Quantity Surveyors vs Cost Estimators in Your Construction Project | Ep.07 Property Blueprint Podcast

Welcome Property Blueprinters, to the latest installment of The Property Blueprint Newsletter.

This week, we have an engaging episode on the Property Blueprint Podcast.

We have the privilege of hosting Quoc Duong , Managing Director of Duo Tax Consultancy, renowned for their laser focus on ensuring construction projects accurately costed, financially sustainable and efficiently managed within budget.

Watch and listen to this week's fascinating episode.

Unveiling the Impact of Cost Consultants in Streamlining Your Construction Project

From his collaborative journey alongside his brother Tuan Duong (Managing Director, Duo Tax ) to unraveling the intricate differences between Quantity Surveyors and Cost Estimators, Quoc Duong offers invaluable insights that shines a spotlight on the often underestimated yet indispensable dimensions of the construction industry.

In this edition, we encapsulate the key takeaways from Episode 7 of the Podcast, underscoring the profound role of Quantity Surveyors in steering judicious decisions and finely tuned cost efficiency for construction undertakings.

Decoding the Distinction: Quantity Surveyor vs. Cost Estimator

Quoc Duong demystifies the fundamental differences between Quantity Surveyors and Cost Estimators. While both functions orbit around cost estimations in the construction industry, Quantity Surveyors are engaged as independent consultants (by either the ATO, banks, insurance companies, or local councils etc) and cover a wider spectrum encompassing project administration, risk appraisal, and contractual commitments. Conversely, cost estimators focus on generating pre-tender estimates for builders Cost of Works. This distinction is pivotal in comprehending the multifaceted value that cost consultants infuse into construction projects.

Harmonising Forces: Insurance Companies and Quantity Surveyors

Quoc highlights the symbiotic relationship between insurance companies and Quantity Surveyors, illustrating how insurance acts as a bulwark against potential contingencies for both clients and consultants alike.

Having adequate coverage is critical and Quoc highlights the importance of updating your home value for insurance purposes every 3 to 5 years. Tune-in from 11:33 in the episode to hear a story that emphasises this point.

Banking on Assurance: Quantity Surveyors' Trusted Role

From 18:52 Quoc reveals how and why banks rely on the expertise of Quantity Surveyors (QS) for their construction ventures. Quantity Surveyors furnish financial institutions with impartial and adept evaluations of project expenses, guaranteeing the viability and prudence of proposed budgets. The rationale? Safeguarding investments and averting overallocation or underallocation of resources. By enlisting the expertise of QS cost consultants, banks can confidently fund construction projects, substantially curtailing the prospect of risks stemming from flawed cost approximations.

Empowering Architects of Dreams: Cost Insights for Builders and Property Owners

Quoc explains how builders and property owners can harness the acumen of Quantity Surveyors to prepare pre-tender estimates and cost plans. He cautioned though that this has to be done at arms length and the QS cannot represent both the bank and the owner for the same project (watch from 21:40)

Property Blueprint Brain Buster

In a new segment on the podcast, we address difficult or tricky scenarios and get our expert to comment on their recommendation.

This week, we discuss the issue of dipsutes that often erupt around progress claims. Firstly, many builders front-load projects with large up-front progress payment amounts and subsequent progress claims come with very opaque or ambiguous descriptions of the exact nature of scope of works completed - which in turn can be misinterpreted by the client, or used to withold the entire payment until the misunderstanding or scope of works are cleared up.

Quoc shares an interesting example that's worth listening to and goes on further to recommend a clever strategy to manage risk and ensure fair and equitable outcome for all parties, particularly on larger more complex developments.

When you enlist the help of an independent Quantity Surveyor they can, on a monthly basis, provide a detailed report of what's actually been completed and determine what payments can be released to the builder - based on actual works completed, right down to the nitty-gritty details. Quoc shares his recommendation around adopting a monthly drawdown strategy rather than the standard stage-based drawdown. Tune-in from 25:05 to learn more.

Navigating the Differences: Quantity Surveyors vs. Cost Estimators in Construction Management

Quantity Surveyor:

• Scope of Expertise - Quantity Surveyors have a broader scope of expertise that encompasses various aspects of construction project management beyond cost estimation.
• Project Management - Quantity Surveyors are involved in project management, risk assessment, and contractual obligations.
• Cost and Beyond - They handle cost assessment as well as quantity measurement, procurement, contract administration, and dispute resolution.
• Risk Assessment - They assess and manage potential risks and uncertainties throughout the project lifecycle.
• Contractual Obligations - Quantity Surveyors deal with contract negotiation, drafting, and administration.
• Dispute Resolution - They play a role in resolving disputes that may arise during construction, offering expert opinions.
• Cost Forecasting - They provide cost forecasts and budget predictions while considering various project elements.
• Financial Viability - Quantity Surveyors analyze the financial viability of construction projects and provide recommendations.
• Scope of Contribution - They contribute to project planning, feasibility studies, and value engineering.

Cost Estimators:

• Focused on Costs - Cost Estimators primarily focus on calculating and estimating the costs associated with a construction project.
• Material and Labor - They concentrate on determining the costs of materials, labor, equipment, and other construction-related expenses.
• Specialised Area - Cost Estimators are specialized in providing accurate cost estimates for construction projects.
• Limited to Cost - Their scope is limited to estimating project costs and may not be involved in other project management aspects.
• No Contractual Involvement - Cost Estimators are not typically involved in contractual negotiations or administration.
• Risk Awareness - While they consider cost-related risks, they may not be extensively engaged in broader risk management.
• Budgetary Focus - Cost Estimators help establish budgets and ensure that projects align with financial constraints.
• Data-Driven - They rely on data and historical cost information to arrive at accurate estimations.
• Pre-Construction Phase - Cost Estimators are often active in the pre-construction phase, assisting with initial project planning.

In summary, while both Quantity Surveyors and Cost Estimators deal with cost-related aspects of construction projects, Quantity Surveyors are primarily seen as independent consultants with a broader role encompassing various project management elements beyond cost estimation, such as risk management, contract administration, and dispute resolution. Cost Estimators, on the other hand, generally focus on accurately estimating project costs and are mainly focused on the financial aspect of construction projects.

Duo Tax Consultancy:

Cost Consultant related:

About the Property Blueprint

In addition to this LinkedIn Newsletter, The Property Blueprint is a podcast proudly brought to you by the team at?Duo Tax?- Australia's Most Highly Rated Quantity Surveyors and Tax Depreciation Specialists.

Property Blueprint is aimed at educating and empowering all property investors, whether they are just starting out on their property journey, or a seasoned investor with multiple properties in their portfolio. You can learn more about The Property Blueprint here, where we explain the purpose and mission of the podcast.

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