Prime contracting can save 12%, says MOD

Defence minister John Spellar will next week reveal a new form of contracting developed by the Ministry of Defence that can save 12% in costs over a building’s first 35 years.

Spellar, who will turn the first sod next Thursday on an Amec sports centre that is a pilot scheme for “prime” contracting, is set to explain how savings can be made by centralising works through one contractor.

Amec believes it can better the 12% figure, calculating that it can save up to 15% on the going rate for this type of building. If it meets this target, the extra 3% on the £5.5m project in Aldershot will be shared between the contractor and the MOD.

Laing, too, has managed to cut 12% from the expected life-cycle cost of a £3.5m sports centre it will start soon at Wattisham in Suffolk.

Both projects are part of the MOD’s Building Down Barriers initiative, which seeks to achieve savings by making a contractor solely responsible for all aspects of the project from an early stage.

The MOD believes that, in the past, designers and contractors on a project have not worked together closely enough to reduce project costs. It expects the new system to change this.

Defence Estates Organisation director Clive Cain said that, at Aldershot, Amec specified materials that would last longer than cheaper ones, making them more economical over the building’s life.

With Amec in sole charge, the team has been able to incorporate design changes quickly. For example, when the MOD decided that it wanted an Olympic-sized, rather than a 25 m long pool, the new design was created in three weeks rather than the usual six months.

Cain also believes that the MOD will save on any future legal costs relating to the buildings. With Amec and Laing taking responsibility for defects, the MOD will not struggle to win compensation if problems arise in future. All it has to do is maintain the sports centres to the contractors’ set standards.

Cain conceded that the 18-month development period for Building Down Barriers had been extremely difficult for all involved.

Some firms, including architect Foster and Partners, dropped out of the projects because of the complexities of the system, although participants have also cited the MOD’s own difficulties in adapting to prime contracting.

The MOD plans to introduce prime contracting across its £1.7bn-a-year spend, with whole packages of buildings set to be let to firms with sole responsibility for construction.