By Patrick Murphy,2014-12-28 14:09
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    ESD, LCC and the Quantity Surveyor

     Cost Engineers Environmentally Sustainable Design


    This paper discusses the role of the Quantity Surveyor in costing Environmentally Sustainable Design (ESD), and the use of Life Cycle Costing (LCC) techniques in evaluating the economic viability of various ESD options.

    The author of this paper was the co-author of the Sustainable Energy Authority‟s QS Energy Reference, and much of this paper is based on the contents of that document.

    The author wishes to acknowledge the assistance of the SEAV in preparation of this paper.

The Role of the QS in Construction

    The QS provides advice on the capital and recurrent costs of construction. The name “Quantity Surveyor” dates back to England a couple of centuries ago. In those days, all the QS did was measure and calculate the quantities of materials required to construct a building. They were, in fact, surveyors of quantities, therefore the title Quantity Surveyor.

    Over time, the QS also developed skills in estimating building costs, and analysing them to enable the costs of buildings to be estimated, or cost planned, during the design process. This has become our core skill, and the service most valued by our clients. Measurement of quantities is still carried out on projects, but this is a secondary task.

    In recent times, our services have extended into the area of recurrent costs as well as capital costs.

    In America, we are called Cost Engineers, which is perhaps a better description of our role.

The Role of the QS in LCC

    Life Cycle Costing, or the analysis of the total cost of a building, or a component of a building over its life, is an integral part of the services we provide.

    This does not just relate to ESD or environmental issues. Sometimes it is used to evaluate different building options from the perspective of future


    ESD, LCC and the Quantity Surveyor

     Cost Engineers Environmentally Sustainable Design

    maintenance costs, or to evaluate two different development options of a complete project.

    For example, the Department of Treasury and Finance require an analysis called an Investment Evaluation on every major project submitted to Treasury for funding. An integral part of this report is the LCC analysis of various development options. For example, it might include an analysis of the difference between building a new building and refurbishing an existing building. The new building would usually have a higher capital cost and lower recurrent costs, and an LCC analysis is used to determine which option is the best, usually over 20 years.

The Role of the QS in ESD

    In most cases, the decision whether of not to incorporate ESD options in a building are evaluated primarily on economic grounds.

    Will it cost more, and will the savings justify the additional costs?

It is usually the QS who answers these questions.

    In recognition of this, The Sustainable Energy Authority Victoria (SEAV) has collaborated with the Australian Institute of Quantity Surveyors (AIQS) to produce a QS Energy Reference to assist quantity surveyors assess energy efficiency opportunities within the capital/recurrent/life cycle budgets. Getting quantity surveyors involved in the process of producing low energy buildings, particularly in the area of analysis of capital and recurring costs, is pivotal in the evaluation of energy efficiency options

    This demonstrates how important the QS is in evaluating ESD options. The SEAV believes that it is often a lack of will and knowledge that limits the incorporation of ESD options, rather than economic viability.

Their QS Energy Reference states

    “Environmental sustainability relies on us using what we have differently. It is how we are using Australia‟s natural resources that is clearly not

    sustainable; all we seem to be lacking, in many instances, is the will and know-how.”


    ESD, LCC and the Quantity Surveyor

     Cost Engineers Environmentally Sustainable Design

What is currently happening in the QS industry?

    A survey was distributed to quantity surveying practices in early June 2001. The results of this survey show the following:

; Number of life cycle calculations undertaken A fairly low

    percentage of total projects have undertaken life cycle


; Importance of life cycle calculations Quantity surveying firms

    considered life cycle calculations to be an important service.

; Clients‟ perceptions Quantity surveying firms reported that

    clients generally perceive that life cycle calculations are a low

    priority, and will therefore need encouragement and educating on

    the value of this service.

; Methods of life cycle calculations Most quantity surveying firms

    used the discounted cash flow analysis in preference to the

    simple payback calculation.

; Payback periods Clients‟ commonly expected pay back period

    for energy efficiency design options to be between five and 15

    years. This is shorter than the Department of Treasury and

    Finance Investment Evaluation Guidelines that recommend 20

    years. As most energy efficient options require increase in

    capital costs, offset by a saving in recurrent costs, clients and

    their quantity surveyors should be encouraged to consider longer

    payback periods.

What should be happening in the industry?

    A team-based approach is an essential element of energy efficiency design, and this approach should involve all stakeholders from the very beginning of the project

    For quantity surveyors, this means an understanding of the energy efficiency techniques involved, as well as the capital and recurrent costs that result.

    It is important that the team is fully committed to the concept of ESD. Simply preparing an LCC analysis when asked to will not get ESD off the laboratory benches and into real buildings.