Teamwork means better business

In his Accelerating change report, Sir John Egan expressed his vision of the future of UK construction. He wanted to see a time when "...the construction industry is able to offer clients projects that are predictable on cost, time and quality; where the industry understands its customers needs and can deliver products which are predictable in every way..."

Egan also said that clients should improve their understanding of construction, and they should "help lead the process of creating integrated teams".

Stanhope is making great strides in this direction, developing an integrated, non-adversarial approach to construction. In a recent round table discussion with Martin Long, Stanhope's project director, and several of their suppliers, BSj learned that it is possible to achieve Egan's vision.

The latest project completed by Stanhope is 95 Queen Victoria Street. This is one of a series of buildings in London which has been put together by Stanhope teams. Paul Davey of Bovis Lend Lease, construction manager on the Queen Victoria Street building, explains: "This building is part of Legal & General's portfolio of property investments. What Stanhope has done with us is to build a team from preferred suppliers, contractors and consultants. All of these relationships are based on negotiation. There is no competitive bidding. The trade contractors are treated the same way."

These relationships last longer than a few projects. In some cases, the suppliers have worked with Stanhope for over a decade. Martin Long says: "The companies we work with have effectively selected themselves. They suit our way of working. We tend not to work with companies which are divisions of large corporates. But all the people we work with on the contracting side tend to be small, privately-owned companies where we have a historical level with the owner, or managing director."

The usual question that is raised when clients hear of this kind of working is, "Am I really going to get the best price for the job?". Long has personal experience of dealing with this question: "A lot of the financial institutions do have a problem with the way we work. They put a maximum price on a job because they are concerned that they can't get the job for the price we say we can. We have to discuss the process with our clients. We work with particular funders to get them to buy into this whole idea of negotiation, single source trade contractors and so on."

Stop fighting, start talking
But Long's argument for less adversarial work is compelling: "There is a paranoia in the industry that if I go to a single source supplier or trade contractor, I won't get the best price. Our answer is, no, you won't get the lowest price on day one, but we feel we get the best value at the end of the job. How many people go low cost at the start of a project, and then end up at the end in court and taking two years to sort it all out?"

Davey says establishing costs at the start is important: "We give trade contractors the cost-plan values, or a percentage of cost plan value. They know what budget we are working to, which is the budget developed by Mott Green Wall in this case. We can then have cost discussions up front, so we have greater cost certainty."

"We now appoint trade contractors very early, so that we are not presenting them with a fait accompli of a particular layout or manufacturer's equipment," says Long. "We get the benefit of a contribution from the m&e consultant in terms of a design, and then have our contractors give it a reality-check, and a cost check."

From the point of view of manufacturers and smaller contractors – who would usually expect to be much further down the pecking order – this kind of working has proved revolutionary. Ian Windrigde of Eton Associates says: "The construction industry is so confrontational. From day one you start to make a claim because you've been screwed down on your price, and you have to make a profit somehow. But the Stanhope approach is 'we're going to do things differently'. They recognise that the way to deliver good jobs and good quality is to work with the people who have to do the jobs at the end of the day. Our voice is heard and listened to. We are involved from day one, and these jobs are finished on time, to budget and to very high standards."

Kevin Burrows, contracts director of Gardner & Co adds: "This is totally different from how everyone else is doing business in the construction industry. Right from the start we're made aware of what the cost model is, and we are invited to make comments on that. That's where jobs can go wrong – if there's an unrealistic cost plan, and everyone is trying to squeeze the job. Tempers get frayed and corners are cut. The consultant puts his spec together in isolation, produces it then it becomes a battleground."

Mark Kowal, of architectural practice Sheppard Robson agrees: "This way of working makes the more common method look archaic by comparison – barriers in place, and designers on one side of the table, and contractors on the other with everyone defending their position."

Stanhope has also prohibited use of retentions; there are no bonds and no 12 month defect clauses. These factors go a long way to helping suppliers run their businesses better. Windridge says: "I've yet to find the true worth of a bond. I do know that it affects your business cash flow and overdraft. The bank will give you a bond, but it impinges on your overdraft facility."

The IT factor
One of the key reasons for the success of this type of working is negotiation and discussion. "Half the issues that arise on the job, especially with services, can be resolved in the open office," says Windridge. Burrows adds: "We sit on the same level as the professional team, and out of that come good value engineering solutions."

