1A : STEEL CONSTRUCTION: ECONOMIC & COMMERCIAL FACTORS

Lecture 1A.1 : Introduction to Steel's Role in Construction in Europe

Lecture 1A.1: Introduction to Steel's Role

in Construction in Europe

OBJECTIVE/SCOPE:

To inspire students with an enthusiasm for steel construction. To identify the advantages of steel for
construction in Europe, emphasising its future potential and the rewarding challenge it offers to able
students. To introduce ESDEP as a response to this potential.

PREREQUISITES

None

RELATED LECTURES

Lecture 1A.2: Steelmaking and Steel Products

Lecture 1A.3: Introduction to Structural Steel Costs

Lecture 1A.4: The European Building Market

SUMMARY

Steel has been produced for about 100 years. It is a modern material with an exciting future.

The advantages of steel are described together with recent developments which have enhanced them, i.e.
improvements in manufacture, enhanced range of properties, improvements in fabrication and speed of
construction, adaptability, consistent quality, lightness, stiffness and strength.

The future development of uses of steel, the associated training needs and the role of ESDEP in meeting
those needs are discussed.

1. INTRODUCTION

Steel was first produced in the Middle Ages, but it was not until just over a century ago that it was used
for structural engineering.

Today, many remarkable structures demonstrate the possibilities of this well developed material in their
clear and transparent appearance, Slides 1 - 5.
Slide 1 : Centre Pompidou, Paris, France

Slide 2
Slide 3 : Olympic Stadium, Munich, Germany

Slide 4 : Faro Bridge, Denmark

 Slide 5 : North Sea Oil Platform

The strength-to-volume ratio, the wide range of possible applications, the availability of many
standardised parts, the reliability of the material and the ability to give shape to nearly all architectural
wishes are some of the reasons to choose this material for the main structure and for other elements of a
building or other construction.

Safe and strong steel structures are assured by well-educated designers with a Quality Assured and
Quality Controlled production. A long life with a small amount of maintenance can be guaranteed by
using well designed details, a high level of pre-production in modern well-equipped shops with skilled
employees and modern corrosion-resistant systems.

2. DEVELOPMENTS IN PRODUCTION AND DESIGN

Many of the inherent advantages of steel have been considerably enhanced by the vigour with which the
steel construction industry has improved its performance in an increasingly competitive world.

2.1 Steel Production

Early steels were manufactured by a range of processes which produced a material of uncertain
composition and variable properties. Today almost all structural steel is produced by the BOS (Basic
Oxygen Steelmaking) process together with a modern purification process which produces a fine grained,
weldable material of consistent strength and toughness.

Whilst methods of steel production have improved since the first introduction of the material, the rate of
improvement has been most dramatic in the last decade or so. Since the mid-1970's steel productivity has
increased from 60-100 kg/man hour (depending on producer) to over 250 kg/man hour for most modern
plants. This improvement has had a significant effect on relative material costs, Slide 6.
Slide 6 : Relative material costs showing the relative change in prices between steel and concrete in recent
years

Improvements in basic production have been matched by investment in better rolling mills. The latest hot
rolling mill can produce sections to a wider variety of shapes with close tolerances, good surface finish
and consistent, homogeneous composition. Slide 7 gives an indication of the range of sections that are
produced. Heat treatments in-line permit the greater control and enhancement of mechanical properties.
Cold rolling can be used to produce thin gauge strip material which can subsequently be formed into a
wide range of shapes, Slide 8.
Slide 7 : Range of typical standard hot-rolled sections manufactured by the steelmaking industry
 Slide 8 : Range of typical cold-rolled profiles manufactured from thin galvanised sheet

This revolution in manufacturing techniques has been accompanied by, and has probably been possible
because of, a major restructuring of the entire industry. It is worth recalling that the European Coal and
Steel Community (one of the founding components of the European Community) was established in 1952
to ensure the restructuring of these crucial industries after World War 2. It has been a difficult and painful
process for both traditional industries but a lean, fit and modern steel industry has finally emerged.

2.2 Range of Steels

While cheap, good quality mild steel remains the backbone of the industry, it is now complemented by a
wider range of commercially available structural steels, Slide 9. High yield steel has increased in
popularity as designers strive for more cost effective structures. Where necessary, thermo-mechanically
controlled rolled steels can be specified. Slide 9 also shows the mechanical properties that can be obtained
with special steels, in this case a very high strength wire.
 Slide 9 : Mechanical properties for a range of steels showing the wide range of characteristics which
different steels exhibit

Improvements in mechanical properties are best typified by a simple example. The Eiffel Tower was
undoubtedly an engineering triumph when it was completed in 1888. Making the best use of the available
materials, it contains around 7000 tonnes of iron. A redesign today would require just 2000 tonnes.

The breadth of steels also encompasses corrosion resistance. Weather resistant steels that can, in
appropriate circumstances, be left unpainted throughout the life of the structure are now used for many
bridges, Slide 10. Stainless steels are available in an almost bewildering range of compositions.
Appropriate choice of chemistry and finish produces a durable and attractive structure, Slide 11. Coated
steel products are very widely used for cladding, Slides 12 and 13.
 Slide 10 : Footbridge - York University, UK

Slide 11 : Opera de la Bastille, Paris, France (1991).

 Slide 12 : Use of cold rolled steel for cladding at Revigny, France

Slide 13 : Use of cold rolled steel for cladding: (Entrepot de la Societe Calberson, France).

2.3 Design

Design in steel used to be regarded as a 'black art' where one only reached a level of competence after 20
years of hardwon experience. Whilst, of course, experience is still very important, the designer is now
much better supported and is able to be more accurate. Computers have made routine, levels of analysis
that would otherwise have taken much manual calculation. Codes of practice have become more
comprehensive. The advent of limit state design concentrates the designer's mind on the most important
aspects of a particular design. The Eurocodes [1 - 4] are the culmination of many years' hard work,
drawing together the best information on steel and composite design.
Two example illustrate the refinements in structural form that have been achieved by the improvements in
understanding of structural behaviour, analysis and design. The portal frame, the subject of much research
from 1950 to the present day, is an elegant, minimalist structure, see Slide 14. Its inherent efficiency of
shape (its centreline closely follows the thrust line that would be associated with an axial equilibrium
path, thus minimising bending moments) is enhanced by modern plastic or elastic design. Plastic design
permits redistribution of the moments so that the bending moment envelope is the closest possible fit to
the envelopes of uniform strength associated with prismatic sections; a haunch is used to resist the peak
moment at the eaves. Elastic analysis and modern methods of fabrication permit the construction of a
frame whose varying strength distribution is a close fit to the elastic bending moment envelope.

Slide 14 : Evolution of portal frame design

The second example is the modern box girder bridge, see Slides 15 and 16. This elegant form of
construction permits the use of wide flanges, thus reducing structural depth. The inherent torsional
stiffness of the closed section is used to distribute the effects of eccentric loading over the full width of
the section, thus reducing maximum bending stresses. Internal diaphragms serve both to jig the box
during fabrication and to resist distortion of the cross-section which could reduce the torsional resistance
of the closed section.
Slide 15 : Box girder bridge near Nijmegen, Netherlands
 Slide 16 : Behaviour of box girder bridges

2.4 Fabrication

In parallel with the improved efficiency of steel production, there have been significant increases in the
productivity of the steel fabrication industry, with roughly a doubling in output per man between 1980
and 1990. The introduction of numerically controlled machine tools has not only greatly reduced the time
in both preparing and handling the material but has also made an important contribution to achieving
higher quality. The shot blasting of steel sections and the process of painting can now be carried out
automatically, while sawing and drilling operations have also been automated. In the most modern plants,
conveyor systems are available which transfer material from machine to machine.

A good example of a piece of modern fabrication equipment is the numerically controlled plant for flame
cutting castellated sections. Such equipment offers substantial improvements in quality and productivity
compared to traditional equipment, see Slide 17.
 Slide 17 : Numerically controlled cutting of castellated beams

3. ADVANTAGES OF STEEL

3.1 Speed of Execution

There is increasing pressure on all civil and structural engineering projects to reduce the periods of
execution. Nowhere has this had a more dramatic impact on methods of execution than in the
streamlining and simplification of a modern composite building.

Much execution is now by management contract in which the conventionally sequential activities of
design, substructures execution, superstructure execution, envelope execution and finishing are
overlapped to reduce the overall contract period. The contractor becomes a member of the design team at
an early stage. In many cases the client becomes involved in the buildability of the project which is
divided into self-contained work packages.

Structural steel - fast, accurate, prefabricated - lends itself naturally to fast track execution. Key elements
are metal deck for shuttering and reinforcement; through-deck stud welding for composite and diaphragm
action and lightweight fire protection, Slide 18.
 Slide 18 : Structural steel in fast track construction

Metal deck is easily hoisted in bundles and laid out by hand (Slide 19). Edge trims are available to level
concrete and prevent over-run (Slide 20). The shear studs which provide the key between beam, deck and
concrete can be placed by a single operative at 1000 per day (Slide 21).

Slide 19 : Metal decking ready to be laid by hand

 Slide 20 : Edge trims for metal deck floor construction

Slide 21 : Fixing shear studs

Concrete is placed by pumping (Slide 22). Services are easily fixed to the underside of the decking (Slide
23). Prefabricated stairs can be transported by crane and placed in position to give rapid and safe access
for construction workers (Slide 24). Cladding units - pre-cast granite faced or curtain walling -can be
lifted straight from the lorry and into position to avoid site storage (Slide 25).
 Slide 22 : Concrete being placed by pumping

Slide 23 : Services fixed to underside of decking

Slide 24 : Pre-fabricated stairs
 Slide 25 : Curtain walling

Steel frames with both metal deck and pre-cast concrete planks permit sequential execution with
following trades able to proceed in safety and with protection from the weather.

Traditionally, the greatest disincentives to the use of steel for multi-storey frames were the additional
costs and time for fire protection (Slide 26). However, the use of new, lower-cost, lightweight board and
spray systems have now largely replaced in-situ concrete encasement. Fire protection costs have thereby
been halved and the implications on execution programmes reduced substantially. (The programme
savings outlined above include the fire protection systems).
 Slide 26 : Breakdown of steelwork construction costs

In many cases the benefits of faster speed of execution can be translated into substantial financial savings
for the client. These savings are particularly significant in situations where he has made substantial initial
investment in acquiring the site. Slide 27 shows the execution programme achieved at the Finsbury
Avenue Project in London. This programme represented a 40 week saving over conventional construction
in in-situ concrete. While, for a typical building the costs of the two solutions are similar, at around 900
ecu/m2 at 1990 prices, studies of London development costs suggest time-related savings of up to 7 mecu
per week (for the whole building) for earlier completion in a buoyant letting market, potentially dwarfing
the total cost of the structure.

Slide 27 : Construction programme for No. 1 Finsbury Avenue, London (1985)

3.2 Lightness, Stiffness and Strength

Steel structures are generally lighter than those in other materials. In almost all cases this lower weight
leads to lower costs for foundations particularly for sites with poor ground. Smaller columns increase
effective floor utilisation and, where longer spans are required, the cost savings between steel and other
forms of construction increase considerably. For large column grids in buildings, steel is the only feasible
solution.

For multi-storey commercial offices a number of new design approaches are being introduced to achieve
clear spans of 12-18m or more (slides 28 and 29) . These approaches include composite universal beam
and lattice girder arrangements; parallel beam approaches; tapered, haunched and notched beam and
storey deep construction, Slide 30. These schemes can increase spans in office buildings with only a small
increase, in many cases less than 15%, in structural costs. Since the structural cost is only a small
proportion (< 20%) of the total development cost, clear span offices can be achieved for less than 3% of
total development cost. This cost is a very small premium to pay for the increased flexibility in usage that
results. Office activities are changing rapidly, following the high rate of change of information
technology; one can only speculate on the requirements 30 years from now, well within the life of the
structure. Clear, column-free space offers the best opportunity of being able to adapt a building to these
changing needs.

Slide 28 : Long span floor systems for office buildings - alternative solutions
 Slide 29 : Long span floor systems for office buildings

Slide 30 : Long span floor systems for office buildings

For bridges, the strength and toughness of steel have led to the elegant solution of cable stayed and
suspension bridges and the tight tracery of modern truss bridges, Slides 31-33. Similar design concepts
have led to the development of striking structural solutions for long span roofs.

Slide 31 : Kohlbrand Bridge, Hamburg, Germany

 Slide 32 : Humber Suspension Bridge, UK (1982)

Slide 33 : Tonegawa Bridge, Saitama Prefecture, Japan

In other contexts triangulated structures have been refined and lightened to the extent that they become
sculptures, Slide 34.
 Slide 34 : Telecommunications mast, Barcelona, Spain

3.3 Adaptability of Usage of Steel Frames for Refurbishment

Structural steel provides maximum adaptability for changes in building use, because structural alterations
can be accommodated with relative ease. Where additional members are required, connections can be
made to the existing frame with minimum disturbance and cost. It is for this reason that steel frames have
been so popular with leading retail and industrial groups.

The importance of adaptability in use is also demonstrated by considering the widely differing life spans
of the components of a modern office building, Slide 35. The benefits of longer spans in this context have
already been discussed in the previous Section. It is likely that some part of the long-life structure is going
to require modification to accommodate some radical change in information systems or services.
 Slide 35 : Differing life spans of building components

The attribute of adaptability is of particular importance in refurbishment contracts, whether it is a case of

strengthening existing structures or complete re-construction behind retained facades (Slides 36 and 37).
Steel is delivered to site pre-fabricated; it does not need propping once in position nor does it suffer from
shrinkage or creep. It can therefore take load immediately. When it is chosen for the structure behind a
retained facade, the frame can be inserted through pockets cut in the structure. Modern techniques like
metal deck floors can be used with advantage in accommodating irregular floor plans and extensive
services can be installed, just as in a new building.
 Slide 36 : Strengthening existing concrete floors

Slide 37 : Reconstruction behind retained facades

Steel's adaptability can also be put to good use in bridges. The main towers of the Severn suspension
bridge, Slide 38, were strengthened to absorb a doubling of traffic loading since the structure was initially
designed 40 years ago.

Slide 38 : The Severn Bridge after completion of major strengthening

3.4 Quality

Employment patterns in construction have recently changed considerably. Most site work is now carried
out by small, labour-only subcontractors. These companies have little long-term involvement in the
construction sector and are too informal to make any investment in training. The striving for further
economy has reduced the overall level of site supervision.

In this environment it is difficult to maintain the quality of on-site construction. However, a steel frame is
a factory made, precise product, produced by a stable, well-trained workforce. Only the erection of pre-
fabricated members is left for the site - a process which is easily controlled.

4. THE FUTURE FOR STEEL: FURTHER DEVELOPMENTS

The previous section has drawn attention to the inherent advantages of steel and the way in which recent
developments are strengthening those advantages. It is remarkable that a material that is 100 years old
should still be capable of such worthwhile development. It is more remarkable still that the rate of
development in many sectors appears to be increasing. Development is in response to the greater rate of
change of society's demands of its built environment and the greater willingness of an increasingly
competitive commercial industry to respond to the needs of society and its customers.

