Discussion
Hi all,
We have started looking to get the CA/QS(Cost consultant?) appointed for a new project.
The fee estimates we have had seem to be percentages of our estimated build cost. This is not yet finalised, but broadly should come in at just under £3.5m (part of the build was fully costed out, but then there was some planning gain so more units added).
We are having a highly detailed design put together by the architect, M&E, and Structural Engineer and then going to tender on traditional route (everything down to the door handles specified). None of our consultants to date have gone for percentage fee quotes.
Is this still normal in the industry, or have we been a bit unlucky? There would seem to be all sorts of conflicts of interest if the person/team supposed to be saving costs is paid a percentage of them?
Finally, if the project is say 1 year actual build (mobilisation to handover), then how many days do you think would be involved? Everyone needs to make money at the end of the day, but taking that approach and dividing it up on a day rate came back with an insane number of days!?!?
Apologies for all the questions - we have never engaged a QS/CA before so might be out of line here.
Thanks,
Raj
We have started looking to get the CA/QS(Cost consultant?) appointed for a new project.
The fee estimates we have had seem to be percentages of our estimated build cost. This is not yet finalised, but broadly should come in at just under £3.5m (part of the build was fully costed out, but then there was some planning gain so more units added).
We are having a highly detailed design put together by the architect, M&E, and Structural Engineer and then going to tender on traditional route (everything down to the door handles specified). None of our consultants to date have gone for percentage fee quotes.
Is this still normal in the industry, or have we been a bit unlucky? There would seem to be all sorts of conflicts of interest if the person/team supposed to be saving costs is paid a percentage of them?
Finally, if the project is say 1 year actual build (mobilisation to handover), then how many days do you think would be involved? Everyone needs to make money at the end of the day, but taking that approach and dividing it up on a day rate came back with an insane number of days!?!?
Apologies for all the questions - we have never engaged a QS/CA before so might be out of line here.
Thanks,
Raj
Thanks for all the replies.
Thinking about what malks222 said, an incentive system sounds like a good idea, but then as it's going to be fully specified before going to tender, this would all be front loaded. In that sense, it'd probably be better to purchase a day or more of time, and let the cost consultant/qs comment on our direction in terms of spec and where they think savings could be achieved.
Rob makes sense about the cost plan. Actually, our thinking now is that there's no point in getting one done, as the market is the market and if fully specified what we get back (on average etc) is what it's going to cost. Maybe we can just PAYG till we find out the contract sums involved and then can work out something from there?
If we stick to £3.5m on a 18 month package (from reviewing professional engagement paperwork with architect/s.engineer etc, compiling tender docs, reviewing tenders, and finally the CA/CC role) at even 2% that's £70k, which is about 125 days at £75/hr on an 8 hour day, so 25 weeks. Giving leeway of 5 weeks for pre-contractor start stuff, that's 20 weeks to admin a 12 month contract. Not trying to be a stingy git here, but what am I missing?
We didn't go with D&B as we actually wanted to make sure tenders were for the same thing, and also that we got exactly what we wanted. I suppose a pitfall is that sometimes contractors can have their own input in terms of value engineering or options, so we are then heavily dependent on the Architect, QS, and our own experience in terms of what to go for. Someone mentioned having a section where comments could be made by the contractor for alternative options/potential cost savings, so this may be a way to go?
Thanks again,
Raj
Thinking about what malks222 said, an incentive system sounds like a good idea, but then as it's going to be fully specified before going to tender, this would all be front loaded. In that sense, it'd probably be better to purchase a day or more of time, and let the cost consultant/qs comment on our direction in terms of spec and where they think savings could be achieved.
Rob makes sense about the cost plan. Actually, our thinking now is that there's no point in getting one done, as the market is the market and if fully specified what we get back (on average etc) is what it's going to cost. Maybe we can just PAYG till we find out the contract sums involved and then can work out something from there?
If we stick to £3.5m on a 18 month package (from reviewing professional engagement paperwork with architect/s.engineer etc, compiling tender docs, reviewing tenders, and finally the CA/CC role) at even 2% that's £70k, which is about 125 days at £75/hr on an 8 hour day, so 25 weeks. Giving leeway of 5 weeks for pre-contractor start stuff, that's 20 weeks to admin a 12 month contract. Not trying to be a stingy git here, but what am I missing?
We didn't go with D&B as we actually wanted to make sure tenders were for the same thing, and also that we got exactly what we wanted. I suppose a pitfall is that sometimes contractors can have their own input in terms of value engineering or options, so we are then heavily dependent on the Architect, QS, and our own experience in terms of what to go for. Someone mentioned having a section where comments could be made by the contractor for alternative options/potential cost savings, so this may be a way to go?
Thanks again,
Raj
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