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6 PositionIT – Jan/Feb 2011

The land survey tariffby Steve Blackenberg, Land Surveyor

This article proposing a tariff for surveyors was presented at the SAGI Northern Provinces Business Management Workshop on 20 October 2010.

Tariff comes from an Arabic word meaning “notification” or “to announce”. It is a table, scale or

schedule of prices or rates that put a value to something. The Afrikaans word tarief is translated as tariff, or a list (scale) of charges.

A tariff should be an open contract between a service provider (the surveyor) and the public, filed with a regulating body (PLATO/SAGI). The tariff should outline the terms and conditions of providing a service to the public including rates, fees and charges. At a minimum, tariffs imposed must cover the cost of providing the service, maintaining this service at an optimum quality that is acceptable to the customer, additional research and other indirect costs associated with providing the service.

Maybe the word tariff scares people, especially the Competition Commission, and should be changed to a more acceptable word. Suggestions are welcomed.

• Engineers use the phrase “an indicative time based fee rate”

• Property valuers – “Professional fees in terms of their act”

• Architects – “Recommended tariff of professional fees in terms of their act”

• Town planners – “Guideline tariff of fees”

• Quantity surveyors – “Tariff of professional fees in terms of their act”

Note: All these professions have a current tariff, surveyors are the only ones in the built environment who do not have a tariff.

History of our tariff

I stand to be corrected but the first mention of a tariff is made in November 1962 when the Land Survey Act 9 of 1927 was amended by the inclusion of the Survey Regulations. In these regulations, regulation 67 – Tariff for Surveys –states “The charge for any services performed by a land surveyor under the Act and these regulations

shall be in accordance with the tariff of fees prescribed in Annexure A; provided that increased charges may be made by written agreement between the land surveyor and the person responsible for

the payment of his fees.” Clearly this was the minimum that a land surveyor should charge for his services.

In the case of a dispute arising from fees charged, regulation 68 gave the Surveyor General and/or the president of the institute of each province the functions of a taxing officer of the court in relation to fees charged in terms of regulation 67.

Section 9 (1) (a) of the act gave the survey regulations board the authority to make regulations regarding the fees to be paid and the way accounts could be taxed for surveys done in terms of the act.

These regulations were deleted in July 1993 by means of a Government Notice, why and by whom I do not know. As of August 1996 the tariff appeared as a Board Notice until it

Steve Blanckenberg

Date >5 yrs R/hr %+pa A <400 m2 %+pa 1 to 5 Ha %+pa

4 January 2010 R1500 14,2 R9917 14,2 R15 870 14,2

1 July 2003 R630 11,5 R4162 9,4 R6660 9,4

21 September 2001 R520 11,8 R3480 15,6 R5568 15,7

1 September 1997 R330 13,2 R1950 10,5 R3110 13,3

2 August 1996 R300 9,6 R1770 2,9 R2830 10,1

28 February 1992 R200 21,2 R1560 22,7 R1954 30,0

19 April 1991 R170 20,0 R1271 14,4 R1503 14,4

31 August 1990 R150 20,0 R1111 24,0 R1314 21,0

28 April 1989 R120 10,9 R896 11,8 R1086 11,8

17 July 1987 R100 26,7 R717 29,4 R869 20,0

11 April 1986 R75 16,8 R554 22,6 R724 13,7

10 May 1985 R65 6,7 R452 8,9 R637 17,5

24 February 1984 R60 4,9 R415 19,9 R542 19,9

28 January 1983 R57 11,8 R346 7,2 R452 7,2

27 November 1981 R50 33,3 R301 24,9 R393 25,2

10 July 1981 R45 23,5 R241 11,7 R314 11,8

24 August 1979 R30 4,8 R193 4,7 R251 4,8

20 May 1977 R27 0,0 R168 3,2 R218 3,3

13 December 1974 R27 12,7 R153 10,6 R198 10,4

9 June 1972 R20 26,8 R113 15,7 R147 14,5

4 July 1969 R10 8,0 R73 3,9 R98 4,3

2 November 1962 R6 R56 R73

Table 1: Extrapolation of tariff to 2010.

