Practices and Procedures on the New Scottish Parliament - Essay Example

ANALYSIS OF PROJECT MANAGEMENT TOOLS AND TECHNIQUES WITH A COMPARATIVE STUDY OF THE PROGRESS OF THE CONSTRUCTION PROJECTS – SCOTTISH ASSEMBLY BUILDING AT HOLYROOD AND WELSH ASSEMBLY BUILDING AT CARDIFF 1.0 INTRODUCTION Unique, non-repetitive activities occurring only once within a specified time frame are known as ‘Projects’. Project management encompasses planning the project and controlling the project activities subject to resource and budget constraints to keep the project on schedule. Thus controlling time, quality and costs form the basis of any project management. Examples of projects include constructing facilities and buildings such as houses, factories, shopping malls, an athletic stadium or an arena. This paper attempts to critically analyse the essential elements of an effective project management, in the light of the shortcomings as well as the efficiencies depicted by two major construction projects undertaken to bring the marvel of building constructions. 2.0 HOLYROOD PROJECT – THE BACKGROUND In January 1998, Donald Dewar, the then Secretary of State for Scotland made an announcement, that the new Scottish Parliament Building would be permanently housed in Holyrood. . In order to start the construction of the Parliament building the architectural firm led by Enric Mirallees of Belgrade and RMJM based in Edinburg was chosen to make the architectural design for the new building. The Holyrood building project was handed over in June 1999 to the legal responsibility of an entity created with representatives of Scottish parliament which was called Scottish Parliamentary Corporate Body (SPCB). The Construction process of the building commenced in Summer 1999. As per a resolution passed by the Scottish Parliament in April 2000, a Holyrood Progress Group (HPG) comprises of representatives of the Parliament and construction professional to work with the SPCB. The mission of this body is to finalise the design, control the progress of the building, complete the project in time and make periodical reports to the SPCB. In turn SPCB will advise the Members on the total amount spent so far on the project and the estimated time and cost for completion of the project. There were regular meetings and reports of the HPG since summer 2000 compiled and presented by the project director and key consultants. In June 2001, the Scottish parliament advised the SPCB to make quarterly reports to the Parliament’s finance Committee on the progress of the Holyrood building Project, highlighting especially the escalation in the costs of completing the project for getting the concurrence of the Committee for the increase in costs in the annual budget sanctions. The Chief Executive of the project made monthly reports to SPCB on issues relating to program budgets and quality. All these reports were based on the regular meetings and discussions between HPG and the SPCB. 2.1 PROGRESS OF THE HOLYROOD PROJECT: Because of the unusual design, aesthetic construction features and usage of high quality materials the Scottish Parliament building project was made to a complex construction project. The project saw a lot of slippages during the progress, due to multifarious reasons. Especially in the area of cost escalation the project suffered many set backs in that £ 195 million target fixed in June 2001 was unachievable and was subsequently been fixed at £ 431 million with so many upward revision of estimated construction costs in between. The procurement of works changed radically because of program pressures in 2000 and 2001. Only in June 2001 the project witnessed some foreseeable completion process. However even after this stage, the project suffered many set backs through the year 2002, with the result that a complete status of the costs involved and the underlying problems in completing the project was taken in November 2002. From January 2003, more thrust was placed on completing the project as quickly as possible with the idea that the completing the project at a greater speed is the only way to contain costs. However, after a review of the abysmal progress and still mounting cost escalations of the project, in June 2003, the First Minister ordered an official inquiry into the increasing costs and delay of the project. Even after all the necessary steps were taken still ninety percent of final accounts for construction remain to be finally settled. 2.2 THE CAUSES FOR DELAY IN PROGRESS: Design slippage was the major factor which contributed to the delay in the completion of the building project. Moreover such a complex design made the project a challenging one to be delivered against a very tight time schedule. Another reason for the delay is the unusual procurement route used by the project which is unsuitable for public construction projects. Major challenges obstructed the progress of the project making it more complex and always the client maintained a drive for the earliest achievable date, irrespective of the cost escalations. 