THE INSTITUTION OF CIVIL ENGINEERS CESMM3 HANDBOOK Aguide to the financial control of contracts using the Civil Engineering Standard Method of Measurement MARTIN BARNES _ 1 THOMAS TELFORD, LONDON, 1992Published fortheinsti House, 1 Heron Quay, ion of Civil Engineersby Thomas Telford Services Ltd, Thomaa Telford ‘ondan £1440, Firstedition 1986 Socondecition 1992 ‘Terms used n this book include terms which are definedin the CE Concitions of Contract and in the Givi Engineering Standard Method of Measurement, hird edition (CESNIM, third edition). These termsare printed with intial lettersin eapitalsto indicate that the defined mooning s intended. Paragraph numbers and class letters refer those inthe CESMM, third ection: rules inthe CESMM, thirdedition, are referrodto by their laee and number. The interpretation e! the ICE Conditions of Contract andiof the Civi/ Engineering Standerd Method of Measurersent tied dition, offeredin this Bookis not an official interpretation and should not be used as euch inthe settlement of disputes arising in the course of civil engineering contracts, sments made or opinions expressed herein is publishedon the tunderstanding thatthe authori solely responsibie forthe opinions expreseedin itandthatits, Publication does not necessarily imply that such statements andor opinions are o refiectthe views or opinions of ICE Councilor ICE commito © The institution of Civil Engineers 1932 ahLitey Eatoguing nPubcston Dat tet eyitam civsnamitein ary ormerbyanymaane learns chi, Stang rcaages et towne writen parmisiosbangottartc omega “Trpenty Opuehegaies Landon ‘eed wthowrdin ret Birt Buta Tarr, SereratFOREWORD By the President of the Institution of Civil Engineers When the Civil Engineering Standard Method of Measurement (CESMM) was first published in 1976, the practice of preparing and using bills of quantities on civil engineering projects was revolutionized. The practical structure which the CESMM introduced and the thorough analysis upon which its details were based led to its rapid and effective adoption. It was copied widely and influenced quantity surveying practice in many sectors beyond civil engineering. Martin Barnes, who designed and draughted the CESMM, wrote a handbook to go with it. Fifteen years later, it isa pleasure to welcome this third edition of the handbook, published to coincide with publication of the third edition ofthe CESMM itself. Much of the original text is still here and will continue to instruct young engineers coming freshly to the use of bills of quantities. The new material explaining the new features of CESMM3 will help to ensure the smooth and uncontentious adoption of this method of measurement in the tradition of its predecessors. Mastering of financial control is an essential skill for the rounded civil engineer. I commend Martin Barnes’ CESMM3 handbook as an important help in acquiring the skill Robin Wilson, FEng, FICE London, 1991PREFACE This is the third edition of the handbook for use alongside the Civil Engincering Standard Method of Measurement, third edition (CESMM) itself. In content it differs from the second only in that it explains the changes and additions made in producing CESMM3, ‘There are a number of minor improvements and detailed changes which are introduced either to keep CESMMG up to date or to eliminate difficulties which have been experienced in practice. A significant addition is the new class Z which covers building work incidental to civil engineering projects. acknowledge the help of various members of the Institution of Civil Engincers specialist committees who have helped with advice, and pay my thanks to the staff of Thomas Telford Services for their patience and assistance. Jacknowledge principally the help of my colleague John McGee, who has contributed a high proportion of the text for the changes mad this third edition of the handbook. Martin Barnes London, 1991Section 1. Section2. Section3. Section 4, Sections. Section6. Section? Section 8. Index. Definitions General principles ‘Application of the Work Classi Coding and numbering of items Preparation of the Bill of Quantities Completion and pricing of the Bill of Quantities bya tenderer Method-Related Charges Work Classifi Generalitems Groundinvestigation Geotechnical and other specialist processes Demolition andsite clearance Classe: Earthworks Class: Insituconcret GlaseG: Concrete ancillaries ClassH: Precaetconcrete Classi: Pipework—pipes Class Ji Pipework—fittings andvalves, Class: Pipework—manholes and pipeworkancilaries Glass: Pipework—supports and protection ancillariesto laying and excavation Clase M: Structural metalwork Class: Miscellaneous metalwork Class0: Timber ClassP: Piles Class; Pilingencillaies Class: Roads andpavings Clases: Reitrack ClassT: Tunnels lass: Brickwork blockworkandmasonry Glasses Vand W: Painting and Waterprooting ClassX: Miscellaneous work Class: Seworandwatermain renovation andaneillary works Class2: Simple building works incidentalto civil engineering works 137 14 uaz 45 159 169 m 178 181 186 197 194 an 25 225 237INTRODUCTION Financial control means control of money changing hands. Since money almost always changes hands in the opposite direction from thatin which goods or services are supplied, it can be considered as the control of who provides what and at what price. This thought establishes a priced bill of quantities as the central vehicle for the financial control of a civil engineering contract. The Bill of Quantities is the agreed statement of the prices which will be paid for work done by the Contractor for the Employer and it shares with the Drawings and the Specification the responsibility for defining what has been agreed shall be done. Control is usually based on a forecast. The difficulty of controlling something is proportional to the difficulty of predicting its behaviour. The points, finer and coarser, of the financial control of civil engineering contracts revolve around the difficulty the Employer has. in forecasting and defining to a Contractor precisely and immutably what he is required to do, and the difficulty the Contractor has in forecasting precisely what the work will cost. To achieve effective control it is necessary to limit these difficulties as much as possible within reasonable limits of practicality. This means using as much precision as possible in defining the work to the Contractor and in enabling him to forecast its cost as precisely as possible. These are the ‘essential fanctions of bills of quantities. It is the essential function of a method of measurement to define how bills of quantities should be compiled so that they serve these two essential functions. itis clear from this consideration that a bill of quantities works bestifit is a model in words and numbers of the work in a contract. Such a model could be large, intricately detailed and reproducing the Workings ofthe rel thing in an enact representation. Alternatively. i could be as simple as possible while still reproducing accurately those aspects of the behaviour of the original which are relevant 10 the Purposes for which the model is constructed The first purpose of a bill of quantities is to facilitate the estimating of the cost of work by a contractor when tendering. Considered as a model, it should therefore comprise a list of carefully described Parameters on which the cost of the work to be done can be expected to depend. Clearly these parameters should include the quantities of the work to be done in the course of the main construction operations. There is no point in listing those parameters whose influence on the total cost of the work is so small as to be masked by uncertainty in the forecasting of the cost of the major operations. Other points of general application emerge from this principle of cost-significant parameters. The separation of design from construction in civil engineering contracts and the appointment of INTRODUCTIONCESMM3 HANDBOOK contractors on the basis of the lowest tender are the two features ofthe system which make ie essential for a good set of parameters to be passed to contractors for pricing, and for a good set of priced parameters to be passed back to designers and employers. Only then can they design and plan with the benefit of realistic knowledge of how their decisions will affect construction costs. The less contractual pressures cause distortion of the form of the prices exchanged from the form of actual construction costs the better this object is served. It is very much in the interests of employers of the civil engincering industry, whether they are habitually or only occasionally in that role, that the distortion of actual cost parameters should be minimized in priced bills of quantities. ‘An employer's most important decision is whether to proceed to construction or not. This decision, if it is not to be taken wrongly, must be based on an accurate forecast of contract price. Only if a designer has a means of predicting likely construction cost can such a forecast be achieved. The absence of cost parameters which are sensitive to methods and timing of construction has probably caused as much waste of capital as any other characteristic of the civil ‘engineering industry. It has sustained dependence on the view that quantity is the only cost-significant parameter long after the era when ithad some veracity. Generations of contractors, facing drawings first when estimating, have found themselves marvelling at the construction complexity of some concrete shape which has apparently been designed with the object of carrying loads using the minimum volume of concrete. That it has required unnecessary expense in constructing the formwork, in bending and placing the reinforcement and in supporting the member until the concrete is cured often appears to have been ignored. A major aspect of financial control in civil engineering contracts is the control of the prices paid for work which has been varied. Varying work means varying what the Contractor will be required to do, not varying what has already been actually done. Having once been built, workis seldom varied by demolition and reconstruction; the difficulty of pricing variations arises because what gets built is not what the Contractor originally plans to build. If the work actually buile were that shown on the original Drawings and measured in the original Bill of Quantities, the prices given would have to cover all the intricate combinations of costs which produce the total cost the Contractor wi actually experience. This would inchide every hour of every man’s paid time — his good days, his bad days and the days when what he does is totally unforeseen. It would include every tonne or cubic metre of material and the unknown number of bricks which get trodden into the ground, It would include every hour of use of every piece of plant and the weeks when the least popular bulldozer is parked in a far comer of the Site with a track roller missing. The original estimate of the total cost of this varied and unpredictable series of activities could reasonably only be based on an attempt to foresee the level of resources required to finish the job, with many little overestimates balancing many little underestimates. Changes to the work from that originally planned may produce changes to total cost which are unrelated to changed quantities of work. They are less likely to produce changes in cost which are close to the changed valuation if value is taken to be purely proportional to quantity of the finished work. Where there are many variations to the work, the act of faith embodied in the original estimate and tender can be completely| INTRODUCTION undermined, The Contractor may find himself living from day to day doing work the costs of which have no relationship to the pattern originally assumed, ‘That cost is difficult to predict must not be allowed to obscure the fact that financial control depends on prediction. Ifehe content of the work cannot be predicted the conduct of the work cannot be planned. Ifthe work cannot be planned its cost can only be recorded, not controlled. It must also be accepted that valuation of variations using only unit prices in bills of quantities is an unrealistic exercise for most work and does little to restore the heavily varied project to a climate of effective financial control. Only for the few items of work whose costs are dominated by the cost of a frecly available material is the quantity of work a realistic cost parameter. It follows that employers are well served by the civil engineering industry only if contractors are able to plan work effectively: to select and mobilize the plant and labour teams most appropriate to the scale and nature of the expected work and to apply experience and ingenuity to the choice of the most appropriate methods of construction and use of temporary works. ‘That this type of planning is often invalidated by variations and delays has blunted the incentive of contractors to plan in the interests of economy and profit. The use of over-simplified and unrealistic parameters for pricing variations has led to effort being applied to the pursuit of payment instead of to the pursuit of construction efficiency. In a climate of uncertainty brain power may be better applied to maximizing payment than to minimizing cost. Mitigation of this problem lies in using better parameters of cost as the basis of prices in bills of quantities. It would be ideal ifthe items in a bill were a set of parameters of total project cost which the Contractor i had priced by forecasting the cost of each and then adding a uniform margin to allow for profit. Then, if parameters such as a quantity of work or a length of time were to change, the application of the new parameters to each of the prices would produce a new total price bearing the same relationship to the original estimated price as the new total cost bore to the original estimated cost. The Employer would then pay for variations at prices which were clearly related to tender prices and the derivation of the adjusted price could be wholly systematic and uncontentious, This ideal is unobtainable, but it is brought closer as bills of quantities are built up from increasingly realistic parameters of actual construction costs. From the cash flow point of view there are also advantages in sticking to the principle of cost parameters. The closer the relationship tween the pattern of the prices in a bill of quantities and the pattern | ofthe construction costs, the closer the amount paid by the Employer to the Contractor each month is to the amount paid by the Contractor i cach month to his suppliers and sub-contractors. The Contractor's i cash balance position is stabilized, only accumulating profit or loss ‘when his operations are costing less or more than was estimated. Since much of the Contractor's turnover is that of materials suppliers and sub-contractors with little added value, stability and predictability of cash-flow has an importance often not appreciated by employers i and engineers, Contractors are in business to achieve a return on their Resources of management and working capital — a return which is seldom related closely to profit on turnover. Predictability of theCESMM3 HANDBOOK amount of working capital required is a function of prompt and cost-related payment from the Employer another benefit of using pricing parameters closely related to parameters of construction cost. In the detailed consideration of the financial control of civil engineering contracts and of the use for the purposes of control of CESMM3 which follows in this book, the application ofthe priniple set down here is recognized. It should not be thought that the close attention to the affairs of contractors implied by this principle allows them a partisan advantage over employers. An employer’s interest is best served by a contractor who is able to base an accurate estimate on a reliable plan for constructing a clearly defined project, and who is able to carry out the work with a continuing incentive to build efficiently and economically despite the assaults of those unforeseen circumstances which characterize civil engineering work. Confidence in being paid fully, promptly and fairly will lead to the prosperity of efficient contractors and to the demise of those whose success depends more on the vigour with which they pursue doubtful claims, As Louis XIV's department of works was recommended in 1683, as a result of what may have been the first government enquiry into the financial control of civil engineering contracts: ‘In the name of God: re-establish good faith, give the quantities of the work and do not refuse a reasonable extra payment to the contractor who will falfil his obligations.” CESMM3 sets out to serve the financial control of civil engineering contracts and in doing so finds itself at one with this advice. This book elaborates on and illustrates the use of CESMM3. To facilitate ‘cross-reference its sections correspond to those of CESMM3 itself. The first edition of the Civil Engineering Standard Method of ‘Measurement was in use for a few months less than ten years, The changes between the first and second editions were many, The layout of what were first called notes were changed. They were replaced by rules, which were categorized and classified to make reference to them easier and interpretation more straightforward. How the rules are intended to be used is explained in detail in Section 3. A new class Y was introduced in the second edition to cover sewer renovation work. This has been expanded in CESMM3 to include ‘water main renovation work. CESMM3 introduces a brand new class Z for simple building works incidental co civil engineering works. Classes Y and Z are explained in detail in Section 8 as are the other changes in CESMM3. The principles of the Civil Engineering Standard Method of ‘Measurement were not tampered with in producing the second and third editions. The innovations which the Civil Engineering Standard Method of Measurement contained, such as coded and tabulated measurement rules, simplified itemization and Method-Related Charges, were all retained unchanged. Fifteen years of use had proved their worth. Many of the changes between the first and third editions are detailed refinements. The purposes behind the more significant of these isINTRODUCTION explained in che technical sections of this book. Each section of this book concludes with schedules of the principal changes between the first and second and and the second and third editions of the Civil Engineering Standard Method of Measurement. These schedules do not include the smaller textual changes. For brevity, the third edition of the Civil Engineering Standard Method of Measurement is referred to throughout this book, asin its title, as CESMM3.SECTION 1. DEFINITIONS The definitions given in CESMM3 are intended to simplify its text by enabling the defined words and expressions to be used as abbreviations for the full definitions. Where the same words and expressions arc used in bills of quantities they are taken to have the same definitions. There are two changes to the definitions in CESMM3 concerning paragraphs 1.2 and 1.15. These have been updated to tie in with the ICE Conditions of Contract, sixth edition and European procurement law. It is helpful to use capital initial letters in bills of quantities for any of the terms defined in CESMM3 or the Conditions of Contract which themselves have capital initial letters. This leaves no doubt that the defined meaning is intended. The definition of ‘work’ in paragraph 1.5 is important. Work in CESMM3 is different from the three types of ‘Works’ defined in clause 1 of the Conditions of Contract. It is a more comprehensive term and includes ail the things the Contractor does. Itis not confined to the physical matter which he is to construct. For example, maintaining a piece of plant is work as defined in CESMM3, but ‘would not be covered by any of the definitions of Works in the Conditions of Contract. ‘The expression ‘expressly required’, defined in paragraph 1.6, is very helpful in the use of bills of quantities. It is used typically in rule M15 of class E which says that the area of supports left in an excavation which is to be measured shall be that area which is ‘expressly required’ tobeleft in. The corollary to this rule is that, if the Contractor chooses toleave in supports other than at the Enginccr’s request, theit arca will not be measured and the Contractor will receive no specific payment forit, Knowing this, the Contractor will leave the supports in only ifit is in his own interests to do so. However, if the Engineer orders the supports to be left in, itis because it is in the Employer's interest that they should be left in, and the Employer will then pay for them at the bill rate for the appropriate items (E 5 7-8 0). Rules in CESMM& use ‘expressly required’ wherever it is intended that the Engineer should determine how much work of a particular type is to be paid for. Usually this is work which could be either temporary — done for the convenience of the Contractor — or permanent — done for the benefit of the Employer. Expressly Tequired also means ‘shown on the Drawings’ and ‘described in the Specification’ so that it is applicable if intentions ate clear before a contract exists. DEFINITIONSCESMM3 HANDBOOK Rule MS of class E is an example which refers to excavation in stages. ‘The Contractor may decide to excavate in stages for his own economy and convenience, or the Engineer may require excavation to be cartied ‘out in stages for the benefit of the completed Works. The use of the term ‘expressly required’ in rule M5 of dass E and in other places draws attention to the fact that the work referred to, when done on the Site, will not necessarily be paid for asa special item unless itis a result of work of the type described having been expressly required. It is prudent for Engineers and Contractors to make sure that work done on the Site which may or may not be measured is carefully recorded between the Contractor and the Engineer's Representative 0 that it can be agreed whether work is or is not expressly required. Preferably these agreements should be reached before work is carried out. ‘The definition of ‘Bill of Quantities’ in paragraph 1.7 establishes that the bill does not determine either the nature or the extent of the work in the Contract. The descriptions of the items only identify work which must be defined elsewhere. ‘This definition is important as it directly implies the difference between the status of the Bill of Quantities under the ICE Conditions of Contract and under the building or JCT conditions of contract.