A third of people in construction and its related disciplines are not interested in making the industry better, safer and more sustainable so should be driven out, according to Building Engineering Services Association (BESA) CEO David Frise.
Speaking at the Association’s annual conference, Frise said one third were highly professional, competent and compliant with legislation and best practice, the next third wanted to reach that standard and just needed help to get there, but the rest “simply don’t care”.
“We can try to drag them up…or drive them out of the industry,” he told the 300 delegates gathered at The Brewery in London. “Just doing enough is not good enough. We need to take control and change the things we can change so we can have a better industry, but to get there we need competent people”.
BESA launched its Member Pledge initiative during the conference with several prominent members signing an agreement to put competence and compliance at the heart of their operations and encourage their supply chains to do the same.
Frise said this would create a powerful incentive for clients to specify BESA members because of their ability to prove their competence through the Association’s technical audit process. He pointed to the fact that the Association expelled 14 members earlier this year for failing to reach the standard required.
Membership
“It might seem counterintuitive for a membership organisation to do that but believe me it works. We now have more people waiting to join…membership needs to stand for something.”
Driving competence and compliance through supply chains was also seen as an important response to the procurement practices that continue to threaten the future of many specialist firms.
“Procurement is killing our industry,” said Remi Suzan, managing director of Gratte Brothers Group, who referenced the recent insolvencies of ISG and HE Simm “among others”.
“We must be able to work to an acceptable profit margin…and there is far too much unfair transfer of risk to supply chains. Clients are not bad people, but they will not voluntarily take risk off the table…unfortunately there is always someone willing to accept a project on any terms.
“If there are cost constraints then the contractor is bound to get aggressive and start looking for mistakes in the specification so they can charge for variations,” added Suzan.
He added that the quality of tender information had been falling steadily for some time which made it harder to price work accurately. Lilly Gallafent, director at Cast Consultancy (left) admitted that consultants were part of the problem because they advised clients on what levels of risk to accept.
“Change needs to start with clients…and we need to persuade them that even if they feel they have ‘won’ now [in a contract negotiation] they won’t feel that in a few years’ time [when all the problems become apparent].
“They need to stop dumping risk on their supply chains…and there are better models out there, but we are not using them. We do try to allocate risk more equitably by analysing it properly, but the client needs to be willing.”
Noble Francis from the Construction Products Association said things were no better in the public sector. He said civil servants struggled to get projects ‘green lit’ by the Treasury if they tried to specify something over the allocated budget in a bid to achieve better long-term value and quality.
“The government has lots of theory and value matrices about how to improve procurement, but this rarely reflects reality…and the industry knows how it works so there will always be companies bidding work at the lower level,” he told the BESA Conference.
However, the building safety agenda could, eventually, have a significant impact on this issue, delegates heard. Gallefant said more clients were taking an interest in the competence of their supply chains because of increased awareness of legal responsibilities under the Building Safety Act.
Risk
Francis added that the Act made it clear “you can’t sub-contract legal risk” and, by forcing a legal responsibility on clients, the legislation was changing “incentives”.
Neil Hope-Collins from the office of the Building Safety Regulator pointed out that clients were legally responsible for ensuring all safety related work was “adequately resourced” and contractors were legally obliged to establish that their clients “understood their duties” under the Act before starting work.
“Otherwise, you are breaking the law,” he said.
Jon Vanstone, chair of the Industry Competence Committee, said the “competence of clients” was a key focus for the Regulator and targeted guidance for them would be available later this year. However, he acknowledged the problems the MEP sector often had with working out “who is actually the client”.
This also fed into discussions about the government’s current consultation on late payment and retentions with Build UK CEO Suzannah Nichol describing the safety regime as “a massive game changer for performance and late payment”.
She urged building engineering contractors to use it to “have a conversation with your clients about what you get if you just want it cheaper”.
“We have a once in a lifetime opportunity to do something about [late payment and retentions],” said Nichol. “This is not a system that works [but just] takes cash flow out of the supply chain. [I would ask] why is a company in your supply chain if you don’t trust them enough that you have to apply retentions?
“Clients should be using members of trade associations, but we need to make it clear what membership stands for. That’s why demonstrating value through the BESA Member Pledge allows [clients] to say why not use them?”
For more information about the BESA Annual Conference, which was sponsored by Mitsubishi Electric, Schneider Electric, and airo, visit the website here.