An insight into quantity surveying and commercial management at project level
Andy Inchmore, Managing Surveyor, GVE Commercial Solutions
A QUESTION often asked by those not in the construction industry is, ‘what does a civil engineering quantity surveyor (QS) and commercial manager in construction actually do?’
It is not a quick or easy question to answer as these roles are themselves different and can vary depending on which organisation you work for, your focus areas and the stages of the construction process you are involved in. Both roles can also be undertaken individually or as part of a wider team, either operating as part of a client, contractor or specialist subcontractor team or as an external consultant. So, the correct answer is ‘it depends.
A quantity surveyor and a commercial manager both play crucial roles in construction projects and these are some comparisons:
Primary focus
- Cost management and financial control of construction projects.
Key responsibilities
- Cost estimation: Preparing detailed cost estimates and budgets for projects.
- Cost planning: Monitoring and managing costs throughout the project lifecycle to ensure the project stays within budget.
- Contract administration: Managing contracts between clients, contractors, specialist subcontractors and suppliers, including the preparation, negotiation, and implementation of contracts.
- Valuation of work: Assessing and implementing the value of work completed and preparing interim and final payment certificates.
- Tendering: Preparing tender documents, evaluating bids, and making recommendations for contract awards.
- Change management: Managing changes to the project scope, including assessing cost implications and evaluating the price of change.
- Risk management: Identifying and assisting with the mitigation of costrelated risks.
Skills required
A QS is often project based and focuses primarily on cost management, contract administration and ensuring financial control throughout the lifecycle of a construction project.
- Strong analytical and numerical skills.
- Knowledge of construction methods and materials.
- Understanding of construction law and contracts.
- Proficiency in cost estimation and financial management software.
- Collaboration and negotiation skills.
Qualifications
- Typically, a degree in quantity surveying, construction management, or a related field.
- Professional qualifications with industry bodies such as the CICES, RICS or CIOB.
Primary focus
- Overall commercial strategy and financial performance of construction projects.
Key responsibilities:
- Financial management: Overseeing the financial aspects of projects, including budgeting, forecasting, and financial reporting.
- Contract negotiation: Leading negotiations for contracts and agreements to ensure sensible and favourable terms and conditions.
- Procurement: Managing the procurement process, including selection, contract awards, and procurement strategy.
- Business development: Identifying and pursuing new business opportunities, managing relationships and developing commercial strategies.
- Risk management: Identifying, assessing, and managing commercial risks associated with projects.
- Team management: Leading and managing commercial teams, including QS, estimator and procurement professional teams.
- Performance monitoring: Tracking project performance against financial and commercial targets and implementing corrective actions if needed.
Skills required
- Strong negotiation and communication skills.
- Strategic thinking and business acumen.
- Financial management and commercial awareness.
- Leadership and team management capabilities.
- In-depth understanding of contracts and legal frameworks.
- Extensive collaboration and negotiation skills.
Qualifications
- Typically, a degree in business management, construction management, quantity surveying, or a related field.
- Professional qualifications from institutions such as CICES, CIArb, RICS, CIOB, or CIPS.
In essence, a QS is often project based and focuses primarily on cost management, contract administration and ensuring financial control throughout the lifecycle of a construction project. In contrast, a commercial manager has a broader role that encompasses overall commercial strategy, financial performance, procurement and risk management, often leading a team of professionals, including QS’. While there is some overlap, particularly in areas like contract management and cost control, the commercial manager’s role is likely to be more strategic and business-oriented.
As a senior consultant QS within the civil engineering team at GVE we provide commercial services across the industry with a focus on supporting contractors and specialist subcontractors. This comes with different challenges to being directly employed by either a contractor or specialist subcontractor as consultants are typically hired by organisations to help solve specific problems, improve processes, or provide specialist knowledge that might not be available in-house.
In contrast, a commercial manager has a broader role that encompasses overall commercial strategy, financial performance, procurement and risk management, often leading a team of professionals, including QS’.The role often requires quick integration into established teams as well as a need to quickly become familiar with an organisations structure, processes and procedures and often the most challenging, the systems they use.
GVE specialise in the NEC form of contact and within the company there are extensive levels of knowledge and experience on how the suite of contracts operate. Bringing this knowledge and support network to a project can be of great value to organisations but entering in to an organisation from an external consultancy can come with specific expectations. Something to consider for those looking to pursue this career avenue.
