Abnormally Low Tender Rates- Case Study 1

One of the prime tasks of a consultant quantity surveyor is to perform tender evaluations in view of preparing tender reports. While I was working as a consultant quantity surveyor, I had ample chances of performing this task. This is where I stumbled on the term "Abnormally Low Tenders (ALT)" for the first time.

In the beginning of my career, I used to benchmark the rates submitted by the respective tenderers against the pretender estimate performed by my own organisation for the respective tender. Whenever a rate submitted by a tenderer deviates by +or - 15% of that of the pretender estimate, we used to query the respective tenderer as a good practice.

In one of those tenders, I observed a significant deviation of the Glassfibre Reinforced Concrete (GRC) screens priced. They were about 40% less than that of the pretender estimate. Firstly, I was quite alarmed, as I had a doubt whether the rate in the pretender estimate was correct. Then I had a sigh of relief as the rate is less, not more which will never contribute to exceed the pretender estimate. This is a common mistake as most quantity surveyors think that if the pretender estimate has not been exceeded, the client will be happy, but in reality if you provide an overestimated pretender estimate, the client will block more money than required for the project wherein the client lose the opportunity to invest those additional money somewhere else. However, in this case, the other tenderers have priced GRC screen rates closer to that of the pretender. Therefore I regained confidence of our pretender estimate.

Then the question came into my mind, how on earth this particular tenderer has priced the GRC screens substantially lower than that of the others. The query answer by the tenderers threw some light into the matter. They have got their own GRC fabrication yard. As most of the GRC screens are very common across construction projects (especially in the Middle East, the patterns are similar) they have got the moulds of the exact GRC screens in place. Therefore there is no requirement for this particular tenderer to include the price of the GRC moulds into their unit rate.

This is what we call as "Economics of Manufacturing Process" where certain tenderers will get an advantage over the others which is  justifiable. There are other similar cases I found within tenders which promotes this notion especially if a tenderer owns his/her own prefabrication yards of various Construction elements such as Post Tension (PT) slabs, Autoclaved Aerated Concrete (AAC) blocks, etc.

I hope to write more case studies on this subject which you will be able to read in near future.

Learning Basic Communication Skills Through Your Favourite Sport

Today we are going to discuss about the basic concepts of communication through sports!!.  Surprised. You read it right. Sports is considered as one of the best ways of communicating.

You may have heard that communication is a two-way process. In simple terms that means no matter how well you send the message if the recipient has not captured the same. Let us take a real-life example from sports. Suppose you are participating in a relay event (say 4 x 100 m) where you are running the third lap and you are supposed to pass the baton to the runner who will be finishing the event. Therefore the two way process is that you pass the baton to your colleague. Without the presence of your colleague, there is no communication.

Now let us look into the concept of sending and receiving information with an end result in mind which is essentially the meaning of communication. You heard it, "sending and receiving information with an end result in mind". The baton is essentially the piece of information that you send to your team mate who needs to receive properly. What is the end result? That is to complete the relay successfully or in more supreme terms, to win the relay.

There should be a chemistry between you and the other runner to pass the baton as quickly as possible if you were to win the event. In order to make this process successful, you should be knowing about the other runner’s physical features such as his/her height, behavioural features such as how far he/she is willing to extend his/ her arm to grab the baton, whether or not he/she is willing to turn to a certain extent to check your actual location behind him/ her. This example paves way to comprehend the concept of understanding your audience. For instance, when you are performing a lecture to an audience, you should be knowing about their educational background, cultural background and their level of maturity. Accordingly, you have to have a tailor-made version of your lecture for successful communication.

Now think about a team sport which you have engaged in. Try to create an example on the basic principles of communication you may have used to achieve success in a team sport.

Who Invented Sustainability?

As we all know, the concept of sustainability is "meeting the needs of the present without compromising the ability of the future generations to meet their own needs". I learned this from Brundtland Report which is considered as one of the greatest pieces of literature written on the subject matter. The report famously known as "Our Common Future" was issued in 1987. Wasn't there sustainability before? Of course it was. Here are some examples which spans across different religions, cultures, etc.

