APC COACH QUESTIONS SUMMARY

Q 01 What is the process/procedure for valuing materials off site on an interim valuation?
Q 02 What are the different ways of valuing variations on an interim valuation?
Q 03 How do you value materials onsite in an interim valuation?
Q 04 How do you value Preliminaries in an Interim Valuation?
Q 05 How do you value PC Sums in an Interim Valuation?
Q 06 How do you value Provisional Sums in an Interim Valuation?
Q 07 How do you value Main contractor’s work in an Interim Valuation?
Q 08 How do you deal with Retention on Interim Valuations?
Q 09 How do you calculate fluctuations on an Interim Valuation?
Q 10 What do you understand by Cost Reporting/Financial Statements during the post contract phase of a project?
Q 11 What is a final account and under what circumstances can it be opened up once signed for full and final settlement ?
Q 12 What do you need to do if the Main Contractor goes into receivership?
Q 13 A client is interested in obtaining some initial indicative costs on a project but does not have any drawings yet. How would you advise?

Q 14 A client has an Architect, Engineer etc. onboard and they have produced some basic sketches of a scheme (to scale). How would you
advise about the costs?
Q 15 The scheme at cost plan develops further and there are some indicative layout drawings (to scale) and outline spec. How would you
advise about the costs ?
Q 16 What procurement route would you recommend for proposed 5 storey office building in the centre of a town ?
Q 17 Can you tell me some of the main/fundamental differences between any of two procurement routes?
Q 18 Can you tell me which form of contract might be suitable for a £2 million office refurb project, bearing in mind that I have already
chosen to go down the traditional procurement route?
Q 19 Can you tell me some of the fundamental differences of two different types of tendering documents (ie BQ v spec drgs or BQ v
schedule of rates …..) ?
Q 20 If you were to set up in practice what sorts of things should you be aware of/observe?
Q 21 How is the RICS structured?
Q 22 What are some of the current issues in our profession?
Q 23 What is the difference between cost savings and Value Management/Engineering ?
Q 24 What do understand by Life Cycle Costing and can you run me through a simple example ?
Q.25 What are the different forms of dispute resolution. What are the different benefits and pitfalls of each to the client?
Q 26 What is PFI and how are we (as QS’s) involved with it ?
Q 27 What has Facilities Management got to do with QSing?
Q 28 Describe to me the various ways in which a client can take possession of the completed project?
Q 29 Once Practical completion has been achieved what measures should you/client take?
Q 30 What is the difference between Partial Possession and Sectional completion?
Q 31 A possible delay is likely on site – what possible ways can the contractor mitigate this delay?
Q 32 Can you tell me about the various insurance provisions under a form of contract ?
Q 33 How do you prepare a fire re-instatement valuation?
Q 34 What is your understanding of Latent Damage?
Q 35 The Client (The Employer under the contract) goes into receivership. What do you do?
Q 36 What do you says to a potential client who says “Partnering is just about having a cup of tea around a table – there are no real
benefits”
Q 37 What are the benefits for a client who wishes to consider faster construction methods for a residential development?
Q 38 What are your views on Egan reforms ?
Q 39 What is the difference between Tender Price Index and Building Cost Index – in what instances would you use them ?
Q 40 Tell me the sequence of site operations that lead to the installation of a strip foundation from topsoil to DPC ?
Q 41 Tell me briefly the options available to a client for an air conditioning system for a 5 storey office block in London with indicative gfa
rates?
Q 42 Tell me about CDM regs/describe the process (please ignore same question sent as Question 00 – answer this one)
Q 43 What is the role of an expert witness?
Q 44 How do you compile an acceleration package ?
Q 45 What different sources of funding are available for a potential client?
Q 46 A client approaches you and asks for a fee for your professional services. How do you approach this?
Q 47 A clients asks you what your prediction is for tender prices over the next 3 years. Respond giving indications with reasons?
Q 48 What are the different ways in which you can protect a clients interest following completion of the project?
Q 49 Upon completion of a project, the client applies LAD’s that he has actually suffered as a result of having to rent some temporary
accommodation. Is this the right approach and if not, why?
Q 50 A client has been informed by a friend about “set off” – what is this?
Q 51 Prior to commencement and during the construction phase, how does a client know how much money he will need to have ready prior
to each monthly payment?
Q 52 What is included in a loss & expense claim ?
Q 53 Can you tell me the procedure for tendering?
Q 54 What can give piece of mind to a client that a Contractor will perform on a contract?
Q 55 What kind of things do you do when examining and reporting on tenders received?
Q 56 What is the significance of money laundering upon us as QS’s ?
Q 57 What do you understand by Life Long Learning?
Q 58 What is the RICS requirement for a complaints procedure?
Q 59 What are the consequences of Merrit V Bab ?
Q 60 What’s currently happening at the education and training end of QS’s?
 APC COACH QUESTIONS

Q 01 What is the process/procedure for valuing materials off site on an interim valuation?

A Ensure provision in Main Contract for payment of Materials off Site.

B Contractor to produce a list of materials to be paid for off site.

C Arrange a visit to place of storage ensuring that the materials are stored separately, clearly identifiable
and are safely secured,

D Check programme to ensure that materials have been programmed for and are not "premature".

E To ensure that the materials are in accordance with the requirements of the specification a member of
the Design Team should accompany the PQS while checking the materials.

F PQS should adjust valuation to ensure that payment is only made for the materials element of the
Pricing Document items in question.

G The Contractor must provide proof that premises where the materials are stored have adequate
contents insurance

H On payment ownership passes to the Employer but the responsibility for storage, insurance and
delivery to site remains with the Contractor he also indemnifies the Employer against any loss or
damage that may occur prior to delivery to site.

I Within the JCT the contractor must agree if requried to signing a Vesting Agreement, this sets down
the agreement for change of ownership, insurance etc.
 APC COACH QUESTIONS

Q 02 What are the different ways of valuing variations on an interim valuation?

A Only variations that have been instructed by the architect under the contract should be included within
the interim valuations .

B The Client has the opportunity to ask the contractor price submit a price statement under Clause 13A of
the JCT 1998 SFBC which he can accept or reject.

C The PQS can value variations using the following methods :

(i) Using existing bill rates from Pricing Document

(ii) Using pro-rata bill rates for works of a similar nature adjusted for quantity, location, specification.

(iii) "Star Rates" PQS using rates based from experience

(iv) Last resort by using dayworks where the work is of a nature that it cannot be valued in any other way.
The QS must ensure that the sheets are signed by the COW and Architect and are submitted in a timely
manner in accordance with the Contract Conditions. The issuing and signing of dayworks is not condition
precedence for the QS to pay on this basis, he must still satisfy himself that the hours recorded and the
materials claimed are fair and reasonable, if not adjusted accordingly.
 APC COACH QUESTIONS

Q 03 How do you value materials onsite in an interim valuation?

A Under JCT Contract, provision is made in the payment clause for materials and goods to be
incorporated in interim valuations.

B The contractor normally provides a schedule of materials with his application.

C Such a list enables the PQS to get a general idea of what is being claimed, the accuracy of which
should be verified by visiting the site.

D Check that materials had been stored safely, protected from damage and secured against theft.

E The JCT payment clause states that materials on site should only include those items that are
reasonably, properly and not prematurely delivered to site, construction programme should be
checked.

F Delivery receipts and if possible invoices should be cross checked these against materials on site.

G Ensure that the value of measured work and the materials claimed for do not exceed the total value of
the quantities in the bill.
 APC COACH QUESTIONS

Q 04 How do you value Preliminaries in an Interim Valuation?

A Assume under JCT Std form Contract with Quants QS prepares interim valuation

B One of the responsibilities of the Private Quantity Surveyor is to ensure that during pre-contract
negotiations that the main contractor submits a detailed breakdown of his preliminaries

C The contractor’s preliminaries should be broken down into fixed costs and time related costs.

D Typical fixed costs which are payable on site set up include; tower crane erection, hutting & stat
connections, hoarding, welfare / canteen set up, PPE provision. Similarly these will have removal
costs at the end.

E Typical time charge costs include; management staff, skips, cleaning, general labour, tower crane
hire, driver & radio man, hire of plant / levels, insurances, hutting hire, stat on going charges, parking
bay closures (dependent on how these are secured), etc. Important to note that TR issues will
fluctuate with the peak points of the programme, with typically engineers, buyers being around at the
start of the job, finishes foremen, increased management toward the end. It would be unexpected to
see a constant level of time related charges.

F There are also one off costs, dependent on the particularities of the job, say in 21.2.1 Insurances, final
clean, road closures, scaffolding and the like.

G The PQS must take into account these fixed and time related items when valuing the preliminaries,
not appropriate to take the overall preliminary costs, divide them by the contract period and pay
relative to the number of weeks being valued.

H
The main issue with prelims is getting the level of information from the contractor at the
commencement of the scheme that will allow you to control the flow of these monies to the contractor.
 APC COACH QUESTIONS

Q 05 How do you value PC Sums in an Interim Valuation?

A Prime cost sums are allowances within the contract for works carried out by nominated subcontractors
or suppliers.

B The architect must instruct the expenditure of these sums, which will normally involve the contractor
entering into a nominated agreement with the subcontractor.

C The contractor submits the valuation together with the agreed OH&P and attendance additions. The
contractor within his tender will have stated the required amount for his recovery in terms of OH&P
expressed a % of the PC Sum.

D
Care must be taken to ensure that the scope of works has not substantially altered which in turn may
affect the contractors attendance allowance e.g if there is a PC included for installing 10 chandeliers
and this amount is reduced to 5, the contractor will have allowed for scaffolding to 10 chandeliers and
is now only required to provide scaffold for 5 and therefore should only be paid for 5.

E It is usual for the contractor to request a 1/39th on top of the nominated subcontractor'
s net price for
prompt payment.
 APC COACH QUESTIONS

Q 06 How do you value Provisional Sums in an Interim Valuation?

A Lump sum costs are included in tenders against Provisional Sums where work cannot be fully
measured, or where Approximate or "Provisional" Quantities cannot be estimated.

B General Rule 10 of SMM7 defines two types of Provisional Sum, "Defined" and "Undefined", which
are valued differently.

C Defined Prov Sums are those which some information is known, namely quantities that indicate
scope, any limitations/employers restrictions, nature and construction of the work and fixings etc.
These details will allow the contractor to programme, plan and price the works for such defined Prov
Sums.

D However, where Undefined Provisional Sums (eg Contingencies) are expended or valued, the
contractor has not programmed this work or allowed it in their pricing, so extension(s) of time and
attendant costs (and possibly loss and expense) will be incurred and will need to be valued.

E It is for this reason that Clients and Design Team members should be made aware of the
ramifications of unfinished design work.

F The same rules apply in valuing all Prov Sums as for main contract works, that it must be witnessed
on site by the QS (unless paid for as part of Materials on/off site, whereby additional requirements
apply), with corroboration from the Architect or Consultant (if specialist work) regarding compliance
with specification etc. Provisional sums should be included in the valuation, but only when
confirmed/authorised as a variation.

G Provisional Sums should be valued in the same way as variations ie using tendered BoQ rates for
identical work, Pro-rata rates, agreed rates/costs, invoices or dayworks.
 APC COACH QUESTIONS

Q 07 How do you value Main contractor’s work in an Interim Valuation?

Assuming a traditional contract under JCT 1998 Private with Quants the Main Contractors work
should be valued under the following headings:

A Measured work properly executed-which will be an assessment of the amount of work carried out as
described in the BQ based on actual measure or more realistically a %. This should also be adjusted
for location and for partly completed work. This will also include approximate quants and provisional
sums instructed by the architect

B PC Sums-any amounts included for Nominated subcontractors and suppliers should be assessed in
the similar way to the measured works.

C Works of a specialist nature should be verified by the appropriate consultant if appointed.

Preliminaries-a breakdown of costs into set up, running and dismantle should have been agreed with
the contractor up front.

D Preliminaries-a breakdown of costs into set up, running and dismantle should have been agreed with
the contractor up front. Prelims will be assessed on a % time taking due account of progress i.e. if the
contractor is in culpable delay then an adjustment in the period will have to be made

E Materials on site-as long as the have not been brought onto the job prematurely, they are adequately
protected and insured and they are for incorporation into the main works.

F Materials off site should only be paid whereby the Qs has satisfactory proof that the materials are
clearly identified and stored separately, there is proof of title in the form of a vesting certificate, the
materials are insured. A visit to the factory to check the above must be made. It is also possible to
obtain a bond.

G Variations-Only those which have been properly instructed under the contract should be included
within the interim valuation. They will come in three categories 1. Pre-agreed in terms of cost and
time, 2.pre-agreed in terms of cost but not in terms of the affect on the contract and 3. Not agreed in
terms of cost or time. If the variation has not been agreed it should be valued in accordance with rates
in the bills for works of a identical nature, pro-rata rates in the BQ for works of a similar nature, fair
rates and prices either using quotes provided by the Contractor or by assessing based on similar
works carried out on other schemes or by using price books. As a last resort works can be valued on
a daywork basis and long as the vouchers have been submitted and signed off in the same week as
the work has been carried out. Daywork sheets are not condition precedent for the final valuation of
the works, it is up to the QS to value the works in the most appropriate way as long as it fair and
reasonable

H Fluctuations-the measured works should be adjusted using the appropriate formula adjustment Loss
and expense-if the contractor has made an application for loss and expense

I Retention-the appropriate deduction for retention is made on all the valuation save for loss and
expense, special payments and fluctuations.

J The net valuation is calculated by deducting the previous net payment

 APC COACH QUESTIONS

Q 08 How do you deal with Retention on Interim Valuations?

