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Construction

Journal

Sustainable supply chains


Meeting the requirements of Construction 2025
Embracing
innovation

Reconciling
differences

Putting managers
to the test

Understanding the
importance of data collection

Why knowing local markets is


key to project procurement

Are certain personality types


more susceptible to stress?

PG.

PG.

12

PG.

20

February/March 2015

rics.org/journals

RICS CON ST RUCT I O N


JO URN A L

A DV E RTI S I N G

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2 F E B R U A R Y/ M A R C H 2 0 1 5

C O NTENTS

RI CS CONST RU C TIO N
JOUR NAL

Construction
Journal

Sustainable supply chains


Meeting the requirements of Construction 2025
Embracing
innovation
Understanding the
importance of data collection
PG.

Reconciling
differences
Why knowing local markets is
key to project procurement
PG.

12

Putting managers
to the test

February/March 2015

rics.org/journals

Are certain personality types


more susceptible to stress?
PG.

20

Front cover:
Alamy

contents
4
Chairmans column

C ON TACTS
CO N STR UCTI O N J OU R NAL

5
Update

Editor: Robert Mallett


T +44 (0)20 7695 1533 E rmallett@rics.org

6
Embracing innovation

The Construction Journal is the journal of the Project


Management and Quantity Surveying & Construction
Professional Groups
Advisory group:
Craig Abraham (Evolution5), Gerard Clohessy (EC Harris),
Christopher Green (Capita Property and Infrastructure),
William Hall (Lendlease), Vytas Macenas (Faithful+Gould),
Andrew McSmythurs (Sweett Group), David Reynolds, Justin
Sullivan (Adair Associates), Tim Fry (Project Management
Professional Group Chairman), Alan Muse (RICS)

Construction Journal is available on annual subscription. All


enquiries from non-RICS members for institutional or company
subscriptions should be directed to:
Proquest Online Institutional Access E sales@proquest.co.uk
T +44 (0)1223 215512 for online subscriptions or
SWETS Print Institutional Access E info@uk.swets.com
T +44 (0)1235 857500 for print subscriptions
To take out a personal subscription, members and non-members
should contact Licensing Manager Louise Weale
E lweale@rics.org

Published by: Royal Institution of Chartered Surveyors,


Parliament Square, London SW1P 3AD
T +44 (0)24 7686 8555 W www.rics.org
ISSN: ISSN 1752-8720 (Print) ISSN 1759-3360 (Online)
Editorial and production manager: Toni Gill

Vasileios Vernikos examines


the importance of the effective
management of data in achieving
future supply chain sustainability

16
Reaping the benefits

Liam Brady and the One Team


assess the effectiveness of BIM
technology on the Manchester
Central Library restoration

20
Put to the test

Matthew Maslen reports on stress


in construction and its relevance
to all members of the project team

8
Roadmap to reliability

22
Striking a balance

Sustainable supply chains


are all about action, interaction,
relationships and results,
argues Glyn Race

Changes to the employment


tribunal process has shifted
the focus to avoiding claims,
explains Helen Crossland

10
Only the best will do

25
Resolving disputes

David Whysall outlines why securing


exceptional performance is vital
for clients if they are to thrive in
the increasingly competitive global
construction market

Jacqui Joyce discusses


why RICS has published
new guidance on mediation

12
Reconciling differences

Legal experts answer


common queries

26
Legal Q&A

In procuring infrastructure projects


around the world, understanding
local market conditions is key,
suggest Richard Graham, Shy
Jackson and Norman Kerfoot

15
Inside information

Getting the right data is the


first step in making better
decisions about the delivery
and operation of infrastructure
assets, says Dave Monswhite

Sub editor: Gill Rastall


Senior designer: Wasim Akande
Creative director: Mark Parry
Advertising: Charlotte Turner T +44 (0)20 7871 5734
E charlotte@sundaypublishing.com
Design by: Redactive Media Group Printed by: Page Bros

While every reasonable effort has been made to ensure the


accuracy of all content in the journal, RICS will have no
responsibility for any errors or omissions in the content. The
views expressed in the journal are not necessarily those of RICS.
RICS cannot accept any liability for any loss or damage suffered
by any person as a result of the content and the opinions
expressed in the journal, or by any person acting or refraining to
act as a result of the material included in the journal. All rights in
the journal, including full copyright or publishing right, content
and design, are owned by RICS, except where otherwise
described. Any dispute arising out of the journal is subject to the
law and jurisdiction of England and Wales. Crown copyright
material is reproduced under the Open Government Licence
v1.0 for public sector information: www.nationalarchives.gov.uk/
doc/open-government-licence

F E B R U A R Y/ M A R C H 2 0 1 5 3

RICS CON ST RUCT I O N


JO URN A L

C H A I R M A N S CO L U MN

CHAIRMAN'S COLUMN
Tim Fry sets out ways in which the construction
industry can work toward supply chain sustainability

Building stronger links


along the supply chain

S
Supply chains are key
to all industries and projects.
If they work well, projects
deliver. But how do we
make sure that they
are sustainable?
I believe that each
component needs to take
responsibility for becoming
the supplier of choice,
whether that is an individual,
business unit or a firm. This
model is flexible because
components can align
themselves to others, and
by being flexible it can
adapt to an ever changing
marketplace.
By making sure that
the following aspects are
covered, RICS members
and their firms are giving
themselves a fighting
chance of being successful,
profitable and therefore
sustainable.

4 F E B R U A R Y/ M A R C H 2 0 1 5

Provide a quality service:


Firms are teams of individuals
working together via clear
processes to achieve a
common goal. Each individual,
for instance a RICS member,
needs to work to the best
of their ability, apply best
practice, learn the lessons
that our work offers us.
Consistency: As in sport,
the most consistent team
wins. It is no use being
very good one week and
not the next; a solid
performance is required
every day in every task.

Each
component
of the supply
chain needs
to take
responsibility
for becoming
the supplier
of choice

Targeted marketing: Firms


have finite resources and
cannot win every commission
or contract on offer. Better
results will be obtained by
putting your best foot forward
on the ones where you have a
competitive advantage.
Trend analysis: Track
performance of teams and
look for variations. Encourage
those who outperform
their peers and share their
winning formula. Analyse
the underperformers and
help them to improve.
Performance manifests
itself in various metrics
e.g. percentage of bids won,
repeat commissions. Use
data to spot a trend and even
more importantly take action.
Product shaping: As
clients evolve, so do their
needs and consequently
what they seek to buy.
The current trend is toward
buying whole life advice
and project management
expertise as opposed to
only capital build knowledge.
Are you prepared for the
new challenges? Do you
need to buddy with others to
convert a bid into a sale and
income stream? Best start
talking now.

Marketing and selling: These


are two separate activities.
One involves the research,
preparation and proposal
building and the other the
conversion. Both are required
to win work.
As you may have surmised,
my view is that it is up to
the components of a supply
chain to step up to the
plate to ensure that they
have a robust pipeline of work,
are financially sustainable,
with good products that
clients want and perform
consistently to a high
standard. If these building
blocks are all in place then
supply chains, which are
simply linked components,
will also be sustainable.
Underpinning all of the
above are RICS standards
in the form of ethics and
information papers and
guidance notes. By applying
this knowledge consistently
our members will stay
employable and employed
for years to come. b
Tim Fry is Chairman
of the RICS Project
Management Board
pm.professionalgroup@
rics.org

UPDATE

RI CS CONST RU C TIO N
JOUR NAL

UPDATE
Parties pick up industry ideas
as election agenda hots up
The RICS Property in Politics campaign
is having a major impact as policies are
drawn up for this years general election.
Over the past eight months, RICS
Property in Politics: Driving economic
growth and building better communities
report (http://bit.ly/1C4g8pM) has led
the conversation between property
professionals and the political parties
about building a vibrant property
marketplace in the UK.
Behind the reports 12
recommendations to the next government
was the weight of expertise drawn from
the insights of more than 500 chartered
surveyors and 273 organisations.
RICS brought together members,
firms, industry leaders, parliamentarians
and policy-makers at panel discussions
throughout the political party conference
season, supported by GVA, Barratt
Developments and Rider Levett Bucknall.
Nick Raynsford, Chair of the
All Party Parliamentary Group for
Excellence in the Built Environment
joined the Property in Politics panel
at the Labour Party conference, while

Conferences
and events
RICS Dispute Resolution Conference
28 January, London
Practical contract, risk and relationship
mechanisms for dispute avoidance or
early intervention.
n www.rics.org/disputeconference
Mediation roadshow
February, various UK locations
Following the launch of the RICS
Mediation guidance note in January,
find out your obligations to clients who
are involved in disputes and the advice
you should provide before taking matters
to court.
n www.rics.org/mediationroadshow

Stephen Gilbert, Parliamentary


Private Secretary to Energy Secretary
Ed Davey took part in the Liberal
Democrats discussion.
Housing and Planning Minister Brandon
Lewis joined a distinguished panel at the
Conservatives conference, joining more
than 120 senior members and industry
partners. RICS President Louise Brooke
Smith hosted the event before discussing
housing, planning and communities
with a panel that included Communities
Secretary Eric Pickles.
The first outcome from the party
conference launches is a heightened
interest from politicians in the views
of RICS. One-to-one discussions have
taken place with Pickles and Lewis as
well as Shadow Housing Minister Emma
Reynolds and Shadow Business Minister
Iain Wright.
The successes so far have seen
Housing Zones Prospectus announced
by HM Treasury, rolling out in 2015.
The Labour Party has adopted New
Homes Corporations that mirror
RICS development delivery units