It is possible to speculate on some of the directions that further development might take.

 Quality Assured and Quality Controlled production methods will give cheaper and better results
with less time consuming repairs.
 An increasing role for computers will lead to a greater refinement of design both to minimise
fabrication and construction costs (for everyday structures) and to permit the more adventurous
use of steel (for monumental structures).
 Developments in steel production. At present very high strength steels (fy>500 N/mm2) carry a
substantial price premium. However further developments in on-line thermo-mechanical
treatment are likely to reduce this premium considerably. As the price of high strength steel drops
so designers will become more adventurous in using their full potential. This will tax engineers'
ingenuity to the full because the stiffness of steel (modulus of elasticity) does not vary with
strength. Structural forms with greater inherent stiffness will have to be developed if these higher
strengths are to be mobilised.
 Greater range of sections and products. Modern rolling techniques, for both hot and cold
products, are increasing in flexibility of use. Thus a greater range of sections will be made
available to the designer, a further spur to him to use his ingenuity for greater structural
efficiency.
 Fire and corrosion resistance. As techniques for fire and corrosion resistance improve further,
designers will have a greater opportunity to express the steelwork leading to more elegant and
exciting structures.
 The environment. As society pays greater attention to environmental issues, its demands for
buildings will evolve. Insulation standards will rise requiring more attention to details of
construction. There will be increasing usage of demountable, recyclable buildings and
components, for which steel is eminently suitable.

5. THE FUTURE FOR STEEL: TRAINING AND ESDEP

It is clear from the foregoing that the demands on engineers' skills and knowledge are going to increase
for the foreseeable future. Within the context of an increasing rate of change, society will demand an
increasing standard from its built environment. Both initial technical education and in-career training are
going to become even more important than they are today.

The greatest training resources for steel in Europe are in its widely distributed network of technical skills.
A particular strength of the steel construction industry is the existence of an infrastructure of specialist
personnel who have learnt to work together through the media of both the ECCS technical committees
and the drafting committees of Eurocode 3 and Eurocode 4.

ESDEP, the European Steel Design Education Programme, was established in 1988 to draw on both
resources to prepare a comprehensive set of teaching aids on steel design and construction. It comprises
nineteen working groups with an appropriate supporting network of steering committees. Over 200
specialists from all countries of the European Community and the European Free Trade Association have
contributed to the project, Slides 39 and 40 summarise how the project was managed and the distribution
of contributors and working groups. The projects was sponsored by the European Commission and the
steel industry from every country in both the EC and EFTA. Steelwork designers and constructors who
will benefit from the improved quality and performance of the industry, have much cause for gratitude for
their farsightedness.

Slide 39 : ESDEP: Distribution of working groups throughout Europe

 Slide 40 : ESDEP: Distribution of contractors throughout Europe

6. CONCLUDING SUMMARY

 Steel is a modern material, produced in large quantity with high and reliable quality.
 Steel is available in a wide range of hot and cold rolled products, as plates and profiles.
 Steel is easily manufactured into end products.
 Most of this manufacture takes place in quality controlled workshops.
 Site connections can easily be made and can carry load immediately.
 Given good corrosion protection and maintenance, steel has an indefinite life.
 Erection on site can take place quickly with little risk of delay.
 Steel structures are light and strong and only require simple foundations.
 Existing steel structures can easily be adapted to new demands.
 Quality Control and Quality Assurance will give a further guarantee of the economic application
of steel structures.

7. REFERENCES

[1] Eurocode 1: "Basis of Design and Actions on Structures", CEN (in preparation)

[2] Eurocode 3: "Design of Steel Structures": ENV 1993-1-1: Part 1.1: General Rules and Rules for
Buildings, CEN Brussels, 1992.

[3] Eurocode 4: "Design of Composite Steel and Concrete Structures": ENV 1994-1-1: Part 1: General
Rules and Rules for Buildings, CEN (in press).

[4] Eurocode 8: "Earthquake Resistant Design of Structures" CEN (in preparation)

Lecture 1A.2: Steelmaking and Steel

Products
OBJECTIVE/SCOPE

To introduce the history of steelmaking and steelmaking today. To describe how steel is produced and the
standardisation of steel products. To summarise the consumption of steel in building and civil engineering
worldwide.

PREREQUISITES

Lecture 1A.1: Introduction to Steel's Role in Construction in Europe

RELATED LECTURES

Lecture 1A.3: Introduction to Structural Steel Costs

Lecture 1A.4: The European Building Market

SUMMARY

The history of steelmaking is introduced and the developments described which have led to modern steel
production. The essentials of modern production are summarised.

World production of steel is described and the European standardisation of steel products (Euronorms) is
introduced. The use of steel in civil engineering and building in the different regions of the world is
discussed.

1. A BRIEF HISTORICAL ACCOUNT OF STEELMAKING

Of the construction materials in common use, steel is the one which offers the greatest load resistance for
the smallest section. It is primarily an alloy of iron and carbon.

The production of industrial steel is relatively recent, dating back only one hundred and twenty years or
so. However, ferrous metals, of which the main component is iron, have been known since antiquity. The
first examples were of iron found in its natural state in Sumer, capital of the ancient Babylonian
civilization. The first proof of actual production of iron goes back to the Chalybes, a tribe living on the
South Coast of the Black Sea around the XVIIth Century BC.

The use of iron spread into Europe and Asia, but it was only in the Middle Ages that any significant
improvements in manufacturing can be noted with the introduction of tuyeres, which blew air from
bellows powered by hydraulic energy. Before the discovery of steel, iron was frequently used in the
construction of buildings, bridges, railway stations, etc. In the year 1855 an Englishman by the name of
Bessemer improved the process of purifying pig iron by blowing air in at great pressure. Over the next 25
years, a Frenchman Emile Martin then two Englishmen, Thomas and Gilchrist, introduced further
improvements which allowed us to make the transition from iron to the modern period of steel.

At the beginning of the 20th century, the use of iron in construction was prohibited; in accordance with
the new regulations only steel could be used. Nevertheless, to this day there exist numerous structures
made of iron which are still in service. Renovation of structures built in the second half of the 19th
century is to be expected. The most important question to address is whether the structural material is iron
or steel. In order to answer this, a sample must be taken and laboratory tests performed in order to
determine the mechanical and chemical properties of the metal. These results will enable us to define the
techniques which need to be adopted, particularly in relation to welding.

Further developments in substituting coal and subsequently coke for charcoal prepared the way for
industrial steel production which began in the middle of the XIXth century AD.

2. STEELMAKING TODAY (PERFORMANCE AND OUTPUT)

Even though the same principles initially developed over 100 years ago are still used in the majority of
steel production, instruments and techniques have developed considerably:

 in less than a century, blast furnace capacity has been increased by a factor of 100;
 production of 6 to 10 million tonnes per year has become normal for a steelmaking plant;
 some operations, previously independent, are now linked into one uninterrupted operation;
 the intensive use of oxygen was one of the outstanding steps;
 the development of computers has enabled the automation of much of the production and control
equipment.

The developments have resulted in:

 more sophisticated products with better control of grades and qualities;

 a notable improvement in productivity: 4 hours to produce a tonne of crude steel today, compared
to 9,8 hours 15 years ago;
 a nearly constant price over a long period of years;
 pure and better weldable materials (no preheating);
 quenched and tempered steels with higher strengths;
 higher impact values and better LOD tests (for offshore structures).
 an ability to respond to the changing needs of customers;
 better management of products and flow of stock;
 improvements, through the creation of new jobs, in the qualifications of people working in the
steelmaking industry. Technical skills have taken over from physical effort. One of the results has
been to provide a smaller but more stable workforce and therefore reduced production costs. The
cutbacks in the workforce amounted to about one third in 14 years (Figure 1);
 provision of a wide range of specifically dimensioned products for construction, with thicknesses
ranging from 0,7 mm to 150 mm; increased lengths and weights of long products; with maximum
imperfections (out-of-straightness) of 7 mm/m.
These factors have made it possible to simplify construction thus reducing fabrication, joining and
assembly costs whilst at the same time enabling improvements in aesthetic appearance.

For example in bridge construction, the main beam of a bridge made 100 years ago consisted of a riveted
combination of flats and universal sections. Today, a single plate with a variable thickness permits the
optimisation of the section and hence a saving in weight and manufacturing costs. In addition the
maintenance of the bridge is reduced since surfaces are smooth and encourage the rapid dispersal of
water.

All of these factors have made it possible to maintain competitive prices and provide the quality
demanded by users.

3. STEELMAKING IN THE WORLD AND IN EUROPE

3.1 Production

3.1.1 World production

In 1989, world crude steel output was approximately 784 million tonnes.

Note: "Crude steel" refer to products which appear either in a liquid form (ready to cast) or in the form of
solid ingots (obtained by liquid steel cast into a mould to be processed later on).

The world steel producers are found geographically as follows (Figure 2):

Far East: Japan (108 MT) - China (61 MT) - South

191 MT 24,5%
Korea (22 MT)
Former USSR 161 MT 20,0%
EEC12 140 MT 18,0%
USA 89 MT 11,5%
Other countries 203 MT 26,0%
Total 784 MT

The graph of world raw steel production reflects the development of the world economy (Figure 3).

3.1.2 International trade

In 1988, more than a fifth of the steel produced in the world (167MT out of 780) was involved in
international trade. Because of its high specific value i.e., the ratio between the price per ton and the
density, steel is a product that "travels" more easily than other materials such as aluminium, wood,
cement or glass. Nevertheless, most international steel trade is over short and middle distances, and
seldom over long distances. Exchanges are essentially intra-community exchanges - 41 MT out of the
above-mentioned 167 MT were exchanged between the different EEC countries and, on a larger scale, 83
MT between continental European countries. Moreover, 23 MT of steel were exchanged between Asia
and Australasia.
3.2 Consumption

The growth of apparent raw steel consumption shows that the need for steel is rising in the world (Figure
4).

Improvements in the making of steel and its intrinsic properties have led to a decrease in its specific
consumption, i.e. the weight of steel used for a specific purpose. Although Figure 4 indicates only a slow
increase in raw steel consumption, greater use occurs because the improved quality of products, reduces
the weight of steel in them.

Global changes in the world economy, the possible growth of steel needs, the developing areas and the
arrival of "new" producers are all factors that influence the economy of the steel industry.

Certain patterns of production have gradually appeared:

 Developing countries disposing of raw materials, make and export semi-finished products and
simple products for direct use, such as rebars.
 Industrialized countries concentrate on the production of more sophisticated products with a
higher added value due to their appearance (for example coated sheets) or their composition (for
example stainless steel).

3.3 Steelmaking and the Environment

The environmental nuisance created by the steel industry has been considerably reduced. Considerable
investment has been made in connection with environmental factors:

 industrial waters are recycled;

 air is filtered;
 gases are used as an energy source;
 slag is used for substructure construction;
 scrap steel is reprocessed.

4. HOW IS STEEL PRODUCED?

4.1 General

The basis for industrial production of steel is pig iron, and although the fundamentals of the production
method are largely unchanged, instruments and techniques of production have been greatly improved.

There are several types of steel. Depending on whether the metal will be used, for example, in building,
electronics, automobile or packaging industries, it will require suitable physical, chemical and mechanical
properties for that purpose. These properties are obtained through:

 the adjustment of the carbon content: the lower it is, the more malleable the steel is; the higher it
is, the more resistant and harder the steel is (the hardening or "mildening" can also be adjusted
using some additional elements).

4.2 Steelmaking

Iron is, as a chemical element (Fe), the main constituent of pig iron (96% iron and 3-4% carbon). It
provides the basis for the refining of steel.

Iron, pig iron and steel are three manufactured products that appeared in this order in the history of
materials. They represent different chemical combinations of iron and carbon. The carbon content
determines the nature of very different products:

 Iron: minute carbon content. As a soft and malleable material it is the ancestor of "mild" steel
(today: "low-carbon steel"). It was formed initially by forging and then later by rolling.
 Pig iron: high carbon content (from 2 to 5-6%). There are several qualities of pig iron, from "hard
and resistant" to "malleable and ductile". It is formed by casting.
 Steel: carbon content from about 0,03% to 2% maximum. It is malleable and resistant. It is
formed, in its solid state, by rolling (squeezing between two cylinders in order to make it thinner
and stretch it) or forging.

There are three steps in the steelmaking process:

1. From raw materials to liquid steel

aim: to adjust the chemical content of the steel

two processes: "integrated" steelmaking

"electric" steelmaking.
 2. From liquid steel to semi-finished products

aim: to solidify the steel into blanks

two processes: continuous casting

ingot casting.

3. From semi-finished products to finished products

aim: to shape and size through rolling, and finish for sale.
two groups of long products (beams, bars, wire)
products:
flat products (plate, sheet, coil).

Note: Not all steels are formed by rolling; they may also be forged, cast or manufactured from alloy
powders.

The process is described in Lecture 2.2.

5. EUROPEAN STANDARDIZATION OF STEEL PRODUCTS

5.1 Standardization Process

Steel products have been standardized in order to ensure a common language between producers and
customers of steel products. Since the beginning of the XXth century, countries have developed their own
standards defining and classifying steel products. The creation of the EEC has made it necessary to
establish common standards named "European Norms" (EN).

5.1.1 The establishment of European Norms within member states for steel products

The "Commission de Coordination et de Normalisation des Produits Sidérurgiques" COCOR, founded in

1953 to service the European Coal and Steel Community (ECSC), was commissioned to coordinate
standards. Since 1965 COCOR has been placed under the authority of the European Commission and has
published about 175 Euronorms. Each country is free to adopt or not, fully or partially, the Euronorms
and Background Documents.

The completion of the European Single Market scheduled to occur at the end of 1992 has required the
speeding up of standardization. The Commission created and financed, within COCOR, an independent
technical department exclusively devoted to standardization activities: the ECISS (European Committee
for Iron and Steel Standardization). ECISS, with the assistance of Technical Committees (TC), has
developed documents which are submitted to COCOR for approval before being proposed to the CEN
(Comite European de Normalisation) for adoption as Euronorms.
When a Euronorm (EN) is adopted by the CEN members, it must be fully applied as a national norm by
all EEC Countries (even if they voted against it) and by EFTA members which voted for it. The EN, once
adopted, invalidates and replaces the Euronorm and the corresponding national standard.

5.2 Contents of the Euronorms (EN) for Steel

The EN is concerned with the standardization of the manufacture, chemical composition and mechanical
characteristics of steel products. By way of illustration, consider one aspect of these norms, the way steels
are designated.

The specification of steel quality is essentially composed of:

 the norm number;

 the Fe symbol;
 the minimum guaranteed tensile strength expressed in N/mm2.

Example: A hot-rolled non-alloy structural steel (for use in the manufacture of welded or assembled
structural elements to be used at ambient temperatures) is designated:

EN 10 025 S355

The designation may be followed by symbols concerning:

the weldability and guaranteed values of impact energy (B);

the deoxidation method used, if applicable (FU);

the steel's suitability for a particular application, if applicable (KP);

whether the steel is delivered in an effectively normalised condition (N).

