QUANTITY SURVEYING DIVISION

ASSESSMENT OF PROFESSIONAL COMPETENCE

FINAL ASSESSMENT 2019

PRACTICE PROBLEMS

Wednesday, 11th September, 2019

and
th
Thursday, 12 September, 2019
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

CONTENTS

1) Candidates’ Role

2) Candidates’ Experience

3) Depth of Answers

4) Format and Style of Answers

5) Notes to Assessors

6) Marking

7) Acceptance Standard

8) General Notes

9) Notes to Candidates (as given in the Question Paper)

10) Five Common Criteria (as given in the Question Paper)

Page 2
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

1.0 YOUR ROLE

1.1 You should approach the submissions in the role of a manager / supervisor
considering letters, reports, estimates, etc. which have been prepared by a
qualified member of staff, ready for typing and signature in accordance with
the Instructions to Candidates.

2.0 CANDIDATES’ EXPERIENCE

2.1 In many cases, Candidates would not have much experience of the
situations encountered in this Final Assessment. This should be kept in
mind when carrying out your assessment.

3.0 DEPTH OF ANSWERS

3.1 The question paper is quite extensive. Candidates are required to consider
a range of problems. In the limited time available, it is expected that
Candidates would cover the main principles of each issue.

3.2 Candidates are not expected to go into exhaustive detail, quoting

extensively from textbooks, but should address the crucial points and
demonstrate an understanding of the fundamental requirements of each
question. Where appropriate, Candidates should provide a brief account of
the issues involved and state any rationales that support their arguments
given in the answers. Merely stating the issues without giving the
reasoning would not be considered as satisfactory.

3.3 The answers given by Candidates should show that they had identified the
problems, recognised practical solutions and given constructive
professional advice or solid arguments to the recipient. You should put
yourselves in the position of the recipient and ask if you have received
proper advice on the problems or if you could easily reject the arguments.

Page 3
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

4.0 FORMAT AND STYLE OF ANSWERS

4.1 When the questions require a letter, a report, a memo or an e-mail to be

drafted, Candidates’ answers should be in the form of a letter, a report, a
memo or an e-mail as required with date, addressee, title, salutation, space
for signature, etc.

4.2 Candidates should begin their answers with a brief introductory description
of the matter being asked, such as “With reference to the telephone
conversation with you yesterday regarding …”, “We refer to your query
regarding …”, etc. They should not jump straight to give points of answers.

4.3 Candidates should lay out their answers systematically. Lengthy

paragraphs not broken into an itemized or annotated list would be difficult to
read. On the other hand, answers given all in point form without an
introductory sentence would not be a good style.

4.4 It is not suggested that you should mark down the paper if the format and
style of the answers are not in the above desirable conditions. However,
answers should be presented in a professional manner such that the
recipient would understand the answers.

5.0 NOTES TO ASSESSORS

5.1 The Notes to Assessors are given here to:

(a) simplify your task in assessing Candidates’ answers; and

(b) facilitate a more uniform level of assessment.

5.2 The time spent in preparing the Notes to Assessors is much more than that
allowed to Candidates. Therefore, Candidates should not be expected to
mention all the points given in the Notes to Assessors for full marks. It
should be considered as Acceptable if a Candidate could address the core
issues.

5.3 Other valid points given by Candidates should be admitted, particularly

when the question can have alternative interpretations to that intended by
the question drafter and the Notes to Assessors.

Page 4
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

6.0 MARKING

6.1 The Practice Problems (Part II Written Test) were undertaken in an

examination hall on two days – each lasting for 4 hours.

6.2 See “NOTES TO CANDIDATES” below for the number of questions and the
passing marks.

6.3 A marking sheet is given in table form for you to assign marks.

6.4 Just before the final total of each day’s paper, a line is given for you to add
discretionary bonus marks of up to 2.5 marks. The bonus marks should be
given to Candidates for good presentation, good English, good handwriting,
and those who deserve a few more marks after your second thoughts on
their overall performance and potential.

6.5 You should not write notes or other marks on the submissions which you
are assessing since such notes or other marks may influence the next
Assessor’s marking.

7.0 ACCEPTANCE STANDARD

7.1 In case you desire not to follow the Notes to Assessors in detail or you want
a simper guide, you are offered the following questions to ask yourself
when giving your marks:

(a) Would I sign the letter for dispatch after minor editing corrections as
supervisor?
(b) Would the recipient consider sufficient advice has been given?
(c) Could the recipient easily reject the arguments?

7.2 If the answers are “yes” to (a) and (b) and “no” to (c), then the answer
should be considered as Acceptable or better.

7.3 The most important question when concluding the overall result as a pass
or a failure would be “Would I employ the Candidate to work as a
qualified Quantity Surveyor with the ability to resolve problems in a
professional manner?”

Page 5
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

8.0 GENERAL NOTES

8.1 This year’s questions are intended to test Candidates’ knowledge from a
wide spectrum of issues, with weight given to their associated and extended
thinking.

8.2 The Five Common Criteria (perception, imagination, technical skills,

judgment and communication) for assessing Candidates’ answers have
also been included in the Question Paper for Candidates’ attention.

9.0 NOTES TO CANDIDATES

9.1 Headings to questions are for ease of identification only and do not form
part of the questions.

9.2 The number of main questions is as follows:

(a) First day – Questions with varying marks totalling 50 marks

(b) Second day – Questions with varying marks totalling 50 marks

DAY 1

Question No. 1 Cost Comparison 14 marks

Question No. 2 Modular Integrated Construction 12 marks
Question No. 3 Contract Drafting 12 marks
Question No. 4 Stage Payment / Activity Schedule 12 marks
---------------
50 marks
---------------
DAY 2

Question No. 1 Payment Valuation 12 marks

Question No. 2 Valuation of Variations 16 marks
Question No. 3 Extension of Time 10 marks
Question No. 4 Phased Completion 12 marks
---------------
50 marks
---------------

9.3 All Main Questions and Sub-Questions are compulsory.

Page 6
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

9.0 NOTES TO CANDIDATES (Cont’d)

9.4 The total mark of each day’s paper is 50. The passing mark of each day’s
paper is 55% of the total mark of that paper. Candidates who have
passed both days’ papers will be considered as having passed the APC
Practice Problems.

9.5 Refer also to INSTRUCTIONS TO CANDIDATES, which were issued to you

in advance.

10.0 FIVE COMMON CRITERIA

10.1 Candidates are expected to demonstrate a reasonable level of professional

competence against five common criteria outlined below, sufficient for the
Assessors to answer the question “Would I employ the Candidate to
work as a qualified Quantity Surveyor with the ability to resolve
problems in a professional manner?” However, it should be recognized
that not all these criteria apply to every problem, nor do they carry equal
weight.

(a) Perception: A full understanding of the problem posed, evidenced

by a response to each item in the question. Candidates should also
show foresight by anticipating additional problems not specifically
mentioned.

(b) Imagination: The assumption of essential supplementary

information so as to provide a full response; also the use of
imaginary telephone inquiries, quotations, notes, etc.

(c) Technical skills: The correct use of measurement principles, prices,

discount factors, etc. The use of appropriate short cuts, rounding off
of figures, etc. to suit the scale of the problem. The provision of
analysis to a depth appropriate to the stage reached by Candidates
and the time constraints imposed on Candidates.