Martin Long says: "Part of the reason that negotiations are straightforward is that people know there will be more work coming their way. There's no point arguing over a few thousand pounds now, because you could be throwing away five years' work."

Discussion after the project has also proved useful. Kowal says: "We found the feedback process very useful. Simple buildability things came to light. Tricky things that we might have designed, we don't do in future because we know how the team works. We feed this back into our technical department and set up standard details. These include sets of notes on things to watch out for, and things we should aim to do."

The team used IT to aid co-operation and better design. Long says: "We used a collaborative tool right from the beginning so that every trade contractor and designer on the job had to have an A-site address. We used this for all drawings and 70% to 80% of all paperwork on the job was sent this way. We tried to outlaw the fax! People would scan drawings and send them by electronic transfer on A-site instead."

The group emphasises that teamwork fuelled the use of IT, not the other way around. Trust and co-operation were vital. For example, 3D modelling of 95 Queen Victoria Street was overseen by Mark Terndrup, associate director of Waterman Gore. "Using 3D interactive design is a first. We did the whole thing in 3D, working closely with the team. We needed their input. We were using novated trades and suppliers, that means that as designer I can pick the equipment that we want to use from the Stanhope supply list. That means that when it's handed over, we know that it will all fit together. This saves us having to design for several options all the time because we don't know what the contractor is going to use."

While 3D modelling is very useful, it does require careful management of design. "If you have a fluid design, you can't use the 3D model so effectively. But design on this job was constant," says Terndrup. He adds that his vision for the model is that eventually it will become the basis for the o&m manual on future Waterman Gore/Stanhope projects.

Stanhope has prohibited use of retentions; there are no bonds and no 12 month defect clauses. This helps suppliers run their businesses better.

There are challenges to overcome for any team when using IT. "We had to get a foreman, with twenty years in the business to log on and check his e-mails every morning," says Long. "They can be reluctant at the start, but we have found that people become very enthusiastic once they are familiar with it. That's the level you're starting at."

Architects also have issues with 3D modelling. "To get the benefits out of 3D you have to go down to the minutiae," comments Kowal. "To model all of that would take an age to do. It would have to be done by an architect who understands the building process, and there are very few architects out there who want to sit at a computer and model all day. We do use modelling to help us understand how the roof would work on this project, and to negotiate with planners. But on this type of project the schedule is very aggressive so we don't have time to go into great detail."

But everyone felt that use of this kind of technology has enormous potential. Martin Long points out that because of electronic communications, there is a living record of the job, which won't get lost or misplaced. Everyone involved could, in theory, have a copy of this. "All of the o&ms have now been completed for this job and you can interrogate all our records," says Long.

Long is aware that while the Stanhope way of working has huge advantages, there are some areas where more work could be done. "This way of working makes it easier to discuss new ideas. But we haven't got to the point where new ideas on, say, sustainability are coming through any quicker. It's easy to say you could come up with an idea and get it reviewed. We are not very good at finding new products and new ideas to respond to a different agenda such as energy, sustainability or waste management. It is still quite an uphill struggle to change, even though we've got the team working together. You have to convince everyone that a new product might be better, and I don't feel we do enough of that."

The elusive trust factor
The team holds 'lessons learned' sessions and there is a short report produced. Stanhope also holds quarterly meetings to talk about what's happening in the marketplace. Innovation, however, remains a sticking point for the whole of construction: "As an industry, there are a lot of suppliers that say they have great ideas. How we apply them on our jobs seems to fall short," comments Long.

Teamwork fuelled the use of IT, not the other way around. Trust and cooperation were vital in getting the technology up and running

But if this way of working is so successful, why isn't it more common? Long says that the simple answer is that trust is difficult to engender. Chris Trew of Mott Green Wall says that lessons learned from working with Stanhope can be transferred, but that each client has their own preferred way of working.

In fact, one of the tough things about working in a non-adversarial climate, is going back to the old ways. "It is difficult to take a team of people who like working the Stanhope way, and put them back on a job with a client who wants to bang the table and wants to trip you up at every turn. You find that your man may not react the right way. He needs to go back to being a contractual animal. It's difficult to switch that on and off," says Burrows.

It is both encouraging and frustrating to hear about the Stanhope teamworking methods. Encouraging because it is obviously possible to achieve non-adversarial working relationships within construction. But frustrating because too few people are even attempting it.