How to stay out of hell

Two things have attracted my attention recently. The first was the report on procurement published by the Chartered Institute of Building just before Christmas; it is based upon responses from 525 construction professionals. The second was the article by my friend Colin Harding (Building, 7 January, page 24). They were connected. The CIOB’s report identified major weaknesses in the procurement process, with almost 50% of respondents expressing concern over the extent of changes to clients’ requirements. Other significant issues related to design team performance and design faults.

Colin followed this up by calling for an end to the separation between design and construction. No manufacturer worth his salt would separate design from manufacture.
The knock-on effect of all these problems - particularly the difficulties involved in putting design into production - is costly in relation to redesign and re-work. Disputes are inevitable. A classic example is the case of Shawton Engineering vs DGP Internationalin 2005.

British Nuclear Fuels had a contract with Kvaerner Construction to build a plant at Sellafield for handling nuclear waste. Kvaerner subcontracted this project to a joint venture, Kat Nuclear. Kat placed a subcontract with Shawton for the design and manufacture of some of the major packages. Shawton, in turn, subcontracted the design work for some of these to DGP.

The way in which the design process was conducted on this job was, to put it mildly, imbecilic. It was unclear (as is usual) whether DGP was obliged to develop the initial design and/or produce detailed manufacturing drawings. As a tier 4 contractor, it had no knowledge of the initial design intent or of the calculations upon which the original design was based. Furthermore, there were variations to the original design without any contractual mechanism for extending time on account of these variations (echoes of Wembley, you might say). Needless to say, an attempt was made to put all the blame at the door of DGP for the delays in failing to bring their design (whatever its scope was) to fruition within a reasonable time. Luckily for DGP, the Court of Appeal rejected the claim.

The source of these problems arises from the way we view the design process; it is not treated as a risk management process. Where else can project risks be more effectively managed than during the design process? The greatest risk is that the design cannot be technically or practically implemented or, if it can, it can’t be done within the cost plan.

In not addressing this risk, we persistently ignore the best practice exhortation given over the years that those involved in the physical delivery of the project should be appointed early enough to consider such risks alongside consultants. Colin aptly describes this failure as the “management equation from hell”.

Even risks as serious as health and safety are not being sufficiently managed in the design process. Last year there was a rare prosecution of a firm of architects for designing a building in which the plant room could only be accessed by a ladder at the edge of a flat roof. In fining the firm, the judge held that the failure to take safety considerations into account in the design was a contributory factor in the death of an employee of a subcontractor. Last year, a survey of engineering firms revealed that (contrary to the CDM Approved Code of Practice) most had not been involved in assessing design outcomes for health and safety risks.

There is an irony in all this. While we neglect to treat design as a risk management process, we spend billions of pounds on negotiating, drafting, redrafting and scrutinising mountains of construction contracts. Ostensibly this is about managing risk, although to look at most traditional contracts you would be hard pushed to find any reference to the word “risk”.

All this activity is simply wasted because, by the time you get to the construction phase, it is too late to manage risk in the most cost-effective way. This is implicitly acknowledged in traditional contracts; they are about facilitating the process of casting around for blame when risks materialise. They add no value to the project whatsoever.
The chief construction adviser has strongly recommended the use of Building Information Modelling (BIM). The University of Northumbria is taking this forward by launching a BIM academy. It seems to me that the greatest potential of BIM will be as a tool to enable an integrated project team to work together to risk manage the design process from the outset. Over the longer term, BIM should be a component part of all construction-related degrees.

Rudi Klein is a barrister and chief executive of the SEC Group