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The Scottish Parliament is a symbol for the UK democracy which is characterised by its wonderful architectural façade. The building won several local and international awards for its unique façade such as the Civic Trust award in 29 March 2006. The Secretary of State for Scotland announced, on 9 January 1998, that Holyrood would be the permanent home for the new Scottish Parliament building (Mccallum & Wakefield, 2003). The reasons behind the selection of Holyrood as Donald Dewar identified in January 1998 are its city centre location and its historical links (White and Sidhu, 2005).
Despite these facts, the Parliament is also considered as an example of a failed project in UK. For any project, failure is the inability to meet the project delivery targets which are set at the outset simply; time, cost and quality. In this case - the Parliament project- although more than the pre-set quality was achieved the project was excessively delayed (3 years late) and over budget (£391M over budget). There are several reasons behind the project failure and different parties contributed by a way or another to reach to this situation. This report explores and analysis the reasons behind the Holyrood project failure. It explores the relationship between these reasons and the role of the project management. It also identifies the strategic actions that could be taken to increase the chance for a successful delivery. Finally, a conclusion is set which identifies the key lessons that any project management can learn from the experience of this project.
Is the design appropriate for the initial budget?
A number of controversies and criticism was thrown to the project of constructing the new Scottish Parliament Building. To start with, using the public's money in order to create the said project already sparked controversies. Furthermore, as time passed by, the cost of the project increased dramatically. In fact, the cost increased almost 10 times its original estimated cost of £10 to £40 million in July 1997. By the end of the project, it was determined that the final cost of constructing the building almost reached £430 million.
The initial figure of £10 to £40 million is only based on the structure that would house the Members of the Scottish Parliament. The cost projections did not take into consideration other aspects of the project like the design or location of the building. (Fraser, 2004)
A year after, upon finding the winning design for the new building, the cost projection was adjusted to conform to the design drew by Miralles. At that time, the revised cost was £50 to £55 million (Fraser, 2004). This figure was derived by considering the use of sixteen thousand square feet of land in Holyrood or Leith, Haymarket. It assumed that the land is already cleared and ready for use. Furthermore, value added taxes and other costs attributable to the procurement of the land were not considered. In June 1999, Donald Dewar made further adjustments to the estimated cost of the project in order to give provisions for other costs like consultancy fees, demolition costs, value added taxes, cost of acquiring the site, and other provisions for risks and unforeseen events. After making the adjustments, the estimated cost reached £109 million. Further revision to the cost projections drove it much higher up to £195 million in April 2000 (Fraser, 2004)
Finally, in November of 2001, the official cost of the project is made known to the public. It reached £241 million after considering major changes. The design and the space needed for the project were changed. Furthermore, the project was pressured by rescheduling the completion of the project earlier to May 2003. In effect therefore, various difficulties were encountered. This gave led to more increases in the cost of the project. The project managers told the Scottish Parliament's Finance Committee that the changes made in the design and schedule made the costs even higher. At that time, the official cost of the project was £241 million.
As the project progresses, other needs of the building were considered. Due to the fact that the building will house the Scottish Parliament, it will need claddings that are bombproof as fabrics outside the building walls. Delays and other hidden costs in the construction further raise the cost of the building. The project failed to meet its expected opening date once again. At December 2002, the cost of the building already reached the £300 million mark.
George Reid was appointed as the new Presiding Officer for the project in July 2003. He submitted the first monthly report of costs and time table for the building construction. According to the report, the cost of the project as of that date was already £373.9 million. The increase was blamed to the amount of consultancy fees that costs over £50 million. Further problems primarily in the internal design and structure of the building pushed the cost over the £400 million mark.
A series of other problems occurred some time in early 2004 that further raised the cost to £430 million. The opening was actually moved the next year. Fortunately, the building managed to be finished and ready for opening by October 2004.
The Scottish Parliament Corporate Body revealed the ultimate cost of the building in February 2007. The figure amounted to £414.4 million (Fraser, 2004)
The characteristics that made the Scottish Parliament great in terms of architectural wonder also brought with it the problems associated with that kind of architecture. The design changes and rising costs made things difficult for the already difficult project of building the Scottish Parliament.
Aside from the cost of the construction itself, other aspects of the Scottish Parliament Building was questioned. There was the issue about the need itself of having to build a new building. The selection of the site was also intrigued.
The choice for a non-Scottish architect and for Bovis as the head of the construction were all questioned. In fact, Bovis was not even part of the shortlist for possible construction managers. With regard to the site choice, controversy sparked when the Royal High School on Calton Hill was rejected. For many years back then, it has been the very first choice for the location of the Scottish Parliament. On the 30th of May 1997, Dewar visited the Royal High School and found out that it was not conducive as the location of the Scottish Parliament because of its size and location.
On the 1st of June 1999, the Scottish Office transferred the control over the project to the Scottish Parliamentary Body. The said body is composed of different people from different parties. Sir David Steel was chosen as the Presiding Officer of the project. This all happened during the time when constructions costs are increasing. These increases in costs can be attributed upon considering the need to have other structures that will specifically accommodate the staffs of the Members of the Scottish Parliament.
