When the head of construction at John Lewis says competitive tendering gets projects done for 10% less than partnering, it’s clear the paradigm has shifted
Liam Fox took the opportunity afforded by the Farnborough air show on Tuesday to tell the representatives of the armaments industry that either they cut their prices or he’d cut their projects. The next day, the National Audit Office told Fox’s Ministry of Defence that it could no longer “live beyond its means” (which is very much the phrase of the moment).
Meanwhile, closer to home, Paul Morrell, the chief construction adviser, told the industry, its clients, and its Biggest Client of All, that they had to put in place basic measures to improve efficiency (page 12).
Well, one likeable thing about the defence sector is that its procurement record makes everyone else look like Harvard Business School graduates, magna cum laude. But of course Morrell is right: the state may not be shutting up shop, but its spending departments will certainly be favouring those companies that can build things for the money they have available.
One of his targets is, as ever, red tape: if we could simplify the prequalification process, this would cut costs and disproportionately benefit smaller companies with fewer management resources.
Another idea is to produce buildings of “good enough quality” to serve their purpose, with an emphasis on standardisation and with that, large-scale offsite construction. If you’ve been taught in a leaky Nissan hut, the chance of having a desk in a shiny classroom in a brick-clad, pitched-roof box is pretty attractive, even if your new learning space won’t be winning any Stirling prizes (at least not this year - see the shortlist on page 10). On the other hand, standardisation can be good or bad. We may have to cut our cloth differently, but what a terrible shame it would be to take all public architecture back to the “design and build” days of the early PFI. And we certainly need a sensible, informed arbiter of what is acceptable and fit for purpose - so Morrell’s call to keep delivery agencies is a welcome one.
One other obvious ways of trying to increase value for money is to put higher value work out to competitive tender, as the MoD is proposing to do (page 13). Well, you’d expect aggression from the armed forces, but when the head of construction at John Lewis says competitive tendering gets projects done for 10% less than partnering or negotiated work, it’s clear the paradigm has shifted. Incidently, Tony Jacobs made those remarks at Building’s supermarkets conference last week (see building.co.uk), and he added that he didn’t just take the lowest bid, and that as costs were on a downward trend he was looking to see “how sustainable some of these low costs are”. That is reassuring. Partnering may be out of fashion, but clients shouldn’t mistake a fair and sustainable price that won’t lead to problems down the line as “living beyond their means”. It’s the exact opposite.
Small change, big difference
The latest report from the Zero Carbon Hub is a thoughtful piece of work (page 22). Oh sure, it may sound dull - the shortcomings of the standard assessment procedure in determining compliance with Part L of the Building Regulations is never going to be that sexy. But this report is important for two reasons. First, it indicates how SAP needs to develop to meet the zero carbon agenda (the performance of our future homes will only be as good as the performance of the program that measures it). Second, the Hub has shown it can come up with strategic solutions acceptable to housebuilders and the government. So it is perhaps a bit myopic of the latter to threaten the withdrawal of state funding (a paltry £750,000 last year) once the definition of zero carbon has been finalised. Achieving that goal requires thinking through the scientific framework and then painstakingly filling in its technical details, and this report is a good example of that. Surely that’s worth a few coppers from the government’s small change jar?