Narration by

Sr. Sanusi Md Yunus

Many have complained that consultants failed
to provide quality professional services during
the implementation stage of the projects.
Since service quality depends on the officers
experience, the Clients questioned why are
junior quantity surveyors be made responsible
for the projects?
Why cant the quantity surveying firms allocate
more senior quantity surveyor of at least 7 years
in service for the jobs?
Were the consultants intentionally guilty or that
they actually wanted to but simply could not
afford it, financially?
In other words, employing senior quantity
surveyors currently is not financially
sustainable, let alone commercially viable,
especially in the light of the existing scale of fee
structure and indefinite scope of services asked
for by the Client.
While professionalism is questioned here, the
financial sustainability in providing services
must not be forsaken because to provide quality
service, we must be able to pay for the costs and
hope to make some money out of it.
While we have the standard scale of fees being
used across the board, there are specific areas
within the scale of fees which have not covered
for and interpretations so varied even amongst
fellow quantity surveyors, let alone non
technical Clients.
This paper dissects the financial reality of post
contract fees, from statements as such
Unless we get new jobs, we might have to close shop.
This paper shall further try to make others
understand the difficulties in maintaining an
office on fees which were stretched by
extended project period,
non-performing contractors,
logistic nightmares of packaged projects
etc. on top of the extremely intricate payment
procedures.
We employed them as freshmen. Educate and
trained them, make good their mistakes, bear
with their demands and one fine day, they said
Boss, I have offers from friends working
in the Middle East. I have offers from Clients as
project managers paying very much more than
what the Company pays me now. I am also
considering offers from Contractors to come in
as their technical directors. Can we discuss a
new package for me before I make my choice?
 How much money is actually there in post
contract work? What is the period of service are
we looking at ? How are we being paid?
QS Act 1967
Valuation of works in progress for 15 %
interim valuations / certificates
including variations

Preparation of Final Accounts 15%

 Terms of Reference Rev 1/2002

Valuation of works in progress for 15 %

interim valuations / certificates
including variations

Preparation of Final Accounts 20%

These percentages seemed to be normal

numbers, so what is the problem?
 To understand the true reasonableness of the
fees, we shall take a few common projects to us
all as samples.
Type Contract Contract DLP
Amount period

1. Secondary School RM18m 24 12

2. Housing RM25m 24 18
3. Mosque RM8m 18 12
4. Office block RM4.5m 15 12
Sample 1.
Secondary school
Contractor : G7
Contract amount : RM18 million
Overall fees : RM339,150.00
Fees for valuation of works in progress for
interim valuations / certificates including
variations : 15 % ( RM50,872.50 )
Service period : 24 months
Average fees per month : RM2,119.69
Sample 2.
Housing project
Contractor : G7
Contract amount : RM25 million
Overall fees : RM125,000.00
Fees for valuation of works in progress for
interim valuations / certificates including
variations : 15 % ( RM 18,750.00 )
Service period : 24 months
Average fees per month : RM781.25
Sample 3.
Mosque project
Contractor : G6
Contract amount : RM8 million
Overall fees : RM188,040.00
Fees for valuation of works in progress for
interim valuations / certificates including
variations : 15 % ( RM 28,206.00 )
Service period : 18 months
Average fees per month : RM1,567.00
Sample 4.
Office block
Contractor : G5
Contract amount : RM4.5 million
Overall fees : RM115,000.00
Fees for valuation of works in progress for
interim valuations / certificates including
variations : 15 % ( RM 17,250.00 )
Service period : 15 months
Average fees per month : RM1,150.00
 To summarize, the fees that we could collect
during the construction period is hardly enough
to pay for the wages, let alone make a profit.
Type Contract Contract Av. Fees /
Amount period month

1. Secondary School RM18m 24 2,119.69

2. Housing RM25m 24 781.25
3. Mosque RM8m 18 1,567.00
4. Office block RM4.5m 15 1,150.00
 But some will say that for bigger jobs it will be
ok, so we will do another evaluation.
Type Contract Amount Contract DLP
period

