Cost Consultants:

Prioritising early
involvement
More by Ranju Warrier

In the construction industry, stakeholders always

want their projects to be successful and to meet both
client expectations and internal goals. However, the
reality on the ground frequently differs from their
expectations. This is usually the case with costs
determined for a project.

Costs are determined by the initial construction budgets

which have historically been vulnerable to the competing
objectives of their key stakeholders, influencing
expectations and behaviours for project lifespans. While a
majority of the projects are executed within the set
budgets, many others exceed the target, which leads to
cost overruns. For companies, that is not good news. Cost
overruns have a negative influence on the company’s
profitability as well as their capacity to complete future
projects.

Enter cost consultants. In order for projects to run as

smoothly as possible, stay on budget, be delivered on
time, and provide forecasted profits, accurate and realistic
cost advice is crucial at the outset.

“Early involvement of a cost consultant helps to ensure

that the aspirations of a client, and therefore their brief to
the wider professional team and design consultants, has
been well considered and is realistic,” says Paul Ralph,
vice president, Program Cost Consultancy at AECOM,
Middle East & Africa.

Historically, costs are determined by the initial construction budgets.

From determining the client’s requirements and
undertaking feasibility studies, assessing and comparing
options, helping to define the project budget, checking
that designs meet legal and quality standards, and
estimating the cost of variations, cost consultants handle
a broad range of duties and responsibilities, which
indicates on the importance of their early involvement.

According to Olga Witchalls, business development

manager at C-Quest, an allied practice of KEO
International Consultants, the most critical decisions
relating to the development of a project are made at the
early stages, when only limited information is available.

She tells Construction Week Middle East: “For maximum

effectiveness, clients should bring cost consultants in
from the beginning of the development process.
Independent professional expertise helps clients to
understand the costs involved and the contractual
implications of decisions before they are made, saving
money, time, and resources.

“Early involvement allows their [cost consultants’]

expertise to be used to the best advantage and enables
them to provide the most appropriate and effective
advice. In fact, if they are engaged early enough, it may be
that advice is all that’s needed to avoid a claims issue
escalating and becoming a costly dispute.”
Olga Witchalls, business development manager, C-Quest, an allied practice of KEO.

For construction projects, whether large or small, complex

or traditional, the earlier and longer the cost consultant is
engaged on the project, the greater the client’s cost and
quality control over its development.

Steven Batchelor, regional director UAE at Compass

Project Consulting explains: “Once the brief is agreed and
the budget is set, the cost consultant can then set design
parameters for the lead design consultant (LDC) to follow
by providing elemental budgets, outline specifications,
and area schedules before the design commences. From
the above, it’s determined by the cost consultant leading
rather than responding in delivery, the project can be set
up in a correct manner to achieve best value for the client.
This is the ideal scenario for project delivery.”
Irvine Mushonga, director of quantity surveying and contracts, Khatib & Alami.

For successful project delivery, involvement of cost

consultants in the very early stages means providing
information to enable owners and contractors to make
critical decisions efficiently.

According to David Griffiths, director and head of cost

management, UAE at Turner & Townsend, ‘low cost’ early
interventions are typically high-level estimates generated
from past benchmark information for similar type, scale,
and composition of assets and can be generated from
feasibility studies.

“Having this advice allows project stakeholders’

expectations to be managed from the outset. This, in
theory, should mean a realistic budget is set which is
communicated to the design team who, with the support
of the cost consultant, designs to the budget and avoid
any future issues when the design and budget do not
align, leading to re-design or clients seeking additional
budget to fulfil their obligations,” Griffiths explains.

The advantages of an early engagement of cost

consultants and quantity surveyors in projects also
includes fostering and promoting better commercial and
contractual administration. They also help to understand
the associated risks, and provide advice on risk mitigation
measures, all of which are crucial for the successful start-
up of a project.

Emerging role of cost consultants

In the past, the role of cost consultants had been

underplayed compared to other teams involved in a
project. According to Irvine Mushonga, director of
quantity surveying and contracts at Khatib & Alami, a
“general lack of understanding” about the role and
capabilities of cost consultants as well as quantity
surveyors led to an underestimation of what these
stakeholders could add to a project. This lack of
understanding further led to their expertise being
overlooked.

