Paraphrased

The document identifies the three ‘most significant reviews’ over the past twenty years and how they form the basis for this document and the current changes being implemented across the industry and in particular the Government. The first review cited is that of ‘The Constructing Team- Sir Michael Latham’ in 1994. Its key conclusion was that ‘Implementation must begin with the client’ and also recommends that the ‘Government commit itself to becoming a best practise client’. The next key review is ‘The Levene Efficiency Scrutiny into Construction’ this was published by the Government in 1995. This review also placed responsibility on the Government by concluding that ‘departments and agencies were to blame for poor performance of the industry. Finally in 1998 Sir John Egan published ‘ Rethinking Construction’ which led to the formation of the Construction Task Force and identified 7 quantifiable targets for the industry as a whole.

So what are the weaknesses that these reviews and numerous others have identified within the Construction industry? The two most serious issues within the industry also given as key examples within the Executive Summary of the report are the issues of the number of jobs running over budget and secondly the percentage of jobs delivered late. Other failings directly relating to these, found by some of the reviews just mentioned is the lack of responsiveness to customer needs, a ‘lack of respect shown to those who work in the industry’ (page 20), a lack of funding into research and design, a ‘culture of blame’ and likewise a ‘lack of a culture of learning’. The report points out that the UK Construction industry is lagging behind many of its international counterparts. The Government highlights a number of barriers, which it believes are creating these problems within the Construction Industry, these exist at every level in the Construction chain. The first major barrier is presented at the procurement stage. Here Designers, Contractors, and sub- contractors underbid in order to win the work. This results in poor designs, briefing and specification and fails to prepare for any future risks or additional costs. The document appreciates that this can be ‘attributed in part to clients placing too much emphasis on lowest price when awarding contracts.’ Unpredicted costs can mean disputed costs further down the line, litigation and in return a fractured Client- Contractor relationship.

The errors in the procurement process lay with both parties, Contractor and Client. Unfortunately in the Construction Industry as in any industry there exits both experienced and inexperienced clients who can have very different aims. Both can make mistakes however inexperienced clients due to their willingness to achieve a low price and a fast completion sometimes do not focus enough on procurement, design and quality which can lead to serious problems later in the project. The document offers three alternatives to the traditional procurement method. The first is ‘Public Private Partnerships’. This is where the Contractor not only builds the facility but is also expected to provide the service that will run from that facility. The advantage the document states is the transferral of risk as the Contractor now has even more responsibility. The document fails to emphasize that by expecting the Contractor to not only build but also run a service means an even more in depth contract is required as the details and levels of service

expected must be clearly defined by the client. The second alternative offered is the ‘Design and Build’ procurement method where the contractor is responsible for both the design and the construction. There are many advantages with this method. As the Contractor is responsible for both the construction and the design there are less likely to be unexpected problems around the design at later stages in the project. The Contractor has more control over the project and whether or not there will be any variations in the design later on. A good example of this is Holly rood as mentioned previously at question 2 where work started before the design was fully developed and this led to a very high price and a huge overlap in completion. The third procurement solution the document offers is the method of ‘Prime Contracting’ where several suppliers are used but one prime contractor must co ordinate and integrate all involved.

The next major barrier exists at the briefing and specification stage of a project. An experienced client is often more aware of the importance of a good brief and the impact a poor brief can have, this means they are often more likely to gain the most from a project. A poor brief again jeopardizes the Client – Contractor relationship as if the aims of the project and roles of those involved are not clearly defined from the outset this can cause confusion and points of contention later in the project.

At the Design and planning stage barriers can be created if the Contractor is not involved from the outset. Poor designs means increased inefficiency in the construction process and an increased risk of accidents. A more extreme example of the possible implications of poor design are illustrated by the case of the structural collapse in terminal 2 Charles de Gaul airport where 4 people died in 2004 (Building magazine 11.04.08 page 51). Bad design can also limit the opportunity for pre fabrication and standardisation. Two advantages, which were used to great effect by Tesco as a successful client as stated at Q.2.

