Which clients deserve a medal? Which should be shunned like yellow dogs?
And which deserve a day in the stocks dodging stockpiled brick-ends? As the industry enters a world where single-stage lowest-cost tendering is the norm again, where fees are being slashed and where the public sector comes to the rescue with the agility of a man wading through waist-high syrup, firms have to ask themselves who they can trust to pay their invoices.
It is inscribed on page one of the Book of Construction that if you do a good job, you deserve to be paid the sum agreed at the time agreed. Sadly, and demoralisingly, this seems to have become a lottery. Two big developments have bitten the dust this week. Mountgrange, the developer behind the £300m Carltongate project in Edinburgh, has gone into administration. And in Wakefield, Anglo Irish Bank has pulled the plug on a £200m shopping centre halfway through construction.
In the public sector, we’ve seen the Learning and Skills Council (LSC) turn a £2.3bn building programme into a clown act. The aim was to transform the UK’s further education colleges; now it seems that out of 152 schemes put on hold in December only eight will go ahead, while the rest will sit on ice till at least September. This has cost the colleges and their teams hundreds of millions of pounds, so it was no surprise when Mark Haysom, the LSC’s chief executive, lost his job, but little consolation for the 40,000 people who may now do likewise. The least the government can do now is make more money available, create a timetable for the other colleges and reform the process to ensure this doesn’t happen again.
Finally, there isn’t much relief to be found in the Gulf. According to UK firms in the region the average contractor is owed about £50m, consultants’ fees are subject to arbitrary, and swingeing, reductions and many are wondering how much help the UAE’s legal system will be if push comes to shove.
It was no surprise when the LSC’s chief executive, lost his job, but little consolation for the 40,000 people who may now do likewise
On a happier note, a report by Business Vantage points out that there are still some clients that want to cut costs by working more closely with their suppliers. So we must be grateful to the Stanhopes of this world that take their partners for better or for worse. BAA, which we feature this week to mark the anniversary of Terminal 5, is not the client it was. But that doesn’t mean it’s a worse one. It’s investing £800m a year and will continue to upgrade all its airports until they’re sold. Like all clients, BAA is under pressure. Everyone in the industry would accept that. But it has not turned into an axe-wielding maniac; rather, Colin Matthews, it chief executive, says he wants to bring costs down by better integrating design and construction. This is an intelligent response to adverse conditions, and shows it can still act as an enlightened client in these dark days.
Our new ruler
The RICS’ new rules of measurement, to be published on Monday, may not sound sexy but they will bring the profession into the 21st century. For the past 87 years QSs have relied on the standard method of measurement when calculating costs; now these are to be pensioned off, and cost managers will have a clearly defined way to treat intangibles such as preliminaries, overheads and profit, risk allowances and inflation. The idea is that this will produce cost plans that reflect the true costs of a project, and are directly comparable to cost plans produced by other cost consultants. This should give clients and funders more confidence when it comes to spending and lending – and that could make the difference between projects getting the go ahead or being consigned to the desk drawer of history.
Denise Chevin, editor