5. Polytechnic RM450m 48 12
6. Residential school RM80m 36 12
Sample 5.
Polytechnic
Contractor : G7
Contract amount : RM450 million
Overall fees : RM4,953,750.00
Fees for valuation of works in progress for
interim valuations / certificates including
variations : 15 % ( RM743,062.50 )
Service period : 48 months
Average fees per month : RM15,480.47
Sample 6.
Residential school
Contractor : G7
Contract amount : RM80 million
Overall fees : RM1,020,416.67
Fees for valuation of works in progress for
interim valuations / certificates including
variations : 15 % ( RM 153,062.25)
Service period : 36 months
Average fees per month : RM4,251.74
 Type Contract Contract Av. Fees /
Amount period month

5. Polytechnic RM450m 48 15,480.47

6. Residential school RM80m 36 4,251.74

At RM80m project size, paid in accordance to the

approved scale of fees, the amount is barely
enough to meet the costs. It is only when the job
goes more than RM150m , then the fee
collectable for post contract services becomes
commercially viable.
Though the figures are not that inviting enough,
we are further burdened with an increasingly
indefinite service period while the fee amount
remains the same.
We have projects that went way, way beyond
the original contract period for reasons of :
a. Delays in getting approvals and permits
from Authorities
b. Non performing contractors especially those
who think that they have political ties
c. Failure by designers in producing complete
designs
Indefinite service period on the QS came about
from
a. Approved extension

b. Period where work is carried out under LAD

Though the MOA classify attendance of

meetings during LAD period as an additional
service claimable under reimbursable expenses,
the minute the Contractor is given an extension
of time for some reason or another, your rights
to claim is gone.
 Indefinite service scope on the QS resulted in
a. Increase manpower input in attending
technical and project meetings to assist non-
performing contractors
b. Increase manpower input to prepare
progress payments twice monthly and in
some cases on weekly basis, just to help the
contractors cash flow.
c. Attendance of more meetings and briefings
consequential from visits of EPU, KSU,
politicians and other concerned parties.
 Type Contract Contract Av. Fees /
Amount period month

1. Secondary School RM18m 24 2,119.69

If delayed by 6mth 30 1,695.75
If delayed by 12 mth 36 1,413.12
2. Housing RM25m 24 781.25
If delayed by 6mth 30 625.00
If delayed by 12 mth 36 520.83
 Type Contract Contract Av. Fees /
Amount period month

3. Mosque RM8m 18 1,567.00

If delayed by 6mth 24 1,175.25
If delayed by 12 mth 30 940.20
4. Office block RM4.5m 15 1,150.00
If delayed by 6mth 21 821.43
If delayed by 12 mth 27 638.89
The CSA2014 differentiate the CQS contract with
the Client and that of the Contractor with the
Client.
Clause 3.2 Extension of Contract Period
(a) The CQS shall, upon it becoming apparent that the
progress of the Services is delayed, apply in writing
to the Government for the approval of extension of
the Contract Period. The CQS shall further furnish
to the Government relevant information as to the
causes of delay together with a revised Services
Implementation Schedule and estimated revised
costs (if any) for the approval of the Government.
The CSA2014 gives room for us to propose revised
costs in extended service period beyond that
originally scheduled. This form is relatively new
and to what extent it could compensate, it is yet to
be known.
However, attention must not be diverted from the
current set of CSA because most of us are still
running and bound by it.
Termination is carried out only after all avenues
have been exhausted for the Contractor, after
giving over generous extensions of time despite
the recommendations of consultants to severe
the contract when symptoms of the Contractors
incapacity being highlighted earlier.
Only when the Contractor is beyond help, does
the termination happens. And even in some
cases, the termination letter was revoked and
the Contractor was given another chance to
proceed with the Works and hopefully finish off
the project.
So, how could that affect the QS consultant?
After all, it is the Contractor issues and involves
only extra time.
At the point of termination , the fee payable
would be recalculated based on the financial
value of work done not the period of service
rendered by the QS. This is not mentioned in the
Act but adopted as it is in the worked example .
Meetings after meetings, non-ending
discussions and at the end of it is lesser fees and
more work for the QS.
 Type Amount period Av. Fees /
month