The range of symbols is detailed, for this example, in the text of EN 10 025.

The relevant Euronorms and current national equivalents are shown in Table 1.

Table 1 Corresponding Table of Euronorms, ISO Standards and National Standards for EC
Countries

European Euronorm ISO Germany Belgium Denmark Spain France Greece Italy Irela
Standard (I) Standard DIN NBN (2) DS UNE NF UNI
EH (3)
17-1970 8457 TI 59110 = 524 38 089 A 45- 5598
051
18-1979 377 50125 A 03-001 36 300 A 03- UNI-EU
38 400 111 18
19-1957 657/8 1025 T5 533 38 526 A 45- 5398
205
 21-1978 404 17010 A 02-001 38 007 A 03- UNI-EU
500-49 115 21
22-1970 783 50145 A 11-201 7 223 A 03- 3918
351
23-1971 642 50191 A 11-181 7 279 A 04- 3150
303
24-1962 DP 657/10 1025 T1 632-01 38 521 A 45- 5879
1028 36 522 210 5680
10025 (25-1986) 630- 17100 A 21-101 38 080 A 35- 7070
1052 4995 501
27-1974 DIR 4949 147 38 009 A 02- UNI-EU
005 27
28-1985 883/1 17155 / 829 38 A 38- 7070
2604/4 / 830 087/1 205 A
38-208
29-1981 7452 1543 = A 43-101 38 559 A 48- UNI-EU
503 A 29
46-505
30-1969 17100 A 33- 3063
(= EU 25 101
= EU 30)
31-1969 A 43- 7063
301
34-1962 657/13 1025 T2 = 632-02 36 527 A 45- 5397
T3 et T4 36 528 211
36 529
36-1983 437 EU / 271 7 014 A 06- UNI-ISO
301 437

6. STEEL IN CIVIL ENGINEERING AND BUILDING ACTIVITIES

6.1 Steel in Construction

In construction, the penetration of steel in civil engineering and building activities is very variable across
the regions of the world. In 1988 steel consumption in three major regions of the world was as shown in
Table 2.

Table 2 Steel consumption in major regions

(Kt) Kg/inhabitant
 JAPAN 9050/10400(1) 74/85

USA 5200 21

WESTERN EUROPE 5700/6200 17/18

(1) with or without "composite construction"

For each type of work, these consumptions are spread across different types of construction as shown in
Table 3.

Table 3 Steel consumption by type of construction

(% tonnages) JAPAN USA EUROPE

housing 21 4 2

industrial 34 33 58

other buildings 34 45 31

pylons 3 5 5

bridges and hydraulic 8 13 4

engineering

TOTAL 100 100 100

Table 3 shows, for all constructional steelwork, the particular importance of:

 housing in Japan;
 tertiary buildings in the USA;
 industrial buildings in Europe.

There are marked differences between countries in the consumption of constructional steelwork, for
example in Europe in 1988 (Table 4).

Table 4 Consumption of constructional steelwork (1988)

(Kt) Kg/inhabitant

United Kingdom 1227 22

West Germany 1045 16

France 683 15
Italy 570 11

Spain 500 13

Netherlands 727 31

Luxembourg 100 28

Sweden 94 17

Finland 185 25

Switzerland 89 18

Portugal 100 10

Austria 94 11

Norway 80 20

Denmark 73 11

Greece 50 5

Ireland 60 17

Belgium 195 28

estimated TOTAL 5867 17

Source: European Convention for Constructional Steelwork

Several "small" countries have a very high constructional steelwork consumption/ inhabitant
(Netherlands, Belgium, Luxembourg, Finland, Norway). In the United Kingdom, which is the European
country with the largest constructional steelwork industry, the use of steelwork/inhabitant is higher than
in any other major country.

Steel product tonnages of all construction steelwork are globally distributed as follows:

Steel products:

Hot rolled sections H, I, U, L about 60%

Plates about 20%

First processing products:

Coated sheets,
Cold rolled sections, pipes about 20%.

7. CONCLUDING SUMMARY

 Although iron has been in use for a very long time, steel production is relatively recent.
 Developments in production methods have improved both efficiency and quality. Energy
consumption has been reduced and environmental factors improved.
 European Norms are being established to achieve common standards throughout Europe.
 Steel consumption shows some marked difference between individual countries, worldwide and
within Europe.

Lecture 1A.3 : Introduction to Structural Steel Costs

Previous | Next | Contents

ESDEP WG 1A:

STEEL CONSTRUCTION:

ECONOMIC & COMMERCIAL FACTORS

Lecture 1A.3: Introduction to Structural

Steel Costs

OBJECTIVE/SCOPE

To introduce the different factors affecting the cost of a steel construction. To show how the factors are
considered in developing a design taking into account technical and recurrent and environmental costs.

PREREQUISITES

None.

RELATED LECTURES

Lecture 1A.1 : European Construction Industry

Lecture 1B.1 : Process of Design

SUMMARY

Total costs of a steel construction are affected by technical and environmental factors and recurrent costs.
The steel costs, the energy, maintenance, adaptability and end of life costs must all be appreciated from
the very beginning of a project in order to lead to a well designed construction, which meets the
requirements of the client. Different parameters such as speed of construction, or choice of foundations
are studied so that they may be taken into account in the design of the construction and in determining its
cost. Secondary activities such as erection, fabrication and protection against corrosion and fire complete
this analysis.

1. INTRODUCTION

Costs of construction works can be considered in various categories. Technical costs, relating to material
and labour in completing the project, are those which can most easily be quantified. Recurrent costs
should also be considered in studying whole life economics, and again these can be estimated.
Environmental costs are more difficult to establish; there are signs that an environmental audit will
increasingly be required as a part of the consideration given to proposed projects. Environmental aspects
can be considered in terms of local and global effects and include issues such as appearance, safety, local
economics, use of natural resources, and energy consumption.

This lecture concentrates on the technical costs of steel construction. It deals with the topic in a broad
way. Whole life costing is dealt with first before examining the costs of execution, which are concerned
initially with total construction, leading onto structural costs and finally economic considerations applied
to individual activities such as fabrication and erection. This sequence has been chosen deliberately to
emphasise the need to examine overall costs in an integrated manner.

2. LIFE CYCLE COSTS

2.1 Attitude

Traditionally designers have considered only the initial cost of that part of the project for which they are
responsible and have sought the most cost-effective solution for it. There is increasing recognition that the
sum of optimum cost components do not necessarily lead to the most economic solution overall.
However, there is still relatively little regard given to whole life costs. This is in marked contrast to the
consideration given to running costs when purchasing a new car, for instance. Then fuel consumption,
likely service costs, repair costs and depreciation are often carefully accounted for alongside initial price,
when making cost comparisons between different models.

2.2 Cost Elements

Initial costs of execution, including the fabric, structure, foundations and services, are an important and
immediate consideration. In addition to these items, the need to finance the construction, and the
associated costs, should be quantified and included as part of the debate on the form of the design. The
way in which the cost of finance influences the project is discussed in more detail in Section 3.2. In some
cases, it might be a major factor.

Other recurrent costs, which should be considered in the overall economic discussions surrounding a
proposed project, include maintenance, future alterations and running costs associated with environmental
control of building interiors (heating, ventilation and lighting). Another factor which should be considered
is the likely benefit or financial return. For instance, projected traffic density will clearly be an important
influence on required highway bridge capacity, whilst clearer floor areas and greater flexibility in the use
of floor space may attract higher revenue in commercial developments. These factors are discussed in
more detail in Section 2.6.
2.3 Energy Costs

Energy costs for lighting, heating and ventilation remain a significant recurrent cost item. For buildings,
initial expenditure related to energy requirements is concerned with such aspects as the balance of
provision of natural and artificial lighting, and the heating/ventilation requirements, which are clearly
affected by the insulation specification for the external skin.

Artificial lighting represents a surprisingly high proportion of energy consumption in commercial and
residential buildings. Adequate provision of windows and rooflights can therefore mean significant long-
term savings. These provisions need to be assessed against higher initial expenditure, and secondary
considerations, such as security. Heat gain and glare are two potential problems which should also be
considered since they may effectively neutralise any potential savings.

Space heating and ventilation are both related to insulation levels and the volume of air to be treated. One
of the reasons why low-pitch portal frames have become more popular than the traditional column and
truss construction for industrial applications is that the enclosed building volume is reduced and includes
very little wasted space.

2.4 Maintenance

All structures (buildings, bridges and others) should be inspected and maintained on a regular basis. There
is often a trade-off between costs associated with these activities and initial costs. Areas which are
difficult or impossible to inspect need careful treatment. In many cases there is a trade-off between capital
expenditure and life expectancy/maintenance requirements.

For steels, corrosion and its prevention is a major concern. Cost factors associated with corrosion
prevention relate to exposure conditions, planned inspection and maintenance, design detailing, the
protection specification, and the quality of the first application.

Good detailing in fact has very little cost implication and is an important part of all designs. For instance,
arrangements which allow water to collect should be avoided and inaccessible areas sealed (Figure 1).
The specification for the corrosion protection system should be appropriate to the exposure conditions
expected. Although some extremely good systems are now available, there is little point in using such
systems where corrosion risks are low. This point is discussed in more detail in Section 4.3.

2.5 ADAPTABILITY
Although it is not always possible to predict future client requirements, alterations and extensions to
projects are often carried out subsequent to the initial development. Such projects can be
disproportionately expensive. Specific provision for future alterations can only be made if details are
known at the outset, but significant savings are possible if the original design takes account of possible
changes. Although the initial development costs may be marginally increased, long-term costs overall can
be reduced.

The building life is always longer than the life expectancy of services, so the construction should be able
to accommodate likely changes in use. This capability can be provided by adopting a "loose fit" approach,
giving additional space without disproportionate increase in cost.

Shell and core construction, in which the building consists of the structure and major services only, with
the more specific services for floors installed by the tenant, is becoming increasingly popular for
speculative commercial developments. In such cases there is an even clearer need for a "loose fit"
approach from the outset.

It is very common for the use of building to change. Change of use may require upgrading floor loadings,
modifications to floor layouts, installation of new lifts, or extending the structure to provide more usable
space. Allowing for such developments in the original design could lead to significant subsequent
savings.

Steel structures can be adapted or extended without great difficulty. The potential exists for making
connections to the existing frame, and the strength of the existing structure, and any new attachments to it,
can be determined with confidence. Nevertheless, where future changes are envisaged, it is often more
efficient to provide for these at the outset. Where future extension is planned, simple modifications to the
fabrication details and appropriate sizing of critical members for the new conditions should be
incorporated. For instance, pre-drilling of steelwork for new connections at the interface with the possible
extension and sizing columns for increased loads facilitates later construction.

If unforeseen changes arise, it is not difficult to strengthen individual beams and columns, for instance, by
attaching flange plates to the existing section. Strengthening connections is very much less simple, and
some designers therefore overspecify the shear capacity for connections to minimise the need for
strengthening in subsequent alterations.

2.6 Benefits and Financial Return

Costs should not be considered in isolation but set against perceived benefit. The benefit may be clearly
quantifiable in terms of rental income or relate to the provision of additional facilities. In either case
usable floor area is a key factor. This might suggest fewer, smaller columns, and should certainly
encourage the designer to avoid unusable space, for instance between columns and adjacent perimeter
walls. Minimising the thickness of partition walls and the external skin may also yield an increased floor
area, but their performance should not be compromised in doing so.

2.7 End of Life Costs

For many structures there comes a time when demolition is necessary. The cost associated with this
activity can be offset by income from the sale of recyclable materials. For steel structures the material can
be re-used either as scrap in the manufacture of liquid steel or as secondhand products which can be re-
used in new structures. The nature of steel construction lends itself to dismantling rather than demolition.
Some structures take this principle further and are designed as demountable. Such structures are generally
for short-term use such as exhibition facilities, temporary car parks and highway crossings. With careful
design the complete structure can be dismantled and erected elsewhere.

3. TOTAL CONSTRUCTION

Total building cost is a complex issue due to the interaction of various elements. Usually the best design
of one aspect (e.g. structure) conflicts with others (e.g. services or cladding). It is not, therefore, simply a
case of optimising each to achieve an optimum solution for the whole building, but rather the costings
should be examined in an integrated, holistic manner.

Buildability is also important. It is concerned not simply with the development of new details or erection
systems which might facilitate work on site, but with an understanding of how design and construction
can be dealt with in an integrated fashion to produce a building which is simple, quick and cost-effective
to execute and maintain. This approach involves harmonisation of structural, service and planning grids.

At a more detailed level, standardisation, particularly of connection and fixing details, can lead to
significant economies, even if it implies some apparent wastage of materials. Co-ordination between
different elements, such as cladding and structure, achieved by simplicity of the interfaces between them,
is particularly important. Non-typical areas such as corner panels for cladding and edge details for floors
need special consideration. All too often these areas are ignored until execution is well under way and last
minute solutions can be both inelegant and costly.

Bridges and other structures are much less sensitive than buildings to interactions between structural and
non-structural components. However, for offshore structures for instance, aspects such as appropriate
construction sites and transparency of the structure to wave loadings, installation procedures and fitting
out all influence the total costing.

3.1 Typical Breakdown of Costs and Interactions

An important cost element in a steel framed building is that of the frame itself. Other major items include
foundations, flooring, cladding/external finishes and services. The relative contributions of these items
vary considerably from one project to another, but typical cost proportions are 9% for the steel frame
compared with 25-35% each for cladding and services. Land prices can sometimes be as high as the direct
costs of the construction, in which case speed of execution becomes a predominant factor as discussed in
Section 3.2.

For multi-storey buildings, the importance of lateral bracing becomes a primary consideration. For low-
rise construction, a rigid jointed frame is often an economic solution, but as overall height increases, this
system becomes too flexible. Cross-bracing or shear walls might then be preferred, despite possible
restrictions on internal planning imposed by the location of the bracing. With greater building heights,
more sophisticated lateral bracing systems become necessary. These systems include derivatives of both
rigid frames and cross-bracing such as outrigger trusses, braced tubes and facade frames. Some of these
systems are shown in Figure 5 which includes indications of their appropriate ranges of use.
A similar discussion of the use of rigid and simple frames can be held in relation to gravity loads. The
effect of rigid frame action is typically to reduce beam sizes but increase column sections. In general,
whilst the total weight of steel is less in rigid construction, savings are often more than offset by the
increased complexity of the connections. However there may be other considerations - reduced structural
depth, the undesirability of bracing (if rigid frame action is not used to provide lateral stability) and
reduced deflections resulting from improved stiffness. For longer spans, material savings for rigid
construction are likely to be greater. Not only does the increased rigidity become more important in
controlling deflections, but the relative saving in steel weight of beams compared with the increased
weight of columns becomes more significant.

Important advantages of steel construction are speed of execution, prefabrication and lightness. To
maximise the advantages the concepts must be followed through in the design of the building as a whole,
including cladding, finishes and services. For example the use of smaller foundations can only be
achieved if the lightness of the structure is reflected in appropriate design of other building components.
This example again emphasises the need for co-ordinating the design of services, cladding and structure
and associated with this approach, the discipline of producing the final design at an early stage.