2.3 THE REASONS FOR THE COST ESCALATIONS: Extended construction period is the main cause for the escalation of the project costs beyond reasonable levels. Very high costs involved in the development of designs and changes in each stage also caused the cost increases. The main focus on meeting the program deadlines has led to the process of uncompetitive procurement which ultimately escalated the project costs. In general, in most of the procurement contracts design changes in between make the estimated final cost of the project exceed the original cost plan allowance. 2.4 PROJECT MANAGEMENT AND CONTROL: TIME, QUALITY OR COST – which of these aspects need to be given priority had been the dilemma throughout the project life. Confusion on the clarity of the leadership and lack of control on the part of client organization was the factor prevalent predominantly during the progress of the project. It so happened that the after 2001 there was no consensus to the overall budget or approved cost ceiling for the whole project. There never had been efforts taken to make a concise report on the progress as well as on the financial aspects of the project at any level. There was neither the risk approach in consistent with good and established practices nor was the construction management implemented fully with the usual practices. The excessive consultants’ fees were controlled at a very late stage of the project. 2.5 CRITICAL ANALYSIS OF THE PROGRESS OF THE BUILDING PROJECT OF SCOTTISH PARLIAMENT: The Report of the Auditor General for Scotland has made the following observations in the progress of the Holyrood project. Primarily, being an extremely difficult and complex building project, using the strategy of construction management method of procurement was the main reason for the problems that arose in the progress of the project. Among other things the frequent variations in designs and late supply of vital information during the construction process led to the delay in the execution of the project. The unachievable completion targets fixed by the project management were another reason for the debacle. At no point of time either the construction manager or the project management realized that the time targets were only wishful thinking and far from being realistic and achievable. There had never been an attempt to rectify the root cause of the problem by suitably altering the time and cost expectations. While the idea of realizing the original design persisted, the cost escalation became inevitable. Unfortunately the design developments were related to realizing the quality of materials and finish that the client was expecting. This project motive has led the award of the original contract with lot of uncertainties in the client’s program requirements. Such non-specific procurement works packages has allowed contractor’s claim for prolongation, disruption and delay, in addition to the escalation in costs to the extent of £ 86 million. This value was over and above the escalation of £ 80 million involved in detailed design development. Lack of leadership quality, stricter budgetary control norms and the absence of an effective decision making process to balance the varied preferences of time, quality and cost was also another aspect which made the project extend over a considerable time period resulting in greater costs. Selection of the unusual method of procuring construction projects also contributed to the delay, where the responsibility could not be pin pointed on anyone. 2.6 SALIENT POINTS OF FRASER REPORT: In June 2003 Lord Fraser of Carmyllie was appointed to conduct a non-judicial inquiry into the construction management of the Scottish Parliament Building project in Holyrood. In his report Lord Fraser stated that the selection of Construction management was the “single factor to which most of the misfortunes that have befallen the Project can be attributed” – (The Holyrood Inquiry 2004, 86) He went on to say (para 6.24) that “it beggars belief that Ministers were not asked to approve the proposal to adopt construction management. Nor did they … have the advantage of Treasury Advice.” The principal conclusion in the Fraser Report was that the decision to adopt construction management was taken without an adequate evaluation or understanding of the risk involved and without being referred to the Ministers. The report also states that whenever there was a conflict between quality and cost, quality was preferred and whenever there was a conflict between early completion and cost, completion was preferred without in fact any significant acceleration being achieved. There was no appreciation of the complexity of the architectural designs and their inevitable costs. 3.0 CONSTRUCTION OF WELSH ASSEMBLY BUILDING – A BACKGROUND: It was decided in April 1998 that the Debating Chamber Building for the National Assembly for Wales will be constructed in Cardiff Bay with an initial price limit of £ 12 million including fees and the completion was scheduled for early 2002. However, it was found out that by January 2000 the cost estimate had increased to £ 22.8 million. Originally the idea of allotting the contract for the construction of the building as ‘design and build’ was not considered favourably by the Welsh Assembly due to the fact that the construction involved new and complex designs. The Welsh Assembly decided to follow a hybrid “construction management” strategy, where the main contractor assists the architect with advises on the buildability and