Memorandum submitted by Construction Clients'
Group
INTRODUCTION
AND SUMMARY
1. The Construction Clients' Group (CCG)
is a membership forum affiliated to Constructing Excellence (CE),
the leading organisation dedicated to improving industry performance
for a demonstrably better built environment. CE was part grant-funded
by the DTI until March 2007 and is now a thriving membership-governed
organisation with government and consultancy commissions. Its
core activities are action research and innovation, benchmarking,
demonstration, best practice guidance, and learning networks.
2. Unlike the other forums affiliated to
CE, CCG members have a single role within the construction supply
chain and it provides independent, representation for all clients
within government and the private sector. The CCG is in a unique
position in that it is able to provide its members with opportunities
to influence government policy and regulation while also providing
opportunities for networking and the sharing of best practice.
3. Since becoming affiliated to Constructing
Excellence in March 2006, the CCG has evolved from primarily being
a lobbying organisation with considerable influence to also incorporating
a portfolio of products and services to its members. The mission
of CCG is:
To maximise client outreach and assist infrequent
and repeat clients alike to gain maximum value from their construction
procurement activities
4. The CCG is now structured to provide
its core activities to national frequent clients, regional frequent
clients and products/services to occasional clients.
5. The CCG has a seat at the Strategic Forum
for Construction as one of the construction umbrella bodies and
has representatives across a number of pan-industry boards and
working groups such as Construction Skills board, Health &
Safety Executive, Strategic Forum, a number of CONIAC sub-groups
and the Public Sector Construction Clients' forum—Working
Group 6.
6. The CCG are currently playing a key role
in the Constructing Excellence action research work on Value with
specific regard to whole life value. There are two main strands
of work required to make progress towards this vision:
— We need to understand the relative
ratio of building cost and business value. The initial capital
costs of a construction project, the maintenance and building
operating costs, and the business operating costs (salaries, IT
etc) of the organisation occupying the building are easily identified.
For the economy as a whole over 20 years, research by University
College London has shown that these figures might have the ratio
1:3:30, but ratios as high as 1:5:200 have been suggested by others.
Add in two more figures, the project design and management cost,
typically 10% of the capital cost, and the value added (earned)
by the occupier organisation, perhaps 33% more than the business
operating costs, and we find the gearing of design input, where
what is to be built is defined, to value for the business could
be of the order of 1:400.
— We need to bring together three inter-related
activities which will enable a value-driven process:
(a) post-occupancy continuous evaluation—finding
out on an on-going basis how well a new or refurbished building
actually performs, how it affects those who use it, and how it
meets the operational needs of the organisation on an on-going
basis, is notable for its usual absence.
(b) evidence-based design—recording,
understanding and cataloguing for use by others, design solutions
which work particularly well, is largely unheard of and would
be considered by many to be eccentric.
(c) briefing—this process is notable
for the wide variation in its quality, which is hardly surprising
without (a) above as how can the process be based on an understanding
of how buildings work in use and therefore their strategic impact
on the client's operation?
7. EMPLOYMENT
AND PAYMENT
PRACTICES
The CCG is involved in a number of activities
regarding this area:
— Role on the ConstructionSkills Board
to represent the role of the client and to ensure that client
capability and capacity is on the agenda of ConstructionSkills.
— Representation on the CSCS Board
and compulsory commitment for all CCG members to have CSCS cards
across their construction sites.
— Through the Strategic Forum for Construction,
the CCG is involved across all working groups including the group
on integration which is investigating fair payment practices across
the supply chain.
— The CCG is also committed to the
Respect for People agenda and the associated toolkits that have
been championed by the Constructing Excellence through the Egan
change agenda, Rethinking Construction.
— Has formally signed the FAIR PAYMENT
IN CONSTRUCTION charter set out by the OGC.
8. LONG TERM
CAPACITY FOR
DELIVERING LARGE
INFRASTRUCTURE PROJECTS
ON TIME
AND ON
BUDGET
The CCG's membership is broadly split into two
key areas:
— Frequent and "knowledgeable"
clients.
— Occasional and infrequent clients.
The CCG captures the learning from frequent
and knowledgeable clients and then disseminates this as "best"
and desirable practice to the occasional clients. For example,
the CCG has organisations such as BAA, Highways Agency and Network
Rail as members. The CCG works closely with these organisations
through the use of benchmarking and demonstration projects to
capture knowledge from major projects.
9. DELIVERY OF
GOVERNMENT'S
CAPITAL INVESTMENT
PROGRAMME
The CCG is well represented through its membership
by the main spending Government departments. Initiatives such
as "Achieving Excellence in Construction" have really
had an impact on construction procured by the public sector. For
example the March 2005 NAO report "Improving public services
through better construction" reported an increase of projects
coming in on budget (from 27% in 1998 to 65% in 2006) and on time
(from 30% in 1998 to 61% in 2006).