This approach also implies that the steelwork contractor should be involved at the earliest opportunity as
part of the project team and it also places additional responsibilities on other members of that team to
avoid late changes.

3.2 Speed of Execution

The costs of financing a project may be a major consideration. High land prices and staged payments to
the contractor mean that the client may have to sustain a high borrowing requirement throughout the
period of execution without any return in terms of either rental income or use of the building. With high
interest rates the borrowing requirement can represent a major element in the total project cost and, under
these circumstances, the speed with which the project can be completed becomes an extremely important
factor.

The importance of speed has been highlighted in a comparison of costs for typical 3, 7, and 10-storey
office buildings using three different building systems (steel frame and precast concrete floor, steel frame
and composite floor, and in-situ reinforced concrete). Construction programmes and cost estimates
prepared independently for each building clearly showed the importance of execution time. The study
also demonstrated the benefits of steel deck composite flooring in avoiding the need for temporary
propping or scaffolding, the advantages of simplicity, and the need to ensure that various trades are able
to complete work at one level in a single operation. Providing access by programming staircases to rise
with the frame and installing floors as quickly as possible after the frame also streamlines site work.

The trend towards greater prefabrication and sub-assembly with reduced site work has spread from simply
the steel frame to include other elements such as cladding panels and accommodation modules.
Prefabrication all helps to save execution time but it places more pressure on the design phase. It also
improves quality, reduces reliance on a skilled, mobile workforce, and enables deficiencies to be rectified
more easily than on site. Precommissioning should also produce a greater awareness of, and provision for,
future maintenance requirements.

Late changes and traditional reliance on resolving problems on site may be suitable for insitu
construction. However, more emphasis on prefabrication in modern construction means that the site
becomes an assembly shop where the components must fit first time if expensive delays and corrections
are to be avoided.

Fast build rather than fast track is perhaps the optimum solution. In the latter the construction programme
overlaps with the design phase, implying incomplete information. In contrast fast build construction does
not start until all design is complete, and embodies the best features of efficient building.

3.3 Weather

Any construction can be affected by adverse weather. Execution programmes and methods themselves are
generally organised with this in mind. For instance when industrial sheds are built it is normal practice to
complete the frame and envelope at the earliest opportunity, with the concrete ground slabs subsequently
being cast within a relatively controlled and sheltered environment. Multi-storey construction utilising
composite floor decks offers similar advantages of rapid isolation from the worst effects of adverse
weather.

Some building systems have been developed on the basis of providing a dry envelope for the work of
execution.

3.4 Services, Cladding and Structure

The greatest cost interactions between building components are probably those between structure, main
services and cladding. The total floor depth includes the structure (slab and beam) and services. The
greater this depth the greater will be the total height of the building, increasing the area of cladding. Even
for simple enclosure systems, increased costs will result. For sophisticated curtain walling systems these
increases could be very high. In extreme cases, where planning constraints are particularly severe with
regard to total building height, it is possible that the selection of a shallow floor zone could result in the
inclusion of an additional storey compared with the case for a deeper floor construction depth.

Smaller scale services (electrics, telecommunication wiring) can be accommodated within raised floors,
or in trunking set in the screed or within the structural concrete slab. They have little implication for the
structure. Large ducted air conditioning systems involve greatest interaction. Here the objective is to
produce an efficient floor structure, which can accommodate the required size of ducts (including cross-
overs), and which also allows the addition or increase of sizes as servicing needs change.

Possible strategic solutions are separation or integration. Separation gives greatest flexibility and
provision for future changes. Allowing the services to pass through the structure may result in some
savings in overall construction depth but installation may be difficult and cause possible damage to paint
and fire protection; future changes may also be limited.

Structural forms to facilitate accommodation of services relate particularly to different arrangements of

beams. There is generally much more space available between beams where only slab depth contributes to
construction depth. Possible solutions (Figure 2) include standard I beams, castellated beams (which,
although deeper, provide limited opportunity for accommodating service ducts), trusses and stub girders
(both deeper again but with greater provision for ductwork). The parallel beam arrangement, which
separates on two levels both structure and service runs in two directions, has proved to be a successful
solution for a number of projects (Figure 3). Other possibilities include various forms of tapered and
haunched beams, used to optimise overall depth and structural efficiency, but at the expense of greater
fabrication costs (Figure 4).
3.5 Foundations

Foundation costs are an important factor in the overall economics of building construction. For small
scale buildings on sites with good foundation conditions, simple foundation solutions are likely to be
suitable. Where foundation loads are high and/or foundation conditions are poor, more sophisticated and
expensive solutions such as piling may be necessary, Figure 6. In such circumstances the weight of the
superstructure may be critical and suggest a lighter, possibly less efficient form. For instance closely
spaced beams to reduce the thickness of floor slabs, which might themselves be constructed using
lightweight concrete can reduce foundation loads considerably. Steel as a structural material is also lighter
than other structural materials for a given load resistance.
4. STEELWORK COSTS

At a more detailed level the economics of steelwork construction can be affected by decisions regarding
the precise form of element, type of steel used and the method of connection. Some of these decisions are
influenced by the purchase route for the steel itself. For large projects, steel can be purchased directly
from the mill in the exact lengths required and in the desired grade. The price of individual structural
products varies not only with type (hollow sections are generally more expensive than open sections such
as I-beams and H-columns) but also within a product range, with little apparent rationale behind the
pricing policy. Thus selecting a section of minimum weight does not guarantee an optimum solution in
terms of cost, even for an individual element. Specifiers should therefore be aware of pricing policies.
Small orders cannot be processed in this way and the steel is then purchased from stockholders. In this
case the steel is only available in a limited range of grades, (probably only mild steel) and a premium is
payable to the stockholder. In addition certain sizes of standard section may not be stocked and the
sections will only be available in a limited range of lengths.

These considerations clearly have important implications for the specifier.

Where higher grades of steel are available they may offer the opportunity for improved efficiency. For
instance, high yield steel has a yield strength approximately 25% higher than normal mild steel yet costs
only about 10% more. However, where strength is not a critical design condition, for instance in the case
of very long span beams where deflection control may be dominant, the use of high grade steel may
simply be wasteful.

A breakdown of costs for structural steelwork in a multi-storey building might typically be as follows:

steel 47%
corrosion protection 5%
fabrication 22%
erection 8%
fire protection 18%

Clearly optimising the cost of the steelwork (within an optimum solution for structure and construction as
a whole) is dependent on minimising the total cost of these contributory elements, rather than optimising
each independently. A balance is needed between structural efficiency, simplicity of construction and
building use.

It is clear that there is more potential for reducing costs in fabrication and erection than in the steel itself.
In this respect, work on site is of most importance - easier assembly is likely to lead to overall economy.
Transport is also important, not as a cost item in itself but as an aid to more efficient erection.

4.1 Erection

Because erection is carried out in the open, often under difficult conditions, and it is the essential interface
with other construction trades, it is in many ways the most important part of the design and execution
process for a steel structure. Problems at this stage can be costly to rectify and involve long delays to the
programme. Apparently trivial issues, such as steelwork delivered out of sequence, lack of bolts or
fittings, long lead times for minor additional items, extensive double handling of materials and misfit of
members, can cause significant reductions in construction efficiency.

Much depends on good planning. Preparation of an erection scheme should be made on receipt of first
construction issue drawings prior to detailed drawing office work by the fabricator. At this stage items for
delivery as sub-assemblies can be identified and the need for temporary bracing assessed. Attachments for
bracing should be incorporated within initial fabrication drawings to avoid double handling of both
drawings and materials.

The need for safe access for erectors must be recognised. Time can be saved and material re-used if
temporary stagings are pre-engineered and delivered with steelwork rather than relying on makeshift
methods on site.
Loose temporary landing cleats under major beams and girders, shop-bolted to columns greatly facilitate
erection. Erection drawings should be clear, unambiguous and complete, including on a single drawing all
details such as bolt sizes, weights of members, presence of fittings, etc.

4.2 Fabrication

The size of individual components is limited by the lifting capacity of available cranes and transportation.
This applies also to other parts of the construction such as finishes and cladding. Within these constraints
however the general principle is to maximise work at the fabrication stage and minimise work on site,
pre-assembling units in sections which are as large as possible.

Connection design and detailing which standardises details, bolt diameters and lengths (HSFG and 8.8
bolts of same diameter should never be used on the same job) simplifies erection and minimises risk of
error. Although material and fabrication costs may be increased marginally, savings on site far outweigh
such increases. Simplicity and repetition of frame components is related to design; for instance special
fabricated sections such as tapered beams become more economic in larger numbers.

Preferred details should be incorporated to facilitate site erection. For instance fin plates are preferable to
end plates or cleats since they enable beams to be swung directly into position (Figure 7). Moment
connections should be avoided if possible, but where necessary the erector should be consulted with
regard to the preferred type of detail.

A loading schedule should be prepared by the erector showing when steel is to be delivered, how it is to
be bundled, where to be placed on the trailer for optimum off-loading and where to be set down in its
correct location on the building frame. Lack of vigorous production control often requires a buffer store
on site to maintain the erection programme. This procedure is inefficient in terms of storage space,
cranage and multi-handling. Programmed site erection should be the control and 'pull' on fabrication, with
delivery scheduled to accord with the daily erection programme. One of the most notable examples of
erection programming was the construction of the Empire State Building in New York.
There is a clear need for a production engineering philosophy in the design office, factory and on site. For
example, a careful study of the fabrication process can significantly reduce material handling. The
productivity of the most efficient shops is based on a labour content of 2 man hours per tonne for simple
multi-storey construction compared with more than 20 man hours per tonne average for all steelwork.

Some structurally efficient solutions, even based on standard rolled sections, may be less efficient in
terms of fabrication. Column sections with bigger overall dimensions generally have larger radii of
gyration and hence, for a given application, have lower slenderness ratios and higher buckling strength;
they may therefore be lighter in weight than a comparable section of more compact shape. Where these
sections are used as part of a moment resisting frame, however, the reduced flange thickness of the bigger
section may well mean that local stiffening is required, increasing fabrication costs.

Computer controlled cold sawing, punching and drilling machines mean that bolting for low to medium
rise construction is often cheaper than welding which involves more labour, cost and time. This is
particularly so on site where special access, weather protection, inspection and temporary erection
supports are required.

Linking of CAD/CAM and management information systems avoids transcription of information, saving
time and eliminating possible errors.

4.3 Corrosion and Fire Protection

The cost of initial corrosion protection is unlikely to be greatly influenced by the steelwork details,
although maintenance costs and performance can be significantly affected. Appropriate specification of
the corrosion protection system is important. Steel within a heated building is unlikely to need any long
term protection at all, whereas exposed steel or steel within the external envelope may need a high level
of protection. Detailed advice is available. Painting costs are partly dependent on the area to be painted,
whilst galvanising costs are related to the weight of steelwork. The latter therefore becomes a more
attractive alternative for lightweight structures with a large surface area such as trusses and lattice girders.

Regulations relating to fire protection requirements now allow calculation methods to prove reduced or
indeed the elimination of such protection. A range of relatively cheap, lightweight proprietary systems is
also available and, if these systems are adopted, performance, appearance, and wet or dry application
influence the final selection. Some structural solutions such as slimfloor beams offer the potential for
adequate fire resistance without protection. Although the weight of steel is greater than for conventional
systems, the overall effect may be some savings. In addition, slimfloors offer a reduction in structural
depth and are, therefore, attractive in terms of accommodation for services.

5. CONCLUDING SUMMARY

 Costing of construction projects is a complex issue and should include all aspects in an integrated
fashion.
 Evaluation of whole life costs should be encouraged rather than focusing only on initial
construction costs.
 Buildability and good planning are important aspects in minimising costs.
 Efficient integration of structural and non-structural items is dependent on detailed information
being available at an early stage, but is essential if efficient construction is to be achieved.

6. ADDITIONAL READING
 1. British Steel Corrosion Protection Guides.
2. Brett, P. Design of Continuous Composite Beams in Buildings; Parallel Beam Approach. The
Steel Construction Institute, 1989.
3. Owens, G.W. An Evaluation of Different Solutions for Steel Frames, ECCS International
Symposium, "Building in Steel - The Way Ahead", No: 57 September 1989, pp 6/1 - 6/28.
4. Glover, M.J. Buildability and Services Integration, Ibid.
5. Horridge, J.F. and Morris, L.J. Comparative Costs of Single-Storey Steel Framed Buildings, The
Structural Engineer, Vol. 64A, No. 7, July1986, pp. 177-181.
6. Iyengar, H. High Rise Buildings, ECCS International Symposium, "Building in Steel - The Way
Ahead", No: 57 September 1989, pp 1/1 - 1/30.
7. Copeland, B., Glover, M.J., Hart, A., Haryott, R. and Marshall, S. Designing for Steel, Architects
Journal, 24 & 31 August 1983.
8. Hayward, A.C.G. Composite Steel Highway Bridges, Constrado.
9. Customer Led - Construction Led, Steel Construction, Vol 7, No. 1, (BCSA), February 1991.
10. Horridge, J. F. and Morris, L. J., "Comparative Costs of Single Storey Steel Framed Structures",
The Structural Engineer, Vol 64A, No. 7, July 1986.

Lecture 1A.4 : The European Building Market

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Lecture 1A.4: The European Building

Market

OBJECTIVE/SCOPE

To explain both the need and the difficulty of harmonising construction in Europe in accordance with the
Single European Act.

PREREQUISITES

None.

RELATED LECTURES

None.

SUMMARY
Construction in Europe is a complex and important industry. At present legal, regulatory and contractual
frameworks vary significantly throughout the European Community. There are also considerable
differences in procurement methods. The framework and timetable for harmonisation is presented,
highlighting the importance of the Construction Products Directive. The role and development of the
Eurocodes, European Standards and the CE mark are summarised. The future implications and
development of harmonisation are postulated. Annex A provides a summary of current practice in some
Member States.

1. INTRODUCTION

European construction is an extremely complex industry encompassing a wide range of activities and
professions. It is also the largest employer in the European Community, employing 6,6% of the active
population and accounting for 9,1% of gross domestic product (GDP) in 1985, when the last survey was
conducted.

Major groups within the industry include public authorities such as local government or town planning
authorities, and private clients, contractors, specialist sub-contractors, design and technical service
professionals, consultants, building product manufacturers and specialists in the financial sector dealing
with construction and property.

The ways in which these groups operate and the controls and procedures they use vary considerably
throughout the European Community, according to a comprehensive study commissioned by the
Commission of European Communities (CEC) [1]. The study was originally instigated in response to a
resolution calling for the standardisation of contracts and controls in the construction industry and the
harmonisation of responsibility and standards governing after-sales guarantees on housing; subsequently
it was extended to encompass all building construction.

It has been widely recognised that construction presents the greatest challenge to European
harmonisation. The Commission decided to tackle this most difficult task first. Successful harmonisation
of the construction industry would be a major step towards the objectives of the Single European Act,
which calls for a Unified European Market by the end of 1992. A special terminology has developed for
harmonisation. Words are given specific meanings that may have legal significance. For this reason a
glossary of terms is given in Annex A.