* In the building contract the bill of quantities is the statement of what the Contractor has to do in terms of both definition and quantity. This difference from civil engineering practice is significant, There is no reason to lessen this difference. Both the ICE Conditions of Contract and CESMM3 rely heavily on it. The estimator pricing a civil engineering bill of quantities will derive most of the information he needs in order to estimate the cost of the work from the Drawings nd Specification. He will use the bill as a source of information about quantities and as the vehicle for offering prices to the Employer. The main vehicles for expressing a design and instructing the Contractor what to build remain the Drawings and Specification. The definitions of four surfaces in paragraphs 1.10-1.13 are used to avoid ambiguity about the levels from which and to which work such as excavation is measured. When the Contractor first walks on to the Site, the surface he sees is the Original Surface. During the course of the work he may excavate to lower surfaces, leaving the surface in its final position when everything is finished. Between the Original and Final Surfaces he may do work covered by more than one bill item, as for example in carrying out general excavation before excavating for pile caps. The surface which is left after the work in one bill item is Ennished is the Excavated Surface for that item, and the Commencing Surface for the work in the next item if there is one. ‘Final Surface’ is defined as the surface shown on the Drawings at which excavation is to finish, This is so that any further excavation to remove soft spots can be referred to as ‘excavation below the Final Surface’. Fig. 1 illustrates the use of the four definitions of surface. ‘The words of definitions 1.12 and 1.13 were changed in the second edition. No change to the effect of the definitions was intended, butit had become apparent that some compilers of bills of quantities were “Joint Contracts Tribunal. Standard form of building contrat. Private edition with ‘quantities, Royal Istcute of British Architects, London, 1980.-e___—_— DEFINITIONS. taking the implied instructions in paragraph 5.21 and the ewo definitions further than was necessary as regards measurement of excavation of different materials It was never intended that the Commencing and Excavated Surfaces of layers of different materials within one hole to be excavated should be identified separately as regards Commencing and Excavated Surfaces. For example, if excavation of a hole involved excavation of a layer of topsoil, then ordinary soft material, then a band of rock, the ‘Commencing Surface forall three items could be properly regarded as the Original Surface, and the Excavated Surface for all three items could be properly regarded as the Final Surface. The maximum depth stated in the item descriptions for al three items would be the range of those stated in the class E table in which the maximum depth of the complete hole occurred, irrespective of the thickness of each layer of material or of the sequence within the total depth in which they occurred. Fig. 2illustrates this point. This produces item descriptions which can occasionally seem peculiar such as ‘Excavate topsoil maximum depth 5-10 m’, This description seems less peculiar as soon as itis understood that it means ‘Excavate the topsoil encountered in the course of digging a hole whose maximum depth is between 5 and 10m’, Fig, 1.Aplicaton of the dations Sora ceen ee, fine for surooos gue oar pagans 10-1 1 The Bxcovated Sitece lor ong tor becomes the ‘Commencing Surface for the next 7 fam excoatn massed | ihre arene stage fase ase ieeeecm nitty porepash S21 a ena . rane ei ren i Final Surace anc Exewateg Surece fritem Fig. 2. Three items are required for commencing this excavation, All can be described be {8 maximum depth 10-15 m” Definition rules 1.12 and 1.13 da not oor require intermediate surfaces to be identified (ther salt mata Exeavaieg SuttacdCESMM3 HANDBOOK ‘Schedule of changes in CESMM2 1, Paragraph 1.1. Makes the definitions apply to terms used in bili of quantities. 2, Paragraph 1.2, Refers to the latest edition of the ICE Conditions of Contract 3. Peragraphs 1.12 and 1.19. Revised 10 eliminate the identification of surfaces between different ‘materials in excavation. Schedule of changes in CESMM3. 1. Paragraph 1.2. Refers to the ICE Conditions of Contract, sixth edition 2, Paragraph 1.16 Defines references to Brtish Standards as references to equivalent standards in the European Community 40 ‘The changes to definitions 1.12 and 1.13 mean that item descriptions will no longer be cluttered with unnecessary identifications of Commencing and Excavated surfaces, Such phrases as ‘Excavate topsoil, Excavated Surface underside of topsoil’ or ‘Excavated rock, Commencing Surface underside of soft material’ should no longer appear. They were never necessary: the new wording of definitions 1.12and 1.13 makes this more obvious. Definition 1.14 provides a simple abbreviation for phrases like ‘exceeding 5 m but not exceeding 10 m’. In bills compiled using CESMM3 this phrase should be abbreviated to ‘5-10 m’. This con- vention does not work ifranges are defined with the larger dimension first, ¢.g. 10-5 m means nothing. Definition 1.15 has been introduced in CESMM3 to take account of developments in European law which affects contracts awarded by public authorities within the United Kingdom. ‘The main factor in this was an Irish case [Commission of the European Communities (supported by the King of Spain, intervenor) v Ireland, Building Law Reports, vol. 44P1] in which the court declared that a specification which called for materials to comply with an Irish Standard was illegal. The court ruled that this was contrary to Article 30 of the Treaty of Rome and that the specification should have called for the materials to be the ‘Irish Standard or equivalent’ This decision only affects contracts let by government agencies and local authorities at the present time. However, these contracts represent a substantial proportion of the UK civil engineering workload and the coverage will extend further if the present draft Excluded Sectors Directive is implemented.a | GENERAL PRINCIPLES SECTION 2. GENERAL PRINCIPLES ‘The general principles in CESMMG3 are a small group of rules and statements which set the scene for the detailed rules which follow. Where they are expressed in mandatory terms they are rules of full significance; where they are expressed in less than mandatory terms they give background to help interpretation of the rules. Paragraph 2.1 points out that CESMMS is intended to be used in conjunction with the ICE Conditions of Contract, sixth edition and only in connection with civil engineering works or simple building works incidental to civil engineering works. This is a change from the second edition which has been achieved through the introduction of a new class Z. Class Z sets out rules for measuring simple building works which are incidental to civil engineering works. CESMM3 can be used with other conditions of contract which invest the Bill of Quantities and the method of measurement with the same functions. The co-ordination of the provisions of CESMM3 with other conditions of contract must then be checked carefully before tenders are invited and appropriate amending preamble clauses included in the bill. The standard conditions of contract for ground investigation* are referred to in the preface of CESMM3 but not specifically in the ‘general principles. Where CESMM3 is used for ground investigation work, the clause numbers can be left as printed because the clauses referred to in CESMM3 have the same numbers in both contracts. In several places CESMM3 refers to individual clauses of the Conditions of Contract. Any change to the significance of these references should be checked when CESMMS is used in conjunction with other conditions of contract or with supplementary conditions to the Conditions of Contract. For example, rule C1 of class A of CESMM3 limits the coverage of the insurance items included in class Ato the minimum insurance requirements stated in clauses 21 and 23 ofthe Conditions of Contract. Itis therefore essential to use additional specific items to cover any other requirements for insurance which may be applied in particular contracts. Provided that the responsibilities of the parties are similar and that the status of the Bill of Quantities and method of measurement are similar, CESMM3 can be used with other conditions of contract and for work which is not civil engineering or measured in class Z. In such ases it will usually be necessary to give amending preambles. There is clearly no point in using CESMM3 if the work in a contract is not Principally made up of the things which CESMM3 covers. ee eee EEE Ee EEE eee ee eee eee eee eee eee ‘MCE conditions of contac for ground investigation. Thomas Telford, London, 1983. u scansCESMM3 HANDBOOK 12 Paragraph 2.2 deals with the problem of identifying and measuring work which is not covered by CESMM3, either because it is work outside the range of work which CESMM3 covers or because it is work not sufficiently common to justify its measurement being standardized in CESMM3. Work which is not covered by CESMM3 includes mechanical or electrical engineering works or building works other than those covered by class Z. No rules are given for itemization, description or measurement of such work but principles are given which should be followed. Ifthe work needs to be measured, that is to say a quantity calculated, any special conventions for so doing which it is intended shall be used should be stated in the Preamble to the bill. The last sentence of paragraph 2.2 says that non-civil engineering work outside the scope of CESMM3 which has to be covered shall be dealt with in the way which the compiler of the bill chooses, governed ‘only by the nced to give the itemization and identification of work in item descriptions in sufficient detail to enable it to be priced adequately. Paragraph 2.2 does not imply a standard method of measurement because for this type of work there is no necessity for there to be a standard method. Thus, an entry in the Preamble to the bill which complies with this paragraph might refer to another standard method of measurement, such as the standard method of measurement for building, or it might state a measurement convention adopted for a particular work component. An example of this would be the measurement of large oil tanks associated with oil refinery installations. These are not mentioned in CESMM3 but they might have to be measured within a civil engineering contract. In such a case the compiler of the bill would probably decide to measure the tanks by their mass of steel and might need to state related measurement conventions in the Preamble to the bill. These conventions might include the rules by which the mass of steel in the oil tank was to be calculated for payment. There is no need for non-standard measurement rules to be complicated or indeed to be given atall in many cases. The function of s bill item is identify work and to enable a price to beset against it If, for example, an item description read: “The thing described in Specification clause 252 and shown in detail D of drawing 137/65" and were given as a sum to be priced by the Contractor it would be a satisfactory item from all points of view. It would not require any ‘measurement conventions, No method of measurement is required for any self-contained component of the work which does not have a particular quantity as a useful parameter of its cost. It might be a plague on the wall by an entrance, or a complicated piece of manufactured equipment peculiar to the use to be made of the finished project. Only if it is something which may be changed and the financial control of which would benefit from remeasurement of a cost-related quantity is it necessary to give a quantity for it in the Bll “Royal Institution of Chartered Surveyors and Building Employers’ Confeder: Standard method of measurement of building works, 6th edn. Royal Institution of Chartered Surveyors and National Federation of Building Trades Employers, London, 1988,—_—_——————$—$—$<$KFKFK<$<$_ GENERAL PRINCIPLES Usually these items are something like others which are covered by CESMM3 and related measurement rules can be used It is good practice to keep away from non-standard measurement conventions for unusual work as much as possible because they can become contentious in preparing final accounts, Ie is better to make sure that the work required to provide the unusual thing is clearly defined in the Contract and for it to be priced as a sum. If there are several items they can be counted and measured by number, Paragraph 5.18 of CESMM3 provides a general convention of measurement, namely that quantities are measured net using dimensions from the Drawings. Special conventions are needed for non-standard work only when this general convention is inappropriate. Simple building works incidental to civil engineering works are dealt with in CESMM3 through the introduction of class Z. This is because compilers of bills were often reluctant to use the building standard method of measurement for a simple incidental building such as a gatehouse, valve house, or a simple superstructure in a water or sewerage treatment works. Although use of another standard leads to inconsistency between parts ofa bill and some problems of mismatch with the Conditions of Contract, it should be considered when the building work is substantial or complex. When the building work is 7 self-contained and uncomplicated it may be controlled most effectively by being treated as specialist work. A provisional sum in the main bill can then be used in a manner appropriate to the circumstances. There should be few problems if it can be priced on a complete and well thought out design which does not have to be changed. Effort is better applied to achieving stable design than to setting up contractual arrangements and drawing up a detailed bill of quantities for something ill-defined which may not be what is eventually wanted. The scope of CESMM3 is referred to in general terms in paragraph 2.2. In detail it can be judged by examination of the various classes of work and the lists of classified components of work which each class includes. It should be noted that CESMM3 only provides procedures for measurement of work which is normal new construction. Maintenance and alterations to existing work are mentioned only in relation to sewer and water main renovation. Extraction of piles is not mentioned, nor is any other work which involves removal of previous work unless that work is classed as demolition. Any such activity which is to be included in a Contract must be included in the Bill of Quantities. Itis suggested that the itemization and description of such work should follow the principles of the appropriate class of CESMM3 for new work, with the fact that the items are for extraction or removal stated in descriptions or applicable headings. Class ¥ dealing with sewer and water main renovation is an exception to the general principle that CESMM3 only provides for new construction, Ie does not indicate that the general principle has been abandoned, When the compiler of a bill is faced with a drawing which shows a ¢omponent of work not mentioned in CESMM3, he will occasionally be in doubt as to whether it is outside the scope of CESMM3 or whether itis within its scope but not mentioned because a separate bill item for itis not required. No standard method of measurement could avoid this dilemma entirely as there will always be some items of work 13‘CESMM3 HANDBOOK 14 whose nature is just outside the normal understanding of the terms used to name work items in the method. CESMM3 should yield few instances of this dilemma, ‘but where it does arise, the treatment should always be to insert non-standard items which describe the work clearly and preferably also to state the location of the work. The resulting bill cannot be held to be in error as this treatment is preciscly that intended by paragraphs 2.2 and 5.15. The objects of the Bill of Quantities are set down in paragraphs 2.4-2.7. Paragraph 2,5 encapsulates the theme of this book. It is important to the financial control of civil engineering contracts that the people who influence it should concern themselves with the practical realities of the costs to contractors of constructing civil ‘engineering Works. Paragraph 2.5 establishes an overriding principle that Bill of Quantities Should encoarage expostite of cost differentials arising from special circumstances. It is the application of this principle which puts flesh on the standardized skeleton of a bill of ‘quantities and makes the descriptions and prices particular to the job in hand. Its importance is hard to over-emphasize. Differences in construction costs due to the influence of location and other factors on methods of construction are often much greater than the whole cost of the smaller items of permanent work which are itemized separately in abill. ‘The items dealing with pipe laying and drain laying provide an example of this. Many bills used to include a schedule of trench depths for drain laying so that an appropriate slightly different rate could be paid for excavating and backfilling trenches whose depths were slightly different, perhaps 100 mm shallower, than that originally billed. In practice the cost of the work is so dependent on whether or not the trench can be battered, whether or not it is through boulders, whether or not there is room to side pile the spoil, whether or not adjacent buildings prevent a backacter swinging round and so on that differences in depth make lle impact on the diflerence between the actual cost and the bill rate, That cost significance is the allsimportant factor in dividing the work into separate bill items is demonstrated by how CESMM3 deals with this matter, Lengths of pipe laying are given in separate items to indicate different locations by reference to the Drawings (rule A1 of class 1). Items are subdivided according to trench depth only within depth ranges. In applying these detailed rules and the general principle in paragraph 2.5 the bill compiler is required to think about construction costs and to divide up the work so that the likely influence of location on cost is exposed in the bill, He will not be able to read the minds of the contractors who will price his bill, who will not in any case be of one mind as to what is or is not cost significant. Paragraph 2.5 confers on the compiler the obligation to use his best judgement of cost significance while protecting him from any Consequence of his judgement being less than perfect. It achieves this by saying that he ‘should’ itemize the bill in a way which distinguishes work which ‘may ’ have different cost considerations. If he does not foresee cost differentials perfectly, as he cannot, a contractor cannot claim that the bill is in error and ask for an adjustment to payment. Paragraph 2.5 ends with an exhortation to strive for brevity and simplicity in bills. Bills of Quantities are not works of literature: they are vehicles ofee i GENERAL PRINCIPLES technical communication. They should convey information clearly and, in the interests of economy, briefly. An engineer writing a bill of quantities should aim to carry the load of communication safely but with minimum use of resources, in the same way as in his design he aims to carry physical load safely with minimum use of resources. A general principle not stated in CESMM3 is the principle that its use is not mandatory. Whether or not a standard method of measurement a mandatory document used to be a favourite discussion topic, and each view had strong adherents. When using the ICE Conditions of Contract the method of measurement applicable to each contracts the one the title of which is inserted in the Appendix to the Form of Tender: now normally the Civil Engineering Standard Method of Measurement, Such an insertion brings clause 57 of the Conditions of Contract into play, giving a warranty (subject to the condition given in the opening words of the clause) that the Bill of Quantities shall be ‘deemed to have been prepared and measurements shall be made according to the procedure set forth’ in the Civil Engineering Standard Method of Measurement. In order to relate properly to this clause the rules of CESMMG are expressed in authoritative terms; they say, for example, that ‘separate items should be given’ and “descriptions shall include’. The Employer or Engineer is free to decide not to use CESMM3, but if he decides that he will use it, he must do what it says that he'shall unless he expressly shows in the Bill of Quantities that he has done otherwise. There are a few instances where CESMM3 says that details of the procedure ‘should’ or ‘may’ be followed. In these instances there is no infringement of CESMM if the procedure is not followed. These less imperative details of procedure are of two types. One type concerns the procedure for bill layout and arrangement, which has no contractual significance whether followed or not; paragraphs 4.3 and 5.22 are examples. The other type is where the bill compiler is encouraged to use his judgement of likely cost-significant factors to decide on such matters as the subdivision of the bill into parts {paragraph 5.8) or the provision of additional item description (paragraph 5.10). Since the compiler cannot accurately make such Judgements without an unattainable foreknowledge of the factors which would actually influence the Contractor's costs, he can only be ‘Schedule of changes in CESMM2 encouraged to do his best, secure in the knowledge that hismothaving 1, Newly stated princste at peragraph Bot i quite right will not entitle the Contractor to have the bill "28 corrected later by an application of clause 55(2). This clause is in the 2 Former paragraph 2.6 is background of all the uses of the words ‘may’ and ‘should’ in renumbered 2.7. CESMM3. If, for example, paragraph 5.22 had said ‘the work items shall beset out in column tuled as follows --'a Contactor could SehadUe of chergosin CESS have asked for a bill to be corrected if the rate column ona particular 1. Paragraphs 2.1 and 2.2 make age were only 19 mm wide, Whether ornot the Engineer would then reference to class 2 for the decide that this affected ‘the value of the work actually carried out’ is ‘easurernent of simple ‘buidrg another matter. It would obviously have been pedantic to have made engineering works, this a rule instead ofa suggestion aimed at helpful standardization. 