RICS Assessment of Professional Competence (APC) Quantity Surveying and Construction Syllabus

What is the difference between a budget, a cost target and a cost check?

The budget is the approved total the client will spend. A cost target is the allocated cost for an individual element within that budget. A cost check is the act of measuring/pricing emerging design detail to confirm it remains within its cost target.

What is NRM2 and what is its scope?

NRM2 is the RICS New Rules of Measurement Volume 2: Detailed measurement for building works. It provides detailed measurement rules and a standard structure for preparing bills of quantities and quantified schedules of works for tendering.

What are the two ways of measuring quantities, and which does NRM2 use?

Net measurement (measuring the actual finished quantity in place) and gross measurement. NRM2 uses net measurement of finished work, with no allowance for waste or laps included in the dimension (waste/laps are reflected in the rate).

In NRM2 a measured item description has a standard structure. What information must a fully described item convey?

It must convey the work to be done, including the work classification, the descriptive features (per the rules), the unit of measurement, and sufficient detail (with any 'mandatory' information) for the contractor to price it, supported by drawings and specification.

What is the difference between 'measured works' and 'preliminaries' in a bill of quantities?

Measured works are the quantified physical building items priced at unit rates (e.g. concrete per $m^{3}$). Preliminaries are project-wide/site-wide costs not specific to a measured item (e.g. site management, scaffolding, welfare, insurances) covering management and method-related costs.

How is a unit rate typically built up for a measured item?

By aggregating the costs of labour, materials (including waste), plant, and applying allowances for overheads and profit. $$\text{Unit rate} = (L + M + P) \times (1 + \text{O\&P} \%)$$ where $L$, $M$, $P$ are labour, material and plant cost per unit.

What are 'all-in rates' for labour, and what do they include?

The all-in labour rate is the total hourly cost of employing an operative, including basic wages plus bonuses, employer's National Insurance, holiday pay, pension, travel/subsistence, training levies (CITB), and non-productive time, expressed per productive hour.

Distinguish fixed and time-related preliminaries.

Fixed (one-off) preliminaries are independent of contract duration, e.g. setting up and removing the site compound. Time-related preliminaries vary with the length of the contract, e.g. site management staff, plant hire and welfare facilities priced per week/month.

What is tender documentation and what does a typical tender package include?

Tender documentation is the set of documents issued to tenderers to obtain priced bids. It typically includes the form of tender, instructions to tenderers, conditions/form of contract, drawings, specification, and pricing document (bill of quantities, schedule of works, or pricing schedule), plus pre-construction information.

What is a pricing schedule (priced schedule of works) and when is it used?

A pricing schedule is a list of work items or activities against which tenderers insert prices, used where a full bill of quantities is not produced (e.g. design-and-build or smaller projects). It is less detailed than a BoQ and may place quantification risk on the contractor.

Distinguish a bill of quantities from an activity schedule.

A bill of quantities is a measured list of items with quantities priced at unit rates; the employer carries quantity risk and re-measurement is possible. An activity schedule lists discrete activities each priced as a lump sum; payment is by completed activity, placing quantity risk on the contractor (used in NEC).

What are the main purposes of a bill of quantities?

To provide a consistent basis for competitive tendering (like-for-like pricing), assist valuation of interim payments and variations, support cost planning/cost analysis, and provide a schedule of rates for the project.

What is a firm BoQ versus an approximate (provisional) BoQ?

A firm bill of quantities is fully measured from substantially complete design and forms a lump-sum (re-measured only for variations) contract. An approximate bill is measured from incomplete design, with all quantities subject to re-measurement on completion (a measurement/re-measurement contract).

Name the principal construction procurement routes.

Traditional (design-bid-build), Design and Build (D&B), Management Contracting, Construction Management, and partnering/framework arrangements. Variants include develop-and-construct and two-stage tendering.

Under the traditional procurement route, who holds design responsibility and what is its main trade-off?

The client/consultants retain design responsibility; the contractor builds to that design. It offers high cost certainty and client design control but is generally slower because design must be substantially complete before construction starts (no overlap).

Under design and build, how do risk and the single point of responsibility work?

