Laing and Amec both struggled with major "cultural" issues in drawing up concept designs for the Ministry of Defence's new form of contracting, it was revealed last week.

Details of how the firms wrestled with the development of prime contracting were released to coincide with the start on site of Amec's contribution to the MOD's Building Down Barriers initiative.

This is designed to increase efficiency through management of the supply chain, and is being piloted by Amec on a £10m project at Aldershot and by Laing on a £4.3m project near Ipswich.

An interim report on the concept phase by research group the Tavistock Institute shows that whole-life costs of the buildings are expected to be 10% less than similar schemes.

Contractors and their teams are also promised "fair" margins.

But the process failed to achieve any savings in initial capital expenditure, although there is evidence that the new approach will lead to lower capital costs in the future.

Contractors also found it difficult to give high levels of authority to supplier "clusters", and Tavistock found that efforts to reduce costs were hampered by the teams' inability to produce reliable prices for the speedy construction of elements.

The report also shows that both Laing and Amec have identified areas of corporate policy and practice where they need to make "profound" changes to cope with prime contracting.

Commercial practice, the handling of liabilities, people management and the adoption of new working practices are all set to be rethought by the contractors.

Despite some of the projects' setbacks, defence minister John Spellar remained upbeat when cutting the first turf at the Aldershot site.

He welcomed the fact that concept designs were advanced enough for the British Army to see 3D images of the sports centre project before it began on site.

He said the projects, which are pilots for a reorganisation of the MOD's whole building programme, are "ushering in a fundamentally new and fundamentally better way to manage our building programmes".