18, APPLICATION OF THE WORK CLASSIFICATION SECTION 3. APPLICATION OF THE WORK CLASSIFICATION ‘The Work Classification is the framework and structure of CESMM3. It is the main instrument of CESMM3 by which co-ordination of various financial control functions is fostered. It is a basic classification of the work included in civil engineering contracts which can be used for all purposes where it is helpful Examples of use of the Work Classification outside CESMM3 itself are: as the basis of contractors’ allocations in cost control, as an index for records of prices to help with pre-contract estimating and as an index to Specification clauses. The classification is a list of all the commonly occurring components of civil engineering work. It starts with the contractual requirement to provide a performance bond and ends with renovation of sewer manholes. The Work Classification is not a continuous list. It is divided into ' blocks of entries which have generic names. First the whole list is divided into 26 classes from ‘Class A: General items’ to ‘Class 2: Simple building works incidental to civil engineering works’. In between are classes for main operations, like class E for earthworks and class P for piling. Each class is divided into three divisions. The first division is divided into up to cight of the main types of work in the class, the second divides each of these up to cight times, and the 8.3. Ciassifcation table for pipasin process is repeated into the third division. Class I for pipes is illustrated Ceo Gecctoa toni Bi tig, 3. The frst division classifies pipes by the material of which hrecensaonsoreesatetoon cars they are made, the second by thenominal bore ofthe pipeand the third "bina to produce biet descrptions by the depth below the Commencing Surface at which they are laid. and code numbers for groups of com ponents of chil engineering works. In this case the brief descriptions are ‘The entries in the divisions are called ‘descriptive features’ because, cetnedir bile otautetos by when three are linked together — one drawn from each division more specific information given in between the same pair of horizontal lines — they comprise the ‘accordance with the additional description of a component of work in the full list of work in description rules in class CLASS |: PIPEWORK — PIPES Includes: Provision, laying and jointing of pipes Excavating and backfiling pipe trenches Exeludes: Work included in classes J, K, Land Y Piped building services (ineludedinciass Z) RST DIISION SECOND DIVISION THiRo oNsiON 1 Clayoipes ar [a Nominal bore: notesceesing 00mm | 1 Notinrenches 2 Concrtepipes m2 300"360 mm 2 Intvenenes, Soph: not excoading 15m 3 Wronpipee nis 300-800.mm 3 {Sam 4 Stotpipes mys 00-800 mm 4 23m 5 Folnylchloae pins ms So. asa mm : Ban Glessrenforcedpleste pipes mis "300-1s00mm m z ra mi? 1500-1800 mm 7 354m 8 mie exceeding 100mm |B excoeding Am v7CESMM3 HANDBOOK 18 the whole classification. Thus class I can generate 512 components in the list, from ‘Clay pipes nominal bore not exceeding 200 mm not in trenches’ to ‘Medium density polyethylene pipes nominal bore exceeding 1800 mm in trenches depth exceeding 4m’. ‘All components can be identified by their position in the classification list if the numbers of the descriptive features are also linked together. Thus the components mentioned in the previous paragraph are numbers 111 and 888 respectively of class I. When a class letter is put in front ofa number, a code number which identifies the component is produced. Thus 123 4 is a unique reference number for iron pipes of nominal bore 300-600 mm laid in trenches of depth 2-2.5 m. ‘The Work Classification does not subdivide to the finest level of detail at which distinctions might be needed. It does not, for example, subdivide pipes according to the different types of joints which can be used or different specifications of pipe quality. Also the method of trenching is not classified; neither is the type of terrain being crossed. The reason for this is that the Work Classification and the code numbers which go with it are intended to be adopted as the core of wider ranging classification systems used for other purposes and not necessarily standard among different users. This is the main importance of the Work Classification. Linked as it is to the items in the Bill of Quantities, it makes the use of logical data handling muct more worthwhile than hitherto on both sides of the contract. Wher bill items arising from any Employer or Engineer fit into the same classification, the use of an expansion of that classification by the Contractor as a framework for systematic estimating, cost recording output recording and valuation becomes possible and justifiable. Alsc bill preparation, with the aid of computers, estimating for the Employer linked to prices and escalation factors stored within the ‘Work Classification are made simpler. Coded classification of items in the Bill of Quantities is the key to the development of modem data handling arrangements used in civi engineering contracts, Tt makes possible computer assistance acros the whole spectrum of financial control. The person taking of quantities from a drawing could begin a process which was wholl computer aided up to the point where a draft-analysed estimate fo consideration by a tenderer’s estimator was produced, Itis not fancifu to foresee that, if a disc of the Bill of Quantities were to be sent ov with the invitation to tender, this could be used by the recipien contractors to produce immediately an analysis of the job wit tentative prices calculated from output figures and current unit cost drawn from files held on their own computers. The estimator's jo would then be to convert these average prices into prices appropriat to the specific job for which the tender was required. Clearly, sophistication of that order is not necessary, desirable practicable in all cases and the usefulness of the Work Classificatio does not depend on such refinement being attained. The discipline ¢ compiling CESMM3 for possible usc in that way meant that a procedures related to it could be made simple and logical. This h: more immediate benefits to organizations that do not aim to be in tk forefront of systems development. For example, the fact thar bil compiled using CESMM3 list items within the classes of CESMM means that contractors are able to set up simple arrangements f¢ allocating costs to classes and to find that these match self-containe[APPLICATION OF THE WORK CLASSIFICATION site activities. The simplest possible form of cost monitoring and comparison with valuations is thereby made utterly straightforward, and can be achieved without requiring a small company to use or obtain the help of specialists to set up a new procedure. The classification provides for contractors’ indirect and overhead costs to be allocated to class A. Also two of its eight first division features are left unused to provide room for any such costs which do not appear as prices in the Bill of Quantities and which would not become the subject of Method-Related Charges. The application of the Work Classification to the preparation of Bills of Quantities is explained in section 3 of CESMM3. Paragraph 3.1 requires that each item description should identify the component of work covered with respect to one feature from each division of the relevant class. The following example is given ‘Class H_ (precast concrete) contains three divisions of classi- fication, The first classifies different types of precast concrete units, the second classifies different units by their dimensions, and the third classifies them by their mass. Each item description for precast concrete units shall therefore identify the component of work in terms of the type of unit, its dimensions and mass." Paragraph 3.1 docs not say that the item descriptions shall use precisely the words which are stated in the Work Classification. Bill compilers are therefore not bound to use the words given in the Work Classification; they should use judgement to produce descriptions which comply with paragraph 3.1 without duplicating information. ‘This is particularly noteworthy where more detail of description is required by a rule in the Work Classification than is given in the tabulated and classified lists themselves. For example, a joint in concrete may be measured which comprises a ‘plastics waterstop average width 210 mm’. That is an adequate description which docs not have to be preceded by a statement that the waterstop is made of ‘plastics or rubber’ or that it is in the size range 200-300 mm’ Compilers of bills of quantities will need to exercise this type of judgement in many instances, most commonly when a rule requires a particular definition to be given in addition to the general definition provided by the Work Classification table. The rule then overrides the tabulated classification so that the latter merely indicates the appropriate code number for the items concerned. Rule 3.10 confirms this arrangement Another example will serve to emphasize this important point. It shows that the wording of the Work Classification can be simplified in item descriptions without losing meaning and without infringing the rule in paragraph 3.1. The text ‘Unlined V section ditch cross-sectional area 1-1.5 m?" would identify an item clearly as derived from the descriptive features for item K 4 6 5. It is not necessary to add to the description the words from the first division of the classification at K 4 * * : ‘French drains, rabble drains, ditches and trenches’, This is because the word ‘ditch’ appears in the second * division descriptive feature and itis irrelevant to point out in the item description that the item is from a division which also includes French and rubble drains. The lists of different descriptive features given are compiled to show the eight most common types of component in each part of the class. They do not attempt to list all types of component in any class. The 18CESMMS HANDBOOK 20 digit 9s to be used for any type of component which is not among th eight listed Paragraph 3.2 deals with the question of style in item descriptions. Ie point is that the bill, where it is dealing with Permanent Works should identify the physical measurable things and not attempr to lis all the stages of activity which the Contractor will havc to go throug! to produce them, There are good reasons for this apart from brevity However careful the bill compiler might be in listing the necessar tasks there will always be at least one more he could have added. Th risk of listing tasks inconsistently from one item to another i considerable, and if it occurs the Contractor may subsequently alleg that he had not allowed for the thing in the item that was incomplete It is better and contractually proper to rely on the wording of th Specification, Drawings and Conditions of Contract to establish th overriding assumption that the Contractor knew what he had to dot achieve the defined result and either did or did not allow for it in hi price, entirely at his own risk. For example, suppose a bill item wer worded: ‘Supply, deliver, take into store, place in positior temporarily support, thoroughly clean and cast onto in situ concret mild steel channels as specified and in accordance with the Drawing all to the satisfaction of the Engineer and clear away all rubbish o completion rate to allow for all delays and any necessary cutting < formwork and making good.’ This descripion is much ler informative than ‘Mild steel channels in pumphouse roof beams : detail E on drawing 137/66." ‘The latter description is much less dangerous to financial control if tt work on behalf of the Employer than the first, not just becau: something may have been left out of the first, but because the fir invites comparison with other item descriptions. Ifit is not stated th some other component is to be cleaned, the Contractor may conter that he has not allowed for cleaning, despite the fact that it would t unreasonable for him to expect not to have to. Phrases like ‘properly cleaned’, ‘to a good finish’, and ‘well ramme should be avoided like the plague. They are usually masks for slopy specification. ‘To the satisfaction of the Engineer’ is a particular abhorrent phrase to use ina bill of quantitics. The Contractor is und a general obligation to ‘construct and complete the Works in stri accordance with the Contract to the satisfaction of the Engine: (clause 13(1)). Adding these phrases to a bill item description misguided on ewo further counts. First the Specification, not the B of Quantities, is the place to define workmanship requirement Second if the Engineer knows what standard of work will bring hi satisfaction he should describe it in the Specification; if he does n know what standard he requires, the Contractor assuredly cann know and cannot estimate the cost of reaching it. Paragraph 3.2 refers to item descriptions for ‘Permanent Work CESMMB also sets out rules for temporary works such as formwo and temporary supports which should also be described in accordan with paragraph 3.2. In the context of paragraphs 3.2 and 3.3, it should be noted that t general case, assumed unless otherwise stated, is that item descriptic ‘identify new work which is to be constructed by the Contractor usi materials which he has obtained at his cost. Additional descriptiorAPPLICATION OF THE WORK CLASSIFICATION needed wherever this assumption is not intended. For example, additional description is needed to identify items for extracting piles, for underpinning and related work to existing structures, and for any work which involves the use of existing materials, such as the relocation of existing street furniture The first example in paragraph 3.3 uses the expression ‘excluding supply and delivery to the Site’ to illustrate an item description for work which is specifically limited. Compilers of bills of quantities should note that this expression is not defined in CESMM3 as its exact scope may vary from one contract to another. For example, pipework supplied by the Employer may be for collection by the Contractor from a depot or may be delivered to the site for the Contractor. Compilers of bills of quantities should therefore ensure that, whenever the scope of an item is specifically limited in this way, the precise limitation is stated and that, if an abbreviated expression such. as ‘fix only’ is used, a definition of this term is given in the preambles to bills or in a heading to the appropriate items. A second example is included in paragraph 3.3. This is intended to clarify how work divided between two bill items should be described. This often occurs when additional description is necessary to make it clear how the cost of supply and fix ate divided between two items. The principle to be followed in bills prepared using CESMM3 is simple. Unless otherwise stated, all items are assumed to include both supply and fixing of the work they cover. Whenever this is not intended, additional description must be given to identify whether the item is intended to cover supply or to cover fixing. Paragraphs 3.4 and 3.9 which deal with separate items, are important as they directly govern against which different components of work the tenderer will be able to insert different prices. There is no absolute criterion of ‘full’ measurement no level of detailed subdivision of the work into items which is complete or incomplete. A bill of quantities for a motorway would earn the name if it contained one item ‘Amount Number | Item description | Unit | Quantity | Rate £ |p 1 Motorway m_| 23124 It would also earn thename ifit contained separate items for each piece of reinforcing stccl of a different shape in each different bridge, for each differently shaped formwork surface, for each detail of water stops and drainage fitings, and generally for no two things of any detectable dissimilarity. Such a bill would contain several thousand items and would be as useless due to its over-complexity as the single item bill would be due to its over-simplicity. In practice effective financial control is served by using bills of quantities which balance the opposing pressures for precision and simplicity. Real cost differentials should be exposed by dividing work into separate items which itis helpful to price differently. Trivial or imagined cost differentials are ignored when their influence on the amounts of money changing hands does not justify the cost of cosseting the necessary items through the processes of estimating and interim measurement into the final account. 2CESMM3 HANDBOOK 2 The effect of paragraph 3.4 is that no two items from the Work Classification list may be put into one item. Hence formwork may not be included with concrete, lined and unlined ditches may not be covered in the same item, and so on. Thus the Work Classification, coupled with paragraph 3.4, has the effect which is achieved in other methods of measurement by many different rules of the general form, separate items shall be given for lined ditches’ or for any other distinctive component of work. Paragraphs 3.6-3. 11 are the rules which establish the function of all the material which appears on the right-hand pages of the Work Classification. The rules are categorized according to whether they refer to measurement itself, definitions of terms used in the Work Classification coverage to be assumed for particular items and description to be given in addition to that which is derived from the main classification tables in accordance with paragraph 3,1. These four types of rules are set out in columns. Generally, each rule is printed alongside the section of the classification tables on the left-hand page to which it refers. Fig. 4 is a reproduction of the first group of right-hand page rules from class C of CESMM3. Paragraph 3.6 is the definition of the first type of rule, the measurement rule, Measurement rules either say something which affects how a quantity against a particular item or group of items will be calculated or say something about the circumstances in which particular work will or will not be measured. The measurement rules exemplified in Fig, 4 show these different functions. Rules M1 and M2 are rules affecting the quantity calculated for such items as the depths of holes in carrying out geotechnical processes. Rule M3 is a ‘measurement rule stating the circumstances in which work associated with drilling grout holes shall be measured. M¢ is an example of a measurement rule using the expression ‘expressly required’. All uses of this expression in the Work Classification are contained in the ‘measurement rules. Paragraph 3.6 refers to paragraph 5.18. The logical connection between the two demonstrates that the measurement rules are quite clearly and consistently the exceptions to the general rule of calculation of quantities set out in paragraph 5.18, Put another way, this means that if there is no measurement rule alongside a particular group of items in the Work Classification the general rule of measurement in paragraph 5,18 applies. This is the principle, but it does not apply entirely. It has to be qualified because there may be measurement tules that are applicable to the whole of one class which appear at the head of the class as illustrated by Fig. 4. Paragraph 3.7 establishes the function of definition rules. The phrases or words for which definitions are given in the definition rules are assumed to have the same meanings when they are used in bills of quantities. Most of the definition rules cover matters which it is helpful to define in order to avoid ambiguity in bills of quantities. For example, definition rule D8 in class F says thata wall less than 1 mlong isto be called a column, Itis followed by definition rule D9 which says what is meant by a ‘special beam section’. A particular function of some definition rules is to enable bill item descriptions to be abbreviated. The example which appears in Fig. 4 is of this type. It says that drilling and excavation for geotechnical processes shall be deemed to be in material other than rock or artificial hard material‘APPLICATION OF THE WORK CLASSIFICATION (MEASUREMENT RULES DEFINITION RULES COVERAGE RULES CLASS C ADDITIONAL DESCRIPTION RULES. {obs m moter other ten sector irsfotherdmatonalunces Stroreiso satan tem Seseions DI Driling andexcavatonior | C1 Wamatormorkinthiaclass orkinisclassshell be deomes | shalibe deemed telnctda IM3_ Orting trough previously i} routed holes inte course oF Stage growing shal not be aeured. Where oles are ‘cpessiy aquired tobe ‘extended the numberct bales {hall be meesared onc ding through previously proved hoes ‘halloe mecsureaa ding tivough oct or rit hae IMa_ the numberof stages ‘measured shal athe tal umber of grouting stages Bepresry requires 'At_ The darters ofholes sal ba stated item descitions ler Erling ae eng fo grout hoes unless otherwise stated in item descriptions. The effect of this rule is nothing more than to permit the words ‘material other than rock or artificial hard material’ to be omitted from bill item descriptions. This mechanism is used in a number of places in CESMM3 to allow the words which would establish the general case to be omitted from bill item descriptions leaving only special cases to be explicitly mentioned, Paragraph 3.8 is an important rule in CESMM3 which establishes the fanction of coverage rules, Work inchided by virtue of a coverage rule does not need to be itemized separately in the Bill of Quantities. For example, coverage rule C1 in class R of CESMMG states that items in the class which involve in situ concrete shall be deemed to include formwork. Paragraph 3.8 includes a very important provision to the effect that coverage rules do not state all the work covered by the item concerned. This means, taking the same example again, that items in bills of quantities for concrete carriageway slabs do cover, and the rates entered against such items in a Bill of Quantities arc decmd to include, formwork. Paragraph 3.8 is worded carefully so that the existence of this coverage rule cannot lead to an argument that any work other than formwork is not included in the item because itis not mentioned in the rule. It follows that coverage rules only draw attention to particular elements of cost within a bill item which are certainly deemed to be covered. They leave the majority of the clements of cost to be inferred from the description used in the Bill of Quantities which identifies the work shown on the Drawings and described in the Specification. The coverage rule does not, of course, override drawings and specifications in the sensc that if, for example, no formwork is required for a particular carriageway slab the rate against a bill item for it would not include formwork. Coverage rules do not normally mention work which is also mentioned in additional description rules. Occasionally this repetition is made in order to add emphasis Fig. 4. The layout of the classified rulas in CESMM3: note the different style of each of the four types of rule, ‘the horizontal alignment and the use of the double horzontal ine to separate rules of general application to the class,(CESMM3 HANDBOOK 2 ‘The last sentence of paragraph 3.8 points out that the Contractor may have allowed for the work referred to in a coverage rule in : Method-Related Charge. This is quite permissible and indeed is to bx encouraged where the cost of the work referred to in the coverage ru is either independent of the quantity required or related to time. Paragraph 3.9 in CESMMS establishes the function of the additiona description rules in the Work Classification. The importance of th additional description rules should be emphasized. Paragraph 3.9 i very explicit. In simple terms, it should be understood that th classification tables on the left-hand page in CESMM3 only generat the basic subdivision of civil engineering work into items and the basi descriptions which will be used. Further description and furthe subdivision into items is very often required as a result of applying th additional description rules. The main classification tables are divide. into three divisions. [It may be helpful to think of the additions description rules as providing a fourth uncoded division. Paragraph 3.10 makes it explicit that additional description rules cat override the main classification table. It refers in particular t dimensions mentioned in item descriptions. There are a number 0 instances in CESMM3 where an additional description rule requires particular dimension to be stated in an item description although th related part of the Work Classification table only requires a range 0 dimensions to be stated. The most well known example of this is th cone which is used as an example in CESMM3. Additional description rule A2 of class I requires that the nominz bores of the pipes shall be stated in item descriptions. The range ¢ nominal bore taken from the second division of the classification class I shall not also be stated. The rule in paragraph 3. 