Assuming a traditional contract under JCT 1998 Private with Quants the Main Contractors work
should be valued under the following headings:

A Measured work properly executed-which will be an assessment of the amount of work carried out as
described in the BQ based on actual measure or more realistically a %. This should also be adjusted
for location and for partly completed work. This will also include approximate quants and provisional
sums instructed by the architect

B PC Sums-any amounts included for Nominated subcontractors and suppliers should be assessed in a
similar way to the measured works.

C Works of a specialist nature should be verified by the appropriate consultant if appointed.

Preliminaries-a breakdown of costs into set up, running and dismantle should have been agreed with
the contractor up front.

D Preliminaries-a breakdown of costs into set up, running and dismantle should have been agreed with
the contractor up front. Prelims will be assessed on a % time taking due account of progress i.e. if the
contractor is in culpable delay then an adjustment in the period will have to be made

E Materials on site-as long as the have not been brought onto the job prematurely, they are adequately
protected and insured and they are for incorporation into the main works.

F Materials off site should only be paid whereby the Qs has satisfactory proof that the materials are
clearly identified and stored separately, there is proof of title in the form of a vesting certificate, the
materials are insured. A visit to the factory to check the above must be made. It is also possible to
obtain a bond.

G Variations-Only those which have been properly instructed under the contract should be included
within the interim valuation. They will come in three categories 1. Pre-agreed in terms of cost and
time, 2.pre-agreed in terms of cost but not in terms of the affect on the contract and 3. Not agreed in
terms of cost or time. If the variation has not been agreed it should be valued in accordance with rates
in the bills for works of a identical nature, pro-rata rates in the BQ for works of a similar nature, fair
rates and prices either using quotes provided by the Contractor or by assessing based on similar
works carried out on other schemes or by using price books. As a last resort works can be valued on
a daywork basis and long as the vouchers have been submitted and signed off in the same week as
the work has been carried out. Daywork sheets are not condition precedent for the final valuation of
the works, it is up to the QS to value the works in the most appropriate way as long as it fair and
reasonable

H Fluctuations-the measured works should be adjusted using the appropriate formula adjustment Loss
and expense-if the contractor has made an application for loss and expense

I Retention-the appropriate deduction for retention is made on all the valuation save for loss and
expense, special payments and fluctuations.

J The net valuation is calculated by deducting the previous net payment

 APC COACH QUESTIONS

Q 09 How do you calculate fluctuations on an Interim Valuation?

A Fluctuations are an alternative to fixed price tendering. Fluctuations only apply to valued work when
this provision is specifically mentioned in the tender documents

B Firm price contracts limits the re-reimbursement for changes in cost to statutory contributions, levies
and taxes.

C Fluctuating contracts contain provisions for re-reimbursements of changes in labour, materials and
statutory costs.

D Fluctuations clauses and Formula Rules are written into the Standard JCT98 Form, for example, but
are not extensively used these days. They were particularly useful on longer-term contracts, especially
at times of higher inflation, where contractors prices/rates were rapidly becoming overtaken by costs.

E The operation of fluctuations to adjust plant, material and labour costs can be quite time consuming,
because it entails the adjustment of contract rates by set/agreed formulae, such as with the NEDO
system, which relies upon the allocation of a code to each measured item.

F The allocation of such codes to each measured slip when taking off on CATO Enterprise software is
time consuming, but modern software packages can easily change traditional BoQ's into trade format,
that are suited for Fluctuations.

G The use of fluctuations means that the Client is not guaranteed a fixed price for the contract at
contract commencement. It transfers the risk (that contractors might otherwise have priced in fixed
rates) to the Client.

H It might be worth the Client considering avoiding such fluctuations if fixed prices are preferred,
perhaps by splitting a contract into smaller more manageable contracts of shorter duration, where
fluctuations would not come into play, thus guaranteeing more cost certainty

I Alternatively the Client could ask for two tenders to be submitted - one fixed price and one on a
fluctuating basis.

J In an interim valuation once the amount due has been calculated and applied for by the contractor, it
needs to be paid in the next interim certificate, and is not subject to retention
 APC COACH QUESTIONS

Q 10 What do you understand by Cost Reporting/Financial Statements during the post contract phase of a
project?

A Cost Reporting / Cost Statements. Cost Reporting is the updating of the project cost information to reflect the post-
contract phase of the project.

B The start point of the job is the tender price - within this figure there maybe Provisional Sums, Approx Quantities,
Prime Cost Sums, Nominated Works (i.e. another mini-project), Contingencies etc.

C The Cost Reporting process allows the QS to manage the unfixed elements of the contract, by keeping these
elements monitored and managed.

D The client is required to be kept informed of what expenditure is taking place against the issues & helps to allow
the client to make informed decisions in regard to future decisions / choices in regard to the project as a whole.

E The CR also allows the management of changes to the fixed / unfixed elements of the projects where these are
varied by changes - normally in the form of Instructions. These can be budgeted / accounted for to the client to
again keep him fully informed of the financial status of the project.

F CR can also address proposed changes - either budgeted for by the QS or priced by the contractor under the
Price Statement / 13A Quotation route

G In addition a good CR will address further anticipated issues. Often this relates back to the underlying risks that
remain on the job which may be managed on a risk register. CR can also account for further projects costs such
as delays / loss and expense - which again are important in keeping the client fully informed and aware of what is
happening on the project.

H The importance of the CR is that it keeps the client informed of his financial choices which may have a
considerable affect on the overall project. For example if significant costs are incurred due to unforeseen works
by keeping the client informed he may have the opportunity to change other elements of the scheme to account
for this over -expenditure on another element of the works. A good cost manager not only keeps the client
informed of the Financial status of the project but also gives guidance / direction as to decision to be be made to
keep the project on track.

I The Cost Report should be issued as frequently as they are need to be issued - a month long project might need
CR every week. A year long project could need monthly CR' s. It is dependent upon specific circumstances & we
need to be flexible and aware of the way in which information can be utilised by the client.
 APC COACH QUESTIONS

Q 11 What is a final account and under what circumstances can it be opened up once signed for full
and final settlement ?

A A final account is a calculation of the amount to be Certified under the contract as a Final Certificate.

B Final Accounts are sometimes the subject of a Client'

s audit procedure before they can be signed off
and formally agreed/countersigned by the Contractor on the usual sort of pro-forma.

C The account may follow the format of the Financial Statement/Cost Report for ease of reference and is
usually backed-up with invoices, price build-ups etc that form the basis of the QS valuation of the work

D The format usually starts with (a) the Contract Sum (b) +/- adjustments for Provisional Sums (c) +/-
adjustments for P.C. Sums (d) +/- adjustments for Remeasurements/Provisional/Approx Quantities
(e)+/- adjustments for Variations and Dayworks (f) +/- adjustments for claims of loss and expense (g)
+/- fluctuations. This will totalise to the Final Account Sum, from which previous payments will be
deducted.

E It is prudent to undertake a check that all previous payments match up with the previous payment
figures in the Final Certificate in addition to the usual arithmetical and technical checks of the account.

F An agreed and signed for Final Account can be opened up where either party starts adjudication,
arbitration or other proceedings within 28 days of conclusion of the contract, if the CA has certified on
something that the contract gives no power to certify, where there is fraud or collusion between the
certifier and one of the parties, where the employer has improperly pressurized or influenced the
certifier.
 APC COACH QUESTIONS

Q 12 What do you need to do if the Main Contractor goes into receivership?

A Firstly ensure that the Conractor has definitely gone into receivership.

B If a contractor has gone into receivership, the contract is automatically determined - the contract
classes this act at "insolvency" (which also includes bankruptcy, liquidation, winding up order or
administration).

C When this occurs, the Client should be informed immediately, as a stop may be put on any payments.

D Determination of the contract might also stop insurance if it was the Contractor'
s responsibility to
insure the works, which may need to be addressed by the Client.

E The site should be locked-up to prevent removal or theft of materials etc.

F Any bondsmen should be informed.

G Measures should then be put in place to take the situation forward, whereby the QS should undertake
a site valuation to assess the financial situation at that moment in time for the Client.

H The QS should also recommend that the Architect should inspect the works executed and materials for
compliance with the contract/defective works that might need rectification, as this is not the QS'
s duty.

I The receiver should be approached to see if work will continue, or what arrangements they will
propose to meet their original contractual obligations.

J If the Contractor is in administration, then it may be possible that the original contractor will continue
with the works. This would be the preferred way forward. Otherwise, the appointment of another
contractor may be necessary to complete the works, or perhaps a contract manager plus sub-
contractors (depending on how much work is outstanding).

K The Client may have to resort to approaching the second lowest tenderer, or, as a last resort, to
retendering the scheme, which would involve all parties (especially the Client) in extra cost and time
delays in the project delivery. In the event of the appointment of a different contractor, any extra costs
that the Client may incur will be deducted from outstanding monies (retentions) and any performance
bond may also be called upon.
 APC COACH QUESTIONS

Q 13 A client is interested in obtaining some initial indicative costs on a project but does not have
any drawings yet. How would you advise?

A Assume the Client has previously been given information on the level of fees (and level of service to
expect from the QS) and that an agreement been made with reference to the RICS Conditions of
Engagement.

B It may be that the (lay) Client would need an explanation as to what we do (especially when there is no
brief), together with an indication of cost of fees. Get everything/put everything in writing by somebody
authorised to commission work.

C In terms of the building cost, it would be important to obtain as much information as possible from the
client about their proposals (in terms of the building's function, appearance, level of specification and
servicing, location/address, known site restrictions/abnormals, size, number of storeys and
timescale/likely start date) - anything that might increase the accuracy of your estimate for the Client

D In the absence of drawings, I might arrive at an indication of cost in a number of ways, which might be
used in isolation (or in combination) to produce my estimate:(a) lump sums, and/or (b) functional cost
eg costs related back to numbers of pupils/staff/patients, like those that appear in DfES Building
Bulletins or in the back of Spons price books.

E Both methods would derive their costs from previous experience, similar in-house projects or other
cost databases (eg AJ Building Dossier etc). If a Client has an indication of floor area required, then
the gross internal floor area can be used, in conjunction with £/m2 costs from in-house data, Spons,
BCIS on-line etc.

F In all these cases, it would be necessary to update the budget for inflation (using Tender indices from
BCIS or Spons) and for regional variance to ensure that the costs you are reporting relate to the
expected market price. Personal experience of local markets might also be brought to bear on your
advice.

G Procurement route and contractual arrangements could also have a bearing on cost and it is important
to state any exclusions or caveats - you might not know the VAT status of your Client, in which case
you should state these as exclusions. You might also wish to summarise the inclusions or
assumptions made (Tender Price Index used).

H The estimate should be given or confirmed in writing. It is also important to bear in mind that the first
cost that the Client is given (however accurate or inaccurate) is the one that always sticks in their
mind, so it is important to be as accurate as possible. Maths checks should always be done as a
matter of course. Indications of other professionals fees might also be obtained from Spons or from
Mirza & Nacey (in addition to Local Authorities costs for Planning and Building Regulations), but I
would recommend that the Client makes their own enquiries to obtain firmer fees/costs from other
professional consultants, especially for legal advice, conveyancing and letting/selling costs
 APC COACH QUESTIONS

Q 14 A client has an Architect, Engineer etc. onboard and they have produced some basic sketches
of a scheme (to scale). How would you advise about the costs?

A Now that we have scale sketches, albeit very basic, this will still give me enough information to
measure the GIFA of the proposed scheme.

B To measure the GIFA I would follow the procedure laid out in the Code of Measuring Practice that
shows what to include for when measuring GIFA. Now that I have a proposed GIFA, I would check with
the architect if this is correct - because sometimes an architect will put the GIFA on the drawing and if
there are any differences in the measurement, it is important to establish this and both agree on the
correct area.

C To calaculate a cost to use for the GIFA rate I would consult cost data from within the office based
upon previous similar projects. By doing this I would be able to get a cost per/sqft for a recent project
that has been completed. I would have to discuss with the architect what level of specification does he
perceive the proposed building to contain, for example if the scheme is a hotel, and a high specification
- 5star - is required by the client and the previous projects that I have used to get a cost/sqft are from
3star hotels, I would need to make an allowance in my rate for this proposed scheme to allow for the
increased level in specification. To make sure that my allowance is sufficient I would consult various
pricing books, foe example BCIS or SPONS, to find out what they are allowing for building 5star hotels
on a cost per/sq

D Again, I would use suitable cost indicies from BCIS to take account of the diifernces in time - i.e the
cost per sq/ft from the hotel completed by my office may have been tendered 2 years ago and the
proposed scheme may not be programmed for a construction start until another 2 years. For this I
would need to allow for inflation up to the proposed start-on-site and also to mid-point construction.

E I would advise the client what procurement route the cost I have used was based upon. For example it
may have been a traditional route based upon tendering a BQ. I would ask the client what his priorities
are in terms of time, cost , quality and risk. From this I would be able to assess if a traditional BQ
procurement route would be sensible for his proposed project. If not, I would assess what allowance I
would have to allow for chosing a different procurement route. To do this I would consult our office data
based upon differences in tendered costs through different procurement routes undertaken for various
projects. From this I would be able to make an assessment on how much to uplift or decrease my GIFA
cost per sq/ft.

