The ODA manifesto for building the 2012 Olympics talks about delivering on time, to a tight budget.But if that is to be done, novel ways of thinking are needed
What are you up to in the next 2,097 days? Better still, are you up for a little bit of building and civil engineering between now and Friday 27 July 2012? Yes, you are? Excellent. That’s the opening day of the London Olympics.
The Olympic Delivery Authority recently published its draft manifesto. It asks you building folk what you think of the ODA’s “procurement policy”. To make sure it gets everything ready for Friday afternoon, the ODA says it needs to “work with some of the best designers and construction companies in the world, many of them based in the UK. And the finest chippies and plasterers”. (I added that last bit, as I want the ODA to think about the putter-upperers, too. You know the people I mean – the ones who actually do the work.)
And the ODA manifesto explains that the task is to build on time, and to budget. Actually, it says, “… deliver on time against a tight budget”. You’ve heard that phrase before, haven’t you? You were weaned on it. Every single construction job I know has used those words as a mantra … like a hymn … an instrument of thought. It’s why I came into the disputes business!
But why don’t we try a different slogan? “Let’s deliver on time and make a profit.” If you try to build anything to a tight budget, you will end up dancing … dancing with lawyers. And dancing with a lawyer is like dancing with a gorilla; you only stop dancing when the gorilla says stop.
Building to a “tight budget” is the curse of construction worldwide. And here on page, one of the manifesto is the same old-fashioned notion. Book your place in the High Court now. But how about this? For every £1 in the budget, you use the best designers and contractors in the world to design for 60p; you know you will spend 50% more, and you let people make a profit. Page one of the manifesto needs to be rewritten.
Dancing with a lawyer is like dancing with a gorilla; you only stop when the gorilla says stop
So are you ready to make a profit? Let’s have a look at the delivery programme. Detailed planning and detailed design is all to be done by 1 July 2008. Construction work is supposed to start one year before, on 1 July 2007 …
Oh, hell – any overlap between design and build calls for a red flashing light. The trick in all building construction is to give the builder the drawings on day one of pricing. And who will build? It will not, please, be the contractors that bid lowest, or those subcontractors that are pretending to be able to do jobs that they don’t have resources for. Focus, please, on the subcontractors and their competence. Place the contracts with the price nearest the mean average. Do you see what I mean by profit?
And, if the drawings are all done and go with that order to the contractors, the next mantra can be: “no creep.” Time without number, I decide disputes about creep. Squillions of variations crucify this industry. I am telling the truth when I say final accounts bear no resemblance to contract price. Variations cut the legs from that “tight” budget and, even worse, utterly torpedo the programme. If you are to stand half a chance of hitting the completion date, stop the design – then, and only then, start to build. In other words, the idea, daft as it sounds, is to have a final account for the steelwork, the M&E and the plastering that is the same as the contract price. Don’t be a creep. Finish designing, price it, then build it.
Now then, what about morale? If this Olympic adventure is to be a success, don’t make people fed up and suspicious at the outset. The ODA proposes to use the NEC3 – the “New Engineering Contract: Version 3”. No matter how much I tell folk how brilliant that animal is, they do not believe me. Every time I do a dispute on the NEC, I find the parties flummoxed by its machinery. The industry has struggled to warm to NEC. The worst bit of it is the poppycock idea that the project manager has no duty to be impartial between employer and contractor when assessing sums payable to the contractor. NEC really must dispel that idea. The latest NEC has not won a great press. Sad, really.
Then the manifesto mentions “partnering”. Has the ODA not had its ear to the ground? Partnering works wonderfully, so long as the contractor side of partnering does what it is told and puts up with the employer’s demands day in day out. The contractor pretends it is up for partnering. But, get it on one side, ply it with the odd Mickey Finn and the truth will out. Partnering is a myth. When the chips are down and the account is in dispute, partnering gives way to dancing.
Tony Bingham is a barrister and arbitrator