Tinkering with design and build won’t fix anything – but alliancing can

It was 50 years ago that I first got to know Tony Bingham: he was then a suspended ceiling subcontractor. He also represented specialist subcontractors on the Committee of Associations of Specialist Engineering Contractors. In this forum he was able to advocate proactive co-ordination between M&E specialist subcontractors (whose design skills he cites) and firms such as his, for example in the integration of bracketry and fixings.

Let us therefore not underplay the contributions of specialist and trade contractors to design, assembly, logistics and installation, together with innovations in product design and application.

The criticisms of the design and build contractor in the Grenfell Phase 2 report are indeed merited; the failings are replicated on many projects, but there are exceptions. To explain them as due to the fact that contractors are mere “putter-uppers” is, with respect, superficial.

>>Also read: Tony Bingham on why Grenfell shows it’s time to scrap design and build

>>Also read: Safety comes first in the JCT’s updated contract suite

Volume 4, Part 6, evidences how (a) the procurement process was rerun and (b) the cladding and associated systems were cheapened in order to get an ever lower price. Despite procurers’ protestations that they seek fair value for money, by inviting multiple tenders they deliberately expose themselves to the irresistible temptation to take the lowest price (or less, as at Grenfell).

Main contractors have learned to survive in this world of cost and risk manipulation… Hence the policy of dumping liability upon anyone whom they can persuade to take it

Over the years main contractors have learned to survive in this world of cost and risk manipulation, and their key resource is therefore quantity surveyors, not engineers. Hence the policy of dumping liability upon anyone whom they can persuade to take it, prime targets being specialist engineering subcontractors for detailed design.

Why do contractors do this? As the newly appointed CEO of Wates recently recognised in Building, they have lost a viable business case – hence the insolvencies. Let us not forget the stark warning by Dame Judith Hackitt in her building safety report: “The whole industry is on notice that the race to the bottom, the fragmentation, the passing on of responsibility, has to stop.”

In the Grenfell report much is made of the role of the principal designer under the Building Safety Act and previous legislation. Less emphasis is placed on the role of the complementary principal contractor, except for this telling observation [67.11]: “Such is the complexity of modern construction that no principal contractor, particularly under a design and build contract, can be expected to retain in its own employment people with the full range of skills required for every project it takes on.”

By introducing design and build, the JCT initiated a fatal combination: placing design responsibility on contractors without removing the ongoing requirement for those contractors to live in a lowest-cost environment

These two distinct roles perpetuate the antiquated division in our construction industry between design and construction. The advent of subcontractors has in part reflected the presence of design in their products and services. By introducing design and build, the Joint Contracts Tribunal initiated a fatal combination: placing design responsibility on contractors (who were used to working to architects’ drawings and instructions) without removing the ongoing requirement for those contractors to live in a lowest-cost environment. Hence Grenfell et al.

And by the way, since Margaret Thatcher abolished scale fees, the consultants are contracted on a price basis – which the procurers also habitually squeeze, leaving too little money for the essential design tasks.

The reality is that many critical and detailed design decisions are taken by engineering supply chains

Tony’s solution is to leave contractors as mere “putter-uppers” and look to the designers for issues of assembly, methods of working etc. That is swinging the pendulum too far the other way: designers may understand the legislation and have a great conceptual grasp of what needs to be done, but as already stated, they have far less grasp of the practical issues, for the simple reason that they don’t supply and install.

The reality is that many critical and detailed design decisions are taken by engineering supply chains. Tony rightly recalls the rationale for nominated subcontractors, who were appointed on direction of the design team, often before the main contractor, in order to have a formal basis for the sort of dialogue he advocates. But that was sticking plaster to an antiquated system. There’s better available now.

Alliancing eliminates at a stroke the contractual and cultural dichotomy between design and construction. Consultants, specialist contractors, constructors and key suppliers form an integrated team to deliver best-for-project solutions

Alliancing, which was born in the oil, gas and utilities sector in UK and infrastructure projects in Australia, eliminates at a stroke the contractual and cultural dichotomy between design and construction. Consultants, specialist contractors, constructors and key suppliers are appointed at the outset and form an integrated team to deliver best-for-project solutions. Alternative solutions are therefore “optioneered” and costed between consultants, specialists and relevant suppliers as a single process, obviating the need for re-engineering.

Over the last decade, insurance-backed alliancing has been developed and tested, but importantly this comes with a unique form of integrated project insurance which includes independent facilitation and risk assurance, cost overrun and 12 years’ latent defects covers. The results are groundbreaking, not least because the team is liberated from the traditional commercial pressures, confrontations and disputes. Crucially, it eliminates the causes of Grenfell and, if adopted, will minimise the risk of a recurrence. Try it, Tony – it’s a tonic!

Martin Davis was commercial director and vice chairman of M&E specialist Drake & Scull/EMCOR and is co-creator of the Integrated Project Insurance Model www.ipinitiatives.co.uk