1 RICS The Royal Institution of Chartered Surveyors London Quantity Surveying & Construction Faculty The Built Environment Group Corporate Professional

1

RICSThe Royal Institution of Chartered Surveyors

LondonQuantity Surveying & Construction Faculty

The Built Environment Group

Corporate Professional Local

Faculties & Forums www.rics.org

CityRail 2007Shanghai, People’s Republic of China

11th September 2007

Estimating & Bidding for Rail Infrastructure Projects – a Whole Life Cycle approach

Michael Byng FRICS, AAIQS, ACIArb, MPWIChairman

Quantity Surveying & Construction Faculty

2


London



1. RICS, Built Environment Group - Who are we?

Building Surveyors - 25,000 Members

Building Control Surveyors - 2,500 Members

Project Management Surveyors - 30,000 Members

Quantity Surveyors - 40,000 Members

Some members belong to one or more of these faculties; the total number of members in the BEG is 75,000 (57% of whole membership)

3


London



2. Built Environment Group – What do we do?

Quantity Surveyors - Costing of Construction works- Life Cycle costing- Construction procurement- Construction payment and dispute

resolution

Project Management - Client ManagementSurveyors - Programme Management

- Contract Administration- Project Monitoring

Building Surveyors - Building Pathology- Neighborly Issues- Design and Specification- Property Management

Building Control - Development of Building codesSurveyors - Design Audits

- Construction Inspections and Approvals

4


London



3. Built Environment Group – What the RICS Does?

Regulates the profession

Develops the profession

Develops members

Sets standards

Represents the Members Interests

Promotes member services

5




London

Feasibility studies

Procurement

Commercial management

Dispute resolution

Whole Life Cycle Asset Management

Scope of advice

Project work – CAPEX

Maintenance - OPEX

Quantity Surveyors and the Railway Industry– What do they do?

6



Rail infrastructure projects – issues to be addressed (1)

Time and budget

Optimum time for delivery against optimum capital cost

Capital cost – meeting the business case

Ensuring competitive tenders

Limited supply versus increasing demand

Equitable management of risk

Other competing concurrent schemes

Problems in dealing with an international market

The supplier’s needs

The supply chain’s ability to meet the purchaser’s requirements

7



Rail infrastructure projects – issues to be addressed (2)

Minimise disruption to existing operations

Speed of construction

Availability of a skilled workforce

Innovative working methods

Use of High Output Plant

The effect of design decisions on operating costs

Is the maintenance strategy available at tender stage; if so – what is it?

Is the cost of maintenance affordable?

Ease of maintenance during the life of the assets

8



Estimating and bidding should include

Design, construct and delivery of capital projects

Extended maintenance obligations – set against tendered Whole Life Cycle cost targets

The supplier’s obligations to maintain

Supplier to be responsible for maintenance of the assets for an agreed period of operation

The annual cost of maintenance to be agreed at tender stages

Benchmarked against asset performance Key Performance Indicators (KPI’s) with Variation of Price (VOP) adjustments

Adjustable against purchaser’s future decisions to upgrade or improve assets

Rail infrastructure projects – a “Whole Life Cost” procurement strategy

http://www.designajob.co.uk/images/Design/plans.jpg

9



Design decisions should take into account

Labour skills, plant & equipment available to maintain the assets

The impact of construction on sustainable development

Health & Safety requirements to protect the work force

Strategic asset management experience

Proposals for effective “Planned, Preventative Maintenance

The provision of modern maintenance and track renewals plant to minimise disruption to revenue earning operations.

Rail infrastructure projects – a “Whole Life Cost” procurement strategy

The Supplier’s obligations to maintain must include


10



The Business Case/CAPEX and OPEX

Procurement and delivery must be seamless

Design decisions should consider maintenance and operating requirements

Team working – supplier and purchaser’s design team should work together

Choice of supplier should reflect the operating and maintenance costs of his capital proposal

Rail infrastructure projects – procurement solutions (1)


11



Rail infrastructure projects – procurement solutions (2)

The effect of design decisions on operating costs

Supplier should be asked to warrant maintenance costs and

Should have his performance benchmarked against Key Performance Indicators (KPI’s)

Maintenance and operation Ease of maintenance during the life of the assets

12



Measurement management software from inception to completion

Creating the business case – approximate estimating on a “Whole Life Cycle Cost” basis

Procurement and evaluation of tenders – reconciling suppliers’ offers for CAPX and OPEX with business case

Commercial management – of design, construction and maintenance

Project monitoring of supplier performance – monitored against agreed benchmarks (KPI’s)

Rail infrastructure projects – “Whole Life Cycle Cost” approach – the Quantity

Surveyor’s involvement

For details of the tools used by Quantity Surveyors and the range of services offered, see the next two slides

13



Rail infrastructure projects – tools used by the Quantity Surveyor to deliver these services

Involvement from inception to completion

Measurement management systems – linked to computer aided design (CAD)

Measurement linked to industry standard programming & planning software – linked to Primavera © or other industry standards

Project management of resources – labour and plant managed by reference to the programme approved in the business case

Asset management software related to the maintenance activities – activities monitored against PPM targets; for Health and Safety records and against “Whole Life Cycle Cost Plan”

This is a selection of software – there are other industry standards

14



Project monitoring at each stage of the process – 5 levels:

Estimates

Cost plans

Composite Quantities for tendering

Full Bills of Quantities for detailed negotiations of individual work sections

Whole Life Cycle Cost planning

These techniques are applied by both purchaser and supplier

Rail infrastructure projects – “Whole Life Cycle Cost” approach – the Quantity Surveyor’s

involvement – in diagrammatic form

Estimating

Cost Planning

Full Quantities

Whole Life Costing

Composite Quantities

Co-ordinated projects controls through an integrated process

15



Summary

The purpose of the process is to create for purchasers and suppliers alike:-

“The Bankable Proposition”.

For further information please contact Michael Byng at [email protected]

Estimating & Bidding for Rail Infrastructure Projects

– a Whole Life Cycle approach

Documents

1 RICS The Royal Institution of Chartered Surveyors London Quantity Surveying & Construction Faculty The Built Environment Group Corporate Professional