Measurement Based Procurement of Buildings

A Survey of Who Measures Buildings

Research carried out by BCIS Limited on behalf of RICS Construction Faculty

Summary Report
Discussed at the RICS Measurement Conference 30 September 2004

Survey of Measurement Based Procurement of Buildings

Summary Report
RICS Construction Faculty

Preface
Recent changes in procurement routes have reduced the requirement for measurement to be
carried out on behalf of the client before a contractor is appointed. The responsibility for
measurement is, therefore, passed down the supply chain.
The Construction Faculty commissioned this research into who measures construction work to
establish:

The extent of measurement based procurement i.e. provision of measurement with

tender documents

The extent of measurement by contractors where measurement is not provided with

tender documents

When and by whom measurement is being undertaken

What measurement conventions are being used

The relevance of SMM7

The results show the continued importance of measurement to the procurement process and
highlight:

A difference of opinion between consultants and contractors about the provision of

measurement

The widespread use of SMM7 by consultants and contractors

A significant amount of comments and some criticism on the detail of SMM7

Slow take up of electronic communication

A demand for a standard method of measurement for Approximate (Builders)

Quantities.

There is no doubt that the proliferation of procurement practices will continue, but in the
circumstances where there is a degree of design certainty before the contractor is appointed,
measurement based procurement will still be appropriate. Furthermore where design
decisions are being passed down the supply chain, measurement should be undertaken at the
level that the design is carried out in order to remove the need for duplication.
It is in the interest of the industry as a whole, including its clients, that measurement is carried
out consistently and there is therefore a continued need for a standard method of
measurement and by implication, a continued need for measurement skills.
The slow take up of electronic communication of documents, which are in the vast majority of
cases available in digital form, is interesting and the Construction Faculty have commissioned
research into why this should be. However the move towards integrated communication
systems is inevitable and will make the principles of Coordinated Project Information (CPI), of
which the Standard Method of Measurement forms part, more not less important.

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The Construction Faculty will be reviewing the Standard Method of Measurement and would
welcome any further comments.
I would like to thank Theresa Burrows of BCIS Ltd who carried out this research.

Phil Shearer

Survey of Measurement Based Procurement of Buildings

Summary Report
RICS Construction Faculty

Executive Summary

Many respondents have taken the opportunity to voice their opinions on all aspects of
measurement. Whilst most seem to recognise that accurate measurement is important,
not everyone agrees that SMM7 is the best way of achieving this.

Consultants estimate that they prepare measurement for tendering purposes on 55%
of projects compared to 23% of projects for which contractors believe that they receive
measurement. Even allowing for the fact that these are subjective opinions, there
seems to be some discrepancy over what constitutes measurement.

The Construction Facultys Contracts in Use survey tends to support the contractors
views as it shows that between 20 and 25% of projects are let on contracts requiring
quantities. This may indicate that the questionnaires were more likely to be returned by
consultants that carried out some measurement than those that did not.

SMM7 is used as the primary method of measurement on 66% of all projects

represented in the survey. SMM6 continues to attract a small but significant following at
7%.

At 31%, contractors are nearly twice as likely as consultants (17%) to regularly amend
SMM7. Some respondents felt that measurement under SMM7 does not necessarily
focus on those factors which influence price.

There is a perception that SMM7 and, therefore the Common Arrangement for Work
Sections, do not represent trades in the industry.

Where BQs are not prepared, 95% of contractors are likely to undertake their own
measurement, 86% preparing measurement in-house and 8% employing a private
quantity surveyor to carry out measurement on their behalf.

Some feel that SMM7 is open to interpretation and therefore often subject to
misunderstanding. In any event, some contractors were particularly vociferous in their
criticisms of the consultant QSs interpretation of SMM7.

Where BQs are prepared, consultants measure mechanical and electrical services only
15% of the time.

The proposal for a standard method of Approximate (Builders) Quantities met with
widespread approval: 56% of consultants, 61% of local authorities and 64% of
contractors agreed with this proposal in principle.

Survey of Measurement Based Procurement of Buildings

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RICS Construction Faculty

Respondents suggest many changes to SMM7 (ranging from general comments to

specific amendments). Approximately 10% of consultants were opposed to any
changes to the current standard method of measurement.