The contractor takes responsibility for both design and construction, giving the client a single point of responsibility. Design and price risk transfer largely to the contractor, improving cost/time certainty but reducing the client's direct control over design detail.

Distinguish management contracting from construction management.

In management contracting the management contractor enters into the works/trade contracts and is paid a fee; trade contractors are its subcontractors. In construction management, the construction manager only manages for a fee and the client contracts directly with each trade contractor (client carries more risk).

What key criteria drive selection of a procurement route?

Time (speed/programme certainty), cost (price certainty), and quality, plus client risk appetite, need for design control, complexity, market conditions, and the client's experience. These are often summarised as the time-cost-quality triangle.

What is the difference between single-stage and two-stage tendering?

Single-stage tendering obtains complete competitive bids in one process from fully developed documents. Two-stage tendering appoints a contractor early on partial information (stage 1, often on preliminaries and overheads) to assist design, then negotiates a firm price (stage 2), trading some price competition for early contractor involvement.

What is probity in tendering and why does it matter?

Probity is honesty, fairness and integrity in the tender process. It ensures all tenderers are treated equally, information is confidential, no collusion or improper influence occurs, and decisions are transparent and auditable, protecting the client and the surveyor's professional and RICS ethical obligations.

What should a surveyor do on identifying an arithmetical error in a tender during examination?

Follow a defined error-correction procedure (e.g. JCT/Code of Procedure): notify the tenderer and give the option either to confirm/withdraw the offer, or to correct genuine errors. The chosen alternative must be applied consistently and the priced document and rates handled in accordance with the stated procedure.

What is supply chain management in construction?

Supply chain management is the coordination and integration of all parties (contractor, subcontractors, suppliers, manufacturers) involved in delivering the works, to improve efficiency, value, collaboration and risk management, and to reduce waste and adversarial behaviour across the chain.

What is the general principle of good risk allocation in construction contracts?

Risk should be allocated to the party best able to manage, control or absorb it. Inappropriate transfer (e.g. forcing a contractor to carry uncontrollable risk) leads to inflated pricing, disputes and contingency padding rather than genuine risk reduction.

Name the main standard forms of construction contract used in the UK.

JCT (Joint Contracts Tribunal) suite, NEC (NEC4 Engineering and Construction Contract), FIDIC (international), and the PPC2000/PPC partnering form. Each has variants for different procurement routes and project sizes.

What are the principal NEC4 ECC main Options A to F and their pricing basis?

Option A: priced contract with activity schedule (lump sum). Option B: priced contract with bill of quantities. Option C: target contract with activity schedule (pain/gain share). Option D: target contract with BoQ. Option E: cost reimbursable. Option F: management contract.

What is the JCT 'with Quantities' versus 'without Quantities' Standard Building Contract?

'With Quantities' includes a bill of quantities forming part of the contract documents, so the BoQ defines the quantity and quality. 'Without Quantities' has no BoQ; the works are defined by drawings and specification, and the contract sum is a lump sum based on those.

What is an interim valuation and what is its purpose?

An interim valuation is the periodic assessment of the value of work properly executed (plus materials, less retention and previous payments) to determine the amount due in an interim certificate, giving the contractor regular payment to maintain cash flow during the works.

Write the basic calculation of an interim payment due.

$$\text{Amount due} = (\text{Value of work done} + \text{Materials on/off site} - \text{Retention}) - \text{Previously certified}$$ adjusted for any agreed variations, fluctuations and amounts already paid.

What is the 'Construction Act' and what does it require regarding payment?

The Housing Grants, Construction and Regeneration Act 1996 (as amended by the LDEDC Act 2009). It gives a statutory right to interim/periodic payments, requires an adequate payment mechanism with payment and final dates, payment and pay-less notices, prohibits 'pay-when-paid', and gives a right to adjudication and to suspend for non-payment.

Under the Construction Act, what are the payment notice, pay-less notice and final date for payment?

A payment notice (from the payer or specified person) states the sum due and basis, issued not later than 5 days after the due date. A pay-less notice must be given before the final date for payment if the payer intends to pay less, stating the sum and basis. The final date for payment is the contractual deadline by which payment must actually be made.

What is a variation (change) under a construction contract?