RICS BIM Conference 2015


12 February, London
Bringing together more than 300 players
who are developing and implementing
building information modelling processes
collaboratively in their projects, this event
will include practical guidance on the lead
up to the 2016 deadline.
n www. rics.org/bimconference
Project Leadership conference
24 February, London
This RICS and APM conference will
examine the important elements,
approaches and strategies that
contribute to mitigating the major
risk factors in project investment,
construction, development and
operations, to avoid costly failures.
n www.rics.org/leadershipconference

and included four Property in Politics


recommendations in its Lyons Housing
Review. Labours Independent Armitt
Review of Infrastructure also uses RICS
expertise and proposals for delivery
plans. The Liberal Democrats have
supported a planning revolution to
support neighbourhood planning.
Property in Politics construction
recommendations include the
implementation of single construction
finance hub, which is now being
discussed with the Department
of Business, Innovation and Skills.
Meanwhile, the Labour Party has voiced
support for National Procurement
Framework, and RICS is working with
the Construction Industry Council on
the proposal.
RICS concerns over construction
skills are shared by the Confederation
of British Industries and are rising up the
political agenda.
On infrastructure, RICS is collaborating
with partner organisations including
Infrastructure UK to prioritise regional
infrastructure and Brooke-Smith hosted
a pre-Autumn Statement infrastructure
briefing for Chief Secretary to the
Treasury Danny Alexander.

In brief...

n Read more and sign up to support the


vision at www.rics.org/propertyinpolitics

TRAINING
12 February, London
NEC3 contracts: principles
and processes
http://bit.ly/1zij9zg

24 February, London
Residential building surveys
workshop
http://bit.ly/1ytmlZZ

4 March, London
BIM implementation and
management: purpose,
benefits and challenges
http://bit.ly/15ZFnvf

F E B R U A R Y/ M A R C H 2 0 1 5 5

RICS CON ST RUCT I O N


JO URN A L

S U P P LY C H A I N
M A N AGE M E N T

Embracing
innovation
Vasileios Vernikos examines the importance
of the effective management of data in
achieving future supply chain sustainability

mproving efficiency in
construction has been
on the government
and industry agenda
for many years. This
process began with the
1962 Emmerson report,
which identified problems that restrained
improvements. This was closely followed
by the Banwell study in 1964, which
focused on contractual management
and promoted early contractor
involvement and increasing collaboration
across the supply chain.
The Egan report in 1998 stood out
from previous reports in focusing on
innovation and, although some of the
same issues were highlighted by Latham
in 1994, one could argue that many of
the points raised are still troubling the
construction industry today. Drastic
transformation was recommended
rather than incremental improvement.
In recent years, former UK
government Chief Construction
Adviser Paul Morrell initiated a
technologically driven transformation
of the construction industry with the
building information modelling (BIM)
initiative, which was embraced by
his successor Peter Hansford in the
Construction 2025 strategy.
Nevertheless, academics and
industry sceptics are still debating the
construction industrys ability to collect
and manage data. Construction is not,
as it stands today, a high-intensity,
data-driven sector, especially when
compared to finance, retail, marketing
and advertising.
Aiming to catch up, over the past
two years the BIM initiative has driven
zealous efforts by some construction
firms to centralise and manage data. Big
data, however, can hide as much as it
6 F E B R U A R Y/ M A R C H 2 0 1 5

reveals. Modern construction firms


are diversifying their offering and
moving toward a more programme
and project management approach,
delegating large chunks of their projects
to specialist contractors.
Playing the role of the coordinator
inherently requires management skills.
With the digitalisation of the construction
industry these management skills are
increasingly focusing on data, even if a
plethora of construction firms have yet
to understand its value. It appears that
some construction professionals still
feel the sole aim is to manage data in an
effective way, until they can offload it
onto the next party.

Forum for discussion


To discuss this question in greater depth
CH2M Hill, Rail Champions and RICS
launched a series of workshops and
round table discussions on the topic of
innovation and supply chain sustainability.
The key point that emerged was
that the data-driven integration of the
supply chain must not be perceived as
a fixed vision, but rather a direction of
travel. The discussion of standardisation
issues included crucial themes such
as products, designs and processes,
with the ultimate aim of convincing the
industry of the practicality of using
Meccano/Lego type components.
The end goal, according to the
round table participants, should also
include the development of product
libraries, component focus design
and mass customisation, focused on
library-style components, but with a
project-specific approach rather than
having a specified target for a percentage
offsite. This can be only accomplished
by having a project-specific offsite plan,
it was believed.

The most important objective of


putting together these thought leadership
activities would be to raise awareness
regarding the benefits of data-driven
supply chain, and the integration of
BIM and other initiatives, such as offsite
construction, enabling and empowering
individuals to promote innovative
techniques. Essentially, this would lead
to the creation of an information
exchange community serving as a
platform to encourage rethinking and
challenge the status quo.

Aligning strategies
The topic of procurement throughout
Europe was raised at several stages of
the workshop. There was a consensus
that there is a need for further work
to align strategies across the supply
chain. Many participants emphasised
the importance of early engagement,
particularly in enabling offsite. But there
are still issues with these approaches
under current European models. BIM
was described as the enabler for new
approach to procurement, and there
are currently several initiatives across
Europe hoping to address the issues with
EU procurement models and BIM, which
it was agreed could allow further actions
to be taken.
Another point discussed was the
governments approach to offsite, and

RI CS CONST RU C TIO N
JOUR NAL

Mission for change


The industry-led roundtable initiative organised by CH2M Hill,
Rail Champions and RICS aims to provide specialist yet neutral
thinking designed to encourage positive change in the existing
supply chain culture.
The first discussion forum, chaired by Martin Rowark and
attended by representatives of the infrastructure rail industry,
met last September in London. Invited guest speakers,
including government officials, infrastructure clients and
suppliers, discussed the various problems confronting
sustainability (social, economic, ecological).
The next event, to be staged at RICS headquaters in
Parliament Square on 11 February, will be chaired by RICS
Director for the Built Environment Alan Muse, and will
look at ways in which the construction industry can better
integrate supply chains. The discussions will focus on the
role of BIM and technology, ways in which the industry and
government can address serious skills shortages and the part
that governments can play in encouraging early contractor
engagement and consistent pipelines of work.
One more discussion forum will be held in the summer prior
to producing recommendations for the infrastructure transport
industry in the autumn.

Digitialisation

It appears that
some construction
professionals still
feel the sole aim is to
manage data in an
effective way, until
they can offload it
onto the next party
setting a minimum offsite percentage per
project. Some participants believed that
a precise percentage of offsite should
be mandated by government similar to
the BIM Level 2 mandate. Others thought
that it would be impossible to define
offsite and, therefore, to apply a precise
percentage per project. In addition,
offsite may not add value to all types of
projects, and therefore it may not be the
best option available.
Nevertheless, all agreed that offsite
should be connected with the primary
government strategy, and has great
export potential not just on offsite
solutions and products, but also on
offsite expertise.

It is evident that text is not up to the job


any more, because it cannot leverage
the metrics or aid rapid decision-making.
Physically grouping and regrouping data
and tabularising it, rather than discussing
and describing it, allows engineers to
identify and comprehend trends or
obstacles faster. The firms that embed
this ideology in their ethos will naturally
develop a competitive advantage.
With the digitalisation of construction
data it is expected that advanced
automation in design, manufacturing and
assembly through BIM will increase.
The UK government aims to achieve a
33% savings in construction costs and is
to implement BIM in all its procurement
contracts by 2016 in the expectation that
this will contribute to the target. Many
would consider this to be a significant
challenge if achieved solely through
a single innovative initiative in such
a short time.
Such ideas do find expression in some
quarters in construction firms today, but
by and large they live on empty words. In
contrast. firms in finance, marketing and
retail have found a common philosophy.
It is revealed in the way they act, with the
central tenet that more data is better
than less.
Such dataism is to be expected
in an era that glorifies quantification.
Image Alamy

Most engineers would prefer a chart


over a report. More than that, it reflects
an economic orthodoxy that sees
data as key to increased efficiency.
With the Construction 2025 strategy
aiming to significantly reduce not only
cost but delivery time, emissions and
simultaneously increase exports, this
gives support to the idea that not just
producing but also managing data is a
firms most important purpose.
As data management in construction
is becoming a critical business
issue, there is a growing need for
integrating environmentally sound
choices into supply chain management.
A robust supply chain is increasingly
seen as essential to delivering
long-term profitability and has
replaced cost, value, and speed as the
dominant topic of discussion among
construction professionals. b
Vasielos Vernikos is Head of BIM
Development at CH2M Hill
vasileios.vernikos@ch2m.com

Related competencies include


Sustainability

F E B R U A R Y/ M A R C H 2 0 1 5 7

RICS CON ST RUCT I O N


JO URN A L

S U P P LY C H A I N
M A N AGE M E N T

Sustainable supply chains are all about action, interaction,


relationships and results, argues Glyn Race

Roadmap to reliability

urviving in todays highly


competitive markets
is not about just being
effective. To thrive, lead,
excel and innovate, a
new mindset is needed.
A commercial concern
must be able to demonstrate to its
customers how it can make a significant
contribution to their business.
Any entrepreneurial company should
be very capable of delivering technically
complex projects. To do this, contractors
cannot operate in the same old inefficient
ways, forcing each other to give up
profits and overhead recovery to deliver
at what seems the market price. Better
performance in design and construction
through increased schedule/programme
predictability provides the greatest
platform to deliver significant gains for
our customer base.

