Insights
Commercial writing for people carrying the risk
Six subjects, written for developers, funders and investors rather than for other surveyors. No case studies dressed up as marketing and no numbers we cannot stand behind.
Categories
Where the commercial questions sit.
01Cost planning and estimating
Budgets, elemental cost plans, contingency and the figures a board or a lender will test.
Read the category
02Measurement and BIM take-off
NRM2, bills of quantities, model based take-off and the audit trail behind a defensible number.
Read the category
03Procurement and contracts
Routes, tender lists, JCT and NEC, bid analysis and where liability actually lands.
Read the category
04Cost control and variations
Valuations, change control, outturn forecasting and the records that settle an argument.
Read the category
05Development finance and monitoring
Initial appraisal, drawdown certification, cost to complete and reporting written for a credit team.
Read the category
06Final accounts and disputes
Assembling an account, testing entitlement, negotiation and the route into adjudication.
Read the category
07Development management
Appraisals, funding, procurement and the monthly numbers on schemes run end to end.
Read the categoryLatest
Most recent.
What you are signing when you certify
The application is what the contractor believes they are owed. The certificate is what an independent assessment says is due. Where those two are...
Change control on design and build
Before tender a change is priced by several parties who want the work. After signature it is priced by one who already has it. Nothing else about the...
What practical completion actually triggers
Practical completion is not a milestone in a programme. It is a switch that changes several financial positions at once, and it is usually certified...
Who can issue an instruction
A conversation on site is not an instruction. It becomes one when somebody with authority confirms it in writing, and it becomes a claim when nobody does.
Reading contractor’s proposals against your requirements
Two documents describe the building. One is what you asked for, the other is what you are being offered. Nobody is obliged to point out where they differ.
Novation, and what the client gives up
Your architect wrote the specification. After novation the same architect works for the contractor building it. That is normal, and it is worth...
What an employer’s agent is actually for
On design and build there is no architect administering the contract. Somebody has to hold the employer’s side of it, and the contract assumes...
Employer’s requirements that can be enforced
A requirement that states an outcome and a test is enforceable. A requirement that states an aspiration is an invitation to price the cheapest thing...
What a cost plan must state on its face
Two cost plans can carry the same total and mean entirely different things. The difference is in what each one says it has left out.
When to appoint a quantity surveyor
By the time there are drawings worth measuring, the structural solution, the specification and the procurement route have all been chosen. Each moved...
Why a cost per square metre fails at tender
The rate that made the appraisal work is almost never the rate the scheme gets built at. Here is where the gap comes from, and how to close it before...
Benchmarking without copying the last scheme
Every early cost figure starts from something that was built before. The question is whether the differences were adjusted for, or whether the rate was...
Every article
All insights, by subject.
One hundred and eight articles across seven subjects. Nothing here is gated and nothing is a case study dressed up as marketing.
Development management
16 articles. Open the category
How much should you pay for a development site
The asking price is an opinion. The residual land value is the only figure that tells you what the site is worth to you.
Seven site risks to check before you exchange
Every one of these is cheaper to investigate before exchange than to discover after it.
Five costs first-time developers leave out of an appraisal
None of these five are hidden. They are simply not in the spreadsheet when the offer goes in.
Why a build cost per square foot misleads investors
An average rate describes a population of buildings. It does not describe the one you are about to build.
Office to residential: when prior approval is the route
Prior approval is narrower than a planning permission and it is not automatic. Both of those facts cost money when they are discovered late.
Why the brief and budget come before the architect
A design produced without a budget is not a design. It is a proposal waiting to be cut.
What a development lender checks before releasing funds
A facility is not a pot of money you draw on request. Every release is a check, and the checks are predictable.
Bridging or development finance: which one and when
They are not two prices for the same thing. They are built for different parts of a scheme, and the exit is what separates them.
The lowest tender and the highest final account
A bid is not a price until you know what is in it. The cheapest number on the page is usually the one with the most missing.
Which JCT contract suits a small development?
The form you sign decides who carries the design, how change is valued and what happens when the programme slips.
Monthly valuations explained for property investors
Each month someone decides what the building is worth so far. That decision is the one that pays your contractor.
Taking over a development that is running over budget
The first job is not to cut cost. It is to find out what the position actually is, because the reported one is rarely right.
