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The UK Building Industry is described as one lagging in terms of innovation and dominated by conservative professionals, entangled in a fragmented structure where delineation of responsibilities was clearly defined, according to Bowley (1966). In order to clarify the reasoning behind Bowley's conclusion, this chapter draws a portrait of the UK building industry from the mid-19th to the mid-20th century, which epitomizes the span of Bowley's (1966) study.
This chapter is confined into 4 sections; the first depicts the structure of the building industry in relation to the parties involved. The second section is concerned with the role of the professions and their interaction within the industry. The third section identifies the role of the public authorities and professional organisations involved within the industry, and their attitude towards innovation. Also included is an insight of the types of contract and tendering used. The fourth and final section presents Bowley's theories of the UK building Industry and the main arguments leading to the theories.
The Structure of the Building Industry
The building profession emanates from a core system or structure, incarnated by the master builder, which in later days was also referred to the architect as he held the dual role of designer and builder, or the master mason that used to launch building projects (Khan, 1979). However, as the level of complexity in building development increased, the amount of knowledge pertaining to materials, types of structures and production processes represented too much knowledge for one individual. Subsequently fragmentation of the master builder occupation made way to two distinct professions: designers and builders. While, fragmentation was meant to promote specialisation through 'division of labour', segregation resulted as a major drawback, as esoteric group was formed in terms of training and knowledge instead of combining resources and working as one entity (Bowley, 1966).
The outcome of fragmentation resulted in a linear structure (now referred as the traditional procurement system), where clients in need of a building seek an architect, and provide him with a brief and an estimate of the capital to be invested in the project. Based on the following information the architect develops a proposal for the client. Once the design of the proposal is completed, a contractor or builder is selected through competitive tendering. While this is the classic structure, other practices were as follows:
The client or architect recruiting individual workmen for each task, while the building owner supplied the materials.
The architect/designer carrying both the functions of designer and contractor.
The master craftsmen could take responsibility for the supply of both materials and workmen.
Other arrangements included the architect or building owner employees in the form of clerk of works or surveyor acting as entrepreneurs.
Though a multitude of alternatives routes exists to undertake the construction process, a standard hierarchical structure or work plan was prevalent, at the top of which was the architect or designer as the client's agent and responsible for the design (of both aesthetic and functional features) of the building. The engineer responsibility was restricted to the design of structures in cases where it was beyond the scope of the architect, and the builders the erection of the building. The prevailing structure barred the engineer in enhancing the design physically or economically, though his knowledge and experience was undoubted. Similar to the engineer, the builder's knowledge was extraneous in the eyes of the architect and engineer, as they provided him with completed drawings. The builder's fate was unchanged even in situation where the engineer was the main designer (Bowley, 1966). However, the advancement of larger building in the early 19th century would expose the architect's limited scientific knowledge for the design of complex structures. This developed a dependence on engineers, who had the expertise and knowledge to design large building (Bowley, 1966). It led to claims that architects were inferior to engineers by some section of the engineering society (Bowley, 1966).
Besides the traditional procurement system, others systems such as package deal and negotiated contract were already introduced by the 1960s at a trial level by the Public Authorities in the construction of houses and schools (Bowley, 1966). The package deal system is one where both the design and construction process is the responsibility of one organization, usually the builder (Bowley, 1966). This system is best described as an off the shelf building, which hardly satisfies the client's requirement, due to the bespoke design solution (Bowley, 1966; Masterman, 2007) and involved a shift in role as the builder hold the position of the decision maker compared to the architect (Bowley, 1966).
The dominance of the traditional system between the prewar periods to the 1960's, depicts a fragmented industry dominated by a top-down hierarchical structure with a unidirectional flow of communication; at the top of which was the client or the architect as the client agent. The system did not allow for optimization of the knowledge present within the professionals at lower level of the hierarchy, thereby hindering the process of innovation and buildability. The opportunity for innovating was only in the hand of the architect, who had limited interest in technical innovation. However, engineer and builders could not contribute to technical innovation because of the clustering and delineation of the different professions from each other.
As mentioned earlier, fragmentation of the master builder functions led to new professions. This section explores the roles and responsibilities of the various professions prevalent during the period spanning the First World War to the 1960's.
Designers - Architects
Sir John Soane's classic definition of the professional responsibility of the architect published in 1788
"The business of the architect is to make the designs and estimates, to direct the works and to measure and value the different parts; he is the intermediate agent between the employer, whose honour and interest he is to study, and the mechanic, whose rights he is to defend. His situation implies great trust; he is responsible for the mistakes, negligences, and ignorances of those he employs; and above all, he is to take care that the workmen's bills do not exceed his own estimates. If these are the duties of an architect, with what propriety can this situation and that of the builder, or the contractor be unites?" (Kostof, 1977).
150 years later, the architect's responsibilities were reduced as a result of further fragmentation. Their main functions and liability were limited to the design of the aesthetic and structural components of building and the monitoring of the construction process (Khan, 1979). However, to demonstrate a more client related approach in 1887 the RIBA ruled its members from having any direct benefits in any building firm (Bowley, 1966).
The employment of architects in the early 20th century was restricted to projects where appearance was of concern such as the house of the wealthy, churches and public buildings such as hospitals and schools (Bowley, 1966). Hence, the architects focused towards aesthetic innovation instead of technical innovation. Moreover, the absence of demand for buildings requiring new functions led the architect to believe there was no need for technical innovation (Bowley, 1966). This period is denoted by an absence of interest to neither improve functionality in design nor reduce cost on behalf of designers (Bowley, 1966).