Respondents emphasise the detrimental effect incomplete design information has on

accurate measurement at pre-tender stage.

Some consultants feel that SMM7 is complex and perhaps unnecessarily complicated.
They also feel that current fee levels often do not support or justify the production of full
BQs.

Digital transmission of tenders remains relatively low (less than 10%) and experience
of e-commerce among survey respondents is negligible. Approximately half of
consultants utilise one of a wide variety of software billing systems.

Survey of Measurement Based Procurement of Buildings

Summary Report
RICS Construction Faculty

Commentary
Purpose
The aim of this research was to establish the current practice in measurement-based
procurement in the UK.
In order to achieve this, the following objectives were set:

to establish the extent of measurement based procurement

to confirm how measurement is being carried out for what purpose and in what context

to identify when and by whom it is being undertaken

to establish what measurement conversions and systems are being used

to gauge what level of detail is being measured

Respondents
This report has been based on the 'Measurement Based Procurement of Buildings' survey
issued in July 2002 by BCIS Ltd on behalf of the RICS Construction Faculty that was sent to
consultants, contractors and local authority clients. The response was as follows:
462 questionnaires were received from consultants (20% response rate); these returns
represent approximately 8,739 projects.

160 questionnaires were completed and returned by contractors (12% response rate)
representing 19,540 projects tendered.

The Society of Chief Quantity Surveyors in Local Authorities submitted 49 responses

as clients (27% response rate) that represent approximately 2,218 projects. (These
respondents are collectively referred to as clients in this report.)

The organisational profile of the consultants responses was not dissimilar to the typical
structure of UK quantity surveying practices. The majority of consultants responses
(76%) were received from practices employing five or less surveying staff.

Survey of Measurement Based Procurement of Buildings

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RICS Construction Faculty

Measurement for tendering

Consultants estimated that they prepared measurement on behalf of the client on 55% of
projects, which is starkly at odds with the 23% of projects on which contractors believe that
they receive BQs. The local authorities, acting as clients, responded that they required
measurement from the consultants on 44% of projects. There are some possible explanations
for the different views of consultants and contractors. The consultants who do no
measurement at all are unlikely to have responded and contractors may receive request to
tender on projects where, perish the thought, no quantity surveyor is involved.
Where BQs are not provided by the client, contractors prepare their own measurement on
95% of projects. Of these projects, the contractor commissions a private quantity surveyor to
do the measurement on approximately 8% of the projects. The rest of the measurement is
done in-house by estimators and quantity surveyors. 65% of all consultants have been
commissioned to prepare measurement by contractors.
Figure 1 Who measures buildings?

Consultants for Contractors

Contractors own staff
Consultants for Clients

4%
39%
55%

Use of SMM7
Survey results indicate that SMM7 is used as the basis for measurement on over 66% of all
projects. Specifically, where BQs are prepared, 77% of consultants stated that they use the
current method of measurement. Thirty-three percent of contractors stated that they use
SMM7 as the basis for measurement where tender BQs are not provided.
Seventeen percent of consultants and 15% of contractors regularly amend the standard
method and 31% of contractors reported that there were areas where SMM7 did not match
their estimating conventions.
Interestingly 4% of consultants and 7% of contractors stated that they continue to use SMM6
for the measurement of BQs. This suggests that SMM6 continues to be used as the primary
method of measurement on approximately 7% of all projects.

Survey of Measurement Based Procurement of Buildings

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RICS Construction Faculty

Figure 2 Method of measurement used: Consultants

Quantified Schedule
or non standard
method
12%

Method not stated

3%

Other Method
4%

SMM6
4%

SMM7
77%

Figure 3 Method of measurement used: Contractors

Method not stated
9%
Quantified Schedule
or non standard
method
20%

SMM7
33%

SMM6
7%

Other Method
31%

Survey of Measurement Based Procurement of Buildings

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RICS Construction Faculty

Measurement of mechanical and electrical works

Where the consultant provides measurement, they measure mechanical installations only 14%
of the time and electrical 15%. There are higher figures for local authorities where they require
M&E measurement on 30% of projects.
Use of Approximate (Builders) Quantitie s
On over half of projects where the consultants have not been employed to prepare
measurement as part of the procurement process, they will prepare approximate quantities in
order to provide a pre-tender estimate. This equates to about 26% of all projects. Seventeen
percent of firms have their own standard system of measuring approximate quantities.
Fifty-six percent 56% of consultants, 61% of local authorities and 64% of contractors felt that
an industry standard method of measurement for Approximate (Builders) Quantities would be
useful.
Figure 4 Would you find a SMM for Approx (Builders) Quants useful?
Contractors