F At this stage of design, detail such as the type of foundations, status of ground conditions, type of
frame to be used - steel vs concrete, will not have been decided or possibly even investigated. I would
therefore state to the client the assumptions that my costs per sq/ft are based upon. For example, the
cost per sq/ft that I have calculated may have been based upon good ground conditions with strip and
pad foundations and a steel frame and therefore I would advise this to the client.I would advise the
client what my cost excludes, for example professional fees, VAT, finance charges, and any other costs
that I feel appropriate at this stage - for example there may be demolition involved of an existing
building. I could either exclude this or if the client wants it included make an assessment on the cost
involved and add it in to the construction costs as an extra over cost from the GIFA cost per sq/ft given.
 APC COACH QUESTIONS

Q 15 The scheme at cost plan develops further and there are some indicative layout drawings (to
scale) and outline spec. How would you advise about the costs ?

A At cost plan stage, cost advice will be given to the Client in cost plan form, usually in BCIS or CISFB
format. It is assumed (in the question) that a cost plan has been prepared and that further drawn
information and specification is received.

B The cost plan is developed in tandem with the design and is updated. An element (say internal walls)
might have been priced in the initial cost plan on the basis of an overall rate applied to the floor area.

C This cost checking exercise might involve the measurement of approximate elemental quantities (eg
internal wall areas) from the drawings and rates applied to them.

D The cost checking exercise will continue as the detailed design progresses. Markets can change over
time and price indices provided by BCIS etc are updated on a quarterly basis (provisional indices
firmed up, or delays in project programme). These might also affect all elements, not just the work
packages that might have been revised by the new drawings and specification package recently
received.

E It may be prudent to review other rates at this stage, not just those amended by the new information.
Percentages allowed for preliminaries might also be reviewed in this way, as the proposals are
progressed - the design team might become aware of new employers restrictions, as the relationship
with the client grows, or proposed contract period might change.

F It will also be prudent to adjust contingency allowances/percentages, because the risk decreases as
design certainty progresses. The contingency/design risk allowance might need to be changed,
depending on the quality of information expected from/performance of the Architect, if you are aware
of their track record.

G The contingency/design risk allowance might need to be changed, depending on the quality of
information expected from/performance of the Architect, if you are aware of their track record. The cost
checking exercise should take account of time, quality, cost and risk considerations. Revised costs
should be forwarded to the Client in writing and this could affect other clients finances (VAT,
professional fees, finance charges)
 APC COACH QUESTIONS

Q 16 What procurement route would you recommend for proposed 5 storey office building in the
centre of a town ?

A The selection of procurement route will depend on time, quality, cost and risk considerations of the
project and the importance that the Client puts on each of these

B It is for this reason that the QS must employ their communication skills to draw this information out of
the Client before giving advice on the preferred procurement route ie the decision just does not just rely
on the site/building alone, but on the Client'
s needs.

C Whilst the Client may have a preferred/preset method of procurement in mind, the QS has a duty to
advise if this is the most appropriate route for the Client, not just accept their decision

D There is generally an inverse relationship between Client risk and cost ie there is a financial cost to
transferring risk onto others, whether those risks are responsibilities for time (project delivery/delays),
for quality (specification or health & safety) or for cost (fixed/fluctuating/remeasurable etc cost
considerations).

E The chosen procurement strategy will, in turn, affect the choice of tender selection process
(selective/serial/single or 2-stage/negotiation/partnering etc), and that too will affect the Forms of
contract (JCT with/without Quants or even other suites - ICE, FIDIC, ECC), methods of measurement
and type tender documentation to be used (BoQ, Approx Quants Bills, Contractors Quants, Schedules
of Work, Spec & Drawings, Schedules of Rates etc). There are four main options for procurement
route, each with different risks/advantages/disadvantages to the Client. (a) Traditional Route (b)
Managed fee (c) Design & Build (d) Turnkey Whole books have been written on the topic of
procurement, so I will restrict my comments to the 5-storey town centre office scenario.

F I have assumed that the project is new-build and that the offices are for letting (rather than owner
occupation, which would have higher/corporate specification). The five storeys suggests an element of
repetition of design and specification, which leads me to conclude that the quality of internal
specification and design could be easily undertaken by a constructor.

G The fact the development is 5-storeys suggests that it is not within a conservation area and that
architectural input will be less important. The 5-storey design suggests that the Client is trying to
squeeze the most floor area out of the development and that the maximum building footprint could
create a constrained site.

H A contractor' s early input into the design to overcome these issues (ie using the contractor's expertise
in buildibility and resourcing) would be desirable. These assumptions might lead me to consider Design
and Build options. The client could transfer design risks, but could still control specification levels
through the Clients requirements or performance specifications or novation of Clients design team
professionals (some signature architects like Foster are sometimes employed in this manner).

I The fact that the offices are medium rise and town centre suggests that letting deadlines might be
fixed, or certainly an important consideration.

J When time is constrained/a risk, it could be worth transferring time risks to the Constructor in a turnkey
arrangement. Here the Client would be guaranteed a building completion date. Such a mechanism
might also transfer risks of cost overrun to the Constructor, which could be a consideration in town
centre sites that are re-developed (where demolition/existing basements and poor ground conditions of
infill sites) could result in costly variations if more traditional routes are used

K If (lack of) finance is an issue for the Client, then Contractor involvement might be taken one step
further, via PFI of DBFO arrangements, but this is usually reserved for non-commercial largescale
projects (schools/hospitals or roads), rather than office accommodation.
 APC COACH QUESTIONS

Q 17 Can you tell me some of the main/fundamental differences between any of two procurement
routes?

A The fundamental differences between any procurement routes are the ways in which Client risk is
handled.

B Those risks can be considered in three main areas - time cost and quality - and the way/extent to which
the Client wishes to involve themselves in taking responsibility for them, or in the transfer of risk to
others

C I will demonstrate this by comparing these considerations under two procurement routes - the
Traditional and Design & Build routes and how they deal with the 3 considerations of time, cost and
quality.

D Time: Under the traditional route, design, tendering and construction processes are sequential and this
tends to lead to comparatively longer project timescales. Even when traditional contracts are of fixed
duration, they often overrun due to variations, lack of fully designed work etc that can lead to delays and
Extensions of Time. Conversely, D&B contracts can be of shorter duration, because the design does not
necessarily need to be completed by the Constructor before work starts on site. Later elements can be
designed whilst foundations are going in ie design risk is transferred to the Constructor, which could
reduce potential claims and delays in the procurement programme.

E Quality: Traditionally the Traditional procurement route has been favoured when quality was an
important issue, whereby the Client Engages a design team who ensures that the desired quality is
incorporated into the designs. Qualitative checks are also undertaken by the design team (architects
mainly) during the construction period, together with the Client's representative on site - the Clerk of
Works. Control and responsibility for quality therefore remains with the Client. However, under D&B
these responsibilities are undertaken by the Constructor. The Client, if wanting to retain some control
over quality/design is entitled to list such in the Employer'
s requirements document. Furthermore, the
Client may novate all or parts of the design team to the constructor, to ensure that there is continuity of
design and quality (signature architects like Foster have been novated in this manner). Quality can also
include Health & Safety.

F Cost: Under traditional routes, the Client carries the "can" for costs of variations and overruns, both
during the contract period and for overruns in the pre-contract or overall programme that might involve
extra fees or loss of income or other opportunity costs. Again, under D&B routes, the responsibility for
the design and construction is laid at the foot of the Contractor. Nevertheless, the Client will have to pay
a premium for the transfer of these risks, whereby the contractor will make allowances in their pricing.
 APC COACH QUESTIONS

Q 18
Can you tell me which form of contract might be suitable for a £2 million office refurb project,
bearing in mind that I have already chosen to go down the traditional procurement route?

A The choice has been made to go down the traditional route which disregards D&B forms and those
incorporating contractors design. I would recommend that the Client goes with a contract from an
industry-wide provider of contracts, such as the JCT or ECC suites, whereby they are tried and tested,
rather than a bespoke contract that the Client may have written themselves

B The use of a contract from such a suite would minimise risks to the Client and is purported to be fair
and equitable to all parties, which is the duty of the PQS - it is not always in the Client' s best interests
to have contract clauses all stacked in the Employer' s favour, as this will be reflected in the
contractor's pricing and could force the Contractor into financial difficulties (which would definitely not
be in the Client's best interests).

C I have a duty to the Client to recommend the most appropriate contract form for the project, because
an inappropriate recommendation could potentially expose the Client to undue risk and my Employer
to claims for negligence. Normally I would recommend the JCT suite to the Client, as these contract
forms tend to be more for building projects, whereas the ECC contracts tend to be used for
engineering work or for projects with a partnering ethos or two stage tendering process (but not
exclusively so)

D However, the JCT suite is in the throes of revision and the range of contracts are getting completely re-
written, with the JCT05 editions due out this 1st May. Whilst the use of these forms are untested in the
courts, the JCT (Joint Contracts Tribunal) includes august bodies, such as the RICS, which negates
this risk for the Client. I understand that the new forms will include main contract, intermediate and
minor works versions. Until these forms are formally issued/published, I would follow the JCT Practice
Notes that would recommend the use of JCT98 (private edition with Quants) incorporating
Amendments 1-5. However, once this form is superseded by the issue of JCT05, it would be negligent
to recommend the use of a superseded contract.

E In the interim, I would recommend the JCT98 form because the £2 million refurb is not a project of
minor works, nor suitable for IFC98, whish is used for schemes of simple content and jobs of a smaller
financial value - this is an office project and a refurb, which is likely to be of a more complicated
nature. The "full" JCT form also contains an antiquities clause, which might be important on a
refurbishment scheme, whereas IFC & Minor Works do not

F The fact that the scheme is a large refurbishment, suggests that dayworks might also be a possibility
and only the "full" version includes clauses on how these should be dealt with through the contract.

G These provisions within the full form eliminate the chance of a dispute arising on these points, which
therefore minimises the risk to the Client of contract overruns, extra costs and legal implications and
associated costs. The "with quantities form" is assumed because a scheme of this size and complexity
is likely to be tendered on a Bill of Quantities, bearing in mind that a refurbishment project is likely to
have variations (for which BoQ rates would be desirable to value the variations). Private edition is
assumed, rather than Local Authorities Edition, as the Client of such an office building is more likely to
be a private client.
 APC COACH QUESTIONS

Q 19 Can you tell me some of the fundamental differences of two different types of tendering
documents (ie BQ v spec drgs or BQ v schedule of rates …..) ?

A The fundamental differences between tender documentation (such as between a Bill of Quantities and
Spec & Drawings) is one of Client risk and how this is dealt with in terms of time, cost and quality.

B For example, with time, a BoQ will take longer to prepare at tender stage, compared to the preparation
of Spec & Drawings - a BoQ usually incorporates preambles and/or Architects NBS type Specification;
whereas a Specification in Spec & Drawings might take slightly longer to prepare than in it'
s BoQ
counterpart, because more reliance is placed upon it a pricing document, but the overall preparation
time of tender documentation should be less with Spec & Drawings.

C The time taken to prepare a BoQ, however, pays dividends at post-contract stage, as it is often easier
and quicker to assess/value variations and interim valuations and disputes are less likely to occur as
to what is included in the contract than when using Spec & Drawings. Such disputes can contribute to
wasted time for the design team and could delay the Client by way of possibly delaying the contract
completion or delaying the completion of overall financial programme due to claims or other legal
disputes continuing after handover

D A tendering contractor will take longer to price a Spec & Drawings, because they will be involved in
measuring the works (builder' s quants for which there is no set method of measurement) for estimating
purposes. This extra time will be reflected in their price.

E In terms of cost, the Client should pay less fees for the preparation of Spec & Drawings than for
preparing a BoQ. However, a Spec & Drawings will give the Client and their Design Team less cost
certainty at the outset and at final account stage - the fact that tenderers will all be undertaking their
own measurements will lead to greater variances in their prices, even if pricing levels were the same -
there is an inherent risk of omission. Such contractors will also include an element of risk in their
pricing due to the lack of measurement that a BoQ would offer. Subsequently, a Spec & Drawings
could result in the Client receiving a wider range of tenders

F As previously mentioned, a priced BoQ is an excellent tool at post contract stage and can be split
more easily into cost plan format, or cost analysis format (for use in future estimating).

G The lack of priced rates in Spec and Drawings means that it is less easy to agree the cost of
variations, which is a risk that the Client takes with this type of documentation

H A BoQ is also more easily split into Client cost centres that might be required for funding
considerations, or for different VAT regimes.

I Regarding quality, the QS' s measurement role with BoQ' s result in QS' s becoming more intimate with
the design and more query lists are usually generated, than are usually issued on Spec & Drawings.
This is often a valuable check and may reveal errors in (or conflicts between) drawings, specification
or design that might otherwise be missed with Spec & Drawings, a scenario that could lead to disputes
or variation

J Whilst under a Spec & Drawings, there is more risk on the contractor, the risk of omissions or errors in
the tender are greater and this could lead to the Contractor attempting to recoup losses through
claims.
 APC COACH QUESTIONS

Q 20 If you were to set up in practice what sorts of things should you be aware of/observe?
A If I were to set up in practice I would contact the RICS and obtain a Setting up in Practice Pack.

B I would inform the RICS that I had set up in practice and complete the new practice questionnaire.

C I would only be able to use a Chartered designation if at least 50% of the partners or directors were
members of the institution or in the event of three people at least 2 must be members for use to be
able to use the chartered designation.

D I would ensure that I had the appropriate level of PI cover at the minimum levels as stated by the
Rules of Conduct.

E If I were to employ staff I would also take out employer'

s liability insurance.

F For advertising and logos, I would contact the RICS marketing department for advice but I would
ensure that any logos were not misrepresentative, not offensive and were in accordance with the RIC
guidelines.