The privatization of housing development in the 1920s saw many builders seize the opportunity to become speculative builders, subsequently the architects were found working for the builder, who was considered inferior by the former (Bowley, 1966). The conservatism nature prevalent among the architects meant they were reticent to take this position (Bowley, 1966). The architect's position at the top of the hierarchy suffered another blow in the 1930s, following the introduction of braced and skeleton structures, which raised the interest towards the design of larger buildings (Bowley, 1966). The architect's limited knowledge in the design of complex structures meant they were dependant on the engineer for such designs (Bowley, 1966). Eventually engineers became more important than architect where large commercial buildings were concerned, even pushing some section of the engineer to claim that they were more important than architects (Bowley, 1966).
The architect profession in the 1960s was distributed as follows; 42% in the public sector and 52% in the private sector (Bowley, 1966). The private sector was represented by a pyramidal structure, dominated by a large number of 1 person firm to a few employing over 50 architects and other assistant such as draughtsman, technicians and clerks. The lack of technical knowledge in the architects' offices meant they needed to consult experts such as heating engineers and 'floor and roofing' experts whenever technical knowledge was required. Hence, to maintain the expert advice, architects were often led to nominate the experts as sub-contractors on the project (Bowley, 1966). The period was defined by buildings of poor operational features and high maintenance cost, for which the architects were being blamed. The lack of standardization of design and absence of alternatives in the structural systems used, were some of the prevalent issues in design (Bowley, 1966). The inefficiency of the design process had an adverse effect on the whole building industry. On the other hand architectural firms were being blamed for the poor quality of building services, a result of the lack of employed specialists, since they were composed mostly of architects (Bowley, 1966). The artistic view adopted by architects at the time led to neglects in the design element of the production process for the building and simultaneously forsaking many of their previous responsibilities like engineering, technician and cost experts, while holding to the administrative tasks involved in the function as the client's agent.
Designer - Engineers
Prior to the 19th century, it was still difficult to draw a demarcation line between the engineer and architect in term of their responsibilities and function since both cumulated the role of designer. While the engineer focus was in the performance of functions, the architect's interest lied in the aesthetics of the building (Bowley, 1966). This difference between the engineer and architect was also prevalent in the type of project each were designing; the engineer was mostly employed for the design of industrial and commercial work, compared to the architect employment for the design of churches and the house of the wealthy (Bowley, 1966). However in the 1950's as appearance became an important feature of industrial buildings, the architects found new openings, to the detriment of the engineer's. However, in the 1930s the introduction of new materials like reinforced concrete and steel and the growing interest of architects in larger buildings redefined the importance of the civil engineers in the building industry (Bowley, 1966). Subsequently, the 'structural engineer' as a profession would be recognized by the ICE, due to the increased market for complex structures and the availability of large number of choices of materials to be used for in the erection of structures.
The industrial revolution in the 1950s led to an increased demand for larger and more complex buildings, such as factories and workshop and for improved building services (central heating, lavish plumbing and lighting were in demand) in both commercial buildings and the housing industry. These changes in demand meant that specialist engineers such as electrical and mechanical engineers' role in the industry was suddenly enhanced.
Quantity surveying as a profession has emerged from the architect's profession, as the latter were demonstrating a lack of interest towards the cost element of project development. While the quantity surveyor was meant to fill the gap left by the architect, their function was initially limited to the drafting of bill of quantities (its purpose was to allow the builder to estimate the total tender prices, and ensure that such prices provided by the builder were not absurd) and the measurement of variations and other works excluded from detailed specification (Bowley, 1966). While, comparative cost analysis of designs alternative, should have been integral part of the quantity surveyors role, the format of the bill of quantities in the 1960s was not appropriate as the builder tendered prices was inclusive of overhead cost, which were not a separate item in the bill (Bowley, 1966). However, though the QS experience and knowledge of material, labour and building cost made him an ideal candidate to advise on cost reducing initiatives, it was not the case. The QS were therefore not incentivised to develop the scientific knowledge required for a better cost analysis method.
The responsibility of builders in the early years of the 20th century was limited to the construction process of a building, wherever an architect or engineer was employed to design the project, except in the case where package deal or negotiated contract were used (Bowley, 1966). Planning and coordinating of the site related activities were the daily chore of the builder, of which the supply chain coordination was the most strenuous activity (Bowley, 1966). The building process being a labour intensive task, improper coordination of material supply could lead to hours or days of idleness. However, in the mid-30s with the opportunities in the housing market, many builders would swap for the double coat of builder and developer (Bowley, 1966). Also the housing and school schemes proposed by the government for non-traditional houses would see builders come up with number of innovative proposal. It is one of the few opportunities whereby builders did put into practice their knowledge from the design stages, the period was marked as one with large advances in technical innovations and cost reducing initiatives.
The other professional associated in the industry were specialised sub-contractors, who were skilled in one specific craft, such as masons, floor specialist, electrician, plumbers etc. However, as the complexity of buildings would increase and the requirement for services raised more and more, specialised jobs were being created.
Government, Local Authorities & Regulatory Bodies
The UK Government and other Public Authorities
The UK Government acts as the main regulatory body of the building industry, through the use of tools such as Bylaws and Acts of parliament to dictate the actions of the building industry. Therefore, the Government can intervene to enhance, control or limit innovations within the industry. Over the course of her study, Bowley (1966) points out numerous government interventions between the First World War up to the 1960s. This section provides a brief chronological review of the influence of the UK Government on the building industry within that period.
