advise on professional procedures to be followed by surveyors. They should be provided in writing to RICS Books Publishing. In the event of litigation. It is again. they should do so only for good reason. Surveyor Court. F Subscription Service Any change of address should be notified to the address appearing below: The Surveyors’ Construction Handbook Subscription Service RICS Books Surveyor Court Westwood Business Park Coventry CV4 8JE Tel: 020 7222 7000 ext 647 The Surveyors’ Construction Handbook Introduction (revised 10/01) Effective from 1/12/01 Page 3 . Westwood Business Park. In addition.INTRODUCTION On the other hand. However. the Court is likely to take account of the contents of any relevant information published by the RICS in deciding whether or not the surveyor has acted with reasonable competence. However. Coventry. C3 Material classified as ‘information’ is intended to provide information and explanations to Members of the RICS on specific topics of relevance to the profession. It is the responsibility of each individual surveyor to decide on the appropriate procedure to follow in any professional task. Guidance Notes are relevant to professional competence in that each surveyor should be up to date and should have informed himself of Guidance Notes within a reasonable time of their promulgation. D Currency of References The cases cited and the editions quoted were up-to-date at the time of writing. however. Members should note that if an allegation of professional negligence is made against a surveyor.

Possible objectives are as follows: (a) Cost-related • minimise capital cost • maximise capital cost/value ratio • maximise capital cost/worth to client ratio • achieve necessary income cash flow profile • minimise management costs • minimise maintenance and insurance costs • minimise tax liability • respect capital cost constraint • be energy efficient.2 I 1. Indeed.1. value for money is a key criterion.1.1 Establishing the Client’s Objectives G 1. They may also be concerned with image and building style. There will usually be particular criteria for achievement which are critical or important to each particular client.1.9). However. The type of client will affect the criteria which must be met if the client is to be satisfied with the project.1 Client satisfaction will be maximised if the client’s objectives as established in the business case for the project are met.1. certainty of completion date may be a key issue. G 1.1.1. They may be predominantly concerned with speed rather than performance. SECTION 1 PART ONE: THE CLIENT SECTION 1: THE CLIENT’S REQUIREMENTS AND ROLES 1.1. In this sense.1.6 and 3.1.1.3 I 1.4 I 1. Section 1 (01/03) Effective from 1/3/03 Page 1 .1.1. This is not to say that owner occupiers are unconcerned about time.1. Developers. The surveyor should be able to assist with the development of the business case and the prioritisation of project objectives (see 3.1. may be driven by market conditions which enable the project to be let or sold at maximum commercial advantage. Nor is it fair to suggest that developers are unconcerned about building performance or cost.1. the client’s purpose in initiating a building project is usually driven by the need for the project as a functional unit or as an investment.5 The Surveyors’ Construction Handbook Part 1. There are market conditions where both of these issues may become important.PART 1. on the other hand. Owner occupiers are usually primarily concerned with building performance in terms of functionality and costs in use.

g. G 1.14 and 3. outside the competence of the surveyor.9). It is important that the client seek investment appraisal advice in respect of the project and that the appraisal considers ‘what if’ questions to ensure that the impact of changes of key components in the appraisal is clearly understood.g.1. the giving of advice on some of the requirements listed above is. (e) Timing • construct within a defined period • minimise risks of delay during construction. The later that changes are made in a project. SECTION 1 (b) Marketability • maximise prompt or future disposal (freehold or otherwise). the business case for the project and to the extent to which he/she is able to cope with risk (see 3.1.2. However. Thomas Telford Publishing.1. the more they are likely to cost in both direct and knock-on effects (see 3.6 The importance of each of these criteria will be relative to the objectives of the client. London.4. 1997. Where such a particular requirement is important to the client and outside the client’s expertise.1. impression on occupier’s customers) • minimise any alterations to specific features • reflect planning authority’s brief/policies • minimise potential opposition • reflect corporate style or personal preferences of proposed occupier/employees • maximise comfort of occupants • minimise inconvenience to others during construction. A chartered surveyor will be able to assist the client in these matters. (c) Use-related • optimise operational requirements of intended occupier(s) • provide greatest flexibility in potential uses • reflect intended occupier’s requirements/preferences/ability to afford • meet social/management/occupier’s special needs (e. Briefing the Team. Many construction projects suffer from poor definition due to inadequate time and thought being given at an early stage1.1. disabled). the client should be advised to seek other professional advice. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . Page 2 Part 1. (d) Environmental • minimise health and safety risks • choose materials which reflect sustainability • aesthetically please (e. Investing time at the beginning of a project in developing a complete definition taking account of all the requirements will reduce the likelihood of changes later.2.PART 1.14(f) & (g)).1.7 1 Construction Industry Board.1. This is often because there is a sense of urgency fuelled by the desire for an immediate solution. of course. G 1.

1.1.2.2 The Role for Independent Advice G 1. all but the most experienced client may need advice.g.12).3.3 Project Brief G 1.1.10 and 3.1 With the potential for the involvement of many consultants and/or constructors in a project and the range of contracts associated with their employment.1.1.PART 1. The Surveyors’ Construction Handbook Part 1.2. SECTION 1 1. It may be more difficult for a design team member to remain impartial in carrying out this process and it is recommended that any expert retained should be solely for this purpose.1. The advice offered should be informed and unbiased and it should be based upon a logical analysis of the needs of the client. the type and character of the project and the range of appropriate strategies available. Section 1 (01/03) Effective from 1/3/03 Page 3 . The inexperienced client will need professional help in the preparation of the brief. The project brief is a comprehensive statement of the client’s requirements for the project based on close consultation between the client and users and based upon the parameters established (see 3.1.1.2 • • • • • Assistance in preparing the business case underpinning the project Identifying the needs and requirements of the client Defining the project Matching needs and project characteristics with appropriate procurement strategy Facilitating the associated selection and contractual processes and policies (the business case) (briefing) (project definition) (procurement strategy) (implementation) I 1.1. The project brief may include: (a) project description.1. it may be part of a larger planned development).2. (b) how it fits into the client’s corporate plan (e.3 Possible sources for the appointment of independent advisers include suitably qualified and experienced construction professionals such as chartered surveyors. This function can be identified as the role of the principal adviser and may encompass: G 1.1.1 The importance of a clear project brief to the successful completion of the project and in ensuring appropriate performance of the project cannot be over emphasised. This advice can be offered by a member of the client’s design team or can be a separate function.

project managers and other consultants. whose roles are also explained in this handbook. To perform effectively. depending on their knowledge and expertise. and explains how it should be carried out.2 G 1. will need help from their professional advisers. little constructive work can be done. 1. (d) schedule of accommodation and quality of internal environment. all parties must have timely G 1. (h) quality and cost limitations. 1997.4.4 The Client’s Role G 1. and (k) statutory controls.3.4.2 This is the initial control document for the early planning of the project. Effective management is vital in any construction project.3 1 Construction Industry Board. together with their space requirements. A crucial part of any effective management structure is efficient communication. Page 4 Part 1. clients.1.1. without it. Where projects are of a large or complex nature it may be advisable to consider the appointment of a project manager. The success of any project will depend upon the motivation given by the client. (e) standards. If all the information required for the project brief is not readily available. (f) equipment and special services/requirements. This section aims to outline the client’s task in setting policy and formulating strategy.PART 1. Thomas Telford Publishing. (i) life span. Experienced clients may take a leading role in the procurement process. London.1.1 This section briefly explains the client’s responsibilities through the life of a construction project. G 1.4. Briefing the Team. SECTION 1 (c) number of people that are to occupy the building. In carrying out their role. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . (j) site.1. less experienced clients will need to seek advice or to appoint advisers to assist them. The client’s prime role is to establish a structure for the management of the project and to make sure that it works. it is better to issue it in an incomplete form and to update it progressively1.1. (g) when the building needs to be available for use.

As can be seen. and (b) appoint designers with proven ability in designing buildings which satisfy users’ requirements and harmonise with and contribute to the quality of the built environment. the client can expect to be supported and advised by his/her adviser or (if appointed) the project manager.1.1. therefore. and communicate those requirements to the designers (see 3. More detail for each of these activities can be found in the section of this handbook indicated in brackets in the figure. In the performance of these activities.1.4.1. The Surveyors’ Construction Handbook Part 1. G 1. Section 1 (01/03) Effective from 1/3/03 Page 5 .5 The accompanying figure indicates the activities in the procurement process and when activities are usually performed.1. with a wide range of activities to perform and implement before both the design and the construction processes.4.10). SECTION 1 access to all information relevant to their tasks and the project’s objectives and status (see 3.4.11). and. G 1.4.4 The client has substantial influence on the design of the project in respect both of functional efficiency and of overall appearance. the client’s role is significant. ensure that the requirements of the users are accommodated. The selection of the right people is emphasised as a key to success (see 3.8).1. has to take particular care to: (a) understand fully the purpose of the building.PART 1.

4.4.1.1.1.1.3–5) Organisational structure (3.1 The client should set policy and outline strategy including: (a) setting and prioritising the project objectives within the business plan.4.1.1.13) Time control overview (3.4.4. (b) planing to meet the objectives (the pre-design phase).12) Cost control overview (3.1.8) Procurement strategy* (3.1.1.1.1.9) Appoint adviser (3.4.6) Define client’s responsibilities (3.7) Project Brief (3.2) Contractual arrangements (3.1.4.1.1.17) Time control overview* (3.1.1.1.1.1.11) Systems and controls (3.4.7) Appointment of design and cost consultants (3.2) Implementation Resources (Client) (3.1.1.16) Procurement strategy (3.1.4.14) Quality control overview* (3.4.4.4.13) Whole-life Costs (3.1.12) Cost Control overview* (3.10) Systems and controls* (3. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook .1.4.6) Contractual arrangements* (3.1.12) Appointment of PM (if appropriate) (3.5.4.13) Design overview* (3.1.11) Implementation policy (3. Page 6 Part 1.1.1.1.13) Value management (3.PART 1.5 The Client’s Responsibilities G 1.4.1.4.1.1.14) Quality control overview (3.4.4.18) Procurement Strategy Procurement strategy development (3.1.18) Appointment of constructors (3.10) Systems and controls (3.1.1.19) Commissioning (3.4.1.4.11) * () Indicates the activity will continue into the next phase Indicates the section of this document referring to the activity in more detail 1.17) Occupation and takeover (3.1.9) Confirming the business case (3. (c) implementing the plans (the pre-construction phase). (d) controlling their implementation (the construction phase).1.1.4.4.9) Design overview (3.1.1. SECTION 1 FIGURE TO INDICATE THE ACTIVITIES IN THE P ROCUREMENT PROCESS Pre-Design Phase Pre-Construction Phase Construction Post-Construction Client’s Role Develop business case for project (3.18) Change control overview (3.15) Value Engineering (3.4.1.1.1.

Heriot Watt University.. 1 Kelly.1. 1997. London. This document is out of print. Section 1 (01/03) Effective from 1/3/03 Page 7 . G 1. (d) cost estimates are comprehensive and include all capital and resource costs..1. and (b) to supply the technical expertise.1.5.5.4. J. (1992). S. The Surveyors’ Construction Handbook Part 1. (e) allowances made in the feasibility and viability assessments to cover possible risks are sufficient (contingency allowance).1.1.1. (b) any constraints demanded by the project funder(s) are known and their impact understood.11). Department of Building Engineering and Surveying. G 1.6): (a) user groups – who will work in the building. procure.1. S. and (g) plans are in place for adequate project management including systems for cost. the client should be satisfied that: (a) the project brief is comprehensive and clear and has the full support of the users1&2 (see 3. 2 Construction Industry Board. to assess.PART 1. (f) substantial sensitivity analysis and ‘what if’ studies have been carried out to assess the effect of possible changed criteria on the viability of the project. and (f) evaluating the complete post-construction phase). realistic and achievable (see 3. Briefing the Team.1.4. to resolve conflicts. The Briefing Process: A Review and Critique.9).5.4 The client should also co-ordinate and resolve conflicts between all interested sections of the client organisation including (see 3. monitor and control the external resources needed to implement the project (see 3. to act as the formal point of contact for the project (see 3.2 project against the objectives (the The client also has a dual management function: (a) to manage the client input. and Male.1. G 1. (c) the critical assumptions made in preparing the initial estimates and programmes are valid.3 In particular.1.12). quality and change control. to co-ordinate functional and administrative needs. time. Thomas Telford Publishing. RICS. SECTION 1 (e) arbitrating between conflicting demands. MacPherson.3–5).4.

5 The client is responsible for ensuring that all necessary decisions are made on time. time. responsibility for the project.7) G 1. (d) finance and accounts – who will plan and control expenditure and pay bills as they arise. (c) facilities management – who will manage the completed building including maintenance and security. and (h) promptly communicating decisions made to the parties affected by them. (e) warning decision makers regarding forthcoming submissions – making sure items are on the agenda.11): (a) scheduling the key decisions to be made.1. and (e) legal advisers – who will advise on and monitor the client’s formal relationships with outside parties. Timely decisions are necessary to avoid delays and increased costs: the decision-making process requires as much planning and management as any other activity. (b) identifying the decision makers and their required procedures. (d) establishing a formal programme for decisions.4.1.1.4. computers. G 1. e. or predominant.g. 1.PART 1.1. This will include (see 3. The project manager may be a member of the client organisation who is given sole. Project management practices also exist to enable appointment to be made on a consultancy basis. communications. (c) ascertaining the time required for making decisions. Effective from 1/3/03 The Surveyors’ Construction Handbook Page 8 Part 1.6.6 Appointment of Project Manager (where appropriate) (see 3. In this case. cost and quality requirements are achieved. (f) preparing on time fully detailed submissions and/or presentations in full compliance with procedural requirements.1.1 Due to the complexity of modern buildings and the potentially large number of parties involved in the process the client may wish to appoint a single person to draw the process together and manage it to ensure that the overall performance. (g) following up submissions throughout the decision making process. Section 1 (01/03) . SECTION 1 (b) specialist groups – responsible for technical systems within the building.5.

6. The terms and conditions of these appointments are governed by the procurement strategy adopted for the project. and price.4.1. 1.1.8) G The process of selecting and appointing the design team and the cost consultant is carried out by the client who may seek the advice of his/her advisers. and services should be clearly identified. SECTION 1 selection should be based upon resources.9) G The selection of those who will actually construct the project is often key to a successful outcome.1. The selection of procurement strategy is a complex one and is referred to in Part 3 section 1 of this handbook.2 It should be emphasised that the role of the project manager should be to act as part of the client organisation.8 Appointment of Constructors (see 3. G 1. 1.1. The Surveyors’ Construction Handbook Part 1. reputation. Selection should always be on quality as well as price and ideally the procurement strategy governing when they are appointed should facilitate the early involvement of constructors in the design process.PART 1. Section 1 (01/03) Effective from 1/3/03 Page 9 .7 Appointment of Consultants (see 3.4.1.

APPENDIX A Appendix A: Further Reading Construction Industry Board.. 1997 Construction Industry Board. 1997 European Construction Institute. The Surveyors’ Construction Handbook Part 1.. London. Project Specific Partnering on Construction Projects. Partnering in the Public Sector: a Toolkit for the Implementation of Post-Award. RICS. Partnering in the Team. J. London.. S. Department of Building Engineering and Surveying. London. 1997 Kelly. CIC. Briefing the Team. Thomas Telford Publishing. Selecting Consultants for the Team: Balancing Quality and Price. London. MacPherson. Thomas Telford Publishing. SECTION 1. Loughborough.PART 1. ECI. Section 1 Appendix A (01/03) Effective from 1/3/03 Page 1 . 1992. and Male. 1997 Construction Industry Council. Thomas Telford Publishing. 1997 Construction Industry Board. The Procurement of Professional Services: Guidelines for the Value Assessment of Competitive Tenders. This document is out of print. The Briefing Process: A Review and Critique. Heriot Watt University. S.

value management ensures a clearer understanding of the brief by all project participants and improves team working. ‘Rethinking Construction’ (published by the DETR in July 1998) it is practiced by up to a quarter of the construction industry in the UK. This section of the handbook looks at the carrying out of a value engineering exercise during the early design phase of a project. SECTION 2 PART ONE: THE CLIENT SECTION 2: VALUE ENGINEERING Introduction Value management (and within it. it can also reduce costs by up to 10 per cent. a method of ensuring that the client gets the best possible value for money in terms of safety. It is not intended for surveyors acting as value engineering facilitators and makes no attempt to address the very particular skills required for this role.PART 1. i. an evaluation of design solutions against the client’s brief. Used to deliver more effective and better quality buildings. Value engineering is a ‘systematic approach to delivering the required functions to the required quality at the least cost’. i. Value management includes value engineering as part of this process. Section 2 (12/99) Effective from 1/1/00 Page 1 .e. value engineering) is a structured method of eliminating waste from a client’s brief and from the design on a construction project before binding commitments are made. According to the Construction Task Force report. It is a structured form of consensus decision making that compares and assesses the design solutions against the value systems declared by the client. performance and delivery targets. for example.e. Value management is the wider term used in the UK to describe the overall structured team-based approach to a construction project. The Surveyors’ Construction Handbook Part 1. through taking unnecessary costs out of designs. as described here. as well as a review of the whole process after occupancy. Value engineering. It involves clearly defining the client’s strategic objectives. can be a stand-alone exercise (a value engineering workshop) or may be part of an overall value management process. The report also estimates that while the objective of value management is to increase value. considering optimum design solutions within the context of the client’s business objectives and deciding which of these provides the optimum lifetime value to the client. In describing the value engineering process this section aims to assist surveyors both in advising clients on the use of value engineering and taking part in a value engineering exercise as part of the design team.

For example. This is because it is more difficult to develop the design brief in such instances and consequently a design solution may be adopted without being questioned. However. Figure 1: Projects Benefiting from Value Engineering High Essential Complexity Optional Low Low High Value 1. Furthermore. Consequently.1.1 Value engineering has grown in popularity for the simple reason that it actually works.2. Section 2 (12/99) Effective from 1/1/00 The Surveyors’ Construction Handbook .2.2. thus ensuring that a management system is in place which forces designers to justify their decisions when tested against the client’s required function. value engineering will be invaluable where repetitive schemes are being considered Page 2 Part 1.2 G 1. more complicated and higher value buildings are likely to benefit the most (see figure 1).2. 1. there is no reason why the process should not be applied to smaller schemes.000 or more and Northumbrian Water will only consider it for projects worth over £1m.1 The technique of value engineering can be employed on any project. Railtrack will carry out the technique on projects valued at £250. Despite this.1 Why Value Engineering? 1. However.2.1. usually because of time constraints placed upon the designers. Construction projects can often take on a life of their own when members of the design team become focused on their own particular problems and time constraints. If a value engineering exercise is carried out in isolation from any strategic review of the project requirements.2. S ECTION 2 G 1. Value engineering relates design proposals directly back to a client’s business.2.2 Many client organisations will only undertake value engineering on schemes over a certain value.PART 1.2 Applicability 1. A value engineering exercise can only relate design proposals to a client’s business requirements if early value management studies have encapsulated these requirements within the brief. it can only act as a functional assessment of the technical design solutions and their relative cost.2. the true objectives of the client get lost along the way. even in this limited function it can still be very useful.

3 At What Stage Should Value Engineering be Carried Out? 1.2. G 1.2.3. Once it has been established that the client’s needs will best be met through a construction project the purpose of the first VE exercise should be to inform the brief.PART 1. (b) A review of the project at ‘outline design’ could be conducted to ensure that the decisions taken earlier have been implemented or.2. Section 2 (revised 10/01) Effective from 1/12/01 Page 3 . 1. develop and construct or PFI projects. The ‘objectives’ of the project should remain the same throughout the process and they should be validated at the beginning of each workshop.1 The greatest benefits can be obtained by commencing the VE process at the earliest possible stage. It is important that time for the value engineering process and any resultant redesign is included in the scheme design programme at the outset. (c) Another review (a functional analysis of the solutions) would then be carried out at ‘scheme design’ to test individual building elements involving traditional cost planning/life cycle costing techniques.3.3 The Surveyors’ Construction Handbook Part 1.2. Several workshops may be necessary at each of the crucial decision-making stages of a project: (a) A first exercise (a functional analysis of requirements). to define the project needs and inform the brief. Carry it out too early and not enough will be known about the problems associated with the building function.2 This section of the handbook considers the evaluation of a design at the end of the scheme design phase. They can also be tested in practice. or a value management exercise has already examined the client’s requirements. but the process will be the same whenever it is carried out. the value engineering exercise (which will address the proposed design solutions) is best done towards the end of the ‘scheme design’. whereas too late and minds become set on the solutions formulated by the design team.2.3. if changed. 1. the technique is just as appropriate in ensuring that a well-defined statement of requirements is first established and that subsequent design solutions address the function of the building most economically. and since this could generate the greatest benefit to the client the timing is crucial. SECTION 2 as improvements and savings can be incorporated into future schemes. If the project objectives do change the whole direction of the project will need to reassessed. 1.3 Value engineering works irrespective of the procurement route taken. leading to the sort of continuous improvement recommended by the ‘Rethinking Construction’ report. for example. Where the contractor is mainly responsible for the design. When an experienced client has prepared the brief. design and build. It is a discipline upon the design team members and the clients who appoint them. could be carried out as early as ‘option appraisal’.2. The objectives of each workshop may be different. that they still meet the functional requirements.

the client.4 Who Should Carry Out Value Engineering? 1.1 It is strongly recommended that a value engineering exercise is organized by an experienced value management facilitator to ensure that the value engineering participants retain their objectivity and that an unbiased approach is maintained.4.2.4 Page 4 Part 1. However. and • those who will be affected by the outcome. Panels with fewer than four members could be considered ineffective. However. letting agents or rating valuers.PART 1. 1.2. Different stakeholders will be required to participate at different stages of the project. it is considered that panels of more than twelve members are difficult to manage.2. the building users and the design team (designer. with an appropriately briefed panel.2. design and implementation of the operation/project.2. These may include: • those people with responsibility for the needs of the business. this practice has been known to cause resentment between the project team and the external advisers and might therefore compromise the final design solutions. However. • those with responsibility for the management and/or maintenance of the operation.4.2 1. • those with specific responsibility for development. for example. engineers and quantity surveyor) and also the contractor.4. SECTION 2 G 1. It is important that each of the participants have the authority to make decisions at the workshop. The value engineering participants should represent the principal stakeholders in the project namely.4. will ensure that the design team’s solutions are adequately tested at the workshop. It is common practice in North America to appoint an outside team of consultants to question the design team’s solutions. 1. It may also be appropriate to include clients’ advisers. It is considered that an experienced facilitator independent of the design team. where applicable. The participants should be those who can make decisions and provide information related to the specific aims and objectives of the workshop. Section 2 (revised 10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook . it is important that all stakeholders are represented even if this results in a larger group.3 The optimum size of a value engineering panel would depend upon the complexity of the project as well as the skills of the facilitator.

not to take part in it. SECTION 2 G 1.5.2 1.6.1 It should be understood that it is not possible to find meaningful alternatives to a technical solution without first identifying the function required of it. it is most important that an agenda is agreed by the panel and distributed by the facilitator. 1.5 How Long Should It Last? 1.2. This can be simple ‘creative session’ of the functions and possible alternatives.3 The Surveyors’ Construction Handbook . 1. The FAST system uses a ‘function diagram’ which identifies the basic function ‘what is required’ on the left-hand side and more detailed secondary functions working from left to right until all the means of achieving these Part 1. The client’s value criteria will have been developed in the first value management workshop. Section 2 (revised 10/01) Effective from 1/12/01 Page 5 1. but the most common method is using a functional analysis systems technique (FAST) diagram.1 The length of time taken over the value engineering workshop will depend on the complexity of the project and the level of design detail that has been completed. It is the role of the facilitator to facilitate this process.2.7.2 G 1.6 Preparing for a Value Engineering Workshop 1.2. All participants must be prepared to propose and challenge design solutions. However.1 Prior to the workshop.2. The ‘40-hour workshop’ is the classic industrial value engineering standard. two-day workshops at key points during the design process are more common in the UK construction industry. The input of all participants (not just those who are experts in a particular discipline) is one of the strengths of the VE process and should be encouraged by the facilitator.7. With each successive workshop these criteria will be developed further into a function diagram.2 G 1.2. In addition to an agenda.2.2.2. This should be included in the workshop handbook.6.2. a functional analysis of the client’s requirements should be drawn up. If it is to be developed further this will take place as part of the information stage of the workshop.2. The functional analysis should always be generated by the client representatives with the help of the other members of the workshop.7 Functional Analysis of Design Relative to the Client’s Requirements 1.PART 1.5.7. Functional analysis is any technique designed to appraise value by careful analysis of function.

It was then recognized that.PART 1. SECTION 2 functions ‘how are they to be fulfilled’ are identified on the right. This diagram describes what a product. See figure 2 for an example of a FAST diagram. Reference is sometimes made to different types of FAST diagram: Classical FAST. The objective of functional analysis is to produce a complete description of the end purpose of the design in terms of what it must do. Subsequently it was recognized that all functions did not fit into the flow logic so it was decided to separate out the functions that are always active. Technical FAST or Customer/Task FAST. It was a technique used to assemble the functions of a product in a hierarchy and to assess ‘why’ and ‘how’ they are delivered. This is known as a Classical FAST. ideally. The resulting FAST Figure 2: FAST Diagram Page 6 Part 1. It should be understood that this is a broad-brush technique. The original FAST diagram was a presentation of the user-related and product-related functions of a design solution. whether the product is operational or not. Section 2 (revised 10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook . It was also decided to separate out those functions that only occur one time regardless of repetitiveness of the process. element or component must do and is known as a Technical FAST. it is the customer who should determine the value of the product and that the FAST diagram should include the customer/user in the development of value study projects.

The FAST model displays functions in a logical sequence and tests their dependency. it can be developed at any stage in order to confirm the brief. However.3 of this handbook. ‘minimize energy consumption’. The scope line limits the area of the project on which attention is being focused. A Value Tree should be developed at an early stage in order to inform the brief. 1. It does not indicate how a function should be performed.5 1.4 Most practitioners insist that functions are defined in terms of ‘active verb/measurable noun (or phrase)’ combinations. The scope line for a project will begin to the right of the Value Tree. There is no such thing as a correct FAST model. 1.2.7. helps all panel members develop a shared understanding and promotes the examination process. Standard Form of Cost Analysis: Principles. This process is called ‘functional decomposition’.2.2.PART 1.6 The Surveyors’ Construction Handbook Part 1. The criteria are then developed further into the functions required in order to achieve them.7.2. the requirement for increased energy efficiency might be provided by increased levels of insulation which might be achieved by changes to all or any of roof.7. This improves clarity. VALUE TREE A Value Tree is a diagram that describes the business driver (mission) for a project or need and the criteria that need to be satisfied in order to achieve it. Function elements (object functions) are defined in the BCIS publication. A typical example of a value engineering process is included in Appendix B. The scope is the portion of the project that is selected for the value study. It is this concept from which the Value Tree has developed.7. The process of setting up a FAST diagram is of matching the functional elements of the building (object functions) to the client’s required functions (user functions). floor. walls. only a valid FAST model. All FAST diagrams should include a scope line on the left-hand side of the diagram. For example. Instructions and Definitions and in Section 2. Section 2 (revised 10/01) Effective from 1/12/01 Page 7 . These should be interrogated by asking ‘why’ the client requires this in order to examine how it should be achieved. It will generally be carried out by the client organization in order to establish whether a project is the solution to their needs.7 Appendix A gives an example of part of a Value Tree and a FAST diagram for a health centre. windows and doors or finishes. for example. 1. The number of levels ‘of decomposition’ required cannot be predetermined. The functional requirements need to be broken down until they are reflected in elements which can be priced (and built). SECTION 2 diagram has become known as a Customer or Task FAST.

they should expect to be questioned quite extensively. For example. SECTION 2 G 1. It is important that each member of the panel thinks positively.2. they should not be analysed or rejected. It asks the questions about what is the prime function of an element?. designers should be prepared to stand by their design solution if they think it is correct for the function being considered. It is creativity in finding the most economical solution that is the essence of the value engineering exercise. speculation. G 1. The value engineering team’s task is to put a price on the various design solutions suggested that will achieve this end.1 Design solutions should be presented as designers normally would to any panel of users. On the other hand.8.2 G 1.1 A value engineering workshop will work through phases of information. elements and components in terms of the functions they fulfill.9. All ideas should be logged at this stage. However. it is important that all functions are clearly defined if costs of alternative proposals are to be meaningful.PART 1. not to criticize for the sake of it. It is important that the underlying functions of suggestions for improvement are listed for evaluation later. in order to encourage idea building. However.1 As the FAST diagram progresses and different solutions are found. Design solutions should not be developed at this stage to ensure that Page 8 Part 1.2.8.8 Pricing the FAST Diagram 1.10 The Workshop 1. The facilitator will ensure that no one is allowed to become overly critical of another member’s contribution in order that ideas flow. They should keep an open mind and maintain objectivity in justifying their proposals because the objective is to find the most cost-effective solution. Fees and value added tax (VAT) and other financial and fiscal matters may also need to be considered. Also. (b) ‘Speculation’ is the brainstorming stage which will generate the ideas from which solutions will be developed.9 Presenting a Design Solution to a Value Engineering Workshop 1.10.2.2.2. Section 2 (10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook . development and presentation: (a) The ‘information phase’ identifies the spaces.2. However. 1. what does it cost?. what are it’s subsidiary functions?. what is it’s value? It is at this stage that the FAST diagram is developed and it is against the background of this information that the value engineering evaluation will be made. evaluation. the client can identify the value of savings from reduced energy consumption or may rank this as important for other reasons. it becomes possible to establish alternative costs for achieving a given function. it should be remembered that it is the design solutions to the functional requirements that are being priced and compared to the value and importance that the client puts on that function.2.

a positive feeling will be encouraged by the facilitator with advantages/disadvantages being discussed in an even-handed manner. will be continued beyond the initial meeting and the outcome presented to a subsequent meeting for the panel to determine which design options to adopt. It is essential to ensure that all the ramifications of any suggested changes should be considered. if the exercise has suggested a change to a piece of M&E equipment. (c) ‘Evaluation’ is the analysis of the ideas generated by the earlier speculation. Again. G 1.2. SECTION 2 ‘what is to be achieved’ is properly addressed. For example. 1. the effects on the control management systems and structural requirements must also be considered. Section 2 (10/01) Effective from 1/12/01 Page 9 .10. This report is normally presented to the client by the value engineering panel at a meeting held within one or two weeks of the date of the workshop. (e) ‘Presentation’ takes the form of a report prepared by the facilitator which records in some detail all elements of the study and concludes with those options to be incorporated in the developed design. Often the detailed development including life cycle costing.3 The Surveyors’ Construction Handbook Part 1.PART 1. (d) ‘Development’ of the ideas to be taken forward will be initiated at the meeting and a programme established for completion of this stage. 1. All optional solutions should only be considered at the evaluation stage.2 1.1 Areas for research/change identified at the workshop could be grouped into three categories: (i) those that are removed/changed and result in reduced cost.11. for example.2.2 The workshop should focus on expensive items or ‘mismatches’.2. (ii) those that are added/changed and result in additional cost.11 Assessing the Value of the Workshop 1. and (iii) those that are identified for investigation but not implemented The financial benefit should then be identified against all elements within categories (i) or (ii).11. A major benefit of the workshop which will be enjoyed by the panel members is a better understanding of the project functions and common ownership of the team-based designs solutions which have evolved. Life cycle costing can be an important factor in the process when considering optional solutions but the criticality of this aspect will hinge on the client’s philosophy. if appropriate.11.2.2. parts of the FAST diagram which are important to the client but which have been allocated little money or have cost a lot of money but do not contribute to the function. At this stage some ideas will be rejected and the best taken forward.

Section 2 (10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook .12 Implementing the Results 1.2 1.13.1 The value engineering panel’s decisions are recommendations that need to be accepted by all stakeholders. If necessary.2. SECTION 2 G 1.13 Feedback from Post-Occupancy Evaluation 1.2. Those stakeholders that are not part of the panel are likely to have a right to comment before decisions are adopted.2.12. amendments to the design brief.2.12. Page 10 Part 1.12. These should always be set against the cost of carrying out the exercise. As part of the project evaluation process.PART 1.2. briefing those members whose work is affected as to why the changes were made. it should be established whether the project represents best value for money and whether or not key design changes made as a result of value engineering have achieved the benefits expected.3 G 1. design programme and scope of professional team’s brief should be incorporated into these documents. decisions should be fed back to the design team. Once the workshop’s proposals have been sanctioned by the client. 1.2.1 It is important for any client to carry out a project review to demonstrate how project objectives have been achieved and particular problems overcome.

PART 1. Section 2 Appendix A (revised 10/01) Effective from 1/12/01 Page 1 . SECTION 2. APPENDIX A Appendix A: Health Centre Value Tree The Surveyors’ Construction Handbook Part 1.

the client set a target of reducing the costs on these projects by 10 per cent. B2 SPECIFIC EXAMPLE: VENTILATION TO SALES FLOOR The original design was based on previous solutions and included ‘traditional’ ventilation. with no material effect on quality or health and safety. Cost plan figures were based on the client’s current specification. distribution ductwork. To encourage value engineering. With displacement ventilation. Section 2 Appendix B (12/99) Effective from 1/1/00 Page 1 .000m2) entered into a partnering agreement with key members of the construction team for four new projects. A PPENDIX B Appendix B: Typical Example of a Value Engineering Process B1 BACKGROUND A retail client with a regular development programme for a series of new stores (typical size 8.g. etc. The alternative method of ventilation proposed was of the displacement type. There is a saving in the amount of ductwork required. In an effort to reduce costs and ultimately add value to the schemes. Allowances were included for any items that were classified as ‘site specific’ (e. Due to the volume of developments undertaken by the client and the repetitive nature of the works. the functional requirement.PART 1. (The The Surveyors’ Construction Handbook Part 1. acoustic requirements stipulated by the district surveyor). Natural convection currents are utilised to remove excess heat and pollutants out of the occupied zone. the savings generated by value engineering can be incorporated in any future schemes. air is only conditioned at the level at which occupiers are breathing. as only two runs of ductwork are needed on the sales floor. To set a benchmark for this reduction model cost plan costs for a typical store (derived from historical records) were modified to suit the new scheme layouts.) At the ‘speculation phase’. sprinklers and electrical). S ECTION 2. including the need for ventilation. Air is introduced at low level and at low velocity. diffusers. the partnering contractors share in any savings that relate to any accepted proposals. was examined against the client’s desire to reduce capital costs. At the ‘information phase’. For two of these projects the client opted for a design and build contract for the services installations (mechanical. the client’s engineering department worked closely with the mechanical partnering contractor to consider alternative methods of ventilating the sales floor of the store. This identified that a high proportion of the cost of the mechanical installation related to the provision of ventilation to the sales floor of the store (plant.

the project programme and the interface with other subcontractors were taken into account. Furthermore. Summary of Value Engineering Exercise Original installation: Traditional ventilation Value engineering proposal: Displacement ventilation Benefits: Saving on air handling plant size Saving on chiller plant size Saving on sales floor ductwork Air handling plant Chiller plant Ductwork and diffusers 10% 5% 25% Savings on capital cost: At the ‘development phase’. S ECTION 2. A PPENDIX B traditional method is designed for four separate branches of ductwork. the proposed method was discussed with other members of the design team to ensure that any impact on the other building elements. with the facility of automatically varying the air throw pattern whether in heating or cooling mode.PART 1. This has resulted in capital cost savings on plant and in the likely running costs of the system. The evaluation identified significant savings.) The new specification requires diffusers of the displacement type. Page 2 Part 1. Section 2 Appendix B (12/99) Effective from 1/1/00 The Surveyors’ Construction Handbook . the proposed system required ventilation to the occupied zone only rather than the full building space.

College of Estate Management. Van Nostrand Reinhold Co. British Standards Institute. Fernie. Thomas Telford Publishing. MA. D. Alphonse. Kelly. William. Grongvist and Bowles. Stephen. Elements for Design and Build. 1989 Kelly. Susan. Value Management in Construction: A Practical Guide. The Value Management Benchmark: Good Practice Framework for Clients and Practitioners. G. London. Alastair. Means & Co. D. London. Edinburgh.P. Heriott-Watt University. Instructions and Definitions. 1994 Mole. 1996 Building Cost Information Service. R. Value Engineering: Practical Software Applications for Design. Peter. 2000. 1996 Dell’isola. BCIS Ltd. Construction. Maintenance and Operations. APPENDIX C Appendix C: Further Reading British Standards Institute. and Male. Law. and Popper. J. Alphonse. and Male. London 1998 Norton. 1983 Dell’isola. S. N. Value Engineering: The Search for Unnecessary Cost. Alastair G. Washington DC. New York.. SECTION 2.PART 1. London. R. BCIS Ltd. 1988 Kelly. 1997 Green. Kingston. C. A Study of Value Management and Quantity Surveying Practice. Value Engineering in the Construction Industry. J. Royal Institution of Chartered Surveyors. London. Basingstoke. Berkshire. The Practice of Value Management: Enhancing Value or Cutting Cost? RICS. A Study of Value Engineering and Quantity Surveying Practice. Reading. Department of Building Engineering and Surveying. Chartered Institute of Building. Brian. CIRIA. C. 1991 Law. 1969 (Reprinted 1997) Connaughton. 1990 Institution of Civil Engineers. John.R. College of Estate Management. Value Engineering and Value Management: A CPD Study Pack.P.. 1996 Kelly. Building Cost Information Service.. Macmillan.. 1981 May. Stuart. Standard Form of Cost Analysis. Creating Value in Enginering. Value Analysis Vocabulary – Part 1: Value Analysis and Functional Analysis. Principles. Construction Industry Research and Information Association. Thomas Telford Publishing. Heriot-Watt University. Value Engineering.R.. Green. Coventry.. Section 2 Appendix C (revised 10/01) Effective from 1/12/01 Page 1 . John and Male. BS EN 1325–1 1997. A. Value Management in Construction: A Client’s Guide. RICS Books. S. An Introduction to Value Engineering: A New Technique in Technology Assessment and Evalution. Stuart. and McElligott. S. 1995 The Surveyors’ Construction Handbook Part 1.

Beck. 1998 Zimmerman. Wyatt. A. Value and the Client (papers presented at a conference held at the RICS on 29 January 1992).. Designers and Contractors. and Hart. Value Engineering: A Practical Approach for Owners. Chartered Institute of Building. Section 2 Appendix C (10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook . Chapman. SECTION 2. Larry. R. Angela. Berkshire. D. 1992 Smith. London. RICS. K. Van Nostrand Reinhold & Co. Royal Institution of Chartered Surveyors. London.. 1982 Page 2 Part 1. N.. APPENDIX C Palmer. Can Any Facilitator Run a Value Engineering Workshop? RICS. Shirazi. Smyth... New York. Hampson. Jackson. A Critique of Value Management. 1990 Royal Institution of Chartered Surveyors. H... J. M. Glen. W..PART 1. K.

The Surveyors’ Construction Handbook Part 2. The information and guidance which follow are based on a traditionally procured new-build project. Control of costs can only be achieved by the actions of the whole project team. the responsibility for developing the cost plan may change but the stages suggested here remain appropriate. (See the figure showing the outline of the cost planning procedure. The procedures are not designed for use with civil engineering projects. However. The quantity surveyor’s role is to facilitate the design process by systematic application of cost criteria so as to maintain a sensible and economic relationship between cost. The process described would apply to refurbishment or conversion schemes and the elemental approach would be suitable even if all elements were not required.) On projects where non-traditional procurement routes are used. the client’s quantity surveyor will be responsible for the cost plan at feasibility and outline proposal stage and the D&B contractor’s quantity surveyor will be responsible for developing the cost plan with the contractor’s design team to produce the tender. quality. but should provide a framework appropriate to civil engineering needs. Section 1 (4/98) Effective from 1/6/98 Page 1 . but varying client requirements and different procurement methods may prevent implementation of some aspects of the following procedures. the principles of budget. through the various design stages to the acceptance of a contractor’s tender. SECTION 1 PART TWO: CONSTRUCTION DESIGN AND ECONOMICS SECTION 1: PRE-CONTRACT COST PLANNING AND COST MANAGEMENT Introduction This Section of the Handbook sets out procedures which enable pre-contract cost management of building projects to be carried out from the client’s brief. including the client. cost checks and reconciliation should be adhered to whenever possible. on Design and Build (D&B) schemes. the design of the elements may proceed at different speeds and the stages described here may overlap. In practice. cost plan. For example. utility and appearance which thus helps in achieving the client’s requirements within the agreed budget.PART 2.

1.1. Cost management is the total process which ensures that the contract sum is within the client’s approved budget or cost limit. Page 2 Part 2.PART 2.1 Pre-contract Cost Planning and Cost Management I 2. It is the process of helping the design team design to a cost rather than the quantity surveyor costing a design. SECTION 1 2.1.1 DEFINITION Pre-contract cost planning is the technique by which the budget is allocated to the various elements of an intended building project to provide the design team with a balanced cost framework within which to produce a successful design. It allows for the redistribution of the budget between elements as the design develops. Section 1 (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook .

1.1. for abnormal site costs which subsequently are found to have been wholly or partially unnecessary. work with the other design team members to satisfy the client at a lower cost if possible.1. G 2. and (d) to advise the client and members of the design team of cost-in-use or life-cycle costing techniques. the engineering services should also be subject to the cost planning process). The links to the cost planning procedures outlined in this section are summarised here: Design Stages Stage B: Feasibility Quantity Surveyor Prepare feasibility studies and determine the budget Consider with client and design team alternative strategies and prepare cost plan Carry out cost checks and update cost plan if necessary Stage C: Outline Proposals Stage D: Scheme Design Stage E: Detail Design Stage F: Production Information Carry out cost checks Stage H: Tender Action The Surveyors’ Construction Handbook Prepare reconciliation statement Effective from 1/7/03 Page 3 Part 2. (c) to ensure that all requirements arising from the client’s brief to the design team are included in the cost planning process (e. SECTION 1 G 2.1.1. at all times. and the quantity surveyor should. (b) to make the design process more efficient. at any time. sums have been included in the approved budget. Section 1 (05/03) . whilst still maintaining the desired objectives for quality and function. G 2.4 DESIGN STAGES References to Design Stages are to the RIBA Plan of Work (taken from the RIBA Handbook of Architectural Practice and Management) and refer to the main stages through which a project design typically passes.2 OBJECTIVES (a) To ensure that the client obtains an economical and efficient project in accordance with the agreed brief and budget. thus reducing the time needed to produce a successful design.g.3 GENERALLY (a) A general principle applies throughout the cost planning process that any agreed budget or cost limit is seen as the maximum cost.PART 2. for example. (b) If.1. the consequential saving should always be notified to the client.

It is possible to produce a typical elemental estimate for Page 4 Part 2.) This might affect both the client’s requirements and the chosen design solution and changes would. that before and during the formulation of the client’s brief (Design Stage B: Feasibility).5 VALUE ENGINEERING A value engineering exercise may be carried out on all or part of the design during the design process. G 2. if appropriate.1. The client’s and project’s status with regard to VAT (Value Added Tax) will also need to be established. OBJECTIVES (a) To establish the limit of expenditure necessary to meet the client’s brief.1. section 2 of this handbook. therefore. as a matter of importance. which is achievable within the limit of expenditure.1.1. and (d) to provide the client with alternative budgets for different occupation dates and qualities of building.2. the quantity surveyor. should undertake such feasibility studies as may be necessary to ensure that the client’s requirements can be reasonably accommodated within the finance that is available for the project. 2. the quantity surveyor should state clearly any assumptions made.1.1.3.3 INFORMATION REQUIREMENTS (a) The ideal requirements from the client and members of the project team to the quantity surveyor are given below.1 DEFINITION Budget is the total expenditure authorised by the client which is the responsibility of the design team at the end of the feasibility stage (Design Stage B). (c) to provide a statement of the recommended methods of construction and of the contractual procedures to achieve the required occupation date.3.) 2. (See 2. On projects where this level of information is not available.2 Preliminary cost studies and feasibility studies G 2.3 Budget I 2. affect the budget and the cost plan. The client’s budget is established as a result of these studies.1.3.3.2 .1 It is recommended.1.1. (b) to provide the client with a statement of the likely area and quality of building. SECTION 1 I 2. in consultation with other members of the design team and the client.PART 2. Section 1 (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook G 2. (For further details see part 1.

• in conjunction with the designer. • advice on necessary storey heights for any specialist areas shown on schedule of accommodation. Note: If the quantity surveyor is not responsible for cost planning the engineering services. • advice on probable floor loadings. building surveyor. • advice on statutory regulations. • requirements in respect of the treatment of inflation. and • the client’s VAT status and any other tax matters which may affect the overall cost of the project. and • names of similar projects previously designed by the practice. and • advice on availability of public utility services. • instructions regarding Construction (Design and Management) Regulations. • names of other similar buildings of broadly suitable quality if appropriate. Section 1 (4/98) Effective from 1/6/98 Page 5 . SECTION 1 a particular type of building from very little information. a schedule of accommodation. architect. • the required occupation date or phased occupation dates. (c) Information required from the designer. (d) Information required from the structural engineer: • advice on probable ground conditions. this should be clearly stated in the budget and cost plan. • any specific requirements as to specification and/or procedures. but it is important to clarify as many information issues as possible before such an estimate is accepted as the budget for a particular project. or other source: • approximate location of the building on the site. (b) Information required from the client: • location of the site. (e) Information required from the services engineer: • advice on areas of building which will require specialist engineering services. • designer’s concept of building. The information from the quantity surveyor to the design team is as follows: The Surveyors’ Construction Handbook Part 2. and • any information on structural solutions. architect or building surveyor. • any specific requirements relating to life-cycle costs. • advice on routes of public sewers and the like.PART 2. availability of the site for commencement of construction work. • any information on the types of systems.

1.4 METHODS OF PREPARATION (a) The method of preparation depends on the type of project involved. it is possible to build up an elemental budget using the parameters set out under G 2. • a statement setting out the programme for design and construction on which the budget is based. or on an appropriate cost model.1. to which rates applicable to agreed quality and performance standards can be applied. other published sources.3. • an outline cash-flow forecast. SECTION 1 (An example of a format for the quantity surveyor’s report is given in Appendix B to this Section. (h) Information to be provided to other consultants: • such quantity and quality parameters as relate to their area of design.3.5 STATEMENT OF QUANTITY AND QUALITY PARAMETERS The main parameters which should normally be incorporated in the calculation are as follows (the list is not exhaustive): Page 6 Part 2. (g) Information to be provided to the designer: • a copy of the report sent to the client.PART 2. Unusual projects. and • assumptions in respect of inflation forecasts and current/future market conditions. from the RICS Building Cost Information Service (BCIS). with alternative proposals if appropriate. G 2. G 2. (b) For most types of project. (d) Once the budget has been established.3. it provides the first cost plan for the project. (c) The main elemental quantities of hypothetical buildings can be generated using agreed parameters. An example of a method of calculating hypothetical quantities is described in Appendix C to this Section. This can be based on cost information from previous projects. and the framework for the actual design to be developed. Section 1 (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook .5. and • a more detailed statement of the quantity and quality parameters included in the calculations.) (f) Information to be provided to the client involves a report containing: • the budget.1. projects of great complexity and projects containing a large element of alterations are more difficult to budget accurately at an early stage. • a statement of any items not included. • a statement of the basis of the budget calculation including any important assumptions made.

(b) Some clients. have their own inflation controls. and • length of boundary walls or fencing. particularly in the public sector. • total electrical load. a range of probable inflation is best provided. internal vertical division. (b) Quality • A general statement of quality and specification which relates to the rates used for the budget calculation.1. • proportion of window area. • the density of vertical division or partition/floor ratio (see appendix C to this section). • air change rates. and a statement of cost at current prices may be adequate. for example by BCIS or the Department of Trade and Industry. and service mains.3. • the number of storeys of a possible solution. Likewise. the quantity surveyor should inform the client if he or she believes it to be unrealistic.PART 2. This should cover specifically at least the following: foundations. Section 1 (05/03) Effective from 1/7/03 Page 7 The Surveyors’ Construction Handbook . boundary walls and fences. circulation) used to calculate a gross floor area. SECTION 1 (a) Quantity • in addition to the briefed areas. • heating and hot-water loads. the client should be informed and instructions requested. • floor loadings. • lighting levels. • thermal resistance values of fabric. planting and the like. lighting and other services. floors and vertical circulation. a statement of the allowances (e. G 2. roof. This can be calculated using predictions published. external walls. internal finishes. • the storey height(s).3.g. landscape. • areas of the brief with special functions of significant cost. G 2. • paved pedestrian areas. paths.7 COST REPORTING If at any time during the design process it becomes apparent that the agreed budget is likely to be exceeded without the brief being changed. • road area and number of car parking spaces.6 INFLATION (a) The prediction of future inflation may not be necessary for some clients. Where the client requests that a particular level of inflation be included in the budget. Where an assessment of inflation is required for more than a few months ahead. External works should include roads. if it becomes Part 2. • the square index or wall/floor ratio (see appendix C to this section).1. The assumptions upon which the prediction is made should be stated.

3 INFORMATION REQUIREMENTS The basic information requirements from the members of the project team to be provided to the quantity surveyor are as follows: (a) Information required from the client: • the budget.1.4. and (d) to provide the opportunity for consideration of life-cycle costs. together with their approximate quantity and quality parameters. the chosen distribution of the resources within the budget to provide a balanced design to meet the client’s needs.2 . • confirmation of the brief.1. SECTION 1 apparent that the whole of the agreed budget will not be required. (b) to set cost targets for the main elements so that.1.4. the targets can be checked and adjustments made so that the overall cost of the project is managed within the budget. Page 8 Part 2.1. (c) Information required from the structural engineer: • outline proposals or alternative structural solutions. together with the outline proposal drawings.1 DEFINITION The cost plan at outline proposals stage is a statement of the probable cost of the project at Design Stage C which sets out the cost targets for the main elements of a building. the client should be informed. (b) Information required from the designer: • outline drawings of the building and site works indicating alternative solutions. (c) to provide the design team with controls which communicate the costs. • confirmation of the programme for design and construction times stated in the budget report. OBJECTIVES (a) To describe. as the design develops. Section 1 (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook G 2. the client should state the preferred alternative.PART 2. • acceptance or variation of any other matters within the budget report. and • authority to proceed. quality and time parameters to be followed. 2.4. and • an indication of the preferred specification for the main elements. quantity.4 The cost plan at outline proposals stage I 2. Where alternative budgets have been quoted in the budget report. G 2.

• a broad indication of the specification. (b) Evaluation should be made of the alternative forms of construction. of the ‘key’ elements.1. • a statement of floor areas. • an updated cash-flow forecast. The Surveyors’ Construction Handbook Part 2. SECTION 1 (d) Information required from the services engineer: • outline proposals for installations. they are likely to be those with major financial consequences.PART 2. and service installations. and • an update of inflation projections.4 METHODS OF PREPARATION (a) The method of preparation should be appropriate to the level of detail available for each element and may be: • the measurement of approximate quantities and the application of rates to the quantities generated. and • the cost plan with target costs for each element. • allowances for contingencies and design reserve. (h) Information to be provided to other consultants: • such quality and quantity parameters as relate to their design responsibilities and target costs. and to include the structural and service elements.g.) (f) Information to be provided to the client involves a report containing: • a statement of cost. The basic information requirements from the quantity surveyor to the design team are as follows: (An example of a format for the quantity surveyor’s report is given in Appendix B to this Section. (g) Information to be provided to the designer: • a copy of the documents sent to the client. • comparison of the requirements with analyses of previous projects of a similar character. However.4. after acceptance by the designer of its visual implications. with advice thereon. (e) Information required from specialist consultants: • outline proposals. • a request for decisions on any alternative proposals and/or procurement routes. and • an indication of the preferred specification. e. • use of appropriate cost models. The ‘key’ elements on each project will vary. structural elements. and/or • a mixture of the above methods. Section 1 (4/98) Effective from 1/6/98 Page 9 . indicating any alternative systems. or systems. G 2.

1. it is recommended that the quantity surveyor take account of proposals made by the other members of the design team and their effects upon both the design and construction programmes. The parameters should follow those included at the budget stage. (b) If completion dates are critical.5 STATEMENT OF QUANTITY AND QUALITY PARAMETERS The quantity surveyor’s statement should include the following: (a) Quantity Confirmation of information provided at budget stage with the addition of: • the areas of the accommodation divided into use classification (e. plant-room space. when considering a proposed change. in a similar format to that provided at budget stage. totalled to give gross floor area.g. in principle. the use of consultants for additional work should take into account any consequential addition to professional fees. • in all considerations of alternative proposals. In particular. this applies to consulting engineers. to the proposal. Section 1 (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook . • where the proposal involves additional cost over the elemental target. • no proposal should be incorporated into the cost plan without the agreement of the quantity surveyor. or to the scope of the work. be based upon the outline drawings and preferred specifications.1. circulation space). (b) Quality • a statement of quality and specification.PART 2.4. components and/or systems should be selected with a view to the availability of acceptable alternatives so as to avoid supply difficulties. and where possible.7 CONTROLLING CHANGES TO THE COST PLAN Should a change be proposed to the outline cost plan. SECTION 1 G 2.1. the following procedures should be implemented: • all relevant members of the design team should be informed.4. the quantity surveyor should identify to the design team alternative savings that are available in order to maintain the overall budget. whose fees are calculated only on specific parts of the project. • the designer should confirm his agreement. and Page 10 Part 2.6 DESIGN AND CONSTRUCTION PERIOD (a) In establishing the outline cost plan.4. and his confirmation or otherwise that the proposal can be met within the elemental target. any likely effect on the design and construction programme. • the quantity surveyor should take into account. G 2. sanitary accommodation space. office/classroom space. or would cause the total budget to be exceeded. and • a schedule of those items for which lump sum allowances have been incorporated and a note on the sources of this information. expanded to incorporate additional information. G 2.

and • authority to proceed.5. (c) Information required from the structural engineer.5 The Cost Plan at Scheme Design Stage Note: If the cost plan has been produced at an earlier design stage only updating may be required. the quantity surveyor should communicate to the client and all members of the design team. (b) To set cost targets for all the elements so that. G 2.1. together with the quantity and quality parameters described by the scheme drawings and specifications. the targets are checked and adjustments made in order that the overall cost of the project is managed within the budget. and (c) To provide the whole design team with a control document which describes.5. quantity. • confirmation of the brief. quality and time parameters which have been adopted. (b) Information required from the designer: • scheme drawings and scheme specifications. The Surveyors’ Construction Handbook Part 2. 2. in detail.4. • scheme drawings and scheme specifications.PART 2.3 INFORMATION REQUIREMENTS The information to be provided to the quantity surveyor is as follows: (a) Information required from the client: • confirmation or otherwise that the cost plan prepared at the outline stage is accepted.5.2 . as the detail design develops. • an indication of any preferred alternatives in a previous cost plan.1. G 2. Section 1 (4/98) Effective from 1/6/98 Page 11 G 2.1. the effects of such change and provide an updated cost plan.1. OBJECTIVES (a) To set out for the design team the actual distribution of resources described by the scheme design.8 INFLATION Any changes in inflation forecasts should be reported periodically. SECTION 1 • upon the determination of a proposed change. I 2.1. the costs. • acceptance or variation of any other matters within the previous cost plan report.1 DEFINITION The cost plan at scheme design stage is a statement of the cost of a selected design at Design Stage D which details the cost targets for all elements of a building.

• a statement of the specification. The basic information requirements from the quantity surveyor to the design team are as follows: (An example of a format for the quantity surveyor’s report is given in Appendix B to this Section. e. where appropriate. and • provisional indication of reinforcement weights. where appropriate.PART 2. and • the cost plan with target costs for each element. (d) Information required from the services engineer: • scheme drawings and scheme specifications. Major elements will normally need to be priced in greater detail. G 2. • a statement of the relevant life-cycle costs. where appropriate. (h) Information to be provided to the other consultants: • such quality and quantity parameters as relate to their area of design and their target costs. (b) The preliminary engineering and specialist services scheme drawings and outline specification notes will be required from the consulting engineers. The degree of detail to be measured should relate to the cost significance of the elements in the particular design. (g) Information to be provided to the designer: • a copy of documents sent to the client.g. (e) Information required from specialist consultants: • scheme drawings and scheme specifications. Some elements may still be most suitably priced on an elemental unit rate basis. heat loads.5.1. • a statement of the floor areas. and • detailed design parameters. The pricing should be similarly related. and electrical loads. This ensures that the likely implications of the builder’s work are understood by the design team and the costs are taken into account. • a cash-flow forecast. involves a report containing: • a statement of the cost. from which approximate quantities of equipment can be measured and priced using all-in rates. Section 1 (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook . SECTION 1 • confirmation of floor loadings and the like. Page 12 Part 2. Pipework and cables will normally still need to be priced on an overall basis relating to floor area or service points at this stage.) (f) Information to be provided to the client. where the cost significance is low. and • an update of inflation forecasts.4 METHODS OF PREPARATION (a) The method of preparation is normally by measurement of approximate quantities from the proposed scheme drawings. • a statement of the proposed design and construction programme.

5 STATEMENT OF QUANTITY AND QUALITY PARAMETERS The quantity surveyor’s statement should include the following: (a) Quantity confirmation of the information provided at outline proposal stage (b) Quality a statement of quality and specification based on scheme drawings in sufficient detail to provide control of the production information drawings by the designer and consultants (c) Life-cycle information a statement of the likely relevant maintenance. the cost remains within the budget.1. and running costs which are required or implied by the scheme design proposals and the expected life of major components.1.1. OBJECTIVES (a) To confirm that as the design develops.6. this takes the form of measurement of approximate quantities from the consultants’ drawings to provide a check on the quantity and quality of parameters set down in the appropriate cost plan.5. (b) The dominant considerations in deciding the priorities for cost checking elements are as follows: The Surveyors’ Construction Handbook Part 2.5.5. Section 1 (4/98) Effective from 1/6/98 Page 13 G 2. G 2.7 2.1 DEFINITION Cost checking is the process of calculating the costs of specific design proposals and comparing them with the cost plan during the whole design process (Design Stages D–F).3 PRINCIPLES (a) The methods will vary according to the stage reached in the design process.1. The gross floor area should always be the first check at any stage.1.1.6. Normally. however.4. 2. G 2.7. INFLATION Any changes in inflation forecasts should be reported. SECTION 1 G 2.PART 2.1. and (b) To reduce the abortive design work and lost time caused through proceeding too far in the design process before realisation that the budget will be exceeded.1.6 Cost Checking I 2.2 .6 CONTROLLING CHANGES TO THE COST PLAN The principles have been described in G 2. cleaning.6.

and (b) To provide suitable analyses for future projects. and • If there are significant changes from the initial tender documents. If.2 OBJECTIVES (a) To obtain a contract sum within the approved budget.4 IDENTIFICATION AND NOTIFICATION OF EXCESS COSTS (a) It is recommended that judgement be applied before notifying the designer of possible excess expenditure in a particular element. SECTION 1 • the cost significance of an element related to the total cost of the project. the excess (or saving) revealed in an element is relatively small and there are still a number of elements to be checked. it is usually more appropriate to advise the designer of the difference and to suggest that action is held until other cost checks have been carried out.7.1. (b) It is important for the quantity surveyor to maintain records of the cost checking process. Identification of the drawings and information upon which the cost check has been based is also important. however.PART 2. then such excess should be reported immediately and the design team be asked to consider modification of the cost plan. it becomes necessary to cost check it before checking any elements of low variability but of the same overall cost significance. and to set down in summary the value of the elements cost checked compared with the cost plan targets. 2. consideration should be given to the need for seeking revised tenders. (b) The following points should be noted: • In most cases.1. Should a wide range of cost be possible in an element.6. If an excess revealed during cost checking is of such significance that it is highly improbable that compensating savings are available elsewhere.1.7.7 Action after Receipt of Tenders G 2. Section 1 (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook . due to market conditions or late changes in designs and specification. If. Page 14 Part 2. G 2. adjustments need to be made to a tender. and • the known variability in cost of any element. G 2.1 DEFINITION (a) Action after receipt of tenders is that required at the tender stage (Design Stage H) in analysing each tender and updating information for the client and consultants. information on potential savings will need to be identified by the design team.1. sound cost planning will produce tenders within budget.

• any further information in respect of the construction programme. (Where the client body is a Public Authority or similar. (c) Information required from other sources: • indexing of the tender by BCIS to establish confirmation of tender levels. The basic information requirements from the quantity surveyor are as follows: (d) Information to be provided to the client involves a report containing: • a statement of the cost reconciled to the latest budget. if appropriate. and • an updated preliminary cash-flow forecast. • details in respect of any analyses required. consideration of this matter should be given during the preparation of the Bills of Quantities). if required. and • a detailed reconciliation between the tender and the latest cost plan. Section 1 (4/98) Effective from 1/6/98 Page 15 . where standard analyses are always required. (b) Information required from the designer.PART 2. • a provisional list of potential areas of saving (to be considered during tendering period and before tender acceptance). where appropriate. building surveyor and other consultants. SECTION 1 G 2. if required. (f) Information to be provided to the other consultants: • such information as relates to their area of design and associated costs.1. and • permission to submit analyses to BCIS if appropriate. The Surveyors’ Construction Handbook Part 2. and • a detailed list of drawings and other sources of data from which to determine actual savings. architect.7. (e) Information to be provided to the designer: • a copy of documents sent to the client.3 INFORMATION REQUIREMENTS Information to be provided to the quantity surveyor is as follows: (a) Information required from the client: • acceptance of potential savings.

Transport and the Regions. • Ti Wessex – a range of price books covering most areas of construction. • acute shortages in specific trades at different times. Appendix A (05/03) Effective from 1/7/03 Page 1 . A2 A2. APPENDIX A Appendix A: Sources of cost information A1 OBJECTIVE To ensure that all costs used are up to date and accurate. A2. Section 1. The use of published information The following points should be considered carefully when using any of the above information: • differential rates of inflation on various aspects/elements of the building. • specialist suppliers’ quotations.3 Published indices • tender indices and cost studies on regional variations – BCIS.PART 2. and • Glenigan Cost Information Services – Material Price Guides. A2.1 SOURCES Elemental cost analysis • in-house cost analyses of previous projects. • Spon’s (E & FN Spon) – a range of price books covering most areas of construction. • Price Adjustment Formulae for Construction Contracts (NEDO) Indices – Department of the Environment. • Architects’ Journal. • Griffiths Building Price Book. • Building Cost Information Service (BCIS). and • Building. Note: Current editions of price books are available from RICS Books. • external published information. • Laxton’s – a range of price books covering most areas of construction. • regional variations. and • Architects’ Journal. • the published indices of the Department of Trade and Industry. • market conditions applicable to information based on project specific information such as elemental cost analyses and bills of quantities. Unit rate information • in-house priced bills of quantities. • Building Maintenance Information’s Building Maintenance Price Book. SECTION 1.2 A3 The Surveyors’ Construction Handbook Part 2.

and site-specific constraints in either the analysed or current project.PART 2.g. initial quotations from specialists are likely to be low. Care must therefore be taken to ensure that the analysis used is consistent with current building standards. e. special planning conditions applying either to the analysed or to the current project. firm price or fluctuating contract terms. SECTION 1. Section 1. the assumption that cost information in elemental cost analysis is tendered price information. whereas a significant amount could be in prime cost or provisional sums. Appendix A (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook . high levels of inflation demand constant checking and revision of rates and prices. APPENDIX A • • • • • • • • consideration of the tender period of the analysis and its relationship to the current project’s tender period. energy conservation measures have increased the ‘U’ value (a measurement of thermal resistance) requirements for insulation properties of roofs and walls. building regulations can be statutorily amended. Page 2 Part 2.

3 B2. The ‘Report to Client and Design Team’ is intended as a guide as to what can be provided to a client to ensure that there is a clear statement of the budget or cost limits. A copy of information sent to the client should also be sent to the design team. FORMAT The presentation of information to the client and design team should be of a high standard. The presentation and content will need to be adjusted to meet the specific requirements of individual organisations and their clients. B2 B2.2 B2. The level of detail to be included in these documents should relate to the size and complexity of projects.PART 2. Simple projects may require less information than shown in the example. The example format included here is intended to be an example of good practice showing the main areas of information that may require coverage. its inclusions and exclusions. Budget and cost plans result from the application of a high level of professional skill. APPENDIX B Appendix B: Format of budget and cost plans B1 B1. designer and consultants.1 OBJECTIVE To communicate clearly the basis of the budget and cost plans to the client. Appendix B (05/03) Effective from 1/7/03 Page 1 . SECTION 1. complex projects significantly more. Provision is made for the quantity surveyor to suggest alternatives which the client may wish to consider. These are client orientated.1 B2. and the format of documents should reflect the importance that the profession attaches to this service. Additional information to be sent to the design team once the cost plan is prepared is set out in the ‘Report to the Design Team’. Section 1. together with the total programme to which the budget relates and the standards which have been used in its calculation.4 The Surveyors’ Construction Handbook Part 2. The main parameters affecting the cost targets should be clearly set out.

APPENDIX B REPORT TO CLIENT AND DESIGN TEAM (referred to in B2. SECTION 1.2 of this appendix) CONSTRUCTION BUDGET AND PROGRAMME Client Project Location Budget serial number: COSTS (for basis see sheet ....PART 2... Section 1.) Price base date: New building work: Site works: Alterations: Construction costs (at stated price base) Estimate inflation to probable tender date of Construction costs at tender Estimated increased costs payable to contractors during construction period Construction costs at completion Professional fees of all consultants including expenses Value Added Tax – On construction On fee Total budget of construction works and fees % % Exclusions from budget Page 2 Part 2.. Appendix B (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook .

PART 2. APPENDIX B zzz REPORT TO CLIENT AND DESIGN TEAM (continued) TIME Preliminary/Final Programme (weeks) as Budget Cost 0 Client decision to accept budget and proceed Final brief and scheme design approved Alternative 1 0 Alternative 2 0 Receipt of first tenders Formation of contract Construction commencement Client occupation: phase phase phase phase Total Cost Variation (including fees) Contractor and/or construction implications of programme The alternative time scales shown make the following assumptions: Alternative 1 Alternative 2 CASH FLOW – FORECAST Quarterly from acceptance of budget and authority to proceed (including fees) 1Q As Budget Cost 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q 11Q 12Q Balance Total Alternative 1 Alternative 2 Note: All figures in thousands ’Occupation quarter indicated by ‘O’ Construction commencement quarter indicated by ‘C Balance shown normally payable during first year of occupation The Surveyors’ Construction Handbook Part 2. Section 1 Appendix B (4/98) Effective from 1/6/98 Page 3 . SECTION 1.

APPENDIX B REPORT TO CLIENT AND DESIGN TEAM (continued) BASIS OF BUDGET Areas Schedule of accommodation Area m2 Min. floor loadings – kN/m2 Comment TOTAL FLOOR AREA Quality Standards External elevations: Internal finishes: Heating & ventilation: Lighting: Site works: Other (specify): Exclusions from budget: Page 4 Part 2.PART 2. Section 1 Appendix B (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook . floor to ceiling height (m) Max. SECTION 1.

SECTION 1. APPENDIX B REPORT TO CLIENT AND DESIGN TEAM (continued) Alternative standards Alternatives Cost: extra/saving Comment Budget prepared by: Signature: ____________________________________________ Date: ____________________ Firm: ____________________________________________ ____________________________________________ ____________________________________________ ____________________________________________ The Surveyors’ Construction Handbook Part 2. Appendix B (05/03) Effective from 1/7/03 Page 5 . Section 1.PART 2.

m. m. Section 1. of storeys m2 (Perimeter on plan Floor to ceiling heights: lowest floor intermediate floors highest floor Floor/roof zone Calculated external wall/floor ratio Density of vertical division Proportion of glazed external wall area m. SECTION 1.3 of this appendix) TECHNICAL QUANTITY AND QUALITY PARAMETERS Budget serial number BUILDING Quantity Gross floor area Maximum square index No.PART 2.) Calculated partition/floor ratio Lifts ____________________________ Stairs: number of flights Number ____________________ Type _______________________________ Structural Ground bearing pressure Floor loadings: kN/m2 Ground water level Ground Intermediate Highest Roof loading: kN/m2 (maximum live) kN/m2 (maximum live) kN/m2 (maximum live) kN/m2 (maximum live) Environmental Fabric ‘U’ values: Roof Walls (average) Ground floor Air change rates and air temperature (Specify spaces and rates/hour and minimum temperatures) Heating load Hot water load kW kW ( W/m2) W/m2°C W/m2°C W/m2°C Page 6 Part 2. APPENDIX B REPORT TO DESIGN TEAM (referred to in B2.) m. m. Appendix B (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook . % (length of partitions and internal walls measured over door openings m.

Section 1 Appendix B (4/98) Effective from 1/6/98 Page 7 . SECTION 1. APPENDIX B REPORT TO AND DESIGN TEAM (continued) REPORT TO CLIENT DESIGN TEAM (continued) TECHNICAL QUANTITY AND QUALITY PARAMETERS (continued) Lighting levels (Specify spaces. lux level and load in W/m2) Total lighting load Total power load kW kW ( ( w/m2) w/m2) Special areas with higher than average service or other costs (specify) Other External Works Site area Road area hectares m2 Car Parking: Number of spaces Area Pedestrian paved area Boundary walls or fencing Other m2 m2 No.PART 2. m2 If quantities calculated from drawings state drawing number(s) etc. The Surveyors’ Construction Handbook Part 2.

.... SECTION 1..PART 2............................................... APPENDIX B REPORT TO AND DESIGN TEAM (continued) REPORT TO CLIENT DESIGN TEAM (continued) COST PLAN Element Building: ................ Total cost Cost per m2 Element unit quantity Element unit rate 1 2A 2B 2C 2D 2E 2F 2G 2H 2 Substructure Frame Upper floors Roof Stairs External walls Windows and external doors Internal walls and partitions Internal doors Superstructure 3A Wall finishes 3B Floor finishes 3C Ceiling finishes Internal finishes 4 5A 5B 5C 5D 5E 5F 5G 5H 5I 5J 5K 5L 5M 5N 5O 5 Fittings Sanitary appliances Services equipment Disposal installations Water installations Heat source Space heating and air treatment Ventilating systems Electrical installations Gas installations Lift and conveyor installations Protective installations Communications installations Special installations Builder’s work in connection Builder’s profit and attendance Services Building sub-total 6A 6B 6C 6D 6 7 Site works Drainage External services Minor building works External works Preliminaries Total (less contingencies) Contingencies Construction costs 8 Page 8 Part 2................................. Section 1 Appendix B (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook ...

.............. APPENDIX B REPORT TO CLIENT DESIGN TEAM (continued) REPORT TO AND DESIGN TEAM (continued) COST PLAN Elements Building: .............PART 2........................... SECTION 1...... Section 1 Appendix B (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook ........................................ Specification included in budget/cost plan Alternatives Cost + or – 1 Substructure 2A Frame 2B Upper floors 2C Roof 2D Stairs 2E External walls 2F Windows and external doors 2G Internal walls and partitions 2H Internal doors 3A Wall finishes 3B Floor finishes 3C Ceiling finishes 4 Fittings and furnishings 5A Sanitary appliances 5B Services equipment 5C Disposal installations Page 9 Part 2.....

..................... Section 1 Appendix B (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook ..... Specification included in budget/cost plan Alternatives Cost + or – 5D Water installations 5E Heat source 5F Space heating and air treatment 5G Ventilating systems 5H Electrical installations 5I 5J Gas installations Lift and conveyor installations 5K Protective installations 5L Communication installations 5M Special installations 5N Builder’s work in connection with services 5O Builder’s profit and attendance on services 6A Site work 6B Drainage 6C External services 6D Minor building works Page 10 Part 2. SECTION 1............................... APPENDIX B REPORT TO CLIENTDESIGN TEAM (continued) REPORT TO AND DESIGN TEAM (continued) SPECIFICATION Elements Building: .......................PART 2...................

PART 2................................................ APPENDIX B REPORT TO CLIENTDESIGN TEAM (continued) REPORT TO AND DESIGN TEAM (continued) COST TARGETS Building: ... Section 1 Appendix B (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook ........... Elements Price base: ........................................... SECTION 1..... Parameter Rate Target cost 19 ...... Cost per m2 Page 11 Part 2.....

etc. SECTION 1. etc. As the formula includes the perimeter of the building. WALL TO FLOOR RATIO This is a simple method of expressing the relationship of the external walls to internal floor area. measured over doors A = gross internal floor area d = density of vertical division The Surveyors’ Construction Handbook Part 2. as can also multi-storey buildings. It describes the degree to which the perimeter length of an actual building exceeds that of a building of the same area which is a perfect square. Section 1 Appendix C (4/98) Effective from 1/6/98 Page 1 . with a constant shape on each floor. that a building contains. Some of the most common formulae and some worked examples are given here.PART 2. It is the ratio of the area of external walls (including windows and doors) to the gross internal floor area. estimates of elemental quantities can be produced using standard formulae and typical assumptions. Formula w = e A where e = area of external walls including windows and doors A = gross internal floor area w = wall to floor ratio SQUARE INDEX This is an alternative way of expressing the relationship between the floor area and the external walls. Any single storey building can be described. APPENDIX C Appendix C: Element Unit Quantities Generation for Hypothetical Buildings Where very little quantity information is available at the early stages of a project. – Formula d = ( 1 åp) + L 2 A where p = sum of the perimeter lengths of a building measured on each floor L = total length of partitions. loadbearing walls. it takes into account the contribution to the enclosure of spaces that this makes. Formula s = p — 4í a where p = perimeter length on plan a = area on plan (not the gross floor area in multi-storey buildings) s = square index DENSITY OF VERTICAL DIVISION This density provides a coarse measure of the amount of partitioning.

or similar ways. e. or for checking the approximate cost difference of alternative design solutions. window and door area = external walls × w = 945 m2 × 30% = 284 m2. The quantities calculated in this.7 Percentage of windows and doors in external walls*: 30% Density of vertical division*: 0. gross floor area = 1350 m2 (including circulation) Site area dictates a two storey solution = 2 storeys Average floor to ceiling height: 2. † A percentage can be used to split ‘wall’ from ‘window’. Assumed floor/roof zone: 0. Square index*: 1.PART 2. can then be used with selected element unit rates to calculate budgets and cost plans for projects in the earliest stages of design. Section 1 Appendix C (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook . SECTION 1.3 Area of ground floor = 675 m2 * These parameters can be based on information from typical or similar schemes.g.6 m.7 m. Page 2 Part 2.4 Wall to floor ratio*: 0. APPENDIX C Example of element quantity generation for a hypothetical building ASSUMPTIONS From brief.

Section 1 Appendix C (4/98) Effective from 1/6/98 Page 3 . APPENDIX C where A= n= a= s= f= d= w= gross floor area number of storeys ground floor area square index floor to wall ratio density of vertical division percentage of windows and doors in external walls. The Surveyors’ Construction Handbook Part 2. SECTION 1.PART 2.

E & FN Spon. 1980 Ashworth. London... Oxford. K. D. 1982 Brandon. SECTION 1. DETR. P. Hutchinson.. Blackwell Science. 2002 Bathurst. Oxford. Building Economics and Cost Control: Worked Solutions. Tendering and Estimating (2nd edition). Longman. 1987 Buchan.. Oxford. Appendix D (05/03) Effective from 1/7/03 Page 1 . R. 2003 Building Cost Information Service... Blackwell Science.ricsbooks. and Hogg. A. Butterworth Heinemann. D. Standard Form of Cost Analysis: Principles. D. London. Economics. K.). 2001 Ferry. Building Cost Modelling and Computers. Oxford. S. 2001 Ashworth. A... and Weight. P. Ferry. Cost Studies of Buildings (3rd edition). Building Cost Techniques: New Directions. R. Heinemann. and Grant. J. Successful Construction Cost Control. (ed. Feasibility Studies in Construction. I. D. Willis’s Practice and Procedure for the Quantity Surveyor (11th edition). New York. W. 2001 Ashworth.com). London. London. R. E. S. Kingston upon Thames. (ed. P. 1996 Building Cost Information Service. John Wiley & Sons. Contractual Procedures in the Construction Industry (4th edition).). Butterworth Heinemann.. 1980 Brandon. and Brandon. N. F. Mitchell. Copies of articles and older books are available from the RICS Library whilst current books are available from RICS Books (www. Section 1. Butterworths. and Construction Task Force. APPENDIX D Appendix D: Further reading A selection of further reading is given below. Pre-Contract Studies: Development. P. 1969 (reprinted August 2001) Cartlidge. 1990 The Surveyors’ Construction Handbook Part 2. A. J. P. N. A. Fleming. 1998 Gruneberg. A. RICS. and Mehrtens. Practical Cost Planning: A Guide for Surveyors and Architects. J. 1982 Chudley. D. Blackwell. London. L. London. 1999 Ashworth. A. Rethinking Construction. Estimating for Builders and Surveyors (2nd edition). Building Cost Control Techniques and Economics (2nd edition).. E. Harlow. and Greeno.. F. Longman. E & FN Spon. Instructions and Definitions. S. 1999 Egan.. 1983 Ashworth. D.. and Butler. Elements for Design and Build. London. Whilst not comprehensive it is considered to be appropriate. Cost Planning of Buildings (7th edition). BCIS. H. H.PART 2.. BOOKS Ahuja. E. Building Construction Handbook (4th edition).

. Blackwell. J. Constructing the Team: Joint Review of Procurement and Contractual Arrangements in the United Kingdom Construction Industry: Final Report July 1994. Spon. H. Blackwell. 1987 Latham. Pre-Contract Practice and Contract Administration for the Building Team (9th edition). Oxford. Section 1. J. M. Building Services Handbook (2nd edition). Macmillan. Stallworthy. and Liverpool John Moores University. Blackwell Scientific Publications Ltd. et al. Oxford. Estimating and Cost Control. 1994 Masterman. Gower Technical Press.. D. 1980 Stone. 1997 Kelly.. J... New York. Oxford. London. Blackwell Science. F. John Wiley & Sons. F. and Williams. A. Oxford. M. Building Design Evaluation: Costs in Use (3rd edition). Blackwell. London.. R. M. A. 2002 Jaggar. Management of International Construction Projects. and Department of the Environment. 2001 Miller. O.. 1992 Neil. Pergamon Press... section 1 of this handbook) Seeley. 2003 Institution of Civil Engineers.. and Greeno. 1985 Jaggar. S. Accelerating Change. Butterworth Heinemann. Ruthtrek Limited. A. et al. Project Cost Control in Action (2nd edition). Kingston upon Thames. Basingstoke. Building Design Cost Management. J. Oxford... Constructing Cost Estimating for Project Control. Design Production and Organisation (3rd edition). I. E. Prentice Hall Inc.. F. Best Value in Construction... Design and the Economics of Building. P. Introduction to Building Procurement Systems (2nd edition). Building Economics: Appraisal and Control of Building Design Cost and Efficiency (4th edition). 2002 Hall. Herne Bay. London. 1961 Pilcher. and Morton. Civil Engineering Cost Analysis (CECA). 2002 Kharbanda. 1996 Stone. 2001 McCabe. 1982 Nisbet. Project Cost Control in Construction (2nd edition). E & FN Spon. APPENDIX D Hackett.PART 2. 2002 Ward. et al.. Spon Press. Oxford. Appendix D (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook . Oxford. Developing an Appropriate Building Procurement Strategy (see part 3. SECTION 1.. Aldershot. Rethinking Construction. S. A. BCIS. Thomas Telford. R. P. Batsford. 1994 Royal Institution of Chartered Surveyors.. Building and Civil Engineering Cost-Value Comparisons. London. R. D. Cost Engineering for Effective Project Control. HMSO. N. 1992 Page 2 Part 2. 1983 Strategic Forum for Construction. Building Economy. Benchmarking in Construction. P. L. 1995 Jaggar. New Jersey. D.

. T. Section 1. Aldershot. H. 1968 Morris. ‘Interpersonal Communication in Cost Planning During the Building Design Phase’. Construction Industry Research and Information Association. M. R. HMSO. 28(4) 1990. ‘A New Approach’. and Skitmore. APPENDIX D Wilson. M. J. 1990 Southgate. P. 34 (1) January 1992. Life Cycle Costing: a Radical Approach. 17–24(8) Bowen. 4. ‘Procurement – the Key Area for Cost Control’. ‘Cost Control in Building Design’. London. ‘Meeting the Problems of Cost Control Systems’. 11(3) November 1988. and Gunner. M. ‘Consultant Cost Control in The Pacific Rim’.. 24(4) August/September 1988. J.. R. Building. D. K. Chartered Institute of Building (Construction Papers 67). CIRIA Report 122. B.PART 2. et al. Gower Publishing. Integration of Time and Cost Control. (52) April 1996. 25–31(7) Farrow. ‘Modelling Standard Cost Commitment Curves for Contractors’ Cash Flow Forecasting’.. second edition March 1957. Construction Computing. 11(4) July 1993... A. P. 14(11) November 1992. D. and Edwards. 271–283(13) Ministry of Education Building Bulletin No. D. A. Building Technology & Management. O. 1991 Gilmour. A. R and D Building Management Handbook 4. Building Services. Construction Management & Economics. J. ‘A Rational Approach to Cost’. third edition 1972 Ministry of Public Building and Works/International Tutor Machines Ltd. 1983 ARTICLES AND REPORTS Abdullah. F. ‘Cost Planning Engineering Services Contracts’. and Tyler. J. 260(7889) 21 April 1995. Chartered Institute of Building (Construction Papers 7). Ascot. Cost Engineer. ‘The Accuracy of Construction Price Forecasts’. R. and Price.. Construction Management & Economics. ‘A New Approach to Early Stage Estimating’. S. University of Salford. 1996 Ferry.. Appendix D (05/03) Effective from 1/7/03 Page 3 . 395–404(10) Costing Services. Salford. Performance Setting and Monitoring on Building Projects for Contractors. Cost Control Handbook (2nd edition). Cost Study. A. 1992 Betts. Chartered Quantity Surveyor.. P.. 35–36 Watson. SECTION 1.. M. London. T. 36–38(2) Kaka. K.. J. (1996) 14. Z. first edition March 1951.. 33(1) Skitmore. and Flanagan. and Rutter. A. 14–16(3) Baxendale. 8–10(3) Watson.. 11(9) May 1989. 12–13(2) The Surveyors’ Construction Handbook Part 2. Cost Engineering. Ascot. Chartered Quantity Surveyor.

operating costs and the cost or benefit of the eventual disposal of the asset at the end of its life).2. • evaluate total building options. 2. Life cycle cost techniques can be used.1. • determine optimum maintenance strategies. The life cycle cost (LCC) of an asset is defined as the present value of the total cost of that asset over its operating life (including initial capital cost. The following Sub-sections expand on this trend by covering recent changes in the industry and their effect on LCC.5. to: • evaluate design options at the elemental or component level.1 The Client Context 2.2.1 Following the recession of the early 1990s construction clients are generally more streamlined and competitive and some recognise that their ongoing property costs may provide them with the business ‘edge’ they need. for example. for example refurbishment versus new build.2. The objective of this Section is to inform chartered surveyors of the increasing need to adopt life cycle costing (2. Worked examples for the above are included in 2.PART 2. • analyse relocation strategies. Its use is Part 2. SECTION 2 PART TWO: CONSTRUCTION DESIGN & ECONOMICS I SECTION 2: LIFE CYCLE COSTING Introduction It is becoming increasingly important that investment appraisal uses a whole life approach in a more systematic way than at present. Section 2 (4/99) Effective from 1/6/99 Page 1 2. Major construction clients are now insisting upon an analysis of life cycle costs and not just capital costs.2. occupation costs.2 The Surveyors’ Construction Handbook .1. VALUE ENGINEERING Value engineering involves preparing structured option appraisals during the design process so demonstrating value for money for clients.2. There is therefore increased attention to life cycle costing. and • determine sinking fund requirements to finance planned maintenance programmes.1) and to introduce them to the techniques and their application.

CONSTRUCTION (DESIGN AND MANAGEMENT) REGULATIONS 1994 The Construction (Design and Management) Regulations 1994 place a specific duty upon clients and their designers to consider the potential hazards associated with the construction process during design. or of any person who may be affected by the work of such a person at work.2. and furthermore to consider the health and safety implications of maintaining the structure when complete. calls for a 30% real reduction in construction costs. M.PART 2. Such increased focus on maintenance may therefore encourage greater consideration of maintenance costs. SECTION 2 increasing and with it comes the opportunity and need for LCC to be part of the options appraisal criteria.4 (ii) It follows that the selection of materials for certain elements of a structure that may involve maintenance. HMSO London Page 2 Part 2. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . Similarly marble flooring is cheaper than cork tiles over a 60-year period and while the decision to use marble is economically sound it also removes health hazards 1 Latham.1. (1994).1. complies with the spirit of Regulation 13.. 2. to combat at source risks to the health and safety of any person at work carrying out construction work or cleaning work in or on the structure at any time. or of any person who may be affected by the work of such a person at work. This principle is enshrined in Regulation 13(2)(a)(i) and (ii) which states: “(2) Every designer shall: (a) ensure that any design he prepares and which he is aware will be used for the purposes of construction work includes among the design considerations adequate regard to the need: (i) to avoid foreseeable risks to the health and safety of any person at work carrying out construction work or cleaning work in or on the structure at any time.” 2. For example. Constructing the Team: Joint Review of Procurement and Contractual Arrangements in the United Kingdom Construction Industry: Final Report. the selection of PVCu window frames with ‘easy clean’ hinges involves limited maintenance and allows cleaning from the inside. This statement includes life cycle costs.2. Sir. The report also strongly advocates the need to ‘build right first time’ in which environment life cycle cost calculations (involving assumptions about future maintenance) have more credibility.3 THE LATHAM REPORT Sir Michael Latham’s report Constructing the Team1. (particularly where access to those elements involves working at height).

it lasts longer. This service will include the management of a building which should be heated. cleaned.2. The use of life cycle costing places initial capital cost in the context of future maintenance expenditure. It is therefore critical that the provider accurately predicts the cost in use of the service or the facility over its operational life so that he can calculate the cash flows generated by the assets over the term of the contract.1.PART 2. 2. For example.2. lighted. energy conscious refurbishment of buildings and passive cooling techniques versus air conditioned design. cooled.5 THE PRIVATE FINANCE INITIATIVE (PFI) The PFI is driven by a cash flow which is achieved by the private sector provider delivering a service to the client. Section 2 (4/99) Effective from 1/6/99 Page 3 .1. Typical investments for analysis would be economic thickness of insulation. uses less The Surveyors’ Construction Handbook Part 2. SECTION 2 associated with fumes and vapour when cork has to be resealed. There is common feeling that property overheads are too large. ENERGY EFFICIENCY ISSUES IN RELATION TO BUILDING PROJECTS Studies by the Building Research Establishment through the BRECSU (Building Research Energy Conservation Support Unit) ‘Best Practice Programme’ have found that energy consumed to heat. light and service buildings accounts for almost half of the UK’s energy bill. This cash flow should sufficiently cover all costs and outgoings. building energy management system installations. energy efficient services. Life cycle costs and their accurate prediction. e. however. maintained. By reducing costs over this term it should be financially viable for the private sector to provide a service to the public sector and to achieve an acceptable return. especially prestigious. the selection of the materials referred to above may be more expensive than their traditional counterparts. 2. intelligent buildings. air conditioned property (typically £20/m2 per year in 1991 compared to £15/m2 for the same ‘best practice’ office). and there is considerable scope to reduce it. In purely capital cost terms. Such data is vital so as to negotiate the complexities of the contract to both parties’ satisfaction. Office buildings were found to have the highest energy costs. Energy costs are potentially one of the most controllable items of overheads and life cycle costing can be used as a tool for predicting the benefits of investment in energy efficiency. a manufacturer can supply a light bulb some ten times more expensive than a normal one. control and reduction are critical to the successful performance of a PFI deal. insured and renovated.g. and helps justify decisions which have beneficial health and safety implications. leaving the provider with a surplus or profit which should be commensurate with his risk exposure. with energy bills contributing significantly to the operating costs. secured. To assist this process some suppliers give guaranteed long-term costs. for lifts and kitchen equipment.

conversion to house a growing less mobile and aged population.1. Similarly.PART 2. 2.g. condensing gas boilers can save 10–20% of fossil fuel bills with pay back in five years. However. as more are being converted to alternative uses it is probably only a matter of time before investors in property call for properties to be constructed with a view to extending the building’s usable life. Similarly. Such a concept will require building layouts and structures to be more flexible with maintenance.1. raised flooring or greater storey heights to demonstrate continual viability for future generations. A cost in use study at design stage may justify larger bay sizes.2.e. Significantly it is also the third largest controllable cost in running a typical supermarket. Such costing is increasingly carried out by a specialist Quantity Surveyor so bringing greater opportunity to focus on M & E life cycle costs which are a significant proportion of a building’s cost in use. A cost in use study would explore the economics involved of using a building for its notional design life and for its intended use in the usual way. Sainsbury has been the first grocery retailer to produce an environmental report and recognises that energy probably accounts for its single biggest direct environmental impact. e. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . re-servicing and conversion to alternative uses being simplified and made more economical.7 MECHANICAL AND ELECTRICAL BUILDING SERVICES The increasing capital cost significance and complexity of M & E services has resulted in greater cost emphasis during the early design stages. e.8 BUILDING SUSTAINABILITY If there is to be a conscious shift of opinion towards sustainable buildings i.g. Buildings have not been traditionally designed for anything beyond their immediate requirement.2. supplementary investigations would explore potential alternative uses for the building and the conversion cost (and possibly the cost in use for a further notional period). then there has to be a simultaneous re-examination of a building’s costs in use or perhaps more correctly costs in uses. Hertfordshire County Council have housing and nursing homes with a 20-year life expectancy. SECTION 2 electricity and performs better. some light industrial units for English Partnerships have been designed for a ten-year life. it could be used to demonstrate the continued asset value of the property and go a considerable Page 4 Part 2. energy use and replacement costs associated with the M & E installations. accounted for by the operation. However. It is also worth noting that oil is becoming increasingly harder to extract and environmental concerns generally will increase in the very near future. 2. Such consideration is more valid the shorter the predicted current building life. If sufficient consideration were to be given at the initial design stage for potential future uses of a building. those which have a viable life expectancy beyond their initial designed use.

2. 2. residual values can be very significant factors in determining the optimum life cycle cost options. To determine and analyse the future costs it is necessary to establish: • the building life. At the end of the life of a building.2. In cases where calculations are based on a relatively short building life. elemental or total building level as appropriate). say 20 years or less. the building (or component) and the land will have a residual value. • any tax implications (see 2.2 THE DISCOUNT RATE The life cycle cost technique is concerned with the assessment of the time stream of costs and revenues that will flow throughout the life of a construction project option.5.2.3). • the cost and frequency of future payments (at the component. and would take into account the residual value. An assessment must therefore be made of the life of the investment – ‘building life’.2. In the case of relatively short life cycles or high value land. explained below.2. • the discount rate (which. minimises the effect of such future payments). Building life is influenced by obsolescence.2. the assessment of the time horizons must be considered with special care. SECTION 2 way to minimising the obsolescent properties which currently dominate certain market sectors. expressed simply. will be expected to hold an interest in the building. When the building life is assessed to be over 40 years.3 includes a residual value in the calculation).1 THE BUILDING LIFE An essential element of life cycle costing is defining the life cycle period to be adopted.2.2 The Life Cycle Costing Calculation INTRODUCTION The calculation generally involves the appraisal of options. Section 2 (4/99) Effective from 1/6/99 Page 5 The Surveyors’ Construction Handbook . 2. the precise life is not critical for the purposes of life cycle costing (as discounting. the causes of which are summarised in Appendix B. for whom the study is being conducted. Typically the relevant building life will be the period over which the organisation. each option having different capital and future costs. Residual values are briefly discussed in Appendix A (and worked example 2.2. is the difference between the interest and inflation rate and is used to convert future payments to present values).PART 2. Part 2.

This recommendation is based on the assumption that when inflation rates are reasonably low. (b) use a rate which requires an ‘explicit treatment’ of inflation in relation to future costs and values. SECTION 2 As ‘money today’ has a different value from ‘money tomorrow’ or ‘money in ten years’ time’.2. implying a real discount rate of between 4% and 5% (i. Some forecasters may take the view that as different categories of cost inflate at different rates. 2. It is therefore essential to involve the client (and his accountant if appropriate) in the process and reach agreement on the discount rate to be used.PART 2. The process of converting ‘future money’ to ‘present money’ is called discounting. the interest rate is 4 to 5% greater than inflation). these differences should be taken into account in setting discount rates. Three approaches on the selection of discount rates are given for guidance purposes and in each the future costs are priced at current prices. These diversities of view ‘before the fact’ make it difficult to recommend any firm guidelines for surveyors to adopt for selecting discount rates. some judgement will need to be made about the degree of risk return (interest) and the likely levels of future inflation rates. i. accountants and clients will all have different views about future levels of inflation and interest rates. Interest rates are particular to the client and the degree of risk. Discounting involves establishing the discount rate to be used.2. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . It is recommended that in the circumstances. It is suggested that it is easier to deal with the former situation where future costs and values are assessed at current prices. Economists. (in this case future costs and values will be priced at today’s prices and adjusted by a factor to reflect future inflation). In making the decision on a discount rate for a particular project.e.e. a technique has to be adopted that will express future costs or revenues in present values.3 DISCOUNT RATE METHODS (a) Test Discount Rate In the absence of better information it is recommended that a test discount rate should be used. where no better information is Page 6 Part 2. less than 15%. there is quite a stable relationship between inflation and the bank base interest rate. There are two main approaches to discounting: (a) use a rate which ‘implies’ inflation of future costs and values (in this case future costs and values will be priced at today’s prices).

and to utilise the ‘all risks’ yield as the discount rate. The Surveyors’ Construction Handbook Part 2. concurrent interest and inflation rates have been added and subtracted in order to clarify the methodology. In the examples of the calculation of discount rates. (b) No risk return discount rate Investment in long-term Treasury Bonds can be assumed as having no risk. This is mathematically imprecise. Section 2 (4/99) Effective from 1/6/99 Page 7 . the discount rate for construction investment could be assessed as: No risk return Construction premium risk (8% × ½) Average construction risk return discount rate 3% 4% ——– 7% ——– (d) A further approach to establishing a discount rate is to analyse transactions involving the sale of comparable properties. a test discount rate of 4% is used.PART 2. This method is often adopted in the public sector where minimal risk associated with the investment is assumed. On this basis the discount rate would be assessed as: Treasury Bond rate of return Less Inflation No risk return discount rate 8% 5% —— 3% —— (c) Average risk premium discount rate The average return on equities reflects the interest required on an average risk. and are a good reflection of the return to be expected on other investments where there is no risk. The actual calculation will need to be compounded. The excess of this rate of return over that expected from the above Treasury Bonds can then be taken as the premium expected for the average risk. SECTION 2 available. On this basis the average risk premium could therefore be calculated as: Average equity rate return Less Treasury Bond rate Average risk premium discount rate 16% 8% ——– 8% ——– Therefore if construction is deemed to be half as risky as equities. Therefore the discount rate can be taken as the Treasury Bond rate less an allowance for the expected rate of inflation.