G If holding clients money I would complete a declaration form to this affect and ensure that I complied
with submitting annual accountants statements detailing all the accounts and transactions.

H I would also ensure that I had a complaints handling procedure that was displayed in the office and
notify all my clients that it is available on request.

I If I employed more than 5 staff I would also be liable under the H&S at Work Act 1974 and ensure that
my premises took due cognizance of these requirements.

J The implications of the new DDA would need to be considered, would my services be available to all
and if not what reasonable adjustments could I make to my premises or what could I do differently to
deliver my services.

K Implicit in the above would be strict adherence to the rules as set out by the Rules of Professional
Conduct.
 APC COACH QUESTIONS

Q 21 How is the RICS structured?

A Following the "Agenda for Change" under Louis Armstrong, the RICS was restructured from the old
Divisions and Regional Branches, due to the need for a more relevant cross-cutting structure. The
RICS was updated into Faculties, Forums and other regional groupings (National, Regional and Local
Associations).

B The RICS was updated into Faculties, Forums and other regional groupings (National, Regional and
Local Associations).

C
This would enable members to belong to regional affiliations, whilst also belonging to faculty
groupings that would represent their working environment or interests. For example, as a QS, I am in
the Construction Faculty, although I have also registered (for interest purposes only) with the
maximum number of faculties (Project Management, Dispute Resolution & Management Consultancy)

D Former president Nick Brooke has addressed the issues relating to restructuring in his "Brooke
Review" which could rationalise the faculties structure. The RICS has a governing council and the
executive board are just about to change, with Steve Williams about to replace Nick Brooke as the
Presiden

E The RICS has a governing council and the executive board are just about to change, with Steve
Williams about to replace Nick Brooke as the President.

F Lionheart is a charitable sister organisation for RICS members which also appears on the RICS
website.
 APC COACH QUESTIONS

Q 22 What are some of the current issues in our profession?

A The RICS's restructuring under the "Agenda For Change" was intended to acknowledge the
importance of globalisation and global issues, whilst still addressing local, national and regional
needs.

B One global issue affecting the profession is one of climate change and associated sustainability
issues which will effect every faculty of the RICS and ultimately their clients.

C Climate change and the requirement of the Kyoto Protocol to reduce CO2/greenhouse gasses
omissions is the driving force behind the EU regulation.

D This in turn has affected national regulation via the Building Regulations - the April 2005 Amendments
to Part L require greater energy efficiency, which effectively mean condensing boilers are almost
unavoidable instead of conventional ones - they are more efficient, which should reduce fossil fuel
use, which in turn reduces carbon emissions.

E These and imminent changes to Building Regs will ultimately impact on Clients budgets, as the capital
costs will increase, although running costs and life cycle (or whole-life) costs might be reduced.

F Energy performance of buildings will be shortly addressed through Building Regs and the
measurement of this could be an opportunity for surveyors.

G Certainly that element in the Home Condition Report is cause for concern for existing practitioners in
terms of training.

H Climate change has also had local implications eg increased flood risk has lead to the Environment
Agency getting involved in planning issues, especially on developments on flood plains. This has an
adverse affect on the Client' s budget. Negative flood plain considerations have been raised elsewhere
eg in relation to the viability recent proposals for huge housing schemes (including the Thames
Gateway). There was an excellent article in last week' s "Building" magazine on sustainability and
various sustainable design details.

I In summary, it is clear to see how global issues can affect the RICS, its structure, its members and
clients, down to grass roots level in every facet of surveying - legal, technical, procedural and
business opportunities.

J The Brooke Review where past President Nick Brooke produced a report with 43 recommendations.
The purpose of the report was to:

(i) Improve two way communication between the RICS and its members

(ii) How to encourage more awarenes of and involvement in RICS affairs

(iii) Better arrangement for considering members'opinions and complaints

K Sir Bryan Carlsberg has recently submitted the findings of his report into the self regulation of the
RICS with the main recommendations beings as follows:

(i) Chartered Surveyors should continue to be regulated by the RICS but with separate regulatory and
conduct boards comprised of a lay majority.

(ii) RICS should regulate firms as well as individuals

(iii) The RICS should conduct competence monitoring and have simpler disciplinary procedures.

K Discuss Merret vs Babb and how it affected the requirement for run off cover, see Q 59.
 APC COACH QUESTIONS

Q 23 What is the difference between cost savings and Value Management/Engineering ?

A Cost saving usually involves omitting items from the scope of works or reducing the specification of
an item, this is usually done when a project is over budget and the cost needs to be brought back
down in line the the construction budget.

B Value Management/Engineering is the term used to describe a process where a project is broken
down and looked at in its component parts to see if an alternative product can be used that provides
the same value but at a lower cost.

C Value management can also increase costs if it can be shown that an alternate product can be
provided that would significantly increase the value of the product to the client at a slightly increased
cost. For example if a carpet has a life of 10 years opposed to another carpet that has only 5yrs life
expectancy yet only costs a £1 more per m2, then it would be of value to the client to specify the more
costly carpet now as it wouldn' t have to be replaced till after 10 years, where as the cheaper carpet
will have to be replaced after 5 and 10 years. Thus actually saving the client significant money in the
future.

D Value management looks not only at the capital cost of products but also the life cycle costs in order
to determine the product that would offer the best value for the life time of the product.

E VE emphasis on delivering the required functions to the required quality at least cost. This is not about
the lowest price, but ultimately about the best value for money. VE have most impact during the
design/brief stage, where the client's requirements is well-defined and the design solution is address
the function at least cost.
 APC COACH QUESTIONS

Q 24 What do understand by Life Cycle Costing and can you run me through a simple example ?

A Life Cycle Costing (LCC) is defined as the present value of the total cost of an asset over its operating
life.

B The cost comprises of the initial capital costs, operating costs and cost/benefit of the eventual disposal
of the asset at the end of its life.

C A typical example is that of life cycle costs regarding the use of UPVC on a building project. For
purposes of this question, a wooden window might have a 15 yr life as compared to a uPVC window
with a 40 yr life. A wooden window would normally have low capital costs but needs regular
maintenance over its life time. In comparison a uPVC window will have higher capital costs but low
running costs since little or no maintenance is required. Initial costs and running costs over the
operating life of these two products are brought to present values and the two are compared to make a
decision.
 APC COACH QUESTIONS

Q.25 What are the different forms of dispute resolution. What are the different benefits and pitfalls
of each to the client?

The various options for dispute resolution available to the client may be determined by the contract
type as these normally stipulate the rules for dispute resloution.

A Negotiation-this is relatively cheap and involves face to face discussions between the parties. It
involves establishing the opponents lower limits in order to reach an amicable settlement. Any
outcome or solution arising from negotiation is non binding. It may be a way of fishing to test the
validity of any claims before going down a more formal route. It can also be used as delaying tactic as
the limitation periods for arbitration and litigation still run once commenced.

B Mediation or Conciliation-this is a negotiated process which is facilitated by an independent third

party. Again this process is relatively cheap but the outcome is not binding unless the parties agree to
sign a binding agreement. It is unlikely to be effective in complicated disputes.It is however private
and can preserve future relationships. It is a way of the management team retaining control.

C Adjudication-all building contracts have the right to adjudicate as the HGCRA. This is where a party
issues a notice of intention to adjudicate, then an adjudicator is appointed, as agreed in the contract,
the adjudicator then makes a decision normally within 28 days. This decision is enforceable. It is
relatively cheap and quick although recent reports suggest that the cost of adjudication has risen
quite sharply over the last couple of years. It is also not really suitable for complex cases.

D Arbitration-these are appropriate to disputes of a relatively technical nature. It arrives at a binding

decision by an independent third party. It is unable to deal with multi party disputes. It can be lengthy
and expensive depending on the complexity of the dispute

E Litigation-this has become a little simpler and quicker as there are now specialist courts called TCCs
which deal specifically with construction disputes, you therefore have judges who are experts in
construction law. The decision of the court is readily enforeable and there are very limited rights of
appeal. Litigation can also deal with multi party disputes. It is very time consuming and expensive as
it involves barristers and solicitors. It is very infelxible as the CPR rules are rigidly applied. It is
normally adversarial and open to the public and press.
Q 26

I
 APC COACH QUESTIONS

What is PFI and how are we (as QS’s) involved with it ?

Throughout the world governments are facing an increasing demand to finance the rising expectations of their
populations. This is especially acute for expenditure on capital projects that have traditionally been the
preserve of the public sector. The main benefit expected of PFI was a greater level of innovation and
entrepreneurial input by the private sector in the provision of public sector services - thus improving quality
and value for money (VFM). Obviously in this environment there is a strong demand for QSs with their broad
management and specialist expertise offering advice on the economics of building construction and
use.These attributes make the QS a valuable contributor to the success of PFI projects. The opportunities
that exist for the QS on the client'
s side include,

Advice on construction and operational costs and land building values for preparing outline business case
(OBC)

Develop optional solutions for OBC including review of Public Sector comparator.

Planned Strategic management of client real estate and forward maintenance plans.

Lead or contribute to procurement strategy and mangement of bid process

Negotiate future contract variations and undertake technical audit of operational contract management.

The opportunities that exist for surveyors on the suppliers side include;

Lead or contributor for bidding consortium to provide strategic and tactical advice on construction and
opertational costs, land and building values and alternative use options.

Design, land use planning and development implications for PFI solution.

Project Management of PFI in whole or part.

Longer term role in negotiating contract variations and ensuring compliance with the service supply contract.
 APC COACH QUESTIONS

Q 27 What has Facilities Management got to do with QSing?

A Facilities Management (FM) is a profession that encompasses multiple disciplines to ensure

functionality of the built environment by integrating people, place, process and technology. The roles
for a QS in FM are wideranging

B Facilities management is the delivery of management of an organisation'

s assets.

C Effective Facilities Managers combine the resources and activities that contribute to the success of
the organisation by contributing to the delivery of strategic and operational objectives.

D Facilities management helps to integrate the processes that deliver business continuity and service
(especially its provision, maintenance and development) and will therefore include property strategy,
space management, communications infrastructure, building maintenance and administrative and
contract management.

E Facilities Managers are responsible for many of the buildings and services which support businesses
and other types of organisations.

F Facilities Management integrates the management of hard and soft issues to achieve better quality
and economies of scale ? hard issues comprising the building fabric and soft issues being things like
catering, cleaning, security and health & safety.

G Whilst Facilities Management is recognised by the RICS as a separate faculty, QS' s have the correct
aptitude/attitude, training and skills to undertake (or assist in) facilities management, because they
deal with property ? one of the assets that Clients use to meet their service provision objectives.

H In particular, skills in these "hard" areas might include all the normal property related roles that a QS
undertakes in their day-to-day work, including the contractual arrangements and financial
management of property and its maintenance.

I QS negotiation skills, obtained through costing variations and contractual issues, might also be
applied to other fields in FM. "Soft" areas might include the management and business skills that are
shared with other chartered surveyors - customer orientated services - a good knowledge of health
and safety (which may also be important in other industries that the FM Clients operate) ? experience
in dealing with/managing contractors (eg for M&E maintenance, security, cleaning, catering and
building fabric maintenance).

J The RICS has also recently been trying to improve the business skills of surveyors, which might also
be of use in an FM role for a Client.

K QS's may also be familiar with term tenders/contracts, under which FM services may be awarded, so
might be able to act as a Client advisor in these matters, as opposed to bidding for FM services.

L Certainly, the skills of the QS have been acknowledged by their increasing involvement in similar
roles to FM in PFI/PPP schemes.

M FM is often used when the Client requires rapid use of the facility by the end user, by transferring all
the risks and responsibilities to a facilities manager, whose main considerations will be time, cost and
quality ? all aspects in which the QS will be involved.
 APC COACH QUESTIONS

Q 28 Describe to me the various ways in which a client can take possession of the completed
project?

A Under JCT98 the Client may use the site (or parts of it) prior to Practical Completion for storage or the
like, but only after obtaining the contractor'
s permission and after checking with the insurers of the
works that such use will not invalidate the insurance. This insurance is (on new-builds) usually the
Contractors responsibility and the use of the site by the Client may result in a hike in the premium, for
which the Client will be liable.

B Alternatively, if the Contractor consents, Partial Possession may be given to the Employer before
Practical Completion, if parts of the site are available and suitable (fit for use) for handover to the
Client, but only if the Client requests to do this ? the contractor cannot ask to do this for areas that
have been completed early, just to suit the contractor.

C Once consent is obtained, the Architect/CA then issues a statement that identifies the relevant part(s)
of the Works taken into possession and the relevant date(s). Defects Liability period for the relevant
part then commences.

D The Client is responsible for insuring this relevant part of the works.

E Retention is also released early on the relevant part of the works.

F Any liquidated damages for late completion of the remainder of the works must be reduced pro-rata to
exclude the relevant part of the works previously handed over.

G Sectional Completion may be used to hand over possession to the Client. This tends to be a bolt-on
provision to the contract ? usually a "Sectional Completion Supplement", in which (from the outset)
the work is divided into pre-defined "Sections", valued in sections and reaches Practical Completion
in sections (whereby retentions and Defects Liabilities are released in sections). These sections are
agreed before tendering, whereas Partial Possession is something which may arise during the
currency of the contract.

H Sectional Completion is therefore planned from the outset, but partial possession may be something
that can be adopted by the Client if it is to their advantage when the contractor completes a part of
the works earlier than envisaged

I Partial possession clauses exist as standard clauses within the JCT Main Works and IFC Forms, so
the Client can adopt PP in every occasion when it would be of benefit (provided that it is at the
contractor's discretion).