1. Secondary School RM18m

Original fee portion 50,872 24 2,119.69
EOT given 6
Work under LAD 4
Work done 65% RM11.7
Revised fee portion 33,067 34 972.56
Overall movement (-35%) +42% (54.12%)
It is wrongful for an officer to break up a project
into smaller contracts but there is no stopping
an officer to group up smaller projects into a
bigger package.
Packages could be within a district, a state, a
zone or even one contract for the whole country.
We are not here to comment on the rationale
behind them, but currently, the calculation of
fees for the packaged projects is the same as a
project of the same value being carried out at a
single site.
Surely a RM30m project at a single location is
easier to handle than a series of RM2m project at
15 locations. But to them, the fee is the same
because there is no provision in the MOA and
also in the worked examples to show that a
packaged project carried out at different sites
should be paid differently from that of a single
project.
We are looking at losses in fees ranging from
20% up to 40% here.
However, there is a mention in the definition of
project (garis panduan dan contoh pengiraan
bayaran iktisas) item 4.2 (iii) as follows :
Where more than one tender is called for the works
in a project, Cost of Works shall mean the total Cost
of Works of all the tenders, provided the tender for
each works comprised in the Project is called within
three months of the latest tender.
And to make things worse, the definition of
project (garis panduan dan contoh pengiraan
bayaran iktisas) as per item 4.2 (i) is that :
A Project is defined as comprising all works awarded
to a Consulting QS in one Letter of Appointment.
So, do we accept this type of appointment,
knowing all the way that we are bound to lose a
lot in logistics or we say no and risk not being
considered for future jobs?
Yes , we are saying that we are grossly
underpaid for our post contract services but
how are others being paid?
Architects are paid almost 3 times our fee, only
attend meetings and all supervision by the
resident architect or clerk of works, who are
paid separately on top of their fees. Most of the
time, they will be in their office modifying their
designs, resulting in more VO applications for
the QS.
Same for civil engineers, they are paid almost
twice our fee and most meetings are attended by
the resident engineer and supervision done by
the RE or the clerk of works and both being paid
separately from their fees.
For the M&E engineers, they are paid slightly
less than our fee and supervision done by the
clerk of works and is being paid separately too.
We have lost to them because we provide all
staffing requirement from our office since most
project do not have any provision for resident
qs.
So the other consultants collect their post
contract fees purely for their head office tasks
and on top of that get a further profit on top of
the site management costs. The profit margin on
the site management costs is unaffected whether
the contractor runs late or the project runs late
for other reasons.
We, on the other hand have our head office
tasks including site works for an indefinite
period and got paid only post contract fees. Poor
Mr QS ...
The Clients are insisting on more experienced
quantity surveyors attending the projects, swift
payment issuance and better advisory in
contractual negotiations.
Do we have a right to say no to the Clients on
grounds that the amount that we are paid is
simply insufficient to provide the requested
services?
Or are we agreeable to absorb all the losses in
the name of professionalism and continue
smiling as if everything is ok?
To uphold professionalism is good but to
pretend being happy and continue smiling as if
everything is ok is plainly stupid.
The way to go is to find ways and means of
getting reimbursed from the Clients to meet our
costs in providing the level of services that they
desire and hopefully, leave us with some profits.
We will examine the existing provisions that has
not been used, existing provisions that need
some re-definition and some provisions that are
to be re-worded.
To get extra fee through a new higher fee
structure seems impossible in the current
economic climate.
Working around the current approved structure
and the QS Act would be a very much easier
task than going head on and demand for a
higher percentage.
Since the Act does not spell out everything, the
Client usually fall back to Guidelines,
clarifications and interpretations with worked
examples for situational interpretations.
It is now the time for us to review the Guidelines,
clarifications and interpretations with worked
examples which has never undergone such
exercise since it was prepared way back in April
1996 .
The review shall explore more comprehensive
definitions, clarifications and added worked
examples based on varying project situations.
The review shall also take into consideration of
those Contract service agreements currently
being used and that of the new CSA2014.
Suggested Clarification reviews
1. Fees for works awarded under a few
packages to be quantified separately for each
contract with adjustment factor and not as a
