Quantity surveying is a young industry on the rise in Cambodia
Quantity surveying is a young industry on the rise in Cambodia
Singapore-based boutique agency Oliver Ho & Associates is an independent practice that has made it its mission to provide consultation expertise and management services across all aspects of construction and construction-related products.
Founded in 1995, the boutique quantity surveyor company focuses on quantity surveying – a best practice that allows property developers to gain full control and overview not only over construction contracts, but more importantly, costs.
Marketing director of Oliver Ho & Associates, Darius Ho, spoke to Post Property on what construction quantity surveying entails and what the firm has accomplished in the Kingdom since entering the market in 2014.
What exactly is quantity survey/surveying (QS)?
The role of a quantity survey is described in three stages.
Stage I - Investigation, preliminary design and estimates:
This stage provides cost information or data, conducts feasibility and cost studies, and cost estimates, sets cost limits and prepares cost plans in respect of the architectural, civil, structural, electrical and other works undertaken by the other consultants appointed by the client.
In addition, it entails revising such studies, and estimates and plans whenever necessary in the course of the changes or modification of the preliminary design as may be necessary.
Stage II - Detailed design:
This involves preparing pre-tender estimates; co-ordinating with the client to arrange for the invitation of tenders and receipt of tenders.
Prepare bills of quantities and specifications complete with schedules of internal and external finishes, doors and iron-mongery, fitments, sanitary fittings and other schedules deemed necessary for the purpose of inviting tenders and the making of such alterations and modifications there to as may be dictated by changes in design requirements and as may be reasonably requested by the client.
Attend to the tenderers’ queries regarding information contained in the tender documents and issuing corrigendum to the tenderers if so required by the client and then prepare analysis of the tenders received for the project.
Prepare and furnish at an additional cost (lithography charges) of all necessary contract documents relating to tender acceptance. The consultant shall, at his own expense, prepare additional contract documents for the administration of the contract.
Render skilled and confidential advice to the client in the evaluation of the tenders received. The consultant shall analyse and compare the tenders received with the approved estimates and current prices in the market and advise the client as to the most suitable tender for acceptance. The client may consider the advice of the consultant and award the tender as it deems fit or reject all tenders received and instruct the consultant to make further amendments to the drawings etc. and invite fresh tenders accordingly.
The consultant shall ensure that the evaluation process shall be in accordance with the client’s procedures.
Stage III - Supervision and contract administration of the works:
Administer the works in progress and ensure that the works carried out by the contractor are in accordance with the specifications or bills of quantities, drawings and all other contract documents.
Value the work carried out each month and recommend to the other relevant consultants the appropriate progress payments for the contractor and where applicable, his sub-contractors.
Provide cost advice, supplying such cost information and prepare such periodic financial statements as are necessary and as and when required by the Client so as to maintain an effective cost control over the construction of the project.
Value variations of the works as and when they arise, and adjust fluctuations in the cost of materials or labour, if so required, in accordance with the terms of the contract between the client and the contractor.
Assist in settling disputes or differences which may arise between the client and the contractor.
The consultant works with and consults the other designated consultants forming the team for this project and such other consultants as may be appointed by the client from time to time, in the course of discharging his duties for the project.
Has QS already taken off in Cambodia?
Quantity surveying is gaining traction in Cambodia. Foreign investors appreciate the services of the quantity surveyor as this is a wide practice in Southeast Asia. Though not mandatory, developers would require quantity surveyors for cost as well as contractual input. More importantly, the QS can easily do up a detailed cost plan based on the architect’s and engineers’ drawings instead of a generic estimate per square metre.
We have seen a fair share of Cambodian developers expressing interest in finding out what we do. Cambodian architectural firms have contacted us to see how we can fit into their project consultancy.
More than often, the banks require developers who are taking a loan to build to engage an independent cost consultant. This would in turn protect the banks interest and ensure the percentage of completion on site matches with the claim amounts.
What are the challenges and chances that you face in the Cambodian market?
Challenges would be to explain to the client our scope. In Cambodia, nine times out of ten, the architect doubles up as the role of a QS.
The Cambodian market has huge potential, not only in the residential sector as we have noticed in the coming months of an oversupply. The favourable conditions of manufacturing would attract multinational companies to invest in high tech equipment and infrastructure, but more importantly training the Cambodian workers, thus improving their skills.
Who are your clients?
Our clients spread across the two main industries in construction, consisting of manufacturing and residential/commercial (mixed use).
Is your company interested in investing in Cambodian real estate?
Definitely. There are plans in the pipeline in the coming year.
As a consultant, we believe in walking the talk. With a good grasp of Cambodian construction contract experience as well as understanding construction rates, we are confident in getting an experienced local contractor for a very good fee.
Currently, there is a bit of a downturn in the real estate market, which will likely affect the construction sector. Do you see this as a problem for your activities in the Cambodian market?
We believe our market share in QS work will grow apart from these reports. The reason being, we see the market moving to affordable housing and manufacturing. Cambodia’s location, geographically, is very convenient while improving corporate governance and political stability translates to a manufacturing magnet in South East Asia as manufacturing costs around the region rise. Companies which require a labour intensive workforce are attracted very much to Cambodia.
Please explain the cost-saving effect for developers that your service has.
One of the greatest challenges of developing a project is to:
1) First, accurately estimate the project’s cost and create a realistic budget,
2) Then, to complete the project within budget.
Many a project gets into serious trouble when, for whatever reason, the project can’t be developed within the budget. Usually, by the time the problem is discovered, it’s too late to increase the budget, as financing has already been secured.
So to keep the project within budget, critical features end up being compromised, such as the finishes, and the quality of the materials, furniture and equipment.
Value engineering is a process that takes place in the early and mid-stage design phases when structural and mechanical systems, finish details and specifications are being decided. Value engineering is the process of finding the best way to build (design) the project to accomplish the task and design goals for the least possible cost.
Cost overruns are also caused by the traditional design-bid-build process. First the project is designed, and then a contractor is selected to build the project either by competitive bid or negotiation. This process precludes value engineering until the project is already designed. So by the time the bid comes in over budget, the only way to reduce costs is to make major compromises in finishes, quality or components.
As quantity surveyors, we oversee the process. Foremost, to come up with a realistic construction cost estimate, we develop a schematic design and work with a preselected general contractor and subcontractors to estimate the construction cost.
The key is to manage expectations before going to the drawing board. This is vital to the budget of the project. The only way to control a major building project is to be fully informed of the cost impact of every decision made.
Once the goals are clearly understood, we will conduct reviews during the design of the project. We have also developed a database that targets client needs and expectations.
To summarise it all, we do not want a 5-star hotel to have 3-star furnishings.