11 is illustrated in Fig. 4. To reduce repetitio. of the rules in CESMMG3, any rales which apply to the whole of a clas, ate printed at the head of the first right-hand page above a doubl horizontal line. Ifthe class runs over onto a second page, a reminde that there are rules of general application is printed at the head of th following right-hand page. In some classes, rules are repeated once 0 twice within the class because they apply to more than one section ¢ the table. In such cases the rule is printed more than once but th number is kept the same. “The phrases printed in italics in the rules on the right-hand pages of th Work Classification are those which are taken directly from th classification table on the left-hand page. This has no contract: significance: its adopted merely as a convenience to enable users ¢ CESMMS to recognize very quickly the type of work to which th tule refers. ‘The numbering of the rules in CESMMG reflects the categorizatior Rules of each type are numbered consecutively within each class wit a prefix letter identifying the type as follows M = Measurement rule D_ Definition rule C Coverage rule A. Additional description rule Identical rules in the same class have the same number. Some class. inclide a note printed below the categorized rules. These are genuir‘APPLICATION OF THE WORK CLASSIFICATION, notes in the sense that they refer to options open to compilers of bills of quantities; they are not rules which must be followed. There are notes in classes A, G, K, N, R, T, V, W, Y and Z. In accordance with the general principles, the main object of subdividing civil engineering work is to derive a set of items which most realistically represents those different aspects which influence the total cost of what is to be done. This pursuit of realism is tempered only by the need to limit the number of items to one which will not generate clerical work out of proportion to the resulting precision of the estimating for and valuation of the work. ‘The introduction of Method-Related Charges cakes one significant pressure off this process of dividing work into separate items. Since Method-Related Charges are provided to cover, along with the Engineer's general items, all the elements of the cost of the work which are not directly proportional to the quantities of the Permanent ‘Works, it follows that the classification of the Permanent Works need concern itself only with distinctions of those costs which are proportional to the quantities of measured work. This is why, for example, there are no items in the Work Classification for bringing items of plant to and from the Site. Where the cost of such transport of plant is significant, the tenderer may, and should, enter it as a Method-Related Charge. An important point about the Work Classification is that the Contractor is assumed to have allowed for everything which is required by the Contract somewhere in his set of prices against items, subject only to the provision for correction of errors and omissions from the bill provided by clause 55(2). Neither CESMM3 nor the Bill of Quantities attempts to tell the Contractor precisely how he shall distribute his expected costs between the prices inserted against the various bill items. There is only a general assumption that the costs of the components ofthe work identified by the item descriptions, which are related in some proportion to the measurement unit of the item, are in the prices inserted against cach item. Paragraph 3.5 is the rule which gives effect to the way in which the Work Classification prescribes the units in which the various work components are to be measured. ‘Schedule of changes in CESMM2 11. Work split between two classes is ‘eferred to in paragraph 3.3. 2, Rules for the use of the right-hand ages in the Work Classification have been changed and now ap- pear as paragraphs 3.6-3.11. ‘Schedule of changes in CESMM3. NoneCODING AND NUMBERING OF ITEMS SECTION 4. CODING AND NUMBERING OF ITEMS Section 4 of CESMM3 explains how the coding of items in the Work Classification can be used as the basis of item numbering in bills of quantities. It is not a requirement of CESMM3 that code numbers should be used as item numbers. It is clearly helpful to contractors using the CESMM3 classification structure in connection with estimating or cost control if bills arrive ready coded by means of the item numbers. The other advantage of using item numbers based on code numbers is that it encourages uniformity of sequence of items in bills. Items should not be listed rigidly in ascending order of code number as there are some places where this would prevent useful headings being provided, but it is of great assistance to estimators, planners and buyers if bills arriving from various sources all have items presented in the same sequence. It can take a long time for an estimator or for the buyer responsible for sending out enquiries to develop the necessary familiarity with the document ifitis not set out in the order which has become familiar through standardization. ‘There is a tenacious view held by many who are not directly concerned that estimators like to see work billed in the order in which itis done on the Site, to see the formwork with the concrete or to see the large value items listed first. Most of these ideas are based on a mental image of the estimate being compiled by one person who works through the bill from page one to the end, considering each item separately and writing in its price before reading the next. This image is quite out of date and was probably ever near the truth only in the building sector. Estimating generally begins with separating the materials and sub-contracted elements for obtaining quotations. Then the various operations of plant and labour are planned information being taken from the Drawings, Specification and Bill of Quantities Unit estimated costs emerge first, in blocks of items which may be for any part of the bill. Gaps are gradually filled and itis only at a very late stage in the process that any prices are fixed based on these estimated costs. The sequence of items is largely unimportant, but it is of significant convenience ifitis always the same, Bills are usually divided into parts to distinguish phases of the work or different structures, or for other cost-significant purposes. Where separate ‘bills’ were formerly the normal way of dividing up a bill, these are now replaced by ‘parts’. The items in each part are arranged in the general order of the Work Classification. This means that there can be items with the same code number in different parts of the bill Where items are referred to outside the bill their number is preceded by the number of the part from which they are taken so that no wo items in one bill have the same complete reference number. Thus, ifan item H 1 3 6 were in two parts of a motorway bill, one of which was 2CESMM3 HANDBOOK Schedule of changes in CESMM2 None. Schedule of changos in CESMIM3 None “Part 4: Corvedale Road Bridge’, outside the bill the item number would be referred to as 4. H 136. If that item were to have a suffix number as well, denoting the presence of additional description, the item number would be 4. H 136.2. Ina very big bill there may be ‘many parts and many suffixes and an item number could be 24. H13 6.15. The patt of the item number between the dots has the standard ‘meaning drawn from CESMM3, in this case ‘Precast concrete beam length 7-10 m mass 5-10 t’. The prefix and suffix are non-standard and are peculiar to the particular bill. The prefix is a part reference, usually to a location, which might mean ‘Corvedale Road Bridge’ in ‘one job or ‘Whettleton pumping station’ in another. The suftix number might mean the additional description ‘rectangular 200 mm x 400 mm concrete grade 30 mark 25 in deck’ in the first case or ‘1 section 250 mm X 350 mm concrete grade 25 mark 4 in roof’ in the second. Where subheadings are used within parts of a bill ic is sometimes difficult to ensure that the same item number is not repeated within a part. This can be avoided by adding suffix numbers as ifthe heading ‘were additional description. The suffix number 1 may be added to all items which have additional description, whether or not they are followed by other items of the same code with different additional description. This then acts merely to indicate that there is additional description amplifying the standardized description derived from the Work Classification, CESMM3 does not require this indication to be given. Some parts of the Work Classification do not make use of all three divisions. An item drawn from such a part may be coded with zero in the position of the unused division. Examples of this are given in the example bill pages in section 8 of this book, To comply with paragraphs 4.5 and 4.6, the numbers of the gaps in the Work Classification should not be used to code non-classified items. However, this practice cannot mislead users and it is sometimes adopted in order to simplify item numbers, Itis pertinent to end this section with a reminder and a reassurance. ‘The reminder is that the whole subject of code numbers and itern numbers has no contractual significance. The only item description is the text in the column headed ‘Item description’ and itis unaffected by the item number be it correctly coded, incorrectly coded or not coded at all, The reassurance is that estimators are not expected to commit code numbers to memory or to use CESMM3 as a code directory. CESMN3 gives no authority for code numbers to be used within item descriptions in place of text properly assembled in accordance with the rules of CESMM3. Section 4 in CESMMB is the same as in the first edition. Despite the novelty of the coding system when introduced in the first edition, no change to how it works has become necessary. The code numbers themselves have been changed in the Work Classification of later editions where the itemization has been changed, but the arrangements for using the coding are unaltered.PREPARATION OF THE BILL OF QUANTITIES SECTION 5. PREPARATION OF THE BILL OF QUANTITIES Section 5 of CESMM3 contains the details of the general rules for preparing bills of quantities and deals with the treatment of special features of bills such as items for Daywork and Nominated Sub-contractors, ‘The first paragraph is a reminder that the method of measurement isa } method of measuring what has been done after ithas been built as well as a method of measuring what is expected to be required. CESMM3 contains rules for compiling bills of quantities from the measurements made of proposed work. The same rules apply to the measurements made of completed work. Paragraph 5.2 establishes that bills of quantities should be divided into sections in a standardized way in order to sustain uniformity of presentation which is one of the principal aims of CESMM3. This rule \ produces the typical table of contents for a sample Bill of Quantities shown in Fig, 5. The sections are identified by the letters A to Eso that they are not confused with the locational or cost-significant parts into i which the work items are divided and which are identified by \ numbers. Section C is the Daywork Schedule, and may be omitted. ‘The use of the list of principal quantities is defined in paragraph 5.3. This paragraph echoes the wording of the Form of Tender so that itis quite clear that no subsequent contractual contentions can be attached to any discrepancy between the impression created by the list of principal quantities and the details of the quantities proper given in the Bill of Quantities itself. A list of principal quantities like that required by CESMM3 was often given in the Specification prior to the introduction of the first edition. There is no standard method of specification, but bringing the requirement into CESMM3 ensures that the list is always given. It does not need to be an extensive list. It can be assembled by the bill compiler very easily after the bill has been drafted, using his 5 knowledge of the job and of the bill layout. It will be referred to by { estimators at the beginning of their involvement with the bill, until i they also gain a knowledge of the job and of the bill layout. Fig. 5. Example of the standardized 1 Section B. Preamble sequence of contents of a bill of i Section C Daywork Schedule Quantities which results from Section D. Work items application of paragraphs 6.2 and 6.8. Pant 1. General items Sections of the Bill are identified by | Part 2. Outfit the lettars A to E to distinguish them | Pen 3, Plowden treatment works ‘tom the numbered pars into which ) Peat est bran sae the work items themselves are ar. Eost branch sewers tale Part 6. Whetleton pumping station | ‘Section E. Grand Summary‘CESMM3 HANDBOOK Fig. 6. Example of alist of principal quantities compiled to comply with paragraph 5.3 30 CESMM3 gives no guidance on which quantities should be regarded 4s principal ones for the purpose of compiling thelist because it would be difficult to make a bad job of selecting them. It would be exceptional for the list to need 3 second page in the bill. Ifthere are too many principal quantities the object of thelist is defeated. A suggested list for a hypothetical contract is shown in Fig. 6. It is not essential to divide the list into the bill parts and it is unhelpfill to do so if there are very many parts. More detail may be given when one type of construction predominates. Only four of the functions of the Preamble to a bill of quantities are defined in CESMM3. It is the place where any special methods of measurement adopted for the particular contract are defined. That CESMM3 sets forth a procedure'to be used where the standard procedure is not going to be used is something of a paradox. It should not be taken as a licence to use non-standard methods of measurement indiscriminately. The stipulated procedure should be used throughout every bill of quantities except where there are practical remons why a clearly defined differen procedure would be preferable. ‘An example of such a reason is where the Contractor is to have some abnormal design responsibility so that the quantities of work to be carried out will be more under his control than usual. Ifthe Contractor has a performance specification for a component itis preferable for it to be measured in less detail chan CESMM3 requires so that the valuation of the work is unaffected by the Contractor's choice of design. A similar situation arises where the Specification contains permitted alternatives, as is common for major road contracts. The permitted alternatives have to be grouped into one bill item so that the Valuation is unaffected by the choice between alternatives eventually made by the Contractor. Such groupings of work within one item conflict with paragraph 3.4, Where this arrangement is used a clause should be given in the Preamble which states which components of the work are the subject of permitted alternative specifications and which provisions of CESMM3 Work Classification are not to apply, and sets out any non-standard rules for measurement which are to Section A. List of principal quantities 1, General items Provisional Sums 40.000£ Prime Cost hems 1650006 Pan 2. Outta © ‘4.000m= 1 000. 850m 200m Pana 23 000m? 8.000 m= 9000 n 4.200% Pars, 800m 400 Pan. 900m Manholes 80a Part 6, Whetieton pumping station ‘Excavation 1200 m9 Filing ‘400 9? Concrete 600 m2PREPARATION OF THE BILL OF QUANTITIES apply. Paragraph 5.4 also contains a statement about measurement of contractor-designed work or work where the contractor is expected to make a design decision by the choice between alternative materials ‘or methods. The principle set out is simply that, if the Contractor is given a choice of permanent works to provide, the Contract Sum should be unaltered whatever choice he makes. This implies a briefer than usual description and itemization in the Bill of Quantities to which reference must be given in the Preamble. The standard method of measurement used before the first edition was published listed a group of directions to tenderers which were usually repeated in bills, All of these are now covered by statements in the Conditions of Contract, the Appendix to the Form of Tender, or CESMM3 and there is no need for them to be given in bills of quantities. It used to be particularly common for the Preamble to say that the cost of any work for which the items were unpriced would be deemed to be covered by the prices inserted against the items which ‘were priced. This point is now established in clauses 11(3)(b) and 55(2) of the Conditions of Contract. ‘The former practice of stating in the Preamble that the bill had been prepared ‘generally in accordance’ with the standard method of measurement is something which by now should have died out. It was intended to shield the Employer from any inadvertent deficiencies in the preparation of the bill by stating that none of the particular rules of measurement could be assumed to have been followed. Such statements were always unhelpful; they are now quite out of place. Itis ‘no more tolerable for the Contractor to accept such a declaration than it is for the Employer to receive a tender declaring that the prices are to cover work ‘generally in accordance with the Specification’. ‘The Preamble may also be used to bring into the Contract precise definitions of the tasks which are intended to be covered by the items. Such schedules of item coverage are now well established in some of the sectors of civil engineering where an employer is able to use a standard specification linked to the Bills of Quantities for his work. Item coverage schedules can be brought into bills compiled using (CESMM3 by setting out in the Preamble the amendment to or substitution for paragraph 5.11 of CESMM3 which is to apply. For example, if an cxisting schedule of item coverage is to apply, it could be stated in the Preamble that paragraph 5.11 of CESMMB is to be amended by the addition at the end of the paragraph of the words ‘and the Schedule of Item Coverage issued by. .. dated. ..'. Tt must be noted that the use of schedules of item coverage is not essential to the use of CESMMG3, It is justified only where a large volume of work is being carried out using a standard specification which covers a limited range of work. Where this is not the case item coverage schedules can be misleading. Suppose, for example, a schedule stated that the work covered by the items for kerbs included construction of a concrete bed and backing, including formwork, reinforcement and joints. Provided that the item coverage was used only where a standard detail of beds and backings was shown on the Drawings and described in the Specification this would be a helpful reminder to the estimator. It does not help actually to price the item because the estimator in any case has to look at the Drawings and Specification in order to find out the dimensions and quantities of work and to estimate its cost 31CESMMs HANDBOOK Adjustment Item Method-Related Charges Where there are no standard details or standard specification there is danger that the standardized item coverage may conflict with th particular Drawings and Specification. It would be most unhelpful fo the standard item coverage to say that the item included conerete be: and backing to kerbs ifno such work was actually required. Users of CESMM3 must understand that it does not include a ful coverage schedule. It only includes 2 relatively small number coverage statements made to avoid uncertainty in particular areas. Paragraph 5.4 requires the extent of the work affected b non-standard measurement to be stated in the Preamble. This mean that estimators must study the Preamble carefully as they cannot reb on a reminder appearing in the bill itself that something is bein; treated in a non-standard way. Paragraph 5.5 refers to the definition of rock given in the Preamble 0 the bill for any contract which includes excavation, boring or driving Excavation here does not mean only work described as excavation i the Work Classification; it includes work which comes within th normal wider meaning of the word, such as trenching for pipes anc ducts. The paragraph effectively means that a definition of rock mus be given in all but the rare cases where the Permanent Works are abov. ground and superimposed on existing foundations or structures Standard methods of measurement used to require the definition 0 rock to be in terms of the expected geological formations. CESMM. only requires a definition to be given; it does not constrain its terms Until numerical classifications of the digability of strata can be given it is advisable that this definition should be in terms of gcologica formations and conditions. These should be related to the terms use in any borehole logs or other site investigation data made available t tenderers so that the quantities given can be referred to such data. Iti not helpfal to define rock in terms of the plant which the Engine considers is capable of removing the various strata shown on th borehole logs unless his assumptions in this respect are stated in th Contract, Boulders should be referred to in the definition of rock. Th minimum size of boulder which is classed as rock is stated in class E but if a similar minimum is intended to be applied to excavation it other classes it should be stated in the definition of rock in th Preamble. Paragraphs 6.4 and 7.7 require that statements about the Adjustmen Item and Method-Related Charges should appear in the Preamble ‘The following statements can be used. For the purposes of clause 60 interim additions or deductions 0 account of the amount, ifany, of the Adjustment Item shall be made i instalments in interim certificates in the proportion that the amour referred to in clause 60(2)(2) bears to the total of the Bill of Quantitic before the addition or deduction of the Adjustment Item. Method-Related Charges shall be certified and paid pursuant t clauses 60(1)(d) and 60()(a) ‘The fourth function of the Preamble defined by CESMM3 is that should identify any bodies of open water on the Site. This procedure explained in the context of paragraph 5.20 later in this chapte:PREPARATION OF THE BILL OF QUANTITIES Paragraphs 5.6 and 5.7 deal with the Daywork Schedule, Three possible procedures are offered: (a) in paragraph 5.6 is the use of an ad hoc schedule of resources and conditions of payment compiled specifically for a particular contract; (b) is the use of the Federation of Civil Engineering Contractors’ daywork schedules with provision for adjustment of rates by percentages inserted by the tenderer. The third procedure, not directly referred to in CESMM3, is not to put a Daywork Schedule in the bill a all. The effect of this is that the FCEC schedules are used without adjustment (clause 52(3)). Procedure (b) should be used unless there are special circumstances which dictate otherwise. It has the advantage that it uses the well-established and well-known arrangement of and conditions attached to the FCEC daywork schedules while allowing the general level of the rates to be subject to the pressures of competition and to reflect differing cost levels in different arcas, Materials and plant costs are normally higher in remote areas due to higher transport costs and lower in major conurbations. It is helpful to the financial control of projects if this can be reflected in Daywork rates in the same way as tis reflected in the ordinary rates for work in the bill. Clause 52(3) of the Conditions of Contract allows for the use of procedure (b) only ifit is presented in the Bill of Quantities in what may scem an odd way. Unless there actually is a section headed ‘ Daywork Schedule’ in the bill the clause says that the FCEC schedules will be used without provision for any adjustment, To avoid this interpretation, sub- paragraph (b) of paragraph 5.6 has to be given in the bill under the heading ‘Daywork Schedule’ Sub-paragraph (b) of paragraph 5.6 refers to the adjustment of the labour, materials, plant and supplementary charges proportions of the payment for Daywork. This adjustment consequently applies to the total payment made against expenditure under these four schedules in the FCEC schedules. Thus the percentage addition or deduction stated in the Daywork Schedule in the bill against labour would apply to all payments referred to in schedule 1 of the CEC schedules. Similarly the adjustments entered for materials and plant would apply to afl payments referred to in schedules 2 and 3 respectively. CESMM3 provides for adjustment of Schedule 4— Supplementary charges. The charges referred to in notes and conditions 2{i), 3 and 6 of schedule 4 are not regarded as supplementary charges for the purposes of ‘CESMM3 because they are actually categories of expenditure covered by the earlier schedules. ‘The wording of paragraph 5.6(b) makes it quite clear that the addition ‘or deduction inserted by contractors in the Daywork Schedule in the Bill of Quantities is in addition to and not in place of the percentage additions in the FCEC schedules themselves. Paragraph 5.6 includes the word ‘inserted’. CESMMS uses the words ‘given’ and ‘inserted’ to distinguish by whom words, phrases and other material are put into Bills of Quantities. The word ‘given’ is always used to refer to material which will appear in the printed Bill of ‘Quantities and which is therefore the responsibility of the compiler of the bill to determine. This includes item descriptions and quantities for Permanent Works. The word ‘inserted’ is generally used to refer to ‘any material put into the bill by the tenderer and which may differ from one tenderer to another. This includes rates and prices against items, and item descriptions for Method-Related Charges. 