And finally barriers to successful construction can arise at the project management level. Poor project management leads to bad organisation and bad team relationships. Payments end up being made late and as with the other barriers already mentioned results in the overall late completion of the project. Tesco’s can again be given as a very good example of good project management where a speedy construction is always achieved, as well as minimal costs and disruption to those involved, good quality as a main target achieved.

It is of great importance to examine what has been achieved so far in improving construction performance. The Construction Best Practice Programme has created a programme of seminars and workshops where approximately 9 percent of the working population in the industry have attended it. But it is still difficult to determine whether these improvements in process and growing awareness of best practice have started to deliver the value for money as recommended by Sir John Egan’s report “Rethinking construction” across the spectrum of industry and clients, where demonstrations of

projects showing significant improvements in performance and in many cases with similar targets to “rethinking construction”. However the Department of Environment, Transport and the Regions, the Office of government Commerce and the construction industry generally believed that further progress is needed in a number of areas such as;

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Promoting improvements in construction performance.

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Disseminating and applying the lessons

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Construction funded indirectly

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Repairs and maintenance

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Recruitment and Retention

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Education and training

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Information technology

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Cultural change

This lack of client skills is something the Government recognizes and has over the past few years aimed to instil within its staff to

At this stage of the essay we should focus on the use of different forms of partnership and identify the inefficiencies that may occur. “In UK, the partnering concept has been given impetus by a number of government commissioned reports notably the Latham report (1994) and Egan (1998). Both reports advocate the use of partnering and collaborative working arrangements to deliver client’s objectives and value for money” (N.J. Smith, Engineering project Management, 3rdEdition page 285). Partnering based on the idea of team work, discussion of problems, joint risk taking for both parties (in other words trust and open communication), common goals (as in cost and time). Partnering appear to have two forms, which are as follows:

1, Project partnering 2. Strategic partnering

At the first, the client organisation and the main contractor working together as a team for a single project and usually for an awarded project. At the second, the client organisation and the main contractor work together for a series of projects to promote continuous improvement. In partnering value for money is being achieved for the following reasons

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As competition still applies.

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Clear targets have to be agreed.

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Open books accounting is needed.

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There is a commitment to continuous improvement.

Partnering can promote better value for money by encouraging clients and contractors to work together. According to NAO report in the Modernising Construction report initiatives taken by Defence Estates, NHS Estates, The Highways Agency, and The Environment Agency to improve construction. The latter become true for each of these organisations by improving their procurement method and management of construction.

Partnering often offer advantages and opportunities specific to individual’s members of the project team. Client benefits in partnering can be more control over cost overruns, also reduce dependent on legal counsel and the development of a team for future projects. Revenues may be more stable and potential for the claims or litigation process is significantly reduced. Also the contractor may achieve faster decision-making and more effective time and cost control. Partnering gives the opportunity to both clients and contractor to be more close to each other and achieve high quality and safety and even encourages of finding new and better ways of doing business. The benefits of partnering according to NAO report for both the client and the contractor are: improve of building design, minimise the need of costly design changes, identify ways of eliminating waste and inefficiency in construction process, replicate good practice learned on earlier projects and minimise risk of costly disputes. Appendix 2 can give us an example of a super efficient construction industry that operates complex projects under great organisation. This shows the benefits of full training, morning briefing, health and safety, off site building and profit and their impact on efficiency.

Of course partnering has some negative points, which are as follows: additional expenses are incurred in providing training and running joint workshops. Some time through negotiating partnering agreements or even finding partnering agreement an additional cost appears. In some cases contractors are keen for work and may be less excited in the end as the level of commitment required will be lower to the initial.

The Construction industry still has long way to go in order to meet the original targets set out by Sir John Egan. Due to its obvious size and influence the Government is an ideal vehicle to lead the way to best practise however greater uniformity is still needed as several departments have there own separate training schemes and methods in place

which can not only lead to confusion for Government workers but also any Private companies turning to the Government for help or advice.