(d) Judgement: The provision of sound professional advice indicative of

professional knowledge and experience gained by Candidates. The
advice should be firm and unhesitating, except where suitable
caveats are essential.

(e) Communication: Free of ambiguity, with clear expression and an

absence of irrelevant or inappropriate technical details, particularly
when provided to a lay Employer. Correct syntax and good
professional style in letters and reports are important. Candidates
should clearly convey their interpretations and proposals.

Page 7
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Abbreviations

The following abbreviations used in the Notes to Assessors mean:

SFBC 2005 Agreement & Schedule of Conditions of Building Contract for

use in the Hong Kong Special Administrative Region, Private
Edition - With Quantities 2005 Edition

SFBC 2006 Agreement & Schedule of Conditions of Building Contract for

use in the Hong Kong Special Administrative Region, Private
Edition - Without Quantities 2006 Edition

GCC 1999 General Conditions of Contract for Building Works 1999 Edition
published by the Government of the Hong Kong Special
Administrative Region.

Candidates should clearly state the standard form of contract upon which their
answers are based.

Page 8
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

DAY 1

11th SEPTEMBER 2019

Page 9
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 1 – Cost Comparison

You are the newly recruited Assistant QS Manager of Good Investment Ltd. Good
is going to develop a new-build 5-star hotel “Project T”. Good’s Project Manager
wrote you an email below. Please reply to the Project Manager by an email.

Dear AQS Manager,

I know that you have reviewed the Scheme Design Cost Plan for Project T
prepared by our Consultant QS and you consider it in order. However, I have
found that the unit construction cost in $/m2 GFA is approximately 15% higher
than that of our first hotel “Project W” completed a few years ago. Given the
time, I can only recall some key information about Project W below for
comparison. I understand you may need more information about Project W for a
detailed comparison, but, for the time being, please advise on the probable
reasons for the difference based only on the information available.

Description Project W Project T

Overall Unit Construction HK$48,000/m2 HK$55,000/m2
Cost in HK$/m2 GFA at *Contract Sum adjusted by
1Q2019 price level TPI to 1Q2019 price level

Project location Tsuen Wan Repulse Bay

Completion Date July 2014 November 2024 (planned)
CFA (m2) Guestroom floor 16,000m2 Guestroom floor 18,200m2
Front of House 4,500m2 Front of House 7,000m2
Back of House 3,500m2 Back of House 4,500m2
Carpark 1,000m2 Carpark 1,000m2
---------------------------------- ----------------------------------
Total 25,000m2 Total 30,700m2
No. of levels Guestrooms: 10 levels Guestrooms: 12 levels
Podium: 4 levels Podium: 4 levels
Basement: 1 level Basement: 1 level
No of guestrooms 200 280
Designer AB Design Ltd AB Design Ltd

[14 marks]

Page 10
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 1 – Cost Comparison

NOTES TO ASSESSORS

Objective

The objective of this question is to test Candidates’ ability to analyse the given
information about Project W and Project T and form an opinion that is sensible to
explain the difference in $/m2.

Project W vs Project T

1. Grade - Project T is a 5-star hotel. The grade of Project W is not given in the
question. If Project W is of a lower grade, it would be cheaper.

2. Contract Sum – It is not sure whether the Contract Sum of Project W is the
Final Contract Sum. Project T’s estimate is supposed to forecast the Final
Contract Sum inclusive of allowance for contingencies (though at 1Q2019
price level, meaning that further fluctuations ae excluded). Project W should
also use the Final Contract Sum.

3. Point in time for TPI Adjustment – It is not sure how the TPI was used for
adjustment. The TPI taken at the time of estimate, the time of contract
award, the middle of the construction period or the end of the construction
period can be different by a few percent. Any inconsistency in the points in
the project time taken for choosing the TPIs for the two projects may
contribute to the difference. On the other hand, it is more likely that the time
taken for the TPI for Project W is later rather than earlier. This may in fact
have reduced the difference if the fluctuation trend was rising at the time of
Project W.

4. Index trend – The index trends at the times of the two projects should be
studied. If the TPI at the time of Project W was dropping, while that of
Project T is rising, the difference will be bigger.

5. Suitability of the TPI – The completion date of Project W was July 2014. The
contract award date should be at least 2 or 3 years earlier. The suitability of
using TPI more than 7 to 8 years ago is doubtful.

6. Scope of works - The scope of works covered by the Contract Sum of

Project W is not known. An apple-to-apple comparison is required for the
two projects. The extent of FF&E included in the construction contract may
vary between projects.

Page 11
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 1 – Cost Comparison (Cont’d)

NOTES TO ASSESSORS

7. Proportions of functional areas – The proportions of functional areas are

quite different. Project T has bigger proportion of the more expensive Front
of House.

Functional area Project W Project T

Area Proportion Area Proportion
Guestroom floor 16,000m2 64% 18,200m2 59%
Front of House 4,500m2 18% 7,000m2 23%
Back of House 3,500m2 14% 4,500m2 15%
Carpark 1,000m2 4% 1,000m2 3%
Total 25,000m2 100% 30,700m2 100%

8. Room size – The average room area is 16,000 m2 / 200 room = 80 m2 for
Project W and 18,200 m2 / 280 m2 = 65 m2 for Project T. If the provisions
within a room are the same, smaller rooms will cost more per unit area
because the costs of internal walls, wall finishes, doors, windows, furniture
and fittings are not sensitive to the reduction of floor area per room.

9. Technological change - TPI shows a general historical trend of tender prices

of the construction industry. It is usually compiled based on the same set of
work and quantities priced at rates at different times. The rates may reflect
the changes to the quality of the work over the years and statutory or market
influences on the price levels, but would not reflect those technological
changes or statutory requirements causing different or more varieties and
quantities of work per the same CFA, e.g. fundamental change of the
construction methods shifting the distribution of the types of work per CFA,
changes in the extent of exempted gross floor areas resulting in different
extent of work per CFA, provision of green building features. Generally, the
standard of work and quantities per CFA have increased over the years.

10. Design standard - Although the same designer is appointed for both
projects, it does not mean the design standards are the same for both
projects. Different designs will cost very differently.

11. Location - Repulse Bay is considered relatively remote as compared to

Tsuen Wan with respect to travelling time of workers, proximity to factories
in the mainland, cargo ship and airport terminals, delivery of materials and
plant. Environmental nuisance control would be more stringent. The location
factor may contribute to some cost difference.

Page 12
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 1 – Cost Comparison (Cont’d)

NOTES TO ASSESSORS

12. Site conditions – While the site conditions are not known, it is permissible for
the Candidate to doubt whether Repulse Bay’s site is more likely to be on
slope or in rocky ground while the Tsuen Wan site is more likely to be in
reclaimed ground.

13. Other factors – Other factors such as floor-to-floor height, façade ratio,
number storeys, number of lift stops, programme, contract terms, etc. are
unlikely to cause significant contribution to the higher unit rate. If the
Candidates attempt to put forward these or other factors, they should
demonstrate that the factors are very likely even though there is no
information for the time being.

The above notes give possible reasons only without being definitive. It is
permissible for the Candidate to state that he or she has done some quick check
before giving a more definitive answer.

Answers containing 8 points (combination of the above points and other valid
points of equal weight) should warrant full marks.