A variation is an authorised change to the works, scope, quality, quantity or conditions from those in the contract documents, instructed under the contract. It is valued under the contract's valuation rules and may affect the contract sum and the completion date.

What are the typical rules for valuing variations under a standard contract?

1) Use BoQ/contract rates for like work in similar conditions; 2) use contract rates as a basis (pro-rata/star rates) where work is similar but conditions differ; 3) use fair rates and prices where work is not of similar character; 4) value as dayworks where work cannot properly be measured.

What is 'loss and expense' and on what grounds can it arise?

Loss and expense is reimbursement to the contractor of direct loss and/or expense not recoverable elsewhere, caused by matters for which the employer is responsible (Relevant Matters), e.g. late information, variations causing disruption, or deferment of possession. It must be substantiated and may include prolongation, disruption, head office overheads and finance charges.

What is the difference between a Relevant Event and a Relevant Matter in JCT contracts?

A Relevant Event is a cause of delay that may entitle the contractor to an extension of time (more time). A Relevant Matter is a cause that may entitle the contractor to loss and expense (more money). Some causes are both; some are only one.

What is an extension of time (EOT) and why is it important to both parties?

An EOT is a contractual adjustment moving the completion date later due to delay caused by a Relevant Event. It protects the contractor from liquidated damages for excusable delay and preserves the employer's right to levy liquidated damages by keeping a definite completion date in place (avoiding 'time at large').

Name the common delay analysis methods used in EOT and disruption claims.

As-planned versus as-built; impacted as-planned; time impact analysis (TIA); collapsed as-built (as-built but-for); and windows analysis. The SCL Delay and Disruption Protocol provides guidance on their selection and use.

What is the difference between concurrent delay and culpable delay?

Concurrent delay is where two or more delays (one the employer's risk, one the contractor's) operate over the same period. Culpable delay is delay for which the contractor is responsible and which is not excusable, exposing the contractor to liquidated damages.

What are liquidated damages (LDs) and what is the key legal test for their enforceability?

Liquidated damages are a pre-agreed sum payable by the contractor for each period of culpable delay beyond the completion date. They must be a genuine attempt to reflect the employer's likely loss; following Cavendish v Makdessi, they are unenforceable as a penalty only if they impose a detriment out of all proportion to the employer's legitimate interest.

What is a final account and what is its purpose?

The final account is the agreed statement of the total adjusted contract sum payable to the contractor on completion. It reconciles the original contract sum with all additions and omissions (variations, provisional sums, fluctuations, loss and expense, remeasurement) to establish the final amount due.

What is a provisional sum and how are 'defined' and 'undefined' provisional sums treated?

A provisional sum is an allowance for work not fully designed at tender. For a defined provisional sum the contractor is deemed to have allowed for programming and preliminaries (no EOT/extra prelims). For an undefined provisional sum the contractor has not, so EOT and additional preliminaries may be due when the work is instructed.

What is retention, and what is the typical mechanism for its release?

Retention is a percentage (commonly 3-5%) withheld from interim payments as security for performance. Typically half is released at practical completion and the remaining half at the end of the rectification/defects liability period once defects are made good and the final certificate issued.

What activities are involved in contract close-out at practical completion and final certificate?

Issuing the practical completion certificate, releasing first half of retention, commencing the rectification period, agreeing the final account, issuing the final certificate (releasing the balance and remaining retention), handing over O&M manuals/as-built information, and resolving outstanding claims/defects.

What is cost value reconciliation (CVR) from a contractor's perspective?

CVR is the contractor's internal periodic comparison of the value (income/turnover earned) against the cost (actual spend) of the works to determine the true profit or loss on a project and to identify variances, accruals and provisions before they materialise.

Write the basic profit relationship used in cost value reconciliation.

$$\text{Profit (or loss)} = \text{Value (turnover)} - \text{Cost}$$ where value is the amount earned for work done (often the certified or internally assessed value) and cost is the actual and accrued cost of achieving that work.

What is a cash flow forecast and why does a contractor and client each prepare one?

A cash flow forecast projects the timing and amount of money flowing in and out over the project. The client uses it to plan funding and certify-payment timing; the contractor uses it to manage working capital, finance costs and to avoid insolvency from negative cash position. It is commonly shown as an S-curve.