Local Authorities

Consultants

31%
64%
No

35%
61%

Yes

39%
56%

Electronic bill preparation

Fifty-one percent of bills were prepared by consultants on word-processors or spreadsheets.
The remainder were prepared on one of a dozen proprietary or bespoke systems.
Four proprietary systems (CATO, Masterbill, RIPAC and Snape) dominate the market;
additionally a significant number of respondents use their own bespoke systems to prepare
BQs electronically.
Based on the overall number of projects represented in the survey, only 14% of BQs were
prepared using digital measurement.

Survey of Measurement Based Procurement of Buildings

Summary Report
RICS Construction Faculty

Electronic communication
Whilst it is likely that all BQs have been initially created in an electronic format, the incidence
of digitally submitted measurement for the purpose of inviting and evaluating tenders remains
low.
Consultants stated that only 29% of bills were provided to the contractor in digital form (13%
on disk or CD-Rom, 15% by e-mail and 1% via a website). This is at odds with the contractors
view, which is that only 16% of projects are bills sent electronically. This difference of
viewpoints may result from the practice of sending both hardcopy and digital formats or
making the digital versions available on request only.
Figure 5 Method of distributing bills

BQ sent digitally:
by email
15%

BQ sent digitally:
via website
1%

BQ sent digitally:
by disc or CD
13%

BQs sent in hard

copy
71%

The perceptions also diverge when the question relates to the return of priced bills in digital
form, which consultants believe they receive on 6% of projects sent electronically while
contractors believe that they return 17% of projects in this way.
Despite the differences of opinion it is clear that only between 2% and 3% of tenders make the
round trip electronically.
Word-processing files or spreadsheets are the most common formats for sending bills. Only
10% of projects sent electronically are sent in Construction Industry Trading Electronically
(CITE) format while 4% are sent as ASCII text files.
Overall, 55% of contractors had received bills electronically. Where digital bills were made
available, contractors reported that on 13% of projects this information could not be imported
into their estimating systems.

Survey of Measurement Based Procurement of Buildings

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RICS Construction Faculty

When receiving bills electronically, 43% of contractors who expressed a preference, preferred
the information in spreadsheet format, while 38% would prefer it in CITE format. Wordprocessing was held to be a useful format by 32% of contractors but slightly more classed it as
unhelpful.
Only 3% of consultants and 4% of contractors had experience of e-commerce systems.
Design and build tender sum analysis
Bills of Quantities are submitted with the tender sum analyses on 35% of Design and Build
contracts. There is a higher use of non-standard methods of measurement in this area.
Thirty-three percent of the tender sum analyses are elemental.
Figure 6 Format of Contract Sum Analyses on D&B contracts

No method stated
8%

BQ in SMM7
22%
BQ in SMM6
2%

Elements
33%

BQ in other
format
11%
Non Standard
Elements
24%

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RICS Construction Faculty

Suggested changes to current SMM7

The survey question concerning changes to the current SMM7 provoked a considerable
response with numerous, varied and conflicting comments from all three surveys, some quite
trenchantly expressed.
Whilst many respondents took the opportunity to detail specific proposals (e.g. enumeration of
manholes, plasterboard measured by m 2), two significant trends seem to emerge from the
numerous comments received:

Over 10% of consultants were opposed to any changes to SMM7. This contrasts with only
4% of contractors and 3% of clients who agreed on this point.

Nearly 10% of consultants suggested that the current standard method should either revert
to SMM6 or trade order or generally proposed overall simplification of SMM7.
Approximately 3.2% of clients and 5.7% of contractors would appear to agree with these
proposals.

