Unlocking specialist potential: Work in progress?
This month, Martyn Jones asks us how much progress have we made in unlocking the potential of specialist contractors and giving them a more participative role in the development process. Back in 1998 Martyn co-authored a report for the then Department for Trade and Industry (DTI), Unlocking specialist potential: A more participative role for specialist contractors with the support of the members of a Task Force assembled by the Reading Construction Forum.
In the report, the Task Force set out the crucial role that the specialist contractor plays in delivering project outcomes and providing client satisfaction, particularly in the case of those specialists contributing a significant amount to product design and specification.
It proposed three main strategies for adding value for the whole supply chain: improving relationships through teamwork and collaboration, taking a process-oriented approach to the design and construction process, and making customer requirements the central focus.
The report also argued that transformational leadership and cultural change brought about through continuous and shared learning were needed if the proposed strategies were to be successfully implemented and sustained.
Later, the Bristol Constructing Excellence Club, again with DTI funding, undertook an investigation into the means to engage specialist contractors and suppliers in the Rethinking/Constructing Excellence agenda. The report set out the barriers the specialists faced in engaging with the Rethinking Construction principles, the forms of help they needed, the strategies they should employ, and the role that the Constructing Excellence Clubs could play in supporting them in their transition to a more central and proactive role.
And CESW had yet another go with the publication of two guides: Outcome-led procurement: A common sense approach to procurement and then Outcome-led procurement: The view from the supply chain. The former called for design and construction to be treated as a joined-up process and the latter for other upstream project participants to think value and not price, and to think about putting themselves in the position of their specialist contractors and suppliers.
To follow up on the publication of the guide to Outcome led procurement: The view from the supply chain, CESW facilitated a series of regional workshops aimed at clients and their advisors on Outcome led procurement: How to get more value out of the supply chain. The workshops, in partnership with CE Clubs, set out what its like to be a specialist contractor/supplier and what participants upstream in the design and construction process could to unlock more value.
So, what progress have we made? According to Martin Davis, a member of the Reading Construction Forum Task Force back in 1998, and a practitioner with 31 years as a specialist M&E contractor, it’s still very much work in progress. In a recent article in Building magazine on The Construction Playbook Davis argues that although the supply chain accounts typically for about 80% of the cost of the project they are still largely marginalised in the design and construction process. He says, “Speak to any of them [specialist contractors] about collaborative procurement and they will tell you that nothing much has changed: they are still typically appointed on a price, screwed down as the main contractor seeks to recoup the losses from his decision to discount his margins to win the overall contract. Simply put, value has been sucked out of the [very] asset to be provided by the supply chain.”
He goes on, “How could anyone who cares about construction disagree with anything in the Construction Playbook? Why then do I, a practitioner with 31 years as a specialist M&E contractor, know that it will not realise the government’s ambition to “change our approach to delivery”?
He observed that, tellingly, of the 48 signatories to the Playbook, only one was a specialist subcontractor (as distinct from an “official”).
So, what can we do to further develop and fully unlock specialist potential and engage them in the change agenda? Here are four to be getting on with:
- Clients to ensure that their Principal Contractors (Tier 1s) have fair margins in line with the complexity and risks associated with the project (As I argued in an earlier Thought for the Month, one way of achieving this is to adopt Project Bank Accounts).
- In turn, Tier 1s, to adopt less commercially, less opportunistically oriented relationships with their Tier 2s and suppliers.
- Tier 2s and 3s to take a more proactive role in projects and the wider change agenda.
In Constructing Excellence, we all re-energise our efforts to engage more specialists and suppliers in shaping the industry’s change agenda and transformation.