The use of schedules of quantities in providing financial management in construction projects
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Permanent link to Research Bank record:http://hdl.handle.net/10652/1784
The Schedule of Quantities (SOQ) emerged after the industrial revolution of the 19th century in Europe however due to the popularity of alternative procurement methods, their use over the past 20 years has dramatically decreased. The literature noted that a SOQ is considered the most misunderstood facet of construction contracts and there is a belief by some clients that a SOQ is an additional cost that produces no benefit to the project. The misunderstanding is further compounded by the perception that a SOQ can become a key source of variations due to potential measurement errors However the literature also presented a conflicting view whereby the benefits of a SOQ are clearly demonstrated. These benefits include providing financial management in the form of cost certainty and control. Due to these conflicting views, the objective of the research was to obtain client representative feedback on the efficacy of a SOQ in providing financial management. The research method was in the form of semi-structured interviews which comprised a questionnaire collecting both quantitative and qualitative data from client representatives. The overall findings demonstrate the use of a SOQ to be effective for financial management because it provided a documented price containing the proposed scope, quantity and cost for a project. Furthermore the SOQ provided numerous financial management benefits which extend throughout the duration of the project. These benefits include a fair basis for the comparison of contractors’ tender submissions, an effective variation management tool, basis for progress payment evaluation, a useful cost database for future estimation purposes, together with other beneficial uses.