News Roundup: Nov/Dec 2010
High street offers PV deals
Marks & Spencer has launched a solar PV and solar thermal hot water installation business, becoming the third household-name retailer to offer the service direct to consumers. The launch in September follows Sainsbury’s and Tesco into the market, which is being driven by the government’s new feed-in tariff programme, writes Michael Willoughby.
Under FITs, homeowners receive 41.3p/kWh for electricity they generate from renewable sources and consume themselves, and 3p/kWh for additional power they sell back into the grid.
Domestic PV and solar thermal installation is likely to be an expanding market, driven by the need to cut carbon emissions and the low-cost loans to be announced in the government’s Green Deal, due to arrive in autumn 2012.
The move into renewables installation builds on the supermarkets’ track record of insulating customers’ homes. Since 2008, more than 34,000 customers have signed up to Tesco’s Home Insulation service.
The supermarkets charge between £8,000-£15,000 to install PV systems depending on the capacity of the system and the property. M&S suggests that customers can reap £1,000 a year in savings and earnings in an optimal scenario.
Marks & Spencer and Tesco both use Cornwall-based Enact energy consultants to project manage their programmes and select regional installers. Contractor Rok is one of the firms Enact uses to carry out work for the two supermarkets.
But Rok is also positioning itself to enter the market on its own behalf. The firm is offering a free surveying and quotation service to customers in the UK who are interested in solar systems.
The work is then carried out by Rok’s specialist teams, which are certified by the Microgeneration Certification Scheme (MCS), an independent certification body supported by the Department for Energy and Climate Change.
“These tariffs provide a big incentive for people to install PV as well as companies to invest,” said Adrian Marshman, Rok area leader. “We already do lots of work for private homes and housing association and council properties. When you added it all up, it was an absolutely viable business proposition.”
Meanwhile, Gentoo Homes, the registered social landlord, property and construction group operating in the north-east, is developing a new installation service for social landlords and local authorities, building on its experience installing solar PV and solar thermal for it own stock. In future phases, it could also extend the service to private households.
In the past four months, it has trained 20 joiners, roofers and electricians and is aiming for MCS certification soon.
“Work on our own properties brings benefits to tenants and to us in terms of generating an income,” said Alan Thompson, director of operations at Gentoo. “We will then look outside of the group to see if we can sell the service into RSLs and local authorities.”
Thompson added that Gentoo was open to the idea of offering the service to consumers in practice, but that scalability made the business-to-business service a more natural market.
Constructing Excellence Wales has published a new report on procurement in the age of austerity. Michael Edmonds, chairman of the report task group and associate director at Arup, explains its work.
How has the Welsh Assembly Government responded to the report?
Jane Hutt, the Welsh minister for business and budget, announced last month that a steering group will be set up to examine the report’s six recommendations. She had three main concerns: providing clarity for the industry on the capital spend in Wales; ensuring the public sector and industry publicly commit to fully collaborative construction procurement; and linking public investment in construction to sustainable benefits.
A major goal is to resist moving back towards lowest price tendering, which will not provide the best value solutions.
How can collaboration work in the context of cost cutting?
The report highlights the fact that it’s no good having public sector projects delivered when private sector companies are going bust and their workforces are being made redundant due to unsustainable pricing. So creating a robust commercial proposition will mean ensuring members of supply chains can achieve reasonable levels of return.
How will it work in practice?
The report highlights several CE Wales demonstration projects that delivered more for less, reduced waste and better quality buildings through collaborative working. They showed strong leadership geared towards collaboration.
Will collaboration increase opportunities for SME contractors?
We need to ensure the process of collaboration isn’t seen as a mechanism for large organisations to mop up all the work and win framework deals. It’s not about that, it’s about consistency and appropriateness, making sure smaller firms are just as welcome to enter the process as larger ones.
What happens next?
The Welsh Assembly Government must complete its budget review. We need clarity on where cuts will happen and where money will be available.
Ultimately we hope the steering group will recommend that all public projects are procured with a more open dialogue, collaboration and knowledge sharing across Wales’s 22 local authorities.
Month in numbers
11 The percentage increase in construction output in Q3 2010 compared to Q3 2009, according to the Office of National Statistics, suggesting activity levels last seen in 2007.
42 The number of construction fatalities in the year to 31 March 2010, down from 52 in 2009 and a peak of 105 in 2000/01
60.1 The percentage of 2009 building and architecture graduates with jobs, says the Higher Education Careers Service Unit. However, 10.9% remained unemployed.
£250m The sum likely to be cut from Crossrail’s administration budget, including fees paid to delivery partners Bechtel and CH2M Hill, after total cuts of £1.4bn were unveiled last month.
£270m The value of a new listed infrastructure fund run by PFI specialist John Laing, giving investors an alternative to gilts and equities.
Lukewarm reception for new PQQ
The launch of a standardised pre-qualification questionnaire (PQQ) for public sector contracts has met with a mixed reception from clients, writes Michael Willoughby.
According to last month’s press release from the Department of Business, Innovation and Skills, the new form could save the construction industry £250m a year.
Before this can happen, procurement managers throughout the public sector will have to accept Publicly Available Standard (PAS) 91 instead of making contractors fill out separate, bespoke questionnaires each time.
Constructionline, the BIS-operated register of pre-qualified contractors and consultants, which is used by many local authorities and NHS Trusts, was a member of the steering group involved in the consultation process which led to PAS 91.
But the organisation said it had no immediate plans to adopt PAS 91as an alternative to its current precodures.
