A Comparative Study of Construction Cost and Commercial Management Services in the UK and China

A Comparative Study of Construction Cost and Commercial Management Services in the UK and China

PERERA, S., ZHOU, L., UDEAJA, C., VICTORIA, M. and CHEN, Q. 2016. A comparative study of construction cost and commercial management services in the UK and China. London: RICS. A comparative study of construction cost and commercial management services in the UK and China. PERERA, S., ZHOU, L., UDEAJA, C., VICTORIA, M. and CHEN, Q. 2016 © 2016 Royal Institution of Chartered Surveyors. This document was downloaded from https://openair.rgu.ac.uk Research May 2016 A Comparative Study of Construction Cost and Commercial Management Services in the UK and China 中英工程造价管理产业比较研究 GLOBAL/APRIL 2016/DML/20603/RESEARCH GLOBAL/APRIL rics.org/research A Comparative Study of Construction Cost and Commercial Management Services in the UK and China 中英工程造价管理产业比较研究 rics.org/research Report for Royal Institution of Chartered Surveyors Report written by: Prof. Srinath Perera PhD MSc IT BSc (Hons) QS MRICS AAIQS Chair in Construction Economics [email protected] kimtag.com/srinath Dr. Lei Zhou Senior Lecturer Dr. Chika Udeaja Senior Lecturer Michele Victoria Researcher Northumbria University northumbria-qs.org Prof. Qijun Chen Director of Human Resource Department, Shandong Jianzhu University RICS Research team Dr. Clare Eriksson FRICS Director of Global Research & Policy [email protected] Amanprit Johal Funded by: Global Research and Policy Manager [email protected] Published by the Royal Institution of Chartered Surveyors (RICS) RICS, Parliament Square, London SW1P 3AD www.rics.org The views expressed by the authors are not necessarily those of RICS nor any body connected with RICS. Neither the authors, nor RICS accept any liability arising from the use of this publication. All rights reserved. No part of this publication may be reproduced or transmitted in any The RICS Research Trust, a registered form or by any means, electronic or mechanical, including photocopy, recording, or any charity established by RICS in 1955 information storage and retrieval system, without permission in writing from the publisher. to support research and education in the field of surveying. Copyright RICS 2016 © RICS Research 2016 3 A Comparative Study of CCCM Framework in the UK and China Contents List of Abbreviations .............................................................................................. 5 Executive Summary ............................................................................................... 7 1.0 Introduction ..................................................................................................20 1.1 Background .........................................................................................20 1.2 Aim & Objectives ................................................................................20 2.0 UK Quantity Surveying System .........................................................21 2.1 Construction Procurement..............................................................21 2.2 Procurement Strategies ..................................................................23 2.3 The Role of the Quantity Surveyor in the UK ................................24 2.4 Tools and Techniques in Cost Management .................................29 2.5 Forms of Contract .............................................................................33 2.6 Due Diligence and Auditing ..............................................................33 3.0 China Engineering Cost System ........................................................34 3.1 History of Engineering Cost System in China ..............................34 3.2 Background and Implementations of Engineering Cost Management System ........................................................................35 3.3 Engineering Cost Management Standards System ...................38 3.4 Pricing Code and Index System ......................................................41 3.5 Cost Engineering Information System ..........................................43 4.0 Research Method .......................................................................................44 4.1 Phase 1 – Literature Review & Model Development...................46 4.2 Phase 2 – Professional Body Review: RICS and CECA ................46 4.3 Phase 3 – Business Comparison .....................................................46 5.0 The Professional Bodies ........................................................................47 5.1 Royal Institution of Chartered Surveyors (RICS)........................47 5.2 China Engineering Cost Association (CECA) ................................54 6.0 Comparative Analysis of Cost & Commercial Management Practice Surveys .........................................................59 6.1 Responding Organisation Profiles .................................................59 6.2 Aspects Reflecting Business Models in use .................................62 6.3 In-Depth Review of Cost Management Services.........................69 6.4 Future Trends ......................................................................................80 7.0 Cost and Commercial Management Practice Case Studies .................................................................................................83 7.1 Practice Case Studies from the UK ................................................84 7.2 Practice Case Studies from China..................................................92 8.0 The UK-China Comparative Cost and Commercial Management Framework ......................................................................99 8.1 Cost and Commercial Management Process for UK...................99 8.2 Cost and Commercial Management Process for China .......... 102 8.3 Comparison of UK and China Cost & Commercial Management Systems ................................................................... 104 4 © RICS Research 2016 A Comparative Study of CCCM Framework in the UK and China rics.org/research 9.0 Conclusions ................................................................................................ 105 9.1 The Need and the Research Approach ........................................ 105 9.2 The Construction Cost and Commercial Management Framework (CCCMF) ...................................................................... 106 9.3 The Relevance and Applicability of the Work ............................ 109 9.4 Final Recommendations................................................................ 109 10.0 References.................................................................................................. 110 11.0 Appendix A – Cost and Commercial Management Process (CCMP) ....................................................................................... 112 12.0 Appendix B – Engineering Cost Process (ECP) ...................... 123 List of Abbreviations ADZ Accelerated Development Zones AACE American Association of Cost Engineers APC Assessment of Professional Competence APM Association for Project Management Assoc RICS Associate RICS BCIS Building Cost Information Service BEF Building Employers Federation BIM Building Information Modelling BoQ Bill of Quantities BOT Build Operate and Transfer CCCM Comparative Cost and Commercial Management CDM Regulations Construction Design and Management Regulations CE Cost Engineer CECA China Cost Engineering Association CESMM Civil Engineering Standard Method of Measurement CIBSE Chartered Institution of Building Services Engineers CIOB Chartered Institute of Building CMP Cost Management Process CPD Continuing Professional Development CQS Contractors’ Quantity Surveyor CVR Cost Value Reconciliation EC Engineering Cost EC Engineering Cost ECP Engineering Cost Process EPSRC Engineering and Physical Science Research Council FIDIC International Federation of Consulting Engineers FIG International Federation of Surveyors FRICS Fellow RICS HR Human Resources ICE Institution of Civil Engineering ICEC International Cost Engineering Council ICT Information and Communication Technology IMI Innovative Manufacturing Initiative © RICS Research 2016 5 A Comparative Study of CCCM Framework in the UK and China IPMS International Property Measurement Standards IT Information Technology JCT Joint contracts Tribunal MoC Ministry of Construction MoHURD Ministry of Housing and Urban-Rural Development MOU Memorandum of Understanding MP Major Project Construction Contract MRICS Member RICS NAO National Audit Office NDRC National Development and Reform Commission NEC New Engineering Contract NRM New Rules of Measurements OGC Office of Government Commerce PAQS Pacific Association of Quantity Surveyors PF2 Private Finance 2 PFI Private Finance Initiative PP Process Protocol PPP Public Private Partnership PQS Professional Quantity Surveyor QS Quantity Surveyor RIBA Royal Institute of British Architects RICS Royal Institution of Chartered Surveyors SBC Standard Building Contract SMM Standard Method of Measurements TL Tendering Law UK United Kingdom VE Value Engineering VFM Value for Money VM Value Management VoIP Voice over Transfer Protocol WLC/LCC Whole Life Costing/ Life Cycle Costing 6 © RICS Research 2016 A Comparative Study of CCCM Framework in the UK and China rics.org/research Executive Summary Introduction The State of Development of Cost and commercial management processes and Cost Management Practice practices in different parts of the world vary significantly. In the UK and the British Commonwealth these practices Cost Management System – The UK are mainly market oriented and matured over several Cost and commercial management of construction centuries.

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