[14 marks]

Page 13
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Modular Integrated Construction

You are the Consultant QS for the construction of the superstructure of five 28-
storey residential blocks on a site in Kowloon Bay. The number of residential flats
is 8 per storey. The Employer would like to change the flats from in-situ reinforced
concrete construction to Modular Integrated Construction (MiC), where the
structure, finishes, building services and equipment of the modules are
manufactured and assembled in the factories before transportation to the site for
installation. He wishes to enhance quality control, site safety, environmental
performance (construction waste, noise and air nuisance reduction), and
productivity, in a shorter construction time.

The Architect asks you apart from the perceived benefits what problems and
issues should be considered before adopting MiC. Please reply by an email. Give
18 points preferably grouped under different aspects for easy understanding.

[12 marks]

Page 14
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Modular Integrated Construction

NOTES TO ASSESSORS

Objective

The objective of this question is to test Candidates’ understanding of the impact of

Modular Integrated Construction on design, procurement and construction as far as
making a choice to use MiC is concerned. The topical headings given below are for
Assessors’ reference only and should not be viewed as restrictive.

Answer

Design feasibility

1. Economy of scale
 Volume/extent of work which can be modularized.
 Degree of repetition possible to maximize the economy of scale.
2. Demarcation lines between MiC and in-situ construction to ensure integrity
without abortive work.
3. Structural integrity, waterproofing, jointing and grouting work between
modules or components.
4. Compliance with statutory requirements on design. Time to obtain approval
and consent or exemption.
5. Flexibility to change
 Limited room for design changes after the commencement of off-site
fabrication.
 Possibility to freeze design early enough to call for MiC tenders.
 Likelihood to change design during construction.
 Possibilities and measures to accommodate slight on-site adjustments to
the modules.
6. Limitation to the sizes and weights of modules due to logistic issues.
7. Possibility of repair and replacement in case of serious defects after
construction.

Design expertise

8. Knowledge of design consultants in MiC.

9. Engagement of specialists knowing MiC.

Page 15
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Modular Integrated Construction (Cont’d)

NOTES TO ASSESSORS
Contractors and manufacturers

10. Availability of competent contractors and module manufacturers.

11. Early involvement of contractors and module manufacturers to obtain their
knowledge - for design stage only or for full implementation, transition
arrangement.
12. Choice between open systems permitting many manufacturers or limitation
to a few or one – accountability, freedom to choose, competition, etc.
13. Different roles of consultants and contractors in design stage and
construction stage.
14. Duplication of contractor’s design team and employer’s design / design
checking team.

Logistics

15. Locations of off-site fabrication yards. Suitability of transport from yards to

site.
16. Suitability of access roads to the site. Traffic congestion. Entry and exit
waiting time.
17. Availability of on-site ground level storage and working space for
maneuvering of modules.
18. Availability of space for heavy hoisting plant, hoisting routes, anchoring
measures, etc.
19. Availability of nearby off-site storage after manufacture and pending
installation.
20. Challenges in synchronization of production, logistics and site coordination.

Quality

21. Arrangement for quality control at the off-site yards – resident, travelling,
integrity.
22. Training of workers especially on-site for installation of modules.
23. Protection of the modules before and after installation.

Contractual

24. Payment terms with recognition of heavy upfront off-site costs.

25. Insurances for off-site work.
26. Ownership of off-site materials, and intellectual property rights.
27. Extension of time and loss and expense clauses to take account of events
arising off-site or not.

Page 16
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Modular Integrated Construction (Cont’d)

NOTES TO ASSESSORS
Cost

28. Construction costs of MiC versus in-situ construction after taking into
consideration of the above – benefits of gross floor area exemption and
Government funding for using MiC may also be taken into account.
29. Measurement and pricing of the MiC modules – any breakdown of tender
prices to facilitate future valuation of variations and how.

The above points or other valid points of equal weight should be scored based on
a ratio of 18 points per 12 marks.

[12 marks]

Page 17
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Contract Drafting

You are the Consultant QS for a proposed new school project now in the early
stage of tender documentation for the foundations and superstructure works.
Demolition works are being done on site. The Client has expressed his concern
about the timely completion of the project in order to suit the programme for school
opening. At a project meeting, the Project Manager has suggested the following
possible ways to secure the timely completion of the project:

(a) Change the foundation works from Engineer’s design to Contractor’s design;

(b) Shorten the period for notifying delays by the Contractor to eliminate those
delays; and

(c) Add requirements for notifying delays as conditions precedent to granting

extension of time.

Please reply by an email advising on the contractual feasibility, possible benefits,

possible problems and issues, and effectiveness to achieve the goal.

[9 marks]

Suggest concisely 6 other suggestions to achieve the goal.

[3 marks]

[total 12 marks]

Page 18
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Contract Drafting

NOTES TO ASSESSORS

Objectives

The objectives of this question are to test:

 Candidates’ understanding of the different implications of Engineer’s design

versus Contractor’s design.

 Candidates’ contract knowledge about EOT and analytical thinking on

stringent requirements imposed on EOT clause.

 Candidates’ ability to make other suggestions to meet the time goal.

(a) Engineer’s design changed to Contractor’s design

Contractual feasibility

1. It is contractually feasible to procure the foundation works as a design-and-

build item as far as the scope of the works and design liability are clearly
stated in the Contract.

Possible benefits

2. The responsibility for design and obtaining Government approval and

consent will usually be passed on to the Contractor.

3. [Bonus point] The risks of the ground conditions may also be passed on to
the Contractor.

4. While more risks are passed on to the Contractor, the valid chances for the
Contractor to claim extension of time will be reduced.

5. The tenderer may be able to propose a better solution to suit his plant
resources, and design and build expertise, with time and cost benefits.

6. [Bonus point] The Contractor may have greater incentive to optimize the
design to suit his resources, with time and cost benefits.

Page 19
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Contract Drafting (Cont’d)

NOTES TO ASSESSORS
Possible problems and issues

7. (Bonus point) Any ambiguity in the Contract or any change of the scope of
work and design liability for design-and-build items will still become a
variation which will have extension of time entitlement as well.

8. (Bonus point) The foundation loading schedule will usually be given to the
Contractor during tendering to form his basis for tendering. A change of the
loading schedule will be a variation.

9. The Contractor can only start his design after the award of the Contract,
while the Engineer’s design can start earlier and gain time for Government
approval and consent.

10. (Bonus point) Including the Engineer’s foundation works design in the
Tender Documents for the tenderers’ reference only and taking up the risks
is one usual solution.

11. Moving forward the tendering time to secure Contractor’s foundation works
design may mean earlier freeze of the superstructure design and lesser time
for the development of the details for the rest of the project.

12. Whether there will be time advantage as compared to the Engineer’s design
would depend on the time left from now until the respective times for
obtaining Government consent.

13. (Bonus point) The time spent by the Architect in approving the Contractor’s
design may become too long and result in extension of time entitlement.

14. (Bonus point) The Contractor’s programme may have no or little buffer for
disapproval by Government.

15. (Bonus point) The Contractor may not have expertise in foundation works
and will have to sublet to others. The expected design and cost benefits
may be reduced.

16. (Bonus point) More intensive post contract supervision and monitoring may
be required as there may be higher tendency for the Contractor to design
down to cut costs.

Page 20
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Contract Drafting (Cont’d)

NOTES TO ASSESSORS

Time goal

17. The suggestion can reduce the Contractor’s extension of time entitlement
but is unlikely to reduce the Contractor’s actual possibility of delays.