Long-term relationships
At VVB Engineering, we have already
made the transition to collaborative
working, building a mindset on the
common characteristics of a high
reliability organisation and recently
gaining certification to BS 11000.
Therefore, the small changes we
are recommending, offer a roadmap
to better performance and deeper
client engagement.
A whole-system approach is needed
to bring together coordinated planning
and field operations. The adoption of
an industry-wide framework such as
BS 11000 has proved to be a valuable
tool for infrastructure owners
and operators seeking a dramatic
improvement in programme delivery,
management of risk and cost.
Given that the governments
Construction 2025 document places
great emphasis on the need for future
collaborative working across public
sector projects, it is clear that the
industry must make further progress
8 F E B R U A R Y/ M A R C H 2 0 1 5

down this road. However, even now


many Tier 1 contractors sign up to this
philosophy without necessarily embracing
the true meaning of what is required to
deliver projects in this way, and to the
benefit of all parties.

Integrated teamwork
It was evident from industry discussions
at the first sustainable supply chain
roundtable held at CH2M Hill last
September, that there are well
documented problems facing Tier 2
and 3 SMEs as part of contemporary
culture. During the meeting, senior
Image Alamy

industry executives examined various


ways in which commercial relationships
impede the development of sustainable
supply chains.
Referring to the recent 32m Blackwall
Tunnel refurbishment contract, I argued
that greater confidence in project delivery
resulted from a one team approach.
This undoubtedly helped to embed good
habits and enhanced system processes
to meet BS 11000 principles.
Clients wish to see evidence of an
increasing number of projects that
deliver intended business case benefits.
Suppliers need to establish common key

RI CS CONST RU C TIO N
JOUR NAL

m A one team
approach
underpinned
work on the
Blackwall
tunnel

performance indicators and targets, and


work ever more closely with stakeholders.
They also need to work together to
identify specific actions for supply chain
partners (including the client), which will
all help to extend cost certainty to new
models of procurement in other sectors
(e.g. air and sea, road and rail, power and
utilities and tunnelling and construction).

Value creation
If Tier 2 contractors are to unlock the full
potential of supply chain partnerships,
there must be clarity of purpose and
total visibility of the clients opportunity

Key points
To achieve a sustainable supply chain:
bb Focus the culture on the hidden benefits of collaboration:
you may get more support, involvement and contribution from people
from end-to-end of the supply chain.
bb Plan effectively: engage your people with compelling information,
share common goals, KPIs and communicate shared objectives.
bb Build choices into project plans: offering alternative
proposals to clients seeking innovative solutions to long-term
programmes of work.
bb Complete transparency: choose the plan with the preferred
blend of benefits, cost and risk and share these with customers.
bb Review performance data, issues management, risk and safety
regularly: people then do the right thing more often.
bb Manage skillsets and check your ability to self-assure
delivery: do not be afraid to re-plan and make necessary changes
that reflect what is best for the project.

pipeline. Without this vital information, it


is impossible to align goals, or build trust
quickly between partners.
Therefore, early engagement with the
client to set the ground rules is highly
recommended, focusing on a clients key
objectives: problems, priorities, account
potential and knowledge exchange.
Organisations such as Rail Champions
can help to inspire deeper client
engagement by working with key
suppliers and stakeholders at the right
times for the right reasons, thereby
bringing science and craft together
with strategy development. On the
Network Rail CP5 frameworks, the
client wishes to see efficient resource
management and weekly control of
project costs. Forging strong team
relationships will help gain alignment,
ownership and individual accountability
for driving performance management.
It is also important to acknowledge
that different clients may adopt a different
methodology to manage their respective
supply chains. This has worked with
both Network Rails new generation of
prime contractor networks and Transport
for Londons Innovative Contractor
Engagement tender model.

extended from one end of the supply


chain to the other, Tier 2s will be able to
generate the maximum value for their
clients. The intention should be to focus
on close control and engagement with
customers, and then extend this approach
to their clients.
There is a real business need to
foster a consistent message, by
defining measurable contributions to
reflect any target customers identity,
and subsequently to demonstrate to
them how their most important goals
and objectives can be met. This,
ultimately, helps to build trust and
sustainable relationships.
Collaboration enables the appropriate
commercial freedom for continuous
improvement in all dimensions of the
supply chain. If the right environment
is created to function effectively, then
each supplier must resource their
roles with individuals striving to make a
significant contribution to the projects
success themselves. b

Glyn Race is a Director at VVB Engineering


glyn@vvb-eng.com

A new approach
Successful strategy execution relies
heavily on a one team approach,
adopting and working to and above
current industry best practice. If lean
construction principles are eventually

Related competencies include


Data management

F E B R U A R Y/ M A R C H 2 0 1 5 9

RICS CON ST RUCT I O N


JO URN A L

S U P P LY C H A I N
M A N AGE M E N T

Only the
best will do
David Whysall outlines why securing
exceptional performance is vital
for clients if they are to thrive in
the increasingly competitive
global construction market

he past five years


have been tough for
construction industry
supply chain. The
impact of the global
financial crisis has
been felt across all
sectors, with clients calling the shots
and contractors keen to win work,
sometimes at the slimmest of margins.
Now, the tide is turning. In many
regions, it is a sellers market: the supply
chain has a degree of choice in selecting
the major programmes it works on and
who it works for.
Global spending on infrastructure
currently stands at US$2.7 trillion a year,
according to the World Economic Forum,
and is predicted to grow to over 9 trillion
a year by 2025 (http://pwc.to/1yTM9wP).
Projects such as Sydneys 4.9bn
North West Rail Link and major airport
1 0 F E B R U A R Y/ M A R C H 2 0 1 5

programmes in Abu Dhabi, Dubai,


Muscat and Doha are all competing to
secure a world-class supply chain from a
pool that has slimmed down significantly
during the years that followed the global
economic downturn.
Alongside the growing demand for
resources, infrastructure operators
and clients with major programmes
face another pressure: the demand for
exceptional performance to be delivered,
demonstrated and realised for funders,
regulators and the public. There is
scrutiny from all directions.

Attracting investment
The stakes are high. Governments
around the world are recognising
that infrastructure is a strong driver
of economic development, and are
committing serious proportions of GDP.
But public money alone is not enough:

attracting private sector investment is


a vital part of any infrastructure plan.
Funders require assurance that
they will secure a good return on
their investment through efficient
infrastructure delivery and operation.
Regulation in developed economies is
tightening, demanding year-on-year
improvement in efficiency and customer
service. Meanwhile, the expectation from
those using infrastructure services has
never been higher. Consumers expect
first-class service in return for reasonable
fares and bills. Clients must be able to
demonstrate that they are securing value
for money for the consumer.
Clients must think in a radically
different way about all aspects of asset
investment, delivery and operation.
They must go in search of exceptional
performance and to do this they must
become more informed. Many clients will

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need to redefine how they engage, work


with and drive sustainable performance
from the supply chain. Simply procuring
a first-tier supplier with an intelligent
commercial model is unlikely to be
enough. So what must clients do?

Create the currency


The best of the worlds supply chain
partners will be seeking to work
on programmes that enhance their
reputation and develop their capability
in order to position them to win more
prestigious work in the future. This is the
currency of a successful programme and
to create that a client must make itself
attractive to the market. Defining and
positioning its brand, and its values, will
help. A client must engage the market
so that it brings the whole supply chain
together to achieve those goals.
Tony Douglas, Chief Executive of
Abu Dhabi Airports, talks about the
one team culture he has worked to
establish with his supply chain. Working
on a prestigious and successful
programme sets supply chain members
above their peers, and attracts other
world-class companies to join the party.

Unlock innovation
Create the environment for your
supply chain to innovate so that they
can be rewarded for the value they
create think 10% rather than 2% as
well as delivering better outcomes for
your customers. Innovative companies
are usually more productive; this was
demonstrated on Londons Crossrail,
using data analytics to identify a direct
link between the extent of innovation
and cost-efficient performance.
Ensure that the supply chain
understands your business and enable
them to bring in new ideas to help
you become more efficient. Some
infrastructure owners are procuring
based on innovative solutions developed
during bidding. A major metro owner, for
example, asked contractors to provide
station upgrade designs, with one
showing how higher passenger flows
could be achieved and journey times
reduced through an intelligent approach.
While a larger capital investment may
have been needed, the whole-life solution
and subsequent value generated for
the operator was far greater. The
contractor understood the clients
business, and was successful.
Clients require a commercial model
that supports innovation and enables
access to Tier 3 and Tier 4 suppliers
where innovation generally originates.

Investment in data
makes subjective
conversations
objective, allowing
time to be more
productively spent
examining ways to
improve performance
Some operators are now integrating
models with the need to think whole
life, balancing capital and operational
expenditure to help drive innovation.

