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QUANTITY SURVEYOURS: A FORCE FOR GOOD
By Doyles Construction Lawyers
Introduction
The quantity surveyor has a vital role to play in the development and improvement in productivity of the Australian construction industry and is able and expected to make a contribution informed by the current state of the industry from time to time.
Role Of The Quantity Surveyor
The role of the quantity surveyor in the Australian construction industry is particularly valuable in that the quantity surveyor has the accepted and traditional role of being independent, professional, and able to discharge their duties to the client in an honest, transparent, and disciplined manner. They occupy a unique role in the construction industry where their work is valuable to a number of participants, notwithstanding that they have been retained by only one participant, usually either the principal or the principal’s financier.
Quantity surveyors are required to act in an ethical manner consistent with the general standards of their profession and the expectations of the industry and the public. Further, the quantity surveyor is respected by their client as an independent source of disciplined, rational and practical expertise in the cost of works and all of its related aspects, and external stakeholders (subcontractors, suppliers, builders and other professionals), who will respect the construction cost that has been carried out by a senior, experienced and qualified quantity surveyor.
Present Uncertainties
Inflation is currently a concern for all in Australia and particularly in the construction industry, which has experienced substantial and unexpected cost increases in recent times and particularly over the last year. Industry must now operate in an unpredictable global environment – war in Ukraine, tensions in the Pacific and supply disruptions due to Covid have stressed the world economy and the world’s communities.
The recent budget outlined the government’s expectation that the housing crisis with a shortage of housing stock and escalation in house prices would be addressed by government investment and tax incentives.
Locally, there has been a high rate of insolvency in the construction industry. Quantity surveyors have a particular perspective on such events as the insolvency of a subcontractor or a main contractor leads to a cascading effect throughout all participants in the projects affected.
Contract Culture
The quantity surveyor has a particular and accurate insight into the culture of contracts in the Australian construction industry. While there are a wide variety of contracts, the basic classification of contracts categorises:
1. Hard-dollar lump sum contracts
2. Cost-plus contracts
3. Contracts with rise and fall.
The quantity surveyor has the responsibility and role to recommend which of those particular contract forms are suitable for a particular project. It is necessary to assess the suitability of those contract forms accurately to prevent unexpected and unnecessary damage to the contractor or the principal in the case that the contractor is thrown into financial difficulty in the execution of the contract.
Fair Contracts
Accordingly, the quantity surveyor can be a “force for good” by recommending fair contracts that properly deliver a competitive and quality output for the principal but also do not expose the contractor and his subcontractors to unacceptable risks that may lead to insolvency. That insolvency necessarily entails gross waste in the destruction of productivity and technical innovation in the industry. Additionally, each insolvency usually means that the life savings of the personal participants is substantially reduced if not completely lost.
Implementation
The quantity surveyor can ensure that the implementation of those contracts can be successfully achieved. They are often involved in costing projects progressively over the duration of the construction, from pre-feasibility to its final completion.
Accordingly, the quantity surveyor is able to ensure that the contracts and their contractual risks are sensibly administered to the preservation of the industry and its capacity as well as the successful completion of a project. The quantity surveyor is often in a unique position to advise an owner or financier on appropriate adjustments, concessions, or arrangements that might alleviate some of the uncertainties which would otherwise fall to the other participants.
Change In The Industry
The quantity surveyor has the opportunity to be a powerful advocate for change improvement in the industry. The need in these circumstances for most contracts, if not all, to have suitable and sensible rise and fall provisions is obvious.
The present ills of the industry are almost directly traceable to the fact that a contractor has given a lump sum price for the work, where the costs that are going to be involved in those works are not able to be properly estimated and may rise by significant percentages during the course of the works.
Re-adjustment of those risks between the participants can lead to better and more successful projects for both parties. The quantity surveyor is, and should be, an advocate for fair and reasonable contracts for the industry to be productive and efficient and no participant is subject to the overwhelming risks of recent times.
The advocacy will need to be directed to:
• The financiers, who are expecting to protect their return and the investment they have made
• The principal and the expectations they have for the prompt delivery of a quality building and its efficient utilisation
• The contractor for making a sustainable contract that protects their employees and subcontractors and develops and maintains effective productive units that can deliver future projects competently.
Of course, the quantity surveyor must also advocate for the industry to ensure that those who would seek to retain the benefit of a rise and fall contract pass the benefits of the rise and fall to their subcontractors and suppliers so that the whole industry is sustained.
The quantity surveyor could also advocate for the government to change the nature and rigidity of price provisions in government contracts to promote sensible contracting practices and more effective delivery of the industry’s outputs.
Leadership
Quantity surveyors should realise and revel in the established and respected role that they have in the industry and also accept that they can be a force for good. There is much benefit to society as a whole with a construction industry that is better designed and able to deliver the productivity and efficiency which the community expects.
This article was written by the team at Doyles Construction Lawyers www.doylesconstructionlawyers.com