1919 - The Local Government Board (LGB) refused to grant loan to local authorities for reinforced concrete projects, on the basis that the UK building industry lacked the knowledge and expertise with respect to reinforced concrete. Though reinforced concrete had already been used previously in the UK and was widely popular in countries such as the US, France, Denmark and Germany at the time. Few years later, following pressure from municipal engineers, the LGB would alter its decision and grant loan for reinforced concrete structures at only a 15 years period compared to a 30 years period for steel framework structures; Steel was considered a traditional material in the UK and professionals were more conversant with steel than reinforced concrete, the conservative attitude towards the new material hindered the use of it, and the action of the LGB had only contributed as a retardant to the use of reinforced concrete in the UK.
1919 - The Housing and Town Planning Act was implemented, and Local Authorities were given the power to waive any bylaws preventing the use of novel methods and materials, provided it was approved by the Standardisation and New Methods of Construction Committee (SNMCC). The SNMCC was a committee set-up to develop the standardization of fittings and to investigate new methods of construction. The SNMCC would eventually setup the Building Research Board in 1924, which is now known as Building Research Establishment or BRE. The latter would proceed with a number of research on materials and new techniques of construction over the decades.
1925 - New Methods of House Construction committee was set up to investigate substitutes for materials requiring labour intensive techniques such as clay tiles and slates, traditional lath and plaster. However, the committee was unable to provide any relevant alternative for these materials.
1937 - Establishment of the National House-Builders Registration Council, led to the enactment of specification model for work to be executed, as well as standard of materials to be used for houses. In order to control quality of houses, councils were made to issue conformance certificates for houses meeting the set specification.
1939 - Enactment of the Building Societies Act - The Act introduced a quality certification system for houses, such as to reduce malpractices prevalent among builders at the time.
1939 to 1945 - Committee of Wartime Building instigated the Building Research Station to conduct a number of researches. In 1941, a series of expert committees was setup by the Ministry of Work to review the major problems likely to affect post war building, and thus provide recommendations to minimize materials used and improve speed of construction in the postwar period. In 1944 the Committee on Walls, Floors and Roofs reported that during wartime period considerable improvement were achieved in terms of economy in labour and reduction in use of scarce materials. Also experience in standardization, prefabrication, transport and erection were all widely used during wartime.
1943 - Local Authorities and the London City Council in particular made attempts to transfer the innovative ideas developed for non-traditional houses to the construction of flats.
1947 - The government decision to abolish the expansion of the building industry, through the removal of subsidies for non-traditional houses in favour of the export programme, led to a consequent decline in the total number of non-traditional houses completed
1953 - Control of steel use in the building industry by government, encouraged building professionals to devise or make use of other method of constructions with minimum steel consumption. In the 1950's the UK Government was in control of buildings both directly and indirectly, as well as prices of materials and their uses were being controlled. While in 1954 the BRS led research on cost-reducing methods of building high blocks- the first result of the research were not available before 1957 and 1963. Government had set subsidy policy to avoid encouraging expenditure in high blocks except where really necessary, and the special subsidy for flats was restricted to urban sites of high value.
1955 - A letter addressed to the Minister of Works, recommending the ministry to convene a meeting to solve the problem of high steel usage in the industry, was rejected, the Minister reply was "â€¦it is inopportune to adopt such issue at the present time" (Bowley, 1966). Which demonstrate a lack of interest in cost and materials optimisation initiatives at the time.
As much as the influence of the UK government on the building industry is undeniable, poor decision making of the latter has had major consequences on the industry. The skepticism pertaining to the introduction of reinforced concrete, the altering of subsidies pertaining to non-traditional houses are examples of poor decisions that have led the UK building industry to lag behind with respect to other European Countries such as France and Germany. While the introduction of BRE and the setting up of quotas with respect to steel usage, have contributed as enhancers of innovation and the introduction of the Building Act and other regulatory acts to raising the quality of the final products, the government then have demonstrated a mixed feeling about their objectives towards improving the industry.
RIBA, RICS & ICE
Based on finding from Bowley (1966) it can be observed that the professional organisations such as RIBA, RICS and ICE were very static during the first half of the 20th century where innovation was of concern. The conservative attitude of its members is the main reason behind this static situation. Bowley (1966) stated that besides the publication of articles and regular meetings, the professional bodies did not do much in terms of enhancing innovative ideas. This was supported by the lack of interest in the use or development of materials such as reinforced concrete or mild steel for the erection of building, while these were widely used across Europe and the US (Bowley, 1966). One important element that did affect the industry however, was the decision of the RIBA and RICS to prohibit members of the association from having any direct interest in any building firm so as to demonstrate a more trustworthy attitude towards clients. Whether the decision was beneficial to the industry or not is debatable (Bowley, 1966). However, the fact that architects could have no benefits in building firm, can explain the lack of architect firm applying for the sponsor scheme for the development of non-traditional houses in the aftermath of the war, as it would not have been in their best interest to develop new types of building for which builders would have been taking all the applause.
One of the great contributions to the industry was the involvement of professional bodies like the RIBA in the War Executive Committee, which marked a period of extensive innovation with the advent of prefabrication, standardization of materials and use of reinforced concrete to state a few.
Types of Contracts
Standard form of contract was common by the 1960, as the first form of contract was introduced in 1903 with the collaboration of the RIBA, Institute of Builders and the National Federation of Building Trades Employers of Great Britain and Northern Ireland (JCT, 2012). However, the early history of Standard Form of Contract did not meet much success; as the Standard Form of Contract used by the local authorities was considered to be unfair (Bowley, 1966). The consequence was unsuited tenderers winning many of the tenders, as experienced and genuine firms were not willing to bare the risk associated with the unfair contracts (Bowley, 1966). While the RIBA's contract was fairer, the clause pertaining to nominated subcontractors was of concern to the builders, as it meant limited control of the project operation flow and therefore more issues in organizing site works (Bowley, 1966). To bypass these issues Bovis Ltd, one of the large building firm in the early 20th century would come up with the 'negotiated contract' (Bowley, 1966), a system of contract that allowed the integration of the builder at the design stage (the builder was able to contribute his knowledge through collaboration with the pool of experts involved in the design process (Bowley, 1966)). The negotiated contract proved an efficient method where novel methods of construction were concerned. Since it is quite problematic to work out estimates for new method of construction negotiated contract allowed for a better alternative in getting the work done at reasonable prices. Hence, the use of negotiated contract by the public authorities for the construction of non-traditional schools in the 1950s (Bowley, 1966).
