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Technical Report

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THIS IS THE PUBLIC CONSULATION DRAFT - NOVEMBER 2016

Welcome to ICMS: Global Consistency in Presenting Construction Costs ICMS aims to provide global consistency in classifying, defining, analysing and presenting construction costs at a project, regional, state, national or international level. This project is the first of its kind, bringing together numerous organisations from around the world to create shared international standards for presenting construction costs. This first edition of ICMS focuses on capital costs; however, future editions of ICMS may incorporate other matters such as costs in use. Consistent practice in presenting construction costs globally would bring significant benefits to construction cost management. Globalisation of the construction business has increased the need to make meaningful comparative analysis between countries, not least by international organisations such as the World Bank Group, the International Monetary Fund, various regional development banks, non-governmental organisations and the United Nations. The Coalition did not identify any existing standard that was suitable for international adoption. For this reason, the Coalition has come together to create shared standards. At a meeting at the International Monetary Fund in June 2015, Coalition members confirmed they were committed to promoting the implementation of ICMS to encourage world markets to accept and adopt ICMS as the primary standard for presenting construction costs across different nations in a consistent way. An independent Standard Setting Committee (the SSC) was formed. The SSC includes technical experts from 11 countries and a combined expertise covering 47 different markets. The SSC worked virtually and also met three times, once in Brussels and twice in London. A wide range of professional organisations are represented in the Coalition and the SSC. They were generous in providing their national standards, which provided the basis for the early deliberations of the SSC. The SSC produced the complete consultation draft of ICMS within a year, in July 2016. Following the private consultation period in October 2016, two public consultations took place between November 2016 and April 2017. The completed first edition was published in July 2017. The Coalition accepts that standard setting is a continuous and dynamic process; it will be listening closely to the global construction cost management community to ensure necessary updates are captured for continued improvement. In addition to preparing further editions of ICMS for additional categories of civil engineering projects, the SSC will also monitor all guidance notes on ICMS to ensure that they are consistent with the principles and intent of ICMS. All local, regional or worldwide approaches will be documented to allow coordination, expansion and consistency of ICMS guidance whenever required. The Coalition is beginning the important work of implementation by liaising with governments on a national, regional or state and local level to seek adoption of ICMS. Many key stakeholders are being engaged in the process of implementation. A list of ICMS-supporting partners is shown on the ICMS Coalition website (www.icms-coalition.org) – these organisations are committed to the adoption of ICMS. The Coalition, the SSC and the numerous participants in the consultation are proud to present ICMS. For further information on ICMS please visit the website (www.icms-coalition.org). On behalf of the ICMS Coalition Trustees: Ken Creighton – (Royal Institution of Chartered Surveyors) - Chair Martin Darley – (Association for the Advancement of Cost Engineering) - Vice Chair Julie Dela Cruz – (Philippine Institute of Certified Quantity Surveyors) – General Secretary Craig Bye – (Canadian Institute of Quantity Surveyors) - General Secretary