(b) Shorten the delay notice period

Contractual feasibility

1. It is contractually feasible to shorten the contractual period for notifying

delays so long as the contract provisions have clearly so state.

Possible benefits

2. It may help give an early warning to the Architect and the Employer for them
to implement measures to mitigate the delays before it is too late.

Possible problems and issues

3. Without express words to the effect of imposing a time bar, any time frames
specified can only be regarded as a matter of good practice. Any failure to
comply may not have serious implication to the effect of reducing extension
of time entitlement.

4. (Bonus point) Also, the time to start counting the period may not be
concisely determinable, e.g. the usual phrase “the commencement of an
event likely to cause delay” for the purpose of starting to count the period is
not a precise term and may cause different interpretations and arguments.

5. The shortened notifying period may cause the Contractor to submit

enormous number of notices of delay with insufficient details to cover every
event which may cause possible or potential delay to safeguard his position.
More time resources will be spent by the Architect and the Contractor to
deal with these notices leaving less time to deal with more important matters.

6. The Architect may not be able to respond to the enormous number notices
of delay reasonably promptly and this may result in a time-at-large argument.

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Contract Drafting (Cont’d)

NOTES TO ASSESSORS

Time goal

7. The suggestion will not reduce the Contractor’s extension of time

entitlement nor the Contractor’s actual possibility of delays.

(c) Add condition precedent requirements

Contractual feasibility

1. It is contractually feasible to add more stringent requirements for notifying

delays and submitting detailed claim particulars as conditions precedent to
granting extension of time.

Possible benefits

2. By making it more difficult to claim, the extension of time entitlement may be

reduced.

Possible problems and issues

3. Conditions precedent may deal with the periods for notifying delays and
submitting detailed claims usually in the form of a time bar, and with the
particulars to be submitted usually in terms of sufficiency.

4. A time bar in respect of neutral event will be more readily upheld than a time
bar in respect of acts of delays or preventions by the Employer, the Architect
or persons for whom they are reasonable. For the time bars to be effective,
the intent must be expressly stated beyond doubt.

5. As mentioned in (b) above, the start time to count the permissible time can
be difficult to ascertain.

6. For the sufficiency of particulars to be submitted, it is always open to

argument as to whether the particulars are sufficient.

7. The administrative burden as mentioned in (b) above also apply to here.

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Contract Drafting (Cont’d)

NOTES TO ASSESSORS

(c) Add condition precedent requirements (Cont’d)

8. (Bonus point) Very stringent EOT provisions may limit the Architect’s or the
Project Manager’s flexibility to exercise discretions to resolve disputes. The
dispute may end up in the more costly dispute resolution methods.

9. (Bonus point) More stringent requirements may attract higher prices or

reduce tendering interests.

10. If the specified contract period is estimated to be shorter than the realistic
contract period, allowance for liquidated damages will likely be included in
the tender sums. This means the contract period is not really realistic.

Time goal

11. The suggestion can reduce the Contractor’s extension of time entitlement
but is unlikely to reduce the Contractor’s actual possibility of delays.

Answers addressing the contractual feasibility and time goal properly and covering
the core points (i.e. those not marked as bonus points) of benefits, problems and
issues should warrant full mark.

[9 marks]

(d) Six other suggestions

Design

1. Reduce possible variations by incorporating as full as possible the

Employer’s wishes in the Tender Documents.

2. Reduce possible variations by reviewing the adequacy and consistency of

the drawings and specifications.

3. Submit to the Government departments for approval as early as possible

during the design stage.

4. Shorten the design period by deferring the detailed design of non-critical

and non-significant items to the post contract stage, if the potential extra
costs so incurred can be afforded.

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Contract Drafting (Cont’d)

NOTES TO ASSESSORS

(d) Six other suggestions (Cont’d)

Procurement

5. Call for the foundation works tender first without waiting for the detailed
design of the superstructure works to complete.

6. Exclude work not essential for school opening.

7. Make work not essential for school opening as optional items which may be
omitted with no claim for profit if there is no enough time left do the work,
and with stipulation that the omission can be taken into account in extension
of time assessment.

Time

8. Shorten the contract period to give buffer for unavoidable delays with or
without extension of time entitlement.

9. Delete grounds for extension of time for inclement weathers.

10. Act proactively and promptly to resolve post contract problems.

11. Give incentive for early completion.

Others

12. Any other suggestion which may achieve the time goal, whether or not at
higher costs.

One of the above points or other valid point of equal weight should warrant 0.5
mark.

[3 marks]

[total 12 marks]

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NOTES TO ASSESSORS

Question No. 4 – Stage Payment / Activity Schedule

You are the in-house Quantity Surveyor of a Developer and are responsible for the
procurement of a proposed 10-storey carpark in Shum Shui Po (“the Project”).

The tender drawings and specification for the Project have been completed. In the
absence of external Consultant QS, your company accepts to invite tenders based
on drawings and specification without bills of quantities.

Your Project Manager would like to use stage payment method to simplify the
payment process, and has also heard about the use of activity schedule in lieu of
bills of quantities in some modern forms of contract.

Your Project Manager would like you to advise him via a memo:

(a) The features, mechanism and advantages of stage payment method, and
the possible drawbacks and preventive actions; and
[7 marks]

(b) The special differences between using activity schedule and using stage
payment method.
[5 marks]

[total 12 marks]

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 4 – Stage Payment / Activity Schedule

NOTES TO ASSESSORS

Objective

The objective of this question is to test Candidates’ understanding of stage

payment method and activity schedule. The topical headings given below are for
Assessors’ reference only and should not be viewed as restrictive.

(a) Stage payment method

Mechanism

1. A stage payment schedule is included in the Tender Documents whereby

the Works are broken down into various stages for the purposes of payment
and the amount against each stage will be paid only upon the completion of
the stage. The schedule may also be agreed ad-hoc after the return of
tenders.

2. Usually, payments will be made based on the stages completed by the

regular payment valuation dates. If there are only a few stages, payments
may be paid as and when a stage is completed independent of any regular
payment valuation dates.

3. The most stringent arrangement is to link the stage payment to a milestone

date whereby the stage payment will be made only if the milestone date is
met but this will increase the Contractor’s financial burden and will trigger
claims for adjustment of the milestone date.

Basis of the amounts payable

4. Tenders are invited with bills of quantities provided to the tenderers or

schedule of quantities and rates submitted by the tenderers. The use of a
stage payment schedule would not affect the tender documentation time or
tendering time.

5. The amount payable against each stage will be a pre-fixed percentage of

the Contract Sum or a sum linked to the priced bills of quantities or schedule
of quantities or rates or a lump sum with no link at all.

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NOTES TO ASSESSORS

Question No. 4 – Stage Payment / Activity Schedule (Cont’d)

NOTES TO ASSESSORS

(a) Stage payment method (Cont’d)

Relevance to programme

6. The stages may not be closely related to the programme activities of the
Contractor.

Cash flow expectation

7. The cash flow requirements and expectation for both parties are more
definite.

Motivation

8. In order to receive payment, the Contractor is motivated to complete each

stage to the fullest extent.

Ease of implementation

9. If the stage payments are specified in the form of fixed percentages and
fixed lump sums, the valuation for payment based on the achievement of the
specified criteria will be very easy.