One of the salient notions of sustainability is Reuse. During the regime of Buddha (about 2600 years back) Buddhist monks effectively used the concept of reuse. This was practised basically be reusing the robe worn by the Buddhist monks. When the robe was no longer able to be used, they did not throw away the old robes. They used the same for bed covers/ pillow covers. Once the bed covers/ pillow covers became old, they used them for floor carpets. When the floor carpets bacame old, they used the same as foot towels. Upon deterioration of the foot towels, the monks broke up the old foot towels with a sharp knife, mixed them with clay and plastered them over the walls of their lodgings. With the newest technology at our doorsteps, how many of us have tried this with our old belongings. Have we ever tried preparing pillow covers from old bed sheets. We casually go into the shops to buy new pillow covers. Aren't we?

Muslims do not keep their dead bodies within expensive caskets. We all know that the caskets are buried and will not be of any use after that. This is one of the 3 R concepts of sustainability named Reduce. Have you ever thought that the expensive caskets we use with synthetic materials will be detrimental to the environment owing to less biodegradability? So respect the dead person by not letting him/ her become a burden to the environment.

The Bible states "God commissioned people to steward the earth's resources." It states we are not the originals, but the images, our duty is to use the original (i.e. the nature created by god) as our pattern, not ourselves. This teaches us a good lesson on living in harmony with the environment. That is Environmental Sustainability.

Most of the Hindus being vegetarians automatically promote sustainability as meat production is detrimental to the environment due to Green House Gas Emissions.

Likewise, there are ample examples which can be cited from various religions and diverse cultures who has been adhering to sustainable practices thousands of years ago.

Now coming back to the question of who invented Sustainability ? Prior answering this question, let me ask you a question. Who invented America? Most may say Christopher Columbus. You are wrong. With all due respect to the great navigator, Columbus was lost in the sea and saw a land where there were native Americans. It was the native Americans who discovered Columbus. America was already there, nobody needed to invent America. In the similar fashion, Sustainability was always there since the beginning of this universe. Nobody invented Sustainability. It is poor us, the so called modern humans who are searching for the land called "Sustainability" as we are lost within the basic concepts in living in harmony with the nature.

Extended Cost Value Reconciliation

When we talk about Cost Value Reconciliation (CVR) two things come into our minds. If the cost of a particular BQ item exceeds the rate stipulated within the Contract, either it could have been a productivity issue at site or the estimator has used incorrect norms in arriving at the rate. The best way to identify the actual case is to perform a work study. Suppose you are a contractor performing a bulk excavation for a basement of a building. Upon completion of a CVR, you may find that the cost incurred in the production of a unit of excavation is higher than that of the BQ rate. The traditional way of looking at this is to perform a work study and to identify the actual resources expended to excavate a unit volume. After repeated number of work studies, if you still find that the resources spent in the production of one unit is higher than that allocated within the BQ, you may be opted to think that the estimator's norms are impractical. If your judgement is justifiable by observing the production rate under similar conditions (may be from another site running in parallel) it is your duty to alarm your estimation department to avoid future losses. So that the estimator can correct the norms in future tenders. On the other hand, if you find that the production rate at your site is lower than that of the aforesaid similar sites, it is the time to alarm the project manager on the productivity concern. He/ She may have to consult the higher management on either changing the labour or provide them more training on the job to elevate productivity.

Now let us think out of the box. Whenever there is a bulk excavation, the excavation rate is high  at the initial stage of the project owing to the facts such as ease of access to excavation, ease of loading, ease of carting away the material, no threat of demobilization of equipment which is common in completion stage of any work element and no fine tuning is required to achieve fixed reduced levels. when you go deeper, a degree of complexity is unavoidable due to above reasons. furthermore depending upon the ramp slopes it may not be possible to load the trucks fully in carting the material away  which will definitely affect the productivity. Therefore, your advice to either the estimator or the project manager shall be more detailed despite the fact that the BQ has got a single rate for the whole of the excavation (in CESMM and NRM this is different as there are depth bands identified within the BQ to embed the degree of complexity on executing the works). You may have to perform separate work studies for different depth bands defined based on your experience. Accordingly, you can apportion the excavation quantity into your own depth bands which will generate a more accurate advice to either the estimator or the project manager.

Conclusively, you can perform an extended CVR.