A QS will progress through various grades or levels in their careers, each reflecting increasing levels of experience, responsibility and expertise. The career progression for a QS involves moving from support roles (trainee/apprentice, junior/ assistant QS) to independent management of projects (senior/ project QS) and then into senior and strategic roles (principal/ managing QS). Each grade reflects increased responsibility, expertise and leadership within the profession.
A QS at a senior level works closely with the commercial manager on construction projects as it is generally at this level where there is an interface between project performance and business requirements.
Progressing from a senior/project QS to a commercial manager typically involves developing a broader skill set and gaining experience in various aspects of project and financial management. Commercial management can follow on from a senior/project QS role either due to an internal promotion or from a strategic career move to an alternative organisation. Depending on the size and structure of the organisation there may be further routes to progress from commercial manager into associate and commercial director roles.
As an external consultant and managing QS for a main contractor on the seventh asset management period (AMP 7) planned by the UK water industry my current project plays a crucial role in shaping the activities and investments of water companies.
AMP 7 is part of a regulatory framework set by Ofwat, the economic regulator for the water sector in England and Wales and runs from 2020 to 2025. It is a pivotal regulatory period for the UK water industry, emphasising customer service, environmental sustainability and resilience. It requires water companies to adopt innovative approaches, meet stringent performance targets, and engage closely with customers to ensure the delivery of highquality and cost-effective water and sewerage services.
As seen in the media, the UK water industry is encountering tough criticisms due to some failings, combined with price increases for the customer. Working within this industry, it is apparent that the negative news stories do not reflect the maximum efforts that are being made to ensure that the required infrastructure improvements are made to deliver better services and outcomes for customers including improved reliability, quality and customer service.
Under this framework agreement, projects of work are batched into tranches of similar scope which invariably vary in size and value. These tranches are then let under individual contracts based on the NEC3 Engineering and Construction Contract, main option C. A team is formed within the contractor’s organisation to deliver these tranches including a number of QS’ and commercial managers who work with and alongside the other professionals required to deliver the works such as project managers, planners, site managers and the like.
As a managing QS, part of the role is to support the QS team where necessary but the focus leans more towards internal project reporting, cost control and risk management as well as administration of the contract.
Complex amendments and incentive mechanisms have been introduced into this specific framework and these need to be understood to ensure the contracts are administered as intended. This requires good contract knowledge and understanding specifically in relation to identifying how the amended contracts differ from the standard NEC3 form. Understanding the agreement that has been entered into is fundamental to the success of any project.
Prior to commencing on site, a scope of works and budget to deliver these works is set and the goal of the project team is to deliver the required scope within the set budget.
The supporting QS’ will undertake key responsibilities throughout the lifecycle of the tranche which will commonly include the procurement and administration of specialist subcontract packages, valuation of works and payment processing. It is common that specialist subcontract packages will be let under an NEC engineering and construction subcontract main option A or B as these are generally simpler when dealing with payment processes.
As a managing QS, part of the role is to support the QS team where necessary but the focus leans more towards internal project reporting, cost control and risk management as well as administration of the contract including applications for payment (AfP), progress reports and cost forecasting.
The AfP procedure under an NEC3 main option C contract can take a comparatively significant amount of time to that of main options A or B due to the volume of cost information that is associated with the definition of ‘defined cost’ under this NEC3 contract form.
The process involves downloading and reviewing all the cost data that has been allocated and cost coded to each specific project and then separating these costs into recognised categories. This data is then used to provide both an interim and cumulative expenditure profile over the project’s lifecycle.
Alongside the AfP, the cost information is used to produce and provide a snapshot report to highlight ‘cost v forecast’ for the period and any update to the final forecast cost. This information is useful to the project team as it can identify any significant changes that may have occurred which may need further review or discussion. Overspends or underspends against forecast cost can also be useful to indicate if the programme of works is progressing as planned.
Upon completion, the cost data is collated and the contract incentive mechanisms will be applied to determine the financial position. Ensuring the cost data is accurate and complete will be pivotal in ensuring the financial position is correct, particularly under the share mechanism of an NEC3 main option C contract.
As highlighted, answering the question ‘what does a civil engineering QS and commercial manager do’ is dependent on many variables and doesn’t have a simple and easy answer.
Andy Inchmore, Managing Surveyor
GVE Commercial Solutions