2.05 = 0.19 Such conversion of future payments to present value provides a basis for comparing alternative expenditures. 2. with assumptions made regarding when payments will occur in the future.e. Selection of a suitable discount rate is crucial as it can overwhelm all other decisions. For example. the present value of £100 to be paid in five years’ time at a discount rate of £4% = £100 × 0. SECTION 2 In the ‘no risk return discount rate’ method. Treasury Bond rate net of inflation (1 = Treasury Bond rate) = ——————————— – 1 (1 + Inflation rate) 1. a risk taking client is less likely to spend money on the building to reduce future costs since he can use this money to get a higher return elsewhere.5. the higher the discount rate the less effect future payments have on the LCC calculation.82192 (from valuation tables at 2.2.PART 2.2.e. the calculation should be as follows: Treasury Bond rate of return Inflation rate 8% 5% Discount rate (i. for example.2.4 THE COST AND FREQUENCY OF FUTURE PAYMENTS The costs are generally dealt with using current prices (using the discount rate to allow for inflation). some calculations will be relatively straightforward (see the option appraisal exercise for internal doors as shown Page 8 Part 2. 2. Depending upon requirements.7 ‘present value of £1’) = £82. For example. the effect of future payments on an LCC calculation is in inverse proportion to the level of discount rates i.857% The same methodology should be adopted for actual calculations using other methods. As an approximation however this may be ignored.02857 = 2.08 = —— – 1 1. (e) In summary. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . Once the discount rate is established valuation tables can be used to convert future payments to present value.4 includes possible sources for such data.

furniture and equipment. (a) Capital costs – include land. professional fees. The significance of any tax benefits and grants should be established with the client. Indeed an additional advantage of life cycle costing is that it requires design assumptions to be stated explicitly rather than implied. The following costs for each category should be considered and where necessary established with the client. The major categories of costs are: • • • • • • • capital costs financing costs operation costs annual maintenance costs intermittent maintenance. An expanded check list of costs is given in Appendix C. • construction period finance charges and long-term finance costs. inter alia. the cost effect of alternative sources of funds. with an intended useful life of more than one year. replacement and alterations costs occupancy costs residual values and disposal costs. Estimates for these costs will be based upon assumptions about future events and should be clearly stated. The Surveyors’ Construction Handbook Part 2. (b) Financing costs – the method of funding the project should include. all expenditure throughout the life of the building could be included if the total building analysis were required. However. For example. Section 2 (4/99) Effective from 1/6/99 Page 9 . SECTION 2 in the worked examples).PART 2. Although current costs are generally used. and gearing. building. it would be unwise to assume that market conditions would remain unchanged for any extended period when tender levels for building work are very depressed. and • the taxation implications of the various options. it is important that future cost assessment should reflect any expected divergence of a specific cost from the level of inflation allowed in the discount rate. The level of detail used will be dictated by the availability of information and the requirements of the client. Some allowance should therefore be made to adjust current building prices to more normal market conditions when pricing future building work. which form assets for the business to use in its operation. Consideration should also be given to • the accounting effect of capital employed. or permanent improvements thereto. the future flexibility of funds in terms of amounts and sources.

cleaning costs. (f) Occupancy costs – the cost of performing the function for which the building is intended (e.2. Page 10 Part 2. In seeking a realistic assessment of the life of materials and components. as not relating directly to the building. energy costs. reference should be made to manufacturers. 2. a more relevant estimate can be produced based on information obtained from manufacturers or maintenance managers. building related staffing costs and other staffing costs.2. land and other assets after the expiry of the life cycle. This would impact on his occupancy costs. a car manufacturer may change to the production of heavy goods vehicles. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . particularly those with an ‘open market value’ will have a significant residual value. and to be offset against a private commercial organisation’s taxable profits. replacement and alteration costs – replacement costs can be produced using normal cost estimating techniques. during the life of the asset. whereas his building related operation costs could be relatively unchanged. producing motor vehicles). Incentives and Business Rates INTRODUCTION This Sub-section deals with the effect of taxation allowances and incentives available for expenditure upon property and construction applicable in the United Kingdom to date. Tax relief is available on both capital and revenue expenditure.g. A glossary of terms is included in Appendix D. Maintenance costs are a charge on the profit and loss account. Many buildings. maintenance managers and other sources of such data (as discussed in 2. Currently. Occupancy costs are distinguished from operation costs.4). (e) Intermittent maintenance. plant. which again reduces the tax payable. As an example. (d) Annual maintenance costs – average maintenance costs are available but once details of design are completed. Some clients might not require the surveyor to take these costs into account. as they relate to costs attributable to a specific process undertaken by the client. (g) Residual values and disposal costs – estimate of the resale value and the cost of disposing of the building. rates. legislation offers tax relief by allowing expenditure upon certain assets to be depreciated. Care should be taken in assessing this value as it can have a major effect on the life cycle costing calculations (see Appendix A).3 Tax Allowances.PART 2. which may change within the life of the building. Capital costs receive this relief by way of capital allowances which are deductible items from the taxpayer’s taxation liability account. SECTION 2 (c) Operation costs – include estimates of rent.

so making the use of efficient plant more attractive than increasing the thermal efficiency of the building.2. of £1.3.2. This varies considerably. Section 2 (4/99) Effective from 1/6/99 Page 11 .000 1.000 889 778 650 i.PART 2. 50% of £1. Following the Finance Act 1985.000 spent on differing types of expenditure. 2.1 The following example shows the net discounted cost. 2. a new oil refinery will have a greater proportion of allowance than a shop unit shell. capital allowances available that relate to Real Property were as follows: The Surveyors’ Construction Handbook Part 2. SECTION 2 The significance of tax relief depends upon the amount of allowable expenditure. For example. being dependent upon the type and function of the asset.2 TYPES OF ALLOWANCES The types of allowances and rates of depreciation often change.000 222 Relief given on maintenance 100% £ 1. after tax relief. The impact of tax relief on the life cycle evaluation lessens proportionately with the ratio of allowable expenditure to the total expenditure and the timing of relief.000 350 1. its design and sophistication (particularly in respect of services) and whether or not the project is a new building or a refurbishment.e. No relief £ Expenditure Tax relief assuming 35% Corporation Tax Net discounted cost after tax relief 1 Where capital allowances are allowed on 50% of capital expenditure £ 1. A detailed estimate of the allowable expenditure should only be prepared if tax relief is found to be significant.000 1111 Where capital allowances are allowed on 100% of capital expenditure £ 1. The impact of tax relief should be sensitively tested at the earliest possible stage. It is also worth noting that capital allowances tend to be greater on plant than on buildings.3. which is dependent on the annual rate of taxation allowances.000 × 25% reducing balance × 35% Corporation Tax with future allowances discounted at 10% per annum (a discounting calculation is required in order to establish the above figures).

A reducing balance computation is achieved each year by first deducting all previous allowance amounts from original cost and then applying the allowable percentage to the balance. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . clients will incur differing overall capital expenditure for the same item depending upon whether they can or cannot recover. discounted. or recover only a proportion of. Different types of allowances. they relate to specific incentives. 2. certain assisted projects or expenditure relates to a transitional period e. These are not treated as taxable and may be disregarded when assessing the capital cost upon which tax relief is calculated. While the building itself may be subject to a 4% straight line allowance the plant and machinery in the building will receive a 25% reducing balance. Currently the running and maintenance costs of an asset are deductible in full (i.PART 2. 100% allowance) against taxable profits in the year of expenditure. It should be noted that the significant part of capital allowance relief on a 25% reducing balance basis comes in the first five to seven years.3.3 VALUE ADDED TAX (VAT) Capital allowances are given against the net capital cost to the taxpayer.g.e. Straight line allowances are calculated as a percentage of original cost and at 4% the allowance is spread evenly over 25 years. Therefore. terms of the Finance Act 1984 (applicable until 31 March 1987). 25% in the first year. SECTION 2 Allowable expenditure Plant and machinery Industrial buildings Agricultural buildings Dredging Scientific research Cemeteries and crematoria Dwelling houses let on assured tenancies – only expenditure expended prior to 1 April 1987 Hotels Enterprise zone building expenditure Mining and certain related construction works Timing or percentage per annum 25% (reducing balancing) 4% (straight line) 4% (straight line) 4% (straight line) 100% Ratio based upon grave spaces used 4% (straight line) 4% (straight line) 100% 40% plus a ratio based upon usable life Subsequent to the Finance Act 1997 first year allowances were changed and at the time of writing were still being finalised. Regional development grants (or their Northern Ireland equivalent) may also be available. 25% of 75% in the second. the VAT. Page 12 Part 2. first year and writing down are explained in the Glossary of Terms (Appendix D). as VAT is part of that capital cost. This is included in the above example where the tax relief amount is a product of the incremental annual writing down allowance.e. and so on. initial.e. i. In certain circumstances allowances may be at a higher rate i.2.

its profit or loss on cost. against which revenue running costs can be charged. (b) the future Corporation Tax and allowance rate at the date of replacement.e. The Surveyors’ Construction Handbook Part 2. certain parameters need to be ascertained: (a) the Corporation Tax and allowances rate that will be current at the date of construction of first use. (c) the Corporation Tax rate current at dates between date of construction of first use and the date of replacement. charges or taxable profits needs to be considered against the relevant Corporation Tax rate. (g) the impact of these adjustments therefore needs to be taken into account in the life cycle costing assessment. and if the owner will have sufficient taxable profits to use the allowances generated in any one year. regulations and entitlements. the entitlements are aimed at providing incentives for commercial organisations and therefore expenditure upon residential property is largely excluded. The recipient has to prove to the Inland Revenue that he qualifies for allowances (i. or if the item or building is to be sold at the end of its economic life. Caution is further necessary as there are specific restrictions. (e) whether the item’s economic life will be shorter than the tax write down period.3.4 CALCULATION OF THE EFFECT OF CAPITAL AND REVENUE ALLOWANCES Before calculating the effect of taxation allowances.5 DYNAMICS The surveyor should therefore appreciate the variables and frequent changes that occur in respect to the application of taxation allowances. (b) the interpretation of entitlement is affected by case law precedents. SECTION 2 2. Entitlements are also restricted between connected persons). (d) whether the owner will be liable to tax during the period between the date of construction or first use and the date of replacement.2. (f) the value of the balancing allowances. 2.PART 2. Section 2 (4/99) Effective from 1/6/99 Page 13 .2. These circumstances will generate a taxable profit or loss on proceeds above or below the tax write down value and will attract a balancing adjustment. These arise because: (a) the Government uses taxation to impose fiscal policy and influence the economy and therefore statutes are introduced amending previous rates of depreciation. This will either generate an added write down amount when it is demolished.3.

Ltd – generally published annually. and/or energy costs.5.2. Page 14 Part 2.6 APPLICATIONS Taxation allowances provide the opportunity for innovative funding arrangements whereby the tax relief can be ‘exported’ to a party who can enjoy more benefit from the entitlement.3 summarises the effect of capital and revenue allowances. Furthermore. Butterworth & Co.PART 2. installation and usage as well as technical development. Butterworths Yellow Tax Handbook.2. Expert advice should be sought in such a situation. replacement and energy costs is said to be a significant reason for LCC rarely being carried out at present. (Publishers) Ltd – abstract of Statutes Tax Statutes and Statutory Instruments. SECTION 2 (c) the Inland Revenue practices and extra statutory concessions develop to address specific issues or vagaries. reality is dependent upon individual design.2. while historic data is useful. Building Surveyors and Facility Managers will often have valuable in-house data. Business Rates Large plant and machinery regarded as an integral part of the building can attract additional rates which can be influenced by design niceties (such as how the plant is covered over). LCC calculations require information regarding the durability of materials/components. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . Notwithstanding this. Tolley Publishing Co. 2. They also need to be advised during property transfers so the relevant balancing adjustments can be calculated and the purchasers advised of their proper entitlements.4 Data Sources Lack of data in a suitable format for maintenance. Worked example 2.6 includes a detailed calculation of the capital and revenue allowances. However. Lack of such accurate data in a suitable format may affect the credibility of the LCC calculation. CCH Editions Ltd – incorporating extra statutory concessions 2.7 WORKED EXAMPLES Worked example 2. Further reading for taxation Tolley’s Capital Allowances.2. professional judgement should not be disregarded.3. 2.5.3.2.

89/m2 × 20 m2 = £218 • £218 incurred every year for 60 years at 4% discount = £218 × 22.927 present value (c) For maintenance the present cost of £6. The intention of this Sub-section is to give the reader an appreciation of its application.5. Section 2 (4/99) Effective from 1/6/99 Page 15 . worked examples 2. as used by surveyors in practice. Trade literature which is a prime source of detailed information is not included. The objective is to evaluate four comparative specifications over a building life of 60 years using a discount rate of 4% (7% interest rate less 3% inflation rate). (a) The present value for purchasing the doors is obviously the same as the capital cost: £35.2. The remainder consider more detailed scenarios. 2. The examples follow in order of complexity.5 Worked Examples INTRODUCTION Life cycle costing can be used in numerous situations. say Year 12 at 4% discount = £6.20828** = £7.2. ranging from a simple elemental option appraisal to complex total building analyses. The information is summarised in the table below with an explanation of the calculation for option 1 detailed at (a) to (d) below. Any tax implications are excluded. SECTION 2 Whilst the selection of data sources given in Appendix F is not comprehensive.5.2.1 and 2.2. 2. maintenance and replacement costs = £57.5. annual running cost.000 (present cost) × 0.037 showing option 1 is the most expensive life cycle cost * from valuation tables at 2.2 will readily convey the principles of life cycle costing including discounting.2.5.773 (d) The replacement cost after 40 years = £35. and the relative complexities of associated calculations.6* = £4.7 (present value of £1) The Surveyors’ Construction Handbook Part 2.62459** = £3.040 × 0.290 • The total present value of the capital cost.000 (b) For the annual running costs: • £10.7 (year’s purchase or present value of £1 per period) **from valuation tables at 2.2. Chartered Quantity Surveyors. it gives an indication of the level of information available.PART 2.5.1 DESIGN OPTION: INTERNAL DOORS This example is kindly provided by Messrs Gardiner & Theobald.040 for new ironmongery and repainting taking place in.

000 300 300 6.000 300 300 256 219 3.000 218 4.748 160 137 2.040 340 340 6.000 17.040 340 340 6.000 300 300 6.520 7.520 118 2.000 – 14. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook .000 20.080 340 340 6.000 17.068 4.000 – 20.000 300 300 6.462 62 53 Page 16 Part 2.472 71 61 919 44 38 300 300 6.040 340 340 291 248 3.040 340 340 6.040 340 340 6.00% per annum Discount Rate 4.000 – OPTION 2 Hardwood Glazed Vision Panels Finish Life 30 Years Maintenance Period 4 Years Estimated Cost LCCM5 Internal Doors Unit: 20 m2 OPTION 3 Softwood Finish Life 20 Years Maintenance Period 4 Years Estimated Cost Present Value OPTION 4 Metal Finish Life 30 Years Maintenance Period 4 Years Estimated Cost Present Value PROJECT LIFE Discount Rate 60 Years 4.341 100 86 1.040 340 340 6.PART 2.90 m2 17.927 11. Inflation (3%)) COSTS Capital Costs Aluminium Glazed Hardwood Glazed Vision Panels Softwood Metal Contingency Total Year 1 Annual Running Costs Aluminium Glazed Hardwood Glazed Vision Panels Softwood Metal Maintenance OPTION 1 Repaint Repaint New ironmongery Repaint Repaint Repaint New ironmongery Repaint Repaint Repaint New ironmongery Repaint Repaint Repaint New ironmongery Repaint Repaint Repaint OPTION 2 Repaint Repaint New ironmongery Repaint Repaint Repaint New ironmongery Repaint Repaint Repaint New ironmongery Repaint Repaint Repaint Present Value £ 1750.773 182 155 2.040 340 340 300 300 6.356 113 97 1.000 14.588 Total Annual Running Costs Year Present Cost 4 340 8 340 12 16 20 24 28 32 36 40 44 48 52 56 4 8 12 16 20 24 28 32 36 40 44 6.000 35.670 360 8.99 m2 5.988 4.99 m2 35.140 2.00% per annum (Interest Rate (7%).000 300 300 13.00 m2 £ 700.670 21.000 300 300 6.927 200 4.000 – 17. SECTION 2 PROJECT: Life Cycle Model SHEET NUMBER: ELEMENT: OPTION 1 Aluminium Glazed Finish Life 40 Years Maintenance Period 4 Years Estimated Cost Present Value 35.000 20.140 8.000 14.040 340 340 6.00 m2 £ 850.89 m2 9.00 m2 £ 1000.00 m2 Capital Costs £ £ £ £ 10.

810 48 3.241 14.100 300 300 6.820 320 320 274 234 2.132 40.00% per annum (Interest Rate (7%).628 17.037 47.776 20.000 14.290 20.993 23.380 100 86 1.490 107 91 931 67 57 581 42 36 300 300 6.PART 2.297 46.400 65.037 57.486 62 53 928 39 33 3.820 320 320 3.132 15.100 16 300 20 300 24 6.000 7.917 18.480 53.916 17.100 256 219 3.810 160 137 2.100 300 300 6.820 320 320 Present Value 6.386 171 146 1.820 320 320 3.820 320 320 3.000 30 20.988 15.100 28 300 32 300 36 6.586 44.100 300 300 6.000 5.000 30 17.820 320 320 3.000 6.000 40 14.000 58. Section 2 (4/99) Effective from 1/6/99 Page 17 . Inflation (3%)) COSTS Maintenance New ironmongery Repaint Repaint Repaint OPTION 3 Repaint Repaint New ironmongery Repaint Repaint Repaint New ironmongery Repaint Repaint Repaint New ironmongery Repaint Repaint Repaint New ironmongery Repaint Repaint Repaint OPTION 4 Repaint Repaint Repaint Repaint Repaint Repaint Repaint Repaint Repaint Repaint Repaint Repaint Repaint Repaint Replacement OPTION 1 OPTION 2 OPTION 3 OPTION 4 Year Present Cost 48 52 56 4 8 12 16 20 24 28 32 36 40 44 6.820 52 320 56 320 4 300 8 300 12 6.820 320 320 3.988 Total Maintenance/Replacement Costs Total Running Costs Total Net Present Value of Life Cycle Costs 62.00% per annum Discount Rate 4.000 20 14.560 The Surveyors’ Construction Handbook Part 2.100 300 300 6. SECTION 2 PROJECT: Life Cycle Model (continued SHEET NUMBER: ELEMENT: OPTION 1 Aluminium Glazed Finish Life 40 Years Maintenance Period 4 Years Estimated Cost Present Value OPTION 2 Hardwood Glazed Vision Panels Finish Life 30 Years Maintenance Period 4 Years Estimated Cost LCCM5 Internal Doors Unit: 20 m2 OPTION 3 Softwood Finish Life 20 Years Maintenance Period 4 Years Estimated Cost Present Value OPTION 4 Metal Finish Life 30 Years Maintenance Period 4 Years Estimated Cost Present Value PROJECT LIFE Discount Rate 60 Years 4.000 300 300 913 39 33 320 320 3.166 14.100 40 300 44 300 48 6.560 75.586 32.109 22.100 52 300 56 300 Year Present Cost 40 35.000 35.389 2.000 300 300 320 320 3.000 6.297 40.

2. a life of 60 years and a discount rate of 4% (7% interest less 3% inflation). The information is summarised overleaf with the methodology for the calculation being exactly as that for the previous example.PART 2.2 BUILDING SERVICES DESIGN OPTION: AIR CONDITIONING AND UNDER FLOOR TRUNKING VERSUS HOT WATER HEATING AND RING MAIN ELECTRICS This example is again provided by Messrs Gardiner & Theobald. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . SECTION 2 2.000 m2 floor area. Page 18 Part 2. The objective is to evaluate the above options for a building of 3. Any taxation implications are excluded.5.

000 5.000 5.000 333.000 5.000 2.00 m2 4.000 160.000 1.352 OPTION 2 Genearl repaint/repair Genearl repaint/repair Genearl repaint/repair Genearl repaint/repair Genearl repaint/repair Genearl repaint/repair Genearl repaint/repair OPTION 3 OPTION 4 Replacement OPTION 1 1.282 1.000 5.855.000 6.500 450.719 300.516.00 m2 £ 5.000 600.378 2.000 600.041 856 704 578 2.762 Present Value Unit: 3.000 4.000 5.000 600. Inflation (3%) COSTS Capital Cost Air Conditioning U/Floor Trunking HW Heating & Ring Main Electric Contingency Total Year 1 Annual Running Costs Air Conditioning U/Floor Trunking HW Heating & Ring Main Electric Total Annual Costs Maintenance OPTION 1 Overhall Overhall Overhall Overhall Overhall Overhall Overhall Overhall Overhall Overhall £ £ 750.000 5.000 300.000 5.000 5.500 75.000 5.338.000 5.000 2.000 5.000 600.500 787.876 1.352 339.000 2.000 2.159 184.000 2.155 878 667 507 385 293 222 Year 15 30 45 Present Cost 600.000 641.000 5.000 600.000 37.125.000 300.696.000 300. SECTION 2 Element: Services PROJECT LIFE Discount Rate 60 Years 4% per annum OPTION 1 Air Conditioning U/Floor Trunking Finish Life 15 Years Maintenance Period 5 Years Estimated Cost 250 m2 150 m2 5% Capital Costs £ 25.000 22.228 The Surveyors’ Construction Handbook Part 2.000 2.000 m2 OPTION 2 HW Heating & Ring Main Electrics Finish Life 25 Years Maintenance Period 7 Years Estimated Cost Present Value OPTION 3 OPTION 4 Finish Life Maintenance Period Years Estimated Cost Present Value Finish Life Maintenance Period Years Estimated Cost Present Value Discount Rate 4.000 900.267 1.110 3.214 OPTION 2 OPTION 3 OPTION 4 25 50 Total Maintenance/Replacement Costs Total Running Costs Total Net Present Value of Life Cycle Cost 1.000 5.000 339.000 1.542 1.000 2.355.000 Year 5 Equipment 10 Equipment 15 Equipment 20 Equipment 25 Equipment 30 Equipment 35 Equipment 40 Equipment 45 Equipment 50 Equipment 55 7 14 21 28 35 42 49 56 Present Cost 5.000 5.000 5.000 112.500.000 2.000 450.000 2.000 2.728 972.000 5.375 499.776 2.000 5. Section 2 (4/99) Effective from 1/6/99 Page 19 .000 5.000 2.000 2.000 5.000 2.00% per annum (Interest Rate (7%).540 616.000 1.991 102.000 5.000 750.PART 2.000 5.500 472.696.762 15.520 1.000 2.000 2.040 3.535 42.278 2.

250 less 25% × 25% × 33% £881 × 33% = = The methodology applies for the rest of the 25 years as summarised overleaf.5.PART 2.908 291 ——– 3.181 291 ——– 2.3 MAINTENANCE OPTION: WITH/WITHOUT CLEANING GANTRY This example is kindly provided by Gerald Hall. Year 1 with gantry calculation: Capital Maintenance £35. firstly to provide the cleaning gantry and secondly to omit the gantry. Assumed criteria: – Building Life – VAT assumed to remain at current levels with the client being an ‘end user’ under VAT rules – Gantry capital cost – The gantry will have a residual value – Capital cost for opening lights in lieu of gantry – Discount rate (assuming the interest rate will average 11% over 25 years and the inflation rate 6%) – Corporation Tax Taxation Calculation The capital cost for plant and machinery receives a 25% reducing balance.199 ——– £ 2.000 5% 33% Year 2 with gantry calculation: Capital Maintenance £35.000 £2.2.472 ——– 25 years 17. The following figure compares two options.510 present value £26.447 present value The Surveyors’ Construction Handbook .5% £30. Maintenance and running costs receive 100% allowance.250 × 25% × 33% £881 × 33% = = £ 2. SECTION 2 2.000 £5. Section 2 (4/99) Effective from 1/6/99 £36. However: with gantry investment without gantry investment Page 20 Part 2. The client initially considered that the gantry would pay for itself due to savings in maintenance and cleaning cost. The capital cost and costs associated with anticipated maintenance were calculated by using normal cost estimating techniques.

711 0.318) 0.175 679 – – 750 131 881 679 – – 750 131 881 808 – – 2.430) – – 750 131 881 1.000 750 750 2.500 438 2.660 1.530 0.028 264 263 354 253 245 809 227 218 279 199 191 609 (422) 36.310 0.746 0.645 0.000 – – The Surveyors’ Construction Handbook 1 – – – 2 – – – 3 – – – 4 – – – 5 – – – 6 – – – 7 – – – 8 – – – 9 – – – 10 – – – 11 – – – 12 – – – Part 2.000 Disposal/ residual value 35.343 30.541 PRESENT VALUE VAT 17.278 73 202 496 372 427 1.750 – – 250 – – 1.024 33.864 0.557 0.518 (637) – – 1.938 – – 750 131 881 – – 750 131 881 509 454 1.458 0.443) (733) (524) (258) 953 52 137 320 229 250 1.933 34.250 33.316 33.211 (330) – – 750 131 881 1.186 34.COMPARATIVE COMPONENT LIFE CYCLE COSTING CLIENT: PROJECT TITLE: Retail Development/Shopping Mall JOB NO: OPTION: Cleaning ‘with’ gantry – curtain walling to new facace TOTAL Occupacy Intermittent – – – 250 – – 1.677 0.541 Costs Maintenance Annual – 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 750 Year Capital Financing Operation Present value of £1 @ 5% 0 30.938 (1.866 30.500 (1.250 1.396 0.965 (1.342 0.175 881 881 2.436 0.250 0 35.500 438 2.295 – – 750 131 881 3.964 36.084 31.784 0.5% TOTAL inc VAT Less tax allowance NET TOTAL CUMULATIVE PRESENT VALUE 35.505 0.226 31.685 35.354 36.947 574 578 778 583 585 1.250) – – 750 – – 2.846 498 521 735 551 561 1.614 0. SECTION 2 TOTAL PRESENT VALUE AT END OF INVESTMENT LIFE Page 21 .175 881 881 2.326 0.000 175 1.207) (1.000 5.938 881 881 1.938 1.750 – – – – (2.000) – – – – – – – – 750 1.000 175 – – 750 131 – – 750 131 881 881 1.377 0.467 35.952 – – 30.250 (2.089 31.546 31.600 30.585 0.431 35.750 – – 250 – – 1.591) 0.092 383 360 440 330 320 991 307 303 397 298 296 973 311 – – 1.250 35.024 (849) – – 750 131 881 2.119) – – 2.052 33.500 – – 750 131 438 131 131 175 131 131 438 131 – – 750 131 – – 1.580 33.750 – – 250 – – 1.823 0.416 0.043 31.000 175 1.175 2.037 31.963 36.472 (1.481 0.239 35.163 36.359 0.775 32. Section 2 (4/99) 13 – – – 14 – – – 15 – – – 16 – – – 17 – – – 18 – – – 19 – – – 20 – – – 21 – – – 22 – – – Effective from 1/6/99 23 – – – 24 – – – 25 – – – PART 2.199 (2.907 0.

The Surveyors’ Construction Handbook . 4 It is assumed that VAT will remain at around 17.e.199 £ 2. Section 2 (4/99) 3 The life cycle costing is based on an agreed investment life of 25 years.Page 22 COMPARATIVE COMPONENT LIFE CYCLE COSTING (continuation of table on page 21) 6 Capital cost as plant and machinery with 100% tax allowance – i. Effective from 1/6/99 5 There are disposal cost advantages with this option. 2 Details of the maintenance requirements and cost estimates can be provided upon request. Discount rate: Taxation allowances are subject to negotiation and agreement. SECTION 2 FORECASTER’S ASSUMPTIONS 7 1 The capital cost includes allowances for preliminaries and associated builders work. (ii) Inflation rate – 7% average over 25 years.5% and the client is the ‘end user’ under VAT rules.908 PART 2. 291 ——— 3. 1st year Maintenance and running costs with 100% allowance – ie 1st year total 8 9 (i) Interest rate – 11% average over 25 years. Part 2. (1 + 11%) ————— (1 + 7%) – 1 × 100% = 5% discount rate.

763 1.181 1.763 3.500 263 – – 1.763 582 1.500 1.763 839 799 761 725 690 2.763 582 – – 1.500 1.763 582 1.181 2.562 19.239 23.849 626 596 568 541 515 981 467 445 424 404 384 732 349 26.521 582 582 582 582 582 1.310 0.000 – – 1.416 0.117 1.500 1.500 1.396 0.557 0.875 1.095 26.614 0.386 15.763 1.500 263 525 263 263 263 263 263 263 263 – – 1.763 1.181 – – 1.481 0.634 21.875 1.000 263 3.181 1.500 1.COMPARATIVE COMPONENT LIFE CYCLE COSTING CLIENT: PROJECT TITLE: Retail Development/Shopping Mall JOB NO: OPTION: Cleaning ‘with’ gantry – curtain walling to new facace TOTAL Occupacy Intermittent – – – – – – 1.181 1.500 1.500 1.500 1.500 263 1.500 263 – – 1.181 1.525 1.500 1.500 1.872 16.500 1.061 10.362 1.763 – – 1.500 1.500 263 1.986 12.500 – – 3.763 582 1.500 3.181 1.090 10.147 15.864 0.138 7.458 0.763 3.020 971 925 1.500 Year Capital Financing Operation Present value of £1 @ 5% 0 5.500 1.742 22.444 PRESENT VALUE VAT 17.763 1.070 9.978 25.525 1.5% TOTAL inc VAT Less tax allowance NET TOTAL CUMULATIVE PRESENT VALUE 5.500 1.181 1.181 – – 1.500 263 1.763 1.181 1.163 582 582 582 582 582 1.500 1.500 – – – – – 1.638 – – 1.163 582 – – 1.500 263 1.181 1.585 0.362 1.505 0.587 14.763 1.500 263 – – 1.163 2.500 – – 1.377 0.823 0.500 263 1.000 – – 1 – – – 2 – – – 3 – – – 4 – – – 5 – – – 6 – – – 7 – – – 8 – – – 9 – – – 10 – – – 11 – – – 12 – – – 13 – – – 14 – – – 15 – – – 16 – – – 17 – – – 18 – – – 19 – – – 20 – – – 21 – – – 22 – – – 23 – – – 24 – – – 25 – – – TOTAL PRESENT VALUE AT END OF INVESTMENT LIFE .181 – – 1.436 0.257 23.500 1.952 – – 5.875 6.500 1.444 Costs Maintenance Annual – 1.999 8.181 1.000 875 5.181 0.500 1.763 582 – – 3.181 2.500 – – – – – – – – – – – – – 1.500 1.500 1.342 0.326 0.530 0.181 0.875 0 5.500 – – – – – – – – – – – 1.763 – – 6.411 20.500 1.763 582 – – 1.500 263 1.706 24.763 582 1.000 Disposal/ residual value 5.295 – – 1.362 1.500 263 1.645 0.500 263 1.181 1.359 0.711 0.500 1.181 5.907 0.363 26.181 1.763 582 582 2.763 582 1.500 263 1.202 21.500 263 1.746 0.037 20.763 1.525 1.124 1.784 0.500 1.071 1.500 1.500 1.500 263 1.181 – – 1.500 1.763 1.500 1.151 24.181 1.500 1.575 24.677 0.749 13.000 1.

Capital cost as plant and machinery with 100% tax allowance – NIL PART 2. 4 It is assumed that VAT will remain at around 17. Maintenance and running costs with 100% allowance. SECTION 2 FORECASTER’S ASSUMPTIONS 1 The capital cost includes allowances for opening lights now required. Effective from 1/6/99 5 There are disposal cost advantages with this option. without capital allowances. Section 2 (4/99) 3 The life cycle costing is based on an agreed investment life of 25 years.5% and the client is the ‘end user’ under VAT rules.Page 24 COMPARATIVE COMPONENT LIFE CYCLE COSTING (continuation of table on page 23) 6 7 8 9 (i) Interest rate – 11% average over 25 years. (ii) Inflation rate – 7% average over 25 years. The Surveyors’ Construction Handbook . Discount rate: Taxation allowances are subject to negotiation and agreement. (1 + 11%) ————— (1 + 7%) – 1 × 100% = 5% discount rate. 2 Details of the maintenance requirements and cost estimates can be provided upon request. Part 2.

761 £9. £3. SECTION 2 2.7 (present value of £1) ** from valuation tables at 2.5. which then allows actual costs and maintenance periods incurred to form the basis of the life cycle costs. In due course they can be adapted to allow historical information to be fed into the programme. on two spreadsheets. Section 2 (4/99) Effective from 1/6/99 Page 25 . There are various ways of presenting the data. One method widely accepted is shown below. thereby providing a more accurate projection.5.5.013 × 0. The data could also be presented as an annual sinking fund e. a Planned Maintenance Programme. The spreadsheets can be ‘fine tuned’ to meet specific client requirements.04296** = £387 * from valuation tables at 2.2. Guidance Booklet No 3’ published in January 1997. and a ‘costed’ Planned Maintenance Programme which establishes in this case the present value of future costs.e.4 HOUSING SINKING FUND (BASED UPON COSTED PLANNED MAINTENANCE) (a) Background This example is kindly provided by Ian Sloan of Armour Construction Consultants.013 = £3.942 would have to be invested now at 6% to cover all maintenance and repairs for the next 60 years.761 would have to be invested now for 15 years at 6% compound interest in order to meet the costs in Year 15 of £9. the amount to be invested for each of 15 years at 6% compound interest in order to meet the costs in Year 15 of £9. An example of the calculation shown overleaf is: Year 15. total maintenance and repair expenditure at current prices = £9.013 × 0.g.41726* i.013 is: £9.2.013. Housing Associations and Co-operatives in Scotland generally request that their investment/sinking fund requirements are prepared in accordance with the Scottish Federation of Housing Associations’ (SFHA) ‘Planned Maintenance and Repairs (Revised).2. (b) Brief The client needed to establish the capital to be invested for a new build housing project to cover all maintenance and repairs for the next 60 years. The discount rate is 6%. In summary £24.PART 2.7 (annual sinking fund) The Surveyors’ Construction Handbook Part 2.

whbs Stainless steel Water pipes etc Insulation Pipes & Fittns Effective from 1/6/99 < < < < < < < < < < < < < < < < < < < < < < < < 1 1 < < < < < < < < < < < < < < 1 < < < < < < < < < < < < < < 1 1 < < < < < < < < < < < < < < < < < < T 2.4.4.2. Ceilings INT FABRIC 3.3 FLOORS 3.1.4.2.1.3. Rendering 2. Skirtings 3.1.7.3.1.1. Painting Brick/pboard Ceramic Plasterboard Timber/Vinyl Timber Timber Units/Worktops Wcs.1.1. Kitchen Units 4. Boilers/equipment The Surveyors’ Construction Handbook < < < < 5.4 DOORS 3.1. Door Operation < < < < < < < < < < < < 2. Roof Tiles etc < < < < < < < < < < < < < < < 1 < < < < < < < < 1 < < < < < < 1 < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < 1 < < 0 0 0 0 0 0 2.1.2.1.2.3.2.1.5. Grab rails etc 5. Door Operation 3. Walls 2.4. Openings 1.1 ROOF 2.6 HEAT SYSTEM 5.1. Roofs 1.2. Flooring 3.2.1.1. Fans etc . SECTION 2 1.KEY 1 = Inspect/Consider T = Test until replacement Cumulative 1 0 0 0 0 0 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Cost Page 26 < = Inspect and Remedy < = until Replacement / = Decorate / = Inspect & 1 = Renewal/Replacement 02/12/98 COMPONENT Timber Timber Concrete/Brick Timber Timber Concrete Tiles Lead UPVC Facing Brick PLANNED MAINTENANCE PROGRAMME EXAMPLE Date Printed CODE ELEMENT SUB-ELEMENT PART 2.2. Ventilation EXT FABRIC 2.1.4.3.1.1 FITTINGS & FURNISH 4.4. 5. INTERNAL DRAINAGE 5.3. Floors < < < < < < < < < < < < < < < < < < < < < < < < < < / < < < / < < < < < < < < < < < < / < < < < < < < < < < < < < T < T T T < < < < < < < < < < < / < < < / 1 < < < < < < < < < < < < < < < < < < 1 < T < T T T < < < < < < < < < < < / < < < / < < 1 < 1 < < < < < < < < < < < < < < < < < < < < < < < < < < 1 < < 1 < < T < T T < < < < < < < < < < < / < < < / < 1 / < < < 1 < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < 1 1 < 1 < T < T T < < < < < < < < < < < < < < < / < < < < < < < < < / < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < < T < T T < < < < < < < < < < < < < < < < < < 1 1 STRUCTURE 1. Flashings 2.3. Stairs 1.5 HEAT SOURCE 5. Window Op 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2. baths.3. Water storage 5.2.1 STRUCTURE 1.7 VENTILATION 5. Section 2 (4/99) < < Timber/Glass < < / < < < / 1 < < < < < < < < < < < < < < < 1 < < / 1 / < < < < < < < < < < < < < < < < < < 1 < < < < < < < / < < < < < < < / < < < < < < < < < / < < < < 1 < < / 1 < < < 1 < < < < < < < < < < < < < < < < < < < < < < < < < 1 1 1 1 1 1 < T < T T Timber/Metal 2. Radiators/fires T 1 1 1 < < < < < < < < < < < < < < < < < < 1 1 0 0 0 5.1. Ironmongery 3.1.3 WINDOWS 2.3.2 SERVICES EQUIPMENT 5.3. SERVICES 5.2. Gutters etc Part 2.4.2. Painting 2. Pointing 2.2 CEILINGS 3.3.1.4.3.1. Pipes & Fittns 5.1.1 SANITARY APPLIANCES 5.1. Sanitary ware 5.1.2.2.4.4.3 WATER SUPPLY 5. DISPOSAL INST 5. Wall Tiling 3.2.6.4 EXTERNAL DOORS 2.2. 5.1.2.1. Ironmongery 2.3.1.2 EXTERNAL WALLS 2. Ironmongery FITTS FURN 4. Kitchen sinks 5.1. Pointing 2.4. Handrails etc 2.2.3.2 STAIRS 1.2.4.1 INTERNAL WALLS 3.2.3. Walls & Open’s 3.1.1.1.1.2.3.1.

00 0.1. Roads. Manholes etc 6.1.00 0.00 0.00 0.2.1.000’s of 0.00 0.4 OUTBUILDINGS 6.12.2 EXT WORKS BOUNDARIES & ENCLOSURES 6.1. External Lighting 5.9 GAS INSTALLATION 5. Section 2 (4/99) COST IN .1.1.00 0.1. Door entry 5.1.2.00 0.00 0.00 0.1.00 0.2 Telephones 6.3 EXTERNAL SERVICES 6.1. Power and lighting < < < 1 0 < < < < < < < 1 1 < 1 1 0 < < < / / < < < < < < < < < / < < < < < < / / < < < < < < 1 1 1 < 1 1 < 1 1 < 1 1 < < 1 < < 1 1 < 1 < < 1 5.12.11 PROTECTIVE INST 5.00 0. Walls etc 6. TV system etc The Surveyors’ Construction Handbook < < < < < < < < 1 < < < < < < < 1 < < < < < T < < < / < < < < £ 5.00 0.00 0.1.00 0.3. Switchgear 5. Grass/planting < < < / < / / < < < < < < < < < < < < < < < < 6.00 0.00 0.00 0.2.00 0.10 LIFT INSTALLATION – 5.00 0.1.00 0. Binstores/platts Part 2.2.00 0.8 Close Light T T T T T T ELECTRICAL INST 5.00 0.00 0. Equipment & supply SERVICES 5.3.00 0. Clothes poles 6.1.8. SECTION 2 Page 27 . Fences and gates 6.2.00 0. Smoke detectors < < T < < / / < < < < < < < / / < / < < < < / < / < < < 1 < 1 < < < < < < < < < < < < < 1 < < < < < < < < < < < < < < < < < < < < 1 < T < T < < 1 < < < < 1 1 < < < < T 1 < < < < 1 1 < < < < T 1 0 0 0 0 0 0 0 0 0 0 0 5.00 0. footpaths 6.2.00 0.1.3.1.00 0.1.8. Ducts & cables 6.2 DRAINAGE 6.11.1.1.8.00 0.00 Effective from 1/6/99 PART 2.4.2.9.1 LANDSCAPING 6. Pipes & fittings 6.1.11.2 COMMUNICATION 5.2.2.2.KEY 1 = Inspect/Consider T = Test until replacement Cumulative 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Cost 0 0 0 0 0 PLANNED MAINTENANCE PROGRAMME EXAMPLE (Continued) 1 = Renewal/Replacement 02/12/98 COMPONENT < = Inspect and Remedy < = until Replacement / = Decorate / = Inspect & Date Printed CODE ELEMENT SUB-ELEMENT 5.

2. Openings ) 1.1.1 Door Operation 2. Fans etc The Surveyors’ Construction Handbook 5.4. Pipes & Fittns 5.000 120 0 0 2.5 Heat source 5.2. Handrails etc 2.555 990 1. Kitchen Units FITTS FURN 4.020 870 1.3.1. baths.2 Stairs 1. Boilers/equipment 5. Radiators/fires 5. Skirtings 3.1.1.4.2 Ceilings 3. Rendering 2.2.2 Disposal inst 5. Ironmongery 4.1.2 Services Equipment 5.607 960 4.2.3. Walls & Open’s 3.Page 28 02/12/98 COMPONENT Timber Timber ) Concrete/Brick ) Timber Timber Concrete Tiles Lead UPVC Facing Brick inc inc Timber/Glass 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 100 inc inc inc inc inc inc inc inc inc 210 inc inc inc inc inc inc inc inc inc Timber/Metal 5 60 inc inc inc inc inc inc inc inc inc 60 inc inc inc inc inc inc inc inc inc Brick/pboard Ceramic Plasterboard Timber/Vinyl Timber Timber Units/Worktops inc inc inc 50 50 290 20 20 20 inc inc 275 10 10 10 60 60 60 60 60 inc 10 inc 20 50 inc 83 inc 83 inc 60 10 5 5 5 450 5 5 125 inc inc 60 inc 20 5 100 5 5 5 5 200 5 100 5 5 5 125 inc inc 60 inc 650 5 1500 PLANNED MAINTENANCE PROGRAMME (COSTED) Date Printed EXAMPLE Years 1 50 100 25 140 140 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 75 2380 20 20 20 20 20 20 20 20 20 150 20 20 20 20 20 20 20 20 20 150 20 20 20 20 20 20 20 20 20 20 20 20 20 20 220 20 20 20 20 20 inc inc 10 10 100 inc 400 inc 5 inc inc 5 5 5 inc 5 5 5 5 100 5 5 60 10 inc 20 50 inc 5 5 5 5 inc inc inc inc inc inc inc 20 20 20 20 20 20 20 75 75 75 75 75 75 75 75 75 75 20 20 20 20 20 20 20 20 150 20 20 20 20 20 20 20 20 220 20 inc inc 25 25 25 25 25 100 100 100 100 100 600 0 150 0 4.2.4.1.4.4.2.1. Wall Tiling 3.7 Ventilation 5. Grab rails etc 5.2. Ventilation 2.1.1. SECTION 2 1.3.4.000 420 545 145 540 120 60 550 120 780 0 3.1 Internal walls 3.400 2. Pointing 2.3.3. Pipes & Fittns 5.040 485 875 125 0 360 0 1. Walls Part 2.1.4. Floors ) STRUCTURE 1. Window Op EXT FABRIC 2. Painting 2.3.1.4.1.8.8 Electrical inst 5. Sanitary ware 5. whbs Stainless steel 125 inc inc 60 inc 20 5 5 5 5 5 5 5 5 5 5 5 5 5 5 inc inc inc inc inc inc inc inc inc 160 inc inc inc inc 40 40 40 40 40 40 40 40 40 750 40 40 40 40 40 40 40 40 40 750 2. Flashings 2.1. Flooring 3.2.3. Pointing 2.3.4. Insulation SERVICES 5.2.390 290 100 5 5 60 5 5 5 5 100 5 5 60 inc inc inc inc inc inc inc inc 60 10 275 20 290 inc 83 83 83 83 83 83 83 83 1200 inc inc inc inc inc inc inc inc 480 60 60 60 60 60 60 60 60 800 10 10 10 10 10 10 10 10 200 5 5 5 5 inc inc inc inc 160 125 inc inc 60 inc 20 40 5 5 5 5 5 200 100 5 5 5 5 5 inc 5 5 5 5 125 inc inc 60 inc 20 5 100 5 5 5 5 5 5 5 450 inc inc inc inc inc inc inc inc 160 250 125 inc 60 inc 650 40 40 40 40 40 40 40 40 750 5 200 1500 Cumulative 3 50 50 50 50 50 300 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Cost CODE ELEMENT SUB-ELEMENT 2 1.2.2.1 Sanitary Appliances 5.1 Roof 2.1 Internal drainage 5.6 Heat system 5. Ironmongery Effective from 1/6/99 3.4 External doors 2. Power and lighting .1. Water storage 5.1. Roof Tiles etc 2.7.1.3.1 Structure 1.4.4. Door Operation 3.3.3.2.2.1.2.2.1.2. Gutters etc 2.1.1. Ironmongery 2.1. Ceilings INT FABRIC 3.3 Floors 3.1.1.4 Doors 3.1.2.330 735 3.3.1.2 External walls 2.3 Windows 2. Painting 1.1.2.2.1.1 Fittings & Furnish 4.1. Kitchen sinks 5.4.380 3.1.3. Water pipes etc 5.6.3.3 Water Supply 5.3.1.1.1. Section 2 (4/99) 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 2100 100 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 100 100 100 100 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 inc inc inc inc inc inc inc inc 210 5 5 5 5 5 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83 inc inc inc inc inc inc inc inc inc inc inc inc inc inc 480 inc inc inc inc 60 60 60 60 60 60 60 60 60 800 60 60 60 60 60 60 60 60 60 800 10 10 10 10 10 10 10 10 10 200 10 10 10 10 10 10 10 10 10 200 Wcs. Stairs 1. Roofs PART 2.

4.400 3. Manholes etc 6. Fences and gates 6.2 Boundaries & Enclosures 6.1.11 Protective inst 5.3.PLANNED MAINTENANCE PROGRAMME (COSTED) (Continued) Date Printed 02/12/98 EXAMPLE Years 1 inc Close Light 25 25 10 10 10 10 75 10 10 10 10 75 10 10 10 10 75 10 10 10 10 75 10 10 10 10 75 10 10 10 10 10 10 100 10 10 150 25 150 25 150 75 25 25 25 25 25 inc 100 inc 100 inc inc 200 150 0 525 690 0 100 240 0 2.1.1.2.2. Equipment & supply 5.1. Clothes poles 6.3.1.9.12.1.3 External services 6.1. Smoke detectors 5.8.2 Communication 5. Ducts & cables 6.2.12.2.1.2. TV system etc 5. Grass/planting 6.4 Outbuildings 6.10 Lift installation – SERVICES n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a 50 50 50 50 50 50 50 50 50 50 50 50 50 50 500 50 50 50 50 50 50 50 50 50 50 50 50 50 50 500 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 750 10 10 500 10 10 500 10 10 500 10 10 500 10 10 3000 10 10 500 10 10 500 10 10 500 10 10 500 10 10 3000 50 40 100 inc 25 50 £ PRESENT VALUE (at discount rate of 6%) Repeat Years Current Cost per yr Present Value 50 50 25 25 inc inc 100 100 40 40 40 200 40 50 50 50 5.1.1.1 Landscaping 6. External Lighting 5.1.1.2.8. Door entry The Surveyors’ Construction Handbook 518 518 1208 518 1448 1208 518 518 1208 4068 518 1208 518 518 9013 518 518 1208 518 8673 1048 518 518 1208 1448 518 1208 518 518 15460 489 461 1014 410 1082 852 344 325 715 2272 273 600 243 229 3761 204 192 423 171 2704 308 144 136 298 337 114 251 101 96 2692 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 (Yrs 31–60) 518 518 1208 518 1448 1208 518 518 1208 4068 518 1208 518 518 9013 518 518 1208 518 8673 1048 518 518 1208 1448 518 1208 518 518 15460 £57902 £115804 (Current cost) 85 80 177 71 188 148 60 57 124 395 48 105 42 40 655 36 33 74 30 471 54 25 24 52 59 20 44 18 17 469 £3701 £24942 (Present Value) 5.000 0 525 750 57.902 (Yrs 1–30) 21241 Yrs 1–30) inc inc inc inc inc 0 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Cost Cumulative COMPONENT CODE ELEMENT SUB-ELEMENT 5.1.2.1. Pipes & fittings 6.200 50 40 100 inc 25 50 40 100 inc 25 50 40 50 750 500 inc 400 500 300 1.270 1.1.1. Binstores/platts Part 2. Roads.650 10.2. Section 2 (4/99) TOTAL COST PER YEAR Effective from 1/6/99 PART 2. Telephones 6.11.1. SECTION 2 Page 29 .2 Drainage 6. Switchgear 5.11.1. Walls etc EXT WORKS 6.2.2.9 Gas installation 5. footpaths 6.3.2.

(e) Discount Rates In accordance with the client guidelines the investment horizon is 40 years and the discount rate 8%. (c) Revenue Costs • fuel: the energy manager provided existing costs which were used as the basis for the new proposal. • operation costs for this client included waste removal.5. hygiene. mail collections. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . SECTION 2 2. The offices were originally spread out over three main sites. insurances. • staffing costs were excluded as they would remain constant. (d) Capital Income Options 2 and 3 will free up existing space for sale and rent which are included as a deduction against expenditure. • water costs were excluded (the client was a water company). those costs in excess of £10. • security costs are based on existing security costs and judgement. sanitary hire. (b) Capital Costs These were calculated using traditional cost estimating and included cyclical capital costs.2.000 are included in the capital cost element under the assumption they would be part of the capital cost programme. Again this was based on existing client data plus judgement. water coolers. Three options were identified: • do nothing. The distinction between cyclical capital costs and cyclical maintenance costs is often vague. Relocation costs (labour and plant required to transport office equipment. • centralise at location B and construct additional new offices. Page 30 Part 2.000. • cleaning costs are based on existing cleaning costs and judgement. compound materials and stationery items) are included under Year 0 on the assumption they would be complete within 12 months and a contingency for new furniture included. • centralise at location A and construct additional new offices. The client wished to investigate a centralisation (of offices) strategy as a means to improve business efficiency in an increasingly competitive market. • rates were not provided by the client by the deadline and are therefore excluded. telephones. stores. • maintenance costs under £10. Even with constant staff numbers these costs reduce with centralisation. machinery. although this would require repair and refurbishment of the existing offices.PART 2. fire prevention.5 CENTRALISATION OF OFFICES STUDY (a) Brief This example is kindly provided by Gerald Hall.

506. All costs are calculated using traditional cost estimating and included as present costs.632.900 1. Discount Rates 6% 6% 6% 8% 8% 8% 10% 10% 10% Life Cycle 0 20 40 0 20 40 0 20 40 Option 1 £ 287.900 1. electrical and mechanical plant replaced after 20 years with a refurbishment after ten years or mid-life.164.950 287.100 1. However it is worth noting that: • Value Added Tax on all capital costs would affect the financial benefits of options 2 and 3 which require considerable capital expenditure.950 £1.607.900 1.522 1.900 1.164.709.900 1. windows and doors after 30 years.000 1.900 £1.593.000 1.843.100 1.451.000 1.100 1.091 1.262. (g) Renewal and Refurbishment Costs General building refurbishment has been allowed in ten-year cycles.515.100 2.638.000 £1.PART 2.444. (h) Cost Comparison The detailed calculation is summarised over for option 2 which is the most cost effective over 40 years.000 1.826.614.896 £1. Section 2 (4/99) Effective from 1/6/99 Page 31 .164.960.843. SECTION 2 (f) Tax Implications Tax allowances have been excluded on the basis that this study is a minor part of the overall company business and assumptions are not appropriate.146 The Surveyors’ Construction Handbook Part 2. Year 0 Expenditure £ £203.420 287.896 1.562 Option 2 £ 1.164.000 2.607.047.262.100 1.000 1.900 1. felt roofs replaced after 20 years.721. profiled metal decking.068 Option 1 Option 2 Option 3 (i) Sensitivity Analysis An analysis of different discount rates and time frame confirm option 2 as the most favourable.068 1. • Capital Allowances would help support options 2 and 3.100 Year 40 Net Present Value £ £1.721 Option 3 £ 1.960.762.859.423.262.100 1.262.

123 0 0. Section 2 (4/99) Capital Income Annual Rental -7.4 27.4 1.2 5.07 0.4 27.4 1.1 5.4 27.4 0 12 0 1.63 0.9 19.16 0.4 0 12 0 1.1 5.5 Land Sale -55 0 0 0 0 0 0 Value -62.7 7.2 5.2 5.393 -7.4 1.4 1.4 1.5 -7.2 5.1 7.9 19.4 1.4 27.9 19.4 27.07 0.1 7.5 -7.5 0 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 -8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -8 -7.2 5.7 Security 7.4 27.08 0.7 1.11 12 11 CLIENT JOB TITLE JOB NO DATE WATER COMPANY LIMITED CENTRALISATION OF AREA OFFICE STUDY 3985 29th MARCH 1996 PART 2.4 27.5 -7.7 1.1 7.9 19.1 7.2 0.5 -7.1 7.2 5.5 -7.5 -7.4 0 12 0 1.4 0 12 0 1.9 19.7 1.7 7.2 5.4 1.2 0 57 0 492 0 70 291 213 0 1.05 0.5 -7.9 19.4 27.2 5.9 19.5 -7.4 27.9 19.7 1.9 19.2 5.1 5.4 1.896 .7 1.4 0 12 0 1.7 7.5 -7.7 1.34 0.1 7.9 Present Value of £1 @ 8% 1 0.79 0.5 -7.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 0 1.5 -7.12 0.1 5.1 7.4 1.9 19.2 Staff Costs 0 0 0 0 0 0 0 Value 27.4 27.7 1.1 Operation Costs 5.9 19.4 0 12 0 1.4 1.4 0 12 0 1.4 27.2 5.Page 32 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Total Value £000 0 0 0 0 0 0 190 0 0 0 0 0 0 0 0 0 300 0 0 0 0 0 0 0 0 0 393 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 190 0 0 0 0 0 0 0 0 0 300 0 0 0 0 0 0 0 0 0 393 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 310 0 0 310 2.9 19.2 0 1.4 27.2 0 1.4 27.2 5.5 -7.74 0.7 1.9 19.05 4 4 3 3 3 3 2 2 2 41 2 2 2 1 1 1 1 1 1 15 1608 0.5 -7.7 1.4 27.7 1.4 1.4 1.2 0 1.2 0 1.2 0 1.14 0.5 -7.4 1.2 0 1.9 19.4 27.5 -7.4 27.4 1.1 7.32 0.4 0 12 0 1.4 1.4 1.7 7.5 0 0 0 0 0 0 Furniture 8.4 27.1 5.5 -7.9 19.9 19.13 0.2 5.9 19.4 1.1 5.9 19.5 -8 -8 -8 -8 -8 Revenue Costs Fuel 1.4 27.2 5.27 0.1 5.1 5.9 319.7 1.5 -7.1 5.4 27.5 -7.4 27.7 1.4 27.7 7.4 1.37 0.5 0 -8 0 -8 0 -8 0 -8 0 -8 0 -8 -7.7 7.05 0.9 412.2 5.1 0.4 0 12 0 1.9 19.1 7.18 0.15 0.9 19.4 27.4 27.2 5.4 27.9 19.5 0 0 0 0 0 0 Value 1200 0 0 0 0 0 0 Part 2.4 27.29 0.7 7.4 1.2 5.4 27.9 19.86 0.4 0.5 -7.1 5.4 27.9 19.5 -7.09 0.2 0 1.4 Net Cash Flow 1164.4 27.4 1.4 27.9 19.1 5.17 0.2 5.607.09 0.4 0 12 0 1.4 27.1 7.9 329.7 7.5 -7.46 0.7 1.9 19.9 19.9 19.2 0 1.06 0.2 5.5 -7.5 -7.1 7.5 -7.7 1.68 0.4 1.1 5.4 1.25 0.9 19.4 0 12 0 1.9 19.7 1.1 7.1 7.1 7.7 7.5 -7.4 27.7 7.93 0.9 19.2 0 1.4 27.5 -7.1 7.21 0.2 0 7.5 -7.7 7.1 7.4 27.4 Water 0 0 0 0 0 0 0 Maintenance 12 12 12 12 12 12 12 Effective from 1/6/99 Rates 0 0 0 0 0 0 0 Cleaning 1.54 NET PRESENT VALUE 1165 18 17 16 15 14 13 The Surveyors’ Construction Handbook EXPENDITURE NVP£=1.9 19.5 -7.1 7.2 5.1 5.7 1.9 19.7 7.1 7.1 7.7 1.4 27.5 -7.1 7.4 1.1 7.7 1.2 5.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5.7 1.06 0.5 -7.4 1.23 0.7 1.7 7.9 209.2 0 1.5 -7.4 1.7 1.5 -7.4 27.1 7.9 19.7 1.5 -7.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12 0 1.1 7.5 -7.4 1.2 5.2 5.4 0 12 0 1.7 7.4 27.5 0 -8 -308 -55 -363 0 -8 -8 -8 0 0 1.369 16 9 2.4 27.7 1.1 7.9 19.58 0.4 1.4 27.5 0.7 1.5 -7.1 5.7 1.1 5.5 -7.7 7.43 10 97 9 8 7 7 6 6 5 5 5 69 0.9 19.2 0 1.9 19.4 1.5 -7.1 5.2 0 1.4 27.4 27.5 -7. SECTION 2 YEAR (SEPT 1996) 0 1 2 3 4 5 6 £’000 Capital Costs Building Works 1176 0 0 0 0 0 0 Relocation Costs 15.2 5.

as far as practicable. – occupancy costs. The following costs are to be excluded: – costs associated with the purchase of land. The appraisal is to include all taxation implications for comparative purposes. Single-storey concrete basement.PART 2. The discount rate calculation is as follows [(1. Section 2 (4/99) Effective from 1/6/99 Page 33 . Solid party walls to both sides. SECTION 2 2.2. – financing charges associated with the redevelopment. The Surveyors’ Construction Handbook Part 2.6 TOTAL BUILDING OPTION: DEMOLISH AND REBUILD VERSUS REFURBISHMENT (a) Brief The life cycle cost appraisal is to evaluate the life cycle cost effects of the following options: • demolish existing building and rebuild to the client’s specific requirements incorporating ‘all-air’ air conditioning systems.03) – 1] The client has agreed that the discount rate can be rounded to 4%. • refurbish the existing building to meet.07) – 1] —— × 100 = 3. (d) Description of Existing Building Late 1950s office block of multi-storey framed construction with curtain wall cladding to front and rear. – costs associated with the removal and temporary re-housing of staff during the construction period. the client’s requirements. The client has been advised that an inflation rate of 3% is a reasonable assessment. (e) Description of Existing Engineering Services Gas-fired low pressure hot water boiler situated in basement serving perimeter convector system with warm air ventilation to central parts of the building.88% [(1. (c) Building Life It has been agreed with the client to use a 20-year life cycle. VAT is to be included as the client is VAT-exempt. re-using existing systems wherever possible. Fluorescent luminaires to all office areas and tungsten fittings to circulation. (b) Discount Rate The building is in owner-occupation and the client’s accountants have advised the use of a long-term government stock interest rate of 7%.5. – residual values of land or buildings.

Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . incorporating ‘all air’ air conditioning systems. (h) Summary Net Present Value £k OPTION A demolish existing building and rebuild to the client’s specific requirements. other than temporary shoring. % difference (A extra on B) 3889 2177 ——— 79% ——— The net present value is a key factor in the option appraisal. however. SECTION 2 (f) Condition of the Existing Building The building is structurally sound with few defects. The calculation of the above is detailed below. it is in a poor state of decorative repair. (g) Basic Requirements of the Redevelopment Gross internal area Ratio of net to gross internal area Number of occupants Ratio of occupants to net internal floor area External wall area (excluding party walls) 1500 m2 70% 110 9. re-using systems wherever possible.PART 2. OPTION B refurbish the existing building to meet as far as practicable. The structural engineers have advised that no work is required to party walls. for instance to look at different discount rates and time frames. It is also recommended that a sensitivity analysis be carried out. the client’s requirements. However other less tangible benefits and disadvantages of each option should be carefully considered in relation to the business objectives.7 m2 700 m2 The adjacent buildings will continue to remain in use as offices during and after the development. Page 34 Part 2.

7599 .4936 52 27 131 23 154 48 106 .6496 68 70 67 61 57 55 53 74 52 55 124 . Section 2 (4/99) Less Tax allowance 0 102 88 NET TOTAL 2531 52 66 Present value of £1 at 4% 1 .5134 54 27 131 23 154 48 106 .4564 81 - Operation - 104 104 Maintenance: annual - 27 27 intermittent - - Occupancy - - Disposal/residual value - - Total 2154 131 131 VAT 17½% 377 23 23 Total (inc VAT) 2531 154 154 Part 2.9615 .8548 .7903 .7026 .6246 77 154 161 157 154 154 154 227 152 179 23 24 23 23 23 23 34 23 27 23 154 48 106 .5775 61 153 27 180 56 124 .5553 69 6 3 62 3 21 22 27 27 27 27 27 27 27 27 27 27 27 27 27 3 134 23 157 49 108 .6756 84 94 96 97 99 101 153 105 .8890 68 72 77 76 74 72 71 103 .4746 50 27 86 217 40 257 80 177 .LIFE CYCLE COST SUMMARY 3 £k 104 104 104 104 104 104 104 104 104 104 104 104 104 104 104 104 104 £k £k £k £k £k £k £k £k £k £k £1 £k £k £k £k £k 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 £k 104 OPTION A Year 0 1 2 Costs - £k £k £k Capital 2154 - Financing - - The Surveyors’ Construction Handbook 27 131 23 154 78 76 .5339 58 27 131 23 154 48 106 .7307 .6006 64 131 137 134 131 131 131 193 134 152 131 131 23 154 48 106 .9246 Present value 2531 50 61 Effective from 1/6/99 TOTAL NET PRESENT VALUE £3889k PART 2.8219 . SECTION 2 Page 35 .

8548 .6006 50 104 121 107 104 104 104 149 107 125 104 104 18 122 38 84 .4936 41 15 69 104 18 122 38 84 . Section 2 (4/99) Maintenance: annual - 15 15 intermittent - - Occupancy - - Disposal/residual value - - Total 904 104 104 Effective from 1/6/99 VAT 17.8890 56 58 71 62 59 58 56 .5553 61 17 3 45 3 21 32 15 15 15 15 15 15 15 15 15 15 15 15 15 3 107 19 126 39 87 .7026 .4746 40 173 30 203 63 140 .7599 .8219 . SECTION 2 OPTION B Year 0 1 2 Costs £k £k £k Capital 904 - Financing - - Operation - 89 89 Part 2.6496 55 122 142 126 122 122 122 175 126 147 46 101 .9615 .7307 .5775 49 136 24 160 50 110 .4564 64 15 - LIFE CYCLE COST SUMMARY PART 2.5134 43 15 104 18 122 38 84 .6756 80 68 86 78 78 79 80 118 54 56 48 44 43 42 57 41 85 .5339 46 15 104 18 122 38 84 .6246 63 18 21 19 18 18 18 26 19 22 18 122 38 84 .7903 .9246 Present value 1062 45 52 The Surveyors’ Construction Handbook TOTAL NET PRESENT VALUE £2177k .5% 158 18 18 Total (inc VAT) 1062 122 122 Less Tax allowance 0 75 66 NET TOTAL 1062 47 56 Present value of £1 at 4% 1 .Page 36 3 £k 89 89 89 89 89 89 89 89 89 89 89 89 89 89 89 89 89 £k £k £k £k £k £k £k £k £k £k £1 £k £k £k £k £k £k 89 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 15 104 18 122 59 63 .

SECTION 2 CAPITAL OPTION A GFA: 1500 m2 Elemental Cost Plan Demolition Substructure Superstructure External walls Internal walls Internal finishings Fittings/fixtures Sanitary appliances Public Health services Mechanical services Electrical services Lift installation External work Drainage Total cost £k 70.0 98.5 232.0 2.5% 759.0 Total cost £k 14.0 84.0 63.5 506.0 19% 2154.0 252.0 1.0 77.PART 2.0 51.5 3% 1833.0 Sub-total Preliminaries (% of sub-total) Contingencies (% of sub-total) Total construction cost Professional fees( % of construction cost) Total capital costs to life cycle cost summary 1553.0 – 12.0 9.0 21.0 210.0 – 17.0 56.0 91.0 70.0 14.0 14.0 7.0 327.0 60.0 42.5 126.0 36.0 147.0 15% 46.5 21.0 321.0 17.0 3.0 168.0 8.0 – 6.0 315. Section 2 (4/99) Effective from 1/6/99 Page 37 .0 14.0 54.0 490.0 The Surveyors’ Construction Handbook Part 2.0 OPTION B £/m2GFA £ 9.5 429.0 – 9.0 67.0 2.0 10.0 94.0 5.5 144.5 96.5 101.5 3% 19.0 28.0 1222.5 21.0 105.0 14.0 15% 643.5 £/m2GFA £ 47.0 6.5 84.0 6.0 904.0 1036.

SECTION 2 OPERATION OPTION A £ per annum Energy see next page Cleaning OPTION A Budget allowance £7.PART 2.00 per m2 NB: existing building materials more labour intensive for cleaning Rates (including water rates) OPTION A Budget allowance £50.2% of building cost (£2154) OPTION B OPTION B Budget allowance 0.00 per m2 10500 13617 OPTION B £ per annum 9964 OPTION B Budget allowance £9. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook .2% of building cost (£904) Total operation costs Total £k to life cycle cost summary 103425 104 1808 75000 13500 63000 4308 88272 89 Page 38 Part 2.00 per m2 NB: air conditioned building attracts higher rates Insurance Building fabric replacement OPTION A Budget allowance 0.00 per m2 OPTION B Budget allowance £42.

000 3 9.50 1500 58*** 100 5.840 80 5.8 = 1.2/27.076** 1500 160 240. SECTION 2 Page 39 .5 = 48 + 10 (other mechanical plant) = 58 Gas Heating – Option A Electricity Lighting Small Power Part 2.ENERGY OPTION A Building usage Diversity Unit energy cost (p/kwh) kwh* (f) (d) (e) (c) (d) (e) £ per annum (g) f × c/100 m2 w/m2 m2 w/m2 kwh* (f) Area Energy rate Area Energy rate OPTION B SYSTEM (hrs per annum) (a) (b) The Surveyors’ Construction Handbook (%) £ per annum (g) f × c/100 2000 50 1.000 114.600 2904 1815 2178 9964 *NB: formula for kwh = area (d) × energy rate (e) × unit energy cost (c) × building usage (a) × diversity (b) 1000 ** Gas Board rate per therm 30p 1 therm = 27.50 1500 20 52.8 kwh rate per kwh = 35.800 2904 1815 6316 13617 1500 1500 1500 20 10 20 52.000 3067 2200 2200 2200 Total energy costs to operation costs summary 60 5.076 *** Assume cooling load 120 watts/m2 Conversion rate electricity to cooling 2.5:1 Therefore w/m2 for cooling 120/2.50 1500 10 33.000 2582 1500 190 285. Section 2 (4/99) Power for mechanical services Effective from 1/6/99 PART 2.800 33.

Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook .PART 2.00 12.50 OPTION B £ per annum 6000 6000 2250 Total annual maintenance costs £26.00 1.250 £14.250 Total £k to life cycle cost summary £27k £15k * NB: full air conditioning maintenance for Option A Page 40 Part 2.00 4.50 £ per annum 6000 18000 2250 £/m2 4. SECTION 2 ANNUAL MAINTENANCE OPTION A £/m2 General building maintenance Engineering services maintenance Lifts – service agreement 4.00* 1.

0 3 – – – – – – – – – – – – – – – 42 14 – 86 86 2 £k – – – – 11 – – – – 11 – – – – – – – – – – £k £k £k £k £k £k £k £k £k £k – – 3 4 5 6 7 8 9 10 11 12 13 £k – – 14 £k – – 15 £k – 11 16 £k – – 17 £k – – 18 £k – – 19 £k – – 20 £k 10 11 – – – – 5.5 – – – – – – – – – – – – – – – – – – – – – £k £k £k £k £k £k £k £k £k £k £k £k £k £k £k £k £k 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 £k 10 0. SECTION 2 Total £k to life cycle cost summary – – Page 41 .) – – Internal finishings: carpets – – paintwork. etc.0 3 – – – 21 21 – – – – – – – – – – – – 15.5 45 – – – 3.0 – – 16. etc.0 21 – – – 3.5 – – – – 5.0 – – – – – – – 14 5.5 – – – – 3.5 32 32 – – – 3.0 21 – – – – – – – – – – – – – – – – – – – – – – 14 – – – – – 15.5 – – – – 0.0 – 21 – – – – – – 5.5 69 paintwork.5 OPTION A Year 0 1 Costs £k £k Roof renewal – – External decoration (fire escapes only) – – Internal finishings: – – – – 5.5 3. – – Engineering services: mechanical (equipment) – – electrical (luminaires) – – Effective from 1/6/99 lifts (major overhaul) – – Totals – – PART 2.0 – – – – 5.5 3.0 3 – – – – – – – – – – – – – – – 14 14 – 68.5 carpets – – The Surveyors’ Construction Handbook – – – – – – – 6 3 – – – 62 3 21 – – – 6 3 – – – 62 3.0 – – – – – – 14 5.0 – – – – 3.INTERMITTENT MAINTENANCE 2 £k – – – – 0. etc.5 21.5 – – – – 5.0 – – – – – – – – – – – – – – – – – – – – – – – – – – – 14 14 – 44.5 – – – – 0. – – Engineering services: mechanical (equipment) – – electrical (luminaires) – – lifts (major overhaul) – – Totals – – Total £k to life cycle cost summary – – OPTION B Year 0 1 Part 2.5 3.5 22 – – – – – – – 42 – – – – – – – – 3.5 – – – – – – – 3.5 – – – – – – – 17 3. Section 2 (4/99) Costs £k £k Roof renewal – – External decoration (facades.

SECTION 2 TAX VAT CHARGEABLE VALUE £k OPTION A Capital costs Fees Capital costs Fees 1833 321 759. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . e. *NB.500 × 25% × 31% Tax allowances can only be allowed one year in arrears.PART 2.g. Page 42 Part 2.5 144. running cost VAT Total Tax allowance @ 31% 377 158.000 × 25% × 31% Second year tax allowance 7. If.50 £36.2 377 158 £100 £17. capital item £10. e.3 OPTION B £k OPTION B Total VAT to capital costs Total £k to life cycle cost summary VAT is chargeable directly on all running costs items and appears on the summary. the client can claim back VAT he cannot claim tax relief on this portion of his costs. Corporation Tax The client currently pays corporation tax at the rate of 31%.running costs 100% tax deductible based upon total inclusive of VAT*.2 132.8 56.43 Tax allowance . This percentage has been assumed for all calculations. This is only applicable when the client is an end user and exempt from VAT.capital costs Certain capital items are classified as plant and machinery (see appendix E) and are tax deductible at a rate of 25% per annum on reducing balance.50 £117. Tax allowance . in the course of his business.g.9 25.5 VAT RATE % 17½ 17½ 17½ 17½ OPTION A £k 320.000 First year tax allowance 10.

a.TAX ALLOWANCE 2 £k £k £k £k £k £k £k £k £k £k £k £k £k £k £k £k £k £k £k 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 0 1 £k £k OPTION A Capital allowances Total allowances see next page The Surveyors’ Construction Handbook 131 98 73 55 41 31 23 17 13 10 – – – – – – – – – 154 285 252 227 216 198 185 177 171 240 167 179 154 154 154 154 161 157 154 154 154 227 157 179 154 154 150 180 157 157 154 154 154 154 154 154 257 257 88 78 70 67 61 57 55 53 74 52 55 48 48 56 49 48 48 48 80 90 68 51 38 29 21 16 12 9 7 – – – – – – – – – 122 212 66 59 54 56 48 44 43 190 173 180 155 143 138 122 122 142 126 122 122 122 134 42 175 184 57 126 133 41 147 147 46 122 122 38 122 122 38 160 160 50 126 126 39 122 122 38 122 122 38 122 122 38 203 203 63 £696k (inc VAT) @ 25% p. SECTION 2 Page 43 .a. Section 2 (4/99) Total allowances see next page £482.1k (inc VAT) @ 25% p. reducing balance – 174 Running cost allowances From LCC summary (inc VAT) 154 Total 328 Apply current tax rate 31% Total £k to LCC summary 102 OPTION B Capital allowances Part 2. reducing balance – 121 Running cost allowances From LCC summary (inc VAT) 122 Total Apply current tax rate 31% 243 Effective from 1/6/99 Total £k to LCC summary 75 PART 2.

1 43.1 Option A – Fees only GFA: 1500 m2 Elemental cost plan Demolition Substructure Superstructure External walls Internal walls Internal finishings Fittings/fixtures Sanitary appliances Public Health services Mechanical services Electrical services Lift installation External work Drainage Sub-total Preliminaries (% of sub-total) Contingencies (% of sub-total) Total construction cost Professional fees (% of construction cost) VAT Total tax-allowable capital costs to previous page BWIC allowable on refurbishment BWIC allowable on refurbishment Office lighting and associated switchgear not allowable Taken on proportion of construction costs Page 44 Part 2.5 27.5 27.5 27.2 77.4 45.0 88.0 9.5 19.8 8.5 101 54 105 – 9.5 84 2.1 64.5 1553.5 96.5 144.6 91.5 27.2 – – 9.5 1833 321 377 OPTION A % tax allowable £k – – – – – – 20 100 – 100 60 100 – – 27. Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook .5 233 46.6 71.5 759.5 – 94.1 12.4 45.0 – – 292.7 696 Total cost £k 14 – 17.5 126 91 7 3 634.7 482.3 103.9 65.PART 2.4 45. SECTION 2 CAPITAL ALLOWANCE Proposed capital allowance for taxation purposes Subject to negotiation and agreement with the Inland Revenue on evidence of eventual costs Total cost £k 70 42 315 490 14.5 Tax allowable £k – – – – – – 0.5 75.4 9.5 158 OPTION B % tax allowable £k – – 30 – 30 – – 100 – 100 60 100 – – 45.0 – – 427.5 – 252.4 45.4 Tax Remarks allowable £k – – 5.5 21 252 147 77 21 8.8 88.5 21 94.3 – 16.

7605 9.9026 27.7538 12.0352 13.3708 20.2245 15.1885 19.0772 18.5595 8.4773 10.7658 21.9416 2.3941 13.5771 3.1002 4.4720 7.5244 15.9346 1.1210 20.4236 34.3711 10.2421 6.2064 5.7995 28.7864 6.8355 11.5890 15.7455 9.5631 11.5235 20.2098 6.3356 10.2526 9.0004 20.6055 13.0021 6.1390 7.3296 16.8493 13.2470 15.8181 10.0236 7.2122 12.1059 10.1374 12.1476 18. SECTION 2 2.3872 4.4558 15.8775 15.7648 13.6500 13.3270 18.7305 13.9672 12.8027 16.6299 4.1148 23.2124 4.6235 5 0.4090 12.1109 8.9920 15.6756 Single Rate 6 0.8768 18.9524 1.9355 17.2722 11.5288 10.6748 10.6014 6.9293 The Surveyors’ Construction Handbook Part 2.3936 9.7609 3 0.9477 13.4888 25.9083 19.9826 9.8080 2.9931 20.3681 14.2469 6.8378 11.0800 29.4112 18.2813 21.1657 12.4524 13.9427 8.3415 21.5753 11.9927 4.7466 6.5824 6.3034 12.8100 10.0432 12.PART 2.9886 24.3238 14.7632 10.3838 8.3484 12.4986 24.7741 17.6916 13.8007 14.6243 3.4353 8.2944 17.8981 15.7101 7.9379 12.7641 19.0463 15.4683 23.7641 12.4822 22.1184 11.1856 20.6036 9.4150 15.9491 15.4511 14.8786 11.1584 11.5017 25.8017 7.7298 27.4406 26.8847 21.5797 5.5361 7.7535 14.7752 11.1891 12.9540 10.2303 7.3317 13.4902 29.9867 12.2543 24.1170 13.7986 14.7232 3.9352 11.3851 9.9713 6.6546 11.7751 3.5488 20.5.9377 23.9804 1.1078 7.3893 5.0197 7.1216 9.3555 27.4622 12.2302 14.0771 12.9291 14.9259 1.5504 12.8276 11.3742 16.8460 14.7834 13.5885 17.1084 12.5139 11.2007 10.8289 11.5777 14.5460 4.6466 12.7665 5.4693 11.3725 15.4436 16. (111th Edition) (Estates Gazette) YEARS’ PURCHASE RATE PER CENT No Income Tax Years 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 60 2 0.4699 11.6616 29.6536 11.5903 14.4982 14.0170 17.7928 19.8540 12.1591 17.7 A SELECTION FROM PARRY’S VALUATION AND INVESTMENT TABLES (for full tables rewference is made to Parry’s Valuation and Investment Tables.6210 14.1339 13.5579 13.5152 7.3121 3.0416 12.3965 22.3797 10.5940 10.9986 25.2335 12.2922 18.3679 19.6350 11.0025 16.3719 9.3062 15.7076 15.9810 18.0112 17.3752 14.5318 12.1622 8.4872 21.5070 13.8323 22.1380 15. Section 2 (4/99) Effective from 1/6/99 Page 45 .7135 5.1614 7 0.1581 11.3255 8.7113 16.2919 14.3064 8.5845 19.8212 13.8861 2.5928 15.1426 19.4987 7.0591 10.9246 11.4172 6.8986 10.9434 1.6004 20.4518 5.0939 14.6731 31.5187 24.1371 12.7200 20.1411 15.8839 3.2777 12.9856 10.6229 5.6430 14.7619 16.1935 13.8801 17.9615 1.0168 10.4232 17.7754 25.8334 2.3888 20.9369 16.7327 7.7014 23.9828 16.0612 11.0840 14.6631 16.4131 17.8077 4.8736 18.2649 13.0292 14.7368 14.8082 23.2866 30.0853 12.3295 5.8923 30.9038 8.3514 17.1687 18.6628 17.8527 9.2442 8.6785 16.7217 8.0247 25.9139 19.7122 10.8514 9.6646 18.9135 2.2559 18.8258 11.0429 21.4632 7.4466 9.1318 21.1643 12.6580 18.0511 11.7069 21.9709 1.5869 11.9819 24.5907 13.2105 13.4124 23.1661 13.6523 12.2.0032 13.2348 28.1929 16.1951 21.8594 2.3601 7.5469 16.8568 15.2578 11.3577 8.2950 9.2920 17.4350 11.2741 11.9173 5.2961 11.0067 12.7861 8.6500 15.1672 22.8444 22.3766 4 0.8633 9.4062 13.5459 17.9837 17.5302 9.1062 12.0392 8 0.1630 13.3832 15.8286 3.7833 2.6896 12. A W Davidson (1989).4651 4.7668 13.8679 17.7172 11.5611 13.4886 13.1079 9.2667 25.6221 15.9695 26.7171 4.0757 5.8869 8.6593 13.0521 31.6730 3.7868 10.3498 11.4925 22.

2166206 .4919337 .4057263 .2617973 .0542884 .0313279 .0917190 .6805832 .2342968 .8367553 .5873946 .3751168 .2812407 .1956301 .0363241 .0460309 .1157932 .6809513 .1313671 .0852000 .8734387 .7472582 .0172573 8 .5520709 .7025867 .6418619 .2436687 .1998725 .0609984 .4423010 .1703153 .4440102 .0788889 .1521948 .7835262 .5267875 .1073275 .1420457 .3503438 .PART 2.5218925 .9425959 .2145482 .3713644 .4021537 .3936463 .7628952 .4440120 .1839405 .1491480 .6231669 .2644386 .5303214 .5846793 .1168613 .0685378 .2329986 .0303143 7 .4353041 .1726574 .8227025 .5702860 .1159137 .9238454 .2953028 .0865274 .3334775 .0624116 .1549574 .6768394 .2317121 .2964603 .1002193 .6050164 .0535355 6 .4746424 .2419988 .3770262 .7938322 .1741101 .0950604 5 .3065568 .2534155 .3418499 .9615385 .6227497 .2889592 .1352018 .0818088 .8884870 .1842492 .3305130 .2073680 .1566054 .2257132 .0444986 .0388668 .3165744 .2805429 .5133732 .4688390 .1405628 .2678483 .4631935 .0290073 .2281071 .0579857 .9259259 .0339478 .4119868 .9803922 .5202287 .3901215 .0770091 .3404610 .1582826 .2492588 .7141626 .5918985 .0365408 .8573388 .0497134 .5375493 .6755642 .2976280 .1851682 .6301696 .8203483 .0626246 .5339082 .1642548 .9523810 .3450324 .1504022 .6611178 .9245562 .5306333 .3047823 3 .1644356 .3768895 .4776056 .1986557 .3349829 .0415875 .1646139 .0667804 .4936281 .6217215 6095309 .1971466 .1227408 .2469785 .5412460 .3255713 .7920937 .7306902 .2723718 .6005741 .1147411 .7106813 .4711872 .4243464 .8374843 .7049605 .3883370 .0726501 .7350299 .3387346 .1288396 .9070295 .1407126 .3971138 .2002779 .0646583 .2082890 .3624460 .9611688 .1379115 .3553834 .6274124 .0268586 .1460179 .1301052 .6341559 .4902232 .2775051 .7730325 .2941554 .2109469 .5631123 .5083493 .9708738 .0426212 .0213212 .8219271 .2203595 .0509464 .2313774 .4172651 .2098662 .5066917 .5858620 .0961421 .1072347 .3206514 .4563869 .2918905 .1009492 .7599178 .7578750 .0575457 .7894092 .4810171 .4636947 .3715279 .8879714 .8042630 .0872037 .9151417 .2702690 .4388336 .3999871 .1845567 .1711984 .2850579 .7903145 .0536905 .4101968 .2550936 .4184007 .8548042 .8396193 .2198100 .1251868 .8705602 .4149644 .7013799 .2740942 .1030555 .8889964 .41552-7 .0338341 .5552645 .3157535 .0875355 .0936629 .5050680 .5002490 .4619482 .9057308 .5774751 .0394641 .0230269 .5568374 .1227044 .2567365 .0764569 .0476135 .1812903 .6468390 .3865376 .1780463 .7129862 .2349503 .7440939 . Section 2 (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook .1461862 .7462154 .1227730 .5743746 .3606892 .6446089 .4528904 .6864308 .6597758 .0248691 .0583286 .4219554 .0972222 . SECTION 2 No Income Tax Years 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 60 2 .1352816 .6729713 .6139133 .4969694 .6245970 .3789584 .0714550 .4806109 .4581115 .8162979 .1059967 .2584190 .2415131 .4267688 .0993773 .1112965 .5100282 .0816296 .9345794 .8130915 .1463411 .1576993 .0676345 .8626088 .5000276 .5402689 .9423223 .3676979 .0920160 .2635521 .3083187 .0915639 .3660449 .7664167 .3100679 .3252262 .6495809 .2429463 .3152417 .8534904 .3957340 .2502490 .7001594 .5583948 .1721955 .8899964 .3942684 .4750928 .1697331 PRESENT VALUE OF £1 RATE PER CENT 4 .3468166 .4288829 .2765083 .5439337 .5536758 .1925749 .4370768 .2958639 .1903548 .3878172 .7284458 .5834904 .1092389 .5820091 .8638376 .9433962 .7884932 .2252854 .3589424 .3118047 .7430147 .0545127 .1609304 .5975793 .6650571 .4362967 .0098759 Page 46 Part 2.6663422 .4501891 .0730453 .7224213 .

0230456 .0032600 .0291988 .0065502 .0665522 .0324252 .0088274 .0145926 .0633569 .0158038 .1165098 .0047005 .0056142 .0107852 .0023899 .4854369 .0049244 .1305064 .0429628 .0190466 .0210193 .0690295 .0032868 .0123919 .0622020 .1846271 .0216865 .0585263 .0105235 .0030341 .0087680 3 1.1363154 . The Surveyors’ Construction Handbook Part 2.0834865 .0037577 .0132824 .0086645 .0226106 .0427087 .0087646 .0096185 .0241276 .2285915 .0095778 .0148899 .0078574 .0198323 .0496508 .1738907 .PART 2.0225674 .1155532 .0081073 .0348718 .0053184 .1883546 .0075219 .1085278 .0000000 .0294126 .0913265 .0047767 .0028282 6 1.0312801 .4807692 .0143148 .1433626 .0171890 .0117922 .0058033 .4950495 .0056834 .0173220 .0499698 .0045389 .1228198 .0092842 .0135773 .1266096 .0180321 .0250045 .0564558 .0083948 .0200130 .0199989 .0069933 .0125071 .0126018 .0335818 .0144593 .0059282 .0000000 .0168554 .1704565 .0143879 .1921584 .0354448 . SECTION 2 No Income Tax Years 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 60 ANNUAL SINKING FUND FOR THE REDEMPTION OF £1 CAPITAL INVESTED RATE PER CENT 2 1.0188799 .0150514 .0050061 .3110517 .0386991 .1010359 .4878049 .0018856 .0421985 .0117554 .0346681 .0118232 .1345120 .3267547 .0043359 .2219208 .0361386 .0296992 .0038602 .0255868 .0372157 .0208187 .0279961 .0122040 .0443449 .0182919 .0282931 .0000000 .0158105 .3080335 .0496108 .0259705 .0467021 .0758680 .0308139 .4901961 .0412969 .0171225 .1191350 .2354900 .4830918 .0510240 .0832909 .0000000 .0000000 .0536501 .0020403 .0068938 .0800797 .0245642 .0090729 .0066163 .2252281 .0218522 .0110023 .0200022 .0134534 .0204058 .2390270 .0088655 .0974678 .0221147 .0068516 .0135796 .0061330 4 1.0328711 .0704621 .0463423 .0537666 .0795046 .0600763 .0151036 .0780774 .0024598 8 1.0640295 .0028307 .0078223 .0327474 .3172086 .1047218 .0078820 .0185068 .0071806 .0159719 .0156972 .0870222 .1545975 .0068571 .0050396 .0267021 .1025154 .0000000 .0089739 .0312204 .0592770 .0034996 .0267530 .1397958 .0095402 .0038977 .0271846 .0212785 .0100174 .0160455 .0302426 .0139096 .0741490 .0151116 .0368295 .0628254 .0095984 .0323565 .0196790 .0389933 .0329769 .0578255 .0034443 7 1.0090899 .0060589 .3203485 .0128869 .0041851 .0437818 .0169043 .0475849 .0053447 .0290474 .0171711 .0030374 .0269897 .0667929 .0358576 .0178206 .0116319 .0057951 .0098398 .0273091 .0499411 .0097969 .0422699 .1809748 .0104889 .0026385 .0084081 .0114481 .0000000 .0257784 .0110717 .0136788 .0046596 .0105864 .0141321 .0110608 . A W Davidson (1989).0327450 .0073581 .0104345 .2426238 .0984339 .0082782 .0074508 .0165393 .0366314 .0099605 .0195643 .0259383 .0053868 .0411567 .0397946 . (11th Edition) (Estates Gazette) reproduced by permission of the College of Estate Management which owns the copyright.0529601 .0053331 .0389521 .0398139 .0028015 .0241368 .0017429 Extracts from Parry’s Valuation and Investment Tables.0723775 .0121917 .0940148 .0355462 .0165557 .0134257 .0681184 .0044149 .0042018 5 1.1124564 .0130179 .0127124 .0102729 .0025873 .0145610 .0050091 .0296294 .0224709 .0040359 .0240120 .0116981 .0064615 .0212385 .0062617 .0182267 .0459525 .0944930 .0077967 .0072340 .0246499 .0114487 .0192329 .0122396 .0235963 .0187139 .0132804 . Section 2 (4/99) Effective from 1/6/99 Page 47 .1470175 .0062368 .0181561 .1585258 .0601437 .0906901 .0274279 .0243929 .0112298 .1773964 .3235304 .0465218 .0126489 .0526950 .0164222 .0149780 .2320118 .1120724 .3141098 .0387848 .0559020 .0232932 .0872305 .0222890 .0022080 .4926108 .0124900 .0103625 .0154173 .0296209 .0159486 .0458200 .0745596 .0063041 .0703889 .0082625 .0209525 .0178301 .0067153 .0035615 .1507619 .0073947 .0092131 .0036636 .0546690 .0138439 .0041477 .0821779 .

There will be one of two situations. as parties to property transactions sometimes select/contract disposal values of tax relievable components with specific tax planning objectives. In considering residual values. an allowance should be made for the cost of disposing of plant and equipment and for the demolition of buildings. but does have an alternative use. the vendor should declare whether allowances have been claimed. An adjustment to their after tax cost will arise depending upon whether the disposal value is greater or less than the written down value remaining on the vendor’s accounts. allowance should be made for the value of any re-usable materials. This area of tax advice is experiencing increased scrutiny from the Inland Revenue and the District Valuer’s Department. APPENDIX A I Appendix A: Residual Values A1 At the end of the life of a building. A2 A3 A4 A5 A6 A7 The Surveyors’ Construction Handbook Part 2. with no alternative use.PART 2. If the plant and machinery is ‘scrapped’ the remaining value is written off and a balancing allowance brought into account. In either situation the residual value of the building and/or the land may be significant and will need to be carefully assessed as it may have a substantial effect on life cycle costing calculations. the component/building and the land will have a residual value. if appropriate. Residual values will be of particular significance if the time horizon used for life cycle costing calculations is relatively short. There are strict guidelines for taxation adjustments that arise at disposal. Section 2. or the building will have reached the end of the life for its planned purpose. SECTION 2. Either the building will have reached the end of its life. Alternatively if the building (and the plant and machinery contained therein) is sold. In assessing demolition costs. Owners also need to be cognisant of taxation issues and whether these affect their property/building decisions. Appendix A (4/99) Effective from 1/6/99 Page 1 .

Economic Life of the building to when occupation is not considered to be the least cost alternative of meeting a particular objective. are therefore likely to have shorter lives than buildings offering flexibility for the change of function of the building. Deterioration of suspended concrete floors. How long will the building be economic for the client to own or operate? The value of the land on which the building stands is more than the capitalised full rental value that could be derived from letting the building. Appendix B (4/99) Effective from 1/6/99 Page 1 .PART 2. containing high alumina cement. The table below gives definitions and examples of each form of obsolescence: Types of obsolescence Definition of type of obsolescence Basis for assessment of building life How long will the building stand up? Examples of factors leading to obsolescence Deterioration of external brick walls affecting their structural stability. Buildings designed for a specific specialised use. The Surveyors’ Construction Handbook Part 2. B3 Physical Life of the building to when physical collapse is possible. Section 2. The asset would achieve a better rate of return in the possession of another. with little or no flexibility for changing their use. APPENDIX B I Appendix B: Obsolescence B1 Building life is influenced by obsolescence. Buildings usually end their ‘life’ before the end of their physical life. However. in multi-storey buildings. Almost all its forms relate to economic considerations. six different forms of obsolescence can be categorised as: • • • • • • B2 physical economic functional technological social legal. affecting structural stability. The most common reasons for buildings becoming obsolete are probably economic and functional considerations. SECTION 2. or in the redevelopment or refurbishment scheme.

Appendix B (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . How long will the building meet human desires. While the above examples relate to the whole building. the surveyor. B5 Page 2 Part 2. (with the exclusion of economic considerations). Timber football stand replaced (following Bradford Football Club fire disaster). village railway stations converted into private houses. for example major refurbishment of retail buildings at say 15-year intervals to remain attractive. SECTION 2. APPENDIX B Types of obsolescence Definition of type of obsolescence Basis for assessment of building life How long will the building be used for the purpose for which it was built? Examples of factors leading to obsolescence Cinemas converted into bingo halls. in consultation with the client. Storage warehouse unable to accommodate the introduction of robotics for goods handling. Section 2. obsolescence of elements or components is also relevant. In making that assessment the surveyor will need to take account of a number of factors which may influence the final assessment of building life in any particular case. should make an informed assessment of the building life to be used in any particular study. Technological How long will the building be technologically superior to alternatives? Prestige office unable to accommodate introduction of high level of computing facilities. Multi-storey flats in inner city demolished (following social and community problems). B4 Notwithstanding the difficulty of the task. Life of the building until the building is no longer technologically superior to alternatives. Functional Life of the building to when the building ceases to function for the same purpose as that for which it was built.PART 2. Social and Legal The life of a building until the time when human desire or legal requirement dictates replacement for reasons other than economic considerations.

SECTION 2.1 C3.7 C1.3 C4.6 C1. C1 C1.6 C3.9 C1.2 C2.8 C1.9 C3.PART 2. REPLACEMENT ALTERATION COSTS Main structure External decorations Internal decorations Finishes.1 C1.13 C2 C2.1 C2.11 C4 C4.10 C3.7 C3.11 C1.5 C3.5 C1. APPENDIX C I Appendix C: Costs And Values The following checklist provides suggestions for cost and value categories to be considered. Section 2.8 C3.6 CAPITAL COSTS Land Fees on acquisition Design team professional fees Demolition and site clearance Construction price for building work Cost of statutory consents Development Land Tax Capital Gains Tax Value Added Tax Furnishings Other capital costs Commissioning expenses Decanting charges FINANCING COSTS Finance for land purchase and during construction Finance during period of intended occupation Loan charges (public sector) OPERATION COSTS Energy Cleaning Rates Insurances Security and Health Staff (related to the building) Management and administration of the building Land charges Energy conservation measures Internal planting Equipment associated with occupier’s occupation ANNUAL MAINTENANCE COSTS.2 C1.4 C3.1 C4.12 C1.5 C4. fixtures and fittings Plumbing and sanitary services Heat source Part 2.4 C1.3 C3 C3. Appendix C (4/99) Effective from 1/6/99 AND The Surveyors’ Construction Handbook Page 1 .3 C1.2 C4. INTERMITTENT MAINTENANCE.2 C3. This list is not exhaustive and items may need to be added or others disregarded as applicable to any particular project.10 C1.4 C4.3 C3.

Appendix C (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . SECTION 2.10 C4.12 C4.13 C4.9 C4.8 C4.14 C4.7 C4.1 C6.3 Space heating and air treatment Ventilating systems Electrical installations Gas installations Life and conveyor installation Communications installation Special and protective installations External works Gardening OCCUPANCY COSTS Client’s occupancy costs RESIDUAL VALUES Resale value – building. Section 2.2 C6.1 C6 C6.15 C5 C5. land and plant and equipment Related costs – demolition and site clearance and disposal of fees and charges Capital Gains Tax and balancing charges Page 2 Part 2.PART 2. APPENDIX C C4.11 C4.

manufacturing. To assist clarification examples of items likely to attract taxation relief are illustrated in Appendix E. D4 INDUSTRIAL BUILDING Industrial buildings or structures which qualify for capital allowances are defined in the statutes CAA 1968 S7 and CAA 1990 S18. When an asset is disposed of a review of the allowances received is required and an adjustment may be necessary. As explained in 2. furniture and equipment thereto.3 there are various types of taxation allowances and the proportion of initial expenditure which attracts tax relief is often varied by successive Finance Acts. Part 2. This should be differentiated from the rate of depreciation adopted by accountants/auditors when preparing company management accounts to allow provision for replacement of assets. This is because the depreciation allowance for taxation purposes is fixed by legislation.PART 2. buildings. salaries. REVENUE EXPENDITURE Expenditure incurred as a trading expense e. PLANT AND MACHINERY This type of tax relief was introduced after the second world war to provide an incentive to industry to replace equipment used in industry and commerce. These assets should have a useful life of more than one year. These include factories. SECTION 2. docks. occupancy and regular maintenance costs. permanent improvements or additions/extensions to existing assets including associated professional fees. The precise definition of plant and machinery is frequently contested in the courts. Section 2. consumables.g. storage. There are specific rules which apply where part of the building is used for a non-qualifying purpose. tunnels and mines. TAXATION ‘DEPRECIATION’ ALLOWANCES (FOR TAXATION PURPOSES) This is a collective term for taxation relief afforded to commercial (tax paying) organisations to offset the cost of capital expenditure incurred upon assets used for the purposes of their trade. Appendix D (4/99) Effective from 1/6/99 Page 1 D2 D3 D5 The Surveyors’ Construction Handbook . APPENDIX D I Appendix D: Glossary of Terms for Taxation D1 CAPITAL EXPENDITURE Money expended in acquiring long life assets which includes land. D6 INITIAL ALLOWANCES/FIRST YEAR ALLOWANCES These were introduced to provide an acceleration to the standard rate of annual tax relief (depreciation allowance) being a proportion of the original capital expenditure. which are intended for use in the carrying out of business operations.2.

APPENDIX D Governments use successive Finance Acts to vary the proportion awarded to increase or reduce this incentive as a method of influencing or stimulating capital investment within the commercial sector of the economy. reduction of tax relief). original cost less the amounts already calculated and benefiting from tax relief. Appendix D (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook .PART 2. then a ‘profit’ has arisen which is subject to an adjustment to the depreciation allowance (i. D8 Page 2 Part 2. Alternatively. If the asset is sold for a sum in excess of the vendor’s after tax relief cost. termed a ‘balancing allowance’. Section 2. D7 ANNUAL ‘WRITING DOWN’ ALLOWANCE This is the annual depreciation allowance awarded in respect to ‘qualifying expenditure’ as a proportion of the residual balance of the initial expenditure i. SECTION 2.e. BALANCING ALLOWANCE Upon disposal of an asset a comparison between its value and the written down amount remaining on the owner’s accounts is required. termed a ‘balancing charge’. if the asset is ‘scrapped’ or disposed of at low value (compared with the residual amount) then an additional tax relief is awarded.e.

SECTION 2. flue. 3. shelves. 8. 6. 1. 2.PART 2. 2. e. 5. water pumps. 4. ventilating or air conditioning system Any movable fixtures and fittings Demountable partitions Curtains. blinds and furnishing Cupboards. Electrical installations 1. telephone booths Sanitary fittings (not the pipework) Vanity units Soap dispensers Mirrors Demountable toilet partitions Coat hooks and racks Towel rails and cabinets Toilet roll holders Tanks Boilers and equipment. curtain track. APPENDIX E I Appendix E: Examples of items of Expenditure Likely to Attract Taxation Allowances Item Finishes/fixtures/ fittings Plant and equipment 1. 9. display counters. 4. 3. Plumbing and sanitary services 1. 6. 6. 6. 5. cookers and equipment including flues and builder’s work in connection 5. 2. dustbins. 3. curtains. Appendix E (4/99) Effective from 1/6/99 Page 1 . lockers. Ventilation systems 1. 4. 4. 7. 8. 3. Section 2. 3. ash removal plant Control equipment to the heating system Builder’s work in connection with the heat source Part cost of boiler room Equipment in connection with heating. (not the pipework from the boiler) Boiler bases and foundations Oil storage tanks and foundations Fuel hoppers. Heat source The Surveyors’ Construction Handbook Part 2. air conditioning and hot water installation (not the pipework or ducting) Builder’s work in connection with the equipment Plant room Electrical and mechanical control system Solar heating systems Insulation to pipework Dust and fume extraction equipment including ductwork and builder’s work in connection Extract fans and builder’s work Ventilators Instrumentation controls Electrical installation to all plant and equipment (excludes conduit and wiring to power and lighting for the building generally) Light fittings Emergency lighting Switchgear and transformers Control gear and distribution boards Plant rooms Builder’s work in connection with the electrical installation Gas fires. 2. 5. 5. 2. 7. fuel pumps. 7. 4. 4. 7. 6. 3. Wall finishes where they can be removed from the building. 2. Space heating and air treatment 1. battens for fixing Floor finishes such as carpets and any floor finishing that can be removed from the building Door mats and matwell frames Suspended ceilings which are airtight and can be used as an extract system or any ceiling which is an integral part of the heating. cloakroom fittings. chalkboards. Gas installations 1. etc.g.

2. 1. 4. 2. SECTION 2. 5. 9. 3. motors and ancillary builder’s work Refuse disposal equipment including ancillary builder’s work Lighting conductors and earthing systems Occupational equipment associated with the building user Computer equipment and all ancillary work Crane gantries All builder’s work in connection with items 1 to 20 above Removable fire escapes Shelving Safes and strong rooms Roller shutters Ladders Dock levellers Signs/notice boards Interior planting External signs Traffic signs. 2. 6. 16. 5. 15. 17. Section 2. Lift installation complete including builder’s work in connection with lift motors. 19. bells. 20. 7. External works Page 2 Part 2. 1. APPENDIX E Item Lift and conveyor installations Communications installations Plant and equipment 1. 21. 2. 6.PART 2. 3. 1. 3. 4. 11. signals and the like Fire alarms Burglar alarms Telephone installation Builder’s work in connection with communication installations Sprinkler system Dry riser system Hosereel system CO2 system Fire extinguishers Refrigeration equipment Kitchen equipment Laundry equipment Health equipment Laboratory equipment Manufacturing equipment Incinerators and flues Water heaters Hand dryers Window cleaning hoists and equipment including track. 7. 12. 10. crash barriers Drainage where it is specifically required for plant and equipment Cycle racks Special installations/ protective installations Special items within a building (the items shown are only given as indicative of the types of item) 1. 3. 4. 14. 6. 18. 13. 5. 4. lift guides and plant room Escalators and hoists are as for lifts Clocks Sound distribution. 8. 2. Appendix E (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . 8.