Comments received from respondents

Many respondents have offered their opinions and observations on all aspects of
measurement. Moreover, several survey recipients who chose not to complete the
questionnaire instead submitted their own views on measurement. Every attempt has been
made to capture all of these remarks and details can be found in the full research report.
These remarks vary widely: from individuals who strongly believe that a system of
measurement-based procurement is critical to the success of the construction industry to
those who feel measurement is not of massive importance.
The sheer volume, intensity and diversity of these responses clearly warrants further
exploration. It is difficult to summarise the many and varied comments that were appended to
the questionnaires, however some of the main points which emerge are:

Most respondents recognise that accurate measurement is of critical importance

however, not everyone agrees that SMM7 is the best way of achieving this, nor who is
best placed to carry out accurate measurement.

Perception that SMM7 and, therefore, Common Arrangement for Work Sections
(CAWS), do not represent trades in the industry. Some respondents seemed to think
that SMM7 is organised by building elements.

SMM7 does not necessarily focus on those factors which influence price or the way
work is carried out.

SMM6 continues to attract a small but committed following due in part to its perceived
relevance to construction industry trades.

A divergence of opinion between consultants and contractors regarding the frequency

of measurement provided for tendering purposes.

Some felt that SMM7 is open to interpretation and therefore prone to

misunderstanding, the result of which all too often provides grounds for claims and
disputes between parties.

Survey of Measurement Based Procurement of Buildings

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RICS Construction Faculty

Some contractors were critical of consultants interpretation and use of SMM7.

Some respondents noted the detrimental effect inadequate design information has on
the competitive tendering process.

Some consultants feel that SMM7 is complex and perhaps unnecessarily complicated.
Some also feel that current fee levels do not necessarily support or justify the
production of full BQs.

Sample of Respondent Comments

Changes ought not to be made by those who use it. When QS's adapt the document to their
own use they negate the reason for having a standard method. It's a little like learning a foreign
language, then deciding to speak your own version of it and then wondering why nobody
understands you. Contractor, Greater London [584]

SMM7 created many arguments by leaving it to the individual surveyor to decide effectively if
further rules were required. This gave rise to the need for increasing numbers of
revisions/classifications being required each time QS in Local Authority, Humberside [3795]

We price tenders for a whole spectrum of clients.. in most cases quality of both the drawn
information and specification leaves much to be desired. In a bid to retain market
competitiveness, it seems as though the quality of tender documentation sent out by
consultants is certainly suffering. This without doubt is driving up the cost of tenders; I
personally would like to see contracts tendered under the traditional process based on SMM7
with quantities. When in private practice, I found that the spread of tender figures was much
smaller when tendered in the above manner rather than plan and spec. Should we receive a BQ
in the office, it's such a long time since I've seen one, I think I would probably frame it rather
than price it. Contractor, East Midlands. [839]

Clarifications are needed to remove the ambiguities and inconsistencies. Feedback from
estimators informs us that SMM7 is not clear or fully understood. Consultant, North West
[3317]

Numerous Q/S practices have their own interpretation of the rules of SMM7. We can be
presented with totally different bill descriptions for the same item of work. Contractor, Scotland
[947]

We note your observations on the recent changes to the procurement of projects and the
increasing practice of passing the responsibility for measurement down the supply chain. Being
at the sharp end of this change we have to comment that we find this practice very difficult to
bear financially, and it appears to be QS driven rather than client driven in many cases. As a
consequence the obvious drawback to the enquiry as far as we are concerned is the nonrecovery of fees incurred for quantities during the tender process if we are not successful. We
are unable to generate a great deal of interest from our sub-contractors to price without
quantities and the client probably does not received the most competitive tender. The client
pays for this service at the end of the day as contractors usually include the cost in their tender
submissions. Let us get back to the tried and tested ways of procuring tendered projects on bills
with assistance of course of the latest technology and everyone would be happy..
Contractor, South East [999]

I would like to take the opportunity to state that a system of measurement based
procurement is in my opinion critical to the success of the construction industry in areas like
Argyll where small to medium local contractors depend heavily on good measurement practice
when pricing works for the vast majority of clients. It is of utmost importance that the ability to
produce accurate quantities is retained and strengthened if practices like my own are to provide
a high level of service to clients in remote areas like the West Highlands. I am strongly against

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any move away from a robust standard method of measurement as in my opinion it will not be
in the best interest of our wide and varied client base Consultant, Scotland [2801]

More emphasis placed on need to highlight factors which influence price. Many of rules of
measurement are unclear in their coverage. Contractor, East Anglia [591]