“This could often lead to clients trying to save money by

avoiding the hiring of a cost consultant; there was a
perception among some that they had nothing to add to
the project,” Mushonga adds.

Over the past 25 years, the profile and influence of cost

consultants within a professional team has dramatically
changed, making the former reference of their work –
underplayed ¬ “an outdated stereotype”, according to
AECOM’s Ralph.

Kieran Duckworth, director, Omnium International.

Sharing his view, Ralph says: “I think this has historically

been a combination of the unglamorous nature of
traditional quantity surveying and cost consulting services
when compared to the more high-profile design
professionals.

“A cost consultant is often first in the door as the client

considers the type and feasibility of development they
would like to pursue and often last out on the conclusion
of final accounts, claims, and DLP periods.”

C-Quest’s Witchalls reminisces the time when factors

such as economic developments, countless studies, and
technological growth resulted in the evolution of cost
consultants’ role in a project’s lifecycle.

According to her, upon analysing these factors, the results

showed that the development trends in building
economics at the end of the twentieth century
significantly impacted and shifted the role of cost
consultants.

She notes: “Consequently, improved and more prominent

roles of cost consultants have emerged in keeping up with
the requirements to satisfy clients. They have started to
venture into areas like procurement, design, budget cost
planning, whole life costing, value management, risk
analysis as well as facilities management.

“Hence, it is predicted that cost consultants will establish

more roles in the future in proportion to client focus,
development and application of information/
communication technologies, research and its
dissemination, graduate capability, and practice size.”

Helping future-proof projects

In the Middle East, cost consultants have become trusted

advisors to companies that benefit from their advice in
addition to the basic quantity surveying deliverables.
However, an often unanswered question is how cost
consultants contribute to future-proofing projects.

Steven Batchelor, regional director UAE, Compass Project Consulting.

Mushonga explains: “Having qualified, experienced cost

consultants and quantity surveyors help clients to
understand issues, risks, and pitfalls well in advance of
problems occurring. In addition, they can effectively
conduct dispute resolution activities as works progress by
mitigating risks and negotiating with contractors where
known issues are like to occur, thereby avoiding costly
incidents from happening in the first place.” In other
words, the risk management process is “an integral part”
of the work carried out by cost consultants.

A majority of the construction projects are planned to be

commercially viable in the future. It is critical that the
teams associated with a project collaborate with clear
knowledge of what viability means to the project owner
and how that translates into proper design, procurement,
construction, and operation.

“Cost consultants can provide advice on more than the

construction cost of various options proposed by the
design teams. With a good understanding of design and
performance metrics for buildings they can help clients
understand and translate their requirements to brief and
help guide the design teams in the development of the
design solutions,” Ralph notes.

He adds that companies are now also looking for advice

on the sustainability of buildings, bringing in the cost
consultants’ skills around carbon estimating, the IRR of
sustainability measures, and whole life cycle costing of
buildings.

Sharing their experience as cost consultants, Kieran

Duckworth, director at Omnium International notes that
the company’s involvement from the earliest stages
contributes significantly to managing expectations and
reducing unnecessary abortive work and services by all
stakeholders engaged at each stage of a project lifecycle.

He says: “If a client is able to future-proof feasibility study

from inception this then sets the tone for all parties to
work cohesively from ‘design to budget’.”

According to Compass Project Consulting’s Batchelor, a

project can only be future-proofed when the cost
consultant is considered an integral part from inception to
completion and has a more senior role in the delivery
team.

Digitising cost consulting

While the construction industry has been slow in the

adoption of technology-driven methodologies, cost
consulting services have been early adopters of digital
processes. The tech-focused approach has not only
helped in adapting to client needs but also in managing
cost operations in an ongoing project.

AECOM’s Ralph says: “Digital innovation for cost

consultants has accelerated more recently, stimulated by
the pandemic so that we’re now operating in cloud
environments, using collaborative tools as part of our day-
to-day work and providing interactive reporting to our
clients, allowing them to engage with their projects in an
active way.”

The consultancy has been developing more effective tools

and processes where their cost consultants have been
working with design teams to understand how 3D design
could be undertaken to make the extraction,
measurement and estimating processes more
streamlined. According to Ralph, this process helps
reduce the lag time between completion of a design stage
and the time of cost advice being provided.

