Forecasting construction costs for developments not yet procured will be even more of a challenge than usual given the current question mark around what impact the European market will have on suppliers and the perception of risk. This uncertainty makes the need to control cost and maximise value-add opportunities as the project unfolds more crucial than ever.
It is interesting to note that, with this in mind, there is a growing trend for real estate developers to recruit in-house commercial managers or quantity surveyors where they may previously have only relied on external cost consultants.
The purpose of these expanding in-house cost management functions within real estate development vary from business to business. Some of these commercial focused roles are to work closely with the external consultant, acting as a point of liaison and communication more than anything, streamlining the information provided by the consultant and reporting back. Others have more of a monitoring focus, providing developers with an alternative and comparative benchmark of approach in order to manage budgets more accurately.
Regardless of whether the developer has an in-house commercial manager or not, there will always be a place for a cost consultant; indeed the role of a QS has never been more important than now. With the principle of cost management under the microscope as it is, different procurement methods emerging and evolving as they are and the growing use of technology and modern construction methods becoming more prevalent, the need for an expert to pull all these threads together from a cost perspective is essential.
The changes in procurement methods throughout the history of cost management such as the introduction of design & build contracts have already intensified the need for cost consultants during the tender stages as well as increase the level of post-contract disputes as a result, something that is likely to incline further as the pending post-brexit economy looms.
At whatever stage a QS is engaged, working in partnership with a cost consulting team should ensure the developer is never unnecessarily exposed to financial risk. Whether the QS is saving money in variations or making sure it is not spent in the first place, working with the design team to ensure the most cost effective design is selected, partnering with the client to choose the most appropriate procurement method by which to select a contractor, advising the best contract for the client's protection as well as negotiating a cost plan with the contractor thereafter, are all invaluable means by which to ensure financial risk is mitigated and disputes avoided.
Interestingly, when it comes to dispute resolution, there is also a notable shift within the claims consulting market that reflects a wider picture as larger consultancies steer their dispute resolution teams towards dispute avoidance, promoting a prevention approach to try and help clients identify potential pitfalls before they arise.
Ultimately, whilst the demand for quantity surveyors will no doubt increase as the market tightens and disputes become inevitable, the true value of a quantity surveyor lies in their appointment from the outset where financial control across the project lifecycle can be maintained. Engaging a consultant from project inception also ensures consistency across each stage of the build and enables the developer to build trust with the consultant early on in the process so that when it comes to the crunch, there are no nasty surprises at final account stages. For any forward thinking developer, surely a priceless notion in itself.
Heron Partnership are specialists in cost and project management recruitment. For more thoughts and industry insight from Heron Partnership on the quantity surveying profession, you might also be interested in some of our previous blogs below: