Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 20-39)



  20. Looking to the future now, if you turn to page 39, you will see at paragraph 4.13, that the survey of the building interior completed in September 2001 logged some 7,500 defects. As you know, there has been a lot of concern, particularly last summer, about the air conditioning, and I know it is not called that, but however we get fresh air or lack of fresh air into the building. Just tell us a little about how you are assessing the views of the occupants of the building and how you can improve their working environment.
  (Sir William McKay) We have to balance the desire of the House service to know what is going on with Members' rational fatigue with surveys. However, we are trying to balance this by assisting in a survey currently being undertaken by the Associated Parliamentary Group for Design and Innovation on the impact of Portcullis House on Members' work activities and attitudes. I can say, without descending either to the level of gossip or revealing a report which is not yet written, that the initial feedback from the survey has highlighted the fact that Members and their staff use and appreciate the building in different ways, but there are Members and there are others who believe also that Portcullis House has vastly improved the way they do their jobs.

  Chairman: Thank you for that, Sir William.

Mr Williams

  21. Sir William, back to the bronze roof on page 25. It says there that the Commission approved a number of changes affecting the cost of the building, and the two main elements were the bronze roof and the fenestration elements. What changes were approved which led to the doubling of the cost of the bronze roof?
  (Sir William McKay) I think the bronze roof, if I have understood you correctly, simply came in at a lot more than we had anticipated. It was not that we changed the specification, but when we received the tenders they were in excess of what we had thought likely.

  22. I am sorry, Sir William, I meant that you would extend, and the Report says "approved a number of changes affecting the cost of the building". Let me read it to you again: "Between its approval of the project in May 1992 and the start of construction in January 1998, the House of Commons Commission approved a number of changes affecting the cost of the building. There were two main elements to the changes:", therefore there must have been change in relation to the roof. It was not just a matter of a difference between the original estimate and the final tender, was it?
  (Sir William McKay) There was not change in respect of the roof, there were other changes, and I can tell you what they were.

  23. Yes, please do.
  (Sir William McKay) There were new statutory requirements for health and safety which were introduced and applicable to the House, after the Commission agreed the budget for Portcullis House. After the final sketch plan had been approved there were other things which by law we had to do. There were some things which it made sense to do, even at the cost of an excess of the budget, like putting the PDVN wiring into this building.

  24. But that has nothing to do with the roof. I am asking specifically about the bronze roof. I want to concentrate on the bronze roof. At least, I think it is bronze. It looks rather black for bronze, but perhaps you will explain what happened to lead to this miraculous change in colour.
  (Sir William McKay) I do not know what happened with the change in colour. It rather surprised the architect. I gather that the change in colour was within his expected limits.

  25. I am not sure what that means.
  (Sir William McKay) He expected the roof, I suppose, to be—

  26. Bronze?
  (Sir William McKay) Yes, bronze. A little bit black or a lot black. It turned out to be a lot blacker than he anticipated.

  27. Blacker than it is now?
  (Sir William McKay) Yes.

  28. Because I understand that there was actually a change made, was there not?
  (Sir William McKay) No, there was a proposal for a change, and when the Commission discovered it was going to cost a million, it would not do it.

  29. Right. How could the colour of bronze become such a surprise to whoever specified bronze? In fairness, Sir William, that is not a question for you. Whichever of your colleagues who is best placed to answer, please do so. Why was it a surprise? Because it looks like a sawn-off power station, does it not? Who is owning up to that? Who is pleading guilty?
  (Mr Barram) Mr Williams, I am a finance man rather than an architect, but the Final Sketch Plan Report—and I quote—says "The roof will be patinated bronze panels, nearly black in colour to match the cast-iron roof of the Palace." That was the report in February 1992 which was debated in the House on 9 March 1992, and that is a direct quotation.

  30. When the price increased, did that in any way affect the fees that were paid to anyone in relation to the work—that is, the consultants' fees?
  (Sir William McKay) The fees were on a percentage basis, yes.

  31. On a percentage basis, incidentally, there was a recommendation from the Northcroft Report—this is on page 30—"The House of Commons accepted in principle the Northcroft Report", and this referred to the method of charging fees. However, the House did not make a formal offer of a fixed fee to the architects or enter into negotiations to change the fees basis with the other members of the project management team. Why not?
  (Sir William McKay) We negotiated after the Northcroft Report a change with the project manager and the quantity surveyor. The engineer's work was largely complete, so there was, it seemed, little benefit to be gained there. The matter was raised with the architect, but it seemed likely that with the capital costs dropping, the economics pointed rather to maintaining our original position, because we felt that the architect, perfectly reasonably in his own interest, might want to retain the level of income he had anticipated from the scale fee before the capital costs were accounted for. Negotiations with the construction managing firm made little progress, and we could not, after all, force them into a new contractual arrangement. We did what Northcroft recommended us to do, so far as we could.

  32. You see, in an earlier paragraph it says that when a new project manager started work in 1996 he suggested a move from percentage to fixed fees. However, the Parliamentary Works Directorate did not attempt—did not attempt—to negotiate the contract. Now whoever was responsible for that, tell us why?
  (Mr Webber) Chairman, the concern at that point was that the firms concerned would wish to protect themselves unduly against the risks remaining in the project, and that the resulting fee costs, as a result of going to fixed fee at that point, would have contained an undue margin of risk protection for the consultancy concerned and would have resulted in a higher cost to the House, not a reduced cost.

  33. If you did not attempt to negotiate, how can you be sure of that?
  (Mr Webber) Considerable discussion took place, Chairman.

  34. So there were not negotiations, but there were actual discussions between the parties?
  (Mr Webber) There were discussions within the project team to decide which was likely to be the best way forward.

  35. I know that you did not want to prolong the delay, but I am surprised to find that a lot of contracts ended at the end of 1997, whereas the construction did not start till 1998, so that Laings, for example, raised an extra 10 million in fees. Were there any major projects, other than the underground, that accounted for that?
  (Sir William McKay) Nothing other than the underground, that I know of, no.

  36. When negotiating the contract, I know it says in the report that you took various risks into account, but someone must have massively underestimated the risk in the construction of the underground, must they not?
  (Sir William McKay) The biggest surprise in the tender, Chairman, was the roof, and that was a pretty unusual piece of construction.

  37. Who got it so wrong, then? How did someone estimate half of the eventual tender price? Who did that? Who was it who got the figure wrong?
  (Sir William McKay) The project team, I imagine, will have done their best to look into the future, but the future was particularly cloudy, because the technology and the use of this kind of material was, while not unprecedented, at that time relatively unusual.

  38. If it was unprecedented or relatively unusual, what makes you so sure it was the right thing to go for?
  (Sir William McKay) It was the Commission's decision that the balance of capital and lifetime costs made it attractive, together with its aesthetic attractiveness.

  39. The Chairman referred to various things that have happened. You remember the leakage of water down into the library rooms underneath the atrium area. Who put that right? What caused it, who put it right and who paid for it?
  (Mr Makepeace) I am sorry, I did not catch that.


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