APPENDIX F I Appendix F: Further Reading Ferry. London. SW1P 3AD. Occupancy Cost Planning. Kent. 1983 Flanagan. Includes addresses of numerous trade and professional organisations as possible data sources. Life Cycle Costing: Theory and Practice. Graham. London. Roger. Justin Robinson. Life Cycle Costing For Construction. George. J. Tel: 01923 664 258. Oxford. The Surveyors’ Construction Handbook Part 2.J. 1992.. Section 2. Building Maintenance Information. BSP Professional Books. Life Cycle Costing: A Radical Approach. 1991 Flanagan. Building Research Energy Conservation Support Unit. Tel: 0171 222 7000. Central Unit on Procurement.. Norman. A comprehensive study including hard costs. Owning and Operating Costs. George Meadows. 1994 British Standard 7543: 1992 Guide to Durability of Buildings and Building Elements. D. Section B18. Covers typical energy costs for different building types. 1992 Building Research Energy Conservation Support Unit. 1992 Data Sources Bernard Williams Associates. CIB W80 report 96: Prediction of Service Life of Building Materials and Components CIBSE. HM Treasury.. Energy Consumption Study. David & Townsend. Facilities Economics. Building Economics Bureau Ltd. BMI. Review of Maintenance and Occupancy Costs. Tel: 0181 460 1111. 1996. Surveyors Publications. 12 Great George Street. Building Maintenance Information. London. BMI. contact details as above. Geoffrey M. WD2 7JR. Guidance Note No. Bernard Williams Associates. good practice guides and energy consumption guides for different building types including costings. 1995. BMI. Chartered Institute of Building Services Engineers. contact details as above. Norman. Watford. Roger. SECTION 2. CIB. Gives indicative details of energy consumption. R. London. Furbur.PART 2. Construction Industry Research and Information Association (CIRIA Report 122). Energy Efficiency Best Practice Programme. Includes numerous good practice case studies. British Standards Institution.O. Flanagan. CIBSE Guide. Products and Components. 1989 HM Treasury. London. Appendix F (4/99) Effective from 1/6/99 Page 1 . London. 35: Life Cycle Costing. maintenance costs and rough life spans for plant (currently being updated in more detail). Building Maintenance Information.

1985. NBA Construction Consultants. Comprehensive life-span assessment for over 500 housing components based on insured life assessments. Dell’isola. RICS. London. ISO Guide to Service Life Planning of Buildings (under preparation at the time of writing but it will include a method of estimating the durability of individual building components). 1995.. 3rd Edition. RICS Research Paper Series No 11.. Life Expectancies of Building Components. Tel: 0171 204 2481. Alphonse J. New York. APPENDIX F HAPM Component Life Manual. Includes 45 pages of maintenance and replacement data (in dollars) covering all elements. Jones Lang Wootton. SECTION 2. Includes elemental analysis of cleaning. London HMSO 1991. Jones Lang Wootton. (2nd Edition). A review of 300 buildings including unit costs. 1995. E & FN Spon. 1992. McGraw-Hill Inc. Stephen J. Office Service Charges Analysis 1995. Section 2.PART 2. Preliminary results from a survey of Building Surveyors’ views. maintenance and repair costs. NBA Construction Consultants PSA Cost in Use Tables. Page 2 Part 2. Kirk. Maintenance Cycles and Life Expectancies of Building Components and Elements: a guide to data and sources. Life Cycle Costing For Design Professionals. Appendix F (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook .

irrespective of how it may be constructed. However. specification or construction.PART 2.3. for example. The tender cost is broken down into the standard BCIS elements (see Appendix A) using the definitions to determine which items should be included in any particular element.e.1 An element is a part of a building which fulfils a specific function or functions irrespective of its design. budget estimates are normally prepared in elemental form and developing the designs are normally described and costed in this manner. the element ‘external walls’ provides the external vertical envelope to a building.2 I 2. I 2. Part 2.1. Instructions and Definitions. Standard Form of Cost Analysis: Principles.2.1 An elemental cost analysis is prepared following the receipt and acceptance of a tender for building work.1. i. Elements relate to the design process.1 Elements 2. separating the internal and external environment.4 The Surveyors’ Construction Handbook .3. the development of a design with a preset budget and were published in the BCIS document.. For further information on the preparation of an elemental cost analysis using the BCIS elements.3. The elements are also referred to in other sections of the handbook. Instructions and Definitions. please refer to the BCIS publication. SECTION 3 PART TWO: CONSTRUCTION DESIGN & ECONOMICS SECTION 3: ELEMENTS FOR BUILDINGS Introduction The Building Cost Information Service (BCIS) elements were originally produced for use in cost planning. since their introduction elements have become widely used for structuring building information in value engineering. Section 3 (10/99) Effective from 1/11/99 Page 1 2.2 2. specifications. The elemental cost analysis can then be used to estimate future projects of a similar type. This section discusses some of the uses for elemental information and gives a complete definition for each element.2.3. Therefore. contract drafting and tender evaluation as well as for cost planning/cost analysis.3. Standard Form of Cost Analysis: Principles.2.2 Elemental Cost Analysis 2.3 2.3.3.2.3. 2.

Standard elements. 2. the use of non-standard elements and definitions can be confusing. S ECTION 3 I 2.PART 2. Performance specifications and outline specifications naturally fit into an elemental format. prepared for the employer by his own consultants or other professional advisers: • Any design input from the employer must be embodied in the employer’s requirements as there is no provision for design input from the employer during the course of the contract.1 DESIGN AND BUILD In the procurement of design and build projects there has been an increase in the use of elements to structure both employer’s requirements and the contract sum analysis. as detailed in the following subsections. or may be anything up to full ‘scheme design’ or further. on the other hand. but if anything beyond basic accommodation requirements is being given. • There is no set format for the employer’s requirements. encourage a structured thought process and produce more coherent employer’s requirements.3 Other Uses The standard elements can be used successfully for other purposes. This helps to avoid some conflicting statements that may arise in contract documents if standard elements are not used. where necessary. setting it out in design elements will be helpful to both the employer and the contractor. It also means that the requirements are presented to the contractor in a form that will assist him in developing his design proposal. particularly where an outline specification is being prepared. CD/1A states that the employer’s requirements may be little more than a description of accommodation required. • Elements are the most helpful form for structuring specifications to be included in the employer’s requirements.3. • Using the element headings to structure the requirements will act as a checklist for the employer and his representatives in producing any design requirements they may have.3. (a) Employer’s Requirements The Joint Contracts Tribunal (JCT) practice note on the Standard Form of Building Contract With Contractor’s Design. with the more detailed specification in trade (work sections) form. However. Section 3 (10/99) Effective from 1/11/99 The Surveyors’ Construction Handbook .3. Page 2 Part 2. Where a more detailed specification is required it may be more helpful to give performance requirements in elemental form.

The Surveyors’ Construction Handbook Part 2. (c) Contract Sum Analysis Design and build contracts are for a lump sum price. Section 3 (10/99) Effective from 1/11/99 Page 3 . The use of standard elements to format the contract sum analysis makes the foregoing procedures simpler (see Section 2. Contractor’s proposals on contractor-led design projects should be systematically checked to ensure that they meet the employer’s requirements. for checking interim payments and for valuation of changes in the employer’s requirements. S ECTION 3 (b) Contractor’s Proposals The contractor’s proposals should follow the format of the employer’s requirements. (d) Evaluation of Tender Proposals On client-led design projects where tenders are based on a detailed set of employer’s requirements and a highly developed design. the proposal and the contract sum analysis in consistent elemental form greatly assists in this process. If the contractor’s proposals were not structured in this way. Indeed. Contract sum analyses presented in consistent elemental form allow comparison both with the client’s quantity surveyor’s original cost plan and between the competing tenders. Where alternative solutions have been put forward for particular elements. This identifies where individual tenders have proposed any elemental solutions with a significantly different cost.PART 2.3. it is difficult to imagine any successful detailed technical check of a tender that did not follow a design elemental form. Comparison of the tender with the cost plan element by element helps in assessing the contractor’s compliance with the employer’s design. The structuring of the requirements. (e) Interim Payments The JCT Standard Form of Building Contract With Contractor’s Design 1998 (CD98) provides for the use of one of two methods for interim payments. the employer should in theory be able to accept the lowest tender.1 (e)). If the contract sum analysis has been set out elementally it lends itself to Alternative A. Alternative A is by stage payments and Alternative B is by periodic payments. as elements and sub-elements provide easily definable stages. the existence of an elemental cost plan and an elemental contract sum analysis prove invaluable in assessing the tender value.3. but the standard forms of contract provide for a contract sum analysis for assisting the employer in assessing tenders. The preparation of the specification for materials and workmanship in elemental form facilitates the development of the specification alongside the design and tendering process. the process would be much more difficult. It also highlights any amendments to the employer’s requirements either proposed by the contractor or requested by the client.

Section 3 (10/99) Effective from 1/11/99 The Surveyors’ Construction Handbook . Page 4 Part 2. However. If the contractor does include an activity schedule.an elemental breakdown of the contract sum analysis makes valuations relatively easy. The use of an activity schedule broken down into BCIS standard elements would also allow an elemental cost analysis to be completed relatively easily and would be particularly useful if projects have been procured without bills of quantities.3.3. S ECTION 3 With Alternative B . The activity schedule is defined as ‘the schedule of activities as attached to the Appendix with each activity priced and with the sum of those prices being the contract sum excluding provisional sums.3. prime cost sums and any contractor’s profit thereon’.periodic payments . particularly if different design solutions within a single element are identified separately. Furthermore. 2. it must be by agreement with the employer. using a BCIS standard list of elements (Appendix A) to provide an activity schedule eliminates any problems with definitions.3. an elemental breakdown makes valuation for interim payments simple (see Section 2.2 ACTIVITY SCHEDULES The JCT Standard Form of Building Contract 1998 (JCT98) contains an option for the contractor to include an activity schedule for use in interim payments. a periodic payment for the external walls would be a simple task of proportioning the amount of external wall completed to the total.1 (e)) and overcomes some of the problems that may arise if activity schedules have been broken down into trades. There is no standard format stipulated for the activity schedule. For example.PART 2. This overcomes some of the problems that arise in checking interim valuations where the contract sum analysis has been prepared in trade format but no bill of quantities or quantified schedule of rates has been provided.

parapet walls and balustrades. Flashings and trims. rainwater heads and roof outlets. 2C Roof 2C1 Roof structure Construction. suspended floors over or in basements. together with relevant excavations and foundations. Section 3 Appendix A (10/99) Effective from 1/11/99 Page 1 . Insulation. balconies and structural screeds. felt. S ECTION 3. 2C2 Roof coverings Roof screeds and finishings. Casing to stanchions and beams for structural or protective purposes. Main floor and roof beams. internal walls and chimneys above plate level. Battening. plates and ceiling joists. The Surveyors’ Construction Handbook Part 2. tiling and the like. frame. 2 2A SUPERSTRUCTURE Frame Loadbearing framework of concrete. Eaves and verge treatment.PART 2. trusses. kerb and glazing. A PPENDIX A Appendix A: BCIS Standard Elements (Please also refer to the notes which follow the definitions) 1 SUBSTRUCTURE All work below underside of screed or where no screed exists to underside of lowest floor finish including damp-proof membrane. Pavement lights. opening gear. slating. (Rainwater downpipes to be included in ‘Internal drainage’ (5C1). steel or timber. ties and roof trusses of framed buildings. 2B Upper floors Upper floors. gable ends.) 2C4 Roof lights Roof lights. including eaves and verges. 2C3 Roof drainage Gutters where not integral with roof structure.

S ECTION 3. Ironmongery and glazing. Curtain walling. Sliding and folding doors. 2H Internal doors Doors. landings and stairwells. Escape staircases. fanlights and sidelights. Ladders. linings and trims. Hatches. strings and soffits. Applied external finishes. Vertical tanking. fanlights and sidelights. cavity damp-proof courses and work to reveals of openings. stairs and landings other than at floor levels. linings and trims. 2F2 External doors Doors. Moveable spacedividing partitions. linings and trims. ramp surfaces. Page 2 Part 2. sheeting rails and cladding. 2E External walls External enclosing walls including that to basements but excluding items included with ‘Roof structure’ (2C1). sills. Chimneys forming part of internal walls up to plate level. Shop fronts. Ironmongery and glazing. landings (other than at floor levels). 2F Windows and external doors 2F1 Windows Sashes. 2G Internal walls and partitions Internal walls. risers. Lintels. borrowed lights and glazing. Chimneys forming part of external walls up to plate level. partitions and insulation.PART 2. 2D2 Stair finishes Finishes to treads. Screens. Lintels. Frames. Insulation. frames. 2D3 Stair balustrades and handrails Balustrades and handrails to stairs. thresholds. Frames. Lintels. Ironmongery and glazing. A PPENDIX A 2D Stairs 2D1 Stair structure Construction of ramps. Section 3 Appendix A (10/99) Effective from 1/11/99 The Surveyors’ Construction Handbook . cavity damp-proof courses and work to reveals of openings. Internal balustrades excluding items included with ‘Stair balustrades and handrails’ (2D3). thresholds and work to reveals of openings.

PART 2, S ECTION 3, A PPENDIX A

3 3A

INTERNAL FINISHES Wall finishes Preparatory work and finishes to surfaces of walls internally. Picture, dado and similar rails.

3B

Floor finishes Preparatory work, screeds, skirtings and finishes to floor surfaces excluding items included with ‘Stair finishes’ (2D2) and structural screeds included with ‘Upper floors’ (2B)

3C

Ceiling finishes 3C1 Finishes to ceilings Preparatory work and finishes to surfaces of soffits excluding items included with ‘Stair finishes’ (2D2) but including sides and soffits of beams not forming part of a wall surface. Cornices, coves. 3C2 Suspended ceilings Construction and finishes of suspended ceilings.

4 4A

FITTINGS AND FURNISHINGS Fittings and furnishings 4A1 Fittings, fixtures and furniture Fixed and loose fittings and furniture including shelving, cupboards, wardrobes, benches, seating, counters and the like. Blinds, blind boxes, curtain tracks and pelmets. Blackboards, pin-up boards, notice boards, signs, lettering, mirrors and the like. Ironmongery, other than to doors and windows. 4A2 Soft furnishings Curtains, loose carpets or similar soft furnishing materials. 4A3 Works of art Works of art if not included in a finishes element or elsewhere. 4A4 Equipment Non-mechanical and non-electrical equipment related to the function or need of the building (e.g. gymnasia equipment).

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5 5A

SERVICES Sanitary appliances Baths, basins, sinks, etc. WC’s, slop sinks, urinals and the like. Toilet-roll holders, towel rails, etc. Traps, waste fittings, overflows and taps as appropriate.

5B

Services equipment Kitchen, laundry, hospital and dental equipment and other specialist mechanical and electrical equipment related to the function of the building.

5C

Disposal installations 5C1 Internal drainage Waste pipes to ‘Sanitary appliances’ (5A) and ‘Services equipment’ (5B). Soil, anti-syphonage and ventilation pipes. Rainwater downpipes. Floor channels and gratings and drains in ground within buildings up to external face of external walls. 5C2 Refuse disposal Refuse ducts, waste disposal (grinding) units, chutes and bins. Local incinerators and flues thereto. Paper shredders and incinerators.

5D

Water installations 5D1 Water – mains supply Incoming water main from external face of external wall at point of entry into building including valves, water meters, rising main to (but excluding) storage tanks and main taps. Insulation. 5D2 Cold water services Storage tanks, pumps, pressure boosters, distribution pipework to sanitary appliances and to services equipment. Valves and taps not included with ‘Sanitary appliances’ (5A) and/or ‘Services equipment’ (5B). Insulation. 5D3 Hot water services Hot water and/or mixed water services. Storage cylinders, pumps, calorifiers, instantaneous water heaters, distribution pipework to sanitary appliances and services equipment. Valves and taps not included with ‘Sanitary appliances’ (5A) and/or ‘Services equipment’ (5B). Insulation. 5D4 Steam and condensate Steam distribution and condensate return pipework to and from services equipment within the building including all valves, fittings, etc. Insulation.

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5E

Heat source Boilers, mounting, firing equipment, pressurising equipment, instrumentation and control, ID and FD fans, gantries, flues and chimneys, fuel conveyors and calorifiers. Cold and treated water supplies and tanks, fuel oil and/or gas supplies, storage tanks, etc., pipework, (water or steam mains) pumps, valves and other equipment. Insulation.

5F

Space heating and air treatment 5F1 Water and/or steam (heating only) Heat emission units (radiators, pipe coils, etc.) valves and fittings, instrumentation and control and distribution pipework from ‘Heat source’ (5E). 5F2 Ducted warm air (heating only) Ductwork, grilles, fans, filters, etc., instrumentation and control. 5F3 Electricity (heating only) Cable heating systems, off-peak heating system, including storage radiators. 5F4 Local heating (heating only) Fireplaces (except flues), radiant heaters, small electrical or gas appliances, etc. 5F5 Other heating systems (heating only) 5F6 Heating with ventilation (air treated locally) Distribution pipework ducting, grilles, heat emission units including heating calorifiers, except those which are part of ‘Heat source’ (5E) instrumentation and control. 5F7 Heating with ventilation (air treated centrally) All works as detailed under 5F6 for system where air treated centrally. 5F8 Heating with cooling (air treated locally) All work as detailed under 5F6 including chilled water systems and/or cold or treated water feeds. The whole of the costs of the cooling plant and distribution pipework to local cooling units shall be shown separately. 5F9 Heating with cooling (air treated centrally) All work detailed under 5F8 for system where air treated centrally.

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5G

Ventilating systems Mechanical ventilating system not incorporating heating or cooling installations including dust and fume extraction and fresh air injection, unit extract fans, rotating ventilators and instrumentation and controls.

5H

Electrical installations 5H1 Electric source and mains All work from external face of building up to and including local distribution boards including main switchgear, main and sub-main cables, control gear, power factor correction equipment, stand-by equipment, earthing, etc. 5H2 Electric power supplies All wiring, cables, conduits, switches from local distribution boards, etc., to and including outlet points for individual installations. 5H3 Electric lighting All wiring, cables, conduits, switches, etc. from local distribution boards and fittings to and including outlet points. 5H4 Electric lighting fittings Lighting fittings including fixing.

5I

Gas installations Town and natural gas services from meter or from point of entry where there is no individual meter: distribution pipework to appliances and equipment.

5J

Lift and conveyor installations 5J1 Lifts and hoists The complete installation including gantries, trolleys, blocks, hooks and ropes, downshop leads, pendant controls and electrical work from and including isolator. 5J2 Escalators As detailed under 5J1. 5J3 Conveyors As detailed under 5J1.

5K

Protective installations 5K1 Sprinkler installations The complete sprinkler, installation and CO 2 extinguishing system. Including tanks, control mechanism, etc.

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5K2 Fire-fighting installations Hose reels, hand extinguishers, asbestos blankets, water and sand buckets, foam inlets, dry risers (and wet risers where only serving firefighting equipment). 5K3 Lightning protection The complete lightning protection installation from finials conductor tapes, to and including earthing. 5L Communication installation Warning installations (fire and theft) Burglar and security alarms Fire alarms Visual and audio installations Door signals Timed signals Call signals Clocks Telephones Public address Radio Television Pneumatic message systems 5M Special installations All other mechanical and/or electrical installations (separately identifiable) which have not been included elsewhere, e.g. chemical gases; medical gases; vacuum cleaning; window cleaning equipment and cradles; compressed air; treated water; refrigerated stores. 5N Builder’s work in connection with services Builder’s work in connection with mechanical and electrical services. 5O Builder’s profit and attendance on services Builder’s profit and attendance in connection with mechanical and electrical services.

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6 6A

EXTERNAL WORKS Site works 6A1 Site preparations Clearance and demolitions. Preparatory earth works to form new contours. 6A2 Surface treatments Roads and associated footways Vehicle parks Paths and paved areas Playing fields Playgrounds Games courts Retaining walls Land drainage Landscape work 6A3 Site enclosure and division Gates and entrances. Fencing, walling and hedges. 6A4 Fittings and furniture Notice boards, flag poles, seats, signs.

6B

Drainage Surface water drainage. Foul drainage. Sewage treatment.

6C

External services 6C1 Water mains Main from existing supply up to external face of building. 6C2 Fire mains Main from existing supply up to external face of building; fire hydrants. 6C3 Heating mains Main from existing supply or heat source up to external face of building. 6C4 Gas mains Main from existing supply up to external face of building. 6C5 Electric mains Main from existing supply up to external face of building. 6C6 Site lighting Distribution, fittings and equipment.

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6C7 Other mains and services Mains relating to other service installations (each shown separately). 6C8 Builder’s work in connection with external services Builder’s work in connection with external mechanical and electrical services: e.g. pits, trenches, ducts, etc. 6C9 Builder’s profit and attendance on external mechanical and electrical services. 6D Minor building work 6D1 Ancillary buildings Separate minor buildings such as sub-stations, bicycle stores, horticultural buildings and the like, inclusive of local engineering services. 6D2 Alterations to existing buildings Alterations and minor additions, shoring, repair and maintenance to existing buildings. 7 PRELIMINARIES Priced items in preliminaries bill and summary but excluding contractors’ price adjustments. This is not classed as an element but is included for allocation of costs. 8 EMPLOYERS CONTINGENCIES This is not classed as an element but is included for allocation of costs.

Notes
1 Substructure (a) Where lowest floor construction does not otherwise provide a platform, the flooring surface shall be included with this element (e.g. if joisted floor, floor boarding would be included here). (b) Stanchions and columns (with relevant castings) shall be included with ‘Frame’ (2A). (c) External enclosing walls to basements shall be included with ‘External walls’ (2E). Frame (a) Structural walls which form an integral part of the loadbearing framework shall be included either with ‘External walls’ (2E) or ‘Internal walls and partitions’ (2G) as appropriate. (b) Beams which form an integral part of a floor or roof which cannot be segregated therefrom shall be included in the appropriate element.

2A

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(c) In unframed buildings roof beams and trusses and floor beams shall be included with ‘Upper floors’ (2B) or ‘Roof structure’ (2C1) as appropriate. (d) If the ‘Stair structure’ (2D1) has had to be included in this element it should be noted. 2B Upper floors (a) Where floor construction does not otherwise provide a platform the flooring surface shall be included with this element (e.g. if joisted floor, floor boardings would be included here). (b) Beams which form an integral part of a floor slab shall be included with this element. (c) If the ‘Stair structure’ (2D1) has had to be included in this element it should be noted. Roof structure (a) Trusses which form part of a whole building framework shall be included in ‘Frame’ (2A). (b) Beams which form an integral part of a roof shall be included with this element. (c) Roof housings (e.g. lift motor and plant rooms) shall be broken down into the appropriate constituent elements. Stair structure (a) The cost of external escape staircases shall be shown separately. (b) If the stair structure has had to be included in the elements ‘Frame’ (2A) or ‘Upper floors’ (2B) this should be stated. External walls (a) If walls are self-finished on internal face, this shall be stated. Wall finishes (a) Surfaces which are self-finished (e.g. self-finished partitions, fair-faced work) shall be included in the appropriate element. (b) Insulation which is a wall finishing shall be included here. Floor finishes (a) Where the floor construction does not otherwise provide a platform the flooring surface will be included either in ‘Substructure’ (1A) or ‘Upper floors’ (2B) as appropriate. Access floors. Ceiling finishes (a) Where ceilings principally provide a source of heat, artificial lighting or ventilation, they shall be included with the appropriate ‘Services’ element. Fittings, fixtures and furniture (a) Ironmongery to ‘Windows and external doors’ and ‘Internal doors’ should be included in (2F) and (2H) respectively.

2C1

2D1

2E

3A

3B

3C

4A1

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4A3

Works of art (a) Where items in this element have a significant effect on other elements a note should be included in the appropriate element. Services equipment (a) Local incinerators shall be included with ‘Refuse disposal’ (5C2). Internal drainage (a) Rainwater gutters are included in ‘Roof drainage’ (2C3). Cold water services (a) Header tanks, cold water supplies, etc. for heating systems should be included in ‘Heat source’ (5E). Steam and condensate (a) Steam and condensate pipework installed in connection with space heating, or the like, shall be included as appropriate with ‘Heat source’ (5E) or ‘Space heating and air treatment’ (5F). Heat source (a) Chimneys and flues which are an integral part of the structure shall be included with the appropriate structural element. (b) Local heat source shall be included with ‘Local heating’ (5F4). Space heating and air treatment System described as having: (a) ‘Air treated locally’ shall be deemed to include all systems where air treatment (heating or cooling) is performed either in or adjacent to the space to be treated. (b) ‘Air treated centrally’ shall be deemed to include all systems where air treatment (heating or cooling) is performed at a central point and ducted to the space being treated. Space heating and air treatment - Electricity (heating only) (a) Electrically-operated heat emission units other than storage radiators should be included under ‘Local heating’ (5F4). Electric source and mains (a) Installation for electric heating (‘built-in’ systems) shall be included with ‘Space heating and air treatment’ (5F3). Lifts and hoists (a) Special structural work, e.g. lift walls, lift motor rooms, etc., shall be included in the appropriate structural elements. (b) Remaining electrical work shall be included with ‘Electrical power supplies’ (5H2). (c) Each type of lift or hoist shall be stated separately where appropriate.

5B

5C1

5D2

5D4

5E

5F

5F3

5H1

5J1

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S ECTION 3. be shown separately. Builder’s profit and attendance on services (a) The profit and attendance in connection with each of the services elements shall. refrigerated stores and the like other than that required for ‘Space heating and air treatment’ (5F8 and 5F9). (b) The cost of the work in connection with electrical supply shall be included with ‘Electrical power supplies’ (5H2). (b) Where tank rooms. to and including disposal point. their component parts shall be included under the appropriate elements. cold room thermal insulation and vapour sealing. where possible. Section 3 Appendix A (10/99) Effective from 1/11/99 The Surveyors’ Construction Handbook . Drainage (a) To include all drainage works (other than land drainage included with ‘Surface treatment’ (6A2)) outside the building. instrumentation and controls. connection to sewer or to treatment plants. compressors. where possible. be shown separately. A PPENDIX A 5K1 Sprinkler installations (a) Electrical work shall be included with ‘Electrical power supplies’ (5H2). housings and the like are included in the gross floor area. Builder’s work in connection with external services (a) Builder’s work shall be stated separately for each installation where appropriate.PART 2. Builder’s work in connection with services (a) Builder’s work in connection with each of the services elements shall.) for cold rooms. Where this is not the case the items shall be included here. Communication installations (a) Each installation shall be stated separately where appropriate. where appropriate. (b) Items deemed to be included under ‘Refrigerated stores’ comprises all plant required to provide refrigerated conditions (i.e. Builder’s profit and attendance on external mechanical and electrical services (a) Profit and attendances shall be stated separately for each installation where appropriate. Special installations (a) The cost of each installation shall. cold room doors. 5L 5M 5N 5O 6B 6C8 6C9 Page 12 Part 2. cooling towers. etc. be shown separately.

the role of the employer’s agent is to act on behalf of the client in the matters specified in the contract. With regard to procurement strategies. Section 4 (09/03) Effective from 1/11/03 Page 1 . This form of contract makes no provision for a contract administrator (CA) and all matters which would have been certified by the CA are ascribed to either the client or the contractor. it is to the current edition of the Joint Contracts Tribunal (JCT) Standard Form of Building Contract With Contractor’s Design 1998 (CD 98).PART 2. etc. Generally. There are a number of ‘standard’ forms of design and build contracts.) At its most basic. it assumes that all optional procurement strategies have been carefully considered by clients and their advisors and that the decision has been made to adopt design and build. SECTION 4 PART TWO: CONSTRUCTION DESIGN & ECONOMICS SECTION 4: DESIGN AND BUILD – GUIDANCE FOR EMPLOYERS’ AGENTS Introduction This section describes some of the tasks and responsibilities that a surveyor may be asked to undertake when appointed as an employer’s agent on a design and build contract. ‘Design and build’ describes contracts whereby the contractor assumes responsibility both for completing the design for the works and for carrying out the construction in return for a fixed lump sum. This section is not about procurement options. (Note: The organisation or person commissioning a building is referred to in this section as both the client and the employer. However. section 1 of this handbook (‘Developing an Appropriate Building Procurement Strategy’) which provides extensive guidance on selection of the most appropriate option for the procurement of buildings. The Surveyors’ Construction Handbook Part 2. the term ‘client’ is used in relationship to the employer’s agent and ‘employer’ to denote the relationship to the contractor. It should be noted that the prescribed duties of the employer’s agent are restricted to ‘access to documents on site’ and ‘access to works. Importantly however. but where specific reference is made in this section. workshops. in practice there are a wide range of tasks that a client may ask an employer’s agent to undertake. the contract also allows the client to delegate his or her responsibilities under the contract and in practice this is usually what happens. reference should be made to part 3.’.

reduced professional fees.1 Design and build is not a new concept. Furthermore. through the competitive process.1. However.4.PART 2.4. in recent years the use of design and build has extended to cover a significant number of building projects of all types.1. Many historic buildings have been procured in this way and the technique has been used for simple industrial shell buildings.1. the function of the lead consultant may not be dissimilar to that of a project manager. improved lead-in times.4.5 I 2. In appendix A the services which may be requested from an employer’s agent are set out. However.1. Proponents of design and build claim that it can deliver coordinated planning.3 2. SECTION 4 The services of an employer’s agent can be provided by any one of the construction professionals (determined by the nature of the project) but often it is a chartered surveyor.4.1. tenderers can take account of current availability of labour. On more complex projects the role of employer’s agent may sometimes be provided by a team comprising the ‘lead’ consultant. It is thought that design and build has become more popular because clients believed that in some circumstances the traditional route failed to deliver their projects on time and to budget. Proponents of design and build also claim that it can allow tenderers to bring their skills to the design which.4. as well as the construction of a project. can deliver benefits to the client in terms of buildability.4.4. G 2. the scope of the role can vary considerably depending upon the particular circumstances of the commission.2 2. Effective from 1/11/03 The Surveyors’ Construction Handbook Page 2 Part 2. shorter construction programmes and cost savings. Responsibility for the development of the design. materials and plant in their design and pricing considerations. Section 4 (09/03) . is firmly placed with the contractor.1 The JCT Standard Form of Building Contract With Contractor’s Design was first introduced in response to demand for a form of contract which allowed the contractor to carry out a complete contract (including design development) for a lump sum. with other consultants advising on matters relative to their respective disciplines.1 Background 2. This is perceived to clarify any litigation or dispute between the parties to the contract.2. In such circumstances.4. 2.2 Contract documentation 2. as well as providing greater cost certainty for clients through a single point of contact. It would be unusual for any client to require all the services listed in appendix A but they serve to indicate the extent to which this role can be developed.4 2.

the agent can arrange or assist with the selection of tenderers and arrange the formal tendering process. • the contractor’s proposals. Subsequently he or she can review the contractor’s proposals (including the developed design and the contract sum analysis) to ensure that all aspects of the employer’s requirements have been met with particular reference to quality. Section 4 (09/03) Effective from 1/11/03 Page 3 .4.1 The list in appendix A is intentionally comprehensive and involves some duties which may be beyond a surveyor’s normal skills.4. Typically.3.2. including the employer’s requirements based on the brief developed with the client.4. resident engineer or quality control inspector and should be the subject of a separate agreement outside the employer’s agent commission.3. The employer’s agent will be responsible for checking the contractor’s valuations and confirming interim and final payment amounts to the client in accordance with the contract conditions. In England and Wales the contract documents under this form are: • the employer’s requirements.PART 2. and • the articles and conditions set out in the form including optional supplementary provisions and appendices. it will also involve the administration of the project in terms of design and cost by sanctioning all design issues and by instructing any changes. time and cost issues.4.4.4.3 2. The employer’s agent will normally be involved from the outset and will be instrumental in producing the contract documentation. If a day-to-day inspection is required this should be carried out by a clerk of works. An inability to deliver a service could expose the employer’s agent to claims for negligence from both the client and the contractor. he or she is responsible for ensuring that the project is carried out in accordance with the conditions of contract.2 Throughout its life the JCT Standard Form of Building Contract With Contractor’s Design has been subject to many amendments to account for changes in the law. Thereafter. The role will usually include monitoring the construction process to ensure best practice. regulations affecting building development and increasing expectations and involvement of clients. controlling expenditure and overseeing contractor compliance with all current regulations. Where the employer’s agent has been delegated the authority by the client. 2.4 The Surveyors’ Construction Handbook Part 2.3. • the contract sum analysis. Great care should be exercised by the employer’s agent in advising on which duties to incorporate within the commissioning contract.3 G 2.2 2.3 Additional services 2.4. contractor’s proposals and contract sum analysis. 2. SECTION 4 2. employer’s requirements.3.2.

The appointed employer’s agent has an obligation to guide the client. and that the client understands the position.4.3. Section 4 (09/03) Effective from 1/11/03 The Surveyors’ Construction Handbook . It has been held that an employer’s agent was responsible for failure to comment on high risk design elements of the contractor’s proposals and an ongoing failure to approve the contractor’s design development proposals.4.1 The contractor’s proposals and the employer’s requirements taken together set out the scope of the works.3 Page 4 Part 2. which attract a duty of care similar to that under traditional procurement methods and advise the employer on the appointment of any other consultants required to fulfil any additional roles.4. 2. SECTION 4 2.4 Employer’s requirements and contractor’s proposals (including contract sum analysis) 2. it is strongly recommended that the agent’s contractual responsibilities as delegated by the client. 2.2 2. Any areas of conflict should be resolved since the contract assumes they are compatible when it is signed.4. It would be an unusual project arrangement if these essential tasks were not delegated by the client to the employer’s agent. good practice requires an active approach to ensure that the contractor undertakes all of his or her responsibilities under the contract. Therefore.7 2.4.5 The role of employer’s agent is not just one of monitoring the contractor’s performance. Design and build is fundamentally about the allocation of risk and responsibility. even after thorough checks have been carried out.4.4.4.3. The employer’s agent should advise the employer on those roles that are within his or her competency.4. provide technical and professional advice and draft the employer’s requirements in order to protect the client and to ensure the project is completed. the duty to approve the contractor’s design development and drawing should be included expressly or by implication in the contract between the client and the employer’s agent. In this case it may be worth consdering inserting an additional clause as to how conflicts between the two are to be resolved. The employer’s requirements can be by way of performance specification.8 G 2.3. the employer’s agent should not hinder or prevent the contractor from fulfilling his or her duties.3. concern about the possibility of a conflict between the two documents may well remain.PART 2.4. If the employer’s requirements and the contractor’s proposals are long and/or complicated. However. On the other hand.4.6 2. together with any additional duties the agent has agreed to undertake on behalf of the client. or on a prescriptive basis where a great deal of design may have been produced initially. are clearly defined and recorded. so it is important that the proposals are examined in detail and that they match the requirements.

4. Therefore. Similarly. any amendments to the contractor’s proposals after they have been submitted should be incorporated.6 2. performance and desired end requirements of the project and to avoid involvement in the construction method. most important that the client’s input is sufficiently detailed to enable the production of clear and concise ‘employer’s requirements’ to achieve the client’s objectives.8 2. The employer’s agent should try to encourage the client to concentrate on the purpose. Any ambiguity between these two documents could give rise to conflict at a later date. Some clients may require a detailed level of specification. The requirements should always be sufficiently detailed to ensure the client obtains the building he or she needs. The list of elements. however. Additional requirements arising from meetings during the tender process should be incorporated into the requirements by amendment.4.5 2. The Building Cost Information Service (BCIS) publication.4. unless there has been a pre-agreed limitation to the contract.4.4. great care should be exercised by the employer’s agent in advising the client on the appropriate level of detail to be provided in the employer’s requirements and that requested in the contractor’s proposal.3 of this handbook. is also given in section 2.4. Elements for Design and Build is considered to be important supplementary reading. SECTION 4 2.4. Contractors are only responsible for that which they design or specify.4. All relevant parts of the client’s brief should be given in the employer’s requirements.7 2. Thus.4. if the employer’s requirements become unnecessarily prescriptive as to the contractor’s basic construction methods. 2. The employer’s agent should offer guidance on the effect that this might have on the contractor’s flexibility in design and construction. It is. the extent of any designing and specifying by prescription in the employer’s requirements should be limited to those elements in which the employer requires such control. Section 4 (09/03) Effective from 1/11/03 Page 5 . and their definition.PART 2.4. in turn employers or their consultants are responsible for all that they design and/or specify. However. the contractor may lose sight of the client’s real requirements. in order for the employer to maximise the benefit from design and build.4 The employer’s agent and the employer should agree between them the standard of performance and the requirements of the building.4.4. Elements for Design and Build offers guidance to employer’s agents on the use of building elements for structuring the employer’s requirements and the contractor’s proposals/contract sum analysis. The requirements should also be comprehensive enough to avoid amendments during the construction process as these can be very costly.9 The Surveyors’ Construction Handbook Part 2. There should be no misunderstanding as to what comprises the employer’s requirements.

A fully developed preliminary design may negate many of the advantages associated with conventional design and build.5 Design and build variants 2. the client may be happy to forego these advantages and to impose his or her own particular design or specification in return for other benefits perceived to derive from a design and build procurement strategy. I 2. and design build fund and operate. Page 6 Part 2. Any chartered surveyors acting as employer’s agents are advised to make themselves aware of all matters which are relevant to the client and the client’s business so as to ensure that the employer’s requirements/contractor’s proposal reflects the client’s needs. However. 2. Appendix B is a checklist of matters which surveyors are advised to consider when compiling employer’s requirements and checking contractor’s proposals.4. Section 4 (09/03) Effective from 1/11/03 The Surveyors’ Construction Handbook . listing specific manufacturers’ products). two-stage tender.5. turnkey. The contractor is obliged to adopt this data and should reflect this developed design information in the contractor’s proposals. The list covers the major matters and the elements that relate to buildings in general. as part of the employer’s requirements. for example: • • • • • • 2. imposes a design and/or specification developed to a greater degree than most (for example. develop and construct. but with the absolute minimum of client involvement in the design development (or the building operations).3 DEVELOP AND CONSTRUCT Develop and construct is the name given to the ‘variant’ where the client. joint venture/negotiated.5. PACKAGE DEAL AND TURNKEY Package deal and turnkey are both expressions used to describe traditional design and build.5.4. SECTION 4 Note should also be made of the Code of Procedure for Selective Tendering for Design and Build published by the National Joint Consultative Committee for Building (NJCC) in 1995 and as amended from time to time.4.4. It cannot be exhaustive when applied to any particular buildings.PART 2.2 package deal.1 The forms of design and build contract allow for the production of variation to the conventional design and build contract. A turnkey contract additionally requires that the building is fully fitted out to enable immediate operation by the end user.

it is not applied to the quantity surveyor who remains with the client acting as the employer’s agent during the design development and construction phase. this arrangement having been included in the tender documents.PART 2. CD 98 is not therefore appropriate as part of the primary agreement. The Surveyors’ Construction Handbook Part 2.6 Novation 2. SECTION 4 2.4. although it is widely practised. I 2.5 JOINT VENTURE/NEGOTIATED Joint venture/negotiated projects arise when a client is approached by a contractor or developer with a proposal which broadly aligns with the client’s needs.4. 2.6. Section 4 (09/03) Effective from 1/11/03 Page 7 .4 TWO-STAGE TENDER Two-stage tender requests seek to obtain proposals from a number of tenderers from which one is selected. Thereafter the shadow team ensures that the building incorporates the specified user requirements. and receives the benefit of continuity of design. Novation is not defined in CD 98.5. Irrespective of the design and build variant employed.4. Often when novation is implemented.5.4.6 DESIGN BUILD FUND AND OPERATE Design build fund and operate (DBFO) contracts have been created as a result of the private finance initiative.5. Clearly. Although this form of procurement has been listed as a design and build variant it should be remembered that the end user never actually owns the building (unless otherwise provided). the service of the employer’s agent does not alter radically and can still be developed from the items of service listed in appendix A. In most instances. the earlier the employer’s agent can be introduced the better. the client will appoint a shadow design team to ensure that user’s requirements are properly established and communicated to the bidders.1 Novation can be employed on any of the design and build variants and involves the transfer of the client’s contract with his or her designer (or designers) to the successful contractor. Many successful projects have been carried out using this route with considerable benefit to the client.4. That tenderer then works up the preferred submission in greater detail. although it could feature in a subcontract. The contractor assumes the responsibility for the payment of fees and associated value added tax (VAT). since his or her involvement should help limit any abortive design. The shadow team checks the offers received to ensure that the user’s requirements have been addressed and continues to monitor design and development with the preferred bidder. 2.

PART 2. Page 8 Part 2. SECTION 4 2.6.2 Where designers are novated it is important for clients to understand that their designers’ allegiance transfers from the client to the contractor. Section 4 (09/03) Effective from 1/11/03 The Surveyors’ Construction Handbook .4. It is also important that the employer’s agent advises on selecting appropriate designers and contractors and that the transfer of roles occurs and is maintained. This transfer of allegiance should be properly explained to the client prior to a decision to implement novation.

APPENDIX A Appendix A: Potential services associated with the role of employer’s agent The services to be provided should follow the NJCC’s Code of Procedure for Selective Tendering for Design and Build (1995). A1 INITIAL DESIGN INPUT • Advising on the need for specialist appointments where necessary including appointments under CDM (Regulations) 1994 (also competency and resource check). • Initiating measured survey with levels. • Initiating and reviewing subsoil reports. for example. • Preparing or procuring preliminary design for the development. The Surveyors’ Construction Handbook Part 2. (Note: submission of formal full town and country planning application is normally at a later stage (see A2) and sometimes this application is by the contractor. rights of way. • Investigating/establishing location of existing services to site with local and statutory authorities. if any) and ensuring that these are ‘signed off’. Section 4 Appendix A (09/03) Effective from 1/11/03 Page 1 .PART 2. cost assessment and submission of formal town and country planning applications. restrictive covenants. Reference should also be made to the BCIS publication Elements for Design and Build which provides guidance on how to structure documents for design and build contracts. The scope of services should be fully agreed between the employer’s agent and the client at the outset of the commission and all interested parties should be informed as to the extent of delegated authority. • Agreeing with the client the scope of the employer’s requirements (including the need for preliminary design. • Reviewing scheme under Town and Country Planning Acts including consultations with local planning authority leading to initial outline town planning application.) • On projects involving the refurbishment of existing buildings the provision of design. • Consulting as appropriate with relevant agencies. • Establishing with the client the programme to suit funding availability. • Assessing suitability and cost effectiveness of general and structural design. English Nature and English Heritage.). • Examining land transfer documents to clarify boundary positions including an assessment of the likely impact of existing easements (including rights of light. etc. • Advising on the implementation of the Construction Act and any other relevant legislation. SECTION 4.

• Preparing cost estimate/structured cost plan. including consultation with building occupiers prior to submitting a full town and country planning application. Section 4 Appendix A (09/03) Effective from 1/11/03 The Surveyors’ Construction Handbook . • Assisting with completion of formal applications in connection with approvals relating to funding. in particular CD 98 supplementary provisions which provide both parties with time and cost certainty. APPENDIX A A2 PRE-CONTRACT • Advising on the need for further specialist appointments where necessary. • Developing project brief with client and reflecting same in the employer’s requirements. • Reviewing and reporting on tenders received for the project including comparison with cost plan and comment on programme proposed by each. • Advising on the need for provision of Party Wall Act or Access to Neighbouring Land Act Agreements. • Advising on all aspects of future maintenance of the completed development.PART 2. • Advising on optional clauses in standard forms of contract.or two-stage tendering. • Where applicable. • Reviewing subsoil reports and commenting on foundation design and contamination considerations. • Advising on tendering options including single. SECTION 4. develop and construct or joint venture. financial and tax exemption status. • Arranging drawings and performance specification for mechanical and electrical services. • Advising on need for risk analysis to include market research to underpin financial viability. resources. • Assessing environmental impact and advising generally on environmental issues. advising (after interview if required) on the selection of suitable tenderers including their capacity. Page 2 Part 2. • Advising on dispute resolution. • Establishing with client the format of the contract sum analysis. • Advising on services installation and future maintenance to these services including checking and commenting upon working drawings produced by tenderers. • Conducting local public investigations as related to town planning. • Arranging design/cost audit at appropriate work stages if appropriate. • Advising level of contingencies and preparing appropriate daywork clause. • Advising on any possible archaeological implications for the site. necessary consents and other requirements. • In consultation with client finalising the employer’s requirements document and arranging for this to be formally ‘signed off’ by the client.

National Housing Energy Rating and Standard Assessment Procedure. • Preparing contract documentation. APPENDIX A • Advising on energy ratings. parent company guarantees.PART 2. A3 CONTRACT DURATION • Issuing letters of intent where appropriate. • Attending site with contractor and assisting in arranging closure of roads and footpaths. • Preparing and agreeing a schedule of rates for valuation or negotiation purposes. trees.) • Ensuring that there are regular properly conducted site meetings with a chairman operating to a prescribed agenda and formal minutes. • Distributing contract documents in accordance with the contract. • Arranging for all necessary collateral warranties to be prepared and completed by contractor. subcontractors and consultants. if appropriate. • Ensuring access audit is executed (to meet the requirements of the Disability Discrimination Act). The Surveyors’ Construction Handbook Part 2. • Advising on novation of designers’ contracts. • Approving/monitoring/commenting. • Advising both client and tenderer on any agreed amendments to the employer’s requirements following receipt of contractor’s proposals and other relevant inputs. town and country planning. • Providing information to client in connection with post-tender documentation for lender/funder. roads. agreeing documentation with both parties and arranging execution. building regulations and any further criteria imposed upon the project by external organisations. Section 4 Appendix A (09/03) Effective from 1/11/03 Page 3 . • Preparing cash flow forecasts. • In conjunction with the client’s broker reviewing contractor’s and client’s insurances (including professional indemnity insurance of designers). for example. • Advising on necessity for and wording of performance bonds and. • Visiting the construction site. • Arranging for the appointment of a clerk of works. • Agreeing with contractor cash flow based on stage or periodic payments. SECTION 4. (The number of site visits depends on the stage of construction (or as agreed with client) and may be weekly during initial stages until all superstructure is erected and complete. • Advising on assignment and subcontracting (including design). on contractor’s design development. also. • Visiting the site with the contractor and agreeing by schedule and photographic records the existing condition of any buildings to be retained. shrubs and other similar items liable to be damaged. where applicable. as appropriate. • Auditing contractor’s proposals (including design and detailed drawings) to ensure compliance with employer’s requirements. footpaths.

Assessing compliance of service installations. for example. Ensuring compliance with all reserved matters contained within Town and Country Planning Certificate. Addressing requests from contractors for payment for off-site material. Effective from 1/11/03 The Surveyors’ Construction Handbook . Checking contractor’s valuations for stage or periodic payments and notifying the client. Issuing all other final statements relating to the final accounts that may be required by the client.PART 2. Issuing instructions on behalf of the client to instigate changes to the design quality or quantity of the works or on any other matter as required by the contract. Ensuring that there is no adjustment to the contract sum other than as provided in the contract. SECTION 4. Arranging and attending pre-handover inspections. preparing. Also. plant and materials. Section 4 Appendix A (09/03) Attending all site meetings. Preparing snagging lists. Ensuring that adoption procedure is put in hand at appropriate stage and following through to achieve adoption prior to handover and to include for drainage installation. matters of interest. Monitoring spend rate against cash flow forecasts including earned value analysis. Ensuring that appropriate VAT is levied in accordance with current legislation. site organisation and labour employed. Generally monitoring the works in terms of quality and progress. in a format agreed with the client. Negotiating and agreeing any loss and expense claims submitted in writing by the contractor. APPENDIX A • • • • • • • • • • • • • • • • • • • • • • • • • Page 4 Part 2. defects and weather stoppages. where applicable. Preparing and issuing financial statements as may be required by the client. etc. Ensuring that all required tests are carried out by the contractor and documented proof provided prior to practical completion. assessing. Issuing certificate of practical completion. quality. progress against programme. Checking contractor’s final account and issuing final statements. non-completion certificate and advising on the implications of imposition as well as the amount of liquidated and ascertained damages which may be deducted by the client from any payment certified. Regularly reporting to client. Issuing. Measuring for and agreeing with contractor any variations resulting from changes to the employer’s requirements during construction as well as the expenditure of any provisional sums. Assessing compliance with contract conditions by contractor. granting and issuing any notice of extension of time. Agreeing valuation of fluctuations in the cost of labour. Receiving requests.

Section 4 Appendix A (09/03) Effective from 1/11/03 Page 5 . • Obtaining final clearance certificates from local authority in connection with compliance with building regulations. if appropriate. The Surveyors’ Construction Handbook Part 2. SECTION 4. Feng Shui. agreeing value thereof. APPENDIX A • Ensuring that all snagging items are rectified before inviting client to receive handover. • Issuing notices on making good defects at end of defects liability period. A4 POST-CONTRACT • Receiving health and safety file from planning supervisor and delivering to client. • Advising on alternative means of remedying defects. if applicable. for example. • Ensuring compliance with any insurance requirements. • Ensuring that all service installations are completed in accordance with original approved design. terrorist insurance. • Preparing post-contract schedules of defects after occupation and arranging for rectification by contractor and on completion notifying client. • Issuing notices of practical completion on client satisfaction or beneficial occupation. examining the rectified works and certifying completion of making good defects.PART 2. • Advising on values for building insurance purposes. A5 GENERAL ADDITIONAL SERVICES • Dealing with essential items of defect that arise during maintenance periods. where applicable. • Advising on contingency planning and business recovery for select buildings. • Preparing capital allowances and revenue schedules. • Arranging and attending handover sessions. • Advising on obtaining statutory approvals such as registration for food preparation. • Advising on insolvency of any party involved with the contract. for example. bomb threats and construction of communication rooms. • Reviewing means of escape as built and ensuring procurement of fire certificate by the contractor. • Resolving any issues concerning latent defects. attending final commissioning and procuring test certificates. • Ensuring the provision of ‘as built’ information compiled in manual form and supplied to the client at completion of construction process – user’s manual and/or computer disk. • Advising on provision of post-handover service relating to ongoing maintenance. • Advising on special design requirements. • On partial possession and/or sectional completion.

PART 2. where a great deal of design work has taken place a prescriptive specification would be needed.1 General Information • Project title • Employer • Employer’s agent • List of drawings and other information accompanying documents • Location. A PPENDIX B Appendix B: Employer’s Requirement/Contractor’s Proposal Checklist B1 CONTRACT DOCUMENTATION The contract documentation will include: • the employer’s requirements • the contractor’s proposal • the contract sum analysis • the article conditions. However. optional supplementary provisions and appendices set out in the form of contract. B2 CHECKLIST (Note that this list is not intended to be exhaustive in total or in any section) B2. An indication of the employer’s business and overall objectives (to provide a feel for the eventual product) • Access to site • Site boundary defined • Form of contract • Permissible modification to standard form of contract • Details of appendices to the conditions of contract • Form of contract sum analysis Building and Accommodation Outline Outline description of the building Accommodation schedule • schedule of net usable areas (including definition of occupancy) • schedule of occupancy numbers and duration of occupancy • circulation requirements Part 2. including a narrative on the proposed use/user of the building. S ECTION 4. an outline design or a fully worked up design. The employer’s requirements can be a brief statement of the client’s accommodation requirements. Where little design work has been carried out before tenders and proposals are invited. The required level of detail will vary from client to client and contract to contract but it is suggested that information on this checklist would be the minimum requirement. Section 4 Appendix B (10/99) Effective from 1/11/99 Page 1 B2. a performance specification would be normally required.2 The Surveyors’ Construction Handbook . The contractor’s proposals should be in sufficient detail to allow the client to judge between the tenders on design as well as price.

For example. A performance specification should be checked to ascertain that it is feasible to design a structure with the requirements given and that there is no conflict between performance and other prescriptive requirements given.4) assumes an employer’s requirement drafted in performance specification terms and the contractor’s proposals should convert these performance specifications into clearly defined design proposals. Section 4 Appendix B (10/99) Effective from 1/11/99 The Surveyors’ Construction Handbook . level of concealment of services and architectural treatments to exposed surfaces B2.5) can be used in preparing employer’s requirements or a specification for a contractor’s proposal. S ECTION 4.) The scope of work (see Section B2.PART 2. or in prescriptive terms (contractor delivery) by including detailed specification and drawings. Page 2 Part 2. A PPENDIX B Basis of design Conceptual design statement and drawings • site layout • plans • elevations • sections • relevant working details • site works and landscaping layouts • sketch perspectives • structural design • services design Design standards • legislation or standards • details of standards which apply (for example codes of practice) • statement of workmanship • tolerances • CDM regulations Aesthetics • specific aesthetic needs (other than planning requirements) Integration of components • relationship with each other • methods of dealing with interfaces • method of dealing with services installations.3 Form of Detailed Specification (Note: The detailed employer’s requirements can be drafted in performance specification terms. or a combination of performance and prescriptive specification. The specifications and design checklist (see Section B2.

4 Scope of Work (Performance Requirements) Performance specification may relate to the whole building or include elements or both.PART 2. Section 4 Appendix B (10/99) Effective from 1/11/99 Page 3 . S ECTION 4. • clear ceilings/soffit heights • tolerances • vehicle access door heights and widths • toilet/bathroom/locker room requirements • kitchen/catering requirements • restaurant/vending requirements • plant room configuration • noise breakout between rooms The Surveyors’ Construction Handbook Part 2.lux levels and method of measurement • natural ventilation • column grid arrangement including projections from walls. Image/description of key areas • drawings • sketches • statements Flexibility • flexibility of accommodation • flexibility of design Energy • energy conservation and heat measures • insulation values • Building research establishment environmental assessment method (BREEAM) certification rating • plant room layouts Loading requirements Details of dead and imposed loadings Facilities for disabled • provision statement to comply with building regulations and current disability legislation • specific needs of disabled Building configuration • written statement and/or drawing • relationship of accommodation • size of accommodation • purpose • layout • dimensional constraints including clear heights under slabs and beams • natural lighting . The following are some matter which may be addressed. A PPENDIX B B2. etc.

cleaners. kind and quality may be given in elemental or other format. Standard Form of Cost Analysis for definition of elements. The standard elements are listed below.3 of this handbook or the BCIS publication. cupboards. S ECTION 4.PART 2.5 Specifications and Design Specification of performance. (Please see Section 2. or the form of construction.) 1 Substructure 2 Superstructure 2A Frame 2B Upper floors 2C Roof 2C1 Roof structure 2C2 Roof coverings 2C3 Roof drainage 2C4 Roof lights 2D Stairs 2D1 Stair structure 2D2 Stair finishes 2D3 Stair balustrades and handrails 2E External walls 2F Windows and external doors 2F1 Windows 2F2 External Doors 2G Internal walls and partitions 2G1 WC cubicles 2H Internal doors 3 Internal finishes Page 4 Part 2. maintenance facilities • access for cleaning and maintenance • security Means of escape Plantrooms External works • car parking • leisure facilities • environmental considerations • visual effects • waste disposal • emergency vehicle access • water features • loading bays • existing site features and treatments • function buildings within externals • site survey B2. A PPENDIX B • storage space. Section 4 Appendix B (10/99) Effective from 1/11/99 The Surveyors’ Construction Handbook .

PART 2. Section 4 Appendix B (10/99) Effective from 1/11/99 Page 5 . A PPENDIX B 3A Wall finishes 3B Floor finishes 3C Ceiling finishes 3C1 Finishes to ceilings 3C2 Suspended ceilings 4 Fittings and furnishings 4A Fittings and furnishings 4A1 Fittings. fixtures and furniture 4A2 Soft furnishings 4A3 Works of art 4A4 Equipment 5 Services 5A Sanitary appliances 5B Services equipment 5C Disposal installations 5C1 Internal drainage 5C2 Refuse disposal 5D Water installations 5D1 Water mains supply 5D2 Cold water service 5D3 Hot water service 5D4 Steam and condensate 5E Heat source 5F Space heating and air treatment 5F1 Water and/or steam (heating only) 5F2 Ducted warm air (heating only) 5F3 Electricity (heating only) 5F4 Local heating (heating only) 5F5 Other heating systems (heating only) 5F6 Heating with ventilation (air heated locally) 5F7 Heating with ventilation (air heated centrally) 5F8 Heating with cooling (air heated locally) 5F9 Heating with cooling (air heated centrally) 5G Ventilating systems 5H Electrical installations 5H1 Electric source and mains 5H2 Electric power supplies 5H3 Electric lighting 5H4 Electric lighting fittings 5I Gas installation 5J Lift and conveyor installations 5J1 Lifts and hoists 5J2 Escalators 5J3 Conveyors 5K Protective installations 5K1 Sprinkler installation 5K2 Fire-fighting installations The Surveyors’ Construction Handbook Part 2. S ECTION 4.

S ECTION 4. A PPENDIX B 5K3 Lightning protection 5L Communication installations 5M Special installations Details of each installation 5N Builder’s work in connection with services 5O Builder’s profit and attendance on services 6 External works 6A Site works 6A1 Site preparation 6A2 Surface treatment 6A3 Site enclosure and division 6A4 Fittings and furniture 6B Drainage 6C External Services 6C1 Water mains 6C2 Fire mains 6C3 Heating mains 6C4 Gas mains 6C5 Electric mains 6C6 Site lighting 6C7 Other mains and services 6C8 Builder’s work in conjunction with external services 6C9 Builder’s profit and attendance on external mechanical and electrical services 6D Minor building work 6D1 Ancillary buildings 6D2 Alterations to existing buildings B2.6 Particular Requirements Additional Responsibilities The employer’s requirements should state who is responsible for all matters that affect the construction of the building including such matters as: Site investigations • soil survey • ground conditions • topographical surveys • existing services • hazardous waste • archaeological features Development controls or other controls • planning permission (including reserved matters) • building regulations • Water Authority • Licensing Authority (liqour) • Licensing Authority (entertainments) • fire officer requirements Page 6 Part 2.PART 2. Section 4 Appendix B (10/99) Effective from 1/11/99 The Surveyors’ Construction Handbook .

S ECTION 4. etc. drawings. required to be handed over on completion including: • record drawings • maintenance manuals • CAD data disks • design calculations • staff training requirements • warranties and guarantees Exclusions Give details of items not to be designed and/or constructed by the contractor and the requirements and responsibilities for integrating these into the works Future developments Provide details of any provisions required for future developments The Surveyors’ Construction Handbook Part 2. A PPENDIX B • • • • • • • factory inspector environmental health officer employer’s building insurers (if appropriate) Traffic Planning Authority utilities National Rivers Authority Any other authority or statutory undertaker which has jurisdiction with regard to the works Establish responsibility for fees payable in connection with above Other legislation or provisions Adjoining premises • rights of access to adjoining premises Trespass.PART 2. nuisance • contractor to acquire rights as required and absolve the employer of responsibility Use and maintenance of existing: • roads • sewers • services If the responsibility for any of these matters is to be with the contractor the client should include disclaimers in any information which is provided to the contractor. Section 4 (10/99) Appendix B (10/99) Effective from 1/11/99 Page 7 .. Information requirements The employer’s requirements should give details of all records.

1 Definitions: The Difference between a Project Manager and Lead Consultant 2.1 The role of project manager is to directly manage and coordinate all other consultants involved with a project on behalf of the client. many have become planning supervisors. or are managed and paid by the project manager (although the client directly appoints them). For those embarking on this route care must be taken to ensure that the additional duties required by the role of lead consultant are fully understood and considered when undertaking the project.PART 2.1.5. together with the associated professional liabilities. On some projects consultants are appointed by the project manager as subconsultants. It also identifies some of the benefits for both clients and projects when appointing a chartered surveyor as lead consultant. this role has largely been the domain of the architect. However.5. Ultimately the delivery of the project is the direct responsibility of the project manager. do not wish to have a pro-active involvement with the project. SECTION 5 PART TWO: CONSTRUCTION DESIGN AND ECONOMICS SECTION 5: THE CHARTERED SURVEYOR AS LEAD CONSULTANT Introduction Over recent years many property and construction professionals have diversified into areas outside their core discipline. I 2. Some have become barristers. but the most common and obvious diversification has been to take on the role of lead consultant or project manager. This arrangement is most beneficial to clients who. through desire or inexperience. In the past. This section highlights some of the issues which the chartered surveyor should consider before undertaking this role. Section 5 (05/00) Effective from 1/7/00 Page 1 . The Surveyors’ Construction Handbook Part 2. A schedule of the additional duties that are likely to be required in excess of the main professional duties defined in appointment documents (such as those for building and quantity surveying) is included at the end of the section. in recent years many clients have increasingly used the services of the chartered surveyor to carry out these duties.

and to take an overall view to ensure coordination of all aspects of the project. However.2 Benefits of Appointing a Chartered Surveyor as Lead Consultant 2. Sup.2 The position of lead consultant is more of a coordinating role. Figure 2: Project Structure using a Lead Consultant Client Client’s Representative Advising & coordination Lead Consultant Arch. S ECTION 5 Figure 1: Project Structure using a Project Manager Client Project Manager Managing & coordination Arch. and often clients will appreciate this financial control being extended to a project liaison function. but also in the peripheral activities such as wayleaves. is better suited to more informed clients who may have their own in-house project managers undertaking an overall management role. Sup. right to light.PART 2..1. etc. the chartered surveyor can provide added value to the management of a construction project. party wall and boundary disputes.. QS Plann.2. Eng. By utilising this awareness.5.5. I 2. 2. Chartered building surveyors are not only involved in design.5. the management of the other consultants is ultimately down to the client and. ensuring that other parties in the design. Chartered quantity surveyors have an inherent knowledge of the complete design package through their cost control role. therefore. procurement and construction process of a project provide the right input at the right time. QS Plann. Section 5 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . Page 2 Part 2. Eng. etc.1 In many circumstances a chartered surveyor can provide a greater breadth of knowledge and understanding of the complete process of a construction project.

With the constant changes in the way that buildings are procured and designed. Fees for these additional activities must be at the discretion of the provider.5.4 Schedule of Lead Consultant Duties 2.5.1 Before taking on the role of lead consultant.3 2. SECTION 5 2. valuation.5. It may be that some of the lead consultant duties overlap with existing duties and that economies may be obtained.3 I 2. However.PART 2.5. development potential and building cost.4. the converse may equally apply and it is essential that the chartered surveyor thoroughly reviews the actual additional duties required before providing fee quotations. or in parallel with the concept designs. For those individuals or practices who do not wish to undertake the more encompassing role of project manager. 2. They should take into account the level of additional time and resources required in excess of the core professional services provided.2. many other skills are required to provide a functional space for a client and the chartered surveyor is often more conversant with these additional activities. but feel that they can make a positive contribution by directing a particular project. This early involvement opens the door of opportunity for the chartered surveyor to take up the reins as lead consultant.2 2. The chartered surveyor is frequently called upon in matters associated with land purchase.5. The Royal Institution of Chartered Surveyors provides a range of publications which describe in more detail individual professional services such as quantity and The Surveyors’ Construction Handbook Part 2.5.1 The schedule of duties of a lead consultant is not exhaustive. This level of competency will impact directly on professional liability insurance policies and ‘competency’ under the Construction (Design and Management) (CDM) Regulations. careful consideration must be taken to ensure that there is sufficient competency to undertake the additional duties involved in the role.2. This front-end advice provides the opportunity to advise clients and add value before the appointment of the architect.5.2.5. the chartered surveyor is in a prime position for providing real added value to the process. However.2 As well as simply the design of the buildings.3 Issues to Consider before Undertaking the Role 2. Section 5 (05/00) Effective from 1/7/00 Page 3 .3. Other benefits to a client can be derived where the ‘project’ requires a distinct specialism and the design process is only part of a more specialised activity.3. condition survey.5.3. for example farms management. then the role of lead consultant fits the bill. care must be taken to ensure that the necessary additional skills exist to be certain that the increased responsibility can be taken on comfortably and to the ultimate benefit to the client.4 I 2. 2.

will liaise with the client representative and will be responsible for the following activities.3 GENERALLY (a) Establish the client’s brief and ensure that it is agreed with the client and communicated to all designers. cost and programme. Ensure that all drawn and specification material is forwarded to all other consultants in accordance with the previously agreed project team programme. cost and design. Monitor the service provided by all consultants to ensure that they are carrying out their duties to the standard required at each work stage.2 PURPOSE During a construction project many issues can arise on which the client may require professional advice from his or her consultants. Seek advice from the client where necessary.4.PART 2. Deal with all queries and solve problems as they arise. FEASABILITY AND BRIEFING AB/1 Establish the scope of the project and ensure that all other members of the project team have the same understanding. (b) (c) (d) (e) 2. 2. S ECTION 5 building surveying and it is recommended that. who may or may not be an active design member of the project team. Review. Regularly review the design with the client and designers and formally minute any agreed amendments.4. AB/2 Advise on the need for site investigations. 2.5. The lead consultant. standards.5. Section 5 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . but be aware that professional responsibility for the proper management of all aspects of the project lies solely with the lead consultant and project team members.4. AB/3 Investigate planning constraints. the surveyor refers to these when confirming the scope of service to be provided as lead consultant. Submit all reports. Page 4 Part 2. The client nominates a lead consultant for each capital project undertaken.5. plans and proposals to the client with the request for approval to proceed to the next work stage. Inform the client of the impact of these amendments on time. coordinate and confirm design drawings of all project team members. The lead consultant’s role is to provide the client with comprehensive professional support to ensure that the client’s requirements are met with regard to legislation.4 STAGES A AND B: INCEPTION. wherever possible.

Discuss and agree a detailed design and general construction programme with all members of the design team. D2 The Surveyors’ Construction Handbook Part 2. Arrange dates and venues with the architect and client representative for brief development and presentation meetings.5 STAGE C: OUTLINE PROPOSALS C1 Arrange dates and venues. AB/7 Advise the client with regard to the general application of the CDM Regulations and comply with Regulation 13(1). AB/6 Advise on procurement methods.4. investigations and consultations with statutory bodies.5. Collate and prepare a report for submission to the client. Compile and submit Stage C report to the client. Ensure compliance with Regulation 13(2) of the CDM Regulations and liaise with the planning supervisor. Section 5 (05/00) Effective from 1/7/00 Page 5 .PART 2. 2. financial and programming requirements. Request approval to proceed to Stage D. legal. AB/8 Agree fee with the client. S ECTION 5 AB/4 Direct the activities of any supporting consultants such that the option appraisal/feasibility study is fully investigated. Attend presentation meetings as required. Arrange for surveys.6 STAGE D: SCHEME DESIGN D1 Arrange for any site investigations and consultations which are still necessary.5. statutory. C2 C3 C4 C5 C6 C7 2. Arrange to circulate a list of specific duties of each consultant to establish roles and responsibilities. AB/9 Obtain further instructions from the client. Review progress. With the project team’s assistance prepare and agree a detailed design programme of work and flow of information.4. Chair and minute all regular design team meetings (at least monthly up to tender stage). AB/5 Assist the client with the preparation of detailed briefing documents with special input on technical. brief and the client’s decisions.

F2 Page 6 Part 2.5. • sample boards and recommendations for selection of materials and finishes. Clarify items of fixed furniture and equipment required by the client. Request approval to proceed to Stage E. Ensure compliance with Regulation 13(2) of the CDM Regulations and liaise with the planning supervisor. • reports from advising authorities. Compile and submit the Stage E report to the client which. Section 5 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . E4 E5 E6 2. S ECTION 5 D3 Prepare the initial health and safety plan (if acting as the planning supervisor). and • schedule of areas showing the direct relation to the areas in the brief. undertake a formal presentation (or presentations) to the client.7 STAGE E: DETAILED DESIGN E1 E2 E3 Review the outcome of planning submission. Request approval to proceed to Stage F.5. D4 D5 D6 D7 D8 2. Advise on the form of contract.PART 2. Ensure appropriate applications for approval under the building regulations or other applicable statutory requirements (including negotiating waivers or relaxations). should comprise: • furniture and layout drawings. • phasing and site management drawing showing the effects of disruption on the operation of the establishment.4.8 STAGE F: PRODUCTION OF INFORMATION F1 Ensure appropriate applications for approval under other applicable statutory requirements (including negotiating waivers or relaxations). Compile the Stage D report from work undertaken and coordinated by all project team members.4. With the architect. Consider the need for pre-ordering of materials or equipment. Ensure compliance with Regulation 13(2) of the CDM Regulations and liaise with the planning supervisor. in addition to the usual reports and cost plans.

Ensure that a list of tenderers from approved register of contractors is obtained. and/or negotiation with tenderer(s) and client. Section 5 (05/00) Effective from 1/7/00 Page 7 . Liaise with the property manager/client for all temporary site management and services issues. on reductions in tendered contract sum to meet the client’s budget. construction methods or site management that could be of concern under health and safety legislation. F4 F5 F6 2. Ensure that planning and building regulation approval has been achieved.4. Update the health and safety plan. Obtain pre-tender estimate from quantity surveyors. methods of appointing subcontractors and suppliers and insurance liabilities. undertake redesign. changes to standard contract conditions. performance bonds. Be available to assist tenderers in the clarification or correction of data within the tender documents. H2 H3 H4 The Surveyors’ Construction Handbook Part 2. Carry out tender appraisal in conjunction with other consultants and submit a formal tender report to the client recommending (or otherwise) the acceptance of a single tender. On instructions to proceed to tender. Follow all the client’s standard procedures for this activity.10 STAGE H: TENDER ACTION H1 Ensure that all arrangements for temporary works and client site preparation have been undertaken. Report to the client at monthly intervals on progress and cost plan checks. the completion of the appendix to the contract. instruct the quantity surveyor (if appointed) to issue tender documents. Confirm all requirements from the planning authority. fire officer. G2 G3 G4 2. Inform the client of readiness.5.5. If necessary.4.9 STAGE G: BILLS OF QUANTITIES G1 Discuss with the client and project team suitable amendments to standard contract preliminary clauses. S ECTION 5 F3 Discuss any aspects of the design.PART 2. Contact each contractor giving outline details of the scheme and request that they confirm their interest in submitting a bona fide tender. crime prevention officer and highway authority will be incorporated in the contract documents.

5. Notify the client’s insurers that work is complete and arrange for release of bonds. other consultants and clerk of works. Arrange a pre-contract meeting with the contractor. Hold regular meetings on site with the head of establishment. Visit the site as appropriate to inspect the progress and quality of work. Ensure that all temporary and enabling works are complete. Produce a detailed financial report showing the value of all actual and expected variations to be issued at three monthly intervals throughout the construction process. K2 K3 K4 K5 K6 K7 K8 K9 Page 8 Part 2. Ensure that cost control of the project is maintained. Ensure that all the client’s handover procedures have been followed before accepting the building from the contractor.12 STAGE K: OPERATIONS ON SITE K1 Ensure that the contract is administered in accordance with its terms.5. site relationships. subcontractors. Liaise and coordinate the work of all design consultants during the postcontract period ensuring solutions are found to issues that may arise and that the schedules for issue of later design information are met. Monitor contractor’s health and safety plan and records. Advise on arrangements for access to the site and deal with queries and concerns on works. consultants. Notify the client’s insurers. Ensure that certificates are issued for interim payments on the RIBA standard form to the client. S ECTION 5 2. Attend regular site meetings with the contractor. Section 5 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . Give a short general report at appropriate intervals during the course of the contract on progress.PART 2. Produce short financial reports on a cumulative basis (cash flow predictions are required to be attached to each valuation certificate). clerk of works. J2 J3 J4 2. and signed by the contractor.11 STAGE J: PROJECT PLANNING J1 Prepare the building contract and arrange for it to be forwarded to the client or his or her solicitor. quality of workmanship and any other pertinent matter.4. client and head of establishment.4. client and clerk of works to appraise them of progress and to establish and resolve any concerns that may be arising.

building control certificates. in relation to completion of the works. Ensure that the issue of final certificate is made and that all consultants complete construction certificate. complete with observations on successes and failures. Resolve any issues relating to emergency latent defects over the defects period. contractor and other consultants. issue certificate of making good defects. agreed with the head of establishment in writing. L2 L3 L4 L5 L6 L7 L8 L9 L10 Ensure that all fire safety certificates. Complete quality assurance questionnaire on performance of the client.13 STAGE L: COMPLETION L1 Check making good of all outstanding patent defects. L11 Review the project from start to finish and report findings to the client. Continue to produce a financial report at three monthly intervals. Send to the client with the request for approval to issue final certificate.PART 2. etc. The Surveyors’ Construction Handbook Part 2. S ECTION 5 2. Section 5 (05/00) Effective from 1/7/00 Page 9 . Resolve contractual claims and provide any necessary reports to the client. Ensure that the quantity surveyor completes the final account to an auditable standard. Ensure that all parties involved are sent a copy of the report.5. are administered. are obtained and handed to the client.4. Ensure that the health and safety file is completed and handed to the client. Ensure that the terms of the contract. licenses. On completion of all making good. Resolve any issues relating to emergency latent defects after the patent defects period.

Section 6 (10/00) Effective from 1/12/00 Page 1 . Unless purely organic materials.PART 2. from the economic development of a nation to the construction of a simple building. A source of supply for timber may be well managed. are used. SECTION 6 PART TWO: CONSTRUCTION DESIGN & ECONOMICS SECTION 6: DEFINING SUSTAINABLE CONSTRUCTION Introduction The term ‘sustainable’ was first used in the construction industry when it was applied to sources of timber. At that time timber was declared to come from ‘sustainable sources’. But what is this difference? The definition of sustainability that seems to have achieved almost universal acceptance is that put forward by the World Commission on Environment and Development in 1987. The time frame element is therefore the difference between something which is well managed and something which is sustainable.’ This definition appears quite clear in its meaning: we are charged with the responsibility of ensuring that our activities do not damage the legacy which we are passing on to our successors. timber from ‘sustainable sources’ has been replaced with the expression ‘well managed’ or even ‘managed’ sources implying that there is a difference between being sustainable and being well managed. In the construction industry a resource stock can either be land. 40 or 50 years. an infinite timescale and therefore has inter-generational equity (where the term equity can mean a resource stock. Today. This can be regarded as the principal of ‘common inheritance’ or. capital stock or a stock of technologies). the availability of raw materials or the buildings from which the raw materials have been constructed. theoretically. Something which is sustainable has. Development can be taken in any context. then in-organic materials are used such as stone. but may only be so for 20. It confers upon us the responsibility to consider the impact of our activity now and the legacy that we are leaving behind us. clay and minerals which are deposits available in finite quantities and cannot be regenerated. which are capable of self-regeneration. often referred to as the Brundtland definition: ‘Humanity has the ability to make development sustainable – to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs. The Surveyors’ Construction Handbook Part 2. alternatively. ‘intergenerational equity’. 30.

In this instance. The inter-generational equity principal is therefore a mechanism by which the total available resource to future generations is maintained at a constant level. To summarize. The definition of sustainability has therefore been satisfied in that the activities of one generation in achieving their goals has not prevented future generations from achieving their goals. it is universally agreed that human activity will have to change and the reliance upon oil will have to decline as the availability diminishes and it becomes more costly to extract. Section 6 (10/00) Effective from 1/12/00 The Surveyors’ Construction Handbook . development. to ensure that the buildings being constructed from the finite raw material resources are capable of inter-generation usage. Today. Oil provides a very good example of non-sustainability in practice.PART 2. pollution-free energy source is therefore vital to the sustainability of human development. The best demonstration of this. I 2. detailing and construction methods as well as the cost in use to show that a valuable legacy has been left to future generations. and probably the first major challenge that will face humankind. economic and political stability depend entirely upon the availability of oil as a fuel and a raw materials source. if a technology is produced that is a substitute for the original raw material resource once this is exhausted. and the consumption of finite raw materials justified. the industry has a responsibility to consider the design. if the revenues generated from the use of oil were diverted to the research and development of alternative. the construction industry cannot be considered to be sustainable in terms of resource usage because raw materials. The development of an alternative renewable. are being extracted and processed into building products for incorporation into a building where the building itself is only designed for a finite life. which are only available in finite quantities. the result of using one resource has been the production of an alternative technology which is a direct substitute for the resource that has been exhausted. sustainable. this would be an example of sustainability in practice in the form of a technology swap. and we are likely to enjoy the benefits of it for at least another 100 years or so. S ECTION 6 The mineral resources that are used are therefore not sustainable in themselves.6. For the industry to be seen to act in a sustainable manner it needs to provide a building stock that demonstrates appropriate investment of these raw materials such that the swap is an equitable one.1 Technology Swaps Sustainability can be demonstrated. under the definition. Although estimates of available economic oil reserves continually extend. is the exhaustion of fossil fuels. or at least a ‘more’ sustainable construction industry it is the industry’s responsibility. To ensure that this takes place. Page 2 Part 2. sustainable energy sources. However. and in order to demonstrate a sustainable.

however. At present. a technology advance has been made for economic gain but at an environmental cost. but one that is being imposed on future generations.6. but the likely loser will be the industrialized economy which will have to alter the way in which the indicators of economic development are measured. This leads to the conclusion that acts which damage the environment do carry a penalty for future generations and therefore to ignore them is a risk. Section 6 (10/01) Effective from 1/12/01 Page 3 . knowledge and technical advances will still be made and future generations will still be at least as well off as the present generations. be quantified if there was a technology to replace the ozone layer which would itself carry the missing cost element within the equation. The important factor is that the overall equity stock must not be diminished.PART 2. If economic values are attributed to environmental functions in relation to economic development.2 How Can the Environment and Sustainability be Valued? At present the only method that has been developed for assessing the impact of human activities has been to put a financial value on everything. This could. This risk may not necessarily be a risk for the present generation. In the fullness of time it is to be hoped that we will devise different methods of quantifying value. An example of a technology advance resulting in huge potential environmental damage is the CFC gases that have been identified as being largely responsible for the depletion of the ozone layer. the national economic balance sheets would take on a considerably different complexion. However. The Surveyors’ Construction Handbook Part 2. industrialized nations generally consider economic development to mean an increase in Gross National Product (GNP) per capita. the element of timescale judgement is removed as each successive generation looks after the next. Under these criteria. But how do we value the environmental damage and possibly attempt to justify it in terms that are economically acceptable? It has been suggested that the only way that ozone layer depletion could be argued and justified as economically acceptable is if there was a way of reinstating it at an acceptable cost. I 2. capital wealth or alternative technologies. Providing that each generation adheres to these principals. which is available for their use. In other words. This environmental cost cannot be quantified in economic terms because no cost yardstick has been devised for attributing economic value to our environmental stock. Under a philosophy of sustainability it is the responsibility of the present generation to hand on to the next generation the same total stock as it itself inherited so as to ensure the same overall balance of advantages for future development as originally inherited. SECTION 6 This resource. can either be in the form of raw materials. GNP assumes all matters relating to the environment have zero value.

The use of terrazzo has now been superseded by the increased use in solid marble and granite although it will only be a matter of time before these sources are similarly exhausted. Using a variety of comparison models and mathematical techniques Ecopoint values have been attributed to building materials and systems. Such a method would have to attribute units of measurement to each environmental impact and in turn to relate these back to a datum to render the results meaningful on a human scale.PART 2. Brazilian Rio Rosewood. an environmental estimating software tool which attributes Ecopoints to environmental impacts. World War I saw timber in short supply again and resulted in the birth of the Forestry Commission as a Government Agency in 1919. Timber was first imported after the Great Fire of London and in 1668 it became necessary for Acts of Parliament to be passed to create forest reserves like the New Forest in Hampshire to try to arrest the situation. 2. Even organic materials are not immune. have been exhausted or the quarries closed and it now has to be obtained from the Continent. Humankind has a history of failing to adequately consider the impact that its activities are having on the resource base and examples are easy to find. Local British sources of Portland stone.3. which was very popular for making high-quality furniture in the 1960s. once popular in the 1960s.6.2 BENCH MARKING ENVIRONMENTAL IMPACTS In order to be able to assess the effect that we are having upon the environment as a result of our activities a scientifically rigorous and consistent method of analysis and bench marking is required.3 How Does This Affect the Construction Industry? 2. which has been used as a cladding material for many years. The Building Research Establishment (BRE) has undertaken more work than most in this area. Section 6 (revised 10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook .1 MATERIALS Most construction materials are a finite resource and will eventually be exhausted. and it Page 4 Part 2. The history of timber production in the UK is an interesting one which has seen the rapid depletion of forests from approximately 90 per cent forest coverage at the time the Romans arrived to a low point of less than 5 per cent of land coverage at the early part of this century. is now so endangered that it appears on the Control in Trade of Endangered Species (CITES) list as being illegal for fear of extinction.6. are no longer available as entire mountains in Italy have been levelled. An example closer to home is the UK’s reliance upon imported timber having used up its own supply. World War II resulted in timber shortages again and the emergency created the major post-war plantation of quick-growing conifers. Certain colours of terrazzo marble.3. SECTION 6 I 2. Many already are. with 100 Ecopoints being equivalent to the environmental impact of the average UK citizen. It has developed Envest.6. Mahogany is also on the fringes of being listed and it is widely reported that there are no longer any legal sources for the supply of the true Swietenia mahogany.

1 5. It is also possible to quantify the decision-making process using environmental criteria. refurbishment and custom use. From this data one form of construction can be analysed against another.04 tonnes 0. • acid deposition.0 6.7 kg toxicity 7.2 kg ethene eq.19 tonnes 418000 litres 58. to calculate the total Ecopoints score for building types. • fossil fuel depletion. Table 1: Environmental Impact of UK Citizens Issue % weighting Characterized impact associated with a typical UK citizen 12300 kg CO2 eq. Environmental Impacts In undertaking the assessment of environmental impacts and attributing Ecopoints values to various activities and products.9 kg SO2 eq. All these factors have been considered.6 % may not add up to 100% due to rounding The Surveyors’ Construction Handbook Part 2.0 8.09 tonnes oil eq.3 4.2 7. SECTION 6 is now possible. • ecotoxicity.0275 kg toxicity Climate change Fossil fuel depletion Ozone depletion Human toxicity to air Waste disposal Water extraction Acid deposition Eutrophication Ecotoxicity Photochemical ozone creation Mineral extraction Human toxicity to water 37. • water extraction. 5.8 3. • ozone depletion. • waste disposal. and • mineral extraction. • human toxicity to air and water.8 12. 8.01 kg PO4 eq 178000 m3 toxicity 32.286 kg CFC11 eq. quantified.PART 2. 90. Section 6 (revised 10/01) Effective from 1/12/01 Page 5 . the following must be considered carefully: • climate change.5 2. via the software package.3 3. not only by building type and the method of construction that should be used but also the decision whether to build new or to refurbish. compared and weighted in relation to the impact associated with a typical UK citizen and are shown in table 1. (100yr) 4. • eutrophication (or over enrichment of water courses).1 4. 0. • low-level ozone creation (summer smog). building operations.4 5.

Conversely. Perhaps the only constant method there may be in the winning and working of materials. it is virtually impossible to examine all of the possible environmental impacts that the various activities are likely to have because the variables are just so great. It should therefore be scientifically possible to establish a method of calculating the quantity of embodied energy that is required to make a building component.198 multipled by 3. SECTION 6 So for example.5% Ecopoints = 0. from extraction of the raw material to its incorporation into a construction. Page 6 Part 2. Section 6 (revised 10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook .5 = 0. From this it can be appreciated just how energy intensive some processes are and therefore how relatively good and bad some components are.693 Ecopoints 2. carry a larger embodied energy by virtue of the cost of global transportation.2) which can also take account of the building form and fabric typical replacement intervals and other data held by the Centre for Sustainable Construction. A fundamental difference in environmental terms between refurbishment and redevelopment is the saving of embodied environmental impact and energy if refurbishment is undertaken in preference to demolition and redevelopment. Embodied energy impacts associated with materials have also been assessed quantitively by the BRE using Envest (see 2. Appendix A shows a comparison of embodied energy values for some common materials. The results generated are quoted in Ecopoints per m² of element and factors such as replacement intervals can also be factored in as part of a full cost and use study. therefore it is not possible to use monetary value of energy as a unit of measure. to calculate the Ecopoints for 1 tonne of mineral extraction: Characterized impact = 1 tonne mineral extraction Characterized impact for 1 typical UK citizen = 5.198 Weighting = 3. a square metre of glass or a sheet of plasterboard. the sum total of these energy inputs can be termed as the embodied energy of that product.3.PART 2.04 tonnes mineral extraction Normalized impact = 1 divided by 5.3 EMBODIED ENERGY As materials can be extracted in any part of the world and either processed into building components locally or transported as raw materials. by definition.6. and eventually to demolition and possible reprocessing. a single brick. If materials have to be imported or are chosen to be imported on the grounds of economic cost these will.6. the unit of energy input itself can be used. However. The actual monetary value of energy can also be different from country to country.04 = 0. As energy is required to be consumed at every stage of the production process. their transportation and processing into building components up to the point when they are assembled into completed buildings is the energy requirements of the various processes.3. be it a cubic metre of concrete. economies may be derived by local energy consumption and waste disposal which can also be incorporated into the equation.

Some species of timber are better than others at resisting rot and decay. Note: specifiers should exercise care with regards to the source of timber as all is not always as it seems. SECTION 6 2.PART 2. which are again being considered as a viable alternative to PVC-u or aluminium. A major criticism that could be levelled at such a system is that it would starve the construction industry of design flexibility. but they would have to pay for the privilege. This would enable those that wish to exceed the design criteria of the regulations to do so. When sourcing imported timbers designers should ensure that the material originates from a suitable source.6. It is also now possible to obtain plaster and plasterboard made from waste gypsum which is a by-product from fuel gas de-sulphurization.4 LEGISLATIVE CHANGES Armed with bench-marking data it would be possible for systems of regulation to be built into the existing regulations. Another form of construction finding favour is a solid block or concrete wall with insulation and render externally. Dense concrete blocks are preferred to lightweight aerated blocks which use more energy in production. Pulverized fuel ash blocks contain over 50 per cent fuel ash which is a waste product from power stations. Western Red Cedar and Douglas Fir. I 2. this could be overcome by introducing a scale of energy taxation.3. and is strong.6. In particular. With the increasing emphasis on energy conservation within the building regulations (which currently concentrate on energy consumed in use) it would be a simple extension of these regulations to lay down embodied energy maxima per square metre for various building types. insulating and easy to work. Brick manufacturers are now keen to promote their products which use low energy kilns. especially if lime mortars are specified. Conversely. because this enables the bricks to be used again in the future. Section 6 (revised 10/01) Effective from 1/12/01 Page 7 . The Surveyors’ Construction Handbook Part 2. those who produce buildings and achieve significant savings beneath the bench mark could receive aid in the form of grants as recognition for their efforts and ingenuity. Ideally. As well as having a relatively low embodied energy content. The Forest Stewardship Council and the Timber Trades Federation both supply lists of suppliers of timber from good UK sources (see Appendix B). it absorbs and stores carbon from CO2 when growing. Masonry construction can be considered green. However. timber should be sourced in the UK but the supply is severely limited.4 Green Building Materials Timber is undoubtedly the material most favoured by green designers.

5 Whole Building Sustainability The matters discussed above help us to use resources and raw materials wisely and to produce better buildings in terms of energy consumed in construction and use. timber. attention must be turned to wise material usage and reduction of waste as well as to producing a building of the highest possible quality and with maximum adaptability. One of the key issues in building sustainability is to ensure that what is originally constructed from the resources becomes a similar resource for the future generations. SECTION 6 Insulation boards made from polyurethane. expanded polystyrene. which have for many years been seen as suitable residential conversion opportunities. as well as warehouses and barns. this in itself is not sustainable construction. The building created must continue to serve future generations well for whatever purpose they wish to put it to. glass fibre. this will cause problems in sourcing adequate quantities to satisfy demands. These are just a few examples of alternative material resources now available. unfortunately at premium prices. design and construction. extruded polystyrene and phenolic foams have given way to mineral wool. I 2. rather than being constructed for a single use and then rendered redundant when there is no longer a requirement for the original purpose. There are many buildings of over 200 years of age that have found suitable alternative purposes beyond that for which they were originally designed. Section 6 (revised 10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook .6. roofing materials and assorted ironwork are already available.PART 2. although it is certainly a vital component in the process. There is a logic to the use of recycled materials (where the embodied energy can be utilized again) as being perhaps the greenest contribution to be made. and in some cases foam glass or cork. The uses to which these buildings are now being put were never originally envisaged at the time of their planning. or even a 300 year design life. However. with the minimum of additional cost in terms of energy and raw material resource input in order to convert and use it for their own purposes. It is therefore possible to establish with a reasonable degree of certainty what the vital component parts are in ensuring the success of a building for say a 200. In order to achieve this. One such product is known as ‘warm cell’ and is available from Excel Industries (see Appendix B). Page 8 Part 2. An example of such practice is the current trend for the conversion of redundant 1960s office buildings into residential accommodation. Recycled cellulose fibre (newspaper print) is now being specified more for loft insulation and wall insulation in timber frame construction. It is of course interesting to consider that as these materials gain popularity and become specified as a matter of course. Second-hand bricks. but suitable alternative uses have been found. Sustainable construction would only be achieved when the finished product can demonstrate usefulness and serviceability on an inter-generation basis.

I 2. in particular. the timescale over which a building is considered a viable proposition would need to be reviewed and an alternative method of valuing the asset would need to be established. but also the environmental resource value invested in the construction. is sufficiently flexible for the alternative uses to be achieved with minimal additional input. SECTION 6 The methods of funding and. and • contributing to sustainable development internationally. as proposed. This would reflect not just the economic value. Transport and the Regions (DETR) published A Better Quality of Life – A Strategy for Sustainable Development for the United Kingdom. • improving towns and cities and protecting the quality of the countryside. The other components to ensure that a building is suitable for inter-generation use is to get the detailing.PART 2. This would require the procurers and designers of the building to demonstrate how it could be used for identified alternative purposes and to ensure that the design.6.6 The Government Line In May 1999 the Department of Environment. The Government also felt that the construction industry can contribute to achieving the sustainable development aims by: The Surveyors’ Construction Handbook Part 2. It may be necessary for us to re-learn some old skills in order to produce buildings of a long life expectancy but it is now necessary for us to change from being a disposal society to a considerate and conserving one. product selection and construction quality right such that the building does not wear out before the inter-generation uses can be realised. • achieving higher growth whilst reducing pollution and reuse of resources. Whilst some technologies have changed very significantly the base skills have not and nor have the materials. • sharing the benefits of growth more widely and more fairly. This document endeavoured to set out a framework and priorities for achieving sustainable development which included: • more investment in people and equipment for a competitive economy. Section 6 (10/01) Effective from 1/12/01 Page 9 . and the social impact and benefits that the construction is likely to have for future generations. The planning process could be slightly extended such that alternative uses are identified and documented and form an integral part of the planning process.

design out waste at all phases in the construction and occupation process and involve the supply chain. high quality management of the projects and supply chain and good communication. • design for minimum waste – specify materials with care. • preserve and enhance bio-diversity – look for opportunities throughout the construction process to provide and protect habitats. waste elimination. In April 2000 the DETR published Building a Better Quality of Life – A Strategy for More Sustainable Construction. value for money. • delivering buildings and structures that provide greater satisfaction. • conserve water resources – design for increased water efficiency in building services and within the built environment. • do not pollute – understand environmental impacts. • aim for lean construction – aim for continuous improvement.) This document shows that the Government now feels that the main themes for action in achieving ‘more’ sustainable construction can best be served by adopting the following action points: • reuse existing built assets – meeting functional requirements may not require new buildings and refurbishment and renovation may work better. (It should be noted that the inclusion of the word ‘more’ is now associated with a sustainable development strategy which perhaps indicates a slight rethink of absolutes. Section 6 (10/01) Effective from 1/12/01 The Surveyors’ Construction Handbook . think about using recycled materials.PART 2. • enhancing and better protecting the natural environment. customer focus. well-being and value to customers and users. Page 10 Part 2. and • set targets – measure and compare your performance with others and set targets for continuous improvement. • respect people and their local environment – be responsive to the community and consider your workforce. • minimize energy in construction – be aware of embodied energies and transportation of construction projects. • minimize energy in use – consider more energy efficient solutions and energy production from renewable sources. • respecting and treating its stakeholders more fairly. Adopt ‘green’ travel policies. and • minimizing its impact on the consumption of energy (especially carbon-based energy) and natural resources. SECTION 6 • being more profitable and more competitive.

Finally. the professions responsible for the design and construction of buildings to meet the requirements of funders and users must respond to the challenge of sustainability in order to deliver the required product. occupiers and managers of the building to each play their part in making the most of what we have. together with the demands for greater longevity and flexibility. SECTION 6 I 2. material manufacturers and suppliers to re-examine and justify their methods. The professionals would have to put new demands upon the material producers in the production of more sustainable materials. This would require new demands and disciplines in relation to the construction form and the standard of construction itself. requiring funders.7 What Might the Future Hold If sustainability is going to be the way forward in the next millennium many existing conceptions of development have to be reviewed and overhauled.6. In other words the principles of sustainability must be fully embraced by every participant from the supplier of the raw material. material technologists. building users. The sustainable building should be a piece of procession engineering. This will require an overhaul of the planning process and regulatory frameworks within which the construction industry operates. have to be re-examined and justified against a policy of sustainability. Section 6 (10/01) Effective from 1/12/01 Page 11 . the facilities managers and the future owners. the method of valuation and justification. The sourcing of the materials and the methods employed in conversion and production of building products must be the first priority in making progress towards sustainable constructions. the contribution that those actually constructing the building have to make would need to be considered. The second area for examination would have to be the philosophy behind procuring buildings and meeting user requirements.PART 2. The finished product would have to be a monument to sustainable construction and inter-generational equity making the optimum use of the energy and materials invested. New materials and techniques would need to be developed and adapted into sustainable construction. The way in which raw materials are extracted and processed at source can have the most direct impact upon the environment and must be closely examined as well as the actual material manufacturers themselves. the procurement and design functions right up to the occupation of the completed building where the responsibility passes to the occupiers. and how they are used. but above all they must build for longevity and flexibility with minimum re-investment by way of adaptation and maintenance if the goals and targets are to be met. Thirdly. The way the environment and resources are valued. The materials and resources that are used in construction activities and the buildings that are created will require fresh justification against sustainability objectives. The Surveyors’ Construction Handbook Part 2. through the material manufacturing process. the method by which buildings are funded. simply constructed but to the very highest of quality standards with good detailing and nothing left to chance.

A PPENDIX A Page 1 Source: The Architects Handbook 8 June 1995 .Appendix A: Embodied Energy Content of Building Material Lightweight blocks 625 417 The Surveyors’ Construction Handbook 694 833 1222 1806 9300 15000 63000 195000 5000 10000 15000 Concrete Timber Lightweight concrete Bricks Material Part 2. Section 6 Appendix A (10/00) Plaster Plastic Glass Steel Effective from 1/12/00 Aluminium 0 kWh/m3 PART 2. S ECTION 6.

APPENDIX B Appendix B: Useful Addresses Timber Trade Federation Clareville House 22/27 Oxenden Street London SW1Y 4EL Centre for Sustainable Construction Building Research Establishment Garston Watford WD2 7JR Department of Transport. Transport and Regions) Sustainable Construction Team Eland House Bressenden Place London SW1E 5DU The Forest Stewardship Council Unit D Station Building Llanidloes Powys SY18 6EB Excel Industries 13 Rassau Industrial Estate Ebbw Vale Monmouthshire NP3 5SD Construction Resources 16 Great Guildford Street London SE1 0HS The Building Centre 26 Store Street London WC1 The Environment Information Service PO Box 197 Cawston Norwich NR10 4BH The Surveyors’ Construction Handbook Part 2. Section 6 Appendix B (revised 10/01) Effective from 1/12/01 Page 1 .PART 2. Local Government and Regions (formerly Department of Environment. SECTION 6.

3). Section 1 (01/03) Effective from 1/3/03 Page 1 .1. however.1. In 3. 3.1).1 informs clients as to their involvement as it relates to key stages in the process. an inappropriate choice can be a key factor in performance failure. disappointment and potential litigation. The selection of an appropriate procurement strategy is identified as a key decision in terms of achieving client objectives. This section looks at the client’s role (3. The selection process should. resulting in cost and time overruns and poor building performance.2).1. It also stresses the importance of appropriate professional advice. The implementation of strategies is considered in 3. provide a best-fit solution based on good judgement and which is acceptable in terms of the identified criteria and the acceptable distribution of risk.2–3.PART 3. Appendix A outlines procurement options.1. the key issues are addressed together with the characteristics of a variety of procurement strategies: the aim is to match client needs. and the implementation process (3. The Surveyors’ Construction Handbook Part 3. the development of procurement strategies (3.1. The strategy developed for the purpose of project procurement should result from an objective assessment of client needs and project characteristics.1. Choice of an inappropriate strategy can. the particular project’s criteria and the chosen strategy. Conversely.4 where reference is also made to standard contracts for the designer. therefore. result in a failure to meet client objectives.1. the selection of the most appropriate procurement route (3. consultant or constructor appointment. since it is considered that there will be no single procurement strategy suitable for all projects and all clients. SECTION 1 PART THREE: CONSTRUCTION PLANNING AND PROCUREMENT SECTION 1: DEVELOPING AN APPROPRIATE BUILDING PROCUREMENT STRATEGY Introduction This section is intended to provide both clients and their advisers with procedures which will assist them in the selection of an appropriate procurement strategy for a building project.4).

Section 1) G G 3. This Section addresses these issues and provides. depending on their knowledge and expertise. clients. Owner-occupiers are usually primarily concerned with building performance in terms of functionality and costs in use. much of the advice is applicable to other types of project. In this sense.1 3. each client is unique and will be more or less experienced in the process of building procurement depending on company size and stage of development. a process to aid selection. It is important to consider those factors which will affect client satisfaction as well as the level of knowledge and experience of the client in the process of building procurement. They may be predominantly concerned with speed rather than performance.1.1 INTRODUCTION This subsection explains the client’s responsibilities through the life of a project. SECTION 1 EFFECT OF CLIENT TYPE ON SATISFACTION CRITERIA The type of client will affect the criteria which must be met if the client is to be satisfied with the project. SCOPE The section and the processes included should be used as a prompt and a focus for the issues to be addressed during the development of procurement strategy. value for money is a key criterion. Developers. Although it is written for building projects. will need help from their Page 2 Part 3. 3. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . They may also be concerned with image and building style. These factors should have a major influence on procurement strategy and whether the client should take an active role in the procurement process.1 The Client’s Role (It is recommended that this be read in conjunction with Part 1. In carrying out their role. certainty of completion date may be a key issue. However.1.1. Indeed. This is not to say that owner-occupiers are unconcerned about time. may be driven by market conditions which enable the project to be let or sold at maximum advantage. There are market conditions where both of these issues may become important. on the other hand. Attempts to categorise clients in various ways may be helpful in the early stages of developing procurement strategy.1.PART 3. Nor is it fair to suggest that developers are unconcerned about building performance or cost. It is not intended that the section will be used as a substitute for judgement.1. through the form of a checklist.