The CCG, through its representation on the Forum,
supports the Strategic Forum's submission to the Public Sector
Construction Clients' Forum of the OGC in March in which, jointly
with Constructing Excellence, CCG said that we wish to see public
sector procurers:
— providing clear and long-term information
on investment programmes and strategies. This gives confidence
to industry to invest in its supply chains;
— ensuring a steady deal flow which
runs in accordance with previously published timescales. This
enables the industry to keep together experienced teams to deliver
projects more effectively and to benefit from economies of scale;
— abandoning the practice of aggressive
competitive tendering in favour of building long term relationships
with contractors and their supply chains;
— promote the value agenda including
best value not lowest price tendering;
— involving construction supply chain
partners at the earliest possible stage of projects to ensure
maximum efficiencies are generated in the design and construction
process;
— delivering more projects through
integrated supply chains; and
— standardising contracts, processes
and design, where appropriate.
10. MAINTENANCE
OF STANDARDS
IN THE
SECTOR
The CCG is responsible for the Construction
Clients' Charter, which is currently a standard that must be attained
by clients and covers issues such as procurement & supply
chain integration; health and safety; sustainability; commitment
to people; design quality; and client leadership. The CCG is driving
the 2012 Construction Commitments through the revision of the
Clients' Charter and is creating a standard by which clients can
utilise in their engagement with the construction supply chain.
This new "Charter" will inject into the construction
process better understanding of why importance is placed where
it is on client related issues.
The CCG has also been heavily involved in the
joint British Standards Institute and Constructing Excellence
initiative into Rethinking Standards in Construction. This initiative
concerned with linking standards to the Construction Industry
KPIs and the performance of core company and industry issues,
future standards will be developed that assist and contribute
to improved performance and enhanced value throughout the built
environment sector.
The CCG has provided representatives to attend
workshops on sectors such as Residential, Commercial/Industrial,
Infrastructure, Building Processes and Water.
11. CONSTRUCTION
R&D
The CCG has been keenly involved in the UK National
Platform for the Built Environment, which aims to increase significantly
the level of business-led, relevant strategic research applicable
to the built environment and the Knowledge Transfer Network for
the Modern Built Environment which is more sector orientated on
immediate innovation requirements.
The CCG supports the National Platform's Strategic
Research Agenda, which has three key strategic themes defining
priority areas for the UK which require strategic, collaborative
research projects:
— Reduced resource consumption.
— A new client-driven, knowledge-based
process.
12. REGULATORY
MATTERS, SUCH
AS HEALTH
AND SAFETY,
AND THE
BUILDING REGULATIONS
The CCG has been asked to respond as to what
it sees as the main issues in relation to a number of industry
consultations such as the review of the CDM 2007 Regulations,
BERR's draft Sustainable Construction Strategy, H&S, Construction
Act, Building Regulations, and the recent Department of Work and
Pensions debate into the increase in fatal incidents to workers
in the housing sector of the construction industry. There are
two levels; macro—industry and government level and micro—business
and operational level:
— At the macro level we see a greater
need for more inter departmental government collaboration to address
the duplication and potential confusion of civil and criminal
liability for health and safety requirements for construction.
This relates in particular to the regulatory process and application
of better regulation and Hampton Review principles.
— To some clients construction refers
to a new project on a green field site, to others it is an extension
of asset management and facilities management and do not see themselves
as constructors. More effort needs to be made in engaging with
non construction industry stakeholders whose members may carry
out construction work, be they small, infrequent, one off or repeat
clients. In essence we need to raise the awareness levels outside
of the construction industry and promote generally accepted ways
of doing things for clients who procure construction work. Our
concern is that the regulators and the construction industry are
too inward looking and do not actively engage enough with non-construction
stakeholders to address this.
— The current CDM 2007 Regulations
again we believe have not been drafted to enable small, infrequent
and one off clients to comply with their obligations: they are
too complex, have not articulated a significant forecast in increased
client compliance during their development and approval and are
not supported by innovative ways to assist compliance like HSE's
Agricultural safety software see: http://www.hse.gov.uk/agriculture/assessment/index.htm.
CCG is working on a proposal to assist with this at the moment.
— The readily available data on incidents
is classified by type such as falls, slips and trips, but we need
more transparency on the actual causes of the incidents to help
the construction industry target its resources and clients ask
the right questions. As such a more behavioural look and causational
analysis needs to come through: are the incidents all down to
lack of training, or poor risk assessment, poor design, wilful
acts as identified in HSE's own guidance HSG 65?
— There are over 200 construction industry
stakeholders and this presents a strategic communication challenge
for any representative within the industry or outside it as to
how and who to engage with best effect. This is something that
needs to be regularly monitored by the key stakeholders and regulators
alike.
