Chatham Dockyard's salvage operation

Nine years ago, Bill Ferris signed an agreement that he hoped would safeguard the future of the Number One Smithery at Chatham Historic Dockyard. He was just in time. As you can see from the photo on this page, the forge in the north Kent dockyards had just about mouldered away. This was a considerable loss to the physical remains of Britain’s maritime history: for 200 years the smithery had supplied the Royal Navy with everything from mighty anchors to metal deck beams. That work came to a halt in 1972, and 12 years later the dockyard around it was taken out of service. Not long after that, the smithery made its debut on English Heritage’s buildings at risk register.

The deal that Ferris signed in his capacity as chief executive of the Chatham Historic Dockyard Trust was with the National Maritime Museum and the Imperial War Museum, and it promised to transform the scheduled ancient monument into an archive and visitor attraction.

That promise will be kept this weekend, when the restored smithery is opened to the public. But it very nearly wasn’t. Three months before the project was expected to complete, the main contractor went bust, leaving Ferris and the trust in a sticky situation. Not only had it spent the best part of 10 years planning, raising funds and getting the work under way, but it had an opening date it was determined not to miss.

“July 2010 was when we planned to open. The threat of missing that window and losing a whole summer of trade was unthinkable,” says Ferris.

The collapse of mid-sized contractors has become a motif of the recession. In the past month alone, Banner Holdings, the firm behind Rafael Viñoly’s Colchester Arts Centre, has gone into administration, as have Southampton contractor Laishley and Mansfield firm Baggaley and Jenkins.

Less than 12 months earlier, the same fate hit RJ Barwick Construction Services, the 150-year-old Kent contractor that had been awarded the £5m contract for the smithery.

When the construction phase of the project began in earnest in July 2008 there were no grounds for pessimism. RJ Barwick was known for its historic building conservation work. Among its restoration projects were Dover castle and Ightham Mote, a National Trust property in Kent. It had also worked on new build schools and social housing.

Nigel Howard, the trust’s historic environment and building project manager, recalls that, after a lengthy procurement procedure, it was happy with the selection. “The contractor fitted with the nature of the project; they were a local firm and when they were on site they had a lot of true craftsmen employed as direct labour,” he says.

What’s more, a lot of work had already been done to de-risk the project. A full archaeological survey and pile probing had been carried out, which meant any uncertainties with the groundworks - usually the most problematic area of a project - had already been identified. In addition, all the work was being carried out in a weather-tight building.

Construction began on site on 21 July 2008, with completion set for mid-September 2009, after which the specialist fit-out and installation of the collections would begin and end in time for a soft launch in early April. Howard admits it wasn’t an overly generous programme, but it was doable. “Most of the tenders came in at around the 60-week period, so that seemed about right,” he says.

But as work progressed on site the programme began to slip. By August 2009 the project was running a disputed eight to 10 weeks behind programme.

Bob Dollin, a partner in Davis Langdon, says with hindsight there were telltale signs that all was not well. RJ Barwick asked for the quick payment of £100,000 to cover the cost of an air-handling unit once it arrived on site. The trust agreed to this. But a few weeks later the full extent of the problems came to light when the M&E subcontractor told the trust and its project managers that they were suspending work as they hadn’t been paid.

This was particularly frustrating for the trust because it had been paying RJ Barwick before the due date each month. Stephen Prowse, associate director with project manager Appleyards, had to choose between allowing the main contractor go under or working with it and the funders to find a way through the problems.

The trust, Davis Langdon and Appleyards immediately started planning for both eventualities, says Prowse. Security was stepped up around the site to make sure no one turned up out of hours to remove materials and plant. This had to be done subtly. “Most of the subcontractors and site staff were, I think, unaware of the severity of the situation and were cracking on at speed,” says Dollin. “Also you don’t want to start rumours flowing that might bring the company down.” 

Meetings were held with RJ Barwick and the M&E subcontractor to see if a system of direct payment could be set up between the trust and the subcontractor. An arrangement was thrashed out, but it was too late. On 28 August, as Prowse was about to go on holiday, RJ Barwick went into administration.

At this stage the confidential plan, known as Operation Blacksmith, went into full swing. The big question was how to get the procurement process started and the project back on track. The administrator was offering to novate the project to another contractor, but the trust had already decided against this.

“The problem with novation is that you are waiting for someone else to come in and that could take three weeks to sort out,” says Dollin. “And there’s no guarantee it will be three weeks or that they will come up with a company you think is appropriate.”

If the trust had any chance of meeting the July opening date it knew it had to take control. Within half an hour of receiving the administration notice, the site agent was handed a letter saying the trust was taking charge of the site.

This left the trust with two options. It could re-employ the incumbent subcontractors and manage the project itself or employ a completion contractor. It opted for the latter. “We decided the project wasn’t complete enough,” says Prowse. Dollin says he thought the process of appointing a new contractor might take six weeks; in fact it took 12. In hindsight, he says, even this was pretty good.

The first step in the process was to evaluate the exact state of progress of the build and what materials were on site and who owned them. This turned out to be a minefield. Materials that have already been fixed count as work executed and are owned by the client, but materials stored on site are more contentious. Resolving that problem involved delving into the contracts between RJ Barwick and the subcontractors.

As a result of the downturn there were plenty of contractors interested in taking on the job, but projects of this nature can be high risk and the trust made it clear that completion wasn’t to be at any cost.

After a competitive two-stage tender process, ISG signed a £2.1m contract to complete the job. This is between £700,000 and £1m above the original cost of the building work, which will be met in part by the performance bond procured on the contract with RJ Barwick. ISG says its strategy was comprehensive. It drew up an extensive schedule of information to evaluate the state of the project and worked out a detailed programme for completion. “This was so we could come to the table and flush out all the issues and then look at the minimum time required on site to get the job done,” says Stuart Deverill, director of the refurbishments division of ISG.

By now all the programme’s float had been used up. To add to the pressure, specialist displays and archives were already being manufactured, so a fast-track, 27-week programme had to be developed. And it was no longer possible to segregate the construction and specialist fit-out works as planned. The exhibition spaces were a priority, says Prowse, as these would be open to the public. Work was also speeded up on the restricted areas where the archives were to be stored, to leave time for the humidity to stabilise and the artefacts to be brought in.

“When you get an issue like a contractor failing on you it has a bit of an effect on motivation,” says Deverill. “We had to come in and be positive and forceful.” Only half of the incumbent subcontractors were re-employed on the project. “That’s because we were looking for buy-in and who would work as a team and had the get up and go needed.”

The Number One Smithery is to open this weekend, just in time for the summer rush of visitors. Ferris says there was never a point when he didn’t think they would deliver the project, although he concedes: “It’s later than I would have liked, which peeves me.”

But given the problems the team has faced, the fact that it’s opening at all for the summer crowds must come as a relief.