Originally, overcrowding problems are being encountered at the previous Scottish Parliament site in Royal Mile. Another cost object of the project was the necessity for a formal entrance to the building. Media interest rose as the cost issues of the project were uncovered. The Members of the Scottish Parliament went into a debate regarding the construction of the building. Some members thought that the construction should be stopped. The debate resulted into a favorable verdict for the Scottish Parliament Building.
The design of Mirelles for the Parliament asks for an increase in the size of the park by another 4,000 sq. m. The downside of the design change led to an increase in project cost to £115 million on an assessment made in September 2009. During the 1st quarter of 1999, an architect, John Spencely performed an audit of the project as requested by the Scottish Parliament Corporate Body.
What is type material use during Construction?
Delays caused by architect joint venture
One of the main reasons caused the project delay is the complex design delivered by the Spanish signature architect Enric Miralles in association with RMJM. Enric Miralles won many architectural prizes and competitions throughout Europe including the Madrid City Prize in 1993, the National Prize of Spanish Architecture in 1995 and the Golden Lion at the Biennial of Venice in 1996. The Scottish Parliament user brief requested for a high standard building which reflects the aspirations of the government and the people of Scotland (White and Sidhu, 2005). To achieve this target Enric Miralles developed a novel, unusual in style and complex design. The building materials that were selected for the project are unusual with high quality such as the laminated oak roof beams and the stainless steel in the debating chamber. Delivering such design is not that easy and led to difficulties and challenges for the specialist contractors, project management and the designers themselves. This in fact created a real challenge in meeting the target completion date by July 2001. It can be argued that even in ideal situations with a good management and expert contractors still implementation of such design requires reasonable time.
Are all materials are available?
Design complexity caused also delays in design information production required for work packages tendering and executing. Some of these delayed packages such as glazing were in the critical path and as a result caused other packages to be delayed (Auditor General, 2004). For instance, complexity caused some difficulties in installation of some structural members such as the beams of the debating chamber roof which took more time than planned and as a result other work packages were delayed.
Should the completion of the final design before the project?
The design development is the evolution of the design throughout the project. Design development might include small parts of the design such as functional aspects (Gray and Larson, 2008). In this project it included architectural, structural and building service issues. This caused disruptions to the trade contractors and time extensions were guaranteed. An example of the design development is the foyer roof. In 2001 the design of this part was completely changed from the original design and in early 2004 it was again completely changed (Auditor General, 2004).
Is enough space in the planned?
The design growth had affected both the charge and the plan program. Around 10,000 changes had been approved by the project management throughout the life of the project with a total cost of £68 million (Audit General, 2004). The briefed gross area on which the £50 million budget had originally been based had increased from the initial 17,500 to 23,000 meters squared in the latest design proposals. This increase was to accommodate large numbers of staff in the light of better knowledge of the way the Parliament would operate. Furthermore, the need to incorporate an additional formal entrance to the building had been recognized and imposed additional space demands and therefore costs (White and Sidhu, 2005).
"Delays result in extension of project time, which leads to extra overheads that increase the cost" (Faridi & El-Sayegh, 2006, p.1167). In this project the delay in construction and time extensions given to the trade contractors was also a significant factor for cost increase. Time extension also led to extending the design services and the construction manager contract. The amount due to the construction delay amounted £73 million (Audit General, 2004).
There are more than one option for the procurement, it is important to determine the procurement method appropriate for the type of project and those are:
The Traditional route
Design is completed before the contractor is appointed, preventing inclusion of the contractor's design expertise, Reliance on competitive tendering to appoint the Reliance on competitive tendering to appoint the contractor (usually with the lowest cost), Client controls the design through its consultants client. retains all design risk, Provides reasonable cost certainty, A contract administrator runs the contract.
Competitive fairness, Relatively low tender preparation costs, Satisfactory public accountability
Procedures are well known, Changes are reasonably easy to implement.
Slow to start on site (no concurrent working), Open to abuse when design incomplete
Poor buildability as contractor is not involved in design, Potential for adversarial relationships
Design risk lies with client.
The Design and Build route
Tender documents usually comprise a brief developed to outline scheme stage, stating:
Required building function Areas / spaces required
Building services performance criteria, Outline specification of key elements (e.g. finishes)
A single Contractor is appointed to complete the design and construct the project
The Contractor will employ its own consultants.
Client interacts with a single point of responsibility Inherent buildability
A firm price can be agreed prior to construction Shorter overall duration (compared to traditional) , Contractor's design liability can be extended to include fitness for purpose.
Client needs to appoint Contractor before design is complete
No design overview unless ,Consultants are appointed by Client, Difficult for clients to prepare an adequate brief Contractors' bids are difficult to compare Design liability limited by use of standard contracts Client changes can be expensive.
The Management Contracting route
Management Contractor advises Client on programming and buildability Work divided into series of packages basis to separate Works Contractors Construction of each package can start as soon as the Client approves its design Design and construction overlap considerably Relies on clear communication and cooperation.
