In the second of two articles, Nigel Ostime of Hawkins\Brown provides a comprehensive guide on managing a Pre-Construction Services Agreement to get the best outcome for architects and their clients
In last month’s edition, I explained what a Pre-Construction Services Agreement (PCSA) involves, as well as setting out the benefits and explaining some of the potential pitfalls for architects and their clients. In this article, I explain how architects can get the most out of a PCSA for the best project outcomes.
The key areas of procurement, programme, cost, value engineering (VE), change control, coordination and design information must all be carefully considered from the outset when it comes to a PCSA. So I have considered these factors in turn.
Procurement
You need to speak to the client early on about procurement, and the approach they intend to take. Where appropriate, advise on alternative routes. Hold early discussions about the PCSA process, including agreeing with the contractor at the outset the aims, the activities to be undertaken, and the programme for these.
You should advise when a project requires more specialist input, or if it has a significant subcontractor design package. Use single stage tendering on completed Stage 4 information for less specialist projects, so that costing is more straightforward. Ensure the client is aware of any further specialist input required in the next stage.
Define early on which, if any, subcontractors will be involved in the PCSA, and confirm the intention that they will be retained for the project, so that their early input is not lost or overwritten. Also, confirm the preferred suppliers and how they should be engaged with during the PCSA (not just verbally in tender interviews). Request that the PCSA team is the contractor’s build team, as this is often not the case.
Identify what the real benefits of having the contractor on board could be for the project and make them deliver against those as a priority. Document the aims of the PCSA with the client and the project manager to understand what they are looking to get out of the process and make sure the contractor signs up to them.
Programme
At the outset of the PCSA, ensure you agree with the contractor the scope, the DRM (Design Responsibility Matrix), and a programme which identifies what is needed and when, and then monitor progress on a regular basis.
Don’t revisit packages until the end, but review the programme and make sure realistic time is given for coordination and detailed design. Allow a review period once all design work is complete, and remember that IRS (Information Release Schedule) dates are key to the contractor. Be open
from the outset that coordination time is required during the PCSA before tendering, and that the overall programme needs to facilitate this.
There are some potential issues to avoid within the PCSA programme itself:
- Be careful the contractor does not try to change the DRM after it has been agreed with the client
- Beware of where the package review timetable only allows, say, two days between reviews, which is not enough time to bring in benefits that the contractor is supposed to bring
- Watch out for time allocated to the Stage 4 design programme but based on the tender events schedule; this can give too little time for coordination.
Cost
The cost plan is often not made available, but try to get visibility of it, to be able to analyse it and determine whether it is realistic, and get cost under control. An initial cost plan that is based on Stage 3 can lead to Stage 4 design development (after the design should have been fully coordinated and frozen) and this can be difficult to explain to the client, so ensure early dialogue about what is legitimate design development and when the design should be fixed (ie at the end of Stage 3).
Possible cost pitfalls:
- Be wary of the need for coordination post tender and the contractor raising concerns over cost as a result
- Keep an eye out to check that the cost consultant is properly resourced and being pro-active
- Beware of provisional sums that push the design risk into the next stage and often end up being much more work when they are agreed later on.
Value engineering
The programme for VE should be separated from the main flow of work and identified as a separate fee. As the onus is on cost, the VE/cost review programme needs to be integrated into the design process. There should be a final cost and a VE review/cost analysis period after the contractor cost is submitted. Trying to revisit packages already issued while you are preparing the next ones causes problems.
The PCSA is effectively continuous value engineering, and there needs to be flexibility in the programme to allow for this. Programme in cost reviews for each package, and the process for agreement. Consider not just the additional work from VE but also the level of information needed, such as in the facade. Also, when agreeing performance or quality VE changes on their own (not as part of a coordinated solution), be aware that this could have an impact on later work when integrating into the developed design.
Change control
The change control process must be set up from the outset and be managed by the contractor. There must be clear definition of what is design development, and what is a change. Items not drawn in Stage 3 can be seen as a change, as they are not costed.
Coordination
Focus on coordination with MEP and structures, before package information is progressed. Difficulties occur where the planning application has been submitted without a fully coordinated design being developed, and this can lead to issues where the PCSA immediately follows on. Exercise caution and aim to submit sufficiently detailed planning applications with fully coordinated designs (you may need to accept this is not possible if the client wants to minimise the scope of the pre-planning design activities).
Design information
Be wary of issuing a preliminary detail and the contractor taking it as final and making assumptions based on it. Sketches are the right way of illustrating PCSA proposals, to make it clear they are not to be adopted as the comprehensive solution. Include a ‘PCSA discussion’ watermark onto these types of study. Derogations which cannot be captured on official drawings need to be clear and concise; sketches or markups are better – written schedules often have grey areas, and ambiguities.
Separate teams need to progress the design and variations from the PCSA process; otherwise it will cause disruption. Note that QSs and contractors do not always understand 4a and 4b; it’s important to lay out the ground rules.
In order to get the PCSA to work, all parties need to approach it as the buildability exercise it is intended to be, with an agreed programme and contributions defined from all parties. Architects and other designers should guard against the potential prolongation of PCSA periods, as it can take a lot of time, and therefore cost, to support them.
Nigel Ostime is partner and project delivery lead at Hawkins\Brown