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News Release from: Joint Contracts Tribunal (JCT) | Subject: JCT Povey Lecture
Edited by the Buildingtalk Editorial
Team on 22 November 2007
Frameworks the cure for the curse of
fragmentation
The fragmented structure and work practices of the construction industry continue to inhibit progress to high performance, according to speaker at JCT Povey Lecture
At the annual JCT Povey Lecture last week, more than 100 industry leaders heard Bob White, chairman of Constructing Excellence in the Built Environment, non-executive chairman of Mace and chief executive of Building Futures Limited, give a presentation entitled Innovation in the Change Agenda He said: "This fragmentation is well demonstrated by the structures within the industry, as well as the way work is organised on construction sites
This article was originally published on Buildingtalk on 25 Apr 2008 at 8.00am (UK)
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"There remains the old chestnut of the divide between design and construction, as well as the multiplicity of organisations which have to be brought together and orchestrated into a single team to achieve even the most straightforward of projects".
Bob White also said that construction reform, which had now been going on for more than a decade, had reached a stage "where the philosophy of collaboration (i.e.partnering/integrated team working) is accepted by most major industry organisations.
"Leading clients, most regular users of the industry, both public and private, have accepted that the most successful way of harnessing the power of this collaboration is through frameworks - of a variety of shapes, sizes and duration".
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Bob went on to outline eight benefits of framework agreements and how they promote higher performance and innovation:.
- Clients can use them as significant drivers of change.
- They result in reduced competitive bidding/long term relationships.
- Innovations and cost savings can be delivered through supply chain relationships.
- They will deliver continuous improvement agendas.
- Long term collaboration on capital programmes and long term service revenues boost margins.
- They help to spread the overhead over a larger workload and produce fewer loss-making projects (less risk, less volatility).
- They can improve performance based reward mechanisms.
- They encourage deeper relationships between clients/contractors/supply chain demanding new upstream and downstream skills.
Echoing the importance of framework agreements, the JCT had announced at its annual conference last month that it is about to publish its new JCT Framework Agreement.
Bob White said: "The JCT, I am pleased to acknowledge, are 'on the case'".
Bob described how the construction industry is not viewed as being particularly innovative, a view with which he only partly agreed.
He said: "Construction firms have always displayed a capability for innovation.
The specific nature of on-site assembly particularly, with the many different organisations and specialisms, varieties of products and processes and the customisation of nearly every project has bred into the sector an innate ability to innovate.
Despite this, however, we are not viewed as an innovative sector.
This is probably because the way in which we innovate does not lead to lasting improvements in performance across the industry." Concluding his lecture, Bob left those assembled in no doubt that they were part of a great industry, one which was well on the path to completing its reform: "I do not need persuading about how good our industry can become.
I have seen examples of world class performance for many years now.
"We have it within our grasp, I believe, to change finally the behaviour of our industry from short term to long term, to be a skilled sector with new skills, to use technology and new materials to drive home a manufacturing paradigm in appropriate areas of the sector and, by so doing, to reduce construction costs.
We can, and should, make a significant contribution to the societal, economic and environmental challenges of our age and by so doing, enhance the industry's reputation and make it a magnet for young people as a workplace of choice.
"All we need to do is to be more innovative.
In an era of extensive innovation, we will find the ways to deliver all these benefits and, who knows, perhaps even how to be more profitable other than simply by charging more! I have great hopes for our future for, as someone once said, "the one natural resource that the world still has in infinite quantity, is human ingenuity".
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