Ryan Simmonds examines why there can be a significant difference between projected costs versus final costs and reviews how changing the approach to planning the project can bring these figures closer together
It’s a truth universally acknowledged that the budgetary costs on major construction projects rarely match up with the final cost at handover of the project. In fact, one study estimated that as many as nine out of ten high profile projects go over budget.
The Olympic Stadium in London is a famous example. Originally budgeted at £280m, the final project came in at a staggering £701m – more than two and half times the original plan. Other welldocumented examples include the Scottish Parliament building, costing ten times its original budget and delivered more than three years late, and London’s Shard, costing a rumoured £1.5bn, coming in at more than 240 per cent over budget.
There can be a number of reasons why a project exceeds its budget. Project delays, issues with land, materials or financing problems. However, it is often the case that the original budget is set too low by the client, or that the solution is selected by a commercial team, basing decisions on cost rather than a full integrated review. The irony here is that selecting a solution based on price rather than how closely it fits the vision by the end client invariably means that elements are changed as the project progresses, which alters the cost of the project each time.
The Farmer Review of the UK Construction Labour Model, published last Autumn, explores poor predictability as a major industry failing, but more worrying is the fact that this failure and under performance is accepted by both the industry and, begrudgingly, by clients as well.
The design phase of any project – big or small – is vital, however this is often the stage that, in retrospect, the parties involved accept that they did not spend enough time on or engage with the right stakeholders.
Partnering in Planning Stages
So, communication is clearly the weak link in the chain. It’s at the initial strategic and briefing stages that end clients and those appointed to deliver the project should engage with groups such as installers and manufacturers to collectively review and critique the design. This lack of collaboration, according to the Farmer report, is at the root of the industry’s change inertia.
With all parties working on the project plan together and adopting digitisation through media such as Building Information Modelling (BIM), any issues that are recognised can be resolved whilst still in the design stages.
Without this engagement, projects often progress to the technical design or even the construction stages before stumbling blocks are identified and, by this stage, they are already time-consuming and expensive to rectify.
Additionally, engaging with experts such as structural engineers, fabricators and manufacturers, the end client is able to take account of the advice of specialists at the point where their input is of most value. Like Metsec, many of these stakeholders will have their own design capabilities that they can utilise and BIM allows for this work to be done collaboratively.
The Role of BIM
Building Information Modelling (BIM) is the management of information through the whole life cycle of a built asset, from initial design all the way through to construction, maintaining and finally de-commissioning, through the use of digital modelling.
Metsec is accredited to BIM
Level 2 and can offer design services to clients in the concept design stage. In practice, this means that a building, infrastructure or landscape can be designed and built using data sets and images digitally, even before the first spade goes in the ground.
BIM is all about collaboration between engineers, owners, architects contractors, allowing design and construction teams to communicate about design and co-ordinate information across different levels that have been unseen before. It also helps to analyse any potential impacts that previously may have been overlooked or unforeseen.
The objective of BIM is to satisfy the three components of a successful project; namely time, cost and quality, by managing the project using a more efficient and reliable method of work.
With project costs an ongoing concern, particularly with public projects, the UK government has recognised the invaluable role that BIM can play in controlling costs and timescales. Since April 2016, the UK government has required construction suppliers tendering for centrally-procured government projects, including buildings and infrastructure, to be working at BIM Level 2. What was industry best practice has now become a compulsory part of major projects.
A key issue that contributes to these budgetary – and often timescale – issues is the fact that a limited number of parties are engaged in the early design stages of the project. The end client, the architect and often a commercial team will work on the initial phase, but ultimately those who can advise and guide – namely the manufacturers and installers – are not consulted in this stage and are often appointed much further down the line of the project.
With these major projects, early engagement of all delivery partners can have a significant impact on the project and ensure that the designs and construction methods are fit for purpose.
But it is more than just that. Whilst early engagement is key, its early commitment to the design that is vital in keeping costs down and a project on-track. All parties need to finalise the materials, methods and timescales on the project in the early stages and commit to adhering to these elements throughout the delivery of the project.
Whilst BIM has been introduced as a compulsory measure for many public projects, it’s important for the industry not to view it as red tape or a restrictive burden, but rather see BIM as an enabler to streamline processes and work collaboratively in order to bring down costs for the overall project.
Ryan Simmonds is sales director for framing at voestalpine Metsec plc, the UK’s largest specialist cold roll-forming company, providing products for the construction and manufacturing industries. The company focuses on adding value through expert design, precision manufacturing and on time in full product delivery. Metsec combines an excellent service and quality products to provide cost effective solutions for all its customers worldwide.
For more information, please see www.metsec.com