Faculty of Engineering, Built Environment and Information Technology
School for the Built Environment
Department of Construction Economics
Selected Highlights from Research Findings
One of the functions of the South African Council for the Quantity Surveying Profession (SACQSP) is to publish a Tariff of Professional Fees for the industry. This tariff, which is reviewed on an annual basis, provides quantity surveyors and their clients with guidance concerning fair remuneration for the services being offered.
However, due to the growing competitiveness of the market, it has become the norm for South African quantity surveyors to offer reduced professional fees on construction projects. In some instances, these discounted fees are far below those recommended by the SACQSP.
A study was conducted to identify the criteria used by quantity surveying firms when calculating fees for construction projects, and also to investigate the relationship between the magnitude of the discount offered and the risk of making a financial loss on a project.
Data were collected by means of a questionnaire distributed to twenty quantity surveying firms of various sizes, all of them based in Gauteng.
The results of the study suggest that most quantity surveyors offer discounts on an ad hoc basis, and that some firms do not regularly conduct reconciliation at the end of a project to determine whether they have in fact made a profit.
An analysis of a number of projects also revealed that their margins ranged from a loss of 79% to a profit of 364%. These findings indicate that quantity surveyors can make a profit on most projects – provided that the calculation of discounts takes into account relevant factors such as the type of project, its size and the amount of work in the office
Contact person: Mr JHH Cruywagen.
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