Three Step Plan to Rebuild Construction

Step 1: Return to the principle of unamended contracts. 

In 1931 we agreed that risk should be shared fairly through the supply chain. To this end we established and set up a suite of contracts that defined the roles and responsibilities of the various parts of our industry from design through to specialist, the JCT contracts. Yet since day one we have abused and manipulated this system and now we see contracts that have reams of amendments often larger that the initial contract and invariably designed to squeeze risk down the supply chain. In a sector where margins are measly why on earth do we allow legal fees almost double the industry average to remove vital waste.

FIS is encouraging members to sign the Conflict Avoidance Pledge.

Meeting contractual Obligations through Retentions and Better Payment Practice remain a concern  too:

Read the FIS Position Paper on Retentions which FIS advocates are an archaic way to manage quality and no longer fit for purpose.  They undermine a positive culture in construction and engender a lack of trust.  At the end of last year, the House of Lords debated how the Government could support the implementation of the Build UK Roadmap to Zero Retentions. The Government confirmed it favoured an approach taken forward by the CLC and we will be raising this issue with the Task Force in due course.

Read more about the work FIS is doing with the Small Business Commisioner on prompt payment.

Step 2: Move to Integrated Project Insurance.

Whilst our contracts bounce risk around like a game of pinball, our insurance does little to protect or manage it. A move towards project insurance would start to ensure that risks are clearly thought through from the outset and managed throughout, ensuring that the details are considered and we move away from the Build and Design culture that we find ourselves in.

 For more information on FIS Insurance Services click here.

Step 3: Establish a Building Safety Fund.

As the Grenfell Inquiry causes companies to revisit risks in the past buildings are being opened up.  As part of these investigations there is the essential review of fire safety, but a concern about who we will get to pay the bill.   Where there is genuine negligence, people should be held to account, but the culture now is that jobs are being revisited with the benefit of hindsight with a view to finding any minor issue that will enable some of that bill for re-work to be loaded on the sub-contractor responsible, whether or not it relates directly to the core issue identified.  The reality here is that few will be able to afford the punitive damage claims and will be wound-up. Many problems are simply symptoms of an industry that has been ground down for decades and we have to accept are based on endemic systemic failure, an industry no set up to succeed.

FIS re-iterated a pressing need to review Governmental approach here in November 2021.  We continue to support a number of Working Groups established to deliver meaningful change in terms of processes in construction and measuring and managing competence.

Find out more about FIS work on Delivering Quality in the New Normal

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