A Quantity Surveyor Explains How To Manage Construction Costs | With Paddy Carroll

Ciaran Brennan, LiveCosts

It’s great to get you on where we’ve been thinking about putting pieces together for what next year might look like. We were keen to get you on. We know you’ve got your finger on the pulse when it comes to dealing with, I suppose, a lot of different companies. 

You’ve probably got a good sounding board there to what’s happening on the ground out there.

Before I even go into that, let me go right back. Why QS? As you’re leaving school, was there a driving factor to how you even ended up doing what you’re doing today?

Paddy Carroll, Carroll Estimating

Well, believe it or not, my last degree was in the services management, and I had an interview with a company for a service engineer for a contractor and I went up for an interview.

As I was driving away from that interview, I got a call from a recruitment agency to say that there was a contractor, small to medium size builder down in Kilkenny that was looking for a quantity surveyor.

I’d never talked about quantity surveying before, so I rocked down anyway to Kilkenny. 

He started to say to me that he’d put me through college, part time and all.

I was after doing three years of college at this stage. I said another three years part-time, so that’s six years of college.

I said, Do you know what? I’ll go do it. So I became a QS, or a junior QS in , that was.

I was with that contractor for  years after that then. He really schooled me from getting to the sites and getting on. 

Building has been in my family’s background for generations. My dad was a foreman all his life. Get up at half five every morning to go to Dublin. The buildings just drew me, to be honest with you. But I tell you why I like the QS because when I was just doing general operative works on site with mixing concrete or whatever we were at the time, I used to always see these lads coming into site in their suits and with the clipboard and a piece of paper and marking off stuff.

I said, you know what it is? Them boys have it handy. I said, I want to be one of them.

I always wanted to know what did the QS do?

Ciaran Brennan, LiveCosts

Thinking about that junior QS thing, I know it’s a similar background to yourself, family just embedded in construction. I went down the apprenticeship road, but there was definitely periods of time whereby you are definitely taken advantage of as cheap labour alternative right on site. 

Is there any like that in Quantity Surveying?

Paddy Carroll, Carroll Estimating

Yes, to be honest with you. We have taken on our first apprentice now he’s gone into his second year. He was 18 years of age, had finished secondary school, and he had approached us. 

His family comes from a building background and he approached us to become a quantity surveyor, so obviously I would have the discussion with him to say “It’s college life, or it’s working life – what do you really want to do?”

He took the option of working four days a week and one day in college. Jack, in fairness to him, has excelled at it.

Caroll Estimating is one company in there. There are companies up there that have

employees of 100 to 200 people in his class.

On the apprenticeship model, and I go back to about graduates and juniors, quantity-surveying, what I find is that you have to get to a site. 

If you have a summer holiday and you can get working on a site as either a general labourer, or just doing anything on a building site, even if it’s QS or whatever you can get, but getting to a building site and walking the site each day and seeing how even a block layer lays a block, how long does it take a carpenter to lay a door or to put up a door.

How long does it take the electrician to put up a light to mark out spots in a ceiling?

Because when I walk onto any site, no matter how big or small it is, I actually talk to the trades. I’m still learning today.

I’m 42 years of age, I still learn. I don’t know everything. Because I’m asking that blocklayer, How many blocks did you lay today? How many bricks are you laying in a week there?

Because that all comes back to time and money. It’s very important that the young people out there don’t get stuck in an office – get out.

Ciaran Brennan, LiveCosts

Even with the business then, what was the driver there to start your own business? 

Especially now, quantity surveying is just good money to be earned, as you say, with some of the big firms. Why did you go out on your own?

Paddy Carroll, Carroll Estimating

Well, about five years ago, Ciaran, I just saw that the levels of quantity surveyors just weren’t coming out of colleges. 

I said to myself, “Okay, there’s an opening here that there is going to be a time at pinch point where there won’t be enough resources in quantity surveying.”

