16 March 2021
Under Construction - Q2 2021 – 2 of 5 Insights
There is a pressing need for the construction industry to digitalise. According to the McKinsey Digitisation index, construction is one of the most under-digitised industries with only agriculture coming lower. It is not that the industry is perfect and not in need of a disruptor. Far from it - a third of construction projects end in disputes and around a third of these disputes are due to inadequate specification.
Why is this? The design and construction of a building is too often divided between several different parties with poor co-ordination/collaboration. Often projects are approached in an adversarial manner. There are recurrent themes we see in construction disputes:
These issues could be avoided with collaborative, digitised information systems which assist construction professionals to properly plan and record projects. Often the design process is a series of emails with PDFs etc exchanged. This information is not then always readily available if it is needed. Sometimes the impact of these issues can be minor. However, sometimes, the impact of poor quality construction information can be catastrophic as was the case in Grenfell.
Regulatory change in the form of the Building Safety Bill is on the way which will make detailed planning of "high risk buildings" a necessity. The Bill is the government's response to Dame Hackitt's "Independent Review of Building Regulations and Fire Safety" following the Grenfell tragedy. It is due to be introduced to parliament later this year, but its implementation is unlikely to be until 2023. It will introduce the most radical overhaul of building safety regulations for decades and will fasten the pace of digitalisation in the construction industry - requiring up to date building data to be held in a digital format known as "the Golden Thread". This will capture the decision-making process in the design and construction of a building providing a clear record of what has been built.
The duty holder under the Bill will need to seek certain approvals and provide certain information to the regulator at three key gateway points:
The Golden Thread of information is then passed to the "accountable person" i.e. the person responsible for the occupied building under the regulatory regime. Other duty holders, in particular Principal Designers and Principal Contractors, must assist the client in meeting the gateway points and contribute information. The Golden Thread must be updated and remain accurate throughout the building’s life cycle.
In order to meet this regulatory burden, clients will need to establish information management systems. Industry bodies have been looking at how to help meet the requirements of the Golden Thread. For example, NBS has developed NBS Source in conjunction with architects and manufacturers, which aims to help support construction professionals put the Golden Thread into practice. Their aim is to provide "structured, high-quality product data, which can include all relevant performance criteria and certifications". This would work as follows:
It is easy to see how this type of system could create the basis of the Golden Thread that can then be used in the design and construction process and in the life cycle of the building.
For this to work, clearly all parts of the industry need to buy into the new digital landscape. For example, manufacturers will need to provide information about their products in an accurate and comprehensive manner which aligns with terminology used in standards. As with anything, a system is only as good as its weakest link. However, it is not difficult to see how designers/manufacturers which do not align their systems with the digital landscape may fall out of favour in the market.
The traditional professional indemnity insurance market may struggle to respond to this more collaborative approach. We predict that for "high risk building" there will be a move towards "Integrated Project Insurances" - which broadly cover all parties rather than seeking to allocate blame for issues to particular parties.
by Rebecca May