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In April 2017, the Association of Consulting Architects prepared an Industry Discussion Paper on Procuring Architectural Services.1 This paper sends a clear warning that all buildings should be designed to fit their intended purpose.  “They should be efficient to build, maintain and operate, and should have a positive impact on the communities they serve”.  

The report also aims to  arouse due diligence about the procurement role in developing our cities and communities. It seeks to inform clients about the fundamentals of good procurement, as opposed to poor procurement processes which can entrench problems at the beginning of a project and lead to inefficient processes, high on-costs, increased long-term life-cycle costs and safety issues.

Apparently, several organizations in both public and private sectors either ignored this report or never read it and the lessons they learned were costly:  

  • In June 2017, afire started on the fourth floor of a high rise tower in London. Flammable cladding installed on a recent renovation is thought to have contributed to the rapid spread of the fire.  The zinc cladding had been replaced with an aluminium type which was less fire resistant and less expensive.  Although using the aluminium cladding saved the organization nearly £300,000, 72 lives were lost in the fire.
  • The same happened in early 2019 when a fast-moving fire raced up cladding on the side of a high rise in Melbourne, Australia. Flames ravaged the middle floors of a 41-storey Neo200 apartment building, where the same aluminium cladding had been installed that had been used on the high rise in London.

After the 2017 fire authorities blamed the local and national governments, the building’s management company and the corporations it had contracted to renovate the tower. Corporate manslaughter charges could potentially be brought against them. Individuals involved in these or other companies could also possibly be charged with health and safety offenses or manslaughter.

As I consider these losses, I cannot help but appreciate IACCM’s vision of a world where all trading relationships -- whether for buildings, IT systems or professional services -- should also be fit for purpose and deliver both economic and social benefit.

It is not good enough, to design a building or design a contract which just focuses on short-term economics. Cheaper materials and cheaper services, as were procured for both towers, can save money in the short-term but can have serious consequences in whole-of-life, and potentially, in loss-of-life, costs.

The Procuring Architectural Services paper notes that “Good procurement can support high quality design and documentation and establish effective, efficient relationships between client, architect, consultants and contractors”.

And, like the Association of Consulting Architects, IACCM also believes that the seeds of good contracts and relationships are sown in the beginning of the contracting lifecycle, and that we need to spend less time doing the deal and more time getting the requirements right for the whole-of-life, then managing the delivery of the business and social outcomes – see figure below.

Will short-sighted, unscrupulous clients and suppliers still focus on procurement savings? Probably. Will organizations and individuals be charged with negligence and manslaughter? Possibly. Do associations like the Consulting Architects and IACCM have a role to play to define good and poor practices? Yes.

Want to learn more? Please join us at our 2019 conferences on the theme of Creating Value through Change: Contract Economics, Ethics and Innovation as we provoke more thinking on these issues.

 

END NOTE

  1. ACA Procuring Architectural ServicesAn Industry Discussion Paper, April 2017

Topics: procurement, contracting excellence, contract management, communication, IACCM

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