Extract value from sub-tier


Create long-term relationships with
manufacturers, small and medium-sized
enterprises and suppliers that can
genuinely unlock value. This could
mean working with Tier 1 suppliers to
build these relationships, but if you
cannot find the right fit, bypass major
contractors altogether.
The latter approach requires that
clients, sometimes with support, take
on the role of construction manager,
developing their capabilities so that
they can work directly with specialists
and manufacturers.

Get informed through data


Too many clients spend time and
money substantiating a position with
their supply chain, regulator or a third
party, because they are not informed.
Investment in data makes subjective
conversations objective, allowing time
to be more productively spent examining
ways to improve performance in
collaboration with others, rather than
to back up an argument or negotiation.
An informed client knows the should
cost without going out to the market.
Industry collaboration and benchmarking
can be a powerful way to optimise costs
across a whole sector. Now in its 20th
year, the Performance Forum is one
example of this, a collaborative project
sponsored by 25 major oil companies
operating across the oil and gas industry.
In the UK, Anglian Water, which
supplies around 1,200 million litres of
water a day to six million customers,
has been investing in the aggregation
of data for over a decade. It now has

a clear understanding of its cost base


for the infrastructure it procures, while
engaging the market to bring innovations
that can further enhance performance.
Building information modelling (BIM) also
has an important role to play, becoming
the control centre for asset delivery and
operation. In markets where it is now
used, BIM has not progressed far enough,
often being driven by designers as simply
a clash-detection tool.

Communicate
Work with your supply chain to
define exceptional performance, and
engage partners effectively to ensure
that they align their approach to
deliver your long-term objectives. This
could include enhanced customer or
end-user satisfaction, the ability to
demonstrate best value to funders
and world-class health, safety and
environmental performance.
The most visionary clients are not
only realising these benefits on their
own programmes, but are transforming
industry for the better. Their legacy is
enhancing supply chain capability and
creating a streamlined, fit for purpose,
high performance delivery environment.

Towards exceptional
Doing the same as they have always
done is not an option for clients
going forward. It will not deliver the
exceptional performance required in
todays world. Traditional supply chain
engagement will fail to secure the best
global supply chains.
Excellence requires a different mindset.
Clients must understand what drives
their supply chain, and ensure that their
partners understand their business.
Goals need to be aligned.
Attracting the best Tier 1 suppliers
is not enough. Clients must measure
performance and outputs and use that
data intelligently. Only then can they
establish where value is added, and how
the whole supply chains performance
can be progressively enhanced. b

David Whysall is a Director at


Turner and Townsend
david.whysall@turntown.com

Related competencies include


Sustainability

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Reconciling
differences
In procuring infrastructure projects around
the world, understanding local market
conditions is key, suggest Richard Graham,
Shy Jackson and Norman Kerfoot

uppliers operating in
a single jurisdiction
often assume that the
procurement norms
they are used to apply
universally. They are
often surprised when
they attempt to operate in another market
and discover that different rules apply.
In reality, there are common themes
that apply everywhere, such as cost
pressures and the desire to achieve a
good outcome. Conversely, even within
the same jurisdiction there will often
be different procurement methods, and
they will have different results depending
on the specific circumstances of each
project as well as external factors such
as the strength of the economy.
In looking at how supply chains operate
both in the UK and internationally, while
it is not possible to identify a universal
solution to ensuring these work efficiently
and perform well, there are a number
of common themes that are worth
considering in greater detail.
1 2 F E B R U A R Y/ M A R C H 2 0 1 5

What is success?
Anyone studying comparative
procurement methods must first face
the question as to whether this is in
fact possible. Whether a project is
successful and, for example, has
delivered good value for money will not
be easily quantifiable.
Indeed, even defining what constitutes
a successful project based on delivery
on-time and on-budget becomes
dependent on how the two are managed.
The London 2012 Olympic Games were
hailed as a public success and while the
timing was fixed, the approved budget
certainly changed over the projects life.
The vision statement was defined more
widely as: To deliver the Olympic Park
and all the venues on time, within agreed
budget and to specification, minimising
the call on public funds and providing
a sustainable legacy. In their book,
Programme procurement in construction:
learning from London 2012, John
Mead and Stephen Gruneberg discuss
how this vision was developed into a
Image Shutterstock

successful delivery strategy, and package


procurement that addressed suppliers
needs within a competitive process.
Once it is accepted that time and
budget are not sufficient or reliable
criteria, one must look at other issues
such as the benefit of long-term
arrangements, the growth of local
communities, skills transfer and better
health and safety records. Suppliers
need to be able to demonstrate delivery
of all such criteria within their bids.
Looking at more specific issues,
it is necessary to appreciate that
different countries and cultures
have their own procurement models
and customs. Further, full transparency
of the procurement process and
award decision-making remains rare,
which makes comparative assessment
more difficult.
Differences are driven by the extent
to which the local market is truly open
to wider suppliers; whether procurement
adopts pure competition or is governed
by local knowledge and contacts. The

RI CS CONST RU C TIO N
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final award decision may change the


recommended solution. This is often
down to the preferences of the ultimate
decision maker.
Barriers govern whether procurers
adopt a competitive or relationship-led
approach, and may include:
bb local relationships: governing
a suppliers ability to access these
relationships and invest in a local network
bb captive suppliers and technology:
the extent of a level playing field that
exists between bidders. Some might have
exclusive access to preferred technology
or be part of a supply chain favoured in
client bidding terms
bb ability of supplier to meet client
terms: cost of compliance e.g. safety
bb transparency: methods of advertising
may favour an incumbent bidder
bb pricing method and other commercial
terms: can all bidders understand and
comply with basis of tender?
bb legal: interpretation of local
requirements
bb transaction costs in doing business:
local agencies, offices establishment
bb language and culture: understanding
local ways of doing business
bb specific commercial terms: such as
significant public liability insurance that
disadvantage SMEs
bb credit terms: national export bids that
potentially favour one party or skew the
award criteria
bb relationships: previous experience of
the parties with each other.
Nonetheless, it is widely accepted that
better procurement leads to better
outcomes. Regularly updated Building
Cost Information Service tender price
studies, for example, suggest that
competitive tenders achieve savings of
approximately 10%. And HM Treasury
highlights the savings that can be
achieved from applying collaborative
approaches (http://bit.ly/1xo3JZu).
The interesting question, however,
is whether it is possible to quantify the
benefit of investing in collaborative
models based on relational contracts. It
seems generally accepted that, at least in
the short term, such models require more
investment. Whether the benefit is gained
remains difficult to assess. The UK is not
unique in looking at whether collaborative
contracting can make a difference
(http://bit.ly/1xUoaNL). What is true is
that collaborative contracts are more able
to accommodate change and continue
to deliver than more conventional
forms of contracts. This is because in a
traditional contract change tends to be

In jurisdictions where
legal processes are
expensive and slow,
parties have to place
more reliance on
their relationships
seen as an adversarial process, while in
a collaborative contract it is a common
problem to be solved for the benefit
of all parties.

Views from abroad


Within the EU one expects to find greater
commonality of procurement rules
driving homogeneity, with the ultimate
aim being an open market without
barriers. However, national differences
do exist that limit the extent of markets
and the ability of suppliers to genuinely
access those markets. The variety of
international contractors that can be
found in London working on projects
such as Crossrail has no equivalent in
other EU jurisdictions, where language
and local regulation make entry more
difficult. In general, suppliers still need to
exercise choice and caution when moving
into other nations markets.
Outside the EU, wider approaches
to procurement are expected.
Relational-based contracts are favoured
in Japan and other jurisdictions in Asia
where conflict is to be avoided and there
is a greater emphasis on relationships.
In Singapore, a Court of Appeal decision
in HSBC Institutional Trust Services
(Singapore) Ltd v Toshin Development
Singapore Pte Ltd [2012] SGCA 48
hinged on good faith clauses, which the
court suggested was fairly common
practice for Asian businesses to include
in their commercial contracts.
Views expressed by Philip J
McConnaughay (http://bit.ly/11i7rY2)
were endorsed to the effect that
such clauses capture the essence of
contractual obligations in Asia, although
not shared in western understanding.
Such clauses embody and express the
supposition that the written contract
is tentative rather than final, a source
of guidance rather than determinative,
and subordinate to other values
such as preserving the relationship,
avoiding disputes and reciprocating
accommodations that may control far

more than the written contract itself. The


USA tends, in contrast, to adopt a more
contractual-based, logical approach, at
least on the surface.
The majority of jurisdictions are likely
to adopt a combination of both
approaches. Paradoxically, one could
argue that in the UK the existence of a
fast and cost-effective dispute resolution
in the form of statutory adjudication
encourages a more contractual approach.
In contrast, in jurisdictions where legal
processes are expensive and slow,
parties have to place more reliance on
their relationships.
The nature of adjudication is such that
it can still encourage parties to resolve
issues through collaboration. Indeed,
adjudication can be used collaboratively
to resolve disputes where there is
a genuine need for a decision by a
third party. In an international context,
the FIDIC form provides for dispute
adjudication boards to fulfil the same
function, but there are issues around
effective enforcement that do not exist
in the UK.

