A proposed new framework for construction cost reporting is aimed at enabling consistent and transparent cross-border comparisons of the capital outlay required for a dozen different categories of commercial, industrial and infrastructure projects. A coalition of 43 international and national professional organizations, including the Canadian Institute of Quantity Surveyors, developed the International Construction Measurement Standards (ICMS), which have been released for public comment until January 13, 2017.
“Consistent practice in presenting construction costs globally would bring significant benefits to construction cost management,” states the introductory note to the proposed standards. “Globalization of the construction business has increased the need to make meaningful comparative analysis between countries, not least by international organizations such as the World Bank Group, the International Monetary Fund, various regional development banks, non-governmental organizations and the United Nations.”
The ICMS provides a four-level framework, first defining the project type — i.e. buildings; roads; sewer and water treatment facilities; etc. — and then grouping costs into increasingly detailed categories and line items. This covers 16 categories of construction capital costs related to site acquisition and preparation, design and consulting fees, structural materials and services, system installations, connections to off-site infrastructure and utilities, interior furnishings and equipment, administrative, legal and marketing fees, and taxes and levies.
Proponents suggest this detailed cost monitoring will also make it easier for analysts to pinpoint anomalies and more precisely identify where projects have gone over budget and/or vary from other projects. Like other benchmarks and international standards, ICMS is also expected to appeal to investors and lenders seeking reliable, widely applicable evidence of costs and returns.
“Research has shown that different approaches to presenting the costs of construction can vary by as much as 25 to 30 per cent due to inconsistent methodology and standards,” the ICMS consultation document reports. “The aim is not to replace existing local standards, but to provide a consistent framework into which data generated locally can be allocated for the purposes of comparison. In time, it is expected the ICMS will become the primary basis for both global and local construction cost reporting.”