Could your next project deliver “more for less?” Here’s eight areas you might want to look at to deliver efficiencies and cost savings. Elaine Knutt reports.
01 Over-engineering
Foundations are literally buried beneath the building, but does out of sight mean out of mind? Adrian Mercer, business development manager at Balfour Beatty Ground Engineering suggests that in many civils and construction schemes, the default option of continuous flight augur (CFA) piles loads unnecessary costs onto the groundworks element. “I think overdesign is pretty common. [Consulting] engineers are becoming more conservative, trying to cover all the risks. And once the engineering assessment says ‘CFA piles’, it’s often difficult for the contractor to value engineer it.”
Mercer asserts that the alternative of driven piles are often less disruptive, avoid deliveries of concrete and removal of muck-away. On the other hand, where CFA piles are necessary, their diameter can often be reduced. Meanwhile, the alternative of ground improvements — suitable in certain soil conditions for buildings up to five storeys — has the knock-on benefit of simplifying the building’s structural design as there is no need to match columns to piles.
Mercer estimates that groundworks and piling account for 10-20% of the costs of the structure, and that specifying ground improvements rather than piling could halve the bill.
02 Greater cost transparency
The industry has to be clear about the cost base of what it actually does. But it’s not as simple as it sounds. Cost consultancies routinely publish construction cost data averaged out over building types or geographies, but there is no pooling of information or industry-wide standardisation as to what is included.
As for publishing out-turn costs on completed projects, private clients want the information kept private, and public bodies take a variety of approaches. “Organisations assess value and costs in different ways,” says Michael Hall, policy manager at the Association of Consulting Engineers. “The Highways Agency is good at analysing its projects in depth, but others don’t disclose details. Partly, it’s a cultural issue.”
A report from the Institution of Civil Engineers due next month will investigate some of these “cultural” barriers. The Construction Sector Transparency Initiative invited four public sector clients to disclose cost information on eight projects (see news, p5).
03 Over-design
“Putting the material in the right place” sounds like it should be within the scope of most construction teams. But actually, it’s the title of a three-year engineering doctorate by Clement Thirion of Expedition Engineering, which is examining the industry’s habit of specifying columns, beams and slabs that are too thick, too long or too numerous for the structural job they’re supposed to do.
Examining a recently-completed office project, Thirion found concrete slabs where the depth had been over-estimated before the contract was tendered, but then never redesigned, and columns of the same thickness throughout the building, when those on the top storey were only working at 17% capacity.
With today’s sophisticated CAD modelling, and awareness of the need to reduce embodied carbon, why is this still happening? “Because every structural engineer thinks ‘the cost of my time is more expensive than a few kilos of concrete’,” is Thirion’s honest reply.
Other suggestions are that design fees tend to be calculated as a percentage of the out-turn costs; that engineers don’t yet have the IT tools to rapidly calculate trade-offs between structural capacity, cost and embodied carbon; that BS and Eurocodes steer designers towards solutions they know have worked in the past; and also that many of today’s design codes are based on yesterday’s assumptions.
“We’re still designing for floor loadings based on filing cabinets, or designing for very low vibration levels when maybe people could tolerate higher levels,” says Judith Sykes, director of MustRD, Expedition Engineering’s R&D arm. “We want to look at ‘skinnying down’ structures, grids and slabs, then working out the carbon and cost impact — in design terms and construction costs.”
04 Standardised schools
Architect Cartwright Pickard has flown the flag for off-site fabrication and modular buildings since it built Hackney’s Murray Grove apartment block for the Peabody Trust a decade ago. Now, working with manufacturer Tarmac, it has launched Nurture Future, a suite of products and systems that aims to bring all the efficiencies of standardised, off-site fabrication to bear on the next phase of the school building programme.
The system is based on Thermodeck concrete slabs and interior and exterior wall panels, which combine thermal mass with in-built fresh air ventilation. Schools can have their own internal layout, floor plates, roof shape and cladding. But Nurture Future schools will only have old-fashioned right angles, and — for maximum cost efficiency — three storeys.
The impetus came from the realisation that office projects could be delivered for £1,300/m2, while BSF schools were costing an average £1,850/m2 (NAO 2009 figures), several have been costed at £2,200/m2, and Pickard quotes an anecodotal figure of £2,800 for one school in Sefton. “Why are schools up to twice as expensive, when they’re not that different? Even for allowing for differences in fit-out, there’s still a large gap,” says Pickard.