Abstract

The International Construction Measurement Standard Coalition (the Coalition) was formed on 17 June 2015 after meeting at the International Monetary Fund in Washington DC, USA. The Coalition, comprising the organisations listed below at the date of publication, aims to bring about consistency in construction cost reporting standards internationally. This is achieved by the creation and adoption of this ICMS, an agreed international standard for the structuring and presentation of cost reports. ICMS sets out a structure for describing construction costs in terms of project scope, attributes and values descriptors. This document setting out the provisions of ICMS is the first prepared by the Coalition’s Standard Setting Committee (the SSC). The Coalition members at the date of publication are: Africa Association of Quantity Surveyors (AAQS) Association for the Advancement of Cost Engineering International (AACE) Association of Cost Engineers (ACostE) Association of South African Quantity Surveyors (ASAQS) Australian Institute of Quantity Surveyors (AIQS) Brazilian Institute of Cost Engineers (IBEC) Building Surveyors Institute of Japan (BSIJ) Canadian Institute of Quantity Surveyors (CIQS) Chartered Institute of Building (CIOB) Chartered Institution of Civil Engineering Surveyors (ICES) China Electricity Council (CEC) China Engineering Cost Association (CECA) Commonwealth Association of Surveying and Land Economy (CASLE) Conseil Europeen des Economistes de la Construction (CEEC) Consejo General de la Arquitectura Técnica de España (CGATE) Dutch Association of Quantity Surveyors (NVBK) European Federation of Engineering Consultancy Associations (EFCA) Federation Internationale des Geometres (FIG) Ghana Institution of Surveyors (GhIS) Hong Kong Institute of Surveyors (HKIS) Ikatan Quantity Surveyor Indonesia (IQSI) Indian Institute of Quantity Surveyors (IIQS) Institute of Engineering and Technology (IET) Institute of Quantity Surveyors of Kenya (IQSK) Institution of Civil Engineers (ICE) Institution of Surveyors Kenya (ISK) International Cost Engineering Council (ICEC) Italian Association for Total Cost Management (AICE) Korean Institution of Quantity Surveyors (KIQS) New Zealand Institute of Quantity Surveyors (NZIQS) Nigerian Institute of Quantity Surveyors (NIQS) Pacific Association of Quantity Surveyors (PAQS) Philippine Institute of Certified Quantity Surveyors (PICQS) Property Institute of New Zealand (PINZ) Real Estate Institute of Botswana (REIB) Royal Institute of British Architects (RIBA) Royal Institution of Chartered Surveyors (RICS) Royal Institution of Surveyors Malaysia (RISM) Singapore Institute of Building Limited (SIBL) Singapore Institute of Surveyors and Valuers (SISV) Sociedad Mexicana de Ingeniería Económica, Financiera y de Costos Society of Chartered Surveyors Ireland (SCSI) Union Nationale des Economistes de la Construction (UNTEC) Construction organisations have been working internationally for many years. Research has shown, however, that different approaches to presenting the costs of construction can vary by as much as International Construction Measurement Standard (ICMS) Global Consistency in Presenting Construction Costs 4 25–30% due to inconsistent methodology and standards. Hence international standards are required to ensure global consistency in presenting the costs of construction projects. The aim of the Coalition is to provide a structure and format for classifying, defining, analysing and presenting construction costs that will provide consistency and transparency across international boundaries. The SSC has focused only on issues directly related to the costs of construction so that cross-boundary costs can be benchmarked and the causes of differences in costs can be identified. The ICMS project followed work on the development of International Property Measurement Standards (IPMS). IPMS established standards for measuring the floor areas of buildings. For ICMS a key element agreed by the Coalition members was that ICMS would be compatible and would accord with IPMS. This Standard offers a framework of 13 Project Categories, each identifying a different type of construction Project and a template against which costs can be classified, recorded, analysed and presented. The hierarchical framework has four levels:  Level 1: Project Category  Level 2: Cost Category  Level 3: Cost Group  Level 4: Cost Subgroup. The composition of Levels 2 and 3 is the same for all Project Categories. Although discretion is allowed in the contents of Level 4, the recommended contents of Level 4 are given in Appendices A, B and C. This Standard provides definitions, scope, attributes and values, units of measurement and explanatory notes for each Project Category. It provides guidance on:  how the Standard is to be used  the level of detail to be included  the method of dealing with projects combining different Project Categories; and  the approach to be taken to ensure that like is compared with like, especially taking account different currencies and time frames. For buildings, the various cost analysis standards worldwide require the measurement of a gross floor area either external gross external floor area (GEFA) or internal gross internal floor area (GIFA). This permits the representation of overall costs in terms of currency per GEFA or GIFA. Research shows that floor area measurement standards vary considerably between countries. The linking of ICMS with IPMS provides a valuable tool for overcoming these inconsistencies. ICMS requires a cost report to include both GEFA (IPMS 1) and GIFA (IPMS 2) measured in accordance with the rules set out in IPMS. These are summarised in Appendix F. For civil engineering projects, ICMS also provides units of measurement describing their sizes and functional capacities for the purpose of comparison. The SSC prioritised setting a measurement standard for buildings and selected categories of civil engineering projects. The civil engineering categories chosen for this first edition of ICMS are those that are most commonly required and cover:  transport  energy  oil and gas and  the utility sectors. Further categories will be added in future editions. ICMS has been created through a transparent, detailed and inclusive standard-setting process by the SSC. Members of the SSC brought to share their expertise and knowledge of practices in their own countries as well as a broader understanding informed by their international experience. In addition, they drew upon the guidance of international correspondents. This resulted in a full analysis and International Construction Measurement Standard (ICMS) Global Consistency in Presenting Construction Costs 5 appreciation of the standards and practices in many more countries than those directly represented by SSC members. ICMS is not a hybrid of those standards but does introduce some concepts that may be new to some markets. ICMS is a high-level standard. Markets that do not have established standards are encouraged to adopt ICMS. Markets that do have established local standards should adopt ICMS to compare cost data prepared using different standards from different markets on a consistent, like-for-like basis. The aim of the SSC is not to replace existing local standards, but to provide a consistent framework into which data generated locally can be allocated for the purposes of comparison. In time it is expected that ICMS will become the primary basis for both global and local construction cost reporting.

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