The digital transformation of the industry has taken

immense steps forward both in mitigating the working
restrictions and bringing forward new ways of working
that may have previously been seen as future adoption
possibilities.

“Traditionally, cost consultants have employed technology

to design and manage the construction process but, now,
asset surveyors are increasingly realising BIM’s potential
to create efficiencies throughout the project life cycle,”
says C-Quest’s Witchalls.

Paul Ralph, vice president, Program Cost Consultancy, AECOM Middle East & Africa.
She adds that digitalisation not only allows the sector to
offer innovative solutions to small and large scale
problems, but also supports stakeholders in creating an
efficient method of working that is capable of creating
and adding value.

Compass Project Consulting utilises CostX software for

cost consultancy service delivery across all projects.
Batchelor explains the benefit of the software saying that
it has helped in productivity improvement of
approximately 25% across projects.

Batchelor adds: “It provides added value to our clients to

achieve change management control in both design and
construction phases. This is achieved by the ability of the
software to overlay design drawings and identity any
variances preventing unapproved design changes and
scope creep in design and quantification of changes in
construction.”

Interesting times for cost consulting

Using the lowest cost as the determining factor during the

procurement process for products and services often
creates more harm than good for a project and for
stakeholders involved, which further causes disputes. As
their role continues to evolve, cost consultants support
stakeholders to create better procurement strategies.

“Projects can become grossly delayed, littered with claims

and in the most extreme cases we have seen contractors
and supply chain defaulting on their contracts,” says
Omnium’s Duckworth.

“In our experience, using the lowest cost as the

determining factor during the procurement process is
simply unsustainable, reducing value for all parties, and is
only a short term fix to what could otherwise be a long
term issue where early savings are all too often offset by
the cost of remedy later in the life of the project.”

David Griffiths, director, head of cost management, UAE, Turner & Townsend

He adds: “There does however seem to be a shift towards

alternative methods of procurement with some clients
recognising the value that a collaboration between
consultant and contractor team can bring to a project.
Early Contractor Engagement under Pre-Construction
Services Agreements, Two-Stage Tendering and Target
Cost Contracts are now being seriously looked at in the
Middle East for a viable procurement.”

Meanwhile, Griffiths notes that the Middle East has been

going through “an interesting phase” when it comes to
procurement strategies. “With the KSA market expanding
at exponential rates, we’re seeing a lot more impetus put
onto the strategy of procuring the right contractor at the
right price at the right time. This means that cost
consultants’ input and advice relating to different
strategies is paramount to help steer projects in the right
direction,” he stresses.

He adds: “As cost consultants, we’re no longer just

focusing on the most cost effective way to procure a
project but also while factoring in other considerations
such as the complexity of the project, status of the
design, stakeholder engagement and approval,
programme, market conditions, and ultimately the clients
key objectives for the project.”

The Middle East has been witnessing an exponential

increase in the number of mega and gigaprojects
including infrastructure developments. According to
Khatib & Alami’s Mushonga this rise in the number of
projects calls for “a level of maturity” that has been driving
a positive shift in the way the industry engages cost
consultants and quantity surveyors.
Tony Owens, technical director, Cundall

He adds: “Clients are demanding more information so

they can make more informed commercial and contractual
decisions about their projects. They are keen to have
more control over project budgets, and this is leading
them to hire qualified professionals who can provide
advice and manage the process to the highest
international standards.” In fact, both developers and
contractors have been engaging with professional
advisors across all disciplines, including cost consultants,
when it comes to the execution of such large-scale
projects.

“Typically with megaprojects, particularly infrastructure

projects is that time and cost overruns can be expected.
While the cost manager is rarely the primary decision-
maker, they have a role to inform the project
stakeholders,” says Tony Owens, technical director at
Cundall, adding that this requires their [cost managers’]
role to be more strategic.

He adds: “They should be advising whether the project is

viable, what the real project benefits and costs are.
Invariably, megaprojects are either a technological
success or a financial failure.”

On a concluding note, Witchalls notes: “As the role of cost

consultant has evolved from post-measurement and
accounting discipline to the role of project strategic
advisor, it is their competency to prevent budget and time
overruns to keep the whole enterprise on the track.”