J Sectional completion needs to be pre-planned and is not a standard provision within the
abovementioned forms.

K Sectional completion may be of benefit to the Client and contractor, in that cash flows and financing
will be able to be pre-planned and budgeted for.

L Partial Possession would be less so. However, early possession could be beneficial to the Client by
potentially reducing interest charges, or perhaps by reducing void finance or increasing income by
earlier disposal/sale/rental.

M Both these last two methods of early possession increase the liabilities of the Client, in that they need
to insure the works and the introduction of occupation of parts of the building site could have
ramifications on health and safety/security of Client'
s staff (eg incomplete escape routes/increased
risk from adjacent building activities.

N Dust and noise might also be a hindrance to the operation on the areas handed over to the client).
There could possibly be some argument over demarcation, especially with partial possession, which
relies on the architect'
s statement or definition of the completed part of the works.

O With Sectional Completion and the Full possession routes, the works to be handed over are fully
defined and demarcated, so that financial aspects can be accurately ascertained (for valuation
purposes and for retention release and insurance calculations purposes).

P However, early handover may involve larger costs (more security hoardings/changing temporary
compound layouts) and reductions in economies of scale eg plastering done in two hits rather than
one visit. It can be seen that timescale, cost and quality considerations provide the client with
different risks that need to be assessed when choosing the appropriate method of taking possession
that most suits the clients needs
 APC COACH QUESTIONS

Q 29 Once Practical completion has been achieved what measures should you/client take?

A Once Practical Completion has been achieved and appropriately certified in accordance with the
relevant contract conditions, the Client should be reminded that the insurance provisions of the
contract have lapsed and that they should now have appropriate insurance in place, as possession of
the works has transferred to them, together with risks of security and damage to the works and third
party liability.

B Liability for frost damage also transfers from the Contractor to the Client and heating arrangements
may need to be put in place, especially if the building is still empty.

C Defects that have arisen during the contract should have been rectified prior to PC although it is
practice for Architects to issue minor snagging lists for later completion if the Client can enjoy
beneficial occupation and use of the facility, provided that it is "fit for use".

D Upon PC, the Defects Liability Period commences and no further instructions may be issued, other
than for rectification of defects that arise during the Defects Liability Period.

E Subsequently, this results in the commencement of the period of final adjustment of the contract sum
(Final Account), which would have been prepared/formulated in tandem with the progress of the
project (at interim Valuation during financial report preparation).

F Other financial considerations at PC might be that L&A damages for late completion stop accruing
and an interim valuation is prepared to value the completed works.

G The Client might utilise this figure in the rebuilding calculations for insurance purposes.

H In this valuation one half of the retention is released.

I PC also activates the period for final review of extensions of time which expires in 12 weeks (under
JCT98) from PC date.

J The effect of the PC may have extra-contractual implications on 3rd parties eg an end to obligations
of a surety in respect of a guarantee or performance bond.

K Remind the Client of the need to store/forward the Health & Safety File (& O&M Manuals) to the
appropriate person in their organisation, as these are useful during any defect rectification and for any
future reference for maintenance or refurbishment.

L As part of the valuation process, always check that any items of work measured in the BoQ or tender
document have been undertaken as part of the valuation process eg specifically measured items for
handing over, labelled keys to the employer, manhole lifting keys, as built drawings for performance
specified work or spare materials (carpet or ceiling tiles etc) that might have been specified for
handing to the employer in the NBS Spec.

M This might also include materials that might have been paid for by the Employer (and transferred say
to storage depot) rather than paying a contractor restocking charges, which might "disappear" during
the contractor'
s clearance and demobilisation.
 APC COACH QUESTIONS

Q 30 What is the difference between Partial Possession and Sectional completion?

The employer is entitled to recover liquidated damages from the contractor in respect of the period
between the completion date and the practical completion of the section i.e. with sectional completion
a specific completion date is stated in the contract for completion of the works. With sectional
completion the following applies:

A if the employer wishes to place an obligation on the contractor to release parts of the works before
others, then the use of the sectional completion supplement is essential.

B The following will be identified - the sections/parts of the works will be identified in the appendix, the
start and completion dates of each sections, and the relevant liquidated damages for each section.

C Sectional completion is stated seperately in the contract, it should be priced as seperate components,
and programmed specificely.

D Each section has to be treated rather like an individual contract in respect of 1. time and 2. loss and/or
expense.

E There are requirements for seperate notices for the following - delay or loss, seperate awards of
extensions of time, and seperate practical completion certificates.

F The effects of sectional completion are the following - practical completion certificate is issued for that
section of the works, 1/2 the retention is to be released on the value of the section works, the
employer will take ove rthe insurance requirements, it is the start of the DLP for that section only, and
no LAD' s are avaialble to the employer on that section.

Partial Possession on the otherhand is not stipilated in the contract, is not priced for seperately, and is
not programmed into the works.

G The Employer is entitled to take over some of the works '

early'when they have reached a suitable
stage, ONLY with the contractor' s consent.

H There are two factors required here, 1. Employer'

s wish and 2. Contractor'
s consent - which cannot be
unreasonably delayed or withheld.

I The Contractor can refuse on the grounds that the use of such parts would seriously impede the
carrying out of the uncompleted works.

J The effects of partial possession are similar in some respects to the effect of Practical Completion in
that the contractor's responsibility to insure the relevant part comes to an end and the employer
provides the relevant insurance under clause 22C of the contract.

K The DLP runs from the date the Employer takes possession of the part, 1/2 retention of the value of
the work is released, and there is to be a proportional reduction in the amount of liquidated damages
deductible for delayed completion of the rest of the works - if the value of the works in the part is X%
of the contract sum, the liquidated damages are reduced by X%.
 APC COACH QUESTIONS

Q 31 A possible delay is likely on site – what possible ways can the contractor mitigate this delay?

The contractor can mitigate delays in several ways

A By resequencing or reprogramming the works. Analysis of the Critical Path (particularly of the activities
that have been delayed), may mean that the Critical Activities have changed. Furthermore, reappraisal
of floats may help to mitigate matters if they are in a new critical activity. This reprogramming might not
involve the Client in any extra costs, as the activities are merely re-ordered or re-prioritised. A contractor
may have some float in their overall programme, particularly if the Client has set a pessimistic contract
duration. The delay may also have occurred early in the programme, when a project' s timescale can be
more easily "rescued". Resequencing the works might also arise if the contractor is asked to suggest
alternative designs or specifications that might achieve shorter activities ie dry lining in lieu of plaster wet
trades, where there may be little cost significance, but may offer savings in time.

B More labour/teams - this increases the output of work in a given time, although productivity per man or
per unit of work remains the same eg two bricklayers may lay at the same rate and cost the same per
m2, but will achieve the job in half the time of a single bricklayer. However, flooding the site with labour
can sometimes have a detrimental affect if resources in excess of the optimum are used eg problems
with different tradesmen wanting to work in the same area at the same time.

C Overtime; longer working hours or weekend working could mitigate a delay, particularly if the critical
activities are targeted. Overtime will only affect the labour element of an activity and will be valued using
National Working Rule Agreement. However, the Client will only be liable for these costs if the
Contractor is not responsible for the delay. Generally, these mitigation measures may be termed
"acceleration" and these arrangements or agreements may be "extra" to (or outside) the scope of the
contract. In conclusion, there will be time, cost and quality considerations, or combinations of all three,
which must be addressed in the techniques selected by a contractor to mitigate a delay.

D Whilst a contractor should always use their best endeavours, mitigation may not always be possible and
the delay could result in liquidated damages being levied by the Client.
 APC COACH QUESTIONS

Q 32 Can you tell me about the various insurance provisions under a form of contract ?

A Under the JCT 98 with Quantities, insurance is covered under clause 20 to Clause 22 A- D

B Clause 20 places the obligation upon the Contractor to cover the Client against the consequence of
injury to persons or property. This clause covers the Client in the event of personal injury or death to
any person as a result of the project/works taking place. It must be made clear that the Contractors
insurance will only cover people associated with the project.

C Clause 21 is an insurance clause as opposed to an indemnity clause and provides financial backbone
to the indemnity given to the Client under clause 20.

D Clauses 22 A-C are alternative insurance clauses, only one of the these clauses will be applicable to
any one contract.

(i) Clause 22 A is insurance cover for new works provided by the Contractor.

(ii) Clause 22 B is insurance for new works provided by the Client.

(iii) Clause 22 C is insurance for works on an existing building and is arranged by the Client on a joint
names policy. The applicable clause must be stated in the appendix to the contract.

E Clause 22 D provides the option for insurance cover in respect to the Clients LADS. Such a risk would
arise where an EOT has been granted for delays as a result of a specified peril.The Contractor must
arrange this insurance and the cost of the cover added to the contract sum.
 APC COACH QUESTIONS

Q 33 How do you prepare a fire re-instatement valuation?

The preparation of a Fire Reinstatement Valuation involves the following:

A Taking instructions, this involves identifying the client (individual or company), clarifying with the client
that the valuation is for, insurance not other purposes, establishing the extent of what is to be insured
(cluster, single building or part thereof), the physical parameters of the building, agreeing the fee,
making access arrangements, ensuring that the timescales are clearly defined, establishing any other
relevant information regarding the building and notifying the client that the surveyor' s firm'
s complaints
procedure is available on request.

B Preparing for inspection, this includes obtaining a copy of the client's existing insurance policy and
cover details as this may affect the details of the advice to be given. I should also confirm with the
relvant local authority wether the building is in a conservation area, listed and obtain the Ordnance
Survey maps and larger scale location maps, establish wetherthe building is occupied or not.

C Equipment required for a site inspection includes a camera, tape/rod/laser, notepads, a torch,
protective equipment and a copy of authoristion.

D Collecting the information - the inspection is the most time consuming part of the assessment. It
involves cheking whether the extent of the property conforms with the description given by the client.
consider wether access to the property will be restricted during demolition and rebuilding, consider the
surrounding buildings as residentila buildings will restrict working times

E Sufficient note must be taken to produce sketch plans with dimensions, schedule of accomodation,
summary of the building' s structure and different types of construction and finishes, summary of the
buildning's services e.g lifts, airconditioning etc, summary of specialist features e.g external marble
cladding, canopy over entrance hallway, external metal escape staircase etc

F Processing the data - accuracy and consistency are important, calculations are made on the basis of
total loss or of such substantial damage that the building(s) will need to be demolished and rebuilt. In
collating the data I should be aware of both hte quality of the datat and the way its compliance with the
client's requirements.

G Producing the report - the report it is valuable to consult the following the advice contained in the
following RICS publications: a) Reinstatement Cost Assessment and Insurance Claims b) Property
Insurance Evidence of current building costs can be obtained from various sources including BCIS
quarterly reviews and Spons building costs and various technical press.
 APC COACH QUESTIONS

Q 34 What is your understanding of Latent Damage?

A A latent damage is a defect, which can arise in a building after the defects liability period ends on a
contract and the making good defects certificate has been issued.

B Such defects can occur years after the building is completed and once discovered there will be a need
for recourse. It is recognised that in contract law (under the provisions of the Limitation Act 1980)
legal proceedings must be commenced within a period of limitation, therefore, claims based on a
breach of contract must be commenced within 6 years if the contract is executed under hand and 12
years if the contract is executed as a deed.

C Actions based upon the tort of negligence must be commenced within 6 years, assessed from the
date when the damage occurs. In building cases, however, there is a potential iniquity on the basis
that the defect or damage may be undetected for many years. By the time the defect or damage is
discovered, the claim may be statute-barred.

D Due to this perceived unfairness the Latent Damage Act 1986 was passed. The act only applies to
cases involving the tort of negligence, but extends the 6-year period by up to 3 years from the date
when the damage is identified, subject to a maximum of 15 years from the date of the act or omission.

E The law commission have aimed to simplify the rules determining limitation periods. This stipulates a
3-year limitation period, to apply to tort and contract, to run from the date from which it was
discovered, with an overall maximum claim period of 10 years from the act of breach of contract.

F The Department of the Environment, Transport and the Regions (DETR) has suggested compulsory
latent defects insurance or BUILD (Building Users’ Insurance against latent defects).

G Such insurance would cover the client against the risk of latent defects, the costs of remedying the
defects and the cost of damage caused by the defect including loss of rents, profit and consequential
loss.

H The doctrine of privity of contract means, that as a general rule, a contract cannot confer rights or
impose obligations arising under it on any person except the parties to it. Consequently tenants, and
subsequent owners of buildings have no privity of contract with contractors or consultants. There are
various other contractual techniques to overcome this problem and that is the use of collateral
warranties or assignment or novation. These techniques would be required to create contractual
relationships, should a party find a latent defect, who was not the original client to the building.
 APC COACH QUESTIONS

Q 35 The Client (The Employer under the contract) goes into receivership. What do you do?

A When an employer become insolvent, the contractor may determine his own employment (JCT 98
Clause 28.3)

B Such determination is effected by the contractor forthwith giving written notice to the employer by
registered post (Determination operates only from the time it is received, not when it is posted.

Under JCT98 Clause 28.4 set out the consequences of determination

C The contractor shall with all reasonable dispatch remove from site his plant, temporary buildings,
materials, tools, etc and give his sub-contractor ( NSC &DSC) facilities doing the same. The
contractor must not destroy property in the act of exercising his removal.

