Can you afford NOT to have a QS managing your construction budget? Introducing: How the Project Quantity Surveyor can make a difference Can you afford NOT to have a QS managing your construction budget?

Presentation contents: INTRODUCTION PACE’S PRIMARY OBJECTIVE DELIVERABLES 1. Accurate estimates 2. Proper procurement WITH watertight contractual agreements Confident, transparent and “real time” cost reporting EXAMPLE 1: “a one element project” – estimate to cost report EXAMPLE 2: “real time” cost reporting – screenshots from our website

INTRODUCTION: PACE was founded in 1996 by Pierre Gillissen Snr Since 1996, we have been involved with the roll out of Vodacom’s cell phone and data networks in South Africa, the DRC and Lesotho PACE has established itself as an expert in this field especially with the cost engineering of electrical and mechanical services and related builders work.

Our primary objective Our primary objective is to control the clients money “as if it’s our own” We do this efficiently through proactive cost control models; with emphasis on the following deliverables: Accurate estimates Proper procurement WITH watertight contractual agreements Confident, transparent and “real time” cost reporting

We deliver: 1. Accurate estimates · We understand that accurate estimates starts with the client, so we emphasise on: Getting involved with the client and design team at inception stage To understand the initial brief Thereby setting cost parameters to the brief; That will enable us to “financially guide” the design architect and engineers through the pre-contract stages · We spend quality time on estimates; and by doing so we: produce comprehensive and accurate budgets that are not INFLATED that are based on current cost data, not historic cost data and that fully understands and incorporates the client’s brief · We understand design parameters: each project is unique, never to be repeated pro-active participation in the design process we “educate” the professional team on cost parameters implement the “TTTD” rule (Thoroughly thought through design)

We deliver: 2. proper procurement with watertight contractual agreements · We make sure we get the right “person for the job” by; selecting suitable contractors for the tender list selecting competitive contractors for the tender list putting tenders to market that are transparent on both scope of works and contractual t’s & c’s setting the correct analysis criteria to receive bona fide tenders making recommendation for “peace of mind” appointments compiling contractual documentation that is fair and with a equitable distribution of contractual risk assuring assignment and maintenance of the agreement throughout the project assessing and advising on contractual claims advising on dispute resolution avenues and procedures ·

We deliver: 3. confident, transparent and “real time” cost reporting · We keep the Client confident in the budget numbers throughout the project stages by: Compiling a Baseline Budget at inception stage (stage 1) Revising and updating the Baseline Budget at concept and viability stage (stage 2) Finalising and setting the Baseline Budget at design development stage (stage 3) Compiling a Cost Report and reporting on tenders at documentation and procurement stage (stage 4) Compiling monthly Valuation Statements for Payment Certificates and issuing Cost Reports for Variations to the Baseline Budget at construction stage (stage 5) Settling and agreeing final accounts at close out stage (stage 6) Our cost reporting is transparent, simple and easy to understand For us, cost reporting starts at inception stage (stage 1) We make sure the client fully understands the baseline budget, item for item, as this forms the foundation for all future cost reporting we will make The baseline budget is measured using the “elemental” method, meaning the works is grouped, measured and then costed into their elemental components, making it simpler for revisions at the design development stage (stage 3) Once the baseline budget is established, we group it into sensible work “packages” to compile the cost report. A work “package” is usually a trade like Earthworks or a subcontract like HVAC installation The cost report will always have the same bottom line as the baseline budget, the only difference is they are grouped differently, but in essence they add up to the same total.

example 1: a one element project – cost plan to cost report · For the purpose if this example let us assume a project consists of the following one element: A reinforced concrete strip footing 36m long x 750mm wide x 250mm thick with excavations 1500mm deep as per section A-A below · Measureable items for this element: Excavate for trenches Hard rock Soft rock Backfilling to trenches Risk of collapse Ant proofing Cart away surplus soil Concrete blinding Concrete in strip footings Reinforcing Concrete test cubes 750mm 1500mm 250mm · Section A-A:

Example 1: a one element project: ELEMENTAL Cost plan The item is measured and costed in the elemental cost plan as follows: item description dimensions total cost package: earth works rate build-up package: concrete

Example 1: a one element project: cost report – pre tender At documentation and tender stage a cost report is compiled from the elemental cost plan. The item gets differentiated into suitable packages, or trades, ready for tendering package budget tender amount variations estimated final Note: Budget Allowance = Estimated Final Cost

Example 1: a one element project: cost report – post tender The lowest tender price came in at R 18 000.00. This means that there is a project saving of R 3 000.00 This saving is transferred to the “contingency” package as indicated below contractor transferred tender amount saving Note: Budget Allowance = Estimated Final Cost

Example 1: a one element project: cost report – VARIATION ORDER During construction stage variations occur every day. Using the “strip footing” item as an example a variation requires 2 m additional strip footing to be constructed, and is reported as follows: Tendered amount: R 18 000.00 Rate per meter: R 18 000.00 / 36 m = R 500.00 VO = 2m @ R 500.00 = R 1 000.00 transferred Earthworks: R 333.33 + Concrete, Formwork & Reinforcing: R 666.67 The R 1 000.00 extra is transferred from the contingency package, reducing it to R 2 000.00 Note: Budget Allowance = Estimated Final Cost

We deliver: 3.“real time” cost reporting · REAL reporting that is available all the TIME: All cost reporting gets recorded on a ledger and then published on our website All parties to the contract are given access to this facility A Contractor can therefore easily track when: Letter of appointments are issued The client approves variation orders When a payment becomes due for invoicing www.paceqs.com/downloads

Thank you QUESTIONS? Can you afford NOT to have a QS managing your construction budget?