CM in the dock

This court case has been billed by some as placing construction management under hostile interrogation, when in fact it was the competence of the assigned construction manager that was in question. Great Eastern Hotel, as the claimant, had been specific in where it perceived the blame lay for the projects delay and the ensuing costs associated with it. In accordance with the terms and conditions of the construction management agreement, and what could be termed best practice for a specialist practitioner, that blame lay at the door of Laing. Through the court proceedings Laing has been unable to offset that blame.

Pure and simple.

So, no undue cause for alarm then for CM specialists currently operating in the UK? As long as you perform in accordance with the terms and conditions of the CMA and exercise all of the skill, care and diligence to be expected of a properly qualified and competent construction manager, all will be well and the most you could lose is their fee …

Well, maybe not.

As Hercule Poirot would have said, “I put it to you, Laing’s expert witness in this instance was not trying to resolve the problem of defending the competence of Laing as a specialist construction manager, but actually the problem of what the assigned construction manager is liable for if they are proved incompetent.”

As the report on the case states, CM as a concept can be described as a method of procurement whereby the construction manager manages the construction of the project without accepting the principal risks of time and cost, which remain with the client.

The advantage to the client of this form of procurement is that responsibility for the construction can be handed to professionals who can manage the risks and the work can be started before the whole design is complete.

Well, in this case, the project’s risks have actually borne by the construction manager. It would appear in this instance it was okay for the other professionals to simply receive their agreed fees, but not the construction manager. Therefore, construction managers everywhere should be warned.

Should we perhaps be questioning the actions of those other professionals who awarded the CM contract to Laing? Controversial maybe, but Laing’s personnel were acknowledged as not sufficiently experienced in CM. They were staffed with a construction team. Could it be that the ill-fated project was a predictable surprise? Was the Laing team sufficiently qualified and competent in CM to have been awarded such a project?

I cannot help wonder what the outcome would have been if two particular events had occurred. First, that Laing had been provided with the opportunity to convert its original CM appointment to a guaranteed maximum price contract, as originally intended. If that had been the case, all parties would have had the opportunity to agree a final programme duration and associated costs for the project, and Laing would have officially relinquished its status as a fee-earning professional and reverted to a traditional risk-taking contractor. Second, if the client’s team had appointed a specialist construction manager that was staffed with personnel with backgrounds in CM rather than construction.

As creative management consultants, we endeavour to ensure the problem owners have an agreed and clearly defined the problem statement, before setting off and trying to resolve it. In this case it would appear there was not an agreed problem statement. It seems John Laing’s expert witness was trying to resolve the problem of John Laing’s liability as the CM, whilst Great Eastern Hotel’s were resolving the problem of Laing’s competence. What the outcome would have been if the expert witnesses roles had been reversed? Just how would have the eminent and highly respected CM experts Ian Wylie and Gary France of Mace have tackled the problem of resolving the CM’s liability? Food for thought.

Elvin Box, formerly with Bovis Lend Lease and Schal, is now a director for the creative management consultants, Stand Up Management