Professional Ethics- Case Study 1

Suppose you are a Consultant’s Quantity Surveyor in a certain Project. You were out of the country in an official duty, wherein your subordinate who has taken over your duties during your absence had signed and sent a letter dictated by you, on your behalf, in your absence. Upon perusal of the letter sent, you realize that the text in the letter is wrong and could lead to a claim for negligence by your Client. What should be your course of action? 

This is a very common occurrence wherein a professional is delegating his/ her duties to another professional to act on his/her behalf in his/ her absence. If your subordinate has dictated the said letter of his/her own without your knowledge, the case is completely different.

In this particular case, you were the one who dictated the letter. For some reason you could not send the letter under your signature and you have not informed your subordinate not to send the letter until you arrive. The subordinate may have sent the letter in good faith. Therefore the RICS GPES No. 5 “Take Responsibility” comes into play which states “This means being accountable for all your actions – don’t blame others if things go wrong, and if you suspect something isn’t right be prepared to do something.”

It is human tendency to hide things unless it is being noticed. Based on the same you may have thought of an option of “ignoring the fault hoping no one notices (option 1)”. This action will violate the statement of “…………….if you suspect something isn’t right be prepared to do something.” Therefore you have to drop that option.

You may have thought that your subordinate would have asked you about sending the letter prior sending and decide to “sack your subordinate (option 2)”. This action (or sending a warning letter to your Subordinate as a punishment of lesser degree which is the preferred option in lieu of sacking the subordinate which will depend on the degree and frequency of his/her negligent acts ) would have been possible, had the subordinate did get an express instruction from you not to send the letter. Therefore you have to drop that option.

You may have also thought to “send a correct letter to the client (option 3)”. This is a common practice amongst professionals wherein if a mistake occurs in a document you tend to say “please disregard the previous, attached is the correct version”. Though this option seems the right thing to do, the following statement of RICS GPES No. 1 “Act with Integrity” is violated: “Being open and transparent in the way you work. Sharing appropriate and necessary information with your clients and/or others to conduct business and doing so in a way so they can understand that information.” Even though you correct the mistake, you do not share the reason for the correction with the client. Therefore you have to drop that option.

Another option would be to “warn your professional indemnity insurance provider, and send a letter to your client admitting the error and providing the correct advice (option 4)”. There is a degree of uncertainty about the potential claim for negligence by the client since it states that “……… you realize that the text in the letter is wrong and could lead to a claim for negligence by your Client”. Though you are convinced of the fact that the text in the letter is wrong you are unsure about whether or not the claim for negligence by the client is definite. Therefore warning your professional indemnity insurance provider on something which is uncertain seems premature. Therefore though this option is not incorrect from the ethical perspective the decision seems a bit extra cautious.

The best option would be to “contact the client to advise him/her of the error and decide together on the action to be taken (option 5)” wherein you take responsibility, being transparent and giving opportunity to your client to look into a matter which has a degree of uncertainty involving him/her.

Informed Consent V Informed Decision

Imagine you have to remember 100 phone numbers having 8 digits in each phone number. If by any chance you are able to group the phone numbers with same first 4 digits, it is easy to remember the phone numbers in the same group as the first 4 digits will be memorized effortlessly. This is a very powerful tool in memorizing phrases. For instance the meanings of "Informed Consent" and "Informed Decision" can be studied together although they have different meanings as both terms start with the word "informed".

Informed Consent is a term which is associated with the concept of conflict of interest. In simple terms, conflict of interest means you have more than one interest towards a particular aspect. Suppose you are the judge of a debate competition where your son is a member of one of the teams. On one hand your interest is to assess the talents of each member of the respective debate teams. On the other hand your interest is to give preference to your own son. This is a very common scenario in everyday life. Conflict of interest may lead to unfavourable situations for the "victim" as well. For instance suppose one of the interviewees for a potential job is known to you as you have dealt with him/her in a project wherein as per your personal judgement he/she is not a good performer. If you are the interviewer, your personal judgement on the particular person may become detrimental to his/her successful performance in the interview.