But also what was my spark was that no matter how small a contractor you are, I believe that you’re entitled to have a contractor beside you. 

Our motto in my business is that we are a team of quantity surveyors and estimators for less cost than one QS employee. 

We can actually give contractors no matter what their turnover is per year, whatever, or the profit margin, whatever, that they have access to a team of quantity surveyors that act on their behalf.

We do the whole thing from tendering right up to final account, negotiations to going out to getting procurements on their behalf. So if you’re doing a path for €10,000, the same principle applies to whether we’re doing a multi-million euro data centre in Frankfurt for one of the big companies.

Now the way we work is that we see, I don’t like using this phrase, but “the man in the van”, okay? That guy or girl is probably looking after three or four jobs at one time. And they’re trying to project manage those jobs, whether it’s trying to get material on site, trying to get subcontractors on site, trying to deal with payment claims, trying to deal with final

accounts, architects, design teams, clients and the whole lot. 

That’s a busy day.

What we’re trying to do is for that smaller builder or medium size builder, you don’t have to employ a QS and pay big money for them. You can come to us. You can either dip in or dip out or pay a retainer fee where we come to you. We’re there every month behind you. We’ll do the quantity surveying stuff for you. We don’t have to be coming home at the evening time. You’re losing out on family time then. 

For the medium and large size contractors, some of these have commercial teams, they have quantity surveyors, but they can only do so much. One person can only do so much. If you’re a QS and you’re the only QS in a company, you have to tender and you also have to watch the management of the money on a site. It’s very hard to do both of those if you’ve got a multiple amount of jobs. 

We actually come in to help those QSs and come in and help those commercial teams, whether it’s a measurement of a project or checking the measurement or maybe there’s something wrong with it, there’s a clause within the contract that someone is asking a query on and we have to guide them along. 

We’ve introduced a hybrid model into our company. We have surveyors all over the country working for us. We have eight at the moment and we’re hoping to get to ten now in the next couple of weeks. We’ve just put up an advert for a senior QS.

If I’m a small, medium size contractor and maybe I’m not winning work, could I send you the tender? At what stage do you step in?

I suppose you’re saying the minute the architect, engineer or PQS has sent you that tender, that comes to us. We want to have a look at that from day one. We will actually look at that. It all depends. If we retain our clients, we just fire ahead. But if it’s on a fee proposal, obviously we send across our costs and it’s up to the builder then if they want to go ahead. But what we do is when we’re rating that bill of quantities, we go out to the market for them on their behalf.

Now, what we find is that during the recession here and after the recession, we found that contractors got embedded with their supply chain. It was the one electrician, it was the one plumber, it was the one carpenter, it was the one this, and they haven’t brought them out. 

Unfortunately, when you go to the market and you’re trying to get a new contractor on board with you, it’s very hard because they’re sussing you out.

Who are you and why are you coming to me now?

You’re trying to build relationships, and that’s what we try to do as well. What we’re bringing now with contractors is we’ve put another aspect to our business is that we are actually building

brands now for small and medium size contractors. 

They’re trying to get onto tender list with architects and through with architects due diligence.

An architect is just not going to put you onto a tender list if they don’t know you. Because they want to see even your skirting detail on a million euro house. That detail, that joint has to be 100%. 

They’re not going to let any willy nilly tender that job. But to get in with those crowds and clients, you’ve got to do your work. You can’t just send a picture of a manhole or of a brick.

It’s not good.

Ciaran Brennan, LiveCosts

What would you recommend there?

We deal with a lot of the guys that are in the high end. When I say the high end, they’re working in the right parts of town. Their jobs are, as you say, probably multi-million homes, and what we call in the game, they’re a nice project. They’re a nice project. They’ve got a bit of meat in them and we’re going to make money on this and the finishes are nice and what we call a nice project.

But if I’m not breaking into that, but as you say, there’s a branded aspect of this to be thought about.

What would you recommend to someone thinking about trying to break into that upper end of the market?

