Playing the game in the best way

"Confidence comes from being prepared.”

John Wooden (the first person ever enshrined as a member of the Basketball Hall of Fame as both a player and as a coach)

Aligning the variables around expectations and execution early is the only way to ensure you are best placed for success. This is the same for construction works as it is for business or sports, whether you are looking to renovate your existing space or fit-out newly acquired premises.

The true fundamentals of construction are based around 3 key pillars:

1. Time
2. Money
3. Finish

Before you kick-off with your project, do you have those fundamentals nailed down?

Time

Questions to consider early on: 

• When is your next lease break?
• Is your existing lease due to run out in 2 years’ time?
• Do you need to find a new site (for a more competitive location or for more or less space)?

Much like investing in tomorrow’s talent, there can be a long lead-in time between tender and execution. In order to maximise obtaining the best price and best finish, a potential relocation or renovation should be on the agenda no later than 18-24 months before you intend to commence any works.

Money

It’s always more expensive to buy at the end of the transfer window, and the same is often true for construction projects. If you leave it too late to develop a tender (i.e. list of your own building requirements), the opportunity to create a competitive bid process may be lost. You will pay over the odds purely due to the delay in executing the fundamentals of an effective press on the tender.

The earlier you engage in appointing your Project Team, the easier it should be to develop and secure what you are looking for. This increases the potential for a competitive tender process to secure better pricing and improved cost certainty.

For more bespoke design finishes it may be worth investing time and money in developing the performance requirements and specifications prior to going to tender. A common example of these bespoke requirements will be acoustic linked requirements (perhaps a noisy gym next to a coaching facility is just not workable day-to-day). To achieve a robust technical specification, you would be expected to appoint a specialist consultant. In this example, an acoustician, to aid with developing your “Employer’s Requirements,” which later form part of the Building Contract.

Finish

What type of quality of finishing are you looking for and how will you control this:

1. Take control of the finished look by retaining responsibility for the design i.e. by appointing a team of design consultants to work alongside you (e.g. architect, mechanical engineer, electrical engineer, structural engineers, an acoustician etc), and therefore develop your own requirements. This is known as Traditional Procurement; or
2. Are you more driven by securing a competitive fixed cost and are prepared to pass design responsibility onto the Building Contractor? If the finish of the design is less important (this being more akin to an “off the shelf” option), then we would typically refer to this as Design & Build Procurement.

The choice made will impact how key the design aspects are to your project will determine the correct form of Building Contract that will best serve your needs. Of course, there are always hybrids of the two procurement methods. But you need to be clear what is in your design, and what you are letting someone else decide. By way of football analogy, we would ask whether you are the Head Coach or are you the Manager?

Which Contract?

Once you have determined the specification taking into account Time, Money, and Finish, you would typically specify the correct type of Building Contract to use. Often Building Contracts for construction works are based on the Joint Contract Tribunal (JCT) form contract (the latest form being the 2024 JCT suite).

However, it is worth noting that these standard form contracts only reflect a balanced position between the various roles involved in the project (i.e. client, contractor, professional consultant, and subcontractor). Just like in sport, there is no one formation being the best for all scenarios, so no single form of contract will cater for all of your needs.

A tailored set of amendments to the JCT form of contract are therefore highly advisable to make sure you are getting the best use of your resources and aligning the 3 key fundamentals in your project with the terms in the Building Contract. You may also need to incorporate unique building or Landlord requirements and any business’ specific working practices that you need the Building Contractor to follow during construction.

Why do I need a Project Team?

Since October 2011, certain construction works are governed by the Construction Act. This provides:

1. a robust framework for managing payments in construction contracts. It requires Building Contracts to set out clear payment terms and ensure prompt payment. The rationale is to reduce the ambiguity and improve cash flow and minimises payment disputes; and 
2. a dispute resolution mechanism known as adjudication. This eases quick and cost-effective resolutions, enabling parties to bypass lengthy and expensive court proceedings. Disputes in the construction industry now need to be addressed within a short defined timeframe (usually 28-42 days), allowing projects to proceed with minimal disruption.

It is therefore important to appoint a qualified team. This Project Team will typically be constituted by your legal counsel, contract administrator and quantity surveyor at the very least. A contract administrator will oversee administering the Building Contract and interim payments during the project cycle (including effective execution of pay-less notices), alongside a quantity surveyor who will calculate what has been completed to ensure you do not overpay and are paying the Building Contractor in line with the progress of the Works.

But the depth of your Project Team will depend on the complexity of the project. It may also be necessary to consider design specialists including architect, engineers, acousticians, particularly if you are looking to take the route of Traditional Procurement.

Next steps?

Hopefully, this article has given you some areas to consider for both marginal and material gains in your future projects. Finding the key drivers will help shape the form of procurement  and Building Contract that will best suit your needs.

Lewis Silkin’s Real Estate practice can not only help you address the knowns and unknowns in your future or current projects, but we also have a solid and reputable network of real estate and construction professionals who can help build your “A” team.

Feel free to reach out to Scarlett Wheeler, Head of Construction for help with perfecting the procurement of your next project.