As a professional, it is not ethical to hide a conflict of interest. However, there is a mechanism to deal with this situation which is called obtaining the informed consent. In my personal experience, I had to interview one of my own RICS candidates as a key person for a project representing the Contractor. It was compulsory for me to assess this person as the Employer (Fidic terminology for Client) as the position was related to my field of expertise. I therefore informed "all affected parties" namely my reporting manager, Consulting Engineer, Consultant Quantity Surveyor and the Contractor on the subject conflict of interest and obtained "informed consent" to interview the candidate. Therefore in simple terms, Informed Consent is a consent obtained to proceed for a certain process after knowing the repercussions of the same.

In contrast, Informed Decision  is a decision based on facts or information. For instance, suppose you want to choose which education system is better for your child. Prior making this decision, you often research on the different education systems available within the market and make a choice. Sometimes, this may be a decision taken by a professional by consulting another professional who often possesses more expertise on a subject matter. Suppose if you are a consultant quantity surveyor assessing a Claim or a Variation (in NEC terminology both claims and variations have got a common name called "Compensation Event") wherein you need to refer to the Law of the Country which you are unfamiliar with. In this case, you can obtain professional advice from a lawyer which will then become an "Informed Decision". However, please be aware that you cannot hold that particular lawyer responsible if something goes wrong within your report. This is the adherence to one of the ethical standards of RICS called "Take Responsibility".

Do you understand what exactly the "Site" is, as per Fidic Red Book?

The word “Site” has been defined as follows within the four versions of Fidic Red Book:

1977 Version
means the land and other places on, under, in or through which the Permanent Works or Temporary Works designed by the Engineer are to be executed and any other lands and places provided by the Employer for working space or any other purpose as may be specifically designated in the Contract as forming part of the Site.

1987 Version
means the places provided by the Employer where the Works are to be executed and any other places specified in the Contract as forming part of the Site.

1999 Version
means the places where the Permanent Works are to be executed and to which Plant and Materials are to be delivered, and any other places as may be specified in the Contract as forming part of the Site.

2017 Version
means the places where the Permanent Works are to be executed and to which Plant and Materials are to be delivered, and any other places specified in the Contract as forming part of the Site.

The 1977 version has made an unsuccessful attempt to define the horizontal and vertical dimensions of the Site. The prepositions used to relate the boundaries of the site are on, under in and through, wherein the English language has got a wider spectrum of prepositions such as across, around, over and past which were missing from this definition. For instance, one would argue that if it is a tunneling project, usage of the preposition “through the tunnel” would be appropriate but it may not be the case for a bridge project wherein the more appropriate term would be “across the bridge”. The 1987 version refrained from using any prepositions to define such boundaries of the Site and simply adopted the term as “places where the Works are to be executed”. This practice has been continued within both the 1999 version and the 2017 version.
Both the 1977 version and the 1987 version include Works which comprises of both the Permanent Works and the Temporary Works to define the boundaries of the word Site. However the 1999 version and 2017 version exclude the Temporary Works and the new definition of Site includes only the Permanent Works.
Throughout all the four versions the Employer has been given the liberty to define “any other places” as part of the Site. This is an important inclusion as there may be places which are essential to be defined as part of the site depending on the nature of the project. For instance, Employer may opt to define a prefabrication yard as part of the Site.

Effective V Efficient Communication

You may have heard about effective communication and efficient communication. For instance if an employee comes late to work regularly, the best way to avoid him/her repeating this act is to send him/her a warning letter.  This is a much faster method than explaining him/ her on the consequences of coming late. The difference between these two methods is "time" wherein efficient communication is a faster way of achieving results. However, you cannot say that efficient communication is the best solution for every situation. Suppose you have a time constraint in teaching a child on how to solve a particular maths question. You may teach him/her a mechanical way of solving the problem, yet there is a risk that the child may not succeed in solving a slightly different question if he/she did not get the logic of solving the problem.  Therefore, the selection of either efficient or effective communication is dependent upon the situation. The best example would be to take the judgement call in direct hitting a wicket or throwing the ball to the wicket keeper in getting a run out in cricket. A direct hit will represent an efficient communication situation wherein there is a risk of achieving the desired result. On the other hand if the batsman is far away from the wicket, sending the ball to the safe hands of the wicket keeper will be less risky in getting the batsman out reflecting features of effective communication.