Paddy Carroll, Carroll Estimating

The first thing is why? Why are you doing it? You’re not in it to be a charity. You’re in the business to make money. That’s not different to your business, Ciaran, and my business. I’m in the business. If I don’t make money, if we don’t make profit, the guys won’t be employed here. 

So if you’re putting in all that time and effort and you want to get in the door, you are the brand of your company.

So you’ve got to build that rapport. You’ve got to build that relationship. You’ve got to meet the clients and you’ve got to meet the architects. At the end of the day, the architect is the first person that usually gets the call to say, I want to design something or I want to go for planning.

And if you’re not at the table or talking to that architect and saying, look, here’s my portfolio, here’s my story about me, about who I am and what we are about. Here are my supply chain, here’s what I work with, and here’s the previous projects I’ve worked with.

So there’s no point in, if you’re the guy or the girl, the contractor that’s been doing extensions for  €200,000 and you want to move up to €500,000, you’ve got to show how you were able to go up that because your credit terms change. 

Everything changes because your turnover changes and then your credit turns to your suppliers changes as well. You’ve got to make sure that you’re okay to pay for all this stuff.

Ciaran Brennan, LiveCosts

What’s been the most difficult part? I think you mentioned there, five or six years ago, what’s been the most difficult part of getting the business off the ground, getting the wheels turning? 

As you say now having a group and a remote team of quality surveyors – it’s a great operation you have going. But what’s been the most difficult part that you’ve only been saying? And you’ve also had a pandemic in the middle of that, I’m sure, which was not ideal.

Paddy Carroll, Carroll Estimating

The biggest part was, to be honest with you, the hardest part was identifying software that can drive on our business. There is so much estimating and quantity software out around the world, and to pick one can be quite difficult. You’ve got to say, is there going to be an ROI? Is there going to be return on investment?

That was a difficulty when we started off, but we did choose a company, they’re an Australian company. Now we have moved five years later. We have invested quite heavily into a new software. They’re a UK based company that’s been rolled out in the next couple of months.

I will say resources, finding the right quantity surveyor can be tough. I’ll tell you the reason why. We’re an all round company. We don’t just do buildings, Ciaran, or refurbs. We do rail, we do heavy civils, we do studs and partitions, we do data centres and the whole lot.

Sometimes when we’re sitting across from a senior quantity surveyor, the hard questions do be asked, do you still measure or what types of projects have you been on? Sometimes when a lot of these surveyors go into a company that just does residential, they won’t know stuff about marine stuff. They won’t know stuff about fit-outs or data centre. It’s very hard to find that balance at the moment.

Plus, as you said, and that’s why we try to offer cheaper services, senior quantity suppliers are not cheap, Ciaran, they’re not cheap. The packages now can be quite high. Obviously, the bigger companies can afford those.

Ciaran Brennan, LiveCosts

Did Covid-19 have much of an impact on that growth or did you have to let people go or were you able to walk through all that?

Paddy Carroll, Carroll Estimating

No, I didn’t, because at that stage, it was just me and Tom. Tom has been my right-hand man since day one, really. No, we just kept tipping away with our builders. We were working with micro builders. We moved from micro to small builders. Your name starts to get around the place.

Now during the pandemic, you’d be surprised the power of picking up the phone to your competitors. Years ago, when I was working for a contractor and you said, “Look, we’re doing X, Y, and Z, would you be interested in us doing a bit of a measure for you or whatever?”

While that was going on, there were tenders were still coming in, Ciaran, at the time. We were doing the measurements for them and doing the tenders. Hopefully, when the pandemic finished, they were ready to start the job.

Obviously then what started then was the crack with the material and resources and all that.

That was another challenge. 

Ciaran Brennan, LiveCosts

Do you think we’re out of it? Do you think the industry has seen the full impact of COVID or is there still a bit of shaking of the trees to happen?

