International Construction Measurement Standards: global benefits

The bigger picture

24 October 2017

Kevin O’Grady discusses the benefits of the International Construction Measurement Standards in their global context

Infrastructure project costs vary from one region to the next. To align global markets, the International Construction Measurement Standards (ICMS) Coalition was launched in Washington DC in 2015; it comprises more than 46 professional not-for-profit global organisations, working to develop and implement standards for benchmarking, measuring and reporting construction project costs. The ICMS were published in July.

The standards are intended to be used to compare historic, present and estimated future costs for new projects and retrofits or refurbishments, and facilitate the following processes:

  • global investment decisions
  • international, national, regional or state cost comparisons
  • feasibility studies
  • development appraisals
  • project work, including cost planning, control, analysis and modelling, and the procurement and analysis of tenders
  • reinstatement costs for insurance
  • valuation of assets and liabilities.

It is important to note that ICMS will not replace existing measurement guidelines, such as the New Rules of Measurement (NRM) or Civil Engineering Standard Method of Measurement (CESMM), or bespoke client cost breakdown structures. Instead, they are a new way of presenting and reporting infrastructure costs to clients, stakeholders and investors at all project stages.

The standards define what is required, and at Arup we approached their adoption with 'ICMS' of our own, comprising the following 4 stages: identification, communication, monitoring and success.

Identification

We sought to identify a consistent way to define, classify, analyse and report construction costs at project, category, regional and international levels. In doing so, we endeavoured to enhance the quality and comparability of data that will be required to provide sound value management and robust decision-making, thereby maximising the value of international integration.

The drive for standards and efficiencies in construction has meant that embedding digital information in building models has been mandated in many parts of the world, to improve the data flow between project stages from inception through feasibility, design and construction to handover and operation.

A common standard is essential for that data flow, and embedding construction assets in the model allows facilities and asset management professionals alike to access this information, as well as enabling operational efficiencies.

Moving from a spreadsheet-based estimation to a secure, centralised digital environment, data needs to have a common standard to enable global benchmarking and sharing. Launching the ICMS at this time is therefore ideal, aligning with our search for a common structure that has been ratified by professionals in all markets.

Once we had identified the need, we set out a strategic plan for our commercial ICMS digital vision and specified the available platforms that will integrate with our existing systems. To understand more about the standards, we collaborated with professional bodies in different regions: Arup staff were among speakers at the ICMS panel discussion at RICS headquarters in London in February, and our cost engineering and management leaders worked with AACE International, CMAA and RICS at events in San Francisco in January.

However, we understand that it will take time for common standards to emerge alongside the entrenched localised and divergent ones that already exist. We believe that introducing international standards is the right thing to do in construction, which is increasingly interconnected and global; but in certain regions, adoption will be hard because standard methods of measurement are not extensively used.

Communication

Communication is crucial to understand the context for the ICMS’ adoption.

People

For the uptake to be successful, we had to find what standards were being used in each region and whether the ICMS were aligned with these markets. Through global consultation with our cost centres, we proposed the use of the ICMS in data collection, and requested feedback and support on this.

Policies

Digital systems work best when all those involved in a project understand policies and can share information freely and collaborate. Contract clauses on confidentiality, liability and litigation can sometimes restrict collaboration.

Process

Too many processes create useless and wasted data, and there are always better and more effective ways of doing things. By taking the time to set up a common framework, we can produce a consistent, efficient and collaborative foundation.

What Arup expects

In terms of communication, Arup expects the following at each of the 4 levels of the ICMS.

  • Level 1: Project Categories: these describe the essence and principal purpose of the project, that is, the stage, date, currency, function, area, location, programme, procurement method, design life and so on.
  • Level 2: Cost Categories: these include capital construction costs, total costs for each of the elemental packages as defined in Level 3, and associated capital costs. Soft costs are extracted again from Level 3.
  • Level 3: Cost Groups: this stage shows the traditional elemental split of packages of works. Capital construction costs at Level 3 include elemental headings similar to the old Building Cost Information Services cost plan format, such as demolition, substructure, superstructure external works and so on. This level also covers associated capital costs such as land acquisition, furniture, administration, legal, marketing, consultant fees, risks and the like.
  • Level 4: Cost Subgroups: covering the sub-elemental quantities and estimating for the packages, this standard does not mandate the classification of the cost subgroups. However, in the standard there are appendices that recommend best practice:
    • ICMS Appendix A: Level 4 Cost Subgroups: Buildings
    • ICMS Appendix B: Level 4 Cost Subgroups: Civil Engineering
    • ICMS Appendix C: Level 4 Cost Subgroups: Associated Capital Costs.