33CESMM3 HANDBOOK a4 Paragraph 5.7 provides for Provisional Sums to be given in the Bill o ‘Quantities in class A, not in the Daywork Schedule for the expectec expenditure on Daywork labour, materials, plant and supplementary charges, They should be set realistically so that the addition of thi percentage adjustments provided under sub-paragraph (b) 0 paragraph 5.6 contributes a realistic amount to the total of the pricec Bill of Quantities on which tenders will be compared. Paragraph 5.8-5,23 deal with general points about the ordinary bill items whicl make up the bulk of the Bill of Quantities Section D: Work items ‘These items are divided into numbered parts. This is a change fron ‘earlier practice when it was common to divide the bill into bills. As th: Conditions of Contract and other documents outside the bill itsel refer c© the bill in the singular, it is consistent to refer to it in thy singular within itself. The main division of the bill is into section which are standardized by paragraph 5.2. Section D (work items) i then divided into numbered parts which differ from one bill to anothe and are mainly locational or related to the timing of the work. Th {guidelines for the division of the bill into parts are given in paragrap| 5.8 and are sufficiently important to be considered separately. ‘The criterion of division of the bill into parts is distinction betweer parts of the work which for any reason are thought likely to give ris to different methods of construction or considerations of cost Paragraph 5.8 does not say whose thoughts are meant; it must be thos of whoever is responsible for the preparation of the bill. Carefu consideration of this distinction is very important to the usefulness 0 the bill to the tenderer during estimating and to all parties in th subsequent financial control of the contract. If well done it make co-ordination of planning and scheduling with financial contre straightforward, allows the prices to reflect properly the realities © the cost of the various parts of work, enables interim valuations to b prepared easily, simplifies agreement of new rates for varied work an: encourages prompt settlement of quantities and prices for complete: parts of the work in the final account. If dividing of the bill into parts done badly or not done at all che estimator may have to set abou taking off quantities from the Drawings in order to isolate how muc work is where and of what type. Preparation of a programme of wor! may eequite further taking of fo isolate how much work can be don when and in what sequence. Short cuts in interim measuremen ‘cannot be taken by assessing the percentage complete of the variou parts of the work, Few bill items are finished with until the end of th job so that preparation of the final account cannot ‘start until then ‘When a new rate based on an original rate has to be developed an: agreed, the cost factors for the work under consideration are difficul to separate. The original rate is a compromise struck from considerin, several different costs which could only be expressed as one rate. Cas flow forecasting by both the Employer and the Contractor is mad difficult by the absence ofa breakdown of prices which can be relate easily to the construction programme. Dividing the bill into parts is one of the many aspects of bi preparation and contract financial control generally which requir judgement based on knowledge of the factors which influence th Contractor's costs to be exerted by the Engineer and othe professional people who may be retained to act on behalf of th Employer. Positive involvement in the acquisition and application ¢ this knowledge is a rewarding aspect of the professional task. } develops positive working relationships with the Contractor's stafiPREPARATION OF THE BILL OF QUANTITIES and leads to sounder design decisions, and an enhanced facility to recognize and respond appropriately to efficiency and inefficiency in contractors. Itis intended that the suggestions made in paragraph 5.8 should lead to a greater subdivision of the bill than was normal hitherto. This will enlarge bills to some extent, particularly where similar items recur in several different parts of the bill, but the advantages of subdivision will amply compensate for the enlargement. Estimating will be simplified by the subdivision of quantities into parts which are likely to have different cost characteristics, but will be slightly hampered by the separation of some items which have the same cost into different parts of the job. Planning, valuation of variations, cash flow forecasting and settlement of final accounts are all simplified by thorough subdivision of the bill Obviously one of the main purposes of paragraph 5.8is ro enable parts of the bill to be related to operations in a construction programme. This means chat planning and estimating can be integrated more easily. This is helpful, but a more easily obtained benefit is its effect on valuation procedures. It is not uncommon to measure in detail for interim payments only at quarterly intervals, and to use an approximation for the intervening two months. This reduces administrative cost slightly. However, it is more effective to estimate the value of incomplete bill parts on a percentage complete or quantity of'mainitem basi, and to add this each month tothe agreed final vale of completed bill parts. The site staff responsible for assembling the final account can begin this as soon as work on the first part is complete and need not concern themselves with incomplete parts. ‘The assessment of incomplete parts for interim payment is treated as a by-product of measurements taken for other purposes, such as the Contractor's cost control or bonus scheme. In theory this produces the complete final account very soon after completion of the work, but in practice there are often reasons why this is not achieved, Some improvement will always derive from the fact that site surveying staff can be instructed to work only on the final account right from the start of their work. Full subdivision of the bill into parts helps this to be realized. In special circumstances it has been recommended that bills should be subdivided into parts which are synonymous with the activities on a skeletal programme or network for the work specified in the Contract. Users of CESMM3 should not confuse the arrangements for dividing 2 Bill of Quantities into parts with the division of CESMM3 itself into classes. Iris not necessary or even advisable to make the items in a bill which are drawn from one class into one part of the bill. Location and timing are the main criteria for subdividing a bill into parts. It is not ‘necessary to have an earthworks bill, a concrete bill, etc. Sometimes. location and class are synonymous. The class arrangement is sufficiently apparent from the bill items themselves (whether coded or not) to make use of the class title to separate parts of the bill unnecessary. The exception to this advice is Class A: General items. It is often helpful to keep all the general items in a separate partof the bill, ‘in which case Bill Part 1 comprises all the items drawn from class A and no others.CESMM3 HANDBOOK 36 Paragraph 5.9 gives the rules for interpretation of headings in bills of quantities. It does not say how a heading shall be indicated, but common sense dictates that a heading needs to look different from the ‘ordinary text of item descriptions. Since any textin a heading is read as, part of the following item descriptions, any part of a description Which is common toa group of items can be used as a heading in order to simplify following item descriptions. This should not be done excessively ot where only a small number of items are involved because it inevitably adds extra effort to interpreting individual bill items, CESMM3 does not preclude the use of ‘ditto’ within item descriptions, but it is not encouraged because, like excessive use of headings, it makes the interpretation of individual items difficult and causes problems ifitems are referred to outside the bill. Difficulties can also arise when new items are added or existing items deleted. Paragraph 5.10 is one of the most important in CESMM3. It establishes that the bill compiler may elaborate item descriptions and split work into separate items more than CESMM3 require: Whenever the work to be carried out ‘is thought likely to give rise te special methods of construction or considerations of cost’. The paragraph says this ‘may’ be done, not that it shall be done, Again this is because it would be unreasonable for the Contractor to havea basi: for claiming extra payment if the compiler of the bill did not havc perfect foresight. Both paragraph 5.8 and paragraph 5.10 would impose an impossiblc task on the compiler if they said ‘shall’ instead of ‘may’. As it is the compiler should recognize the benefit to the administration of the Contract which doing what is suggested in paragraph 5.10 wil achieve, and also recognize that he cannot be assailed if he does i les: than perfectly. The bill compiler will soon realize that it is in th: thorough and comprehensive application of paragraph 5.10 that thy exercise of his professional judgement in the preparation of a civi engineering bill of quantities mainly lies. CESMM3 provides a set of rules for describing, and itemizing mos components of civil engineering work. It is not a strait jacke procedure; it produces a minimum detail of description an: itemization on which the Contractor can rely, but encourages greate detail in non-standard circumstances. Since civil engineering contract invariably include non-standard work and work in non-standar: circumstances, the bill compiler must always expect to amplify th information given so that non-standard characteristics ar highlighted. Paragraph 5.10 will normally lead to non-standar: itemization and additional description affecting a significan proportion of the items in any bill. The test which should be applic: by the bill compiler is to ask himself which unusual features of th work component which he is to describe are significant to the likel cost ofthe component. Ifany of these features are not mentioned in th description which would be generated by the application of th CESMMG rules they should be mentioned as additional descriptio and the resulting item must be given separately from other items. Iti worth bearing in mind that this applies equally to unusually easy an cheap work as to unusually difficult and expensive work. [As this aspect of bill preparation is non-standard, the Contracto ‘cannot rely on its having been done in any particular way. Contractually, by virtue of the wording of paragraph 5.10, he eanncPREPARATION OF THE BILL OF QUANTITIES rely on it having been done at all. A bill compiler who does not apply paragraph 5.10 at all may comply with the letter of CESMM3, but he will fal entirely to comply with its spirit and intention, Unusual or differing tolerances are good examples of information which should be given as additonal descrpcion a a result of applying paragraph ‘When the final account is being prepared, paragraph 5.10/is still in the background. Any extra or varied work should be valued by the Engineer, when applying clause 52 of the Contract, taking full account of any differences in the cost of work due to different locations, different methods of construction and so on. This does not mean, of course, that he should be tempted to introduce price differences in valuing the originally contracted work due to cost differences which were in the original work but were not exposed by the itemization of the original Bill of Quantities. For example, the compiler of the original Bill of Quantities may have decided not to itemize separately a particularly awkward piece of concrete work, although he could have done under the authority of paragraph 5.10 of CESMM3. The Engineer has no right or obligation to review that decision at final account stage if the work has not been varied. The Contractor is not entitled to have an enhanced rate for the part of the work which turned out to cost more than the average for all the work covered by the actual item in the bill, Nor is the Employer entitled to have a reduced rate set for any part of the work which turned out to cost less than average. Paragraphs 5,11-5.14 deal with some important matters regarding bill item descriptions. Paragraph 5.11 retains the use of the feature of previous standard methods of measurement which produced the main difference between civil engineering and building bills of quantities. It makes it clear that item descriptions only ‘identify’ work the nature and extent of which are defined by the contract documents as a whole, The item description identifies the work; it does not define the work and it certainly does not aim to contain all the information relevant to pricing the work. Ifall such information were contained in the item descriptions the Drawings and Specification would be superfluous for tendering. The main characteristic of civil engineering estimating which distinguishes it from building estimating is that much of the information relevant to pricing is conveyed by drawings and specification. This difference is very deliberately sustained in ‘CESMM3. One reason for this is so that the incentive to complete design before inviting tenders is not weakened; another is that the cost of civil engineering work depends heavily on the shape and position of work and on terrain, and drawingsare the best way of indicating shape and position to tenderers. It is sometimes said that it is unreasonable to expect tenderers to familiarize themselves with a large number of drawings during the preparation of an estimate and that the courts will rule in favour of the Contractor who has missed something shown on a drawing when building up his prices. This is used as an argument for using the full building type of item description in place of the brief identification which is the civil engineering norm. The argument falls down on ‘examination because, ifthe item description does properly identify the work, it identifies work which, at that stage, is only identifiable on the 7‘CESMM3 HANDBOOK 38 Drawings and in the Specification. Ifthe bill item does not say enoug. about the work covered as to make it easy to find the drawing an clauses in the Specification which govern it, then it has not identifie the work. CESMM3 therefore frequently asks for location: information and/or mark or type numbers in item descriptions, s that identification is made easier. For these reasons estimators should continue to study the Drawings ‘order to plan and to cost the operations making up the project. It helpful ifthis is made as easy as possible by cross-referencing betwee the different documents, For example, clauses in the Specification ca use the CESMM3 classes and codes as numbering or referencin systems, and the numbers of drawings can be given as addition: description in bill items or as subheadings in the bill. The mechanism provided by clause 55(2) of the Conditions « Contract is relevant to the question of the role of the Drawings and « item descriptions. Errors in description in bills and omissior therefrom ate corrected and corrections are then treated as variation For there to be proof of an error there must be a comparison betwee right and wrong. Anything in a bill which is wrongly treated elation to the right way shown in CESMM3 might be regarded as : error, However, iit is obviously given treatment different from.th in CESMM3 it could be argued that it is an example of a bill whic ‘expressly shows’ (within the meaning of clause 57) that CESMN has not been applied so that there was notan ‘error’ of ‘omission’ int] bill (within the meaning of clause 55(2)). Itis unhelpful to attempt provide a general solution to this problem. Each case has to | determined on its own facts. Paragraph 5.12 is a technical statement which allows the descriptio required by CESMM3 to be shortened by the use of a reference to t Drawings or the Specification. A reference to a drawing or to a clau inthe Specification, ifitis to replace description, must bea reference information which is as precise as the description would be. Suppo: for example, a description of an item for concrete joints read: ‘Joi external detail as on drawing 137/11.’ This would only identify whe the omitted information may be found if drawing 137/11 showed the particulars of the joint detail required by CESMM3 (as F additional description rule A11 of class G) and also did not cont particulars of more than one type of joint detail. If the drawi reference were not specific, the reference to it would have to be ma specific by referring to, say, ‘detail A’ or ‘detail C’. Anot requirement placing judgement with the compiler is contained paragraph 5.13, CESMMG does not set out to define the techni: fecms which are used in it. The bill compiler is offered no help, 1 example; in deciding whether the thing he is looking at on a drawi should be regarded as an ordinary concrete structure (measured classes E, F and G) or a bigger than usual concrete chamber in pi laying work (measured in classes K and L). No definition is giv which establishes the boundary between the application of che t sets of rules, Similarly excavation on a foreshore might be classed dredging because itis sometimes under water or as general excavati because itis sometimes not under water. A supporting structure fo road sign may be sufficiently substantial to be classed as a me structure in its own right (measured in class M), or it may be regare as included in the sign items (measured in class R).| PREPARATION OF THE BILL OF QUANTITIES: CESMM3 deliberately does not make these decisions for the bill compiler. To have attempted to include comprehensive definitions in CESMM3 would have led to many arbitrary and misleading classifications with consequent arguments in difficult cases. Instead, paragraph 5.13 requires the compiler to produce item descriptions which eliminate uncertainty by the use of additional description. The paragraph tells the compiler not to worry about into which of the two possible classes an awkward piece of work should go. He should place itin one and then give additional description, peculiar to the item and quantity concerned, which identifies the work precisely in relation to the Drawings or other contract documents. In this way the tenderer can be in no doubt as to which piece of work he is to price against the item, whether the class selected is exactly right or not. This procedure should be used frequently by bill compilers. There is no virtue in treating classification of work as an intellectual exercise and forcing everything into one or other of the pigeon-holes provided by the Work Classification in CESMM3. To use this approach would make the resulting bill present the work to be priced looking much ‘more normal and standardized than it really is. If the compiler is unsure which is the right pigeon-hole for a ‘component, he must make sure that the tendering estimators will not also be unsure. Additional description giving location overcomes this problem and ensures that the price is related to the actual work to be Gone, in whichever class or part of a classification it is placed. It is worth bearing in mind that if the particular work is at one end of the spectrum of work which the ordinary person would consider as of that type, the cost of building itis also likely to be at one end of the cost spectrum and a special price for it would be appropriate in any case. CESMM3 frequently requires items of work which are similar and differ only in one aspect of size to be grouped together into items which cover ranges of that aspect of size. An example is the third division of items in class F dealing with placing concrete in slabs. This groups slabs of different thickness in ranges of thickness as follows 1 Thickness: not exceeding 150 mm 2 150-300 mm 3 300-500 mm 4 exceeding 500 mm [All slabs not separately itemized for other reasons whose thickness exceeds 150 mm but does not exceed 300 mm are grouped in a single item which incorporates the descriptive feature ‘thickness 150-300 mm’. Paragraph 5. 14 says that ifall the slabs in this group happen to be of the same thickness, say 250 mm, the item description should state this actual thickness, not the range in which it occurs. This measure ensures that the item descriptions are not needlessly imprecise. The arrangements for billing work to be done by Nominated Sub-contractors in CESMM3 do not add much to the procedure set ‘out in the Conditions of Contract in clauses 58 and 59. The items for ‘labours in connection’ and for ‘other charges and profit’ are those referred to in clause 59(5). Sub-paragraph (a) of paragraph 5.15 contains a narrowly drawn definition of what is covered by labours in connection with nominated sub-contracts. It deals differently with nominated sub-contracts which include site work and those which are‘CESMM3 HANDBOOK 40 only for supply of materials or components. CESMM3 docs not envisage that any bill icem should contain both main Contractor's and ‘Nominated Sub-contractor’s work. The Prime Cost Items covering nominated sub-contracts are classified as general items in class A. Measurement rule M6 of class A stipulates that any labours in connection with Nominated Sub-contractors other than those defined in che two parts of paragraph 5.15(a) must be identified as ‘special labours’. This means that the labours item will be special if itis to include anything that is not in the standard definition or indeed if it is to exclude anything in the standard definition. Additional description rule AG in class A requires the labours to be included in special labours items to be stated in item descriptions. Such statements of special labours (sometimes called special attendance) should not be defined vaguely as itis not in the interests of the Employer to require the main Contractor to allow for services the ‘extent of which cannot be foreseen at the main tender stage. Where ‘major special attendance facilities are envisaged but their extent cannot beassessed, they should be made the subject of a Provisional Sum. No provision by the main Contractor of fixing materials for work Supplied by a Nominated Sub-contractor can be covered by Prime Cost Items or by the attendance, other charges and profit items. Parageaph 5.17 establishes that che quantity stated against each item ir the original bill should be the quantity which is expected to be required, not a quantity padded to provide a concealed contingency 0! 