Submission  to  the  Oireachtas  Committee  on  Housing  and  Homelessness  

       

 

UCD  School  of  Architecture,  Planning  and  Environmental  Policy    

Written  Submission  to  the  Oireachtas  Committee  on  Housing  &  Homelessness  

 

Written  and  Compiled  by   Orla  Hegarty  B.Arch  MRIAI  RIBA    

4.  ‘Value  for  money’  and  efficiency  in  the  construction  sector     ‘Change  the  procurement  models,  improve  competitiveness  and  address  inefficiencies’     Orla  Hegarty  B.Arch  MRIAI  RIBA     The  cost  of  construction  is  a  factor  of  the    site,  the  design,  the  procurement  model,  the  market  and  other   local  factors.  Identifying  elemental  construction  costs  is  relevant,  however  the  design  decisions  and  the   mechanisms  of  procurement  and  delivery  have  a  far  greater  impact  on  overall  costs.  It  is  critical,   therefore,  to  overcome  structural  barriers,  to  open  competition  in  the  market  and  support  efficient   delivery.     Proposal:  The  following  technical  proposals  can  be  implemented  without  primary  legislation  in  a  short   timescale,  making  efficient  use  of  limited  resources  and  skills,  to  improve  efficiency  and  lower  costs.     1.

Support  design  innovation  The  ‘hard’  construction  costs  (labour  and  materials)  vary  with  the   availability  of  appropriate  labour  and  materials  in  the  market.  The  most  effective  way  to  reduce   costs  is  through  investing  in  design  (which  can  reduce  capital  and  life-­‐cycle  costs)  and  also  by   providing  appropriate  supports  and  information  to  the  design  process.    Design  is  critical  because   sustainable  housing  demand  will  not  be  met  by  standardised  typologies  such  as  3-­‐bed  housing   estates  and  high-­‐rise  apartments.  Housing  is  site-­‐specific  and  must  provide  long-­‐term   communities.  

2.

Make  technical  information  available.  Technical  information  is  critical  because  there  is  no   standardized  approach  to  construction  detailing,  in  the  context  of  technical  advances  and   regulatory  developments-­‐  this  reduces  opportunities  for  economies  of  scale,  adds  to  waste  and   labour  costs  and  impacts  on  tender  prices.  

3.

Support  technical  innovation  and  efficiency  in  BIM  (Building  Information  Modeling)  and  BEM   (Building  Energy  Modeling)  and  ensure  that  the  regulatory  systems  are  aligned  with  technical   advances.  This  can  reduce  waste,  improve  performance  and  expedite  construction  programming.  

4.

Address  inefficiencies  in  the  regulatory  systems.  The  ‘soft’  costs  of  construction  include   regulatory  requirements,  contractual  obligations,  insurances,  etc.  (note:  taxation,  development   contributions,  finance  costs  etc.  are  beyond  the  scope  of  this  paper).  (refer  also  to  Sections  1  &  2).  

5.

Optimize  transparency  and  ‘value  for  money’  by  using  the  most  appropriate  procurement   models.  Generally,  procurement  systems  that  are  ‘hands  off’,  that  prioritise  cost  certainty  and   that  transfer  substantial  risk  are  more  expensive.  Using  ‘market  friendly’  procurement  models  to   optimize  competitiveness  in  the  market  and  intelligent  design  can  have  greater  benefits  than   compromising  space  standards,  material  specification  and  build  quality.  

6.

Centralise  and  standardise  the  pre-­‐qualification  system  for  public  procurement.  This  applies  to   all  tenderers  (professionals,  contractors  and  suppliers)  and  is  required  to  address  administrative   inefficiencies,  bureaucracy  and  duplication  for  both  the  commissioning  bodies  and  the  tenderers.  

UCD  School  of  Architecture,  Planning  and  Environmental  Policy

Part  4-­‐  1  of  2  

7.

Prioritise  direct  involvement  of  SMEs  and  opening  competition  in  the  market,  reduce  workloads   in  the  commissioning  bodies.  The  construction  industry  is  predominantly  made  up  of  SMEs  and   micro-­‐enterprises.  In  2010,  95%  of  construction  companies  employed  fewer  than  10  employees.   This  means  that  house-­‐building  is  substantially  sub-­‐contracted  so  that  the  role  of  developers  and   main-­‐contractors  is  principally  one  of  management  and  co-­‐ordination.  As  a  result,  procurement  of   housing  through  large  contracts  is  uncompetitive  and  risks  reducing  competition  by  narrowing   the  market  and  introducing  further  layers  of  management.  EU  Procurement  Policy  favours  SME   participation  in  order  to  improve  competitiveness.    

8.

Modernize  the  building  contracts  in  use  in  the  construction  industry  in  both  the  public  and   private  sectors  to  respond  to  the  housing  challenge.  In  particular,  the  risk  transfer  in  the  PWC   (Public  Works)  contracts  adds  cost  and  reduces  competitiveness.  Reform  of  Building  Control  (See   Part  1)  will  also  reduce  contractual  complexity,  disputes  and  delay.    

9.

Provide  technical  and  legal  support  for  the  commissioning  bodies  (local  authorities,  housing   agencies  etc.)  in  order  to  standardize  procedures,  improve  efficiency  in  the  procurement   processes  and  reduce  contractual  disputes.  Publish  guidance  and  advice  on  operational  issues.    

10.

Re-­‐evaluate  the  insurance  arrangements  in  the  construction  industry,  particularly  in  relation  to   construction  defects.  The  current  industry  practices  are  inadequate  and  unreliable  to  protect   consumers  and  remedy  defects  in  a  timely  manner.  It  may  be  more  cost-­‐effective  for  the  State  to   retain  a  ‘defects  fund’    for  housing  (1-­‐2%)  rather  than  impose  requirements  for  multiple  policies   that  are  not  fit  for  purpose  and  may  have  limited  or  uncertain  cover.     /END  

UCD  School  of  Architecture,  Planning  and  Environmental  Policy

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