PQSC Quantity Surveyor Registration flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Whole-life cost

Total of acquisition, operation, maintenance, replacement, and disposal costs over an asset's life, discounted to present value. Used to compare options whose capital and running costs differ.

Net present value

Sum of all future cash flows discounted to today at a chosen rate, minus the initial outlay. A positive NPV means the option adds value at that rate.

Discount rate

The rate used to convert future money into present value, reflecting the cost of capital or a policy social rate. It is stated as an input, not derived from the project.

Payback period

The time taken for cumulative net cash inflows to recover the initial investment. It ignores time value and all cash flows after break-even, so it is only a screening measure.

Internal rate of return

The discount rate at which a project's NPV equals zero. It is sensitive to project scale and to unusual cash flow patterns, so it is read alongside NPV.

Real versus nominal cost

Nominal values include expected inflation; real values are stated at constant prices. Discounting must use a rate consistent with the cash flow basis chosen.

Cost escalation

The adjustment of prices over time for inflation or market movement. It is not the same as discounting, which converts future value to present value.

Preliminaries

Project and time-related costs such as site staff, temporary works, scaffolding, insurances, and site facilities. They vary with duration and conditions, not with measured quantity.

Unit rate build-up

The composition of a priced rate from labour, material, plant, subcontract, preliminary allocation, risk, overhead, and profit. Quantities come from a standard measurement method.

Value engineering

A structured review of function against cost, following information, function analysis, creativity, evaluation, and development stages. Savings must be tested against whole-life cost and quality.

Expected value of risk

Probability multiplied by impact for an identified risk. Summing expected values for known risks plus an allowance for unknown risks gives the tender risk provision.

Optimism bias

The documented tendency for project estimates to understate cost and duration. Appraisal adds an explicit uplift to the base estimate rather than relying on contingency alone.

Sensitivity analysis

Testing how NPV or cost changes when one input, such as material price or programme duration, is varied. It shows which assumptions most affect the outcome.

Break-even analysis

Finding the output or duration at which total cost equals total revenue or benefit. It identifies the threshold beyond which an option becomes economically preferable.

Capital versus operating cost

Capital cost is incurred to create the asset; operating cost is incurred to run and maintain it. Splitting them wrongly distorts option comparison and budget allocation.

Contingency versus allowance

Contingency covers identified risks with assessed probability and impact; an allowance covers unknown risks. Both are held and released under stated authority, not absorbed silently into rates.

Conflict of interest

A personal, financial, or family interest that could improperly influence professional judgement. It must be declared in writing promptly to affected parties and recorded.

Confidentiality duty

The obligation not to disclose client, tender, or third-party information without authority or legal requirement. It continues after the engagement ends and covers storage and transmission.

Impartial certification

A quantity surveyor valuing and certifying payment states the amount due under the contract on measured work and entitlement, not the outcome preferred by the paying party.

Bribery prohibition

Offering, giving, or accepting an advantage to influence a decision is prohibited regardless of local custom. Facilitation payments are not an exception.

Gifts and hospitality register

A record of offered and accepted benefits, showing donor, value, and decision context. Modest, transparent, recorded benefits are acceptable; those tied to pending decisions are refused.

Competence limit

The boundary of a practitioner's training and experience. Work beyond it must be disclosed and referred to a qualified specialist rather than attempted unsupervised.

Tender confidentiality

Sealed tender prices are not disclosed to competing tenderers before opening. A practitioner who prepared one tender cannot evaluate the same competition without disclosure and consent.

Contemporaneous records

Documents created at the time of the event, dated and attributable. They carry more evidential weight for valuations, variations, and claims than records reconstructed later.

Whistleblowing

Reporting suspected fraud, corruption, or unsafe practice. Internal channels are used first where safe; otherwise the matter goes to a regulator or prescribed external body.

Undisclosed commission

A payment from a supplier or contractor to a practitioner that is not disclosed to the client. It creates a conflict and undermines independent advice, so it must be disclosed or refused.

Fee agreement

The basis of remuneration, whether lump sum, percentage, time-based, or performance-linked, agreed and recorded before work starts so that scope and payment are clear.

Professional indemnity insurance

Cover protecting a practitioner against claims of negligent advice or error. Clients often require evidence of cover and a stated limit before appointing a consultant.

Duty to warn client

The obligation to inform the client promptly of material risks, errors, or cost overruns identified in the work, even where the news is unwelcome or reflects on the practitioner.

Reliance and third parties

Advice is prepared for the named client for a stated purpose. A practitioner states whether others may rely on it, since unchecked reliance can create unintended liability.

Document retention

Keeping project records for the period set by the contract, statute, or insurer. Retention supports audits, claims, and later disputes long after practical completion.

Fair and transparent procurement

Evaluation against published criteria applied equally to all tenderers, with reasons recorded. Changes to criteria or weightings after issue undermine fairness and defensibility.