A quantity surveyor's report lands in your inbox and it looks impressive. Proper letterhead, lots of columns, figures running to tens of thousands of euro. Most people scan it, feel reassured that a professional has looked at things, and sign. That is usually a mistake.
The report is only useful if you understand what the numbers actually mean and, just as importantly, what they do not cover. Here is what to look at before you commit to anything.
Understand the difference between a cost plan and a bill of quantities
These are two different documents and people mix them up constantly. A cost plan is an estimate, prepared early in the process, based on drawings and assumptions. A bill of quantities is a more detailed breakdown prepared once the design is largely fixed, listing materials and labour by trade. If someone hands you a cost plan and calls it a full QS report, ask which one you are actually looking at. The answer changes how much weight you should give the figures.
Provisional sums: the line item that catches people out most often
Look through the report for the words "provisional sum" or "PS" beside a figure. This means the QS has put a placeholder number in because the scope or specification is not yet clear enough to price properly. It is an educated guess, sometimes a fairly rough one.
Common examples include kitchens, bathrooms, landscaping, and ground investigation works. A contractor will price around those provisional sums and then substitute the real cost once work starts or specifications are confirmed. That real cost is almost always higher than the provisional figure.
Before you sign, ask your QS to flag every provisional sum in the report and give you a realistic range for each one. Do not assume the figure in the document is what you will pay.
Contingency: what it is and whether it is enough
Most QS reports include a contingency allowance, usually expressed as a percentage of the build cost. Ten percent is fairly common on a new build, but on a renovation, especially an older property, experienced QS professionals often recommend more like fifteen to twenty percent.
The contingency is not a savings fund. It is money set aside for things that go wrong or turn out to be more complicated than expected. If you are opening up walls in a house built before the 1970s, you are almost certainly going to find something unexpected. If the contingency in your report feels low for the type of project you are doing, say so. Ask the QS to justify the figure or adjust it.
Preliminaries: the costs that do not show up on a builder's quote
Preliminaries cover things like site setup, temporary fencing, skips, scaffolding, insurance, site management and welfare facilities. On a large project these can add ten to fifteen percent to the overall cost. On smaller jobs it might be less, but it will still be something.
Check whether the builder's quote you have received includes these costs or whether they sit separately in the QS report. If they are in both places, you may be counting them twice. If they are in neither, you have a gap in your budget.
VAT and professional fees
Some QS reports quote figures exclusive of VAT. The applicable rate in Ireland depends on the type of work, but reduced rates apply to certain qualifying works on homes. Either way, you need to know whether VAT is included or excluded before you compare any figure to a contractor's quote. The same goes for professional fees, which often appear as a separate line item covering your architect, engineer and the QS themselves.
A figure that looks manageable can jump significantly once you add VAT and fees. Make sure you are looking at the total cost to you, not just the construction cost.
What to ask before you sign
Go through the report with the QS on a call or in person if you can. These are the questions worth having answered in writing:
- Which figures are provisional sums and what are realistic upper limits for each?
- Is contingency included and how was the percentage chosen for this specific project?
- Are preliminaries included in the main figure or separate?
- Are all figures exclusive or inclusive of VAT?
- What assumptions were made that could change the cost if they turn out to be wrong?
The QS is working for you. A good one will welcome these questions. If you get vague answers or feel like you are being rushed past the detail, that is worth paying attention to.
People often spend more energy negotiating a contractor's day rate than they do reading the document that is supposed to tell them what the whole job will cost. The report is the foundation of your budget. It is worth an hour of your time before anything gets signed.