Developer Expectations & Requirements from the QS During the Project Life Cycle How to Add Maximum Value

Sunil Gomes, QS Requirements in the Development Cycle, February 2011

The Development Cycle

QS provides dramatically different input at the different stages

Development Concept

Operation

Development Feasibility

Construction

Planning & Negotiation

Design & Tendering

Sunil Gomes, QS Requirements in the Development Cycle, February 2011

Development Concept
Fluid, fast moving and creative
During this stage a developer wants a friend! Fast informal advice on construction rates, laws, timescales, contractual possibilities, procurement strategies This has to be on a friendly basis as the development opportunity may not have a budget and advice is needed immediately and at no cost No contractual responsibilities or obligations This is how QS firms will get inroads into new clients, think of it as a loss leader Sage advice - someone to bounce ideas off!!

Sunil Gomes, QS Requirements in the Development Cycle, February 2011

Development Feasibility (1/2)

What is it going to cost?
During this stage a developer wants the best possible educated guess. Major Issues Cost estimates in the region are often woefully inaccurate usually in the wrong direction Massive contingencies or disclaimers are of no use to the developer !! This is as much an art as a science, and requires putting your reputation on the line Escalation rates are particularly sensitive on megaprojects with very long durations Advice on procurement route is more critical in the region as clients try to move from traditional to some kind of D&B scenario

Please us this!!

Sunil Gomes, QS Requirements in the Development Cycle, February 2011

Development Feasibility (2/2)

What is it going to cost?
During this stage a developer wants the best possible educated guess. How to be most helpful Understanding of and advice on risk issues from the QS helps the developer build a more robust strategy Understanding and incorporating the time value of money into the QSs cost models is crucial to accurately forecasting project viability Constructive and open minded participation in brainstorming, often the QS is a quiet member of the team Advice, ideas and connections that help the developer finance the project. Project finance is scarce! Dont be bullied into reducing cost estimates by overoptimistic clients - the developer is best served by hard facts however unpalatable they may be.

Sunil Gomes, QS Requirements in the Development Cycle, February 2011

Planning, Negotiation & Structuring

Contractors, procurement and cost certainty
During this stage a developer wants to be advised as to the most appropriate procurement route. Risk is the central issue in procurement Understanding what level of risk the developer is willing to take is crucial to delivering good QS services Understanding (and advice on) the legal framework (or lack of it) in the locality is essential. Understanding of (and advice on) local laws, nuances of local culture Understanding of(and advice on) the development opportunity. The QS need to think like a developer not simply provide cost information small ideas can move developments from unviable to viable Basic tax advice Advice on all of the appropriate insurances required under local law Advice on bonds

Sunil Gomes, QS Requirements in the Development Cycle, February 2011

Design & Tendering

Keep the design to the budget!
During this stage a developer wants to enforce the budget constraints upon the designers Design Architects will frequently be asked for a Toyota and design a Lexus The developer needs the QS to help to enforce tough financial control over the progressing design Rapid response to differing design scenarios helps the developer to make quick decisions that avoid wasting design time Level headed advice on weather the design and associated costs are reasonable Cost advice on options, options and more options Be vocal!! Often the QS provides too little input into the project team Tendering Tender adjudication Impartial advice Legal/contractual advice Smoothing the way in what is an area fraught with last minute hold ups and negotiations Sunil Gomes, Shark protection QS Requirements in the Development Cycle, February 2011

Construction
Project accountant/lawyer
During this stage a developer wants to control cash flow. I want to be told! Dont delay in telling the developer about problems. Finding out you are 20% over budget at the end is no use at all Be pro active dont wait to be asked to undertake tasks which are clearly going to be needed Risk mitigation a dynamic and smart attitude to managing the contractor is often better than simply sticking to the contract Management of (and advice on) guarantees and bonds we need to be flexible in a post recession scenario Responsibility to sign off of payments Preventing the contractor from front loading the payments Adjudicating on various contractual issues variations, extension of time claims, LADs etc Management of escalation clause issues Monthly reporting

Sunil Gomes, QS Requirements in the Development Cycle, February 2011

Operation
Handover and final account
During this stage a developer wants to conclude construction and get tenants/buyers so as to make a profit Management of retentions and defects liabilities Production and payment of final account Input into the transfer from construction to operational phases of an assets life cycle this is where the developer makers his money so try to be involved Strategies for handover and commissioning Advice, input, brainstorming on exit strategies and how best to execute them

Sunil Gomes, QS Requirements in the Development Cycle, February 2011

Conclusions
A good QS is a developers best friend !!!

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Sunil Gomes, QS Requirements in the Development Cycle, February 2011