Construction Confederation chairman Alan Crane, who heads the Egan working group looking at performance measurement, argues that contractors should assess their performance using a set of "key performance indicators" and then publish the results on a common database and compare the findings with their peers. By doing this, contractors can discover their weak points and focus their attempts to improve performance.
But, although benchmarking contractors' performance sounds good in theory, it is proving tough to put into practice. What do you measure? How do you measure it? And will it provide work for a legion of new consultants? These are questions that the DETR's Key Performance Indicator Working Group is grappling with.
The group published a set of "headline" indicators last September. It found that the 10 areas of performance that matter most to clients are capital cost, construction time, predictability of cost and time, defects, safety, productivity, profitability, and client satisfaction with the product and the process.
Since September, however, progress has been slow. The problem is defining the headline indicators. For instance, when measuring construction time, do you start at the planning stage, when the tender is issued, or when the foundations are laid? And when is a project complete? Meanwhile, frustrated contractors, keen to get on with measuring their Egan demonstration projects, are starting to define their own indicators. HBG, for instance, is developing a system of "balance scorecards" for measuring its performance. Director Chris Gilmour explains that four scorecards are being produced: a financial scorecard, a market and clients scorecard, a culture scorecard and a structure scorecard. He adds that four or five targets are set for each scorecard, so, for instance, on the client scorecard, HBG might set a target of working with four new clients in the year.
Kier is also developing a measurement strategy. Director Martin Scarth explains that the firm is trialling a system with subsidiaries French Kier Anglia and Moss Construction whereby defects are measured in cost rather than volume. This, explains Scarth, helps Kier prioritise problems. It is also developing a standard format for client debriefings and databasing them.
Critics claim that the drive to develop a performance database is out of control: different measurement systems produce different results, so they cannot be compared fairly. A leading member of the working group acknowledged that this is a "big problem". "Definitions are the key. If we can produce accurate definitions of what the results should show, there's no problem," he says.
But, say the critics, unscrupulous or confused contractors will produce inaccurate data, creating false comparisons. For instance, what is to stop a contractor measuring construction time to practical completion rather than when the last defect is put right? Crane acknowledges the dangers: "Of course people can play games to fiddle the figures, but that misses the point – it's a culture change we're after," he says.
Of course people can play games to fiddle the figures, but that misses the point – it’s a culture change we’re after. Construction Confederation chairman Alan Crane
The cost of implementing performance measurement is also causing concern. Will a new set of £500-a-day consultants flood in to measure productivity and dish out advice on fitting existing data into headline indicators? Asda is already talking to one consultant about a bespoke system for measuring design and construction, and Gleeds is advising Marks & Spencer on its performance indicators.
Although much of the headline information is already recorded by contractors and can be cheaply correlated, measuring the construction process on site can be an expensive business.
The Building Research Establishment's Calibre monitoring system is the market leader for construction process measurement. The system is based on year-out students observing and recording details of work in progress, then feeding back the results.
Vassos Chrysostomou, who runs Calibre, charges £100 a day for an observer and recommends two observers for every 100 operatives on site. The payback is a cost saving of up to 10-12%, he claims.
Calibre has caught the imagination of the industry. Clients in the Design Build Foundation, including Safeway, have vowed to use it on every project. But some who have used the system find it bureaucratic.
Stanhope's Peter Rogers witnessed Calibre in action on the Tate Bankside project in London. He says it induces "paralysis by analysis". Working in conjunction with Bovis, Stanhope has devised a much simpler system that was used on Garrard House (23 October 1998, pages 48-53).
Contractor R&S Drywall was monitored at Tate Bankside. Managing director Keith Adams says the observers met a lot of resistance from the workers over the first few weeks because it felt like Big Brother watching over them. But, he adds, they came to like the system because it got them off the hook for some stoppages. If the power went down and they couldn't work, the workers would ask the observer to "write it down and tell Schal".