Building projects – prevention is better than cure so plan, plan, plan.
Jun 06, 2012
Schools are businesses like any other. They must provide high standard facilities and performance, demonstrate pecuniary competence and deliver excellent results. Schools must respond, adapt and grow to meet changing demands. As part of this complex evolving process is estate management and development. No matter how large or small any building project, it must be planned carefully and implemented competently if it is to be a success in every respect.
The demand to maintain existing (and often historic) building stock, upgrade well used resources and develop new facilities is unrelenting. Every building project must be considered fully, planned meticulously, implemented in compliance, monitored competently and controlled with fiduciary responsibility. Due to the intricacies of building contracts and the closeness of employers to their projects, not surprisingly, they are not always the best guardians of their finances in connection. Put simply, schools are typical employers, they require the work to be properly designed and executed, completed on budget, on time and usually before the start of term. The end product has to be a worthy addition to the prospectus. All very straightforward when stated simply. Any reasonably minded bursar and board of governors would understand all that is required and implement to suit. Why would tackling a building contract be considered in any other way?
I may be accused of holding a jaundiced view because I see so many projects of different types that have failed in one way or another, in part or wholly. Such occurrences usually happen because the obvious is in some way overlooked or worse, ignored. Prevention is always better than cure and so plan, plan and plan.
Many projects start well, run smoothly, finish on time and on budget and everyone is delighted. This usually happens because golden rules have been followed and little has been left to chance. So what are these principles? What follows is a very simplified résumé:
- Establish exactly what the project is to be – Whether it is repair of a leaking flat roof or construction of a new boarding house or concert hall, from the outset, define the extent of the project, the work required and its impact.
- Establish expectations– Is the work ‘functional’ planned maintenance or is the project a landmark building?
- Establish the budget– Construction is expensive; the cost of bricks and mortar is just the core of any building. Services for a science block or a concert hall can make up 25 – 35% of the build cost.
Obtaining statutory approvals can be time consuming and expensive, particularly if more than one planning application is made, additional investigation and reports are required. Professional fees may seem dear; the cost however of not taking independent advice, can be many times greater. Schools that are charities must factor in 20% VAT on services and building costs (this will be determined by circumstances).
- Define the specification– Consultation is a significant part of the design process. Full discussion allows the specification to be honed to perfection in order to satisfy aesthetic, design and performance criteria. Any element of the design that is not fully designed and precisely specified is a potential delay and additional cost.
- Avoid making changes – Critical path deadlines should be introduced into the procurement programme before which times changes can be made without adverse consequences. Miss these dates and there will be time lost and usually associated cost incurred and perhaps consequential costs as well.
- Contractor selection – Prepare tender lists carefully. Choosing contractors to tender requires the same care as choosing any service provider. Contractors must be comparable in organisational size, experience and ethos. They should have similar reputations for performance, quality and attitude to contract claims. Seek references from professionals that have experienced potential tenderers’ performance first hand.
- The correct contract - Even the smallest project requires a contract. This can be as uncomplicated as an exchange of letters for a simple repair. These still need to address the basics, the works, their cost, how variations are to be addressed, timescale, retention/warranty period, how disputes will be resolved and more. With more substantial projects, contracts are much more critical because the risks and their consequences are so much greater. Increase in the use of Design and Build contracts has lead many employers to believe that this is the most effective form of procurement. This is because the employer contracts directly with the contractor who guarantees a finished product on time and at an agreed price. Design Build however, suits contractors, their approach to procurement and cost. In addition, contractors have control over their professional teams, other than the clients’ agents, whose limited role is to monitor quality and contract compliance, yet without any design responsibility.
- Defects and Warranties – There should always be a retention held by the employer throughout the contract. This will be released in part on completion and in part when any defects have been rectified. Whether the contact is underhand or by deed affects the warranty period. In addition, other and additional warranties may be available.
- Professional Advice – Employers’ professional teams must be selected as carefully as the contractors for tender lists. Justification of employing a professional team remains a question for many employers. Independent guidance is needed through the whole process. Every employer needs advisors on their side.
Many schools will only tackle large projects infrequently. Aside of securing the building that is needed, minimise the risk and achieve value for money. Lack of clarity, indecision and changes are just three ways in which employers can create situations that lead to disputes. All disputes have the potential to be time consuming, expensive and destructive to resolve. Consequential loss can often exceed the contractual cost of error, delay or both. Allow plenty of time and take advice early.
So says Howard Jenkins who is a Fellow of the Royal Institution of Chartered Surveyor, Senior Consultant to the Baqus Group PLC.
Howard specialises in dispute prevention as well as resolution and acts as an Expert Witness.
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