Section 1 (01/03) Effective from 1/3/03 Page 3 .3 a unique demand – the client’s specific need for accommodation (but future adaptability and possible disposal must not be ignored).1. The client’s prime role is to define the project and to establish a structure for the management of the project to make sure that it works. It is unlikely that the same team will work together again. Experienced clients may take a leading role in the procurement process. who will manage the whole project on behalf of the client. a prototype and involves a learning curve. whose roles are also explained in this section. and a unique end product – the finished building. and if it does. To perform effectively all parties should have timely access to all information relevant to their tasks and the project’s objectives and status. G 3. G 3.4 (a) Effective management is vital in any construction project. although itself unique. This team will normally only be formed for this unique project and then be disassembled. but will also assist experienced clients and their advisers. less experienced clients will need to seek advice or to appoint an adviser to assist them. Each project is. It has been written with the lay client in mind.1.1. SECTION 1 consultants. Where projects are of a large or complex nature it may be advisable to consider the appointment of a project manager.PART 3. a unique location – the site available for the building. It has three other particular characteristics: • • • the final product. It outlines their task and explains how it should be carried out. wherever possible. The Surveyors’ Construction Handbook Part 3. its construction involves major expenditure over a comparatively short period of time.1. and the construction of a new building requires a large team of individuals and firms with particular expertise to work together to complete the project satisfactorily. therefore. that clients obtain advice from an objective and independent adviser who will then not be involved as a consultant on the project.2 A building project represents a discrete piece of work with clear start and finish dates.1. providing specified benefits at accepted cost. The success of any project will depend on the motivation given by the client. Project testing is rare. It is advisable.1. is built up of many standard parts assembled in accordance with a series of standard rules and practices. unique constraints – the cost and time parameters for the project. the project is likely to be different. This subsection aims to assist both current and future clients in setting policy and formulating strategy. (b) A crucial part of any effective management structure is effective communication. project managers and other advisers. It is unlike any other manufactured product because it has: • • • • G 3.

(d) This subsection sets out the role and responsibilities of the client through all stages of the project. ensure that the requirements of the users are accommodated. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . Page 4 Part 3. As can be seen the client’s role is significant with a wide range of activities to perform and implement before both the design and the construction processes. has to take particular care to: • develop a business case for the project identifying primary needs and analysing costs and benefits • understand fully the purpose of the building. The selection of the right people is emphasised as a key to success. and. (e) The diagram on the next page indicates the primary activities in the procurement process and when activities are performed.PART 3. therefore. SECTION 1 (c) The client can have substantial influence on the design of the project in respect of both functional efficiency and of overall appearance. • appoint architects and engineers with the proven ability of designing buildings which satisfy users’ requirements and harmonise with and contribute to the quality of the built environment. In the performance of these activities clients can expect to be supported and advised by their advisers or (if appointed) the project manager. and communicate those requirements to the designers.

3–5) (Client) Organisational structure (3.1.19) Commissioning (3.18) Change control overview (3.1.1.1.4.9) Confirming the business case (3.1.4.2) Implementation Resources (3.6) Contractual arrangements* (3.7) Project definition (3.4.4.18) Construction Post-construction 3.1.1.9) Define client’s responsibilities (3.1.4.1.1.10) Project briefing (3.1.1.1.4.1.4.1.4.1.8) Procurement strategy* (3.1.15) Value engineering (3.1.11) Diagram to indicate the activities in the Procurement Process Client’s role Appoint adviser (3.4.1.4.1.13) Value management (3.1.4.12) Appointment of PM (if appropriate) (3.12) Cost control overview* (3.1.1.14) Quality control overview* (3.16) Part 3.10) Systems and controls (3.1.4.4.7) Appointment of design and cost consultants (3.1.9) Design overview (3. Section 1 (01/03) Procurement strategy Procurement strategy development (3.17) Time control overview* (3. SECTION 1 ( ) Indicates the subsection of this document referring to the activity Page 5 .1.G Pre-construction phase Procurement strategy (3.2) Effective from 1/3/03 * Indicates the activity will continue into the next phase PART 3.4.1.1.1.13) Whole-life costs (3.4.1.1.1.4.11) Systems and controls (3.1.1.1.5 PRIMARY ACTIVITIES IN THE PROCUREMENT PROCESS Pre-design phase The Surveyors’ Construction Handbook Contractual arrangements (3.1.4.4.1.18) Appointment of constructors (3.14) Quality control overview (3.1.1.13) Time control overview (3.12) Cost control overview (3.1.1.4.1.13) Design overview* (3.10) Systems and controls* (3.4.4.1.1.1.17) Occupation and takeover (3.1.6) Develop the business case for the project* (3.11) Implementation policy (3.4.4.

Page 6 Part 3. Thomas Telford Publishing. 1997. (e) Possible sources for independent client advice include a suitably qualified and experienced construction professional such as a chartered surveyor.PART 3. This function may encompass: • • • • • Assistance in preparing the business case underpinning the project Identifying the needs and requirements of the client Defining the project Matching needs and project characteristics with appropriate procurement strategy Facilitating the associated selection and contractual processes and policies (the business case) (briefing) (project definition) (procurement strategy) (implementation) (c) The decision as to which procurement strategy to select should be based upon information from the client and information about the project.1.1. SECTION 1 G 3.1. • arbitrating between conflicting demands. • clarifying client attitude to project risk.1. Briefing the Team. London. the type and character of the project and the range of appropriate strategies available. The advice offered should be informed and unbiased and it should be based upon a logical analysis of the needs of the client. and • evaluating the completed project against the objectives. all but the most experienced client may need advice. and the range of contracts associated with their employment. 1 Construction Industry Board. It may be more difficult for a design team member to remain impartial in carrying out this process and it is recommended that any expertise retained should be retained solely for this purpose. G 3. • establishing procurement strategy.7 CLIENT’S RESPONSIBILITIES (a) The client should set policy and outline strategy including: • setting and prioritising the project objectives. (b) This advice can be offered by a member of the client’s design team or can be a separate function.6 INDEPENDENT CLIENT ADVICE (a) With the potential for the involvement of many consultants and/or constructors in a project. (d) A best practice guide is available to assist in this process1. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook .

• substantial sensitivity analysis and ‘what if’ studies have been carried out to assess the effect of possible changed criteria on the viability of the project. • finance and accounts – who will plan and control expenditure and pay bills as they arise. • specialist groups – responsible for technical systems within the building. as far as possible. • to manage the client input. • land will be purchased and available for the commencement of the work. • the project brief is comprehensive and clear and has the full support of the users. • an adequate risk analysis has been completed. procure. to co-ordinate functional and administrative needs. to resolve conflicts. (c) In particular the client should be satisfied. realistic and achievable. to make decisions when needed. that: • the project brief is clearly defined as far as possible and linked back to the client’s business case for the project. computers. (d) The client should also co-ordinate and resolve conflicts between all interested sections of the client organisation including: • user groups – who will work in the building. The Surveyors’ Construction Handbook Part 3. monitor and control the external resources need to implement the project (throughout the procurement process). and • to supply the technical expertise.g. time and change control. to assess. • legal advisers – who will advise on and monitor the client’s formal relationships with outside parties. and that health and safety has been adequately addressed. • plans are in place for adequate project management including systems for cost.PART 3. • facilities management – who will manage the completed building including maintenance and security. e. • the critical assumptions made in preparing the initial estimates and programmes are valid. SECTION 1 (b) The client also has a threefold management function: • to provide financial resources and land for the project. communications. to act as the formal point of contract for the project. • allowances made in the feasibility and viability assessments to cover possible risks are sufficient (contingency allowance). • any constraints demanded by the project funder(s) are known and their impact understood. Section 1 (01/03) Effective from 1/3/03 Page 7 . • advisers have developed cost estimates which are comprehensive and include all capital and resources costs.

1. In doing so he/she will have to consider the returns expected. (d) Further influences in the case of a development project may include likely annual rental. period between rent reviews.1. • ascertaining the time required for making decisions. total development time and taxation issues may also be influential on the decision process. This will include: • scheduling the key decisions to be made. (e) It is important that the client seeks advice in terms of investment appraisal of the planned project and that any appraisal considers ‘what if’ questions to ensure that the impact of changes of key components in the appraisal are clearly understood. • establishing a formal programme for decisions. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . • preparing on time fully detailed submissions and/or presentations in full compliance with procedural requirements. the client will have an active personal involvement in the key activities explained in the following subsections. • following up submissions throughout the decision making process. fitting out and commissioning costs. the decision-making process requires as much planning and management as any other activity. and • promptly communicating decisions made to the parties affected by them. (b) The client will need to review project feasibility in terms of time and cost against benefits which will stem from the proposed project. A chartered surveyor will be able to assist the client in these matters. construction costs. operating and maintenance costs and the opportunity cost of money.PART 3. G 3. Timely decisions are necessary to avoid delays and increased costs. the value (in use) of the projected asset against projected land costs. cost of fees. • identifying the decision makers and their required procedures.8 KEY CLIENT ACTIVITIES Notwithstanding overall responsibility for the whole of the project. SECTION 1 (e) The client is responsible for ensuring that all necessary decisions are made on time.1. G 3. (c) The importance of each of these issues will be relative to the objectives of the client and to the extent to which the client is able to cope with risk. and growth of rental value.1. In terms of the project development.9 DEVELOPING THE BUSINESS CASE FOR THE PROJECT (a) The client’s purpose in initiating a building project may be driven by the need for the project as a functional unit or long-term investment. Page 8 Part 3. • pre-warning decision makers of forthcoming submissions – making sure ‘items are on the agenda’.

(e) This is the initial control document for the early planning of the project.PART 3.1. equipment and special services/requirements. function of building.g. and site. the identification of priorities is very important.10 PROJECT DEFINITION The importance of a clear project definition to the successful completion of the project and in ensuring appropriate performance of the project cannot be over emphasised. it is better to issue it in an incomplete form and progressively update it. The project definition is a comprehensive statement of the client’s objectives and parameters for the project based on close consultation between the client and users covering: • • • • • G 3. ESTABLISHING PRIMARY OBJECTIVES (a) In establishing the primary objectives for the project it is necessary to prioritise these objectives to ensure that when developing a procurement strategy appropriate emphasis is given to the most important objectives.1. environmental quality and specification.11 project description. (c) One way to achieve this is to consider ‘what if’ scenarios to establish the importance of key factors: • what if the project does not meet its functional requirements? • what if the project is delivered late? • what if the cost of the project exceeds the budget? (d) By carrying out an analysis in this way relative importance can be given to each aspect by weighting that aspect against a total. (b) Since there can be a tension between the long-term objectives set for the project in the business plan and the short-term objectives set for the project by the project team.1. target programme. The inexperienced client will need professional help from the advisers or design team in the preparation of the definition.1. G 3. cost can be divided into capital and running costs. time into speed or reliability of delivery date and function into layout.1. without it little constructive work can be done. Section 1 (01/03) Effective from 1/3/03 Page 9 .12 BRIEFING (a) Once the project definition has been completed the briefing process will be carried out. If all the information required for the project definition is not readily available. This is when the design team and cost consultants are able to flesh out The Surveyors’ Construction Handbook Part 3. For example: Function Completion Cost % 50 20 30 100 Each of these can be subdivided to produce clarity. SECTION 1 G 3. e.1.

design and construction overlap. and planning the administration of the contracts underpinning the implementation of the strategy.14 (a) Strategies may include: • traditional – design by consultants completed before lump sum tenders are obtained. Where a concept design is produced by the consultants before the contractor is appointed. The processes of procurement strategy selection and implementation are dealt with in 3. G 3.PART 3. The process commences with concept design building upon project definition and progresses through to a project brief which should encompass the client’s aesthetic.4.4 – Implementation).1. This is a three-stage process which may be key to project success: • • • selecting the strategy. • management contract – design by consultants. G 3. construction manager appointed early to produce and manage trade package contracts made directly with the client. (c) The Construction Industry Board (1997) have produced an excellent guide called Briefing the Team which summarises the processes involved. the strategy is called develop and construct. design and construction overlap. Section 1 (01/03) .1. as ‘management contract’ but detailed design by the management contractor. management contractor appointed early and work package contracts let progressively in the contractor’s name.1. • design and manage – outline design by the consultants. • design and build – detailed design and construction by the contractor for lump sum.1.3 and 3. and • construction management – design by consultants.1. implementing the strategy.1. spatial and service requirements. SECTION 1 the project prior to extensive design work. Effective from 1/3/03 The Surveyors’ Construction Handbook Page 10 Part 3. (b) While it may be difficult for inexperienced construction clients to visualise the descriptions outlined during the briefing process it is worth spending time seeking consensus on its content to avoid waste in the later design process.1 (d) Following the development of the brief for the project the design process will commence (see 3.13 DEVELOPMENT OF PROCUREMENT STRATEGY The client is responsible for selecting the procurement strategy most suited to the project and deciding how it is to be administered. design and construction may overlap.1. design and construction overlap. The client may need to take consultant advice on which strategy is most appropriate considering the prioritised objectives and attitude to risk.

The Surveyors’ Construction Handbook Part 3.15 (a) The extent of collaboration possible between those who design the project and those responsible for delivery will vary with the strategy adopted. (b) Selection strategies may include selection by competition for price.16 (a) Where direct consultant appointments are made each will be subject to a separate form of contract. simple approaches to dealing with disputes and a focus on continuous improvement which can be measured. designers may be appointed by the contractor. (g) The number and style of contract documents will depend on the contract strategy selected. (b) Contract implementation can be complex and may encompass the additional appointment of consultant advisers or the novation of designers from the client to the contractor. (e) This approach represents a change in the culture traditionally adopted by the UK construction industry which has previously been based on price-bid approaches and will need to be carefully managed. In addition. or by negotiation. Partnering is usually most advantageous where the client has a range of projects to procure but can be adopted for single projects. Thomas Telford Publishing. 1997. In some cases a high level of collaboration is possible enabling those responsible for delivery to adopt a ‘Partnering’ approach to project delivery. (f) The Construction Industry Board have published a most useful guide to partnering1.1. London. 1 Construction Industry Board. evidence is beginning to emerge of real all-round benefits being achieved particularly by regular and experienced construction clients. Partnering in the Team. Section 1 (01/03) Effective from 1/3/03 Page 11 . forms of warranty and collateral contracts may be involved. but where a design and build strategy is selected. (c) Partnering is not so much a contract strategy as a way by which the project team can be drawn together for their mutual benefit.1. G 3.PART 3. the client will be required to enter into many individual trade contracts. SECTION 1 G 3. on the basis of the quality of the bid as well as price alone. The consultant advisers can assist the client in the selection of appropriate contracts and the documentation associated with them. The primary principles include developing mutual objectives. However. There is also a focus on achieving the best outcome for the client as well as a satisfactory outcome for each participant.1.1. (d) The principles associated with Partnering are based on inclusiveness and depend upon a trust being established within the team. In the case of construction management.

(d) Guidance on the appointment of consultants and contractors is included in 3. (c) However commissioning is facilitated. • the hand-over and acceptance of the building from the contractor(s).1. This activity is separate from the design and construction process.1. (b) In relatively simple buildings the client can insist that this is a function which the contractor must perform. staffing and subsequent operation and maintenance of the building. resource and cost implications which should be incorporated into the overall project plan. contractors and suppliers work together as a team is determined by the procurement strategy and forms of contract entered Effective from 1/3/03 The Surveyors’ Construction Handbook Page 12 Part 3.1 Designing and constructing a new building is rarely straightforward. and may fall upon the design team. G 3.2. 3. Section 1 (01/03) . Occupation plans should be established during the design stages of the project and should cover: • the operation of the building on a regular on-going basis. • the progressive final fitting-out (if any) and physical occupation of the building with minimum disruption to the client’s operations. the client may wish to arrange for the nomination of a member of the department to act as occupation manager to manage this activity or may appoint a facilities manager. The client should seek advice to ensure that the administration process is appropriately planned and delegated.PART 3.2 Procurement Strategy G 3. SECTION 1 (c) The responsibility for contract administration will depend upon the procurement strategy selected. It is subject to a series of risks and uncertainties and involves a number of organisations especially assembled for the project.1. the project manager.1. it must be achieved before any building can function effectively. or the client him/herself. a contract administrator.1.4 (Implementation).18 OCCUPATION AND TAKE-OVER (a) The client is responsible for addressing the issues of occupation. commissioning can be established as an independent activity carried out by specialists.1. although it will affect it. G 3. Where buildings have sophisticated systems controlling the internal environment or facilitating staff movement or safety. (b) For large projects. The way in which the client and the various designers. and will have its own time.17 COMMISSIONING (a) Once the building work is complete the systems which will support comfort must be commissioned to ensure they are working effectively and reliably.1.

G 3.3 G 3. SECTION 1 into between the project participants and the client.1. construction. It is most important that the strategy is reconsidered at key times in the progress of the project such as when planning approval is given. It is one of the most important decisions facing the client. Risks are also allocated by means of the associated contracts. A management contractor is appointed early to let elements of work progressively by trade or package contracts (called ‘works packages’). DEFINITION OF TERMS Different procurement strategies provide different ways of allocating risk and responsibility to the organisation contributing to the project. then carry out. The main types of procurement strategy are summarised below (they are covered in more detail in Appendix A). construction management: design by the client’s consultants and construction overlap. A fee-earning construction manager defines and manages the work packages. the design strategy and the method of employment of consultants and contractors.2 Procurement strategy is the outcome of a series of decisions which are made during the early stages of a project. clients can choose from several different strategies. Generally. The chosen strategy influences the allocation of risk.4 G 3. before contract strategy is decided and before construction contracts are let. They can either integrate the design and construction processes or segregate them. A successful strategy is one which leads to a completed building which meets the client’s objectives.2. the final cost can only be accurately forecast when the last package has been let. management contracting: design by the client’s consultant and construction overlap.PART 3. Section 1 (01/03) Effective from 1/3/03 Page 13 The Surveyors’ Construction Handbook . Procurement strategy has a major impact on the timescale and ultimate cost of the project.4 (Implementation).2. The final cost of the project may only be accurately forecast when all packages have been let.2. As with construction management. The preferred aim is for contributing parties to work together for a quality result rather than competing against each other. or the programme is otherwise affected by unexpected occurrences. G 3.1. The contracts are between the management contractor and the works contractors. All contracts are between the client and the trade contractors.5 • • • traditional: design by consultants is completed before contractors tender for. The procurement strategy should be consistent with the objectives of the project and should enable the risks to be controlled to achieve a successful outcome. Where the development of design does not maintain the pace anticipated.2. Approaches to the selection of processes enabling collaboration are referred to in 3. Part 3.1.1. the selected strategy must be reviewed.1.

To minimise such risks the client should select the procurement strategy which matches the objectives of the project. A separate strategy. without delaying the start of construction. the resultant contract strategy and forms of contract should be chosen (i.7 G 3. both for the appointment of consultants and contractors. Where a concept design is prepared before the contractor is appointed. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . and G 3. For example. carpets. G 3. This is known as a shell and core contract. for example. PROJECT OBJECTIVES (a) Construction (and refurbishment) projects are often complex with potential for cost and time overruns or the finished building performing less well than planned. the terms and conditions of the contract). (b) The client must decide the relative importance of the three main types of criteria – time.PART 3. may be used to fit out the building with ceilings. The range of contracts available is referred to in 3. These must be clearly established and prioritised before any design or other work begins (see 3. partitions and electrical fittings. When the choice of procurement strategy has been made.4 (Implementation).1. To avoid the need for fresh legal drafting each time. the strategy is called develop and construct. with the contractor also being responsible either for detailed design or for managing the detailed design process. Construction professionals re usually experienced in understanding these contracts and can advise on the implications of their adoption.10–11 – Project Definition. • cost: with the exception of simple ‘standard’ buildings and certain ‘design and build’ strategies. This increases the importance of accurate cost forecasting and the risk to the client. a final construction contract sum cannot be established until the design is complete. Any overlap between design and construction means that construction starts before the cost is fixed.1.e. and design and build: detailed design and construction are both undertaken by a single contractor is return for a lump sum price. various standard forms of contract are available. raised floors.2. SECTION 1 • • design and manage: similar to the management contract. construction management.1.2. The greater the overlap between the two.8 Page 14 Part 3. the less time will be required to complete the project.1. a traditional approach may be used for completing the building structurally with main services installed.2. Establishing Primary Objectives).1. cost and performance: • time: earlier completion can be achieved if construction is started before design is finished.1.6 On some projects it may be necessary to use more than one strategy to meet the project’s objectives. The use of two strategies allows the client more time to finalise the user’s detailed requirements.

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• performance (design): the quality and performance characteristics required from the completed building determine both the project time and cost. Some strategies reduce the client’s ability to control and make changes to the detailed building specification after the contracts have been let.
(c) Performance includes the function of the building, its quality and appearance and other factors such as durability, cost in use and flexibility. The relative importance of each objective must be given careful consideration because decisions throughout the project will be based on balances between the other objectives (see Figure 1). In any project these three criteria will be interdependent and decisions affecting one will affect one or both of the other criteria. The appropriate procurement strategy will recognise this interrelationship and reflect the client’s objectives and the characteristics of the project. It is uncommon for a project simply to emphasise one criterion alone and most projects would emphasise time and cost, time and performance or cost and performance. The project strategies most commonly adopted reflect this characteristic. The strategy should also reflect the client’s technical ability and resources and the amount of control over the process which he/she wishes to exert directly or through the project manager (if appointed).

FIGURE 1 THE RELATIONSHIP BE TWEEN P RIMARY CRITERIA

Time aspects (speed to completion, programme certainty)

As the emphasis on one or two of these criteria increases the other(s) will be affected

Cost Issues (level of price, certainty of price)

Performance Issues (quality, functionality, design)

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G

3.1.2.9

RISK AND RESPONSIBILITY (a) There is a finite amount of risk and responsibility associated with any project and this should be an influencing factor on the selection of the procurement strategy. The uncertainties of time, cost and performance are the three main risks that are present in every project. Risks are usually considered as uncertain future events, which may have significant effects, e.g. extra cost, delay or damage to the performance of the finished project. Having set the priorities for the project’s objectives, the client should consider the effect of those objectives not being met and the resulting risks to which he/she could be exposed. Although the project is subject to a wide variety of risks, it is important to note that only a few have a major effect. This is a powerful argument for concentrating attention during cost estimating and management decision-making on the few largest sources of uncertainty and risk and for developing strategies for managing out risk and for setting up contracts in such a way that the allocation of the major risks is clear. (b) The risks which are considered to have potentially the greatest impact on construction projects include: • a project which will not function in accordance with the client’s needs; • a project which is of inadequate quality; • a project which is completed later than required deadlines; and • a project which costs more than the client’s budget or ability to pay. In each case, the strategy can be to transfer the whole risk to another through the medium of contract. This is possible but will attract high price premiums or will expose the transferee to risks which they may not be able to ‘own’ or insure and therefore the party transferring the risk will remain exposed. Risk may alternatively be retained in part by the client, or reduced by adequate pre-design or pre-price investigation. (c) As has been already suggested, an adequate brief will reduce risk and ensure functionality and quality standards. Equally, adequacy of programme will reduce the risk of overrun and adequacy of cost estimates should ensure a resultant cost which is within budget. Both construction time and construction cost estimates depend upon sufficient design development, which itself will depend upon an adequate brief and parallel investigation of ground conditions and the particular requirements of statutory controls. In ensuring that the brief is adequate, and that design is appropriately developed, the client can successfully reduce some risk in a way that will not result in high price premiums. (d) Ideally, risk and responsibility should go together, so that the party responsible for performing a task is accountable. Each risk should be allocated

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to the party with the greatest ability to own the risk and to manage its effects. If, for example, the client considers it critical that the price for the building is fixed before construction commences, the risk of meeting that objective could be passed to contractors, making them contractually responsible for completion to an agreed design and specification for a lump sum price. G 3.1.2.10 PASSING ON RISK (a) Responsibility for risk and the ability to control a project interact. The more the client chooses to allocate risk to other parties, the less control the client has over the way in which the project is executed. In the example above, if the contractor has to meet the agreed specification within the budget and time, the client has little influence over the way in which these objectives are met. In practice, risk allocation is determined by the chosen strategy and allocated by means of contracts between the client and those responsible for managing, designing or constructing the project. The way in which risk and responsibility are allocated by different contract strategies is indicated below and shown in Appendix A. (b) In all cases where risks are transferred in contractual terms, it is necessary to ensure the ability of the transferee to own the risk. In the case of design failure, for example, this is usually passed to the design team including the architect and engineering consultants. Because of the nature of their professions they should have insurances of sufficient capacity to meet the maximum possible cost of correcting the design failure. The client should ensure that such insurances are in place, adequate and paid for; where a project manager or consultant adviser has been appointed, this is a role that may be performed by him/her. (c) Some design work may be carried out by subcontractors who may or may not continue to pay design liability insurance premiums and usually will have limited liability status. Liability for their design work is commonly passed by warranties but these are less secure. Equally, where time risks are passed to contractors their attempts to transfer them to small subcontractors may fail where the capacity to own or accept the risk is limited. In situations such as these it may be possible to pass risks contractually but the lack of security associated with the transfer may result in the risk being borne by the party attempting to pass it. It is difficult to allocate blame in team situations. The client should be aware of this weakness in terms of risk allocation. (d) While the transfer of risk provides an incentive for the receiving party to minimise its impact, the client should avoid transferring risks when the receiving party has no control over them or no capacity to absorb them. Generally, the more the risk of cost and time slippage is allocated to other
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parties, the higher the tendered cost. In pricing the project, tenderers may over-estimate the size of the risk or add a high safety margin to an accurate estimate and thereby increase the project’s costs unnecessarily. G 3.1.2.11 RISK AND PROCUREMENT STRATEGY (a) Risks are inherent in the data used by the client in the preparation of the brief, they are inherent in the characteristics of the project, and they are inherent in the procurement strategy which is selected. The identification of primary risks and an analysis of the client’s ability to be a risk taker, or need to be risk averse, should affect procurement strategy. With this information in mind steps should be taken:

• •

to inform the client of the extent of the risks involved; and to prepare a strategy for managing risk.

Since the latter will have a cost the client should also be advised of the expense of managing risk. (b) Appendix A refers to the characteristics of each procurement strategy and indicates the levels of risk associated with time, cost and performance in each case on the assumption that the procurement strategy is properly utilised and in no way abused. (Thus, for example, in relation to the traditional system it has been assumed that design completion is achieved before measurement and documentation is carried out.) These primary risks are summarised (by simple examples in Figure 2) by procurement method in the categories time, cost and performance. Where design is by the client’s consultant, design risk is placed by the appointment agreement. Where design is by the contractor, design risk is placed by the building contract agreement. Where lump sum price is fixed by the contract the responsibility rests with the contractor. Where a contract sets standards of specification, meeting these standards is the contractor’s responsibility (risk). Thus by contractual agreement primary risks can be distributed between client, designer and constructor. It is impossible to dispose of all risk inherent in construction projects and some will inevitably remain with the client. For example, the risks listed here tend to be client risks and although they may be of varying likelihood they should be understood.

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FIGURE 2 S U M M A R I S I N G T H E P R I M A RY R I S K S , B Y E X A M P L E
Time Traditional Fixed but extension of time possible due to client and designer initiated changes Cost Fixed but subject to change where design changes are made, where inflation occurs or where contractor is alleged to have grounds for contractual claims As traditional Performance Designed by client’s consultant. Quality set by contract documents

Design and Build Contractor

As traditional

Design by contractor but with varying levels of input by client – quality set in same way As traditional

Separate management function

Time not fixed by contract

Cost not fixed before commencement

(c) This short list segregates residual risk by procurement method. The extent to which risk remains with the client can be established by a detailed analysis of contractual agreements.

Traditional – building suitability – risk of contractor insolvency – risk of delay by consultant or the causes allowed by contract Design and Build – building suitability – design functionality and usability – design insurance if contractor moves away from this type of business, goes out of business or fails to pay premium Management Contracting/Construction Management – as traditional procurement plus: risk of cost overrun risk of time overrun

G

3.1.2.12

SUMMARY (RISK) Risk can be reduced, retained, transferred or distributed. To transfer risk successfully the risk taker should have the capacity to take the full extent of the risk or the risk placer will have failed. Where there are so many relatively small firms, as in the UK construction industry, this can be problematic because many contracts place risks with risk takers without sufficient capacity. They may be limited liability companies or may be unable or unwilling to insure.

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Thus, for example, attempting to enforce large scale liquidated damages for late completion on a small-sized domestic subcontractor may fail for lack of financial capacity within the small company. Procurement strategy should therefore reflect the ability to place risk, and where possible risk should be managed out. G 3.1.2.13 PROCUREMENT STRATEGY AND THE PROJECT CYCLE The development of procurement strategy follows the stages in the life of a project. Initially, a preliminary strategy is determined. It is based on a broad definition of objectives and is an essential step in establishing the way forward for the project. It encourages the client to consider strategy early. The preliminary procurement strategy is usually developed with help from the client’s adviser and possibly other consultants. Procurement strategy development has three components:

• • •

analysis – assessing and setting the priorities of the project objectives and requirements; choice – considering possible options, evaluating them and selecting the most appropriate; and implementation – putting the chosen strategy into effect.

During strategy preparation, it may be necessary to seek specialist advice from other consultants, for example, in relation to expected costs for the project. The adviser should advise the client on this. Specialist advice should be sought when developing the strategy for novel or especially difficult projects. Until construction contracts are let, the client, with help from his adviser, must systematically ensure that the strategy is on course to meet the project’s established objectives. This is important because objectives sometimes change. G 3.1.2.14 IMPORTANT CONSIDERATIONS The factors listed below should be considered in analysing project objectives, requirements and their relative priorities (each is then considered in detail) and may have an effect on the choice of procurement strategy:

• • • • • • • •
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factors outside the control of the project team; client resources; project characteristics; ability to make changes; risk management; cost issues; timing; and quality and performance.
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Inevitably, some of these requirements will be in conflict and priorities need to be decided. The choice of strategy should ensure that control is maintained over those factors which are of most importance to the client. The way in which this choice can be made is covered below and in 3.1.4. (a) Factors outside the control of the project team Consideration should be given to economic, technological, social, political and legal factors which influence the client and the project team or are likely to do so during the lifetime of the project. These may include forecast and actual:

• • • •

interest rates; inflation; changes in output of construction industry affecting tender price levels and the availability of skilled labour; and legislation, particularly legislation affecting the design and construction of projects. In many cases the client will have responsibility for legal compliance, particularly in relation to health and safety matters and should seek the advice of his/her advisers (including the design team) on such issues as a matter of importance.

(b) Client resources The client’s knowledge and experience of the company’s organisation and the environment in which it operates are vital in assessing the appropriate procurement strategy. Project objectives are influenced by the nature and culture of the company, external influences and the expectations of individuals affected by the project. The extent to which the client is prepared to take a full and active role is a major consideration. (c) Project characteristics The size, complexity and location of the project should be carefully considered and particular attention given to projects with novel elements. For example, if the building is especially large or complex there may be a bigger risk of cost or time overrun. Novel projects present special risks. The novelty potential factor means that estimates of time, cost and performance are all subject to greater error with an increased probability of one or more of the project’s objectives failing. (d) Ability to make changes It is preferable to identify the total needs of the project during the early stages but this is not always possible. Rapidly changing technology often means late changes. Changes in the scope of the project very often result in increased costs, especially if they arise during construction. Changes introduced after the design is well advanced or construction has commenced often have a disproportionate effect on the project, in terms of cost, delay and disruption, compared with the change itself. The design process goes through a progressive
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series of ‘freezes’ as it develops but the client should set a final design freeze date after which no significant changes to requirements or design are allowed. Some procurement strategies such as construction management are better than others at handling the introduction of changes later in the project without having to pay some form of specific premium. (e) Cost issues Price certainty – influences the project timing and the procurement strategy which should be used. Generally, design should be complete if price certainty is required before construction commences. Cost of changes – if cost certainty is to be maintained during the course of construction changes should be avoided. Changes often have cost and time implications on the project well in excess of the change itself. It is therefore important for the client to fix a date after which no significant changes should be introduced. (f) Timing The programme of the project is influenced by many of the above factors. A particularly large and/or complex project is likely to require more time for design, specification and construction than would be required for a simple small building. It is of vital importance to allow for adequate design time in terms of the total project. If design is required to be complete before construction commences (where perhaps cost certainty is required) this is particularly the case. In the process of the appointment of the design team assurances should be obtained about resource levels and the ability to meet key dates or programmes. It is not usual to impose contractual dates upon designers, although their progress is probably the key to the overall completion date. Decisions to progress with a project may be influenced by the gaining of planning approval, by the successful operation of compulsory purchase order, by land purchase or by some other non-specific but critical factor (such as obtaining funding approval). Depending on whether these factors occur earlier or later, they may be an influence upon the planned or desired time available for design. Procurement strategies such as management contracting, construction management, and design and build provide an overlap between the design and construction stages, so construction can start earlier than sequential strategies and offer the potential for earlier completion. It may be necessary to review planned procurement strategy in the light of design progress at the point where restraints to constructions are removed, bearing in mind the stage of design and the consequence in terms of risk.
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F IGURE 3 CON STRUCT ION T IME S
The following times are based upon historical data and are only a guide. Projects of relatively simple design may be constructed more quickly and more complex designs may take longer. New purpose built cost (£millions) 30 25 20 15 10 5 New purpose built cost (£millions) 30 25 20 15 10 5 Retail facilities weeks 90 80 75 70 65 55 Office facilities weeks 120 110 100 90 85 70 New speculative cost (£millions) 30 25 20 15 10 5 New speculative cost (£millions) 30 25 20 15 10 5 Retail facilities weeks 100 95 90 85 80 70 Office facilities weeks 135 130 120 110 100 85

(g) Construction times Total construction time is a consequence of design. Insufficient time allowance can result in apparent delay when in fact the targets were unachievable. Design is a time-consuming process and often will take as long as construction itself (sometimes longer). More complex structures will take longer given the same cost or size, and may require more resources. Although it is possible to work on site for extensive hours or to increase resources, it is not always possible to achieve directly resulting productivity. The law of diminishing returns will have an influence because of the limited space and the nature of traditional construction methods (such as concreting and bricklaying). Indications of construction times are shown in Figure 3. These are only a general guide and should not be relied on without careful review. The data on which these are based was available only for commercial and industrial projects. This data was used to confirm, enhance and update that published by NEDO (1988), Faster Building for Commerce and the construction costs have been updated by index to the year 2002. If possible (as in the case of
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failure to recognise the true performance objective leads to an unsatisfactory product.1. As a general rule it will take between two thirds of construction time to one and a half times construction time to design a building.1.PART 3. This can be achieved by employing the design team directly. If quality and performance are particularly important the client will probably want to keep direct control over the development of the design. as they are more likely to be aware of the logistical consequences of particular designs. (i) Performance The required performance of the project measured both in terms of its response to the needs of the client and the quality of individual elements must be clearly identified. In developing strategies.2. G 3. the extent of involvement of the contractor in the design stage when the contractor may be able to influence the ‘buildability’ of the project. a premium will be paid for exceeding actual requirements. Section 1 (01/03) .15 PROCUREMENT OPTIONS When all the factors influencing the project have been identified and the project requirements analysed. a potential danger is that only the most obvious course of action may be considered – this is not necessarily the best in the longer term.2. Conversely. Effective from 1/3/03 The Surveyors’ Construction Handbook Page 24 Part 3. in most cases. (h) Design times There is no reliable data available to indicate the time to be allowed for design. It is likely that there will be more than one way to achieve the requirements of the project. If performance is over-specified. thereby affecting the cost objective. Other projects are likely. The impact that this will have on the overall programme will depend upon the choice of procurement strategy and whether any overlap of design and construction is allowed. the degree of control that the client has over the design and construction processes. the final strategy for the project must be developed. as each will address the various influencing factors to a different extent.16 Common strategies differ from each other in relation to: • • • • the financial risk that the client is exposed to. to be more complex and may therefore take longer. the information required at the time construction contracts are let. SECTION 1 management contracting and construction management) those who will be involved in the construction process should also be involved in the planning process. G 3. Over-specification will also lead to time overruns. It is important to consider carefully each option.

1. The Surveyors’ Construction Handbook Part 3.PART 3. the sequential nature of the process. the advantages and disadvantages.1 The ultimate responsibility for selection of appropriate procurement strategy will rest with the client. cost and performance (design) forms a key criterion in the selection mechanism as does inherent risk and its apportionment. The selected strategy should be: • • suitable in the light of the client’s needs. not to replace judgement.3 Selection of Most Appropriate Procurement Strategy G 3. Professional judgement is a reliable way of selecting an appropriate procurement strategy although some procurement strategies can be inappropriately adopted because of individual preference. Each diagram has a consistent format to indicate: • • • • the contractual relationships (showing administrative responsibility in most cases). 3. Section 1 (01/03) Effective from 1/3/03 Page 25 . SECTION 1 • • G 3. It is intended to inform judgement. A procurement selection checklist is provided here to assist the client and advisers in the identification of an appropriate strategy.3. and the dominant risks categorised broadly (as high.1. and feasible in the light of the client’s expertise.3.17 the organisational arrangements which distribute responsibility and accountability. medium or low). and to develop this information in parallel with the characteristics of procurement strategies and associated risk. based upon advice from the project team and principal adviser.2. and the sequential nature of the process. G 3. resource and funding facility. internal management structure.1. The relative importance of time. In Appendix A each of the most commonly used procurement strategies is described and is also illustrated by diagram.1. the project type and the client’s exposure to risk.2 PROCUREMENT SELECTION CHECKLIST This process has been designed to establish a range of information about client needs and about the particular project being considered.

3 new business opportunities 4.1 suggest a faster than ‘normal’ total project time in the judgement of the adviser? 3. The resultant information should then be transferred to Checklist 4 which will enable the information to be analysed and evaluated. 5.4 unsuitability of present premises 4. How long is it in months from the date of completion of this protocol until the desired ‘move in’ date? 4. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook .2 sale of premises 4. What is the approximate value. CHECKLIST 1: TIME The following should be considered: 1.4 don’t know. rental or cost savings per month? 7.3 Is the client prepared to pay more for earlier completion? 2.1 Is completion needed by a specific date? 1.3 close down? 7.2 Is completion needed in the shortest possible time? 1.1 stay in existing premises? 7.2 Is the need for completion by a specific date or within a specific time more important than spending an extended time on design? 6.1.1 end of lease 4.5 company restructuring 4. to the client of the building or facility in terms of contribution. 2 and 3 should be carefully completed in consultation with the client.2 find temporary accommodation? 7.1 Is the need for completion by a specific date or within a specific time more important than certainty of construction cost before work starts? 5. in sterling. Does the answer to question 1. and the associated risk so that an informed decision can finally be made.3.6 other. SECTION 1 G 3.PART 3. Page 26 Part 3. The analysis can then be compared with the characteristics of each procurement method.3 METHOD Checklists 1. Define the reason for the identified completion or ‘move in’ date: 4. If the building is completed later than the specified or desired time will the client: 7.

Does the building type suggest highly complex mechanical.1 shape or topography? 2.2 access? 2.PART 3. 1(e) the potential financial implication of earlier or later completion. Does the client wish to particularly emphasise low running costs? 8. Does the building type suggest relative design complexity? 4. 2(c) whether the building design is complex. and 1(f) what action the client may take if the dates are not achieved. Does the client wish to particularly emphasise product quality at a higher potential cost? Upon the completion of this part of the process. 2(d) whether functionality is particularly important. the following information should have been established and should be transferred to Checklist 4: 2(a) whether the client has clear ideas about his/her needs. The Surveyors’ Construction Handbook Part 3. Section 1 (01/03) Effective from 1/3/03 Page 27 . 1(c) whether required completion time is relatively fast. Does the site (if selected) pose any particular problems for the designer in respect of: 2. 1(b) reason for completion time. electrical or engineering installations? 6. Does the building type suggest emphasis upon functionality? 5. and 2(e) whether the client has a long-term view about the cost of the building. SECTION 1 Upon the completion of this part.3 storage space? 3. Is it anticipated that extensive changes to design may be required during the construction phase? 7. 1(d) whether time is seen as the predominant client need. Does the client wish to particularly emphasise low maintenance costs? 9. 2(b) whether the site poses complex design problems. CHECKLIST 2: DESIGN/PERFORMANCE 1. Has the client clear ideas about building functionality and its desired design? 2. the following information should have been established and should be transferred to Checklist 4: 1(a) specified completion time.

• Does the information provided indicate that the project is complex in terms of design or in terms of site-related problems? See 2b. Is the reason given as to why it should be completed by the specified date vital to the project’s success in terms of client needs. the following information should have been established and should be transferred to Checklist 4: 3(a) total maximum spending capacity. If no. including fees 2. this may mean that fast-track approaches may be suitable. Where design cannot be completed. and 3(c) need for pre-construction cost certainty.5 other (define). 3c. fast-track systems can achieve relative speed by overlapping design and construction. 2a. proceed.4 contingencies 2. or can slippage be coped with if cost is considered? See 1b. is the project feasible in terms of time and viable in terms of cost on the basis of the information in 1a.1 land purchase and fees 2. adequate time should be allowed for a design process to occur which will provide the client with an acceptable design solution. 3b. the completion date can be contractually fixed. What is the client’s maximum budget? 2. 3c. 2b. 1d. If no. 3c? If yes. a method of achieving cost certainty relatively quickly may be through negotiation. 2d. 2b. If relative speed is required can the client accept less cost certainty? See 1c. advise client and seek other solutions.2 construction. If so. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . 2c.PART 3. 2a. SECTION 1 CHECKLIST 3: COST 1. the project has to be carefully planned from a reasonably advanced design. 3a. 2c. Will the client need to have a fixed contract price for the construction element of his budget or will a reasonably accurate budget be adequate? Upon the completion of this part of the process. If vital. 3. 2c. Design and construction should be planned. CHECKLIST 4: ANALYSIS • • As an overview.3 fittings and plant 2. Page 28 Part 3. If yes. Where design is completed. Can the budget be allocated as below? 2. 3(b) total construction spending capacity.

SECTION 1 • Some fast-track solutions will enable the design process to be extended into the construction phase where pre-construction time is not available. The Surveyors’ Construction Handbook Part 3.3. System selection should consider whether the project is design or production-led but should also consider the client’s need to manage and/or distribute risk.4 Implementation G 3. Design-led projects have the greater capacity for cost and time overrun. the strategy should be successfully implemented.1. Design-led projects usually reflect the characteristics of procurement systems where the client appoints his/her own design team. design should be complete before construction is commenced or a sufficiently large contingency should be allowed.1. This will reduce cost certainty. organisational structure. The client should implement the strategy but may do this with the advice of consultants or a project manager. In many cases they will carry out most or all of the necessary functions in achieving implementation and the client’s role will be to formally approve their actions. the importance of time. whereas the potential capacity for design shortcomings may rest with production-led systems.1. Section 1 (01/03) Effective from 1/3/03 Page 29 . cost and design has now been reviewed. whereas production-led projects enable the constructor to take on some or all of the design function. Notwithstanding the role of consultants or a project manager. G 3. systems and controls necessary for a successful project outcome. The latter will not give cost certainty and may result in a less balanced project in financial terms.1 Having selected a procurement strategy for a project. There is always an interrelationship between these three primary criteria and procurement systems selected should reflect this. the client should ensure that he/she puts in place the necessary resources.4.4 CHECKLIST SUMMARY Having established whether the project is both feasible and viable. Is the need to ensure that the project can be built within a budget a priority? See 3c.PART 3. 3. contractual arrangements. In this event. Projects can probably be broadly categorised into those which will be design-led and those which will be production-led.

4. this is a matter for the client and/or the client’s organisation although these are matters which can be handled by a project manager. (c) The criteria for the selection of the design team are outlined below and are based upon the factors of capability. the client has a greater chance of obtaining the right project at the right time at the right cost with the minimum of conflict. Useful advice in this context can be provided by the project manager or the project cost consultant. rather than cost being the major influence in selection. staff and cost.4.1. it is self-evident that the client should ensure their availability in a suitable form at the right time. but a client will have his/her own staff member who will provide liaison and a focus for decisions. It is a vital function and by the time the procurement strategy is set. plant and machinery have to be provided by the client. with value for money. G 3.2 IMPLEMENTATION POLICY Implementation of procurement strategy is a key role for the team and warrants sufficient thought and review. (b) Funding requirements are usually a consequence of contractual agreements. to design or to construct.1.5 PHYSICAL RESOURCES (a) Where physical resources such as land. the funding function has been assumed to be a matter for the client.1. Page 30 Part 3.4. G 3. The policy developed to ensure appropriate implementation should be clearly communicated to all the key players.PART 3. In most cases. It is possible to take account of each contractual agreement and to plan expenditure in the form of a cash flow. sufficient funding should be available at appropriate times in the pre-construction and construction process. Both of these team members should be in place at an appropriate time to ensure that funding arrangements are appropriate. Only one individual should have the authority to instruct those carrying out the design or construction on behalf of the client. Where this is not possible the appointment of a project manager is desirable.1. (b) Design and construction resources must also be appropriately selected and in place at the right time. G 3.3 FINANCIAL RESOURCES (a) In this section. competence. whether they be agreements to purchase land.4. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . consultants are appointed to design and cost a project. the client should be prepared to allocate appropriate in-house personnel to the project or should be prepared to appoint consultants for this purpose. By ensuring that implementation policy is maintained. or where specific arrangements for decanting are necessary.4 HUMAN RESOURCES In terms of client organisation. Where alternative accommodation is required. SECTION 1 G 3.

in the case of design and build options. maintenance staff. or predominant. (c) The organisational structure created may be headed by a key member of the client organisation or may be headed by an imported project manager. time and cost requirements are achieved.4.9. or right. (e) A number of Codes of Procedure for the selection process are available and are referred to in sections 3. selection The Surveyors’ Construction Handbook Part 3. specialists. as appropriate.7 APPOINTMENT OF A PROJECT MANAGER (WHERE APPROPRIATE) (a) Due to the complexity of modern building and the potentially large number of parties involved in the process the client may wish to appoint a single person to draw the process together and manage it to ensure that the overall performance.PART 3. Project management practices also exist to enable appointments to be made on a consultancy basis. legal advisers and security personnel can all have input to the project through the created organisational structure by invitation.6 ORGANISATIONAL STRUCTURE (a) The client has a dual management role. be based upon competition for design solutions too. but this tends to be a much more complex process and the criteria are dependent upon the procurement strategy selected. Whichever choice is made.4. and. to co-ordinate functional and administrative needs. but decisions are reserved to the in-house executive or the project manager. G 3.1. can meet with designers or constructors to ensure effective communication. to resolve conflicts. Section 1 (01/03) Effective from 1/3/03 Page 31 . extreme confusion can take place. Suitable documentation for the selection process must be prepared and the client should seek the advice of consultants or the project manager who may also be required to manage the process. (b) This will require the creation of an organisational structure for the life of the project to enable communication to occur and to facilitate effective decision-making. as well as to act as the formal point of contact for the project. G 3.4. (d) Building users. responsibility for the project. or can be based upon a two-stage process. the designated member must have sole authority to communicate decisions to the project design and/or construction team. Where more than one individual is empowered to instruct.1. In this case. based upon a fixed design and specification or can. or to require changes.8 and 3. The basis for selection of constructors can be price competition.1. Selection can also be by negotiation with one or two constructors. finance and accounts personnel. facilities managers.1. part of which is to manage the client input.4. The project manager may be a member of the client organisation who is given sole. SECTION 1 (d) The criteria for the selection of contractors are referred to below and are broadly the same.

although the contracts will be direct with the client. • no matter what may be said in private. • establishing with the project manager a common approach to major issues which arise. • assisting the project manager in the resolution of problems. the client will retain ultimate authority and therefore must have adequate knowledge and information about the project to be able to exercise the authority properly. • where a project manager has been appointed the client should not formally communicate directly with consultants and contractors employed on the project – such communications will always be routed through the project manager. performance and risk. • managing the project manager’s performance of delegated responsibilities. SECTION 1 should be based upon resources. • receiving and reviewing detailed reports on the project from the project manager. • monitoring the implementation by the project manager of control and management systems. cost. Page 32 Part 3. (c) The client’s role upon the appointment of a project manager should include: • explaining the project objectives and their priorities. • no matter how much responsibility is delegated to the project manager. • defining the criteria for control and management of the project. reputation and price. the client should publicly support the project manager and avoid any actions which could undermine that manager’s authority over the consultants and contractors. • the client should agree with the project manager the precise extent of any delegated authority together with those decisions reserved for the client. (d) The client’s relationship with a project manager will be crucial to the success of the project and will require careful development and nurturing within the following guidelines: • the client. and • maintaining with the project manager at all times an overview of the project status in relation to the established objectives. and duties should be clearly identified. not follow. (b) It should be emphasised that the role of the project manager should be to act as part of the client organisation. • ensuring that the project manager receives decisions on time. defining the project and outlining parameters associated with time.PART 3. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . though taking the project manager’s advice should lead.

normally the architect on building projects. • competence – the performance of the firm on past projects.) (b) The following alternatives exist in selecting the design team: • single appointment – either of a multi-discipline firm which can itself provide the full range of architectural and engineering design services required. and • the cost – quoted by the firm.PART 3. (c) The selection of the design team and the cost consultant (and other consultants as appropriate) will require the client to make a balanced judgement on the following factors: • capability – the experience of the firm in projects of similar size and function and the availability within the firm of sufficient uncommitted resources for it to meet the demands of the project.4. (d) Value for money. SECTION 1 G 3. should be the aim in the selection of design team members.1. (The client is also required under the Construction (Design and Management) Regulations 1994 to appoint a competent planning supervisor to ensure that the design team have met their responsibilities under these regulations and to advise the client and the constructors how they can comply. Section 1 (01/03) Effective from 1/3/03 Page 33 . efficient performance by design consultants cannot be taken for granted. one firm being appointed design team leader with the responsibility for co-ordinating the work carried out by the others. to be ascertained by detailed. The latter offers the chance of selecting the best firm in each discipline but makes communication more difficult. not lowest price. who will subcontract design of other disciplines to independent professional firms and be responsible for their work and its co-ordination. The final selection will depend on the particular features of the project. or • separate appointments – for each of the design disciplines required. • staff – the personal capability and experience of the key staff whom the firm proposes to employ on the project. the demands of the project programme may be particularly important. or of a lead consultant. confidential references from past clients. The Surveyors’ Construction Handbook Part 3.8 APPOINTMENT OF CONSULTANTS (a) The process of selecting and appointing the design team and the cost consultant is carried out by the client but he/she may seek the advice of his/her adviser. unless large differences exist between offers from competing firms this should not be critical. The terms and conditions of these appointments are governed by the procurement strategy adopted for the project. The former has the benefit of administrative simplicity and of single source responsibility for design.

the client will need to establish systems for monitoring the consultants’ performance to ensure that they provide the full.4. Where lump sum fees are to be paid. (f) Fees payable to professional consultants may be expressed in one of the following ways: • as a percentage of the construction cost of the project. The client’s role will include selecting those constructors with whom he will negotiate or who will be invited to tender. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . There are a number of codes of procedure to assist in this process. (b) The timing of the need to appoint constructors (whether contractors or trade contractors) will be dependent upon the procurement strategy which is selected. specified service and do not skimp their services to save money. or • a permutation of all three. 2 Construction Industry Board. the factors which affect the Construction Industry Board. value and timescale of the project can be established with reasonable accuracy before the appointments are made and that the services to be provided by the consultants can be accurately defined. G 3. • on a time charge basis. Thomas Telford Publishing. documentation for tender and advice in relation to contract issues can be obtained by the client from professional advisers and particularly the principal adviser. 1 Page 34 Part 3.1. 1996. Thomas Telford Publishing. of particular assistance is the Code of Practice for the Selection of Main Contractors2 which has been approved by the National Audit Office. Selecting Consultants for the Team: balancing quality and price. Code of Practice for the Selection of Main Contractors. 1997. it will be the client who formally selects the constructor(s) to carry out the work and then contracts with this company. In broad terms. (g) Percentage fees based on the out-turn construction cost are not generally recommended as they increase when cost overruns occur. SECTION 1 (e) Guidelines for the value assessment of competitive tenders in the procurement of professional services are available1. • as a lump sum. but the client will have a formal role in this process. London. London. (h) Lump sum fees may be the most satisfactory form of remuneration provided only that the scope.9 APPOINTMENT OF CONSTRUCTORS (a) The client is responsible under the Construction (Design and Management) Regulations 1994 to be reasonably satisfied that the constructors appointed are competent and have adequate resources. (c) Assistance with the selection. In the case of the latter. (i) Where time charge fees are to be paid.PART 3. the final amount of fees payable is not fixed and there is a substantial risk that this amount may exceed initial estimates.

The Surveyors’ Construction Handbook Part 3. rather than lowest price should be the aim in the selection of constructors. G 3. • design change systems to implement and monitor change as it becomes necessary. Usually this relates to projects over about ¤5 million and requires appropriate tender advertising and selection. The distribution of major project risks results from the wording of the contract selected. there may be a case for considering a special arrangement with a construction firm as indicated in 3.10 CONTRACTUAL ARRANGEMENTS (a) Having selected an appropriate procurement strategy and methods of consultant and constructor selection. the client should see that systems are put in place to ensure that the procurement process can be implemented in fact. SECTION 1 selection of design and cost consultants shown above (capability. staffing and cost) will affect the choice of constructors. Clients from the public sector must be aware of the existence of and the procedures demanded by such regulations.4.1. (b) These systems should include: • financial systems to ensure that payments are made in accordance with contract agreements.1. Many of these arrangements will be based upon standard forms of agreement in common use in the construction industry. Where clients regularly build. (d) European Union legislation has an effect on the procurement of public works and the supply of services in the public sector. value for money.15. but the documents on which selection is made (particularly for cost) can be extensive and very complex.PART 3. organisational and contractual arrangements are in place.1. This may mean delegating elements of the process to the project manager (if appointed) or ensuring that existing company systems are specifically adapted.11 SYSTEMS AND CONTROLS (a) Once resources. • decision systems to ensure that decisions made are communicated at the appropriate time and with appropriate authority. (e) As with the selection of design and cost consultants.4.1. G 3. competence. Section 1 (01/03) Effective from 1/3/03 Page 35 . This is outside the remit of this handbook. and • cost and time monitoring systems to inform the client of the current position at any point in time. Most clients will need specialist advice on contract selection. this strategy should be implemented by a range of contractual arrangements.

Good design can contribute to economy and efficiency – by efficient layout and economical use of space. the client will require: Page 36 Part 3. Programming can be provided by a project manager or developed with the advice of the principal adviser. quality is controlled within standards set. This is particularly the case in specialist buildings or buildings which have sophisticated mechanical and/or electrical installations.) by low maintenance costs.12 DESIGN OVERVIEW (a) While responsibility for achieving a successful design solution to the client’s requirements lies chiefly with the designer. The blame for a poor building is likely to be ascribed to the client as well as to the designer. SECTION 1 (c) Controls are also important to ensure that cost is controlled within budget. a well-designed building reflects credit on those who commissioned it as well as on the designers who conceived it. (d) Cost control can be achieved by ensuring appropriate pre-construction cost planning and an adequate system of regular cost reporting. (b) Design is an important factor in ensuring good working conditions for staff and convenience for members of the public who need to visit the building. (f) Quality can be controlled through the provision of a sound contractual specification. and systems are properly employed. mechanical services. A well-designed building is a good investment.PART 3. It may be appropriate to appoint a clerk of works to inspect the works during progress and to ensure that work is satisfactory and matches the specification. (g) Controlling the client systems to ensure that they are appropriately applied and not abused is a matter for the client’s management team – perhaps this is the key management input from the client.4. (e) Pace can be monitored against a programme or time plan and can be controlled by the imposition of contract completion dates. the responsibility rests with the client both for ensuring that his/her needs are met and for the impact of such development on the local environment. (d) The formulation of an accurate design brief and the development of design in strict accordance with that brief are key processes for the client (or the project manager) to oversee. Equally. G 3. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook .1. insulation. (c) No one person has all the design skills for any but the very simplest project and therefore the collaboration of many designers will be necessary. etc. These services can be provided by the cost consultant. by energy efficiency (in heating. and by ensuring flexibility to meet changing requirements. pace is controlled within programme. In practical terms.

Methods for updating progress should also be sought by the client.PART 3.) (a) It is essential that the client understands the difference between: • estimating – giving an informed opinion at a particular time of what the final cost of the project is likely to be. and • formal presentation of developed designs to the users and formal sign-off by the client. The Surveyors’ Construction Handbook Part 3. The client should feel able to say ‘no’ and ‘try again’ and to expect alternatives within the fee. G 3. Section 1 (01/03) Effective from 1/3/03 Page 37 . (b) The techniques used to produce estimates vary according to the type and level of data available when they are prepared.13 COST CONTROL OVERVIEW (It is recommended that this be read in conjunction with Part 1. and • cost control – managing the consequences of the design and construction processes so as to achieve value for money and ensure that the final cost does not exceed the budget.1. Section 1. (e) It will also prove valuable for the client to indicate clearly his/her intentions in respect of the programme and for the design team to respond in terms of their strategy for meeting this programme. (Computer aided design [CAD] may enable three dimensional presentation.4. Notwithstanding this progressive improvement in accuracy. (f) As the majority of users. The general level of estimating accuracy improves as the design of a project develops. are likely to find the reading and interpretation of design drawings a difficult task. it is important to ensure that the design team present their proposals in a form that can be readily understood. provided that cost control is being exercised. the client should require that all estimates are supported by: • a risk analysis – an assessment of the potential risks. and • a sensitivity analysis – a statement of the comparative effects on the total estimate of changes to principal data and assumptions on which the estimate is based. • formal checking that the developed design meets. but does not exceed. SECTION 1 • close collaboration between users and the design team in the development of the design. the requirements of the design brief. Estimates cannot be expected to be proved accurate unless they are based upon reliable data and cost control is exercised. their probability and the associated time and cost consequences if they should occur. (c) For estimates to be effective. and indeed the client. the general level of accuracy of early estimates can be stated with sufficient precision for them to be valid parameters for decision making and for the management of the project.) The setting of the design and not just the design in isolation should be taken into account.

Page 38 Part 3. (h) Pre-construction cost control. In some cases higher initial costs will result in lower running or maintenance costs during the life of the building. and • the overall cost of mechanical and electrical systems and the effectiveness of the cost control procedures which can be applied to them is largely governed by early decisions as to the type of system selected. the excess can only be corrected by: • redesigning the element to reduce its cost. and • cost checking each element as it is designed against its allowance in the cost plan. SECTION 1 (d) The amount included in estimates to cover the uncertain cost of risks based on the analyses described above is known as the contingency. reserves for changes in market prices and the like. Cost control during the former depends partly on formulating an appropriate procurement strategy but more on controlling the design process within that strategy. It is important that contingencies are sufficient to cover risks and are not eroded to facilitate any lack of cost control. enabling the client to take these matters into account when considering total project costs and building design. (f) The earlier cost control procedures are instituted. external cladding and roofing. The term ‘cost-in-use’ is used to describe how these costs can be estimated. during the latter it is a function of effective management and avoidance of change after commitment. or • transferring money into that element from contingencies or from another element yet to be designed. By way of simplistic illustration: • cost varies with (but not in direct proportion to) size: once the size of a building is fixed. so is the general level of cost. structural frame. with allowances for contingencies. the more effective they will be. comprises: • preparing a cost plan – an allocation of the control budget into cost centres which match readily identifiable elements of expenditure. • the selection of the most economical design for basic elements such as foundations. (g) The methods used for cost control differ radically between the pre-construction and construction stages of a project. (e) A primary concern may be the cost of running and maintaining the building. is of far greater cost significance than the types of finishings. If the cost of an element as designed exceeds its allowance in the cost plan. in simple terms. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook .PART 3.

(k) All estimates and cost control procedures should take account of inflation. with the resultant possibility that the requirements of the brief will not be met. and • a clear policy and method for drawing down inflation reserves be established and observed. contractors adjust their tender prices by reducing or increasing their target profit margins in accordance with their need to obtain new work. Such unforeseen happenings are covered in the cost control system by the The Surveyors’ Construction Handbook Part 3. (l) The client should distinguish between inflation and the effect on construction prices of market conditions at the time of tender. The unexpected will happen. after construction has started. however. and • minimising changes to the design. recognise that such corrective action is not always beneficial. It is unwise to base early estimates on an assumption of favourable market conditions at the time of tender as the construction industry is subject to wide. • the assumptions on which inflation allowances are calculated be reviewed as each new estimate is prepared and the allowances corrected in accordance with such reviews. since: • cost savings can be made only by reductions in standards or by omissions of part of the work remaining to be finalised. the increase in construction cost from the date when the estimate is prepared to the date when the work will be carried out. and • late cost savings are inefficient as any amount saved will be reduced or may be negated by the costs of disruption inherent in making the changes needed to generate the savings. changes in workload in accordance with economic conditions. • these allowances for inflation should be clearly identified within the estimates and not be allowed to be used to correct other overspending.PART 3. (i) Successful cost control during the construction stage depends on: • ensuring that all design work is completed and fully co-ordinated before any commitment to construct is made (this applies in a progressive way when design and construction overlap). • administering the contract efficiently and promptly in strict accordance with its terms and conditions. It is essential for effective cost control that: • allowances should be made for inflation in all estimates and that the assumptions on which such allowances were calculated be stated. (j) Regular cost reports can be produced throughout the construction stage from which potential overspending can be identified before it occurs with the intent that corrective action should be possible. SECTION 1 If neither is done. for any reason.e. The client should. that is largely in the visible finishings and fittings. In simple terms. Section 1 (01/03) Effective from 1/3/03 Page 39 . the control budget will be exceeded. (m) Things will go wrong on the project. comparatively swift. i.

at all times in the project. or • shortening the time allowance for future activities by increasing the resources to be made available for them. and • time checking – monitoring closely actual time spent on each activity against the allowance in the time plan. which may involve abandoning low priority restraints and/or phased transitions from earlier activities to later activities logically following them. Insufficient design time will have an effect upon client risk as will insufficient time allowed for construction. not disclosed to the consultants or the contractors. SECTION 1 contingency.4. G 3. (c) The client should be aware of those tasks which are vital to completion on time and those tasks where some flexibility may be available. once fixed. • time plan – the division of total time into inter-linked time allowances for readily identifiable activities with definable start and finish points. funding and planning permission should be completed. and within which other key stages. the remaining contingencies match the remaining risks. The client may also establish and control a client reserve. (e) If the time taken for an activity exceeds its time allowance there are essentially only two forms of corrective action available: • the re-sequencing of later activities. Time for the approval processes should be included as specific activities in the time plan for the project. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook .1. Thus a time control system can embrace: • time budget – the overall project duration as fixed either by specific constraints or by the selected procurement strategy. These are invariably vital as the need to obtain approval is likely to be a prerequisite to further work on the project proceeding. reporting divergence as soon as it is observed. (d) The process of time control is in many ways analogous to that of cost control.14 TIME CONTROL OVERVIEW (a) The overall programme of activities which will constitute the project should be developed at a very early stage in the procurement cycle. Page 40 Part 3. the period which.PART 3. (b) The programme of activities should be feasible and realistic. to cover late changes in user requirements and unforeseeable third party events. such as land purchase. becomes a key parameter for management of the project. This programme will form the time framework within which the designers and the constructors should complete their activities. The client should develop a policy for management of contingency funds to ensure that. the overall project programme.

and • making up lost time by re-sequencing later activities may be achievable but often only at the risk of compromising quality or cost control. Designers should work to a series of deadlines at which different elements of the design should be agreed (i. it is likely that some of them will be borne by the client. frozen) if costs and the overall programme are to be kept under control. G 3. It is The Surveyors’ Construction Handbook Part 3. with strict procedures for allocating the reserve to specific events. This concept is essential on projects which are subject to external time constraints. Who carries such additional costs depends on the detailed contractual arrangements between the parties. (f) The client should recognise that time control is as important during the design stages of the project as the construction stage.e. Such considerations may review higher initial costs against lower running costs or longer life to replacement or maintenance.15 WHOLE-LIFE COSTS (a) In addition to considering project cost purely in terms of initial capital costs the client may wish to consider costs over the projected life of the building. SECTION 1 If neither is done. every project contains time-related costs whether these are openly stated or not. any project seeks to satisfy the differing requirements of several parties. G 3.1. In general. the overall time budget will be exceeded and the project will finish late. Value management provides a structured framework for the examination and discussion of these requirements to reach a consensus before the project brief is finalised. where a building has to be available for occupation before the lease on another building expires.1.4. for example. or where planned maintenance or energy consumption. (g) The client should consider developing (with the help of the project manager if appointed) a time contingency (reserve). The project manager or project cost consultant will be able to advise the client of the availability of their application in each case.16 VALUE MANAGEMENT (a) Value management is usually reserved for relatively complex projects where value for money is important and concerned with defining what ‘value’ means to the client in meeting a particular need. This may be of particular impact where shorter-life inherent assets. such as mechanical or electrical equipment. are being considered. quality and cost: • any extension of the overall timescale for a project always generates additional costs to either constructor or client.4. Section 1 (01/03) Effective from 1/3/03 Page 41 .PART 3. (h) The client should take account at all times of fundamental relationships between time. (b) The techniques associated with whole-life costing are often complex and predictive.

the interface between related components and systems. G 3. great care is needed to ensure that this standard is unambiguous. formal reviews of the design philosophy and the detailed solutions at one or more stages of the design development. the integration of mechanical and electrical systems into the overall design. (b) Value management is usually carried out at the concept and feasibility stages of a project. by: • the project brief – a clear statement of the standards of quality required.g. • the original design – the adequacy of the components selected for the building. (b) Value engineering studies are pre-planned.4.18 QUALITY CONTROL OVERVIEW (a) The final quality of the project is governed. They are sometimes carried out by firms or individuals not connected with or employed on the project and are short exercises intended to review the detailed design solutions against the objectives and to establish whether they can be achieved in a more cost effective manner. • a wide range of options and alternatives to meet that need is considered. (c) The client may wish to appoint a professional adviser experienced in these techniques and who will provide support in writing the objectives and subsequent brief.1. and • the project objectives are made explicit and are commonly understood by all parties. progressively. by reference to standards.1. Page 42 Part 3. such phrases as ‘the highest quality attainable within the control budget’ should be avoided. • specification – the conversion of the quality standard demanded by the project brief into precise requirements for both the supply and the installation of materials.17 VALUE ENGINEERING (a) This occurs later in the development of the project and is concerned with how value is achieved rather than what the relative values are as defined in the project brief and objectives. The aim is to establish a clear statement of a project’s objectives matched to their relative values.PART 3. The aim is to ensure that: • a project is commissioned in response to a careful analysis of balance of needs. G 3. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . the setting out of criteria against which the standard of the finished work will be judged.4. SECTION 1 used to ensure that the need for and scope of any construction is thoroughly analysed before any further commitment to proceed is made. the completeness of design before construction starts. e. components and systems. codes of practice or the like.

(b) The client may choose to appoint a clerk of works whose function is to act as an inspector of work done to ensure quality. the cost can be contained to that of the changed feature itself. or ‘improved’. procedures for witnessing tests. or • the client after the design brief has been agreed. Section 1 (01/03) Effective from 1/3/03 Page 43 . formal quality assurance systems for their own work or services in accordance with ISO 9000 or equivalent standard.4. to a design feature which. the procedures for rectifying any defective work. If changes are unavoidable. it can disrupt the contractor’s work and invariably gives rise to a higher cost than if the change had been included in the contract as let. the detailed. (c) Client changes can be relatively minor. and • inspection – the independent inspection and verification of the contractor’s work by the design team. for commissioning plant and systems. The avoidance of change should be a prime objective of the project strategy. SECTION 1 • quality control – setting up control mechanisms to apply to the execution of the work on site. the cost will be disproportionate to the value of the change. (c) Many construction companies and firms of consultants within the building industry have adopted.PART 3. the programmes for testing. the quality control activities carried out by the contractor while work is being done. but who should recognise that inspection and verification is the last line of defence. or altered to overcome design errors and inconsistencies. they should be dealt with as described in the paragraphs below. Many minor changes The Surveyors’ Construction Handbook Part 3. such as the addition of an extra storey. on-going supervision by the contractor. (b) Client changes (as distinct from design development) are changes which are made either by: • the design team. The key to quality control on site is to specify clearly. should be frozen. with the approval of the client.19 CHANGE CONTROL OVERVIEW (a) Clients should aim to make no changes once a particular design feature has been decided because these are one of the more significant causes of cost and time overruns in construction projects. for pre-completion inspection for defects lists and defect rectification and for final hand over. The most significant of these are changes to the scope of the works. and perhaps some relatively small resource cost. and to monitor closely. and • after the construction contract has been let. or are in the process of adopting. it has been decided. (d) The cost of client changes depends on when they are made: • before the construction contract has been let. or can have major cost implications. such as adding a few extra power points. G 3.1.

RICS Guidance Note. • taking into account any proposed new legislation. (f) The contingency in the project budget should be sufficient to take account of the likelihood of such changes based on risk assessments. contingencies. Section 1 (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . RICS Books. If they are unavoidable. and • imposing discipline on users to finalise and sign off their requirements in strict accordance with the project programme. (i) The need for changes should be minimised by: • ensuring.PART 3.g. Disruption claims caused by a large number of small changes are common. the client. Page 44 Part 3. (e) Some client changes are unavoidable. and • source of funding of any cost overrun. • having early discussions with outside authorities so as to anticipate their requirements. (g) Changes proposed prior to construction may either be unavoidable or optional. client cost reserves. • the source of the change. • those required by unforeseen ground conditions. If they are not essential they should be deferred until the project is complete and then reviewed to see if they are necessary and economically justified. and • previously unforeseen users’ requirements. SECTION 1 can have a cumulative and serious effect. e. • the full cost and time consequence of the change. if satisfied that they are. • proposals for avoiding or mitigating time overrun. 1997. with the assistance of an experienced project team and designers. (j) When changes do occur. • requirements of the health and safety or fire prevention authorities. the client should call for: • the reasons for the change. 1 Stock Condition Surveys. Coventry. compensating savings elsewhere. • undertaking adequate site investigation or condition surveys1 if existing buildings are to be renovated. • ensuring that designs are fully developed and co-ordinated before construction contracts are committed. Examples of such changes are: • compliance with changes in legislation. should authorise a transfer from the contingency in the budget to cover them. If they are optional they should be approved if it can be demonstrated that they offer good value for money (or a saving) and that there are sufficient funds available to pay for them. (h) Changes proposed after the construction contract has been let can have major time and cost implications and should be avoided if at all possible. that the project brief is as comprehensive as possible and the users have ‘signed it off’.

This reduces the total time to complete the project at the risk of losing certainty of cost before construction starts. Section 1 Appendix A (01/03) Effective from 1/3/03 Page 1 . (f) Another alternative is to let the work by a two-stage process or by negotiation thus reducing the pre-construction time involved and enabling the contractor to have some (limited) involvement in the design and planning stage. and the construction tendered separately. (b) The contractor assumes responsibility and financial risks for the building works as described whilst the client takes the responsibility and risk for design team performance. piling and foundations) to proceed to construction whilst the design for the rest of the building is completed. if the contractor’s works are delayed by the failure of the design team to meet their obligations. SECTION 1. design should be completed before tenders are invited and before the main construction contract is let. the temptation to let the work begin before the design is complete should be strongly resisted. Where a traditional strategy is chosen because of its particular advantages. (d) The strategy is unfortunately open to a level of abuse if any attempt is made to let the work before the design is complete. In most cases the price is established on the basis of tender documentation.PART 3. Such action may result in many post-contract changes which could delay the progress of the works and increase the costs. a substantial risk is created in that the contractor who builds the superstructure will take no responsibility for the foundation works carried out by another contractor. (c) Clients are able to influence the development of the design to meet their requirements because they have direct contractual relationships with the design team. In turn. (e) It is possible to have an accelerated traditional procurement strategy where some design overlaps construction. advance works contract. Therefore. The Surveyors’ Construction Handbook Part 3. if negligence can be proven. the contractor may claim against the client for additional costs and/or time to complete the project. This can be achieved by letting a separate. APPENDIX A Appendix A: Procurement Options A1 TRADITIONAL (SEQUENTIAL) (a) Under a traditional procurement strategy. construction costs can be determined with reasonable certainty before construction starts and a completion date can be fixed. As a result. the client could possibly seek to recover these costs from the design team members responsible. often including a bill of quantities which describes the extent of work to be done. they usually have a single contractual relationship with a main contractor and are therefore able to influence (but not control) the construction process through a single point of contact. by allowing ground works (site clearance. for example. More importantly. and assuming no changes are introduced. When construction begins.

(h) The main advantages of a traditional contract strategy are: • competitive fairness. SECTION 1. • the strategy is satisfactory in terms of public accountability. and • changes are reasonably easy to arrange and value. Section 1 Appendix A (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . Page 2 Part 3. Standard forms of contract are available. facilitating high level of quality in design.PART 3. • design-led. • reasonable price certainty at contract award based upon market forces. APPENDIX A FIGURE A1 PROCUREMENT ARRANGE MENT – TRADITIONAL CONTRACTUAL RELATIONSHIP CLIENT CONSULTANTS (fee contracts) MAIN CONTRACTOR (standard lump sum contract) SUPPLIERS (various contracts) SUBCONTRACTORS (standard lump sum) ARCHITECT (fee contract) administrative responsibility on behalf of the client ADVANTAGES competitive fairness satisfactory public accountability procedures well known changes reasonably easily arranged and valued SEQUENCE brief design DISADVANTAGES slow to start on site (no parallel working) open to abuse where design incomplete (resulting in less certainty) contractor not involved in design or planning (no buildability) adversarial potential competition construction Risk Low cost risk due to lump sum contract Medium time risk due to fixed contract date (but contractor has right to claim extensions) Low quality/design risk where the majority of the work is designed by insured consultants working directly for the client (g) The organisational structure of a traditional strategy is shown in Figure A1. • the procedure is well known.

resulting in less certainty. (d) The main disadvantages of the strategy are: • the strategy offers poor certainty of price. tendering and construction but usually with the result of some lack of price certainty at contract stage because the approximate quantities reflect the lack of information on exactly what is to be built at tender stage. and • the strategy often results in adversarial relationships developing. The contract sum is only established with certainty on completion of construction. A2 MEASUREMENT CONTRACTS Measurement contracts are used when the work required cannot be accurately measured for the tender bill of quantities. Measurement contracts provide more risk than lump sum contracts for the client but probably with programme advantages. • the overall programme may be longer than for other strategies as there is no parallel working. the approximate price and a programme should be clear at contract stage. (b) The organisational structure of a measurement contract strategy is shown in Figure A2. • no ‘buildability’ input by contractor. • there is no contractor involvement in the planning or design stage. Section 1 Appendix A (01/03) Effective from 1/3/03 Page 3 . They are typically used with civil engineering works where there can be significant uncertainty about ground conditions. • competitive prices. a tender based on drawings and a bill of approximate quantities will be satisfactory. Standard forms of contract are available for this strategy. and • there is a potential for adversarial relationships to develop. Measurement contracts allow a client to shorten the overall programme for design. APPENDIX A (i) The main disadvantages are: • the strategy is open to abuse. • the procedure is well known.PART 3. Measurement contracts are sometimes referred to as re-measurement contracts and are based upon the prices tendered by the contractor. The Surveyors’ Construction Handbook Part 3. SECTION 1. when re-measurement of the quantities of work actually carried out takes place and is then valued on an agreed basis. Here. and • there is some parallel working possible. • average public accountability. • the strategy enables changes to be made easily. (c) The main advantages of the measurement contract strategy include: • pre-construction time-saving potential. The scope of the work. The most effective use of a measurement contract is where the work has been substantially designed but final detail has not been completed.

the client employs the design team and a construction manager is engaged as a fee-earning professional to programme and co-ordinate the design and construction activities and to improve the buildability of the design.PART 3. the client does not allocate risk and responsibility to a single main contractor. SECTION 1. The construction manager supervises the construction management process and co-ordinates the design team on behalf of the client. Instead. APPENDIX A FIGURE A2 PROCUREMENT ARRANGE MENT – ME ASUREME NT CONTRACTUAL ARRANGEMENT CLIENT CONSULTANTS (fee contracts) MAIN CONTRACTOR (standard measurement contract) SUPPLIERS (various contracts) SUBCONTRACTORS (standard contracts) ARCHITECT administrative responsibility on behalf of the client ADVANTAGES pre-construction time saving potential competitive prices average public accountability procedures well known easy to arrange changes some parallel working DISADVANTAGES low certainty of price potential no contractor involvement in planning or design potentially adversarial SEQUENCE design competition Risk Variable cost risk as the final figure will be uncertain until the design and often construction is complete Medium time risk as the extent of work will vary and contractors can claim extensions to the period for construction Medium quality/design risk in the sense that design may not be complete at the outset construction brief A3 CONSTRUCTION MANAGEMENT (a) Under a construction management strategy. Construction work is carried out by trade contractors through direct contracts with the client for distinct trade or work packages. The construction manager. Section 1 Appendix A (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . who has no contractual links with the Page 4 Part 3.

APPENDIX A design team or the trade contractors. (c) With this contract strategy. design and construction can overlap. usually on the basis of drawings and specification. the client will be closely involved in each stage of design and construction. (b) On appointment.g. where the client wants ‘hands on’ involvement. therefore. (f) The main advantages of a construction management strategy are: • the strategy offers time-saving potential for overall project time due to the overlapping of procedures. suitable for the inexpert or inexperienced client. SECTION 1. design development of later packages can affect construction work already completed. foundations. unless some greater liability is incorporated into the contract. Although the time for completion can be reduced. Key dates are normally inserted at which client decisions will be required. the construction manager will take over any preliminary schedule and costing information already prepared and draw up a detailed programme of pre-construction activities. As this speeds up the project. London. risks. In adopting the construction management system.. • buildability potential is inherent. M. The client needs to maintain a strong presence through a project management team that is technically and commercially astute. but suggested that there is no intrinsic reason for this. The construction manager should therefore have a good track record in cost forecasting and cost management. and is liable only for negligence by failing to perform the role with reasonable skill and care. • parallel working is an inherent feature. The client should have administrative or project management staff with the time and ability to assess the recommendations of the construction manager and take the necessary action. price certainty is not achieved until the design and construction have advanced to the extent that all the construction work (trade) packages have been let. (d) The Latham Review1 recognised that construction management has been used predominantly for large and/or complex projects. Indeed. 1994. concrete. it is particularly recommended for projects where there is a high degree of design innovation. Also. The Surveyors’ Construction Handbook Part 3. • the breakdown of traditional adversarial barriers. Sir. electrical installation or decorating. construction management is known as a ‘fast track’ strategy. These packages are tendered individually. HMSO. A package is made up of work for which one of the trade contractors is responsible. 1 Latham. e. Section 1 Appendix A (01/03) Effective from 1/3/03 Page 5 . for a lump sum price.PART 3. Constructing the Team: Joint Review of Procurement and Contractual Arrangements in the United Kingdom Construction Industry: Final Report. This strategy is not. • clarity of roles. provides professional construction management expertise without assuming financial risk. and relationships for all participants. (e) The organisational structure of a construction management strategy is shown in Figure A3.

provided the relevant trade packages have not been let and earlier awarded packages are not too adversely affected. risks and relationships for all participants late changes easily accommodated DISADVANTAGES no cost certainty at outset needs informed client. APPENDIX A FIGURE A3 PROCUREMENT ARR ANGEMENT – CON STRUC TION MAN AGEM EN T CONTRACTUAL ARRANGEMENT CLIENT Fee contracts CONSULTANTS including Lump sum contracts CONSTRUCTION MANAGER WORK or TRADE CONTRACTORS ADVANTAGES time saving potential for overall project time trade packages let competitively buildability potential breaks down traditional adversarial barriers parallel working inherent clarity of roles. (There is some evidence that this results in lower prices because of improved cash flow certainty.) Page 6 Part 3.PART 3. without paying a premium. Section 1 Appendix A (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . and • the client has direct contracts with trade contractors and pays them directly. SECTION 1. able to take an active part needs a good quality brief relies on a good quality team needs time and information control SEQUENCE brief design construction Risk Medium cost risk since the actual cost is unknown until the last package is let Medium time risk since no one organisation carries the risk for timed completion Low quality/design risk because there is a close link between client. designers and constructors • changes in design can be accommodated later than some other strategies.

• the client must provide a good quality brief. The management contractor therefore bears the responsibility for the construction works without actually carrying out any of that work. or where this fee is inadequate. the management contractor selects works contractors by competitive tender to undertake sections of the construction work. resistance to works contractors’ claims can be affected by the same circumstances. (b) Management contracting is a ‘fast track’ strategy. All design work will not be complete before the first works contractors start work although the design necessary for those packages must be complete. APPENDIX A (g) The disadvantages are: • price certainty is not achieved until the last trade packages have been let. in turn. • an informed. • the strategy relies upon the client having a good quality team. which are shared by the works contractors. a management contractor is engaged by the client to manage the building process and is paid a fee. (f) The main advantages of a management contracting strategy are: • time-saving potential for overall project time. • buildability potential. As design is completed subsequent packages of work are tendered and let. tower cranes. A4 MANAGEMENT CONTRACTING (a) With this contract strategy.PART 3. It is therefore vital to select the management contractor carefully and to ensure that the fee is appropriate bearing in mind market conditions. such as office accommodation. (d) Where the management construction team is not of the highest quality. SECTION 1. A high level of cost management is therefore required. Section 1 Appendix A (01/03) Effective from 1/3/03 Page 7 . pays the works contractors. Similarly. (c) With the agreement of the client. The client reimburses the cost of these work packages to the management contractor who. The management contractor is responsible for all the construction works and has direct contractual links with all the works contractors. the management contractor can be less than proactive and the system can become a reactive ‘postbox’ approach. The Surveyors’ Construction Handbook Part 3. The management contractor co-ordinates the release of information from the design team to the works contractors. The client employs the design team and therefore bears the risk of the design team delaying construction for reasons other than negligence. hoists and security. (e) The organisational structure of a management contract is shown in Figure A4. The management contractor may provide some of the common services on site. and • time and information control is required. Cost certainty is thus not achieved until all works contractors have been appointed. proactive client is required in order to operate such a strategy.

• parallel working is inherent. Section 1 Appendix A (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook .PART 3. APPENDIX A FIGURE A4 PROCUREMENT ARR ANGEMEN T – MA NAGEMENT C ON TRAC TING CONTRACTUAL ARRANGEMENT CLIENT MAIN CONTRACTOR (standard fee contract) CONSULTANTS (fee contracts) WORKS CONTRACTORS (standard lump sum contracts) ADVANTAGES time saving potential for overall project time buildability potential breaks down traditional adversarial barriers parallel working inherent late changes easily accommodated work packages let competitively DISADVANTAGES need for good quality brief poor certainty of price relies on a good quality team may become no more than a ‘postbox’ system in certain circumstances removes resistance to works contractors’ claims SEQUENCE brief design construction Risk Medium cost risk since the actual cost is unknown until the last package is let Medium time risk since total construction time is a consequence of package selection Low quality/design risk because there is a close link between client. and • works packages are let competitively. • changes can be accommodated provided packages affected have not been let and there is little or no impact on those already let. Page 8 Part 3. (g) The disadvantages are: • need for a good quality brief. SECTION 1. • poor certainty of price is offered. designers and constructors • breaks down traditional adversarial barriers.

and • removes resistance to works contractors’ claims. and • the client has no direct contractual relationship with the works contractors or the design team and it is therefore difficult for the client to recover costs if they fail to meet their obligations. (c) The disadvantages are: • price certainty is not achieved until the last work package has been let. Section 1 Appendix A (01/03) Effective from 1/3/03 Page 9 . Under a design and manage contract. describes the strategy when the client appoints designers to prepare the concept design before the contractor assumes responsibility for completing the detailed design and constructing the works. in return for a fixed-price lump sum. not only for the works contractors. The designer is then employed for the rest of the contract by the contractor who is usually responsible for all of the design including that done prior to the switch. • it may become no more than a ‘postbox’ system in certain circumstances. known as ‘develop and construct’. APPENDIX A • relies on a good quality team. and • the contractor assumes the risk and responsibility for the integration of the design with construction. Construction can start before all the detailed design is completed. Often this strategy is associated with a process where the contractor takes over the client’s designer (architect) contract in a form of ‘contract switch’ or novation.1.PART 3. (b) The main advantages of a design and manage strategy are: • early completion is possible because of overlapping activities. (b) A variant. A5 DESIGN AND MANAGE (a) A design and manage strategy is similar to management contracting.1. but at the contractor’s risk. a single contractor assumes the risk and responsibility for designing and building the project. (d) As explained in 3. A6 DESIGN AND BUILD (a) Under a design and build strategy. the client loses some control over the project. The Surveyors’ Construction Handbook Part 3. • it can be applied to a complex building. but also for the design team. the contractor is paid a fee to manage and assume responsibility. Changes are usually more expensive to introduce after the contract has been let. Any client requirement which is not directly specified in the tender documents will constitute a change or variation to the contract. • the client loses direct control over the design quality. by transferring risk to the contractor. (c) Design and build is a fast-track strategy. compared with other types of strategy. SECTION 1. • the client deals with one firm only.

If a design and build strategy is identified as a possibility at an early stage. Sometimes the successful contractor will assume responsibility for this design team and use them to produce the detailed design. are reasonably insurable. type contracts to ensure that the responsibility for design performance is properly shared. (g) Specification is a dangerous area for inexperienced clients: over-specification can cut out useful specialist experience. the client should provide contractors with a performance specification at tender stage. Such a clause should identify specific obligations that are absolute. in a strong position to ensure that their interpretation of the specification takes preference over the contractor’s. the client’s requirements will need to be stated clearly and accurately and delivered on time. as a consequence. that do not require the designer to be an expert in the client’s business and. that the brief and performance/quality specifications for important requirements in the project are fully and unambiguously defined before entering into this type of contract. or design and build. (m) Non-availability of insurance to cover a higher than normal risk should be weighed against the financial ability of contractors to meet design default claims. (j) Current forms of contract for design and build vary their treatment of design liability. the client may have to pay a termination fee to the design team.PART 3. Clients are. (l) The imposition on contractors of fitness for purpose in design is usually expressly excluded in standard forms of contract and it is a matter of judgement for clients and their professional advisers. under-specification can be exploited. even though tenderers in recessionary markets are likely to agree to undertake such risks. (k) To be effective. (i) Consideration may need to be given to the inclusion of a special clause in design. It will normally be preferable and represent better value for Page 10 Part 3. therefore. APPENDIX A (e) It is very important. The client may wish to retain the independent services of a cost consultant throughout the contract for early cost advice involvement in the bidding process and cost reporting during construction. If requirements are not specific. (f) The contractor develops the design from the specification submitting detailed proposals to the client to establish that they are in accordance with the requirements of the specification. then the basis of the appointment of the design team should reflect this possibility. If it does not. SECTION 1. therefore. (h) The client will often employ a design team to carry out some preliminary design and prepare the project brief and other tender documents. Section 1 Appendix A (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook .

PART 3. Turnkey Package deal Design and build (competitive) Design and build (negotiated) Develop and construct The range of options enables the procurement arrangement to be used for a wide range of client types. but this will be at a cost. showing proportional involvement in the design proces by client and contractor between package deal. Client involvement Contractor involvement The Surveyors’ Construction Handbook Part 3. which will be the subject of an insurance payout in the event of a design fault. yet insurable. and for clients to be involved to a greater or lesser extent. (o) A range of options is available as illustrated in Figure A5. rather than an insurance fitness for purpose requirement on a contractor of limited financial assets. (n) Increasingly. a complete hands off approach). the client may take out insurance to cover post-construction liability. This is a matter for specialist advice. These range from a package deal or turnkey where the client has little involvement in the design development or building procurement process (effectively. to develop and construct where the client appoints designers to develop the brief to a level of sophistication which will leave the design and build contractor to develop detail or specialist design elements. Section 1 Appendix A (01/03) Effective from 1/3/03 Page 11 . APPENDIX A money to impose a lesser. FIGURE A5 P ROCUREMENT ARRANGEMENT – DESIGN AND BUILD Some options available. SECTION 1. collateral warranties are being used to place additional responsibility on designers or subcontractors. Most importantly the client should ensure that adequate design liability insurance is in place and maintained for the period of liability. liability. and develop and construct. In addition.

APPENDIX A (p) The project organisation structure for design and build is shown in Figure A6. Section 1 Appendix A (01/03) Effective from 1/3/03 The Surveyors’ Construction Handbook . or may more usually subcontract these to one or more professional firms whilst retaining control.PART 3. Contractors may use their own firms’ resources for undertaking the design (in-house design and build). SECTION 1. • inherent buildability is achievable. (q) The main advantages of a design and build strategy are: • the client has only to deal with one firm. FIGU RE A6 PROC UREMENT ARRA NGEMEN T – D ESIGN A ND BU ILD CONTRACTUAL ARRANGEMENT CLIENT DESIGN AND BUILD CONTRACTOR (standard lump sum contract) SUPPLIERS (various contracts) SUBCONTRACTORS (standard lump sum contracts) ADVANTAGES single point contact and responsibility inherent buildability early firm price possible reduced total project time DISADVANTAGES client needs to contract before design is complete no design overview unless consultants appointed difficult for clients to prepare adequate brief bids difficult to compare design liability limited by standard contract client driven changes can be expensive SEQUENCE brief competition design construction Risk Low cost risk since most contracts will be let on a lump sum basis Low time risk since the contractor will usually fix the time and be committed to it High design/quality risk where the contractor controls design there are risks related to both design suitability and to the capacity of the design-build firm to own such risks Page 12 Part 3.

and • reduced total project time due to early completion is possible because of overlapping activities. SECTION 1.PART 3. and • client changes to project scope can be expensive. (r) The disadvantages are: • the client is required to contract before the detailed designs are completed. • design liability is limited by the standard contract. • bids are difficult to compare since each design. The Surveyors’ Construction Handbook Part 3. • there is no design overview unless separate consultants are appointed by the client for this purpose. Section 1 Appendix A (01/03) Effective from 1/3/03 Page 13 . • difficulties can be experienced by clients in preparing an adequate brief. programme and cost will vary. APPENDIX A • price certainty can be obtained before construction starts provided that the client’s requirements are adequately specified and changes are not introduced.

PART 3. It is hoped that this guide will lead to a more consistent approach throughout the construction industry. production of tender documentation and the management of the tender process. Finishes 4. project managers. quantity surveyors and commercial managers who are involved in the procurement of building services. Fittings 5. Superstructure 3. Table 1: Elemental Breakdown as a Percentage of Total Construction Cost Group element Highly-serviced factories Air conditioned offices 8 44 11 2 35 100 General hospitals 1. It is aimed at clients. The Surveyors’ Construction Handbook Part 3. It is therefore important that guidance is given to all professionals who provide advice in this field. and for quantity surveyors/commercial managers involved in the selection of a procurement route.2 Introduction The guidance in this section is intended to improve the way in which the procurement of building services is handled by all building professionals active in this field. Substructure 2. It is also intended for use by project managers advising on the procurement strategy for both consultant services and construction work. Section 2 (07/01) Effective from 1/9/01 Page 1 . The value of building services can represent anything up to 50 per cent of a project’s total cost (see table 1) and a considerable proportion of the construction risk.1). ‘The Procurement Guide’ provides both clients and their advisers with a code of procedure to assist them in the selection of an appropriate procurement strategy for a building project. Services Total Data source: BCIS 19 62 4 – 15 100 6 33 8 4 49 100 This guide should be read in conjunction with ‘The Procurement Guide’ (see Section 3. SECTION 2 PART THREE: CONSTRUCTION PLANNING AND PROCUREMENT SECTION 2: BUILDING SERVICES PROCUREMENT 3. It is intended to provide guidance to clients on the production of clear appointment criteria and the benefits that will manifest through the whole procurement process.

entitled ‘Rethinking Construction’. It is common for clients and their advisers to put enormous effort into developing overall procurement solutions and the role of the principal contractor within these solutions and yet. quality and time are always as high on the principal contractor’s agenda as they are on the clients. claim-ridden projects. With this move towards partnering. Without a technical background quantity surveyors have struggled to provide such cost and procurement advice. with the increased complexity and cost sensitivity of this element. HISTORICAL DEVELOPMENT Cost and procurement advice for building services has historically been provided by building services consulting engineers and the provision still exists within the Association of Consulting Engineers (ACE) standard conditions of engagement to provide such a service. With many more specialist quantity surveyors practising in this field. and more specifically partnering through the supply chain. and not just the principal contractor. This may be historic in that principal contractors would traditionally be held responsible for procurement of sub-contractors.PART 3. rather than definitive guidance for any one of the many routes available. very often. guidance on good practice is essential if consistent standards are to be Page 2 Part 3. the role is now more commonly placed in the hands of a specialist quantity surveyor. This often leads to inappropriate procurement methods manifesting in poor quality.1 calls for radical changes to the process through which the construction industry delivers its projects. It is now generally accepted throughout the industry that building services cost and procurement advice requires input and guidance from technically trained specialist quantity surveyors. This. and one that is increasingly more evident within industry today. it will be incumbent on both clients and their advisers to take a more pro-active approach in the procurement of every element of a building. Consideration should be given to the guidance provided here. this approach cannot always ensure that the client’s requirements in terms of cost. The report of the Construction Task Force. It is not the intention within the framework of this guide to cover every procurement option. Supply-chain partnering is one such change. together with the demand from clients for a more pro-active approach to cost and value management at every stage of a project. This guide is intended to provide a framework to supplement the reader’s own skill and judgement when advising and implementing the procurement of building services. However. However. has led to an increase in the demand for specialists. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . as it will have an influence on the selection of the principal procurement strategy. and therefore the guide is written with the most commonly used procurement strategies in mind. they do not take an active role in procurement further down the contractual chain. SECTION 2 The fundamental difference between these sections is that this section examines in greater detail the key aspects of building services procurement.

G 3. ‘who made the choice?’ is a good one. Design is a series of choices and decisions. and so on. The question surrounding this appointment is. It is hoped that by following this guide clients and their advisers will be better placed to avoid the many pitfalls that have historically been associated with building services. irrespective of the procurement route. This process usually begins with the appointment of a building services engineer or a building services designer/contractor. and consideration of spatial. ‘who is best placed to provide design advice and at what stage should it be sought?’ Before answering this question the meaning of the word ‘design’ needs to be explored. In practice it means different things to different people. Choice is exercised as to the way in which a problem is to be solved or requirements are to be met. This includes the calculation of loads for heating. therefore.2 3. A common denominator would be a useful guide. The Surveyors’ Construction Handbook Part 3.2. Section 2 (07/01) Effective from 1/9/01 Page 3 . Design is the exercise of providing a solution to a particular problem or requirement. As a starting point for investigating where design liability rests asking the question.1.1 Appointing the Building Services Designer 3. A good word to represent that common denominator and the essence of design is ‘choice’.1. The designer can be: (i) An independent design-only consulting engineer engaged by the client. The process of designing the building services elements within a construction project is complex.1 INTRODUCTION Most construction projects contain building services. with detailed design often being undertaken by specialist manufacturers and/or installers.PART 3.2.1. 3. SECTION 2 maintained. it is important to know who is responsible for what within the various elements and stages of design. structural engineer and other specialist designers).3 THE IDENTITY OF THE BUILDING SERVICES DESIGNER The building services designer is a member of the client’s design team (which also includes the architect. ventilation power.2. sizing and selecting pipes. both in terms of who is required to make the choices and decisions and accepting responsibility for them. Good practice in procurement necessitates a consistent and logical approach. or set of problems or requirements. It is unusual for a single party to do all the design work and. cooling.2. In order to incorporate these services successfully. ducts and plant and equipment.2 THE MEANING OF DESIGN Once the client’s brief on a construction project is clearly established the process of design proceeds. and in doing so obtain greater value for money. architectural and structural requirements. design advice is required.

• required standard of the product. • size.4 ALLOCATION OF DESIGN RESPONSIBILITIES The concept of single-point responsibility makes it easier to establish where liability lies.2. The use of a table clearly stating the design activity and the assignment of that activity to the party with contractual responsibility is likely to be the most efficient way of avoiding conflict. The Building Services Research Information Association’s (BSRIA) technical note TN21/97. • time available to deliver the project. Using a table in this way is infinitely flexible and should be configured on a project-by-project basis to suit the particular demands of a particular project. in practice. In this example only one sub-system is considered and other consultants are included. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . SECTION 2 (ii) A general contractor or building services contractor who either engages a consulting engineer or employs an in-house design engineer. it would be necessary to create a single table for each sub-system of the complete building services installation. with a single party.1. great care must be taken to clearly describe the allocation of different parts of design to different parties in the building contract. Table 2 is an example of how the pro formas for allocating responsibility produced by BSRIA in their technical note can be configured. Unless a client works solely with a design and build contractor from the outset. Page 4 Part 3.PART 3. If conflict at later stages of the project is to be avoided. The decision on which option to use should be based on important factors such as: • clarity and certainty of the client’s brief. complexity or specialist nature of the project. it is almost inevitable that design responsibility will be split between the client’s design-only consultant and the building services contractor(s). the best engineering expertise for different parts of a design may not rest. Allocation of Design Responsibilities for Building Engineering Services provides practical guidance on the issues involved in the assignment of design responsibility to the various parties to a contract. However. In practice. as design responsibility may vary from sub-system to sub-system. with each being responsible for their respective elements or stages of design. and • financial constraints. 3. or (iii) A hybrid of (i) and (ii) above.

