ICMS: Towards transparency and consistency in a global industry

Alan Muse FRICS

Global Director of Built Environment, RICS

Vice-Chair of ICMS SSC

Agenda

‘We cannot solve our problems with the same level of thinking that created them.’ –Albert Einstein

1. International standards in context

2. International construction costs: the

problem

3. What ICMS aims to do

4. ICMS current status

5. RICS proposals following publication

International standards in context

0

1

2

3

4

5

6

7

2 4 6 8 10 12 14

Largest negative accounting revisions to net profits in US, $BN (Source: The Economist)

More accountable

Year

International standards in context

Standards work and construction needs them.

International standards in professional services are the new frontier.

In Canada, growth in the number of standards

accounted for 17 % of the labour productivity growth rate and

about 9 % of the growth rate in economic output (real GDP) over

the 1981 to 2004 period. If there had been no growth in standardsin this period, real GDP would have been CDN 62 billion lower.(Source: Canadian Government)

In the United Kingdom, standards made an

annual contribution of GBP 2.5 billion to the economy, and

13 % of the growth in labour productivity was attributed to

standards. Standards were identified as enablers of innovation andfacilitators of technological Change.

(Source: UK Government)

International standards in context

Infrastructure project development takes time and risk, and investors will only commit the effort if the conditions are right. We want to encourage

policymakers to build more capacity to improve regulation and

institutions, and public-private partnerships that balance interests through appropriate risk sharing mechanisms.

(Source: World Bank 2015)

International standards in context

Land

(ILMS)

Valuation and Ethics (IVS/IES)

Property (IPMS)

Construction

International construction costs: the problem

International construction costs: the problem

International construction costs: the problem

Although there arecountries with quitecomplete cost relatedstandards andinformation sources,there appear to be manymore countries wherethe quality of publishedguidance and costinformation falls short ofwhat local professionalsmight wish.

(Source: BCIS)

International construction costs: the problem

“the industry as a whole needs to drive transformation through mutual consent on standards”

“the standardized definition of costs, classifications and measurements along the whole life cycle will lead to greater comparability and compatibility among projects”

International construction costs: the problem

Reinventing Construction: A Route to Higher Productivity

McKinsey Global Institute February 2017

One factor in raising productivity is reshaping regulation and raising transparency and the report states:

“encouraging transparency on cost and performance, as the ICMS project does”

The problem is not somewhere else

Delivering Major Projects in government: a briefing for the Committee of Public Accounts January 2016

Concluding comments:

One of the three key challenges for the Authority and departments during this Parliament are to:

“put in place the systems and data which allow proper performance measurement”

What ICMS aims to do

• Global rules in professional services through coalitions

• Cost – ICMS

– Consistent cost comparisons

– High level cost presenting and reporting

– Buildings and civil engineering

• Space - IPMS

– Consistent floor area measurement and classification

– Global deviation of 24%

– Valuation, property management and construction

What ICMS aims to do

• Contents

• Framework

• Cost drivers

What ICMS aims to do

• ICMS draft

– Harmonised

– Simple

– Value and Attribute

descriptors

– BIM ‘friendly’

What ICMS aims to do

• ICMS Values and

Attributes

– Standardized

– Key cost drivers

What ICMS aims to do

How ICMS was developed

• ICMS methodology

– Trustees

– Standard Setting Committee

– Adoption

ICMS current status

Current progress:

– Private consultation ran until mid-October 2016

– 1st Public consultation completed January 2017

– 2nd Public consultation completed May 2017

– Publication July 2017

RICS proposals

NRM and POMI:

• NRM suite to be revised

• POMI withdrawn

Code of Measuring Practice:

• Issued 2015

– RICS Property Measurement

(incorporating International Property

Measurement Standards)

RICS proposals

ICMS

Professional Statement

National guidance

RICS proposals

• Unifying the profession

• International regulation

• 21st century Professional

International Construction Measurement

Standards (ICMS) – Get Involved!

www.icms-coalition.org

Timescales:

• ICMS publication July 2017

• NRM revised 2018

• Global professional statement 2019