4 sinall nominal quantity put into get a price in case some of that work is required, Iffor any reason some work which cannot yet be defined i: to be included in the Contract it must be covered by 2 Provisiona Sum. This rule is based on the sound principle that if the tendere cannot be told what is required he must not be asked to say whatit wil cost. ‘The introduction of clause 56(2) into the Conditions of Contract was similar development. This clause provides that rates may be increase: or decreased if they are ‘rendered unreasonable or inapplicable’ as result of the actual quantities being greater or less than those stated it the Bill of Quantities. This applies toall items and means that all price are treated in the same way as regards their relationship to the state quantity. Previously items which were indicated as ‘provision: quantities’ were treated differently from other items. Now that a items are subject to clause $6(2) the term ‘provisional quantity’ has n significance; it does not appear in CESMM3 or in the Conditions ¢ Contract and should no longer be used. Clause 56(2) has the effect th: tenderers can safely price each item at a rate which is appropriate to th quantity stated in the bill for that item. It follows that they can safel price the whole of the bill from a comprehensive plan linking all th Dperations involved. This plan can allow properly for the indirect an time-telated costs and be based on a build-up to costs generall which is appropriate to the quantities stated for the total project. ‘This basis of estimating is essential to sound financial control of civ engineering contracts. Projects now involve a planned group « interrelated operations the cost of which is often dominated by tl cost of Temporary Works and specialized plant. Economy depends ¢ achieving planned utilization of Temporary Works, plant ar ‘associated labour. The cost of one operation depends on the speed others; the cost of the whole job depends on the balance of quantitiPREPARATION OF THE BILL OF QUANTITIES being unchanged. Thns, under clause 56(2) the tenderer is assumed to have planned to do all the work covered by the bill items (excluding Provisional Sums) and to have based his prices on the combination of the quantities actually stated in the Bill of Quantities. Clause 55(1) obliges the Contractor to carry out work in whatever quantities are subsequently required but clause 56(2) means that any change in quantity may give rise to rate adjustment. In this situation there is no need for provisional quantities, To designate: particular items as provisional quantities could, if the term were so defined, indicate to tenderers thar these quantities were more uncertain than the others. However, the items would still be governed by clause 56(2) and the rates set against them would not be treated any differently from the other rates. They could still be adjusted if the quantities changed and tenderers would therefore still have been entitled to price them on the assumption that the stated quantity would be required. The combined effect of this and paragraph 5.17 is to place a strong incentive on the compiler of the bill to get the quantities as precise as he can. This does not mean measuring accurately from drawings which are tentative; it means measuring accurately from drawings which show the best possible forecast of the nature and extent of the work which will actually be required. Itis most important for the Employer and Enginecr to work to this philosophy before inviting tenders. The difficulty and uncertainty associated with managing a civil engineering project is strongly related to the incidence of differences between what the Contractor expects to have to do and what he actually ends up doing. Clause 56(2) means that the Contractor should be told clearly the nature and extent of the work he must expect to do; any differences between this expectation and later information show up, where previously they could be obscured. Clause 56(2) was the death knell of the old shopping list approach to civil engineering bills of quantities. Although the Contract Price is arrived at by measuring quantities and valuing them at Contract rates, the Conditions of Contract recognize that construction costis the total cost of a group of closely interrelated operations. The Employer cannot expect to buy as many or as few of each of the items on the shopping list as he likes at prices per cubic metre or per tonne which apply to any quantity bought. In the absence of provisional quantities, even the most uncertain quantities have to be estimated as sensibly as possible. At first it may seem strange to put in a bill a quantity for excavation of soft spots or a quantity of hours for pumping plant which is not marked provisional. The last sentence of paragraph 5.17 refers to paragraph 5.25 which points out that a General Contingency Allowance, if required, should be given as a Provisional Sum in the Grand Summary. Paragraph 5.18 provides the basic rule for calculating quantities. The simple statement of the general case is that ‘quantities shall be computed net using dimensions from the Drawings’. Only in special cases are quantities ‘meastired in a more complicated way than calculating the length, area, volume or mass of the actual extent of the finished work which the Contractor is required to produce. The special cases,are those where CESMM3 or the Preamble to a particular bill contains conventions for computing quantities. In CESMM3 these are in the measurement rules in the various classes of work. They deal with the situations where net measurement is not used, mainly where it would necessitate 4aCESMM3 HANDBOOK 2 intricate calculations with little impact on the resulting quantity. Not deducting the volume of concrete occupied by reinforcing steel is 2 lear example of this type of convention (measurement rule M1(a) in Glass F). In older jargon it might have been said that the reinforcing Steel was measured ‘extra over’ the concrete. However, this expression was seldom used in this context. The effect was more Clearly and unambiguously achieved by stating the measurement convention. CESMMG3 avoids the term ‘extra over’ in order not to aise any ambiguities of this sort. Instead the basic rule of net measurement applies except where another convention is expressly noted, Another example is the measurement of pipe fittings ‘Measurement rule M3 in class I says that the measured lengths of pipes in trenches include the lengths occupied by fittings and valves. This means that the fittings are measured extra over the runs of pipe in the Sime way 2s reinforcement is measured extra over the volume of concrete, The term ‘extra over’ was often used in this case. The reason that it was seldom used in the previous example is presumably that the accuracy of estimating was such that its use made hte difference. Use Of CESMMG does not raise such semantic questions. All the items it jgenerates are to be priced to cover the proportion of the cost of the work which is most realistically considered as proportional co the Quantity set against each item, bearing in mind any special SMivencons of quantity calculation and the necessity for covering all costs somewhere. ‘This approach dispenses with the expression ‘extra over’. For example, the piling class provides three items for each group of cast in place piles. Different quantities are set against each: the number of Piles in the group, the length of pile material provided and the depth Pored or driven. It could be argued that the third item is extra over the second, that the second and third are extra over the first, or even that the fis is extra over the other two. Fortunately this argument has nc effect on the interpretation of the prices in a Contract. The last twe sentences of paragraph 5, 18 re self-explanatory. In the background te both of them is the thought that engincers and surveyors are bette: employed in almost any other task than in striving for absolut: mathematical precision in calculating quantities, whether in origina bills interim accounts or final accounts. Thanks to the central limi theorem of statistics, the accuracy of the sum of a set of numbers i much greater than the accuracy of the individual numbers which mak tp theset.4 The total of the final account is the amount the Contract gets paid for doing the job and the cost of the ob to the Employer. Th Constituents of the final account total are of no separate smportanct they only contribute a lot or a litle to that total. The accuracy of th final total is always dominated by the accuracy of the few items whic have the largest extended values, cither because their quantity or rate very large. The accuracy of the quantities and rates set against the mas Sfordinary and small value items is almost totally insignificant. It we demonstrated by the research work which preceded the preparation ¢ the fiest edition that if the 40% of the items in a bill having the lea Value were taken straight from the tender to the final account withot bothering to check whether the quantities had changed or nor it woul have made a difference to the final account averaging 0.2%. If the value were adjusted in the final account pro rata to the change in valtPREPARATION OF THE BILL OF QUANTITIES of the total of the other larger value items the difference would average 0.03%. This means that if measuring, checking and calculating the actual quantities carried out for that 40%, of the items having the least. value on a contract of £1 million were to cost more than £300, the cost of doing it would average more than the difference it would make. It still has to be done, otherwise the Employer has an incentive to underestimate the quantities in the origina! bill for those items which may turn out to be the low value items. It has to be done, but it does not have to be done accurately. Paragraph 5.19 lists the measurement units which are used against the quantities in bills prepared from CESMM3. The list includes some of the units which are used only within descriptions (mm and mm?). The measurement unit ‘sum’ is used wherever a quantity is mot given against an item, I s equivalent to “one number’ which would be abbreviated to ‘nr 1’. Note that the abbreviations for measurement units do not need to have capital initia letters or to be followed by a fall stop. Paragraph 5.20 deals with work affected by water. In the first edition compilers of bills of quantities were required to distinguish work affected by water (other than groundwater) in- appropriate item descriptions. This proved to be difficule owing to uncertainty about where to draw the line between work affected by and work unaffected by the presence of a body of water such as a river or canal. Disputes could result ifthe line was drawn narrowly. Ifit was drawn widely, the procedure could lose its point. For example, 2 contract for building a multispan road bridge over a valley involves some work which is ‘affected by water’. Any piers founded in the river are definitely so affected, but are the spans which are half over the river and half not? No reasonable person would consider that placing the carriageway over those spans was affected by water. To avoid problems of this sort, it is easy to say in the Preamble to the bill that all the work is affected by water. Unfortunately, this is stating the obvious and achieves nothing. CESMMG simply requires that the presence of bodies of open water (other than groundwater) either on the Site or at a boundary of the Site is to be mentioned in the Preamble to the Bill of Quantities. The Preamble must also give a reference to a drawing which indicates the boundaries and surface level of each body of water or, where the boundaries and surface level fluctuate, the anticipated ranges of Guctuation. It is obviously permissible for the statements about levels and boundaries to be in the Preamble itself where this is more convenient. ‘Two typical statements exemplifying this rule might be (a) The Siteis crossed by the River Corve. The position of the river is shown and the anticipated ranges of fluctuation of its width and surface level are indicated on drawing 137/86 (b) The Site is bounded by the Leominster Canal as shown on drawing 137/87, The width of the canal does not fluctuate but it is anticipated that the surface level may fluctuate between 50.00 a.o.d, and 50.60 a.0.d. The only type of work for which reference to the presence of bodies of open water is required in the item descriptions themselves is for excavation below water in class E (rules A2 and M7 in class E).‘CESMM3 HANDBOOK “The water surface levels stated in compliance with the last sentence o paragraph 5.20 should be the mean low water level ordinary spring tides and the mean high water level ordinary spring tides of the surfac of tidal waters. The presence of ditches and small pools ona site is no intended to call paragraph 5.20 into play. Where they are present, : Preamble clause to this effect may be used. Paragraph 5.21 of CESMMG uses the definitions of four surfaces from paragraphs 1.10-1.13, The paragraph is self-explanatory once it i: read carefully in relation to the definitions. Its intention is to ensur that item descriptions for work involving excavation, boring o: driving are clear as regards where the work included in an item start: and finishes. For most such items the descriptions will not mention : ‘Commencing or an Excavated Surface and it will then be assumed tha the item covers the full depth from the Original Surface (before any workin the Contract is started) to the Final Surface (when all the work shown on the Drawings has been done). In the special circumstance: where an item does not cover the full depth, the intermediate surface: have to be identified. These will either be the Commencing Surface for the item or the Excavated Surface for the item, or occasionally both. The surfaces do not have to be identified by a level; any identification which is clear and convenient will satisfy the requirement of paragraph 5.21. ‘250mm below Original Surface is ar adequate definition of a Commencing or an Excavated Surface, as is “250 mum. above formation’ if formation is itself clearly defined. Ir awkward cases it may be necessary to indicate an intermediate surface ‘on the Drawings. The definitions and this paragraph refer to surface: not levels because they have to cover situations where surfaces arc irregular, inclined or vertical, and it would be misleading to apply the word ‘level’ to such surfaces. The definitions of Commencing anc Excavated Surfaces make it clear that the upper and lower surfaces ot layers of different material occurring within one excavation do noi have to be identified as Commencing and Excavated Surfaces. ‘The last sentence of paragraph 5.21 means that none of the items for excavation or similar work in CESMMB are divided into bands for the volume which occurs between limits of depth below the ‘Commencing Surface. All are given as one item which is classified according to a range in which total depth occurs. This is illustrated by Fig. 7. Paragraph 5.22 suggests that bills should be printed on paper of Aé size with columns ruled and headed in a particular way. This paragraph is not mandatory. The column widths are arranged to sui! the requirements of CESMM3 when bills are produced using « typewriter or printer with the widest common spacing of ter characters to the inch, A binding margin is accommodated. The maximum occupation of the columns is shown in Fig. 8. Thc ‘quantity, rate and amount columns each have a capacity of ten millior less one, All the work items can be set out on paper of this form. Bill: should normally contain four headed but otherwise blank pages whict are used for the insertion of Method-Related Charges by tenderers More blank pages may be needed for contracts involving a largs number of different operations or divided into many bill parts. ‘The last four paragraphs of section 5 deal with minor procedural anc layout matters to do with the Grand Summary. The Grand Summary does not contain work items and would normally not be on ordinaryPREPARATION OF THE BILL OF QUANTITIES 421 €422 c423 Pima Sutace Fig. 7. CESMM3 does not divide excavation into depth bands (al, but = according to total depth (b) € E425 as g E4ce Foal Sutace 1 @ 3 5 a Fina sutace Tsar Fig. 8. Column layout described in < paragraph 6.22 and typing capacity of the columns when a typewriter 1999.95] bescesption 2une max 3% characters au] 9999093] 9999999} 99990) 99 producing ten characters to the inch o.35 isused bill paper. Paragraph 5.25 refers to the General Contingency Allowance which, if required at all, is a Provisional Sum given in the bill and not a percentage to be applied to the total of the work items. Paragraph 5.26 refers to the Adjustment Item which appears as the very last iter in the Bill of Quantities. Its function is described in section 6. There are two general points which deserve mention or emphasis to conclude discussion of section 5. It is a common practice in the civil engineering profession to prepare the Bill of Quantities for a Contract using the Drawings and the bill for the last similar Contract. This is a perfectly satisfactory procedure provided that the last Contract really was similar in those respects which are cost-significant and provided that the bill which is being used as a model is a good one. Some poor bills have been produced by this method, partly because it discourages adaptation of the bill to the special features of the job in hand, and partly because the model bill may be worse than it looks. Once the handwritten headings, item descriptions and quantities have been well laid out and printed they have an aura of authority, rectitude and precision which may be deceptive—a model bill may have been compiled by a novice from an earlier one compiled by a novice. When the first bill is prepared using CESMM3, this one at least should be compiled from first principles,CESMM3 HANDBOOK ‘Schedule of changes in CESMM2 1, Preamble is to include rules of measurement adopted for any contractor-designed wort. 2. Preamble is to refer to clauses in the contract under which the Adjustment Item and Method- Related Charges are to be certified. Preamblo is to identify bodies of ‘open water on or at the boundaries (of the Site instead of identification in iter descriptions for affected ‘work 4, Daywork schedule alternative {b) includes supplementary charges as defined in the FCEC schedules Detinition of labours in connection with Nominated Sub-contractors ‘working on Site includes the use of temporary roads and hoists provided by the Contractor for his ‘wn use and disposal of rubbish, s ‘Schedule of changes in CESMM3 ‘Minor textual changes only with perhaps a check back against an older bill only foriits coverage of the work. Unless this is done, experience has shown that the item descriptions may be unnecessarily non-standard and the style of the document generally may not be in accordance with CESMM3. Compilers of bills should keep in mind that a contractor aims to putin as low a tender as he can in order to get work and aims to getas high a final account payment as he can in order to maximize his profit from doing work. A contractor who did not apply any effort or ingenuity to widening the gap between tender and final account would have to be very much more technically efficient than his competitors in order to remain in business. Unfortunately its often easier to pursue payment than to pursue technical efficiency. Experimentation in the pursuit of payment can only waste hours of professional time. Experimentation In the pursuit of technical efficiency can wasté alot of money in the use of lant, temporary works, materials and labour which turns out to be ineffective. It is better for the health of the industry and for the service it gives to ‘employers that the pursuit of payment should become less rewarding and the pursuit of efficiency more rewarding. This can be achieved ifit is made more difficult to force open a gap between tenders and final accounts. Gap opening feeds only on real and imaginary differences between what the Contractor expected to have to do and what he did have to do; without these there is no gap. The real differences are the variations to the work which the Employer and Engineer know are variations because they recognize that an intention or expectation has been changed. The imaginary differences are those where the Contractor contends that the description in the Bill of Quantities of what he was required to do was misleading or its interpretation uncertain. In order to ensure that his tender is competitive a contractor has to assume that che cheapest interpretation will be acceptable. ‘The designer has the power to limit the real differences by ensuring that his intentions and those of the Employer are as unlikely to change after inviting tenders as is possible in the prevailing circumstances. ‘The compiler of the Bill of Quantities and the Specification has the power to limit the imaginary differences by ensuring that the Sefinition of what the Contractor has to do is as clear, unambiguous and extensive as is possible in the circumstances. These two thoughts should be in the forefront of the bill compiler’s mind — more prominent even than the general principles and detailed rules of CESMMB itself.COMPLETION AND PRICING OF THE BILL OF QUANTITIES SECTION 6. COMPLETION AND PRICING OF THE BILL OF QUANTITIES BY A TENDERER Section 6 of CESMM3 comprises paragraphs dealing with the mechanics of entering rates and totalling a priced bill. The rule for interpretation of the sum, ifany, entered against the Adjustment Item. is included here so that any sum so entered by a tenderer is understood to be governed by the rules in paragraphs 6.4 and 6.5. ‘The rules do not explain what the Adjustment Item is for; they only govern how it is applied. Its object is to provide a convenient place at the end of a bill where the tenderer can make an adjustment without altering rates and amounts within the work items themselves. This is often made necessary by the arrival of revised quotations from suppliers of sub-contractors right at the end of the tender period. Ifa lower quotation for, say, the earthmoving sub-contract is received on the day that the tenders are due in, there is not time to adjust all the rates affected, and to recalculate item, page and part totals. The rates and extensions have to be written in the bill and checked, sometimes starting two or three days before the tender is due in. The other reason for last minute adjustments in relation to the final tender adjudication carried out by the tenderer’s senior staff. This process is called Girone shingd in different