7 – Record drawings 5. SECTION 2 5.1 – Sketch drawings 4.5 – Builders work information Effective from 1/9/01 4. Section 2 (07/01) 4.0 Confirmation of client brief 4.Table 2: Allocation of Design Responsibilites Allocation of design responsibilities This example is based on the contractor being appointed as part of the design team Project manager Building services engineer Structural consultant Contractor Other (stated) Comments Area type: Main building Service: Chilled water installation Activity Employer The Surveyors’ Construction Handbook ✔ ✔ ✔ ✔ ✔ ✔ Prepared in conjunction with the contractor Brief to be issued by project manager ✔ ✔ ✔ ✔ ✔ ✔ ✔ Architect ✔ 1.0 Surveys: 1.0 Feasibility report 3.1 – Existing system 1.3 – Installation drawings 4.4 – Specification 4.2 – Schematics 4.6 – Manufacturers’ drawings 4.1 – Specify plant performance Page 5 .0 Plant selection: PART 3.0 Design: Part 3.2 – System wide 2.

1 – Format 6.Page 6 Allocation of design responsibilities This example is based on the contractor being appointed as part of the design team Project manager Building services engineer ✔ QS ✔ ✔ QS To be done in conjunction with the QS Structural consultant Contractor Other (stated) Comments ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ Table 2: Continued PART 3. Section 2 (07/01) 5.3 – Sign off 7.0 Spatial coordination: 7.4 – Pre-tender plant (if required) 6.1 – Coordinate all services and routes 7. SECTION 2 Area type: Main building Service: Chilled water installation Activity Employer Part 3.3 – Agree plant manufacturers 5.0 O&M manuals: Effective from 1/9/01 6.3 – Re-select plant accordingly.2 – Review installation proposals and amend schematics The Surveyors’ Construction Handbook 7.2 – Production 6.2 – Propose procurement route 5. including any revised calculations .

2 – Carry out testing.0 Monitor the specialist design for compliance with the design intent 9.0 Test and commission the works: 9. Section 2 (07/01) 9. commissioning and provide certification 9.3 – Accept/witness commissioning 10.0 Design team coordinator/contract administrator PART 3.0 Cost advice and monitoring Effective from 1/9/01 11.0 Lead designer Page 7 .Table 2: Continued Allocation of design responsibilities This example is based on the contractor being appointed as part of the design team Project manager Building services engineer ✔ Structural consultant Contractor Other (stated) Comments Area type: Main building Service: Chilled water installation The Surveyors’ Construction Handbook ✔ ✔ ✔ QS ✔ ✔ Activity Employer 8. SECTION 2 12.1 – Commissioning specification Part 3.

Again. as undoubtedly the level of design responsibility will affect his or her fee. the 1981 conditions are still in use on some projects and therefore need to be considered here. with responsibility being allocated to the person within the team best suited to manage the risk. 1988). Alternatively. the completed tables should be included as a contract document in all contracts between the employer and his or her design team. The tables should then be included as part of the tender documents and included as a contract document in both the employer’s contract with the principal contractor and its contract with the building services engineer. under a ‘partnering’ situation the tables could be compiled jointly between the parties. are widely used to make this appointment. The consultant does not warrant that his or her design will be fit for the intended purpose.2. The responsibilities under abridged duties rest between the relative extremes of full duties and performance duties. which would include the principal contractor. a pre-designed single stage competitive tender would require the tables to be created as a basis for appointing the building services engineer. (a) 1981 ACE conditions of engagement The 1981 conditions include agreement 4A which offers a choice of the following forms: (i) full duties. or (iii) performance duties. 3. In practice. (ii) abridged duties. The responsibilities of the consultant under full duties and performance duties are easier to understand than abridged duties. However. Page 8 Part 3. SECTION 2 The tables should be compiled at the outset of a project by the employer or his or her project manager and should be included as a contract document.PART 3. produced by the Association of Consulting Engineers. The ACE conditions of engagement.1.5 APPOINTMENT OF AN INDEPENDENT DESIGN-ONLY ENGINEER The first allocation of design responsibilities usually concerns the appointment by the client of an independent design-only consulting engineer. For example. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . care and diligence in the discharge of his or her duties. All three forms require the consultant (building services engineer) to exercise all reasonable skill. the completion of the tables in terms of timing will be dependent on the procurement route chosen. The 1981 conditions have been replaced by the 1995 conditions (2nd edition.

particularly to the building services contractor who will rely on the information. In practice.’ It is important to note that coordination drawings are not part of normal services. If the client or the project manager want the designer to produce coordination drawings under the 1995 conditions. ‘In connection with the duties of building services engineers it should be noted that agreements A(2) and B(2) list as normal services a level of services which corresponds roughly to the abridged duties in the 1981 agreements 4A(ii) and 4B(ii). abridged and performance duties. Similarly. Abridged duties have been the source of argument and dispute between building services contractors and design-only consultants for many years. the extent of this is unlikely to be clear. it is very important that the extent to which the consultant will produce coordination documentation is clear. normal services are significantly less than full duties under the 1981 conditions. SECTION 2 One very important difference between full duties and abridged duties is that the latter do not require the building services engineer to produce coordination drawings. The 1995 conditions include the following guidance. an equivalent of performance duties may be agreed by listing in A19 those services which are not to be included as normal services. Agreement B(2) divides the duties into normal services and additional services. he or she will almost certainly coordinate design to some extent in conjunction with the other members of the design team. Therefore. From this point of view. (b) 1995 ACE conditions of engagement The 1995 conditions comprise a range of forms. It is open to the client and building services engineer to agree an equivalent of full duties by importing some of the additional services into the normal services. His or her duties under abridge duties are intended to harmonize with those of the architect up to a certain point and this would require some element of design coordination by the building services engineer. the meaning of the words ‘major re-routing’ should be discussed with the designer so that the implications of what they might mean could be risk assessed at an early stage and clearly communicated through the contract documentation. Under normal services. Additional services is a list of services from which the client must choose and add on to the normal services. one of which is called agreement B(2). ‘it should be possible to produce coordination drawings and installation drawings without a major re-routing of those services’. Section 2 (07/01) Effective from 1/9/01 Page 9 . The forms are not formatted into full. the designer is required to prepare ‘detailed design drawings’ from which.PART 3. BSRIA technical note TN21/97 provides practical guidance on deliverables. This is especially important where abridged duties are used. when it comes to engaging a design-only consultant. they must request the inclusion of these drawings. The Surveyors’ Construction Handbook Part 3. However. Although the consultant is not required to produce coordination drawings (as defined in the 1981 ACE conditions) under abridged duties.

Table 3: Main Differences Between Appointments in the 1981 and 1995 ACE Conditions of Engagement 1981 ACE Conditions Performance duties As agreements A(2) and B(2) Least detailed design services Abridged duties No requirement to produce coordination drawings Less detailed design duties (How is coordination of design to be achieved?) Full duties Includes coordination drawings Most detailed design duties 1995 ACE Conditions List in A19 what is to be excluded from normal duties to equate to performance duties Normal duties Roughly equivalent (Coordination to be addressed separately) Additional services List of additional services to be agreed with the consulting engineer Should facilitate coordination drawing ‘without major re-routing’ Independent of who the designer is and how the appointment is made. Bringing the building services designer into a project at a later stage will mean that the building services design is less advanced than the main structural and architectural elements leading to possible conflicts as the design process catches up. • The use of abridged duties from the 1981 ACE conditions agreement 4A or their current equivalent needs very careful consideration. This is because the architectural and structural design will impact on the building services design and vice versa. Page 10 Part 3. it is equally important to appoint him or her at the same time as appointing the architect and the structural engineer. the engineering services element will be less detailed. it is very important to have a clear definition of deliverables expected from him or her. this can lead to disputes.1. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . • It is important to appoint the building services engineer at the same time as the architect and the structural engineer. It will also mean that at a time when the client needs an accurate estimate of the project cost.6 SUMMARY • The designer is the party who is required to make the choice.PART 3. Complete design expertise rarely lies with a single party.2. SECTION 2 The main differences between the 1981 and 1995 ACE conditions of engagement are outlined in table 3. 3. • If allocation of design responsibility between the parties is not clearly described in tender documentation. When engaging a design-only building services engineer under abridged duties.

time may be needed for a design solution to be found and implemented. Failure in the coordination of the building services design can create problems with the building services installation and may have a serious impact on the following areas.2 THE IMPORTANCE OF DESIGN COORDINATION Disputes involving design coordination and installation responsibilities are a major cause of conflict in the building services industry and. • re-installation of the ductwork. it is generally considered to be the principal contractor’s responsibility and is therefore not covered here. which are not recognized during the drawing process. the next part of this section deals more specifically with the coordination of design. are one of the main reasons for delay and disruption on construction projects. and the extent of their design responsibilities. It is important to recognize the distinction between ‘design coordination’ and ‘coordination of the installation’.2. SECTION 2 Having established where the responsibility for design can lie. • re-ordering of materials.2. The solution may require: • preparation of revised calculations.PART 3. Section 2 (07/01) Effective from 1/9/01 Page 11 . 3. and • re-programming. • preparation of a drawing/sketch.2 Design Coordination 3. The Surveyors’ Construction Handbook Part 3. • approval by others of the re-design. this is rarely the case when procuring buildings where the building services element is of significant value and complexity. For example. Whilst coordination of the installation (which is concerned with the planning and sequencing of the works on site) is extremely important. may appear to be fairly straightforward for many elements of a building.2.2. (a) Installation time Design coordination problems. if the ductwork was found to clash with a structural element of the building. However.2. The roles of the various parties. may only become evident when the installation of the works is being carried out. G 3. as such.1 INTRODUCTION This section deals with design coordination. its potential impact on a project and the importance of recognizing appropriate procurement strategies to deal with this impact.

a ductwork problem may prevent the ceiling installation from being completed to programme. In this situation it is unlikely that any party will accept liability for the problem since the consequences. For example. including those arising out of: • engineering time. coordination problems arise as a result of incomplete design or poorly-defined design duties which result in gaps in the design. (c) Effect on other trades The time needed to resolve the design coordination problem might cause a critical delay to other trades or activities.PART 3. the solution can necessitate a compromise of the quality of the installation. are unclear. inevitably leading to conflict and delay. • drawing time – if the works are done out of sequence.2. It must be recognized that design coordination is an inherent part of the overall design process and.3 OBJECTIVE OF DESIGN COORDINATION The process of design coordination should have a clear goal: to ensure that the many different elements of construction fit together effectively to provide a workable and economic solution. and • the costs associated with a variation to the works which may additionally involve loss of productivity and prolongation costs. as such. (d) Cooperation between the parties Invariably. SECTION 2 (b) Installation cost Remedying a design coordination problem often involves working out of sequence and can give rise to additional costs. (e) Standard of workmanship When a building services contractor experiences a problem due to lack of design coordination. This can give rise to parties defending their positions. even when duties and responsibilities are defined in the contract. misunderstanding can still arise if reliance is placed on custom and practice rather than liabilities under the contract.2. Page 12 Part 3. and their associated costs. Furthermore. • incidental items such as retaining the scaffolding in place for a longer period. whoever is responsible for design should ensure it is undertaken. 3. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . Design coordination should be an objective and measurable process that is transparent to all concerned.

2. • The production of documents associated with coordination should be clearly allocated to the various parties to the contract. For example. there could be a number of specialists responsible for the design of their own systems. The contract should also specify the type and number of documents/drawings. before contracts are entered into.1. Whatever method is used the contract should address the duties of the parties as follows. SECTION 2 This may appear to be self-evident. a fully coordinated design would not be achieved until these designs are complete. when drafting appointment and contract documents. a number of key issues need to be addressed.2. and • Recognition should be given to the impact which specialists have on design coordination and the importance of appointing early enough in the procurement process. Therefore.2.PART 3. It should be clear if the designer is responsible for producing The Surveyors’ Construction Handbook Part 3. This may leave the contractor with a substantial amount of design coordination to complete after the building services design engineer has fulfilled his or her design obligation. the functions of design and design coordination are not always clearly defined. design coordination takes on particular importance because of the large number of trades involved. (a) Terms of appointment for the designer Special care must be taken to understand the terms of appointment of the designer. the complexity of their work and the likelihood that these trades may have different design responsibilities. On projects containing a significant amount of building services.4 RESPONSIBILITY FOR DESIGN COORDINATION It is essential. to establish responsibility for coordination of design. the level of detail. the number of copies and the scale to be used. or there could. Section 2 (07/01) Effective from 1/9/01 Page 13 . Therefore. 3. In these circumstances it is beneficial to select the relevant specialists early in the procurement process to enable them to commence their designs and advance the completion of a fully coordinated design. effectively. be two stages associated with it for the reasons outlined in 3. • Coordination of design should be included as a key activity in the planning stage of the project and should be a measurable activity with achievable milestones on the programme(s). This could be scheduled into a simple table with tick boxes indicating the various parties’ responsibilities. the results of which would be transferred into the contract (see table 2). However. These are: • The documents should contain a clear and unambiguous definition of design coordination and define the coordination responsibilities of the various parties.

2. the following factors need to be clear: (c) Delegation under the contract The designer needs to be sure that the terms of appointment allow this or that the client is in agreement with them.2. Ambiguity can lead to a dispute. Whatever form of agreement is used. design responsibilities should be clear and unambiguous.PART 3. Page 14 Part 3. The contract should state whether the building services contractor has any design responsibility (see 3. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . (d) Tender/contract documentation Documents need to be clear on the extent of coordination to be undertaken by the building services contractor and sufficient time must be allowed in the programme to perform the task.1). An express definition of the quality and quantity of information to be provided by the designer should be included. Also.1). (b) Building services contractor’s contract It should be clear if the building services contractor has a duty to coordinate its work and/or the work of others into the overall design. If the building services engineer has design coordination liability and he or she intends to delegate to the building services contractor(s). it should be clear if the building services contractor is the lead coordinator. SECTION 2 Figure 1: Design Coordination coordination drawings during the design and construction stage of the project (see 3.

5 PROCESS FOR IMPLEMENTING DESIGN COORDINATION Once the responsibilities of the parties involved in the project are identified. (ii) The design coordinator must establish a clear understanding of each party’s responsibility for coordinating the design and should ensure that they have the capability to perform their obligations. none of whom are liable for the overall design coordination. detailing how the building services contractor will undertake the process of design coordination. A method statement should also be obtained. (iii) The design coordinator is responsible for the programme and method of implementation of design coordination. Section 2 (07/01) Effective from 1/9/01 Page 15 . The Surveyors’ Construction Handbook Part 3. An example of good practice is detailed below: (i) The client appoints a member of the project team as ‘design coordinator’. This appointment should be made as early as is practical in the design process. It is unwise to have a fragmented contractual arrangement with several contractors undertaking design coordination work. a lead coordination contractor should be appointed. (g) Programme There should be sufficient time within the overall programme of the works for the building services contractor to properly undertake coordination of the design.2. SECTION 2 (e) Ability Checks should be made to ensure that the building services contractor has sufficient experience and resources to undertake coordination duties. the building services contractor should have a compatible system. Ideally this should be a project team member who has no design responsibility in order to avoid a potential conflict of interest. a process should be established to ensure that design coordination is being carried out.2. (f) Computer Aided Design (CAD) Where the scheme is designed on a CAD system.PART 3. The design coordinator’s duty is to manage the design coordination process. This should be prepared with the input of all parties to ensure that it is in harmony with the overall construction programme. 3. (h) Establishment of the lead coordination contractor Where possible.

the building services engineer should be paid an additional fee to undertake this work. unless it is agreed as an additional service.2. (a) Selection of plant and equipment Where the building services engineer is responsible for the selection of plant and equipment. Under the 1981 and 1995 ACE conditions of engagement. Questions often arise over design liability for the proposed equipment ‘meeting the design requirements’. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . the building services contractor may propose an alternative manufacturer for equipment to that chosen by the building services engineer. but usually it is because the building services contractor receives more favourable commercial terms from certain suppliers than others. However. the contract administrator should issue instructions to overcome any problems. the building services contractor Page 16 Part 3. if necessary. It can also result in problems with functionality if the equipment does not meet the specification. Does it lie with the building services contractor who proposes it or the building services engineer who approves it? The answer in law appears to be that the person on whom the client relies to make the decision must ultimately be responsible (see 3. this work is often not included as a duty in the terms of appointment for the building services engineer or in the building services contractor’s contract.6 SPECIFIC PROBLEMS RELATING TO BUILDING SERVICES INSTALLATIONS The following examples are typical problems that can give rise to coordination difficulties. a provisional selection of certain equipment is often made. shape and manufacturer may not only lead to coordination problems. On a practical level it is often better for the building services engineer to undertake a re-evaluation of the design to ensure that the equipment complies both in terms of specification parameters and coordination of the services.2. Therefore. Changes in size. The provisional selection of plant is also necessary for information in preparation of cost advice. In tendering for the works. SECTION 2 (iv) The design coordinator should review the coordination process on a regular basis to ensure compliance.2. In the event that the building services engineer does not undertake the re-evaluation process.1). The reasons for this can be varied. 3. because either it is not in the terms of appointment or the client is not willing to pay additional fees. Reports should be issued to the client and. The client may be in favour of this alternative if the selected equipment achieves cost savings and/or improved delivery times without the quality of equipment being reduced.PART 3. the building services engineer is not responsible for re-evaluation. This is in order to plan layouts and to provide information on space requirements/loadings to the architect/structural engineer.

However. SECTION 2 should be responsible for the design and coordination associated with the change. One of the problems with this. BMS. they should be appointed at a stage which avoids assumptions being made regarding the specialist’s requirements. (c) Variations/changes to the works Variations and changes to the works can have a significant impact on the design coordination depending on their scope and timing. If the building services contractor suddenly takes on this design responsibility it must be reflected in its terms of contract. The associated changes to warranty agreements must also be made.2. It is usual for the specialist companies to provide design information and this information must be incorporated into the works to ensure a properly coordinated design is achieved. (a) Express terms of the contract The appointment of the building services engineer should clearly establish whether there is a responsibility for design coordination.PART 3. where the specialist company’s input is significant to the project. a large element of the building services works may consist of many specialist installations. is that the amount of coordination required may vary substantially from specialist to specialist. The client should be advised that the disadvantage with this option is that there is no independent check that the equipment complies with the specification. in sufficient The Surveyors’ Construction Handbook Part 3. (b) Appointment of specialist installers Depending on the type of project. Such alterations should be carefully considered. refrigeration and sprinklers. and for this to be coordinated with the overall design. Ideally. the law related to coordination is considered briefly below. Many of the standard forms of building contract deal adequately with materials and workmanship requirements but fail to address. However. Such assumptions can often turn out to be incorrect. however.2. Examples of such installations include medical gases. It is recommended that the appointment of the building services engineer should be under the appropriate ACE form of agreement. allowance should be made within the programme for the specialist to develop its design. the cost of these changes may prohibit the proposed change of equipment. lifts. Section 2 (07/01) Effective from 1/9/01 Page 17 .7 LEGAL POSITION The legal position with regard to design coordination cannot be considered in any depth within this section. If a specialist cannot be appointed at an early stage. 3.

design coordination issues. the courts are still likely to imply an obligation on to the building services contractor to warn the client of any problems known to it. Consequently. The application of implied terms is limited and uncertain.PART 3. The disputes usually relate to payment for additional work rather than damages for defective work. It is essential that when a building services contractor is not specifically responsible for design (as. the CDM (Construction (Design & Management)) regulations 1994 do not differentiate between building services engineers and building services contractors who undertake any design duties. the number of parties it is liable to and the length of time it has a liability for. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . even if only restricted to design coordination. particularly where injury is caused to others. should clearly identify design coordination Page 18 Part 3. the law of tort can increase the liability of the building services contractor in terms of its duties. For example. express terms are included to cover design coordination duties and responsibilities. they can also have criminal penalties. Most coordination disputes arise during the course of the works and are dealt with under the contract. irrespective of the parties’ intentions. Therefore. (c) Tort There is much less likelihood of an action in tort for coordination problems than there is for more general design errors. terms may be implied by the courts. for example. • Documentation responsibilities. However.2. common law. This is because latent defects do not generally originate from coordination problems. Where a building services contractor has no express design liability. statute or by custom. (d) Criminal implications Negligent work and breach of statutory duty are normally considered as torts. in design and build contracts). (b) Implied terms of the contract Where the contract is silent on an issue. SECTION 2 detail.8 SUMMARY • Recognize the importance of design coordination within the procurement strategy. Therefore it is important to insert clear express terms in contracts. In fact.2. a clear understanding of liability for design is essential for those taking on coordination work. 3. the application of tort is limited but should not be ignored.

2. • provide a design service. It also depends on the size and complexity of the project.3 Appointing a Building Services Contractor 3. or • provide a lower whole-life cost.2. G 3. and different clients will put different emphasis on each criterion. • take the lead in design coordination. the longer the lead-in period prior to instruction will need to be. Having established an appropriate procurement strategy and terms of appointment. The client may prefer to appoint a building services contractor who can: • build to the quality and standard required.2.1 INTRODUCTION There are many criteria to be considered in the appointment of a building services contractor.3. The lowest tenderer may not always provide the client with the best value for money and there may be more important priorities to consider than simply the initial build cost.3 deals with appointing a building services contractor and examines the common approaches and the pitfalls. SECTION 2 • Ensure there is a clear process and adequate time for design coordination. • Appoint specialists early where design input is key to coordination. • provide the resources to condense the contract programme. The more complex the project.2.PART 3.2 TIMING OF THE APPOINTMENT The timing of the appointment of the building services contractor depends on the selected procurement strategy and/or the cost effectiveness of introducing the building services contractor to the design process at an early stage. The Surveyors’ Construction Handbook Part 3. Section 2 (07/01) Effective from 1/9/01 Page 19 .3. the greater the influence it can have on: • design. The earlier the building services contractor is appointed. • coordination. Section 3. the appointment of the building services contractor in the correct manner is crucial to the success of a project. The prioritization of the criteria to suit the client’s overall objectives ultimately influences how the appointment of the building services contractor is conducted. 3.

• value engineering. or • advice on the programme is required due to long lead-in times for equipment. together with an accompanying preliminary outline specification. (b) Outline and scheme design stage Appointment at this stage usually leads to a lump sum or a guaranteed maximum price. • safety – in terms of maintenance and accessibility. At this stage an outline design. (a) Inception and feasibility stage The building services contractor should only be appointed at this very early stage if one or more of the following criteria is satisfied: • the project is predominantly building services. • limited pool of building services contractors able to develop and finalize the design. • programming. • the cost plan. These are as follows. and • maintenance – post completion. • buildability. • very early design or design coordination input is required due to the complexity of the project. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . and • difficulty comparing tenders effectively. • the building services contractor’s work is of a very specialist nature. These influences should however be balanced with the disadvantages of early appointment: • limited price competition. Page 20 Part 3. may have been produced by the client’s appointed building services engineer. • commissioning advice.PART 3. SECTION 2 • plant and equipment selection and procurement. There are several key considerations relative to appointment at the various stages of design. The appointment would generally take place at outline and scheme design stage when the building services contractor would be required to develop the initial design into a full design.

However. (c) Full design stage Appointment at this stage of the project usually follows a lead-in period allowing design to be virtually completed by the client’s building services engineer prior to appointment. The client’s and team’s view on the benefits of the various appointments discussed earlier will also influence this.1 (‘The Procurement Guide’). It generally leads to a lump sum tender being sought based on the client’s consultant’s design drawings and comprehensive specification. 3. The timing and contractual basis of the building services contractor’s appointment largely depends on the overall project procurement route. For example. SECTION 2 Alternatively. the building services contractor’s expertise can be utilized by appointing it.2. Section 2 (07/01) Effective from 1/9/01 Page 21 .PART 3. for a fee. (a) Traditional procurement: where the building design is complete before the principal contractor is appointed The most commonly used procurement route is the traditional route of complete design prior to tender with either bill of quantities or pricing schedules tendered The Surveyors’ Construction Handbook Part 3. The project team should try to ensure that the terms of the appointment are no more onerous than those of the main contract.3 PROCUREMENT OPTIONS This section reviews how the building services contractor’s appointment fits within the various project procurement strategies. Some contractor design may still be required at this stage for specialist systems. Tables 3 and 4 summarize these advantages and disadvantages. In this example. In this approach the building services engineer and the building services contractor work alongside each other to produce the design and coordinated working drawings. The building services contractor is appointed at this stage if it has little or no design input. the building services engineer could produce performance criteria and schematics which are worked up into fully detailed working drawings with any survey work and the coordination being done by the contractor.3. one level of drawings is deleted from the process and the responsibility of design coordination rests with the contractor. The building services contractor is generally appointed under a domestic sub-contract or package arrangement under a principal contractor. The appointment of the building services contractor under the main contract procurement routes is considered below. A comprehensive review of the overall project procurement options can be found in section 3. In addition to these key considerations there are various minor advantages and disadvantages. to work alongside the client’s design consultants in a ‘concurrent engineering approach’. some clients may consider these to be of importance.

SECTION 2 Table 4: Advantages of Appointment at Design Stage Design stage Inception and feasibility stage Outline and scheme design stage Full design stage Advantage The client would have complete access to the building services contractor’s specialist knowledge. The quality control of the installation can be monitored by the consultant against the original design. Bills of quantities (BQs) or detailed pricing schedules can be readily produced by the quantity surveyor with the inherent advantage of tender cost comparisons.PART 3. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ Page 22 Part 3. A shorter tendering period compared to the traditional route. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . Optimum competition. Early appointment generates a good understanding of the client’s objectives and an accurate brief. A variety of solutions may be provided allowing the client and his or her project team to assess the best solution for the project. The overall project programme could be shortened due to the time saving in the pre-tender period. cost control and use in the valuation of variations. Also. provided the design is practically complete and the bills are correctly described and accurately measured. and very obviously. Tender period shorter together with reduced tendering costs and risk for the building services contractor. The client will benefit from the building services contractor’s expertise in the selection of the most competitive equipment and systems. Simplification of the tender documentation. The measurement process will also provide a check against the adequacy of the design information. The advantage is limited however as the BQs may not reflect the way the contractor prices the work involving additional work for the contractor. unless the design is fully coordinated a BQ reflecting the final design cannot be produced.

equipment and building services contractor selections. costing. The building services contractor will tend to view the capital cost as the priority rather than the quality and through life costs of the building. Extensive tender preparation time and costs for the building services contractor. SECTION 2 Table 5: Disadvantages of Appointment at Design Stage Design stage Inception and feasibility stage Outline and scheme design stage Full design stage Disadvantage Limited number of building services contractors with the required design expertise to develop and finalize the design. The pre-contract stage will tend to be longer due to the time taken to produce the design and the tender documentation. No use made of the contractor’s expertise in terms of buildability. Late tendered cost information may cause budget problems. Delay in appointment may affect the coordination of the services and delay builders work details. ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ The Surveyors’ Construction Handbook Part 3. The cost of the building services consultant’s fee may be more than the contractor’s cost for developing the design. Incorrect allocation of coordination responsibilities may lead to cost escalation. equipment and building services contractor selections during the pre-contract stage. and so on during design process. The client and the client’s design team have less control over final design The client may be forced to make compromises between price and quality depending on how comprehensive the initial enquiry document was. programming. Limited use made of the contractor’s expertise in terms of buildability programming. Clear tender proposals are not always possible due to variations in the tender design proposals. Section 2 (07/01) Effective from 1/9/01 Page 23 .PART 3.

However. To achieve this the building services sub-contract will either be negotiated or tendered by the employer. It also reduces the overall cost of tendering by restricting the number of building services tenderers. This is done prior to letting the main contract and inserting a name into the main contract. However. a prime-cost sum is inserted into the main contract. However. However. It is extremely rare to see this method in use today. (iv) Nomination This arrangement allows even greater control by the employer and usually provides a degree of comfort to the building services contractor. Page 24 Part 3. (iii) Naming a single building services sub-contractor as sub-contractor in the main contract This method allows the employer to appraise building services tenders and select a building services contractor using his of her own criteria. SECTION 2 on a lump sum basis through a main contractor. It provides some competition with a degree of control maintained by the employer. This does not necessarily result in an inappropriate appointment. in which case. the criterion used by the principal contractor to appraise tenders is likely to be price. This method has the disadvantage of higher costs when compared to traditional domestic arrangements. a two-stage selective tendering method is appropriate. particularly if the main contractor follows appointment procedures similar to those set down in the Code of Practice for the Selection of Sub-Contractors.PART 3.3 (ii) Naming a number of alternative building services sub-contractors This arrangement avoids some of the problems associated with domestic sub-contracting. where for example the building services contractor is required to assist the building services engineer with design and coordination. part of the burden of risk is shifted to the employer. It would only be utilized if the employer is the most appropriate person to shift risk too. and the building services contractor is not required to have any design input. It also prevents the principal contractor from working with sub-contractors with whom it has a good relationship or partnering arrangements that may reduce conflict. (v) Two-stage selective tendering If early appointment is required. Alternatively. The employer has little control over the building services contractor’s appointment. it can be done after letting the main contract. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . This method would be used where the employer wishes to maintain an element of control. appointing a building services contractor can be achieved in a number of ways: (i) The principal contractor selects the building services contractor This traditional domestic sub-contracting arrangement is usually most appropriate when the project is small or the building services elements are not complex. the principal contractor’s choice is usually price led and this method can lead to ‘Dutch auctioning’ by the principal contractor.

a number of options should be considered in relation to the number of sub-contracts required and the timing of the appointment. If the building services element is very large. the principal contractor must be prepared to enter into a domestic sub-contract arrangement with the successful building services tenderer. Tender the building services packages after the principal/main contract This allows the principal contractor to comment and. If the employer wants to retain control over the tendering process and selects the building services contractor. balanced with the cost. It is particularly useful to allow time for the building services engineer to complete work on the building services design prior to tendering where this is not as advanced as the main works design. Personal preference for a particular building services contractor may also be a factor. These are then used at stage two to build up the contract sum. in relation to the principal contractor’s appointment. problems occur when a sum at stage two cannot be agreed. Section 2 (07/01) Effective from 1/9/01 Page 25 . To summarize. The Surveyors’ Construction Handbook Part 3. (ii) Timing in relation to the principal contractor appointment Pre-tender the building services sub-contract(s) This allows selection to be made prior to the appointment of the principal contractor. This method allows the principal contractor to be appointed ahead of the building services element. It is particularly useful when the building services contractor is required to take on design liabilities and its early input is required. The employer’s choice usually depends on the amount of input and the size of the building services contract. if necessary. object to the design team’s proposed tender list prior to the works being tendered. SECTION 2 At stage one a schedule of rates and preliminary costs is agreed.PART 3. The building services contractor is then required to enter into a domestic sub-contract with the principal contractor. (i) Number of sub-contracts: tender mechanical and electrical works as separate sub-contracts In order to tender the mechanical and electrical sub-contracts (or even sub-divisions of these) the contract must be of sufficient size to negate the efficiencies that would be gained by having a single sub-contract. However. However. it may be more appropriate to appoint the building services contractor as the principal contractor where it has the necessary management skills to undertake this role. A prime-cost sum could be included in the contract documents for the building services installer at tender stage to provide the principal contractor with the opportunity to price its overheads and profit and preliminaries. This method usually results in a higher contract sum than other methods. the choice depends on the amount of control the employer wishes to maintain.

This should be done prior to the contract being awarded to them. Performance specification or design and build may involve novation of the design team to the chosen building services contractor. plumbing. and so on. or it could be further subdivided into pipework. for the principal contractor to select its own building services contractor. particularly on larger contracts. the delay in appointment may adversely affect the coordination of the services and delay builders work details. If the building services contractor is to design. will be produced by the building services engineer. When the main contract is traditional and the building services element is to be designed by the building services contractor. The quantity surveyor must have an understanding of the final design in order to provide appropriate headings within the pricing document. Joint ventures are often used where the building services element is significant. The building services tenderer is then required to complete the design. The pricing document produced by the quantity surveyor is very important in this situation.PART 3. ductwork. SECTION 2 However. The design coordination responsibilities discussed earlier in 3.3(a) should be applied. (c) Management contracting or construction management route This route involves the building services being subdivided into works packages. and possibly outline drawings. This could consist of two packages. (b) Design and build When the principal contractor is under a design and build contract it is more usual.e. Also. It is usually only beneficial to package the work when the project is large and complex and/or dependent on current market forces. there is the possibility of a less competitive overall cost as the principal contractor is incorporating the works after being awarded the building contract rather than it forming part of its tendering strategy. a performance specification.3. It is recommended that the employer maintains an element of control over the building services element where complex or prestigious building services design is involved. plant. named building services contractors can be used if the employer has a particular preference. If this method is chosen it is vital that the coordinating contractor has the requisite experience in coordinating the various trades involved and fully understands the project. This will enable a meaningful analysis of the tender return to be achieved. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . i. There are three main reasons for introducing packages into a construction project: Page 26 Part 3. This is because a higher degree of cooperation and integration is required between them. However. The tenderers under consideration would be required to submit a quantified schedule of rates to allow post-contract cost management.2 take on even greater significance with an increasing number of interfaces. mechanical and electrical.2. the criteria in section 3.2.

• If the number of packages any one contractor is allowed to win is limited then competition on the final packages may be limited as the number of competent tenderers is reduced as the tendering progresses. Every route has its own distinct advantages and disadvantages and its inherent risks which have to be related to the client’s objectives and the project characteristics. (ii) By tendering the project in packages additional competition may be introduced dependent on market conditions. the amount of confrontation and allowing the parties to concentrate their efforts on the needs of the project instead. When one package contractor becomes too dominant on any project the site management can lose its hold on the project. Each of the possible procurement routes must be objectively considered in conjunction with the project as a whole. • Could cost savings be obtained by reducing the number of work packages? Fewer packages result in lower cost due to less tendering. SECTION 2 (i) It allows the management contractor/construction manager to retain greater control of the project.3. Partnering or new strategies such as ‘supply-chain management’ and ‘concurrent engineering’ which lead to closer relationships between the various construction parties can also benefit the project by reducing. additional interfaces are being introduced which must be balanced with any potential loss of control. Section 2 (07/01) Effective from 1/9/01 Page 27 . and (iii) It allows design development to proceed in parallel with construction. better communications and lower preliminary costs for the project.2.PART 3. the greater the cooperation required between the design team and the building services contractor. 3. Under these circumstances there is a greater need for the client to control the appointment of the building services contractor. To balance these points the following issues should be considered: • Does the project easily divide itself into the separate work package? If not. or eliminating. • Design coordination responsibilities become more difficult to control as the number of individual interfaces increases. • If risk is not evenly distributed between packages this may lead to difficulties in obtaining tenders for some packages. The selection of the principal contractor on complex projects should also be considered carefully to ensure that it provides the necessary building services The Surveyors’ Construction Handbook Part 3.4 SUMMARY OF PROCUREMENT ROUTES When deciding on the appropriate procurement route the most important point to remember is that the more prestigious and complex the project.

If it were. and are sufficiently committed to offer a competitive price. 3. including the client’s objectives.2.5 TENDERING The main objective of any tendering process is quite simply ‘to employ a contractor’. However.3. have the work capacity to undertake the project. coordinated and programmed. this is not the only objective. SECTION 2 Figure 2: Appointing a Contractor: Impact of Procurement on Design Responsbilities experience and input to ensure that the installations are properly controlled. required to form the contract. The selection of building services contractors for interview. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . The aims of the tendering procedure can therefore be summarized as follows: • to assess the skills of the contractor. the client would only have to invite the first contractor professing to have the required skills to start work as and when it was convenient to proceed. The ability of the quantity surveyor to have a positive input into this process so that an appropriate selection is made is very important. (a) Short listing building services contractors The following options can be considered when drawing up the short list of tenderers: Page 28 Part 3.PART 3. and • to obtain a competitive quote. • to translate to the contractor through the tender documentation all the project information. tender or negotiation is often made by committee. are of appropriate size and status. It is also important to ensure that the contractors considered at an early stage are financially sound.

It is important to understand the capabilities of the particular building services contractor and whether there is a bias towards any one specialism. Therefore. (ii) Project team recommendations Recommendations can be based on the past experience of building services contractor’s performance on similar projects. Small contracts may allow subdivision of particular trades. Interviewing can be costly and time consuming for both the building services contractor and the design team. SECTION 2 (i) Client preference An experienced client may have stated preferences for building services contractors of whom they have knowledge or who have performed well on previous comparable projects. but their integration into the overall services installation can lead to difficulties in the later stages of a contract. On larger contracts. particularly commissioning and the incorporation of life safety testing and linking with final commissioning of mechanical plant. Section 2 (07/01) Effective from 1/9/01 Page 29 . i. (iii) Open advertising arrangements Advertisements in the European Journal or similar recognized publications can be arranged. However. (b) Interviewing Once a tender list has been drawn up. This is a common activity in organizations that keep preferred or selected lists of contracting companies for regular construction activities. Companies who qualify in this way may then be invited to tender for the works. mechanical or electrical. The design team evaluation of approved contractor application forms can be used to assess references from other design teams.PART 3. formal interviews should be undertaken with the proposed potential tenderers. (d) Selection criteria In all cases the following list represents the minimum information that should be collected about prospective tenderers: The Surveyors’ Construction Handbook Part 3. The client may also have preferences for approaches such as partnering. the length of interviews and the number of contractors interviewed should be related to the size and complexity of the project. (c) Pre-qualifying In some cases it may be desirable to investigate the companies under consideration prior to including them on the project tender list.e. it is also increasingly frequent for large and/or complex projects. letting all the services to one contractor may prove to be an advantage. where coordination with other trades is a major priority.

the fewer tenderers are required. Guidance on selecting a building services contractor can be found in the Code of Practice for the Selection of Sub-Contractors. This gives the whole team a final chance to assess the building services contractors prior to the tender documents being sent out. It is wise to have a pre-tender meeting with the selected tenderers at this stage.g. commissioning. the individual tenderers should be issued with a scope of work and project programme. • CVs of the key personnel. planning. SECTION 2 • quality of work. Page 30 Part 3. This should establish the current workload. • size of previous projects and the outcomes. (f ) Length of tender list The number of building services contractors finally asked to submit a tender should relate to the type of project. the complexity of the project and the contractors’ responsibilities under the proposed contract. • health and safety experience/record. • previous record of performance – preferably supported with a client recommendation. They should then be asked if they are willing to tender. The complexity does not cover just the construction work but also any design and/or design coordination responsibilities which are devolved to the building services contractor. • size of company (a company’s turnover should be scrutinized in relation to the proposed contract value and programme). • company location. • previous experience. • insurance cover. and • what trades the building services contractor has in-house and which will be sublet. (e) Preliminary enquiry Once a preliminary list has been collated. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook .PART 3. the more complex the contract. • necessary specialist skills – e. who is likely to carry out the work and the likely enthusiasm of the qualified tenderers. Generally. • financial stability.

comprehensive and unambiguous. depending on the parameters mentioned above.2. The control of the building services contractor’s appointment is a key role in the procurement strategy and one that must balance technical services knowledge with commercial and contractual acumen. and (iii) the size of the project. This enables the building services contractor to fully understand the obligations under the contract and to price for these within its tender.3.3). At what stage the principal contractor takes control of the appointment should be carefully considered by the design team and may depend on a number of factors (see section 3.PART 3. The Surveyors’ Construction Handbook Part 3. 3. If the design and build route is chosen. an appropriate tender period must be allowed so that the building services contractor can return a fully considered tender. (ii) the complexity of the project. The amount of influence the design team has on the selection of the building services contractor will increase the longer the project team retains control of the tendering process. The tender period will mainly be dependent on three factors: (i) the procurement route. As long as the appointment is controlled by the design team it is also vital that this is managed by a professional who understands the commercial and contractual process. Tender periods can range between three weeks for a design-only contract to ten weeks for a design and build project. Section 2 (07/01) Effective from 1/9/01 Page 31 . Building services contracts should have a tender period of four to eight weeks. SECTION 2 (g) Tender period Regardless of the procurement route chosen.2. Once the principal contractor takes control of the process. an appropriate design period should be allowed for within the project programme to minimize potential site problems.3.6 AVOIDING THE PITFALLS (a) Control of the appointment The control of the building services contractor’s appointment can be retained by the design team or it can be passed on to the principal contractor. (b) Tender documentation The tender documentation should be clear. it is important to have a single point of contact within the design team through which the information flow to the building services contractor can be monitored. This would normally be undertaken by a quantity surveyor.

It is also important that an appropriate response is obtained from the building services contractor to ensure that it fully understands its role and responsibilities. (c) Coordination brief A coordination brief.4 explores tender documentation more fully. Page 32 Part 3. In addition.4). drawing requirements. it can advise on services loadings. programming and value engineering (for guidance on early appointment see section 3. commissioning. the more likely it is that problems related to coordination of services and the physical limitations of the structure can be avoided. They need to know which elements of which particular services are critical to the other building trades. should be clearly defined in order to avoid disputes occurring later in the contract. interface with the building trades. coordination. alternative schemes. SECTION 2 Tender documentation which does not fulfil these criteria can lead to confusion and to a proliferation of claims once the contract is awarded.3. In more complex installations.2.1. The use of detailed method statements and a signed-off coordination brief at tender stage on a service-by-service basis can often avoid many problems. starting at the initial design stage.2). where the use of building management systems form a major element of the services. Section 3. it should be understood at the outset as to how the building services contractor is intending to install/commission and demonstrate its work. The earlier the building services contractor is introduced into the design process. An example of a method of identifying and allocating design and coordination responsibilities is illustrated in table 2 (see section 3. The design team must plan the interface of the building services contractor with the other building trades.2.2.2). coordination. if the building services contractor is appointed early. The production of working drawings should not be confused with completing the design (see 3. must be included in the building services contractor’s contract. Those managing the project require an understanding of coordination.2.PART 3. This type of table should be included as part of the contract documents and professional appointments. (d) Duties and responsibilities The building services contractor’s responsibility for design. It is far cheaper to resolve these problems during the design period than run the risk of escalating variations and claims for delay and disruption. etc. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . including a definition of terms from the project team to the building services contractor. space planning.

(e) Track record The track record of the building services contractor should be closely scrutinized and an understanding gained of the type of contracts undertaken in the past. A contract that is late will rarely have an adequate commissioning period. It is extremely important to ensure that the building services contractors being considered for selection are of a size. In order to assess this it is useful to liaise with design teams with whom the building services contractor has worked on similar projects in order to assess its capability to undertake the work. etc. Such behaviour can result in an adversarial situation and a ‘raised claims’ consciousness from an early point in the contract. the design team should insist that the programmed commissioning period is maintained and that commissioning does not start until the site is ready. In addition. An example of such an area would be life safety systems (sprinklers. (g) Programming The lead-in period for the building services contractor must be sufficient to allow adequate time for the design. with the exception of the final finishing trades. Good management of the project requires good programming techniques.PART 3. the pressure placed on a building services contractor to commence work on site too early creates the risk of cost escalation through potential abortive work on site or an inability to adequately pre-plan work areas. working drawing production and procurement of specialist plant. to undertake the project. Therefore. (f ) Design role It is often advantageous to pass specialist design responsibility over to the building services contractor. Mismatching of contractors will lead to uncompetitive bidding or a complete lack of interest. Failure to do so will often result in abortive costs or lead to a dissatisfied client when the building provides an unsatisfactory environment. It is naive to cover up design delays and force the building services contractor to try to achieve impossible end dates. Far too often this period becomes compressed and results in an increase in coordination mistakes or design errors because there has been insufficient time to check the drawings properly. fire alarms. and have the expertise. There are often services where difficulties arise with the interface between the building services engineer’s design and the building services contractor’s design and where liaison with third parties may have an influence on the final design. Section 2 (07/01) Effective from 1/9/01 Page 33 . SECTION 2 The commissioning of the building services installation should only be undertaken when all the other trades are complete.). This is vital for successful services installations. The Surveyors’ Construction Handbook Part 3.

Page 34 Part 3. SECTION 2 3.2. including the design and coordination role. • Only allow appropriate number of building services contractors to tender. As a result. • Determine at a very early stage the timing of the contractor appointment to suit the client’s procurement objectives. When inadequate tender documents are produced it is evident that the tender submissions will be of an equivalent. • Consider the elements of risk and consider who is best suited to take these (using recognized risk-management techniques). • Ensure adequate consideration is given to the scope of the building services contractor’s appointment. • Decide at an early stage who will control the appointment of the building services contractor. complexity and the degree of control required by the design team should be recognized.7 SUMMARY • Assess the principal contractor’s ability to manage the building services installation. commercially and contractually. • All tenderers should confirm their willingness to tender.2. G 3.2. size.4. Poor tender documentation will also give rise to inconsistencies between individual tender returns which makes initial comparison of the bids on a like-for-like basis virtually impossible. the tender returns are likely to be heavily quantified technically.3. The importance of design responsibility. • The chosen procurement route should reflect the complexity of the project.4 Tender Documents 3. The ability to retain control over post-tender variations will also be lost if the provision for such control is not adequately covered in the tender process and defined within the contract. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . • Ensure selection is made in a methodical way and that the building services contractor is of an appropriate size and ability in relation to the project requirements. It may be desirable to keep the decision-making process with the design team.1 INTRODUCTION The aim of this section is to identify the problems associated with the production of tender documents for the procurement of building services and to develop potential solutions.PART 3. poor standard.

post-contract cost management procedures. Due to the various forms of procurement available and the wide range of situations.PART 3. For this reason the appointment of the building services contractor takes on added importance.2.4.1 (‘The Procurement Guide’). Section 2 (07/01) Effective from 1/9/01 Page 35 . It can be adapted to whichever procurement route is chosen. On all large projects it is advisable that the principal contractor employs an individual (or organization) to be directly responsible for the management of the building services contractor(s). • set out the procedures for making payments to the contractors and valuing variations. • establish the degree of proof required for any claims made and the required procedures. • identify the roles and responsibilities of the building services contractor in terms of design and design coordination. This individual is the ‘linchpin’ of the construction process as far as the building services installation is concerned and perhaps the project as a whole. The ability to resolve interface problems and to successfully The Surveyors’ Construction Handbook Part 3. please see section 3. 3. it is not possible to refer to specific circumstances here. The building services contractor cannot be considered as simply another trade contractor because they interface with almost every other trade on a project. This is intended to be a general introduction. SECTION 2 This section provides a practical approach to document production. For more information on the various procurement routes available. • set out the required programme. This person should have the authority to make decisions and influence the overall management of the project rather than be informed of the management’s decision. it is also the principal contractor’s ability to coordinate and manage the building services installation. • identify the risks under the contract and the works which the building services contractor is expected to include within the tender. and • inform the building services contractor if a clerk of works will be employed and what his or her duties will be. • define the conditions under which the contract will be administered. • define the scope and standard of work. It is important to understand that it is not only the ability of the building services contractor that requires assessment.e.2 OBJECTIVES OF THE TENDER DOCUMENTATION The aims of the tender documentation can be summarized as follows: • obtain a competitive quote. i.

detailed design is generally still required. If bills of quantities are not being produced this section may be incorporated into the specification. fire alarms. 3. the principal headings generally remain the same: • Preliminaries The preliminaries section of the tender documents contain similar information to that of the principal contractor in a traditional procurement strategy. • Scope The scope should not only cover the construction work but also design and who carries the responsibility. • Drawings Always list out the drawings the contract is based on. and so on which require further design input. special attendances required and any assumptions made while taking off the quantities.2. contractual issues and the contractor’s own general items. This switch in design lead usually occurs with specialist sub-packages such as the BMS.4. the quantity surveyor is the most suited team member to undertake a complete commercial appraisal of the submitted tenders and provide a clear recommendation to the client as to the successful tenderer. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . i.2. site staff. materials. the building services contractor may have no design responsibility. • Preambles Preambles deal primarily with workmanship. If the project is fully designed. and so on.5. SECTION 2 coordinate the building services works with other trades is central to achieving a trouble-free contract. The other extreme occurs when only a performance specification is produced by the client-appointed building services engineer and the building services contractor is responsible for the design.4. Once all technical queries are satisfactorily resolved by the design team.e. However. it is important that the tenders are analyzed in a professional manner. As the building services packages can provide the main arena for confrontation throughout the project’s life. Page 36 Part 3.PART 3.3 TENDER DOCUMENT FORMAT The contents of every contract varies depending on the procurement route chosen. hutting. However. employer’s requirements. and so on. • Specification The specification produced by the design engineer relates directly to the tender pricing document. This allows the contractor an opportunity to price items such as contract insurance. on-site equipment that cannot be allocated to a specific item. The pros and cons of this approach are discussed in section 3. The design team’s responsibilities must be clearly identified within the tender documents.

Along with the programme a key date schedule should be included. this should be stated. With packages such as lifts. MCWA/F or MCWA/P&T. The Surveyors’ Construction Handbook Part 3. • Warranties The wording of the preferred warranty should be provided within the contract documents. • Form of tender The form of tender.PART 3. Section 2 (07/01) Effective from 1/9/01 Page 37 . The tenderer should be asked to produce an outline programme to be submitted with the tender. • Attendances If the building services contractor is to provide any attendances on other trades this should be quantified and described within the tender documents. purchaser and tenant MCWA/F. SECTION 2 • Conditions of contract The type of contract. for example JCT 98.g. • Precedence of documents Somewhere within the tender documents the hierarchy of the documents should be stated. COWA/F. purchaser and tenant • Bond/parent company guarantee (PCG) The preferred wording of any bonds/PCGs should be contained within the contract documents. Likewise. P&T = Collateral warranty for funder. This is difficult for the employer to control. COWA/P&T. A design warranty may be required between the client and the sub-contractor. If a standard wording is to be used. Where the sub-contract conditions are to be negotiated between the principal contractor and sub-contractor these can have a significant effect on price. product liability insurance may be acceptable. • Programme The overall project programme should be included within the tender documents to provide the building services contractor with an idea of how its works will be integrated with the other trades. it should be checked that any attendances required by the building services contractors from other trades are detailed in the appropriate documentation. COWA/F. incorporating any required amendments. This will help relieve some contractual conflict. • PI insurance requirements PI insurance is only required if design responsibility lies with the building services contractor. e. P&T = Main contractors collateral warranty/funder.

The pricing schedule splits the specification into various headings under trades or elements. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . The schedule of rates should always add up to the headings in the pricing document in order to avoid doubt at a later date if disputes arise. This can still occur and so each consultant’s scope must be analyzed to assess who is to provide the pricing documents.4. It is critical that any recommendation takes proper recognition of the tenderers schedule of rates (see section 3.4. Mechanical contractors usually sub-contract a larger proportion of their works than electrical contractors and therefore more lump sums can be expected within the pricing schedule.PART 3. therefore. By creating the pricing schedule in this format everyone knows and agrees the scope of work which is included within each heading. submit a fully completed pricing schedule which breaks down their lump sum tender into various headings that should correspond to the sections of the specification. The tenderers should.9). This avoids the risk that two different pricing documents (or worse none) could be contained within the tender documents. This occurs when all engineering aspects have been verified by the building Page 38 Part 3. It should be detailed within the pricing document how long the tenderer will have to provide the fully quantified schedule of rates. It is good practice for the quantity surveyor to get an early draft of the specification and edit out the contradictions between the building services engineer’s specification and the pricing documents/project preliminaries. By discussing the format of the pricing document openly with the building services engineer confidence is generated between the parties that everything will be covered. the building services contractor has a close relationship with the building services engineer. Once this has happened. This will depend on the programme available and is usually two to seven days from a request being made by the quantity surveyor.4 PRICING DOCUMENTS (a) Pricing schedules Historically. a draft pricing document can be produced and agreed with the building services engineer.2. a breakdown should be requested. with the building services engineer producing all the tender documents inclusive of a pricing document. a fully quantified schedule of rates should be requested from each of the tenderers under consideration. If the project is packaged. It is imperative that each contractor being considered achieves parity of tender to enable a clear and unambiguous recommendation to be made to the client. If this is not clear.2. The pricing schedule should also contain a statement of the contractors rates used within the tender inclusive of overheads and profit. SECTION 2 3. a fully quantified schedule should be available since the number of sub-contractors will be minimal. When the analysis of the submitted pricing schedules has identified the tenderers who are likely to be considered further. This breakdown must show the build up to the contract price including all tender adjustments.

Section 2 (07/01) Effective from 1/9/01 Page 39 . An example of a typical pricing document is given in appendix A. with labour rates and a labour histogram provided separately. • Design development may still be in progress when the bills are started. SECTION 2 services engineer and the quantity surveyor is satisfied with the pricing and all other commercial aspects of the tender. Once all this has occurred. necessitating variations as soon as the tender process starts. Bills of quantities are the traditional method of procuring construction work within the UK where time permits. consequently. Assumptions may often be forced on a quantity surveyor producing the bills to a deadline where this is not clear. each tenderer must be made aware of this change to maintain parity of tender. In this case bills of quantities should not be considered. If the design varies greatly during the contract period the building services contractor could have a case for a re-rate or claim. A bill description can contain so much detail that the price is developed separately in the contractor’s The Surveyors’ Construction Handbook Part 3. A section dealing with the tenderers overheads and profit and daywork rates is required in the schedule.PART 3. In situations where there are complex interfaces in existing structures it is beneficial to request a schedule that only identifies quantified material costs. but the following are some of the issues that should be reviewed to ascertain the benefit of producing bills: • The package may only be partially designed to allow the building services contractors to be responsible for the detailed design. This enables post-contract costs to be controlled in an alternative manner while also providing a management tool to monitor on-site resources. If. • It should be considered whether the building services contractor actually benefits from the production of bills. the potential for errors and omissions. The cost certainty intended by the use of bills is immediately lost when variations start. anything has changed from the tender documents. This would again require variations to be issued. The specific problems associated with the procurement of building services does not exclude the use of bills of quantities. (b) Bills of quantities Bills of quantities should only be used when a fully coordinated design and specification has been prepared by the designers and a fixed lump sum cost for the works is required. • The production of bills introduces the need for detailed design coordination between the various consultants and. There are so many different rates that could be used within the building services trades that it is recommended the quantity surveyor asks the contractor to submit the latest trade rates that will be employed on the contract. If this procedure is not followed there is the potential for post-tender problems regarding supply and performance under the contract. through the negotiations. the client can be made aware of the final decision through a combined report from the full design team.

(ii) Options that the tenderer may put forward Directions should be given at tender stage as to whether or not contractors options are required. Also.PART 3. This can result in areas of the design being described only in terms of its performance. • As discussed in section 3. light fittings may be described within the bill as ‘to include for all necessary conduit and cabling for the light fitting’. This relationship has developed because the building services engineer may rely on the expertise of the building services contractor or its suppliers to design some individual systems. This may result in more competitive prices being obtained as risk is more evenly distributed with the client taking a greater burden or the building services contractor may exploit errors within the document. the building services contractor generally has responsibility for detailed design work such as final cable routes. This results in the descriptions being priced in a number of sections then drawn together for the bill.4.2. To briefly conclude this section. A summary of the advantages and disadvantages of bills is given in table 6. the tenderer can identify these options within Page 40 Part 3. 3. the extra over-costs for a stainless steel finish can be provided. The building services contractor must measure and price the electrical circuit inclusive of conduit and apportion the cost to each light fitting. In the body of the pricing document the diffusers could be priced as powder-coated steel but as an option.4(a). This could well be as time consuming as doing all the measurement. • As each tenderer has the same document to price the tender analysis should be easier.2. history has dictated that the building services design is not far enough advanced within the procurement timetable to provide the quantity surveyor with sufficient information to produce bills of quantities. i. SECTION 2 own estimating system.e. and so on which limits the information available for billing. • The use of bills results in the risk being retained by the client as far as quantities are concerned. For example. This is inappropriate information for quantity surveyors to prepare bills of quantities from.5 PRICING OPTIONS When dealing with pricing options there are two basic possibilities that can occur: (i) Options that are included in the tender This often takes the form of a different finish to an exposed part of the services installation. The tenderers do however have discretion as far as rate build up is concerned.4. If so. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . bracket details. the building services contractor will need to offer a design solution to meet the performance criteria established in the specification. building services contractors and suppliers have traditionally had a closer relationship with the building services engineer than the quantity surveyor.

The easiest method of obtaining this is by assuring that each tenderer prices what will be called the base option. If addendums are required they can be either sent out during the tender period or provided to the two lowest tenderers to price after tenders have been returned. However. Both of these must be catered for in any tender document while still maintaining a like-for-like comparison for tender analysis purposes. since design can often progress during the tender period.6 HOW TO TACKLE ADDENDUMS The most obvious way to deal with tender addendums is not to have any.PART 3. reducing cost certainty. Section 2 (07/01) Effective from 1/9/01 Page 41 . This could be in the form of additional fees or additional coordination costs. It is for the building services engineer to ascertain if the alternative achieves the specification. Integration of these systems can be a problem A small skill base exists within the quantity surveying profession for measuring mechanical and electrical services The design is checked while the measurement is being carried out More even spread of the risk the document which may take the form of alternative suppliers.4. This can be a cheaper supply or where the after-sales support services in an area is better provided for by an alternative supplier. this is an unlikely occurrence. 3. Clear direction should be provided within the tender document on how and where options should be priced. reduced programme or variations on the contract clauses. Any option must include the full cost of ensuring design compliance.2. Each alternative can then be given as an adjustment to the base scheme. The Surveyors’ Construction Handbook Part 3. SECTION 2 Table 6: Advantages and Disadvantages of Bills of Quantities Advantages Provides a fixed price lump sum Conformity of tender returns Disadvantages Time consuming The measurement risk is retained by the client Fully coordinated design is required prior to building Specific items of plant may have to be uniquely specified which will reduce competition A design freeze is required which increases the tendering period The tenderer’s design skills are ignored Specialist systems will be either provisional or prime-cost sums.

PART 3. • agreement to all the documents – i. By providing a separate price for non-essential alterations.2. answering and managing the queries is advisable. This allows proper comparison and demonstrates an understanding of the project and tendered scope: • completed pricing schedule. warranties. 3. • health and safety information.4. A single point for receiving. A master record of whom asked what question should be kept in order to provide an audit trail for later reference. clearly identifying the changes and scope. The response from the relevant consultant should be returned to the quantity surveyor who distributes to the tendering companies. • list of main suppliers used – where choice is with the building services contractor. Queries can then be forwarded on to the appropriate consultant for comment. • programme and agreement to the tender programme. The addendum must still be a precise document. SECTION 2 If the design changes occur during the tendering period. bonds. regardless of when they are issued. On receipt of a query. the quantity surveyor is best placed to manage queries. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook .2. Each addendum should be individually referenced. Page 42 Part 3. 3. the addendum can be handed over and explained at this time. and so on.4. the name of the organization asking the query should be removed and the question given a reference. addendums to the documents should be sent out to each tenderer. The addendum should state if the tender period is extended and each tenderer must acknowledge receipt of the addendum. the client and design team have the option of whether to accept the addendum.e. As the manager of the tender documentation. these should be priced separately. The quantity surveyor should read each query and assess if another tenderer has asked it previously.7 TENDER CLARIFICATIONS Tender clarifications can result in additional information being supplied to the building services contractor. so an audit trail is apparent. If mid-tender interviews have been arranged. as it will form part of the contract. Each question from the building services contractor should be sent to the quantity surveyor for distribution to the design team. If the quantity surveyor believes that addendums provide non-essential design changes. All tenderers should receive all the tender questions so that each is tendering on the same information. • quantified schedule of rates.8 ADDITIONAL INFORMATION REQUIRED FROM THE TENDERERS The following information should be provided by all tenderers regardless of their contractual status.

4. • labour histogram – the total labour resources required to complete the project.9 EVALUATION OF TENDERS To ensure parity of tender. • management histogram – this illustrates the resources the building services contractor has allowed for managing the project and should relate to their preliminaries section of the pricing document. A comparison of the pricing schedules supplied by each tenderer must be completed in conjunction with the tender’s technical information. prior to tender return. This should be done through the quantity surveyor. and • cash flow – the cash flow translates the project programme into the client’s anticipated financial commitment. • method statements. should forward a full list of any contractual qualifications. The building services engineer should check each submission to establish the tenderers compliance with the specification while the quantity surveyor should establish their compliance from a commercial viewpoint. • details of membership of trade bodies. Detailed analysis prior to award is also essential if the schedules are to be bound into the contract as a contract document. • corresponding reference numbers of the local standards when offering options of products from a foreign standard. Section 2 (07/01) Effective from 1/9/01 Page 43 . SECTION 2 • list of any sub-contractors. If this can be agreed with the successful tenderer early on in the project. This shows both the building services contractor’s understanding of the project and provides for a monitor once on site. This is particularly relevant if there are large value provisional sums that will be measured and valued using the schedules. • acceptance of the conditions of contract – the tenderers. the specification should be priced in its original form. there is an opportunity to use this as a valuation tool provided the programme is adhered to. The Surveyors’ Construction Handbook Part 3. 3. as before. During the review process it will probably be necessary to clarify points with the tenderers.2. with alternatives given separately. including all addendums and clarifications. This enables the client to take legal advice and minimize the potential delay to the tender period. Evaluation should not be completed without reference to the building services contractor’s schedules of rates. The quantity surveyor must take a view on the competitiveness (or otherwise) of the submitted schedules as they may not bear comparison with the competitiveness of the tenderers’ lump sum.PART 3. An agreed cash flow can be invaluable when the client’s project funds are similarly time related.

2. • A clear procedure for managing addendums should be agreed by the design team. and • opportunity to price for alternatives.10 SUMMARY • Make sure there is only one pricing document which directly relates to the specification. • Ensure documentation is clear as to the method for managing tender queries. 3. • an all-in man hour rate. • Ensure the pricing schedule covers all the information required such as: • overheads and profit. not solely on price but also considering the tenderers’ understanding of the project and their ability to complete in time and to budget. Page 44 Part 3. In this final analysis it is recommended that the tenderers’ procedures for cost control and reporting are also examined. identifying a single point of responsibility. Once all the information has been gathered it will be necessary to establish a comparable price. An up-front pro-active attitude on the building services contractor’s part will result in potential problems being identified early providing the design team with an opportunity to find a beneficial resolution. SECTION 2 Post-tender interviews are to be encouraged so that the tenderers’ grasp of the project can be established. The final appointment decision should be made. Section 2 (07/01) Effective from 1/9/01 The Surveyors’ Construction Handbook . • daywork rates inclusive of percentage uplifts. • a fully quantified schedule of rates.4.PART 3. • Careful analysis of the return tenders to obtain a clean unqualified bid on which a clear recommendation can be made.

SECTION 2 Notes 1) Department of Environment. Transport and the Regions (1998). London: DETR. M. 2) Clinton. Code of Practice for the Selection of Sub-Contractors. 3) Construction Industry Board (1999). London: Thomas Telford Publishing.PART 3. (1995). (Paper for seminar: ‘The Answer to your Problems – Design & Build’). Section 2 (07/01) Effective from 1/9/01 Page 45 . The Surveyors’ Construction Handbook Part 3. Legal Liabilities. Rethinking Construction.

The calculations shall show weekly rates.PART 3. k) The Surveyors’ Construction Handbook Part 3. connections. The building services contractor is to take into account all the requirements of the contract documents and should price accordingly within the relevant section of the tender summary. The following descriptions are not necessarily complete. unless otherwise stated in this document. The building services contractor is to include in its rates for any temporary works considered necessary. areas. For details of the scope of works refer to the specification. Failure to do so will invalidate the tender submission. plant. SECTION 2. The building services contractor is deemed to have included in its tender for all items of materials. periods of time. The building services contractor is referred to the tender drawings. The following clauses are suggested in relation to the inclusion of a pricing schedule and can appear either in the main preliminaries or as part of the sub-contract tender documents. b) c) d) e) f) g) h) Calculations of Preliminaries j) The contractor shall detail below. General Items a) It is a pre-requisite that the following pricing summary is completed in full with every item priced. etc. The building services contractor is to include in its rates for all necessary fixings. APPENDIX A Appendix A: Typical Example Preliminary Items In the following typical example all general and preliminary items would normally be detailed in the main preliminary documentation. bolts. detailing the build up to all the preliminaries items priced in the pricing document. specification and accompanying documents for a full scope of work. equipment and labour whether or not specifically mentioned or shown in order to carry out the necessary works in accordance with good practice and procedures. Section 2 Appendix A ( 07/01) Effective from 1/9/01 Page 1 . quotations and all other details. or provide a separate document. fittings. No extra payments will be considered through the building services contractor/quotes failure in this respect.

submit a fully priced schedule of all items and quantities involved in the make-up of its tender. SECTION 2. off-site services and all items of expenditure related to off-site management and profit. expenses. Section 2 Appendix A (07/01) The Surveyors’ Construction Handbook . The contractor is to detail its rates and percentages required for the following: Percentage for overheads and profit on building services contractors _____ % Percentage for overheads and profit on plant and equipment if different from a) above _____ % Percentage for overheads and profit on general materials. APPENDIX A Schedule of Rates a) The contractor shall within 3 days of being requested.PART 3. The percentages and labour rates above will be the same as used in the preparation of the tender sum and schedule of rates. administration. if different from b) above _____ % All-in man-hour rates inclusive of overheads. The schedule of rates shall be used for the purposes of pricing any future variations and assisting in the calculation of interim valuation payments. and profit £ ___ (Expand to include all trades) Extra over the above rate for any non-productive overtime work £ _____ (Expand to include all trades) d) The percentages and labour rates entered above will be deemed to include for all contractor’s overheads. All prices included in respect of equipment and building services contractors must be supported by the appropriate quotations. b) c) e) f) g) Page 2 Effective from 1/9/01 Part 3. they will be deemed to be priced at NIL. The sum total of the schedule shall equal the price of the form of tender. If the contractor does not complete any of the above percentages or rates. establishment costs.

supply and install packaged sub-station comprising two main sections as specified Allow for adjusting all protective device settings and carrying out discrimination study Switchboard reference Item £ p Item Item Item Item Item Item Item Standby Power Life safety generator installation incorporating skid mounted heat exchanger installation and fuel system.PART 3. It is intended to depict the detail required in the pricing summary and will require amendment so as to be project particular. including acoustic treatment. SECTION 2. ELECTRICAL SERVICES INSTALLATION Electrical Incoming Provide electric incoming supply. switchroom and metering (supplied and installed by utility) 11KV supply cable and switchgear terminating in the 11KV switchgear to the transformer room Lighting and small power installation associated with HV switchroom Include for obtaining design and construction information coordination and necessary meetings associated with the utility provider Utility switchroom. transformer room and generator earthing. cabling and earth bars Low voltage switchboard. Section 2 Appendix A (7/01) Effective from 1/9/01 Page 3 . APPENDIX A Pricing Schedule The following is a typical example of a pricing summary for a commercial office development. future tenants generator flue and all necessary silencers Item Item _________ To Collection £ The Surveyors’ Construction Handbook Part 3. supply and install necessary earth rods. including all necessary hoisting/craneage Generator flue installation.

final circuit wiring and cable containment system as necessary to the following: Office area lighting Lift lobbies Entrance hall. including dimming Toilets and shower rooms Staircase lighting Lift shaft lighting Plantroom and circulation space External lighting Emergency lighting installation Item Item Item Item Item Item Item Item Item _________ To Collection £ Page 4 Effective from 1/9/01 Part 3.PART 3. SECTION 2. Section 2 Appendix A (07/01) The Surveyors’ Construction Handbook . louvres. including luminaires. APPENDIX A ELECTRICAL SERVICES INSTALLATION (Continued) Test generator at full load inclusive of inductive loads at manufacturers works Test and commission generator installation on site complete with resistive and inductive load banks Item £ p Item LV Distribution Sub-mains power distribution cables Rising bus bar installation Riser A Rising bus bar installation Riser B Rising bus bar installation Riser C Automatic transfer switches to all life safety MCCS and fire fighting controllers and fire service plant Earthing and bonding Item Item Item Item Item Item Lighting Installation Lighting installations. lamps.

SECTION 2. APPENDIX A ELECTRICAL SERVICES INSTALLATION (Continued) Small power installation Small power distribution Item Item £ p Electrical Power for Mechanical Electrical work associated with mechanical services Item Protection Fully automatic addressable analogue fire detection and alarm system Generator room fire protection system Security installation comprising the following: Door entry control system Alarm system Closed circuit television system Lightning protection system Ancillary equipment installations: Fix only free issue warm air hand dryers Fix only free issue hair dryers Disabled persons assistance call system Shaver outlets Item Item Item Item _________ Item Item Item Item Item Item To Collection £ The Surveyors’ Construction Handbook Part 3.PART 3. Section 2 Appendix A (7/01) Effective from 1/9/01 Page 5 .

PART 3. drawings and O&M manuals in the required format as specified by the document production manager Client instruction and operation training Provision of samples and mock-ups as required Provision of tools and spares Any other items not listed above (the sub-contractor to state) Item Item Item Item Item Item Item Item _________ To Collection £ Page 6 Effective from 1/9/01 Part 3. including any necessary manufacturer’s shop drawings Testing and commissioning the complete electrical installation. including compliance with the commissioning manager’s requirements As installed documents. SECTION 2. APPENDIX A ELECTRICAL SERVICES INSTALLATION (Continued) Electrical heating installations: Lift plantroom installation Utility switchroom Temporary electrical heating installation Item Item Item £ p Data Installation Telecommunications and data communications incoming ducts and cable tray systems Item General: Buildings work drawing Electrical sub-contractor’s design and installation drawings. Section 2 Appendix A (07/01) The Surveyors’ Construction Handbook .

Main entrance overdoor heaters Staircase fan convectors Thermal insulation to LPHW installation Water treatment. fittings and valve installation Final connection to sanitaryware Potable water booster pump set Thermal insulation to hot and cold water services Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item £ p _______ To Collection £ The Surveyors’ Construction Handbook Part 3. coordination associated with the new supply Water storage tanks Cold water packaged booster set Water supplies for window cleaning Electric showers Hot water heaters Overflow systems Domestic hot and cold water pipework. APPENDIX A MECHANICAL INSTALLATION LPHW heating installation: Central boiler plant and associated equipment Boiler flue installation LPHW pressurization units LPHW circulation units LPHW pipework installation. valves. etc.PART 3. dosing and flushing Hot and cold water installations: Allow for all negotiations/liaison. Section 2 Appendix A (7/01) Effective from 1/9/01 Page 7 . fittings. SECTION 2.

fittings and valves installation Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item £ p __________ To Collection £ Page 8 Effective from 1/9/01 Part 3. Section 2 Appendix A (07/01) The Surveyors’ Construction Handbook . flushing and dosing Chilled water system pressurization unit Chilled water system pipework. APPENDIX A MECHANICAL INSTALLATION (Continued) Hot and cold water installations: Eye wash facilities Water chlorination. water treatment equipment Chilled water installations: Main A/C condenser water pumps and water make up pumps Cooling tower make up water storage tanks Condenser water system pipework fittings and valves installation Condenser water system installation Chilled water system Centrifugal refrigeration machines Cooling system plate heat exchangers Chilled water circulation pumps Water treatment.PART 3. dosing and flushing Condenser water system: Cooling towers Filter system Packaged water softener Condenser water circuit. SECTION 2.

Duct mounted heater batteries Humidifiers Acoustic connections/attenuation Louvre connection plenums Duct mounted control items Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item Item £ p _________ To Collection £ The Surveyors’ Construction Handbook Part 3. including all duct mounted accessories and fittings Ductwork cleaning requirements Independent ductwork cleanliness inspection. etc.PART 3. External louvres Ductwork thermal insulation Fire and smoke rated ductwork Grilles and diffusers Flexible connections Air handling units fans. etc. SECTION 2. Section 2 Appendix A (7/01) Effective from 1/9/01 Page 9 . APPENDIX A MECHANICAL INSTALLATION (Continued) Chilled water installations (Continued): Chilled water system insulation Refrigeration leak detection system Water leak detection system Fan coil units: Fan coil units Air conditioning and ventilation: Ductwork installation.

Section 2 Appendix A (07/01) The Surveyors’ Construction Handbook . liaison. actuators. BMS/automatic controls software Item Item Item Item Item Item Item £ p Item Item Item Item Item Item Item Item Item _________ To Collection £ Page 10 Effective from 1/9/01 Part 3. APPENDIX A MECHANICAL INSTALLATION (Continued) Natural gas service: New gas service – allow here for all negotiations. etc. life safety MCC and control panels Fireman’s ventilation control panel. sprinkler panel and wiring All control wiring.PART 3. SECTION 2. trunking. liaison. sensors and detectors Interfaces with other systems and equipment New motor control centres. pressurization panel. coordination associated with the new supply Dry riser and falling mains installation Hosereel system Condensate system: Condensate drains from various equipment Building management system and automatic controls central processing unit and field processing units: Control valves. coordination associated with the new supply Allowance for selection of ‘gas shipper’ as described in the specification Gas distribution pipework. conduit. fittings and valves Gas meters Gas detection system Sprinkler installation New fire main allow here for all negotiations.

fittings and valves Oil fill station General: Trace heating to pipework system as necessary Item Item Item Item Item Item £ p Item Item Allow for all works/factory tests and demonstrations of plant and equipment as specified Item Preliminary items Allow for mock-ups and samples specified Test and commission the complete mechanical and public health services installation in accordance with the commissioning manager’s requirements Item Item Item _________ To Collection £ Mechanical and public health contractor’s design and installation drawings including manufacturers/suppliers shop drawings as necessary Item Builders work drawings Item The Surveyors’ Construction Handbook Part 3. Section 2 Appendix A (7/01) Effective from 1/9/01 Page 11 .PART 3. etc. Generator oil storage and distribution system: Bulk oil storage tank Fuel oil transfer pumps Pipework. APPENDIX A MECHANICAL INSTALLATION (Continued) Building management system and automatic controls central processing unit and field processing units (Continued): Attendance on other trades during commissioning of their systems Attendance during demonstration to fire brigade. the engineer and building control on separate occasions Setting to work. client’s maintenance staff. SECTION 2. testing and commissioning including trend logging.

APPENDIX A MECHANICAL INSTALLATION (Continued) General (Continued): As installed documents. SECTION 2.PART 3. the sub-contractor to state £ p Item Item Item Item __________ To Collection £ Page 12 Effective from 1/9/01 Part 3. Section 2 Appendix A (07/01) The Surveyors’ Construction Handbook . drawings and O&M manuals in the required format as specified by the document production manager Client instruction and operation training Provision of tools and spares Any other items not listed above.

SECTION 2. APPENDIX A PUBLIC HEALTH INSTALLATION Rainwater installation Above ground drainage installation (note under-ground drainage may not be part of this sub-contract) Fire fighting lift drainage installation Item £ p Item Item _________ To Collection £ The Surveyors’ Construction Handbook Part 3. Section 2 Appendix A (7/01) Effective from 1/9/01 Page 13 .PART 3.

• the operation of fluctuation provisions after practical completion.1. Thus. • closer examination of the issues surrounding early completion (although analysis of the general scheme of the subject under JCT forms is included). Whilst the title of this section refers to practical completion the subject has been approached at a more generic level.1 What Happens in Practice There is a considerable number of approaches adopted for the certification of completion in standard forms of contract used in the UK construction industry (see 4. Section 1 (revised 10/02) Effective from 1/12/02 Page 1 . SECTION 1 PART FOUR: CONSTRUCTION ADMINISTRATION AND MANAGEMENT SECTION 1: THE PROBLEMS OF PRACTICAL COMPLETION Introduction The law and practices in relation to the completion of building and engineering projects are complex issues that often give rise to conflict. Surprisingly. The following related and subsidiary topics are. The Surveyors’ Construction Handbook Part 4. and standard forms other than JCT variants have been considered.PART 4. not addressed: • the acceptance of defective work either before or after practical completion. however. there are a variety of methods by which some of the problems could be dealt with (see 4. the concepts of ‘substantial completion’ and ‘taking over’ have been included and commented upon.2). • the changing law concerning final certificates. and • the concept of temporary disconformity in building contracts. G 4.3).1. there is an almost universally accepted procedure adopted for both building and civil engineering with regard to the actual practice carried out on site. • wider consideration of the matter of adjudication upon practical completion.1. • the significance of practical completion in relation to performance bonds. • the law concerning latent defects and its inter-relationship with contractual defects liability provisions generally. Similarly. however. for example.

and the contractor. with the architect or engineer producing a new list each time he or she revisits the site. the most commonly held belief is that this should occur when the employer can enjoy beneficial occupation and use of the building or facility. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . or employer’s direct works may be preventing completion of a specific element of the contractor’s work. the architect.2). and indeed the pressures brought by the contractor. • This may be accompanied by the contractor’s own list of uncompleted works.5). (e) Influences upon Certification • Inevitably. The strength of this influence may be dependent upon the demands or otherwise for use or transfer of the building or facility. Although not defined as such in the majority of standard forms (see 4.PART 4. statutory authorities. (b) Snagging List • Either in advance of the contractor’s notice mentioned above. • The process is also influenced by the relationships which exist between the client. (d) Certification • Eventually a point will be reached where completion can be certified in the opinion of the architect. where outstanding information. the client often strongly influences the certification process. and that the making good of any remaining works or removal of snags will not unduly impede that occupation. or the commencement of fit-out works. Page 2 Part 4. engineer or contract administrator. engineer or contract administrator will prepare a list of defects and outstanding works which will be issued to the contractor.1. the professional team. • Such an approach is supported by case law (see 4. despite the contract demanding otherwise. Many points will be argued by the contractor to be unreasonable quality demands. but here is where the disputes will start. • The management of this process is often poor. especially. or work constituting a variation.1. this list is prepared during a joint inspection with the contractor. Confusion and distrust is often generated. perhaps motivated by substantial levels of liquidated damages. for example. but not always. SECTION 1 This may be described as follows: (a) Contractor ‘Offering Up’ • The contractor writes to the employer’s representative/contract administrator suggesting that works will be (or are now) ready for handover by a particular date. • Often. or prompted by it. (c) Clearing the Snagging List • The contractor will endeavour to reduce the length of the snag list.

– Performance Specified Work). a defect which was apparent at practical completion cannot be a defect for the purposes of clause 17.2.1 is inextricably bound with the provisions relating to defects. This is because the duty of the contractor to rectify defects during the defects liability period is limited to those defects appearing after practical completion.’ (b) Clause 17.1. At clause 1. the Contractor has complied with clause 5.9 (Supply of as-built drawings etc.’ These provisions therefore support a view that practical completion cannot be certified under JCT 98 unless all known (patent) defects have been resolved. Definitions. shrinkages or other faults which shall appear within the Defects Liability Period … .2 and. Clause 17. 4.1’ Clause 17.) the following unhelpful entry is made: ‘Practical Completion: see clause 17. However. Clauses 2.10 and 2.1 JCT 98 ‘PRACTICAL COMPLETION’: (a) JCT 98 does not define practical completion. or frost damage.16 of JCT 98.2 commences: (Clauses 17. the architect cannot require the contractor to make good such items of work. etc.1 provides the following ‘When in the opinion of the Architect Practical Completion of the Works is achieved and the Contractor has complied sufficiently with clause 6A. strictly speaking.2 to 17. the nominated sub-contract works have reached practical completion. this distinction is often ignored by architects and contract administrators.PART 4.1. and.1.5). he shall forthwith issue a certificate to that effect and Practical Completion of the Works shall be deemed for all the purposes of this Contract to have taken place on the day named in such certificate. if relevant. Thus.11 of NSC/C state the following: ‘2. Section 1 (revised 10/02) Effective from 1/12/02 Page 3 .2 Standard Form Approaches 4. ‘Any defects.2.10 If the Sub-Contractor notifies the Contractor in writing of the date when in the opinion of the Sub-Contractor the Sub-Contract The Surveyors’ Construction Handbook Part 4. the architect must issue separate certificates of practical completion for each nominated sub-contractor when.4.3 (Interpretation.2 NOMINATED SUB-CONTRACT NSC/C Under clause 35. in his or her opinion. shrinkages or other faults appearing within the defects liability period. SECTION 1 G 4.

2. (c) If the main contractor does not dissent from that date within 14 days of receiving the sub-contractor’s notice. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook .4 JCT INTERMEDIATE FORM (IFC 98) (a) The Intermediate Form closely follows that described above for JCT 98.3A DOMESTIC SUB-CONTRACT 2002 EDITION (a) This form of sub-contract generally maintains the provisions of DOM/1.2.1.1.16 of the Main Contract Conditions or. (d) Clause 2. the Contractor shall immediately pass to the Architect any such notification together with any observations thereon by the Contractor and the Sub-Contractor has complied sufficiently with clause 5E.11 provides for partial possession.6.13 or if earlier or no date is stated in the notification of dissent. the date must either be established by agreement or determined by an adjudicator. the date will be that stated by the main contractor in his/her notification of dissent under clause 2. (b) Clause 2. A copy of any such observations must immediately be sent by the Contractor to the Sub-Contractor.14 requires that if the main contractor does dissent. where clause 18 of the Main Contract Conditions applies.1 of the main contract.9 provides: ‘When in the opinion of the Architect/the Contract Administrator Practical Completion of the Works is achieved and the Contractor has complied sufficiently with clause 5. Page 4 Part 4. The effect is similar to the partial possession provisions of JCT 98 (see 4.11 of the Main Contract Conditions. 2.5.1.’ 4. Practical Completion of the Works shall be deemed for all the purposes of this Contract to have taken place on the day named in such certificate.7.11 Practical Completion of the Sub-Contract Works shall be deemed to have taken place on the day named in the certificate of practical completion of the sub-Contract Works issued by the Architect under clause 35. In the absence of such agreement or determination. (b) Clause 2. as provided in clause 18. SECTION 1 Works will have reached practical completion. 4. on the date of Principal Completion of the Works certified by the architect under clause 17.’ (c) Clause 2. practical completion is deemed to have occurred on the date notified by the sub-contractor.5).1.13 requires the sub-contractor to notify the main contractor of the date on which the sub-contractor considers the domestic sub-contract works have reached practical completion.4 he shall forthwith issue a certificate to that effect.PART 4.

’ (c) It should be noted. Accordingly.5 the words ‘any defects. whereas MW98 refers to ‘excessive shrinkages’. 4. • the words ‘defects. that whereas the mechanism for certifying practical completion is the same as JCT 98.2.4 provides: ‘The Architect/The Contract Administrator shall certify the date when in his opinion the Works have reached practical completion and the Contractor has complied sufficiently with clause 5. Note: JCT 98 clause 17. (b) Clause 2.6 JCT MINOR WORKS: MW98 (a) The JCT Minor Works form provides a crisp. oral notification is sufficient. or other faults’ are not qualified by any reference to the ‘works’ and so would. (d) It has been held2 that the MW80 form (predecessor to MW98): • does not require a written schedule of defects and.PART 4. and Practical Completion of the Works shall be deemed for all the purposes of this Contract to have taken place on the day named in such statement. which statement shall not be unreasonably delayed or withheld.1. the Employer shall give the Contractor a written statement to that effect. Section 1 (revised 10/02) Effective from 1/12/02 Page 5 . excessive shrinkages.9. SECTION 1 4. whichever clause is applicable. • in clause 2.5. (b) Clause 16. excessive shrinkages or other faults which appear within three months of the date of practical completion …’ extend to defects which appear before practical completion. The Surveyors’ Construction Handbook Part 4. therefore. the provisions for defects liability differ. however.1 or has complied sufficiently with clause 6A.2 refers to ‘shrinkages’.1. clear statement which has the same effect as the provisions for the main JCT forms.5 JCT 98: WITH CONTRACTOR’S DESIGN (a) Under this form there is no architect to enable a certificate of practical completion to be issued.5. the responsibility passes to the employer.2.’ (c) Any dispute as to the issuing or withholding of a practical completion certificate must be referred to adjudication for an interim binding decision or to arbitration. therefore. extend to an existing structure.1 provides: ‘When the Works have reached Practical Completion and the Contractor has complied with clause 6A.2.

It is important to note that these defects etc.4 of the Management Contract.2. inspect and test as appropriate.3 there is provision for Part Project Completion by agreement between the client and constructor using a procedure equivalent to that described in Clauses 21. (ii) indicates any aspect of the project which is not in accordance with the Partnering Documents after which the constructor will again present the Project in accordance with Clause 21.4 which requires the constructor to make good any defects.2.9 JCT WORKS CONTRACT/2 (a) Under clause 2. signifying that the relevant works have.1 and 21.4.2.1. (e) Rectification of defects after Project Completion is provided for in Clause 21. in the architect’s opinion.8 JCT MANAGEMENT CONTRACT 1998 EDITION The Management Contract also uses similar wording to the Intermediate Form.1.1 requires the constructor when it considers that the project has achieved Project Completion to give the client representative not less than five working days notice requesting the client representative to attend. inspection and testing the client representative shall issue a notice that either: (i) confirmed that the project has achieved Project Completion. See 4.1.10A THE ACA STANDARD FORM OF CONTRACT FOR PROJECT PARTNERING PPC2000 (a) The ACA form of Project Partnering adopts a different approach.1.14 of the WC/2. The management contractor is. (c) Clause 21. (b) Therefore. (d) At Clause 21.2) than the procedures found in the domestic sub-contract DOM/1.4.2.2.2. however. may have appeared either before project completion or within the Defects Liability Period.2. these provisions more closely resemble the nominated sub-contract provisions of the JCT main forms (see 4.1.1. 4. SECTION 1 4. See 4. Page 6 Part 4.7 JCT PRIME COST CONTRACT 1998 EDITION The Prime Cost Contract uses the same wording as the Intermediate Form. (b) Clause 21. 4. excessive shrinkages or other faults notified by the client.2.2 requires that within two (working) days of completion of such attendance. obliged to obtain the architect’s consent under clause 8.PART 4. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . the management contractor is required to issue separate certificates of practical completion for each works contract. reached practical completion.1.3.1. 4.

and a process is provided for dealing with outstanding works and defects. Section 1 (revised 10/02) Effective from 1/12/02 Page 7 .1 requires the specialist to give the constructor seven working days notice to attend.2. (b) Clause 48 provides: (1) When the Contractor considers that: (a) the whole of the Works or (b) any Section in respect of which a separate time for completion is provided in the Appendix to the Form of Tender has been substantially completed and has satisfactorily passed any final test that may be prescribed by the Contract he may give notice in writing to that effect to the Engineer or to the Engineer’s The Surveyors’ Construction Handbook Part 4.2. (c) Clause 21.1. SECTION 1 4.3 again provides for Part Specialist Completion of any part of the specialist works using a procedure equivalent to clause 21. In this form. 4.2. This defect rectification can include defects arising either before Specialist Completion or during the defects liability period for the specialist works. (b) Clause 21.11 ICE 7TH EDITION: ‘SUBSTANTIAL COMPLETION’ (a) Though not as fully developed as the ACA form (see 4.1 and 21. the contractor ‘offers up’ the works.1.4 requires the specialist to attend site whenever notified by the constructor of any defects.2 requires that within four working days of completion of the attendance. inspect and test as provided for in the Specialist Working Brief. inspection and testing the constructor and other appropriate Partnering team members should issue a notice either: (i) confirming that the specialist works have achieved Specialist Completion: or (ii) indicating where any aspect of the specialist works is not in accordance with the Specialist Documents.1. excessive shrinkages or other faults.2. (d) Clause 21. The specialist is required to rectify non-compliance and thereafter present the specialist works in accordance with clause 21.1. (e) With regard to defect rectification clause 21.10B THE ACA STANDARD FORM OF SPECIALIST CONTRACT FOR PROJECT PARTNERING SPC2000 (a) The provisions of the Standard Form of Specialist Contract SPC2000 are similar to those on PPC2000.10) it may well be said that the ICE 7th edition provides a framework for completion which reflects better than the JCT forms what actually happens in practice.PART 4. although the time frames are a little longer.

It should also be noted that the ICE 7th edition form caters expressly for the circumstances where the employer uses or occupies the works or part of the works prior to a 48(2) certificate being issued. as in other forms. The difficulty of this provision. is that there is often a dispute as to the extent of outstanding works permitted. (2) The Engineer shall within 21 days of the date of delivery of such notice either: (a) issue to the Contractor (with a copy to the Employer) a Certificate of Substantial Completion stating the date on which in his opinion the Works were or the section was substantially completed in accordance with the Contract. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook .PART 4. who is authorized to issue the certificate. The clause gives the engineer a discretion and. If no such times are specified any outstanding work shall be completed as soon as practicable during the Defects Correction Period. SECTION 1 Representative. or (b) give instructions in writing to the Contractor specifying all the work which in the Engineer’s opinion requires to be done by the Contractor before the issue of such certificate. not his representative. Note: It is the Engineer. (c) Clause 49(1) deals with outstanding work and defects as follows: The undertaking to be given under clause 48(1) may after agreement between the Engineer and the Contractor specify a time or times within which the outstanding work shall be completed. If the Engineer gives such instructions the Contractor shall be entitled to receive a Certificate of Substantial Completion within 21 days of completion to the satisfaction of the Engineer of the work specified in the said instructions. (d) Clause 48(3) provides: ‘If any substantial part of the Works has been occupied or used by the Employer other than as provided in the Contract the Contractor may request in writing and the Engineer shall issue a Certificate of Substantial Completion in respect thereof. notwithstanding that it reflects common practice. his or her decision may be reviewed by an adjudicator or arbitrator. This will be of considerable importance when large liquidated damages are potentially claimable. Such notice shall be accompanied by an undertaking to finish any outstanding work in accordance with the provisions of clause 49(1). Such certificate shall take effect from the date of delivery of Page 8 Part 4.

Section 1 (revised 10/02) Effective from 1/12/02 Page 9 . (2) Similarly practical completion of part of the Works may also occur but only if it is fit for such part to be taken into use or possession independently of the remainder. 4.2. 4.2. that there is an express requirement under clause 48(3) for the contractor to provide operation and maintenance instructions prior to the issue of any certificate of substantial completion.5 states as follows: (1) Practical completion of the whole of the Works shall occur when the Works reach a state when notwithstanding any defect or outstanding items therein they are fit to be taken into use or possession by the Employer. 4. however.1. SECTION 1 the Contractor’s request and upon the issue of such certificate the Contractor shall be deemed to have undertaken to complete any outstanding work in that part of the Works during the Defects Correction Period.12 ICE 6TH EDITION: In respect of substantial completion.2. (b) It is to be noted.15 FCEC ‘BLUE FORM’ OF SUB-CONTRACT The FCEC sub-contract form approaches completion of the sub-contract works quite differently from completion under the building sub-contracts.PART 4. (c) Clause 4.7 deals with the completion of outstanding works or defects after practical completion has occurred. 4.1. (3) The Engineer shall upon the Contractor’s request promptly certify in writing the date upon which the Works or any part thereof has reached practical completion or otherwise advise the Contractor in writing of the work necessary to achieve such completion.14 ICE MINOR WORKS (a) The ICE Minor Works is unique amongst standard forms in that it defines completion against the readiness of the works to be used by the employer.1. (b) Clause 4.13 ICE DESIGN AND CONSTRUCT FORMS (a) These provisions are identically worded to the corresponding clauses of the ICE 7th edition.1.’ Note: The ICE Design and Construct Clause 48(3) provisions in respect of operation and maintenance instructions are not present in the 7th edition. except that reference to the engineer or engineer’s representative is replaced by the ‘Employer’s Representative’.2. the same as ICE 7th Edition. The Surveyors’ Construction Handbook Part 4.

2 The Employer need not take over the Works before the Completion Date if it is stated in the Contract Data that he is not willing to do so. Therefore. it is probable that completion of the sub-contract works may not be acknowledged until substantial completion of the main contract works and only then by the implication that the main works have completed. 35. Possession of the whole Site returns to the Employer when the Project Manager certifies termination. ‘taking over’ and ‘termination’. If he does so. 4. As if completion was not vexed enough already. unless the parties otherwise agree. the NEC gives the project manager three terms to deal with: ‘Completion’. the sub-contract does not provide an effective means to establish when completion of the sub-contract works has been achieved. 35. he takes over the part of the Works when he begins to use it except if the use is: Page 10 Part 4.1). However. clause 13(1) of the FCEC ‘blue form’ places the sub-contractor with an absolute obligation to maintain the sub-contract works until substantial completion of the main works. the sub-contractor must complete within the period for completion specified in the Third Schedule (clause 6.1 Possession of each part of the Site returns to the Employer when he takes over the part of the works which occupies it. If the sub-contract works are completed prior to main contract works completion.2 (identified and defined terms) (13) states: Completion is when the Contractor has • done all the work which the Works Information states he is to do by the Completion Date and • corrected notified Defects which would have prevented the Employer from using the works. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook .16 THE NEW ENGINEERING CONTRACT (NEC) 2ND EDITION (a) The NEC eschews the system set out in the ICE form which reflects current practice.PART 4. (c) The NEC provisions are found in the core clauses as follows: • Part 1 – General – Clause 11. The schedule could provide that such a period is to end prior to substantial completion of the main contract works.3 The Employer may use any part of the Works before Completion has been certified. SECTION 1 Under this form. • Part 3 – Time – Clause 35 (Take over) states: 35.2. namely the contractor offering up the works and completion/handover occurring together with clear provisions for dealing with outstanding works and defects. (b) Instead it may be thought that the NEC is in some respects closer to JCT: completion takes place when the project manager decides so.1. Otherwise the Employer takes over the Works not more than two weeks after Completion.

2.’ (c) Requirements for a completion certificate are to be found in clause 39: ‘The PM shall certify the date when the Works. After the end of the last Maintenance Period to expire. keep the Site tidy and free from debris.17 GOVERNMENT CONTRACTS – GC/WORKS/1 (1998) (a) GC/Works/1 (1998) provides that the works are to be completed to the satisfaction of the Project Manager. clear and remove all rubbish and deliver up the Site and the Works in all respects to the satisfaction of the PM. The Contractor shall comply at his own cost with any Instructions relating to the removal of any things and rubbish. and the completed part. (b) Condition 34(2) (commencement and completion) states the following: ‘34(2) The Contractor shall. shall no longer form part The Surveyors’ Construction Handbook Part 4. not later than the Completion of the Works. 35. together with all things not for incorporation. Section 1 (revised 10/02) Effective from 1/12/02 Page 11 . or any Section.1. or (b) any other part of the Works in respect of which the parties agree. or any completed part within the meaning of Condition 37 (Early Possession). the Employer may choose to take partial possession of a part of the works. that possession shall be given before the completion of the Works or the relevant Section. Such completion shall include sufficient compliance by the Contractor with Condition 11(7) (Statutory notices and CDM Regulations). who is required to certify completion. to take possession of any part of the Works (in this Condition referred to as a “completed part”) which is certified by the PM as having been completed in accordance with the Contract and is either – (a) a Section.PART 4. SECTION 1 • for a reason stated in the Works information • to suit the Contractor’s method of working. before the completion of the Works. on and after the date on which the certificate is given. In addition. 4.4 The Project Manager certifies the date upon which the Employer takes over any part of the Works and its extent within one week of the date. The Contractor shall. are completed in accordance with the Contract. he shall issue a certificate when the Contractor has complied with Condition 21 (Defects in Maintenance Periods). by the due date. at all times. remove from the Site all Things for incorporation in the Works or any relevant Section which are unused. or the PM has given an instruction. litter and rubbish and shall.’ (d) Clause 37 deals with partial possession before completion: ‘The Employer shall be entitled.

under clause 33.7. As soon as all the procedures have been successfully carried out. (c) Five points in the completion process are thus recognized. ‘Green Book’ for reimbursable contracts.PART 4. including tests. The IChemE forms. • Once all the construction completion reports have been signed by the project manager. therefore.1. (b) The IChemE forms recognize that on large process plant projects or similar. therefore. the concepts of completion and taking over have distinctly separate ramifications. as may be specified within the contract schedules. the project manager issues a certificate of completion of construction.1 (Red Book). The procedures. If the project manager is not satisfied he or she may endorse the report accordingly and the contractor must repeat the procedure described in clause 33. the project manager issues a take-over certificate to be signed by the purchaser and delivered to the contractor under clause 34. When the plant has satisfactorily completed tests set out in the specification and the contractor has adequately demonstrated completion in accordance with the specification. are closer to a true contractual definition of completion than can be found in any other standard form.1 (Green Book) requires the contractor to notify the project manager by means of a construction completion report when he or she is of the opinion that the plant is substantially complete. the project manager and contractor sign the construction completion report. There are three aspects of significance which are considered: • compliance with the specification with the description of works • time finishing tasks according to programme or with reference to financial incentive • transfer of responsibility.4. • Clause 33. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . SECTION 1 of the Works for the purposes of Condition 19 (Loss or damage) and 30 (Vesting). to follow on from construction completion. and where the contract schedule specifies a date for completion of construction.1.18 INSTITUTION OF CHEMICAL ENGINEERS FORMS: ICHEME (a) ‘Red Book’ for lump sum contracts. There may. These are reflected in the contractual procedures provided in the IChemE forms.’ 4. The purchaser is thereafter Page 12 Part 4.2. • The purchaser normally takes over responsibility for the plant just before any raw materials are to be fed into the plant to undergo the designed process change. provide for the carrying out of take-over procedures. of course. clause 32. from both contractual and safety points of view. be a number of these reports related to different elements of the plant.

certain other factors are conditional upon the certificate of completion. and The Surveyors’ Construction Handbook Part 4.2). • The contract may prescribe performance tests embodied by specific guarantees of the contractor. or unliquidated). Dependent upon the form of contract. (b) possession of the site returns to the employer and the risk of security and damage to the works and third party liability transfers back to the employer (but not damage to the works caused by the contractor during the defects liability period). Section 1 (revised 10/02) Effective from 1/12/02 Page 13 . the IChemE forms lay down procedures for the certification of the correction of defects at the end of the defects liability period where the project manager must issue to the purchaser and contractor a final certificate (clause 38) which provides conclusive evidence that the contractor has completed the works and made good all defects therein.6). SECTION 1 responsible for the care.1. safety. under JCT 98: (a) the employer may assign the right to bring proceedings in his or her name (clause 19. (d) payment to the contractor of one half of the retention fund. operation.PART 4.3 Effects of Practical Completion The various standard forms differ in their treatment of the transfer of rights and obligations between the parties at completion. For example.1. The following issues are however common to most forms: (a) liability to pay damages for delay ceases (whether liquidated and pre-ascertained.2. 17. • Finally.3 G 4.3 and 17. (c) commencement of the defects liability period. The IChemE forms provide for acceptance certificates in respect of the satisfactory operation of the plant in accordance with these tests (clauses 35 and 37). (b) the commencement of the period of the final adjustment of the contract sum (clause 30. (c) liability for frost damage is transferred from the contractor to the employer (clauses 17. servicing and maintenance of the plant. and (e) no further instructions may be issued for variation works or the rectification of works other than those appearing during the defects liability period.5).

