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Clients and contractors must trust their supply chain to unlock real value

Construction is in recovery. Well if the figures gathered quarterly by the Federation of Piling Specialists (FPS) from its members are anything to go by, that is.

They show a 25% increase in geotechnical contracts over the past 12 months, and the recovery looks to be nationwide and not just limited to the South East, or skewed by one or two large schemes.

Growth in the wider construction economy is forecast through 2014 to 2015 too, and there are modest opportunities in some sectors, as well as some significant prospects.

There’s the London Underground investment programme, with works planned at Bank Station and for the Northern Line Extension, as well as energy construction, forecast to double by 2016, and the overhead electrification of rail infrastructure.

So, everything is looking fine!

Well, while it is true that piling and ground engineering will lead any upturn, pricing is still at an unhealthy level. And when you couple this to a willingness to accept significant construction risk, we still exist in a challenging market. However, with prices now starting to improve, caution needs to be exercised when considering long-term fixed price contracts.

Over the last decade geotechnical specialists have moved on from offering a basic install service to invariably a full design and build model. The demands building information modelling places on the sector – together with innovative design, sustainability, systems to improve HSEQ, more sophisticated process instrumentation, guarantees and warranties – all add cost. The specialists argue this is the way forward, as it engages them in the decision-making process and enhances value, and places the risk with the people that can best manage it.

But, is the wider construction sector prone to over-management?  Experience on large projects show that many of the functions are often duplicated at client, principal contractor, and tier one and even tier two subcontractor levels.

Geotechnical visitors to the UK (the FPS is a member of the European Federation of Foundation Contractors) are often amazed at the standard of work we carry out, the attention to safety and are then equally surprised at the level of contracting risk we are prepared to absorb. However, the overriding observation is always amazement at just how many managers and professionals are employed on site, managing the physical works.

Our industry tends to be polarised between those geotechnical companies that are part of larger principal contractors and those that are independent. There is room for both models. But however it is organised, the industry would benefit from a reduction in the overbearing quantity and duplication of management time starting from the client down.

Better to employ a supply chain you can trust, and then trust them to do the job – and maybe we can then really unlock the value we all crave.

Jim De Waele is chairman of the Federation of Piling Specialists

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