Reasons for caution


Factors such as high bidding transaction
costs, tying up key bidder resources and
general bid risk limit chance of success,
where the bidding and delivery premiums,
the cost of doing business, may be
considered too high. So what are the
reasons for this?
True transparency of opportunity and
risk are not readily available, especially
in the Middle East, but also in the USA
and Europe, where preferred local and
national contractors are seen as front
runners or, as a minimum, prerequisite
partners for joint venture bids. The
publication of local content procurement
rules often serves merely to legitimise the
ultimate selection.
In many parts of the Middle East, it
is a part of the governments published
strategy to develop and protect
indigenous skills. Elsewhere, it is still
the safest strategy to include a local
company, even if they are not seen as
central to delivery of the work scope.
The transparency issue lies in the
knowledge of the forthcoming bid
requirement. In the Middle East, the
awareness is high. Qatars water and
roads ministry Ashghal posts requests
for tenders and awards on an electronic
score board in its lobby. Similar
mechanisms exist in the USA for Defense
Department bids.
In the UK, the definition of the bid
requirement will often give clues as to n
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n whom the client wishes to award the

work, which an overseas bidder would not


readily pick up. The recent emphasis on
behavioural criteria can present an even
greater challenge to international parties
less familiar with the current UK thinking
on collaboration.
In addition, the published requirement
may subtly differ from the preferred
requirement, typically only available from
one or two companies. It is not unknown
for the preferred contractor not to win
the competition.
A key factor is the use of incentives in
the supply chain as a way of achieving
better performance. It is significant that
the concept of target costs, which is now
well established in the UK, is still rare
internationally, where incentives tend
to be more simplistic e.g. a bonus for
early completion rather than the more
sophisticated pain/gain mechanism in
the NEC contract.
For the supply chain, however, the
challenge is to transfer the benefit
of such incentives down the line. The
structure and rationale for an economic
incentive under a main contract can be
very different from that under a supply
agreement. The use of incentives
throughout the supply chain appears to

be one area that has not been sufficiently


explored. More recently, however, the
inclusion and incentivisation of the
local supply chains is becoming a key
consideration in the awarding of work in
many markets.

Conclusions
It is not possible to identify a universal
procurement model that is the secret
to effective and successful supply
chains. Unsurprisingly local knowledge
is a key ingredient for both the bid/no
bid decision.
There is, however, widespread support
for the proposal that relational contracts
and collaborative behaviours produce
better results overall. For example, the
UK government has recently published
guidance in support of two-stage open
book, and supply chain collaboration
during bids as advantageous to all parties
within a complex bidding process
(http://bit.ly/1tdPwbt). Its involvement
reflects the fact that collaboration
requires a genuine commitment from
clients, and not another burden to put on
the supply chain with no clear benefit.
Suppliers should consider how the
local market context contrasts with their
own established norms. The general

themes of trust and collaboration are


recognised as being preferable to the
more traditional and adversarial models.
The challenge remains the creation of an
effective economic incentive structure
throughout the supply chain that will
encourage and support collaborative
behaviour as suppliers seek to establish
appropriate commercial relationships
within different jurisdictions, and select
the most effective bidder strategies to
adopt locally. b
Richard Graham FRICS is Director of
Rail Networks at CH2M Hill
richard.graham@ch2m.com
Shy Jackson is a Partner at Pinsent
Mason LLP
shy.jackson@pinsentmasons.com
Norman Kerfoot is Managing Director at
the Advance Consultancy Ltd
norman.kerfoot@advance-consultancy.
com

Related competencies include


Procurement and tendering

Supported by:

Sponsors:

Endorsed by:

BIM4FM

RICS BIM Conference 2015


12 February 2015, London

Returning for the fourth year, this conference will offer


clear guidance from experts on how BIM is used on
projects, in various sectors, and the experiences of
the practices on their journey of implementing BIM.
Find out what is expected of you when implementing BIM,
dealing with challenges and overcoming barriers, as well
as meeting your clients demands. Hear lessons learnt from
implementing BIM in practice and how BIM supports the
operation of an asset in practice and management of big data.

Find out more:

19986 RICS BIM Conference Advert 185x122mm v2.indd 1

1 4 F E B R U A R Y/ M A R C H 2 0 1 5

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21/10/2014 17:34

INF R ASTR UC TUR E

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Inside information

Getting the right data is the first step in making better decisions about the
delivery and operation of infrastructure assets, says Dave Monswhite

Around the world, major


infrastructure projects
continue to grow in size
and complexity. In this
environment, access to
objective, relevant and
accurate information is
crucial to improve the agility
of decision-making. This is
aided by new technology and
collaborative approaches,
such as building information
modelling (BIM), although they
are often under-used.
Unfortunately, many
clients are only exposed to
visualisations of the 3D design
aspects of the BIM process,
focusing on design and
engineering-related elements.
What they often do not see is
the impact of the information
sitting behind those graphics.
Take light fixtures in a
train station. You can see
the object as a 3D image
in a BIM, but it may have
other parameters attached
to it, for example, the type
of street light it is mounted
on, the spare parts it needs,
maintenance cycles and
power use.
Data extracted from such
a model can be used to make
powerful decisions the world
of information management.
Unfortunately, many clients
are not in control of how
information is produced or
communicated to them.

Beyond traditional
Clients generally request and
receive design information in

traditional formats, namely


drawings, plans and sections.
Traditional approaches
supply traditional results. A
more effective tactic is to be
specific from day one about
the information you will need
to make decisions throughout
the life cycle of your asset.
A well-defined and
communicated information
strategy, from the outset, is
key. Think about the questions
you will ask later in your
project. In an airport, for
example, how will retail spaces
work? Will queue flows be
efficient? Or, in a school, will
the corridors be wide enough
for pupils to use safely?
The answers can
fundamentally affect your
assets design, so it is
essential to decide early on
which information and
data-capturing requirements
your organisation will need for
future decision-making. This
also means that the process
of gathering information can
be written into contracts.

A better solution
Many buildings are still
designed using a traditional,
architectural-led approach.
Such designs make use of
floor plans and elevations,
but clients often struggle to
understand the implications
of the design choices at an
early stage. Finding out late
that a concept is flawed will
impact on schedules and
costs and probably mean a
compromise solution.
However, using BIM from
the start, showing simple
floors and walls, primary
cores, orientation and the
relationship with other
buildings, for instance, allows
an objective appraisal on
whether the concept is worth
progressing. If so, the model

can be populated with


more detail about individual
objects doors, heating
systems and windows as
long as these have been
defined from the outset.
Studies demonstrate that
this can shorten overall design
times because the right
solution is being developed
earlier. An accurate
mass-model allows cost
managers to understand
details like wall-to-floor ratios,
and so develop a robust
early cost estimate. Strong
information management also
improves understanding of
the capital and operational
expenditure implications of
any decisions taken, and leads
to improved quality through
minimised rework.
There can also be a huge
programme-wide impact,
for example across multiple
train station redevelopments.
Consistently naming and
structuring information
objects across every model
allows comparisons to be
made and design commonality
to be found, to take advantage
of buying economies or even
understand the implications
of lead times across multiple
sites. There will also be
consistent information
available for operating assets.
However, consistency is
key. If an organic, bespoke
approach is taken to
structuring the data of
individual projects, each
one will look different in
BIM, and actually create
inefficiencies. Culture is
the biggest barrier to true
collaboration and the client is
central to changing this.
Control your scope of
service: get the information
you need to make informed
decisions. If you use the
scope of service you have

always used then you will


receive the traditional outputs
you have had in the past.
Consider your project
holistically: identify and
resolve any disconnect
between those commissioning,
designing or building an asset
and those ultimately operating
it. Involve your operational
team early in the process so
that it does not have to wait to
discover information about a
complex asset at handover.
Collect your FM information
early: use a methodology such
as BS 1192-4, which provides
parameters for gathering
information about every object
even if you do not know how
to use it yet. It will avoid the
need to revisit old projects.
Involve your costs managers
sooner: cost managers should
work alongside designers
to ensure that affordability
is factored into the early
design process. Make your
project gateways more about
affirmation of progress.
Control your data
environment: do not rely on
a third party. What happens if
there is a disagreement and
they block your access?
Information is an often
overlooked intangible asset
that should be managed from
the pre-investment/planning
phase. What is your approach
to maximising its value on
your projects? b
Dave Monswhite MRICS is an
Associate Director at Turner
and Townsend
dave.monswhite@turntown.
com

Related competencies
include Project process
and procedures,
Teamworking

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BIM

Reaping the benefits


In the third and final article on the Manchester Central Library restoration project,
Liam Brady and the One Team assess the effectiveness of BIM technology

lthough a technically
aware client,
Manchester City
Council (MCC) had
little experience of
building information
modelling (BIM) at
the start of its refurbishment of the citys
town hall complex. At the heart of the city,
the town hall extension and central library
are grade II* listed buildings of national
significance, among the best examples of
the architecture of their period; innovative,
sophisticated and constructed to high
standards. The public spaces of Albert
Square and St Peters Square provide the
setting for these important civic buildings,
1 6 F E B R U A R Y/ M A R C H 2 0 1 5

as well as a number of key developments


proposed in the vicinity.
Begun in September 2010 and
completed in March 2014, the project,
involved the redesign of the town
hall extension and central library, and
was allocated a budget of 100m
(Construction Journal December
2014/January 2015 p14).