10. If the stage payments are linked to the priced bills of quantities or schedule
of quantities and rates, then the more time-consuming valuation based on
quantities of work done and materials on site is still required with no time
saving.

11. If the stage payments are linked to milestone dates, more effort may be
needed to submit and deal with claims for adjustment of the milestone dates.

12. If the description (criteria) of a stage is worded to be too restrictive or

subjective, this may render no payment if there are minor incompleteness or
minor defects or stringent acceptance attitude. The descriptions should be
written very carefully with room for approximation and tolerances. Criteria
based on some objective benchmarks would be preferred.

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NOTES TO ASSESSORS

Question No. 4 – Stage Payment / Activity Schedule (Cont’d)

NOTES TO ASSESSORS

(a) Stage payment method (Cont’d)

Changes

13. Provisions should be included to describe how to treat variations, provisional

quantities and claims. Some variations may affect the completion of a stage
and some may not. The stage payment schedule may be rendered
impossible to implement if there are many variations affecting many stages.
The administrative time to make and agree the adjustments may outweigh
the time to do a normal quantity-and-rate valuation. If the amounts of stage
payments are not rigidly fixed but are flexibly linked to the estimated final
contract sum, the task will be easier.

One of the above points or other valid point of equal weight should warrant 1 mark.

[7 marks]

(b) Differing features of activity schedule

Mechanism

1. Similar to the stage payment method but the activity schedules are prepared
by the tenderers and the stages are in the form of activities usually with
reference to their own programmes.

Basis of the amounts payable

2. No bills of quantities nor pro-forma schedule of quantities and rates need to

be provided to the tenderers. The risks of measurement errors are passed
to the Contractor. This will reduce the tender documentation time but will be
more time consuming and costly for the tenderers to prepare their tenders.
A longer tendering period may be required. The cost of tendering will be
reflected in the tender prices.

3. The amount payable against each activity is priced by the tenderers. In the
simplest form, no quantity and rate breakdown of each lump sum price will
be required to be submitted by the tenderers.

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NOTES TO ASSESSORS

Question No. 4 – Stage Payment / Activity Schedule (Cont’d)

NOTES TO ASSESSORS

(b) Differing features of activity schedule (Cont’d)

4. Each lump sum price does not have to be derived from the usual SMM
compliant quantity and all-in rate build-up but can be derived directly from
the costs of labour, materials and plant and can be inclusive of all ancillary
work and costs more relevant to each activity. Varied quantities due to
tenderers’ own design can more easily be accommodated, and the design
itself can become an activity.

Relevance to programme

5. The activities can be more closely related to the programme activities of the
Contractor. Tenderers have to plan the Works very carefully before
preparing the activity schedule. This may help ensure that the tender is
more comprehensive giving greater confidence in the tender prices.

Tender analysis

6. When the activity schedules are prepared by the tenderers based on their
own programmes, it would be difficult to appreciate whether the price
against an activity is reasonable or not as the constituent sub-activities may
vary. A pro-forma activity schedule may help to some extent. A cap in the
form of a percentage of the tender sum may be imposed upon some
activities. However, this may limit the flexibility which is the purpose of
activity schedule.

7. If no breakdown of each lump sum price is required to be submitted by the

tenderers, it would be difficult to assess whether the quantities and rates are
reasonable for the described activity, and there will be no rates for pricing
variations. A quantity and rate breakdown may be required to be submitted
with the tender. A provision needs to be added to stipulate the implications
of the quantities and rates for pricing variations. Alternatively, a schedule of
rates only may be required for pricing variations, but those rates may bear
no relationship with those used in calculating the lump sum price.

Page 29
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NOTES TO ASSESSORS

Question No. 4 – Stage Payment / Activity Schedule (Cont’d)

NOTES TO ASSESSORS

(b) Differing features of activity schedule (Cont’d)

8. Given greater flexibility, tenderers may strategically re-allocate the prices to

their advantage (e.g. front loading). Careful tender analysis should be
conducted and any anomalies should be ironed out, but some client
organisations would not accept post tender adjustments to suit.

One of the above points or other valid point of equal weight should warrant 1 mark.

[5 marks]

[total 12 marks]

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

DAY 2

12th SEPTEMBER 2019

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NOTES TO ASSESSORS

Question No. 1 – Payment Valuation

You are the Consultant QS for the following project.

Project Residential Development in Tuen Mun

Scope of works 2 no. 30-storey residential towers with a 3-level podium
commercial centre and car park
Contractor Fada Co. Ltd.
Main Contract Sum HK$1.5 Billion
Main Contract Period 40 months
Form of Contract Lump sum with BQ
Payment Terms Monthly progress payment

This morning, the Architect sent you the email below:

Dear PQS,

I refer to Fada’s interim payment application no. 28 submitted this morning for a
net payment due of approximately HK$60M. Here are my comments on Fada’s
application:

1. Fada applies for 90% work done for the podium exterior cladding. I accept
that the site work is actually 90% done. However, Fada’s latest submitted
shop drawings have not incorporated all my comments. Please value 50%
instead of 90%. Also, I will instruct Fada to uninstall randomly a few panels
for my inspection to ensure he followed the approved shop drawings.

2. One major item – AI No. 25 – Revised reinforcement details to ground floor

beam B1-20 to B1-38 is missing from Fada’s application. All structural works
have been completed.

3. The electrical nominated subcontractor is now arguing with Fada about Fada
withholding HK$1,000,000 from his payment. The Employer is considering
direct payment to this subcontractor to avoid any delay to the subcontract
works caused by the unresolved payment dispute. I will update you as soon
as possible the Employer’s decision and the amount of direct payment to the
subcontractor. Please then adjust your valuation accordingly.

(Cont’d)

Page 32
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NOTES TO ASSESSORS

Question No. 1 – Payment Valuation (Cont’d)

(Cont’d)

4. Last week, a worker fell from height and was seriously injured. I suggest a
notional sum of say HK$1,000,000 should be held back until Fada’s report
with prevention measures about the accident is submitted and approved by
me. Please feel free to propose the sum you consider appropriate.

5. During the regular site meeting yesterday, Fada presented his latest
construction programme which shows a delay of 1 month. No doubt, Fada
will pursue extension of time. Meanwhile, please draft a statement to be
stated on your valuation of this interim payment to clearly inform Fada the
Employer’s right to deduct liquidated and ascertained damages from any
payment due to Fada.

6. The children play equipment has been delivered to site. However, the
equipment won’t be installed until the 34th month according to the
Contractor’s programme. Should we pay now?

I would be grateful if you could respond to my comments.

Regards,

Architect

Please respond. Citation of contract clauses is not required.

[12 marks]

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 1 – Payment Valuation

NOTES TO ASSESSORS

Objective

The objective of this question is to test Candidates’ ability to assess impartially and
fairly the payment amount while considering the information from other parties.

Interim payment valuation is never intended to arrive at an absolute figure agreed

by both contract parties by remeasuring and pricing every item in the BQ.
Professional judgement should be used in most cases.

Response to the Architect’s comments following the same numbering of the

question

1. The Architect should review whether his comments were late for
incorporation into the latest submitted shop drawings or late after the work
had been done on site. If the work was done pursuant to the approved shop
drawings current at the time, then subsequent changes should be regarded
as variations.

