Don’t let the perfect storm sink your development project – engage early with the experts

Barry Roberts from Downtown sponsor Morgan Sindall discusses the construction sectors current challenges and the best way of overcoming them.

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The construction industry is chomping at the bit to realise the Government’s ‘build, build, build’ vision, but ongoing materials and skills shortage represent challenges. 

Development projects of all sizes and types are experiencing a squeeze on supplies and talent right now. In many instances this is causing significant delays and inflated costs and is even throwing some projects off track completely.

The issue is being caused by a perfect storm of adverse market conditions. Covid-19 and the impact of Brexit have combined to result in transport and manufacturing delays. This has coincided with a worldwide increase in demand, not only for vital building materials, such as timber, steel and glass but for builders and expert tradespeople too.

With industry experts now predicting that the shortages could remain a challenge for another six months, mitigating any potential risk to project delivery must come to the fore. It’s here that the early engagement of contractors can make a big difference. This was recently identified as key principle of the Government’s recently published Construction Playbook and regardless of prevailing conditions, early engagement offers a multitude of added value benefits and should be the norm for any property team seeking to achieve the most efficient results.

Early engagement equals efficient engagement

In recent years, the development market has seen increasing use of single-stage procurement on construction contracts, where the client appoints design consultants to map out detailed plans of the project first, before then going on to separately appoint a contractor to deliver the works.

By separating design and construction, this process can produce knowledge gaps and an illusory promise of competitive pricing and cost certainty. It often results in project budgets being exceeded and does not allow contractors the opportunity to add value for the client by collaborating with designers. Unsurprisingly, it can also cause detrimental friction between the various parties delivering the project.

The alternative is to involve contractors at the earliest stage possible, an approach described by the Institution of Civil Engineers (ICE) as ‘a non-traditional procurement route, where a contractor’s skills are introduced early into a project to bring design ‘buildability’ and cost efficiencies to the pre-construction phase’.

This collaborative route, if managed effectively, ensures that insight from supply chains can be provided early, and designs can be tailored more appropriately to budget. In turn, this can mean fewer snags and projects getting to site more quickly. By working more closely with clients from the outset, contractors can anticipate and address any potential issues relating to materials and skills. The sooner they are brought on, the sooner they can liaise with their supply chain partners to source materials – providing the longer lead time needed where materials are scarce or subject to delivery delay.

An excellent illustration of early engagement in action is our work with Liverpool City Council (LCC) on the Paddington Village Central site within the city’s Knowledge Quarter. Over recent years we’ve worked on numerous projects within the site including The Spine, which was handed over earlier this summer and will be the new northern home for the Royal College of Physicians.

Here, our role goes far beyond that of traditional main contractors – our remit includes full project management, including commercial and cost planning, design procurement, programming, technical and legal.

The development of a masterplan necessitated a highly strategic partnering approach. Early engagement and full integration of Morgan Sindall Construction as contractor partner meant there was no requirement for LCC to use a separate developer to oversee the scheme, creating both efficiencies and cost savings. All projects are being designed to cost from first principles, ensuring high quality and functionality is achieved within budget. Now, more than ever, early contractor engagement is key – a vital form of risk management in challenging times. But its value extends far beyond this. Whether your goal is maximising what you can deliver for a fixed sum, or simply lowering costs while maintaining the very highest aspirations, early contractor engagement is the answer. Through close collaboration at every stage of project delivery – including the design phase – we can create efficiencies, mitigate risk and drive greater certainty of outcome across time, cost and quality.

This article first appeared in DQ Issue 20.

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