Nurture Future tips the scales at an economical £1,650/m2, including fit-out, but excluding furniture. By omitting the suspended ceilings and having lower floor-to-floor heights — the soffits of the Thermodeck panels are left exposed — a typical school will save at least £0.5m.
05 Standardised products
The arguments for product standardisation are regularly aired — and just as regularly undermined by the design team that wants the newest innovation, the client that wants certified originality or low risk, and the construction team that either can’t or won’t object. But if all three groups agree on the necessity, then less product choice could deliver better value and efficiency.
“Every school needs washrooms, so why do we need 150 different designs? In hospitals, why don’t we have consistent air-conditioning, or lighting, or doors?” asks Simon Storer, communications director of the Construction Products Association. To promote intelligent purchasing, the CPA is running networking sessions for clients and specifiers to inform them about available products.
Paul Moore, head of costs research at EC Harris, cites air-handling ductwork and facades as areas where overseas projects often undercut UK costs. “In the US, the market is so huge, you can buy all the vents and ducts off the shelf — you don’t get the purpose-made, sized-to-fit components we specify. And it’s only in the UK that architects want purpose-designed facades.”
06 Materials procurement
Supply chain integration, smart procurement, just-in-time deliveries — after a decade of improvements and KPIs, isn’t the industry already practising state-of-the-art procurement?
One contractor believes that it can go further to get best value on the standard materials it uses on project after project — by buying in advance and in bulk. “Normally these materials pass through several companies in the supply chain before being used on site, and each time they do, they receive a mark up,” says John Frankiewicz, chief executive at Willmott Dixon Capital Works.
“We are looking at the bulk buying of materials to reduce the amount of times they are marked up, and take out cost to ensure our clients pay less for them. This could see us providing the materials our supply chain use
as we aim to increase the efficiency of the overall construction process.”
07 Major Programmes
The reality is that deep cost savings are unlikely to be delivered on one-off projects, whereas the clients that can look forward to cheaper projects are those running long-term repetitive programmes. This is where you find the scale, repetition and concurrency to spread lessons learned in one project to the next, as well as the value streams to make any up-front investments worthwhile.
For instance, when the Office of Rail Regulation challenged Network Rail to drive up efficiency, its first move was a comprehensive reappraisal of its cost base, from track components to property, which brought 20% cost savings. Next, Network Rail ran an internal change management programme across the organisation, from its management structure to the way it planned, designed and delivered projects. This apparently is delivering another 15% cut.
But the parts of the industry that aren’t working on long-term projects can still learn from those that are. “One of the biggest things the [Network Rail] research found was that the two biggest drivers of efficiency were how well you scope projects in the first place, and the capability of the people running the programme,” says Patricia Moore, a director at Turner & Townsend. “One of the reasons we’re still talking about efficiency is [that] we need more high-calibre director level people to deliver these long-term programmes efficiently.”
08 International comparisons
The Infrastructure UK review isn’t the only team to take a cross-border look at major projects — Turner & Townsend has recently analysed a number of major global construction projects and programmes to develop its Capex Efficiency assessment tool.
“Lots of organisations are gathering data, but there’s no single source that says ‘that’s what good [procurement] looks like’,” says director Duncan McIndoe. “But we found that no single client has achieved upper quartile performance in every project it undertook — every client can learn from other clients.”
Turner & Townsend assessed projects against various financial and productivity benchmarks to establish a method of scoring efficiency, allowing construction teams to assess performance relative to their peers, and how they can improve it.
“It’s difficult to come up with solutions if you don’t actually know what the cause is. So we measured hard returns and the maturity of the management approach to assess projects and output against the sector average,” explains McIndoe.
The results found that improvements in contract scoping and administration, risk management and intelligent design management could result in spend reductions of between five and 30%. But it’s impossible to say which country builds most efficiently. “You do get correlations, but no broad patterns,” says McIndoe.
1. We all know that most projects are over engineered.
2. If Clients published out-turn costs perhaps they wouldn’t always accept the lowest tender – low tender = high out-turn.
4. Transportation costs need to be considered carefully for modular buildings. Schemes near factory competitive but further away uncompetitive.
5. Architects will always try and reinvent the wheel – to make their mark!
6. Might work for the majors but the medium to small contractors need the builders merchants – maybe another way for the majors to force the medium and small contractors out of business?
7. We need the high calibre staff on the sites not sat miles away in offices, but with the current competitive market we will never be able to afford them.
just my personal view