Project Management

Posted by on Aug 26, 2020 in Project Management

Project Management

One of my great uncles was a Brigadier General in the Royal Engineers, a long extinct rank. As an engineer before the First World War he was responsible for a large portfolio of military buildings including the construction of brick stables in Chatham, having in mind that they might be repurposed for motor vehicles which were starting to become a thing. He had an interesting take on “procurement”. He believed that it was not possible to do anything more cheaply than by the employment of direct labour. Why pay an overhead to a contractor? The difficulty with direct labour, as subsequent employers of DLOs have repeatedly discovered, is that they tend to become inefficient, lazy and self-serving. His answer was to manage with ruthless attention to detail every piece of work by reference to what were described as “labour constants” in accordance with a system devised by a General Scott-Moncrieff who had evidently worked out how long it took to lay a brick and no bricklayer could pull the wool over his eyes. Indeed my great uncle, by continual analysis of labour constants and a rigid insistence on keeping the labour of soldiers and civilians up to his standards succeeded in reducing building costs, as measured by the cubic rate, to a level that was the despair of contractors.

Nevertheless in the succeeding years competitive tendering has come to dominate the procurement of public and private works alike. Yet in the years running up to the 1990s it too came to be a byword for inefficient, strike prone projects riddled by contractual disputes, delays and escalating costs.

Project Management was put forward and enthusiastically promoted by Mrs Thatcher’s government as a great idea to inject discipline and focus into all the government projects that were prone to going badly off the rails. Responsibility would be pinned on a single expert individual.

However project managers swiftly became the fall guys for public sector client organisations who themselves honed their skills in avoiding responsibility. Building projects, and in due course IT projects, became notorious for “mission creep” and cost escalation.  Project managers soon got wise to this and evolved into Teflon-coated administrators but by this stage they had become indispensable.

The cunning scheme eventually devised was to shift the whole responsibility for funding, designing constructing and subsequently managing new buildings over to private consortiums. The Private Finance Initiative required teams of lawyers, accountants and project managers to set up projects and, for a time, it seemed to tick a great many boxes. The resulting project management was much lighter touch with all the real project management being done on the “contractor” side of the fence – except that, by now, contractors had become management organisations simply coordinating package contractors who did the real work.

The previously high status architects and engineers who had already been downgraded by the emergence of professional project managers, now played an even more low grade, subservient and in due course de-skilled role in the construction process.

Smaller scale projects for which PFI would be a sledgehammer to crack a nut followed a similar pattern with the increasing use of Design and Build. Project Managers could set up D&B projects competitively by tendering the professional services to prepare initial designs and then novating them over to a contractor also competitively appointed on a lump sum basis, on the theory that the contractor was now responsible for both the design and construction of the building. Once again this approach has raised the status of the “professional” contractor at the expense of designers.

At an even smaller scale level procurement of building projects has often been bundled with procurement of a range of other services and various “jacks of all trades” professional firms have emerged to serve this market. The main method of achieving such appointments has been by what are known as “framework agreements”. The underlying theory is to achieve “economies of scale”. GLM regularly supplies specialist technical and design services into this sector.

At GLM we enthusiastically embraced project management as a specialist discipline in the early 1990s, but as time went on our enthusiasm for it as a standalone service waned. As specialists in the repurposing and upgrading of existing buildings we delighted in the fact that we could use project management techniques to keep on top of costs and programs and bring clarity to the management of projects but we soon discovered that we had to remain fully engaged with the personal relationships and the technical detail – the high level non-technical project management approach did not work for us.

As the climate in which building projects are undertaken changes we have had to constantly adapt. In the aftermath of the 2008 meltdown and recession we decided to add Construction Management to our skillset. We first applied this rather daringly to a £7.5m project with outstanding success. Not only did it contain costs but it brought much needed flexibility to a project that the client decided to redesign midstream, and it enabled the much needed employment of skilled local labour so often overlooked by “Main Contractor” procurement. This approach can be made to fit with public procurement requirements but is not all that commonly adopted, perhaps because it appears to place a big weight of responsibility on the professional team, which it does.

In the years running up to the Covid-19 crisis we have had further outstandingly successful projects working with specialist contractors with whom we have developed relationships of trust on a negotiated basis. This approach does not work in terms of public and corporate procurement standing orders, often very much to their disadvantage, particularly in remote locations.

What will be next? There are some considerations to bear in mind:

  1. Contractors and their suppliers and subcontractors have been financially weakened by the lockdown. Contractors do not perform well when they are undercapitalised and they readily go into bankruptcy in good times, let alone bad.
  2. Traditional contracts are a legal minefield especially with Adjudication as a tool for getting the better of the unwary.
  3. The professional scene is littered with designers and project managers who have been deskilled by the procurement processes adopted over the past three decades. They will be desperate for work at any price. If this drives fees through the floor it cannot result in good outcomes. They were already much too tight.
  4. The Climate Emergency requires that we take sustainability very much more seriously than hitherto. Above all this means that the default preference should be to repurpose and upgrade existing buildings rather than building new ones. This takes technical skills which are greatly lacking in both parts of the construction industry, on the professional and on the contracting sides.

David Gibbon