D Within 28 days of the determination, the employer shall pay the contractor the retention deducted by
the employer prior to the determination of the contractor'
s employment

E The contractor shall submit his account and entitle to payment by the insolvent employer for works
completed, direct loss & expense incurred (Cl 26), cost of the determination (i.e . include cost of
materials purchased for used in this contract, removing plants, temporary buildings, tools, etc from
site) and direct loss & damage due to the determination

F The amount due after taking into account amount previously paid, the employer shall pay the
contractor without any deduction of any retention (if and only the retention have been placed in a
separate fund they will be claimed by the administrative receiver) within 28 days of the submission by
the contractor.The appointment of the employer' s professional advisor will cease and they only entitle
for those fees and expenses for work done up to the date of the insolvency.
 APC COACH QUESTIONS

Q 36 What do you says to a potential client who says “Partnering is just about having a cup of tea
around a table – there are no real benefits”

A There are broadly two types of partnering i.e Project Partnering (for a single project) and Measured
Term Contracts (for a series of schemes lasting for a period of time e.g. 5years)

B Benefits of partnering are derived more in MTCs than under project partnering and the emphasis of
my argument will concentrate on MTCs.

C MTCs are appropriate where the client has ongoing need for work of similar nature and where there is
sufficient workload to offer economies of continuity.

D The workload should be large enough to offer contractors continuity of work, which in turn should
provide the Client with a saving in cost and administration.

Partnering has the following advantages:

E Flexibility/ Accountability - there is no more flexible method of procuring a stream of work while
retaining accountability to the taxpayer, the public or the shareholders

F Minimal documentation - a multitude of works orders may be raised under the one contract with very
little in the way of documentation. Immediate response - without the requirement of contract action,
the contractor' s response should be immediate once an order is placed. The minimal precontract
documentation and short post-contract response times result in savings in both time and resource
costs. Apart from being in a position to respond quickly to normal demands, the contractor is "on-call"
to deal with any emergency work that is needed. The client benefits from the contractor' s increasing
familiarity with the buildings, while the conractor benefits from the assurance of a reasonable
continuity of work.

G Value for money - studies have shown that the overall there may be a potential saving by use of lump
sum contracts for the higher value orders. Lower value orders which form the bulk of the MTC's
provide better value for money than in traditional contracts.

H Simplicity - tender documentation, adjustment for inflation and ordering of work are all simple
operations.

The following are the disadvantages of partnering

I Volume of measurement - there is a comparatively large amount of measurement for the small value
order. This can be reduced by careful choice of schedule or by some self assessment.

J Audit requirements - the volume of seperate orders and high value of MTC spend usually creates
auditing problems.

K The main purpose of this procurement route is to remove the adversarial and confontational
relationships under traditional contracting by making every party to the agreement a ' consultant'
. This
ensures that everyone' s expertise is tapped for the benefit of the client. With everyone making their
required contribution to the scheme, the benefits of partnering far outweigh the disadvantages.
 APC COACH QUESTIONS

Q 37 What are the benefits for a client who wishes to consider faster construction methods for a
residential development?

The old adage "time is money" is often true in construction terms. A client who wishes to use faster
construction methods for a residential development may therefore benefit by achieving cost savings
by several ways

A reducing contractor' s time-related preliminaries prices; if faster methods of construction are adopted,
then the overall prices for elements of work will also reduce, because the labour element is reduced.

B Contractors prices will also include an element for inflation in building costs; the impact of which on
the client will be minimised on a reduction in contract period.

C Whilst these factors may reduce the construction cost, there are ancillary cost benefits to the client -
reductions in professional fees, building regulations and planning fees that might be based on
(percentage of) construction costs.
D Furthermore, the reduction in costs from quicker construction could reduce a Client'
s VAT bill.

E A reduction in timescale could also have other financial implications - increasing the period of "void
finance" if letting dates cannot be brought forward.

F However, letting or sale of the property can often be brought forward and an early return on the
investment is always welcome - it could reduce the Client's interest charges for the finance/loan.

G Shorter construction time might also reduce insurance costs for the works.

H Faster construction or reduction in costs might also give the Client better "opportunity costs" - using
the time or reduction in costs to finance other work or to explore other markets.

I Faster construction should not be at the cost of reducing the lifespan of the building - ie alternative
materials or construction methods should not be at the cost of increasing life cycle costs (running or
maintenance
 APC COACH QUESTIONS

Q 38 What are your views on Egan reforms ?

A Sir John Egan represented his views in his report entitled Rethinking Construction. This report is also
known as the Egan Report (1998).

B Resulting from a government construction taskforce, this report praised the construction industry for
its engineering ingenuity, design flair and flexibility; however, the report stressed the need for
improvements through product development, in project implementation and by partnering throughout
the supply chain.

C Five key areas for change were identified in the report: ·

(i) Committed leadership

(ii) Focus on the client.

(iii) Integration of processes and teams.

(iv) Int Quality driven agenda

(v) Commitment to people.

D Egan also advocated education of the construction workforce, in order to enhance quality, and that the
government and the national training organisations should put together an agenda for urgent action.

E Egan sought 40% cost savings throughout the industry and backed the use of key performance
indicators to measure performance and improvement.

F Egan created an agenda with many potential benefits to all construction parties implementing the
principles of Rethinking Construction.

G However, from my own experience, and from many articles that I have read on the matter, it is
becoming more and more evident that many of these parties have not embraced the principals of
 APC COACH QUESTIONS

Q 39 What is the difference between Tender Price Index and Building Cost Index – in what
instances would you use them ?

A Both indices are produced by BCIS and monitor the movement of tender prices and building costs
respectively.

B The tender price index measures the trend of contractors'pricing levels in accepted tenders for new
work and is considered a market index and reflects both the contractors profits and the contractors
anticipated cost during the lifetime of the project.

C The general building cost index purely measures changes in costs to the contractor of its labour,
materials and plant and is therefore a narrower indices.

D Both of these indices measure movements over a given period of time eg quarterly, annually.

E The important point is to consider the difference in the rate of change between the two indices. When
the Tender price Index is increasing at a faster rate than the building cost index then this would
indicate that the contracting market is buoyant with a high workload indicating that contractors are
able to increase their profit margins when pricing new opportunities.

F The indices are employed by quantity surveyors when advising clients on the likely cost of
constructing their proposed project.

G Initially cost are advised as of current day levels eg 2nd quarter 2005. However the client would need
to be advised of the anticipated out turn cost of the project.

H The current day cost would first be adjusted by the Tender Price Index to take the scheme upto the
date of tender and than it will be adjusted by the building cost indice to adjust for changes in
contractors costs during the course of the construction work to generate the final out turn cost of the
scheme under consideration.

I A contractor's estimator may revert to the use of the indices when calculating a firm price tender
inorder to calculate the anticipated change in his costs during the lifetime of the project
 APC COACH QUESTIONS

Q 40 Tell me the sequence of site operations that lead to the installation of a strip foundation from
topsoil to DPC ?

A Set out building in accordance with the designers drawings and use profiles to establish position of
foundations

B Excavate foundations to depth advised by the engineer.

C Arrange for inspection of the excavation by the building inspector to ensure he is satisfied as to the
nature of the soil at the base of the trench, additional excavation may be required on the advice of the
building inspector.

D Arrange for inspection of the excavation by the building inspector to ensure he is satisfied as to the
nature of the soil at the base of the trench, additional excavation may be required on the advice of the
building inspector.

E Place concrete into foundation trench, ensuring a level surface for the laying

F Allow the concrete to harden for a period of time as advised by the engineer

G Set out for foundation wall

H Construct the foundation wall as designed by the engineer eg engineering brick work, block work etc.
where a cavity wall is used insert wall ties at the required spacing with the ties sloping towards the outer
skin.

I Place concrete into the cavity between the two skins of blockwork

J Place damp proof course along top of the blockwork ready to receive the superstructure.

K Back fill excavated material between the face of the foundation wall and the edge of the excavation

L Arrange for another inspection by the building inspector to inspect the suitability and quality of the
workmanship and materials.
 APC COACH QUESTIONS

Q 41 Tell me briefly the options available to a client for an air conditioning system for a 5 storey
office block in London with indicative gfa rates?

a No air conditioning; naturally ventilated

b Two pipe system - cooling in summer / heating in winter £160/nett

c Three pipe - essentially same as two pipe with more control; no longer being implemented
commercially

d Four pipe - individual cooling / heating options; allows different areas to run at different temperatures;
£200/nett

e Chilled beam system; uses floor structure as conductor to reduce ambient temperatures by cooling
structure; complex system which must be designed hand in hand with building; £250/nett

f Ducted air systems; centralised system moving cooled or air to public areas; commonly set at floor
level in grilles; produces little noise as plant generated kit is remote from office space; needs structure
to be developed to accommodate air ducting; may increase flr to flr heights; cost impact elsewhere;
£280/nett.

g Normally service provision for CAT A office will be 4pipe system with VRV units providing ducted air
to floor space; cooled refrigerant is provided by roof / plant room which takes heat away from heated
air. Air grilles can be either linear grille diffusers or other regular diffusers spread across ceiling space
- linear gives clearer clg layout but is more expensive proportionally to square grille diffusers.Service
provision is based upon the grade of office and the proposed user; the more high market the better
the system will be.

h CAT B works will commonly give individual controls to particular areas / service provision to individual
areas i.e. directors offices / mtg rooms.As with all projects - its all about talking to the client / stake
holders and identifying what they want and how this is achieved.
 APC COACH QUESTIONS

Q 42 Tell me about CDM regs/describe the process (please ignore same question sent as Question
00 – answer this one)

a The CDM (Construction ? Design and Management Regulations 1994) were introduced to try and
reduce the high incidence of health and safety risks in the construction industry, by attempting to
eliminate them at source, or by instigating systems of management of those risks

b The CDM Regulations are included in contract clauses of construction contracts, but breach of Health
and Safety is a criminal offence and, under CDM, everyone is jointly and severally liable and it is
important that Clients (especially lay clients) are made aware of their responsibilities under these
Regulations.

c The CDM Regs place legal duties on all those who can contribute to the H&S of a construction project
? Clients, Designers (which includes QS'
s) and contractors.

d The regs also created a new duty holder, the Planning Supervisor and new documents ? the health
and safety plans and health and safety files.

e The CDM Regs apply to most construction projects, with the exception of; - non-demolition works
shorter than 30 days duration and involving less than 4 people - construction work for a domestic
client; - construction work that can be carried out inside shops, offices etc without interrupting the
normal activities without separating the construction activities from normal operations; - maintenance
or removal of pipe insulation, or to boilers or other heating/water systems.

f Property developers who sell to domestic clients have duties under the regs as clients. A client can
appoint an Agent to carry out their duties, but this would entail checking on competency first.

g A client is responsible for appointing a planning supervisor and providing them with H&S information,
for appointing a principal contractor and ensuring that they have prepared a suitable H&S Plan before
stating construction, and for keeping the H&S File at the end of the project

h A client also has to check competency of designers and contractors and that they are adequately
resourced to carry out their H&S responsibilities.

i Designers (& this includes QS' s) duties under CDM are to make clients aware of their duties, to give
regard to H&S in their design work or specification (particularly to consider maintenance H&S), to

j The Planning Supervisor' s role is to ensure that HSE are notified about the project on HSE Form F10
(if construction work is > 30 days or > 500 mandays, to ensure cooperation between designers, to

k The CDM Regulations ACoP has been revised in recent years, but the whole Regs are currently in the
throes of revision.
 APC COACH QUESTIONS

Q 43 What is the role of an expert witness?

a An Expert Witness, is an individual who ha specialist knowledge in the area of dispute.

b His role is to guide the court or arbitration hearing as to the customary practices within the profession
or to give specialist knowledge.

c Construction disputes are generally around technical and cost issues, therefore few lawyers are
conversant in these areas, so require assistance in understanding on the issues involved

d An expert Witness is required to give opinion in one or more of causation, liability and/or quantum.

e Opinion on Liability i.e. Adequacy of design-Was a structure sufficiently robust to perform to normal or
specified standards or serviceability.Was a water tank designed to prevent leakage and evaporator to
the standard called for in the brief.

f Engineers are usually expert witnesses in causation and liability advice.Opinion on Quantum i.e. Cost
of remedial work or value part upon contract delays.

g In this case an engineer cannot advice and a quantity surveyor would be called for as an expert.

h It is important to recognise the qualities that are required to play a role as an expert witness.

i These include; being able to inspire confidence particularly under cross examination; expert witness
must recognise subtleties and absorb aggression from the barrister with equal thumb; expert might
need to have considerable practical experience other than the theoretical knowledge and above all
expert must be fair and give opinions which are based on his experience and are free from bias. T

j The experts witness must be seen as independent.

 APC COACH QUESTIONS

Q 44 How do you compile an acceleration package ?

A Define if by Contractor or Employer

B If by Contractor - what is reason & is it required; to mitigate delay, am I the contractor responsible for
delay & will cost of acceleration equal / offset LAD imposition - will Employer look to actually impose
all LAD; if looking to handover early - will Employer take possession early - sometimes they have
specific dates in mind

C If by employer - what is reason & how can this be contractually enforced? If project is delayed is this
to offset Loss and Expense; if so can we calculate costs / offset / challenge level of cost to ensure no
wastage

D Acceleration relates to increases in resources or use of time; either doubling up work force or working
longer hours

E When proposing acceleration need to consider overall time to be gained & level of cost that this
relates to; Overtime normally only effective in short bursts as effective delivery of workload by av.
person will adjust to suit time expected to be in the work place; i.e. speeding up the site close out -
finishes / defectsWorkforce increase - more effective normally - relates to increasing labour, material
& plant resource to increase level of works being performed.

F Also needs to pick up prelims items that might be affected - management, canteen & H&S, welfare
required for increased work force.

