Following the success of the NBS National Construction Contracts and Law Survey 2012, we ran our second survey in this area from June to July of this year.
The survey provides us with a detailed understanding of:
- Current procurement methods
- Which contracts people use, and how they use them
- The legal issues people face
- The nature and effects of disputes, and how people seek resolution
- The adoption of collaborative working, what hinders and what helps, and where Building Information Modelling (BIM) fits with it.
The survey was carried out with the help of the membership of more than 20 industry bodies, and more than 1,000 clients, contractors and consultants took part, making this the largest independent survey of its type.
This is the first time we have been able to track changes in this area, and those changes give us clues as to how the industry will develop over the coming years. We are in interesting times; led by the Government, BIM is becoming more widespread, and there are early signs that we are beginning to emerge from the worst post war recession. Change is afoot.
However, some things remain familiar: the report reveals that disputes remain a real (and growing) issue for the industry with 30% of respondents having one or more contract entering into dispute in the last 12 months – a rise of 6% from the previous year. Seven per cent of respondents reported that they had been involved in three or more disputes. The perception is that the number of disputes is on the rise, with nearly half saying the number of disputes has increased, while only 10% tell us there are fewer.
It’s also clear from the survey that many disputes involve large sums of money and have a significant effect on the construction process. Half of the disputes reported had a value greater than £250,000, while 13% had a value in excess of £5m.
While disputes look to be on the rise, collaboration is not. Nearly half of all respondents did not adopt any collaborative techniques in 2012, and only 10% did so for all projects. That said, our survey finds the profession embracing collaboration in principle, with respondents agreeing that our core purpose (the delivery of clients’ objectives) is better achieved through collaborative working.
The comments people made when completing the survey underline just how tough and competitive the construction industry now is. It’s often seen that this environment is inimical to collaboration, setting members of the construction team against one another in a struggle for solvency. There are other voices however, those suggesting that it is only through collaborative working and risk sharing that efficiency can come and profitability return.
Almost half of those questioned felt that greater collaboration between all parties was helped by the adoption of BIM (only 6% did not), but it is still not normal practice for BIM to be referenced in contracts, with fewer than a quarter agreeing that they reference, or have adopted, BIM in their contracts.
The challenge to improve and create effective contractual mechanisms that provide the framework for collaboration in construction projects remains.
The survey also tells us how international work (through UK-managed contracts) brings its own issues. Cultural differences, risk distribution, unfamiliar contract forms, security of payment, and language, are all cited as significant challenges for those involved in international contracts.
We hope you enjoy reading the findings from the survey and that this report adds something to our understanding of the legal and contractual issues the industry faces. Perhaps seeing each other’s views here may help us work better together to deliver enhanced value to our clients, other project team members, and ourselves.