TOTAL REVISION! It would be better just to give very basic quantities for the work involved with
each trade and let the contractors' Estimator assess associated items and labours etc that are
cost significant. SMM7 fails to identify many cost significant items Contractor, Wales [684]

Measurement is not of massive importance. However, a requirement to put more effort into
providing information in item descriptions would be helpful, particularly with elements like
foundations which cannot be see on a site visit. Contractor, Scotland [512]

PQ's often group work under headings where they don't understand the full content of work,
especially M and E. Contractor, Scotland [308]

I think there are a number of areas where the SMM7 is simply a way of measuring something,
rather than related to a practical method of building. I also think the way it groups large
elements together, for example a multitude of timber items grouped under P20 does not tell me
where they are, and therefore does not give me enough info to price adequately. Contractor,
East Midlands [698]

We believe the tendency of clients not to use BQs increases the industry costs by 2 to 2.5%.
Builders are tempted to shortcut the correct and prudent estimating processes. Tenders take
longer to prepare. Mistakes are more prevalent and the tendering process does not encourage
or identity value for money. Contractor, South West [86]

In all honesty SMM7 has to be viewed as a step backwards from SMM6. Therefore any
changes to SMM7 should represent a step towards the previously superior SMM6; but retaining
the elements of SMM7 that have proved to be beneficial. Contractor, Scotland [482]

Put it back in trades order. We send bills in tender sum analysis order for the pricing and resorted in trade order for the sub contract enquiries. Work group order is not used. Consultant,
South East [1799]

We would like bills to be prepared properly and adequately describe the work Supplemented by
Drawings, not Drawings replacing bill items. Contractor, Scotland [451]

In my time, not all that long really, I've seen SMM5, 6 and 7. Leave well alone!
Scotland [2396]

Architects should use NBS correctly placing materials in the right category so that the
appropriate SMM7 rules can be used for measurement
Consultant, Wales [1734]

SMM7 was designed for architects issuing detailed drawings for building. They invariably do
not; SMM7 is very difficult to follow even elementally. I find SMM6 more acceptable to
everyone.
Consultant, West Midlands [3390]

I am Chairman of a Construction Company which employs Quantity Surveyors and

Estimators who regularly produce our own take offs from specifications generally based on
SMM7.Where my own staff are overworked we then employ outside Surveyors to produce
these (bills of Quantities) for my Estimators to price. The need for this outside service is
because so many schemes are being sought by clients professionals on a Spec and Drawing
basis on sizes of contracts far larger than was originally intended, placing the onus of
responsibility of measurement, quantities and in some cases buildability down to the
Contractor Contractor, Greater London [1969]

The standard information provided at pre-tender stage is worse than ever. The clauses in the
current SMM referring to providing preliminary or further information can never be completed.
Consultant, West Midlands [1447]

Consultant

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No suggestion to change SMM7 but since it relies upon full working drawings being available at
tender stage which never happens these days. It is becoming increasingly difficult to make it
work as intended. Consultant East Midlands [2813]

Anything that simplifies it enabling less measurement to be undertaken and hence enhancing
fee income!! Consultant, South West [2834]

We find that producing BQ's for clients is becoming poor value for money and feel that the day
is fast approaching where standard methods of measurement are not required.
Consultant
Greater London [1968]]

Clients will not pay the fees for full bills of quantities. Consultant, Wales [2969]

I would suggest that if quantity surveyors try to NOT produce quantities in a manner that is
useful to other trades there will cease to be such a profession, and contract documents will end
up being produced by lawyers. Quantity surveyors have always had problems with justifying
their usefulness. I would suggest that the opinion of estimators who have to read their
documents be taken into account. Contractor, Scotland [397]

The SMM is dead. Killed off by foolish revisions and claims conscious contractors. Consultant,
Wales [2968]

I am surprised that the RICS is not more actively discouraging these changes in
procurement routes whereby these Quantity Surveying duties e.g. Bills of Quantities production,
is now being carried out by Contractors rather than the professional Quantity Surveyor. The
RICS should be promoting BQ production to clients as a way of saving money and obtaining
more competitive tenders. The pure Quantity Surveying profession would appear to be going
back to square one and the work is also being devalued at the same time! I shall be grateful for
the RICS's official stance on this. Consultant Greater London [2992]