The 'Package deal' type of contract was introduced by public authorities during the housing crisis of 1945 (Bowley, 1966), it is an integrated system that provides the client with an off-the shelf like building within a defined cost range. However the be-spoke nature of the design, means in most cases it cannot fully meet the full satisfaction of the client (Masterman, 2007).
In the 1950s, the public authorities would experiment a new type of contract, the 'serial contract' whose purpose was to guarantee a series of contracts to a firm or group for a specific type of work, this type of contract was established with the objective of capitalising on specialisation of personnel and plant (Bowley, 1966).
The UK industry had had much experience with respect to different types of contract by the 1960s, while some like package deal and negotiated contract was a positive innovation within the industry, others like the local authority standard form of contract was deterrent to any type of innovation.
Both selective and open tendering had been introduced by the 1960s, but public authorities had had a mixed feeling about the type of tendering to be used. Starting with the Simon Report in 1944 (Report on the Placing and Management of Building Contracts), which recommended the use of selective tendering over open tendering (Bowley, 1966), to the Model Standing Orders 1957 in which the use of open tendering was recommended to the local authorities by the Ministry of Housing and Local Government.
Bowley's Theories of the UK Building Industry
Marian Bowley was an economist and historian of the economic thought, and a proponent of the classical economics. Throughout her professional career as an academician, at the University College of London, she has contributed to the understanding of the building industry from an economics perspective (Gann, 2003). Throughout her book 'The British Building Industry', Bowley (1966) explores the happening in the UK building industry between the mid-19th centuries to the 1960s. The outcome of the Bowley's study, are three theories of the UK building industry:
Theory 1: The structure of the building industry, leads to problems of economic rationality in the design process.
Economic rationality is defined as a decision made with appropriate reasoning and for which the optimum outcome decision is one that is not just reasoned, but is also optimal for achieving a goal or solving a problem (XXXX). Bowley (1966) inferred the economic irrationality in the design process to:
The absence of competition at the design selection process, limits the client ability to acquire the best alternative
The percentage fee payment method did not incentivise the architect to drive cost down; rather it instigates the designer to optimise his earning through the development of higher value than needed by the client.
The absence of comparative cost method contributed to inefficient design, as opportunities for optimization of design through the use of cheaper alternatives was subsequently reduced.
Designers were deterrent on the use of standard components
There was no drive to develop prefabrication on a sufficient scale such as to enable mass production.
Far too many designs were made and used too sparingly. Design with minor or no modifications for different clients were being used only once.
Theory 2: The design and the production processes must be integrated to enhance innovation
The separation of the design and construction process, limited the participation of the different agent involved in the industry to achieve optimized results.
The design of a building must be developed in collaboration with all participants in the project, such as to achieve an optimum result. Absent to do so, can result in inefficient design at the expense of the client.
To achieve the most economic building, the cost element must be an integral part of the decisions, from inception to the completion of the project
The risk bearer in the development of a project should be the one to lead the project. As the risk bearer is more likely to take the risk for innovative ideas.
Theory 3: Integrated procurement system in the form of package deal would enhance innovation and technical progress
The builder being in control of both the design and construction process, is incentivise to take the risk and innovate.
Retrospective of the study
The purpose of this study is to explore the extent to which Bowley's theories of the building industry was still supported in the 21st century. To meet the set objective, an understanding of the building industry in the current period was developed and comparison between the industry now and that of the pre-1960s was made. Our understanding of the modern industry was limited to the structure of the industry, the role of the different professions and the influence of the government and professional bodies on the industry in recent years.
If there are differences between the two eras, which we assume there are. The objective of the study would be to expose how the changes in the industry were in phase with Bowley's theories.
The Modern Building Industry odern Building Industry
Two successive waves of technological change have taken place since Bowley's study of the UK Building Industry, according to Schumpeterian theory of business cycle. The first is an era of mass production of automobiles and synthetic materials between 1940 and 1990, which overlap with Bowley's period of study. The second the age of microelectronics and computer networks from the 1990s up to now (Freeman & Soete, 1997). Those technological waves have contributed in the moulding of the 21st century building industry. This chapter explores and compares the building industry now with the one in the 1960s; this will help determine the validity of the Bowley's theories in the current context.
This chapter consists of three main sections; the first section explores the UK building industry of the 21st century in term of the procurement systems in use and the professional interactions within the system. The second section relates to the role of the professions within the building industry and the changes since Bowley's study. The third section depicts the contribution and influence of public authorities and professional organisations on the modern industry. Also an insight on the types of contracts and tendering used are provided.
The structure - Procurement System
As mentioned in chapter 2, there is a multitude of alternatives available to undertake a building project. These different alternatives are characterised by the procurement strategy, which forms the fundamental implementation of the project and defines the interfaces and relationships between participants (ISURV, 2012). While some of the procurement systems such as traditional, package deal and partnering were already introduced prior to the 1960s. Others have been introduced more recently such as construction management, management contracting, pure design and build and Public Finance Initiatives (PFI). Since, the procurement system determines the interaction and relationship within the building industry, this section portrays the UK building industry in terms of the procurement system or strategies in use today.