Paddy Carroll, Carroll Estimating

I don’t have a crystal ball, but material has come back. But our problem now is resources. We need houses built today. We just don’t have the workforce. Let’s call a spade a spade. If your two houses were beside each other and you were getting more money in house A than you were to house B, guess which house you’re going to go to work in?

That’s the way lads look at it and that’s the way lads operate. I will say that on the material end, timber has come back, steel has come back, but who knows? 

There’s geographic pressures in the world at the moment. If oil goes up, a lot of material will go straight away. Again, you’ve got to watch your clause. I see too many times, a blue form is a contract coming in to our door or into our inbox. You’ve got to see why they’re either striking out clause 36 and you’ve got to ask why they’ve submitted a bill of quantities with a blue form of contract.

You’ve got to ask why is the builder taking the risk of these quantities.

Ciaran Brennan, LiveCosts

We find that’s where we give our opinion to the builders before we submit back to tender.

Yeah, who is it you mentioned there a go from micro too, and I definitely want to understand the resource question on that one as well.

Who today would be your typical client?

Paddy Carroll, Carroll Estimating

What’s a typical client? We’ll just call them our bread and butter. Our bread and butter is a small contractor that has five projects on the go. Majority companies are our management companies. They’re no different to John Sisk and all these kinds of companies. 

They’re actually subcontracting everything out. They might have four or five general operators themselves that tip around that can do the hard graft and work, the concrete work and all that.

Then they have a QS like ourselves in the background and it’s just themselves and they’re driving around from site to site.

Ciaran Brennan, LiveCosts

How are they dealing with that? You’re saying resources are a massive issue out there. We have no idea what’s coming next either. 

Housing targets most likely ain’t going to be met for no other reason other than the resources aren’t there. 

How are companies thinking about that?

Does that put them cautious when going for tenders? Are they not just going for tenders off the back of, I don’t think we’re going to have the resource to pull that off. What are you seeing out there from a company perspective?

Paddy Carroll, Carroll Estimating

Yeah, I will say that we’re coming to Christmas time, this time of the year is our busiest time of the year in business. 

This is the reason why, because our kids have got their planning through and now they want to start getting a contractor on board to start in either mid-January or end of January. Contractors are obviously looking for work. 

Now it starts to get very competitive because if you don’t have the workload come January or the middle of January, the contractors might have to let people go. We don’t want to do that because once you let them go, anyone go, it’s very hard to get them back. You know what I mean? 

What I will say is that we’ve noticed that tenders do fly in through the door into contractors now.

You’ve got to pick and choose to say, Right, is this the right one for me or if it’s not the right one for me? 

Because there’s no point in going down a rabbit hole if the money is not going to be in it. If you’re not going to make a margin, are your overheads going to be covered, etc?

We ask all our contractors, we actually go down to nitty gritty. What is the overhead of your company? What’s your percentage? Some of the contractors are going, “Oh my God, why are you asking me these questions?” 

But these are very important for tendering because if you’re tendering projects in a year, but you’re only really going to win five. You’ve got to put that cost back to the tenders. That’s the way it works. I would never say we often get asked here

in car estimating, What’s your strike rate? I always say 100%, but you lose money. You know? It all depends. There’s so many factors involved.

I see with the blue form of contract, when we get the callback to say that you were second or third and you were 15% out or 10% out, to me it’s just in the sky. 

There’s no real, there’s no cohesion, there’s no like-for-like tender process on the Blue Form.

Ciaran Brennan, LiveCosts

When it comes to pricing, let’s say, and even into the general cost tracking then on a day to day, which is our world then, what are the biggest mistakes companies make, do you think, that is eating into their margin?

Paddy Carroll, Carroll Estimating

Doing things on a whim, not being organised. Say, for instance, there’s a big massive roof to be done or whatever. Friday you decide, “Oh my God, I’ve got to feckin’ order this timber.”

You leave it to the last minute and you say, “Right, I’m going to go down to whoever the merchant is and I’m just going to buy the timber there.” 

