Bills of Quantities–A New Perspective?

Martin Darley, FRICS, reflects on the changes to Bills of Quantities and questions their relevance in today’s complex procurement environment.



When I started my career as a Junior Quantity Surveyor (QS) back in the 1970s in the industrial North East of England, Bills of Quantities were productions akin to a Hollywood script. They were written bound books produced for each stakeholder in the bid process. The contractor would return two hand-priced editions for the quantity surveyor to check, tabulate and make recommendations to the architect as to the contractor to be awarded the works. Unless the architect issued variations, the bills were effectively a lump sum price for the project.

Even this brief description illustrates the laborious process that a Bill of Quantities document was. But to produce the quantities involved a process even more labor intensive. Dimensions were taken off scale drawings by laying a scale rule across the drawing, then the dimensions and description of the labor and materials to be included were hand written, in a form of shorthand developed by the QS. These were then arranged in order for the bills, either elemental (think Uniformat), or trade order. Having done this, the document was typed, proofed, read, sent to the printer and proofed again, before being printed and bound. Looking back these were true ‘Works of Art’ as much as tools of the trade. Being laborious the bills were expensive, so methodologies evolved to make the process more “automated.” These included the advent of cut-and-shuffle paper: a perforated sheet that could be torn up and shuffled, much like a deck of cards, to represent each line of the bills. The QS had to write the description, and a typist was still required to produce the bills; the photocopier reduced the need to involve a printer in the process. The next development was “standard phraseology,” a book of codes representing standard descriptions for Bills, into which the QS could add “star” items to describe the particular piece of work unique to an individual project. The typists were replaced by a technical writer of a sort, who pulled standard descriptions from the data library and added rogue items. The system was able to retain rogue items for future reference.

It is worth a moment to reflect how the Quantity Surveying profession had evolved to this point. Builders used to produce their own estimates for the work and submit them to the architect who had the job of normalizing the submitted bids and checking for compliance. Each builder retained a specialist to do the work of producing his own bills, estimate, and price. The architect took the lead and started to produce his Bills for the contractor to price.

This lead to the advent of a new specialist, the Quantity Surveyor, and the establishment of the profession and growth of RICS.

To further standardize, the QS produced Standard Methods of Measurement (SMM), the common rules by which the entire industry describes work and what was and, sometimes more importantly, what was not included. I tend to think of Bills of Quantities as transparent distribution of risk. The contractor prices the work quantity as describe to the specified quality. The owner accepts the price as a fair and reasonable for the work to be done. The contractual documents, specifications, preamble, and terms and conditions of contract provide the contractual mechanisms to administer the contract through to agreement of the final account.

Early in my career I drifted from the traditional QS area of the practice of building and commercial property into heavy engineering, measuring everything from chemical plants to oil platforms for the North Sea. My employer, Turner & Townsend, was an industry leader in this field, drafting an SMM for mechanical engineering work that became the foundation for the SMMIEC (Standard Method of Measurement for Industrial Engineering), which is still used today and available at RICS Books.

While working as a QS on various nuclear projects we experimented with ideas of using MTOs (Material Take Offs) from engineering drawings to produce bills for piping installations, utilizing engineers to translate PFD (Process flow diagrams) and P&IDs (Piping and Instrument Diagrams) into approximate quantities; the challenge being that these are not scale drawings. The process used enabled two-stage tendering to maintain a project schedule. Step one was selecting the contractor based on a menu of prices. Step two was establishing the agreed price based on better-defined quantities on firm design. As always, RICS was the standard bearer, drafting the procedures for two-stage selective tendering.

It was also about this time that I was at a charity fundraiser for a local hospital where I was introduced to a project engineer. He told me with complete assurance that he “had seen the future of quantity surveying” and that “I did not have one!”

In this future he saw a profession that would be rapidly replaced by computers and computer aided design integration. They would exchange data automatically, taken from design drawings provided by contractors to owners.

That was almost twenty years ago and rates were still hovering around the physiological barrier of 10GBP per hour. Since then we have seen partnering, open book contracting, target price, risk/reward, design build, and so on. One project I worked on christened the term EPICOM (Engineer Procure Install Operate and Maintain) — a total hands-off approach by the client, while retaining certainty on price.

But let us fast forward now to 2010.

Although I have the professional training and qualifications as a QS, I do not have a Quantity Surveying job. I am a Project Controls Manager. I have taken the broad skills that being a Chartered QS/Chartered Project Manager have given me and applied them to the cost and schedule management of oil and gas projects. In that role I have seen the resurgence in interest in the BOQ procurement process. Why is this?

All owners and contractors have been searching for an equitable sharing of risk — and certainty of price. The Bill of Quantity approach can provide this. The client takes risk on scope and the contractor risk is on productivity: each is best positioned to manage those risks. In addition, the use of the two-stage bidding process provides the opportunity to shorten the overall project schedule or work-around schedule constraints.

Today’s bills are produced using in-house or bespoke software to provide the platform. My own company is partnered with Causeway, a leading provider of cost management software called CATO (Computer Aided Take Off). Via a network of super-users the tool has been modified to be fit for purpose. The basic mechanics of CATO are intuitive to the QS — I describe it as electronic “cut and- shuffle.” However, the software is a platform and has the capability to import data from 2D and 3D CAD. Its features enable the tagging of measured items on the design drawing to track the basis for bills and determine any subsequent changes.

The QS is able to facilitate bidding by exporting information to one of the most basic tools of commerce, Microsoft Excel. Contractors from any region of the globe, with little knowledge of Quantity Surveying techniques, can participate in the bidding process, pricing the spreadsheets via e-rooms. Bid analysis is rapid, allowing time for added value activities: further sensitivity analysis, what-if scenarios, validating estimates assumptions and more. The whole procurement process is more robust and compliant with growing finance regulatory requirements and the desire for greater process transparency.

The systems have the flexibility to adapt to various SMM, such as SMMIEC or NRM (New rules of measurement).

All the data available in the bill production process will facilitate new areas of QS expertise in knowledge management, limited by only the imagination of the professions. We are seeing the emergence of Building Information Management, improved enablers for Whole Life Cycle approach to property management, and e-procurement.

That Project Engineer at the charity event was right, in a way. The measurement role of the Quantity Surveyor, as it was, has disappeared. But it certainly has been replaced by a technology solution that allows us to spend more time adding value — and less time on the burdensome mechanics of the bill production process.

And that is not a bad thing. •