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Nicholson urges mergers as the way forward after Egan

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cic chairman Robin Nicholson has urged all small practices to merge with other consultants to become multi-disciplinary firms, in the light of radical recommendations by Sir John Egan in his long-awaited report, 'Rethinking Construction'.

Nicholson said that the moves - which he sees as a way of formalising the associations formed by one-to-two-person practices currently in place - would represent an opportunity for the firms 'to provide a better service' by getting into 'sixes, sevens and eights'. 'There's no reason why it shouldn't be formalised,' he said, 'and you need the comfort of your friends.'

Nicholson was speaking as part of his reaction to the radical Egan report, the recommendations of which will be applied to £500 million of 'demonstration' projects, including the new Urban Millennium Village at Allerton Bywater near Leeds (aj 16.7.98). The report, launched by deputy prime minister John Prescott, suggests wiping the industry's slate clean to tackle buildings entirely differently, so that in five years' time construction delivers in the same way as the best consumer-led manufacturing and service industries. It recommends that the building industry:

creates an 'integrated' project process around product development, project implementation, partnering the supply chain and production of components

designs projects for ease of construction making maximum use of standard components and processes

replaces competitive tendering with 'long-term relationships' based on performance

creates a forum of improvements in housebuilding performance

improves profitability

invests more in research and development.

In a section on 'Design for Construction and Use', 'designers' are urged to iron out a 'fundamental malaise' in the industry caused by separating design from the rest of the process, by integrating it with construction and performance in use. Egan wants suppliers and subcontractors fully involved with the design team, with buildings designed 'right first time' and with 'whole-life costs' encompassed. There is 'no longer a place for a regime of design fees based on a percentage of the costs of a project, which offers little incentive to build efficiently', and designers are also asked to match professional competence with a greater understanding of client needs.

Putting these into practice should result in productivity gains: cuts in capital costs and construction time by 10 per cent a year; a 20 per cent increase in predictability of delivery; a 20 per cent reduction in defects; a 20 per cent reduction in accidents and an overall jump in profitability and turnover of 10 per cent are envisaged. The report suggests learning from other manufacturing processes: 'The parallel is not with building cars on the production line; it is with designing and planning the production of a new car model.'

Nicholson views the document as a more 'architect-friendly' tome than the Latham report, despite the fact that the word 'architect' is mentioned only once in its 40 pages - it is 'designers' that are referred to in the text. Nor does the report give as much weight to the design-and-build fraternity as the comfort it will bring to the growing group of construction managers, he said.

Nicholson warmly welcomed the idea of radically simplifying contracts, if not getting rid of them, as an 'attractive step', since dealing with contracts, tenders and negotiations with lawyers were all 'a huge amount of waste'. The culture change needs architects to be involved in proper briefing and in post-occupancy evaluations, or feedback. The level of standardisation the report recommends did not worry the cic president, who cited the Eames House as one example where good architecture could legitimately be built on standardised processes. 'We probably over-customise designs to a certain extent,' he said. 'The challenge is to come up with more effective ways of delivering buildings. That's quite an open invitation.'

The report, 'Rethinking Construction', costs £12 through the Stationery Office. A conference will be convened in September, at which implementation vehicles will be discussed. Construction minister Nick Raynsford is to chair a steering group with Egan, paymaster general Geoffrey Robinson, senior members of industry and clients.

INDUSTRY RESPONSE

Other groups broadly welcomed the Egan report. Chief executive of the Alliance of Construction Product Suppliers Nigel Chaldecott said that improved planning would help ensure on-time delivery of materials and components, thereby reducing waste. But he hoped some smaller demonstration projects would be included. The cib called it 'a real boost', but warned that rank-and-file construction companies, as well as the leading players, would receive benefits. cic chief executive Graham Watts said it was 'an iconoclastic rather than a definitive piece of research'. Housing Corporation chief executive and task force member Anthony Mayer said it would have a major impact on the industry, while the rics called it 'a welcome push in the right direction' but was concerned that it 'pays no attention to the role of consultants and consultancy within construction. The idea that a consultant's voice is valuable in making the initial decision whether to build, before assembling the team to decide what and how to build, barely gets a look-in.' And Martin Bishop, chairman of consultancy Franklin and Andrews, called for the professional bodies, rapidly becoming 'an irrelevancy in the late twentieth century', to merge as 'The Royal Construction Institute'.

DEMONSTRATION PROJECTS

The Allerton Bywater urban village for English Partnerships

A physical and recreational training centre for the Ministry of Defence, to be built by amecConstruction and Laing Constructuon

The M60 Manchester Outer Ring Road Contract 3 Project for the Highways Agency

A supermarket in Hazelmere for Tesco

An Industrial 'Flex' building in Slough for Slough Estates

Three hotels for the Whitbread hotel company, at Heathrow, Gatwick and Tower Bridge

An office in Birmingham for British Steel

The South Terminal at Gatwick Airport - a planned extension to the international departure lounge

An 8000m2 office at Stansted Airport is to be built in 30 weeks

Perishables warehouse at Heathrow Airport

A station refurbishment programme for Railtrack.

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