2. CURRENT SITUATION

The report of the study examined the Construction Industry across Europe and found that most Member
States were in favour of harmonised controls and procedures [1]. Many also wished to see more precise
definitions of the responsibilities and liabilities of the participating parties.

The report found that there was wide support for more measures to protect the buyer of the final product
through an insurance scheme. This is consistent with the objectives of the Single European Act, which are
not just confined to the establishment of a free market for the trading of goods and services, but also to
improve consumer protection, health, safety and the environment throughout the Community.

Information sheets containing details of the present methods of procurement, form of contracts, controls
and responsibilities used in the various Member States are given in Annex B. For these methods to be
successfully harmonised the report listed 14 "elements" which should be considered in any common
Community rules [1]. These elements included:
 1. Definition of the role of the client and the task of the engineer,
2. Specific liability
3. Insurance (for professional liability)
4. Qualification of contractors,
5. Design codes and specifications
6. External inspections
7. Acceptance criteria
8. Contractual documents
9. Tenders

The Community already recognises the professional qualifications of its members under the Treaty of
Rome. However, there is much diversity between Member States in the length of university courses and
the amount of practical experience required to become a professional engineer. The requirements for
architects, on the other hand, are less diverse and they may be the first profession to be fully harmonised
within the Construction Industry.

3. LEGISLATIVE FRAMEWORK AND TIMETABLE FOR HARMONISATION

The European Parliament is at the top of the legislative framework. It debates all legislation and has the
power to amend or add further details to the proposed action. A typical proposal passes through the
following stages:

1. One of the 25 Directorates General of the Commission (CEC), or a sub-division of it responsible

for the particular area of policy, e.g. DG III responsible for the Internal Market and Industrial
Affairs, will draw up the measures required to implement the proposed action.
2. The Council of Ministers agrees the proposal, often only by a majority vote.
3. The European Parliament debates the proposed legislation.
4. After the inclusion of any amendments or additions resulting from the debate, the Council of
Ministers agrees the legislation.
5. The Commission then implements the legislation through directives, which are then adopted by
each Member State through legislation in their national parliaments and associated regulations,
recommendations, guidelines or standards. This ensures that the autonomy of individual Member
States is not threatened.

The way the Commission implements the removal of technical barriers to trade was dealt with by the
European Parliament under the New Approach or "Nouvelle Approach" Resolution. It was conceived to
accelerate the completion of the Single European Market and consists of a framework of directives that
cover general principles only. This approach allows each Member State the freedom to use their own
design and manufacturing traditions and skills which have often been developed from centuries of use.

The most fundamental directive affecting the Construction Industry is the Construction Products
Directive. It was conceived under the New Approach Resolution and applies to construction products for
permanent use in building or civil engineering works. A product is deemed fit for use and may carry the
CE mark if it complies with the Directive.

The Directive is implemented by relying on the product's conformity with harmonised standards or, in the
absence of such a standard, with European Technical Approvals (ETA) as proof of compliance with its
essential requirements.
The harmonised standards and guidelines to establish European Technical Approvals are initiated as a
mandate to CEN from the Commission's Standing Committee on Construction (SCC). They may be
accompanied by interpretive documents to assist in the preparation of standards. It is at this stage that the
first detailed technical requirements are considered. The preparation of harmonised standards is
undertaken by the European Committee for Standardisation (CEN). It produces standards through the
following structure:

Mandates for standards preparation are issued by the Commission of the European Communities (CEC)
to the European Committee for Standardisation (CEN). The CEN Technical Board (responsible for
controlling the standards programme and includes delegations from the CEN members, i.e. the natural
standards organisations, establishes Technical Committees (TC's) (formed to prepare standards and
includes representatives from the CEN members with relevant technical expertise) and Technical
Working Groups (TWG's) (formed to undertake specific short term tasks for the committee and may
include representatives from product manufacturers, trade associations and standards authorities).

The timetable for the harmonisation process and the key legal steps are summarised in Table 1.

4. THE ROLE AND DEVELOPMENT OF THE EUROCODES

The Eurocodes and their associated European Standards provide a framework for the implementation of
the Construction Products Directive and the award of the CE mark. This is the reason for their urgent
introduction and their ENV status.

They will only be given full EN status after a period of trial use in Member States and incorporation of
comments through the Technical Committee. The timetable for the issue of the Eurocodes as EN is not
yet established but it is likely that the principal Eurocodes will achieve EN status during the period 1995-
1998.

The framework of European Standards will take a similar time to implement. In the interim, Provisional
Guides are available as Annexes to the main Eurocodes, e.g. Annex T to Eurocode 3: Fabrication of
Structural Steelwork - Provisional Guide.

During the ENV phase, it is intended that the Eurocodes are implemented in Member States by National
Application Documents. These documents provide national values of partial safety factors and also
incorporate any specific material requirements. For example:

 In the UK the requirements for providing minimum ties to ensure adequate structural integrity
and resistance to accidental damage are maintained.
 In France, there are certain clarifications on the detailed application of rules for calculating the
semi-rigid action of connections.

The Eurocodes present best available European design practice. They offer the opportunity of superseding
and improving upon traditional practices. They should therefore improve the overall economy of
construction as well as offering more consistent safety and reliability.

5. THE CE MARK

The CE mark may be used on products that comply with European Standards, or in the absence of such
standards, European Technical Approvals as demonstration of compliance with the Construction Products
Directive (CPD). The objective behind this approach is to ensure compatibility between design, execution
procedures and products. In the transitional stages before the full harmonisation of standards, certain
technical specifications which are recognised by the Community may also provide compliance. In
exceptional cases, certification of conformity by an approved body or a declaration of conformity by the
manufacturer (provided certain conditions are met involving approved bodies during the testing) is
acceptable.

The use of the CE mark implies compliance with the essential requirements of the CPD which relate to:

1. mechanical resistance and stability

2. safety in case of fire
3. health, hygiene and the environment
4. safety in use
5. protection against noise
6. energy economy and heat retention

The use of the CE mark is not a guarantee of performance, only of minimum acceptable compliance with
the essential requirements listed above. Compared to other marks of quality it may well be a levelling
down to a lowest acceptable, safe quality. Other marks of quality, particularly those relating to
performance beyond the essential requirements are therefore likely to remain in operation throughout
Europe. However the situation is intended to be sufficiently transparent for the individual purchaser to be
able to weigh up quality versus price for a particular product or structure.

6. THE FUTURE FOR CONSTRUCTION IN THE UNIFIED EUROPEAN MARKET

The emphasis on quality, even the lowest acceptable quality implied by the CE mark, gives greater
priority to the wishes of both the building owner and his tenant. For the designer and constructor it is
likely to lead to the development of minimum guarantees and associated provisions for damages.
Differential insurance premiums may develop, favouring more reputable contractors and offering tangible
benefit from quality. For the owner there will be responsibilities for `fair play' towards both his
contractors during construction and his tenants during the service life of the building.

Harmonised standards imply larger potential markets and greater opportunities for economies of scale.
Trade should be simpler with reduced certification, documentation and administration. Minimum
standards imply better consumer protection which should lead to greater consumer confidence; this
should act as a direct stimulus to investment.

Of course the greater formality of harmonised, regulated construction is likely to create some problems,
especially for small and medium enterprises. Generally, the cost of entry into steelwork construction will
increase because of the need to be conversant with the details of European legislation prior to trading. To
the benefit of the owner and tenant it will be more difficult to cut corners either in product standards or in
safety in execution.

There could be a concern that the introduction of harmonised construction may lead to a reduction in the
range and individuality of construction. In reality all the regulations are so general in nature that they are
unlikely to inhibit individuality or innovation in any way. What may happen is that the establishment of a
common design base makes it easier to export and import forms of construction. Thus the only individual
forms of construction at risk are those which are inherently uneconomic and deserve to become extinct
from commercial pressures.

7. CONCLUDING SUMMARY
  European construction in a complex and important industry, accounting for 9% of Europe's GDP.
 Harmonisation of European construction is an important but difficult part of the establishment of
the Unified European Market.
 Currently there are significant differences in technical, legal, regulatory and contractual
frameworks between Member States.
 The Single European Act in 1987 and the implementation of the Construction Products Directive
in 1991 were important steps in the creation of the Unified European Market, notionally to be
established by December 1992.
 The Eurocodes and their associated European Standards provide the framework for the
implementation of the CPD and the award of the CE mark.
 A harmonised construction market is expected to improve minimum standards of quality and
assist the transfer of best construction practice throughout Europe.

REFERENCES

[1] Mathurin, C. Controls, Contracts, Responsibilities and Insurance in Construction in the European
Community, Commission of the European Communities, 1988.

Date Event Objective/Outcome

1957 Treaty of Rome EEC Established.

26.07.71 Public Works Directive Co-ordination of procedures for the award

of public works contract.

07.05.85 New Approach to Technical Proposals to accelerate the completion of the

Harmonisation and Standards Single European Market.

10.07.85 Architects Directive Mutual recognition of qualifications.

01.07.87 Single European Act Removal of internal barriers to trade.

Majority voting introduced.

01.10.88 Resolution calling for Standardisation in Standardisation of contracts and controls.

the Construction Industry Harmonisation of responsibility and
standards governing guarantees.

21.12.88 Construction Products Directive Removal of technical barriers to trade.

(CPD) Essential requirements to establish fitness

for use.

12.07.89 Safety at Work Directive Encourage improvement in health and safety

at work.

18.07.89 Public Works Directive Amendment to 1971 Directive.

21.10.89 Testing and Certification Regulations & Approved Bodies.

27.07.91 CPD in force Implemented by Member States.

31.12.92 Deadline for Unified European Market

TABLE 1 - Timetable for harmonisation

ANNEX A: QUESTIONNAIRE - BUILDING PROCUREMENT IN EUROPE

Represented here are the following countries:

Austria

Belgium

Finland

France

Germany

Greece

Ireland

Italy

Luxembourg

Spain

Sweden

United Kingdom

AUSTRIA

1. INTRODUCTION

Technical Standards are generally complete and coherent. Requirements for certification and quality
marks sometimes could cause expensive implications.

There is a good framework for planning and controlling the maintenance of structures during their
lifetime.

2. CONTROLS
Town planning regulations are tightly controlled. Obtaining planning permission can sometimes delay
construction for a long time.

National technical building standards, e.g. ONORM and other rules and guidelines prepared by such
organisations as OIAV, OSTV in some cases are established by federal law.

There are different building laws "Bauordnungen" in the Austrian Federal Countries and some Towns
covering administrative regulations and execution of construction. In those laws, there are additional
directives for certain types of construction such as schools, warehouses, car parks, theatres, etc. and for
some actions, e.g. fire.

In addition to compulsory special rules for energy supply, environmental protection, technical and
mechanical services and installations, there are industrial guidelines which only have to be followed when
contractually agreed.

Where materials and components are not generally used, special federal country government approval or
test marks are required. In addition, formal quality assurance is necessary for some materials and
components that are incorporated into permanent works. Government approval, test marks and quality
assurance have to be executed by authorised organisations such as technical institutes, consulting
engineers, etc.

3. CONTRACTS

3. General

Public sector contracts always adopt specified standard forms. In the private sector modifications to those
standard forms are usual. The principal standard form is regulated in ONORM A 2050 and consecutive
standards. Multi-storey-buildings relate to the LB-H "Leistungsbeschreibung Hochbau".

Pre-qualification is only adopted for large, complex or unusual projects in order to check the capability
and craftsmanship of contractors. It is used in conjunction with the restricted tender procedures.

2. Forms of Contract

(a) Unit Price Contract

Unit price contracts require a description of works with detailed technical specifications and a bill of
quantities. Fixed quantities are defined for all items on the bill.

(b) Lump Sum Contract

Lump sum contracts require a general description of the works with a programme of execution. This type
of contract is used in order to find the best technical, economic and functional solution.

4. MAIN METHODS OF PROCUREMENT

Separation of Design and Construction is usual

(a) Individual Contracting

The client places separate contracts with the designer and several package contractors, in order to separate
design and construction responsibilities.

(b) General Contracting

(i) Design and construction arranged separately by the client. The general contractor is responsible for the
execution of the total scope of work and undertakes the main parts of the work itself. He also places
individual packages to subcontractors. Detailed design is sometimes the responsibility of the general
contractor.

(ii) 'Design and Build' construction: the general contractor takes responsibility for the complete design
and construction. He places several individual package contracts with subcontractors and carries out the
main part of the work himself.

(c) Management Contracting

The management contractor undertakes responsibility for all design and execution works, but does not do
any work directly. The work is carried out by a series of contractors who are contractually bound to the
management contractor.

The most popular forms in Austria are (a) and (b i).

5. RESPONSIBILITIES

There are general clear divisions of responsibilities.

The client is responsible for contract award, taking over the works when they are completed and
payments.

The architect or the master-building ("Baumeister") is responsible for pre-design, detailed design and
drawings, obtaining planning permission, defining bills of quantities, tendering and site management
including architectural and technical supervision. He has the principal responsibility for quality, safety
and compliance with the law.

Consulting engineers are responsible for the technical input in their specialised fields, such as structural
design, etc. The responsibilities cover detailed design, drawings, tendering and supervision.

The contractor is responsible to the client for carrying out the work, warranties, maintaining programme
and for some aspects of detailed design and shop drawings.

6. INSURANCE AND GUARANTEES

It is not general practice to insure against damage during execution. However, architects and consulting
engineers are constrained to carry professional insurance.

Generally, the client is offered a guarantee on the completion of the works for three to five years. Grave
defects can be asserted in thirty five years.

7. FUTURE IMPROVEMENTS
Unification of different building laws should be the main target for Austria.

BELGIUM

1. INTRODUCTION

Technical Standards are generally complete and coherent. However, requirements for certification and
quality marks are sometimes requested. Specifications are not always updated as frequently as is
desirable.

2. CONTROLS

The procedure of obtaining building permits can sometimes delay construction for a long period of time.

National building standards, e.g. NBN, EN, ENV, and guidelines prepared by such organisations as
CSTC, Technical Agreement (Union Belge pour l'Agrement technique dans la Construction) have to be
respected.

For some buildings, special requirements in relation with workers safety have to be respected.

Testing by regional Authorities can be required in some cases (Charpy, welding tests ...).

3. CONTRACTS

1. Public Sector

Public sector contracts always adopt specified standard forms, e.g. "Cahier special des
charges" (Special conditions of contract).

There are 5 methods of tendering:

open tender: the contract is awarded to the contractor offering the lowest price. Any
contractor certified for the type of construction work concerned may tender.

limited tender: same procedure as open tender, however, reserved for a limited number
of selected contractors.

general call for tender: the contract is awarded to the best bid in terms of price,
technical solution proposed and financial soundness of the contractor.

restricted call for tender: same procedure as the general call for tender, however,
reserved for a limited number of contractors.

by mutual agreement: the contract is awarded to a contractor who is asked to submit a

bid. This procedure is only used in a limited number of cases and remains an exception.