Whereas if you went out a couple of weeks beforehand and got your three quotes, you’ll see a difference.

Instead of going to the same merchants all the time or the same supplier or whatever, we always say on a tender stage, we go out for three prices on everything. I’ve been schooled that way from day one when I started with the billing contractor down in Kilkenny.

With that, and I’ll just give an example, a sheet of mesh, A mesh. If you’re one guy is €25 a sheet, another guy is €32, you’re going to go back to the cheapest guy and you’re going to save yourself six euro a sheet. If you’ve got a thousand of those, that’s six grand.

Ciaran Brennan, LiveCosts

We’re starting to see that a lot even with our own customer base is that their companies, the management and the companies, and they’re similar size companies are saying nothing goes out the door above a grand, let’s say, that doesn’t have quotes attached. 

Are you seeing anything like that out there?

Paddy Carroll, Carroll Estimating

No. I’ll tell you what I do see. Nominated contractors and suppliers. This is a difficult one because the contractors are contracted into a contract. 

The client wants windows, they want the kitchen, they want the tiles and they want the bathroomware, the floor and whatever. 

What’s happening is that the builder is paying upfront for those. There’s no retention, no discounts, no nothing whatsoever. 

So what happens is the client actually isn’t going around and getting the best value for money.

They’re just going, Oh, I love that floor there. That floor in there is €100 euro per square metres, and I’m just going to buy that floor in there. There’s a thousand square metres in it and it’s going to cost me €100,000.

Where if that shifts back to the builder, the builder will actually go out, get these three samples of floor and show you the different cost rates and can save you money on it.

Ciaran Brennan, LiveCosts

And is there enough of that happening do you think, or is it the case that the builder just knows, “This is tight, I need to get out of here” and therefore when it comes to the finishing, they want out. 

Paddy Carroll, Carroll Estimating

Are you seeing more of turnkey at this stage? Or are the builders finished to get out and get onto the next one?

No, the builders we work with, 100% is turnkey. At the end of the day, we want the builders that we work for, thank God, they want to go in. They want that person coming into their, we call it a castle. It’s their castle. When they open that door, they’re just coming to sit down on a couch or into their kitchen and boil the kettle.

What it all extends to, and this is about relationships, Ciaran, when the client that you’ve worked with who built this beautiful home or reformed the beautiful home for them, when their friends come in or their family come in and they go, “Oh, my God, who did this for you?”

They go, Well, Joe Bloggs builder did it for me. Well, guess what? Joe Bloggs builder is going to get a call to see if he’d be interested in doing their friends. 

Ireland is so small, we actually all know each other either directly or indirectly. Someone knows someone within somewhere. That’s how it operates. That’s how your name gets around. 

But going back to the thing of marketing and branding, word of mouth is fine, but you’ve got to show if you’re trying to get those articles, you’ve got to produce a story brand book for yourself.

Ciaran Brennan, LiveCosts

You mentioned the Magic Ball there, so let me put you on the spot then. What do you think the industry looks like for 2024?

Paddy Carroll, Carroll Estimating

More competitive. What we’re seeing is that architects were sending out tenders to five contractors that were getting back maybe two or three prices. We’re starting to see the four or five prices are going back.

I will say the contractors that are in the, let’s say the houses or refurbs or anything that’s over half a million, they’re being more cautious of who the client is because believe it or not, just because a tender comes out, a contractor is actually watching, is looking or seeing who you are as well. 

Do you know what I mean? It’s not just you looking at them. The contractor is actually looking at you and looking at who is the design team on this job. It’s a two way street.

What we’ve noticed is, well, we do a lot of negotiating. Sometimes clients or architects will come to us directly to say that this client had a friend or a daughter or a family member and the builder did such and such. Would they mind coming up and walking the site with us? We’re planning to do this. 

