Out-Law Analysis | 28 Apr 2020 | 10:28 am | 2 min. read
It is likely that the coronavirus pandemic will accelerate the digital transformation of the construction industry once the public health emergency is over, through new collaborative ways of working.
This current period of deep uncertainty has demonstrated the need for resilient commercial models in construction, and we can expect businesses in the sector to look towards increased collaboration as a means of innovating and sharing risks once the immediate crisis has subsided.
Project 13 is an example of the type of initiative that could gain traction and define the way in which major infrastructure projects are delivered in future as construction companies learn lessons from the pandemic.
The Project 13 initiative, launched in 2017 by the Institution of Civil Engineers (ICE) with support from major employer and contractors, aims to "deliver better outcomes for the public and customers of infrastructure, a more highly skilled, innovative workforce and lead to a more sustainable, productive construction industry". According to ICE, Project 13 will "establish a better business model for infrastructure delivery, improving productivity, performance and mitigating the skills risk."
The initiative looks to shape the delivery of major projects into an enterprise model with a "capable owner" at its helm. Rather than a fragile "us and them" culture that plagues traditional one-off transactional relationships, the idea is that the 'capable owner' invests in selecting the right partners based on capabilities and behaviours, and develops appropriate value-based incentive mechanisms that focus on outcomes and the performance of infrastructure assets over the entirety of the life of those assets.
Project 13 requires investment in a governance framework that enables effective and collective decision making, with high levels of transparency and layers of assurance built in to the process, ensuring that quality of outcome remains at the core of the enterprise's objectives.
Crucially, ICE has said that the model intends to take an enterprise approach to risk, with an emphasis on jointly owning rather than transferring risk. At the heart of this is the need for processes that allow risks to be identified together with the specific capability required to manage them. Risks are allocated though the commercial model and through enterprise relationships, with incentives to encourage partners to address those risks.
One of the lessons so far from Covid-19 is the importance of resilience in the construction industry. A model such as Project 13 will be underpinned by a "coherent and shared approach to digital transformation". Putting digital technology at the core should result in a more intelligent approach to supply chain management, with increasing deployment of off-site manufacture, for example.
The many benefits of digital technology in construction, discussed for over a decade now, such as designing out health and safety risk and clash detection as seen in building information modelling (BIM), are likely to play a central role in risk mitigation models across the future industry. Project 13's focus on clear communication channels through the governance framework, with all project partners and the wider supply chain has a clear resonance in an industry addressing the impact of Covid-19.
One recently highlighted impact of Covid-19 on sites has been the need for short term co-operation, to ensure supply chains do not collapse. Examples have emerged, including policy notes for contracting authorities in the public sector on the payment of suppliers, and contractors considering jointly the health and safety risks of whether and how to continue working safely. This new requirement for collaboration is already demonstrating the relevance of initiatives such as Project 13.
Before the current crisis, Project 13 had a number of major industry supporters, including the Infrastructure Client Group (ICG) set up to identify and share best practice in the development and delivery of infrastructure, as well as major clients such as Transport for London, HS2, National Grid and Scottish Power. Life after the crisis is likely to change for all of us and a test for the industry will be whether initiatives such as Project 13 gain wider traction in the search for better ways of doing things and how such initiatives are adapted to learn the lessons from the pandemic.
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