What a monthly investor report should tell you
A good report answers one question in the first paragraph: is this scheme still going to do what it was bought to do.
Forecast final cost: the number investors should watch
Spend tells you what has happened. The forecast final cost tells you how the scheme ends.
How a development joint venture is structured
Most joint ventures fail on the things nobody discussed: who decides, who funds an overrun, and what happens if one side wants out.
What a JV shareholders’ agreement should cover
Every clause in it exists because somebody once needed it and did not have it.
Cost planning and estimating
16 articles. Open the category
What a basement adds to a London build
A basement is the most expensive square metre on a London house, and most of the cost is not the digging.
Refurbishment in a conservation area
A conservation area does not stop you refurbishing. It removes the cheap way of doing most of it.
How to read a builder’s quote
Most homeowners compare quotes on the total at the bottom. That number is the least informative part of the document, because two builders can...
What a cost plan must state on its face
Two cost plans can carry the same total and mean entirely different things. The difference is in what each one says it has left out.
When to appoint a quantity surveyor
By the time there are drawings worth measuring, the structural solution, the specification and the procurement route have all been chosen. Each moved...
Why a cost per square metre fails at tender
The rate that made the appraisal work is almost never the rate the scheme gets built at. Here is where the gap comes from, and how to close it before...
Benchmarking without copying the last scheme
Every early cost figure starts from something that was built before. The question is whether the differences were adjusted for, or whether the rate was...
Why refurbishment resists a rate
On new build, the thing you are pricing does not exist yet and is fully described. On refurbishment it exists and is not described at all.
Value engineering, and how it turns into cutting
The phrase describes two entirely different activities. One is design work that improves the scheme. The other is a list of things to take out because...
Professional fees and the costs outside the contract
A construction cost plan describes the building. An appraisal has to describe the development, and the difference between them is large.
Cost planning through RIBA stages 0 to 4
The same document reissued five times with better numbers is not cost planning. Each stage asks a different question.
External works, the line that breaks residential budgets
The building gets four cost plans and three design reviews. The land around it gets a lump sum and a hope.
Inflation allowances to the midpoint of construction
Inflation in a cost plan is not a percentage. It is a percentage attached to two dates, and the dates are the part that moves.
Pricing site abnormals before you buy the land
The building is the predictable part. What sits under it, around it and on the boundary is where land deals go wrong.
How to set a construction contingency that survives
Most contingencies are a percentage somebody inherited. That figure cannot be defended, cannot be released and tells a board nothing about what it is...
What an order of cost estimate should contain
It is the first figure a scheme produces and the one everything afterwards is measured against. Getting its contents right matters more than getting...
Measurement and BIM take-off
14 articles. Open the category
Measuring a conversion before you price it
On a conversion the drawing you are given usually describes the building someone hopes to end up with, not the one that is standing there.
Who owns the quantities on your project
Measurement looks like a technical exercise, so it gets treated as one. In fact the question of whose quantities govern decides who carries the risk...
Measuring an existing building before you price it
You can measure a new building from drawings because the drawings are the building. An existing building has to be measured from itself, and the...
Schedule of works or bill of quantities
Both documents get a contractor to a price. What separates them is what happens afterwards, when something has to be valued.
The pricing document you will need later
The pricing document stops being a tender document the day the contract is signed. From then on it is the instrument every change is valued against.
What a surveyor needs from the design team
A cost plan is a measurement of a design. Where the design is not there, the surveyor either asks, assumes, or produces a figure that means nothing....
Remeasurement contracts and where they bite
A remeasurable contract gives you competitive rates and no fixed price. That is sometimes exactly right and frequently misunderstood.
What a bill of quantities is actually for
Bills of quantities are described as old fashioned by people who have never had to value a variation without one.
Measuring from an incomplete drawing set
Every measurement from an unfinished design contains assumptions. The only question is whether the reader can see them.
Checking a contractor's quantities at tender
On design and build the contractor measures their own work. That does not mean the client has nothing to check.
Builder's work in connection, the forgotten measure
It appears on no drawing, sits in no model, and has to be done on every project. That combination makes it the most reliable omission in construction cost.
Provisional sums, defined and undefined
Two provisional sums of identical value can have entirely different consequences, and the difference is a single word in the bill.
BIM quantity take-off, what the model does not contain
Model based measurement is faster and more consistent than manual take-off. It is also confidently wrong in ways that manual measurement rarely is.