other constructional issues and lets the works to sub-contractors. It was also thought that this would let the control of the progress of the construction in the hands of the project management. Richard Rogers Partnership was the architects and Skansa limited were appointed as management contractors for the project in December 2000, with responsibility for managing the construction of the building. In July 2001 the Assembly voted overwhelmingly to suspend the work on the project. The contract with the designers was terminated and work on the new Assembly building was stopped. In August 2001, Francis Graves Limited a firm of construction project manager, chartered quantity surveyors and cost consultants was appointed to review the whole project and were asked to present a proposal as to how to go about with the construction. According to their advise, in November 2001 the Assembly decided to appoint a new developer to complete the original design and consequently, in May 2002 TPS Schal International Management Limited were appointed as project managers. The Assembly also appointed Taylor Woodrow construction Limited as the contractor to build the new National Assembly debating chamber. The revised cost estimate was fixed at £ 40.997 million excluding VAT. With these changes the construction work was started again in August 2003, with completion scheduled for August 2005. 3.1 ANALYSIS OF THE PROGRESS OF THE WELSH ASSEMBLY BUILDING: It was the original decision of the Welsh Assembly that the debating chamber building is to be awarded on a “construction management form of contract. But due to the slow progress and cost escalations in July 2001, the Assembly decided to terminate the Richard Rogers Partnership’s contract pin pointing the responsibility on them for the slow progress. The report made by Francis Graves Limited, a firm of construction project managers appointed as consultants to advise the Assembly on the future course of the project, described the decision of the Assembly to stop the construction work as correct and brave and they also criticized the structure and lines of accountability for the project management, which in their view were mainly responsible for cost over runs. The Assembly then decided to adopt a ‘Tactical Switch’ in its approach and appointed a developer to complete the design and secure the construction of the building which decision was proved as a prudent one. The Assembly was even prepared to lease out the building or buy the same at £ 22 million. In January 2003 Richard Rogers was re-appointed to the Welsh Assembly project, under the wing of the Taylor Woodrow construction company. Construction costs are reported to have risen significantly from an agreed £ 13.1 million in 1998 to £ 24 million three years later while the total project cost was estimated at £ 47 million. 4.0 COMPARISON OF THE HOLYROOD PROJECT AND THE WELSH ASSEMBLY BUILDING – SCOPE OF CONTROL OF THE PROJECT MANAGEMENT. While we undertake to analyse the reasons underlying the delay in the execution of both the building contracts with the resultant increase in costs it is essential to have an insight into the various types of contract strategies that exist and their relevant features The ‘Treasury’ has produced guidance on ‘contracts and contract management for construction works’ which describes the different contracting or project management strategies and different types of contracts. According to the guidelines, the main types of contract strategy are: Fully pre-planned/Traditional Sequential Tendering/Construction management Design and build The ‘Fully pre-planned or traditional project management strategy’ is one where the design and specifications of the construction is fully developed before hand and the associated costs are well identified before the construction contract is awarded. In the ‘construction management or management contracting’ approach, a specialist contractor is awarded a contract to manage the breakdown of the project into packages and also to supervise the whole process. The ‘Design and build’ strategy involves awarding a single contract to cover both the design work and the construction. This approach can reduce time and can reduce the risk of site coordination problems. However, in practice for any major building contracts any one of these main types or a hybrid variation of any one combined with the other may be adopted to take the advantages of all the strategies combined. It may be noted that both the Holyrood project as well as the Welsh Assembly project were initially based on a Construction Management approach. Now we will attempt to make comparison of the management of both the projects. 