Why does a project's cumulative cash flow typically form an S-curve?

Expenditure is slow at the start (setup, substructure), accelerates through the main construction phase as activity peaks, then tapers off near completion (finishes, snagging). Plotting cumulative value or cost against time therefore produces an S-shaped curve.

What is earned value management (EVM) and its three base measures?

EVM integrates scope, cost and schedule to measure performance. Its measures are: Planned Value (PV/BCWS) - budgeted cost of work scheduled; Earned Value (EV/BCWP) - budgeted cost of work performed; Actual Cost (AC/ACWP) - actual cost of work performed.

Write the formulas for cost variance, schedule variance, CPI and SPI in earned value.

$$CV = EV - AC, \quad SV = EV - PV$$ $$CPI = \frac{EV}{AC}, \quad SPI = \frac{EV}{PV}$$ A value $> 1$ for CPI/SPI (or positive variance) indicates under budget/ahead of schedule; $< 1$ (or negative) indicates over budget/behind schedule.

How is Estimate at Completion (EAC) calculated in earned value when current efficiency is assumed to continue?

$$EAC = \frac{BAC}{CPI}$$ where BAC is the Budget at Completion. The Estimate to Complete is $ETC = EAC - AC$, the forecast remaining cost to finish the work.

Distinguish risk from uncertainty in construction cost management.

A risk is an event that can be identified and to which a probability and impact can be assigned (allowing quantified allowance). Uncertainty refers to events that cannot be readily foreseen or quantified. Risk allowances target known risks; broader contingency or design development allowances cover uncertainty.

What four categories of risk allowance does NRM1 identify in an estimate?

1) Design development risks; 2) Construction (site/works) risks; 3) Employer change risks; 4) Employer other risks. Each is quantified and held in the estimate/cost plan as a risk allowance rather than a single arbitrary percentage.

What is the difference between a contingency and a risk allowance?

A risk allowance is a quantified sum derived from assessing specific identified risks (probability $\times$ impact). A contingency is a more general sum (often a percentage) held to cover unforeseen items. Modern practice (NRM1) favours quantified, risk-register-based allowances over arbitrary contingency percentages.

How is the expected monetary value (EMV) of a risk calculated for a risk register?

$$EMV = P \times I$$ where $P$ is the probability of the risk occurring (0 to 1) and $I$ is the cost impact if it occurs. Summing EMVs across the register gives a quantified risk allowance; Monte Carlo simulation can refine this for correlated risks.

What is insolvency in a construction context, and what are its main legal forms for companies?

Insolvency is the inability to pay debts as they fall due or having liabilities exceeding assets. Main forms for companies: administration, company voluntary arrangement (CVA), receivership/administrative receivership, and liquidation (winding up, voluntary or compulsory).

What contractual steps and protections are relevant when a main contractor becomes insolvent?

Termination provisions are triggered; the employer takes steps to secure the site and materials, may call on performance bonds and parent company guarantees, rely on retention and retention of title clauses, use collateral warranties/third-party rights and step-in rights, and assess completion cost to set off against sums owed before any final payment.

How do retention of title and vesting/off-site materials clauses help recover monies on insolvency?

Retention of title means a supplier keeps ownership of materials until paid, complicating the employer's claim to unfixed goods. Vesting certificates and proper off-site materials clauses transfer ownership to the employer once paid for, protecting the employer's interest in materials if the contractor becomes insolvent.

What is a performance bond and how does it assist recovery of monies?

A performance bond is a guarantee (usually from a bank or surety, often around 10% of contract value) that pays the employer a sum if the contractor defaults or becomes insolvent, helping offset the additional cost of completing the works. It may be 'on demand' or 'conditional' (requiring proof of loss).

On contractor insolvency, how does the employer typically establish the net sum owed or due?

By calculating the cost to complete the works with a replacement contractor plus other losses (delay, additional fees), then setting this against the contract sum that would otherwise have been payable. If completion costs exceed the remaining contract value, the balance is a debt claimed from the contractor/insolvency estate or recovered via bonds/guarantees.