Potential to reduce project duration Concurrent working is inherent Opportunities to improve buildability Breaks down traditional adversarial barriers Late changes easily accommodated
Work packages tendered competitively.
Needs a good quality brief Poor price certainty Requires a good quality project team Difficult to resist Works Contractors' claims.
Project procurement route "construction management"
Construction project management is a "fast track" strategy which can speed up the project by allowing overlap between design and construction as shown on figure 1.
The client has no experience in construction industry and this procurement route requires an informed and pro-active client.
When selecting the project's architect the client did not take in consideration that the architect must have experience in projects that are procured by construction management and this was one of the difficulties the architect faced in the project
The construction manager acted as an advisor for the client. Hence he had no direct contractual links with the designer or with the trade contractors. This means that he did not bear any contractual responsibility for the project delay and cannot instruct them for time and cost control).
The construction project manager divided the work into 60 work packages making the construction program sensitive to disruption and more difficult for the project management to control.
Awarding the work packages with uncertain scope and incomplete design put the client in a weak position to resist any claim for time extension even if the delay was due to the trade contractor's performance.
Some of the trade contractors were assigned design responsibility for some elements subject to final design team approval which caused delays to the project.
Selecting the procurement route and risks management
"No construction project is risk free. Risks can be managed, minimized, shred, transferred or accepted. It cannot be ignored" (Latham, as cited in Hackett, 2007, p.47). The selected construction management procurement rout was associated with many risks. These risks were not identified by the project management and no allowance for accommodating them was included on the project budget. It is well known that risks should be taken by the best parties to manage them. Although, the client of this project has no experience on construction industry and it is not the best party to manage these risks by selecting this procurement route it accepted all the risks. It seems that the construction management was selected for procuring this project for one reason only which is speeding up the construction process to meet the specified target completion dated without any consideration to the risks associated with such route. It seems that the client was informed late of the risks and their effects on the project. This is an unjustified shortcoming from the project management which prevented the client to take its responsibility to realize and manage the risks as much as it can.
By using the construction management procurement for the project, the client held direct contracts with the trade contractors for individual work packages. The way in fact these packages were procured contributed to the cost increase of the project. Most of these packages were tendered without sufficient design information for bids preparation. This made the bidders reluctant to participate due to the high uncertainty. The client found itself with few bidders and higher prices than estimated. Some of the packages were tendered as two-stage tendering which means the bidder submits its offer based on the available design information and later in the second stage the offer will be revised based on the additional information. But unfortunately, due to the design complexity and the slow design information production the information available were also not enough which led to high prices and little chance for negotiation. The rush in awarding these tenders was to meet unachievable target completion date.
In most cases, construction management is inappropriate for construction projects in the public sector particularly for those are very complex. In a project with a complex and prestigious characteristics namely Scottish Permanent project, significant alterations are highly expected. Under the construction management approach the changing orders are more likely to happen. This due to the lack of adequate relationship between design team and contractors, which in turn results in producing designs that the contractor is not able to construct (billability problem). At the same time, the client alone bears the entire responsibilities for those changes
Better procurement strategy and risk management
Before selecting the procurement route, the project management could evaluate the route precisely taking in consideration the complexity of the design and the client experience. The project management could for example evaluate the advantages and disadvantages of such a route from past executed projects delivered by the same way. The risks could be managed by implementing a good strategy which includes risk identification, risk assessment, risk response development and risk response control. Project management could explore other options such as design and build and management contracting which also could speed up the construction process and took away the risks from the client's side. PFI procurement route was politically discarded because it would not achieve the target completion date.
Prior to project procurement it is so important to carefully select the procurement route suitable for the project. There are a variety of procurement routes available and the suitability of each one depends in many factors such as the complexity of the project, the client experience and involvement, the risk allocation and other factors.
To conclude, there were many factors that have led to the delay and cost overrun in Scottish parliament project. Nevertheless the most significant reason is (i) the engagement in contracts before the detailed design and accurate specifications were completed, which resulted in continuous design alterations after the start of construction phase. Another important factors are (ii) the selection of construction management procurement despite the shortage of construction expertise and experiences of the PM team, (iii) unrealistic and very tight project plan, accordingly some work was out of sequence and not productive, and this added to the delays, and lastly but not least (iv) the delay in providing the drawings of the alterations to contractors. The very extensive delay and cost overrun should have been much minimised if several actions have been taken, particularly the following strategic actions; (i) arranging a procurement that does not lie all the risks on client side, and at the same time could deliver the project within the extraordinary quality (prim contracting or PFI seems the most appropriate), (ii) spending adequate time at the planning stage in order come out with a very clear and reliable planning and estimation, (iii) appointing PM team that is highly qualified and capable of controlling complex projects efficiently and effectively, and (iv) identifying a clear roles for the project parties and single point of leadership and control.
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2. Audit Scotland, Management of the Holyrood building project , 2004
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5. Mccallum & Wakefield, The Holyrood Building Project, 2003
6. Robert Black (2000), An examination of the management of the Holyrood project, Scotland