ICMS adoption will benefit GCC dispute resolution

ICMS adoption will benefit GCC dispute resolution
Simon Collard is managing consultant for claims at Hill International.
Published: 4 March 2017 - 8:23 a.m.
By: CW Guest Columnist

The impact of globalisation continues to be felt throughout the built environment, with professionals from different technical and cultural backgrounds working together to deliver projects of all sizes.

While international contractors and consultants seek involvement in the GCC’s scheduled project pipeline, some of the region’s largest developers are increasingly looking to invest away from their home markets. These factors, coupled with disruptive technologies such as building information modelling (BIM), present our industry with an opportunity to introduce standards that will become default practice for professionals across the world.

Take for example a claim for additional construction cost. The failure to apply consistent standards in recording and reporting additional cost can lead to misunderstandings and mistrust between the parties, and potentially end up in a formal dispute-resolution process. Equally, the absence of recognised standards may contribute to a lack of transparency, and prevent matters from being resolved by the parties under the contract.

In light of how global accounting standards have benefitted the financial sector, a group of more than 40 construction and engineering bodies have committed to developing a consistent approach to measuring and recording cost, in the form of the International Construction Measurement Standards (ICMS).

Following on from the International Property Measurement Standards (IPMS) published in 2014, the ICMS Coalition held initial meetings in June 2015 before drafting commenced. The full version is to be released later this year and, if the bold vision projected by the group is realised, the standards will influence the way costs are presented for a wide range of construction and engineering projects globally.

The ICMS Coalition aims to develop standards that: define what is included in construction costs for reporting and auditing purposes; facilitate the comparison of project costs between different countries; assist governments and international bodies in benchmarking costs; aid the identification of causes of cost differences between projects; contribute to the decision-making process when establishing a project location during the design phase; and inform investment and financing decisions as well as the delivery strategy for the project.

It is envisaged that the standards will be used in dispute resolution work, as well as in assisting the identification of capital construction and associated cost categories.

The introduction of the ICMS should also: identify universal cost definitions; recommend a standard reporting format; codify terminology; and be adaptable.

Publications compiled by the Royal Institution of Chartered Surveyors (RICS) indicate that many project costs in the GCC are still prepared and recorded in accordance with the older Principles of Measurement International (POMI) standard, whereas the body’s current guidance suggests that the New Rules of Measurement (NRM) should be used. Any conversion between the two is laborious, and may lead to mistakes further down the line. The ICMS offers guidance as to how records of cost can be taken in a consistent manner, allowing claimants to present their substantiation from the outset in a recognised format familiar to the person or persons responsible for quantum evaluation.

ICMS could also be integrated with BIM to offer a universal platform for digital cost management. As de facto standards already exist within technical drawing and delay analysis software, a comparable standard for quantum analysis of construction claims may also be achievable.

It remains to be seen how long it will take for ICMS to achieve global acceptance. But as the consultation draft has been developed with input from the professional bodies from which many technical arbitrators and expert witnesses are drawn, cost-planning and control professionals may wish to treat the guidance contained therein as the level of detail required to help avoid disputes.

In turn, should a claim situation arise, a clear categorisation of cost – consistent with the ICMS approach – may help to achieve an amicable settlement, especially when working with international project teams.

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