Even if the approved shop drawings have not been strictly followed, only the
non-compliant portion should be excluded from the payment valuation. The
Architect should advise on the nature and extent of non-compliance to
enable a proper valuation. The estimated value of the exterior cladding is
quite significant. A reduction from 90% to 50% without any justification is not
fair.

Opening up for inspection is permissible under the Contract. If the opening

up proves that the work done is not in compliance with the approved shop
drawings, the costs of opening up and making good should be borne by the
Contractor, otherwise the costs should be borne by the Employer. [Clause
8.2 of SFBC 2005 or Clause 45(2) of GCC 1999]

2. Interim payment valuation should also include the value of variations

properly done. The Contract does not have provision to limit the valuation to
the items and amounts applied for by the Contractor. [Clause 32.2(3)(a) of
SFBC 2005 or Clause 79(1)(a) of GCC 1999]

3. Direct payment can be made to the Nominated Subcontractor only if Fada

withholds certified payment without a good reason and without giving a prior
notice to the Subcontractor. Fada’s failure should be ascertained and
certified by the Architect first before implementing direct payment. The direct
payment is at the Employer’s discretion and for the withheld certified
amount only. GCC authorizes wider discretion to cover future payments.
[Clause 29.8(3) of SFBC 2005 or Clause 69(3)(b) of GCC 1999]

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 1 – Payment Valuation (Cont’d)

NOTES TO ASSESSORS

4. The Architect’s recommended sum is more like a penalty to push the

Contractor for a report on the accident. It does not represent the value of
work not properly done nor the loss and expense suffered by the Employer
due to the accident. There is no specific price for the preparation of the
accident report for deduction. Deduction of a notional sum without proven
loss and expense is not permissible. The only possible deduction may be in
respect of prices for safety measures not properly implemented.

5. There are still about 22 months until the contract completion date. Extension
of time is still to be considered. The Employer has not yet suffered any loss
or expense due to the current delay. Liquidated and ascertained damages
(LAD) can only be applied after the contract completion date as reasonably
extended when the Contractor still fails to complete the Works. The
Employer is not entitled to deduct any LAD now. While a declaration to
reserve the Employer’s right to deduct LAD is permissible, it is too
premature to do so. [Clause 24 of SFBC 2005 or Clause 52 of GCC 1999]

6. The payment valuation can exclude materials delivered to site prematurely.

[Clause 32.2(3)(d)(ii) of SFBC 2005 or Clause 79(1)(c) of GCC 1999] It
seems that the children play equipment was brought to site prematurely
when there are still 6 months until installation. This may be an attempt to
save the Contractor’s own costs only. In principle, no payment should be
made now unless there are good reasons for early delivery for the benefit of
the project, e.g. suiting seasonal production time, suiting bulk purchase in
conjunction with the Employer’s other projects, etc. The Contractor should
be asked to clarify.

[12 marks]

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Valuation of Variations

The contract completion date of the Main Contract of a smart building project in
Central is 31 March 2019. The project is a part of the bigger entire development.
After the award of the Contract, the Employer has engaged a direct contractor for
the supply and installation of intelligent building management systems (“IBMS”)
and the IBMS equipment was to be delivered to the Employer’s temporary storage
yard in the rural area on 1 March 2019 for subsequent installation after the Main
Contract works are completed.

In view of the extremely high value of the IBMS equipment and the remoteness of
the temporary storage yard, the Architect upon request of the Employer issued an
instruction (A.I. No. 33) to the Contractor (known as “ABC Contractor”) to state that:

“Please provide additional security guards at the Employer’s temporary storage

yard from 1 March 2019 to the completion of the Main Contract works to watch
over the IBMS equipment on 24-hour full time basis.”

After increasing the security guards as required in A.I. No. 33, the progress of the
Works was delayed by 60 days due to the following reasons:

Delay Reason
(a) 20 days Additional signal cable instructed by the Architect for
which 20 days’ EOT was granted; and
(b) 40 days Use of non-compliant switch box by the Contractor for
which no EOT was granted

As a consequence of the above delays, the deployment period of additional

security guards was extended by 60 days accordingly.

You are the Consultant QS of the project. The Contractor has submitted a
proposed valuation of A.I. No. 33 (see Appendix A). The Architect has requested
you to provide comments on the proposed valuation, in particular, the validity of the
following aspects:
(a) Provision of standby security guards;
(b) Use of star rates after 31 March 2019; and
(c) Payment for the security guards deployed during different delayed periods.

Please advise the Architect in a letter and explain your reasons with reference to
relevant contract provisions. Detailed assessment is not required.

[16 marks]

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Valuation of Variations (Cont’d)

APPENDIX A

ABC Contractor
Proposed Valuation of A.I. No. 33

Item Description Qty Unit Rate Amount (HK$)

(HK$)
Additional security guards
Provision of additional
security guards on or before
31/3/2019
A Day shift (Principal) – 1 No. 31 day 600 18,600
B Day shift (Standby) – 1 No. 31 day 600 18,600
(Ref: BQ 1.5/6D -
$600/day)

C Night shift (Principal) – 1 31 day 800 24,800

No.
D Night shift (Standby) – 1 31 day 800 24,800
No.
(Ref: BQ 1.5/6E -
$800/day)

Provision of additional
security guards after
31/3/2019
E Day shift (Principal) – 1 No. 60 day 900 54,000
F Day shift (Standby) – 1 No. 60 day 900 54,000
(Star rate)

G Night shift (Principal) – 1 60 day 1,200 72,000

No.
H Night shift (Standby) – 1 60 day 1,200 72,000
No.
(Star rate)

I Overheads and profit (15%) 50,820

Total 389,620

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PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Valuation of Variations

ASSESSOR NOTES

Objective

The objective of this question is to test Candidates’ ability to grasp the requirement
of an Architect’s instruction and their understanding of valuation principles under
different circumstances.

(a) Provision of standby security guards

1. The instruction is not specific as to the number of guards to be provided.

2. It should be checked whether there have been subsequent clarifications as

to the number of guards to be provided. The clarified staffing requirements
should be used for the valuation.

3. If there have been no clarifications, then the relevant facts and the
reasonableness of providing the standby guards should be checked.

4. Any full-time guard would need to take meal breaks, go to toilet, take
statutory holidays, take sick leaves, take casual leaves, leave the place for
other emergency causes, etc. It is reasonable that two guards or a standby
guard is required for a shift.

5. If the storage yard is big or there is more than one access or there are
insufficient physical security measures, it is reasonable to provide more than
one guard at any time.

6. The actual duty time of the day and night shifts and the principal and
standby guards should be clarified and substantiated by attendance records
and payroll records to see how the standby guards’ times interacted with the
principal guards’ times, and to see whether the daily rates should be the
same for the principal guards and standby guards.

7. Contract rates have been used for the Contractor. The applicability of the
contract rates should be reviewed.

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NOTES TO ASSESSORS

Question No. 2 – Valuation of Variations (Cont’d)

ASSESSOR NOTES

(b) Use of star rates after 31 March 2019

1. According to clause 13.4(1) of SFBC 2005/2006 or Clause 61 of GCC 1999,

contract rates should be used for the valuation of variation of similar
character executed under similar physical working conditions. If the
character is similar but the conditions are changed, the contract rates should
be adjusted for the difference in the conditions.

