16 August 2011
Ivan O’Toole, Director of Cost Management, on how to cut 20%
costs from project budgets
There are a number of areas in a project budget where costs can
be reduced. First, incentives should be provided throughout the
supply chain to reduce costs and programme in a way that is
realisable for the employer. This means that the procurement
approach requires all parties to share in savings at each stage.
The use of bonus payments could be a way to achieve this.
Second, a project team must analyse and challenge the brief to
ensure that it does not change without good reason.
Third, standardisation and the division of
labour is one of the fundamentals of the industrial age -
standardised and mass production is the best way to reduce costs.
This has been embraced by the industry to an extent and we see
things like pre-made systems from cladding, plant rooms, bedrooms,
toilet pods, service risers, various structural solutions.
There is the obvious argument that “no building is the same and shouldn’t be the same,” but why can’t certain parts be the same?
...
But in order for this to have a real impact,
it must be done on a grand scale and linked to the procurement
model that is transparent and provides true incentives. There is
the obvious argument that “no building is the same and shouldn’t be
the same,” but why can’t certain parts be the same?
Finally, 3D design modelling has another part
to play in the procurement, standardisation and brief development
allowing co-ordinated information to be produced for all
disciplines and throughout the design and construction process.
Of course, the real cost of owning and
operating a building is not in its capital cost but in the
whole-life cost. The intelligent response to the 20% issue would be
to look at the total cost of owning and operating a building -
energy, resources and workplace strategy (admin, payroll, IT
support, flexible working).
While all of these techniques have their use,
the biggest impact would be from a combination of standardisation
linked to a procurement model that offers the right incentives so
that savings are realised by the employer but also to the benefit
of those who have provided the saving.
It can be done if the industry and government
collaborate and invest in these principles - this requires
commitment and may not be wholly realised in one parliament.
It also requires a capital programme - which
is in question at the moment.