The primary area of difficulty lies in aspects of subjective evaluation Page 14 Part 4. (b) Contractor’s Initiative The contractor notifies its own completion which becomes contractually binding unless dissented from by the recipient within a set number of days. however. These factors also impact upon sub-contractors. such as for example. SECTION 1 (d) the period for final review of extensions of time expires 12 weeks from this date (clause 25. (d) It is possible that this could be dealt with as a ‘code of practice’ bound within the contract document and expressly referred to in the conditions.3. G 4.PART 4. that to define completion similarly for universal application in building or civil engineering projects would be extremely difficult. In addition to mechanisms under the construction contract. (e) The IChemE forms come closest to this option.4. For example. this being left entirely to the architect/engineer or contract administrator’s opinion to certify when practical completion has been achieved.4 of JCT 98.1. This option is used in the traditional JCT contract. by prescribing tests and standards to be achieved by the installed plant prior to completion. the issue of a certificate of completion may have direct impact upon third parties. in similar fashion to the code of practice for opening up and testing under clause 8.3). to bring an end to obligations of a surety in respect of a guarantee or performance bond. It is suggested. further developed to deal with the ‘dissent’ of the recipient under a main contractor and sub-contractor relationship. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . the sub-contractors’ protection under the main contract all-risks’ policy ends. This is the model used in DOM/1. The remedy available to the employer or contractor in the event they consider the certificate has been wrongly issued or withheld is to adjudicate. The following are seen as the main options available: (a) The Contract Administrator’s Opinion Under this method there is no contractual definition of practical completion. (c) Definition of Standards Inclusion within the contract of a definition of the tests or standards which the contractor will be required to meet in order to achieve practical completion.4 Methods for Dealing with Practical Completion There are a number of principal methods which might be used to reduce the problems associated with practical completion.

may be due when beneficial occupation is achieved or achievable.4. SECTION 1 such as finishes. Nonetheless it is closer to the model applied in other European countries. The decided cases have tended towards a preference for this approach in any event. (b) This is not a favoured option in the UK. (f) Appendix A offers a number of practical tests for judging the state of completion. The Surveyors’ Construction Handbook Part 4.1.3). and the Courts have given credence to the view that it is a difficult.1. yardstick to apply. 4.1. it is difficult to see how this reduces the incidence of disputes: it is merely shifting the point at which arguments will be made. (c) The first stage may be denoted by the issue of a ‘provisional certificate’ and.PART 4. and an increase in the use of latent defects or ‘build’ insurance (such as the mandatory decennial type liability in France) may bring a move towards ‘fault free’ buildings at completion. and it is doubtful whether this would be lessened by a definition which called for ‘100% fault free works’ (see 4.4. by example.4. yet the standards required by the employer may not have been met. (b) Nonetheless. if not impossible. The building may be capable of being occupied.1 READINESS FOR OCCUPATION (a) Many commentators have agreed that practical completion should be defined in the contract as that point when beneficial occupation may be obtained by the employer.2 PERFECT COMPLETION (a) Here completion would not be granted until all outstanding works are completed and defects rectified. and the ICE Minor Works form is an example of appropriate wording.2) since there will always be disputes on quality issues. (c) As a qualification to this approach.1. the intent is to divide into two the numerous benefits and obligations which fall upon the contractor and employer at completion (see 4.4. Section 1 (revised 10/02) Effective from 1/12/02 Page 15 . 4.3 TWO-STAGE COMPLETION (a) Various models have been suggested for a two-stage process for the certification of completion. 4. Employers have argued that this represents a weakening of their position. an option is to add a rider to the effect that the rectification of outstanding works and defects are capable of being carried out in such a manner and within such a time that the employer’s beneficial occupation will not be impeded. (b) Clearly.1.

Some definitions lean towards perfect.1. SECTION 1 (d) At this point. the standard forms of contract do not provide definitions of what constitutes practical completion. This would also mark the commencement of the defects liability period. in my view. G 4. for the purpose of allowing the council to take possession of the works and use them as intended.6 Page 16 Part 4. I take these words to mean completion for all practical purposes. although the ICE Minor Works form contains a useful development of the term by stating it is contingent upon the works being ‘fit to be taken into use or possession’. Only at this point would the contractor be released from liability for liquidated and ascertained damages. but Practical Completion suggests that is not the intended meaning and what is meant is the completion of all the construction work that has to be done.4 And in the same case: … The defects liability period is provided in order to enable objects not apparent at the date of practical completion to be remedied. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . but not entirely finished. If completion in clause 21 meant completion down to the last detail.e.5 (b) Completion for All Practical Purposes The above quotations need to be compared with the opinion expressed by Salmon LJ when the same case had earlier been heard by the Court of Appeal: The obligation on the contractors under clause 21 to complete the works by the date fixed for completion must.5 Definitions Generally. be an obligation to complete the works in the sense in which the words ‘practically completed’ and ‘practical completion’ are used in clause 15 and clause 16 of the contract. no such certificate would have been issued. It is thought that the first release of retention would also not occur until this point. the employer would re-take possession and insurance risks are transferred. as can be seen in 4. (e) The second stage would be perfect completion of the works. (a) Fault Free Completion Various definitions are available from decided cases and the principal textbooks on construction law. i.PART 4. then clause 22 would be a penalty clause and as such unenforceable.1. If they had been apparent. fault free completion: One would normally say that a task was practically completed when it was almost. however trivial and unimportant.2.

contrary to my view. completion is something which occurs only after all defects. This doctrine is concerned with establishing when payment will be due of an amount payable under an ‘entire’ contract: In considering whether there was substantial performance I am of the opinion that it is relevant to take into account both the nature of the defects and the proportion between the cost of rectifying them and the contract price.10 The Surveyors’ Construction Handbook Part 4.3 and a certificate to that effect has been given under clause 17. and not ‘completion’ but they mean the same. use of many materials and employment of various types of operatives make it virtually impossible to achieve the same degree of perfection as can a manufacturer.8 And in the same case. Judge John Newey said: In my opinion there is room for ‘completion’ as distinct from ‘practical completion’. it would make the liquidated damages provision in clause 24 unworkable and in practice would require the defects liability period to be added to the time initially negotiated by the parties for the carrying out of the works. Section 1 (revised 10/02) Effective from 1/12/02 Page 17 .9 (e) Substantial Performance These arguments applied to practical completion have been used in explaining the doctrine of substantial performance. site conditions.4. It would be wrong to say that the Contractor is only entitled to payment if the defects are so trifling as to be covered by the ‘de minimis’ rule. but that if there were any patent defects in what [the contractor] had done the architect could not have given a certificate of practical completion. Because a building can seldom if ever be built precisely as required by drawings and specification. The construction industry recognizes a difference between the carrying out of new works and ‘snagging’ that is to say dealing with minor defects in them. the contract realistically refers to ‘practical completion’. SECTION 1 (c) The De Minimis Rule This idea of practical completion being permitted despite the existence of minor defects has been expressed elsewhere: I think the word practically … gave the architect a discretion to certify that [the contractor] had fulfilled its obligation under clause 21(1) (of JCT 63) where very minor de minimis work had not been carried out. shrinkages and other faults have been remedied in accordance with clauses 17.7 (d) Impossibility of Perfection The development of this argument has involved contrasting the construction industry with other forms of manufacture: Probably the most important background fact which I should keep in mind is that building construction is not like the manufacture of goods in a factory.2 and 17. The size of the project. If. It must be a rare new building in which every screw and every brush of paint is absolutely correct.PART 4.

It may include work which is Page 18 Part 4.PART 4. however. The term is not defined. but the expressed reference to ‘outstanding work’ to be completed within the Defects Correction Period indicates a state plainly falling short of literal completion. to be treated cautiously. in the words of Somervell LJ in Hoenig v. Isaacs. in clauses 43 and 47.13 The judge reached his conclusion that practical completion had not been achieved in circumstances where.15 (f) Substantial Completion Definitions of the term ‘substantial completion’ appearing in the ICE forms have been similar to those applied to practical completion. We return to the issue of practical completion which we cannot distinguish from substantial performance. though in part defective …12 It has recently been held by the Court of Appeal in Hong Kong that practical completion should be interpreted in a similar manner to the doctrine of substantial performance.14 The direct connection between cases dealing with substantial performance and the definition of practical completion is. There is no reason to limit it to work that has not been carried out. repossession and the release of retention. SECTION 1 In the same case. This term (or equivalent words) used in clause 48(1) of the ICE 7th Edition form ‘… substantially completed …’ now appears consistently throughout the Conditions. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . inter alia. by reason of the failure to modify the sprinkler system. Neither is there any definition of ‘outstanding work’. the work contracted for was. neither ‘finished’ nor ‘done’ in the ordinary sense. the key element for defining a failure to achieve substantial performance was emphasized to be: the general ineffectiveness of (the work) for its primary purpose …11 Substantial performance has been held to have occurred even though the works were in part defective. The defendants were held liable for the sum claimed less a deduction based upon the cost of making good the defects: The question here is whether in a contract for work and labour for a lump sum payable on completion the defendant can repudiate liability under the contract on the ground that the work though ‘finished’ or ‘done’ is in some respects not in accordance with the contract … I think on the facts of this case the work was finished in the ordinary sense. It may be doubted whether cases concerned with substantial performance are relevant to the determination of practical completion as the term is used in the standard form contracts where the event is not directly related to payment obligation (as in the contract considered by the Hong Kong court) but rather with consequences such as liability for liquidated damages.

2 HUDSON’S APPROACH It is desirable to be clear as to the precise meaning of ‘completion’ in a time obligation. Section 1 (revised 10/02) Effective from 1/12/02 Page 19 . (3) Practical Completion means the completion of all the construction work that has to be done. on ‘de minimis’ principles. There is surprisingly little English authority on the point.1 KEATING’S ANALYSIS Practical Completion is perhaps easier to recognize than to define. (4) However.16 The Concise Oxford Dictionary equates ‘substantial’ with ‘virtual’ which is defined as ‘that is such for practical purposes though not in name or according to strict definition’. It is submitted that the following is the correct analysis: (1) The Works can be practically complete notwithstanding that there are latent defects. The many reported cases on the question of ‘substantial’ completion in relation to payment under an entire contract.17 4. No clear answer emerges from the authorities as to the meaning of the term.1 to certify Practical Completion where there are very minor items of work left incomplete. but it is clear that the requirement will be less rigorous than in other contractual contexts. a different legal problem. are of doubtful relevance. SECTION 1 defective. The Defects Liability Period is provided in order to enable defects not apparent at the date of Practical Completion to be remedied.1. and to say that substantial completion allows for minor deficiencies that can be readily remedied and which do not impair the structure as a whole is probably an accurate summary of what is a question of fact in each case. Obviously both the nature and extent of the uncompleted work or defects are relevant. but is to be re-executed or remedied in accordance with the Contract. The words ‘practical’ or ‘substantial’ in the English standard forms probably do no more than indicate that trivial defects not affecting beneficial occupancy will not The Surveyors’ Construction Handbook Part 4.PART 4. the Architect is given a discretion under clause 17.5.1. Usually it will mean bona fide completion free of known or patent defects so as to enable the owner to enter into occupation.5. It is at least clear on the one hand that the fact that the works are or are capable of being used by the employer does not automatically mean that they are substantially complete (‘any substantial part of the Works which has both been completed … and occupied or used’) and on the other hand that the engineer may not postpone his or her certificate under this clause until the works are absolutely completed and free from all defects.18 4. (2) A Certificate of Practical Completion may not be issued if there are patent defects.

Furthermore.1.19 In the last resort the degree of required completion needed to discharge the contractor’s obligation to complete to time will be a matter of interpretation. SECTION 1 prevent completion (the more so. in the absence of contrary indication. In English standard forms of contract employing liquidated damages clauses for delay.1 FINANCING CHARGES AFTER PRACTICAL COMPLETION (a) A specific question was raised in the Rees & Kirby case22 as to whether financing charges incurred by a contractor upon primary elements of loss and expense would cut off at the certificate of practical completion. an employer must wish to reduce to the very minimum the disruption that is caused by the presence of works going through a snagging list and an architect should not issue a certificate of practical completion until all such work has been completed – unless the employer waives the right to insist upon it being done. this is often expressly described as ‘practical’ or ‘substantial’ completion.21 G 4. (c) This contention was rejected by the Court. and the contractor is willing to continue to work in an occupied building and suitable arrangements have been made for the insurance.6. of course. since the causative events complained of must. by that stage.6 Subsidiary Issues 4. (b) The defendant argued that financing charges.5. have come to an end. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . if the contract provides for a maintenance or defects liability period).3 REMEDYING DEFECTS Another ingredient which it is suggested affects practical completion is the extent of disruption an employer would incur in allowing access to a contractor to remedy defects or complete works outstanding after the issue of a practical completion certificate. which were to be considered as a component part of the loss and expense claimed by the contractor as a result of events occurring during the construction of the works. It is submitted that this will. mean when the work reaches a state of readiness for use or occupation by the owner. As I read the clauses. but there is no reason to suppose that these expressions mean anything very different from the word ‘completion’ simpliciter when used or implied in the context of completion to time. given that (on the clauses in the form which they take in the contract now before us) successive applications are made at Page 20 Part 4. and free from any known omissions or defects which are not merely trivial.1.20 4. but can be expected to differ from other aspects of the contractor’s obligations to complete.1.PART 4. could not be recoverable after practical completion.

in order to enable the contractor to effectively finish the works. I can see no reason why the financing charges should not continue to constitute direct loss or expense in which the contractor is involved by reason of. under which clauses of the contract is this power given. But I can for my part see no good reason for holding that the contractor should cease to be involved in loss or expense in the form of financing charges simply because the date of practical completion has passed. become the subject of a supplemental contract.6. after the issue of the certificate of practical completion. to commence fit-out works. for example. A (d) It is considered that whether or not payment is made through the machinery of the contract. in effect. the right to receive payment in respect of the primary loss or expense merges in the right to receive payment under the certificate within the time specified in the contract. for example. However. is the architect empowered to issue instructions.2 INSTRUCTIONS ISSUED AFTER PRACTICAL COMPLETION (a) Often practical completion is certified in an extremely hurried manner to allow the employer occupation. or arguments that time is ‘at large’ in order to defeat the imposition of earlier delay damages. The Architect is not so empowered. or (2) that the certificate has not been honoured on the due date. this causes considerable difficulty to architects or contract administrators who find they must issue instructions after practical completion. so that from the date of the certificate the contractor is out of his money by reason either (1) that the contract permits time to elapse between the issue of the certificate and its payment.Q/89/136).1. a variation. Section 1 (revised 10/02) Effective from 1/12/02 Page 21 . SECTION 1 reasonable intervals. The Surveyors’ Construction Handbook Part 4. Where substantial outstanding works remain. other than for rectifying defects. the parties may agree that further work is to be carried out and paid for through the machinery of the contract (Ref. (b) This brings about the absurd situation of contractors’ claims for extension of time after practical completion.PART 4. At the date of issue of the certificate. 4. the additional work will. as a matter of convenience. (c) The Practice and Management Committee of the RICS published an answer to this question in 199023 as follows: Q Under JCT 80. until the date of the last application made before the last issue of the certificate issued in respect of the primary loss or expense incurred by reason of the relevant variation. If the answer is yes.

that this issued certificate should not have been taken to be the completion certificate required by the terms of the contract.6. (b) Certain standard forms of contract contain clauses that expressly state this to be the case. The architect subsequently certified practical completion. for issue of the completion certificate. although it is qualified by ‘substantial part’: Page 22 Part 4. which induced the purchase of the property. more than minor ‘de minimis’ works remaining) and by reason of subsequent insolvency.1. clause 48(3). (b) It is not uncommon for consultants to be pressured by both client and contractor. when in fact they were not. Although the representation to the architect was made upon the employer’s request. incomplete and defective works remain just so. for breach of a term to ‘exercise all proper professional skill and care’. SECTION 1 4.e. is an example.e. It may also be envisaged that a prospective future owner of a newly-built property may decide to proceed with the purchase upon the issue of a practical completion certificate. However.3 CERTIFICATION OF PRACTICAL COMPLETION WHEN WORKS NOT COMPLETE (a) As can be seen in 4. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook .3 the issue of a practical completion certificate transfers rights and obligations between parties to a construction contract and furthermore often releases a surety from its obligations in respect of a guarantee or bond. as it had purported in a letter to the architect that the mechanical and electrical works were complete.4 OCCUPATION BY EMPLOYER PRIOR TO PRACTICAL COMPLETION (a) A question often raised is whether occupation by the employer will be deemed to constitute practical completion.6. the owner/occupier could be exposed to considerable financial risk if practical completion is certified when in fact the works are not practically complete (i. the consultant should have declined the request as it was in conflict with the future owner’s interests (i. Even though the employer was alleged to have instructed the consultant to issue an early certificate. the interests of the beneficiary of the warranty that the consultant had agreed to) and the consultant did not have the future owner’s express written agreement in this regard. (c) ICE 7th edition.1.24 the Court did not accept the consultant’s defence that because it had qualified its issued completion certificate by a list of ‘reserved matters’.1. The consultant might be held liable for such a loss in these circumstances. (c) In one case. amongst other things. 4. the consultant had not properly advised its client of the relevance and importance of its issue including. albeit for differing reasons. the effect it would have of depriving the employer of the benefit of the performance bond. (d) In another case25 a consultant was held liable under a collateral warranty to a future owner.PART 4.

do not expressly provide for ‘automatic’ practical completion upon use or occupation by the employer of a part or whole of the works. On the facts of this case. the Contractor may request in writing and the Engineer shall issue a Certificate of Substantial Completion in respect thereof … (d) The New Engineering Contract (NEC) is also clear on this point. (f) The JCT forms of contract. SECTION 1 If any substantial part of the works has been occupied or used by the Employer other than as provided in the Contract. the Court held that it could not distinguish practical completion from ‘substantial performance’.PART 4. the Court held that occupation did not amount to completion. George Wimpey28.27 where Lord Denning said: It is always open to a party to waive a condition which is inserted for his benefit. the court of first instance and The Surveyors’ Construction Handbook Part 4. (h) A somewhat different view was held in Hoenig v. by entering into possession and using the fitted furniture. he takes over the part of the works when he begins to use it … (e) It has been argued that since some standard forms expressly deal with this subject as above. clause 23. Section 1 (revised 10/02) Effective from 1/12/02 Page 23 . In other words.26 although the owner’s occupation of the building was not argued as key to the determination of the issues. clause 35.1. (j) In spite of the employer’s tenant installing and using machinery and storing large quantities of paper in parts of the works.5(a)).3. the employer was held to have waived a condition precedent of entire performance and could no longer rely on it. In Big Island Contracting v. (i) In English Industrial Estates v. the express requirements of the contract should be considered to be exhaustive of the circumstances whereby practical completion can be established. then those forms of contract which do not include similar express provisions should be interpreted to the effect that no assumption of deemed practical completion may be made upon occupation or use of part or all of the works. There. despite the fact that the defendants had been in occupation of the building. On the contrary. If he does so.3: The Employer may use any part of the works before Completion has been certified. including JCT 98. (g) A number of cases have looked at this question. Isaacs.6. Skink. the Court held that practical completion had not been achieved.2 of JCT 98 provides for use or occupation in circumstances where practical completion or partial possession will not occur (see 4.

Subject to such confirmation the consent of the Contractor shall not be unreasonably delayed or withheld. Again. Clause 23.2 or . Clause 23. It can be seen that such a mechanism is consensual and that the insurers also must confirm their consent to the occupation.1 the Employer may.3.1 provides: If at any time or times before the date of issue by the Architect of the certificate of Practical Completion the Employer wishes to take possession of any part or parts of the Works and the consent of the Page 24 Part 4. and any occupation of the premises prior to practical completion for fitting-out was a contractual right and not a ‘benefit’ conferred on the employer by delayed completion. Clause 18.6. with the consent in writing of the Contractor. it could not be a genuine pre-estimate of loss.2 states: Notwithstanding the provisions of clause 23. The contract contemplated staged completion.3.3. and would fail as being an unenforceable penalty.3 provides that any increase in the insurance premiums which results must be added to the contract sum. (b) The second level is partial possession. Before the Contractor shall give his consent to such use or occupation the Contractor or the Employer shall notify the insurers under clause 22A or clause 22B or clause 22C.5 PARTIAL POSSESSION/SECTIONAL COMPLETION Under JCT 98 it may be seen that there are four levels of ‘occupation’ which can be attained by the employer. which the contractor must not unreasonably withhold. 4. use or occupy the site or the Works or part thereof whether for the purposes of storage of his goods or otherwise before the date of issue of the certificate of Practical Completion by the Architect. SECTION 1 the Court of Appeal found that partial possession had not occurred and held the contractor and his insurers liable for damage caused by a fire occurring during the employer’s occupation. the contract allowed the employer to have access before practical completion for the purpose of fitting out the building. (a) The first level is use or occupation of the site or a part thereof generally for storage or fit-out. this must be by the consent of both parties.PART 4. (l) The Court summarily rejected this argument. (k) In an Australian case29.1. The contractor argued that as the liquidated and ascertained damages provision gave no credit for this benefit.4 whichever may be applicable and obtain confirmation that such use or occupation will not prejudice the insurance. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook .

2) and liquidated damages (clause 24) will be reduced pro rata to the contract sum. then notwithstanding anything expressed or implied elsewhere in this Contract.4. The contract documents may prescribe predetermined sections of the works.3. the architect or contract administrator must administer the project having regard to these dates. (c) The ‘third level’ is sectional completion. With partial possession. such that retention (clause 30. The contract will also state the separate amounts of liquidated damages which are to be applied to each section in respect of any separate delays. (d) Finally. SECTION 1 Contractor (which consent shall not be unreasonably delayed or withheld) has been obtained. there is practical completion. Thus.1.2 above. This again is different from partial possession.4). with separate dates for completion for each. including allocating separate extensions of time where these apply. The architect’s written statement is used to compile the value of the part taken into possession. The architect or contract administrator must certify completion of the whole of the works according to clause 17 (see 4.PART 4.2. The Architect shall thereupon issue to the Contractor on behalf of the Employer a written statement identifying the part or parts of the Works taken into possession and giving the date when the Employer took possession … The effect of partial possession under clause 18 is quite different from use or occupation described under clause 23.1. Section 1 (revised 10/02) Effective from 1/12/02 Page 25 . The Surveyors’ Construction Handbook Part 4. whether or not the whole of the works is delivered up by the overall date for completion. since it is not consensual in nature.1). the Employer may take possession thereof. and separate practical completion certificates (sectional completion) in respect of each part. Reference is also made to insurance which must be dealt with in the event of any partial possession (clause 18.3).1. The contractor is under an obligation to complete the works under each section on or before the dates set down in the contract appendix. practical completion is deemed to have occurred in respect of that part with all the consequences of a practical completion under clause 17 (see 4.1.

6th edition. 14. Issacs (1952) 2 All ER 176. 6. Emson Eastern Ltd v. 5. H W Neville (Sunblest) Ltd v. at page 179. William Press & Sons Ltd (1982) 20 BLR 78.1 refers to partial possession. 22. 4th edition. 25. City of Westminster v. Environment Agency v. Bolton v. 24. SECTION 1 Notes 1. 23. Hoenig v. at page 1458.1. 13. 2. Max W Abrahamson. 52 BLR. Keating’s Building Contracts. 27. at page 1013. Hilson Moran [2000] CA (unreported to date). 11th edition. 19. at page 115. English Industrial Estates Corporation v. 8. George Fischer Holding Ltd v. 3. Ibid. Jarvis & Sons Ltd (1970) HL. 55 BLR 114. 10. EME Developments Ltd (1991) QBD. George Wimpey & Co Ltd (1973) CA 7 BLR 122. at page 75. 17. The Parochial Church Council of St Michael and Others (1990) 8-CLD-08-01. 7. Tarmac Roadstone Ltd (1997) 87 BLR 96. Swansea City Council (1985) CA 30 BLR. Ibid. Ibid. William Tomkinson & Sons Ltd v. 52 BLR. 15. 20.. Commentary by Editors of Building Law Reports. Issacs (1952) 2 All ER 176. at page 160. Big Island Contracting (HK) Ltd v. 7 BLR 64. 18. at page 590. 16. J. Rees & Kirby Ltd. 4. Chartered Quantity Surveyor June 1990 (ref Q/89/136). 52 BLR 110. 12. Hudson’s Building and Engineering Contracts. at page 1015. Ibid. at page 111. 9. Big Island Contracting (HK) Ltd v. CA [1969] 1 WLR 1448. Skink Ltd (1990) CA of Hong Kong. at page 112. Ibid. 26. Commentary by Editor of Building Law Reports. at page 1109. Clause 18. Multiplex Construction Pty Ltd v. Ibid. 28. Madheva (1972) 1 WLR 1009. Section 1 (revised 10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . v. 52 BLR 110. Abgarus Pty Ltd (1992) APCLR.PART 4. 21. Skink Ltd (1990) CA of Hong Kong. at page 1130. Hoenig v. Multi Design Consultants Ltd and Davis Langdon & Everest & others (1998) CILL 1362. Page 26 Part 4. Matthew Hall Ortech Ltd v. 11. at page 122. Engineering Law and the ICE Conditions.

COMPLIANCE WITH STATUTORY REQUIREMENTS All relevant statutory requirements should have been complied with.) ENTRANCES It is normally expected that the entrance to the premises and access way would be clear and complete. sufficient for the client to operate for all intents and purposes in a normal fashion. for example. Under normal circumstances.PART 4. safety. Electrical test certificates and confirmation of compliance with relevant statutory requirements for fire alarm or smoke-detector installations should be available. STRUCTURE Structural works should be complete and no part of the structure should be unsafe. (Note: Particular attention should be paid to this when considering sectional completion for any part of the works. Normally.1 A6 A6.1 THE CONTRACT DOCUMENTS The works should have been undertaken as intended by the specification and drawings. including confirmation that all planning conditions and building control matters have been satisfactorily resolved. means of escape and the requirements of the statutory supplies. an instruction should be given to so test these elements. APPENDIX A Appendix A: General Objectives to be Achieved at Practical Completion for Small to Medium-sized Building Projects The following are a number of practical tests by which it is considered an architect or contract administrator can judge whether or not practical completion has been achieved. If. for some reason this has not taken place. alternatively. including all appropriate requirements for health. Section 1 Appendix A (4/98) Effective from 1/6/98 Page 1 . etc. test certificates for pressure vessels as well as for hoists (whether they be for equipment or people) should be produced. Certificates confirming safety of the various installations should be provided.1 A5 A5. under design and build arrangements) the contractor shall have satisfied all local authority requirements with regard to.3 A3 A3.2 A2. SECTION 1.g. Where appropriate (e. THE SITE External works should be substantially complete so that the occupier has unfettered access. refuse collection and postal address confirmation. CLADDING The building should be wind and watertight and the cladding should be properly secured. then the specification should include for water testing or.1 A2.1 The Surveyors’ Construction Handbook Part 4. roofs and claddings would be tested by the elements. A2 A2. A1 A1. such that no potential safety hazard remains present. all building impediments such as skips and site huts should have been removed from the site. In addition.1 A4 A4.

signage and the like. then the documentation should state this to enable such works to be undertaken without detriment to the parties.2 A7. a definition which allows for balancing to take place following occupation should be considered. decorations incomplete to a store room in the depths of the basement would not necessarily be considered as important. SECTION 1. in the specification. MECHANICAL AND ELECTRICAL SERVICES The origins of all the appropriate commissioning and test certificates should be issued to the architect or contract administrator. PLANTING If. Particular attention will be required to be paid to the CDM regulations which call for the ‘Safety File’ to be produced prior to practical completion. External works should be complete.1 FINISHES This is the area of works where most reasons for delay in the issue of a certificate of practical completion tend to arise. external planting is included and it is acknowledged that practical completion may take place during a period when undertaking planting may be impractical.3 A7. For example.1 A9 A9. However.PART 4. as should in general terms. the internal areas. including car-park lining. APPENDIX A A7 A7.1 Page 2 Part 4. either a detailed view needs to be taken or potentially a more lenient stance adopted.1 A10 A10. For such elements as air conditioning. All the decoration works should be complete. Section 1 Appendix A (4/98) Effective from 1/6/98 The Surveyors’ Construction Handbook .4 A8 A8. MANUALS The requirement for the provision of operating and maintenance manuals and as-installed drawings should be considered closely. A7. the reception area and staircases should be finished. Manufacturers’ warranties may well be nullified if mechanical plant is not maintained in accordance with their instructions during the warranty period. As suggested above.

Swansea City Council (1985) Financing charges continue after practical completion. 11. HW Neville v. Jarvis & Sons Ltd v. William Whitfield & John Laing (1988) Continuing duty of architect for negligent design after practical completion. Occupation before practical completion without certificate does not amount to partial possession. 2. 8. Isaacs (1952) Substantial performance was held to have occurred even though the works were in part defective. George Wimpey (1973) Fire is the contractor’s risk after possession if clause 16 of JCT 63 is not observed. Big Island v. Mahdeva (1972) Substantial performance – it would be wrong to say that the contractor is only entitled to payment if the defects are so trifling as to be covered by the de minimis rule. 3. Rees & Kirby v. Bolton v. 12. If (defects) had been apparent (at practical completion) no such certificate would have been issued. 9. London Merchant Securities v. Excess Insurance Co (Scotland) (1988) Performance bond survives practical completion. Section 1 Appendix B (revised 10/00) Effective from 1/12/00 Page 1 . 7. S ECTION 1. 10.PART 4. London Borough of Islington (1986) The architect’s certificate was not conclusive (for rating purposes) – substantial completion being a broad question of fact. 6. EME Developments (1991) A building can seldom be built precisely. 4. No set-off for remedial works after practical completion where main contractor insolvent (JCT(80) pre-amendment 11. Completion in determination provisions is equal to practical completion. 5. English Industrial Estates v. Skink (1990) Occupation did not mean practical completion. A PPENDIX B Appendix B: Table of Cases 1. July 92) – common law claim. William Press (1982) The word ‘practically’ gave the architect a discretion to certify … where very minor de minimis work had not been carried out. Emson Eastern v. City of Glasgow District Council v. Abgarus (1992) Occupation prior to practical completion is a right not a benefit. University of Glasgow v. The Surveyors’ Construction Handbook Part 4. City of Westminster (1970) What is meant by completion is the completion of all the construction work that has to be done. Multiplex Construction Pty v. Hoenig v.

Applied Science Publishers. (6th Edition). Section 1 Appendix C (revised 10/00) Effective from 1/12/00 Page 1 . A PPENDIX C Appendix C: Further Reading Books Engineering Law and the ICE Conditions. Sweet & Maxwell. S ECTION 1. 1995 Keatings Building Contracts. 1995 The Surveyors’ Construction Handbook Part 4. (11th Edition). Max Abramson.PART 4. Sweet & Maxwell. (4th Edition). Sir Anthony May. 1979 Hudson’s Building and Engineering Contracts. IN Duncan-Wallace.

4. Reference has been made to the contract administrator throughout this document. The level of such damages has been established by a number of Court cases.1. Section 2 (10/02) Effective from 1/12/02 Page 1 .1 General Principles G 4. or even sees himself. it is not the quantity surveyor’s role (to whom the task of ascertainment is usually given) to seek to get away with as little a payment as he can.2. Equally. may understandably press hard for a significant figure and on occasions overstate his case either in words or money or both. It cannot be emphasised too strongly that the ascertainment of loss and/or expense is an exercise in calculating as precisely as possible that which is incurred by the contractor directly and solely due to the matters listed in the contract. SECTION 2 PART FOUR: CONSTRUCTION ADMINISTRATION AND MANAGEMENT SECTION 2: ASCERTAINING THE AMOUNT OF LOSS AND EXPENSE INCURRED IN BUILDING PROJECTS Introduction The purpose of this Section is to provide practical advice to those who are required to ascertain the amounts due in reimbursement of direct loss and/or expense incurred in building projects. Whilst the quantity surveyor is perfectly entitled to probe such submissions by weighing all the contrary evidence. The contractor. This reference includes architects where that function exists under the contract. his ultimate task is to determine a proper ascertainment in accordance with the conditions of contract and the circumstances that have prevailed. if one party to a contract is in breach then that party is liable to the other for damages.1 Under common law. Surveyors are particularly reminded that their role in these matters is set out in their building contract and is normally limited to determining quantum.2. for his part. as being at the opposite end of a tug-of-war rope to the contractor.PART 4. Too often the quantity surveyor is seen. The Surveyors’ Construction Handbook Part 4. This is incorrect. it does not usually extend to determining liability. It is not an attempt to impose a penalty on an employer or design team for failing to live up to obligations or expectations.

The provisions of the loss and/or expense clauses are generally without prejudice to any other rights and remedies which the contractor may possess. To determine the contractor’s entitlement one must calculate the difference between the costs arising from the application of the following two questions: (a) What is the reasonable cost of carrying out the particular element of work in the delayed or disrupted circumstances that were created directly as a result of the matter under consideration (for example late instructions)? (b) If that delay or disruption had not been so caused what would those costs have been? G 4.3 G 4. for even if there are verified cost records of the 1 2 Robinson v.1 Nor are such damages intended to recompense the aggrieved party for all losses whatever their nature.2.1.2. at the time they made the contract.6 G 4.2. and recovery of damages at common law. so far as money can do it. as if the contract had been performed”.2. Harman (1848) 1 Ex.PART 4.1. and which he may wish to pursue through arbitration or the Courts. as the probable result of the breach of it”. Where building contracts contain clauses dealing with the entitlement of the contractor to recover direct loss and/or expense for any delay or disruption to the regular progress of the Works caused by the client or his team or other designated causes. In the case of the former the requirements laid down in the contract must be rigidly adhered to. or such as may reasonably be supposed to have been in the contemplation of both parties.1. according to the usual course of things.2. and judgement may indeed be involved in answering the first question. to be placed in the same situation with regard to damages.2.1. “he is. There are important distinctions to be drawn between the express provisions in a form of contract on the recovery of direct loss and/or expense. This consideration is.2 However. in respect of the aggrieved party. Section 2 (10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . SECTION 2 G 4.2. outside the scope of this Section of the Handbook.5 G 4. In the case of Hadley v.1. then reimbursement is a contractual entitlement and does not require judgement of the Court or an arbitrator. if they are.4 G 4. 341 Page 2 Part 4. that is.1.8 An element of judgement and even conjecture is almost always inevitable in answering the second question. Baxendale2 it was established that damages ought to be of a kind which “should be such as may fairly and reasonably be considered either arising naturally.1. the level of damages payable at common law has never intended to act as a penalty or deterrent but simply to ensure that. however. Baxendale (1854) 9 Ex.850 Hadley v. such clauses have been developed against this general background. from such a breach of contract itself.7 G 4.

It may even be that.1. an event or failure which gives the contractor grounds for seeking reimbursement of any resultant loss and/or expense is referred to as a ‘matter’. even if the form of contract refers to ‘ascertaining’ the loss – as does the JCT form (see G 4. Section 2 (10/02) Effective from 1/12/02 Page 3 G 4.1.2.2.12 G 4.11 G 4. whereas an event or failure which Part 4.2. The primary purpose of this guidance is not to provide a legal treatise on the matter of claims but to provide practical comment on how to go about determining. G 4.1.2. This should not.2. particular clauses have been amended.PART 4.9 Thus. The correct ascertainment of the amount of any direct loss and/or expense to be reimbursed to the contractor requires sound knowledge and experience of building practice. This entitlement is provided in most. This guidance is based predominantly upon the provisions of the 1998 edition of the Standard Form of Building Contract. as outlined elsewhere in this Section. to that adopted in many of the other forms published by the JCT.1. Following the terminology used in the JCT forms. The wording used in the form is either identical. SECTION 2 work that was carried out it does not follow necessarily that all such costs were properly incurred. In addition. however. by the conditions of contract.2. careful study of the conditions of the relevant contract and an understanding of their legal application. particularly where the form is not one of those promulgated by the JCT.13) – complete proof in the way of invoices or verified cost records is unlikely to be available. It should be noted that in this text extracts from printed forms are frequently paraphrased. Indeed.15 The Surveyors’ Construction Handbook . as reliably as possible. published by the Joint Contracts Tribunal – referred to as JCT 98. the person undertaking the evaluation requires access to the best records and other information that is available on that particular contract. the surveyor is not required to establish ‘complete proof’ but is instead required to use professional judgement.2.1. detract from the critical importance of ensuring that proper and reasonable records are maintained by the contractor and contract administrator. for example the Works Contracts used in association with the JCT Standard Form of Management Contract and the JCT Standard Form of Building Contract with Contractor Design. the contractor’s monetary entitlement. but not all. even where the expression ‘direct loss and/or expense’ may not be used.10 G 4. Readers therefore should in all cases check the precise wording used in the particular form with which they are involved in practice. to reimbursement of his direct loss and/or expense.1. together with knowledge of the relevant and up-to-date case law.1. or very similar.1.14 G 4.13 G 4.2. forms of building contract. The principles referred to are generally applicable to all cases where a contractor is entitled. although a JCT Standard Form has been used.

The contractor’s entitlement to reimbursement under the terms of the contract should be determined as set out below: (a) The loss and/or expense must arise directly as a result of one of the matters referred to under the terms of the contract.2.2. 4.5 and G 4. Section 2 (10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook .6) it follows that ‘to ascertain’ can rarely mean to prove comprehensively with invoices and records but rather to establish by the use of such facts as are available and by the use of expert judgement. Such matters do not usually extend to the contractor underpricing the rates to be used in valuing variations.3 ASCERTAINMENT The definition of this word should be seen in the context of the subject of the ascertainment.2. Thus. Richardson Westgarth & Co (1940) 25 BLR 140 refers to the case only in passing Page 4 Part 4. any costs due. to other causes not recognized as matters by the wording of the contract or to other concurrent delays should be excluded from those reimbursable to the contractor as they are not the direct result of the matter under consideration. losses arising from any such underpricing are not usually reimbursable.1 LIMITATIONS Appendix D provides a checklist of items on which entitlement is allowed under JCT 98. G 4.1 LOSS AND/OR EXPENSE Any monies which a contractor has a proper expectation of receiving but has not received and/or monies properly expended or to be expended by him. for example.3 Entitlement G 4. when used in conjunction with the words ‘loss and/or expense’.2. G 4.2.2).2.2 DIRECT “The direct consequence of the act giving rise to the claim”. The Secretary of State for Air (1922) 2KB 328 Saint Line Ltd v. Thus.2.1 or “that which flows naturally from the breach.2 Clearly this word ‘direct’.2.3.2 Definitions G 4.1.1. without other intervening cause”. is a very restricting one and disqualifies all costs and/or expenses that do not arise as a direct result of the matter under complaint.2.2. 1 2 A & B Taxis Ltd v.PART 4. SECTION 2 gives the contractor grounds for seeking an extension of time for the completion of the works is referred to in this Section as an ‘event’ (also see G 4.3. 4.2.2. to mismanagement. Given that judgement is almost always called for (see G 4.

i.2. the fifteenth week. or preliminaries associated with variations. None of these costs should therefore be duplicated in an ascertainment of loss and/or expense under clause 26. If a delay caused by a matter recognized by the contract occurs which requires that plant to be retained for a further four weeks. therefore. at tender stage the contractor might have anticipated removing some element of plant by. that amount would not be reimbursable. costs not arising directly as a result of the matter under consideration – should be excluded. (c) Costs incurred in respect of which the contractor has not compelled with the conditions laid down in the contract in relation thereto cannot be dealt with under the terms of the contract (but see G 4. the twentieth week. For example. until the nineteenth week. It may be reasonable. fluctuations in prices. It is important. For the contractor to be able to obtain reimbursement in accordance with the contract he must first have complied with that provision (see G 4. a contractor who through good management is destined to increase the profit he anticipated making at tender stage cannot be denied this prospect by the incidence of a matter giving rise to a loss and/or expense claim. JCT 98 requires the contractor to make an application in writing to the contract administrator as soon as it is reasonably apparent that disruption will occur as a result of a matter referred to in clause 26 of that contract (or under clause 34 in the case of loss and/or expense arising from the discovery of antiquities). say.2. for a contractor to bring additional plant or labour to a site in order to reduce the overall effect of a matter on the project as a whole.3 for more detailed advice on the validity of written applications). In this respect the link between cause and effect is a vital factor. The Surveyors’ Construction Handbook Part 4. To the extent that any part of the loss and/or expense incurred could reasonably have been avoided by the contractor taking reasonable steps. The contractor has to make day-to-day decisions in developing situations that may.PART 4. SECTION 2 (b) Indirect costs – i. (e) It is important to consider the mitigation of loss and/or expense.e.e. (d) Reimbursement is restricted to loss and/or expense which the contractor is not entitled to recover under any other provision of the contract. For example. The test must be: “Was the action reasonable in the circumstances prevailing at the time?” (f) On the other hand. say. This requirement to mitigate requires the contractor to act reasonably in all the circumstances.3. the quantity surveyor may have good cause to reject certain costs put forward by the contractor. that in reviewing with hindsight what was reasonable. for example. in retrospect. he is entitled to additional reimbursement for those four weeks. be shown to be wrong. Section 2 (10/02) Effective from 1/12/02 Page 5 . For example. the payments made to the contractor may include allowances for working under changed conditions. Even where such an act was not entirely successful the contractor would be entitled to the reimbursement of the costs incurred provided that he acted reasonably in so doing.6).1. In the event he may be beating this target and be destined to be able to remove it by.

3. to the appropriate party named in the conditions of contract. the contractor may have an entitlement to such reimbursement even when there is no extension of time.3. or will be. under JCT 98 there is a requirement that the contract administrator declares the amount of any extension of time granted for any event which also constitutes a matter under clause 26 where such a declaration is necessary for the ascertainment of loss and/or expense. Extension of time does not necessarily mean that the contractor has an entitlement to reimbursement of loss and/or expense. the quantity surveyor) with all the documents necessary for 1 John Laing Construction Ltd v.4 ADEQUACY OF THE DETAILS JCT 98 requires that the contractor provides the contract administrator (or if so instructed. (b) Applications to the quantity surveyor. are not valid unless specific authority has been given by the employer. The purpose of this written application is to enable the contract administrator to form his opinion on whether or not there has been.3. the existence and amount of any attendant extension of time must be revealed where this is relevant to that ascertainment. In addition. SECTION 2 G 4. G 4. at the appropriate time.3 WRITTEN APPLICATION Before the contractor is entitled to any reimbursement in respect of loss and/or expense he should first have made an application. Nevertheless. Thus. Each matter needs to be treated on its merits whether or not an extension of time is due or granted.2. loss and/or expense incurred which would not be reimbursed under any other provision in the conditions of the contract. it should be noted that. in contrast to those made to the contract administrator. or references to ‘delays’ which do not mention loss and/or expense. do not constitute valid written applications to recover loss and/or expense. Section 2 (10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . with reference to the matter of applications: (a) Applications must be made by the contractor as soon as it reasonably becomes apparent to him that the regular progress of the Works is likely to be materially affected by any of the relevant matters listed in the conditions of contract. On the other hand. in ascertaining the contractor’s entitlement to reimbursement of loss and/or expense. the expression ‘extension of time’ is replaced by the words ‘fixing a new completion date’ but the more traditional ‘extension of time’ is used in this Section. County and District Properties Ltd (1982) 23 BLR 1 Page 6 Part 4.2 EXTENSIONS OF TIME Under JCT 98 and other forms of contract in the same series.2. G 4.2.PART 4.1 (c) Reference to loss and/or expense in site meetings or the like.

clause 26.PART 4. the request for the contractor to keep such details should not only be timely but should also be as specific as possible as to the data required. the contract administrator cannot delegate to the quantity surveyor. G 4. for example. what is going to be adequate data will depend upon the nature of the disruption or delay. It must be recognized. The quantity surveyor should also ask the contract administrator for all the data he has upon which he formed that opinion. A checklist of steps required under JCT 98 is included at Appendix E. and be specific as to the matters which are covered in such an instruction.1. however.4. the task of forming an opinion on whether or not there is a case in principle for loss and/or expense to be ascertained. However.2.2. G 4. the request for them should be made at the earliest opportunity.2. Moreover. Section 2 (10/02) Effective from 1/12/02 Page 7 . It is not for the quantity surveyor to usurp the role of the contract administrator in matters which the contract conditions specifically reserve for him.2.1 RESPONSIBILITY FOR ASCERTAINMENT Under JCT 98 the responsibility for ascertaining the amount due is the contract administrator’s. G 4. Thus.6 4.1 1 John Laing Construction Ltd v. such details as are reasonably necessary for the ascertainment of any reimbursable loss and/or expense. Where the contract administrator so instructs the quantity surveyor this instruction should be in writing. for the quantity surveyor’s task is always one of determining quantum in respect of the items which in the opinion of the contract administrator are admissible in principle. upon request.1). SECTION 2 adjusting the contract sum. This will include documents in support of ascertainments of the contractor’s entitlement to reimbursement of loss and/or expense (see clause 30. But note that these details have to be requested and clearly.4. that a nominated sub-contractor may have an entitlement under the terms of the sub-contract to reimbursement by the main contractor (due.3. County and District Properties Ltd (1982) 23 BLR 1 The Surveyors’ Construction Handbook Part 4.2. NOMINATED SUB-CONTRACTORS In general the same principles apply to ascertaining the loss and/or expense to be reimbursed to a nominated sub-contractor as apply to the main contractor. to be copied to the contractor. or anyone else. for such details to be of maximum use.3 requires the contractor to supply to the contract administrator or quantity surveyor.3.2 The quantity surveyor should be careful to ensure that the contract administrator undertakes this task of forming an opinion before embarking upon any ascertainment.1.5 In practice. unless he instructs the quantity surveyor to undertake this task.6. to the latter’s mismanagement) which should be passed on to the employer.4 Ascertainment G 4.

6 and G 4. as the case may be.2. This may be a mandatory requirement on public sector contracts. calculations and evidential records used in the ascertainment are recorded in writing.2.2. The prices in the contract bills or schedule of rates should not be used as the actual costs may be more or less than these.1. USE OF JUDGEMENT IN MAKING AN ASCERTAINMENT An element of professional judgement is often inevitable in ascertaining the contractor’s entitlement to reimbursement of loss and/or expense. SECTION 2 G 4. the general rule of damages is that the type or kind of loss payable is that “as may reasonably be supposed to have been in the contemplation of both parties.2. It is for the contract administrator or quantity surveyor.4. Additionally. COSTS VERSUS When ascertaining a contractor’s entitlement it is the actual loss or actual expense which is relevant.6 Clause 26.4. wherever ascertainment can properly be made of part of a contractor’s entitlement it is important that this is done and the relevant amounts be certified for payment. However. clause 30. in forming that judgement the best evidence available should always be used in reference.2. If part of a contractor’s entitlement can be wholly ascertained then it should be.9 GLOBAL OR INDIVIDUAL ASCERTAINMENT In recent years there has been much discussion on whether claims should properly be considered on a global basis or whether each item should be considered in isolation.4.2.1. In general the surveyor should ensure that the basis.3 However. at the time they made the contract.4.5 G 4.2. For example. Page 8 Part 4. This is because what the contractor’s cost would have been had the relevant delay or disruption not taken place has to be estimated (see G 4.2.PART 4.3).2. In this respect the quantity surveyor need only be concerned with the points in G 4.4. G 4.10 below.4.4 G 4.2. to ascertain the amount and not to await a detailed submission from the contractor.2. Section 2 (10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . G 4. This means that ascertainment should be an ongoing process where the facts are sufficiently established to make a proper and finite calculation. once the quantity surveyor has been properly instructed to ascertain the amount due he should proceed with this task without delay. as the probable result of the breach of it” (see G 4.7). but there is no provision in this form of contract for provisional assessment to be made.4. Moreover.2.1 of JCT 98 requires that ascertainment is made from time to time.7 G 4. where there is contiguous work that has not been affected by delay or disruption this might well provide good evidence of the progress that the contractor could have been expected to have made generally.2 of JCT 98 states that any amount ascertained under clause 26 should be included in interim certificates.8 G 4.2. Thus.4.1.

PART 4. in writing. The Surveyors’ Construction Handbook Part 4. inflation.5.2.. G 4.4. Simply because there is.2. for example. • increased cost of head office overheads. and • finance charges. • increase in the price of resources.e. for example more supervision. the facility of global ascertainment should not be used to mask facts and figures that could properly have been particularised and presented. i.5. More often than not the dominant items will be the first two from the above list. On the other hand. • extra waste or abortive purchase of materials.2. it does not follow that all other matters on that project can be added in to make a global claim.1 GENERAL A list of possible items admissible as part of an ascertainment of loss and/or expense (which is to be read as including those attributable to sub-contractors) is as follows: • extended and/or increased use of ‘preliminaries’. Thus. SECTION 2 G 4. Section 2 (10/02) Effective from 1/12/02 Page 9 . a series of variation instructions which create overlapping or contiguous disturbance.10 It is important that a contractor makes proper applications on each and every occasion that an entitlement to make a claim arises. 4.2 PRELIMINARIES A representative list of the items normally comprising the preliminaries is given at Appendix A. A global approach to ascertainment should be restricted solely to events which create indistinguishable effects. more plant etc.5 Admissible Items G 4.2. • reduced labour outputs. sent to the contract administrator). • loss of profit. (c) Only where the effect of a series of matters (for example the late issue of a number of instructions or the instructing of a number of variations) is such as to create extra costs which by their nature are indistinguishable from one another can an application on a global basis be entertained. (b) The contractor must keep such records as are necessary for the ascertainment of the amount due. no contractor should be penalised by being denied reimbursement simply because extra costs were incurred which could not by their nature be particularised. (a) It is necessary that each application conforms fully with the rules written into the contract about them (for example timing.

2. Clerk of works’ records and diaries can be invaluable evidence of this. (c) Extra hire charges would be reimbursable if the particular item is required to be kept on site longer than otherwise would have been the case due to the relevant matter. SECTION 2 G 4. In the former case the proportional loss of output can be very high. setting-up costs would rarely be admissible unless setting up has been delayed by a relevant matter and inflation has occurred which is not reimbursable under the fluctuations clauses. rarely if ever are the whole labour costs on a project disrupted. Page 10 Part 4. (d) Extra running charges would be reimbursable if. Where the plant in question is owned by the contractor the measure of his loss is the amount (if any) that he could have earned by using the plant elsewhere had it not been tied up on the site for longer than would have been the case if the matter in question had not occurred. (b) Wherever possible request that contemporary records be kept. due to a relevant matter. noting the output achieved in practice by the particular workmen who are disrupted.8) it is important to break each item down into the following components: (a) Setting-up costs would be admissible where additional plant is properly brought onto the site. If plant is already on site.2. the following general pointers should be of some assistance: (a) In all circumstances avoid the application of an overall percentage to global labour costs.7). whereas in the latter case the loss can be mitigated by redeploying resources elsewhere. Again the comparison is between the period that the item would have been in use had the matter not occurred and the period that it was reasonable to have been in use given that the matter did occur (see G 4. G 4.7). (c) Have regard to whether any delay comprises a series of small recurrent delays or one large one.5. the particular item is required for a longer period than otherwise would have been the case.4.2.2.PART 4.3 When ascertaining the extra cost of ‘preliminary’ items (but see G 4. However.5.2.1. It is impossible to give precise and definitive advice as all will depend upon the circumstances in each case. Section 2 (10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . (b) Removal costs are admissible in the same way as setting-up costs.1.4 DISRUPTION OF LABOUR The ascertainment of the cost of disruption to labour is invariably a difficult process. The comparison is between the period that the item would have been on site had the matter not occurred and the period that it was reasonable to have been on site given that the matter did occur (see G 4.

not related to the particular circumstances. if it contains a non-adjustable element.2.5. Provided that such materials were not purchased prematurely the cost would again properly form part of any ascertainment. G 4. Even where the contract contains a fluctuations clause. stores or compounds following a relevant matter will result in extra waste. if additional labour has to be recruited at short notice it may be necessary to pay premium rates which would in principle be reimbursable. As long as this has not resulted from a lack of proper management this cost will properly form part of any ascertainment. much of the work of labour will not actually be significantly affected.5. The ‘coal face’ operation may not be affected at all. it may be that materials purchased for the works have been omitted by a subsequent variation order. Section 2 (10/02) Effective from 1/12/02 Page 11 . which would be reimbursable.5. G 4. Alternatively. Overall percentages. Greater London Council & Another (1982) 1WLR 149 1 The Surveyors’ Construction Handbook Part 4.1 G 4.5. cannot be used. the interruption of which can result in far-reaching losses.2. they will form part of the ascertainment.5.7 INFLATION If work is executed later than otherwise would have been possible as a result of a relevant matter and if inflation has caused the cost to rise then. a delay in the execution of work might well increase the non-recoverable element. (e) Whatever the level of variation orders. Moreover. bricklaying or fixing pipework once under way may suffer little or no delay.2. G 4. The advantage of this can be lost if a new gang of men is brought in to undertake work which has become familiar to others. provided that such costs are not reimbursable under the fluctuations clause. for example fixing partitions in a series of identical dwellings.9 Wherever possible. (f) Recognize that great economies can flow from a repetitive task. late instructions and so on.6 Tate & Lyle Food and Distribution Co. EXTRA WASTE AND/OR ABORTIVE PURCHASE OF MATERIALS These may not be significant elements in an ascertainment but it may be that the constant moving of materials. the resultant extra cost will be reimbursable. The delay may be associated with becoming familiar with an unexpected or unplanned task.2. Ltd & Another v.5 A list of items relevant to the calculation of reimbursable extra costs of disruption is given at Appendix B. For example. proof should be sought of such items as extra site visits by head office staff or the greater involvement of head office staff in managing G 4. SECTION 2 (d) Recognize that there is a learning curve in all activities.PART 4.8 INCREASED COST OF HEAD OFFICE OVERHEADS Loss in the recovery of head office overheads is an admissible item but the amount of such loss may be difficult to substantiate.2.

at 5% over the base rate of the Bank of England. It might. Moreover. but for this delay and the consequent tying-up of head office resources for a longer period than would otherwise have been the case. loss of profit is suffered which could have been earned in the normal course of business elsewhere. be higher or lower than that contemplated in the contract sum.10 Account should be taken of the extent to which extra costs are already being reimbursed through the pricing of the variation account.2. however. The Courts have increasingly recognized that. McKinney Foundations Ltd (1970) 1 BLR 114 Page 12 Part 4. The level should be that prevailing in the market during the period immediately following the original date for completion or such earlier date at which the resources would have been released from the contract.5.5.13 1 St Modwen Developments Ltd v. for any payments which are overdue.5. finance charges are not an interest on a debt. Appendix C gives further guidance on the components and methods of such an ascertainment.13).1 of JCT 98 now provides for the payment of interest.2.5.5.14 FINANCE CHARGES Clause 30. LOSS OF PROFIT If. providing all the pre-conditions are met. Section 2 (10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook . a formula approach to calculating this element maybe permissible. This is in line with the statutory right now available to certain classes of businesses under the Late Payment of Commercial Debts (Interest) Act 1998. G 4.2 This amount should be calculated by reference to the level of profit to have been made by the use of the resources on other projects during the period of retention on site as a direct result of the cause of delay.1 As with the recovery of loss of profit. where loss of profit is being calculated as a result of a delay caused by the execution of variations it is important that a deduction be made for any other profit reimbursed to the contractor for those variations priced at contract rates. therefore. there is an entitlement to reimbursement of that profit. The JCT form expressly notes that the payment of contractual interest may not be construed as a waiver by the contractor of his or her rights to proper and timely payments. as a direct result of a matter referred to in the conditions of contract. Bowmer & Kirkland Ltd (1996) 1996 CILL 1203 2 Peak Construction (Liverpool) Ltd v.2.2.2.11 G 4. Where there has been a delay as a result of a relevant matter but no consequent increase in value (thereby excluding some contribution to extra head office costs) some extra recovery is an entitlement provided that this does not extend to include costs that should have been mitigated. G 4.12 G 4.1.PART 4. SECTION 2 the project as a result of the matters giving rise to a claim.1.5. It should also be shown that. it is important that overriding consideration be given to the level of recovery that would have been possible on alternative work had the contractor been free to do so (see G 4.2. those resources could have been productively used elsewhere. but a debt which has interest charges as one of its component parts which have been paid by a contractor on money which was G 4. However.

Among these the most usual are: (a) The costs of acceleration. was issued. G 4.2.2.2. that the conditions in the contract in that respect have been met (see G 4.6.3 the cost of so doing may be reimbursable. It is generally thought that the use of ‘best endeavours’ is likely to be limited to the rescheduling of resources and the taking of such measures as may be appropriate to allow the works to proceed without incurring (significant) costs. he provides the data which might be required by the quantity surveyor under clause 26.6.2. provided.5.6.6. G 4.2). however.2.1.4 1F G Minter Ltd v.15 Finance charges are recoverable from the date that the primary loss and/or expense was incurred up to the time that the certificate. THE COST OF PREPARING A SUBMISSION FOR REIMBURSEMENT OF LOSS AND/OR EXPENSE There is no contractual requirement for a contractor to prepare details of the amount of loss and/or expense and thus there is no entitlement to any reimbursement for so doing.6.3 However. as always. delayed is to “use constantly his best endeavours … to prevent the completion of the Works being delayed”.2. it might be helpful to comment upon certain items which are occasionally claimed as being reimbursable when they are not.3 (c)). G 4. G 4. Welsh Health Technical Services Organization (1980) 13 BLR 2 The Surveyors’ Construction Handbook Part 4. Section 2 (10/02) Effective from 1/12/02 Page 13 .1 G 4. SECTION 2 borrowed (or interest that could not be earned on capital) in order to finance the prime cost of the loss and/or expense. If acceleration is required it should be achieved by means of a separate agreement.PART 4.6 Inadmissible Items G 4.6. the contractor’s obligation whenever he is. G 4.2.2. which included the payment of that loss and/or expense.1 GENERALLY It is not possible to list all the items which are inadmissible.3. or is likely to be. However.2 THE COST OF ACCELERATION In common with most lump sum contracts JCT 98 does not contain provisions for instructions to be given to accelerate the works.5 Where.2.2.16 4. Such finance charges are reimbursable. (b) The cost of preparing a submission for the reimbursement of loss and/or expense.5. The rates and manner of interest payable should be those actually incurred (or being earned on capital). unless specifically approved by the employer beforehand (see G 4.

first-aid equipment. pensions etc. • redundancy fund. Section 2 Appendix A (4/99) Effective from 1/6/99 Page 1 . postage/franking machine. including cars and fuel. and progress photographs. office cleaning. • travel costs. guaranteed bonuses and allowances where paid). site welfare and safety. canteen – rental/repairs and maintenance. • private health insurance – employer’s contributions. photocopiers – equipment and consumables. Consider: • staff salaries (including subsistence. The Surveyors’ Construction Handbook Part 4. – employer’s contributions. canteen equipment. telephone/facsimile lines/system rental. holidays with pay. A2 TEMPORARY ACCOMMODATION Consider: • • • • • • • • • • • • • • • • • • • • • • • • • • • temporary offices – rental/repairs and maintenance. general cleaning and disposal. SECTION 2. general site wear. mobile phone calls. • training levy. and • agency staff where applicable. canteen consumables. stores – rental/repairs and maintenance. office furniture. nurse/first-aider. A1 STAFF AND ADMINISTRATION Note: This includes security and welfare personnel and the supervisory time of trades foreman and the like. APPENDIX A Appendix A: Ascertaining the Cost of Running a Site The items given below are intended only as a guide. computers. office consumables and stationary. sanitary accommodation and welfare facilities. boards and notices. telephone/facsimile calls. rates on temporary buildings. the list is not comprehensive. • employer’s liability insurance. gas and electricity.PART 4. superannuation. including servers and data lines. • national insurance. drawing and copying. fire-fighting equipment. signs. canteen subsidy. third party insurance.

site surveying equipment. internal site transport. hoists. SECTION 2. A4 TEMPORARY WORKS/ACCESS Consider: • temporary roads – maintenance. site/crane radio system. Section 2 Appendix A (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . telescopic hoists. and • clean access and site roads. site compound fencing. dumpers and drivers. There is often a guaranteed minimum period of hire which would have been paid for in any case. and rubbish removal (skips). weighbridge. A6 DISTRIBUTION Consider: • • • • • • service gang –cleaning. general site equipment. A5 FENCING AND SECURITY Consider: • • • • site boundary fencing/hoarding. It is advised that the conditions of hire are examined. small plant and tools. Page 2 Part 4. loss must be mitigated by use elsewhere or the termination of the hire contract. When long delays have occurred. forklifts and drivers. compressors. attendance and distribution. banksmen and slingers. mobile cranes. wheel washing facilities.PART 4. and temporary weather proofing. including driver. mixers. Consider: • • • • • • • • • • • • • • • tower cranes. APPENDIX A A3 PLANT This covers plant owned by the contractor or hired from a subsidiary or specialist company. pumps. and hoist drivers. site security (including guards if appropriate). concrete testing.

and maintenance. A10 INSURANCE Consider: • • • • contractor’s all risk. • adaptations. A9 TEMPORARY WATER Consider: • water and sewerage – rates/metered consumption. A11 HEAD OFFICE STAFF COSTS Consider: • that proportion of time spent on project which is only applicable if not booked directly to the project. professional indemnity. public liability.8 to G 4..5. APPENDIX A A7 SCAFFOLDING Consider: • extra hire. and • maintenance.2. transformers etc. Section 2 Appendix A (4/99) Effective from 1/6/99 The Surveyors’ Construction Handbook . SECTION 2.2.5. Page 3 Part 4. See general comments at G 4.12 and Appendix C. consumables. fuel consumption. and performance bond. A8 TEMPORARY ELECTRICS Consider: • • • • equipment – generators. and • additional work – for example safety rails where scaffolding removed.PART 4.

written instructions and correspondence. additional plant. photographs. • standing time. Section 2 Appendix B (4/99) Effective from 1/6/99 Page 1 . APPENDIX B Appendix B: Disruption B1 B1. B1.3 relocation of plant. return of materials to the store or supplier. on or off site.2 Plant Refer to invoices to indicate additional costs due to: • • • • • B1. B2. clerk of works’ reports.2 This information can assist in the ascertainment of the effects of instructions upon progress. Materials Extra costs can be incurred due to the: • • • • double handling of materials. B2 B2. waste and damage of materials. site measures. and minutes of meetings.1 INFORMATION AVAILABLE TO THE CONTRACT ADMINISTRATOR/QUANTITY SURVEYOR Apart from issued drawings.PART 4. this information needs to be in diary form and should indicate: B3 B3. detailed records of delays which disrupt progress. daywork records. Ideally. and • changes in labour strength on the site and in gangs. site reports. other information that should be referred to includes: • • • • • • • contractor’s programme and amendments.1 The Surveyors’ Construction Handbook Part 4. QUANTITY SURVEYOR’S CONSIDERATIONS It is important to receive from the contractor proper. SECTION 2. • overtime. and standing time. and substitution of materials.1 THE EFFECTS OF DISRUPTION Labour Factors to be taken into account include: • loss of productivity (labour resources must have been available and able to have been used profitably elsewhere had the loss of productivity not occurred). alterations or additions to scaffolding. additional tools.

PART 4.2).3 Page 2 Part 4. APPENDIX B • • • • the immediate effect upon working trades. and to examine data on which projections of progress were based in order to indicate the effect that changes have had upon the planning. the inability to divert labour elsewhere (i) on the site. Section 2 Appendix B (4/99 Effective from 1/6/99 The Surveyors’ Construction Handbook . B3. SECTION 2. In making an assessment of disruption. the knock-on effect upon succeeding trades. or to otherwise mitigate the costs of construction and effects of disruption. • evidence of efforts made to divert labour to other contracts.4. particularly sub-contractors. and • the relationship with nominated firms and sub-contractors and records from them to substantiate the claim of disruption. The information may include critical path analyses and similar information. the quantity surveyor may require the tender progress intentions of the contractor. The quantity surveyor should give careful consideration to all this information and judge its relevance to the particular matters being examined (but see G 4. B3.2.2 There may be further items not covered above which the contractor could bring to the notice of the quantity surveyor. the effect upon allied trades working in the vicinity. and (ii) to other contracts.

it is recommended that the quantity surveyor is reasonably satisfied that: • time expended was additional to that reasonably to have been expected. directors’ and staff’s salaries. • the extra costs have not been recouped in other ways (for example from set-off or other arrangements with sub-contractors). and • spread in rates of all items. • lump sum(s) (specify how compiled). • additional costs have not been recovered in dayworks.Appendix C: Ascertaining the Cost of Head Office Overheads C1 HEAD OFFICE OVERHEADS A contractor seeking direct loss and/or expense in relation to head office overheads will probably include some or all of the following: • • • • • • • • C2 C2. telephones etc. including allowances for company’s motor cars etc. and • head office staff costs have not been recovered elsewhere.1 company offices. and depreciation.2 For a contractor to succeed. • any loss and/or expense sought has not been avoided by re-deployment of resources on other contracts. cost of travelling. plant yards. Section 2 Appendix C (10/02) Effective from 1/12/02 Page 1 .. professional legal and/or accountancy fees. running costs/maintenance costs of these units. and • details showing build-up of general head office costs at the relevant time or throughout any relevant period. The Surveyors’ Construction Handbook Part 4. emoluments and allowances (estimating and sales staff should not be included). postage.1 ASCERTAINMENT OF THESE COSTS Check: • time records or diaries which may indicate additional time spent with consequential financial disbursements (this should be time arising from relevant events over and above that which would have been spent on ordinary administration of the contract). • additional costs have not been recovered through rates for measured works. C3. ESSENTIAL BACKGROUND INFORMATION Consider the method adopted by the contractor as policy in incorporating these costs in his tenders: • percentage. • proof of payment made on all admissible items.. C3 C3. rents and rates. including office equipment. expenses.

the impact of the delay to progress on the business of the firm? C4.1 FURTHER CONSIDERATIONS FOR THE QUANTITY SURVEYOR At what stage in the contract did delays occur and what was the impact on head office costs? (The costs are unlikely to have been incurred until the end of original contract period.2 C4.4 C4.C4 C4.6 Page 2 Part 4. for example. therefore. site visits.) While it is correct that the actual sum allowed in the contract price for head office overheads will not necessarily be expanded by the contractor until after the end of the original contract period.3 C4. Section 2 Appendix C (10/02) Effective from 1/12/02 The Surveyors’ Construction Handbook .? Was there a need to employ additional head office staff whether or not a delay had occurred? How effectively did the firm employ staff on this contract as against other contracts that they were undertaking? What was the size of the contract in relation to the size of the firm and.5 C4. What were the relevant events giving rise to delays under the conditions of contract? Were head office costs applicable to those events? To what extent was the head office involved in. meetings etc. the contractor will actually incur the additional costs at the time of the delay and since it is likely that overhead recovery will be delayed as a result of the later execution of original contract work then the additional overheads could be payable before the end of the original contract period.

2. as last item as otherwise agreed between architect and contractor Instructions issued regarding expenditure of provisional sums except work being carried out as a PC sum by the contractor after submission of a tender for it.PART 4.2. but excluding variations for which a clause 13A quotation has been accepted Execution of approximate quantity work where bills are not a reasonably accurate forecast 26.6 26.4 26.2.2 26. way or passage adjoining or connected with the site through or over land etc.5 26.2.1 Item Tick The contractor not having received in due time necessary: instructions drawings. SECTION 2.7 26. APPENDIX D Appendix D: Checklist of Items for which Loss and/or Expense are Allowed The contract clause numbers referred to in this form are from JCT 98 Contract clause number 26.3: opening up for inspection any work covered up and making good testing of any executed work and making good unless inspection reveals items not in accordance with the contract Discrepancy or divergence between the contract drawings and/or the contract bills Execution of work (not forming part of the contract) by the employer or by persons engaged by him. in accordance with the contract bills/contract drawings: through or over land.2.2.2. and levels for which he specifically applied in writing provided the date of application was neither unreasonably close to nor distant from the date the contractor needed them bearing in mind the date of completion Inspection – tests under clause 8. buildings.8 The Surveyors’ Construction Handbook Part 4.2. Section 2 Appendix D (revised 07/01) Effective from 1/9/01 Page 1 .3 26. details. failure by these parties to execute such work Postponement by the architect of any work to be executed under the contract After receipt of any notice the contractor is required to give. failure by the employer to give ingress or egress in due time to the contractor from the site of the works or any part thereof in the possession and control of the employer.

APPENDIX E Appendix E: Checklist of Steps Required when Considering Submissions by Contractor The contract clause numbers referred to in this form are from JCT 98.1.2 The contractor has upon request: supported the application with information to enable an opinion to be formed 26. 26.PART 4.4 A new completion date.3.1.1 Item Comments from the quantity surveyor Tick The contractor has applied in writing stating: he has incurred/is likely to incur direct loss and/or expense not reimbursed by any other contract provision progress has been/is likely to be materially affected by the items listed in clause 26.1 The contractor has made application as soon as it was reasonably apparent that: the regular progress of the works/or part of the works has been/is likely to be affected the contract administrator has requested supporting details to enable an opinion to be formed 26.1.3 The contractor has upon request: provided details of loss and/or expense to assist ascertainment The architect has: requested information from the contractor (26. sufficient particulars and estimate (where completion is less than 2 weeks distant. SECTION 2.2. Section 2 Appendix E (revised 07/01) Effective from 1/9/01 Page 1 .3) to form an opinion has ascertained/requested the quantity surveyor to ascertain the amount of loss and expense The architect has stated in writing: the extension of time granted (if any) from time to time during the contract the relevant event(s) for which it is given (clause 25) and more particularly defined in clause 26. not later than 12 weeks after receipt of this notice.2 26. set a date not later than completion date) The Surveyors’ Construction Handbook Part 4.1.1.3 25. Contract clause number 26.

BSP Professional Books. 2000 LAW REPORT SERIES Building Law Reports Construction Industry Law Letter Construction Law Digest Construction Law Reports The Surveyors’ Construction Handbook Part 4. I N. John. APPENDIX F Appendix F: Further Reading BOOKS Chappell. M. Anthony Sir. The Presentation and Settlement of Contractors’ Claims. David. Michael. 11th Edition. Powell-Smith and Sims’ Building Contract Claims. 2nd Edition. Section 2 Appendix F (revised 07/01) Effective from 1/9/01 Page 1 . E & FN Spon. Collins. 2nd Edition. 1990 Trickey. 3rd Edition. Donald and May. Blackwell Science Ltd. G G and Hackett. Vincent and Furmston. 1998 Duncan-Wallace. 2001 Parris. Keating on Building Contracts.PART 4. The Standard Form of Building Contract JCT 80. 7th Edition. SECTION 2. Sweet & Maxwell. Sweet & Maxwell. 1985 Powell-Smith. Hudsons Building and Engineering Contracts. A Building Contract Casebook. 1995 Keating.

combined with other responsibilities on the project. already have formal procedures in place for managing risk. The risk management process outlined in this section can be applied to any procurement route and to new build or refurbishment-based projects. rather than being dealt with by default.or part-time. Risk management formalises the intuitive approach to risk which project teams often undertake. there needs to be an overall management strategy such that this three-step process is implemented in a co-ordinated fashion. which includes surveyors. Other clients are likely to seek guidance from their professional advisers. The effective management of risk can only be achieved by the actions of the whole project team. Essentially. In addition. and • response – review what can be done to limit this effect. • analysis – assess to what extent these aspects might affect the objective. Major clients. there are three steps to perform: • identification – collect the information available which might affect the achievement of an objective. on how best to deal with risk.PART 4. The role can be either full. Section 3 (05/03) Effective from 1/7/03 Page 1 . The role of a risk manager is to facilitate input into the project management process such that risk is effectively dealt with. By utilising a formal approach. regardless of cost or technical complexity. risk may be managed in a more proactive manner. such as Network Rail and BAA. surveyors are well placed to undertake the role of risk manager. Risk management is concerned with establishing a set of procedures by which risk is managed. This section of the handbook provides an overview of the principles of risk management. This strategy should include how risk management will be integrated into the project management process on a project. Surveyors who want to The Surveyors’ Construction Handbook Part 4. including the client. SECTION 3 PART FOUR: CONSTRUCTION ADMINISTRATION AND MANAGEMENT SECTION 3: THE MANAGEMENT OF RISK Introduction Risk is present in all projects and surveyors are routinely involved in making decisions which have a major impact on risk. The procedures outlined should produce a framework that can be utilised on the majority of construction projects. With further training.

Definitions for key terms used in this section are: 4.1.3.2.1 Definitions In the context of this section of the handbook. Risk management: A structured and auditable process for the benefit of all members of the project team which is dedicated to the sole purpose of controlling and mitigating uncertainty in a project.4 4.2 4.7 I 4. etc.1 Surveyors will invariably be called upon to advise clients as to whether they should undertake risk management on their project. Section 3 (05/03) .6 4.PART 4.2 The rationale for risk management in the construction process 4. SECTION 3 specialise in the application of risk management are advised to undertake further training in this area with a recognised training provider. A risk can be measured in terms of likelihood (probability) and consequence (impact). should it occur.3.3.1 Risk: An uncertain event which. Health and safety related risks are likely to need separate consideration and the Health and Safety Executive (HSE) provide specialist guidance in this area.1.1. brainstorming. risk management is considered to be a process for identifying. will have an effect on the achievement of the project’s objectives.3.) to collate all the potential uncertainties in delivering an objective.1.3. and the focus is on commercial type risks.3. for example.3 4. Risk analysis: An adequate and effective assessment of the individual and combined effect of identified risks on the successful delivery of the objective. 4. Risk response: An action to reduce either the probability of risk arising or the significance of its detrimental impact if it should arise.1. interviews. I 4. While the benefits of risk Effective from 1/7/03 The Surveyors’ Construction Handbook Page 2 Part 4. Risk management plan: An auditable document which describes the risk management approach (identification.3. a construction project.5 4. analysis and response) to be adopted for a specific project or objective delivery and which states who should undertake it and when. Risk identification: The utilisation of methods assessed as effective and appropriate (desk-top studies.3.3.1.3. Risk register: A document listing all the risks identified for the project. assessing and responding to risks associated with delivering an objective.1. explaining the nature of each risk and recording information relevant to its assessment and management.

2 The demands of delivering a construction project are extremely onerous.5 4.2.2. such as cost and/or time overruns and/or forced compromises of performance objectives. A concern often voiced by clients is how to quantify the benefits of risk management.3. These surprises usually result in ‘fire fighting’ and the ineffective application of urgent remedial measures.3. It is the very presence of risk that represents the opportunity for a building project to go ahead in the first place. Some clients require a snapshot of the risks at the outset of the project.2. the delivery of any objective can be made more effective if the risks are fully appreciated. say. In this respect risk is good. without it there would be no opportunity. while moving closer to the boundaries of innovative design. Section 3 (05/03) Effective from 1/7/03 Page 3 4. with an initial risk assessment. The extent of analysis necessary is related to the extent to which the cumulative effects of risks can be appreciated. The desire to deliver projects cheaper and faster.2. • ‘surprises’ being reduced. 4. it is not usually politic to demonstrate its effective application as having minimised the impact of cost overrun to.6 . the effectiveness of risk assessment would be questioned because without risk there would be no opportunity.3. Indeed.3 Risk management is not a panacea and there are likely to be times when it may not be effective to practise all its facets. This leads to: • increased confidence in achieving the project objectives and therefore improved chances of success.3. the provision of a one-off risk register and a quick estimate of the combined effect. adapting to the circumstances of the client’s needs and the project.PART 4. The Surveyors’ Construction Handbook Part 4. However.2. 15%. Risk management. THE RECOGNITION OF UNCERTAINTY By undertaking risk management.3. There is a need for appreciation of risk not just its analysis. together with other services provided. the direct costs of undertaking the process will be. The risk management process may not be at fault just because risks were realised. Other projects may require a full risk management service with risk being continually addressed throughout the project.4 4. if no risks were realised. 4. all increase the risk profile of a project. the actual impact of risk is unique to a project even though its presence may be commonplace. it is possible to ensure that clients appreciate just how sensitive their projects are to changing circumstances. Since risk management has a major emphasis on reducing potentially detrimental effects. should be flexible. Furthermore. SECTION 3 management may not be immediately apparent to clients.

4. • all ranges of parameters which might affect the project being incorporated. perhaps by relaxing overcautious practices such as duplicating insurances or seeking performance bonds unnecessarily. The use of risk management provides an audit trail which can be used should problems occur during later stages of the project. and • all risks change with time and any action (or inaction) taken (or not taken) upon them.PART 4. such as value management. to fully realise the benefits of risk management.7 JUSTIFIABLE DECISION MAKING Risk management allows decision making to be based on an assessment of known variables. Effective from 1/7/03 The Surveyors’ Construction Handbook Page 4 Part 4. Judgement can become far more objective and justification for action (or inaction) demonstrable both at the time and at a later date.8 TEAM DEVELOPMENT During risk management workshops a ‘snapshot’ of what might happen to the delivery of a project is taken. As with other types of facilitated workshops. • it challenges preconceptions. • information about and perception of a risk are fundamental to its assessment and acceptance. The advantages are: • it facilitates team development.3. • allocation of risk is to be gauged by the various parties' abilities to bear and control that risk. SECTION 3 • identification of opportunities as risks are diminished. rather than a single-point estimate (for example. thus avoiding duplicating any allowance already made. the cost for bricks can be between £200 and £300 per 1000 rather than £225). • awareness of uncertainty can lead to positive attributes if recognised early enough. • the management of risk should not remove incentive. this benefit alone can justify undertaking risk management. and • it affirms the project procedures. certain principles should be understood and appropriately applied: • risk management is an awareness of uncertainty. There are a wide range of techniques which can be utilised to facilitate effective decision making.9 In summary. 4. • complete transfer of risk is rarely wholly effective.3.2. should it be questioned.2. • it is a communication tool.2. • risk management will add both direct and secondary benefits to the delivery of any objective. 4.3. Section 3 (05/03) . and • the team recognising and understanding the composition of contingencies. During the workshops the project team discusses its concerns and agrees a common way forward. • it acknowledges but transcends contractual restrictions. • it opens up discussion on what could go wrong without fear of penalty.

3. The construction phase itself will generate new risks and the project team is expanded by new members in the form of trade contractors who can bring additional information to the risk identification process. the risk management process should be commenced as early as possible in a project life cycle and each of the three stages repeated as necessary to effectively manage the risks associated with that project.PART 4. Unfortunately. The risk management process 4.3. These three steps are iterative in nature and it is this iteration which constitutes risk management.3. the more time is available for analysis and the development of a suitable response. Identification is not just undertaken at the start of the project and then simply monitored during construction. It may seem obvious that ground 4. most risk is still dealt with in a reactive manner where a response has to be devised and implemented as soon as the risk arises. Although the process is linear it does allow for iteration and is designed to be proactive. the process has to be undertaken on a repetitive basis. This reactive response does not allow any time for identification and analysis and the right response may not always be implemented.2 4. identification. The risk management process also needs to be integrated into the project management process.1 A risk cannot be managed effectively unless it is identified.3.3. The risk management plan is similar in nature to the project execution plan and may form part of that document.3. RISK IDENTIFICATION The identification stage should commence as early as possible. preferably as part of any feasibility study for the project. Essentially.3. One of the key principles is that the identification of risks should be undertaken at various stages of the project life cycle. analysis and response. SECTION 3 I 4. Since any risk management workshop or assessment is a snapshot in time. At the start of the process a risk management plan should be developed.3 The Surveyors’ Construction Handbook Part 4. (a) Methodology (i) Structured identification of all sources of risk to the project The risk management process is based on the concept of providing a structured approach to dealing with risk. The earlier a risk is identified.3 The risk management process There are three basic steps to the risk management process. Section 3 (05/03) Effective from 1/7/03 Page 5 .

effort is expended managing the risk rather than the effect. but how would this impact on other risks that might be identified on the project? It is this inter-relationship between risks that can only be drawn out through the use of a structured workshop and identification methods where the whole project team have the ability to contribute. It is normal during the identification stage to begin by sifting and removing those risks which the team feel are not worth investigating further. (ii) Structured interviews/questionnaires Interviews with key members of the project team (including client and suppliers) will elicit the greatest insight into risks to the project and how they are perceived by individuals. If the risk does occur it will affect the project. (ii) Preliminary analysis to establish probable major risks for further investigation The identification stage is designed to prompt team thinking and to bring out all possible risks that might impact on the project. something similar will have been. (iii) The true risk needs to be identified.g.PART 4. (b) Techniques (i) Research While exactly the same project will not have been executed before. Investigation into projects on neighbouring sites or projects previously undertaken by the client should be instigated. Cause. location of site. This is shown diagrammatically below. Several hundred risks could be identified and the team may not have time to analyse and develop responses to them all. Section 3 (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook . risk and effect It is all too easy to mistakenly manage the effect rather than the risk itself. Risks are caused by background conditions which are essentially ‘givens’ e. By identifying and managing the true risk. SECTION 3 conditions are one source of risk. Page 6 Part 4. Interviews allow a greater depth of understanding to be achieved than group discussions but do take up a lot of time.

It enables risks to be logged and tracked through the life of a project. One important aspect of such workshops is that lateral thinking is encouraged. – active: the risk is currently being managed. This allows the information to be sorted into different categories. Section 3 (05/03) Effective from 1/7/03 Page 7 . it is much more useful to use a computer spreadsheet package.3. An example of a risk register is shown in figure 1. • Comments – allows notes to be kept on the risk. (v) Risk register A risk register is probably the most useful tool in the risk management process. The probability and impact of the risk can also be shown. Finally the response to the risk can be shown. The example is very generic in nature and additional information may be shown. • Risk description – a written description of the risk.4(a). The team can have a better understanding of how each member perceives risk differently. and – monitor: the risk has been identified but no analysis or response has yet been developed for it. An easy way to start a checklist is for each team member to write down all the variation orders on their last project. Typical column headings for a risk register are: • Risk number – a unique identifying number for the risk. • Status – the status of the risk can be shown as: – done: the risk has arisen and been dealt with. • Impact – what happens if the risk does occur.3. Specialist risk management software is also available which integrates the risk register with risk analysis tools. If the register is placed on a The Surveyors’ Construction Handbook Part 4. (iv) Brainstorming in a workshop environment Bringing the team together in a focused workshop creates a powerful environment in which to discuss risk. • Probability – how likely is the risk to occur. SECTION 3 (iii) Checklists/prompt lists A simple and effective way to stimulate the team into thinking about risk is to use a checklist. such as who is responsible for undertaking actions in response to the risk and by when. with the reasons for their issue. • Response – what actions need to be taken to deal with the risk. The workshop gives the team an opportunity to experiment with different viewpoints which individuals might normally reject out of hand if working alone. • Risk factor – probability multiplied by impact.PART 4. the importance of these factors is discussed in 4. While a risk register can be maintained by hand. • Ownership – who is responsible for the management action in responding to the risk. The risk register is a very useful format for showing a wide range of information in the risk management process.

SECTION 3 Page 8 Figure 1: Typical Risk Register Part 4.PART 4. Section 3 (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook .

While the probability scale shown in figure 2 may be utilised for any project. SECTION 3 computer spreadsheet it is easy to sort the risks in a variety of ways. for example. For each of the risks identified. Hence a very high impact would mean the cost of the project would increase by more than 50% of the original budget. Section 3 (05/03) Effective from 1/7/03 Page 9 . but these can be altered to suit the circumstances of each project. this stage cannot be completely omitted. but although it may save some time in the identification stage. a scale should be set for the probability and impact dimensions. its probability and impact should be assessed. (a) Methodology (i) Analysis of risks to assess the severity of impact and the probability of occurrence Risks have two dimensions: • probability – this is the likelihood of the risk occurring and is generally expressed as a percentage. An indicative layout for defining scales is shown in figure 2.3.PART 4. In figure 1 six categories are shown. The use of categories allow risk to be bundled together and can help responses to be tailored to deal with a category. for instance by category or magnitude of probability. rather than an individual risk. ‘client control’. 4. and • impact – if the risk did occur what impact would it have on meeting the project’s objectives. Setting a common scale will ensure a consistent approach to placing newly-identified risks on the matrix at a later stage in the project life cycle. The historic database should be used as a starting point in the risk management process. the impact scale should be set for each project. It is also possible to place identified risks into categories.4 RISK ANALYSIS The analysis stage is concerned with trying to achieve a better understanding of the nature of the risks identified during the previous stage. Before the risks can be entered onto the risk register. normally in a workshop environment with key stakeholders present. The benefit of historical risk registers is that you know if a risk actually occurred and whether the appropriate response was set in place. (vi) Database of historic risks Experience is a ‘great teacher’ and the provision of a risk register allows information to be stored in a convenient format ready for use on the next project. The risk register allows risks to be logged but can also display additional information linked to the project management process.3. In figure 2 the cost and time impacts are shown as a percentage of the original cost and time. The Surveyors’ Construction Handbook Part 4.

Again. which does occur. So. Once assessed. Figure 3: Example of weighting of probability and impact scales The method of having the probability scale linear and the impact scale non-linear emphasises the significance of low probability/high impact risks. A higher level of sophistication can be applied to the ranking of the risks on the probability/impact matrix. plotting risks on to a matrix. as shown in figure 4.PART 4. Where resources are scarce it also allows attention to be focused on those risks which sit in the high-risk category of the matrix. a risk with a high probability of occurring. Once set the scales should not be changed during the life of a project. indicates very quickly those risks which require detailed consideration and those which only need a cursory glance. the scale should be set according to the needs of a project. Section 3 (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook . would have a very high impact on the project and would require detailed consideration. The matrix allows each risk to be ranked and compared on an even basis. By assigning generic units to a matrix. SECTION 3 Figure 2: Scoring of probability impact scales PROBABILITY Cost Very high High Medium Low Very Low 70% – 95% 50% – 70% 30% – 50% 10% – 30% 5% – 10% > 50% 20 – 50% 10 – 20% 5 – 10% < 5% IMPACT Time > 50% 20 – 50% 10 – 20% 5 – 10% < 5% Although time and cost impacts have been shown separately it is possible to combine them. This allows the right amount of resource to be Page 10 Part 4. This allows risks to be compared on a common scale throughout a project and for the risk profile of a project to be accurately monitored. as shown in figure 3. or to use other criteria such as performance. the relative importance of each cell can be seen.

many of which are supported by computer software packages: The Surveyors’ Construction Handbook Part 4. Section 3 (05/03) Effective from 1/7/03 Page 11 . There are a wide range of such tools and techniques available. the profile should show risks plotted more in the bottom right section of the matrix. More sophisticated tools and techniques may be applied to provide a better understanding of the identified risks. Figure 4: Mapping risks onto the probability/impact matrix The probability/impact matrix (figure 4) allows a risk profile for a project to be developed. (ii) Synthesis of all risks to predict the most likely project outcome Risk tends to have a ‘knock-on’ effect and so it is important to consider not only the effect of individual risks but their cumulative effect as well. For instance. if most of the risks are plotted in the top left section of the matrix it indicates a high-risk project. The alternative courses of action may be plotted on the probability/impact matrix to obtain a clearer understanding of their relative merits in relation to the risk profile.PART 4. During later risk assessment exercises. This matrix is very useful for providing a graphical representation of the risk on a project. SECTION 3 used in managing risk. The risk management strategy is to manage these risks proactively through the project life cycle. (iii) Investigation of alternative course of actions Analysis allows for different scenarios to be developed to provide a high degree of confidence that the appropriate course of action has been chosen. The risk ID numbers from the risk register in figure 1 have been plotted in figure 4 to demonstrate the principle more thoroughly. (b) Tools and techniques The probability/impact matrix is the easiest technique to use and allows all project team members to participate in the process via a risk workshop.

• hard/soft money analysis. • spider diagrams. mitigate. then an appropriate response has clearly not been identified and an alternative should be found. • spreadsheets. its full implications should be assessed to ascertain if a secondary risk arises out of implementing the response. • multiple estimate risk analysis (MERA). Page 12 Part 4. The next stage is to develop a response to those risks. • multi-decision criteria analysis.PART 4.. • decision trees. It might be that the response changes with time as more information becomes available. When a response is proposed. and • flowcharts. • cost movement forecast. • influence diagrams. Section 3 (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook . 4. (a) Methodology (i) Choose the appropriate course of action The principle is to choose the right response based on available information. The response will generally fall into one of the following categories: • • • • avoid. • simulation packages.3. • ‘what if?’ analysis. If the sum of the secondary risk plus the reduced risk (the original risk with the response in place) is greater than the original risk. It is not possible to provide an explanation of all the tools and techniques available. transfer. • linear regression. further information can be obtained from one of the texts in the further reading section (appendix A).3. However.5 RISK RESPONSE The analysis stage provides the team with a better understanding of the risks. An important point to consider when developing responses concerns the generation of secondary risk. and control. • sensitivity analysis. SECTION 3 • Monte Carlo simulation modelling of cost and time risks.

The Surveyors’ Construction Handbook Part 4. resource levelling. special cost schedule allowance. forms of contracts. most surveyors would recommend to their clients that the contractor has third party insurance for the project. • contingency management. This is a risk management tool. Unless responses are effectively managed. Typical tools available are: • • • • • • • • insurances/bonds/warranties. regardless of how well it has been identified and analysed. contingency drawdown models. SECTION 3 Figure 5: The creation of secondary risks (b) Tools and techniques The techniques available are primarily integrated with the project management process. and • project controls. contingency plans. the whole risk process fails. Until a response is actioned. although most surveyors would consider it to be common project procedure. the risk may still occur. The tools available are not usually related purely to risk management.PART 4. for example: • contract acquisition plan. and training. Section 3 (05/03) Effective from 1/7/03 Page 13 . This should form part of the project management system. earned value analysis. For instance. This is a risk management response designed to reduce clients’ exposure to claims for damages if a particular incident were to occur. All responses to risks that are put in place should be managed.

Section 3 (05/03) Effective from 1/7/03 The Surveyors’ Construction Handbook . • state risk audit intervals and key milestones. and planning and reporting systems. • identify possible response strategies and programmes for each risk category including contingency plans and how to handle new or unresolved risks. Page 14 Part 4.3. • link the risk management plan to other project tools such as safety (including CDM). • assess cost involved. • include risk milestones in project plan. • define lines of reporting and responsibility for the risk management process.PART 4. and • monitor success of responses strategies and produce feedback for reporting into future projects. quality and environmental management. SECTION 3 I 4. • consolidate all risks identified into an appropriate and digestible response strategy in order that cumulative effects can be perceived.4 Summary In conclusion. the key components of a risk management strategy are: • identify staff and resources assigned to the risk management process.

John Wiley and Sons. 2003 (ISBN 0 63206 465 X) Boothroyd. M. London. and Norman. CIRIA. P.. Guide to the Management of Business Related Project Risk (BS 6079–3:2000). R. 2000 (ISBN 0 63205 326 7) Tweeds. J. 1996 (ISBN 0 86017 441 7) Smith. Blackwell. 1996 (ISBN 0 75062 973 8) The Surveyors’ Construction Handbook Part 4. Section 3 Appendix A (5/03) Effective from 1/7/03 Page 1 . L. Avoiding Claims in Building Design: Risk Management in Practice. A. C. London. Control of Risk: a Guide to the Systematic Management of Risk from Construction (SP125). London. Techniques and Insights. et al. S. 1997 (ISBN 0 47195 804 2) Edwards.. and Ward. A. et al. S. Oxford. Oxford. APPENDIX A Appendix A: Further reading Akintoye. Laxton’s/Butterworth-Heinemann.. Blackwell Scientific Publications.. Oxford. et al. Chichester. G. Project Risk Management: Processes. London. C.. 1999 (ISBN 0 85406 990 9) Akintoye. 1993 (ISBN 0 63202 816 5) Godfrey. Practical Risk Management in the Construction Industry. London. N.. Royal Institution of Chartered Surveyors. Managing Risk in Construction Projects. 1998 (ISBN 0 63204 243 5) Taylor.. Public Private Partnerships: Managing Risks and Opportunities. British Standards Institute. Thomas Telford.PART 4. Laxton’s Guide to Risk Analysis and Management. Risk Management: a Practical Guide for Construction Professionals. Local Authority Risk Management and the Private Finance Initiative. 1996 (ISBN 1 85609 120 1) BSI. Witherby Publishing. Project Management. Blackwell Science. Oxford. et al. SECTION 3. 2000 (ISBN 0 580 33122 9) Chapman.. Oxford. 1995 (ISBN 0 72772 064 3) Flanagan. Risk Management and Construction. Blackwell Science..

employers and contractors must operate. Interim valuations may now be subjected to the same scrutiny as final accounts as they may be the subject of adjudication provisions in contracts and per se are required to be compiled with care. A low valuation creates unreasonable financial problems for a contractor whereas a high valuation creates a risk to the employer of paying sums for which he or she obtains no benefit. The Surveyors’ Construction Handbook Part 4. The purpose of valuations is to provide advice to the certifier on a construction project (usually the architect) for the issue of interim certificates. architects. the method and procedure of the interim payment which the contractor receives is equally as important. Section 4 (05/00) Effective from 1/7/00 Page 1 . S ECTION 4 PART FOUR: CONSTRUCTION ADMINISTRATION AND MANAGEMENT SECTION 4: VALUATIONS FOR INTERIM CERTIFICATES Introduction Many construction projects require interim payments to be paid to a contractor. I 4. whilst the completion and calculation of the value is important. The certificates issued by the certifier to the contractor are then presented by the contractor to the employer who pays the contractor on an interim or instalment basis. Within each contract there will be clauses which set out the criteria under which interim payments will be made. This is in order to relieve the contractor of the burden of financing the whole of the works until completion.1 Valuations An interim valuation involves a revaluation of the whole work.PART 4. In many contracts. This section of the handbook provides guidance to surveyors carrying out such valuations. The valuation must be a realistic assessment. The valuations should be treated almost as ‘mini final accounts’ as they generally reflect all the matters and items which appear in a final account. the timing of these payments and the administrative rules under which quantity surveyors. works which may take many months or years to complete.4. not the work done since the last certificate was issued.

I 4. particularly with reference to prices of certain items.4.2. assuming normal terms of appointment.4. The guidance in this section is equally relevant to a quantity surveyor acting for a contractor who will be required to produce valuations in similar circumstances to that of a quantity surveyor acting for an employer. S ECTION 4 The quantity surveyor’s purpose is to assess value as distinct from cost. However. Under JCT contracts that person is normally the architect but could be referred to as the contract administrator. However. 4. It is recognised that there are differing methods of procurement and differing forms of contract being used.2.4. it should be noted that any specific directives within the quantity surveyor’s own organisation (such as those within quality assurance schemes) should supplement this advice. to assess what remains of the anticipated final contract value after each valuation and ensure that within the terms of the contract this will be adequate to complete the works.PART 4.2 ROLE OF A QUANTITY SURVEYOR PAYMENTS IN CARRYING OUT VALUATIONS FOR INTERIM This section of the handbook assumes that the quantity surveyor has normal terms of appointment and the relative roles of the quantity surveyor carrying out a valuation for an employer under a normal JCT contract. Therefore. Section 4 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . A basic checklist of actions necessary for practicing quantity surveyors is provided below.1 JCT FORM OF CONTRACTS Most quantity surveyors carry out interim valuations under a JCT Form of Contract. The quantity surveyor carrying out the valuation must be aware of the overall position of any valuation within a project. Page 2 Part 4.2 Assumptions It has been assumed throughout this section of the handbook that the interim valuation by the quantity surveyor is provided for the benefit of an architect: the person who certifies the amount of the valuation to the employer. 4. This contract is only intended for use where the client has engaged a professional consultant to advise on and to administer its terms. this section is based on the JCT Standard Form of Building Contract With Quantities 1998 (JCT 1998 With Quantities). This action is particularly valid towards the end of the contract. This section has been prepared from the standpoint of a quantity surveyor acting for an employer. the principles set out here will remain valid. for example temporary works. Variations required for different contract terms will be noted later.

1. I 4. Section 4 (05/00) Effective from 1/7/00 Page 3 . In this section the quantity surveyor may be a quantity surveyor acting for an employer or a quantity surveyor acting for a contractor. Section 111 states that a party to a construction contract may not withhold payment after the final date for payment of a sum due under the contract unless an effective notice of intention to withhold payment has been given.2. or circumstances in which. Clause 30. S ECTION 4 4.4. issue Interim Certificates The Surveyors’ Construction Handbook Part 4.PART 4. if the local authorities version of the JCT contract is used..4. ‘A party to a construction contract is entitled to payment by installments.4. The client as used in JCT 1998. they become due.2.3 Valuation Under a JCT Contract: Background The current JCT contract (and the one referred to in this part of the section) is the JCT Standard Form of Building Contract With Quantities 1998 (JCT 1998 With Quantities).. ‘The Architect shall from time to time .1.4 LEGISLATION The requirement to provide stage or interim payments is now contained in the Housing Grants and Reconstruction Act 1996 where it is stated in Section 109 that. stage payments or other periodic payments for any work…’ Parties to the contract are free to agree the amounts of the payments and the intervals at which. Section 110 of the Act states that every construction contract shall provide an adequate mechanism for determining what payments become due under the contract and provide for a final date for payment in relation to any sum which becomes due. JCT 1998 With Quantities contains the right of the contractor to interim payments at clause 30 (Certificates and Payments).3 DEFINITIONS Quantity Surveyor This refers to a valuer acting independently for an employer and carrying out a valuation under a JCT 1998 contract.1 states that. a contract administrator. In JCT 1998 With or Without Quantities the contractor is assumed to be a main contractor who may be asked to employ nominated sub-contractors or request permission to sub-contract portions of work to domestic sub-contractors. This generally refers to an architect acting for an employer or. Architect Employer Contractor 4.

‘shall make an interim valuation’. Note whether there are any ad hoc amendments made to the standard form of contract that have a bearing on interim certificates.4. The employer has to advise the contractor of the amount which he or she is due to be paid and the amount of.4.PART 4.2 of JCT 1998 With Quantities and the works of nominated sub-contractors are assessed in the same manner as that of the main contractor.17 of the JCT 1998 Nominated Sub-Contract Conditions (NSC/C).1 states.4 Recommended Action at the Start of a Contract 4.3 the dates for the first and subsequent interim certificates are set out in the Abstract of the conditions. Clause 30.1. Under clause 30. ‘Interim valuations shall be made by the Quantity Surveyor whenever the Architect considers them to be necessary for the purpose of ascertaining the amount to be stated as due in an Interim Certificate’. in response to the contractor’s submission. S ECTION 4 stating the amount due to the Contractor from the Employer specifying to what the amount relates and the basis on which that amount was calculated. The ascertainment of amounts due to nominated sub-contractors are calculated in accordance with clause 4. It is essential that the quantity surveyor makes and issues a valuation even if the interim payment calculation is zero.2 states how the amounts due in an interim certificate are to be ascertained.2.4. Clause 30.1 CONTRACT REQUIREMENTS (i) Check that the architect requires regular valuations for interim certificates and refer to the contract for the frequency. G 4. The quantity surveyor.13 it is stated that the architect shall direct the contractor as to interim payments to nominated sub-contractors.1.17 contains step-down provisions similar to clause 30. and reason for. It follows that any interim valuation prepared by the quantity surveyor should follow the same method as that for an interim certificate.1 also sets out a timescale for payment and the right of the contractor to interest if the timescale is not adhered to by the employer. (ii) (iii) Page 4 Part 4.2. Clause 30. Clause 4.1. In clause 35.1 allows the contractor to submit an application for payment to the quantity surveyor which should set out what the contractor considers to be the amount of the gross valuation. Section 4 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . and Prepare a job progress chart and cash flow forecast ready for checking against the value of work completed at successive valuations. any deduction to that payment.’ Clause 30.