Traditional Procurement Systems
The traditional procurement system was and remains the prominent system since the 1960s, however, the RICS survey on 'contract in use' shows that traditional procurement system is on the decline, falling from 89.9% of all contracts used across the UK in 1985 to 67.2% in 2007, and falling from 69.5% in 1985 for total value of contracts to 31.4% in 2007 (RICS, 2007). The traditional procurement system has not change much since it was first introduced, except for the involvement of quantity surveyors, which is now often involved at the design stage as part of the design team or as a consultant, to advise on design costs and budgets, above the traditional tasks of providing for bill of quantities and tenders (Masterman, 2006). The integration of the QS at the design stage is associated with the modern client focus on obtaining value for money.
Management-Orientated Procurement Systems
The management-orientated procurement system was first introduced in the 1980s, it regroups the procurement systems under which the contractor is recruited as a manager, such that both the design and construction process are managed (Masterman, 2006). Management contracting, construction management and 'design, manage and construct' are the main procurement system in this category.
The management contracting procurement system involves the recruitment of a design team, which is made up of a contract administrator, architect, quantity surveyor and any other professional advisers required for the purpose of the project. Initially, the design team prepares the project brief, drawings and specifications in general terms to reflect the scope of the project. Once completed the management contractor is recruited subsequent to a tendering process. The management contractor; recruited as the client agent, has the same status as the design team and is thoroughly involved in the detailed design of the project. The participation of the latter at the design stage is claimed to promote innovative ideas as well as improving buildability along with cost savings. While the management contractor does not undertake any part of the work on his own account, he is responsible for the recruitment of package contractors to undertake the project. In this system the management contractor takes the risk for the package works, as the contracts are between him and the package contractors (Masterman, 2006).
Though the use of Management contracting has decreased from 1.7% of all contracts in use in 1985 to just 0.7% in 2007 and the value of contract has dropped drastically from 14.4% in 1985 to 1% in 2007 (see appendix 1) (RICS, 2007), the system was quite popular among clients as it allowed for integration of the builders knowledge and expertise at the design stage. However, the decreasing margin of profit in the building industry is purported as the reason behind contractor deterrence to go for such scheme (Masterman, 2006).
Figure 1: The functional relationship in a management contracting system (Masterman, 2006)
The use of construction management procurement system has known a steady rise from 0.2% in 1989 to 1.1% in 2007 of all contracts in use and an increase in the total value of contracts from 6.9% in 1989 to 9.6% in 2007 (RICS, 2007). Construction management is similar to management contracting system, except for the relationship between package contractors or sub-contractors. In the construction management process the contracts for package works are between the client and the sub-contractors (Morton, 2002). Therefore, in the construction management process the client is the one baring the risks for the work of the package contractors compared to the management contracting system.
Figure 2: The functional relationship in a construction management system (Masterman, 2006)
Design, Manage and Construct
Similar to design and build (see section 18.104.22.168), except that the builder is engaged by the client on a management rather than a lump sum contract. The builder is engaged for a fee to both manage and design the project and sublets all building work to specialists. A quantity surveyor is required to manage the financial matters as well as to administer the contract. Architects can also be appointed to administer the builder's design (Morton, 2002).
Integrated Procurement Systems
The integrated procurement systems regroup systems where both the design and construction process is the responsibility of one organization (Morton, 2002; Masterman, 2006). The systems in this group originate from the package deal, of which many variant have been developed over the years such as design and build and turnkey. These systems are characterized by the transfers of risks to the builder and the overlapping of the design and construction process. Which provides for a faster construction and at a lower cost; achievable as a result of the fixed lump sum contract. Furthermore, the direct contact between the client and contractor allows for better and improved communication compared to other procurement systems.
Design and Build
The design and build system is earmarked by the contractors taking the responsibility for both design and construction on a fixed price lump sum contract. In a pure design and build, the latter would be carrying both activities in-house. The contractual responsibilities between parties are simplified, due to the single point responsibility. Communication in a design and build is reduced to a single channel
Figure 3: The functional relationship in a Design and Build system (Masterman, 2007)
The employer or client must provide the tenderers with a brief, on which tenderers are to base their proposal and bids. There are three methods of organizing design and build activities;
Pure design and build: A single organization having the resources to undertake the entire task.
Integrated design and build: an organization or contractor who when need be will be buying design expertise
Fragmented design and build: external design consultants are appointed and coordinated by in-house project managers
Novated design and build (Variant of pure design and build)
The novated-design and build is a variant of the pure design and build system, the difference lies in the design team which is recruited by the client to prepare the brief and tendering documents. Once the contractor is selected following the tendering process, the contractual relationship between the design team and the client is transferred from the client to the contractor.
The use of design and build procurement systems has risen from 3.6% in 1985 for all contract in use to 21.9% in 2007, while in terms of total value of contracts there was a rise from 8% in 1985 to 32.6% in 2007, making it the most used procurement systems in the UK after traditional system.
Package deal procurement system can best be described as an off the shelf building. Though such a package cannot fully satisfy the client requirement, as a bespoke design solution is provided. One of the characteristics of package deal contractors is that they have their own-in-house designers, thus the classification as an integrated procurement system. Though, it is often associated with poor aesthetic appeal, clients are fully aware of the product at the time of purchase, since they can view similar product that have previously been completed by the builder.
Private Finance Initiative (PFI)
PFI is the most modern procurement system around, used extensively by the UK government; it has the benefits of providing high-quality facilities (Brook, 2004). PFI is known by different names such as Built Operate and Transfer (BOT), Build Own Operate and Transfer (BOOT) or Build Own Operate (BOO). The PFI system is similar to design and build but instead of transferring the asset once to the client once the project is completed, the client becomes service purchasers as the builder provides for the operation and maintenance for the building. Also payment is effected in terms of rent over a period of time to the private provider, until the term of the contract, at the end of which the government department takes over the asset.
