Fixing construction

The current model of construction is both structurally fragmented and adversarial in nature. There is an acute lack of integration across the supply chain leading to disjointed developments and inflating costs that eat into already squeezed margins.

While competitive models of tender are healthy in any vibrant market, the relentless undercutting found in construction exacerbates an already fractious situation. Clients tend to fixate on the lowest tendering price, encouraging a culture of untenable undercutting that only benefits the developers. Profit margins in construction remain dangerously low, preventing any investment in improving skills and innovation. Globally, construction profit margins sit at around 4.4% while other industries, such as pharmaceuticals, are sitting pretty at 19.8%.

Through a wider adoption of incentivised contractual arrangements, the industry can encourage a greater focus on performance and therefore a broader, more collaborative approach to delivery.

Long-term framework agreements can provide the structure for collaboration, but there still needs to be a behavioural shift

A clear example of where this approach could be applied is in Building Information Modelling (BIM), which provides a digital representation of the lifecycle of a project. This approach is grounded in the sharing of data that reflects the multiple characteristics of physical infrastructure, including 3D representations, as well as further modelling of functionality and evolution over time.

Although BIM is starting to become the norm, thanks in much part to the government’s requirement that all centrally procured projects must use BIM modelling, it is still only used by about half of the industry

Even more concerning is the fact that a quarter of those survey in the National BIM Report last year felt that they did not have the necessary skills to deliver appropriate modelling.

While BIM encourages collaboration and data sharing, it is limited to the design and coordination of projects. In order to modernise the construction sector, there needs to be a holistic focus on collaboration in delivery that spans from beginning to end.

The increasing use of premanufactured methods in the UK is conducive to collaboration within the sector. Having to bring together stakeholders at the nascent stages of a project and aggregating their interests makes collaboration inevitable.

Collaboration from the onset - between architects, engineers, M&E engineers, trades and contractors - means that the product is a well-considered, well-designed, high-quality building, delivered far more efficiently than traditional construction.

But these stakeholders also need to make a concerted effort to change their approach to developments. To push innovation in the construction sector, they need to take a long-term approach where all involved parties’ interests are taken into consideration, and where the risk is shared more appropriately.

Long-term framework agreements can provide the structure for collaboration, but there still needs to be a behavioural shift that prioritises the modernisation and improvement of the construction sector to meet the challenges of the 21st century.

The collaborative nature of BIM invites a much-needed impetus for sharing knowledge around the industry. There is no doubt that its adoption will improve industry practice, but a wider cultural shift is required.

The only way to counter the sector’s ills is to fundamentally alter the way things are done. If we are to survive as an industry then the only solution is to step forward together in a spirit of modernisation and mutual support.

Keith Brooks, chairman of Cast