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What is this week's blog about?
In this week’s blog, we look at the new RICS Professional Statement Cost Prediction 1st Edition.
Essential reading for RICS APC and AssocRICS candidates on the Quantity Surveying & Construction and Project Management pathways. It is particularly relevant to the Quantification and Costing, Design Economics and Costing Planning, Sustainability
and Project Finance competencies.
The full Professional Statement can be downloaded on the RICS website.
When does the Professional Statement apply from?
1 July 2021.
Why has the Professional Statement been published?
Cost prediction is often undertaken inconsistently across the globe.
RICS, therefore, published the new Professional Statement to make it mandatory for RICS regulated firms and members to follow best practice within the International Construction Measurement Standards (ICMS) 2nd Edition. This will generally be where a cost management professional is providing a cost prediction report to an internal or external client.
What are the aims of the Professional Statement?
To provide a consistent approach to cost prediction globally
To address common cost prediction issues which lead to budget overruns, e.g. accessing accurate inputs in a timely manner
To promote digital collection, analysis, storage, updating and exchange of project and cost data
To improve trust, accuracy and professionalism in cost prediction
What is ICMS?
ICMS are principle-based global standards for classifying, analysing and presenting cost data. The new Professional Statement provides guidance on how to embed ICMS, e.g. by mapping national standards such as the New Rules of Measurement (NRM) in the UK.
What is included in the new Professional Statement?
The new Professional Statement is split into four key sections; Background, Process, Data and Output.
Candidates should ensure that they read the full Professional Statement to understand how to apply the principles to their professional practice.
Property Elite can provide 1-2-1 mentoring on this, including reviewing live examples and the relationship of the new Professional Statement to the candidate’s chosen competencies.
It also includes a helpful glossary of technical terminology, such as direct costs, digital twin, first principle estimating, indirect costs, out-turn cost and parametric estimate.
What are the new mandatory requirements?
When producing a cost prediction report for a client or senior management, the following mandatory principles apply:
‘Based upon the briefing and information provided, produce a reliable prediction of costs appropriate for the needs and best interests of the client, the size and complexity of the project and the project stage.
Consider and agree with the client the appropriate method for reporting costs, recommending the use of ICMS where that would be in the best interests of the client.
Provide the sources of the data on which the cost prediction is based and a commentary on the dependability of the cost data, unless the data source is subject to confidentiality provisions.
Identify the key assumptions, including any exclusions and how they can be managed, as well as timing and methodology constraints, made in deriving the predicted cost and the grounds for making them.
State the change in predicted cost since the last report, and the reason(s) for the change.
Commensurate with the size and complexity of the project, provide an estimate of the accuracy or level of uncertainty of the cost prediction and how this can be improved through management action’.
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Stay tuned for our next blog post to help build a better you.
N.b. Nothing in this article constitutes legal, professional or financial advice.