companies; iis essentially a review ofthe structure and detail of the prices in the tender undertaken in order to assess the risk of not winning the job and the risk of losing money ifit is won. These risks apply opposing pressures. Higher prices mean reduced risk of losing moncy and a greater risk of losing the job; lower prices mean greater risk of losing money and reduced risk of losing the job. Assessment of risk is usually made by discussing the risk issues ‘which the pricing of the work has raised, leading to an agreed level of pricing on which the tender will be based. Ifthis level is not the same as that which the estimator used in his original pricing, the total of the priced bill needs to be adjusted. Again, there may not be time to do this by altering prices: a single adjustment may be needed. Such adjustments used to be made to the larger prices which were entered against some of the more vaguely worded preliminary or general items in the bill. Since the introduction of the first edition no such items are given; each general item is intended to attract a price for a clearly established contractual obligation, whether procedural, managerial or involving site work. It would be against the spirit of CESMM3 for the rational price-to-cost relationship which it fosters to be upset as a result of a legitimate last minute risk adjustment. CESMNMG allows, therefore, for an adjustment, made for whatever reason, to be accommodated in the Grand Summary as the last price inserted by the tenderer immediately before the bill total. Every rate and price in the bill can be entered and totalled through to the Grand Summary before the final adjudication. The Adjustment Item is mainly a convenience to tenderers, its benefit to Employers is only that it can sometimes eliminate irrational pricing of ordinary general items, 2‘CESMM3 HANDBOOK ‘The Adjustment Item could be used as a means of either generally raising or lowering the prices in the bill proper without altering the total of the priced Bill of Quantities. CESMM3 does not require the adjustment to be positive. if, to take an exaggerated example, it were negative and equal to 25% of the tender total, the bill rates would be fon average 25% above their sensible values. This would make derivation of any new rates difficult and uncertain and generally be unhelpful to the administration of the Contract. It would react strongly to the disadvantage of the Contractor if the quantities in the original bill were over-measured. Equally the insertion of a large positive adjustment would react to the disadvantage of the Contractor if the quantities were under-measured. Likeso many other aspects of the financial control of civil engineering contracts, the Adjustment Item works well if changes to the Contract are modest and if the actual extent of the work required is well predicted in the original bill. It does not pay the tenderer to try to manipulate using the Adjustment Item unless he has foreknowledge of the likely differences between the actual quantities and the billed {quantities of work, and he is unlikely to gain such foreknowledge in the short time he has for tendering. Ifthe bill compiler has done what paragraph 5.17 of CESMM3 requires him to do, no particular change in quantity will be likely anyway. ‘The foregoing considerations depend on the Adjustment Item being a fixed lump sum as paragraphs 6.3 and 6.4 of CESMM3 dictate. If it wereadjustable itself, depending on eventual measured work value, it would not add to the pressure to get quantities right and Contractors would incur little risk by pricing it manipulatively instead of realistically. Paragraph 6.4 defines how the sum entered against the Adjustment Item is to be dealt with in interim and final certificates. It is worded in terms of clauses 48 and 60 of the Conditions of Contract. Paragraph 65 refers to the contract price fluctuations clausex which has been published to give effect to the use of the formula called the Baxter Formula. This special condition says that the price fluctuation is calculated by applying indices to the effective value. The effective value includes all contributions to the interim payment which are not based on ‘actual cost or current prices’. This definition includes the apportionment of the Adjustment Item in the interim payment. The ‘Adjustment Item sum is subject to fluctuation when the Baxter formula is used as is stated explicitly in paragraph 6.5. In this respect, asin others, the Baxter formula superimposes price fluctuation due to index movement over the adjustments to the Contract sum proper which are assessed using the ordinary provisions of the Contract. The effect of paragraph 6.4 is that the Adjustment Item is certified in interim payments mainly pro rata to the value of the work items (trictly the amount referred to in sub-clause 60(2)(a)) in interim payments until this calculation produces an amount greater than the original Adjustment Item sum in the bill. The original sum is certifie¢ EE HEE Heeb Hee beet eee ote eee The contract price fluctuations clause (reprinted January 1986) prepared by th Institution of Civil Engineers, the Association of Consuleing Engineers and th Federation of Civil Engineering Contractors in consuleation withthe Government fo tse in appropriate cases as a special condition of the Conditions of Contract,COMPLETION AND PRICING OF THE BILL OF QUANTITIES at that point and continues to be certified in all subsequent certificates. Ifthe original amount is not previously reached by the pro rata process, the original amount is certified in the next certificate issued after issue of the Substantial Completion Certificate for the whole of the Works in accordance with clause 48. In either case, and whatever variations are ordered, the Employer eventually pays and the Contractor receives the original amount shown in the tender against the Adjustment Item. Ifthe adjustment is negative the same procedure applies but to the deduction. The effect of paragraph 6.4 is shown in Fig. 9 CESMM3 itself does not impose any limit on the proportion of the tender sum which may be expressed as the sum against the Adjustment Item. Where the Employer wishes to impose such a limit he can state in his instructions to tenderers that any tender received in which the Adjustment Item exceeds a stated percentage of the tender sum will not be considered, During the currency of the first edition of CESMM3 there were some problems with the settlement of final accounts when contractors had ‘entered substantial sums against the Adjustment Item. On occasions contractors would seek to have the Adjustment Item sum increased when variations increased the value of the work. Alternatively they would seek to have the existence of a substantial positive Adjustment Item taken into account when the Engineer was settling rates for extra work. Neither of these arrangements would be a proper use of the Adjustment Item as paragraph 6.4 makes it clear that the Adjustment Item will appear in the final account at exactly the same value which it had in the accepted tender whatever had happened to the Contract sum in the meantime owing to variations or owing to any other increases or decreases made in accordance with the Contract. Put simply, the Engineer should implement clauses 51, 52 and 56(2) of the Contract as if the Adjustment Item were not there. : Fig. 9, Time based graph showing ' 3 lio _ row the payment of the Adustment q trem sum roates tothe tondored g ‘alu of work torn, tstates the i effect of paragraph 6.4 3 | wontons (a Whee wot ans oot ach 3 wet ant ae 2 a Hea g FB] ventions 5 (nan ne woe tems exceed 3 andre las ine CampionCESMM3 HANDBOOK ‘Schedule of changes in CESMM2 1, Reference to the Adjustment Iter istobemadein the Preambletothe Bill of Quantities. 2. A paragraph has been added to ‘meke it explicit that the Adjustment Item is subject to price adjustment {3s part ofthe Effective Value when the Baxter formula is in use ‘Schedule of changes in CESMM3 1. Reference to Substantial ‘Completion Cerificate is made in ‘accordance with the Conditions of Contract. 50 This can appear to work very unfaitly for the Contractor. For example, on a recent project the Contractor had entered a significant negative Adjustment Item when tendering solely to allow for a late low price arriving from a sub-contractor. He was awarded the contract and shortly afterwards the whole of the particular sub-contractor's work was deleted by a variation order. The Contractor had no contractual basis for asking for the negative adjustment to be deleted as well. At first sight this seems unfair. Perhaps it is crude rather than unfair because, if the adjustment had been positive, it also should have been left alone, yielding an undeserved bonus to the Contractor in the same way that the actual situation had yielded an undeserved penalty. This example serves to illustrate an important point about the Adjustment Item which tendering contractors should consider care- fully. The mechanism works somewhat crudely and can produce an unexpected bonus or penalty if the work is varied. Contractors whe wish to avoid this risk have only one course open to them. They should use strenuous measures to adjust the bill rates themselve: before the tender goes in. To use the Adjustment Item for significan! proportion of the tender sum carries the risk of unexpected outcome: in exchange for the right to make single-figure adjustment at the ls! moment.METHOD-RELATED CHARGES SECTION 7. METHOD-RELATED CHARGES (One of the principal shortcomings of a traditional bill of quantities Purpose ‘was that it was only a bill of the quantities of the permanent work left behind when the Contractor's men and machines had moved on. It concealed the contribution to the value of the work made by those ‘men and machines, and by the men who managed them. This would not have mattered if work was never varied after tenders were accepted, and even then it would not have mattered if the value of the effort of men, machines and managers varied in proportion to the ‘quantities of the permanent work left behind. Since civil engineering contracts are prone to variation, and since a lot of the Contractor's ‘costs do not vary in proportion to quantity, much of the adjustment of ‘aluation falls outside the simple process of remeasurement. If the Bill ‘of Quantities were only to model price in terms of the quantities of Permanent Works, any reconsideration of costs which did not vary in proportion to quantity would have to be totally unsystematic, The “only means of effecting such reconsideration would be by adjustment of rates and by presentation and settlement of claims. Claims bring ‘with them a climate of contention; they invalidate financial control based on forecasts of cost or profit and lead to delay in finalizing payments. “There is no reason why those genuine claims and adjustments arising from necessary changes to the Contractor's methods of working and use of plant and labour should not be within the scope of the semi-systematic processes in the Contract. To mitigate the claims problem and to draw together the attitudes to construction costs on each side of the contract, CESMM3 enables priced bills of quantities to divide the value of work between the quantity proportional elements and the rest. In commissioning civil engineering work the Employer buys the materials left behind, but only hires from the Contractor the men and machines which manipulate them, and the management skill to manipulate them effectively. It is logical to assess their values in the same terms as the origin of their costs. Its illogical not to do so if the Employer is to retain the right at any time to vary what is left behind and if the financial uncertainties affecting Employer and Contractor are to be minimized. Tenderers have the option to define a group of bill items and insert charges against them to cover those unexpected costs which are not proportional to the quantities of Permanent Works. To distinguish these items they are called Method-Related Charges. They are themselves divided into charges for recurrent or time-related cost elements, such as maintaining site facilities or operating major plant, and charges for elements which are neither recurrent nor directly 51CESMM3 HANDBOOK related to quantities, such as setting up, bringing plant to site and Temporary Works. if the tenderer enters any such charges, he must use the rules in CESMM3 for their classification and basic descriptions ‘Since the items required depend on the tenderer’s assumptions about method there would be little point in the compiler printing a full range of possible items in the bill. Many would remain unpriced, and descriptions would be too general for effective use of the prices in valuing variations. Just as there could not be a requirement for a tenderer to price every item in a traditional bill, so there can be no requirement for a tenderer to enter particular Method-Related Charges or to price any if his own. interests appear to dictate otherwise. ‘There was no compunction ina traditional bill to price al items at rates which equalled their anticipated cost plus a uniform profit and overhead margin. The system relied on the tenderer finding it in his ‘own interests to depart from this only to 2 manageable extent. Similarly Method-Related’ Charges are only useful in the administration of contracts if the prices entered against them are reasonable in relation to the description of the charge. Reliance is placed on the self-interest of the Contractor to ensure this. ‘The motives implanted in the Contractor by the procedure must be sufficiently powerful to ensure that, if priced at all, the Method- Related Charges are priced realistically. They should be at least as realistic as prices for measured work, preferably more realistic. The advantages to the Contractor of pricing Method-Related Charges and of doing so realistically are congruent. They all stem from the fact that a tender so priced matches the subdivision of the total value to be put ‘on the work with the subdivision of the Contractor's anticipated total cost of the work. If, in compiling his estimate, the tenderer has to consider any part of the cost of assembling and using the labour and plane teams, Temporary Works, supervision and facilities as isolated or time-related sums and not as costs per unit of concrete or excavation, he will consider representing them in his tender as Method-Related Charges. Even if there are no variations to the work, the advantage of a more stable cash lock-up accrues to the Contractor and the Employer when these costs are allowed for in this way. Interim valuations relate uniformly to expected costs during the construction period. This effect is achieved without the unbalancing of rates which might otherwise be necessary, carrying with it risks of losses if quantities have been wrongly estimated. Similarly the Contractor is protected from losses due to a reduced quantity if the ‘quantity remains within the range to which his original assumptions about methods of work are appropriate. [fit goes outside this range, the basis ofthe assumption and its cost significance are indicated by the Method-Related Charges in the bill and do not have to be re~ established. With variations affecting overheads or increasing the level or duration of provision of a resource or facility, the normal process of valuation includes a review of the Method-Related Charges affected. Ifthere isavariation reducing the work volume, it is seldom necessary for the Contractor to claim for the cost of under-utilization of resources ot under-recovery of indirect costs. Such costs are covered by Method-Related Charges and payment against them is not reduced. If there is a variation increasing the work volume or causing a delay producing an increase in the costs covered by Method-Related Charges, adjustment of the charges can be made within the terms of the Contract, obviating the necessity for a claim. This has great advantages: for the Contractor it leads to prompt adjustments, and for all parties it saves administrative effort and time. Much more than half of agreements on rates for extra and varied work using bills without Method-Related Charges involved consideration of fixed and time-related costs. Many of these claims and new rates would have been unnecessary if prices for the fixed and time-related elements of cost had been realistically separated from the prices for costs which were proportional to quantity. ‘The simplest justification for Method-Related Charges is provided by the example of the varied quantity. There is a fixed cost in any operation which is the cost of setting it up, of finishing it off and of working up to and down from the steady output of the plant and labour teams involved. This fixed cost is a significant proportion of the cost of an operation unless it is long-term, labour-intensive, only uses small plant and does not require any Temporary Works. The total cost of the operation may be approximated by the function cost=a+bg where q is the quantity of work in the operation, a is a constant for the fixed cost and b is 2 constant for the unit cost. The traditional bill of Quantities assumes that price is directly proportional to quantity price = rq where ris the bill rate for the item which covers the operation. For operations with a low fixed cost this produces a relationship of both cost and price to quantity approximately like that shown in Fig. 10(a). A higher fixed cost produces a narrower range of tolerable quantity variation as shown in Fig. 10(b). If a Method-Related Charge is introduced to allow for the fixed cost, the relationship of price to quantity becomes price = f+ rq The bill rate r is reduced to compensate for the introduction of the fixed Method-Related Charge f. This produces the relationship shown in Fig. 10(0). Ifthe fixed charge exceeds the fixed cost by a reasonable margin and the bill rate exceeds the unit cost by the same reasonable margin, the profit on the operation as a whole will exceed the cost by the same margin, whatever the quantity. This is an over-simplification, of course, because the costs of real work do not precisely equal the estimate and do not produce straight lines like those shown in Fig. 10(2)~(c). In reality they produce loosely defined zones of relationship like those shown in Fig. 10(d). ‘There are three main conclusions to draw from this analysis. (@) Payment for work varied in quantity is more likely to be reasonable and applicableif the prices in the Contract assumed to be proportional to quantity do not have to cover costs which are METHOD-RELATED CHARGESCESMM HANDBOOK Fig. 10. Price/cost relationships when ‘quantities vary ‘Guan @ not proportional to quantity. (b) Claims or the application of clause 56(2) usually ensure that the Contractor does not suffer in the event of changed quantities leading to under-recovery (losses?) on fixed costs. Likewise, separation of Method-Related Charges automatically ensures that the Employer does not suffer from over-recovery on fixed costs when things work out the other way. (©) Method-Related Charges work better than claims or clause 56(2) because the ordinary process of admeasurement and interim certification produces reasonable and applicable payment for work wholly in terms of the original Contract prices. Attention does not have to be diverted from getting the [job done to negotiating claims or new rates related to what has “already been done. This third conclusion is idealized as the cost of a civil engineering operation is a function of many factors, some of them totally unpredictable and several of them not simple enough to be represented by recognizable cost parameters.‘The principle acknowledged by the procedure for Method-Related Charges in CESMM3 does not pursue this approach too far. It recognizes that modern mechanized and technically advanced civil engineering operations involve a significant proportion of cost which 4s not proportional to the quantity of the resulting Permanent Works. New relationships are embodied in the structure of prices in the Contract to allow for this. Two relationships — those for fixed costs and time-related costs — are added specifically to represent costs to do with methods of and arrangements for carrying out the work. Using a value model with three types of price (a value equation with three types of term) is much more realistic than the traditional bill which recognized only one type of price. The three price bill does not model value perfectly because it does not model all the many variables which affect total cost. It does, however, represent a larger proportion of cost with tolerable accuracy than did the one price bill. It is consequently much more robust as a means of controlling payment in uncertain circumstances and many fewer issues give rise to claims and new rates, The catalogue of advantages of using Method-Related Charges is so compelling as to suggest that there must also be disadvantages. Comparison of tenders is said to be more difficult, because tenders look different and different policies are adopted for pricing. However, in fact comparison of tendersis easier. Tenders which are different also look different when Method-Related Charges are used. When Method-Related Charges are not used, differing policies for pricing and spreading indirect costs are concealed within the wide but tolerated variation between measured work unit rates. The collateral security for interim payments has been said to be diminished by Method-Related Charges. It is true that Fixed Charges usually mean higher payment at the beginning of the construction period, but later the difference can go either way. Despite the harmful consequences to the Employer in the very few instances when the Contractor goes bankrupt right at the beginning of the construction period, it would be illogical to deny all the advantages of the procedure to the conduct of all other contracts. It has been suggested that a carefully worded description for a Method-Related Charge could constitute a qualification to a tender, in the same sense that a qualifying assumption can be stated in a covering letter. This fear is unfounded because statement of an assumption in such a description only records the assumption; acceptance of the tender does not imply that the Employer has underwritten the assumption. By accepting the render the Employer docs not accept the validity of the tenderer’s assumptions. For example, if the Employer accepts a tender with placing reinforced concrete priced at £10 per cubic metre it does not mean that he is liable for the excess if the Contractor finds it cost him more than £10. For the Employer, the use of Method-Related Charges brings the financial advantage of more predictable final cost; he also benefits from the advantages to his Engineer. The Engincer benefits in a number of ways from method-related costs being brought into the contractual area and out of the area of contention and claim, Also methods can be discussed and administered with the Contactor more openly. In design the realistic separation of Method-Related Charges from quantity proportional rates makes the rates more reliable as param- eters for future projects. Records of Method-Related Charges make it METHOD-RELATED CHARGESCESMM3 HANDBOOK Procedure easier to apply knowledge of construction methods to design decisions. ‘The option of pricing Method-Related Charges will become increasingly popular as users come to recognize its advantages. It is easy to justify the principles of Method-Related Charges, but