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8 PositionIT – Jan/Feb 2011

it comes to relocating beacons this also applies. The worst I have come across has been finding five beacons within a radius of 300 mm, all at different depths, and this in the Sandton CBD.

I feel a tariff is necessary. If you are surveying according to the act, you should be charging according to the act. It will also provide a guideline to young surveyors as to what a job should cost. I remember starting off in practice in 1975 when we had a minimum tariff and every invoice that I prepared was checked and checked again to ensure that I did not leave out an item that could be charged for as I did not want to be disciplined for undercharging.

In those days we made real money and surveying was not only enjoyable but a lucrative profession to be in. Clients did not shop around for three or more quotes, as the firm next door would be charging much the same as you. Most jobs were not even priced, you just did the work and sent the invoice (according to tariff) and were paid promptly. Also the loyalty between surveyor and client was far stronger than today, maybe because he knew he was not being ripped off as he was paying according to tariff, even though most clients didn’t know how much the tariff was.

So where did it all go wrong that we find ourselves scrapping over work today. I feel there were two things that changed the way our profession charges for surveys.

The first was the introduction of project managers into the building trade, most of whom don’t have a clue as to what is involved in doing a survey. All they do to look good in their client's eyes is focus on how much they can save on a project, not on how good the service or product is. They would rather bargain over quantities later than have a proper plan to work with from the beginning. Unfortunately we are going to have to live with these project managers. However, if there was a tariff they could refer to, they could budget a lot more accurately and in turn would not be as shocked as they are when they receive quotes for surveys.

The second factor that changed our attitude to pricing surveys was our own fault when in 1983 we as a profession introduced Table E to the tariff for the 99 year leasehold surveys. This encouraged surveyors to stand on top of towers so as to fix fence poles and bash in pegs as quickly as possible. Yes

was last amended in July 2003. The sectional title tariff was last amended in December 1999.

In Table 1 the columns reflect: [1] date when the tariff was increased, [2] the Rand value per hour of a land surveyor with more than 5 years experience, [3] the annual % increase of the hourly rate, [4] Table A for 1 piece less than 400 m², [5] the annual % increase, [6] Table A for 1 piece – 1 to 5 hectares and [7] its annual % increase. I have extrapolated forward to 2010 using the published hourly rate of a B class engineer of R1500 as our hourly rate. As can be seen there is no scientific method of increasing the rates it has been very randomly done.

To be or not to be

In other words should we have a tariff or not. If we are going to have a tariff, we need to ensure that all surveyors apply the tariff otherwise it is a meaningless regulation. How we do this, I do not know, because there are too many surveyors who do not value their own work and are undercutting to get work. Maybe this is because the quality of the work they produce is well below standard, here I speak mainly of the engineering surveys that I have seen, some done by large reputable companies. We can all do a R100 000 job for R50 000 but then corners are going to be cut and the information finally given will be limited to the reduced hours spent on the job. When

Fig. 1: Comparison between engineers, architects and surveyors' hourly rates (1962 to 2010).

Fig. 2: Comparison of hourly rates between architects, engineers, town planners, valuers and surveyors from 1997 to 2010.

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PositionIT – Jan/Feb 2011 9

good money was made but I feel the standard of work went out the back door and we are left with this legacy today. Thankfully such a tariff was scrapped in 1992 proving that all tariffs are not good tariffs.

Table B of the tariff was introduced in 1972, no doubt, for the purposes of Eskom so that they could award power line servitude surveys and know what they could budget for. Today I’m sure they don’t want a tariff as this would make their bookkeeping far too easy!

If we are to bring back a tariff, it should be as simple as possible so that all who use it can understand it. The last sectional title tariff is reasonably good whereas the cadastral tariff is far too complicated and only parts are regularly used, the rest I feel is there to confuse not only the land surveyor but the client as well. A tariff will also inform the surveyors as to what an hour’s work is actually worth.

If we are not prepared to issue a tariff, I strongly feel we should at least be publishing an hourly rate that can be charged, as most jobs are priced by estimating the time it will take to complete. This and/or the tariff must be updated annually according to inflation and/or in line with allied professions. To make a tariff more user friendly I would suggest that each item be referred to in a number of cost units (much the same as the old non-title tariff), where one cost unit is equivalent to the amount chargeable for an hour's work by a professional land surveyor, and only this hourly rate needs to be updated annually.