4.1 COMPARISON: The comparison of the progress and scope of management of both the projects reveal the following key issues and elements associated with the individual projects. Both the Scottish Assembly and the Welsh Assembly building projects kicked off at the same time and both were heading for a disaster in terms of the cost as well as time of completion in the initial two years of the project. However the Welsh Assembly knew the time at which the project has to be stopped and a re-look into the whole operations have to be undertaken to improve the performance. Both the projects were started using the strategy of ‘construction management’ as the preferred procurement route. While the significantly bigger Scottish Assembly building construction was completed at-least over a year ahead of the Welsh Assembly, the project went through a number of criticisms because of the cost overruns of up to more than £ 400 million coupled with considerable time delay in execution of the contract. The difference of opinion among team members was at the root of the problems associated with the delay in the progress of the Holyrood project and this aspect was highly criticized by the Fraser Report on the inquiry conducted on the performance of this project. The decisions made by the Welsh Assembly to halt the project in 2001, to sack the construction manager and to take stock of the situation for a probable re-look in to the whole project in terms of time, cost and quality was responsible for the success of the Welsh Assembly building. The break in the project allowed a new and clear picture of the status of the project and allowed the project management to take new stands on price certainty and time of completion. This has also led to a change in the construction contract strategy to ‘Design and build’ contract as opposed to the original decision of a construction management. Immediately after the forced break, the construction manager TPS Schal were advised to take a tighter grip on the cost and time than had previously been attempted to. For this purpose they engaged the services of QS Northcroft to revise the cost and work on different elements of the project. In this way the whole project was brought back to its original form at the inception and the client had the opportunity to sign off the drawings once again amounting to rebirth of the entire project. Such a challenge, in the absence of even the architects was met by the Project Managers by drawing into the different teams of the associated consultants Northcroft. With the considerable support form the team members the construction managers were able to control the number of design changes to 80 during the continuance of the project, while a majority of them being related to the provision of IT infrastructure and only less than one fourth were value engineering changes, whereas the Holyrood project witnessed about 15000 design and other changes during the completion of the project. Prevalence of open communication system in the Welsh Assembly project contributed much to the success of this project. Quite contrastingly in the Holyrood project there existed reports for reporting sake with no one available for strictly analyzing the reports on the progress made. The purpose of the reports of Holyrood Project Group was only to get the approvals from the members for the cost escalations. Effective team spirit was also another factor which brought success to the Welsh Assembly project. This was achieved by keeping the teams together ups and downs and the team spirit was prevalent with all the firms involved in the construction at all times. Difference of opinions among the team members predominantly affected the efficient progress of the Holyrood construction project. Finally there is no fairness in the Cost comparison of £ 13400 per sq meter for Welsh assembly building against £ 13060 for the Scottish assembly building, since it is not possible to set such a simpler benchmark for comparison. This is so because of the fact that the Welsh Assembly construction was the front-end public face of the assembly and obviously would entail additional costs. The political and civil servants’ offices already existed and the construction was a new face to the whole complex. The construction in Welsh Assembly is considered as a jewel of the complex while the Scottish parliament was a whole development involving completely new building premises. Completion of final accounts was also possible within months of completion of the Welsh Assembly project whereas, the Scottish assembly construction accounts are yet to get to a final stage even after 18 months of completion of a stage. 5.0 CONCLUSION: In the case of the Welsh Assembly construction project, taking a breather early on might have resulted in the project heading for a delay in the time as well as on the cost control and the management of the project. However because of the changed approach to the problems this project could prove successful as against the Holyrood project, the managers of which never understood and implemented what is necessary to change the course of events in the project. From the foregoing discussions and statement of facts it is evident that it may not be possible to focus simultaneously on the time cost and quality aspects of the project, unless there is a well defined project program detailing the various elements of design and cost involved in their development during the progress of the project. Close control, monitoring and review of the project are very important to complete the project within the stipulated parameters of time and cost, and at the same time keeping the quality aspects in view. The review of the progress of both the projects also brings out the fact that effective team work supported by undaunted team spirit will definitely make a project success. REFERENCES 1. 2. 3. 4. . 5. 6. Read More