I’m delighted to have been invited by Specify to be a regular columnist, and I look forward to sharing my thoughts on the construction industry with you.
Hopefully my knowledge from over 30 years in the industry, that includes 23 years as Managing Director of multiple construction companies, my experience as a board member of the Construction Industry Training Board (CITB), and my position as the Chair of the Chartered Institute of Building (CIOB) in Northern Ireland, along with my experiences establishing and growing my specialist construction consultancy company, Incrementum, will give me an informed and balanced insight into current and topical issues within our industry today.
One of the significant changes I have noticed in recent years within our industry, is the rise in importance of the construction programme. Gone are the days when a programme was something we produced either at tender stage or at the implementation stage of a project, and then it was often only reviewed periodically at the monthly site meeting.
When I first entered the industry in the early 1990’s, programmes were produced on excel sheets with a few dozen bars produced by colouring cells, the only milestones were the start and completion date, and the critical path was seldom, if at all, highlighted.
Today’s programmes are a totally different animal. The use of excel is long gone, and there are now numerous highly complex dedicated software systems that can produce detailed programmes, often with several hundred activities, multiple milestones, linked dependencies, internal and external tasks and multiple summaries and deadlines.
In fact, today’s programmes will often list out pre-construction tasks, procurement tasks, schedules of meetings, design develop periods, information release dates, technical submissions, commissioning programmes, handover processes, the list is endless. Taking the programme a step further, and it can also be used to produce cash flows, procurement schedules and resource schedules
My question is, what has driven this rise in the importance of the programme, and is it a good thing for our industry?
I believe that the adoption of the NEC form of contract was the catalyst for the construction programme to take a leading role as a powerful project management tool within the industry.
The NEC contract, in its quest to simplify the construction contract and to be fair to all parties, identified programme management as a critical tool in tracking the delivery of a project, and in ensuring when evaluating the impact of compensation events, that time implications as well as costs was taken into account simultaneously, and with the introduction of time bars, the planned completion date had to be reviewed and adjusted in a regular and timely manner.
This was such a step change from JCT, where predominantly the priority with variations was to claim the costs first, and often the claim for an extension of time came much later, and it was not unusual for numerous unrelated relevant events to be compiled within one extension of time claim.
Although JCT states that notices of EOT’s should be issued when a delay becomes reasonably apparent, this was often interpreted in a very loose manner with sanctions for non-compliance not set out, subject of course to contract amendments and condition precedents, hence it was not uncommon for EOT’s to be lodged significantly after the fact.
Hence, when administered correctly in the “spirit of the contract”, the NEC contract clearly demonstrated how powerful a project management tool the construction programme could be, and it highlighted how important it was to regularly review and update the completion date, giving all stakeholders visibility at an early juncture of any changes to the planned completion date, which was a significant and positive move forward for the industry.
Therefore, the success of the NEC in promoting the programme was no doubt the driving force in the development of the programme into the essential powerful prolific management tool it is today.
This then leads to my second question, is the importance of the programme and the strong emphasis placed on it as a management tool a good thing for our industry?
In my experience, construction has undergone a significant transformation in the past 30 years. We are now a highly professional, well structured, systems driven industry that has embraced technology.
The rise to prominence of the construction programme has been part of this process, and as we continually break through the glass ceiling of what is possible in the field of construction, with projects becoming highly complicated in their design and execution, there is no doubt that the programme has become an extremely important and essential tool in ensuring projects are delivered in a well structured, planned and efficient manner.
However, as our industry has evolved, the structure of construction companies has changed beyond recognition. Gone are the days when our large construction companies had hundreds of trades people directly employed.
The majority of our Tier 1 main contractors, and in fact a majority of our SME main contractors, are now primarily management contractors, employing directly only the management and technical staff required to deliver a project, and sub-letting all of the delivery packages to specialist subcontractors.
With this increase in the dominance of sub-contractors, the number of constantly changing variables within a project has also increased proportionately, hence it is essential that all deliverables are now tracked and monitored in detail with the programme, and the dependencies of each trade understood in terms of their importance and impact on the critical path.
Good project and programme management will ensure the efficient use of resources, both of the main contractor and subcontractors, and in an industry that operates on such small margins, efficient resource management is critical to the success of not just the project, but to the sustainability of all the companies involved in the delivery process. Hence, in an ideal world, a highly detailed and well executed programme is essential to the industry.
However, in my experience, there are some issues that need to be addressed. For example, the programme is now seen as a document that is absolutely essential when verifying an extension of time, and when a dispute arises, a claim for additional time without effectively demonstrating a relevant event’s impact on the programme will invariably fail.
This has resulted in many main contractors now refusing to provide a programme to their supply chain, as they are concerned that in the event of a delay to the critical path, a programme can be used by the supply chain to prepare a claim against the main contractor for delay or acceleration.
Therefore, what is now happening is that subcontractors are given a contract with a commencement and completion date, but no details on any of the main contractor’s dependency tasks that will have an impact on the programme delivery by the sub-contractor. This makes it very difficult for the sub-contractor to plan effectively to ensure the most efficient use of their resources, and making it difficult to verify any delays outside their control that is impacting the progress of their works.
The other issue with the importance of the construction programme, is that the large majority of sub-contractors, who are in effect the life blood of our industry, are primarily SME’s whose success and growth has been as a result of their ability to provide a high quality service at a competitive price, not necessarily as a result of their strong management capabilities.
Therefore, many of our subcontractors do not have the management skills required to produce a detailed and well-resourced programme, hence when they are delayed due to factors outside their control, they have great difficulty in substantiating any claims for additional time and costs.
This is certainly an issue within our industry whereby there is a skills gap within much of our supply chain in relation to the ability to produce and manage a construction programme. This is one of the areas where my company, Incrementum, is assisting many of our clients within the supply chain by producing detailed programmes on their behalf that, in the absence of a main contractor’s programme, will list our the dependency tasks of the main contractor that will be required for the sub-contractor to deliver their contracted works effectively in line with the main contractor’s programme.
We will also carry out regular reviews on site to monitor actual progress, including the dependency tasks of others, and this information will be essential in the event of a delay becoming apparent in ensuing that early warnings are issued, and this will benefit all parties by giving them the time and opportunity to try and mitigate the effects of any delay to the project. This level of due diligence can also prevent the unreasonable implementation of damages and can be essential in substantiating any claims for delay.
Our philosophy at Incrementum is that rather than having to defend our clients in disputes, we will assist them in taking the correct actions required to prevent them getting involved in disputes in the first place.
Jonathan Payne is the managing director and founder of Incrementum, a specialist consultancy services and bespoke training to the construction industry.