Introducing BIM
MCC had considered using BIM as far
back as 2006 on the Building Schools
for the Future projects, and BIM has been
used on a number of capital projects to
improve stakeholder engagement and
design development. But although BIM

was considered at the start of the town


hall project, it was not included in the
contractual documentation.
Ryder Architecture won the contract
to redesign the Central Library in 2009
and the practice convinced the Council
to adopt BIM on this project. As Director
Ian Kennedy recalls: When we were
appointed for the library project, our
experience as one of the first adopters
of BIM technology allowed us to help
MCC seize the opportunity to improve
its whole approach to asset and facilities
management. Over the past three
years we have worked together to the
point where the library and town hall is
regarded as an exemplar project in this

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processes and especially the importance


of the attitude of the project team.
Without understating the achieved
benefits and significant technical merits
of the project, we think that this is an
exemplary case of the importance
of cultural change in successful BIM
implementation.
The government BIM Task Group
and its chairman Mark Bew were very
hands on. The team attended key BIM
workshops with the supply chain, MCC
operational teams and ICT vendors.
Cabinet Office attendance really helped
to drive the agenda and gave credibility
and confidence to the project vision.

BIM implementation

field. We are delighted to have been part


of the process. The project represented
the most significant refurbishment that
Ryder had undertaken to date.
The practice held early discussions
with MCC to explain the benefits that BIM
could bring to its estate management.
3D survey information was initially
commissioned, and further refined
where required, with localised detailed
analysis of existing building geometry and
intrusive surveys as the project scope
and requirements progressed.
The benefits of BIM in the
refurbishment of a listed building have
been evidenced in the following ways:
bb interactive demonstrations of
complex interventions into the existing
fabric incorporating methodology and
sequencing to stakeholders, notably
English Heritage
bb testing of design options as a
collaborative client/consultant/contractor
team in a 3D environment
bb offsite manufacture of construction
elements from geometric data exported
from the design model

bb transfer of construction data


to the client FM team for ongoing
estate management.

Collaborative working
The project team established a
collocated office to promote a One Team
ethos. This gave the MCC team
day-to-day access to BIM expertise from
Ryder, NG Bailey and Laing ORourke
colleagues with whom they could share
knowledge, ideas and aspirations.
Strong links were also formed with
the University of Salford, the University
of Liverpool and the BIM Academy at
Northumbria University, which offered
guidance and supported the project team
in making informed decisions.
Emphasising the extent to which
the project has served to highlight
BIMs value to the public sector, Arto
Kiviniemi, Professor of Architecture
at the University of Liverpool notes:
Manchester Town Hall complex
is a flagship project in the UK, and
even internationally, highlighting the
importance of BIM protocols and
Image Manchester City Council

Manchester Town Hall Complex


Transformation Programme Construction
Director Alan Garbutt stresses that
the use of BIM demonstrated its value
in terms of estate management. The
objectives were essential to enable
the delivery of services quicker,
cheaper, more efficiently and in less
space. Having a BIM as the basis of
the design, construction, specification
and operation and maintenance
manuals for the project enabled the
city to retain its greater aspiration to
manage its estate through an asset
information model.
He adds: This aim will not be achieved
for some while yet, but the city has the
basic capability to develop ultimately
a city-wide estates asset database
covering the entire tapestry of reactive
and planned maintenance, scheduling,
purchasing, stock control, replenishment
and financial management.

Value and benefits


Communication

Laing ORourke used BIM to


communicate the site establishment
and boundary proposals to local
businesses, neighbours, highways
and planning colleagues, and this
clarity reduced the queries and
concerns that would normally be
expected on such a large city centre
site. BIM was also used as a site
induction tool, which enhanced the
clarity and understanding of the site
access routes and site logistics and
safety requirements.
F E B R U A R Y/ M A R C H 2 0 1 5 1 7

RICS CON ST RUCT I O N


JO URN A L

BIM

Post occupancy evaluation


To ensure that value is achieved in the operational life
cycle of the town hall complex transformation scheme,
MCC and Laing ORourke signed up to the government
Soft Landings policy (below), outlining their expectations
and requirements. A number of forums were established
to allow the active involvement of key players across the
project at a number of levels, to ensure that the desired
outcome of a golden thread between design, construction
and operation is achieved (right).

Forum
Handover
steering group

Attendees
Full project
team

(Clarity of roles and responsibilities)

Controlled approach to
handover
Confirm roles and
responsibilities
Define boundaries
Prepare FM team
Confirm status of handover
Review progress and manage
risks

Soft Landings
Controlled approach
to handover

Objective of group

Familiarisation and
commissioning

Core
operational
team

Laing ORourke
engineers
NG Bailey
MCC FM team

Tighten the relationship


between Laing ORourke/MCC
Focus on operational outcomes
Share risks and responsibilities
Prepare FM team.

Training
and aftercare

Involved end users/


FM team

Share risks and


responsibilities

Focus on operational
outcomes

Set performance
objectives

(Environmental performance
Metering strategy
Energy assessment (POE))

1 8 F E B R U A R Y/ M A R C H 2 0 1 5

Post occupancy
evaluation

Laing ORourke
M&E
commissioning
manager
MCC FM team

Support handover process


Tighten the relationship
between Laing ORourke/MCC
Share risks and responsibilities
Prepare FM team

Development
of metering
strategy

(Environmental/Energy
Performance
Visitor targets
Customer/staff satisfaction )

Visual method statements were


developed using BIM to breakdown
complex site works into individual
activities, which enhanced the clarity
for the site teams. In turn, this served
to promote a right first time approach,
workmanship was improved and site
safety was enhanced.
For its part, Ryder used BIM to
communicate complex design solutions
(e.g. vertical circulation core and
the removal of the four-storey book
stacks in central library) to key

The city has the


basic capability to
develop ultimately
a city-wide estates
asset database

Fire safety,
security and
operational
team

Laing ORourke
M&E
BDP design
engineers
MCC Building
Energy
Systems

stakeholders ranging from the


project team, councillors, librarians,
planning officers to English Heritage
colleagues, enabling them to make
better informed decisions.

Programming
The model also helped to develop
the sequencing and programming,
which gave key stakeholders confidence
that the Grade II* buildings were being
respected, and works were being
appropriately considered and planned.
MCC planning conservation manager
Paul Mason believes that: BIM gave
us the confidence in our decisions and
agreements on design.
The design and installation of the
central librarys ground floor sculptured
troughed ceiling required a supplier
that could use BIM data to manufacture
the product. A local SME gained a
commercial advantage over competitors
because of access to BIM technologies
and expertise in coordinating the
very complex services, structure and
ceiling finishes.

Set performance objectives


Metering strategy
Promote behavioural change
Prepare Laing ORourke/MCC
for post occupancy evaluation

Cost and time savings


A saving of 250,000 was achieved
on the vertical circulation core, 10%
of the value. The coordination of
complex services across the town hall
extension and central library saved
time and money due to right-firsttime solutions and a reduced number
of changes. Time was also saved in
consultation with stakeholders and
especially English Heritage.

Asset management
The MCC operational team has been
actively involved at all stages of the
development of BIM for asset information
management (AIM), focusing on the
mechanical and electrical (M&E) data.
Peter Harvey, the projects building
services engineer, highlights the great
value of BIM technology in achieving real
cost savings across the entire scope of
the project. As he puts it: To have the
ability to interrogate isolated services,
such as a chilled water system or a
combined network such as the ventilation
layout, all from the relative comfort of a

RI CS CONST RU C TIO N
JOUR NAL

The BIM model was central to decision


making at all stages of the restoration
project from design to programming, and
will inform asset management in the future

hand held device provides measurable


cost savings and immeasurable safety
and efficiency savings.
NG Bailey, the projects M&E
subcontractor, has used BIM for a
number of years to enhance its ability to
deliver right-first-time solutions. On the
Town Hall complex, its digital engineers
used great finesse and skill to route
very complex services throughout both
buildings, to avoid redesigns and changes
on site (clash detection).
Initially, MCC was unclear on how
it needed the M&E AIM data to be
presented, so several workshops
were held with Harvey and the estate

management software vendor C-Pad.


The team was keen to adopt the
principles of construction operation
building information (COBie) as promoted
by the BIM Task Group. However, the
naming conventions and scale of detail
have been altered to suit the needs of the
MCC operational team.
While NG Baileys BIM model was
impressive, it was not data rich. The
two parties worked comprehensively
together to ensure that the M&E asset
information was eventually uploaded into
the BIM model in accordance with the
MCC operational team requirements. This
was done retrospectively, which proved
Images Manchester City Council

very time consuming. MCC is keen to use


this learning to develop BIM employer
information requirements that will be
clearly articulated at the outset of works. b
Liam Brady is Manchester City Council
Programme Manager
l.brady@manchester.gov.uk

Related competencies
include Project process and
procedures, Teamworking

F E B R U A R Y/ M A R C H 2 0 1 5 1 9

RICS CON ST RUCT I O N


JO URN A L

H E A LTH A N D S A F E TY

Put to the test

In this second of a three-part series, Matthew Maslen reports on his study


of stress in construction and its relevance to all members of the project team

hen compared
with others, the
construction section
is characterised
by a reluctance to
report stress. This
may be due to a
macho culture and a false perception that
admitting to stress, depression or anxiety
is a sign of weakness (Construction Journal
November/December 2014).
But are certain personalities types more
prone to stress and is there a link between
stress and performance? Psychological
personality testing distinguishes between
a Type A personality intense, driven,
competitive, and a Type B personality no

drive or ambition. My study sampled 110


construction personnel across three groups.
This included 72 construction project
managers, 21 site managers and 17 site
operatives. Each respondent completed
a closed question online questionnaire in
total anonymity.

as time urgency, continuous involvement


in multiple functions with deadlines and
a persistent desire for recognition and
achievement. Site operatives were much
more likely to report traits of a Type-B
personality, such as no desire to compete
or to be involved in deadlines.