If the tariff goes ahead, I would like to suggest, that an item should be added to the tariff that there be an amount a client must pay when requesting a tender price. I feel that we are providing far too many prices just to ensure that the client’s surveyor is not overpricing his jobs and we are wasting our time, knowing we will not be getting the job. This would also help to stop under cutting, as the client would have the tariff to check against and not other surveyor’s prices. I would suggest that it be 2% of the tendered amount with a minimum figure of R1500 or an hour's charge, this would be deductible from the winning tender.

Every job has a true value to it no matter who is going to do it, professional or technician. How many

of you can honestly say when you have completed a job that you priced, whether it be according to tariff or not, that you actually made a huge profit. In other words, the hours spent were less than the hours estimated. Invariably you spend more hours on the job than you bargained for as there are always unseen obstacles that crop up, that is if you intend presenting a professionally done survey. Many practices justify charging low rates as they employ surveyors on a salary and therefore only need to cover these salaries when quoting in cases like this, a tariff would certainly be a waste of time.

Surveying, or more correctly the attitude towards surveying has definitely changed over the years. Today I liken surveying to the insurance game where you wish you didn’t need a policy but the cover you are promised allows you to sleep easier until one day you need to claim against the policy and find out it is not all that you thought it to be. The same with a survey. The client needs the job done but the cheapest will do. Not always the wisest way to go, but unfortunately engineers and architects have come to accept the poor quality associated with our profession.

When I graduated in the early seventies not too many land surveyors were involved in engineering work as there were plenty of townships where good money could be made. Today nearly all are involved in engineering work as the cadastral work is not as plentiful as in the past and a topographical survey or monitoring is treated as money for jam, which is not the case if done correctly. By correctly, I mean the number of spot shots per hectare required for the contour interval quoted for and not just polaring in monitoring points and then giving movement, both horizontal and vertical, to 1 mm. Here I also support a new non-title tariff which I feel should be combined with the title tariff to form one.

If a tariff is reintroduced, I would like to see practices being ISO rated. Besides having to prove the quality of their work, a further condition to obtaining a rating would be proof of charging according to tariff. This might be the only way to get rid of the rats and mice in our profession who would not qualify for a rating. The standard of surveys would then improve as would the remuneration. Having a tariff, especially if the hourly rate was

attractive, would no doubt, also attract youngsters back into the profession.

In my opinion not to have a tariff would be a giant step backward and I cannot see what benefit this will have for our profession. Maybe there are some of you here today who can justify why we do not need a tariff. I am interested in hearing arguments in favour of not having a tariff.

In the graph (see Fig. 1) I give the comparison between engineers, architects and our hourly rates (1962 to 2010), as can be seen we were neck and neck until 1997, in fact we all had to charge an hourly rate of 19,5c/R100 of the annual salary of a director in the government. The second graph (see Fig. 2) shows the comparison of hourly rates between architects, engineers, town planners, valuers and ourselves from 1997 to 2010, here I have extrapolated our hourly rate forward from the last published one in 2003 where we were the lowest earners in the built environment to 2010 using the published hourly rate of a B class engineer of R1500. If we only increase our rate by the same % as we did between 2001 and 2003, we would only be earning R1015/hr today, far below the rest of our colleagues.

If we decide to go ahead with the tariff, we must debate where we fit in with these allied professions. This in turn will determine the rates in Tables A and B. Remember when deciding on an hourly rate that these professions do not have the added cost that we have for equipment and labour. These are two items that should be built into our charges for both office and field hours as the bank does not charge us interest whilst we are only in the field and you do not pay your labour only for the time they spend in the field. This could be an additional cost of ±R350/hr, based on a basic cost of R250 000 for equipment and R50/hr for labour, which brings us in line with an A Class engineer.

On the CD handed out at the workshop, delegates were provided with the published tariff (2003) increased from an hourly rate of R630 to an hourly rate of R1500, this gives an indication of where we could or should be today.

Let the debate begin, should we or shouldn’t we.

Contact Steve Blanckenberg, Tel 011 886-9500, blanks@iburst.co.za