History Of Procurement Strategy Construction Essay

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From the beginning, the Scottish parliament building at holyrood was surrounded with controversy. The building was needed to be completed within a short amount of time. The building is needed to accommodate the members of the new Scottish parliament. There were a number of problems to start with; the location and building type of the new parliament had to be decided. Whether to refurbish and refit exiting buildings or to create a new purpose built parliament. After much discussions and debates the Scottish officials lead by Donald Dewar. In January 1998 they have decided on the Holyrood site as a purpose built parliament offering to make a statement about Scotland's future, its city center location and its historical links (Scottish Parliament website). The choice of design and architect was done by design competition which saw seventy teams, but only five teams were considered for the final competition. The Five teams were asked to produce indicative design ideas for the Parliament building at Holyrood. The final decision was taken and the competition was won, on 6th of July1998 by Enric Miralles Moya of Barcelona in partnership with RMJM (Scotland) Ltd of Edinburgh. The project when it was finally delivered it was 3.5 years over schedule and £300m over budget.

The Scottish parliament launched an inquiry to investigate the issues and methods used in the project. The inquiry is known as The Holyrood Inquiry conducted by Lord Fraser. The findings of the inquiry recognized a number of issues which affected the project. In this paper an examination of the questions which should have been asked of the design team at the time designing, procuring and construction.

Main Cause for Late Delivery of the Project:

The report produced by the Auditor General Report in 2004 came to the following main conclusion: The main cause of the 20 months delay to the project, since September 2000, was the production of detailed design variations and the late supply of information during the construction process.

First, it would be useful to start the investigation by considering the procurement route chosen for the project. The decision to adopt construction management as the procurement vehicle for the construction of the Holyrood building was found to be "one of the most significant, if not the most significant" decisions taken during the course of the project. Separate construction management offers gave the advantage of speed but a disadvantage that the price was uncertain until the last contract had been leased (one of the over-budget reasons for the project).

With regards to the procurement method adopted, there was an inadequate level of evaluation or understanding of the construction management route; subsequently ministers were not informed of all the risks involved; and one of the main reasons for delay is that the client was not experienced enough to deal with a complex project like that of the Scottish parliament building. In addition, in the construction procurement route, for the client to triumph over this shortfall in experience he should have entered into a contract with a more qualified project manager. Moreover, the client should have hired numerous specialist contractors rather than just the one main contractor. This in fact gives the client closer involvement with the project throughout its whole lifetime. This is could be considered one of the reasons for the delay in the project, as the client was not sure enough about his needs and neither did he have a clear concept of the project as a whole.

As a result, instead of reducing the duration for delivering the project, this choice was a main reason for its delay since the risks and challenges were not fully appreciated by the client and project management beforehand. Moreover, synchronizing the design process with the construction, combined with the time pressure and the stress by quality issue, made progression of the design process more difficult to control and update. As a result, the detailed design was made late at every stage.

How did the Architect affect the project?

Obviously, there was some uncertainty about the program throughout the whole project, which is considered to be one of the main factors that caused the delay. In other words, unachievable targets were chosen and set in place within an inadequate timetable. This slippage and uncertainty came about because:

There was a huge failure in the production of design information by the design team or by the trade contractors. Unfortunately, Miralles - the design team leader - died just a few months after construction started in 2000. This meant the loss of one of the main connectors between the client and the rest of the design team (cited in www.scottish.parliament.uk).

The progress between clients as regards the approval of each action point in the project and its target. Unfortunately, there was a considerable delay during this stage.

Is the projects' management responsible for the delay?

To some extent, YES. Delay and Over budget. Audit Scotland stated in their report that "Throughout the project there was tension between the objectives of time, quality and cost", to make it more clear, this table illustrates the end result of the project, by using construction management as the procurement route for the Holyrood project.

Priority

Intended

Actual

Time

First priority

Failed - significant slippage

Cost

Fixed budget

Failed - significant increase

Quality

High quality required

Achieved

They also stated that the recognition that was given to the importance of risk management was not sufficient. Moreover, considering construction management as the only method for procuring the project was not correct; due to the many criteria and factors that form the method. It is clear that the advantage of this method is that it delivers projects with a high level of quality within deadlines, especially when applied with its sequence. On the other hand, unfortunately it was not a method that is noted for providing a fixed budget at the outset. Nevertheless, the client considered that there was a fixed budget for the project from the start but did not state clearly enough what the budget actually was. Here a considerable question introduces itself: i.e. what were the base factors used by the client to state there was a fixed budget for the project? At that stage there was neither a completed design nor a completed conception of the final view of the project. It might be argued here that one of the main negative influences on the project was the using of insufficient project management to deliver a project with like sensitivity. Moreover, this procurement route needs experienced clients to deal with it, and cannot be used when cost certainty is one of the client priorities. In addition, it gives the client an active role in the project, which had a negative effect on the project. From different point of view, since there was nothing fixed or unchangeable it would have been more beneficial to use another method or to modify the route that was chosen for the project, in order to fit with the client requirements more clearly.

Why was an out of date brief being used?

Having a general idea about what happened in the cost estimation for the project, and how it changed during the planning process, will give a clear understanding of the problems that the project faced. At the early stage, i.e. the first estimation of the cost of the Scottish Parliament building, in July 1997, the Government referred to a range of between £10m to £40m without clearly stating what these costs were intended to cover.

Desired Method for the project

From the outlined procurement methods, the best method of procurement which should have been used is management contracting. This method provides the client with the expertise required to initiate the project. Utilizing the expertise provided by the management contractor to build the Scottish parliament building would have resulted in a better outcome. Management contracting has the disadvantage of cost uncertainty, which was part of the problem when construction management was used. The difference is the inexperienced client would not be responsible for tendering of works packages. The experience of management contractor would have benefited the project by being involved at an early stage to overlook the design and raised the issues and concerns and worked to clear them. The use of this method would have given a considerable gap between the design and construction stages, even though they overlap. The management contractor would have given advice to the client as problems arise and provided solutions.

Conclusion:

The Scottish parliament project presented valuable lessons to be considered in major future projects of its magnitude. From the Holyrood Inquiry it is clear that the project was bound to fail in meeting its target of time and cost. The design of the building was complex and the emphasis of the client of an early completion did not allow for adequate planning and considered design. The complexity of the design caused difficulties to communicate to tendereres and difficult to estimate its cost. Complex designs require longer time.

One of the main issues of this project was the multi-client organizational structure where there was not a single point of control and leadership, which is a key to the success of projects implementing construction management procurement method.

The method of management contracting should have been considered as an alternative method to construction management. The management contracting method would have suited this type of project as it delivers the fast track requirement and given enough time to plan and design the project.

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