International Construction Measurement Standards (ICMS)

Global Coalition Transforms Construction Cost System

New high level International Construction Measurement Standards (ICMS), launched in July 2017, will revolutionise the global industry by improving cost prediction in infrastructure projects.

Construction is a global industry but the way project costs are measured varies enormously which makes decision-making risky and creates barriers to investment.
Until now, it has been almost impossible for governments and investors to compare construction costs like with like. It is hard for them to know if public infrastructure projects are good value and this can waste money.

ICMS will create a consistent method for presenting costs, aligning national standards with one universal framework for defining, analysing, classifying and presenting construction costs.

ICMS will benefit all stakeholders with an interest in buildings and civil engineering construction, including governments, developers, owners, occupiers, managers and investors by creating a common language for construction investment and enabling better benchmarking.

International Construction Measurement Standards (ICMS) Coalition

ICMS has been developed and implemented by a growing international coalition of 46 leading standards organisations, representing professionals across the multi-trillion dollar construction sector.

NZIQS has been a member of the ICMS Board of Trustees since the coalition started in 2015. NZIQS supports the move towards greater global consistency of standards. Barry Calvert, NZIQS president says: (quote to come)

Commercial organisations, governments and academic bodies are announcing their intention to implement ICMS by registering as ICMS Partners. Among leading organisations publicly announcing their support are major organisations including Turner & Townsend, Faithful+Gould, Arup, G20 Global Infrastructure Hub, EY and Arcadis. See full list of coalition partners here.

Exactal, NZIQS Platinum Partner, has also become a coalition partner to ensure that their product range is well prepared for these standards, which will be of great benefit to their global customer base.

What do the Standards cover?

  • High level cost classification
  • Buildings and civil engineering
  • Definitions, inclusions and exclusions
  • Four level taxonomy
  • Key cost drivers

What Do the Standards Cover?

  • High level cost classification
  • Buildings and civil engineering
  • Definitions, inclusions and exclusions
  • Four level taxonomy
  • Key cost drivers

Links

Further Reading

The new standard harmonises cost, classification and benchmarking definitions to enhance comparability and consistency of capital projects. A report by McKinsey Global Institute, ‘Reinventing Construction: A route to higher productivity’ (Feb 2017), finds that the International Construction Measurement Standard ‘will help clarify the costs of projects.’

Construction is a large contributor to national economies and to keep cities functioning, governments worldwide need to spend vast sums of public money on essential infrastructure. Inconsistent information causes poor cost prediction which impedes investment and can cause 9 out of 10 mega projects  to run over budget.*

* Bent Flyvbjerg, is a Danish economic geographer. He is Professor of Major Programme Management at Oxford University's Saïd Business School. He has estimated that 9 out of 10 mega projects (infrastructure developments over US$ 1 billion) go over budget. http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/megaprojects-the-good-the-bad-and-the-better. ‘Reference-class forecasting’ is cited as a solution for this issue. An alternative name for this is construction cost prediction and cost benchmarking which is central to the benefits of the new International Construction Measurement Standards which will help provide the right data in the right standardised form.

Overall, close to $78 trillion needs to be spent globally between 2014 and 2025** on infrastructure and the ICMS Coalition saw the need to de-risk these projects for public and private sector investors.

** Oxford Economics and PwC, research: http://press.pwc.com/News-releases/infrastructure-spending-to-more-than-double-to-9-trillion-annually-by-2025/s/e4ea4334-fdfc-4504-9273-c2e545faeb8e

The World Economic Forum has also called for professional collaboration to standardize cost definitions and classification.***

*** ‘Shaping the Future of Construction’ report, World Economic Forum and Boston Consulting Group, page 40, February 2016: http://www3.weforum.org/docs/WEF_Shaping_the_Future_of_Construction_full_report__.pdf

Consultation for ICMS 2nd Edition

The International Construction Measurement Standards Coalition are seeking feedback on the second edition of ICMS, which incorporates life cycle costs.

Since publication in July 2017, the International Construction Measurement Standards (ICMS) have provided a single methodology for reporting, grouping and classifying construction project costs.

In response to industry feedback following the publication of the first edition of ICMS, the ICMS Coalition have introduced and are seeking feedback on a second edition which incorporates life cycle costs.  The second edition will enable practitioners to classify costs across the whole project life cycle, eliminating inconsistencies and discrepancies when accounting, comparing and predicting project finances.

Now is your opportunity to provide feedback to the consultation draft of the second edition of the ICMS standards to ensure that it meets the needs of the global market and builds upon the success of the first edition.

The first edition of ICMS provides an international standard for capital cost reporting.  However, clients and governments are now incorporating both capital and life cycle costs into their project decisions.  To meet this need, the second edition will incorporate both capital and life cycle costs.  The single standard classifying costs across the whole project life cycle will enable professionals to make like-for-like comparisons across markets, regions, states and intra-organisationally, ultimately driving better cost projections and budget management.

NZIQS is part of the ICMS coalition and would appreciate a copy of any feedback you provide on this consultation.

The consultation closes on 22 March 2019.

ICMS 2nd Edition Consultation document

Read more about ICMS