Finding 1: Assessment of
personality type

Finding 2: Assessment of
current stress levels

The assessment was undertaken using


the established Bortner Scale. The groups
A+ and B+ were added to provide a
broader range of results.
Table 1 shows how project managers
and site managers reported a strong Type
A personality. They exhibited traits such

This question measured current


stress using a combination of clinically
established stress, depression and
anxiety assessment tools. Stress
characteristics and markers were
recorded and, for example, respondents
were asked how much they agree with

Assessment findings
Table 1
Sample group

Construction
project managers

Construction site
managers

Site operatives

Type A+ personality

33%

43%

12%

Type A personality

52%

43%

53%

Type B personality

15%

14%

35%

Type B+ personality

0%

0%

0%

Table 2
Sample group

Construction
project managers

Construction site
managers

Site operatives

High

6%

14%

0%

Medium

27%

14%

12%

Low

67%

71%

88%

Table 3
Sample group

Construction
project managers

Construction site
managers

Site operatives

Positive feelings
most selected

Engaged (57%)
Decisive (56%)
Composed (29%)

Decisive (62%)
Interested (48%)
Engaged (38%)

Decisive (24%)
Interested (24%)
Engaged (18%)

Negative feelings
most selected

Rushed (72%)
Irritable (58%)
Annoyed (50%)

Irritable (62%)
Annoyed (62%)
Rushed (62%)

Rushed (76%)
Irritable (64%)
Annoyed (59%)

Positive feelings
least selected

Relaxed (3%)

Calm (5%)

Relaxed (0%)
Satisfied (0%)

Negative feelings
least selected

Nauseous (7%)

Nauseous (5%)

Nauseous (0%)

2 0 F E B R U A R Y/ M A R C H 2 0 1 5

RI CS CONST RU C TIO N
JOUR NAL

Finding 3: Comparing stress


experience to personality type
In this exercise stress score was
compared against personality score.
Across all three groups an average
increase in personality score (namely
becoming more Type A) meant a slight
increase in stress score. However, it
should be noted that the distribution
within all three groups was wide and no
one formula fitted the results.

Finding 4: Optimum levels


of stress
The Yerkes Dodson Curve (Figure
1) proposes that optimum levels of
stress causes high productivity. In
this assessment respondents were
asked their level of agreement with
three questions aimed to assess three
different positions on the curve:
1. When I am not busy at work I
slow down Assessing the left side of
the curve
2. I thrive on stress at work Assessing
the middle of the curve at an optimum
stress level
3. When Im stressed my work suffers
Assessing too much stress and burnout.

Figure 1: Yerkes Dodson Curve comparison


6

Performance scoring
(1-10)

statements such as: I struggle to control


worry. Table 2 shows the percentage of
respondents in each stress level group.
In the project manager and
site manager categories the most
reported problem was sleep disturbance,
but other issues included being
easily distracted and having little
pleasure in doing things. Some
respondents reported worrying and
extreme levels of stress, similar to the
experience of a person experiencing
burnout or breakdown.

Project
manager

Site
manager

Site
operative

2
Work slows/Thrive on stress/Work suffers

The graph clearly shows that the


project manager has an optimum work
and stress level as predicted. It also
shows the project manager can resist
stress and keep up this performance
better than the other groups (to the right
hand side of the graph). It was noted the
site manager and site operative do not
thrive on stress, and their performance
stayed comparatively level across
stress levels. It suggests that a low level
of stress gives low performance, an
optimum or medium stress level gives high
performance and high stress level causes
a return to low performance.

Finding 5: The respondents


feelings
The final question asked for a reflection
of feelings (positive or negative)
experienced on the most stressful day
of the respondents working lives. A
choice of eight positive and eight negative
feelings were offered. The study found
that site operatives reported three times
as many negative feelings as positive
ones. Table 3 shows the feelings most
selected by each group.
Image Image Source

Positive emotions of being decisive,


engaged and interested (similar to a
Type A characteristics) figured highly
in positive emotions across the groups.
Feelings such as calm, relaxed and
satisfied (Type B) were rarely reported
and even absent.
It was noticed that fear and
nausea were rarely reported. Given
the high stress levels recorded in the
respondents it is possible that reporting
these feelings were avoided. Perhaps
macho team members considered this is
a sign of weakness. These results offer
an insight into the psychology of each of
the three groups. b
Matthew Maslen is an Assistant Project
Manager at Norman Rourke Prime
matthew.maslen@nrpcc.com

Related competencies include


Managing people

F E B R U A R Y/ M A R C H 2 0 1 5 2 1

RICS CON ST RUCT I O N


JO URN A L

LEGAL

Striking a balance
Changes to the employment tribunal process has shifted
the focus to avoiding claims, explains Helen Crossland

efore 29 July 2013,


any individual who
had lost their job, or
who alleged to have
been mistreated at
work, could, if eligible,
bring a claim against
their current or former employer before
an employment tribunal free of charge.
The main reason for this was that it was
considered prohibitive and unfair for
someone to have to incur a fee to bring
a claim.
However, soaring costs of running the
service and the concern that too many
spurious and unmeritorious claims were
being brought meant change was needed.
Of the 186,000 claims brought in the 12
months preceding July 2013, for example,
only a quarter proceeded to a final
hearing, and of these, just 8% of unfair
dismissal claims and 3% of discrimination
claims succeeded. Yet in the majority of
these cases, including those that were
withdrawn, struck out, or which settled,
the employer still incurred significant time
and costs defending the claims.
In response, two key measures have
been introduced: fees and mandatory
early conciliation.

holiday and redundancy pay, and


for group action claims against the
same employer.
Fees are only reimbursed to claimants
whose claims succeed and are otherwise
lost. A fee remission scheme is available
for individuals in receipt of state benefits,
or whose gross or disposable income is
below a certain limit.
It was always expected, and indeed
intended, that the new fee system would
deter some potential claimants from
presenting claims. But the decline has
been unprecedented between 70%
and 80% each quarter since fees were
introduced and calls from trade unions
for tribunal fees to be scrapped, or much
reduced, are now at fever pitch.

Early conciliation
Before April 2014, an individual could
complete a claim form online and on
clicking submit, launch a claim in an
employment tribunal. At that point, and
provided the claim was not rejected for
any reason, the parties were off and
running and the employer would have
28 days to file a response (defence).

New fees
Since July 2013, any claimant wishing to
pursue a claim, must pay up to 1,200.
Most complaints, including unfair/
constructive dismissal, discrimination and
whistleblowing, now carry an issue fee of
250 per claim form and a further fee of
950 on a final hearing being listed.
Lower fees apply to money claims
such as unlawful deduction of wages,
2 2 F E B R U A R Y/ M A R C H 2 0 1 5

It is strongly advisable
for employers to
nominate an individual
as the chosen
point of contact

However, after that date, a new


pre-claim stage was implemented to
try to dispose of claims before they are
issued. Anyone now intending to bring
a claim against their (former) employer
must first complete an early conciliation
(EC) form, which is sent to ACAS as
opposed to the employment tribunal.
ACAS will then obtain details and if the
claimant is willing to attempt conciliation,
contact the employer to see if there is
any scope to resolve the dispute.
Employers get no prior warning of any
communication, and ACAS will simply
telephone the person nominated by the
claimant in the EC form to discuss the
potential claim. Whereas some claims
will be expected, others may come as a
surprise, and it is strongly advisable for
employers to nominate an individual (who
could be a manager or their employment
lawyer) as the chosen point of contact.
This will help ensure that ACAS calls that
person rather than the contact named in
the EC form.
Following the submission of an
EC form, either party may decline to
engage. If so, or if the parties commence
negotiations but fail to reach an
agreement, the EC period will be deemed
to have ended and ACAS will issue a
certificate confirming this. Only then can
the would-be claimant lodge a claim in
an employment tribunal. If EC results in
an agreed settlement, employers should
ensure that this waives all prospective
claims the (former) employee could bring,
and not just those that have been brought
to their attention by ACAS.
To allow time for the EC process a
set period of one month extendable by

RI CS CONST RU C TIO N
JOUR NAL

TXXX xxx xxx xxx


x-located office
also created an
environment where
formal meeting
structures were
supplemy informal
meetings

two weeks if the parties agree the


normal limitation period for a claimant
to bring a claim will, in most cases, be
extended. Special rules apply in this
scenario, and professional advice should
be taken to calculate any new limitation
date, and whether a claim brought after
EC was in time.
While EC has not attracted the same
consternation as tribunal fees seen
by many as a barrier to justice it has
proved a less effective means of reducing
claims, with just 18% of claims attributed
as having been resolved by way of EC.