2. On the other hand, the contract rates are for work executed on the contract
site and are not binding for unanticipated work outside the site whether or
not of similar working conditions. The provision of the security guards
outside site is outside the scope of the Works especially when the
equipment is not for use under this Contract nor entirely for use under this
project, and the contract rates are not binding.

3. Putting aside the question of binding or not, the temporary storage yard is
very remote from the contract site. The working conditions at the temporary
storage yard can be very different from those on the contract site making it
unfair to use the contract rates as the base for adjustment. The Contractor is
entitled to ask for star rates instead of contract rates or adjusted contract
rates.

4. Furthermore, the contract rates are for work carried out within the original
contract period. If a piece of contract work or variation is required to be
carried out after the original contract period due to reasons for which the
Employer is responsible, the Contractor is entitled to ask for an adjustment
to the contract rates or claim loss and expense. [Clause 27.1 of SFBC
2005/2006 or Clause 63 of GCC 1999]

5. Even if the contract rates were originally reasonable, possible reasons for
the cost increase are: wage increase from the middle of the original
applicable period to the period after 31 March 2019, change of guards or
security company right after 31 March 2019, etc.

6. In summary, the Contractor can ask for star rates throughout.

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NOTES TO ASSESSORS

Question No. 2 – Valuation of Variations (Cont’d)

ASSESSOR NOTES

(b) Use of star rates after 31 March 2019 (Cont’d)

7. [Bonus point] Strangely, the Contractor has used some contract rates for
valuing the days not later than 31 March 2019 without asking for star rates
or adjusted contract rates, but only asked for star rates for days after 31
March 2019. It may be possible that the quoted contract rates are not for
work of the same descriptions but are those which have already accounted
for the change in working conditions for days not later than 31 March 2019.
In that case, both the reasonableness of the quoted contract rates and the
star rates should be examined.

8. [Bonus point] It may also be possible that the quoted contract rates have not
already accounted for the change in working conditions for days not later
than 31 March 2019 but the Contractor is prepared to be bound by them and
only wants to ask for star rates for the days after 31 March 2019. In that
case, the reasonableness of the star rates should be examined.

9. When contract rates or star rates have been used, there should be no
reason to add another 15% mark-up for overheads and profit at the end.
When star rates have been used, examination of the same is required to
see if profit and overheads have been included.

Page 40
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Valuation of Variations (Cont’d)

ASSESSOR NOTES

(c) Payment for security guards deployed during different delayed periods

1. Along with the delayed completion, the Contractor had no choice but to
continue with the provision of security guards until the completion of the
Works in order to comply with the Architect’s instruction. The real question to
address is whether the Contractor is entitled to payment for the different
delayed periods.

2. Excusable delay – The addition of signal cable is a variation entitling to loss

and/or expense compensation, so there should not be any disagreement as
to whether payment for the guards for the 20 days’ EOT should be made.
However, instead of invoking the loss and/or expense clause, the valuation
of the variation should take in account the full impact of the EOT. [Clause
27.1(2)(c) of SFBC 2005/2006 of Clause 63(b) of GCC 1999]

3. Culpable delay – Generally, there should be no loss and/or expense

compensation for prolonged period due to the Contractor’s own delay. It
may therefore be argued that the Contractor should not be entitled to
payment for the 40 days’ culpable delay.

4. Loss and/or expense compensation generally refers to compensation of loss

and/or expense due to causes over and above the risks for which the
Contractor should have the opportunity to allow for in the Contract Sum. If
the risks belong to the Contractor, no loss and expense compensation will
be made. There would be no loss and/or expense compensation in respect
of the provision of guards on site which is a contract work. However, the
need to provide additional guards outside the site is not within the scope of
the original Contract. The Contractor could not have allowed for the risks of
his own delays in respect of the guards outside site in the Contract Sum.
The instruction did not specify a fixed period, it should have reasonably
expected that the period is floating and the Contractor would be expecting
payment for the floating period. If the instruction did specify a fixed period.
Extension of the fixed period would need another instruction.

5. If it is expressly stated that in the original or additional instruction that any

extended guarding period due to the Contractor’s fault should be borne by
the Contractor, the Contractor will likely follow the argument for star rates
above that the instruction is beyond the scope of the Works and can be
refused.

Page 41
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 2 – Valuation of Variations (Cont’d)

ASSESSOR NOTES

Answers covering 80% of the points above should warrant full mark.

Candidates may not use the argument for the variation being outside the scope of
the Contract. So long as the answers are well reasoned and coherent throughout
and cannot easily be rejected, they can also be admitted.

[16 marks]

Page 42
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Extension of Time

You are the Consultant QS for a minor works contract for the construction of a rain
shelter beside the running track of a sportsground. On Day 40 of construction, the
Architect issued an instruction requiring a variation to the substructure works which
necessitated 10 extra days for the construction of the substructure works.

On the other hand, the Contractor has encountered technical issues on Day 60 on
the transportation of the fabricated rain shelter to the site which also delayed the
completion of the Works.

The Architect approached you and would like your advice on the Contractor’s
entitlement to extension of time, if any. The requirements for notice of delays and
claims can be ignored.

The Baseline Programme and the As-built Programme are given below: -

Duration Day
(day) 10 20 30 40 50 60 70 80 90 100

Baseline

Excavation 10
Plate load test 30
Substructure 30
Shelter erection 15
Fabrication of rain shelter 60

As-built

Excavation 10
Plate load test 30
Substructure 40
Shelter erection 15
Fabrication of rain shelter 85

Please respond with a letter with reasoned explanations supported by diagrams.

[10 marks]

Page 43
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Extension of Time

NOTES TO ASSESSORS

Objective

The objective of this question is to test Candidates’ ability to assess the critical
effects of two or more delay events occurring at different times upon the
completion date and present the reasons in a logical manner supported by
diagrams (not necessarily bar charts).

Analysis of the Programme and Delaying Events

1. A comparison between the two programmes shows:

 Overall completion delayed by 15 days.

 Substructure construction increased from 30 days to 40 days by 10 days
– On its own, this is on the critical path to the overall completion and
would cause 10 days’ delay.
 Fabrication of rain shelter increased from 60 days to 85 days by 25 days
– On its own, after using up the original float of 10 days, the critical delay
to the overall completion would be 15 days.

2. With hindsight, this may be very tempting to argue that the Contractor
should be responsible for the overall delays of 15 days. However, such a
retrospective approach will often lead to a misinterpretation of the changing
critical paths.

3. In principle, extension of time should be granted as soon as the cause of

delay starts to affect the progress to the extent that the effect of the delay
can be estimated, with possible continual review of the extension of time.
The effects of many delays should be assessed individually, and each
should be taken in a prospective manner as much as possible taking the
situation existing at the time when the cause of delay starts to affect the
progress.

4. The extended completion date promptly certified by the Architect can be

incorporated into the programme to serve as a new target for the remaining
work. This would assist the Contractor who is obliged to update the
programme to realistically reflect the latest situation.

Page 44
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 3 – Extension of Time (Cont’d)

NOTES TO ASSESSORS

5. Delay to the substructure:

 at about Day 40, the variation to the substructure works was

expected to require 10 extra days for construction;
 the substructure was on the critical path to the overall completion;
 the 10 extra days would delay the overall completion by 10 days;
 the delay to fabrication did not happen yet and was irrelevant;
 extension of time of 10 days should be granted; and
 if promptly granted and the programme updated, the original float
time for the fabrication of rain shelter would be increased from 10
days to 20 days, and the shelter erection should start on Day 71 + 10
= Day 81.