2. Private Sector
 In the private sector the principal standard form is the "Cahier des charges" (conditions of
contract).

3. Forms of contract

(a) Unit Price Contract

Unit price contracts require a description of works with detailed technical specifications and a bill of
quantities. Fixed prices are defined for all items on the bill. The risk on quantities is with the client.

(b) Lump Sum Contract

Lump sum contracts require a general description of the works with a programme of construction. The
risk on quantities is with the contractor. This type of contract is normally used for 'turnkey' projects by
general contractors in order to find the best technical, economic and functional solution.

4. MAIN METHODS OF PROCUREMENT

(a) Individual Contracting

The client places separate contracts with the designer and several package contractors. Design and
construction responsibilities are separate.

(b) General Contracting

Usually the contracts are lump sum and fixed price.

The general contractor takes responsibility for the complete design and construction. He places several
individual package contracts with subcontractors and carries out the main part of the work himself.

(c) Project Manager Contracting

The Project Manager undertakes responsibility for all design and construction works, but does not do any
work directly. The work is carried out by a series of contractors who are contractually bound to the
project manager who is acting on behalf of the client. Sometimes, these contracts are on a percentage of
global cost.

The most popular forms of contract are (a) and (b).

5. LIABILITIES

5. Contractors

(a) Liability Before Acceptance ("reception")

All contractors are subject to the principles of contractual liability in ordinary law.

Example: completion of execution within the contractual deadline.

(b) Liability After Acceptance

The contractor is liable for:

- Decennial liability

Civil code provides for a special liability of 10 years (for stability aspects only).

This liability is public policy which means that it is forbidden to attenuate it by conventional clauses.

So-called latent defects considered minor which are not discovered at the time of acceptance. The
defects listed in this category are those which do not affect the stability of a building or of a construction.

This liability if not public policy.

Conditions for liability are:

a contract referring to the "gros oeuvre" must exist.

a serious defect affecting the solidity or the stability of a building must be pointed out.

5. Architects

Architects are subject to liability under ordinary law applicable to contractors as well as to decennial
liability.

They are not liable for tasks assigned to a specialised design office (design and planning which is outside
their normal qualification) except for the incorporation of these designs into the entire plan.

5. Sharing out of liabilities

The architect is the project leader, in charge of designing the building. In principle, any design defect is,
therefore, the exclusive liability of the architect.

The contractor is responsible for any defects which stem from the implementation of the plans drafted by
the architect, or defects linked with the execution of the construction project.

4. Sub-contracting

Architects and contractors are solely liable to the contracting authority for any errors made by their sub-
contractors.

Sub-contractors are only liable to the contracting authority if a contractual relationship exists between
them.

6. INSURANCE AND GUARANTEES

Architects and contractors ordinarily subscribe to an insurance policy designed to cover their
commitments in connection with the decennial liability. Furthermore, the contractors are required to
subscribe to a civil liability insurance covering "company risks".

In the case of construction projects carried out on behalf of the State and for the majority of important
construction projects, the contracting authority specifies in its tender that two additional policies have to
be subscribed:

An "all risks at the work site" insurance policy covering any risks inherent in a construction site. It
includes:

financial compensation for damages incurred to insured property

civil liability towards third parties

proximity disturbances, i.e. any damage incurred by adjacent buildings

This insurance takes effect at the beginning of execution and ends when the building is occupied or with
the provisional acceptance.

It is ordinarily subscribed by the general contractor on his behalf and on behalf of the sub-contractors.
However, it may also be subscribed by the contracting authority or the developer.

So-called "liability insurance and inspections" guaranteeing compensation for damage to the building
which occurs within the ten-year period following acceptance of the building irrespective of the
subscriber of the policy (contractor, sub-contractors, architects, engineers, contracting authorities).

The guarantee of the liability insurance and inspections may be implemented only on the condition that
the construction work which is the object of the guarantees is submitted for inspection to an independent
body - the SECO Bureau - which is in charge of inspecting design and execution of works.

FINLAND

1. INTRODUCTION

Contractual methods have been long established, but their relative importance is changing. Construction
management agreements are becoming more popular and system unit procurement is being introduced as
a method of procurement.

In product approval, a change of policy is taking place. Rules that demanded an approval by one specific
body are being abolished in preparation for the European Economic Space Agreement. This is most
notably the case in electric appliances but also elsewhere.

2. CONTROLS

Every building needs a building permit admitted by the local authorities before it can be built. The local
authorities check that the building is designed in accordance with the valid technical and city planning
regulations. Hierarchically the highest level of regulation is incorporated into the Building Law and
Byelaw, which cover both the technical and city planning rules.
The technical regulations are given in the National Building Code, which the Ministry of the Environment
issues. The Building Code includes two kinds of regulations: requirements that are compulsory and
guidelines, which present one approved solution to a specific problem In practice, the guidelines are semi-
compulsory because it may be difficult to persuade the local authorities to approve a solution not
presented in the guidelines although they have the right to do so if the solution satisfies the compulsory
requirements.

Several ministries and National Boards (e.g. the National Board for Housing) have their own technical
rules governing special types of buildings (housing, hotels, etc.). These rules, however, are being
abolished and all technical regulations will be presented in the National Building Code.

The guidelines in the Building Code do not give guidance to all problems that arise in building. In these
cases it is customary to refer to recommendations issued by various industrial organisations or to
standards issued by SFS, the Finnish Standards' Organisation.

The local authorities can also make local rules additional to the national regulations. The local rules
mostly cover subjects related to city planning: the architecture of buildings, the size of building site,
sewage treatment, fire protection, etc. City plans have lagged behind in many major cities, which has been
an obstacle to building in these areas.

The Building Code specifies standards (SFS-standards) for several products that have to be met before a
product can be approved. Such materials are, for instance, heat insulation and fire protection materials.
The guidelines also specify quality control systems for steel, concrete and glued timber structures. The
producer has to be accepted and inspected by a special quality control organisation (TLT for steel
structures) or the satisfactory quality has to be proved by quality control documents in every single case.

3. CONTRACTS

The standard form used in most contracts is the Contract Agreement (RT 16-10193) prepared by the
Association of Employers of Finland together with several other organisations. This form is used together
with General Contract Conditions (YSE 1983) prepared by the same organisations.

4. MAIN METHODS OF PROCUREMENT

(a) Traditional Contracting

Design and building are separated in this form of procurement. The client has separate agreements with
architects, engineers and contractors. The main contractor is responsible for carrying out the actual
building work, procurement of labour and materials and for co-ordinating the work of sub-contractors and
material suppliers. The sub-contractors can have their contracts either directly with the client or with the
main contractor.

This form of contracting is the most widely used at the moment, but it is losing ground both to
management contracting and system unit procurement.

In traditional contracting, the contractor is payed either on a lump sum or unit price basis. Unit price
contracts are often used in industrial buildings and repair works, where the full extent of work is not
exactly known when the contract agreement is signed.
(b) Management Contracting

In this form of contracting, the client has an agreement with the management contactor who is responsible
for co-ordinating the design of the project and for co-ordinating the actual construction work, which is
carried out by sub-contractors. The sub-contractors are contractually bound to the management contractor.

The management contractor is usually paid on a cost plus fee basis.

(c) Design and Build

The contractor is responsible both for the design and construction of the building.

The contractor may also enlarge his responsibilities to the procurement of the building site and marketing
of the building, in which case he becomes a developer. This is often the case in office buildings and
housing projects.

(d) System Unit Procurement

The disadvantage of traditional methods of procurement, where the work is carried out according to
detailed plans prepared by the client and his consultants, is that they do not fully utilise the building
component producers' and sub-contractors' know-how in developing the most cost-effective solutions for
a specific building project. A new form of procurement called "System Unit Procurement" has been
developed to overcome this disadvantage. In this form of procurement the client gives functional
specifications for the building units to be procured and the material supplier or sub-contractor is
responsible for the design and erection of the unit.

5. RESPONSIBILITIES

See items 4 and 6.

6. INSURANCE AND GUARANTEES

Unless the documents state otherwise, the contractor is obliged to take out a fire insurance that covers the
building materials, supplies and components that can be damaged by fire.

He is also obliged to given the client a guarantee for fulfilling the contract and refunding advance
payments. If not stated otherwise, the guarantee is 10% of the contract sum during the building operations
and 2% during the guarantee period.

The guarantee period is one year if not stated otherwise in the documents. The contractor is, after the
guarantee period, still responsible for such defects, omissions, inconveniences or incomplete work that the
client could not reasonably notice during the handing-over inspection or guarantee period. This
responsibility terminates 10 years after the handing-over inspection. There is a tendency for the courts of
law to include an increasing amount of defects within this extended period of guarantee.

The law or the General Contract Conditions for Consultants (KSE 1983) do not require a professional
insurance for the architects and engineers. It is common practice for them to take a voluntary professional
insurance.
The upper limit of the damages a consultant may have to pay for professional omissions is equal to the
consultants fee, if not stated otherwise in the contract documents. His responsibility covers the same
periods of time according to the same principles as those of the contractors.

FRANCE

1. INTRODUCTION

All buildings are subject to standards, technical instructions, standardised technical documents,
professional rules of application, or any other statutory tests which enable all the building clauses to be
defined.

2. INSPECTIONS

The construction of new buildings is subject to a building license being obtained, which is issued today
by the mayor of the district* where the project is located. The license application must contain a
description of the project (purpose, number of M2 ...) as well as the main architectural aspects (type of
structure, architectural concept ...).

After obtaining the licence, the main building contractor draws up a user file on the technical
specifications and the drawings of the operation. In this context the materials are chosen according to:

standards for the products, e.g. steel sections

technical instructions or standardised technical documents (DTU) for building systems, e.g. curtain
wall elevations, matching sheet with trapezoidal corrugations for flat floors and ceilings

particular specifications for certain types of building (energy, buildings with public access)

regional requirements for certain products, e.g. thatched roofing, bricks, etc.

For all public-sector contracts (Government, communes, departments and regions) there is a "public-
sector contracts code" giving the statutory reference texts, for example the computational regulations.

Certification (or label adoption) is not very widespread in France, except for certain products and
industries (e.g. nuclear power stations).

3. CONTRACT

1. General

(a) Public-sector Contract

All public-sector contracts are subject to a "public-sector contracts code". Furthermore, certain
managements or national enterprises (SNCF*, EDF**) have issued their own technical specifications and
material inspection procedures (stipulation of approved suppliers, administrative documents, quality
assurance procedure, qualifying firms).
The opening up of the European market means that today foreign firms are able to tender for this type of
contract, which was often not possible before.

(b) Private Contract

There is a "private contracts code" which defines relations between customers and firms. The clauses of
the contract are drawn up by the main building contractor in agreement with the building owner. It is
possible to issue only one call to tender to a limited number of firms, but it is also possible to negotiate
with only one firm (a so-called order "by private contract".

2. Form of Contract

Contracts usually include price review clauses defined by official formulae and indices. It is possible,
however, to come across contracts with firm, non-renewable prices. This is true for small, short-term
sites.

4. MAIN METHODS OF OBTAINING CONTRACTS

There are mainly three types of contract entered into:

4. General Firm

A firm commits itself to the building price and deadline. It is responsible for the whole site, sub-contracts
certain works to other firms and ensures co-ordination throughout.

It is an easy solution for the end customer and the architect because they only have dealings with a single
manager. In return, this gives the firm considerable power in negotiating with sub-contractors for certain
technical and economic choices and enables him in the end to increase his margin through negotiation
with sub-contractors. This type of contract corresponds to "turnkey" contracts.

4. Contract in Separate Lots

The building owner and architect define lots of works for which they issue separate calls to tender to
firms. This formula means that the most advantageous prices can often by obtained for each lot. It
requires in return great co-ordination on the site, which the architects are not always able to ensure since
there are a number of managers.

There are formulae which limit the number of lots and, therefore, the number of firms.

Moreover, general building firms are increasingly involved in property development. They buy land on
which they construct a building for a customer. This formula generally gives them better margins.

5. RESPONSIBILITIES

As a rule, responsibilities are clearly defined.

The building owner, who is often the building's customer, is responsible for paying the firms and the main
building contractor (architect + BBT*). He generally calls on an inspection office (e.g. Veritas, Socotec)
for the technical aspects to check that the building complies with regulations.
There are different types of tasks for the architect, but he is generally responsible for choosing and
following-up technical solutions. He chooses a BBT* who is responsible for the calculation of the works,
the technical design (electricity, fluids, etc.).

Finally, firms are responsible for performance on the site. They are responsible for assembly in
compliance with the rules and often for implementing the site plans (a task which can be devolved to the
architect in some cases).

6. INSURANCE AND GUARANTEE

In general, the customer is insured for damage during building. In addition, the architect and the BBT*
underwrite insurance covering risks associated with the design of the work.

One specifically French detail is the existence of the "ten-year" guarantee affecting certain parts of the
building. This guarantee period is the result of a law voted in 1978. The various guarantee periods are,
therefore, as follows (as from the date of acceptance of the works to the end of building):

two years for parts which come under the design and completion of the building (e.g. paper wall
covering)

ten years for the entire framework and functions of use of the building (roofing, floors)

thirty years for parts which involve people's safety (balconies, structural elements)

This is a so-called "public liability" guarantee.

Furthermore, there is a one-year guarantee after acceptance of the works on the entire building called a
flawless completion guarantee. In fact, the situation is a complex one because the ten-year guarantee
affects both the assembly firms and the manufacturers of the materials.

In the event of disputes, the guarantees can be transferred from the firm to the manufacturer.
Manufacturers of products may, therefore, be responsible for the use of their own product.

7. FUTURE CHANGES

The future enactment of the European Construction Products Directive will change guarantee and
manufacturers' liability criteria.

In this instance, it is possible that the architects may be obliged to have a more technical vision of the use
of materials because their responsibility will be more heavily involved.

Finally, problems of maintenance, life cycle and demolition of future buildings will have to be considered
when building, which will bring about changes in building techniques.

GERMANY

1. INTRODUCTION
Technical standards are generally complete and coherent. However, requirements for certification and
quality marks sometimes have expensive implications. Specifications are not always updated as
frequently as is desirable.

There is a good framework for planning and controlling the maintenance of structures during their life.

2. CONTROLS

Town planning regulations are tightly controlled. Obtaining planning permission can sometimes delay
construction for a long period of time.

National technical building standards, e.g. DIN, and other rules and guidelines prepared by such
organisations as DASt, DAf, StB, IfBT, Argebau and STLB are established by government edict.

There are also state building laws covering administrative regulations and execution of construction.
There are additional directives for certain types of construction such as schools, warehouses, garages,
assembly halls, etc.

In addition to compulsory special rules for energy supply, environmental protection, technical and
mechanical services and installations, there are industrial guidelines, e.g. AGI, VDI, ISO, which only
have to be followed when contractually agreed.

Where materials and components are not generally used special government approval or test marks are
required. In addition, formal quality assurance is necessary for some materials and components that are
incorporated into permanent works. Materials and components that require test marks or quality assurance
are listed in relevant government regulations. Government approval, test marks and quality assurance
have to be executed by authorised organisations such as technical institutes or acknowledged academic
experts.