PART 4.4.4. Confirm the programme of valuations and certificates with the architect. Note any adjustments to the contract price made in the summary of the bills of quantities or elsewhere.5 Communications 4. with the items in the summary of the bills of quantities. daywork sheets and other supporting information. Remind the contractor that you will be keeping/organising a close watch in the monitoring and checking of daywork and labour returns. If not already detailed.1 PRELIMINARY DISCUSSIONS WITH THE CONTRACTOR (i) Agree with the contractor the programme of valuations decided with the employer.3 of this section. Any details which are applicable to the final account should be collected together as a running record. in line with the employer’s arrangements for payment.4. and Calculations made in the course of the interim valuation should be set out in a clear form and retained for future reference. (ii) (iii) (iv) (v) G 4. Arrange a procedure for the receipt and verification of invoices. similarly.4. (ii) (iii) The Surveyors’ Construction Handbook Part 4. Stipulate that the provision of the contract for submitting daywork records (clause 13.4. and that your own records will be kept.3 GENERAL ADMINISTRATION (i) Obtain a breakdown of preliminaries from the contractor (if not previously supplied).4) must be seen as representing the latest permissible time for submission.4.5. refer to 4.2 EMPLOYER’S REQUIREMENTS (i) Check that the programme of valuations and certificates matches the employer’s programme of payments. (ii) (iii) 4. establish which preliminaries are one-off expenditure items and which are related to time or to value of work done. S ECTION 4 4.9. and Agree the basis on which preliminaries and sums in adjustments to the tender (and/or in the correction of errors) will be incorporated into valuations. and Check whether the employer requires valuations to be built up under various headings.5. Section 4 (05/00) Effective from 1/7/00 Page 5 . Where there are to be fluctuations.4.

PART 4. including briefing and controlling the clerk of works in this respect. Inform him or her that you will be visiting the site to make spot checks unannounced. Obtain the architect’s agreement that you set up this procedure. 4. materials. ready for measurement.4. elements.) that diligence and accuracy in checking on resources used is crucial and that.5.4. time.3 PRELIMINARY DISCUSSIONS WITH THE NOMINATED SUB-CONTRACTORS (i) Inform the nominated sub-contractors of the valuations programme and make arrangements for the valuation of their work (the evaluation to be made by you. and for measured works. (ii) 4. or by the consultant (vetted by you) in the case of specialist work where a specialist consultant is appointed).5. the format of the bills of quantities (for example. trades) may well determine the order of sections that best suits the contract basis (for example. contractor’s and architect’s requirements.5.2 PRELIMINARY DISCUSSIONS WITH THE CONSULTANTS (i) Provide the consultants responsible for preparing valuations for specialist work with details of the interim valuations programme and agree deadlines for the consultants submission to you. The format for the valuations will be suited to the particular project. Acquaint the clerk of works with the valuation dates programmed.4.6. plant. Request that you are notified of all items of work likely to become hidden so that you can ensure that records are made.4 PRELIMINARY DISCUSSIONS WITH THE CLERK OF WORKS (i) Impress on the clerk of works (or site engineer or any person to whom the responsibility has been given to record contractor’s resources.4. and Arrange with the clerk of works to receive his or her labour record (which is required for checking wages fluctuations). and Arrange with the architect a detailed procedure for recording the contractor’s resources on site.4. etc. Effective from 1/7/00 The Surveyors’ Construction Handbook (ii) Page 6 Part 4.1 METHOD (i) The method of approach for preparing the valuations should be determined by the quantity surveyor after consideration of all the employer’s. separate buildings. S ECTION 4 4. (ii) (iii) G 4. he or she must keep a reliable daily record.6 Approach 4. grouping as that required for fluctuations). Section 4 (05/00) . therefore. Remind the architect that he or she (or authorised deputy) has responsibility for verifying daywork.

(ii) The Surveyors’ Construction Handbook Part 4.4. It is good practice for the contractor to be in attendance when the quantity surveyor is carrying out the valuation so that most of this information will be known to him or her. the quantity surveyor should note first in general terms the position of the particular valuation in relation to the overall project and the progress that has been made relative to the forecast of payments. in normal circumstances. to assess the various aspects of the valuation in detail.4. sufficient calculations should be supplied to the contractor in order for him or her to understand how the valuation was calculated.4. When the valuation is complete. 4. it is necessary for the quantity surveyor to respond to the contractor’s submission in the same detail as that used by the contractor. there is no requirement for the contractor to use an agreed format. (iv) 4. The format in which the contractor presents his or her valuation should be agreed in the same manner as detailed earlier in 4.PART 4. Section 4 (05/00) Effective from 1/7/00 Page 7 . First.4 DETAIL OF VALUATION (i) It is important to detail the calculations made to assess the interim valuation and to retain these calculations for future reference.1 and 4.6. Agreement should be made with the contractor at the outset of the contract that he or she must submit this documentation at the same time as his or her valuation. It is also necessary to assess the materials on site for incorporation in the works.3 SITE VISIT (i) It is important (and necessary) to visit the site of the works. Whilst the format which the contractor uses will.1 of this section.4. and The quantity surveyor should ensure that backup information and documentation which he or she requires from the contractor is available in time for each valuation.6.6.5. (ii) 4.4. The details and quantities should be checked.6. be pre-agreed. S ECTION 4 (iii) In approaching each valuation. and (iii) The contractor has the opportunity when submitting his or her valuation to include with it all the relevant documentation.2 CONTRACTOR’S SUBMISSION (i) The JCT 1998 With Quantities allows the contractor to submit an application for payment to the quantity surveyor. secondly. However. to assess the overall progress of the works and.

or descriptions of work items. adjustment to the rates will be necessary having due regard to the location and circumstances of the work.7.PART 4.1 A valuation is likely to consist of the following elements (although not all of these elements will be found in every valuation): Work Executed Measured Work Approximate Quantities Preliminaries Sub-Contracts – Nominated Sub-Contracts – Domestic Suppliers Variations Dayworks Materials – On Site Materials – Off Site Fluctuations Loss and Expense Special Payments Deductions 4.4.7 Content of a Valuation 4. and If the contractor has made a submission under clause 30. particularly the calculation of the amounts in respect of work which he or she has sub-contracted. Include an assessment of the work properly executed using rates within the bills of quantities. subsequently. Section 4 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . S ECTION 4 (iii) It is important for the contractor to be aware of these calculations. the quantity surveyor must respond to the contractor’s submission in the same detail as was supplied by the contractor.2. However. Consider whether an adjustment shall be made to the rates where the item is partially executed.7.2 WORK EXECUTED (a) Measured Work Work under this category relates to work included in the tender documents and. This assessment will normally be carried out using rates within the bills of quantities.4. (iv) G 4.1 of the contract. the contract as measured either in bills of quantity format or schedules.1. where the item is only partially executed. Page 8 Part 4.4. allowing for the location of the work and for inflation if it is a fixed price contract.

Consider adjustments where the contract is behind schedule. Assess items which are related to value. including those items which appear in the summary of the bills of quantities. If measurements are taken regularly. (e) Sub-Contractors – Domestic Under JCT 1998 With Quantities the contractor is permitted to sub-contract with his or her own choice of sub-contractor (defined as domestic subcontractors in the contract).PART 4. (c) Preliminaries From the detail of preliminaries items (see 4.4. the quantities for these items will be up to date and available for valuations. running and removal costs where appropriate. The work represented in the categories Measured Work and Approximate Quantities. S ECTION 4 (b) Approximate Quantities During the construction the quantity surveyor should take regular measurements in respect of work for which there is an approximate quantity in the bills. or to check against the contractor’s submission.4. The rates for the work are contained in the bills and adjustments made in valuations as described in 4.7. The contractor will provide the quantity surveyor with documentation from the domestic sub-contractor as part of his or her substantiation of the valuation. Assess time-related items in relation to the programme. work carried out in a project by domestic sub-contractors may comprise a substantial proportion of the whole of the works. The quantity surveyor must ensure that the detail and information provided from this source is in the terms of the main contract and not the values which occur in the contract between the contractor and domestic sub-contractor as these values may be different.4.2 (a) for partially completed work. together with Variations to Special Payments are equally applicable to nominated sub-contracts and should be considered as part of the nominated sub-contract work values. However. Section 4 (05/00) Effective from 1/7/00 Page 9 . Preliminary items should be further divided into set-up. (d) Sub-Contractors – Nominated The work carried out by nominated sub-contractors should be assessed in the same way as the main contract works.3 (i)) include one-off payment items as circumstances dictate. The Surveyors’ Construction Handbook Part 4. They should not be included with the main contractor’s value headings.

PART 4. All variations should be identified in the quantity surveyor’s valuation in a separate section so that they can be easily identified. For simplicity. The quantity surveyor has to seek further information from the architect and contractor regarding effect on contract. However. the following simple rules should be followed: (i) Only variations properly instructed under the terms of the contract should be included in a valuation. The valuation of variations is described in clause 13 of the Conditions of Contract. Section 4 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . There may be no easy answer in respect of this item.4.7. Invoices confirming the values should be obtained and the relevant discounts checked. the contractor will be seeking to maximise his or her interim recovery in respect of the item until final agreement is reached. • Instructed to be carried out and to be evaluated in terms of the contract. 4.3 VARIATIONS It is not possible to cover all the required information on variations within this section. It is relevant to keep the variation items separate even if the work within the variation is the same as that within Measured Work. • Agreed in terms of price but not in terms of effect on the contract. having been agreed. Instructed to be carried out and to be evaluated in terms of the contract – the variation must be evaluated in terms of the contract (clause 13) and the rules are set out in that clause. • Items identified by the contractor as variations but not instructed by the architect at the time of valuation. Items agreed in terms of price but not in terms of effect on the contract – the price for work in this category. S ECTION 4 (f) Suppliers The value of goods on site supplied by nominated suppliers should be included at the rates stated in the nomination. Remember. In an ongoing situation the contractor will be basing his or her level of recovery on the amount which he or she is having to pay out and for an interim valuation the quantity (ii) (iii) Page 10 Part 4. Items pre-agreed in all facets – for the purposes of valuations items in this category are easily dealt with by following the rules for valuation under Work Executed. can be dealt with as for pre-agreed items. The quantity surveyor must seek agreement with the contractor for the way in which any variation is accounted for at an early stage. variations have been categorised in accordance with the following: • Pre agreed – where the variation has been agreed both in terms of content price and time before being instructed.

2.5. S ECTION 4 surveyor should seek from the contractor the same information.2 of the contract. Value materials at current rates where it is a fixed price contract under clause 38.4.7.7. The contractor’s price in this statement must be based on the provisions of clause 13. If accepted. so that he or she can make a judgement using the same information. If the price statement is not accepted. when the work related to the instruction is being carried out.4. Contractor’s price statement – an alternative to evaluation of an architect’s instruction or of an approximate quantity. appropriate amounts will be included in interim valuations.1. (iv) Clause 13A quotation When the architect issues a variation instruction it is at the employer’s option to ask the contractor to submit a clause 13A quotation on the premis that after a suitable timescale the instruction may not be ratified and thus falls. 4. etc. is for the contractor to submit a ‘price statement’ within a prescribed timescale. together with the cost of preparing the quotation. if the price statement is accepted. The quantity surveyor should be aware of the content of any price statement before including it in an interim valuation. invoices. Care should be taken by the quantity surveyor when including the value or part of the value of the clause 13A quotation in an interim valuation as it may include loss and expense as part of the evaluation of the variation instruction. 4.PART 4. The Surveyors’ Construction Handbook Part 4. check that the percentage additions to prime costs are in accordance with those quoted in the contract documents. a clause 13A quotation becomes an instruction with an agreed price for the scope of work represented by that instruction.5 MATERIALS – ON SITE Include materials on site in accordance with the provisions of clause 30.4 of the contract and verified by the architect. Section 4 (05/00) Effective from 1/7/00 Page 11 . If dayworks are to be included.5 of the contract and then.4 DAYWORKS Include dayworks only if they are prepared in accordance with clause 13. which the contractor is free to adopt. A price statement may include loss and expense or the price may be accepted without an assessment of the effect on the contract. the instruction is evaluated in the normal way.

4.7.10 (e)).4.7.3 of this section of the handbook (or deducted. if appropriate (see 4.7. 4.7.4. The basis of the loss and expense in a contract must be established before any monies are included in an interim payment. 4.4. Clause 30. S ECTION 4 Value materials at base rates where it is a fluctuating price contract under clause 39. Section 4 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook .4 sets out the conditions under which the materials are to be stored before payment is included in a valuation. 4.7 FLUCTUATIONS Where there are to be fluctuations these should be added as described in 4. Page 12 Part 4.PART 4. Clause 30.7. The quantity surveyor may be asked by the architect to view and assess the materials off site. Where the items listed are not uniquely identified the contractor must provide evidence of vesting. The means by which the contractor supplies ‘reasonable proof’ of ownership is explained by a special note in the guidance notes which accompanied the publication of Amendment 18 to JCT 80 (see Appendix B of this section of the handbook). Value materials at current rates where it is a fluctuating price contract under clause 40.3. If so. the quantity surveyor should ensure that all the relevant conditions have been met before including the value of the materials or goods in the interim valuation.4.3.6 MATERIALS – OFF SITE The value of materials or goods intended for the works but stored off site are not included in interim valuations except those which were noted as ‘the listed items’ prior to the contract.1 of the contract states that the property in uniquely identified listed items must be demonstrated by the contractor to the architect to be vested in the contractor.8 LOSS AND EXPENSE Loss and expense may be included within an interim valuation. A bond (details of which are set out in Annex 1 to the appendix to the contract) is provided by the contractor if required by the contract.

assumes that all work completed is in accordance with the contract.1 insurance (which is a joint insurance indemnifying against injury or damage to adjoining buildings which are not the property of the employer) are included in interim valuations. (b) Work not properly executed The architect should advise the quantity surveyor in writing of work which. and the items detailed in Special Payments (statutory fees and charges) are not subject to retention. when compiling his or her valuation. For retention at practical completion or partial possession see 4.2: Statutory fees and charges – fees and charges detailed in this clause shall be added to the contract sum only under the conditions outlined in clause 6.4 sets out the rules for ascertainment of retention and clause 30. Fluctuations is generally subject to retention. Clause 30. although having been carried out. is not in accordance with the contract.10 DEDUCATIONS (a) Retention Retention should be deducted from the gross valuation at the rate stated in the contract.1: Insurance – the premiums incurred by the contractor to affect 21. in compliance with the architect’s instructions. The items described in the categories Work Executed to Materials – Off Site are subject to retention. Section 4 (05/00) Effective from 1/7/00 Page 13 .4. The value in the contract for this work should not be included within an interim valuation. is to be added to the contract sum if the tests show that the works or materials being tested are in accordance with the contract. The Surveyors’ Construction Handbook Part 4. The quantity surveyor. • Clause 8. the contractor is liable to pay royalties or other monies for patent rights. • Clause 21.7. Examples of special payments include: • Clause 6. The gross valuation is calculated in the total derived in the categories referred to above (Work Executed to Special Payments).4.2.3: Inspection and tests – the cost for this work. together with making good.9 SPECIAL PAYMENTS Within the terms of the contract there may be other costs which are required to be added into the valuation. It therefore follows that he or she must then deduct the value of work which is not. • Clause 9. 4.2: Royalties – where.10(c) below.2.7. S ECTION 4 4.2.PART 4.7. Retention is applied in terms of the contract.1 clarifies the items. Loss and Expense is excluded from the retention calculation.2.4. these royalties are added to the contract sum.

in deducting for work which is not in accordance with the contract. The quantity surveyor’s valuation should refer to the total value to that proscribed date less the amount certified by the architect. a deduction may be made under clauses 17. The amount of the advance will be reimbursed to the employer in the amounts and at the times stated (this is also stated in the appendix). shrinkages. Page 14 Part 4. the amount of the advance will be stated in the appendix to the contract. etc. (c) Amounts previously certified Although it may be obvious.3 of the contract refers to this. This reduction will be shown as a deduction to the valuation. S ECTION 4 The quantity surveyor should compile a list of the work and values deducted and include the list with the notes passed to the contractor.9 below.2 the work not in accordance with the contract may be accepted by the architect and a reduction in value allowed for it. the amount previously certified should be deducted. (d) Advance payments (This item does not occur in the local authority version of JCT 1998 With Quantities) If an advance payment has been made to the contractor.1. (e) Fluctuations Where the operation of the fluctuations clauses and the subsequent calculation indicates a reduction. the work will require to be redone or amended in accordance with the contract.4. if defects. However. Section 4 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . However. In a similar manner. Payment to the contractor is determined by the employer. are not made good. payment to the contractor by the employer as distinct from certification by the architect is a different matter.4. For additional information please see 4. It is important to check the amount certified by the architect and not to assume that the amounts within the quantity surveyor’s previous valuation have been used. The previous two paragraphs assume that. a deduction will have to be made to the valuation. under clause 8.4.2 and 17. Retention held at interim valuations is partially released at practical completion of the works and where the employer takes partial possession of part of the works. Clause 30.PART 4. and the quantity surveyor should ignore the amounts paid.3.

17.8 Administration 4.4. (g) Nominated sub-contracts (clause 4.4.4. One way for the quantity surveyor to achieve this additional detail is for the quantity surveyor to use in his or her advice.1 GENERAL The quantity surveyor should ascertain the way in which the architect requires the valuation and whether any additional explanation and information is to be provided at the time of valuation.6.1 above) or on the valuation form. under clause 30.4. if not detailed separately (as described in 4. A deduction may be made to the contract in lieu. these errors may not be amended (at the sole cost to the contractor).2 COVERING LETTER When making his or her recommendation for payment. the quantity surveyor should state the basis of his or her calculations in a covering letter to the architect. such as that issued by the Royal Institution of Chartered Surveyors (RICS) for interim valuations is recommended. it is prudent for the quantity surveyor to provide additional detail of the valuation to the architect than is required by the contract terms. This covering letter would need to include a statement on the authority for part release of retention and details of defective works not included in the valuation.1. as stated in 4. 4.PART 4.7. As indicated in 4. must specify to what the amount of the certificate relates and the basis on which that amount was calculated. The Surveyors’ Construction Handbook Part 4. S ECTION 4 (f) Errors in setting out Under clause 7 of the contract. a similar format that is used in the example in Appendix C of this guidance. the architect. G 4. Section 4 (05/00) Effective from 1/7/00 Page 15 . if errors have been made in setting out.8.1(b) above. The use of a standard form. An appropriate deduction is made but kept separate from that of the main contractor.4. The architect may well require this additional detail when explaining the content of the certificate to the employer. when issuing the certificate to the employer.4.8.3 above.1 of the contract. Whilst the same wording is not used in the contract in the context of the quantity surveyor issuing a valuation to the architect.1. the rules apply equally to the work of nominated subcontractors.3) Where work has not been properly executed.

It is prudent to remind the architect that he or she is to adjust the recommended figure if there are further works or unfixed materials that are not acceptable to him or her. but it is advisable to mention the matter in the letter.4.9. whether nominated sub-contractors have all received their payments under previous certificates.9. The detail of the requirements for valuations are to be found in clause 27 of the contract and will depend on the circumstances of the determination. Where detailed cost recovery is to be the basis. S ECTION 4 In a letter advise the architect whether all the work executed is included in the valuation (the quantity surveyor may have been instructed to exclude specific items).3 FLUCTUATIONS The contract will state the basis of adjustment: whether there is to be detailed cost recovery (clause 38 or 39) or the use of price adjustment formulae (clause 40). for example. Section 4 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook . The wording of the RICS standard form at note (iii)(a) refers to this point. G 4. each time stating the amount. the quantity surveyor may be required to advise of the amount of liquidated damages for which the contractor is liable.9. Advice to the employer and the architect should include: • In a contract. • On there being an appropriate certificate issued under clause 24 of the contract. 4.9 Special Situations 4. Note any imported Page 16 Part 4.4.PART 4. advise the architect in respect of matters regarding previous valuations. electricity and fuels have been agreed.4. 4. when issuing valuations the quantity surveyor should advise the employer and/or the architect of the amount of liquidated damages for which the contractor is liable and continue to advise thereafter.1 DETERMINATION OF SUB-CONTRACTOR THE EMPLOYMENT OF A CONTRACTOR OR NOMINATED There are special provisions relating to valuations in the case of a determination of the employment of a contractor (or of a nominated subcontractor) under the Conditions of Contract. but it is generally not an element of a valuation which should be included (or amounts deducted) by the quantity surveyor. check that basic prices of materials goods.4. Where appropriate.2 LIQUIDATED DAMAGES The application of liquidated damages affects payments to the contractor. where there is a provision for liquidated damages to be applied at the rate included in the contract.

10. 4.10. 4.1 PRIME COST SUMS Prime cost sums are expended on the written orders of the architect in respect of nominated sub-contractors or nominated suppliers.10.1.1 states how the value of work in an activity schedule is to be included in an interim valuation. A separate section of the quantity surveyor’s interim valuation should be created for all work carried out under the expenditure of prime cost sums. If stage payments were included in the contract for all or part of the works.2 the contract allows the parties to agree to stage payments. An example of an activity schedule issued by JCT is included in Appendix C of this section of the handbook. agree with the contractor the allocation of bill items to categories. S ECTION 4 goods which will be subject to currency fluctuations. Section 4 (05/00) Effective from 1/7/00 Page 17 .4. A separate section of the quantity surveyor’s interim valuation should be created for all work carried out under the expenditure of provisional sums.10.3 PERFORMANCE SPECIFIED WORK JCT 1998 With Quantities allows for performance specified work which shall not be carried out by nominated sub-contractors or nominated suppliers.4.2 PROVISIONAL SUMS Provisional sums are expended on the written orders of the architect.10. 4. If fluctuations are to be dealt with by the price adjustment formulae method.4.5 ACTIVITY SCHEDULE An activity schedule may be included in the contract. This analysis may then be used for interim valuations. The stage payment will be included in valuations when the scope of work to which the stage payment relates has been completed and so indicated by the architect.4.4. 4.4 STAGE PAYMENTS In clause 30.PART 4.4. Clause 30. The valuation of work instructed under this method may be dealt with by reference to the other sections.10 Other Contract Terms (relative to valuations) 4. as this method requires. the values for these parts or sub-portions have been pre-agreed. The Surveyors’ Construction Handbook Part 4. G 4. The contractor is required by the contract to supply an analysis of the portion of the contract sum to which the performance specified work relates.2.

Therefore.11 Valuations Under Other Forms of Contract The principles and procedures set out in this section for valuations carried out under JCT 1998 With Quantities will largely be pertinent to other forms of JCT contract. The guidance provided in this section will apply equally to the JCT Without Quantities edition.4.4. 4.6 ELECTRONIC DATA INTERCHANGE (EDI) Annex 2 of the contract allows for an agreement between the parties in respect of the exchange of communications by electronic means. Section 4 (05/00) Effective from 1/7/00 The Surveyors’ Construction Handbook .4.4. This is useful where invoices and the like require to be transferred. and these forms used with the sectional completion supplement and with the contractors designed portion supplement. in general terms.1 OTHER JCT CONTRACTS In general terms other JCT contracts will have the principles set out here applied although the detail may be different. Information is simply reproduced by a fax and the recipient receives a copy.11. backup care should be exercised where originals or copies of invoices and the like are required to be provided. have the principles set out here applied although the detail may be different. the Local Authority editions. Page 18 Part 4. The simplest form of electronic communication is by fax machine and the use of this is now widespread.PART 4. 4. It would appear to be prudent that when EDI is being set up at the outset of the contract the ‘rules’ for interim valuations should also be set out clearly. interim valuations can be communicated by such means. S ECTION 4 4. The Code of Practice for Electronic Data Interchange states that parties proposing to contract on terms which expressly give administrative or other responsibilities to third parties should not adopt EDI in connection with that contract without the agreement of those third parties. together with forms of contract produced by other bodies.2 OTHER FORMS OF CONTRACT Contracts issued by other bodies will. The transfer of information through computers does not generally provide ‘copies’ of material to the recipient unless the original material was scanned into the computer.10. When using computers to transfer the valuation. I 4.11.

Quantity Surveying Practice. 1994 Seeley. I. Section 4 Appendix A (05/00) Effective from 1/7/00 Page 1 . A PPENDIX A Appendix A: Further Reading JCT. London. 1997 The Aqua Group. London. RIBA. S ECTION 4. Practice Note 26 (’94) Valuation and Certification for Interim Payments including Variation. Contract Administration for the Building Team.PART 4. Macmillan Press Limited.H. Basingstoke. 1996 The Surveyors’ Construction Handbook Part 4. Blackwell Science.

4. 5. Thus if.3 if the proof provided of the Contractors ownership is as water-tight as possible. that the Contractor has provided the Architect with 'reasonable proof ' that the property (ownership) in the listed items is vested in the Contractor. A PPENDIX B Appendix B: JCT Definition of ‘Reasonable Proof’ 1. in the amount stated as due in an Interim Certificate. Where the listed items are purchased from a supplier by the Contractor. and a written statement from the supplier that any conditions in that sale contract that must be fulfilled before the property passes to the Contractor have been fulfilled. The Surveyors’ Construction Handbook Part 4. S ECTION 4. it transpires that the property in the listed items is not vested in the Contractor the risk of having paid for listed items for which the Contractor cannot give a good title to the Employer is with the Employer. and a written statement from the sub-contractor that any conditions in that sub-contract that must be fulfilled before the property passes to the Contractor have been fulfilled. notwithstanding the provision of such reasonable proof. of the value of what clause 30. Clause 30. In practice however Employers will only pay pursuant to clause 30.3. The statement of the supplier should also say that the supplier's property in the listed items is not subject to any charge or encumbrance which would prevent the passing of the property unconditionally to the Contractor after fulfilment of all the relevant terms of the sale contract with the Contractor. the Contractor should give the Architect a copy of the written contract of sale applicable to the listed items. Section 4 Appendix B (05/00) Effective from 1/7/00 Page 1 .3 defines as ‘listed items' before their delivery to or adjacent to the Works. and a written statement from the sub-contractor that any conditions in that sub-contract that must be fulfilled before the property passes to the Contractor have been fulfilled. 3. the Contractor should give the Architect a copy of the written sub-contract with the sub-contractor which should expressly state the conditions that have to be fulfilled before the property in those listed items passes from the subcontractor to the Contractor. 2.1 makes it one of the conditions of the inclusion. Where the listed items are manufactured or assembled by any sub-contractor. The Contractor is only required to provide ‘reasonable proof’. Where the listed items have been purchased from a supplier by a sub-contractor the Contractor should give the Architect a copy of the written sub-contract with the sub-contractor which should expressly state the conditions that have to be fulfilled before the property in these listed items passes from the sub-contractor to the Contractor.PART 4.

A PPENDIX C Appendix C: Example of Priced Activity Schedule A B C D E F G H J K L M N P Q R S T U V W X Y Z AA Preliminaries – see breakdown on page 2 Demolition Substructure including ground floor slab Structural frame Upper floor and staircase structures Roof structure and coverings External walls Windows and external doors Internal walls and doors therein Partitioning and doors therein Plasterwork Screeds Suspended ceilings Wall tiling Floor tiling Other floor finishings Metalwork Fittings and fixtures Decorations Sanitary installation and fittings Rainwater installation Mechanical services – see breakdown on page 3 Electrical services – see breakdown on page 4 Underground drainage External works 170.000.000.000.000.00 16.00 75. The Surveyors’ Construction Handbook Part 4.00 297.00 45.00 30.PART 4. S ECTION 4.00 53.00 ___________ £ 2.00 40.00 203.190.000. provisional sums and provisional quantities.00 102.000.00 11.000.000.00 222.000.000.00 178.000.00 75.000.000.000.00 64.00 ___________ Note that the above excludes the prime cost sums and profit thereon.000.500.000.000.000.00 58.000.500.00 48.00 112.00 12.000.000.00 16.000.000.00 21.000.00 33. Section 4 Appendix C (05/00) Effective from 1/7/00 Page 1 .00 8.00 35.00 265.

PART 4, S ECTION 4, A PPENDIX C

Preliminaries breakdown A B Site accommodation (offices, stores, toilets, etc.) Services (power, lighting, telephones, small plant, rubbish disposal, etc.) Mechanical plant Temporary works (roads, walkways, scaffolding, hoardings, etc.) Management and staff The contract, etc. (insurance premiums, cost of providing bond, etc.) 16,000.00

11,000.00 8,500.00

C D

5,000.00 122,500.00

E F

7,000.00 ___________ £ 170,000.00 ___________

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Mechanical Services breakdown A B C Heating installation Hot water installation Cold water installation including rising main and tank Gas installation Mechanical ventilation Controls and wiring Testing and commissioning As installed record drawings Operation and maintenance manuals 235,000.00 6,000.00

14,000.00 2,500.00 25,000.00 9,000.00 3,000.00 1,500.00 1,000.00 ___________ £ 297,000.00 ___________

D E F G H J

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Electrical Services breakdown A Distribution boards, switchgear and sub main cabling Power installation Lighting installation including fittings Fire alarm system Security system Earthing and bonding Testing and certification As installed record drawings Operation and maintenance manuals

28,000.00 72,000.00 92,000.00 14,500.00 6,000.00 5,000.00 2,500.00 1,250.00 750.00 ___________ £ 222,000.00 ___________

B C D E F G H J

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PART FOUR: CONSTRUCTION ADMINISTRATION AND MANAGEMENT
SECTION 5: EXTENSION OF TIME
Introduction
There are probably more disputes about extension of time and consequential cost issues than any other disputes under construction contracts. It is therefore imperative that extension of time issues are dealt with in a proper manner by the contract administrator. The majority of standard form construction contracts enable the contract administrator to grant extensions of time for completion of the work where delay occurs due to certain specified causes. Such provision is of benefit to both parties to the contract. The contractor will benefit because the effect of the provision, if operated, will be to reduce or avoid liability to pay liquidated or unliquidated damages in the event of the delay in question. However, the primary benefit is to the employer. This is because the absence of extension of time provisions can have the effect of preventing the employer’s entitlement to liquidated damages in cases where the delay, or even a small part of it, is due to some prevention or default of the employer or his or her agents, or any other matter for which the employer would be responsible. Therefore the primary purpose of extension of time is to preserve the effectiveness of the liquidated damages provisions for the benefit of the employer. Standard forms and bespoke construction contracts contain extension of time clauses setting out the criteria under which extensions of time will be awarded. This includes: • the provisions for the timing and content of delay notices by the contractor; • the parameters that a contract administrator needs to work within to assess a contractor’s entitlement to an extension of time; • the administrative procedure to be adopted in awarding an extension of time; • the events that entitle a contractor to an extension of time. However, most forms of construction contracts do not include practical guidance on how a contract administrator should carry out an assessment of an extension of time entitlement. Instead, practitioners have to look at guidance
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provided by case law as well as good practice as defined by legal commentators. This section of the handbook provides guidance to surveyors who are required to carry out assessments of extension of time entitlement under a construction contract by virtue of appointment under the contract as contract administrator. It is also for surveyors who are asked to advise either party to a construction contract on extension of time issues.

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4.5.1 Extension of Time Clauses
There are several forms of construction contract and each form will have its own procedure for dealing with extension of time. Whilst the principles to be adopted may be similar, the exact procedure and events that entitle a contractor to an extension of time may well be different depending on the form or edition of contract adopted or indeed the amendments made thereto. The practitioner should therefore always be primarily guided by the words contained in the relevant contract.

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4.5.2 Assumptions
This section has been prepared from the standpoint of the surveyor who has to assess extension of time entitlement under a construction contract by virtue of appointment under the contract as contract administrator. 4.5.2.1 JCT FORMS OF CONTRACTS This section introduces the principles of an extension of time. For illustrative purposes, it is based on the JCT Standard Form of Building Contract With Quantities 1998 (JCT 1998 With Quantities). It is recognized that there are other forms of contract being used. However, the principles set out here will remain valid. Extension of time procedures for different contract terms are briefly noted later (see 4.5.11 and 4.5.12). 4.5.2.2 DEFINITIONS Contract administrator This refers to the person undertaking the functions of the ‘architect’ on behalf of the employer under a JCT 1998 With Quantities contract. Employer Contractor The client as used in a JCT 1998 With Quantities contract. In JCT 1998 With Quantities the contractor is assumed to be a main contractor who may be asked to employ nominated sub-contractors or request permission to sub-contract portions of work to domestic sub-contractors.
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4.5.3 Extension of Time Under a JCT Contract
JCT 1998 With Quantities contains the provision for the contract administrator to award an extension of time at clause 25. Clause 25.2.1.1 provides that: If and whenever it becomes reasonably apparent that the progress of the Works is being or is likely to be delayed the Contractor shall forthwith give written notice to the [contract administrator] of the material circumstances including the cause or causes of the delay and identify in such notice any event which in his opinion is a Relevant Event. Clause 25.2.2 provides that: In respect of each and every Relevant Event identified in the notice given ... the Contractor shall, if practicable in such notice, or otherwise in writing as soon as is possible after such notice: (25.2.2.1) give particulars of the expected effects thereof; and (25.2.2.2) estimate the extent, if any, of the expected delay in the completion of the Works beyond the Completion Date resulting therefrom whether or not concurrently with delay resulting from any other Relevant Event... Clause 25.3.1 provides that: If, in the opinion of the [contract administrator], upon receipt of any notice, particulars or estimate ... (25.3.1.1) any of the events which are stated by the Contractor to be the cause of the delay is a Relevant Event and (25.3.1.2) the completion of the Works is likely to be delayed thereby beyond the Completion Date the [contract administrator] shall in writing to the Contractor give an extension of time by fixing such later date as the Completion date as he then estimates to be fair and reasonable. The contract administrator is required to state which relevant events he or she has taken into account and fix a new completion date within 12 weeks. This should not be later than the completion date that applies at that time, from receipt of the notice and of reasonably sufficient particulars or estimates. The contract administrator, by virtue of clause 25.3.3, also has the power to carry out a final review of the completion date not later than 12 weeks after the date of practical completion. This can result in the fixing of an earlier or later completion date than previously set under clause 25.3.1. (It should be noted that the contract administrator cannot set a completion date earlier than that stated in the appendix.) This final review is not subject to receipt of a notice or particulars and estimate from the contractor. Clause 25.3.4 provides the award of an extension of time is always dependant on the contractor using ‘constantly his best endeavours to prevent delay in the progress of the Works, howsoever caused, and to prevent the completion of the Works being delayed or further delayed beyond the Completion Date.’

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Clause 25.4 includes reference to relevant events. Each of these relevant events entitles the contract administrator to award an extension of time in the event, and to the extent, that they cause a delay. Whilst all relevant events may give rise to entitlement to an extension of time, not all of them entitle the contractor to be reimbursed for any loss and expense arising therefrom. (In any event it should be noted that JCT 1998 With Quantities contains separate provisions under clause 26 in dealing with the financial effect of delay to the Works. It specifically deals with the separate notice provisions required and a list of matters that may entitle the contractor to be reimbursed for any loss and expense incurred arising from the Works being delayed.) Whilst it is convenient to categorize relevant events which are not also set out in the list of matters under clause 26 as neutral events and those which are also set out under clause 26 as employer risk events, it should be emphasized that clause 25 does not provide for financial adjustment of the contract sum. If the contractor wishes to claim loss and expense arising from delay to the Works, he or she is required to make the necessary applications under clause 26.1. The granting of an extension of time under clause 25 is not a condition precedent to a right to direct loss and expense under clause 26.11.

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4.5.4 Notice by the Contractor of Delay to Progress
To receive entitlement to an extension of time during the contract period and before practical completion, the contractor is required to give notice ‘forthwith’ where ‘the progress of the Works is being or is likely to be delayed’. The contractor must give written particulars of the expected effects of the relevant events delaying the Works, estimate the expected delay and keep the particulars and estimates up to date. It is implicit that the contractor should provide information that the contract administrator reasonably requires in order to assist the contract administrator in his or her duty in relation to extensions of time. Whilst the contractor is required to give notice forthwith, the courts have held that such notice (in relation to the JCT 1963 form) was not a condition precedent to the performance of the contract administrator’s duties in respect of giving an extension of time2. Whilst this was in relation to an earlier form of contract, case law further indicates that for something to be a condition precedent a time for compliance must be given and the consequence of non-compliance stated3. Therefore, whilst it may well be that if the contract administrator is unable to take steps to reduce the delay as a result of the contractor not giving notice forthwith, then the contractor should only be entitled to the extension of time that would have occurred had the notice been given. The failure to give notice forthwith does not prevent the contract administrator from awarding an extension of time during the contract period and before practical completion if notice is given later. Further, it should be stressed that, by virtue of clause 25.3.3.1, the giving of notice per se is not a condition precedent to the granting of an extension of time after practical completion.

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4.5.5 The Award of an Extension of Time during the Contract Period and Before the Completion Date
Clause 25.3.1 requires the contract administrator to give extensions of time if he or she is of the opinion that the completion of the Works is likely to be delayed beyond the completion date by one or more of the relevant events notified by the contractor. The contract administrator has 12 weeks (subject always to a cut-off point of the completion date in place at that time) from receipt of the contractor’s notice and reasonably sufficient particulars and estimates. ‘Sufficient’ particulars and estimates are thought to be those that comply with clauses 25.2.2.1 and 25.2.2.2. Therefore it follows that, provided a contractor gives the best particulars and estimates it can in the circumstances that exist at the time of the notice, the contract administrator will not be able to delay granting an extension of time beyond the 12 weeks (or such shorter period if notice is given within 12 weeks of the completion date), on grounds that he or she cannot yet judge the effect that the cause of delay will have on the progress. Whilst the granting of an extension of time is subject to the opinion of the contract administrator, ultimately the opinion may be subject to review by an arbitrator or judge. Therefore, it important that the principles adopted by a contract administrator in assessing an extension of time entitlement are sound. When assessing an extension of time during the contract period and before practical completion, the contract administrator, by virtue of clause 25.3.1.2, can only take into account relevant events that occur before the original or previously fixed (in the event of further extension of time assessments) completion date. Relevant events that occur after the completion date are dealt with when the contract administrator reconsiders extensions of time after either the completion date or practical completion under clause 25.3.3. The contract administrator is required to award an extension of time that he or she estimates to be ‘fair and reasonable’. This reflects that the assessment of the extension of time entitlement will not be an exact science, but will have to be the result of a consideration of various factors such as: • the exact terms and application of the facts of the relevant event in question; • the amount of the immediate delay in the progress of the Works; • the effect of any delay caused by the contractor’s default; • the effect of concurrent causes of delay and whether one of them is an effective dominant cause; and • the extent to which the contractor has used its best endeavours to prevent delay in accordance with clause 25.3.4.

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The courts have held that a contract administrator, in assessing an extension of time, should conduct a logical analysis in a methodical way of the impact which events, whether relevant events or not, were likely to have on the planned programme4. A contract administrator is required to make a calculated, rather than impressionistic, assessment of extension of time entitlement. Therefore the contract administrator, having satisfied him or herself that an event is relevant, is required to assess whether the affected activities were on the critical path or not. In assessing delay the contract administrator could consider the effect of the causes of delay as a whole by carrying out a retrospective delay analysis. This will involve assessing the effect of each individual delaying event in conjunction with other delaying events. This will inevitably involve the preparation of an ‘as built’ record or programme to identify the delayed activities and a subsequent analysis of the causes of the delayed activities and assessment of whether the causes of delay are relevant events. A comment on the approach in dealing with the effect of concurrent delays and consequential entitlement is made later in this section (see 4.5.8 and 4.5.9). Further, if the contract is drafted to include sectional completion dates, the contract administrator is required to assess the effect of each delay in respect of each section and decide whether appropriate extensions of time need to be issued. There will be times where the records either do not exist or are inadequate to construct an ‘as built’ record. Further, an assessment of an extension of time entitlement may have to be considered before the effects of delays are known, thereby preventing a retrospective delay analysis. In these instances the contract administrator should undertake an objective analysis of the likely or probable impact on the critical path activities based on logical analysis and not an impressionistic assessment.

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4.5.6 The Award of an Extension of Time after the Completion Date
Clause 25.3.3. requires the contract administrator to reconsider any previous extension of time awards and/or deal finally with the question of extension of time within a period of 12 weeks from the date of practical completion. In reviewing the completion date, the contract administrator is required again to grant an extension of time that is fair and reasonable. The contract administrator is not limited to relevant events notified by the contractor and, in reviewing earlier extension of time awards, can fix an earlier completion date by taking into account any omissions justifying a reduction in any extension of time awards granted previously. Prior to 1993 it has been argued, in relation to the JCT 1963 form of contract, that if a variation was issued after the completion date, that is, after the date of any previous extension of time awards, the employer would be prevented from deducting liquidated damages for the period up to the date of the issue of the instruction to undertake the variation. However, it has been held that this

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principle does not apply to the JCT 1980 form and, by virtue of the same wording being adopted, its successor the JCT 1998 form. The correct position now is that if instructions for additional work are issued at a time when the contractor is in culpable delay, that is, the Works being incomplete after the latest extended completion date, the contractor is only entitled to a fair and reasonable ‘net’ addition (sometimes referred to as the ‘dot on’ principle) to the previously fixed completion date and not by fixing as the completion date the calendar date upon which the work would reasonably be expected to be completed having regard to the calendar date upon which the variations were instructed5.

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4.5.7 Relevant Events
The relevant events have been categorized as ‘employer risk’ (4.5.7.1) and ‘neutral’ (4.5.7.2) events. 4.5.7.1 EMPLOYER RISK EVENTS Clauses 25.4.5.1 and 25.4.5.2: Compliance with [contract administrator’s] instructions under clauses 2.3, 2.4.1, 13.2 (except for a confirmed acceptance of a 13A Quotation), 13.3 (except compliance with a [contract administrator’s instruction for the expenditure of a provisional sum for defined work or of a provisional sum for Performance Specified Work), 13A 4.1, 23.2, [34, 35 or 366] or in regard to opening up for inspection of any work covered up or the testing of any of the work, materials or goods in accordance with clause 8.3 (including making good in consequence of such opening up or testing) unless the inspection or test showed that the work, materials or goods were not in accordance with this Contract. A contract administrator will need to examine the cause of instructions being issued in the first place (for example, was it a result of defective workmanship?) before assessing the effect of its timing and scope of work on the progress of the Works. It will also be necessary to assess whether the contractor was already in culpable delay or if there are competing causes of delay for which the contractor is responsible. Clauses 25.4.6.1 and 25.4.6.2: Where an information release schedule has been provided, failure of the [contract administrator] to comply with clause 5.4.1 [or] failure of the [contract administrator] to comply with clause 5.4.2. If there is to be an information release schedule the contract administrator will be required to follow it. To the extent that it is not complied with and such non-compliance causes a delay, the contractor will be entitled to an extension of time. However, if there is no provision for an information release schedule, by virtue of clause 5.4.1 being deleted, or if the information release schedule

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does not cover the issue of information that is required, then the contract administrator is required to provide any other drawings and details to explain and amplify the contract drawings when they are reasonably necessary. It has been held that a contractor’s programme or document presented at the commencement of the Works could constitute a specific application for instructions or information provided that the date specified for delivery for each set of instructions met the requirement of not being unreasonably distant from nor unreasonably close to the relevant date7, subject to it being modified if the Works did not progress to plan. It has also been held (by analogy to a House of Lords decision in relation to a similar clause in JCT 1963) that whilst the withdrawal of a nominated sub-contractor may not come within this clause, delay by the employer in making a timeous re-nomination was covered8. Clauses 25.4.8.1 and 25.4.8.2: The execution of work not forming part of this Contract by the Employer himself or by persons employed or otherwise engaged by the Employer as referred to in Clause 29 or the failure to execute such work [or] the supply by the Employer of materials and goods which the Employer as referred to in clause 29 or the failure so to supply. This clause is also known as the ‘artists and tradesmen’ clause. Its scope includes work by a local authority or statutory undertaker under a contract with the employer. Clause 25.4.12: Failure of the Employer to give in due time ingress to and egress from the site of the Works or any part thereof through or over any land, buildings, way or passage adjoining or connected with the site and in the possession and control of the Employer, in accordance with the Contract Bills and/or Contract Drawings, after receipt by the [contract administrator] of such notice, if any, as the Contractor may be required to give, or failure of the Employer to give such ingress or egress as otherwise agreed between the [contract administrator] and the Contractor. This clause is not concerned with possession of the site itself, but with access to it over other land in the possession and control of the employer as stated in the contract documents. Clause 25.4.14: By reason of the execution of work for which an Approximate Quantity is included in the Contract Bills which is not a reasonably accurate forecast of the quantity of work required. What constitutes a reasonably accurate forecast will be a matter of fact. However, it is suggested that empirical studies of the accuracy of quantity surveyor’s estimates may give guidance, that is, +/– 5 per cent accuracy.
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Clause 25.4.17: Compliance or non-compliance by the Employer with clause 6A.1. Clause 6A.1 relates to the employer ensuring that the planning supervisor (and the principle contractor, where the contractor is not the principle contractor) carries out his or her duties under the CDM regulations. Clause 25.4.18: Delay arising from a suspension by the Contractor of the performance of his obligations under the Contract to the Employer pursuant to clause 30.1.4. Clause 30.1.4 relates to the contractor’s rights to suspend the Works as a result of failure by the employer to pay the contractor in accordance with the contract payment terms and procedure in compliance with the Housing Grants, Construction and Regeneration Act 1996. Therefore, if the contractor is entitled to suspend the Works under clause 30.1.4 it will be entitled to an extension of time in the event that the Works are delayed as a result. It is interesting to note that the corresponding matter clause (26.2.10) is more restrictive in that it only entitles the contractor to recover any direct loss and expense if the suspension was not ‘frivolous or vexatious’. 4.5.7.2 NEUTRAL EVENTS

Clause 25.4.1:
‘force majeure’ This term is used in reference to all circumstances independent of the will of humankind which is not in our power to control, such as war, inundations and epidemics. It is wider than ‘Acts of God’, but it is generally thought that in relation to standard forms of construction contracts it has a restricted meaning. This is because matters such as war, strikes, fire, weather and government action are expressly dealt with in the contract. Clause 25.4.2: ‘exceptionally adverse weather conditions’ The correct test to be applied by the contract administrator is whether the weather itself was exceptionally adverse9 so as to give rise to delay. This should be decided in light of the historic norm for the area and the status of the Works when the delay occurred. Therefore, the contract administrator should examine local meteorological and site records, looking at details and timing of rainfall, high wind speed, temperature and assess the effect on the labour, plant and work operations on site for the relevant periods.

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Clause 25.4.3: ‘loss or damage occasioned by any one or more of the Specified Perils’ These are defined by clause 1.3 and include: • fire; • lightning; • explosion; • storm; • tempest; • flood; • bursting or overflowing of water tanks; • apparatus or pipes; • earthquake; • aircraft and other aerial devices or articles dropped therefrom; and • riot and civil commotion. However, they exclude: • ionizing radiations or contamination by radioactivity from any nuclear fuel or nuclear waste from the combustion of nuclear fuel; • radioactive toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof; and • pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds. The scope of the specified perils is very wide and could stem from acts of negligence by the contractor. Clause 25.4.4: Civil commotion, local combination of workmen, strike or lock-out affecting any of the trades employed upon the Works or any of the trades engaged in the preparation, manufacture or transportation of any of the goods or materials required for the Works. The terms strike and lock-out should be given their ordinary meaning. The courts have given guidance on the meaning of civil commotion in relation to insurance contracts to include a stage between ‘riot and civil war’10.
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Clause 25.4.5.1: Compliance with [contract administrator’s] instructions under clauses ... 34, 35 or 36... Clause 34 instructions relate to ‘fossils, antiquities and other objects of interest or value’ found on site during excavation. Clauses 35 and 36 relate to instructions connected with nomination. Whilst the contractor is seemingly not protected for recovering loss and expense monies by virtue of there not being a corresponding ‘matter’ listed under clause 26, with regard to a late nomination it would appear that a contractor could seek to rely on clause 26.2.1 for late instruction of the expenditure of a provisional sum relating to a nominated sub-contractor or supplier. Clause 25.4.6: Delay on the part of nominated sub-contractors or nominated suppliers which the contractor has taken all practicable steps to avoid or reduce. The effect of this clause is that if such a delay causes an extension of time, even if the delay is due to the default of the nominated sub-contractor, the employer is deprived of the right to deduct liquidated damages. However, it should be noted that if a nominated sub-contractor has completed its work and has to return to site to remedy defective workmanship which in turn causes a delay to the Works, then this clause does not apply11. In this scenario an extension of time would not be granted. Whilst the employer is not liable to the contractor for losses caused by nominated sub-contractors and nominated suppliers, the contractor may be able to recover its losses directly through its nominated sub-contract or supplier contract. Clause 25.4.9: The exercise after the Base Date by the United Kingdom Government of any statutory power which directly affects the execution of the Works by restricting the availability or use of labour which is essential to the proper carrying out of the Works or preventing the Contractor from, or delaying the Contractor in, securing such goods or materials or such fuel or energy as are essential to the proper carrying out of the Works. The effect of this sub-clause is to reduce the scope of the force majeure sub-clause (clause 25.4.1) to those events not contained within this wording. Clauses 25.4.10.1 and 25.4.10.2: The contractor’s inability for reasons beyond his control and which he could not reasonably have foreseen at the Base Date to secure such labour [goods or materials] as is [are] essential to the proper carrying out of the Works. These words limit the effect of the sub-clause in respect of shortage of labour, materials or goods that the contractor could have foreseen by reasonable enquiry were likely to continue or arise at all.
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Clause 25.4.11: The carrying out by a local authority or statutory undertaker of work in pursuance of its statutory obligations in relation to the Works, or the failure to carry out such work. This sub-clause is limited to situations where the relevant authority or undertaker carries out work using its statutory powers, as opposed to under a contract with either the employer or contractor, and such work hinders the Works and causes delay. Clause 25.4.13: Where clause 23.1.2 is stated in the appendix to apply, the deferment by the Employer of giving possession of the site under clause 23.1.2. Clause 23.1.2 enables the employer to defer possession of the site by six weeks without being in breach of contract. This clause enables the completion date to be extended accordingly without the employer losing his or her right to deduct liquidated damages for any delay for which the contractor is culpable. Clause 25.4.15: Delay which the Contractor has taken all practicable steps to avoid or reduce consequent upon a change in the Statutory Requirements after the Base Date which necessitates some alteration or modification to any Performance Specified Work. The effect of this clause is limited to legislative changes that affect performance specified work, the effects of which the contractor has made attempts to mitigate. There is no requirement for the contractor to have made reasonable enquiry at or before the base date. Clause 25.4.16 The use or threat of terrorism and/or the activity of the relevant authorities in dealing with such use or threat. The effect of this sub-clause is to reduce the scope of the force majeure sub-clause (clause 25.4.1) to those events not contained within this wording.

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4.5.8 Concurrent Delays
When assessing a contractor’s entitlement to an extension of time, the contract administrator will need to assess the effect of concurrent causes of delay. This is important for two reasons: 1) In relation to the granting of an extension of time: for example in assessing whether delay is caused in total or in part by an event for which the contractor is culpable under the contract. 2) In relation to clause 26 which deals with loss and expense: that is, some relevant events are paying and some are non-paying.

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The contract administrator may be faced with a scenario where there are concurrent causes of delay, each of which could have an equal delaying effect, or alternatively could have significantly unequal effect. The law is unclear on the correct approach. However, the generally accepted approach is that it is the dominant delaying event that should govern the award of an extension of time. Therefore, if a contractor seeks to rely on late instructions as entitlement for an extension of time and at the same relevant time the contractor is also delayed by events for which it is culpable, the contract administrator will need to satisfy him or herself that the delay caused by the late instructions was the dominant delay in order to award an extension of time. Which cause is dominant is a question of fact. This is not solved by the mere point of order of time but is to be decided by applying common sense standards12. The court had to consider the question of concurrent delays in 1999 and held that a contract administrator is entitled to consider the contractor responsible for concurrent delays when establishing whether or not a relevant event has in fact caused a delay13. Therefore, the question for consideration by the contract administrator when there are competing causes of delay, one of which is a relevant event and one which is not, is which cause was the dominant cause of delay. The courts also commented that where those competing causes were of equal causes, then if the contract administrator considers it fair and reasonable to do so, he or she is required to grant an extension of time14.

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4.5.9 Consequential Entitlement
Consequential entitlement is where a delay that is a non-paying relevant event could fall to be an ‘employer risk’ event or ‘matter’ under clause 26. For example, the Works could be delayed by the issue of contract administrator’s instructions that cause the Works to overrun into an ‘exceptional adverse weather’ or industry shutdown period. It is generally thought that the extension should be given under the primary cause.

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4.5.10 Administration
A notification granting an extension of time must be taken with great care. Use of the RIBA and/or RICS Notification of Extension of Time form is recommended. The notification should include: • the job title and number (if any); • the contractor’s name; • the date of issue; • the completion date; • a list of the relevant events for which an extension of time has been given;

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• the extent to which the omission of work has been taken into consideration; • the date of the contractor’s written notice of delay (if any); and • the revised completion date.

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4.5.11 Extension of Time under an ICE Contract
Although the specific contract clauses differ, the principles set out in relation to JCT contracts equally apply to the ICE contracts. The contractor can apply for an extension of time by giving notice, although such notice is not a condition precedent for the giving of an extension of time as the engineer can make an assessment in the absence of such notice. In assessing a contractor’s entitlement for an extension of time, the engineer is required to make an assessment of the delay suffered and consider whether that delay fairly entitles the contractor to an extension of time. The engineer is required to undertake a final review within 14 days of substantial completion.

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4.5.12 Extension of Time under a GC Works Contract
The project manager or supervising officer under GC/Works forms of contract has the power to award an extension of time. However, it should be noted that some forms do make the giving of a notice by the contractor a condition precedent of an extension of time being awarded.

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Notes
1. Fairweather v. Wandsworth (1987) 39 BLR 106 2. London Borough of Merton v. Leech (1985) 32 BLR at pp.89 et seq. 3. Bremer Handelgesellschaft MBH v. Vanden Avenne-Izegem [1978] 2 LLR 109 4. John Barker Construction Limited v. London Portman Hotel Limited (1996) BLR 83 5. Balfour Beatty v. Chestermount Properties (1993) 62 BLR 1 6. Instructions under clauses 34 (antiquities), 35 and 36 (nomination of sub-contractors and suppliers) are non-paying 7. London Borough of Merton v. Leach [1985] 32 BLR 51 at pp.85-89 issue 5 8. Percy Bilton v. GLC [1982] 1 WLR 794 (HL) 9. Walter Lawrence v. Commercial Union Properties (1984) 4 ConLR 37 10. Levy v. Assicurazioni Generali [1940] 3 All ER 427 at p.437 11. Jarvis J. & Sons v. Westminster Corporation [1970] 1 WLR 637 (HL) 12. Leyland Shipping v. Norwich Union [1918] AC 350, Yorkshire Dale Steamship v. Minister of Ware Transport [1942] AC 691 13. Henry Book Construction (UK) Limited (Manchester) Limited 1999) TCC 18.10.99 v. Malmaison Hotel

14. Henry Book Construction (UK) Limited v. Malmaison (Manchester) Limited 1999) TCC 18.10.99 at paragraph 13

Hotel

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London: Sweet & Maxwell Ramsey. S. 2nd edition. Lloyds of London RIBA.N. SECTION 5. (1994) Hudson’s Building and Engineering Contracts.PART 4. (1997) Liquidated Damages and Extensions of Time in Construction Contracts. K. Section 5 Appendix A (12/01) Effective from 1/2/02 Page 1 . The Architect and Extensions of Time The Surveyors’ Construction Handbook Part 4. I. Oxford: Blackwell Science Emden’s Construction Law. V. 7th edition. London: Sweet & Maxwell Pickavance. B. 11th edition. (2000) Keating on Building Contracts. APPENDIX A Appendix A: Further Reading Eggleston. 2nd edition. (2000) Delay and Disruption in Building Contracts. Butterworth Tolley Duncan Wallace. & Furst.

Surveying safely Your guide to personal safety at work .

sufficient resources and effective training will provide a better product more safely and more economically. being at a premises or on site. Using effective health and safety procedures will: • Provide a safer environment for those involved in managing property and construction • Result in higher productivity. partner. FRICS MCIArb MaPS Chairman of RICS Health and Safety Forum 2 . to our colleagues and the public at large. Ian Watson.Surveying safely Your guide to personal safety at work Why is health and safety important? Because it affects you! We take significant risks in our jobs regularly. Serious accidents at work destroy and disrupt family and personal lives. good design. travelling on business or being at a property or on site. we have to take personal responsibility to make it happen by eliminating or reducing risks. The loss of a parent. Decisions taken in the boardroom can have as much influence on health and safety as working practices in the office. It will also remind you of the many aspects of our industry that can be hazardous. If we are to make a difference. and make our industry a safer place to work. be it driving in connection with our work. whatever part you play in the industry. You can make a difference by putting health and safety first. especially if it could have been avoided. This guide has been produced by the new RICS Health and Safety Forum to help you to put health and safety first when carrying out your duties and responsibilities. and • Lessen the chance of having accidents or suffering illness. Adequate planning. and planning and controlling the risks that remain for ourselves. friend is devastating and trying to rebuild a life after an accident can be equally traumatic. breadwinner. You have a critical role. innovation and best practice.

Contents General statement of employers’ and employees’ duties Safety of employees Your workplace Identifying hazards and undertaking risk assessments Before visiting premises/sites Upon arrival and during visits to premises/sites Safety of yourself and others Your legal duties Case studies For more information 4 4 5 6 7 9 11 12 14 15 3 .

Surveying safely Your guide to personal safety at work General statement on employers’ and employees’ duties The Health and Safety at Work etc Act 1974 places a statutory duty on all employers. audit and review the organisation’s health and safety performance on a regular basis. both employers and employees have a duty of care in tort (particularly negligence) towards those who may be affected by their actions or instructions. In addition. including their managers. with roles and responsibilities for managing health and safety • Make sure arrangements are in place that show the organisation’s approach to health and safety. Safety of employees Make sure you comply with the provisions of the Health and Safety at Work etc Act 1974. risk assessments and control measures) • Measure. or others who may be affected by their undertaking. and that it will be reviewed on a regular basis • Detail the organisation’s health and safety structure. and how the management system is planned and implemented (including hazard identification. Equally. to provide and maintain equipment and systems of work that are safe and without risk to the health of employees. The HSE document ‘Successful Health and Safety Management (HS(G) 65)’ provides guidance on how to satisfy the legal requirements of the regulations • Have a policy statement by the chief executive/managing director/senior partner outlining the organisation’s commitment to health and safety. employees need to take reasonable care of their own safety and that of others who may be affected by their acts or oversights. Employers with five or more employees must: • Have written health and safety documents. 4 . Employers must: • Provide information on health and safety • Have emergency procedures • Carry out risk assessments • Eliminate and control risks • Have insurance • Carry out health surveillance • Provide Personal Protective Equipment (PPE) • Provide for those with special needs • Control working hours • Provide regular health and safety training. Other regulations that are important to know and adopt include: • • The Workplace (Health Safety and Welfare) Regulations 1992 The Management of Health and Safety at Work Regulations 1999.

ear defenders. Your workplace The Workplace Health Safety and Welfare Regulations 1992 provide information on what assessments you should be making and the facilities you should provide. particularly those in training or who are inexperienced. face masks. the best way to make sure safe practice by people in your charge is to set a good example. steel capped shoes. Helmets. records of hazards on particular sites. which allows personal details to be extracted from the book and placed in a secure location to comply with the Data Protection Act 1998. torches and batteries – these should be in your office as appropriate and in good condition Make sure your offices are safe: Are there fire precautions and means of escape? Washing facilities? Is electrical equipment up to date and safe? Do you prepare and store food and drink safely? Have you carried out Display Screen Equipment Assessments? Are you aware of the stress that some employees may be suffering? Assess the risks of manual handling in the office or look at the materials being used or stored and whether COSHH assessments are needed Provide guidance on driving on your organisations business or the use of hand held devices while driving. Make sure all relevant people are notified Make sure a supply of the right equipment is available. Finally. Occupiers of premises must also carry out fire risk assessments. Your employees need to have training on how to use it. First aid – accident books – you should have the correct form of accident book.Employer’s actions You have a special responsibility for people in your charge. 5 . • • • • • • • Make sure employees in your charge take the right equipment with them on visits. depending on the size and nature of your organisation: Welfare Smokers Rest room First aid Pregnant mothers Fire – The Fire Regulations Act 1991 and Fire Regulations 1997 need you to maintain adequate fire safety equipment. Check they know how to use it Make sure scrupulous records are kept of employees’ movements Keep available. overalls.

In the words of the Health and Safety Executive (HSE). 6 . Contractors – to protect yourselves. Portable Appliance Testing (PAT) – around 25% of reportable electrical accidents involve portable appliances. in your work.’ Risk assessment involves two key concepts. it is important to write down a summary of the risk assessment process so there is a record of it and so that other people can refer to it. Risk is the likelihood (whether high or low) of the harm being caused. Legionnaires disease – depending on the use of the building with which you may be involved. And get advice on how to reduce any risks and how to carry out your own checks. you should have procedures to make sure no one comes into your building to work without you knowing they are competent. Working with risk assessments The principles of risk assessment are based on common sense. risk increases as both the severity or likelihood of the harm increases. you should make sure you are not at risk.Surveying safely Your guide to personal safety at work Signage – in addition to helpful Health & Safety signs on first aid. A range of HSE and other guidance is available that will allow you to develop a system suitable for you and your business. Asbestos – everyone in control of premises must proactively locate and manage any asbestos that exists. being those of hazard and risk. you should have safety signs displayed for any other significant risks. to suitably provide for people with disabilities. by employing a WTC (Water Treatment Company) to carry out an assessment. Make sure you have them tested regularly (recommended annually) by an approved tester. Disability Discrimination Act 1995 (DDA) – the DDA and the Disability Rights Commission Act 1999 requires anyone providing a service from their building and receiving visitors. fire or manual handling. Identifying hazards and carrying out risk assessments An underlying principle of effective management of health and safety is that of risk assessment. However. could cause harm to people so that you can weigh up whether you have taken enough precautions or should do more to prevent harm. Importantly. Hazard and risk Hazard is something with the potential to cause harm to someone. Familiarity with the basis of risk assessment will make the process a natural part of your day to day work and will give you the mental skills to deal effectively with hazards on site. a risk assessment has been carried out and a safe system of work has been established. whether it be very hot water or fragile roofs. risk assessment is ‘nothing more than a careful examination of what.

and if so what is the extent and nature of the damage? • Are areas to be defined as unsafe for access? • Are security measures in force and how is access to be gained? • Is protective clothing or special equipment needed (see later)? Occupation • Is the property occupied? If so. Either option will involve a consideration of the method of working and if necessary documenting a ‘Safe system of work’ or ‘Method statement’ for the activity. secure. squatters. eg children. vagrants. well lit). identify likely hazards and carry out a risk assessment. Before visiting premises/sites When you receive instructions to inspect a site or premises. ie epilepsy. what stage has been reached? hat are the site rules? • Are the premises known to be derelict or in poor condition. The sorts of factors you need to take into account include: Travelling to and from site • Plan the journey to avoid driving too fast. make sure you get relevant information about the property. Does the office have a record of employees’ mobile numbers? • Who has a record of where the lone worker is and when to expect them back in the office or at home? • Have procedures been made for regular ‘check-in’ calls? • How would access for rescue be achieved? • Does a lone worker suffer from any medical condition which could affect personal safety. easy to exit.Managing risk Having identified a hazard and assessed the risk involved. animals? • Are the occupants or neighbours likely to be aggressive or disaffected? 7 . You must make as full an assessment as reasonably possible. consulting with others as necessary. does the occupant know you are coming and have they made any special access arrangements? • Who are you likely to encounter on the building or site. for too long or when tired • Be aware of where to park (clear. Lone working • Is lone working a safe option and if so what provisions are made for communications in an emergency. etc? Condition of site • If a construction site. diabetes. consider how the risk might be reduced to a level as low as reasonably practicable by looking at: • • Removal of the hazard by re-planning the work process or activity Accepting the hazard will remain but re-planning of the work process or activity to reduce the likelihood of harm happening or to reduce the severity of the consequences if it does.

plant rooms. security establishments. it is safe to use? When it was last inspected by a competent person? • Are any towers. etc? Special equipment In certain circumstances any of the following equipment may be necessary: • Gloves • Respirator or face mask • Safety helmet 8 .g. electronic equipment etc? Site rules and welfare • Does the client/premises manager have ‘house rules’? • Are there ‘Permit to work/enter’ procedures to be followed? • If a site. gas or other noxious atmosphere. noise. masts or tall chimneys involved? • Are they to be inspected. condoms. razor blades etc? • Could the site be a source of anthrax which. confined spaces. eg railway premises. radiation.e. and what might you encounter. warehousing. asbestos. is there a ‘Construction phase health and safety plan’ including induction procedures to be followed? • Might toilet.Surveying safely Your guide to personal safety at work Activity • If a building/site is occupied. fumes. etc. i. wash and first aid facilities be needed and how will these facilities be provided? High structures • If a scaffold exists. what is the nature of that occupation. e. for example. explosives etc? • Are records such as a Register of Asbestos Containing Materials or environmental reports available? What do they reveal and what special precautions need to be taken? Diseases • Is the nature of the site such that it could be contaminated with any form of clinical waste? • Are you likely to encounter used syringes/needles. manufacturing. vehicle movements. could be present in haired plaster? • Could legionella be present in disused water storage systems? • What hazards might arise from vermin (eg Weil’s disease)? Special access • Will special access arrangements be required (eg underground) and who will provide it and manage it? • Is special training needed? Special risks • Is the nature of the building or site such that it presents special hazards. residential. and if so how will they be accessed? • Is a ‘cherry picker’ or other special access equipment needed and who is to provide/manage it? Dangerous substances • Is the inspection likely to bring you into contact with hazardous substances such as chemicals.

Structures • The chance of partial or total collapse of: • Chimney stacks. its occupation or other factors have changed unexpectedly. • • • • 9 . Would lack of fitness present a hazard in itself? • Are special skills needed and do you have those skills? • Do you have any phobias or suffer from vertigo or claustrophobia that would impair judgement with regard to personal safety? The above lists are by no means exhaustive and the extent to which any of the items might be relevant in a particular circumstance will vary. hinges and sashcords weak or broken. gable walls or parapets • Leaning. Arriving and during visits to premises/sites However well a survey or inspection is planned in advance. decay or attack Projecting nails and screws. joists and buried timbers weakened by age. Glass panels in doors and winglights may be painted over. or because the condition of the property. This may arise simply through a general lack of information about the site.• • • • Ear defenders Eye protection Boots Temporary lighting Having considered the ‘physical hazards’ that might exist. Timbers and glass Rotten and broken floors and staircases. you need to consider these in the light of personal and environmental issues: Environmental • Will weather conditions and/or light levels increase risk? (eg windy conditions and high structures) • Will temperature extremes present a hazard? Personal • Does gender or level of fitness have any bearing on the hazards which have been identified? Pregnant or nursing mothers need special consideration. bulged and unrestrained walls (including boundary walls) • Rotten or corroded beams and columns • Roofs and floors. you need to be alert to matters that are unknown until arrival at the premises or site. broken glass Glazing in windows and partitions may be loose. Flimsy cellar flaps and broken pavement lights Floorboards. Review the risk assessment as necessary and be alert during the inspection to other hazards such as.

ducts and sealed rooms • Rotting vegetation which may consume oxygen and give off poisonous fumes • Accumulation of poisonous of flammable gases in buildings on contaminated land • Stores containing flammable materials such as paint. collapsible. Unsafe atmospheres • Confined spaces with insufficient oxygen including manholes. mortar droppings and birds’ nesting material and excrement in roof voids. loose copings • Rusted. rotten or moss covered fire escapes. adhesives. sectional or fixed loft ladders • Concealed ceiling joists and low purlins • Ill-lit roof voids. vaults. access ladders and guard rails • Rotten roof decking and joists • Slippery roof coverings (slates. fuel and cleaning fluids • Hazardous substances. gas. including those obscured by flimsy coverings. 10 . including toxic insecticides and fungicides • Gas build-up in subfloor voids. water and steam supplies • Awkward entrances into sub-stations and fuel stores • Temporary lighting installations: mains connections and generators • Buried cables and pipes • Overhead electrical cables. cellars. Intruders and others • Physical dangers from squatters. moss or algae covered slopes) • Broken access hatches • Mineral wool dust. including bee and wasp colonies • Water cooling plant may harbour legionella • Unguarded flat roofs • Broken. Cornered birds and vermin • Insects.Surveying safely Your guide to personal safety at work Roofs • Fragile asbestos cement and plastic coverings • Fragile rooflights (often obscured by dirt or temporary coverings) • Low parapets or unguarded roof edges. roof voids. wells and septic tanks. stairwells and other unguarded openings • Manholes. Cesspools. Hidden traps. rotten and slippery crawling boards and escape ladders • Weak flat roofs and dust covered rooflights • Slippery roof surfaces • High winds during roof inspection • Ill-secured or flimsy. Danger from live and unsecured services • Electricity. vagrants or guard dogs • Disease risks from discarded syringes and condoms • Structures weakened by vandalism or arson • Aggressive tenants or property owners. loose. ducts and openings • Lift and services shafts.

Safety of yourself and others All employees of any organisation must. lead and other substances hazardous to health • Chemicals in storage or leaked • Contaminated water supplies • Contaminated air conditioning systems (legionella) Rural Environments Hazardous operations such as tree felling or tractor work Shafts. Securing the site and leaving • Upon completion of the visit. safety or welfare. particularly where a risk assessment shows that a hazard exists • Refuse to condone unsafe working practices by yourself or others and distribute information on hazards • Make sure your advice to clients will minimise the risk to the health and safety of others 11 . under the health and safety legislation. Safety of yourself • Make sure you are familiar with your organisation’s health and safety policy and arrangements for implementing safe working procedures • Comply with the office safety policy and ensure that any equipment you may use is in good and safe condition • Comply with your organisation’s safe systems of work. take reasonable care of their own health and safety and that of others who may be affected by their acts or omissions. As well as cooperating with their employer as necessary to help their employer to comply with their statutory duties. If you are a manager within an organisation you are also personally liable if you do not carry out the health and safety responsibilities associated with your duties. etc Farm animals Chemicals in storage or in use. pits.Contamination • Asbestos. or ensure one is put in place prior to carrying out work. ditches. Let them know as you leave and confirm when you expect to be back. the property should be left secure • Inform any occupier or staff in site office that you are leaving • Someone in the office or at home should know where you are and when you are due to return. • • • • Vermin and birds • Rats and mice (Weil’s and other diseases) • Bird droppings • Lice and fleas may be present in bedding. It is equally a criminal offence for you to intentionally or recklessly interfere with or misuse any thing provided in the interests of health. holes. soft furniture and carpets.

the directors/partners and individual managers for non compliance with any health and safety regulations. face masks. 12 . These must be followed to make sure there are satisfactory and safe systems in place for the carrying out of surveying activities. Finally. and a safe working method is in place that has been communicated to and understood before any field work taking place Make sure everyone has suitable and sufficient information. control and review of safe working practices (identified through the risk assessment). Check that they know how to use it and that it is safe to use Make sure a suitable and sufficient risk assessment has been carried out of the tasks to be performed. • • • • • • Make sure anyone in your charge takes the right equipment with them on visits. You will find the key elements of such systems in HSE publication HS(G) 65 – Successful Health and Safety Management.Surveying safely Your guide to personal safety at work • • Make sure you are aware of any hazards which may exist. and also towards anyone who may be affected by your or their work. together with any safe working instructions. Your legal duties Criminal liability The wide ranging requirements of the Health and Safety at Work etc Act 1974 are implemented principally through the Management of Health and Safety at Work Regulations 1999. it is for you to prove everything reasonably practicable was done to comply with the relevant legislation. The regulations need you to have a health and safety policy and to have effective management systems in place for the planning. In other words. training and instruction on health and safety matters for the task in hand Check available records of hazards on particular sites and make sure that all relevant people are notified Make sure. Helmets. Not taking the necessary actions to protect people from avoidable dangers in the workplace is in itself a criminal offence and charges may be brought against both the organisation. If action is taken. many of which by their very nature (particularly when working alone) must be regarded as hazardous activities. safety shoes. Safety of others You are responsible for anyone under your supervision. the best way to ensure safe practice by people in your charge is to set a good example. organisation. An accident does not have to happen before action is taken against you for non-compliance. overalls. wherever necessary that precautions are put in place to safeguard anyone who may be in the vicinity of works and unaware of the possible hazards Make sure the right equipment is used. follow the dictates of common sense. torches and batteries. particularly those in training or who are inexperienced. which have been issued by clients prior to carrying work at their premises If you are working alone. make sure you follow your organisation’s lone working procedures. Do not use any equipment that is defective – report it to your employer. ear defenders.

see case studies). Bearing in mind the wide ranging nature of the profession it is not intended to specify every piece of health and safety legislation. Equally employees must be given sufficient training in hazard identification and reduction/ control techniques to ensure that any non-foreseeable hazards arising during the course of their work do not give rise to otherwise avoidable accidents occurring. where effects of their actions are reasonably foreseeable. The employer or employee must seek out the relevant information themselves. to devise a suitable system.Employers may develop generic sets of safe working practices for each activity carried out. and supply any implements which may be required.’ An increasing area of liability in negligence is that of stress through work overload. However. Key regulations This publication sets down the background to health and safety legislation as it affects the work of surveyors. individual managers/team leaders also have a further responsibility for making sure any generic safe working practices are either sufficient or expanded as necessary for any particular activity taking place within their area of responsibility (Armour v Skeen. particularly in cases where the result is reasonably foreseeable (Barber v Somerset County Council see case studies). code of practice or guidance notes published by the HSE. Where in doubt get specialist advice. The duty to provide safe systems of work is illustrated by the judgement in General Cleaning Contractors v Christmas which stated: ‘It is the duty of the employer to consider the situation. 13 . Civil liability Employers and employees owe a duty of care to anyone who may be affected by their actions. to instruct his/her men what they must do.

It was decided.Surveying safely Your guide to personal safety at work Case studies Criminal offence caused by neglect of director. manager or secretary of an organisation Armour v Skeen Strathclyde Regional Council and its director of highways were both prosecuted following the death of one of its employees due to lack of a safe system of work and failure to make notification of certain works taking place. The second sash fell on to his fingers. his employers took no action to help. When he returned to work. The principal contractor was found guilty of failing to make sure people not in their employ were not exposed to health and safety risks under S3(1) of the Health and Safety at Work etc Act 1974. developed from the authority’s overall policy. This resulted in his being forced to retire through work related stress and the court awarding him £100 000 damages. Mr Barber was a teacher who was forced to take three weeks off work due to stress. To carry out this work he stood on the sill on the outside of the window. Civil liability relating to stress at work Barber v Somerset County Council The House of Lords decision published in April 2004 is the leading case relating to stress at work. 14 . A routine inspection by environment health officers found damaged asbestos insulation boarding and asbestos debris on the floor. the half platform had no edge protection.5metres and suffered fatal injuries. nor had the area been declared an exclusion zone. using one hand on the window sash to steady himself. Employees had been exposed to asbestos fibres over a period of time during routine work activities. fall and injure himself. London. its director of roads (being a manager or similar officer within the meaning of the Health and Safety at Work etc Act 1974) was found to have been negligent in not having a sound safety policy. causing him to let go. Criminal offence caused by failure to ensure persons not in an organisations employment were not exposed to safety risks A heating engineer was working on a development in Fitzroy Square. in place for his department. in the House of Lords. While it was held that it was SRC (as the body corporate ) that had committed the offence. Civil liability for safe systems of work General Cleaning Contractors v Christmas A person was employed by a contractor to clean the outside windows of a club. The principal contractor on site had not carried out a risk assessment in the area in the engineer was working. He climbed an unguarded ladder to a half platform from which he fell some 2. which was known to his employers. And they ought to have instructed their employees how to avoid accidents and supply any implements that may be needed. monitor his situation or reduce his workload. failing to provide information to his subordinates. and failing to provide training and instructions in safe working practices. Criminal offence caused by employer’s failure to manage asbestos High street retailer Poundstretcher Ltd was ordered to pay £15 000 in fines and costs after exposing employees to asbestos fibres. that his employers were negligent in failing to devise a safe system for carrying out such operations on the properties their employees had to visit.

aps.uk www.For more information www.org.rospa.gov.iosh.uk http://agency.uk www.org www.com www.eu.int/ www.hse.co.com www.books.britishsafetycouncil.uk www.uk 15 .shponline.osha.hse.co.co.rics.

www. The Royal Institution of Chartered Surveyors 12 Great George Street Parliament Square London SW1P 3AD United Kingdom T +44 (0)870 333 1600 F +44 (0)207 334 3811 contact@rics. regulation and consumer protection for business and the community.rics.Freeman . promoting best practice.rics.org RICS is the mark of property professionalism worldwide. It is the home of property related knowledge and is an impartial advisor to governments and global organisations.org www.org Oct 2004/5 000/40236/D.

2: CONSTRUCTION (DESIGN AND MANAGEMENT) INFORMATION Health and Safety. The number of publications is daunting and the members of the RICS working party on CDM are frequently asked for advice in this respect. if this is required. not the least of which is the Library Service of the Institution. Section 2 (10/02) Effective from 1/12/02 Page 1 . The list is not exhaustive and has been prepared impartially without inference or preference or ranking and no doubt there are many other equally suitable sources of information not included. This schedule attempts to meet the widest needs. Other eminent organizations. guidance has been prepared which is based on the personal experience of the working party members. A variety of available media has been included such as videos and audio tapes. as well as the written word. produce reading lists which contain much more comprehensive information. In response to this.PART 5. SECTION 2 SECTION 5. data has been collated on a functional basis under the heading of the various representatives of the project team for whom it is felt that the information is most useful. Where possible. THE RICS HEALTH AND SAFETY IN CONSTRUCTION PRACTICE PANEL The Surveyors’ Construction Handbook Part 5. and CDM in particular. publications and other sources of reference. is a growth industry and is supported by a plethora of books. ranging from introductory background for the beginner to more detailed coverage on specific topics for the more experienced reader.

HMSO. 2000 [CIS 39] Clerk of Works The CDM Regulations: Their Implications for Practice. 2000/01 [0717621103] Risk Assessment 5 Steps to Risk Assessment. HSE. HSE.’ Video.2. A Guidance Note for Clerk of Works. 1988 [0118839926] ‘Not Just an Accident. 1995 [1859460062] Clients and The CDM Regulations: What You Need to Do. HSC. Approved Code of Practice and Guidance. RIBA. HSE. ICW GB Page 2 Effective from 1/12/02 Part 5. SECTION 2 5. HSE. 1993 [Video SP100V] Health and Safety Statistics of HSE 2000/01. Safety and Welfare) Regulations 1996. HMSO. APS. 2001 [071 7621391] The Construction (Health. 2000 ‘Managing Construction for Health and Safety’ Construction (Design and Management) Regulations 1994. 1994 [0110438450] The Construction (Design and Management) (Amendment) Regulations 2000. CIRIA. 39 Construction (Design and Management) Regulations 1994: The Role of the Client. 1998 [0717615804] Clients Engaging an Architect: Guidance for Clients on Health and Safety. 2002 Construction Sheet No. HMSO. 1996 [0110359046] Accident Awareness/Statistics ‘Blackspot Construction’ – Study of fatal accidents in the building and civil engineering industries 1981–1988 (out of print).1.PART 5. Schedule of Sources of Useful CDM Information Regulations The Construction (Design and Management) Regulations 1994. Section 2 (10/02) The Surveyors’ Construction Handbook .

42: CDM – The Pre-Tender Stage Health and Safety Plan. Section 2 (10/02) Effective from 1/12/02 Page 3 . APS. ACE. 1997 Out of Print Planning Supervisor Construction Sheet No.PART 5. RIBA. HSE. Building Design. CERCI. CIRIA. 1995 [CIS 42] Construction Sheet No. HSE. CONIAC. HSE. Construction (Design and Management) Regulations 1994: The Role of the Designer. 1995 [Agreement F] Designers Designing for Health and Safety in Construction (The Green Book). 2001 3rd edition [08 601 78005] Building Design: Easibrief. 1995 [CIS 43] The Surveyors’ Construction Handbook Part 5. HSE. 1995 [Video 1898671044] Out of Print Construction Safety Sheet No. 1995 [CIS 41] Site Safety Handbook. 1995 [0717608077] CDM Regulations Case Study Guidance for Designers: An Interim Report. CDM Primer by Henry Haverstock. 41. 43: The Health and Safety Plan During the Construction Phase. 2000 [PS/99] Form of Appointment as Planning Supervisor. CIRIA. 1995 [0717607771] A Safer Bet: An Introduction to the Principles of the CDM Regulations 1994. SECTION 2 Forms of Appointment for Planning Supervisors Form of Appointment as Planning Supervisor. 2000 [FOA/2000] Where a Consulting Engineer is Engaged to Act as Planning Supervisor. Construction (Design and Management) Regulations 1994: The Role of the Planning Supervisor. by Sylvester Bone. 40. 2000 [CIS 40] CDM Documents (See also ‘Comprehensive Guidance’) Construction Sheet No. 1995 [0860174212] Information on Site Safety for Designers of Smaller Building Projects. HSE.

1995 [GCI] Health and Safety in Construction. CIP. HSE. 1996 [HS G 150] [0717621065] Construction Health and Safety Manual (includes 2 updates/year).a. CITB. 1995 [PML 54] Out of Print A Guide to Managing Health and Safety in Construction (The Brown Book). Croner. 1990 [M20 6/90] Out of Print Prevention of Falls to Window Cleaners: Guidance Note. Contract Research Report. HSE. 1997 [CIS 47] General Access. 44: The Health and Safety File. 1997 [CIS 8 rev] Tower Scaffolds. HSC.PART 5. Thomas Telford 2nd edition 2001 [0727730363] Croner’s Management of Construction Safety (includes 2 updates and 12 newsletters p. Building Centre Trust. Section 2 (10/02) The Surveyors’ Construction Handbook . HSE. 1997 [CIS 10 rev] Inspections and Reports. 1997 [0901919136] Comprehensive Guidance CDM Regulations: How Do Regulations Affect You? HSE. HSE. 1995 [CRR73] [0717607682] Control of Substances Hazardous to Health in Construction by HSC. HSE. SECTION 2 Construction Sheet No. HMSO. HSE. HSE. 1997 [CIS 49] Dust and Noise in the Construction Process. HSE.). 1991 [GS 25 0118856820] Out of Print Contractors (See also ‘Comprehensive Guidance’) Page 4 Effective from 1/12/02 Part 5. 1997 [1852630 027] Specific Hazards Safety in Excavations. 1995 [CIS 44] The Building Centre Maintenance Manual & Health and Safety File. 1997 CDM: The View from Here. Scaffolds and Ladders. 1995 [0717607550] CDM Regulations Explained by Raymond Joyce.

Newsletter [SPOL] Construction Safety Manual (2 Volumes). Section 2 (10/02) Effective from 1/12/02 Page 5 . 1995 [AT 1] Health and Safety in Property. CITB. 2000 [GE 700] CD-Rom Audio Tapes CONDAM – CDM Regulations. Owlion. RICS and College of Estate Management. 1997 [CHSMAN] Construction Site Safety: Safety Notes Loose-leaf. BEC. 1995 [ASP 17230] Key to References Used Name ACE (Association of Consulting Engineers) Address Alliance House 12 Caxton Street London SW1H 0QL Telephone 020 7222 6557 APS (Association of Planning 16 Rutland Square Supervisors) Edinburgh EH1 2BB Building Centre Trust The Building Centre 26 Store Street London WC1E 7BT CMP Information City Reach 5 Greenwich View Place Millharbour London E14 9NN 26 Store Street London WC1E 7BT 0131 221 9959 020 7692 4000 Building Design 020 7861 6467 CIC (Constructio Industry Council) 020 7637 8692 020 7222 8891 CIRIA (Construction Industry 6 Storey’s Gate Research and Information London SW1P 3AU Association) CITB (Construction Industry Training Board) CITB Publications Bircham Newton Kings Lynn Norfolk PE31 6RH 01485 577577 CONIAC (Construction HSE Books Industry Advisory Committee) PO Box 1999 Sudbury Suffolk CO10 2WA 01787 881165 The Surveyors’ Construction Handbook Part 5. CITB. Owlion 1995 [ASP 10100] Construction Radio: Talking Point on the CDM Regulations.PART 5. BEC. SECTION 2 Safety Policies for Construction – BEC Guide. RICS and College of Estate Management.

Section 2 (10/02) The Surveyors’ Construction Handbook . SECTION 2 Construction Federation Construction House 56–64 Leonard St London EC2A 4JX Croner CCH Group Ltd 145 London Road Kingston upon Thames Surrey KT2 6SR HSE Books PO Box 1999 Sudbury Suffolk CO10 2WA 1st & 2nd Floors The Old House The Lawns 33 Thorpe Road Peterborough PE3 6AD Bracknells Lane Garston Watford WD25 9XX RICS Books Mail Order Surveyor Court Westwood Business Park Coventry CV4 8JE 66 Portland Place London W1B 4AD 020 7608 5000 Croner 020 8547 3333 HSE/HSC (Health and Safety Executive/Commission) 01787 881165 ICW GB (Institute of Clerks of Works of GB) 01733 564 033 LPC (Loss Prevention Council) Owlion 01923 66 4000 020 7222 7000 (mail order) RIBA (Royal Institute of British Architects) The Stationery Office (previously HMSO) Thomas Telford Publishing 020 7580 5533 0870 600 5522 The Institution of Civil Engineers 1 Great George Street London SW1P 3AA 020 7987 6999 Page 6 Effective from 1/12/02 Part 5.PART 5.

Section 3 (09/03) Effective from 1/11/03 Page 1 . CONSTRUCTION The Construction Faculty is responsible for: • strategic construction consultancy.PART 5. mechanical. employers. • construction management. involved or affected by building control issues to network. and health and safety relating to all forms of construction. The contributing faculties are: BUILDING SURVEYING The Building Surveying Faculty aims to increase the public perception and appreciation of the core values offered by a building surveyor and in particular the building surveying specialisms. heavy. SECTION 3 PART FIVE: ADDITIONAL GUIDANCE AND INFORMATION SECTION 3: BUILT ENVIRONMENT GROUP ROLES AND INFORMATION Introduction The articles and guidance published in the Construction Handbook are largely the responsibility of three faculties and their associated forums. and • surveying profession services in civil. electrical. The associated forums are: BUILDING CONTROL The Building Control Forum was initially established as a consequence of the members of the former Institute of Building Control (IBC) taking up membership of RICS on 1 January 2001. The faculty wants to be identified as the principal source of knowledge and innovative thought on building surveying matters. The Surveyors’ Construction Handbook Part 5. PROJECT MANAGEMENT This Faculty is responsible for project management in the property and construction industries. planning. It also seeks a clearer understanding for the public. It currently has a membership of approximately 4000. management. media and other construction professionals of the skills building surveyors hold and an awareness of what can be added through their appointment. economics. contracts and materials procurement. It represents the building control discipline within RICS but also has a remit to provide a mechanism for all those interested. petrochemical and instrumentation engineering.

Now there is an architects’ accreditation scheme in operation and one for engineers in prospect. It currently has around 1000 members. e. and are a very pleasant way to achieve CPD. to assist in answering queries on the content and quality of professional services (from members. the public. Most of these are low cost. and Information Papers. This highly respected scheme was started to help surveyors win church work and grant-aided work. It represents the building conservation discipline within RICS but also has a remit to provide a networking mechanism for all those interested. after consultation with members. and to receive market briefings and advice on developments in the market and to provide appropriate support to members. Groups and committees fulfil these roles primarily by providing these types of outputs: • • • • • • Page 2 Practice Statements. English Heritage and Historic Scotland will be making it a requirement that professionals involved in grant-aided work be accredited by their professional organisation. dedicated web-sites. and has arranged an active programme of events for members. Section 3 (09/03) . model and standard conditions of engagement and standard services. etc. The forum publishes a regular series of short guides on matters related to historic buildings. lawyers. information and articles in RICS Business and (if produced) faculty journals. Since its formation the forum has contributed to increasing the profile of building conservation. Appointing a Building Surveyor (guidance note). involved or affected by building conservation issues.1 Faculty working groups and committees of selected members have the following roles in respect of defined spheres of surveying services: • • • • • • to help members meet the market’s requirements for their professional services. SECTION 3 BUILDING CONSERVATION The Building Conservation Forum was founded in 1987 to develop a forum for chartered surveyors linked by common interest in conservation.g. The events range from an annual seminar to half-day visits to work in progress at historic buildings. The forum runs an accreditation scheme for surveyors in conservation.3. to respond to consultation papers from other bodies on the content of professional services and to developments in the market.PART 5. Effective from 1/11/03 The Surveyors’ Construction Handbook Part 5. I 5. to produce or contribute to responses to government consultation papers. seminars and conferences. the media. Guidance Notes. electronic communications. to make strategy recommendations for new marketing activity and to assist in the implementation as appropriate.).

Faculty working groups and committees are responsible for producing material for this handbook. The following working groups are currently in existence and are listed by faculty: BUILDING SURVEYING FACULTY Asbestos – management of asbestos regulations.3.PART 5. and proposals for marketing and policy initiatives. etc. Building Insurance and Assessment of Claims Construction Administration and Management Building Survey and Maintenance Dilapidations DDA Construction Design and Economics – certification of domestic structures Boundaries and Party Walls CONSTRUCTION FACULTY IT – working with construction IT Railways – cost planning and cost control of major infrastructure projects and maintenance contracts Cost Planning Taxation – capital allowances. Section 3 (09/03) Effective from 1/11/03 Page 3 .3. Health and Safety Oil and Gas M&E Engineering JCT Consultant QS Procurement Contractors The Surveyors’ Construction Handbook Part 5. by fax on +44 (0)20 7334 3844.org. advice to others on the content of professional services.uk I 5. SECTION 3 • • • I 5. or by email to profinfo@rics. Within the Faculties and Forums department there is a Professional Information Section which provides a free professional and technical enquiry service. The section can be contacted: • • • by telephone on +44 (0)20 7334 3791.2 representations to other bodies.3 Working groups and committees are not permanent and are subject to continuous review. guidance and related asbestos matters.

PART 5. GENERAL ENQUIRIES For general enquiries.org. please get in touch with the RICS Contact Centre on +44 (0)870 333 1600. The postal addresses of our headquarters (Parliament Square) and two other central offices are: RICS 12 Great George Street Parliament Square London SW1P 3AD United Kingdom RICS Surveyor Court Westwood Way Coventry CV4 8JE United Kingdom RICS 3 Cadogan Gate London SW1X 0AS United Kingdom Page 4 Part 5.faculty@rics. SECTION 3 PROJECT MANAGEMENT FACULTY Project Management – PM Agreement FACULTY CONTACTS The relevant faculties can be contacted by Email at the following addresses: Building Surveying: Construction: Project Management: bs.org.uk construction.faculty@rics. by Email at contactrics@rics.uk pm.uk or by fax on +44 (0)20 7334 3844. please call our main switchboard on +44 (0)20 7222 7000.faculty@rics.uk or by post to: RICS Contact Centre Surveyor Court Westwood Way Coventry CV4 8JE United Kingdom If you already know who you need to speak to. Section 3 (09/03) Effective from 1/11/03 The Surveyors’ Construction Handbook .org.org.

1 BCIS provides current.2 I 5.3. Subscribers can also automatically recalculate the costs to reflect a selected location and date. a range of derived regional tender price indices and trade price indices. accurate building cost and tender price information for the construction industry and the property market.3. who include quantity surveyors. building contractors. including consumer prices. building surveyors. I 5.3 AVERAGE PRICES BCIS average prices can be used to give indicative costs prior to producing elemental estimates and they can also be used as a cost check. The Surveyors’ Construction Handbook Part 5.2 INDICES BCIS compiles a full range of building cost. The information is interpreted by BCIS professional staff and presented to subscribers in two accessible and practical formats: the comprehensive BCIS Bulletin Service. which provides hard copy data. developers. engineers. Using analyses allows the cost of a new building to be forecast using examples of buildings priced in the market place.4. reliable and useful by subscribers. The BCIS database is collated by analyzing unique data submitted by members and incorporates material from all other relevant sources. tender and output indices. financial analysts and property owners in both public and private sectors.4.500 projects. together with indices for certain sub-markets in the construction industry.1 ANALYSES Elemental analyses have been at the heart of BCIS since the first printed service was launched. • Element cost per m2. I 5. and BCIS Online for those preferring to receive it electronically via the internet. It is regarded as authoritative.PART 5.4. I 5. construction output and new order statistics.3. Five studies are available: • £/m2 study. A wide range of background statistics is available.4: BUILDING COST INFORMATION SERVICE (BCIS) I 5.4. BCIS Online has a search capability which allows you to quickly and easily find the most appropriate examples to match your current project from the database of over 14. I 5. Section 4 (revised 10/02) Effective from 1/12/02 Page 1 .3 BCIS Online BCIS Online gives direct access to the BCIS database of information and is therefore always complete and up-to-date. architects.4. It includes the following information.4. general practice surveyors. SECTION 4 SECTION 5.

SECTION 4 • Element unit rate study.4.1 BCIS Review Online provides access to summary level information for the BCIS Database.4 Other BCIS Publications and Services 5. I 5.4. regional trends. Page 2 Effective from 1/12/02 Part 5.4. Details of construction wage agreements. Current and historic base rates are provided. building height. Contract percentage studies report on preliminary percentages and percentage additions to PC sums. site conditions and contract sum. • Functional unit prices. This section also includes the annual BCIS Five Year Forecast.4. and • Group element prices I 5. selection of contractor.5 STUDIES Tender price studies report on the effect on tender prices of location.3.PART 5. • Average Prices Two studies are available: • £/m2 study • functional unit prices Briefing BCIS Review Online Briefing carries the latest news in areas of key importance to the construction economy. It includes the following sections: • Indices BCIS Cost and Tender Price Indices are available together with Retail Price Indices. together with the BCIS commentary and background to the forecasts. Section 4 (revised 10/02) The Surveyors’ Construction Handbook .4 BRIEFING BCIS Online Briefing carries the latest news in areas of key importance to the construction economy.3. I I 5. type of work. This section also includes the annual BCIS Five Year Forecast. together with the build-up for the latest rates.4. Together with the BCIS commentary and background to the forecasts.6 DAYWORKS BCIS interprets the definitions of prime cost of daywork for all the main types of operative in the industry.4. I 5. national insurance and CITB levy supplement this part of the service.3. building function.

including tender prices. regional prices. site conditions and contract sum.4.4.4 GUIDE TO DAYWORK RATES AND UPDATING SERVICE This annual guide covers the daywork rate for 63 grades of operative. regional trends. The Surveyors’ Construction Handbook Part 5.4. The information shows the rates and operative dates for current and recent settlements.5 RICS SCHEDULE OF BASIC PLANT CHARGES For use in connection with Daywork under a Building Contract. I 5. (b) Surveys of Tender Prices This quarterly publication contains a range of current pricing studies and an update of the BCIS Tender Price Index. type of work. I 5. (d) Labour. (e) Digests Digests give the source of publication and a brief summary of articles on construction economics. The 2001 edition of the schedule has been revised and extended to reflect the types of plant likely to be available on a building site.PART 5. location factors and average £/m2 building prices. I 5.3 BULLETIN SERVICES BCIS Bulletin Services contain information selected from the BCIS database published in regular bulletins. commentary on market conditions and projected trends. It also carries a brief commentary on market conditions and tender prices.4. I 5. Section 4 (revised 10/02) Effective from 1/12/02 Page 3 . building function. An updating service informs subscribers of any changes. building height. this bulletin contains a complete series of BCIS indices.4. selection of contractor.2 QUARTERLY REVIEW OF BUILDING PRICES The BCIS Quarterly Review contains a selection of BCIS data which gives guidelines on the general level of building prices. SECTION 4 Studies Tender price studies report on the effect on tender prices of location. (c) Elemental Analyses The key source of price information from accepted tenders available at either concise or detailed level.4. It also has an executive summary.4. Detailed analyses break down tender prices into 34 elements. input costs and output costs. They include: (a) Indices and Forecasts Published quarterly.4. Hours and Wages and Dayworks BCIS publishes details of the principal wage rates in the building and allied industries. Published quarterly.

bcis.6 GUIDES TO DOMESTIC REBUILDING COSTS FOR INSURANCE PURPOSES (a) Guide to House Rebuilding Costs This annual guide is widely used by professionals when assessing rebuilding costs for insurance valuations. Section 4 (revised 10/02) The Surveyors’ Construction Handbook . It contains sixteen main tables of costs for: • four regional groups.uk Website: www. (d) ABI/BCIS House Rebuilding Cost Index This index assists in the updating of the figures in the guides between the annual issues. I 5. • five house types. It helps surveyors and valuers take account of differences in various parts of the country. and • flats in converted houses built between 1900 and 1950 which will also be applicable to low-rise purpose built mansion blocks Additional cost advice is given to help to adjust the base figures for a range of specific circumstances.4.4.co. SECTION 4 I 5.5 Further details are available from: BCIS Ltd 12 Great George Street Parliament Square London SW1P 3AD Tel: 020 7695 1500 Fax: 020 7695 1501 Email: bcis@bcis.co. • three sizes of house.uk Page 4 Effective from 1/12/02 Part 5. and • three quality specifications (b) Guide to Rebuilding Cost of Flats This new guide provides cost per unit area tables for: • modern low-rise and medium-rise flats which will be applicable to many flats built post 1950. (c) Regional Supplement The Regional Supplement contains separate tables of costs for each of the Standard Regions.PART 5. A monthly figure is circulated to all subscribers.4.

cost control. gas. • fabric maintenance. • services maintenance. I 5. • lift service labour. It is widely used as a schedule of rates to ensure competitive prices.2 BMI Quarterly Cost Briefing The BMI Quarterly Cost Briefing provides information o current and forecast trends in maintenance costs making it an essential tool for the facilities and maintenance manager.300 items as well as current wage rates and materials prices. oil. Section 5 (revised 10/02) Effective from 1/12/02 Page 1 . It contains guidance on letting maintenance work. Subscribers are provided with information on current. historic and forecast costs of building maintenance and occupancy in a readily accessible form. The publications listed below are included in the full BMI subscription service but are also available separately. fuel.5. contract administration and life-cycle costing. electricity) I 5.5: BUILDING OCCUPANCY COST INFORMATION (BMI) 5. It is a valuable working document for all those involved in estimating. benchmarking. • cleaning (labour and materials). Cost indices track the general movement of costs in different industry sectors allowing users to monitor their own costs against general maintenance cost inflation. Indices are included for: • redecoration. and • energy (coal. checking and negotiating rates for maintenance and repair work.5. forecasting. The Surveyors’ Construction Handbook Part 5.1 BMI provides an independent cost information service for professionals in facilities management. maintenance and refurbishment. SECTION 5 SECTION 5.3 Building Maintenance Price Book The BMI Building Maintenance Price Book is the only annual guide to estimating and pricing exclusively for building maintenance and repairs. The Price Book gives labour constants and measured rates for over 1.PART 5.5. The BMI information will help in budgeting.