6. A diagram is expected to illustrate the above.

7. Delay to the fabrication:

 on Day 60, the transportation problem started to happen, but there

was some float time;
 on Day 70, the float time had all been used up but the delivery was
still not finished;
 on Day 85, the delivery was finished;
 the start of shelter erection was delayed from Day 81 to Day 86 for 5
days;
 the overall completion delay was 5 days due to the Contractor;
 no extension of time should be granted.

8. A diagram is expected to illustrate the above.

The question is rather simple and straightforward and could possibly be answered
with a single statement. However, the question also expects “a letter with reasoned
explanations supported by diagrams”. This requirement should have heavy weight.

[10 marks]

Page 45
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 4 – Phased Completion

You are the QS of Jufu Contracting Ltd. Jufu is the Contractor for the renovation of
a 2-level shopping mall. The area of renovation is 1500m2 x 2 levels. The
Commencement Date is 1 June 2019. Sectional Completion is stated in the
Contract as follows:

 Completion of Section 1: Ground floor, 1 September 2019

 Completion of Section 2: First floor, 31 October 2019
 Section 1 was completed on time and is now in operation.

At the weekly progress meeting on 6 September 2019:

(a) The Employer requested Jufu to repair the wooden floor on Ground Floor
damaged by bursting of an existing cold water pipe the night before.

(b) The Employer said he was considering to split Section 2 into two phases i.e.
Section 2A to complete on 30 September 2019 and Section 2B to complete
on 31 October 2019. Section 2A will then be opened for early operation.
Jufu’s construction manager considers the arrangement feasible without
causing delay to the overall completion.
Jufu’s construction manager asks for your contractual advice regarding the
Employer’s request and any cost implication that Jufu needs to consider.

Please write a memo to the construction manager with your advice.

[12 marks]

Page 46
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 4 – Phased Completion

NOTES TO ASSESSORS

Objective

The objective of this question is to test Candidates’ awareness of the contract

provisions in connection with:

 Damage to Works after completion

 Partial possession by the Employer

(a) Damage by bursting of water pipe

1. Jufu should firstly find out the cause and the party responsible for the
bursting of the existing cold water pipe.

2. As it is an existing cold water pipe, it is unlikely that Jufu is responsible for

providing it, but it should be checked whether Jufu has done anything
affecting it so as to cause the bursting.

3. According to clause 17.6 of SFBC 2005/2006, bursting of pipes after

Substantial Completion is a specified peril relieving the Contractor from
responsibility. However, it should not be interpreted to exclude intentional or
accident acts on the part of the Contractor.

4. [Bonus point] The standard clause has not addressed the issue of bursting
caused by improper materials or workmanship on the part of the Contractor
before Substantial Completion.

5. Without the said clause, such as in the case of GCC 1999, if the bursting
was caused by Jufu whether due to some act or use of improper materials
or workmanship by Jufu before or after renovation, Jufu should be
responsible. Omission to provide protection as required under the Contract
should also fall into the scope of responsibility. Otherwise, Jufu should not
be responsible.

6. If Jufu is not responsible, Jufu may refuse to carry out the remedial work
after Substantial Completion of the relevant section. If Jufu would like to do
it, to avoid doubt, Jufu should ask the Employer/the Architect for a clear
written instruction with an understanding to pay. The work may be treated as
a variation or a separate order.

Page 47
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 4 – Phased Completion (Cont’d)

NOTES TO ASSESSORS

(b) Early possession of completed work

1. Given an open book environment, Candidates could easy pick out and copy
the following clauses from the standard forms of contract to describe the
contractual validity of taking early possession and the subsequent actions.

SFBC 2005/2006

 Clause 18.1(1) - the Employer may, with the Contractor’s consent,

take possession of a part of the Works, i.e the Relevant Part, before
completion of the Works.

 Clause 18.1(2) - the Architect shall issue a certificate identifying the

scope of the Relevant Part, giving the Relevant Date for possession,
and stating the estimated amount of the Relevant Part.

 Clause 18.2 - Substantial Completion of the Relevant Part shall be

deemed to have occurred on the Relevant Date and the following
shall take effect:
o commencement of Defects Liability Period
o exemption from liability for damage by Specified Peril
o release of retention one-half relating to that Relevant Part

 [Bonus point] Clause 2.1(1)(h) – The Contractor’s responsibility for

the care of the Relevant Part shall cease 14 days after possession.

 The core point should be that the Contractor’s consent is required.

This must be mentioned. The Contractor should be more interested in
clause 18.1. Missing to mention clause 18.1(2) can be tolerated.

Page 48
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 4 – Phased Completion (Cont’d)

NOTES TO ASSESSORS

(b) Early possession of completed work (Cont’d)

GCC 1999

 Clause 53(5)(a) - the Architect may, without the Contractor’s consent,

give a certificate of completion of any part of the Works so that the
Employer can take permanent occupation or use before the
completion of the Works.

 Clause 53(5)(c) – the Maintenance Period shall commence on the

day of completion of such part of the Works.

 [Bonus point] Clause 21(1) – the Contractor’s care of such part of the
Works shall cease after 28 days of the certificate.

 Unlike the SFBC, there is no partial release of retention.

 The core point should be that the Contractor’s consent is not

required. This must be mentioned.

2. Although the partial possession would not cause any overall delay, Jufu may
incur additional costs arising from the following:

 Provision of temporary measures to separate between Section 2A

and 2B, in the form of hoardings, fencings, directory signs, etc.

 Provision of temporary separate accesses to Section 2A and 2B, and

provision of protection, signage, security, etc. along the accesses.

 Risks and insurances for other people using access passing through
Section 2B still in construction to Section 2A in operation.

 Maintenance and final removal of the temporary measures, and

reinstatement of permanent work.

 Relocation of any temporary stores, site office, plant, temporary

lighting and power supply, etc. from Section 2A to Section 2B.

Page 49
THE HONG KONG INSTITUTE OF SURVEYORS
QUANTITY SURVEYING DIVISION
ASSESSMENT OF PROFESSIONAL COMPETENCE
TH TH
FINAL ASSESSMENT – 11 & 12 SEPTEMBER 2019
PRACTICE PROBLEMS
NOTES TO ASSESSORS

Question No. 4 – Phased Completion (Cont’d)

NOTES TO ASSESSORS

(b) Early possession of completed work (Cont’d)

 Difficulties with logistics on site, resequencing of work to suit the early

possession of Section 2A.

 Provision of other appropriate health and safety measures to deal

with risks and nuisance caused by the work in Section 2B to Section
2A.

3. While the clauses regarding partial possession have not specifically dealt
with the occurrence of the above costs, the relevant work can be put forward
as a variation under the Contract as the definition of variation is wide
enough to cover any imposition of an obligation or restriction instructed by
the Architect regarding access, working space, limitation of working hours
and sequence of work according to clause 1.6 of SFBC 2006/2007 or to
cover changes to any sequence, method or timing of construction, site
entrance and exit according to Clause 60(1)(b)&(c) of GCC 1999.

4. In the case of SFBC 2006/2007, the Contractor would have a better chance
to negotiate a complete deal with all the required measures stipulated
because of the need for the Contractor’s consent.

Answers covering 80% of the points above should warrant full mark.
[12 marks]

Page 50