— At the micro level we see businesses
whose core work does not include carrying out construction work
as a key concern. Many of these will have no experience of construction
safety and will be largely reliant on the construction supply
chain for advice and support. In addition those businesses whose
work is now classified as non notifiable under the new CDM 2007
regulations will we believe be in the above category and led by
the more inexperienced members of the supply chain. ie; the potential
to continue to get health and safety wrong at this level may remain
as this type of work will not be on the HSE's radar. We believe
this may constitute up to 60% of UK construction based on HSE's
figures in their Regulatory Impact Assessment—although this
might be disputed by the HSE it certainly warrants further investigation
on the level of significance given to it.
— We see a direct link here to the
macro regulatory process in that elements of construction safety,
in particular safe design should be integrated with planning and
building control legislation. So if a business wants to construct
as part of its planning and building acceptance it will need to
satisfy various health and safety requirements. This way we think
there will be a step change at the smaller end of the market that
tackles the cowboy element of the industry and enables greater
compliance by those who need more enabling support to achieve
it.
— Overall we do see continued and very
valuable efforts being made by the supply chain to address health
and safety and one example of this is the industry CDM guidance.
CCG is committed in playing its part in securing improvements
in construction safety and has an active action plan until 2012
that it is working to. We continue to work with other stakeholders
including the Housing Forum to promote awareness and best practice.
13. ENCOURAGING
SUSTAINABILITY
The issue of sustainability has been dramatically
rising up the political and client agenda in recent months. The
CCG has provided the Chairman to the Strategic Forum's new sustainable
construction task group and has also undertaken a consultation
event with clients regarding BERR's draft Sustainable Construction
Strategy consultation.
Sustainability is also one of the six core categories
of the 2012 Construction Commitments and as a result will become
an integral part of the Construction Clients' Charter.
14. BEST PRACTICE
ON CONTRACT
MANAGEMENT
Much of the recent advances in procurement have
focussed on the implementation of collaborative working practices.
Frameworks, for example, have yielded major savings in the costs
of procurement however a much bigger prize waits, if these frameworks
and the next generation of collaborative procurement can be properly
performance-managed.
| Collaborative working
| Best practice "techniques"
| Potential innovations |
| Early involvement | |
|
| Selection by value | Quality-price balance, whole life costs
| |
| Common processes and tools | Project extranets, common IT platforms and protocols
| Single object-orientated 3D drawing model |
| Performance measurement | Project KPIs, regular reporting
| |
| Long-term relationships | Frameworks, long-term relations throughout the supply chain
| |
15. THE UK INDUSTRY'S
PERFORMANCE AGAINST
OTHER COUNTRIES
In the absence of reliable benchmarking, our knowledge comes
largely from anecdotal comparisons with visitors from eg New Zealand,
Hong Kong, Australia, South Africa, Japan, South Korea, the Netherlands,
Finland and Luxembourg, where those visitors report that their
own searches have identified the UK as leading in many respects,
particularly in the approach to pan-industry reform and in the
adoption by the public sector of more enlightened procurement.
The CCG is taking a leading role in the International Construction
Clients' Forum where client groups from different countries come
together on a quarterly basis to share knowledge and experiences
across country boundaries to improve the value clients obtain
from their construction supply chains. One recent example includes
the sharing of information, reports and a toolkit for engaging
in framework activity guiding clients through the OJEU procurement
process. For our European peers in Denmark, Sweden, Netherlands
and Norway, the OJEU process has been a particularly difficult
process for their public sector clients to procure through. The
CCG has shared its learning gained from UK public sector clients
to improve performance across international boundaries.
16. ASSET LIFE
ISSUES
CCG is committed to extending the construction process into
asset life management. This involves establishing a true and proper
relationship with those who maintain the asset post-construction.
This relationship is vital if construction professionals are to
develop solutions that are capable of sustained high performance
for their owners. Engagement at this level will involve the construction
client understanding the business strategic direction, a position
CCG believes with enhance solution performance and will build
a strong awareness of value. A feature that is very difficult
to capture.
17. CONCLUSIONS
In conclusion we would make the following recommendations:
— All stakeholders in the industry need to understand
better how the industry adds value through providing built facilities.
— All stakeholders need to improve their processes
and behaviours to enable and deliver integrated and collaborative
working in order to deliver this "whole life" value.
— An industry which delivers whole life value through
integrated and collaborative working will be much more sustainable
economically, socially and environmentally—with the latter
requiring further encouragement in the short term.
— The industry must recognise and promote the role
of the client that is critical to high performing outcomes however
clients must be trained to be "client" and facilities
should be made available to support this proposal.
With the Committee's support we are confident that this vision
can be realised.
13 October 2007
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