NRM2 explained for developers
Most developers never read a measurement standard and have no reason to. Understanding what it does is another matter, because it decides what your...
Procurement and contracts
19 articles. Open the category
Party wall awards and what they add
The party wall process is not a formality to be cleared before the build. It is a cost line and a programme line, and it belongs to the neighbour.
Checking quantities before you price
A tender is won on a number and lost in the measure. The quantities behind the price decide whether the margin you tendered is the margin you keep.
What to agree before the builder starts
A house project usually begins with a handshake and a quote. That is enough while everything goes well, and it decides very little once it does not.
Who can issue an instruction
A conversation on site is not an instruction. It becomes one when somebody with authority confirms it in writing, and it becomes a claim when nobody does.
Reading contractor’s proposals against your requirements
Two documents describe the building. One is what you asked for, the other is what you are being offered. Nobody is obliged to point out where they differ.
Novation, and what the client gives up
Your architect wrote the specification. After novation the same architect works for the contractor building it. That is normal, and it is worth...
What an employer’s agent is actually for
On design and build there is no architect administering the contract. Somebody has to hold the employer’s side of it, and the contract assumes...
Employer’s requirements that can be enforced
A requirement that states an outcome and a test is enforceable. A requirement that states an aspiration is an invitation to price the cheapest thing...
Collateral warranties and who actually needs them
A building contract binds two parties. Everybody else with an interest in the building, including funders, buyers and tenants, has no contractual route...
Choosing a contractor on more than the price
Every developer knows the cheapest tender is not always the cheapest job. Far fewer have a method for working out which one it is.
Payment terms and what they do to cash flow
Payment terms look administrative until a facility drawdown cycle and a payment cycle fall out of step, at which point they are everything.
Reading contract amendments as a commercial risk
Nobody signs a standard form any more. The deal is in the amendments, and they arrive as an appendix nobody prices.
Retention, bonds and parent company guarantees
Three different instruments protect against three different things. Clients frequently hold one and believe they are covered for all of them.
Qualifications and exclusions, pricing the gaps
A qualification is a bidder telling you what they have not priced. It is the most useful page in the return and the least read.
Liquidated damages, setting a defensible rate
A liquidated damages rate that nobody can explain is a rate that will not be enforced, and the client is left proving actual loss instead.
JCT versus NEC for a residential developer
Both forms work. They fail in different ways, and they fail when a client picks the one their team is not resourced to run.
JCT Design and Build, where the risk really sits
Design and build is chosen for certainty. Whether it delivers any depends almost entirely on a document most clients never read closely.
Normalising bids before you compare them
Four bids for the same scheme are almost never bids for the same scope. Until the differences are stripped out, the totals are not comparable.
Single stage or two stage, choosing honestly
The decision is usually taken by whoever speaks first in the meeting. It deserves better, because it sets how much leverage you will have for the rest...
Cost control and variations
17 articles. Open the category
Site logistics on a tight city site
On a constrained site the preliminaries carry as much commercial risk as the trades, and they are priced with far less care.
An application that is hard to cut
An application for payment is a claim for money, and it is assessed by somebody whose job is to find reasons to pay less. The easiest reason is...
Paying for work actually in place
On a house project the money usually moves faster than the building. Each payment feels reasonable on its own, and the gap only becomes visible if...
What you are signing when you certify
The application is what the contractor believes they are owed. The certificate is what an independent assessment says is due. Where those two are...
Change control on design and build
Before tender a change is priced by several parties who want the work. After signature it is priced by one who already has it. Nothing else about the...
What practical completion actually triggers
Practical completion is not a milestone in a programme. It is a switch that changes several financial positions at once, and it is usually certified...
Early warning, and the cost of finding out late
Every construction problem has a moment when it is cheap and a moment when it is not. The distance between them is usually measured in weeks, and the...
Acceleration, and whether it is worth paying for
Acceleration is one of the few things on a construction project where spending more money can genuinely save money. It is also one of the easiest to...
Extensions of time and the cost that follows
Granting time is not agreeing to pay. The two are decided under different provisions and on different evidence, and they are settled together far too...
Change control that stops a claim forming
Claims are not caused by change. They are caused by change that nobody valued while the facts were still available.
Dayworks, the most disputed line in the account
Dayworks pay for time rather than for output, which reverses every incentive measurement is designed to create.