Partnering is the agreement between two parties for the undertaking of a series of contract, the purpose of which is to develop a long term relationship, whereby technical innovation can prosper. This is not a type of procurement in itself, as client choosing to adopt a partnering agreement, need select a procurement system for the undertaking of the eventual projects (Brooks, 2004).
Review of procurement system
The trend in the UK building industry is shifting towards the use of non-traditional procurement systems nowadays. Which demonstrate a more integrated approach, through the participation of contractors from the design stage, this approach was reported both in the management-orientated and the integrated procurement systems. Even the traditional system has demonstrated some level of integration, through the involvement of the quantity surveyor at the design stage. Beside the concept of integration, cost saving is also reported as some of the advantages of the new systems, which shows the importance attached to cost reducing initiative in the current period. One important question that arises here, is why the need of so many different procurement system, this is justified by the fact that each procurement system offer specific advantages, hence the need to select the appropriate procurement system for each project such that it best meet both the requirements of the client and the project.
The Professionals of the 21st century
The evolution in procurement systems coupled with the technological changes, has redefine the role and responsibilities of many of the existing professions, while also leading to the emergence of new professions such as the construction manager, project manager and building service engineers. The objective of this section is to track the changes in the existing professions (such as the architect, engineer and quantity surveyor), such as to determine whether the prevalent conservative attitude of professional in the 1960s was still prevalent, or whether the modern professional have developed characteristics which provide for better teamwork and an environment promoting the development of innovative ideas.
Designer - Architects
The role of the modern architect is not limited to size, scale and function of buildings (Schnieder, 2009). The RIBA support this argument through an exhaustive list of the 103 things an architect does (Morton, 2002). As such, some of the other tasks of the modern architects are;
To act as contract administrator for the project
Provide estimate of the final cost of the project at the design stage
Advise client on financial planning and whole life costs and value engineering
Assisting in the selection of potential design and construction teams
Checking appropriate aspects of the contract documentation
Performing feasibility studies on potential projects
Ensure conformity to the requirement of the planning and building regulations
Ensure workmanship level is of satisfactory standard
The interest towards services such as whole life costs assessments and value engineering in particular, demonstrates a shift in focus from aesthetic value to offering the client value for money, on behalf of the architect. The modern architect ability to provide such services is supported by the fact that the architect follows one of the most intensive courses in modern education, as it takes not less than five years of formal education and two years of practice in between to obtain the formal qualification (Morton, 2002), to become a RIBA member. Another important point is the eligibility of architect to have interest in building firms, which supersede the rule of 1887. While, Bowley (1966) criticised the percentage fee as a method of payment for the architect, it is interesting to note that the RIBA has come up with new method of payment such as the fixed or calculated lump sum (RIBA, 2008). The RIBA think tank: Building the future report portrait the modern architect as a profession which is being less and less engaged in the design process, as the increased complexity of building technology is driving the design process down the pecking order, such that design works are being done by sub-contractors (Robinson, 2011). Furthermore, the risk adverse approach adopted by clients, are putting the architect furthermore down the pecking order, as a rise in non-traditional procurement takes the leap, and contractors are taking the driving seat of projects, as the trend drift towards a risk-taker-design-driven approach (Robinson, 2011). It is also reported that architectural firm have broaden their scope of work and move into areas such as lighting design, product design, industrial design and community consultation (Robinson, 2011). The architect profession in the UK has also been influenced by the effect of globalization as Asian firm has taken major share of the market and are proving to be technologically more advanced than their UK counterparts (Robinson, 2011).
The engineering profession has been influenced by the advent of technology as much as other profession associated with the building industry. While Campbell (1985) stated that the engineering design has become a mechanical process, aided by codes, manuals and computer programs, the increased complexity of structures and the tougher environment conditions meant the engineers have to deal with more complex analysis than before (XXXX, ). Technology has nevertheless contributed in easing the engineers work in that aspect. Furthermore, the continuous review and update of government policies such as health and safety act and fire protection Act, has indulged the engineer to innovate and improve existing systems. Engineers had had to adapt with the changing need of society in general, developing in the process new methods for testing of materials and structures, such a non-destructive testing, as well as developing new techniques to evaluate the characteristics and behaviour of new and more complex materials in the development of structures (xxxx, ).
Nowadays engineers, education is not limited to mathematics and science, an exposure to humanities and other social sciences form part of their education (Eck, 1990), which did contribute to improving their managerial skills. Engineers have thus evolved to the position of project managers, where they are responsible for many facets of building projects (Campbell, 1985; Handa, 1996). While as consultant engineers, they are integrating the building process earlier in the design stage, as they are now required to provide advice on structural design and materials to be used at the conception stage (Handa, 1996). Contract procedures and contract management are among the top four activities forming regular part of the civil engineers daily work (Campbell, 1985)
New computer tools, such as computer aided design and computer-based workstations, are part of this change. New methods, such as simulation and modeling, are pushing engineering activity towards greater abstraction, more mathematical analysis and less experimentation. The advent of technology have led engineer to doing less and less the routine engineering work and more involved in the formulation of ideas and making choices (Eck, 1990)
The quantity surveying profession had had to reinvent itself over the past few decades, first the introduction of new procurement system, led to a decrease in the use of bill of quantities, while information technology has simplified the measuring process (Morton, 2002). This led the quantity surveyors to optimize itself through focus on services such as cost planning and cost advice (Burnside and Westcott, 1999; Powell, 1996). The quantity surveyor would subsequently venture into new roles such as project management, construction manager, contract administrator and arbitrator (Burnside & Westcott, 1999). The quantity surveyors role is expected to undergo further changes with the use of Building Information Modeling (BIM)
The construction manager is a relatively new profession that has emerged with the management oriented procurement systems in the early 1980s (Masterman, 2006). The construction manager is a representative of the project owner, whose responsibilities includes the administering of the design and construction contracts and may include the management or coordinating of the planning, design and construction phases of the project. In the current period architects, engineers, quantity surveyors and even some contractors have taken the position of construction manager (RICS, 2012). The construction manager is usually hired on a lump sum contract or percentage of project value ( (Masterman, 2006).