G Putting together package - assess overall cost of carrying out the additional works, compile this & set
against proposed time to be gained in performance of this additional work.Additional work relates to
the critical path of the programme - which is the tasks that are concurrent and which no matter what
happens need to be completed sequentially in order to complete the works - i.e. frame, upper floors &
roof not frame, roof and then upper floors; all dependent upon the particular project- need to carefully
assess and plan this aspect of the works proposed to ensure that package proposed is achievable.

H How will this be affected by later changes?

I Will the cost of the additional works be challenged later and will the issue be clouded by any delays
that the contractor incurs besides the acceleration works themselves.Having compiled, programmed
and putting together proposal - this can be offered to the Employer if requested as a thing that he
considers and authorises - as the work is otherwise outside of the boundaries of the contract / not
picked up as something that is compensable under variations / cl.26.
 APC COACH QUESTIONS

Q 45 What different sources of funding are available for a potential client?

A A developer will require a loan for the short term where it is utilised to cover the development period,
whereas the developer will require a long term loan, known as refinancing when he proposes to retain
the completed development as an investment

B The long term loan is provided to enable the clearance of short-term lending incurred during the site
acquisition/construction period. a A variety of sources are available to developers seeking funds for
their proposed developments.

These include:

(i) Insurance and pension funds. Are the most important source for long term finance.The funds have
liabilities which exist long term, they consequently require investments which are geared towards
providing income growth with a high degree of security.

(ii) Property Bonds

(iii) Investment and Property Unit Trusts. Investment unit trusts involve investor money being pooledand
used to purchase shares of quoted stock market companies. These trusts invest in development
indirectly through their shareholdings. Property Unit Trusts, due to their tax position are able to make
a higher rate of return through direct involvement in individual projects rather than through the
purchase of property company shares.

(iv) Retail Banks. Banks have traditionally been the source of short and medium term loans.

(v) Merchant Banks. The ability of merchant banks to structure the finance requirements for a project to
make the attracting of funds possible enables the merchant banks to charge higher rates of interest

(vi) Building Societies, traditionally have providedmortgage finance to private housebuyers.

(vii) Major property companies whohave liquidity reserves available and not earmarked for immediate use,
may be loaned to another company in exchange for a share in the proposed development.

(viii) Government and EEC assistance. Frants, aid and other forms of aid available through central and
local governemtn agencies and the EEC

(ix) Construction Companies. Construction Companies with liquid cash reserves available and anxious to
secure construction contracts will undertake to fund projects on the understanding thatnthey will be
awarded the resulting building contract.
 APC COACH QUESTIONS

Q 46 A client approaches you and asks for a fee for your professional services. How do you
approach this?

A I would consider the best approach for compiling a fee for the project.

B The RICS did provide a scale of fees, but this is no longer applicable, however, they can still be
utilised as a basis for compiling a fee.

C There are three approaches to compiling a fee, these are resource-based fees, percentage- based
fees and hourly or daywork rates.

D A resourced based estimate for fees is compiled using a cost plus basis or target costs.

E An activity chart is used totalling all the roles ie preparation of the bill of quantities, and then a
percentage mark up is placed for profit.

F A percentage-based estimate for fees is calculated by taking a percentage of a fixed rate, such as a
percentage of the final account.

G A typical rate for fees is 2-3%, but a discount may be given on these fees.

H An hourly or daily rate is another alternative for compiling a fee and an indication should be given on
the number of hours on a project. This rate is compiled by taking the salary plus national insurance
costs, holidays and benefits and dividing it by the time

I An average hourly rate may be £40 an hour, but this all depends on experience.Once the most
appropriate fee had been determined, this would then be conveyed to the client and would be put into
writing, to be agreed and signed by the client.
 APC COACH QUESTIONS

Q 47
A clients asks you what your prediction is for tender prices over the next 3 years. Respond
giving indications with reasons?

A A comprehensive system of cost analyses and cost indices has been developed in the UK by the
RICS Building Cost Information Service (BCIS).

B The tender price index is based on a representative sample of tender, from several sources BCIS,
etc.

C While construction output has continued to rise, the future looks less certain;construction new orders
figures have fallen considerably. The market remains uncertain across the UK with some very
pronounced ‘hot spots’ of activity; at the same time some sectors are remaining in the dumps while
others are racing ahead.

D There has been a feeling for some time that the construction industry has been living on borrowed
time, and that the published output figures have given a rosier glow than the experience ‘on the
ground’.

E To predict the tender prices for the next 3 years I would apply the data from the BCIS TPI, which
would give me an indication of the uplift to add onto the building costs. However, I would inisit this is
only a forecast as the economy could change which may influence the index, such as government
funding, interest rates, inflation, etc.
 APC COACH QUESTIONS

Q 48 What are the different ways in which you can protect a clients interest following completion of
the project?

A QS can protect a Client'

s interests following practical completion in several ways:

A Advising the client on liquidated damages entitlement

B Reminding the client that possession of the site has/will revert to them from the contractor and that the
new premises will need insurance

C The QS can provide such a valuation for insurance purposes. The client should be reminded that they
are now responsible for frost damage, and trace heating may need to be activated if premises are
empty/un-let.

D The commencement of the Defects Liability Period (if the contractor defaults in making good snags)
could lead to deductions for defective work to be assessed, in advance of engaging a second
contractor to rectify the defects

E The QS undertakes a valuation, to which half the retention will be released.- the QS should highlight
to the architect that no further AI'
s can be issued under the contract, save those that are related to
snagging. Otherwise the Client may be opened up to claims.

F Practical completion activates the period for adjustment of the final sum (final account). timely
settlement of which will enable the client to predict their funding draw-down ie Clients cash flow to
consider when agreeing the final accounts. Account will also be need to be made for any internal or
external auditing of the account, so that such exercises are undertaken in a timely fashion that does
not affect the clients cashflow

G The client might also be reminded that the period for review of extension of time expires in 12 weeks,
if the architect has not already addressed this.- Practical completion also releases any bonds.
However, the QS should have previously advised that the Client gets the building contract and
conditions of engagement for designers executed as a deed (under seal) so that the liability of the
parties to the contract are extended to 12 years (as opposed to 6 years). RICS members require PII
run-off cover for this reason.

H I would also remind the Client that they need to retain the H&S file for future use. I would also
undertake a cost analysis of the final account, for my own purposes, and possibly for repeat work with
the client. The client may also use this information to ascertain capital allowances and other tax
liabilities (VAT) that will need to be promptly addressed, especially if the end of the tax year is
looming.
 APC COACH QUESTIONS

Q 49
Upon completion of a project, the client applies LAD’s that he has actually suffered as a result
of having to rent some temporary accommodation. Is this the right approach and if not, why?

A Liquidated and ascertained damages applies to a predetermined sum, which becomes payable by a
party to the contract if certain specified breaches occur.

B It can only be applied if the contract makes express provision for it.

C Assuming that this is the case in the above scenario, the Client does have the right to apply LAD’s;
however, this is not the only prerequisite. The Contractor must be guilty of failure to complete the
works by the contractual completion date, and if this is the case, the amount stated in the appendix to
the contract is deducted for every day or week of delay.

D In addition to the failure to comply, the amount stated for LAD’s must be liquidated and ascertained,
that is, they must be a genuine pre-estimate of the likely loss suffered by the Client in the event of a
delay for the completion of the works.

E If it is not a genuine pre-estimate of likely loss, it may be construed as a penalty by the courts and
thus unenforceable.

F If the contract was delayed the Client may claim liquidated damages, however, it must be
demonstrated that

(i) The clause is not a penalty.

(ii) There is a specific date fixed in the contract, from which damages can run.

(iii) All specified contractual procedures have been completed (e.g. certificate of non-completion issues)

(iv) The Client has not waived the right to liquidated damages.

G It is not clear in this circumstance if there has been a delay by the Contractor, and if the above factors
have been considered. Nevertheless, in this instance, assuming that these various aspects have
been regarded, the Client is attempting to deduct damages for renting temporary accommodation.

H This is not a genuine pre-estimate of loss, as the predicted amount should be a figure ascertained pre-
contract stated in the appendix to the contract and would be the losses suffered from a delay in the
works (e.g. loss of rent), not the costs to the Client of renting other accommodation using a sum not
stated in the contract.

I It is imperative that the Contractor knows the liquidated damages figure before they are engaged, as
they need to know the risks they bear.

J In this instance the Clients approach to deducting liquidated and ascertained damages would be
incorrect, and would be taken by the courts as a penalty and consequently would be unenforceable.
 APC COACH QUESTIONS

Q 50 A client has been informed by a friend about “set off” – what is this?

A An essential prerequisite to the right of set off is that the Supplier/Contractor has committed a breach
of contract entitling the Employer to damages.

B An Employer can refuse to meet a Contractors claim for payment, on the grounds that the Employer
has some cross-claim against the Contractor, which would reduce or extinguish what is owed.

C There are three separate defences that may arise in the situation of non-payment as a contractual
remedy, and only one is true set off.

D If the Employer refuses to pay, using a cross-claim in defence this would be classified as a ‘Counter-
Claim’, unless the Contractor took this action to court, and then a mere ‘Counter-Claim’ would not
operate to defeat the claim.

E If a cross-claim does not occur the Employer can refuse to pay, in that the works are not worth what is
being claimed. This is called the defence of ‘abatement’, and can only be used in respect to physical
defects of the work.

F A Contractor’s claim for payment will be defeated by a cross-claim in court if it satisfies the more
limited definition of ‘set off’. This requires the claim and the counter claim to be so closely linked that
it would be unjust to enforce one without taking the other into account.
 APC COACH QUESTIONS

Q 51
Prior to commencement and during the construction phase, how does a client know how
much money he will need to have ready prior to each monthly payment?

A At commencement and during the construction phase, it is imperative for a client to know how much
monthly interim payments will be.

B The client may need to calculate interest charges, tax liabilities/capital allowances, and may need to
know how much grant moneys to draw down well in advance of the payment, or may have funds tied
up in long term investments that need to be realised in a timely fashion to avoid incurring a loss, or
loss of interest.

C There may be also an opportunity cost to the client of employing investment/finances elsewhere. It is
for this reason that the QS will provide the Client with a cash flow forecast, which may accompany
(during construction) the financial statement that follows the valuation - the cash flow will therefore
incorporate the latest financial position in terms of anticipated final account and spend.

D The cash flow could be in nett form or an accumulative "S-Curve" format. There are 3 methods that I
could adopt in preparing a cash flow for the client, which depend on the amount of cost information
available, but whichever method I would adopt, I would make adjustments for retentions and final
account agreement beyond practical completion.

(i) Approximate method by dividing the contract period into three equal parts, whereby a quarter of
expenditure occurs in the first third of the contract, two quarters in the second third and a quarter in
the last third.

(ii) By allocating costs obtained from the tender document to the Contractor'
s Gantt Chart/programme for
the works.

(iii) By requesting a cash flow from the contractor at say pre-contract meeting.

E The QS and Client may also use the cash flow to monitor progress, to assess whether contractor is
behind programme. The contractor will use their cash flow in a similar fashion to monitor their
finances.

F An accurate cash flow forecast may prevent the client from financial difficulties or insolvency.
 APC COACH QUESTIONS

Q 52 What is included in a loss & expense claim ?

A Firstly Differentiate between Variations and Loss and Expense under Cl.26 of standard form.

B Loss and Expense are monies due to the contract arising from one of the faults listed; i.e. late
provision of information, works by others, delay caused by a nominated sub-contractor, works by
statutory authority, delay in supply of goods by the Employer, etc.

C Assessment of costs is made by CA then QS if required.

D Variation is a change to the works which is valued in accordance with the variation rules cl.13.

E Costs that are payable under Cl.26 - Costs arising due to extension of period that works is planned to
be carried out in and thickening of costs due to the way in which the works are to be carried out; i.e. If
there is delay in giving handover to the site, as permitted under cl.23 (if so stated in the appendix),
then costs arising may include revised sub-contract quotes due to delaying start on site or holding
orders of materials off-site prior to their previously scheduled delivery time

F The operation of Cl. 26 allows the contractor to recover costs that arise out of any of the issues -
importantly this differentiates from Cl.25 extension in that delay to a work package may not be on the
critical path but it may well incur costs arising from loss and expense.

G Only costs that are provable and that have actually been incurred are payable; i.e. the planned cost of
the operation related to as performed due to particular (valid in contract under cl.26) circumstances -
i.e. if I cause a specialist labour gang to stand idle for 3d due to not giving access to works, the loss
and expense will relate to a) the standing time b) any additional costs arising from the works being put
back, say having to recommence works the following week is I pushed the planned works over a
planned week duration - so maybe transport / access costs from arriving at the site twice rather than
the planned single visit

H Any costs claimed under Loss and Expense must be traceable to the event and be actually incurred -
thereby a global claim for head office costs must be directly traced to the event and the actual cost
incurred.

I Recent case law suggests that only global claims linked to actual relevant events under cl.26 will
succeed and the contractor should ensure that no claim is made against non-relevant issues.

J In summary; costs arising out of any event under cl.26 which will include the sub-contract costs, site
management / preliminaries type costs and the like - the key being are the costs actually incurred and
was the proposed method achievable against what was actually planned?

K Loss and Expense once calculated and accepted by the CA is payable under an interim valuation if
costs have been incurred at that point in time. Such monies are exclusive of retention as this would be
unfair to impose on costs incurred as result of a Cl.26 event.
 APC COACH QUESTIONS

Q 53 Can you tell me the procedure for tendering?

