6CN008 CQS

(Management)

Lecture 3 Current influences on the

construction industry and the role of the
QS

Appendices

Further slides now follow of reports

into construction

The Latham Report: Constructing the Team (1994)

Final Report of the Government/ Industry Review of
Procurement and Contractual Arrangements in the
Construction Industry

Investigated procurement and contractual arrangements,

and roles, responsibilities and performance of construction
participants including the client with regard to:

The processes by which clients requirements are

established and presented
Methods of procurement
Responsibility for production, management and
development of design
Organisation and management of the construction
process
Contractual issues and methods of dispute resolution

Latham Report
Conclusions & Recommendations
Aimed at Clients - Be best practice clients
Aimed at Industry adopt changed
practices
Modern Contracts recommend NEC
Legislation for payments & disputes
4

Rethinking Construction
(Egan, 1998)

Alliances through the supply chain

Selection of partners not lowest
price, best overall value for money
Proper incentives (pain/gain)
End to a reliance on tendering
alliances formed
Introduction of performance
measurement (benchmarking, KPIs)

Constructing the Team (1994 Latham Report)

Conclusions & Recommendations
CLIENTS (GOVERNMENT & PRIVATE)
Set up a new construction clients forum
Be best practice clients
Publish a Construction Procurement
Strategy Code of Practice
Promote a mechanism for selecting
consultants on quality as well as price
6

Latham Report:
Conclusions & Recommendations
INDUSTRY
Adopted target of 30% real cost reduction
(by 2000)
Improve tendering arrangements/
registration (with Government)
Draw up a code of practice for selecting
subcontractors
Training & education/public image/equal
opportunities plan
7

Latham Report
Conclusions & Recommendations
CONTRACTS
Develop standard contract
documentation include adjudication/
pre-pricing variations/trust accounts
for payments
Recommend use NEC contract
Family of interlocking documents
Restructure contract committees
8

Latham Report
Conclusions & Recommendations
LEGISLATION
Legislation against unfair contracts
Introduce adjudication and trust
accounts
Implement proposals on liability
legislation
Latent defects insurance

Key Construction Reports - timeline

Simon Committee (Placing and

Management of Contracts) 1944 - lack of
progress within the construction industry
over last 50 yrs.

BofQ considered best basis for estimating the

cost
of the whole project and for valuing variations

10

Anglo American Council on Productivity (1950)

Identified the factors which were considered

responsible for the higher productivity levels in
America:
complete pre-planning of the job
co-ordination of sub-contractors work
adequacy of supplies of labour and materials
availability and use of mechanical aids
recognition of the importance of continuous
research into the production of materials and
into building techniques.

11

Anglo American Council on Productivity

(1950)

Significantly, the report concluded by stating that

the Building owner, architect, quantity surveyor,
contractor and sub-contractors should all cooperate more closely to reduce building costs

The report also included a chapter devoted to

tendering procedures and provided a
comprehensive description of the two systems
American without quantities and British with
quantities commenting that Consideration should
be given to the simplification of the Standard
Method of Measurement

12

Construction reports

The Phillips Report on Building (1948-50)

London County Council have claimed that on
certain of their Value Cost Contract sites where
incentive schemes are operating, they have
regained their 1939 level of productivity,
but this experience is exceptional.

The Emerson Report (1962)

Efficiency in operations depends on the quality of
relationships and better co-ordination between
building owner, the professions (architect,
surveyor, engineer) and the contractors and
subcontractors
13

Construction Reports

The Banwell Report (1964)

banding together of those who have suitable work in
prospect is to be encouraged, which will allow construction
to benefit from industrialisation and standardisation.
A common form of contract for all construction work,
covering England, Scotland and Wales, is both desirable and
practicable.
Contractors should apply to the selection of subcontractors
the same standards of fairness which they expect when they
themselves are chosen.
In order to achieve a firm price contract, for any scheme, all
the critical details need to be worked out , thereby leaving
as little as possible to chance.

14

Construction Reports

Tavistock Studies (1965 & 66)

Large Industrial Sites Report (1970)
The Wood Report (1975)

A project requires a sole senior client representative, with

sufficient expertise, authority and time, and public
officials may need advice, support and training to
enable them to play this role effectively today.

15

Achieving Excellence Construction

Procurement Guidance, HM Treasury
1996

No 1 Essential requirements for construction

procurement
No 2 Value for money in construction procurement
No 3 Appointment of consultants and contractors
No 4 Team working, partnering and incentives
No 5 Procurement strategies
No 6 Financial aspects of projects
No 7 Whole life costs
No 8 Project evaluation and feedback
No 9 Benchmarking
16

Reports by the CIB working groups

(1996/7)

WG1 Briefing the team

WG2 Constructing success
WG3 Code of practice for selection of
s/cs
WG4 Selecting consultants for the team:
balancing quality and price
WG5 Framework for a national register
for contractors
WG6 Training the team
WG7 Constructing a better image
17

Reports by CIB working groups

(cont)

WG8 Tomorrows team: women

and men in construction
WG9 Educating the professional
team
WG10 Liability law and latent
defects insurance
WG11 Towards a 30% productivity
improvement in construction
WG12 Partnering in the team

18

Rethinking Construction
Summary

To summarise, the Task Force wishes

to emphasise that we are not inviting
UK construction to look at what it does
already and do it better: we are
asking the industry and Government
to join with major clients to do it
entirely differently. What we are
proposing is a radical change in the
way we build.
19

OTHER KEY REPORTS

Better Public Buildings - Dept Culture

Media & Sport (2000)
Modernising Construction - NAO
(2001)
The Second Egan Report Accelerating Change (2002)
Implementing the Clients Charter, National Housing Federation (2002)
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Other key reports

Achieving Excellence in
Construction Procurement guides,
OGC (2003)
Improving Public Services through
better construction, NAO (2005)

21