Speech at the Design/Build Seminar
November 28, 2008
The following is a speech delivered by TTCA President, Mikey Joseph on November 28, 2008 at the Design/Build Seminar hosted by TTCA, UDeCOTT and NIPDEC at the Hyatt Regency Hotel Convention Centre.
It is my pleasure to make a short presentation at this forum today. My goal is to help find a win-win solution to the conflicts now disrupting the industry and hurting the economy.
As most of us in the construction sector would know, there is battle looming in the industry over the concept of design/build as the preferred building construction delivery method. This method challenges what we have come to accept as the norm, which is the system of design/ bid/ build or client design and tender where the client hires the architect and the architect pulls the design team of engineers and quantity surveyors together. They prepare a preliminary design and cost estimates in accordance with the client’s brief and instructions, and contractors are then invited to tender.
The system of design/build is not new and my research indicates that this method of delivery for construction projects has been around since the 1500s with the master carpenter/master-builder having full responsibility for the design and construction of building projects. However, around the eighteenth century, the professional class of architects and engineers replaced the master carpenter or master-builder of earlier times. The architect eventually became the client representative taking charge of projects from conception to completion including the outfitting of most projects with requisite furnishing. The system of Client Design-Tender then took root as the preferred method of delivery.
However, this process became very adversarial and confrontational between the owner, designer and contractor - with much time and money being spent on litigation and or the avoidance of litigation when projects failed to meet budgetary and completion schedules.
These failures were due to a number of factors, the main ones being:-
1) The inability of the architect and quantity surveyor to keep current with construction cost.
2) Incomplete design at the tender stage, resulting in final construction drawings that varied greatly, both in scope and specifications, from the preliminary tender documents.
3) Client change orders coming during the construction stage, resulting in completed work having to be demolished and rebuild or materials already procured having to be replaced. This problem, I believe, stems from a lack of meaningful communication between the client, the architect and the contractor. Proper communication would allow for value engineering during the process of construction or even at the time of tender.
Other factors that have made the design/build approach so adversarial include:-
4) Improper allocations of risks.
5) Lengthy delays in decision making and providing information to the contractor.
6) Adversarial relationships between all parties resulting from some or all of the above.
The design/build method as we know it today was reintroduce to reduce the adversarial relationship and increase the efficiency and cost effectiveness of construction project delivery by having a single entity take responsibility for the entire project. This is actually nothing new to the construction sector here in Trinidad and Tobago. Most of us who work for the private sector would have done this before. In fact I believe even our Minister of Works, during his sojourn into the private sector, was involved in several such ventures.
The intent of the government to use design/build as a method of delivery should not be viewed as negative by the construction industry. In and of it-self, this method – when properly utilized – has an important role to play. In addition, this process of delivery cannot be used for every project application. In my view, it really offers one of, or an alternative to, the other methods of project delivery.
Design/build is generally about risk management and with this method, over seventy five percent of the risk can be applied to the design/build team, when this is considered and added to the poor payment practices of the government and its procurement agencies, we as contractors need to be concerned. Even the government, as a client, would have to be concerned as there is a cost to risk, and this cost can - and is - passed on to the client.
The modification of the general intent of contract documents by removal of key clauses in contracts would also lend to further cost escalation and possible contention in the application of this delivery method.
One of the most contentious and costly issues has been modification of contract documents to leave contractors exposed, at a financial disadvantage and seemingly without legal redress in the event of disputes. To my mind, this practice is unjustifiable, unfair, contravenes international best practices, introduces mistrust and an adversarial tone into the relationship from the very start, and certainly works against employing this delivery method so as to maximize benefits for everyone while minimizing costs.
There is also the issue of the design brief and again the government, as a client, has not shown its ability to prepare and abide by a proper project brief. Even if there is a fairly decent project brief, the construction and management supervision capabilities of the State may not be responsive to the efficiencies of a competent design/build team. So it is quite possible that the adversarial approach and litigation we are seeking to avoid may just be remodeled.
In order for contractors to make offers on design/build projects, they would have to form consortia with architectural and engineering firms or develop in-house design capacity - which ever is practical. Also, if architectural or engineering firms wish to make offers on design/build projects, they would also have to form consortia with contractors.
I see, coming out to these relationships, a more efficient construction sector, one which has developed systems to handle design/build requirements and which would make us more competitive in the future. This is critical as design/build requires very specific details relating to materials and methods to be employed in order for the client, his consultants and project managers to be able to compare and evaluate offers, comparing apples with apples.
The only constant that I have witnessed in this industry - other than the constant struggle for the industry to be given the respect it deserves and a fair chance to become internationally competitive -is change. If there is to be some measure of change in the delivery methods I ask that we seek to embrace it.
Perhaps, as we face the threat of a financial and economic crisis globally and significant budgetary cutbacks locally, we could all commit to supporting meaningful, sensible, win-win changes. Such, changes and a new spirit of co-operation among all the players, could allow the Government to pursue its construction and development agenda, with minimum cutbacks and maximum value for money while, at the same time, lowering inflation and achieving its diversification goals by building a globally competitive, world-class construction industry.
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Membership Directory 2008