Payment notices, pay less notices and deadlines
The payment provisions are the only part of a construction contract where being right about the money does not help if you missed a date.
Loss and expense, what has to be proved
Loss and expense is not the same as extension of time and it is not the same as a variation. It is its own mechanism with its own requirements.
Forecasting outturn while you can still act
Committed cost tells you where you have been. Forecast outturn tells you where you are going, and it is the only one of the two you can still change.
The monthly cost report a developer can use
Most cost reports describe what has already happened. A useful one tells you what is about to, while you can still do something about it.
Instructions given verbally and paid for twice
Nobody sets out to instruct work verbally. It happens because somebody needed an answer that afternoon and the alternative was to stop.
Valuing a variation under the contract rules
Most variation arguments are not about money. They are about which valuation rule applies, and the parties are arguing past each other because nobody...
Development finance and monitoring
13 articles. Open the category
Preparing a cost plan for a funding application
The cost plan that persuades your board is not the cost plan that satisfies a funder. One is answering whether the scheme works. The other is answering...
Headroom in a facility and where it goes
Nobody sets out to run a facility to the edge. It happens one small overpayment at a time, and the shortfall only becomes visible when there is no work...
Why lenders want your equity in first
The order in which money goes into a scheme is not an accounting detail. It decides how much of your own capital is at risk before anybody else has any...
When the monitoring surveyor disagrees with your valuation
A reduced drawdown is not an accusation. It is two people measuring the same building and reaching different numbers, and the reasons are usually...
Verifying the final account before the last release
After the last release the lender has advanced everything and holds nothing. Whatever is going to be checked has to be checked before that.
Reading a borrower's cost plan as a lender
You are not checking whether the number is right. You are checking whether it can be tested at all.
Why the monitoring surveyor must be independent
The borrower pays, the lender relies, and everybody works together every month. The only thing holding that arrangement together is structure.
Warning signs in the third drawdown
Facilities do not fail suddenly. They fail slowly and then suddenly, and the slow part is visible from about the third month.
The initial appraisal report, section by section
It is the only report written while the lender still has full negotiating leverage. Everything conditioned at this point is free.
Contingency adequacy from the lender's side
A borrower's contingency is the lender's first line of defence. It is also the line most often set by convention rather than by analysis.
Cost to complete, the only number that matters
A facility does not fail because too much has been spent. It fails because what remains will not finish the job.
Drawdown certification explained
Every month somebody decides how much of a facility can be released. The difference between doing that properly and approving an application is the...
What a development monitoring surveyor does
The role is often described as checking progress. It is closer to answering one question every month: does the remaining money still finish the building.
Final accounts and disputes
13 articles. Open the category
The final account from the contractor side
A final account is not written at the end of a job. It is assembled from whatever record exists when the work stops, which is why accounts settle...
Closing a final account on design and build
On a measured contract the final account is largely arithmetic. On design and build it is an argument about scope, and the documents that decide it...
The records that decide an account you have not had yet
Nobody keeps records for the account they expect to be easy. The records that matter are made months before anybody knows they will be needed.
The order in which a final account settles
A final account with sixty open items is not one negotiation. It is sixty, and the order they are taken in decides how long the whole thing takes.
Contra charges and the right to set off
Withholding money because the contractor has cost you something feels like common sense. Whether it survives depends on what was written down and when.
Settling early versus fighting on
Most disputes settle. The only question is how much is spent before they do, and whether the settlement is better than the one available at the start.
When the records are thin, what can still be proved
Every contested account arrives with worse records than either party remembers. The question is what survives.
Adjudication, what it is and what it costs
Twenty eight days sounds like a long time until you are the party who has to answer a referral you did not know was coming.
Prolongation costs, proving the loss
Prolongation is the most commonly claimed head and one of the most commonly overstated, usually because the wrong period has been used.
Global claims and why they usually fail
A global claim is what happens when the records will not support an itemised one. It is a symptom rather than a strategy.
Defects, retention and the last five per cent
Retention is the client's last practical leverage. It is also the money most often released by inattention rather than by decision.
Testing entitlement before you argue about value
Two parties can spend six months negotiating the value of something one of them was never entitled to claim. It happens constantly.
How a final account is actually assembled
Most final accounts are argued rather than assembled. Building one properly takes longer at the start and settles faster at the end.