Construction sector failing to learn from past projects
New survey calls for greater take up of Project 13 procurement tools to boost performance
Major real estate and infrastructure clients are failing to measure performance and implement lessons learnt from programme reviews, according to analysis of the UK construction sector – missing the opportunity to improve delivery and ensure cost efficiencies.
Our new survey has found that 48 percent of key client programmes across the industry do not consistently measure performance. In addition, 61 percent do not take action to review procurement processes in light of lessons learnt from past projects.
The study into procurement approaches across a multitude of sectors focused on capable owners, governance, organisation, integration and digital transformation. These align with the key pillars of Project 13, an initiative from the Infrastructure Client Group (ICG) which is supported by the Institution of Civil Engineers and designed to help UK construction move from a transactional to an enterprise approach to boost productivity.
A key challenge exists around the implementation of innovative digital technologies which as a result hinders client competitiveness. Close to half of those surveyed said they did not have an efficient data management system in place.
Gareth Poole, director of contract services, said:
Successful procurement is rooted in consistent measurement of performance, embracing and implementation of technologies, effective risk management and supply chain collaboration.
“We need to be adopting the new approach to performance measurement outlined in Project 13 – embedding a system to provide information to continuously measure ‘as delivered’ and ‘as operated’ performance against customer outcomes.”
Over half of clients in the sector are also failing to offer effective incentives to suppliers based on volume and performance and nearly three quarters do not operate commercial incentive models to improve supply chain efficiency. This incentivisation is key to driving performance and innovation and maximising cash flow.
By contrast, risk management – one of the six commercial principles of Project 13 – appears better understood and adopted across the industry.
60 per cent of respondents are confident that their contracts set out how risks should be identified and managed during the life cycle of a project.
The Project 13 commercial handbook makes clear that risks the owner or investor are accountable for should not be transferred to the supply chain. Instead all parties in the enterprise are given incentives and potential reward based on their ability to mitigate the risks.
The study also highlighted a dramatic improvement in attitude towards cross-industry collaboration – with 69 percent of clients in the industry now seeking to foster open and honest relationships within the supply chain, a significant shift from the 27 per cent of respondents who believed such collaboration would enhance performance of the industry when asked last year.
Gareth Poole added:
“Our research highlighted a significant shift in attitudes towards collaboration, but there is improvement to be made in performance measurement and the monitoring of lessons learned so that revised practices can be utilised in future procurements, particularly those identified as high risk. This is particularly important given the current state of market volatility and political uncertainty.”