Bad news for lawyers if the revolution hailed as resulting from implementing the government’s Construction Strategy (see News) comes to pass. No bespoke contracts, it is promised, only standardised contracts to be used throughout the supply chain. Bang goes a lot of workload.
A certain breed of quantity surveyor could be left twiddling their thumbs if they are no longer allowed to tinker with standard contracts and then spend months arguing over the consequences; that is being cynical, but no great memory exercise is needed to generate reasons for pessimism, and at least scepticism, over the prospects of this revolution.
The Latham and Egan reports caused far greater upheavals among the industry’s pundits than the Construction Strategy document has so far, but it is arguable how much influence their reports ultimately had. Recent commentators have said the industry is still as if Latham’s report never happened.
This time however it looks like the client has woken up and has moved decisively to create the sort of construction industry service that it wants, one involving more collaboration and integrated project working. The Construction Strategy appears to be a genuine and determined call for change, and contains a structure for managing government procurement to deliver it.
The overall goal is to drive costs down by 20 per cent over the next four years, and the new regime is to be led by the Government Construction Board that will be chaired by Paul Morrell, the current Chief Construction Adviser. Mr Morrell has impressed the construction industry during his tenure and his appointment provides for some welcome continuity.
Mr Morrell has made no bones about what he sees as the Board’s role – it is to strengthen the public sector client’s power in scoping, design, procurement and delivery of all construction projects. There will be a steering group drawn from industry and government to oversee implementation of the plans. The supply chain will benefit from the improvements that the new regime ushers in, but there should be no doubt about who is holding the reins. The industry will fall in with the new ways of working – it is not optional. Individual companies that do not or cannot shape up will be forced out in the cold.
Will the industry like it? The individual elements of the new strategy read like a wish list of industry reforms and initiatives. For a start, more transparency over government spending plans is promised, which will be a great aid to corporate planning, especially for main contractors. Project Bank Accounts will please the specialist and other sub contractors who have always complained that money they are entitled to is being withheld to fund main contractor’s working capital. Project insurance will also help keep costs down.
No more lump sum bidding, it is promised, and whole life costs are to be considered rather than just the upfront cost. Fully integrated project teams will be assembled from the start – what’s not to like?
Will the industry respond in the required way to the new regime? The cynics may pop up again, saying there’s the rub. But those who don’t adapt to new realities seldom survive revolutions.
Nick Barrett
Editor