Defragging Procurement

Stephen Pearse , 20 February 2019

Current fragmented systems for procuring and delivering complex building projects are compromising the built outcome, to the detriment of the consumer, the public and the built environment professions. Stephen Pearse argues that the building procurement process needs a complete defrag.

The current process of building procurement is not driven by consumer protection. It is not delivering the best outcomes for consumers, and compromises the ability of consultants to do their best work. The highly fragmented process from concept to completion means that the consumers’ needs are often lost or frustrated by multiple layers of delivery teams who are under constant pressure to reduce time and cost as the priority over delivering the most effective outcome for clients and end users.

Our buildings are more complex than ever, and are delivered within a very complex approval regime and a public environment that has a growing awareness of their right to quality outcomes.

We need a flexible delivery system with options, but the current system is not working. We need to defragment the design and delivery process. This includes acknowledging that some of the traditional approaches that have been usurped over the past 30 years were very effective, understanding how they were eroded, and examining how they might be reintroduced to create a more reliable, robust delivery system.

Background

The source of many of the complications within the current process can be traced back to the 1980s when the battle for public votes was fought around the creation of a free market economy. The Federal Government focused on maximising competition in the market, while in NSW the State Government was driven by a private sector corporatisation model.

In the Federal sphere the architecture profession was selected as a testing ground for part of this battle and was under threat of losing its specific rights around the use of the term “Architect”, the aim being to open up the provision of design services to the market. It took years to convince the politicians that it was public benefit that drove the architectural profession, that the training involved was an essential part of creating that public benefit, and that the term Architect had real meaning.

We won that battle and kept hold of “Architect” as a legally protected title, and the process of training and registration through the NSW Architects Registration Board was reinforced, but we had lost the war….

In the background, the NSW government broke up the process to deliver their building contracts into multiple fragmented steps including brief and concept, design development and tender, construction and contract administration. Very soon the rest of the industry followed. Each section of the design and delivery process was fought over by new entries into the market. All of a sudden quantity surveyors were becoming project managers running contracts, other un-registered and not necessarily trained groups moved into various segments, and new commissions were designed with A, documented by Z and delivered by B.

At the same time, new contractual processes entered the market to achieve balance and competitive pricing and the input of industry – D&C, partnering, novation to mention a very few. Approaches to construction contracting have also seen an increase in specific project companies and special purpose vehicles for realising complex multi-interest projects.

We moved from fully documented complex systems tendered with lump sums and guaranteed pricing to the highly fragmented process we have now. This needs to change to ensure that the industry can deliver the quality projects that the public expects.

New delivery processes

We now need to look at the whole workflow within the procurement process and prioritise the essential performance and outcomes needed. This may mean that, in some cases, more time is needed to do the job properly and may require adhering to a process that allows meaningful and comprehensive review, adjustments and signoff.

A new or refined method should evolve from the ideal model of a full team commissioned to deliver a comprehensive service for a fully documented lump sum contract, from concept to handover. This team should include some form of good sound construction advice early in the process.

We need to have professionals that are fully accountable and a system that allows high quality professionals to work as teams to design, document and deliver the seriously complicated structures and places that the contemporary work demands. This must occur within a process that provides for the transparent management of the brief through the myriad hands and insurance contracts that are now involved in our system.

We need to work with builders, construction managers and project managers as part of a co-ordinated stable team and project environment.

A useful model can be found in the Japanese system where building contractors receive the architect’s drawings and develop them into highly detailed construction drawings. The contractors work with the original architect throughout this process to provide a fully integrated construction approach and a finely crafted outcome. In Australia we also have many fine local examples of high quality outcomes from complex designs that utilise local methods of contracting. These projects should form the basis of case study analysis to help inform future approaches.

The risks to our cities are becoming ever more serious. It is not just the local end user or occupier who suffers. The whole community benefits from a high quality, well-designed built environment. The issues at stake have many and complex ramifications. To give just one example, there is a danger that recent building failures in apartment buildings will feed into public concerns about increasing density. If we lose the debate about the benefits of well-designed denser urban environments and the government shifts back to broadacre housing, there will be many regional and national implications.

The building procurement process needs a complete defrag. There are many models to refer to, both in Australia and internationally, and much knowledge and expertise to draw on.