ODA to scrutinise project manager CLM’s fees across the board in further bid to make savings
The extent of the costs review that is under way at the body project-managing the £9.3bn construction of the 2012 Olympic Games was laid out by David Higgins, the chief executive of the Olympic Delivery Authority this week.
Higgins said a review of fees paid to project manager CLM, a consortium made up of Laing O’Rourke, Mace and CH2M Hill, would look at whether staff needed to be cut and whether project costs could be squeezed.
He said: “We’ll review everything – the cost make-up, the structures, the resourcing levels. We’ve had a team working on it for the past four months, and yes, the [process will include] the usual commercial negotiations that are involved in any commercial contract negotiation to ensure that we’ve got fair value.”
In August, Building revealed that the ODA had employed QS Gleeds and accountant Ernst & Young to scrutinise CLM’s costs, after £151m was spent on the firm in the year to March 2009. It has since been reported that CLM is to cut staff by 10%.
Higgins said: “We’re looking at the cost recovery items. We’re making sure the costs they claim are valid and that the number of people they need is valid.
“If we’re finishing ahead of schedule we want to make sure we get the benefit of that in terms of what rates and what estimates we approve.”
Higgins’ comments come in the week Balfour Beatty winched the 3,000-tonne roof of the Zaha Hadid-designed aquatic centre into place (see below).
Next year will see 10,000 construction workers on the Olympic site, up from 7,500 this year, with £1.5bn of construction spend concentrating increasingly on cladding, M&E and fit-out as the venues’ structures near completion. Higgins said all remaining major pieces of work would be let by the end of the year, with announcements on the winning bidders for the last two athletes village jobs and construction of a £25m school, the Chobham Academy, for which BAM is the preferred bidder, expected within weeks.
Higgins denied that the construction cost at the village had been slashed by tendering externally to main partner Bovis Lend Lease, but admitted the recession had influenced the decision to let the work.
“The letting enabled us to transfer the construction risk to the partners through a fixed-price contract. That’s an advantage of the recession.”