Offsite construction has been heralded as the future for many decades – so what is standing in its way?
Offsite construction is the future – and has been for over 70 years; it has been the solution to a problem ever since the first major offsite construction programme involving prefabricated public housing following the 1944 Housing Act. Thereafter, many different types of offsite production, especially for public housing, were developed. Offsite is not new or modern, it simply experiences continuous refinement and recurring times of high importance.
Its earnest yet intermittent discussion is driven by the belief that its use will improve productivity and predictability, reduce time for delivery and provide better quality control. This long-held belief is currently augmented by the availability of BIM and highly developed automation. Furthermore, it is seen as overcoming current skills shortages and providing better working conditions for much of a building’s construction.
Some of the barriers are problematic, but those relating to procurement restricting collaboration within the supply chain and how existing contractual arrangements preclude its use are not
If all these benefits are deliverable, what is stopping the greater adoption of offsite manufacture? Publication of the government’s Construction 2025 Strategy, with its references to smart construction and offsite manufacture, was seven years ago. The barriers to adoption are frequently cited to include past experience, prejudice, unsuitability for particular types of work, vested interest in existing processes, being unconvinced on cost/benefit considerations because of a lack of compelling evidence, the nature of construction procurement restricting collaboration within the supply chain and the cost of reorganising this, and the way that contractual arrangements preclude its use.
The precise definition of offsite construction directly determines the nature and extent of barriers to its adoption. There is no denying some of the barriers are problematic, but those relating to procurement restricting collaboration within the supply chain and to how existing contractual arrangements preclude its use are not.
That is because those two barriers are perceived rather than real. First, the nature of construction procurement does not restrict collaboration because procurement is already multifaceted – it is not just one approach and its many approaches involve significant degrees of collaboration. Second, the view that existing contractual arrangements preclude the use of offsite construction is far off the mark.
The view that existing contractual arrangements preclude the use of offsite manufacture is certainly misleading and, at worst, wrong
The industry has for many years had a range of offsite production solutions which procurement has accommodated and where standard form contracts such as JCT have been used accordingly. For example, the JCT Constructing Excellence Contract (CE) and the JCT Framework Agreement encourage and provide for extensive collaboration. Also, other JCT contracts contain collaborative working provisions which should not be overlooked in what is the wide spectrum of construction procurement for offsite production.
The view that existing contractual arrangements preclude the use of offsite manufacture is certainly misleading and, at worst, wrong. For as Robert Shaw of Lavan stated: “The form of building contracts used for traditional construction will be suitable for modular construction subject to some modification.” His suggestion that even traditional contracts can meet the needs of offsite manufacture is made because no doubt it is far better in such situations to use a known base rather than create a bespoke contract. However, JCT contracts go far beyond this approach.
Where building projects comprise largely offsite manufacture the issues of quality control and payment for offsite materials are often purported to be specific problems. However, theoretically the problem is little different from that of small-scale offsite production. That is why JCT makes provision for these and other such issues in its standard form contacts. These contracts include, in addition to CE, the Design and Build Contract, the Prime Cost Contract, the Management Contract and the Construction Management Contract. All are available for use in conjunction with all forms of offsite manufacture: with or without the use of the Framework Agreement.
None of this is to say that construction cannot improve; it can. BIM and automation provide great opportunities to enhance construction quality and improve productivity, but we should not be blinded into believing any specific form of offsite manufacture is the silver bullet. As Paulo Coelho said, “It’s one thing to feel that you are on the right path, but it’s another to think that yours is the only path.” JCT offers a range of paths to meet the various demands for offsite manufacture.
Peter Hibberd is a past chair of the Joint Contracts Tribunal