3. CONTRACTS

2. General

Public sector contracts always adopt specified standard forms. In the private sector modifications to these
standard forms are possible. The principal standard form is the "Verdingungsordnung fur Bauleistungen"
(VOB). Part A defines the procedures prior to award of contract. Parts B and C provide general conditions
of contract and the technical requirements for construction.

Pre-qualification procedures are only adopted for large, complex or unusual projects in order to check the
capability and craftsmanship of contractors. They are used in conjunction with tender procedures.

2. Forms of Contract

(a) Unit Price Contract

Unit price contracts require a description of works with detailed technical specifications
and a bill of quantities. Fixed prices are defined for all items on the bill. The risk on
quantities is with the client.
(b) Lump Sum Contract

Lump sum contracts require a general description of the works with a programme of
construction. The risk on quantities is with the contractor. This type of contract is
normally used for 'turnkey' projects by general contracts in order to find the best
technical, economic and functional solution.

4. METHODS OF PROCUREMENT

(a) Individual Contracting

Here the client places separate contracts with the designer and several package
contractors. Design and construction responsibilities are separate.

(b) General Contracting

Usually these contracts are lump sum and fixed price.

(i) Design and construction are arranged separately by the client. The general contractor
is responsible for the execution of the total scope of work and undertakes th main parts of
the work. He also places individual packages to subcontractors. Detailed design is often
the responsibility of the general contractor.

(ii) 'Design and build' construction

Here, the general contractor takes responsibility for the complete design and construction.
He places several individual package contracts with subcontractors and carries out the
main part of the work himself. The main field of application is for industrial buildings.

(c) Management Contracting

The management contractor undertakes responsibility for all design and construction
works, but does not do any work directly. The work is carried out by a series of
contractors who are contractually bound to the management contractor who is fulfilling
the role of the client. Sometimes these contracts are on a cost plus fee basis.

The most popular forms of contract are (a) and (bi).

5. RESPONSIBILITIES

There are general clear divisions of responsibilities.

The client is responsible for contract award, taking over the works when they are
completed and payments.

The architect is responsible for pre-design, detailed design and drawings, obtaining
planning permission, defining bills of quantities, tendering and site management
including architectural and technical supervision. He has the principal responsibility for
quality, safety and compliance with the law.
Engineers are responsible for the technical input in their specialised fields, such as
structural design, services, etc. The responsibilities cover detailed design, drawings,
tendering and supervision.

The contractor is responsible to the client for carrying out the work, warranties,
maintaining programme and for some aspects of detailed design and shop drawings.
Subcontractors have the same responsibilities as the contractor.

6. INSURANCE AND GUARANTEES

It is not general practice to insure against damage during construction.

Architects are required to carry professional insurance. The contractors are required to
carry insurance for responsibilities under civil law.

Generally, the client is offered a two year guarantee on the completion of the works. This
is regarded as being too advantageous to the contractors and offering insufficient
protection to the client.

7. FUTURE IMPROVEMENTS

Means are being sought to make contractors more responsible.

More emphasis will be given to providing a practical education for designers and
builders. Specifications are becoming more practical and comprehensible.

It is likely that the law will be changed imposing more responsibility on the contractor in
the case of defects after construction.

More research is intended on the behaviour of buildings during their service lives so that
shortcomings in construction that lead to subsequent malfunction of the building can be
identified. The outcome of this work will be transmitted primarily to the contractors to
improve the effective quality of construction.

GREECE

1. INTRODUCTION

National technical codes are not generally complete for all kinds of structures, leading to
the use of foreign ones, e.g. DIN, etc. Some of them are not always updated as frequently
as is desirable.

2. CONTROLS

There are strict planning regulations for all kinds of areas (towns, villages, seasides, etc.).

There are also additional directives for certain types of structures such as schools,
warehouses, garages, industrial buildings, hospitals, hotels, etc.
It is always necessary for all types of construction to obtain permission from public
authorities.

The whole design of structures is covered by compulsory national technical codes (or in
some cases by foreign ones, e.g. DIN). In addition, there are also guidelines which only
have to be followed when contractually agreed.

Formal quality assurance is necessary for some materials that are incorporated into
permanent works. All the test marks or quality assurance required have to be executed by
authorised organisations.

3. CONTRACTS

Public sector contracts adopt specified standard forms, while in the private sector any
different type of form is possible. The forms of contract are as follows:

(a) Unit Price Contract

Unit price contracts require a description of works with detailed technical specifications
and a bill of quantities. Fixed prices are defined for all items on the bill. The risk on
quantities is with the client.

(b) Lump Sum Contract

Lump sum contracts require a general description of the works with a programme of
construction. The risk on quantities is with the contractor.

This type of contract is normally used for 'turnkey' projects by general contractors in
order to find the best technical, economic and functional solution.

4. MAIN METHODS OF PROCUREMENT

(a) Individual Contracting

Here the client places separate contracts with the designer and several package
contractors. Design and construction responsibilities are separate.

(b) General Contracting

Usually these contracts are lump sum and fixed price.

(i) Design and construction are arranged separately by the client. The general contractor
is responsible for the execution of the total scope of work and undertakes the main parts
of the work. He also places individual packages to sub-contractors. Detailed design is
often the responsibility of the general contractor.

(ii) 'Design and build' construction

Here the general contractor takes responsibility for the complete design and construction.
He places several individual package contracts with subcontractors and carries out the
main part of the work himself.

(c) Management Contracting

The management contractor undertakes responsibility for all design and construction
works, but does not do any work directly. The work is carried out by a series of
contractors who are contractually bound to the management contractor, who is fulfilling
the role of the client.

The most popular forms of contract in the private or in public sector are (a) and (bi).

5. RESPONSIBILITIES

There are general clear divisions of responsibilities.

The client is responsible for contract award, taking over the works when they are
completed and payments.

The architect is responsible for pre-design, detailed design and drawings, obtaining
planning permission according to the laws, defining bills of quantities, tendering and site
management including architectural and technical supervision. He has the principal
responsibility for quality, safety and compliance with the law.

Engineers are responsible for the technical input in their specialised fields, such as
structural design, etc. The responsibilities cover detailed design, drawings, tendering and
supervision.

The contractor is responsible to the client for carrying out the work, warranties,
maintaining programme and for some aspects of detailed design and shop drawings. Sub-
contractors have the same responsibilities as the contractor.

6. INSURANCE AND GUARANTEES

There are no legal requirements, but in order to insure against damage during
construction, the client can buy a professional insurance for a two year period.

Generally, the client is offered a short period (one to five years) guarantee on the
completion of the works.

7. FUTURE IMPROVEMENTS

Means are being sought to make contractors generally more responsible.

IRELAND

1. INTRODUCTION
The construction industry in Ireland is effectively divided into three sectors, with
contractors tending to specialise in one of these:

(a) Civil engineering construction - mostly projects funded by central government in the
areas of roads, bridges, water supply, sewerage, etc.

(b) General building construction - mostly private developments, with exceptions such as
schools and hospitals. On local authority or government projects, there is an increasing
tendency for developers to construct and lease back.

(c) Housing construction - largely speculative. Local authority involvement has been
severely curtailed in recent years.

2. CONTROL

Planning is governed by a succession of Planning Acts and Planning Regulations issued

thereunder. These require local authorities to prepare and adopt development plans. Most
developments require the formal permission of the planning authorities.

Building Regulations (1991) were issued under the Building Control Act (1990) under
which the large local authorities were invested with the power of Building Control
Authorities, with powers of inspection and enforcement. These authorities are also Fire
Authorities. Certain aspects relating to the nature of and responsibility for, Certificates of
Compliance with the Building Regulations are still under discussion between Building
Control Authorities and the professional bodies representing consulting engineers and
architects.

Health and safety is governed by the Health, Safety and Welfare at Work Act (1989) and
EC safety directives embodied in the Safety, Health and Welfare at Work Regulations
(1993). These require employers to carry out an analysis of hazards in the workplace, and
include for casual, temporary as well as permanent employees. Previous legislation on
health and safety related in the main to industrial employment, the principal acts being
the Factories Act (1955) and Safety in Industry Act (1980) under which regulations such
as The Construction (Safety, Health and Welfare) Regulations (1975) were enacted.
These remain in force.

Design and materials are governed by standards issued by the National Standards
Authority of Ireland (NSAI). Where NSAI do not provide a standard, British Standards
(BS) or International Standards (ISO) are frequently substituted. NSAI have
responsibility for the issue of Eurocodes and associated National Application Documents
in Ireland.

3. CONTRACTS

(a) RIAI Contract conditions 1989 - with quantities/

- without quantities

Used in conjunction with:

 Subcontract conditions issued by the Construction Industry Federation for use in
conjunction with the RIAI conditions of contract

Quantities measured in accordance with SMM6 (1976), SMM7 (1988) and PCMI.

(b) GDLA Contract conditions 1982 - with quantities/

- without quantities

Used in conjunction with:

Subcontract conditions issued by the Construction Industry Federation for use in

conjunction with the GDLA conditions of contract

Quantities measured in accordance with SMM6, SMM7 and POMI.

(c) IEI Conditions of contract 1980

Used in conjunction with:

ICE subcontract conditions

Quantities measured in accordance with CESMM2 or CESMM3.

also

RISI Short Form Contract - for minor works.

Abbreviations

RIAI - Royal Institution of Architects of Ireland.

GDLA - Government department and local authorities.

IEI - Institution of Engineers of Ireland.

ICE - Institution of Civil Engineers (UK).

SMM6 - Standard Method of measurement of Building Works, Sixth Edition (1979)

SMM7 - Standard Method of Measurement of Building Works, Seventh Edition (1988).

Royal Institution of Chartered Surveyors and Building Employers Federation (UK).

CESMM2 - Civil Engineering Standard Method of Measurement, Third Edition (1985)

CESMM3 - Civil Engineering Standard Method of Measurement, Third Edition (1992).

Institution of Civil Engineers and Federation of Civil Engineering Contractors (UK).

POMI - Principles of Measurement (International).

Royal Institute of Chartered Surveyors (UK).

4. MAIN METHODS OF PROCUREMENT

(a) Negotiated tendering

(b) Open tendering

(c) Selective list

The IEI form of contract nearly always entails open tendering. Selected tendering is
frequently adopted with RIAI and GDLA contract conditions. The selected list typically
extends to 6 to 8 firms, and sometimes entails pre-qualification.

5. RESPONSIBILITIES

The various forms of contract are broadly similar in regard to responsibilities placed on
the parties to the tender - with the exception of 'Design and Build'.

In building contracts, the architect is generally responsible for development of the design
brief, for obtaining permissions, for managing the design through its stages, for site
supervision and budgetary control. To assist in the discharge of these responsibilities the
architect will usually recommend to the client the appointment of civil or structural
engineers, service engineers and quantity surveyors, reporting to the architect.

In civil engineering contracts, the engineer has primary responsibility for all aspects of
design, site supervision and budgetary control.

In both types of contract, the main responsibility for safety during execution lies with the
contractor.

6. INSURANCES AND GUARANTEES

(a) Employees liability insurance

(b) Public liability insurance

(c) All-risk insurance

(d) Non-negligence insurance

(e) Contract guarantee bonds

7. FUTURE DEVELOPMENTS
 (a) Introduction of Eurocodes into design practice.

(b) Implementation of EC safety legislation, e.g. the Construction Sites Directive 1992,
placing responsibilities for Health and Safety on engineering and architectural consultants
as well as on the contractor.

(c) Resolution of outstanding issues relating to Certificates of Compliance with the

Building Regulations.

(d) Greater prevalence of 'Design and Build'.

ITALY

1. INTRODUCTION

Technical standards are generally complete and coherent. There are problems about
quality marks of many products: this depends on the fact that in Italy CE marks are not
yet adopted and there is no law about the "Quality Mark".

Frameworks for controlling and planning the maintenance of structures are adopted for
some of the largest companies only, such as State Railways and State Highways.

2. CONTROLS

Town planning regulations are not often tightly controlled especially in the south of Italy.

Quality marks are not yet defined by law but many products have a proper quality mark.

Obtaining planning permission is difficult.

National building standards, e.g. UNI, and other rules and guidelines prepared by
different organisations such as CAR, are established by government edict.

There are some other building laws covering administrative regulations and execution of
construction. There are additional directives for certain types of construction such as
schools, hospitals, garages, etc.

Where materials and components are not generally used, special government approval is
required. In addition, formal quality assurance is necessary for some materials and
components that are incorporated into permanent works.

Government approval, test marks and quality assurance have to be executed by

authorised organisations such as technical institutes.

3. General

Public sector contracts always adopt specified standard forms. In the private sector modifications are
frequent. The principal standard form is the "Capitolato generale e speciale per l'appalto dei Lavori
pubblici". The first part defines procedures prior to the award of the contract. The second and third parts
provide general conditions of contract and technical requirements for construction.

The weak point of many contracts concerns the requirements for drawings and the description of the
scope of work which are often imprecise. This lack of precision causes claims, delays, etc.

Pre-qualification procedures are widely adopted. In Italy there is a specific "Builders List" - "Albo
Nazionale dei Costruttori" - where the companies are included in relation to their capability to undertake
in different works, such as reinforced concrete, earth movements, buildings, etc. and in relation to their
financial means.

2. Forms of Contract

(a) Unit Price Contract

Unit price contracts require a description of works with detailed technical specifications and a rough bill
of quantities. The risk on quantities is with the client. Programme of execution is required.

(b) Lump Sum Contract

Lump sum contracts require a description of works with detailed technical specifications. A programme
of execution is also required. The risk on quantities is with the contractor.

(c) A variant of the second type is the lump sum contract related to a bill of quantities with unit prices.
Variations required by the client are regulated in conformity to unit fixed prices: otherwise the risk on
quantities is with the contractor.

3. MAIN METHODS OF PROCUREMENT

(a) Individual Contracting

The client places separate contacts with the designers and several package contractors. Design and
construction responsibilities are separated

(b) General Contracting

There are unit prices and lump sum contracts, depending on the scope of works.

(i) Design and Construction Arranged Separately by the Client

The general contractor is responsible for the execution of the total scope of work and undertakes the main
parts of the works himself. He also places individual packages to subcontractors. Workshop design is
often the responsibility of the contractor.

(ii) 'Design and Build' Construction

The general contractor takes responsibility for the complete design and construction. He places several
individual package contracts with sub-contractors and carries out the main part of the work himself. This
is the main field of application of industrial buildings.
(iii) Management Contracting

Rarely used in Italy

The most popular forms of contract are (a) and (bi)

4. RESPONSIBILITIES

Italian laws and regulations give a clear division of responsibilities. Problems arise with the instructions
for a complete, finished work. Often, in fact, drawings and specifications are incomplete and not detailed
enough; this causes, as mentioned before, controversies among the parties and delays.

The client is responsible for the contract award, tendering, taking over the works when they are
completed, and payments.

