Written evidence submitted by the Royal
Institute of British Architects
ABOUT THE
RIBA
The Royal Institute of British Architects (RIBA)
champions better buildings, communities and the environment through
architecture and our members. It has been promoting architecture
and architects since being awarded its Royal Charter in 1837.
The 40,000-strong professional institute is committed to serving
the public interest through good design, and represents 85% of
registered architects in the UK as well as a significant number
of international members.
INTRODUCTION
The RIBA has long argued for changes to the current
process of procuring public buildings, particularly schools and
health buildings, under both Private Finance Initiative (PFI)
and its recent derivatives such as the Building Schools for the
Future (BSF) programme.
Our concerns initially stemmed purely from the perceived
lack of design quality in buildings procured under traditional
forms of PFI procurement processes. There was evidence that even
after 15 years of PFI experience, although buildings are more
often delivered on-time and on-budget, the quality of the buildings
delivered through PFI schemes remained poor in many cases.
The poor quality of the buildings' design lead to
a number of issues, such as rising maintenance costs over the
lifetime of the building, public and professional scepticism regarding
the value of public procurement programmes, and poor buildings
actively constraining health and education service delivery.
Furthermore, the process was also felt to take an
unnecessarily long time, further impacting on the costs of procurement,
and delaying both the start of construction and project delivery
when compared to similar projects delivered via alternative procurement
routes used in other sectors.
PRINCIPLES OF
GOOD PROCUREMENT
There is no one preferred model of procurement and
different methods would be appropriate for different projects.
In our view, the core principles to achieving good outcomes through
public procurement are:
1. There should be close engagement between
designer and user-client in the development of a brief
Meaningful consultation should take place between
those designing a building and those who will use it, in order
to create the right brief, based on the information that the demand
side brings but the supply side doesn't possess. This engagement
needs to be structured properly, so that it does not become unnecessarily
onerous. This does not mean that an entirely bespoke design will
be the end product but just that the brief fits the needs of the
user.
2. There should be a strong, expert client
It is imperative that the public client has access
to the right expertise in managing major construction projects
and a good understanding of the procurement process. It is essential
that clients are able to produce well researched and developed
project briefs at an early stage, prior to being put out to tender
in order to avoid unnecessary delays and rising costs further
along the line.
3. There should be a genuinely integrated
construction team
As highlighted in the Government's recent Innovation
Growth Team (IGT) Report led by the Chief Construction Adviser
Paul Morrell, there is a need for properly integrated, cross-professional
teams in public procurement projects. Government should seek the
procurement of properly integrated teams, of designers and contractors,
in order to encourage joined up thinking both in definition and
execution of a project, through continuous positive engagement
through the duration of the project. This would ensure that construction
team have shared goals leading to better outcomes.
4. There should be clarity of budget from
the outset
Many of the buildings procured under PFI to date
have not had a clear and designated budget from the outset. It
is our view that the most effective means of procurement would
be the target-cost method, which results in designs to fit a budget
rather than a budget to fit the design. We believe that the public
client would gain greater value-for-money if contractors competed
on quality rather than price. This encourages competition on the
quality of a design for that designated budget and promotes innovation.
The specification of a building will therefore be arrived to through
the process of design, rather than it being pre-determined at
the outset.
5. The process and costs should be transparent
The Government could and should insist on open-book
transparency for public procurement projects across all levels
of the supply chain. The public should be able to see where money
is being spent and the spurious contractor confidentiality clauses
in previous PFI contacts should be removed.
6. Public procurement should encourage competition
and innovation and avoid monopoly capture
Procurement processes dominated by a few large firms
inhibit innovation and the incentive for those working on public
projects to improve practices and compete on both cost and quality.
. This reduces the pool of talent working on projects reduces
innovation imported from other sectors, limits the application
of local knowledge from locally-operating firms, and circulates
work around a small and decreasing number of firms
PROBLEMS WITH
EXISTING PFI/PPP MODELS
What causes the problems?
The quality of the design of a building directly
affects its long term operating and maintenance costs, the standards
of service provision, and the building's sustainability. The main
causes of substandard design quality are:
— Under-prepared
clients—Often "first-time" clients, with too little
experience or professional resource available "in-house",
and too little financial support at the very early stages, preventing
them from buying in sufficient professional advice, and little
requirement to do so.
— Insufficiently
tested and under-detailed design briefs—Due to a lack of
professional advice and resources in the preparatory stages (the
Strategic and Outline Business Case stages), and no requirement
for the client to undertake early conceptual design work or a
sufficiently detailed design scheme before putting the project
out to tender, poorly detailed and unresearched project briefs
cause uncertainty, delay and make re-interpretation of the original
brief unavoidable during the procurement process.