itis not easy to design practical procedures which give them effect. ‘Method-Related Charges as introduced in the first edition were not a totally new concept. The previous standard method of measurement required that the bringing of certain pieces of plant to site should be covered by separate items, which the Contractor might or might not choose to price. The Contractor was expected to putin a separate price for bringing prestressing plant to site—two hydraulic jacks on the back of a Land Rover. It was not really breaking new ground to allow him to separate a price for bringing on a derrick, a batching plant, ora team of tractors and scrapers. During the life of the first edition, the innovation of Method-Related Charges received patchy utilization. Commonly contractors used the blank pages for Method-Related Charges to enter the sort of ‘Contractor's Preliminaries’ items which traditional practice had included but did not so as far as declaring items for costs related to construction methods for particular operations. The minority of contractors who did use the new facility more fully were generally pleased with the outcome. There is no doubt that, from the Contractor's point of view, fully declared Method-Related Charges make it easier to secure additional payment related to actual cost when methods and pace of work are changed as a result of variations, It also produces a healthier cash flow. There is no evidence that making a full declaration backfires on the Contractor and those who have tried to use the system fully have usually repeated the exercise, In the years since Method-Related Charges were introduced, civil engineering work has become more mechanized and faster paced. In times when the demand for work is not buoyant, it may be the ‘Contractor who plans to do the work most quickly who will put in the Towest tender. Making a profit then depends for that Contractor on actually finishing quickly, possibly well inside the period for ‘construction set by the Employer in the Contract. These factors mean that it has become even more important for contractors that the structure of price they are committed to in their priced bills of ‘quantities should realistically represent the fixed costs due to setting up particular construction operations and the time-telated costs which they expect to incur. Method-Related Charges give contractors the right and the opportunity to do just this. Not to take up the right and the opportunity is to make a significant addition to the commercial risk which is entirely voluntary and unnecessary. Bills of quantities compiled in accordance with CESMM allow space for tenderers to enter both the descriptions and amounts of ‘Method-Related Charges. Descriptions are to be classified as set out in CESMM3 but tenderers are at liberty to enter as many or as few charges as they think appropriate. ‘The charges represent costs which have not been spread over the rates for measured work. Descriptions have to define cleatly what the sum entered is to cover so that use of charges in the administration of the Contract can be equitable and uncontentious. The procedure is notobligatory—how much it is used and how realistic is the resulting valuation of work depend solely on the incentive it offers to the users. Suppose, for example, that a tenderer has chosen to enter Method Related Charges for the erection and operation of a concrete batching plant. Erection is covered by a non-recurring or Fixed Charge, operation by a Time-Related Charge. Both charges are entered as sums, without quantities, and are not subject to remeasurement. If there are no variations to the work the Contractor will be paid the sums entered, whether or not he uses the batching plant for the length of time that he anticipated. If the work is varied Method-Related Charges are subject to adjustment in the same way as any other rates and prices in the bill, principally as provided by clause 52(2) of the Conditions of Contract. Ifa variation alters the nature or scope of the Contractor's activity covered by a Method-Related Charge, a revised charge reasonable and applicable in the new circumstances has to be fixed by the Engineer. For instance, the Method-Related Charges fora batching plane might need adjustment because of substantial changes in the concreting operations. Assessment for interim payment is also prescribed in the Conditions of Contract. The proportion of payment due is that considered by the Engineer to be due (clause 60(2)(a)). The proportion paid should match the proportion of the work covered by ‘each charge which can be substantiated as having been completed by eect es poeta are eecacs ae eee eG payment against a charge entered for erection of the batching plant ifit has been erected on site, and has the capacity ot is of the type described. If the Contractor has entered a substantial but vaguely described charge for bringing on a batching plant, and claims full payment for a cement-caked old 14/10 mixer dragged on to the Site, he should not be surprised to find payment refused. Iv is in the Contractor's interest to be explicit in his descriptions of Method-Related Charges if he is to secure timely payment. If events ‘on site can be seen to match a precise description, he will be paid promptly; if events cannot be recognized clearly, then the Engineer may have grounds for withholding payment until the associated Permanent Works are completed. The mechanism for adjustment to and payment of a Time-Related ‘Charge such as that for hiring and operating a batching plantiis similar to that for a Fixed Charge. Interim payment should be in proportion to the extent of the activity described which the Engineer is satisfied has been completed. To assess the proportion of payment due against a Time-Related Charge the Engineer must assess the total period over which the charge should be spread. This period is not required to be stated in the description. It is therefore pradent for the Contractor to ensure that the descriptions and durations applicable to Time-Related Charges match the information given in the programme in the Contract. This provides substantiation for the Engineer's judgement of a reasonable proportion for payment and it safeguards the Contractor against unreasonable apportionment. In the event of variations, time-related sums become eligible for adjustment if they are rendered unreasonable or inapplicable. Again, the more precisely the work covered by the charges is described, the more realistic can be the adjustment. METHOD-RELATED CHARGES 87CESMM3 HANDBOOK Unfortunately realism is not always the goal, and there may be contractors tempted to load or unbalance Method-Related Charges in the hope of circumstances changing in a particular way. There can be no absolute protection against unbalanced Method-Related Charges, ds there can be none against unbalanced rates for measured work, but they are a gamble with very long odds. To benefit from unbalanced measured work rates in a traditional bill a contractor has to predict whether particular quantities will increase or decrease. This is difficult enough. To benefit from unbalancing a tender containing Method-Related Charges also requires accurate prediction of the effect of unforeseen variations of the methods and timing of ‘construction. Clairvoyance ofa very high order is necessary to achieve ny success. Experience shows that loaded Method-Related Charges re more easily recognizable than loaded unit rates. The tenderer's incentive to load is reduced by the more stable cash flow yielded by correctly priced Method-Related Charges. ‘The procedure for Method-Related Charges has to allow for the situation which develops if the Contractor changes his mind about arrangements which were assumed when pricing his tender. In the ‘event, for example, of a Contractor who has entered charges for 2 batching plant deciding to use ready-mixed concrete, interim pay- ments against the Method-Related Charges should be certified in proportion to the quantity of concrete placed. It would be un- reasonable, in the contractual sense, to do otherwise. If there were Variations affecting the volume of concrete placed it would similarly be unreasonable to do anything other than value the varied quantity a! a rate cattying an appropriate proportion of the charges for the batching plant. In the rare situation where there are many variations to the Contractor's plan for the work and also many variations disturbances to the work itself, the original Method-Related Charge: may become almost irrelevant. This an also happen to the ordinary bill rates if the contract goes very sour. No normal form of contrac can work well if what has to be done is very different from what bot! parties expected. As Method-Related Charges represent some of thy Contractor's original assumptions, they cannot add to the confusiot in these situations; they may help to clarify it. Ifthe motives implanted by the procedure produced absolute realism all the Contractor's indirect costs and a substantial proportion © plant, Temporary Works and labour costs would be represented & Method-Related Charges. In theory the measured work rates woul cover only material cost and any labour and plant cost which wa purely proportional to the volume of permanent materials placec his split would give a close match between cost and value. A close match would only be obtained by introducing more categories < charge than the three proposed: the two types of Method-Relate Charge and the ordinary measured work rates. In_ practice administrative convenience and commercial pressures make unnecessary to allow separately for method-related costs to quite th extent. [A practical test ro use when pricing a bill is to decide which category charge best represents the way in which a particular element of cost likely to vary. If cost will vary most closely in proportion to quantit| \ | use measured work rates; if it will vary most closely in proportion to the time for which a set of resources is required, use a Time-Related Charge; if cost is not likely to vary either with quantity or time, thea use a Fixed Charge. This means that the costs of the less flexible resources should be partially or wholly covered by Method-Related Charges. Each set of resources, such as major plant items, Temporary ‘Works, site facilities and services, and teams of plant and labour whose composition cannot be varied at will, is likely to involve significant setting up and operating costs which can be represented realistically by Method-Related Charges. There is no precise boundary between the fixed, time-related and quantity proportional costs of any particular site activity. ‘The Contractor's interests are best served by making an honest attempt to represent realistically the value of what he has to do, using the three categories of charge available. Representation will never be perfect, but it will be better than that implied by a traditional bill in which ‘construction costs not proportional to quantity were not usually represented. Since pricing Method-Related Charges is ‘optional to the tenderer, tenders vary from those containing no Method-Related Charges to those with items priced to amount to up to 40% of the tender total and giving a full analysis. Tenderers who choose to use the procedure usually enter 10-20 items amounting to 20-30% of the total tender sum. They cover the usual types of administrative and indirect costs, and extend into more specifically method-related matters such as the provision of haul roads, major plant items, various Temporary Works and the making of formwork. This indicates the range of types of charge which can be expected, all of which are acceptable to the procedure. The procedure rewards a contractor whose offer contains more realistic and comprehensive information than would traditionally have been disclosed, This can raise the fear in both the Employer and the Contractor that the information so disclosed might be used against them, So it might, but ifitis realistic and relevant information, and the use to be made of it is carefully prescribed within the Contract, its exposure can do harm only to a party who would have wrongly benefited from its being concealed. In this respect the procedure could eventually do much to diminish the financial uncertainties surrounding civil engineering construction and to contribute to the equity of ts valuation. Each step in the procedure for using Method-Related Charges requires the Engineer to pay attention to the methods of work both proposed and actually used by the Contractor, and to recognize the origins of their costs. This is not a new requirement and it will only taise difficulties for any Engineers who may have evaded it préviously. That this knowledge is now both required and used is perhaps the most important consequence of the procedure, As construction methods become more mechanized and sophisticated there is a danger of a widening gulf between the designer's and the Contractor's understanding of the cost and value of construction. Use of Method-Related Charges helps to avert this danger so that the separation of design from construction remains competitive with other ways of getting work done. METHOD-RELATED CHARGESCESMM3 HANDBOOK Rules for use The rules for using Method-Related Charges are given in section 7 of CESMM3, supplemented by the classification of Method-Related (Charges given in class A. In the event that an Employer wishes to use CESMM3 without using Method-Related Charges a statement in the Preamble to the Bill of Quantities to the effect that section 7 of CESMM3 does not apply would be adequate. This arrangement should not be sought in normal circumstances as the detailed rules for itemization and description of measured work items are drawn up on the assumption that Method-Related Charges will be used. Ifthey are not used the Employer will be denied the advantages to closer financial control which stem from Method-Related Charges and itis difficult to imagine any circumstances in which the Employer would be well advised not to use them. Paragraph 7.1 gives definitions of Method-Related Charges and their two subdivisions: Time-Related Charges and Fixed Charges. It should be noted that Method-Related Charges are sums for items inserted by tenderers; they are not rates and the item descriptions for them are not given by the bill compiler. Paragraph 7.2 amplifies the definitions given in paragraph 7.1. It makes it clear that the tenderer may insert as many Method -Related Charge items as he chooses, that the costs associated with any item will be considered as costs not proportional to the quantities of the other items (mainly the Permanent Works items) and that any costs he allows for within the Method-Related Charges will be assumed not also to be covered by the rates against those items. The converse of these statements is valid: the tenderer need not insert any Method-Related Charges; by this he declares that he anticipates no cost which he wishes to be considered as not proportional to quantities. This does not mean that the Contractor cannot raise matters which rely on non-quantity proportional costs if valuation of varied work subsequently makes them relevant. However, to do so will invariably seem to be a ‘having your cake and eating it" exercise. It is unlikely to be treated sympathetically and with full credulity by the Engineer. it wort be ike the case of the Contractor who svreteSncludes against a measured item for timber support left in excavations and then claimed extra for having had to leave in much more than he expected. ‘The suspicions are strong that he would not have offered a refund if he had had to leave in less, that he should have allowed for more anyway, and that he probably did allow for more than he subsequently admitted, The chances of this kind of difficulty being resolved to produce reasonable payment to the Contractor by the Employer are small. Similarly a tenderer may create difficulty for himself by not inserting any Method-Related Charges although he expects to incur significant cost not proportional to quantity. It bears repeating, however, that if the nature and extent of the work required are well predicted in the original bill, these difficulties will be few. Paragraph 7.2 refers to ‘items of work relating to his (the tenderer’s) intended method of executing the Works’, where ‘work’ and ‘Works’ are defined in paragraph 1.5 and clause 1 of the Conditions of Contract respectively. In more colloquial terms it could be said that ‘Method-Related Charges can cover anything which the Contractor will have to do (work) which is a consequence of how he proposes to arrange the construction of the finished product (the Works).| METHOD-RELATED CHARGES Metiod’ jn this context should therefore be interpreted widely; it includes all activity on or off the Site which the Contractor has to gay fer and which is not a direct cost closely related t0 the quantity of Bhysical components which he will eventually leave behind as’ the Works. bases the material given by him in the bill on all the other classifereion tables and notes. Like the bill compiler, the tenderer is not confined eo inserting the items listed by the CESMM. He is free to insert other stems provided they fall within the definition given by paragraph 7.2, A Mcthod-Related Charge could cover the cost of any peripheral activity even the cost of the site staff Christmas party’ (a Fixed Charge?). No practical purpose would be served by this particulst example, but it illustrates the point that any indirect cost could in Principle be included in a Method-Related Charge. Paragraph 7.4 is an important rule governing item descriptions for Method Related Charges. It requires additional description to be given for each Method-Related Charge item, The resulting description is required to be more extensive than the normal bill ites description. This is because the item descriptions for Method-Related Charges are not supplemented by the Drawings or Specification; they still identify work, but there is no definition of that work anywhere else in the Contract. ‘The description against each Method-Related Charge is the state~ ment which determines shen Wi aoe ore paid and in what.cir cumstances the amount may be varied. It must therefore describe the extent of the work covered — again ‘work’ in the sense: of activity not in the sense of Permanent Works. Paragraph 7.4 says thar the fesources expected to be used, if any, and the particular items of Permanent Wotks or Temporary Works to which the work relates, if any, should be identified. Resources would include teams of plant, gangs of labour and components of temporary works. Thus the general forms of Method-Related Charge descriptions ate: ‘Fixed Charge for providing/setting up/removing facility/service/tesource feam comprising... . to be used for. .." and “Time-Related Charge for ‘operating/maintaining facility/service/resource team ‘comprising . to be used for...’ The rule does not require the timing or duration of Time-Related Charges to be stated in item descriptions. This is because all Method-Related Charges are sums of money; they are not rates pet week or per month. Method-Related Charges cover work the extent of which is a matter at the Contractor's tisk. For example, if ten derer writes in a Time-Related Charge for maintaining a haul road, his jtem description might be: “Time-Related Charge for maintaining haul road from A to B during construction of embankment at B" This item description could be read as equivalent to: ‘This is the charge for maintaining the haul road from A to B for whatever time it may take to complete the associated Permanent Works which is the construction of the embankment at B’. It is the words ‘during Construction of embankment at B’ which define the extent of the work covered. This is not a fixed time as the timing and duration of the embanking operation may vary due to circumstances which are 6‘CESMM3 HANDBOOK 62 incontravertibly at the Contractor's risk. It would be less helpful to may for 12 weeks’ instead of ‘during the construction of the Sa jankment at B’ as this would define the extent of the cost allowed for but would not identify the work covered. Contractually it would be a5 pointless as describing a measured work item as 20 hours of Labour 5 tonnes of structural steel members and 4 hours of a 10 tonne ‘Grane’ jnstead of giving a conventional description of the result which it is intended to achieve. ‘The example bill on pages 80-82 shows typical descriptions of Method Related Charges. Notice that one activity or piece of work Often has both a Fixed Charge for setting up and taking down the Srouree set or Temporary Works required and a Time Related Charge for maintaining of operating the resource set. Equally, some Seats covered only b Charge, n practice tenderers often do not separate mobilization from ‘Gemebilization in Fixed Charges. Where neither end of an activity is stedfeated, the charge can be assumed to cover both. Fixed Charges are wivay for the Contractor to establish an enticlement to payment for srobilization work when the work is done, i.e, early in the mostruction period. CESMM3 does not prevent the tenderer from STlowing for the cost of purchase of resources against Fixed Charges as srell as for the cost of bringing them to the Site and setting them to were A tenderer could allow for the purchase of a piece of plant gainse a Fixed Charge for mobilization, and give a. credit af seein lization for its resale value. This goes further inthe direction of helping the Contractor with his cash flow problem than the Employer nay ovish, It can be prevented, if required, by the inclusion of a seRsment in the invitation to tenderers that Fixed Charges are not to sever the cost of acquisition of plant or of any other resource which has a significant resale value when it is no longer required for work dader the Contract, Ifa tender is received which appeats not to have complied with this instruction it can be rejected. Alternatively, {nettrctions to tenderers may state that tenderers will be given the option of cither withdrawing cheir tenders or adjusting theit RRethod. Related Charges within the original total of the priced Bill of Quantities before acceptance. Paragraphs 7.5 and 7.8 are emergency provisions necessary but not expected or intended to be used frequently. Paragraph 7.5 can never affect valuation or conduct of work. It establishes simply that the Guntractor is free to arrange and carry out the work covered by the Contract exactly as he chooses within the limits imposed by the Contract. His own descriptions of Method-Related Charges add no constraint; he can change his plans, arrangements and methods Sothout attention to what he may have assumed when tendering. Paragraph 7.5 is another which has a relevant converse. As the Consror is free to change his mind, the plans he illustrates by Method: Related Charge descriptions are not necessarily the plans he will adopt and so nothing in a Method-Related Charge description can Laconstrued a5 a qualification to a tender. If all tenders received are ve Sign the terms under which tenders were invited then they are not Qualified, All enderers are given the same opportunity co insert and rice Method-Related Charges, so that in that sense also they ar nos qualifications. It is recommended that invitations to tender should Site that no description inserted but not essential by a tenderer against a Mtcthed Related Charge shall be construed as a qualification and that Consequently the acceptance of a tender does not constitute an