Should life cycle considerations be built into building contracts and project planning? The JCT is launching an industry consultation with this in mind, so start thinking
The JCT has launched a further industry-wide consultation on sustainability, this time with an emphasis on life cycle considerations. Its purpose is to collect data and obtain views from property professionals and stakeholders on this issue, and to establish how practices are developing. The findings will build upon the earlier work (2008) that resulted in the publication in 2009 of JCT’s guidance note Building a sustainable future together, and the inclusion of provisions on sustainable development and environmental considerations within revision 2 of its standard forms of contract.
Sustainability is a perpetual consideration but globalisation has changed our view of its importance - for example, the government’s Strategy for Sustainable Construction (2008) and its 2050 carbon commitment. However, sustainability is not always a key driver because it is seen as more expensive and consequently provides less competitive solutions. This view is short-sighted - just consider the potential long-term savings from energy and water usage, and from reducing waste and its disposal. It is necessary to maintain our focus on sustainability.
The key findings of the 2008 consultation were:
- There is no single solution to tackling sustainability.
- There is scope for the introduction of contract provisions (on a limited scale) and for producing contract (not project) specific guidance.
- Sustainability provisions can be included in the contract conditions, in a schedule to the conditions or in other contract documentation.
- There is preference for inclusion of detailed requirements in the project specification rather than the contract itself.
Important matters were raised, not least that there is no single solution. Arguably the property and building industries are too fragmented but it may be more a matter of providing integration through co-operation. However, procurement could also change because decisions on most sustainability matters fall within the pre-construction period (an issue for the pre-construction services agreement and/or consultancy agreement rather than the building contract).
The sustainability provisions that together with value engineering, performance indicators and monitoring provisions were introduced by way of the Supplemental Provisions have been maintained in JCT 2011 editions and will remain pending the outcome of the consultation.
Despite the difficulties associated with life cycle costing and there are many … it should be an essential component of any project appraisal
Many have found the concept of sustainability a difficult one to get a handle on: with so many different aspects this is not surprising. JCT’s revised guidance note refers to the Brundtland definition of sustainable development, that it “meets the needs of the present without compromising the ability of future generations to meet their own needs”. This is a good starting point and when used in conjunction with life cycle planning and costing (or rather whole life planning and costing) it provides a powerful decision making tool. There are various definitions as to what constitutes life cycle and whole life costing but for our purposes it is only necessary to appreciate that life cycle costing (which often only relates to the costs directly associated with construction and maintaining the building) is a sub-set of whole life costing.
Life cycle costing has been around for well over 50 years and has served many well, but its impact has been somewhat muted. Perhaps now three years after the BS ISO 15686-5 2008 publication on life cycle costing, and this year’s publication of the Construction Strategy, which puts great emphasis on whole life costing, we shall see much wider use and appreciation. Despite the difficulties associated with life cycle costing and there are many (deciding the period of analysis, replacement periods, recurring costs etc), it should be an essential component of any project appraisal. Unfortunately, it can be too readily manipulated by inappropriately changing, for example, the period of analysis or replacement period and consequently may always be surrounded with suspicion.
A further part of the rationale behind JCT’s new consultation is to bring together in the minds of industry participants these concepts of sustainability and whole life cycle planning. In doing so, we should be able to uncover how they can be better tackled and consequently improve the construction industry’s performance particularly through contracts, contract documentation and procurement.
JCT would like to encourage anyone who has an interest in building to participate in the consultation. The questionnaire is available at www.jctltd.co.uk/life-cycle-consultation.aspx
Professor Peter Hibberd is chairman of the JCT