This standard allows users to adopt a classification based on trades, work breakdown structure or work results according to their local practices. Therefore, Level 4 supporting information is the most suitable measurement and estimating methodology, such as NRM or CESSM. RICS is looking to withdraw Principles of Measurement (International), widely used in the Middle East, at some point this year, though their replacement is uncertain at present.

Figure 1 shows how project categories could be translated for an aviation project at Level 1 . Each project category needs to be reported separately before summing up to show the total project cost; if the cost of a project category is not significant, it may be included under a costlier project category. As part of the integration with the digital estimation, we needed to ensure we would be ready for the July publication of ICMS, so in conjunction with the coalition and the digital software providers, we received an early draft of the standards for our teams to trial.

An airport estimate (see Figure 1) was set up in an ICMS structure that had multiple project categories, to test that the data could be benchmarked by system and type as well as by project. As the estimate information is built on a database, extraction of categories is much easier than it is in a spreadsheet. By way of guidance, Appendix D of the ICMS provides process flowcharts for step-by-step project category allocation. Further communication with our global clients will be required now that the ICMS are in use to inform, consult and adapt to any project-specific requirements they may have.

ICMS level 1

Figure 1: Project category translation for an aviation project at Level 1

Monitoring

The response from our cost centres enabled us to progress to the implementation phase. We are currently planning how to monitor uptake of the ICMS and how to obtain feedback from our clients. RICS plans to amend the NRM at some point this year; we will need to monitor and work with the organisation to understand how to accommodate these changes.

During the adoption of standards and centralised data storage, we will constantly monitor the security of our client information in the light of recent cyber attacks and in compliance with PAS 1192: 2 and 3. Arup’s resilience, security and risk teams have come together to manage built asset security for an executive agency of a UK government department as it rationalises and relocates a number of sensitive assets. This is believed to be the first UK agency to implement PAS 1192: 5, the national standard setting out the security of building information modelling (BIM) information published in 2015.

We are assessing security issues and threats associated with the use of digital built environments, and developing framework and guidance documentation to support BIM use on the project while protecting sensitive data.

PAS 1192: 5 is relevant not only for government projects but also for any project adjacent to their sites, along with commercial developments where BIM contains sensitive information about vulnerability and business-critical systems. In addition, business continuity and security measures should attract protection in BIM as a matter of good practice, regardless of the project’s status; PAS 1192: 5 provides a framework that can be applied in any context.

As measurement guidelines and definitions vary considerably between countries, linking ICMS with International Property Measurement Standards (IPMS) is a valuable way of overcoming these inconsistencies. ICMS require a cost report to include both Gross External Floor Area (IPMS 1) and Gross Internal Floor Area (IPMS 2), measured in accordance with the rules set out in IPMS. These are evolving according to building sector – offices, residential, retail and so on – and although IPMS 1 will be consistent for all building types, IPMS 2 will vary between them. Reference to the specific standard for the building type is therefore recommended.

With ICMS and IPMS, we look to deal with fundamental issues such as building measurement variances, including:

  • Africa: Gross Construction Area
  • New Zealand: Fully Enclosed Covered Areas
  • UK and Middle East: Gross Internal Floor Area
  • USA: Gross Floor Area.

Success

Construction is an international business. Global output is likely to surge by 70% to $15tr by 2025, according to the report Global Construction 2025, with 60% of this surge in China, India and the USA. Accepted standards are thus even more critical, to enable transparency and comparison of costs and efficiencies, and, in turn, competitive markets.

As technology develops, particularly BIM, standard international classifications will become more important in multidisciplinary practices, as they will enable better decisions on design and cost, optimising buildings and assets with less process waste.

Arup’s vision of 'total architecture' encompasses every aspect of the built environment, and ICMS align with our global outlook and drive for collaboration and transparency. Total architecture requires that all relevant design decisions are considered together and integrated into a whole by a well-organised team. It is not the desire to expand but the quest for quality that has prompted us to devise total architecture.

Arup will certainly benefit from the structure of data collection in ICMS. However, success can only be achieved if the standards are adopted by industry, governments and academia. Therefore, early conversations with all Arup clients and other stakeholders will help to raise awareness of the standards and develop more market feedback and data collection. Only by embedding ICMS in all sectors and world regions will they succeed.

Kevin O’Grady is Associate Director, Airport Development, at Arup

Further information

Download a complete “International Construction Measurement Standards: global benefits” PDF