In a statement, it said: “We are currently discussing plans with BIS and users of Constructionline, our end goal is to continue to reduce duplication in the construction PQQ.”
In the week following the announcement from BIS, representatives of both Manchester City Council and the Homes and Communities Agency (HCA) said they had not heard of the form.
PAS 91 can be downloaded from the BIS website. However, it is thought that many clients will view the information it seeks as incomplete. “With risk and insolvency so high on the agenda, any client is going to want to ask additional questions,” said one commentator.
However, the new PQQ is not without its supporters. Andrew Smith is chair of the National Improvement and Efficiency Partnership (NIEP) for the Built Environment, which aims to share best practice in asset management and procurement among local authorities. He said moves that simplified processes and reduced bureaucracy were part of the “direction of travel” for the NIEP.
“We tend to see a lot of the same faces. If data was held centrally, we might be able to say, ‘if you’re applying in the north-west and you’ve already successfully made an application in the south-east, we will be able to field the data for you and you won’t have to go through the process’,” said Smith.
“Industry finds it confusing the way it has to repeatedly supply the data. I commend BIS for its effort,” he added.
PAS 91 has been developed by BIS and the British Standards Institute, with the involvement of the Electrical Contractors Association, the Specialist Engineering Contractors Group, the National Federation of Builders, the Federation of Master Builders and the Civil Engineering Contractors Association, which were all on the Steering Group.
Wood you believe it
Factory-built housing failed to take hold in the boom years, but it could suit the era of public spending cuts.
Ex-Conran architect Peter Marshall, chief executive of Pretek, has just opened a purpose-built factory (pictured) in Wigan, Lancashire. The facility is capable of delivering 3,500 homes a year that can achieve Code 4, 5 or 6 under the Code for Sustainable Homes.
The building system is based on a timber “chassis” with service runs integrated into the factory-engineered timber panels. Costs start at just £800/m2.
Pretek is talking to major housing association clients, including A2 Dominion, Accent and Contour.
“A process that takes four months can be cut to three, a significant improvement to any business plan,” says Marshall.
Contracts body launches project bank account documentation
Following an industry-wide consultation, the Joint Contracts Tribunal (JCT) has published its project bank account (PBA) documentation for use in conjunction with its main standard forms of contract.
When a PBA is used, clients deposit money into a ring-fenced bank account. It is then released to pre-agreed parties — which can include subcontractors normally at the bottom of the supply chain — when certain milestones or certificates are achieved.
Professor Peter Hibberd, JCT chairman, said: “The JCT was keen to get feedback on its PBA provisions, and to put this into a review.”
The consultation found that just 5% of respondents had been involved in a project with a PBA. But when asked to estimate the number of projects likely to use PBAs, answers ranged from zero to 100%, the average being 30%.
PBAs have recently won backing from Defence Estates, the Office of Government Commerce, and Crossrail, which is due to use a PBA to keep payment times down.
The JCT PBA documentation is available from Thomson Reuters, Sweet & Maxwell or via specialist and trade bookshops.
Time management guide launched
A new guide to help construction professionals keep control of timescales on complex projects is about to be published next month by the CIOB and Wiley Blackwell.
The Guide to Good Practice in the Management of Time in Complex Projects is the result of two years’ work by an 11-strong steering group led by Keith Pickavance, PPCIOB and senior vice president of consultant Hill International.
Launched in an era of cuts and cost-awareness, the 176-page guide and its methodology is seen as an important contribution to improving performance.
Its approach is based on regular updates to, and monitoring of, the “time-model”, which goes beyond the conventional programme or schedule to include other aspects of planning and management, including quality assurance and method statements.
The guide defines three levels of time-model density, depending on the length of time between the activities described and the date at the time of planning.
“The basis of the guide is not just to talk about strategy, but the nuts and bolts. In the current climate, where every pound matters, we need to establish a process that brings projects in on time and avoids the need to spend extra money,” said David Tyerman MCIOB, a member of the steering group.
The guide was preceded by CIOB research in 2007/08, which found that only a third of “high rise” projects were completed on time, and 18% were six months late. In two-thirds of cases of delay, the contractor was held primarily responsible.
Following publication, the CIOB plans to develop training opportunities around project time management and a process to assess individuals’ competence and the value they add to project delivery.
The accreditation programme will be administered by the CIOB, being a mix of formal assessments, industry experience and interview by a panel of peers.
“Many practitioners are good project managers, but are not necessarily skilled in the means and methods to advise their clients. Many don’t have training programmes available to them, and so don’t have the means to know what ‘good’ looks like,” added Tyerman, who is also chairman of the CIOB’s working group on accreditation.
Priced at £49.99 in the UK, the book is available from 6 December.
Art of Building photos now available as calendar
The CIOB has produced a desk calendar showcasing the 12 finalists in the Art of Building digital photography competition — one for each month of 2011.
The calendar is available to order for £5 plus postage and packing from the website of Construction Books Direct.
For every calendar purchased, £1 will be donated to the CIOB’s Benevolent Fund, which supports members of the institute in times of difficulty. The rest of the revenue will cover the institute’s costs, and be re-invested in next year’s photography competition.
Meanwhile, 2010 overall winner Jim Dunn has been presented with a framed print of “Elements”, his dramatic shot of Glasgow’s new Museum of Transport by Zaha Hadid Architects and Bam Construct, at a special ceremony on the site.
After Dunn’s photograph was chosen by the public in an internet vote, he also won £500.
Ken Morrison, chairman of the CIOB’s Scottish branch, and branch manager Lynne Mckay officiated at the ceremony.