A There are a variety of tendering procedures used in the construction industry, which include open
tendering, single stage selective tendering, two stage selective tendering, selective tendering for design
and build, negotiation and joint ventures.

B The National Joint Consultative Committee for Building (NJCC) has codified these tendering procedures

C Essentially there are two ways of choosing a contractor; either by competition or negotiation and selective
competition is the traditional and most popular way of awarding construction contracts.

D The ‘Code of procedure for single-stage selective tendering’ is a useful document of good practice on
guidance regarding tendering procedure and awarding construction contracts. The code details the
following:

E The code assumes the use of a standard form of building contract with which all parties are familiar.

F The code recommends that the number of tenders should be limited to six. This is due to the fact that the
cost of preparing abortive tenders will be reflected in prices generally throughout the building industry.

G A shortlist of tenderer’s should be compiled. In compiling this list several factors should be considered
including the firms financial standing, the companies recent experience on building at the required rate of
completion on comparable jobs, the companies technical and management structure, the firms competence
in health and safety, the firms approach to quality management and their capacity to undertake the desired
work.

H This shortlist of tenderers may have already been qualified as they may be part of a client’s Select List of
Contractors.

I Each contracting firm on the shortlist should be sent a preliminary enquiry to determine their willingness to
tender.Once a contactor has confirmed an intention to tender, that tender should be made.

J If it is necessary to withdraw the architect should be notified if possible before the tender documents are
issued, or at the latest two days thereafter.

K A contractor who has expressed a willingness to tender should be informed if they are not chosen for the
final shortlist.All tenderers must submit their tenders on the same basis.

L Tender documents must be dispatched on the same day, standard forms of contract should not be
amended, a time of day should be stated for receipt of tenders and tenders received late should be
returned unopened.

M In addition the tender period will depend on the size and complexity of the job, but should be no less than
four workings weeks.

N If a tenderer requires clarification on any matter, the architect must be notified, and then must inform this
tenderer and all other tenderers of the decision.

O A tender may be withdrawn at any time before acceptance. After tenders are opened, all but the lowest
three tenderers should be informed immediately.

P After tenders are opened, all but the lowest three tenderers should be informed immediately.

Q The lowest tenderer should be asked to submit a priced document within 4 days.

R The other two contractors should be informed that they might be approached again.

S After the contract has been signed, each tenderer should be supplied with a list of tender prices.

T Priced documents should be kept strictly confidential.

U The employer is not bound to accept the lowest or any tender, and is not responsible for the costs of their
preparation.

V If there is an error in pricing, there are two ways of dealing with this. Either the tenderer should notified and
given the opportunity to confirm or withdraw the offer or to confirm or correct the errors.
 APC COACH QUESTIONS

Q 54
What can give piece of mind to a client that a Contractor will perform on a contract?

A Client peace of mind that contractor can perform;

B Get the right contractor = pre-qual, recommendations, referrals, prev. jobs, accounts, pending suits
etc

C Get the right manager / site manager = prev. experience, cv, etc

D Get the right price = put together documents so risk is clearly identified so there is no nasty surprises,
make sure everything that needs to be in is actually included.

DURING CONTRACT

E Cash flow and monitor progress of works = key indicator that works are progressing smoothly; relates
to programme & proper updating of same.

F Retention - 3% under std contracts / bonded possibly.

G Performance Bond - premium cost, 10% normally; ensure is unconditional.

G Materials off site bond - premium / further security

H Generally monitor works

I If something unforeseen does happen - deal with it promptly to resolve any issue arising.

J If WCD then ensure that design / co-ordination is taking place, and that this happens in due time. Ditto
programme for works to ensure client sign offs occur

POST CONTRACT

K Manage works so there is reduced defects

L Clearly identify any works outstanding if looking to take PC or PP - make sure that contractor knows
that something needs to happen; do not take possession before works are actually complete.If there is
some key issue for delivery of works at particular date maybe look at 22D insurances; risk and cost
premium dependent.
 APC COACH QUESTIONS

Q 55
What kind of things do you do when examining and reporting on tenders received?

A The purpose of the tender report prepared by the QS is to provide the client with sufficient information
inorder to make an informed decision as to whether to accept any of the submitted tenders and if so
which one. The tender report should be broken down into various sections.

B Section 1 should describe the process adopted. ie a selective tendering process adopted with
reference to the pre tender enquiry if adopted and the tender period allowed.
C Section 2 should identify the tendering contractors and their respective tender sums submitted.

D Section 3 should comment on the overall pricing level achieved with reference made to the range in
tender prices submitted and the difference between for example the lowest and second lowest
tenders. The QS should comment on whether the tenders are at a higher level, lower level or at the
level expected for the nature of the work being proposed. Reference should be made here to the
pricing level advised within the cost plan prepared immediately prior to the tender. Ideally the QS'
s
cost plan should be at a level midway between the highest and lowest tenders received. The purpose
of this section is to demonstrate to the client that competitive tenders have been secured.

E Section 4 should consider in more detail the two lowest tenders received. This will involve both an
arithmetical check and a qualitative check and should be commented upon within the report.

F Where tenders are based upon a Bill of Quantities confirmation that an arithmetical check has been
undertaken should be made and the outcome of this check.

G Where errors have been detected the method of dealing with these errors should be stated. the Code
of Procedure for Selective Tendering" identifies two approaches for dealing with arithmentic errors.

H The approach to be adopted would be advised within the tender documentation. The two approaches
are either confirm or withdraw or alternatively confirm or correct.

I Apart from the mathematical check a technical check should be made to ensure that the pricing is
consistent and that no anomolies are evident.

J Where there are anomolies these should be discussed with the contractor and their response should
be noted. For example if the joinery works was priced at what was considered a particularly
competitive level, the contractor may answer this by advising that it has its own joinery in-house
joinery department and hence the competive rates. This process may also detect any front loading.
The financial status of the contractor be checked and the client should be advised as their may be
additional interest payments to be considered on his part. Finally, this section should also detail any
qualifications to the tender and the implication should these tenders be removed. This section is
important to demonstrate to the client that the lowest submitted tender is robust and that commercial
issues which could impact on the client later on in the project have been properly dealt with.

K Section 5 Should include a recommndation to the client. The advise may include recommending that
one of the tenders be accepted or alternatively that a re-tender be appropriate. The exact approach to
a tender report may differ depending upon the type of contract procurement. A Design and Build
procurement route would involve a section in the tender report commenting upon how effectively the
tenderers have responded to the clients brief with regard to the building form, in this situation it may
be a more diificult exercise other than simply recommending that the lowest tender is accepted.
Assuming the arithmetical and technical checking of the submitted tender prove satisfactory."
 APC COACH QUESTIONS

Q 56 What is the significance of money laundering upon us as QS’s ?

A Money Laundering may be used to conceal sometimes-serious criminal activities and can take
different forms.

B Any method whereby the proceeds of criminal activities are disguised or converted and then realised
as legitimate fund or assets constitutes money laundering

C A Quantity Surveyor might unwittingly find themselves committing a criminal act as a result of the
Criminal Justice Act 1993 (which came into effect in 1995) and the Money Laundering Regulations
1993 (which came into effect in 1995)

D The relevant legislation applies to everyone and created three broad criminal offences, which are
punishable by imprisonment and/or fine. These offences are:

E Assisting a criminal to obtain, conceal, retain or invest funds, if the person giving assistance knows or
suspects the funds to be the proceeds of crime.Tipping off a person who is the subject of suspicion
that they are under investigation.In the case of drug trafficking and terrorist offences, failure to report
knowledge or suspicion of laundering acquired in the course of a persons business

F The consequence of this, is that a Chartered Surveyor who becomes unwittingly involved with a
money launderer can commit and offence even if he/she is merely suspicious of their clients’
activities.

G Whilst the provisions of the Criminal Justice Act apply universally, the Money Laundering Regulations
apply only to those who undertake “relevant financial business”.

H Quantity Surveyors fall under this domain of “relevant financial business”, and therefore should have
necessary procedures to cater for the need to be able to identify clients, where there is a suspicion of
money laundering.

I Such procedures should include requesting to see an original passport, and in the case of corporate
client, obtaining copies of returns made to Companies House.

J
Further protective measures can also be taken including educating and training staff to identify
potential problem areas and reporting matters of a suspicious nature, appointing a reporting officer to
deal with such matters and the need to set up a record keeping system with an audit trail

K The significance of not complying with the money laundering regulations, could involve a criminal
offence punishable with a fine or up to two years’ imprisonment. ‘Assistance’ offences carry a
maximum penalty of 14 years’ imprisonment and a failure to report suspicious circumstances can
carry up to 5 years’ imprisonment.
 APC COACH QUESTIONS

Q 57 What do you understand by Life Long Learning?

A Life Long Learning (LLL) is the continuous process of professional development that a member (or
trainee) undertakes to keep them abreast of current issues and to acquire professional knowledge
and skills, to ensure that the Client is receiving appropriate and correct advice.

B This is particularly important to maintain best practice in a time of rapid change in construction and
business.

C To this aim, the RICS' s Rules of Conduct compel members to undertake LLL (minimum of 60 hours in
3 years, but minimum of 10 hours in a single year of those three) and defines this learning or study as
"qualifying activities".

D These may be courses, seminars, structured learning etc., but must be related to topics that are
appropriate to professional practice.

E LLL (formerly known as CPD) has to be recorded in an approved manner (PDP) and kept for
minimum of 3 years (as the RICS may call for them).

F The PDP, which is a reflective analysis (similar format to Critical Analysis!) needs to be completed at
least annually. It sets your own learning objectives and new members will have to record this on-line.
 APC COACH QUESTIONS

Q 58 What is the RICS requirement for a complaints procedure?

A Rule 11 of the Rules of Conduct lays down a global obligation for members to set a complaints
handling procedure.

B A formal procedure for dealing with complaints from a client and from any person to whom, in the
opinion of the institution, a duty of care is owed.

C The minimum requirements are;

(i) Firm should appoint a person to carry out an investigation into a complaint in the first instance;

(ii) The procedure and time scales you have set up must be followed

(iii) You should make the information about your complaint handling procedure available to clients if they
so request and if they want to make use of your procedure it is free of charge

D If the complaint remains unhappy with the outcome of the initial investigation, then he or she

(i) has the right to a separate review by an appropriately qualified person

(iii) Could go to mediation if you agree

E If after the internal investigation and/or the separate review and/or mediation, the complaint is still
unhappy, he or she has the right to have the complaint refereed to an independent dispute resolution
e.g. arbitration Surveyors Scheme
 APC COACH QUESTIONS

Q 59 What are the consequences of Merrit V Bab ?

A In 2001 in the Merrett v Babb case, a member of the profession was found professionally liable for
negligence because his employer was not properly insured.

B Normally he would have been covered with professional indemnity insurance (PII), but the employer
went bankrupt and receivers had cancelled the PII. In this case the Bradford & Bingley Building
Society had instructed a firm of surveyors and valuers, Clive Walker Associates, to prepare a
valuation report on a property in Falmouth.

C The Building Society was proposing to provide a mortgage to Miss Merrett and her Mother for the
purchase of a property. Mr Babb, a professionally qualified surveyor and valuer, was an employee of
Clive Walker Associates who inspected the property and prepared a mortgage valuation report using
forms provided by the Building Society.

D This report was passed to Miss Merrett by the Building Society. Unfortunately, Mr Babb failed to
identify settlement cracks in the property and as a result the property was over valued by £14,500. Mr
Babb owed a duty of care, and had been negligent in preparing the report.Ordinarily, Mr Babb’s
employers would have been found vicariously liable for his negligence and the losses suffered by
Miss Merrett. However, Mr Babb’s employers had been declared bankrupt and the receivers had
cancelled the professional indemntity insurance policy. Miss Merritt could not recover her losses from
Clive Walker Associates, so therefore, held Mr Babb responsible. The Court of Appeal found in
favour of Miss Merrett, and Mr Babb was liable.

E The consequence of this case is that RICS was concerned that members could be at risk of this type
of claim, and at risk of other occasions where members may not be protected.

F As a result a special general meeting was held, and members requested that the RICS set up a
member support service. This service is available to UK members who are not required to carry their
own PII, UK retired members, trainee surveyors and members on part time concessionary rates.

G The service provides access to external expert legal advisers, a dedicated helpline manned by
qualified staff and support in dealing with insurance providers.

H In addition to these services, and dependant on a case’s individual merits and levels of funds
available, the service will investigate the allegation, help with legal costs, and at its discretion, provide
further support.
 APC COACH QUESTIONS

Q 60 What’s currently happening at the education and training end of QS’s?

A The APC process in not the end of a QS'

s education and training.

B The Lifelong Learning requirements of the RICS also help to safeguard Clients from receiving out-of-
date advice.

C These requirements (RICS Rules of Conduct) now stipulate that members must undertake a minimum
of 60 hours of LLL in a three year period, with a minimum of 10 hours in any year.

D Furthermore, LLL must now be undertaken on a planned basis using a PDP and new members must
now record such LLL on-line. Continued IT advances now mean that e-learning is becoming a popular
method of LLL, via systems such as the Einstein Network.

E Recent changes in the wider business environment have led to the RICS trying to introduce business
qualifications for new members, but these proposals have been put on hold, pending consultation.

F The RICS has recently introduced more business competencies in the APC, presumably as an interim
measure.

G The recent introduction of the TechRICS qualification is also helping to provide Clients with a
recognisable "badge" or guarantee of service level.

H Other opportunities for training of RICS members have recently emerged due to new requirement for
qualified Home Inspectors to undertake the House buyers surveys/packs.