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Higher education clients go shopping

NCE business : Procurement

A £5bn construction boom is taking place in the higher education sector, where clients are pushing hard for construction innovation. Andrew Mylius reports.

Mention Cambridge University and the chances are you will conjure up an image of venerable ivy-clad bricks and mortar or echoing quadrangles. Take a short detour off the main tourist drag to the University's Sidgwick or West Cambridge campuses, though, and a very different scene unfolds.

In the last century the university has commissioned some of the UK's most seminal modernist buildings. The brutal brick and glass library building designed by James Stirling in 1964, Casson Conder's 1959 faculty of history building on stilts, and Foster & Partners' sleek faculty of law building, opened in 1995, attract architecture buffs from all over the world.

And the university continues to modernise rapidly, with £528M worth of new buildings currently in design, planning or construction. A major programme of work rolling out over the next 15 to 20 years will equip Cambridge with not just a few state of the art research and teaching buildings, but two entirely new campuses.

Cambridge enjoys a financial status comparable with its academic standing - it is one of the richest education establishments in the UK. But it is far from alone in undertaking construction on a grand scale.

'There's an unprecedented amount of money being put into research at the moment, ' says Vic Slater, executive chairman of the Association of University Directors of Estates (AUDE) and director of estates at UMIST. 'In the last three years about £2bn has been spent (by the Higher Education Funding Council for England - HEFCE).' And there is in the region of £3bn more to come, reckons Cambridge University director of estate management David Adamson.

The research funding boom has been jointly generated by government, worried that without a shot in the arm UK industry will struggle to remain competitive, and by industry itself, which is keen to draw on the skills and new thinking coming out of UK universities.

Typically, cash put up by the HEFCE is matched by private sector sponsors, with the Wellcome Trust a major player.

The first HEFCE initiatives, instituted in 1997, were the Joint Infrastructure Fund (JIF) and Poor Estates Project. Schemes financed by these two are being realised now. JIF has been superceded by the Science Research Infrastructure Fund (SRIF) which has generated close to £2bn. Projects are identified but the capital has yet to be spent. The government is planning a third wave of funding, SRIF 2, from 2004-6 which could bring in another £2bn, and two new schemes - Project Capital 1 and Project Capital 2 - worth £240M and £209M respectively, have just been introduced.

While higher education clients have more cash now than they have for decades, they are also pushing to realise the greatest value from their spending.

Most projects are too small to make procurement through the private finance initiative viable, notes Brunel University director of estates Martin Hadland. And universities 'can get fantastically good lending rates through commercial banks. Compared with the PFI we can borrow relatively cheaply, ' he adds. Private finance, construction and operation only comes into its own for provision of facilities like student halls of residence, 'where there is a clear commercial payback', adds HEFCE head of procurement Tim Russell.

Hadland also dismisses long term framework agreements.

'Most university work is one off - there is simply no point in establishing ongoing relationships. With research-led universities it is a different story, ' he adds. 'Some of them are wealthy institutions with long term opportunities.'

But 'the sector is moving towards two stage tendering, ' notes Slater. Clients are aiming to define design and optimise buildability by involving contractors and suppliers in design early on. 'Two stage tendering has improved quality no end, ' says Adamson. 'Everybody is a 'consultant', and the process of signing information off makes people far more meticulous.'

Tenders for construction are only invited when costs have been 80% finalised or better.

While Adamson does not guarantee that contractors or suppliers involved in design will proceed to construction, he likes continuity and is willing to negotiate on price, he says.

Cambridge, Brunel, UMIST, Imperial, University College London and the University of the West of England all favour quality over cost, 60:40.

Cambridge favours the ECC contract for the spirit of co-operation it engenders, says Adamson. He is meticulous about risk and change management, sharing pain and gain with contractors. Unusually, Cambridge stakes a contingency of around 3% total cost on client-generated design changes. It demands that designers are similarly accountable for potential design-related construction problems. Upfront thinking is paramount, Adamson says.

With a view to improving the quality of its design and construction long term, AUDE is developing three initiatives, now being taken up by its members.

First is a training questionnaire, being backed by the Construction Industry Training Board, sent out with tenders. In it bidders are asked what staff training they carry out, what training they would initiate if they won the job, and what training they would like to implement if the client paid.

AUDE is looking to make risk sharing common practice, and wants clients to incentivise its contractors to beat cost and schedule by sharing any savings made.

And under a scheme dubbed 'soft landings', universities increasingly select bidders on relevant experience, safety, and company culture. After delivery of a new facility, universities then make the contractors responsible for operation for anywhere between one and five years, in an extended defects period.

The moves are encouraged by the HEFCE, says head of estates Andrew Smith. 'We have changed the way we distribute funds to encourage a more broad minded approach to construction. HEFCE used to require information from institutions on design details. We are now asking for details of procurement routes. We are looking to institutions to be innovative.'

Innovation meets tradition

'Most buildings are prototypes, but the majority of a building's constituents are not prototypical and need to become even less so, ' says Cambridge University director of estate management David Adamson. 'Go to the US ivy league universities, Massachussetts Institute of Technology or UCLA, and there's more standardisation, and lower unit cost, but at the same time even more diversity.'

Adamson is determined to match the US universities on cost, buildability, quality and architectural diversity.

A clutch of dramatic new buildings are already well out of the ground at the university's West Cambridge site, a 67ha site between the town and the M11.

Development will take place over 15 years as finance becomes available. The university has applied for permission to develop another campus north west of Cambridge.

Both schemes will be mixed use, with many teaching, library and research facilities financed by industry. Other facilities include accommodation for staff and students, 'incubator units' for businesses evolving from university research projects, and symbiotic institutions - such as the Schlumberger research institute, Cambridge Archaeological Unit and British Antarctic Survey. There will also be shops and leisure facilities, says Adamson. 'We're emphasising that this is not an academic ghetto or a business park.'

Cambridge is also pursuing a sustainability agenda. New buildings must conform to tight energy and water efficiency specifications. Construction materials must be sustainably sourced and all buildings must be suited to use, projected over 35 years. West Cambridge is home of the UK's first park and cycle transport scheme, with bike sheds and change facilities located at the site's car park. Solar energy is increasingly important for keeping down new buildings' energy costs, and solar power will soon be used to produce hydrogen, powering a new generation of university vehicles.

INFOPLUS Higher Education Estates: www. heestates. ac. uk University of Cambridge: www. cam. ac. uk

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