single overall contract.
The current definition is more suitable for
project carried out in phases at a single site
rather than the calling of multiple contract
for multiple sites implemented in stages.
Suggested Clarification reviews
2. The time frame for stage (v) valuation of works in
progress shall be taken as the awarded contract
period between the Contractor and the Client plus
any period of extension given to the Contractor
consequential upon breach or negligence by the
Consultant Quantity Surveyor.
The Consultant Quantity Surveyor shall be paid
additional fees for stage (v) for additional periods
until the date of practical completion on a pro-
rata basis or on compensatory basis, subject to the
choice of the Client .
Suggested Clarification reviews
3 The payment for stage (v) valuation of works
in progress shall be changed to time based
and not based on the value of amount
certified.
This is because the input by the quantity
surveyor is almost the same for the project in
terms of attendance of meetings and
preparation of progress payment claims
regardless of the contractors productivity.
Differentiating basic services from additional
services
1 The contract conditions set that payment shall
be issued monthly. Should the Client instruct
that payment is to be made more frequently, the
service shall be considered as additional services
which the CQS shall be reimbursed separately.
The fees for preparing additional progress
payment claim could be deducted from the
Contractors payment at 50% value of the
monthly average amount for stage (v) fees or on
actual costs basis.
Differentiating basic services from additional
services
2 The fees for attending meetings beyond the
contract period .
The fees for additional services shall be pegged
to the awarded contract period between the
Contractor and the Client plus any period of
extension given to the Contractor consequential
upon breach or negligence by the Consultant
Quantity Surveyor. For those under the
CSA2014, it shall be applicable for all meetings
after the period stated in the Services
Implementation Schedule.
Differentiating basic services from additional
services
3 Fees and all other costs incurred in the provision
of additional services in preparation and
administration of quotations in employing of
third parties for the rectification of defects which
the Contractor has failed to make good shall be
claimable from the Contractor through the
Client. This provision has been incorporated in
the CSA2014 but changes must be made to
address those services contract made under
other forms.
These clarifications and definition issues are
from our personal experience in our project
delivery. We believe that there are other issues
that need to be resolved and ideas that could be
developed for the betterment of the quantity
surveying community.
Kindly write in to the Board and best , if you
could join the review committee and contribute
directly.
Clients have recognised that speedy and diligent
delivery of projects is very much determined by
the Contractors cash flow.
Some clients are giving very unrealistic time
frame for the QS in issuing of progress payment
certificates.
Certificates need to be backed by detailed
calculations, site measurements and other
documentations. Reproduction and compilation
of these documents has often failed the CQS in
meeting the timeline set by the Client.
We will now insist that at least an assistant
quantity surveyor, if not a quantity surveyor
himself, is appointed for all sizeable projects,
similar to the practices of other consultants.
There is an existing provision for a resident
quantity surveyor under item 10.5 reimbursable
expenses . We seek the assistance of the Board of
QS Malaysia and PWD to push for the
activation of this provision because it could be
implemented immediately.
With the costs of support staff being taken care
off in the form of reimbursed site staff, the
Company could now hire more senior and
experienced quantity surveyors to handle the
projects, thus achieving the desired level of
expertise demanded by the Client.
Yes, we are looking up to improve on our
project delivery . We are into providing
experienced and polished quantity surveyors to
advise Clients better on matters pertaining to
contract legality and financial control.
However, it is very critical that the silent killers
in post contract fees be eliminated soonest
possible by conducting comprehensive reviews
of the Guidelines and activation of on-site staff .
These moves will assist the quantity surveying
firms in providing quality post contract services
with a smile.
It would be a great help if The Board of
Quantity Surveyors Malaysia could assist those
still under the previous Consultant Service
Agreement to be compensated for extended
service period, in manner agreed by the
Ministry of Finance as per the Consultant
Service Agreement 2014.
The small tokens from each project when added
up could reasonably compensate us for the
losses that we have absorbed over the years.
Warmest
appreciation to
those who have
contributed in
the buildup to
this presentation.
May Allah bless
you.