Middle East Consultant examines how the QS role has changed over the years, and looks at the opportunities and challenges these specialists face in the modern marketplace
There’s no denying the importance of quantity surveyors (QS) in the construction industry. They are a critical part of the project team and provide a wide array of services to clients. In some instances, clients ultimately make them responsible for managing all the commercial and contractual aspects of a project from start to finish.
Due to the nature of their work, quantity surveyors work closely with developers, architects, engineers and contractors to ensure that their clients receive maximum value for money. Perhaps more importantly, they also ensure that the finished project mirrors the original design plans.
Emma Woods, associate director at integrated project and programme management consultancy Faithful + Gould, explains, “Quantity surveyors monitor and control the cost of the project throughout the pre- and post-contract phases. The key to the success of this is a proactive, client-centric approach to cost management, combined with an early appointment at the feasibility stage of the project. The benefit of this is the ability to provide invaluable cost advice from day one, and establish what the client’s main objectives are for the project – essentially driving value. Regular engagement should continue throughout the pre-construction phase, managing a robust value management strategy, challenging any design deviations and ensuring the client’s budget is maintained.”
Steve Gee, vice president, Programme Cost Consultancy, Middle East at AECOM, adds, “There will always be a verification function whereby an independent party manages and signs off on the project construction expenditures on behalf of a client. Outside of this role, the QS who has broadened his or her expertise to encompass cost expertise across the whole lifecycle of a construction project becomes a trusted advisor of the client, and can enable smart decisions to be made at a time when they matter the most.”
The way quantity surveyors do business is changing, thanks to technological advancements and client demands. “The growing needs of clients and technological advancements require the QS to develop new skills. Although basic bill of quantity applications (Masterbill, Buildsoft, Coins) are still utilised, modern tools such as SAP, BIM, AutoCAD and Primavera are being widely used by QS in their ever-growing role on projects,” explains Philip Cronin, managing consultant at HKA.
“New technologies have the potential to provide competitive advantages by increasing opportunities and lowering costs. Most predominant are the advancements in Building Information Modelling (BIM) technology. The use of BIM can speed up the estimating process and provides a more efficient operational solution when cost estimating. However, its success depends on establishing a predetermined set of requirements and the standardisation of drawings,” says Woods.
Despite the wealth of projects spread across the region, quantity surveyors face a competitive and challenging market. At present there are hundreds of QS firms spread across the GCC countries and wider Middle East, and in recent times firms have noted reduced project budgets owing to factors such as a lack of confidence in the market and strained access to finances.
“Over the last 18 months, the industry has become ever more competitive as project budgets have been reduced. We have had to adapt and align our business model to the fee levels available in the market. It is relatively stable at present but that can easily change depending on the volume of new work and the stability of ongoing projects,” explains Gee.
Consultancies that have been quick to adapt have fared well in recent times, but the looming introduction of VAT across the GCC may put additional pressure on clients and project budgets. “It is presumed that the introduction will have an inflationary impact; however, this will not be sustained yearly. All companies in the construction industry will bear additional administration costs, yet in terms of the added tax, this will be imposed at all stages of construction, with each provider passing the additional cost to the next, and consequently it is the end user or customer who will ultimately pay the VAT,” comments Cronin.
Woods also points out that since the region imports a large portion of materials from overseas, it is subject to global market volatility. “Production and shipping costs are also a factor that have been impacted by oil price volatility. Further, with KSA increasing import taxes, we will see further impact on material inflation this year. For services there is less impact, partly because labour and services costs make up a smaller proportion of the constructions cost in this region, and partly because the competitiveness in the market limits the escalation in rates for professional services.”
In the mid- to long term, though, the prospects for quantity surveyors appear healthy. “Social infrastructure, transport infrastructure and industrial/manufacturing will remain the key areas for investment over the next three years. Government budgets will be focused around these areas, along with alternative finance options such as PPP. The consultants that have a diverse business aligned to these growth markets will be best placed to capitalise on these opportunities,” says Gee.
Cronin adds, “Most of the region’s construction industry is focused on Expo 2020, the 2022 World Cup, KSA & UAE rail, the widely anticipated Hyperloop and other such infrastructure projects. However, the region’s leaders’ continued interest in innovative technology and appreciation to develop renewable energy resources is sure to result in new projects, and further opportunities for the firms who are best positioned to undertake such expert work.”
Woods has a similar view. “The upcoming Expo 2020 and Qatar 2022, along with an increase in long-term large infrastructure developments such as roads, rail, aviation and energy projects, will require significant levels of investment. The continued push for social infrastructure in KSA and the drive to alternative financing – such as PPP, BOO and IWPP – represent a real opportunity to differentiate and add value, and Faithful + Gould have a long history of advising in the alternative financing space. The region’s ongoing efforts to diversify its economy away from fossil fuels and into tourism and commerce will provide opportunities, albeit at a lower level than previously witnessed due to greater caution by local developers as a result of global uncertainties.”