The Modern Professionals
The role and responsibilities of the different professions making the UK building industry in the 21st century have changed considerably since Bowley's study (1966), mainly through the advent of technology. Many of the skilled work that was initially carried out by professional have been computerized to such extent, that the professional had had their initial role and responsibilities reduced. As reported by Robinson (2011) architects are doing less and less design, while the engineer is doing less of the complex iteration involved with the calculation of structural designs (Eck, 1990). The same applies to quantity surveyors for who the measurement process is being carried out by specialised softwares (Morton, 2002). However, the empirical data, demonstrate an endeavour for managerial and financial expertise from all fields as cost issues have become a critical element of the building process. Eventually this is leading the different professions to compete for similar positions, such as project manager, contract administrator, construction manager, cost managers etcâ€¦ as well as providing similar consultancy services such as whole life costing and value engineering as a result of a more integrated professional education system. As stated by XXXX (XXX) it is becoming and more difficult to differentiate between professionals within the building industry.
The Government as a Regulatory Body
The building industry has often been used as an economic regulator by the UK government, thus explaining the continuous intervention over time. Since the 1960's some of the major influence of the government reported are;
The introduction of the Public Health Act 1961, which included provisions for buildings and drainage
The Building Regulations 1965, which was the first national building regulations for both England and Wales
The Building Act 1984; where primary legislations scattered into numerous Act were consolidated under one Act
1986 denoted by a shift from prescriptive type of Regulations to Regulations drafted in terms of functionality and performance requirements.
Beside changes to regulations and policies, the UK government has commissioned a number of reports to review the construction industry.
The Latham report 'Constructing the team' 1994
Egan report 'Rethinking Construction' 1998
KPI report for the minister for construction by the KPI working group January 2000
Building a better quality of life: a strategy for more sustainable construction April 2000
Rethinking construction innovation and research: a review of Government R&D policies and practices February 2002
Government response to the sustainable buildings task group, January 2004
Measuring the competitiveness of the UK construction industry November 2004
Sir Michael Latham: review of part II of the Housing Grants Construction and Regeneration Act 1996. June 2006
Innovation in construction services. August 2008
Changing to compete: review of productivity and skills in UK engineering construction. December 2009
Productivity in the UK engineering construction industry. December 2009
IGT 2050 Group final report. November 2010
Constructing Excellence: Never Waste a Good Crisis report 200X
Government Construction Strategy, 2011
While in 2012, six tasks group divided into six work stream was set up to develop government construction strategies. The task group is made up of volunteers from both public and private sector, under the scrutiny of the Government Construction Board (GCB) and directed by the Government Construction steering committee (GCSC).
Field of Study
Procurement lean client
Reduce construction cost by 15 - 20% by the end of this parliament year.
Focus on a process for the definition, selection and consistent embedment of standards across Government that contribute to and incentivize high levels of project team integration and construction safety
To align design and construction with required operation and asset performance
Data & benchmarking
Contribute to the consistent delivery of the range of measures Government and Regulated sector will take to reduce construction costs by 15 - 20% by the end of this parliament
Building Information Modelling
Develop common understanding of BIM
Consider information needs at key stages of asset life cycle
Agree a co-ordinated templates for BIM execution planning and measuring outcomes
Measure supplier performance across all programmes
Develop and implement a shared programme for efficiency and reform
Government Construction: Construction Task Group Core and Affiliate Membership (Government Construction, 2012)
One important issue is the involvement of professional from all the different professional bodies, participating on each of the six tasks group. Which demonstrate the willingness of professional to work with their colleagues towards a common objective; this was a major issue in Bowley study where professional organization often refused to be involved in task committees.
The UK government in collaboration with professional organizations have come up with various initiative to improve the building industry, through performance improvement initiatives such as lean method, to improve integration of the supply chain through the introduction of BIM, and making the British Building Industry a leader on the global market, where sustainable building are concerned.
Since, the introduction of the first standard form of contract in 1903 (JCT, 2012), the standard form has been subject to loads of criticisms. Long gone are the days when the RIBA 1963 form of building contract came under judicial criticism and the ICE form in 1974 was criticised for its obscurity, difficulty of prolix and often near archaic language (RICS, 2012). Since the Latham (1994) report, where the standard form was criticized for adversarial and dispute enhancing characteristics. The contracts have continuously been reviewed and updated in order to cater for changes in regulations and to help reduce disputes or provides faster and simpler means of resolving construction disputes (RICS, 2012). There are 3 main types of standard form of contract in use in the UK nowadays, the Joint Contract Tribunal (JCT) Building Contracts Suite, the New Engineering Contract (NEC) series and the International Federation of Consulting Engineers contract (FIDIC), all of which have been updated recently to improve the standards and reduce conflicts (RICS, 2012).
