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A new era in public sector projects

With the confidence of the Government riding high on the public profile of UK 2012, in a speech on 26 February 2013 the Government’s Chief Construction Adviser, Peter Hansford, was loudly proclaiming both success and grand plans for achieving (an even) Better Deal For Public Building.

The current situation

With the confidence of the Government riding high on the public profile of UK 2012 (the Olympics and the Diamond Jubilee in one year can hardly be beaten for international profile raising), in a speech on 26 February 2013 the Government’s Chief Construction Adviser, Peter Hansford, was loudly proclaiming both success and grand plans for achieving (an even) Better Deal For Public Building.

The report first published in September 2012 and the speech that was given in February 2013, declared a new era in delivery of public sector projects asserting that, like the Olympics, projects will be on time and under budget. A somewhat bold statement if one considers the detail: The Olympics, at bid stage were priced at a mere £4.2billion, but soon after being awarded to London were re-priced at the enormous £9.3billion.

Being not at all superstitious the key recommendations arising from the All Party Group for Excellence in the Built Environment comprise a 13 point plan for a better deal in public building. Headline points include:

  • More time and resources to be dedicated to the project brief; public sector clients are to ask themselves what do we need? Why? How can we get it?
  • The introduction of a new British Standard providing guidance on procurement strategies and best practice.
  • The establishment of a best practice procurement advisory group, intended to assist inexperienced public sector clients to define their objectives clearly and adopt appropriate procurement arrangements dependent on the size and type of the project.
  • Procurement is to be undertaken not on the basis of the lowest price, but on the basis of, as was the case in 2012, a balanced score card.
  • Dialogue is to be encouraged between the clients and the design team.
  • All large scale government projects (of a value of £100million or more) should have mandatory construction commitments (again based on the 2012 construction commitments) against which the project will be required to report on over the duration of the project. Key indicators may include:
    • Client leadership;
    • Sustainability;
    • Team integration (including the trialling of integrated project insurance by certain Government departments on their projects);
    • Design quality;
    • Health & safety; and
    • Commitments of people (meaning local employees).

However, is any of this really new? Those who have memories that stretch back beyond the Olympics, may recall Infrastructure UK (“IUK”). Established in June 2010 to sit within the Treasury, IUK had more or less the same aims and objectives as the All Party Parliamentary Group for Excellence in the Built Environment that is now publishing its recommendations. Specifically: reducing the costs within the UK construction industry by 20% and effecting leaner, meaner procurement and delivery of our public sector projects.

Innovation?

So far so familiar, what we must ask is whether lessons have really been learned, and progress really made?

The real innovation in these recommendations has nothing to do with 2012 and the enormous budget employed but looks forward to the future: specifically to the use of integrated building project management, and in particular the use of building information modelling (“BIM”).

BIM enables the sharing of 3D building plans, and potentially 4D construction sequencing and/or 5D cost information, with multiple contractors, consultants, sub-consultants and key designers. This is done at design stage and allows the whole team to address conflict, co-ordination and site planning issues to ensure deliverables are met. The idea is to capture as much knowledge and information at the early design stage to avoid changes later down the path.

One of the 13 recommendations of a Better Deal for Public Building endorses the Government Construction Strategy that, by 2016, Level 2 BIM will be compulsory on all centrally procured construction projects.

In a Level 2 BIM environment, each party essentially develops their own building models which are shared with the project model(s), keeping appropriate audit trials in place. In the future, Level 3 BIM will allow a single model created from all of the inputs of the project team to be fully integrated. Level 3 BIM is still some way off, and requires the relevant technology to evolve in order to allow a fully collaborative BIM environment.

You may be asking whether BIM is simply collaborative working under a new name, but this appears to be the future of the digital construction industry. With it come new risks and new challenges: On a practical level, the BIM preparedness of various consultants, contractors and designers will vary, possibly considerably, and require careful management and integration. On a risk assessment level, the professional indemnity insurance of professionals engaged in the production and definition of information for projects using building information models needs consideration.

In February 2013 the Best Practice Guide for Professional Indemnity Insurance when using Building Information Models was published by the Construction Industry Council. The Best Practice Guide concludes that in general no issues arise with Level 2 BIM that are sufficiently serious as to require coverage restrictions for consultants which use it.

The Guide recognises that Level 3 BIM, when it arrives, will be a different animal; it acknowledges that in the case of Level 3 BIM, bespoke solutions may be required, and notes the potential for this to “revolutionise the PI market” (indeed, we may even see greater uptake of single project insurance). We can only hope it similarly revolutionises the delivery of major public projects; such that they are truly on time and on budget.

Contact

For more information contact Ruth Lane, Senior Associate on +44 (0)20 7220 5207 or email ruth.lane@dwffishburns.co.uk

By Ruth Lane

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This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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