PART 5. BMI occasional reports include: • The Economic Significance of Maintenance.4 Special Reports for Benchmarking BMI publishes regular reports on maintenance.5 News.5. I 5. administrative costs). Two plans a year are published and recent examples include retail centres and sports centres.co. a full list of BMI special reports. and • rehabilitation. fabric. Digests and Reports BMI also monitors changes in the maintenance and facilities management industries and reports the findings to keep subscribers up to date. further details. I 5. The annual surveys of information provide estimated annual average costs for a range of common building types: • maintenance (redecoration.5. occupancy and rehabilitation costs covering a range of common building types. BMI publishes digests of articles with a bearing on property occupancy from a wide cross-section of the building maintenance and facilities management press. Detailed occupancy cost plans for typical buildings show maintenance and occupancy costs projected over a 20 year period. and • Guide to Information Sources for Facilities Management BMI News summarizes the latest industry developments and contains statistical and editorial articles designed for quick reading to keep subscribers well informed.6 Annual subscription rates.uk Page 2 Effective from 1/12/02 Part 5.5. up-to-date prices and special rates for chartered surveyors are available by contacting: BMI 12 Great George Street Parliament Square London SW1P 3AD Tel: 020 7695 1500 Fax: 020 7695 1501 Email: bmi@bcis. utilities. detailed occupancy cost plans and special benchmarking studies. services). Section 5 (revised 10/02) The Surveyors’ Construction Handbook . • occupancy (cleaning. This information can save subscribers hours of reading time and is backed up with a photocopying service. SECTION 5 I 5.

Two factors have led to the increase in the amount of documentation being produced by businesses. SECTION 6 PART FIVE: ADDITIONAL GUIDANCE AND INFORMATION SECTION 6: ELECTRONIC DOCUMENT STORAGE – LEGAL ADMISSIBILITY G Introduction The production and storage of documents and other information on computer systems has become increasingly common and it is. Increasingly. The quantity of paper produced is increasing year on year and would do so even without expansion of the business. it is hoped. legal admissibility has to be considered: there has to be a certainty that electronically stored documents will have the same weight and validity as the original versions. There is no current standard which guarantees legal admissibility (some countries have made a move towards this). transmitted and stored in significant numbers. without deterioration. In fact. under the right conditions. There is a need to store and retain records for professional and legal purposes. This is a medium that requires far less floor space and ensures longer term storage. there is far more regulation being introduced into everyday life. the growth in management systems generally. Using a local lock-up garage will probably not be adequate to prevent deterioration of paper copies over a period of time. First. paper storage is a significant problem for many practices. as previously promulgated in BS EN ISO 9001:1994 and now in BS EN ISO 9001:2000. the processes involved in compliance with ISO 9001 are designed to provide the documentary evidence which will satisfy the regulations which are relevant to the particular business and. The Surveyors’ Construction Handbook Part 5. has led to an increase in documentation. The need is now to be able to prove what actions occurred and when. In particular. inevitable that these stored documents will be used in their electronic form as a basis for business transactions. Storage conditions must be right to ensure that storage is effective. Section 6 (12/03) Effective from 12/03 Page 1 . businesses are turning to electronic storage. However. Annex G of the Code of Practice (see Part 1) gives information on relevant national legislation. and this is linked directly to a more litigious population. provide acceptable evidence in the event of litigation. However. The requirement for storage also has implications – not least of which is the cost of dedicated storage areas. The purpose of this text is to provide information on the best practice principles which have thus far been identified. there are a number of problems related to electronic storage which have to be addressed. and will be produced. but there is a shift of emphasis away from admissibility towards evidential value or weight which is in line with the Civil Evidence Act 1995.PART 5. therefore. Secondly.

A document entitled Principles of Good Practice for Information Management. Page 2 Part 5. It has not been possible to develop a set of requirements and may not be for some time. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . It has also been extended from the original version to cover any type of electronic storage medium. but also that the data now present has not been modified in any way. In this guidance note. the word ‘should’ indicates that such action is necessary in order to claim compliance with the Code. including those that are rewriteable. It seeks to define the current interpretation of best practice. In the absence of a formal set of requirements approved by the courts through case law or by Parliament through the Civil Evidence Act. namely the Legal Images Initiative (formed by the Information and Document Management Association) and the Document Management Forum (a group of the Computing Suppliers Federation). written by two of the authors of the Code of Practice. The Civil Evidence Act 1995 would have to be updated annually just to keep pace and this clearly cannot happen. multi-function media systems used in a write-once mode. leading institutions took the view that a Code was required which recognised new technologies and would give a framework which reflected the existing legal precedents but applied to the new technologies. SECTION 6 G 5.PART 5. First prepared and published in 1996. as it is necessary to be able to demonstrate not only that the correct data was stored in the first place. It should be emphasised that the Code does not guarantee legal admissibility. The difficulty is the range of issues which have to be considered.1 Code of Practice – DISC PD 0008: 1999 A Code of Practice for Legal Admissibility and Evidential Weight of Information Stored Electronically There has been considerable discussion about the value of documents stored on a document management system (DMS) when documents are required to be kept as evidence for a considerable time. a Code of Practice (DISC PD 0008) has been developed. Instead. contains a detailed explanation of the background to each of the sections of the Code.6. It defines best practice in document management and provides guidance that will help maximise the value and integrity of information in a court of law. and compact-disc-recordable (CD-R) systems. where it is stated that an action ‘should’ be carried out in relation to the Code. which is evolving as technology and electronic commercial practices mature. the rate of change of technology and the need to consult our European partners on all legal aspects. It has been accepted by most commentators that a common discipline needs to be agreed so that the value of these documents as evidence can be maximised. The use of rewriteable media requires additional controls. the Code came about as a result of the merging of the research carried out by two organisations. The Code of Practice should be used as a basic reference document. It covers data files stored on Write-Once-Read-Many times (WORM) optical storage systems and as such covers WORM.

according to agreed procedures) in order to authenticate documents stored on the system. It is likely. it does not follow that documents held on a system that does not conform are not legally acceptable. It will rarely be possible to give a definitive recommendation regarding the destruction of original documents because.PART 5. however. Each business should consult its solicitor. the prosecution faces a much higher burden of proof ‘beyond reasonable doubt’ than in civil proceedings ‘on the balance of probability’. The Code contains examples of compliance statements at Annex I and recommends that the Compliance Workbook PD 0009 be used to demonstrate compliance with the Code. scanned and reproduced from the scanned version to set a benchmark for the quality of copy. G 5.6. until there is a request to produce a document. that it will be more difficult to prove their integrity in a court of law.2 Weight of evidence and document destruction Each business will have its own requirements and it is important to determine. and if weight of evidence or courtroom tactics could be unduly influenced by the destruction of the original document. in advance. (2) By having a control set of documents which have been used. how a document would be presented to a court of law. Section 6 (12/03) Effective from 12/03 Page 3 .3 Authenticity It is important to be able to demonstrate that the computer has been functioning properly (i. in a court of law. Documents may be rejected if this cannot be shown. There are different considerations for civil and criminal law. In a criminal case. the original document should be produced. The Surveyors’ Construction Handbook Part 5. Whilst the Code defines essential procedures to be implemented. It is the reason for the request that will indicate whether. if possible. especially of any modifications to settings required. the document storage system or the access control systems.7).e. who will be able to provide a view as to which types of document are most likely to be disputed regarding their authenticity rather than their content. There are three methods for doing this: (1) A maintenance record should be kept recording regular servicing of the equipment and any repair work either by the supplier/maintenance contract or by the in-house IT support where qualified/trained to do this. that these procedures have been followed. (3) By keeping proper records of scanning and scanning difficulties. This is explained in more detail below (see 5.6. G 5. the reason behind the request may not be known.6. SECTION 6 The Code pays particular attention to the setting up of authorisation procedures and to the subsequent ability to be able to demonstrate.

some photocopies use a raster scan copying mechanism which is essentially the same as an image processing scanner. the adversarial legal process means that the other party may try to discredit evidence on the basis of authenticity. although no cases have yet been reported where this has been tested. Arguments over authenticity of evidence can lead to an investigation into the system that produced the paper and the method of storage. G 5. However. Therefore. particularly when the original documents are subsequently destroyed. It could be disastrous for a business to find that it was uninsured because it had introduced a scan and destroy procedure. It follows that image processed documents are likely to be admissible with the same weight of evidence as photocopies and microfilm images. arguments are over what a document says rather than the authenticity of the document. It could be necessary to satisfy the court that the information is stored in a proper manner. photocopies and microfilm images are admissible as evidence. the advice of the company secretary (or solicitor) should always be sought before implementing any document storage system. no matter how an organisation stores business documents. microfilm and image processing In very general terms. This issue could be used by the opponent to try to discredit the evidence and to make inadmissible that and any similarly stored documents that are produced. However. The procedures by which documents are stored and accessed are vital in satisfying a court of law about the authenticity of a ‘copy’ of a document and the inability to tamper with it. The Code recommends that all interested third parties should be consulted. Indeed. By questioning hardware reliability. image processed documents will be treated as secondary evidence in the same manner as a photocopy or microfilm image. for example.PART 5. microfilm or image processing) will be treated as secondary evidence by a court of law. The company secretary or partners and the manager of the document storage systems are responsible for this document retrieval process. This would allow the whole system to be brought into question and any documents stored within it ruled inadmissible. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook .5 Document storage It is very important to note that. operation and access control. that the document storage system is flawed and cannot be trusted.6.6. to avoid dealing with the content. it is the responsibility of the executives of the organisation to be able to produce the documents when required.4 Photocopies. Page 4 Part 5. not the vendor of the storage system. and even the computer programs and source code. G 5. SECTION 6 In most cases. to the satisfaction of the court. an opponent could establish. All copies of documents (photocopy. and it would be prudent to include professional indemnity insurers.

It is essential that a proper system for auditing and certifying is implemented to demonstrate that the integrity of the system has been maintained from the time the document was stored. but if a signature is being disputed then the original is likely to carry more weight than the copy. the court judge or arbitrator still has to be persuaded to treat the evidence as reliable and so organisations have to put in place procedures to prove the authenticity and reliability of the record. Section 6 (12/03) Effective from 12/03 Page 5 . by the production of a copy of that document or of the material part of it. users should also comply with the relevant sections of BS 7799-1:2000 – Information Technology – A Code of Practice for Information Security Management. G 5. It may be necessary. Sections 8 and 9 of the Act address the hub of this issue: 8 (1) Where a statement contained in a document is admissible as evidence in civil proceedings. The Surveyors’ Construction Handbook Part 5. for the image processing system to indicate whether an image taken was from the original or from a copy of it. it may be proved: (a) by the production of that document. including computer records. It may help demonstrate the proper functioning of a system if a copy of the audit record is stored in the image system at the time of audit. authenticated in such manner as the court may approve.6. Many items to be scanned are actually themselves photocopies. advice should be sought from a company solicitor. Although formal affidavits will not usually be necessary. the original or a copy should be treated with equal weight. if this is not readily apparent.6 Storage and access procedures Due to the duration of storage of many documents. The Act introduces a flexible system whereby all documents and copy documents. As well as the specific details included in the Code. This is in line with current procedures for microfilmed documents. There may be some confusion about ‘originals’ and ‘copies’. particularly if the original documents are to be destroyed. or (b) whether or not that document is still in existence. Of major importance to this Code is the Civil Evidence Act 1995. However. For example. Regular audits of the system should be performed. where the content of a document is under question. may not be able to give evidence in person.PART 5. the person who ‘certified’ a system. The original document may reside in a file elsewhere. and certificates obtained from the company auditors. SECTION 6 with a subsequent reduction of weight of evidence if the authenticity of the copy can be questioned. or a document stored on it. can be admitted as evidence in civil proceedings.

authenticity and evidential weight of information contained in these stored documents is important.6. It is used with a document management system (DMS) incorporating write-once optical media as the storage device. and 5) monitor and audit business processes and procedures. each of which includes details of processes and procedures that need to be put into place to ensure conformity with the Code. Similar work is being undertaken by the Home Office on a Police and Criminal Law amendment. Sections 2 to 6 are structured in accordance with a set of five principles established in BSI DISC PD 0010 Principles of Good Practice for Information Management which are as follows: 1) recognise and understand all types of information.PART 5. covering Write-Once-Read-Many times (WORM). 2) understand the legal issues and execute ‘duty of care responsibilities’. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook .6. including one which identifies the changes since the previous edition. G 5. multi-functional media systems used in a write-once mode. It now incorporates rewriteable media (for example. magnetic storage). 4) identify enabling technologies to support business processes and procedures. there are ten annexes. where the issues of legal admissibility. 3) identify and specify business processes and procedures. 9 (1) A document which is shown to form part of the records of a business or public authority may be received in evidence in civil proceedings without further proof. (2) A document shall be taken to form part of the records of a business or public authority if there is produced to a court a certificate to that effect signed by an officer of the business to which the records belong.7. In addition. SECTION 6 (2) It is immaterial for this purpose how many removes there are between a copy and the original. 5. and compact-disc-recordable (CD-R) systems.1 GENERAL Scope The Code describes the use of electronic management systems to store information. Page 6 Part 5.7 Format of the Code of Practice The Code of Practice contains an introduction and six sections.

DISC PD 0008 was first published by the BSI in 1996. BS 7799:1995 was published in 1995 setting out best practice for information security management. BS ISO/IEC 17799:2000 (BS 7799-1:2000) specifies eight controls which are either essential requirements. the paragraphs identified by text in bold type in the Code are considered essential in so far as they apply to the specific application concerned. SECTION 6 The Code covers any type of data file controlled by the DMS. either created or imported. and the transfer of the images to other systems. for example. which has now been revised as Information Technology – Code of Practice for Information Security Management. Other paragraphs contain recommendations in italics that should be followed where practical. it also covers aspects that may affect the use of images in a legal context. While the Code covers aspects of document management that impinge upon the issue of legal admissibility of digitised images. even where admissibility per se is not at issue. The Code covers all such data files. Such networks may be local or wide area.PART 5. or may be imported into it. and • end users who wish to ensure that the information created by. These are designated ‘key controls’ and apply to all organisations and environments. Section 6 (12/03) Effective from 12/03 Page 7 . In the latter case. Data files may be created by the DMS. It has since been revised and reissued in 1999. users should be aware of the implications of the processes used in the microfilming of the original documents. The Code is intended for: • systems integrators and developers whose equipment provides facilities to meet the requirements of end users. They are intended as a basis for use by organisations setting out to implement information security controls. legislative requirements. Where users wish to claim adherence to the Code. from the time at which the system assumes complete control of the data file. or are considered to be fundamental building blocks for information security. The Code is heavily reliant on this document. Prior to this. and re-titled ‘A Code of Practice for Legal Admissibility and Evidential Weight of Information Stored Electronically’. Such aspects include the legibility and completeness of the document images. directly or through a network system. The Code covers the capture of digitised images both from the original documents and from microform versions of the original documents. entered into and/or stored within the information management systems can be used with confidence as evidence in a court of law. The Surveyors’ Construction Handbook Part 5. covering legal admissibility of information stored on electronic management systems.

BS 7799-1 is to be read in conjunction with BS 7799-2:2002 – Information Security Management Systems – Specification with Guidance for Use. SECTION 6 The recommendations for essential controls include the following: a) data protection and privacy of personal information. The recommendations for common best practice include the following: a) development of an information security policy document. • relevant information management standards. • retention periods and destruction. security. b) allocation of information security responsibilities.PART 5. It is also recommended that the policy document details the responsibilities for compliance with the Code by identifying a person or job function and specifying retention periods for compliance documentation. d) reporting of security incidents. • security classification. b) safeguarding of organisational records.6. In addition. This policy must be approved by senior management and reviewed at regular intervals. such bodies as professional indemnity insurers may wish to be consulted. • responsibilities. c) intellectual property rights. • storage media.7. • data file format and version control. including any special regulations. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . where appropriate. c) information. and • legal advice sought and acted upon. dealing with the policy on: • what information is covered. education and training. e) business continuity management. Page 8 Part 5.2 INFORMATION MANAGEMENT POLICY The Code advises that a policy document should be produced. 5.

there should be business continuity planning to ensure that all data can be recovered successfully following major failures of equipment. SECTION 6 The requirement for an information retention and destruction schedule is amplified as being critical to the successful implementation of the revised Code. Appropriate levels of security for managing information should be agreed and documented. Where the full weight of BS 7799 is not applicable. is also critical. the Code recommends that information should be grouped into types. 5.6. 5. and relevant sections of the Code should be implemented. in addition to any vendor-supplied manuals for the system. In order to define the organisation’s information management policy.PART 5. The Surveyors’ Construction Handbook Part 5.7. • data capture.3 DUTY OF CARE It is essential that an organisation is aware of the value of information that it stores and executes its responsibility with regard to that information under the duty of care principle. environment or personnel. Consultation with interested third parties at the planning stage. Section 6 (12/03) Effective from 12/03 Page 9 . the controls listed in the Code should be implemented.6. with the policy for all information within a type being consistent. where the organisation already has one. The revised Code contains more details of information security requirements which would be satisfied by compliance with BS 7799.7. in either of the above two types. and 3) information generated at a remote user or third party site.4 BUSINESS PROCEDURES AND PROCESSES The organisation should develop its own manual for the DMS. This can be incorporated in the quality management system. • indexing. Such a procedures manual. 2) scanned images/digitised voice and/or video. In any event. systems should be adequately managed. The policy should list all types which are to be stored in compliance with the Code such as: 1) information generated by a computer system – also known as encoded data files. should include the following topics: • document capture. before the system is installed.

• self-modifying files.PART 5. and it is necessary to keep copies of previous versions of the procedure. Page 10 Part 5. If the information management system is used for storing images. The business should. Procedures need to be implemented to ensure that staff who operate the system will comply with the requirements. • workflow. Preparation of paper documents The Code requires documents to be examined before scanning to ensure that they are suitable. then these procedures should be documented and users should comply with the recommendations set out in Annex C of the Code. • use of contracted services. Document capture There must be procedures dealing with the situations either where data files are created by the system or where they are imported into the system. • date and time stamps. • information destruction. have procedures for the examination process documented in its procedures manual. • file transmission. and • maintenance of documentation. • system maintenance • security and protection. therefore. • authentication of copies of data files. • video. SECTION 6 • authenticated output procedures. audio and voice data (if applicable). All procedures must be reviewed at least annually and the results of reviews must be documented. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . Any changes to procedures have to be documented and checked. • version control. • use of trusted third parties. • backup and system recovery.

In practice. Section 6 (12/03) Effective from 12/03 Page 11 . if any. There should also be a method for identifying such things as ‘post-it’ notes attached to the original document or physical amendments which might not be visible after scanning. SECTION 6 Factors which may affect the scanning process should be considered and there must be a procedure to deal with scanning difficulties. • the date and time of scanning. • the type of material scanned. Document batching Wherever possible. Detailed procedures need to be established for general document preparation and collation. it requires each document to have a unique identity that cannot be changed or removed except on deletion and then only under tightly controlled circumstances.PART 5. Photocopying It may be necessary to photocopy a document prior to scanning and the procedures used must ensure that there is no loss of quality or of the total image. documents should be grouped in batches. Information held in the records is expected to include as a minimum: • a unique identifier for each batch. • the number of documents. the scanning software will take care of many of the requirements and a paper record will fill the gaps. Scanning processes The Code requires that the procedures manual should include details of the operational procedures used in the scanning process and that records be kept of all audit trails. (Appendix A shows a specimen form for recording scanning information. In particular. and • details of post-scanning processes. • the name of the person who performed the scanning. alternative methods of controlling the scanning process may need to be established. Where workflow is used. The Surveyors’ Construction Handbook Part 5.) The procedures should also describe how it is ensured that all documents in a batch are scanned. It is also advisable to provide some method of distinguishing between scanned originals and scanned photocopies.

this could conceivably lead to image manipulation. The Code gives a number of criteria which may be appropriate to the user. Procedures need to be established which specify the quality and accuracy level required and that records of accuracy checking are retained. as should any problems or difficulties which are experienced. Page 12 Part 5. The procedures manual should define how this is managed. Annex D of the Code describes some of the different documents and associated image processing facilities that may be used. which can be used to establish the quality of the scanned image. SECTION 6 Quality control To be able to assess the validity of any scanned copy. All hardware and settings are recorded and the quality of each reprint is checked against the originals to ensure it is acceptable by the standards required by the business. Data capture This is mainly used where the original data is provided by such methods as Optical Mark Reading (OMR) or manual entry from an existing document. should make scanned copies of a range of types and conditions of document. for example. The results of all quality control checks (including audits) should be recorded. Rescanning If. where no scale is needed or where a drawn scale is available. The operator. a document has to be rescanned. including print size and grey scale. the procedures should ensure that the original image is replaced and that the batch numbering and audit trail are not compromised. (It may be acceptable. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . Prints are then obtained through the normal printing process. for the copy to be fractionally smaller than the original. it is necessary to prepare a benchmark for evaluation. using normal settings.PART 5. In addition the equipment should be properly maintained at all times.) This set of prints and originals is retained and periodically rescanned and checked. Image processing If image processing is used to improve the quality of the image. There should also be a procedure to deal with data migration from one system to another. following an audit.

Any changes to the index should be fully explained and audit trails dealing with the amendment should be available. a data file received from an external source must be saved on the system and the time and date of any data file should be stored as part of the audit trail. SECTION 6 Indexing The procedures manual must describe the indexing technique to be used and should include a method for checking the accuracy of the records. then procedures should be defined to ensure that changes cannot occur during the transmission either accidentally or deliberately. When a data file is transmitted to another party. Section 6 (12/03) Effective from 12/03 Page 13 . which allows the operator to effectively certify that the document/file has been correctly retrieved. wide-area communications system to the storage device. for example. This is often built into scanning software and electronic document management systems. Authentication of copies of data files It may be necessary to be able to identify whether a data file is original or a copy. In these instances. Equally. monochrome rather than coloured. then retrieval characteristics must be agreed and documented. If some aspect of the layout such as font or pagination is not maintained. Authenticated output procedures For the prints to be legally admissible.PART 5. File transmission If the documents are to be transmitted within a system. the original should be stored on the system. the Code suggests that an electronic/digital signature can be stored with a trusted third party and could then be used to demonstrate whether a file is a true copy of the original. The Code also advises that in all cases the index files should be retained for at least as long as the information to which they relate. Appendix B shows a specimen retrieval record for a scanned document/file. There should be procedures for rebuilding indexes and for amending/correcting information held in the indexes and ensuring its accuracy at all times. via a network or external. The Surveyors’ Construction Handbook Part 5. there should be a formal process for recovery whereby the operator certifies that all equipment is operating normally and identifying the storage index data and document information which confirms that the reproduction is a true and complete record. The Code also places great stress on the authentication process and for controls where the output is not an exact reproduction.

It is necessary. for example. there should be documented procedures to ensure that data file integrity has not been compromised. to have complete maintenance records. In some cases the original document will need to be retained. the original file purports to have been saved at a later date than the copy. including audit trails at regular intervals. the hardware and the software should be operating normally. it should not be possible to destroy an original before it is confirmed it has been safely stored. System maintenance Obviously. Page 14 Part 5. Information retention and destruction The procedure for retention and/or destruction of originals must be properly documented. where the original is of poor quality or holds annotations which cannot be scanned. which should include details of any problems incurred during the procedure. SECTION 6 The Code goes on to explain the benefits of this in questions of authenticity where. the procedures for checking of quality should be followed after maintenance procedures have been completed. Under certain circumstances. including records of any down-time and reasons for faults and to undertake routine preventative maintenance. Where document scanning is used. There should also be a record kept in the system audit trail of all backup activity.PART 5. it will be necessary to rescan documents following the identification of a fault (see Information retention and destruction). Procedures used in these systems should be documented in the procedures manual. It is therefore important that the backup media be tested regularly. Backup and system recovery Backup facilities on the system should allow for automatic backup and verification of all data files and associated information. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . Where backup data is used to recover from a system failure. In each case. therefore. the procedures should deal with this. for example. It is important to ensure that the files can be read even when the original hardware is no longer available. or where fraud is suspected. For the sake of the business. including the requirement for secure off-site storage of the backups.

The Code recommends that the contract between the supplier and the client should set out details of the extent to which compliance is claimed. maintenance and quality control and audit trails should be kept in a secure manner and be available for inspection and audit. If the documents have to be transported physically. e. SECTION 6 Security and protection The system should operate within the guidelines provided in BS 7799-1:2000. • virus protection should be installed. In addition. limited access. • data file transfers must be strictly controlled. The procedures manual should contain all information relevant to the service provider. Use of contracted services Having gone to the trouble of defining an internal procedure which complies with the Code. where the supplier also performs an indexing service. The Code also describes the procedure where a copy is stored with a trusted third party as a secure means of detecting tampering with data files. with at least one backup off site. including checking. it would be unacceptable if the business used outside services which afforded any less protection. Details of the procedures used and the transfer of documents and/or media from the client to the service provider and from the service provider to the client should be documented in the procedures manual. there should be a procedure for despatch and receipt. Section 6 (12/03) Effective from 12/03 Page 15 . • hardware must be protected against power failure. but the central system should be in a secure area. • mixed media may not be in write-once mode. encryption keys and digital signatures. This should be assessed. • user facilities may be in open areas. the client should check that the required accuracy is being achieved. and • all information on status of documents. copies of their procedures and audit records may be necessary. The Surveyors’ Construction Handbook Part 5.g. • all media must be kept secure. although this is not now referred to directly in the Code. • removable media must be handled and stored as recommended.PART 5. The procedures implemented should be described in the procedures manual and should include the following: • appropriate security controls.

the recording system must be up to the same standard as that required by the Code for the information management system. The Code requires operational details such as flow diagrams to be documented. The Code then makes the point that all changes to procedures and processes should be implemented in accordance with an approved change control procedure. Voice. Some workflow applications link documents by virtue of changes to the index information. Self-modifying files In some cases. Date and time stamps Of key importance is an accurate record of the date and time and. ‘summer time’ must be incorporated into the procedures. Only authorised personnel should be able to change the system clocks. There also needs to be a procedure dealing with authentication of the source data. This means that the file cannot be ‘frozen’ in the sense required by the Code. Version control If changes are allowed to stored data files. Either the automatic functions need to be disabled before storing or there need to be procedures which define how the files are to be stored and retrieved to ensure that authenticated copies of the original can be produced.PART 5. audio and video data are to be dealt with. SECTION 6 Workflow This process allows a number of individuals to review a document at various stages.e. it is essential that the system is maintained with the correct information. then this must be in accordance with a documented procedure which includes any requirement to keep previous versions. The information management system should include version control and superseded versions should be kept for at least as long as the final version. Where the recording is not under the control of the information management system. Regular checking of system clocks and changes to reflect seasonal changes. audio and video data The procedures should define how voice. Page 16 Part 5. i. document files contain automatic functions such as date entries which change to the current date when the file is opened. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . as well as the process definition classification and the process definition life cycle. This record of review needs to be stored in conjunction with the original document as a complete record. The creation and destruction of these links should be recorded in the audit trail of each document affected. to this end.

SECTION 6 Maintenance of documentation Procedures and records should be maintained and stored in the same way as information generally. It is also important to prevent modifications being made without detection. • authors or originators. 5. For systems already in operation.PART 5. with information on how they interact. Systems description manual A list of hardware and software should be compiled. Access levels The systems description manual must define the levels of access available. and • information retrieval.6.7. the user should ensure that the system has been designed in accordance with the requirements of the Code. Section 6 (12/03) Effective from 12/03 Page 17 .5 ENABLING TECHNOLOGIES General For a new system. documents stored on the system prior to the introduction of the Code cannot be considered as conforming to it unless controls which meet the requirements of the Code were in place from the time of storing the documents. The following elements need to be addressed to achieve compliance with the Code. This section of the Code describes technologies and how they should be utilised and controlled. • system maintenance. including system configuration and details of changes to the system. • information storage and indexing. Storage media and sub-system considerations Access to information must be controlled with ‘read only’ access or ‘read write’ access where appropriate and it should be possible to identify any changes to the document or data by those with ‘write’ access. • system administrator. as follows: • system manager. The Surveyors’ Construction Handbook Part 5.

including during the transfer of this data to and from the storage media. The system should ensure that they are stored in the same location and can be retrieved as a complete facsimile of the image. It is safer not to allow image processing. Image processing There are a number of ways in which an image may be processed to improve its appearance. and • forms removal. and (2) lossless. Page 18 Part 5. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . • noise removal. System integrity checks The system should ensure that the integrity of data files is maintained throughout the system. • background clean up. the parts may be separated electronically. These should only be used with extreme care and should be fully documented. Compound documents Where an image such as a CAD (computer-aided design) drawing or a linked spreadsheet is stored. • despeckle. SECTION 6 Only authorised members of staff may have access and such authority may only be given after suitable training. Compression techniques Two type of compression technique are recognised: (1) lossy.PART 5. These may include the following: • deskew. An additional element in the Code deals with digital and electronic signatures and the ability to verify the true identity of a person prior to their being enrolled as document signatory. as any interference could invalidate not only that document but any other which may possibly have been adjusted. • black border removal.

It is also essential to be able to amend or remove incorrect or irrelevant data typically held in contravention of the Data Protection Act. In any event. a record should be automatically generated to record the removal and a copy of the template should also be stored on the same medium. This information will be the subject of the audit trails and the records kept should be sufficient to provide a full historical record of all significant events associated with the stored information. leaving only the variable data. The Surveyors’ Construction Handbook Part 5. but the Code sets out the requirements should this method be used. it is almost inevitable that the hardware and/or software will cease to be supported. Form overlays and form removal Where the system software removes a fixed overlay from the digitized image. it is safest not to use lossy compression at all. the procedure for doing this must be documented. as the compressed image will lose certain details which may be replaced by artificially generated data when it is reproduced. including date of creation and/or storage. it may be necessary to provide supporting information on the history of the document or data. Audit trails To be able to use the stored information as evidence. movements from one medium to another and evidence of the controlled operation of the system. In general. Such correction may be accomplished by deleting the original document and substituting the corrected document or by using masks. and the information management system. Handling and storage procedures should also be described. Section 6 (12/03) Effective from 12/03 Page 19 . Information deletion and/or expungement It is essential that the system is able to delete or expunge documents as described in the Data Protection Act 1998. Data file migration With changes in technology. This deletion can be accomplished by the removal of index entries to the relevant documents.PART 5. These should be acknowledged and addressed in the system manual. The business should have procedures in place to handle the transfer of files at the appropriate time. SECTION 6 Lossy should not be used on primarily text files. Environmental considerations The hardware manufacturer may well have its own recommendations for the operational environment. as well as the procedure for checking the storage media regularly.

With the enactment of the Human Rights Act 1998 and the Data Protection Act 1998. Section 6 (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . The procedures for data migration should be defined and the audit trail should include this information. including the user. it defines the best-practice approach for electronic storage generally. this is likely to feature in the Civil Evidence Act. it may be necessary to make it easily accessible to third parties who have little or no experience in the use of the system. in either case. there should be adequate procedures in place and that. The audit trail information should be treated as having the same level of security as the information to which it pertains with secure backup copies being kept. In particular. if followed. indexing.6. should mean that the information can be used as evidence in the civil courts. If paper copies are kept then the procedures should define how frequently they should be removed and stored. it is expected that the pressure will continue to increase for a formal documented statement on legal admissibility. Part of the audit trail should include the records of information capture.8 Conclusion The Code of Practice provides a sound basis for the use of electronic document and information management systems which. change control. Audit trail data should also be stored as a separate entity on the system. Page 20 Part 5. either by reference to the Code or to some European wide standard. however. Even without this requirement. audit trail data should be generated automatically and that where this does not occur.PART 5. The danger. In time. It should be kept for at least as long as the information to which it refers and should be accessible. destruction information and workflow. batch information. G 5. SECTION 6 It is important that the audit trail be agreed with all stakeholders who might need to refer to the information. as far as possible. the date and time should be recorded contemporaneously. The Code recommends that. audit and legal functions. is that technology will continue to outpace any attempt at legislation.

The batch contains .................... Date Indexing information Project number File Folder reference Commentary DIP Operator/Archivist Confirmation of acceptance The above scanned files have been checked................ (No) documents..................... DIP Operator/Archivist Disk refererence….... Signed ….......... Managing Partner The Surveyors’ Construction Handbook Part 5........... Optical disk backup confirmed by IT .... (No) images and consists of ....... SECTION 6...... the images are true and complete representations of the documents scanned..................... APPENDIX A Appendix A: Specimen form for recording scanning information The following files are authorised for scanning Project number Project Confirmation of scanning The above files have been scanned by ...........................................................................................PART 5...... Signed ……………………………................................………........................... Section 6 Appendix A (12/03) Effective from 12/03 Page 1 ..……..... Confirmation of destruction The above original documents may now be destroyed Date …………………..............

............................................ SECTION 6................ Name Date Indexing information Project number File Folder reference Commentary Certificate of authenticity I ……………………......... Authorisation to make certified copies The DIP Operator/Archivist/CAD Manager is authorised to make certified copies of the above Signed ……………………………...... Managing Partner Files/Documents/Drawings retrieved The above files/documents/drawings have been retrieved from disk/tape reference: Retrieved by ………………………….............. Signed ……………………………………….. APPENDIX B Appendix B: Specimen form for recording retrieval Request for certified copies The following files/documents are required as certified copies Project number Project Documents or drawings Request authorised by Group Leader ……………………………………......... being the DIP Operator/Archivist/CAD Manager employed by ……………………........................PART 5.......................... certify that the attached files/documents are a true reproduction of the originals which were archived in accordance with the procedures set out in our user manual.......................... Date …………………………………....... Section 6 Appendix B (12/03) Effective from 12/03 Page 1 ................................................. The Surveyors’ Construction Handbook Part 5.......

Sales Department. Publications include: BSI-DISC PD 0005 Information Service Management BSI-DISC PD 0008:1996 A Code of Practice for Legal Admissibility of Information Stored on Electronic Document Management Systems (Edition 1) BSI-DISC PD 0008:1999 A Code of Practice for Legal Admissibility and Evidential Weight of Information Stored Electronically BSI-DISC PD 0009 Compliance Workbook BSI-DISC PD 0010 Principles of Good Practice for Information Management BSI-DISC PD 3000 Information Security Management: An Introduction BSI-DISC PD 3001 Preparing for BS 7799 Certification BSI-DISC PD 3002 Guide to BS 7799 Risk Assessment and Risk Management BSI-DISC PD 3003 Are you ready for a BS 7799 Audit? BSI-DISC PD 3004 Guide to BS 7799 Auditing BS 4783 Parts 1 to 8 Storage. SECTION 6. Tel: 020 8996 7000 Fax: 020 8996 7001 Web: www. Section 6 Appendix C (12/03) Effective from 12/03 Page 1 . Tel: 0870 600 5522 Fax: 0870 600 5533 Web: www.bsi-global. Transportation and Maintenance of Media used in Data Processing and Information Storage BS 7083:1996 Guide to the Accommodation and Operating Environment for Information Technology Equipment BS 7799-1:2000 Information Technology – A Code of Practice for Information Security Management BS EN ISO 9000 Quality Management and Quality Assurance Standards BSI publications are available from Customer Services.PART 5. London. W4 4AL. London WC1.tso. 123 Kingsway.com The following publications are available from The Stationery Office. 389 Chiswick High Road. APPENDIX C Appendix C: References Further and more detailed information can be obtained from the British Standards Institution (BSI).co.uk • Civil Evidence Act 1995 • Civil Evidence (Scotland) Act 1968 • Police and Criminal Evidence Act 1984 • Criminal Justice Act 1988 The Surveyors’ Construction Handbook Part 5.

PART 5. Wycliffe House. Section 6 Appendix C (12/03) Effective from 12/03 The Surveyors’ Construction Handbook . Tel: 01625 545700 Fax: 01625 524510 Page 2 Part 5. Cheshire SK9 5AF. Water Lane. APPENDIX C • Evidence Act (Northern Ireland) 1939 • Civil Evidence Act (Northern Ireland) 1971 • Statute Law Revision Act (Northern Ireland) 1973 • Police and Criminal Evidence (Northern Ireland) Order 1989 • Criminal Justice (Evidence) (Northern Ireland) Order 1988 Data Protection Registrar. SECTION 6. Wilmslow. Data Protection Guidance for Users of Document Image Processing Systems. 1995 Available from Information Commissioner.

5 BMI Quarterly Cost Briefing 5.2.4 BCIS Online 5.4.3.6.2.1.7.2. Part 2 Section 3: Appendix A BCIS Standard Form of Cost Analysis 1. 2.6.3 BS EN ISO 9001 5. 3.7.2 see also time budget budget format Part 2 Section 1: Appendix B budget preparation methods 2.4(k) authority.3.3.1.4(e).7.4.1.2. 4.3.4.2 BCIS Elements for Design and Build 2.4(f) average risk premium discount rate 2.2. 2. Figures and tables are not included A ACA Standard Form of Contract for Project Partnering PPC 2000 4.6.2(b).3(iii)(iv) Architect’s List 4.5.1. delegated 3.4.4.6. 5.10A acceleration 4.2(Intro).8.1.1.4 best-fit solution 3.2 bond/parent company guarantee 3.2 architect’s information 2.1.2.2.1.4.2(Intro).5.6(a).4.4. 2.5.3 audit trail 4.3.3 BMI News 5. 2.2.4. 3.7.8.4(b).2.4.4.2.4.8 definition of 4. Part 4 Section 4: Appendix C addendums 3.4. 3.6.3.2. 4.3.4. Part 2 Section 3: Appendix A5N.4.3.1.3(d) allowances see tax allowances alteration costs Part 2 Section 2: Appendix C4 alternative design solutions Part 2 Section 1: Appendix C amounts previously certified 4. 4.3.2.1 build insurance 4.4.1.3(e) ascertainment 4.2. 5. Part 2 Section 2: Appendix A6. 5.5(c).1. Part 2 Section 2: Appendix B1.1.5(b) budget 2.2.1 BCIS standard elements 2.4.1. Part 4 Section 2: Appendix A10 all risks yield 2.1.2.1 ACE see Association of Consulting Engineers activity schedules 2.3.10(c) analyses 2.10(c) ascertained damages 4.5.5(Intro) approval processes 3.1.6.1.5. 2.2.1(a). 4.3.4.6.2.2.2(Intro).2.7.6.1(c).3.3 documentation for 4. 2.3 (Intro). 2.2.4. 5. 2. 5.1–4.10.1.3.2.3(c) B balancing adjustment 2. 4.1.3.1.1.7.11(c).4 Brundtland definition 2.1.1.9 judgement in 4.2.2.9.1.2 budgeting 5.5.2.2. 5.2 application 4.2.2.5.2.4(f).2.1.4.4.10(d) agent see employer’s agent all–risks insurance 4.6(c).2.4.4.7.4.11(b) application for reimbursement. 5.5.3.2.1.4 BCIS Bulletin Service 5.6 adjudication 4.1. 2.6.4 Appendix to the Form of Tender 4.1(Intro).4 BCIS Quarterly Review 5.4.1 administration cost Part 4 Section 2: Appendix A1 admissible items 4.1.2.2. 2.2.1. Part 2 Section 4: Appendix A (Intro) automatic practical completion 4.6. 4.2(b) buildability 3.4.5.1.2.6.2.7.4.1 see also risk analysis analysis checklist 3. 2.5.4.1.2 Association of Consulting Engineers 3.2 architect as contract administrator 4.3 appointment documents 2.5 Australian ruling 4.2.3.2. 5.4.2.5.1.15 BMI (Building Maintenance Information) 5. Part 4 Section 2: Appendix C3. 4.5 BMI Building Maintenance Price Book 5.2.4.3(c).1–2.3. D advance payments 4.3 BCIS Online Briefing 5.7(a) assumptions Part 2 Section 1: Appendix C attendances 3.3.4.2. 2.6 analysis 1.1.3 acceptance certificates 4.6 (Intro) BSRIA Allocation of Design Responsibilities for Building Engineering Services 3.2.4.7.2.1.8.1.1.2.1.4.6 arbitrator 4.5. B4 Building Occupancy Information see BMI The Surveyors’ Construction Handbook Index (12/03) Page 1 .3(b) architect’s instruction 4.7.7(c).4(Intro).5.5 architect as certifier 4. 5. 2.2. 4.4. 2.6. Part 2 Section 4: Appendix B2. A5O Building Cost Information Service see BCIS building life 2.7. 2.2.2.2. D8 BCIS (Building Cost Information Service) 2.4.1 BS 7799-1: 2000 5.16 builder’s work 2.3.1.1.7.2.1.3.3. 5. 5.5 benchmarking 2. 4.2.3.INDEX Note: references are to paragraphs.4.4.6.6.6.2.6 balancing allowance 2.11.2. Part 2 Section 4: Appendix A (Intro) BCIS Five Year Forecast 5.2.2.2.4.1.3.4.1.2.3. 2.4. 4.4.4 global or individual 4.3. 4. 5. D8 balancing charge Part 2 Section 2: Appendix C6.2.2.2.3.4.2.2. written 4.5. 4.1 bills of quantities see quantities Blue Form 4.4.14(c) arbitration 4.1. 3.4.2.2.3.2.3.2(Intro) conditions of engagement 3.2. 4. 4.1.2.10 costs versus prices 4.2.6.2. 5.3.4. 4.6 (Intro) BS 7799: 1995 5.4.3 briefing 1.2.5 responsibility for 4.2.3.2.18(c) accidents 5.1.4.

4.1.7(d).2–3.1.2.1.5. 3. 4.2.1.11 client uniqueness 3.2.1 client needs 3.2. 2.2.5.2.2.1 client and consultants 2.6.3(a) client’s information 2.4. 3. 2. life cycle costing 2.5 design responsiblities 3. D3.6.7 C cables 2.6.2. 1.7.5.1.19(a) change control overview 3. 2.4.1. practical completion certification of completion 4.1.1.1 client 1.1.1.4.3. interim certificates.3(a)(d) client’s input 2.2(Intro).1 Civil Evidence Act 1995 5.4. 2.2. 5.4. 2.1 options.4.1 clients requirements 1.6(h) capital costs 2.3.6.1.3. 5.2.4.2.2.6.4. 4.4.2.1.5(c) staged 4.6.5.1.2. 2.7.3. 2.3.3.3.3.3 design coordination 3.1.2. 2. 2.2.1.1.1. 3.7. steps when considering Part 4 Section 2: Appendix E time 3.2 conditions of engagement 3.3.1.6 building project Part 2 Section 4: Appendix B2.2.1. 2.1.1.4.1.5.3(b)(f).2. 1.3(c).4.1. procurement routes 3.16(c). 2.1. 2.1.2.1.2.13.3.6.7.7.1 change.5(f).4.2 client’s responsibilities 1. 2. 2.1.1. 2.5 completion for all practical purposes 4.2.2 client and property costs 2.6.1. 4.3. 3.6.2.1.5.1. 5.3(a)(f).1.6.1.5 built environment group 5.4.4.4.2.2(Intro).2. 4.6.3.1. 5.1 Code of Practice (DISC PD 0008:1999) 5.2.3.5.4.3(Intro).2.1.4.3.7.1.5.2 design-only engineer 3.2.2. Part 3 Section 1: Appendix A.18(b).4.2.5.4.4.6.5 contractor 3.4.7.5. 4.1.1.3. 2.1.3.7. 3.14(d) after contract let 3.4 risk 4. 3.4. 2.5 designer 3.17(d) completion date see completion date sectional 4.1.4.1.2(Intro).2. 3.2.6.1.4. 4.13(g).4.6.1.5(b)(f).16(b) commissioning 3.6.6.5(d) CDM (construction (design and management)) information 5.4.1.2 building services installations 3. Part 4 Section 1: Appendix A10 certificates see final certificates.2.2.2.5.1.1.1. 2.6.2.4(b) capital allowances 2. 2.13 contractor’s proposal Part 2 Section 4: Appendix B2 cost 3.2. 2.3.4.4.2. 3. 1.2.19(g) see also client changes.4.17 common inheritance 2.4 building surveyor’s information 2.6.4.4.6.2.2 Building Research Establishment 2.3.4. D6 capital income 2.3. 3. 3.2. 2.5.5.2.2. 2.7 procedures and processes 5.4.building options.1.4.4.4 Building Services Research Information Association see BSRIA building standards and requirements 2.1.2.1.1.2.4(l) see also perfect completion.3(c).3.4.1.2.5.7 client’s role 1.1. 2.2.6 (Intro) competitive tenders 3.2.5.4.5.1. 2.3 choice (design) 3.1.5(f).4 procedures manual 5. 2.1. Part 2 Section 2: Appendix D4 worked example 2. Part 2 Section 2: Appendix C1 capital expenditure 2.1.8(e) completed part of the works 4.2.1. two-stage completion completion date 2.19(b) client context.1.2.3.2(Intro).4(a).1.8 cladding Part 4 Section 1: Appendix A6 clerk of works 2.2 CITB Levy 5. 4.1.3 employer’s requirement Part 2 Section 4: Appendix B2 items for which loss and/or expense allowed Part 4 Section 2: Appendix D procurement selection 3.6.7.4.19(h) late 3.3.(Intro).6. 2.5.3 enabling technologies 5.5.1. Part 4 Section 2: Appendix B2.3(i). 5.5. Part 2 Section 2: Appendix D1.3(b)(iii) submissions. Part 2 Section 4: Appendix A1. 2.5.6.4.2.1.2.3(c).1.6. 2.5(Intro).4.19 changes 3.6.2. 5.2.3.6.2.4 tendering 3.9(c).5.3.1 client changes 3.9.2.1. 3.1.1.1.14(b) client satisfaction 3.7. 1.1.1 Code of Practice for the Selection of Sub-Contractors 3.4. 4.1.6. 2.5.4.6 building services procurement 3. cost plan.4.1.2. 3.2.3 business rates 2. 2.2.5 Page 2 Index (12/03) The Surveyors’ Construction Handbook . 1.7 client’s brief 1. 2.2.3.4.1.5.3(Intro).1.2.13 prior to construction 3.2. 2.7 civil engineering 2.4.3(a)(g).13(m) client resources 3. 4.4(b).3(b) building sustainability 2. 5.1. B2. 3.3.5.4.2.5.4.3.5 format 5.4 scope and purpose 5.3.5.4.3.1.2 regulations 2.1.4.1. tender documents checklists analysis 3.1.5.4(Intro).2.4 Codes of Procedure 2.4.2.6.2. 2. Part 2 Section 4: Appendix A (Intro) collateral contracts 3. 2.1.4(f) Codes of Practice 3.4.7 client systems 3.4.6 completion distinct from practical completion 4. 2.1 client’s objectives 1.6 client’s involvement 3. 2. 3.1 client reserve 3.2.7. 2. avoidance of 3.1.2.1.5. life cycle costing 2. 2.4.3. 5.2.3 tender documents 3. 2.8 duty of care 5.4.2.2.2–3.8.1.

2. extension of time.2.1.3.8(a) construction administration see construction management construction completion report 4.2.2.1. 3.4.2. 3.1.1.2. and individually.5.4.5.7. risk analysis 4.1.2.1.4.2(a).5.2.8(b) cost estimates 1.7.3.2 computer aided design (CAD) 3.1.6.2. 4.3 analysis 2.4.3.2(Intro). 5. 2.1.3.2.13(d).4.4.4.4 scanning 5.3.4.1.2 appointment of 1.4. 4.3(3).4.5.1.4.11.1.4. 4.2.13(h) cost checklist 3.4.1.2.4.3. 4.6.1.2. 4.4.4.4(h) delay.14(e) cost limit 2. 4. 4. 5.6.5 responsibilities of 2.2.9.6 photocopies.2.1.2.4 Contractor’s List 4. 4.2. 4.completion process 2.3.5. 2.13. Part 4 Section 2: Appendix C4.5. 3.1.3.2.5(d) submissions 4.1.4.1.2.3.1. 2.6.4.18(c) construction costs 2.6.2.4.1. 4.2. 4.2.6. 4.1 Corporation Tax 2.4.2. 4. 4.2.2.4(a)(b)(c)(f) cost categories Part 2 Section 2: Appendix C cost checking 2.6.1 coordination contractor 3.5.1.3 cost comparison (worked example) 2.4.1.1 cost models 2. 3.3 construction (design and management) see CDM construction industry 2.2 standard 3.2.4.2.2.1. 4.5.15.5(c) installations 3.4 determination of employment 4. 4.2.4.1.4.3.3.16. 4.2.2.8.18(c) completion time 3. 3. 5.1.1.16.3.1.14(g) constructors.4. 3. by title contractual arrangements 3.3(c) see also extension of time Construction Task Force 1.2. 3. 2.3(e)(h).1.4.2. appointment of 3.3(h).2.1.1.1.7.3.2.6.4.10.3.4. 2.1.3(b) consultants’ information 2. 4.1.2.1.8 lead see lead consultant responsibilities of 2.9.8 selection of 3.2.3.2. 4.14.2.4.5 contract documents 2.3.1 consulting engineers 2.1.3.2.4.1.3.1.1.3.3(a) cost management.3(d) conflict.2.4.2.1 see also design and build contract. 3.2.1. 4.1.7(d) Constructing the Team see Latham Report construction 3. 5.4.4.6.5.10(c) contractor’s price statement 4.1.2.3 see also time contingency contingency allowance 1. 4.1.2 application 4. 3.4.3.4.4.2.2. 3.3.4. 3.5.5.2(Intro). 2. 3.2.4 contract switch Part 3 Section 1: Appendix A6(b) contract terms and conditions 3. Part 2 Section 4: Appendix B contracts breach of 4. 4.6.4.6.3(d) cost index 5. pre-contract 2. 4.1.5.3(iii) contractor’s proposals 2. 4.2.1. 2.1.1.1 interim payments to 4.2.8.1.2.5. 3.2.1(c).1.2.3 building services 3.2.4.8. 4. 3.3.4.4(f) computer software. dealing with 1.5 The Surveyors’ Construction Handbook Index (12/03) Page 3 .4(b) contingency Part 2 Section 3: Appendix A8.6.4. 2.3.4.2.4(Intro).12(f).4.3 controls 3.2.1.9(f).4.2.13.1.7. Part 4 Section 1: Appendix A1 contract duration role of employer’s agent Part 2 Section 4: Appendix A3 contract implementation and administration 3.3. 4.3.5.15. 4.3(i) see also contracts contractor 4.1.4. 4.3.5(h) cost consultant 1.4.4. Part 4 Section 2: Appendix B2.2. 3.4.1. 3. Part 3 Section 1: Appendix A3.2. Part 2 Section 4: Appendix B1.6 (Intro).4.1.2.4 concurrent engineering 3.11.7.2(Intro).5. 4.3(b)(f) consultation papers 5.4 cost issues 3.9. 4.4. 4. 4.1.13(m) contract administration 5.2 cost information Part 2 Section 1: Appendix A. microfilm and image processing 5.12.1.3. 4.3. 4.1(c)(d).4.1.1.2.6.4.5.3.2. 2.4. 2.3 coordination 3.12.6 construction management 3.1. Part 4 Section 2: Appendix C1 performance monitoring 2.2.7.7 risk allocation 3.10.1.16 contract stages (design and build) duration Part 2 Section 4: Appendix A3 post-contract Part 2 Section 4: Appendix A4 pre-contract Part 2 Section 4: Appendix A2 contract sum 2.2.12.7 clause 13A 4.7 cost control 2.2.13 cost criterion 3.7.1.4.6.2.1 contract administrator 2.1.4 life cycle (worked examples) 2.1.1.1. 2. 4.4.1.2.7.2.2.6.3.11 conversion 2.4. 3.1.4. notification of 4. Part 3 Section 1: Appendix A.1(c)(d)(e).4(b) computerised documentation authenticity 5. 4.5.1.5.10 control document 2. 4. 3.4. 4.9 consultants 2.10 building services 3.4.3. 4.2.3.2.1(Intro).1(b).3.2. 2.2.3 loss and/or expense 4. 4.1. 4.2.3.3.1. 4.2.3(iii)(iv) range of 3.2(Intro) construction time 3. 4.4(b-d). 3. 5. 4.3(e)(h).3(iv) contractor’s initiative 4.2(Intro).1.4(h) design 3. Part 4 Section 2: Appendix E. 4.1.5.2.3.2 Control in Trade of Endangered Species (CITES) 2.5.7.2. 5.2.1.5.1.14(c) see also extension of time completion to time 4.1.2.1.2.11(d) cost control overview 3.1.1.4.4.1.1. 5.4(intro).4.1–5.3.1.1.1. 4.2.4.4.3(e) contingency funds 3.5.2.

4.1.2.1.2.2.3(e). 4.1.4. 4. 1. Part 2 Section 2: Appendix D3. additional 2.2.2.1. 2.4 indirect 4.5.2.7 Design and Build 2. pre-contract 2.5 defects liability 4.2.2.1.2.2.3.1.4.4 types of 2.1 definition of the project 1. 2.1.1. 3. 1.5(a). 2.3.4.1.2.2.2.5 cost planning. patent defects.1.11(b) design solutions 1. 2.2.1.6.5.5.6. 3.1. 5.2. 4.3.3.3.1.6. 2.4. 2.11(d).4 outline proposals stage 2. 1.1(ii).2.4.2.4.2.1.4.7. 3.2.10 contract documentation 2. 1.1.7 delay 3.2.2.3 see also latent defects.3(d). 4.3.1.8 D damage to works 4. 1.2.7. 4.1. 4.1.3.2.3. 5. 4. Trade and the Regions (DETR) 2.3.12.1.1.2(ii).1. 2.5. 4.6.1.2.5.6.1.11.2.11 cost studies.1.3(c).8. 3.5.5.4. 3.2.1.3. 4.5. 4.1.1. 4.1. Part 2 Section 4: Appendix B1 design and build contract contractor’s proposals 2.1. 5.1. 4.4 risk 4.2 costs-in-use 2.1.4.1.4 scheme design stage 2. D6. work not properly executed defects correction 4. Part 3 Section 1: Appendix A5 design brief 1.4.2.1.5.2.2.2.6.2. 4.9. 2. 5.1.4. 2.3.1.1.3.2(Intro).10(b) design (frozen) 3.1(b) design stages 1.2. 4.6 design coordination 3.1.3. life cycle costing (worked examples) 2.4. 2.2.3.4.1 primary 3.2.1.6.6. 1.1.6.4(Intro) variants 2.2.1. 2.1. Part 2 Section 4: Appendix A5 services.7.2.2. 3.6.8 criteria identification of 3.2.4.2.1.1.3.4.1.4.4.3.2.5.4.3.2. C4.4.1–2.7.8 see also disruption demolish and rebuild.2(d).7. 2.2(a) remedying 4. 4.2. Part 2 Section 2: Appendix A3 see also life cycle costing costs categories of 2.1.4 services.5.2(b).3.6.3.4 design and manage 3. 3.2.9(f).1.1.1.3.12 design performance checklist 3.2. Part 2 Section 6: Appendix B depreciation 2. 3.3.4.5(c) design failure 3. 4.5.2 setting of 3. 1.2.2.4 Data Protection Act 1998 5.1.13.5.5 see also contract stages (design and build) design and construction period 2.2.4. Part 2 Section 4: Appendix B employer’s requirements 2.2 design overview 3.14(f).5(c) design times 3.cost plan 3.5.1(f).2.1.17(d) damages 4.2.1.2. initial Part 2: Section 4: Appendix A1 design-only engineer 3.2.1.1.2.1.4.4.4 decoration works Part 4 Section 1: Appendix A7 deductions 4.2.11.10.3. 2.6(a) design responsibilities 3.5.4.4. 4.6.5.3(Intro).1(Intro) outstanding 4.5.1.1. 2. 2.13(j) cost risk 3.6.2.3(c) surveyors as employer’s agent 2.1(c).1.1.5. 4. 1. 3.5. 3.4. 5.4.2.19(d) design input.9–3.7(e).2.1. 3.14(c). 4.5(f).18 amendments 2.3 dayworks preliminaries 5.6 format Part 2 Section 1: Appendix B modification of 2. 2.4.2.1.5.2. Part 3 Section 1: Appendix A6 background 2.3.8.3(e) client-led 2.4. 2.3 design process 2.3 design programme 1.1.4.14.4.1.4.3(b)(vi) sources for costing 2. 2. 3. 4. 5.10 defects 4.4.3 Page 4 Index (12/03) The Surveyors’ Construction Handbook .1 cost reports 2. 2.5.2.1.2.1(d) contractor-led 2.8.14.4.2.3.7.2.4.5.3.1.2.1.4.1.2. 3.2.2.13(h) changes to 2.1.5. 4.4. 4.2 cost targets 2.3.5.1.7. 4.3.1.2.1.3. 2.2(Intro).6.1.7 design re-evaluation 3.4.5.1.3.1 Code of Procedure for Selective Tendering 2.8.13(e) costing calculation 2.3.2.2.18(c). 4.6.5 design options. 4. 1.1. 4.4.6(c) defects liability period 4.6. Part 4 Section 2: Appendix B. 3.1.1.5.2.8 dayworks 4.6.2.1.12 design build fund and operate (DBFO) 2. 3.3.3.3. Part 1 Section 2: Appendix A process 3.4.4.7.4.4.5.1.5.2.2. 4.2.4.2.5.2.5.1.1. 3. 4.2.4 excess 2.2(b)(c) design team 1.1(b) costs versus prices 4.11(c).5. 2.6.9.3.4.7.4.2.1. 2.2. building 3.2.12.1.2.3 design proposals 2.4.1.1.2. 4.1.3.1 decision-making process 1.3.2.1.10. 2. 4. 2.1.1.4. D8 design 1. 4.1.1.4.4(c)(e).4.1.1.18(c) defects correction period 4.4.2.4.5.7.2.2.5.1.2.4.2.2.14(h) designer 2.4. schedule of defects.16.2. 4. 2.1(d) functional analysis of 1.6.4.3. 1.2.2.3.4.10 de minimus rule 4.1.2.2.1.6(a) design requirements 3.4.1.3.5.2.2 data electronic 4. 3.6.1. 3.6 demolition costs Part 2 Section 2: Appendix A4 density of vertical division Part 2 Section 1: Appendix C Department of Environment.2.5.2 design risk 3.1.6 presentation 2.1. 4.1.4.4.2 building services 3.1. D7.1.1.3. 1.7.5.2.7(b).2.1.2. 2.4.2. preliminary 2. costing 2.1. 3.4.

5.5 access procedures 5.1.3 employer’s agent 2.5.1. 5.5(c).5 guidance Part 5 Section 6: Appendix C maintenance record 5.2.1.1.2 elemental unit rate basis 2.5.1.3. 2.13 European Union legislation 3.5.1.2.6 (Intro).5.1.3. 4.2. 2.4. 4. 4. contract documents.2.2.4.2 administration 4. 4.4. 4.13(a) employer’s requirements 2.5 factors beyond control 3.1. 4.6. 4. 4.5.3.4.6.2.4.4.10.2.2.2.4.2.6. 4.6. 4.4.1.4.2.3.3 environmental 2.1.3.7.2.6.4.5. 3.2. 2.3(c)(g).1.2.12(f). 2.6.5.6(b) average risk premium 2. 4.6. 2. Part 2 Section 4: Appendix A Employer’s Representative 4.5.1. 4.1 economic 2.2.5.5.6.5.2.1 contractor’s obligations 4.6.5. 4.1. 2.1.4(b).2 extension of time 4. 4. 4.3.4.2.2.2.14(a) The Surveyors’ Construction Handbook Index (12/03) Page 5 .4.7(b).6 electronic management system 5.4. 2.2.1.2 damage 2.8 electronic document storage 5.2.2. 4.5.1.4.3.6.5.7.1.2.2.2.11 JCT contract 4.3(e) drawings 2. 2.14(b) engineering services 2.3.5.5. Part 2 Section 4: Appendix B2.4.1.4.5. 2.2 evidence see legal admissibility of documents existing building 2.5.4.1.2.3.2 employer’s responsibilities 2. definition of 4.3(d).2.4 retrieval 5.1.3(e) test 2.1.2.4.6.3 electronic 5.7.4.13.6(e) entitlement 4.2.2 impact 2. 4.2.5(Intro) contract clauses 4.6. 5.4(Intro). 2.1. 5.1(a).2.5(d).1.2.2.5(c). 4. 4.6 (Intro) procedures 5.2.6 efficiency 2. Part 2 Section 4: Appendix A(Intro) employer 2.10 award. Part 2 Section 6: Appendix A taxation 2.3(b)(g).2. 2. 2.3(b)(e) develop and construct 2.2.6 concurrent delays 4.4.2.2. 4.1.4.5.6 control set 5.2 disposal costs 2.4.5 document storage 5.2. 2. 4.4.2. 2.2.designer’s information 2.4.6 (Intro).3.7.2. tender documents domestic rebuild 5.2. 2.3.5. 2.1.3.6.6. information.2.1.11 event 4.6.1.4(g) disputes 4.3(1) paper 5.12 ICE contract 4.2. 2. 4.5(e).5.3.1.1.1(Intro) early possession 4.2.1.4.2. reimbursement documents.10 Neutral Event 4.2(Intro).6(c)(d)(f) expenditure excess 2. 5.2.5.5.2.4 engineer 2.5.1.4.6.4.4.5. 4.3.8 consequential entitlement 4.2 digests 5. 3.2. 4.2.3.6.3.3.6.6 see also document storage element unit quantities Part 2 Section 1: Appendix C elemental cost analysis Part 2 Section 1: Appendix A2.4(a) elements for buildings 2.6.7.7.5. 2. 4. Part 3 Section 1: Appendix A6 developers 1.10.1.8.2. 4.9.11(b)(c).3.1.2 – 4.3.1.4. timing of 4. 2. 4.2.5.7. C4 extension of time 4.15.6.3. Part 4 Section 2 Appendix C3. 3.5.13.4.1.1.3 Domestic Sub-contract IN/SC 4.2.4.3.2.3.2.5.1 external works Part 2 Section 3: Appendix A6.6.3(Intro).7. 4.3(b)(d) selection 2.4 further reading Part 4 Section 5: Appendix A GC Works Contract 4. document storage. 4.4.4.5.5.5(Intro).5 direct. 4.1.5.1. revenue expenditure expense in building projects 4.4.5. 4.6. Part 4 Section 1: Appendix A7 F facilities management 5.6. 4. 2. 5.7.6.1(b) disruption 4.1(c).8.4.4.4.2. 4. 5.2.3.4. 2.3.5.1.17(c) effective management 3.5.2.6 embodied 2.2.12(a) estimating and estimates 3.2.4.4.2.6.3.9(k) evaluation 1. 4.1.5.2(b).5.2 DISC PD 0008 see Code of Practice (DISC PD 0008) discount rate 2. 2.5.7.5.2.4 electrical services see mechanical and electrical services electronic data interchange 4.5.2.5.2.3(b)(h).4. 2.2.4.4(Intro).6.5.5.2. Part 5 Section 6: Appendix B see also Code of Practice (DISC PD 0008). 2.4.1. Part 4 Section 2: Appendix B see also delay distribution Part 4 Section 2: Appendix A6 document destruction/deletion 5.5.2.2.2.3.3.2.5.4 see also capital expenditure. 2.1.4.5.6.1.10.2.1. 4.3.2.11.3(a) discounting 2.4.3. computerised documentation documents see appointment documents.7.6.6.3. Part 2 Section 4: Appendix B.1 elements for design and build 2.5.7.3 developing the business case 3.4.4 entrances Part 4 Section 1: Appendix A4 Envest 2.1. 3.2 Relevant Event 4. 5.2.5.4.5 Domestic Sub-contract 2002 Edition 4.1. 2.9 development 2.6 enabling technologies 5.5.3(2) duty of care 5.12.3(c) no risk return 2.2.1. 4.1.1. Part 2 Section 4: Appendix B energy consumption 2.2.6. 2. 2.6.6.5.1 E early completion 4. 4.5.2.5.1.9 contract administrator’s role 4. 4.6.2.10.5.

1.6. Part 2 Section 2 Appendix D5.7 interim certificates 4.2.6.5.2.1.4 Hudson’s approach 4. 3.2.1.9(f).8.1.1(Intro).18 instructions late 4.6 (Intro).13(k).5.7 Hong Kong decision 4.3(d) interest rates 2.2.7.13 ICE Minor Works 4.1. Part 2 Section 4: Appendix B2.2.1.2.2.14.5. 3.3 first year allowances 2. extension of time 4.5.7.1.6.2.4. 4.1.8(f) additional activities 2.8.3.9.6.4. 4.3.5.4.8(h) percentage 3.1.14.1.4.1.12 government works 4.5.2.5. 2.1. 4.1.7.1.1. 2.5.6. 5. 4.6.1.5 FCEC Blue Form of Sub-contract 4.5.1.4.1.18 Government Contracts GC/Works/1/Edition 3 4.2.2.1.3 FAST see functional analysis systems technique (FAST) fault free works 4.6.4.4.7 information general.4.1.5 Housing Grants and Reconstruction Act 1996 4.4.4.9 insurance risks 4.3. Part 4 Section 2: Appendix A11.1. 5.5.2 insurance 3. 4. 4.19 Government Contracts GC/Works contracts.3.7.3.1 preparation of 2. 3.5.3 forecasting 5.1. 4.2.7.2.3.1.2. 2.6.2 specialist 3.2 see also safety hire charges 4.2.4. 4.6. Part 2 Section 2: Appendix D3.1 Forest Stewardship Council 2. 2.2. 3.1.6.2.15 feasibility studies 2. 4.5.8(i) fencing and security Part 4 Section 2: Appendix A5 final account 4.3.7.1. D6 finance charges 4.1.2.2.3.4.7.2 human resources 3.4.1.8 I ICE 6th Edition: Substantial Completion 4.1.4.7.4(e) post-completion 4.2. 4.4.11.1.1.5.1.11 ICE Design and Construct Clause 48(3) 4.3 function elements 1.2 ground conditions 3.18(c) Finance Acts 2.8 requirements 2.2.6. 2.faculty working groups and committees 5.3. 2.7.3(c) holidays-with-pay 5.2.4 (c) ICE contracts.2.2. 5.2–5.11. 5.3.1. 2.2.2. ICE 7th Edition: Substantial Completion 4.1.2.4 fluctuation bonds 4. 4. D6 independent client advice 1. Part 2 Section 4: Appendix B2. 4.5. 4.6. 2.5 image processing of documents 5.3 Gross National Product (GNP) 2.7(b).3.7 FAST diagram 1. documents.13.2.9 installations Part 4 Section 1: Appendix A2.5(b).1 financing costs 2. 4.6. 4.7.2.5(a) fittings and furnishings Part 2 Section 3: Appendix A4.4.2.1.6 interested parties 1.1.2.5 future generation 2.1.1.5. Part 2 Section 6: Appendix B frost damage 4.3.13 ICE Design and Construct Forms 4.2. 2. 1.4.2.2.4(b).1.2.5 G Government Contracts GC/Works/1/Edition 2 4.5 production of 2.1.2(b).1(a) functional decomposition 1.1.1. 3. 5.7.5.7.4.4 housing sinking fund 2.1.2. Part 4 Section 2: Appendix A10.1(Intro) fluctuations 4.1.4(k)(l). 4.6 see also valuations for interim certificates Page 6 Index (12/03) The Surveyors’ Construction Handbook .7.3.6.5(b).1.1.4.5. extension of time 4. 1.6. 4.2.3.2 initial design input role of employer’s agent Part 2 Section 4: Appendix A1 initial/first year allowances Part 2 Section 2: Appendix D6 inspection 2. design and build contract Part 2 Section 4: Appendix B2.2.2.6 incentives 2.3.1(a).2 Indices and Forecasts 5.5.1.2.6 (Intro).7.1.5. Part 3 Section 1: Appendix A6(n). 3.2.1 final certificates 4. records of costs information management policy 5. 4.9(c) H Handbook Introduction.1.1.1.2.5 house rebuilding costs 5. 2.5.2.3 financing charges 4.1.1. Part 2 Section 4: Appendix B2 see also cost information.1.6.2.6.1.7.6.6.1.12.6.1.1.4.4.1.18.1. 4.4.4.2.15 financial resources 3.1.2.4.2.3. 4.3.4.1.7.4.18.2.11(d).4 information services 5.1. 3.10(a).2.1.1. Part 2 Section 2: Appendix D6 fitting-out 3.1.5.3.4.2.5.1.2.4.2.2.2 industrial building Part 2 Section 2: Appendix D4 inflation 2. C health and safety 2. regional development 2. data.5.2.5.5 implementation 1.2. 2. 3.1 time charge 3.8(g) professional 2.2 lump sum 3. Part 2 Section 2: Appendix C2 finishes 4. 5.4. 2.2.2.6.1. 1.1. 3.18(a)(c) gross floor area 2.16 implementation process 3.17 grants. 2. 2. 2.3.10.4.4.4.2. 2.5.4 fees 1.1.4.7.10(c).9.1.6.5.4.3.2.1.2.4.2 Green Book 4.1.6.4 inadmissible items 4.2.16(a) head office 4.5.6.4 inter-generational equality 2. 3. 4.5 initial control document 1.6.6 indices Part 2 Section 1: Appendix A2.4.2.4. 4. 5.18.2 information security 5.1. 4.2.6. 5.5.4.13. 4.1.4.2.1.4.1.5.2.4.1.5.2.4 Human Rights Act 1998 5.2.6(b) Institute of Chemical Engineers Forms (I Chem E) 4.8.3.1.2. 4.1.2. Part 4 Section 1: Appendix A7 internal Part 2 Section 3: Appendix A3. 4.1.1. 2. 4.2.4.10(e).2.2.2 handover 3.6.1.1.4.7.4 implementation of contract 3. 3. Part 1 Section 2: Appendix B functional analysis systems technique (FAST) 1.8.3.1. 4.5.

2.5.4 obsolescence 2.5.2.5.5(b)(c).6.3.2.1.1.6. 2.4. 5.2. 4.2 lump sum contracts 2. Part 2 Section 2: Appendix A. 2.4.3 loss and expense 4.1.3.2 schedule of duties 2.2. 2.4.2.1(c)(d).6 (Intro) late completion 3.2.3.2.2.2.2.2.4.1 electronic documentation 5.2.4.2.6.2.1. 5.2.2. 2. costed planned 2.5.4.2.12.6 Management Contract 1987 4.6. mechanical and electrical 2.5. 5.1 key elements 2.2.3.2.2.1. 5.2.12 late finish 3. disruption of 4.2.2. 4.1.2 Standard Form of Building Contract 1998 (JCT 98) 2. Part 4 Section 2: Appendix D.6.2.6.3.2.13 Standard Form of Building Contract With Contractor’s Design (CD 98) 2. 3.3.5.5 life cycle information 2.7.4(Intro).2.3.1. 4. 2.5.5(Intro).18(a) lump sum price 2. 4. 5.2. 4. 4. 2.2.3.3.1.2.5.6. 4.2.1.6 Code of Practice 5. 4.2 – 4.14(e) latent defects 4.1.3 tax relief.2.13.5.1.6.2.6.2.6.1.1.4(iii) land 2. 2. 3.2.5. 3. 4.1.1.1.6.3.4.3.2.3 design 3.2.1.1(e) see also valuations for interim certificates Intermediate Form 4.2(Intro) see also limited liability life cycle cost appraisal 2.2.7.1.5.4.2.4(Intro).1.3. image processing 5. 4.1.7 JCT practice note CD1A 2.6.1.5.2 Standard Form of Building Contract With Contractor’s Design (CD 81).5.1 labour record 4.1.1.1(c).6.2. 4. 4.5(b)(c). 4.2.2.1(e).5 K Keating’s analysis 4.4. 4.1.3.4.7–4.5 maintenance.1.1.5(a).6(a) payments 2.4. 4.1.3. 4. 4.3.4. 4.4.3(e).4.6.2.5.3(e).1. Part 2 Section 2: Appendix B residual values 2.4.2(d).3 terms for taxation Part 2 Section 2: Appendix D worked examples 2.2.9.4 (f) JCT Agreement for Minor Building Works 1998 (MW98) 4. Part 2 Section 2: Appendix C4.2.3.3(e) JCT 80 Standard Form of Building Contract 4.7 ISO 9000 3.4.3.2. impact on 2.1.1.10(c) liquidated damages 3.7 liability at practical completion 4.7.4.2.4 NAM/SC Sub-Contract Conditions: for Sub–Contractors named under the IFC 84 4.3(Intro). 4.6 JCT 98 Standard Form of Building Contract 4.4(g).8 investment appraisal 1.1. 2.5(c) life cycle period. 2.1.2.4.1. Part 4 Section 2: Appendix B1.3.2 litigation and evidence see legal admissibility of documents local authority requirements Part 4 Section 1: Appendix A2.2.1. 5. 4.5.2.2.5. 4. 5.2. 2. C6 tax allowances examples Part 2 Section 2: Appendix E incentives and business rates 2.5.3.2.8.7.2.5.1. 2.2.2. 2.1.1 building life 2.5.1.5 Standard Form of Building Contract With Quantities 1998 (JCT98 With Quantities) 4.2.4.2.14 JCT variant forms of contract 4.5.4.4.2 role of 2.1.2. inadmissable items J JCT Forms of Building Contracts Intermediate Form of Building Contract 1998 (IFC 99) 4. 2.3 interim valuations 2. 3.2.1.2.6 investment tables (Parry’s) 2.2.10 Standard Form of Prime Cost Contract 1998 4.1.18(c) ISO 9001 5. 4.5.1.10(a) loss in building projects 4.4.2 legal admissibility of documents authenticity 5. 2.13 NSC/C Nominated Sub-contract Conditions 4.1.1 joint venture/negotiated project 2.6(Intro). D2 The Surveyors’ Construction Handbook Index (12/03) Page 7 . 4.2. 5.2.4. 4.3.2.4.2. 2.1.5.1.9(d).1.1.2.2.3.1(Intro).2 Standard Form of Building Contract With Contractor’s Design 2. microfilm.7 limited liability 3.4.11(b) M machinery see plant and machinery maintenance and repairs 5.3 Latham Review Part 3 Section 1: Appendix A3(d) lead consultant competency level 2.7.5.3.5.4. 4.1 client context 2.4.1(Intro).6.1.1.4 surveyor as 2.8 photocopies.2. 4.interim payments 2.4 legal contracts 3.1.2.2.3.2.9.1.4.6(Intro) items see admissable items.4. 4.2(b) Latham Report 2.11.1.1 costing calculation 2.1.2.2.7.2 costs and values Part 2 Section 2: Appendix C data sources 2.5.4 maintenance costs 2.3.2.1(a) JCT Standard Form: wording 4. E.1.1(e). 4.5.4.1 key decisions 1.1.5.2.2.1. 4. 4.2(Intro) life cycle costing 1.13 Management Contract 1998 4.10(c) determination of 4.1.4.1.10.2.4. 5.8.4 techniques 2.8 Works Contract/2 4.3.6.2.5.2.4.2.1.1.9.4 L labour. 5.3 fees and duties 2.2.

2.6.2.1.2.14 mitigation 4. 3.2.6.2. 2.1.1.17.2.1.2.14.1. cost control overview.1.1.2.2. 3.2.1.4.2.1.3.5.14(i) overspending 3.6 see also Code of Practice (DISC PD 0008) managing risk 3.1.4.2.2.4.2.8(b) overrun 3.1.10.2(b) France 4.2.5.2.1. interim payments.2. 2.1. project management.3.1.18(c) periodic payments 2.3 organisational structure 3.1. B1.1.5. 5.4.1.2.5.4.5.1.1 offering up 4.4 ownership ‘reasonable proof’ 4.2.5.4.1 NJCC 2.6.2.1.1.3 Parry’s Valuation and Investment Tables 2. design overview.7.3(c) prior to completion 4.1.5.3.1.5. 4.4. time control overview owner occupiers 1.1.5. Part 2 Section 2: Appendix C3 operatives 5.2.1(Intro) performance criterion 3.5. centralisation of 2.1.3.2. 2.2.1.2.1.7.2 payments see advance payments.5.17(a)(d).5.2. 3.3. Management Contract 3. Part 4 Section 4: Appendix B P pace 3. 4.annual 2.2.14(j) performance bonds 4. Part 2 Section 4: Appendix A(Intro). 2.4.7.4.4.1.2.1. Part 2 Section 2: Appendix C4 cyclical 2.1 New Engineering Contract (NEC) 4.2.3.1.4.1.1.6. 4.4. 4.4. 4.1.1.6.1.2.3. Part 4 Section 1: Appendix A9 schedule of Rates Part 3 Section 2: Appendix A minor works 4.4. 4.1.2.1.1.2 parameters.6. 2.4.4.4(c).15.5.8(a).4.2. 4. life cycle cost payments.1(e) N Named Sub-contract NAM/SC 4. 4.2.6(Intro) audits of systems 5.4.3.2.1.3 options appraisal criteria 1.1.5 operation of the building 3.1. 3.2.5.12 manuals Part 4 Section 1: Appendix A10 market conditions 3.6.5.2.4. Part 4 Section 4: Appendix B on site 4. 3.2.4.7. 4.1.1 performance requirements Part 2 Section 4: Appendix B2.3(d) patent defects 4.5.6.4.1. Part 3 Section 1: Appendix A no risk return discount rate 2.1. 4.4(b) planned maintenance.6.4. quality control overview.13.1.2.2.2.2.5 example 2.4.9 performance specified work 4.1.1 materials 2.2. 2. 3.6(h) making good 4.2.9(c) cost 3.5.1.7 partial possession 4.2. Part 4 Section 2: Appendix A4.1.5. 4.4.2 outline proposals stage 2.1.2.2. 3.5.1–2.1.4 performance risk 3.1. 4.4. 3.2.3(b)(d) Nominated Sub-contract NSC/C 4. Part 3 Section 1: Appendix A design 2. 2.3.8.1.9.1.5.2.5 pipework 2.1(a).2 maintenance 2.9.2.2 building 2.2.7 negligence 2.2.4(j).2.10(a).4.11(e) package deal 2.1.3(e) National Insurance 5.3 maintenance of the building 2.2.5.6.2.3 nomination 3.18 beneficial 4.15. 2.4.2.4.2.4.5.1.1.2.1.3. 2.3.5 ownership of 4. life cycle costing (worked example) 2.1. 3.3. 2. 2.4.5.11(c). 4.4(e).4.2.4(f).3.7(d) new building 3.1.2.4 readiness for 4.5 occupancy costs 2.9 management contracting 3.2.1 time 3.1.4(d). 2.16.4.1(c) future 2.1.3(a).1.6 organisations 5.5.2.2. Part 2 Section 2: Appendix B obsolescent properties 2.1. 4.1.2.2.6 choice of 3.1 management see facilities management.3(a) novation 2.2.5(b) partnering 3.6.4 intermittent 2.2.3.2.3 off site 4.2. impossibility of 4.1. Part 4 Section 2: Appendix C overlap 3. costed 2. 3.1 Page 8 Index (12/03) The Surveyors’ Construction Handbook .3(c) management systems 5.13(l) markets and marketing 5.3.8–4.4.13(j)(k) overview see change control overview.1.5.3.5 performance 2.4.1.3 performance tests 4.2.1.7.2.4. fees.16(a) offices.1.15–3.2. 3.2.2.5.1.4(d) new-build 2. Part 2 Section 2: Appendix C4 tax relief 2.18 operation costs 2.1.4.8 occupancy 1.5.2.5 overheads 2.2.4.3–1.5.4.6.1(e) PFI see Private Finance Initiative (PFI) physical resources 3. Part 4 Section 4: Appendix B matter 4.1.1.15 measurement see quantities measurement contracts Part 3 Section 1: Appendix A2 mechanical and electrical (M & E) services 2.2.6.1.4.6. 5.1.2(b) see also fault free works perfection. Part 3 Section 1: Appendix A4. special payments perfect completion 4.1.4.4.2.1.2.1.1 over-specification 3.4 planned maintenance programme 2.16 maintenance option.2. Part 2 Section 2: Appendix C5 occupation 3. 5.7.1.8(b)(c) performance failure 3.7.1.4.1.13.1.2. quantity and quality 2.1.3(e) Europe 4.1.1.4 Planning Supervisors 5.4(c). 2.2. Part 3 Section 1: Appendix A6(b) O obsolescence 2.

4. public sector publications Part 2 Section 1: Appendix D. 1.1. 3.5.5 probability/impact matrix 4. 3.4. 4.1.3.5 process 2.6 see also early completion.1.1.2.1.1. 2. loss of 4.5. 3.1.1.1.3.4.2.11 project stages 2.1. 2.2. 4.4. 4.1. 1. 3.1.3.1.3.1.4.5.1.1.5.1. Part 4 Section 1: Appendix C.2.4.2 project uniqueness 3.4.4 ascertainment by 4.1.5. 2.5.13.2.7.2.3.2.1.7.5 professional liabilities 2.2 public health installation Part 3 Section 2: Appendix A public sector see procurement.9.3 see also element unit quantities.6.1.1.2.16(c).18 quality/price mechanism 1.13 project funder(s) 1.3.1.6. Part 3 Section 2: Appendix A. Part 4 Section 2: Appendix A.2 selection of 3.1.1.4.6.4. quantity and quality quantity surveyor 2.16(c).4(Intro).2.2.1.3.3.4.4.2. Part 4 Section 1: Appendix A3 fitness for 4.1(iii).3 progress see stages of a project.1.1.2 project testing 3.2.5.4(a)(i) proceedings.4. 3.2(Intro) see also valuations for interim certificates quantity surveyor’s considerations Part 4 Section 2: Appendix B3.10(b) role of 1.2.1 provisional certificate 4.3.3.4. 2.4.4. 4.5(Intro) professional services 5.3.5. 3.4.5. 3.1. 4. 4.5.1.1. B1.1 strategy 1.1. 4.4. 3.1.2. 1.4 role of 2. work executed quantity see parameters.10.1.4.1.1.3.1. 3.3(a).2.1 profit.1. 3.2.3 project type 1.2.3 procurement options 2. 3. 1. 4.1.5.1. 2.5.18(b) planting Part 4 Section 1: Appendix A8 possession 4.2.1.3.1.1.3.11(f).4.2.13 development of 3.10(d) pricing options 3. 2.3.1(f) programme 3.2. Part 4 Section 2: Appendix B2 R raw materials 2.1.1 Q quality see parameters.7 prime cost sums 4.13(l) pricing 1.5. 3.3.7. 3. 5.plant and machinery 2.6. quantity and quality quality assurance 3. C4 quantity surveyor’s information 2. 3. Part 4 Section 2: Appendix A3.4.13 profit margins 3.1.1.4.1.7. 4.2.1. 3. 4.6 (Intro).13 project structure 2.2.1.1.2.1.6.1.2(c).4 objectives Part 4 Section 1: Appendix A problems of 4.4.5.1(a). 3.1.1.3. 3.4.18(a) project characteristics 3.1.2. substantial completion Practice notes 2.3(b) project management 1.1. 2.5 pricing and risk 3.1.1.2.3.2.3.2.6. 5.6.1.3 see also building services procurement professional advice 3.5. 3.6.9(c) prices 4.2.1.1.3 average 5.5 effects of 4.1.5 see also early possession. 3.7. 2. 2.13. 3.10–3.16(c).3.1.1.1.1.2. 3.14(c) project cycle 3.3.1.3(g). 3.4(a).1. 3.4.1 standard forms and certification 4.4.4.1.2. A4. 3.4.6.1.2.1.5 see also building services procurement Project Manager 1.5.4.14(a).16 Principals of Good Practice for Information Management 5. partial possession post-contract role of employer’s agent Part 2 Section 4: Appendix A4 practical completion case decisions Part 4 Section 1: Appendix B definitions of 4.4.6.13(l) profit target 4.3. 3.12. 3.4. D5 plant charges 5. 4. 3. A6.1.4.2.5. 4.2.3 project objectives 1.1. C3.2.1.9(c) professional adviser 3.1.4 quantities 2.5. 5.3. 2.1.13(l) tender 3. 3. 3.4.1. 2.1.4.3.3 protection and safe practice 5.4.4 quality control overview 3.3.17 project monitoring 2.1.2.4. 4.10(b).7.3. 3.1.4(a).1(b).1.4. 3.1(a).18(c).2.8.5.4(a) Prime Cost Contract 4.1. 2.9.3.4. 3.4(Intro).1.2.4. Part 3 Section 1: Appendix A primary activities 3.3 construction 3.8.5. 5.4. 2. 3.1. 2.4.2. 3.1.4.1. 4. 2.8.4.1.3(c).5(g).1.5 price premiums 3.1.4.5.2.2(Intro).1.4. 1.5. 2.2.4. Part 2 Section 4: Appendix B2.2.2.5 approximate 2.4 plant projects 4.1.4. 4.4–2.1.4.5.7.2.1.3.9. 2.1.14.1.4. 4. 4.1 Private Finance Initiative (PFI) 2.4. 4.3(c) provisional sums 4. 5.2.2.1.5.4. 2. determination of 4.2 quality control 2.3.1.2.5 prescriptive requirements 2.1.4.4.11.2.1.5.4.3 routes 2.2.7. 1.3.1.17.4.1.3.3 methods 4. Part 3 Section 1: Appendix A Practice Statements 5.16 project planning 2.4.7. The Surveyors’ Construction Handbook Index (12/03) Page 9 .4(Intro).11.2 subsidiary issues.1.11(e).2.2.2.2.1.8.1 pre-contract role of employer’s agent Part 2 Section 4: Appendix A2 preliminaries Part 2 Section 3: Appendix A7.1.1. updating project brief 1.3. right to bring 4.5. 3.1 principal adviser 3.6. 3. 2.4.6.3.4.11 project evaluation 1.4.4.14.5.2.1.1.2.1.1.4(g).4. 3.2.1.5.1.1.4(b).3.2.4.5 pricing schedules 3.2 project definition 3.1.16(c) professional judgement 4.2.4.1.2.2.1.1. 2.4.4.2.2.2.15–3.2.3.10.5.

5.1.6.3. 3. 5. cost) 3.2.3 extensions of time 4.2.2.4 risk and extension of time 4.1.8(a) regional development grants 2.6 submission cost 4.3. 2. 4.2.3. 4.5(c) revenue expenditure Part 2 Section 2: Appendix D2 RIBA Notification of Extension of Time form 4. 4.4 sensitivity analysis 1.7 revenue costs 2.3(b) renewal costs 2.1. contractor.5. 2.3.2.4.2.2.2.3.2.3.4.3 see also uncertainty risk profile 4.1.1.2.9 process 4.3. Part 2 Section 2: Appendix C4 research 4.6(d) Schedule of Rates Part 3 Section 2: Appendix A.5.2.2.1 documents 4.3.3.2.4.2.5.2.4.10 Rethinking Construction 1.1 key components 4.2.2.1.2(Intro) re-usable materials Part 2 Section 2: Appendix A4 revenue allowances 2.2.3.1.6 security Part 4 Section 2: Appendix A5 security see also information security selection process 3.18(a) reimbursement 4.6(g) refurbishment 2.4 assessment 4.7.1 rebuild.2(Intro).1.1.1.10(f) shell and core contract 3.5.3.3.3.3.2.1(b).2.13.5 risk taker 3.1(d). 1.2 definitions 4.5.6.5(i).2.1.3.1.3(Intro).3. 2.3 royalties 4.2.4. 4.1.5. 4.3. 4.4 RICS Building Cost Information Service (BCIS) 2.12 risk identification 4.8(j).3 recycling 2. 3. costing 2.1.3.6.1.1.3.14(h) removal costs 4.2.4. 4.1 contractural entitlement 4.3(b)(i)(ii) resequencing 3.5.2. 4. 4.4.1.2.2.3.1.3.1.3.4.Part 2 Section 6 Appendix A fossil fuels 2.1 RICS standard forms for interim valuations 4.12.4.4(g).1.1.7.6. 2.2. 3.3(d).5 records of costs 4.4 reimbursable contracts 4.2.2.6.14(h) residual values 2.3(f). Part 2 Section 4: Appendix B2. 4.5.4.4.1. 3.2. 3.5.3(b)(v) and (vi) risk response 4.9.9.2.3. 2. 2.4. 3.2.3 relationships (time. 4.1.2.3.2.6.3.3.1 risk 2.1.1.3.5.2.1.4(b).6. 3.1.3.7.4.2.1.9–3. 4.4.1 risk averse 3.3(3).6.1. 3.2.1.8.3.3.4.2.3.5.2. 4.6 allocation of 3.5(a)(i) risk allocation 2.3.3(a)(ii).2.4.1. 3.1.2 regulations 2.1.1.2.9 running charges 4.2.3.6.3.3.3.2.4.11(c) secondary 4.6. 4.2.1.3(a) setting out.1.3.7 risk assessment 5.3.2.3.3 masonary 2.2.4. 2.6.2.11.6.4.5 written application 4.2. 4.2. 3.1.3. 2.1 mahogany 2. 4.2.1.2.2 of subcontractors 4.3.5.1.11(a) risk transfer 3.6.3.2(Intro).2.1. quality.2.3(Intro).3.3(Intro).3. 4.5.5.4 entitlement to 4.2.6. Part 5 Section 6: Appendix A schedule of defects 4.3.5 in construction process 4.3.4.2.3.7.3 risk management 3.5(g) replacement costs 2. employer’s responsibilities retail buildings Part 2 Section 2: Appendix B5 retention 4.5.3(Intro).1.5.1.1.4.1.3.5.2 timber 2.9–3.6 Red Book 4. 2.4 risk register 4. 5. 4.6. 4. Part 2 Section 2: Appendix B5.6.3(d) services mechanical and electrical (M & E) 2.1.2. 2. 4.3. Part 2 Section 2: Appendix A. 2.2.1.1.5(b).7.9 residual 3.1(b) S Safety File Part 4 Section 1: Appendix A10 saving 2.5 responsibility additional Part 2 Section 4: Appendix B2.6 sinking fund 2.13(c) sequential see traditional strategy service engineer’s information 2.1.1.2.2.3(e).2–5 benefits 4.11(a) risk distribution 3. 3. 4. 3.5.3(d) running costs 2.2.4. 2.1.2.1.7 see also consultant. Part 4 Section 1: Appendix A9 provision costs Part 4 Section 2: Appendix A8.2.3(e). C6 resources 3.2(Intro) 2.4.2. 4.5. 4.5.10 risk analysis 3.3. 4.4.3. 2.10 roles built environment groups 5.6.4 valuation and investment table 2.7.3.2.10 delegated 3.4.3(a)(i) and (b)(iv).4.1.3.3. 4.6.18(a)(c) redevelopment 2.1.6.2. A9 standard elements Part 2 Section 3: Appendix A5.3.5. 4.2.7.2 probability/impact matrix 4.4. 4.3 scheme design stage 1.10 RIBA Plan of Work 2.5 see also building services procurement setting-up costs 4.9.5. Part 4 Section 2: Appendix C2 rectification of works 4.3.10 RICS publications 2.2. Part 3 Section 2: Appendix A.2. 4.1.1.2.1. 2. 2.1.7.2.5.5.2.1. 2. 5. 4.3.1.1.13(m).19(g) scaffolding Part 4 Section 2: Appendix A7 scanning of documents 5.2.3.6.3.1.2. errors in 4.6.13(c). 2.1. 4.4.1 rehabilitation 5.2.1.2.3(a).3.1.4(b) RICS Notification of Extension of Time form 4.4.4 plan 4.5.2. 2.2.6.11.3.3. 3. 2.2.6.1.5.3–3.5.1. 4.3.3.3.4.7 Page 10 Index (12/03) The Surveyors’ Construction Handbook .4 workshops 4.4.5. 3.2. 4. 4.1.4(b) principles 4.2.3.1.3.5.2.6 (Intro).6.2. 3.5.4.15.4.3.5.5. 2. 5.4. 3.3.4.2.8.3.

1.5.4.4. 4.3.1.4. 3. 4.6 changes from initial 2.6. Part 4 Section 2: Appendix B3.1. 3.3.6. 4.1.12. 2.3.1.1.10(c).6.1.6.3. 4. Part 2 Section 4: Appendix B2.1.2. Part 2 Section 4: Appendix B2.4. A9 temporary works/access Part 4 Section 2: Appendix A4 tender acceptance of 2.2. 2.18(c) tax allowances 2.4.3.7.6 (Intro).2.5.3.6.4 specialist installers 3.4.5(a).2.3(a) tender documents 3.1.1.1(b). 4.1.4.1.1.4.1.2.4.10(g). 4.7 see also building sustainability systems and controls 3.6.3. 2.7.2.2.5.2.3.1 action 2.1.2 Structural Engineer’s information 2.1(b).2.4 see also standards and tests third party insurance 4.4.2.3 applications 2.5 substantial performance 4.6.18. 4.9(c) statutory duty 3.7.10.2. 2.4.5.3 special payments 4.2.6 storage see also document storage straight line allowances 2.3.4 standards and tests 4.4.5.2.3(d).11 T take-over 3.5.3 building services 3.7.2. Part 2 Section 4: Appendix B2.3 specification 2.7.2. 2.3. information from 3.3. 4.4.2. B2.9. 3.2.1.2–4.4.3.1(Intro).3.5. 2.1(d) tender stage 2. 4.1 superstructure Part 2 Section 3: Appendix A2.16(b) test discount rate 2.2. A7 see also Corporation Tax. 2.6.3.1.4.1.5 worked examples 2. 2.3.1 Surveyor 1.3(a) domestic 4. Part 4 Section 2: Appendix D checklist Part 4 Section 2: Appendix E substantial completion 4.7 sub-contract Part 3 Section 2: Appendix A tender price index 5.3(d) structure Part 4 Section 1: Appendix A5 subcontract completion 4.5.2.3(d).1.2.4.13(l) two-stage 2.5.4.7.1.2.1.1.1.4.2.4.1.3 team development 4.7.7.12 site visits 4.8 termination 4.2.2.5.5.15.5 alternative 2.3.16(b). A6.3(e) nominated 4.2.6.9 at completion 4.7.2. C3 stage payments 2.2.4.1.6.6.18(b) taking over certificate 4.2.1(e).2 suppliers 4.2.1.1.2.1.2.3.6.2.9 evaluation 3. 2.6.1 snagging list 4.2.5.2.1.1.1 advisory role 2.4. 3.5 subcontractors 3.4. 4.4.2.5. 4.8 technology 2.5.1.5(f).2.1. 4.4.4.1.3(c) site operations 2.2.4.9(c). 4.18 taking over 4.4.3.1 temporary accommodation Part 4 Section 2: Appendix A2 temporary disconformity 4.2. evaluation of 2.6.6.5 submissions 4.4.11.1(Intro) temporary services Part 4 Section 2: Appendix A8.7.5.3 professional judgement 4.4.4.1.4.2.3(a) tests 4.1(Intro).2.2. examples of Part 2 Section 2: Appendix E glossary of terms Part 2 Section 2: Appendix D types 2.4.3. 2.6(b) specialist services 2.1.1.2 tender proposals.3. 5.4. 2.5.10.2.4 cost 2.3 standards and requirements 2. 4.2.6(h) tax relief see tax allowances taxation glossary of terms Part 2 Section 2: Appendix D issues and adjustments Part 2 Section 2: Appendix A5.1.9 statutory requirements Part 4 Section 1: Appendix A2 step-down provisions 4.3.4.7. 4.7.10(a) specialised activity 2.2(Intro). 4.1. 3. 4. 4.2.1. 4.4.4 of plant 4.5(b) timber see raw materials Timber Trade Federation 2.4.1.4.6.4.1.2.9 time of 3.5.9.2.4.4.2.1 clarification 3.2(Intro).3.4.2.6.3.2. 4. 5.3. VAT (Value Added Tax) team 3.5.3 storage 4. 4.2.7 tenderers.2.6 categories defined Part 2 Section 2: Appendix D3 expenditure. 4.2 submission cost 4.1 snagging 4.1.2(e) named 4.1.2 design and build 2.4 statutory controls 3.2.1 The Surveyors’ Construction Handbook Index (12/03) Page 11 .5(b). A11.1.5 see also lead consultant sustainability 2.3.2(f) supply-chain management 3.1.4.6.2.2.1. 5.3.15 Subcontract DOM/2 4.7. 4.1.1.9.1.4. 4.2.4.1.1. 4. Part 3 Section 1: Appendix A6 square index Part 2 Section 1: Appendix C staff cost Part 4 Section 2: Appendix A1.3. 2.2.7(d) statutory fees and charges 4.3.2.1. 4. 4. 4.2(d). 4.site cost Part 4 Section 2: Appendix A site meetings 4.3(e) subcontract work 4.1.1.4.3(d) Surveying Safely 5.5.3.4 addendums 3.6.3.3.1.2.10 building services 3.4(b).4.4(g) substructure Part 2 Section 3: Appendix A1.1.3.2 variables 2.(e).4 standard contract