Many bemoan lack of investment in ground investigation by clients. GE spoke to Arup’s Tim Chapman, who believes we have to educate them about its importance.
When it comes to tendering for a ground investigation, many consultants worry about the price - too high and the bid will be passed over, too low and the margins are squeezed.
But there is also the matter of risk - the more in depth the investigation, the lower the risk and this level of risk can have a direct impact on the success of a project.
“The ground investigation doesn’t add any direct revenue for the project, but poorly designed investigations are often the cause of things going wrong later,” says Arup director Tim Chapman. “The geotechnical industry has a tendency to grumble about the lack of investment in site investigation but they don’t talk to clients in their own language or understand their drivers and value set.
“The cheaper the site investigation, the more risk there is”
“Most geotechnical engineers think clients worry more about budget than time,” he continues. “But, in reality, it costs the developer much more if the project is late.
“The cheaper the site investigation, the more risk there is. Most developers tolerate programme unreliability far less than higher initial costs. So the question is: do we save money or deliver on time?”
Late delivery of the foundations element of a project due to unforeseen ground conditions sets the tone for the rest of the development and will impact on the other contractors who follow on, argues Chapman.
And handing over the site a month late can result in vast cost increases for the developer.
“Foundation construction is a small component of the overall project but it is right on the project’s critical path,” he says.
Chapman points to a review carried out by the National Economic Development Office (NEDO) in 1983, which reviewed 5,000 industrial building construction projects.
It found that 50% of these projects overran by at least a month. Of these, 37% of the delays were caused by ground problems.
Another NEDO study in 1988 showed that, of 8,000 commercial developments studied, a third overran by a month and another third were completed up to two months late.
Around 50% of the delays were caused by unexpected problems relating to ground conditions.
And figures from public spending watchdog the National Audit Office published in 2001 show that 70% of public sector projects were delivered late and 73% went over the tender price.
Today there is little to indicate that investment in ground investigations has improved to reduce the risk of unforeseen ground conditions.
Chapman says that his experience of legal disputes and of articles in the construction press suggests that incidences of unforeseen ground conditions still occur all too often.
In 2007 Chapman, with Martinus Theodorus Van Staveren, undertook a study of the financial impact of all failures, not just geotechnical ones, in the Netherlands.
They estimated that these failures were costing the industry between 5% and 13% of the Dutch construction industry’s annual expenditure - which is around €70bn (£61b).
Chapman suggests that around half may be attributed to ground condition problems.
Around 50% of the delays were caused by unexpected problems relating to ground conditions.
These ground-related problems often originate in an earlier phase than the phase in which they occur, and he points to a study by Chowdhury and Flentje in 2007, based on the extensive work in 1993 of Sowers, to back up this theory.
“The latter study showed that, in 57% of the projects studied, the geotechnical problems originated in the design phase and in 38% of the cases in the construction phase,” explains Chapman. “However, these geotechnical problems actually materialised 41% of the time in the construction phase and 57 % in the operational phase of the project.”
While the potential impact on programme and budget of unforeseen ground conditions is clear, it does beg the question of why the problems are still occurring.
Chapman believes the difficulty lies in the way geotechnical engineers communicate with developers.
“Clients can sometimes have to deal with up to 18 different consultants in the course of a building project,” he says. “In this context, the geotechnical input is minor and us bleating on about our own agenda may not be seen as important. Much better to engage with the client’s agenda and show that you are adding value.
“Site investigation fees are similar to geotechnical fees and may only account for 0.1% of a typical building project cost,” he adds. “Developers see this as insignificant and not a big factor.”
Chapman says the geotechnical industry must explain the need for greater investment at the ground investigation stage in terms of risk to the overall budget and the programme reliability.
The relative costs of delay can be compared to the savings that may have contributed to them. “Using the statistics given earlier, it can be assumed that some 20% of projects are significantly delayed by ground conditions, by perhaps a month or more,” he says.
“Most clients that I have taken the time to explain the need to spend more on the investigation phase have accepted the need for it and haven’t quibbled about cost”
He takes a project costing £100M for land purchase and building costs as an example.
If there is an annual return of 7%, the annual cost to service the loan is £7M, or £583,000 a month.
If the delay prevents the occupier from working in the building then the costs will be much higher as they will have to also include the lost productive effort of the people working there, which is assumed to exceed the cost of employing them - a further £31.25M a year or £2.6M a month, or nearly five times more than the building finance costs.
“Of course, the loss of use of the building could be much higher as these figures omit missing the top of a property rental cycle, so that the achieved rent over subsequent years is less; or missing an important season, such as Christmas for a shop or summer for a holiday facility; or having to pay any dispute costs, which can be several times more than the original loss being argued over,” adds Chapman.
“Most clients that I have taken the time to explain the need to spend more on the investigation phase have accepted the need for it and haven’t quibbled about cost.”
Chapman points to one site in London where he persuaded the client to allow for an early borehole to be drilled on site ahead of the main investigation. “This helped to inform the design of the rest of the site investigation and establish the best basement level and better foundation solutions earlier.
“To influence the design process, geotechnical engineers must understand the issues affecting the whole development and communicate in the right language to get their messages understood.
For example, deeper basements are often driven by M&E plant considerations, so by talking to the M&E engineers it is possible to find out what the demands are for fitting the necessary plant and design the foundations and basement accordingly to deliver an integrated solution.
“An important part of the structural and geotechnical design processes should be for the whole project team to work together to reduce risks in the ground. Ground risks are one of the major causes of project delays and when they occur they are seldom resolved easily or quickly.”
Chapman also says the industry should embrace new technology in an intelligent way.
He recently worked with Concept Consultants on a site investigation in London which used Boart Longyear’s rota-sonic technology to vibrate the borehole casing at high frequency to penetrate through existing concrete structures on site.
“This helped to overcome the issue of obstructions on urban redevelopment sites where it is the lack of access rather than funding issues that often restrict the site investigation work,” he says. “On that project, the information helped us to design the foundations solution around reusing the existing basement, which shortened the overall project by a year.”
Chapman acknowledges that the site investigation market is a difficult business.
“Many clients don’t buy a site investigation on quality and this does drive down standards as companies try to compete for work,” he says. “Site investigation rates have not risen in line with inflation, so it is down to the profession to create a level playing field on which the better players can compete fairly and maintain quality.”
The other issue with the lack of margins that Chapman describes is the lack of investment in new technology. “If there is no money to be made, then there will be no reinvestment,” he says.
And that is not good for anyone.
“Essentially foundations are like socks - you don’t see them but you want them to work,” Chapman concludes. “Generally our industry is associated with delivering bad news in terms of problems. We need to focus on presenting the benefits of investing in site investigation in that it will help the client save money and avoid risk.”