— Barriers
to entering the market—Many architectural practices are
prevented from even bidding for work, due to the limited entry
routes to the market—the lack of design frameworks, or open
competitions—as well as the fact that contractors are required
to have a design team on-board before bidding for the work, meaning
they frequently use their own in-house design teams, and a small
number of practices that they have worked with previously. This
reduces the pool of talent working on school design, reduces innovation
imported from other sectors, limits the application of local knowledge
from locally-operating practices, and circulates work around a
small and decreasing number of practices.
— In
addition, European procurement regulation, due both directly to
the rules governing the OJEU procedure, and their interpretation
and application in the UK, severely restricts access to the market
for a huge number of professional practices.
— Too
much control of the design process by contractors—Currently,
the contractual client of the architect is usually the main project
contractor or constructor, not the public body responsible for
procuring overall project (eg the Local Education Authority).
As a result, we find that direct communication between designer
and user-client is limited, and constrained by the contractor.
It is this direct relationship between architect and true client
that enables an understanding by both parties of the requirements,
aspirations and philosophy for the project. In most sectors, particularly
in private sector projects, best practice requires that the architect
team has the end-user or commissioner of the project as their
client, creating a direct and open relationship. This enables
the architect to work in the direct interest of the commissioner/user.
— Insufficient
weighting for Design Quality—The relatively low scoring
given to design quality in the evaluation of bids and the lack
of relevant skills and experience on the part of many evaluation
teams has a direct impact on the quality of building design.
— Value-engineering
by contractors—There is strong anecdotal evidence of contractors
limiting the amount of information, provided by their architects
working to the specified brief, made available to clients. This
information typically concerns quality specifications, finishes,
and materials, thereby enabling the contractor to "value
engineer" the project, essentially reducing the intended
quality and cost of the project compared to that specified by
the architect, to the detriment of the finished building, without
the knowledge of an unaware client. This is done in order to maintain
the contractor's preferred levels of profitability, but can be
to the detriment of the finish of the building, and its functionality,
and can add considerably to its long term maintenance costs over
the period of its lifetime.
— Simultaneously
developing the design and choosing the contractor—Undertaking
the selection of the major contractor at the same time as the
design being developed almost from scratch to a fully developed
design proposal is detrimental to the design quality. It means
that multiple competing contractors and their design teams are
seeking equal access to the end users, public client and other
technical and public individuals/groups involved in the consultation
process, at the same time, during what is a constrained period
in the procurement process. This duplication of effort limits
the availability of the consultees, and the quality of their engagement
with the process, and this detrimentally impacts on the design
quality.
— High
bidding costs deter competition and add to the overall cost of
procurement, while delays further increase project costs while
delaying public service improvements. The main causes of unnecessarily
high costs and delays are:
— Duplication
of effort—Made worse by the requirement of the Competitive
Dialogue Procedure, many public sector procurement routes require
that up to three bidders work up fully detailed design proposals
simultaneously. We feel that much of this work—particularly
the early and crucial conceptual design work—should be carried
out by the client before going to the market. Instead, the current
requirements mean that efforts are wasted by bidders duplicating
the design and consultation process. The requirements result in
three separate, highly expensive and detailed plans being developed.
The considerable cost of providing access to consultees and providing
cover for staff, etc. are borne by the procuring public authority.
The associated design costs are initially borne by the bidders,
but eventually the huge cost of failed bids (the cost of a failed
bid is on average upward of over £2.5 million per school,
and over £12 million per PFI hospital—2005, Major Contractors'
Group) are returned to the tax payer through future successful
bids.
— Delays
to procurement—Procurement takes too long, and often suffers
from unexpected and unplanned for delays during vital stages of
the process. This is due to a number of reasons, including unnecessary
duplication of effort by bidders, inadequate or poorly tested
specifications for projects in the briefing documents, failures
to address policy issues at the outset, and a lack of negotiating
and professional project management skills within the procuring
authority.
— Bureaucracy
and the amount of information required from bidders—The
information required of applicants under the OJEU process is excessive
and acts as a deterrent to small practices, which may not even
have the necessary information. The frequent requirement for management
and human resource strategies are a boost for larger firms, which
have both the resources and need to put such policies into place.
Small practices have neither the resources required nor the practical
need to have such policies in place. The bureaucracy and cost
of the European route to procurement also discourages clients
from seeking separate specialist contractors or consultants through
a number of OJEU notices, instead finding it easier, cheaper and
quicker to select one large multi-disciplinary provider, or, as
is the case in most public building procurement, a single main
contractor.
April 2011
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