The architect is responsible for pre-design, detailed design and architectural drawings, obtaining planning
permission, architectural and technical supervision, quality, compliance with the law relating to his role
(architectural).

The clerk of works, often an engineer, has the responsibility for the site management and the erection of
the building according to the approved drawings, the control of the bill of quantities, the control of the
programme, safety and compliance with the law relating to his role.

The engineers are responsible for the technical inputs in their specialised fields, such as structural design,
services, etc.

The contractor is responsible to the client for carrying out the work, warranties, maintaining the
programme, and for shop drawings. The contractor is responsible to the client for the subcontractors.

5. INSURANCES AND GUARANTEES

Contractors are required to be insured against damage during the construction and for responsibilities
under civil law.

Architects and engineers are not required to carry professional insurance (if not carried by the contractor).

The contractor must offer a guarantee valid for ten years as far as serious defects of the construction are
concerned.

6. FUTURE DEVELOPMENTS

Many changes are foreseen and requested in the future, as outlined below:

Drawings and specifications must be ready " for construction" at the time of the award, in order to
avoid claims and disputes during execution and further delays and damages.

Architects and engineers must be insured against damages.

 For public works, an independent surveyor dedicated to the control of quality and the bill of quantities
is strongly required.

LUXEMBOURG

1. CONTROLS

Apart from building permits, administrative approvals for building products are not required in
Luxembourg. As Luxembourg has no building standards, reference is normally made to Euronorms (EN)
and Eurocodes or to the standards of neighbouring countries. Quality certificates from an acknowledged
foreign testing institute are often requested.

2. CONTRACTS

Pubic sector contracts always adopt specific standard forms. In the private sector modifications to these
standard forms are possible. The German standard form "Verdingungsordnung fur Bauleistungen" is
commonly used as a basis for contracts.

Usually contracts are awarded in the form of unit price contracts. Lump sum contracts are rather an
exception.

3. MAIN METHODS OF PROCUREMENT

In public works, individual contracting is the rule. The private sector may use general contacting as a
method of procurement.

4. RESPONSIBILITIES

The architect and the engineer are responsible for the design and the bill of quantities.

The contractor is responsible for the executed work or the delivered equipment according to
specifications, drawings and bill of quantities.

5. INSURANCE AND GUARANTEES

In addition to the insurance for responsibility under civil law, major contracts are executed under an all-
risks insurance, covering damage during construction.

Guarantees are at two levels, a two-year guarantee for secondary work and a ten-year guarantee for the
structural part of buildings.

SPAIN

1. Controls
1. Planning and Approvals

The seventeen autonomous communities (comunidad autonoma) or regional governments, not the State,
have ultimate responsibility for planning and control of construction. The powers are exercised by the
local authorities (ayuntamientos), of which there are some 8000 grouped into fifty-two provinces. The
responsibilities were set out in Law 19 of 2 May 1975.

All local authorities of over 50,000 inhabitants have to produce a structure plan (plan general), which is
approved by the planning commission of the autonomous communities. All urban areas each have a more
detailed town plan (plan parcial), which is approved by the local authority as and when new areas are
developed.

Each local authority grants building permits but does not exercise direct technical control. Control of
building regulations and initial control in the light of the structure plan and town plan are exercised
entirely by the architect via the local college of architects.

The building permit (licencia de construccion) is a legal requirement before construction can begin, and is
required before gas, water and electricity connection can be made. It is only given when the developer or
client presents the project documents together with a permit (visado) issued by the college of architects.

As well as checking from the point of view of urban planning, the local authority also verifies where
appropriate that fire regulations, health regulations, or other specific local regulations are satisfied,
particularly for public buildings.

At the end of construction, the architect signs the acceptance certificate, which must be stamped by the
college of architects after the client has paid the architect's fees in full to the college. The certificate is
then submitted to the local authority for the occupation licence (licencia de apertura).

1. Standards and Regulations

Building regulations in Spain are passed principally by the national government, but since 1980 the
autonomous communities also have the power to do so.

The legislation has been divided since 1977 explicitly into two classes:

· The basic norms (normas basicas de la edificacion) (NBEs) which are the only obligatory standards.

· The technical norms (normas technologicas de la edificacion) (NTEs) which are advisory but not
obligatory.

An index to the legislation on building, the Indice de Disposiciones Relacionadas con la

Edificacion (latest edition 1987), is published by MOPU.

The Directorate-General of Architecture and Building Technology of MOPU produces or approves codes
of practice (Soluciones Homologadas de Edificacion) (SHEs) whose use guarantees meeting the
minimum requirements of the NBEs.

Product standards in Spain, for all industries, are set by the Spanish Association for the Normalisation of
Certification (Asociacion Espanol de Normalisacion y Certificacion) (AENOR).

There is, in general, no legal requirement to use approved products, and no import restriction on products
which do not meet or are not approved to UNE standards.
Testing for certification of suppliers and product approval is carried out by approved laboratories. In 1986
a new accreditation system for laboratories was set up as Red Espanola de Laboratorios de
Ensayo (RELE).

1. Contract Forms

In the private sector there are no regulated procurement practices or standard contract forms. The
public sector, on the other hand, is regulated tightly, as in other Napoleonic Code countries.

Basic principles of contracts are laid down in the Civil Code and the Commercial Code. The
drafting of each contract is a matter for the parties involved. There are no standard forms.

· Fixed price lump sum contract (por ajuste alzado global y precio cerrado). This formula is used
rarely except for single family housing.

· Unitary quantities contract (por precio determinado en funcion de la unidad y cantidad). This is
the most common form of contract.

· Management contract (por administracion). This is used rarely.

Public contracts are regulated by:

· The Law of State Contracts (Ley de Contratos del Estado).

· The General Regulations for State Contracts (Regulacion General de Contratos del Estado).

· The General Administrative Clauses (Pliego de Clausulas Administrativas Generales) (PCAG)

The autonomous communities have the power to pass their own public procurement legislation,
but have followed the State legislation.

Public contracts are normally based on a fixed price, subject to cost escalation formulae which are
laid down in considerable detail in the regulations.

2. PROCUREMENT PROCEDURES

2. Private Sector Procurement

The selection of a contractor by a private developer may often by influenced by the complex inter-
relationships of Spanish business.

2. Public Procurement

Further new legislation will need to be introduced to adopt the new EC directives on public procurement.
The existing EC directives were incorporated in decree 2528/1986. Existing procedures are set out in the
legislation on State contracts described in the previous section.

The existing legislation (as modified in 1986) specifies three types of tendering procedure as follows:
· Subasta (auction) in which the tender documents include a fully priced bill of quantities.

· Concurso (competition) in which the bill of quantities is unpriced or not included, and the contract is
awarded to the 'most advantageous offer'.

· Contratacion directa (negotiation) in which the price is negotiated directly with a candidate selected on
general technical criteria.

1. Responsibilities

4. Architects Responsibilities

The architect is totally responsible for ground investigations, design and site supervision and advises on
the appointment of a contractor.

4. Technical Architects Responsibilities

A technical architect is normally responsible for the bills of quantities, cost estimates, detailed budgets
and control of payments in the architect's service.

1. Insurance and Guarantees

The Spanish Civil Code adopted a simple approach to construction liability, similar to the Napoleonic
Code. The code is based on the following two basic principles.

· Ten-year strict liability for serious defects.

· Responsibility shared between the main contractor and two independent professionals acting in a
personal capacity - the architect and the technical architect, or aparejador.

Both architects and technical architects have public liability insurance arranged through their colleges.

There is no obligation to carry insurance cover, and some professionals who are not in independent
practice or have low workloads do not bother to insure.

SWEDEN

1. INTRODUCTION

The Swedish contractual situation within the building sector is standardised and well established between
the various parties. In 1992 a new general regulation, called AB 92, was established (the former was AB
72).

There is a good framework for planning and maintenance of buildings during their lifetime.

2. CONTROLS

Planning regulations are tightly controlled by state and municipalities. Obtaining planning permission can
sometimes delay construction for a very long period of time.
Examples of various Swedish building-regulations and codes are "Boverkets nybyggnadsregler"
(regulations and general recommendations), BBK (concrete structures), BSK (steel structures), etc.

There are also state building laws covering administrative regulations and execution of construction.
There are also additional laws and directives for certain types of constructions and installations.

There is a strong movement in Sweden to give the industry a higher degree of responsibility for its
products and works.

In addition to compulsory special regulations for energy supply, environmental protection and mechanical
services and installations, there are also industrial guidelines.

Where materials and components are not generally tested and used special government approval or test
marks are required. In addition, formal quality assurance is necessary for some materials and components
that are incorporated into permanent construction. Materials and components that require test marks or
quality assurance are listed in relevant government regulations. Testing and approvals have to be executed
by authorised bodies.

3. CONTRACTS

2. General

Public sector contracts always adopt specified standard forms according to the new "AB 92" (general
regulations for contractual works). The principal standard form is the "AB 92".

Pre-qualification procedures are seldom used for projects in order to check capability and craftsmanship
of contractors. They are now used in conjunction with restricted tender procedures and their use will
increase in the next few years.

2. Forms of Contract

(a) Lump Sum Contract

The parties agree on a fixed lump sum for the contractual work. If the extent of the work
does not change, the price is fixed. The fixed price can be subjected to price adjustment.

This type of contract is normally used in turn-key and general contracting.

(b) Unit Price Contract

Unit price contracts require a description of the works with technical specifications and a
bill of quantities. Fixed prices are given by the contractor for all items on the bill. The
quantities given by the client are estimates. The final cost is determined when the work is
completed. This is a normal contract form in road projects.

(c) Cost-plus Contract

The contractor is paid in accordance with his actual costs.

 3. Methods of Procurement

(a) Divided Contract

Here the client places separate contracts with the designer and several package contractors. Design and
construction responsibilities are separate.

(b) General Contracting

Contracts are lump sum and fixed price with or without price adjustment.

(i) Design and construction is arranged separately by the client. The general contractor is responsible for
the execution of the total scope of work and undertakes the main parts of the work himself. He also places
individual packages to subcontractors. Detailed design is often the responsibility of the general contractor.

(ii) 'Design and Build' Construction

Here, the general contractor takes total responsibility for the complete design and construction. He places
several individual package contracts with subcontractors and carries out the main part of the work
himself.

(iii) 'Design, Build and Operate' Construction

This is an extension of 'Design and Build' Construction where the contractor is also responsible for the
management of the finished building.

(c) Management Contracting

The contractor takes responsibility for all design and construction works, but does not do any work
directly. The work is carried out by a series of contractors who are contractually bound to the main
contractor, who fulfils the role of the client. Sometimes these contracts are on a cost plus fee basis.

4. RESPONSIBILITIES

There are generally clear divisions of responsibilities. The client is responsible for contract award, taking
over as the works are completed, and payments.

Engineers are responsible for the technical input in their specialised fields such as structural design. The
responsibilities cover detailed design, drawings, tendering and supervision by the rule of "YOKEL 72".

The contractor is responsible to the client for carrying out the work, warranties, maintaining programme
and some aspects of detailed design and shop drawings. Sub-contractors have equal responsibilities.

5. INSURANCES AND GUARANTEES

Sometimes contractors insure against damage during construction, e.g. "Contractors all risk".
Generally, the client is offered a two-year guarantee on completion of the work. It is under discussion to
establish an eight-year responsibility assurance for contracts, which is expected to increase contract costs
by 1-2%.

6. FUTURE IMPROVEMENTS

Means are being sought to make contractors more responsible, see above.

More emphasis will be given to providing a practical education for designers and builders.

UNITED KINGDOM

1. INTRODUCTION

The market is well developed with suitable technical standards available. There are various routes used
for building procurement depending on the size and type of building and the client preference. In the
particular case of steel frames, responsibility for frame design and the detail design of connections is
often split between different organisations. A Consulting Engineer is often employed for the frame
design, including selection of sections, while the Fabricator will normally detail design the connections to
resist the loads provided by the Designer. There are, therefore, separate contracts involved for the
different operations. An increasing number of jobs are carried out through the "Design & Build" method
where responsibility for the whole rests with one organisation. Some sub-contracting is normal.

2. CONTROLS

In addition to the overall requirement to obtain planning permission for the whole works, it is necessary
to satisfy the Building Regulations. These regulations are administered by the local authority where the
building is to be built. For structural frames, this work will involve a check of the calculations to ensure
the regulations have been satisfied. This is normally achieved by conforming to the appropriate European
or national standard but exceptionally, the Building Control Officer can accept alternatives.

For products for which the codes are not appropriate, test results verified by the British Board of
Agreement or other reputable independent bodies, such as Universities, will usually be accepted.

3. CONTRACTS

Most structural steelwork is carried out as a subcontract to the main or management contractor. The form
of contract is usually JCT 80, although many variants are used. Where the steelwork is measured, as
opposed to a lump sum arrangement, then the measurement will usually be to SMM7 (RICS Standard
Method of Measurement 7th edition).

One of the problems in the industry is the lack of a standard approach and contract. Care must be taken to
understand the legal and technical requirements of each contract. The publication of the "National
Structural Steelwork Specification" assists this process.

4. MAIN METHODS OF PROCUREMENT

The three main procurement routes are:

 4. Traditional

In this method, the building is designed by the client's professional team who then select a main
contractor who organises the work and appoints his

Sub-contractors. The sub-contractors may be pre-selected and nominated by the Design Team.

4. Management Contracting

In this arrangement, a Management Contractor is appointed by the client in the early phases of the work.
He works alongside the Design Team and advises on the practical aspects of the design as well as
ensuring this work proceeds to programme. He also appoints and manages the work of the various Sub-
contractors.

The specialist Sub-contractors, of which the Steelwork Supplier is one, are responsible for the detail
design, fabrication and erection of the various work packages.

The steel sub-contract includes the frame and secondary members and, depending on the type of work, the
cladding, floors, hand railing, etc.

3. On Site Design and Build

The client provides, with professional assistance, an outline scheme and a performance specification. The
remainder of the design and its construction are then put out to competitive tender.

It is the job of each tendering contractor to manage the work. The structural steel frame is usually
provided by a subcontractor as before but with the additional responsibility for the frame design in
addition to the normal detail design, fabrication and erection.

5. RESPONSIBILITIES

The professional team, involving architects, engineers, quality surveyors are responsible for producing the
overall design of the building, How far they proceed with the detail design depends on the form of
contract being employed and the types of specialist sub-contractors.

The main or management contractor is responsible for organising the work on site, safely and to
programme, and for coordinating the various subcontractors. He is responsible to the client for their work.

6. INSURANCES AND GUARANTEES

There are statutory insurance requirements such as Public Liability to cover damage and injury to
personnel. The completed work is subject to a contractual maintenance period, often of 12 months. After
that, responsibilities are covered by the law.

Guarantees of performance, particularly corrosion of some components, are sometimes requested but are
not normal.
7. FUTURE IMPROVEMENTS

The major improvements are likely to come from a less adversarial approach to construction. This change
is inhibited by the litigatious attitude of Contractors and

Sub-contractors at present, and the temptation to increase profits through claims.

A greater understanding by Designers and Quantity Surveyors of modern construction and fabrication
techniques would assist.