A new approach
Fees and early conciliation have
introduced a new dimension to the
tribunal system and have proven highly
beneficial to employers wishing to
avoid the costs and risks of litigation. A
claimants resolve can be tested upfront
if the employer considers the individual
unlikely to invest 1,200 to pursue a
claim, and claimants generally may be
more agreeable to accepting a lower
settlement package.
EC in particular can be useful in
encouraging a would-be claimant to walk
away from a potential claim or as the
case may be, to experience a taste of the

Fewer claims
in the system is
making for speedier
proceedings,
focusing the minds of
the parties to resolve
disputes before they
find themselves in
front of an omniscient
employment judge
battle they may face if they opt to litigate.
Since EC is a confidential process,
employers are safe in the knowledge
that the content of any discussions is
excluded from any legal proceedings
that follow.
Where a claim is issued, normal service
resumes with the employer having 28
days to file a response and directions
being listed thereafter, including for the
exchange of relevant documents and
Image iStock

witness statements, and the listing of a


final hearing.
Also factored into the equation now is
the second tribunal fee of 950, payable
by claimants on a hearing being listed,
putting individuals under greater pressure
to stick or twist. However, the fact of
fewer claims in the system is making
for speedier proceedings, focusing the
minds of the parties to resolve disputes
before they find themselves in front of an
omniscient employment judge.
The future of tribunal fees hangs
in the balance, but there has been an
undeniable shift in the system with the
emphasis now being on resolution. This
can only be beneficial for employers
whose time and money is best focused
on running their business. b
Helen Crossland is a Partner in the
Employment team at Hamlins LLP
hcrossland@hamlins.co.uk

Related competencies include


Managing people

F E B R U A R Y/ M A R C H 2 0 1 5 2 3

RICS CON ST RUCT I O N


JO URN A L

A DV E RTI S I N G

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2 4 F E B R U A R Y/ M A R C H 2 0 1 5

10:28

MEDIATIO N

RI CS CONST RU C TIO N
JOUR NAL

Resolving disputes

Jacqui Joyce discusses why RICS has published new guidance on mediation
f a client walks into a
surveyors office with
a potential dispute,
normally the surveyor
will advise on the
technical matter at hand
and whether they think
the client has a case on the merits.
Occasionally, they may get involved
in advising on tactics on how to deal
with the matter and maybe even have a
meeting with their opposite number on
the other side. If the matter becomes
protracted, surveyors will usually pass
the matter to lawyers to deal with any
legal issues and issue proceedings
when necessary. The next stage for
the surveyor would then be giving expert
evidence by report and at trial.
However, increasingly matters are not
reaching court rooms and a growing part
of a surveyors remit is how to advise
when cases are dealt with by a form of
Alternative Dispute Resolution, the most
common of which is mediation.
Surveyors need to know about the
process of mediation whether they are
attending as an expert as part of a team
or advising their clients at the initial
stages of any dispute on possible ways
it might be dealt with.
Recognising the increasing involvement
of surveyors in this area, RICS carried
out a survey about their knowledge of
mediation. Most thought they had a fair,
good or very good understanding of
mediation as a method for resolving
disputes. However, almost 90% said they
would like to improve their knowledge.
As a result, RICS put together a
working party to produce a mediation
guidance note for its members. The

committee was made up of mediators


from both the surveying and legal
community, working closely with the
Property Litigation Association.

Explaining the benefits


The guidance note is aimed at helping
surveyors to represent their clients at
or before mediations (with or without
lawyers), rather than those who wish to
be mediators. It covers what needs to be
considered beforehand and during the
day, and includes:
bb when mediation should be considered
bb how it works in practical terms
bb the benefits of mediating over litigating
bb the consequences if parties do
not mediate
bb the principles behind mediation,
namely that it is a voluntary, without
prejudice and confidential
bb the role of the mediator as a neutral
third party helping parties do a deal
bb the costs benefits
bb the practical and commercial
resolutions that can be achieved
that a court cannot order
bb choosing a mediator
bb finding a venue
bb entering into a mediation agreement
bb preparing documents including
bundles and position statements
bb the process on the day
bb documenting any settlement.
The guidance note also looks at factors
that parties should consider before the
day of the mediation. These include what
they want to achieve and how they can
do that, how they will deal with costs and,
importantly, thinking about what the other
party wants to achieve and its drivers.

Property cases
Surveyors are involved in a wide variety
of property disputes from large
commercial property and construction
disputes to lower value disputes, e.g.
boundary or other neighbour disputes.
All of these are ideally suited for
mediation, particularly where the cost of
proceedings can quickly outweigh any
financial benefit of the claim. A significant
benefit is that the parties can choose a
mediator who is an expert in the area of
the dispute, which cannot be guaranteed
of a judge. They are therefore fully able
to understand the issues, robustly test
the parties view of their cases, and also
suggest practical solutions.
Recent statistics show that just over
75% of mediations settle on the day, with
another 11% shortly thereafter. Surveyors
clearly need to be confident that they can
advise their clients on this very effective
tool for settling their disputes. b
Jacqui Joyce is a co-author of the RICS
Mediation guidance note, Chair of the RICS
Mediation guidance note working party and
a mediator at The Property Mediators
jacqui@thepropertymediators.co.uk

The Mediation guidance note


will be formally launched at
the RICS Dispute Resolution
Conference in London on 28
January, followed by six half-day
roadshows around England
rics.org/bimmodule
Related competencies
include Conflict avoidance,
management and dispute
resolution procedures

F E B R U A R Y/ M A R C H 2 0 1 5 2 5

RICS CON ST RUCT I O N


JO URN A L

LEGAL HELPLINE

Legal
Q&A
Q

I am a subcontractor on a large project and the main


contractor is paying me later and later as the project
progresses. The delay period is affecting my cash flow.
What can I do?

> Shy Jackson

Unfortunately, late payment of invoices continues to plague


the construction industry. The primary remedy is to claim
interest from the contractor on any late payment. Under
English law, interest can be claimed under the subcontract, if
it provides for this, or under the Late Payment of Commercial
Debts (Interest) Act 1998 (as amended).
Contract terms
The first thing to do is to check whether your subcontract
provides for interest to be claimed. If the contractual rate
amounts to a substantial remedy, interest can be claimed at
that rate on any overdue payment. Most standard form contracts
stipulate the rate to be applied for example, clause 4.10.6 of the
2011 JCT Standard Subcontract Conditions provides for interest
at a rate of 5% above the Bank of England base rate. If there
is such a contractual provision, you would be entitled to be paid
interest and should claim this from the main contractor.
Employers and main contractors sometimes reduce the rate
of interest payable. It is then possible that the revised rate would
not amount to a substantial remedy and the Act will apply. The
test is (judged at the date the contract was made):
bb whether the interest rate is sufficient to both compensate the
subcontractor and to act as a deterrent to late payment
bb whether it is fair and reasonable to oust the right to interest
under the Act
bb the benefits of commercial certainty
bb the bargaining powers of the parties.
By way of an example, a rate of 0.5% above base rate (amended
down from 5%) was not a substantial remedy in Yuanda (UK)
Co Ltd v WW Gear Construction Ltd [2010] EWHC 720 (TCC).
However, a rate of 5%, although less than the statutory remedy,
was held to be a substantial remedy in Walter Lilly & Company
Ltd v Mackay [2012] EWHC 1773.
Applying the Act
If the subcontract does not stipulate an interest rate or the
interest rate is not considered to provide a substantial remedy
2 6 F E B R U A R Y/ M A R C H 2 0 1 5

+info
+info
Shy
Jeremy
Jackson
Ferris
is
is aSenior
Partner
Associate
at Pinsent
at
and
Furley
Masons
Page LLP
shy.jackson@
jcf@furleypage.co.uk
pinsentmasons.com

then you may still have a right to claim interest under the Act.
The Act seeks to deter late payment by imposing a statutory
rate of interest, compensation and for contracts entered into
on or after 16 March 2013, a right to recover the reasonable
costs incurred in collecting the debt. The Act applies to all
business-to-business contracts for the supply of goods or
services, and will therefore apply to construction contracts.
The Act implies a simple fixed rate of interest (currently
8% above base rate) on any qualifying debt. This is deemed
to be when there is an obligation under the subcontract
to pay the whole or part of the contract price, and that payment
is outstanding.
Where the subcontract provides a due date for the payment,
interest will be calculated from the next day until payment is
made. However, if the subcontract is silent on payment dates,
interest will be calculated depending on when the contract was
entered into:
bb contracts made before 16 March 2013: 30 days after the
later of delivery and invoice
bb contracts made on or after 16 March 2013: 30 days
after the later of the subcontractor achieving its contractual
obligations, the subcontractor invoicing and the contractor
accepting the works.
It is possible to agree to extend the payment date from 30 to 60
days (provided the contractor is not a public authority), and even
longer if the extended payment period beyond 60 days is both
expressly agreed and not grossly unfair. Consideration will be
given to:
bb the nature of the goods and services in question
bb any objective reasons to extend the payment date
bb whether an extension is likely to be a gross deviation from
good commercial practice and contrary to good faith.
If interest is being claimed under the Act, you will also be able
to claim a fixed sum as compensation. This will range from
40-100 depending on the value of the outstanding qualifying
debt. If your contract was made on or after 16 March 2013, and
the costs you have incurred in recovering the late payment
exceed the level of compensation, you may also be entitled to
claim those excess costs provided that they are reasonable.
It is yet to be determined what those reasonable costs will
amount to, and to what extent they will cover the costs of court
proceedings, arbitration or adjudication. b

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