Joint Contract Tribunal Building Contract (JCT)
Formed by the RIBA, the JCT Building Contract is the oldest form of contract still in use. It is interesting to note that since its inception in 1937 the JCT has continuously been revised and updated. According to the JCT (2012) the contract have been updated successively in 1939, 1963, 1980, 1998, 2005 with some major reviews between 2008 -2009, while the latest series have been published since 2011 (JCT, 2012). Since the Latham report (1994), where the construction industry was criticized for its lack of innovation and poor performance, the industry has responded positively, through continuous update as depicted by the fast pace changes in the JCT updates over the past 20 years. Since 1998 to 2011 that is a lapse of 13 year the JCT contracts had been updated twice, compared to 1939 to 1998, where only 3 updates have been brought to the JCT in a span of almost 60 years, averaging an update every 20 years.
The tendering process has not changed much over the years, with the traditional open, selective, negotiation and partnering. The main difference might be the increase use of selective and partnering in the public sector, which was recommended by both in the Simon report of 1944 and by the Banwell committee in 1961 (Bowley, 1966). However, a major innovation pertaining to tendering, occurred five years ago with the introduction of 'e-tendering'. According to the RICS;
"â€¦e-tendering is defined as the electronic issuing and receipt of any tender documentation in electronic format as part of the procurement process." (RICS, 2011)
While the impact of information technology have influenced the way things were being done, only recently tender document were still being sent on CD, email or by post. Though the use of CD and email represent some innovation in itself, the use of the internet to transfer the documents is the way forward. And no further than in 2007, the RICS had launch its 'pay-as-you-go' e-tendering service, which allow for the tenderee to make use of a web-enabled system for the transfers of tender documents (Martin, 2009).
The system was claimed to contribute to a 30% saving on tendering cost and 29% saving on time (RICS, 2011). This is supported by the BCIS eTendering Survey report (Martin, 2009), where over 77% of the RICS members sought etendering would enhance their services. While 91 to 65% agreed to the five key benefits of etendering; lower administration costs/effort, better contractor access to information for sub-contractors, reduced effort in issuing clarifications, reduced timescale of tendering, and reduced effort in analysing tenders (Martin, 2009).
Upcoming changes in UK Building Industry
The UK building industry of the 21st century will be marked by two upcoming government initiatives, though the decision has already been ratified by the UK government, the policy changes will not be effective before 2016. The first is the Zero Carbon policy - the aim of this initiative is to develop buildings or structures with an integrated source of renewable energy. Solar panels or/and wind turbines can be coupled with the building to generate the source of energy. The initiative serves as purpose to reduce the carbon emission in the production and the daily running of dwellings. To set the standards, the BRE has developed a coding system for the ranking of houses. The coding system ranges between levels 1 to 6, where a level 6 applies to a fully compliant that does not require any external sources of energy supply.
The second initiative is the introduction of Building Information Modelling (BIM), according to the American Institute of Architects (AIA) BIM is "a model-based technology linked with a database of project information." A BIM carries all information related to a facility, including its physical and functional characteristics and project life cycle information, in a series of "smart objects." For example, an air conditioning unit within a BIM would also contain data about its supplier, operation, and maintenance procedures; flow rates; and clearance requirements" (Forbes & Ahmed, 2011).
The UK government has stated that as from 2016, all public procured projects will be BIM compliant, therefore any firm willing to tender for any public project, would have to be BIM compliant, else they would not qualify for the tender.
Appraisal of chapter
The UK building industry in the current period has known dramatic changes compared to the pre-1960s. It was reported throughout this section that the structure of the industry has been influenced by the introduction of modern procurement system. These procurement systems showed characteristics contributing to a more integrated system, where design and construction was of concern.
The traditional professions (architects, engineers and quantity surveyors) roles and responsibilities have changed with the advent of information technology. They are doing less of the routine work, which has been computerized and are now more focus towards value-added approach to the development of buildings. Also there was a trend toward adopting more managerial orientated position in the building industry. Professional and professional bodies also demonstrated a keener approach to collaborating with their peers. The government on the other hand has come up with number of initiatives to creates a more integrated industry and to promote a more efficient industry
"A construction process that can encompass the use of composite new and traditional materials and components often with extensive factory produced sub-assembly sections and components. This may be in combination with accelerated on-site assembly methods and often to the exclusion of many of the construction industry traditional trades. The process includes new buildings and retrofitting, repair and extension of existing buildings." (Zurich, 2012)
MMC therefore englobes the use of prefabrication or off-site production components or parts up to modular buildings manufactured off-site. According to Wei et al. (2008) utilisation of prefabrication represented only 2.1% by value in 2004 of the whole UK construction industry, but expected a yearly rise of 9.7% per annum up to 2010. While a study of the off-site market in the UK by Goodier & Gibb (2007) showed supplier were confident in the growth of the off-site market in the near future, at the time in 2007 a 10% growth in production capacity was expected by 2008. The expected rise in the MMC market might was justified by the government decision to impose a quota, requiring that 25% of all public funded social houses since 2004 need be MMC houses (The National Audit Office, 2005; Wei , et al., 2008). According to Wei, et al. (2008) MMC technology is currently used for production of complete modular buildings, bathroom and toilet pods and flat packs, kitchen pods and flat packs, offsite plant rooms and complete wall panels (both sides).
The batch production nature of the housing industry in the UK and the volume of new houses which is in excess of 225000 yearly make it one of the area's most attractive for applying standardisation and prefabrication. This is reflected in Leishman & Warren (2006) study of the housing industry, where it was stated that house builders in the UK to make up for economies of scale were making use of standardised house design. According to Leishman & Warren (2006) the six largest UK house builders making up over 40% of the market share, have 267 standardised house types on the database of house type specifications.
Figure 5: From Prefabrication to MMC (Lovell & Smith, 2010)