That’s where we come in and we go, we advise them to say, they might say to us their budget is, I’m just saying €200,000 but it has a zinc roof on it. We go to them, “Look, lads, zinc roof is going to cost you €300 euro a square metre. Can you not just go back to slates or back to tiles?

But we’re advising the architect as well to say, “The people want their castle, but they can’t afford that, so bring it back.” 

Look, I’ll always say this, and I say this to anyone, there is always a deal to be done. Always. A builder will do their best. If the builder wants that job, he will do his best to get it.

So more competitive, any risk of the whole thing fall us on there, just literally just going to sharpen up. That’s what you feel.

Let’s not talk about putting ourselves into recession. No. I hear too much negativity out there at the moment. No, drive on. We’ve too much building to do in this country. What I will say, it is expensive to build. There is no doubt about it. It’s expensive to build, but there are ways to work around.

There are so many methods of construction now. There’s timber frame, there’s traditional,

there’s ICF, there’s lightweight gauge steel. It’s endless. Insulations, finishes. There’s the products, and you only know this with your own software, the amount of products out there is just phenomenal. But you just got to be careful of the cost.

Not only just careful of the cost. Advice. You’ve got to get sound advice.

We have a lot of couples that ring us and the first thing they said to us is, I’m going to go on self-build. That to me is a big red siren going off. Self-build is not for the faint-hearted. The reason being is that you now put yourself in the position of being the project manager of that job. 

Let’s tell the truth. The ground worker doesn’t care about the block layer. The block layer doesn’t care about the lads putting on the concrete, and the concrete fella doesn’t care about the roofer, and the roofer doesn’t care about the plumber, and the plumber doesn’t care about the electrician.

But when you have a builder that’s on top of the pyramid and it’s on his neck or it’s on his

reputation, that means he puts all the ducks in order and that’s how buildings go very smooth and you’d be surprised.

Ciaran Brennan, LiveCosts

We get asked this question, or I ask this question a lot to self-build people. I say, “How much are you saving?” Nobody has given me the answer yet. Nobody. Massive amount of risk.

I’ve seen a lot of it in Australia. And again, that question you’d have to ask that question, is the risk worth the reward? And if they don’t understand the reward at the end of it, you’re going in blind.

I think it’s a nice idea to say we built this ourselves and we were involved in every decision. But at the end of the day, I remember even just pulling my own place apart and doing a small extension even for myself. 

And me being in the game, stress levels involved with even doing anything in your own house, even when someone else is doing it, yeah, I’d be on your side in questioning that. 

Paddy Carroll, Carroll Estimating

Yeah, I’m in the game as well.

If you’re a carpenter, if you are in the game, obviously it’s easier because you know the fellows. 

But if you’re not in this game, it is not an easy game because, Ciaran, it’s tough. You know this, it’s a tough game we’re in.

But I enjoy it. I get up every morning. I love coming to work. Now, obviously, I own my business, but I have to ask the lads about where the hell I’ve gone. 

But they’re still here after years with me. So I have very loyal employees and I wouldn’t be here talking to you, Ciaran, today without those. And going from strength to strength as well.

Ciaran Brennan, LiveCosts

If anyone wants to reach out to you, Paddy, about potential tenders or just to get a bit of a deeper understanding about what services that you’re offering there, where is the best place to find you?

Paddy Carroll, Carroll Estimating

I get a lot of comments about this because people are actually getting sick of looking at me when they turn on their phone every morning. The first port of call is Instagram. That’s where I started off my channel. 

At Caroll Estimating, you’ll see plenty of pictures. We also give tips and tricks and secrets there in that care and very good tips for contractors to not go in with your eyes closed on any contract.

The second part, and we’ve just gone on to LinkedIn there in the last couple of weeks. We’re very active on LinkedIn now. The third thing then is our website, www.carollestimating.ie, all the social channels and you’ll soon probably get sick of listening to me talking, but I’m out there to represent contractors no matter what size you are. It doesn’t matter to us as a company. We just have your back.