ICMS3 - A Paradigm Shift in Cost Management

ICMS3: A Paradigm Shift in Cost Management

The BIM Mandate commenced on the 1^st January 2024 initially on projects over €100m and will extend to all projects including those under €1m within 4 years.

As from the 1^st September 2025 it includes projects over €10m and residential projects over €60m.

Part of the BIM Mandate is the incorporation of the International Cost Management Standard (ICMS), currently on its 3^rd iteration.

ICMS3 is possibly the biggest change in commercial management in Ireland since the introduction of the Capital Works Management Framework.

It replaces the now obsolete National Standard Building Elements (NSBE) which all quantity surveyors have used since it was introduced in 1970. It might be fair to say that there are probably no surveyors still working who recall a time before the NSBE.

ICMS3 is a comprehensive cost management system that allows the comparison of very different types of projects across different jurisdictions.

It also allows for the incorporation and comparison of embodied, or upfront, carbon and life cycle costs.

This will allow clients to assess the total cost and carbon emissions of an asset over the reference lifetime period of 50 years, as set out in EN 15978 for Whole Life Cycle Assessment  (WLCA) for the measurement of carbon emissions and the EU Level(s) framework for healthy and sustainable buildings for both Life Cycle Costing (LCC) and WLCA.

The ICMS3 system covers 19 different construction typologies, of which buildings is just one. The other 18 are civil engineering project types. The project types are as follows:

1.       Buildings

2.       Roads and runways

3.       Railways

4.       Bridges

5.       Tunnels

6.       Wastewater treatment works

7.       Water treatment works

8.       Pipelines

9.       Wells and boreholes

10.   Power-generating plants

11.   Chemical plants

12.   Refineries

13.   Dams and reservoirs

14.   Mines and quarries

15.   Offshore structures

16.   Near shore works

17.   Ports

18.   Waterway works

19.   Land formation and reclamation

ICMS3 is broken down into a hierarchy of levels.

Level 1: Project or Sub Project

The Level 1 projects are as previously listed. For example, a motorway project is the main project. Within that, the project could be subdivided into a series of sub projects including bridges, tunnels, or various sections of the motorway.

Level 2: Categories

There are 6 categories, and they are summarised by the acronym ACROME which stand for:

1.       Acquisition

2.       Construction

3.       Renewal

4.       Operation

5.       Maintenance

6.       End of life

This allows a project to be assessed, for both cost and carbon, from inception to demolition. It enables different kinds of procurement strategy to be comparatively assessed, such as comparing a lease option to a new build over the lifetime of the asset.

Level 3: Groups

At Level 3, the level 2 categories can be broken down into cost and carbon groups. The construction, renewal and maintenance categories can be broken down into the following direct construction groups:

·         Demolition, site preparation and formation

·         Substructure

·         Structure

·         Architectural works/ non-structural works

·         Services and equipment

·         Surface and underground drainage

·         External and ancillary works

There are another 3 non-construction or indirect groups for:

·         Preliminaries/ site overheads

·         Risk allowances (contingencies)

·         Taxes and levies

A further 3 groups cover:

·         work and utilities off-site

·         Production and loose furniture, fittings and equipment

·         Construction-related consultancies and supervision

For operations at level 3 there are 8 group headings:

·         Cleaning

·         Utilities

·         Waste management

·         Security and

·         Information and communications technology.

·         Operators site overheads

·         Risk allowance

·         Taxes and levies

There are also group headings for end of life cost and carbon emissions. These however are a relatively small and subjective area of estimation and are normally accounted for by a percentage factor.

Level 4: Sub-Groups

The ICMS3 guidance advises that level 4 is optional. However, with the retirement of the NSBE, their successor has been nominated as level 4, therefore it is a requirement for all projects in the Irish context.

The Agreed Rules of Measurement (ARM 5) also requires mechanical and electrical works to be measured in accordance with ICMS3 level 4.

If a project has been started with the NSBE, it may be best to continue with this for consistency.

All new projects should be in ICMS3 to level 4 from 2025.

Coding

The guidance states that coding BOQs in ICMS format is optional. Coding requirements can vary depending on project requirements and software limitations.

So, for example, the code builds up in substructures for a building are as follows:

Level 1: Buildings: 01

Level 2: Construction: 01.2

Level 3: Substructure: 01.2.02

Level 4: Foundation piling & underpinning: 01.2.02.010

What we do is we use the codes at each level in the same way as we would have using the NSBE and code the BOQ as we normally do. A BOQ cost subgroups to level 4 for foundations would read as:

(01.2.02.010) Foundation piling and underpinning

(01.2.02.020) Foundations to top of lowest floor

(01.2.02.030) Basement sides and bottom.

For civil engineering, the coding structure and level 3 groups are the same, but level 4 differs to take account of different construction methods. This example relates to project type 4 (Bridges)

(04.2.02.010) Embankments / cuttings

(04.2.02.020) Excavation, disposal & lateral supports

(04.2.02.030) Trenching / common trenches

Mapping ICMS3 to the National Standard of Building Elements (NSBE)

The SCSI has provided a guidance document to assist with the transition from the NSBE to ICMS.

For the most part, the interrelation between the ICMS3 and the NSBE are fairly intuitive, the document does provide clear direction in cases where there may be subjectivity.

International Property Measurement Standard (IPMS)

One important detail to be aware of is that Gross Internal Floor Areas (GIFA) are to be measure in accordance with the IPMS in ICMS3.

There are a number of differences to the way we measured GIFA in the past to how it is detailed in the IPMS.

The two most relevant factors in IPMS when calculating GIFA are:

Measurement to the Internal Dominant Face (IDF) of wall

The rule here is that when the surface area of the wall is 50% or more of the bottom 2.75m of wall, the floor area is to be measured to the face of the glass. This means that if a window is over 1.375m high, and the top of the window is 2.75m or less from the ground, the wall here is to be measured to the inside face of the glass.

External Floor Areas

Another change that has potentially has a greater effect on GIFA is the measurement of External Floor Areas (EFA).

Previously, the GIFA was measured within the habitable space of a building.

Now, external floors areas must be included, but identified separately, such as:

·         Balcony areas

·         Enclosed walkways or passages connecting separate buildings

·         Enclosed rooftop plant areas

By Michael McCarthy, chartered quantity surveyor and managing director of MMC Quantity Surveyors. He is also a member of the SCSI ICMS3 working group.