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The newsletter for RIBA Chartered Practices Valuable support for the business of your practice

In this issue: public sector procurement update, invaluable data from benchmarking, ‘Guerilla Tactics’, regional CPD, exhibitions and talks in London and around the country Summer 2012


RIBA President

Angela Brady

“Building Ladders is just the start of our work to improve public sector procurement.”

Angela Brady, RIBA President

The subject of procurement is at the heart of this summer’s RIBA Chartered Practice newsletter and it is a subject about which I am passionate. The RIBA has led a crossprofession investigation into current procurement procedures, and we recently published Building Ladders of Opportunity. This set out our recommendations to government for change, to create a streamlined procurement process that is fairer, more efficient and less expensive to clients, and one that delivers better designed and greener buildings. I do urge you to read the specially commissioned articles for RIBA Chartered Practices, and to read about the RIBA’s future plans on this subject. Building Ladders is just the start of our work to improve public sector procurement (www.architecture.com/procurement)

Through the RIBA Chartered Practice benchmarking scheme, businesses have invaluable data to help them make informed decisions that affect their business and improve their business acumen. Each practice that takes part receives their own bespoke report, and in addition the data amassed helps the RIBA lobby government from a position of knowledge about the profession. Please do take part in future surveys. Many readers will be RIBA Chartered Members, and this autumn the RIBA will be mailing new-style subscription billing packs, which set out our work over the last year with government and the public, and look ahead to what we will be doing to champion architecture in these challenging times. To our members, thank you for being part of the RIBA.

Follow Angela Brady on twitter: @angelabradyRIBA

RIBA Initiatives

Home Truths RIBA Research Symposium 2012

Home Truths

RIBA Plan of Work 2013: Major review underway

RIBA Research Symposium 2012 The RIBA’s 7th annual research symposium will try to find out whether old houses can become modern homes. With case studies from both architects and academics, and the presentation of an exciting student design charrette devised just for this event, the symposium will be an unmissable date in the autumn season. The event will address issues of conservation, sustainability and design quality in relation to domestic retrofit. Thursday 4 October 2012, 9.30am to 5.00pm. Venue: RIBA, 66 Portland Place. For more information and to book visit www.architecture.com/hometruths or contact research@riba.org or call 020 7307 3714

The RIBA is undertaking a comprehensive review of the RIBA Plan of Work. Below we set out the reasons and the rationale behind this review.

Refer a friend At the RIBA we’ve been supporting our members and the architectural profession for over 175 years. Our strength is our members and as the network grows so does the influence of our community and power of our voice. Why not tell a friend or a colleague about why you have decided to join the RIBA network and if they become a member you’ll receive a £25 RIBA Bookshop voucher to redeem online. To refer a friend email membership.development@riba.org or call 020 7307 3686 providing the name, email address and contact number of the friend you are referring, along with the category of RIBA Membership they will be applying for. Terms & conditions apply. For more information please visit www.architecture.com/jointheriba 2 RIBA Chartered Practice Newsletter

Half a century old Since 1963, the RIBA Plan of Work has been the definitive UK model for the building design and construction process, and has also exercised significant influence internationally. The Plan of Work framework has served both the architects’ profession and the wider construction industry well, but although it has been amended over time to reflect developments in design team organisation and alternative procurement arrangements, these changes have generally been incremental rather than strategically driven. The Plan of Work 2013 offers the opportunity to undertake a fundamental review of the RIBA Plan of Work, to ensure alignment with best practice from all the specialists within the integrated construction team, and to provide a renewed framework which will be fit for purpose for the next generation. The review process A Review Group, chaired by Dale Sinclair, chair of the RIBA Large Practice Group, has been established by the RIBA Practice and Profession Committee to bring forward proposals. The group has a remit to undertake a thorough review of options and to consider radical proposals where appropriate. Their review aims to conclude in late 2012 and future issues of the Chartered Practice Newsletter will keep readers up-to-date. A recent member survey stimulated an excellent response and general support for the proposals. For more information please see www.architecture.com/research


RIBA Publishing

“Probably the gem in the book is Chapter 5 which deals with bespoke professional appointment wording.”

Law in Practice: The RIBA Legal Handbook Book review by Koko Udom, Contracts and Law Manager, NBS

The publication of this book on Law in Practice in June 2012 could not have come at a more opportune time. Being released in the vicinity of two important reports on the legal segment of the industry, one national (National Construction Law and Contracts Survey Report by NBS) and the other international (Global Construction Disputes Report by EC Harris), which point to disputes and disagreements in the industry due to poor knowledge of the law and failure to properly administer construction contracts and related processes, this book provides a good resource for the discerning professional to update their knowledge of the law and avoid such disputes. Books on construction law have often times been inaccessible to the non-legal professional because of the legalese approach in writing them. This title breaks this mould by presenting important concepts in clear and easy to understand terms. This is evident from the opening chapter which explains the question ‘what is Law’ in a simple and practical way complete with a simple diagram that draws attention to the different sources of UK law. The book is divided into 10 chapters and covers most legal topics that an Architect would encounter in practice from contracts to tort, to the Architects role in a project, to professional indemnity insurance, disciplinary proceedings and dispute resolution. Throughout the chapters the author provides answers to common recurring questions, for instance it deals extensively with the issue of negligence, discussing the possible liability of an Architect for pure economic loss. It also covers the issue of concurrent liability in contract and tort, in doing this it takes up and explains many recent decisions including Robinson v PE Jones (Contractors) Limited [2011] EWHC. The book does not hold back in recommending best practice or advising against dangerous practice, in this regard it delivers a convincing argument against an Architect agreeing to contractual clauses where it indemnifies or offer indemnities to other parties. For those still struggling to get their heads around the changes wrought by the amendment of the Housing Grants, Regeneration and Construction (HGRC) Act 1996 by the Local Democracy, Economic Development and Construction (LEDEC) Act 2009, the book in different chapters explains the various changes and how it affects practice succinctly. The book keeps true to its practical approach throughout the chapters, for instance in chapter 10 it covers under its discourse of adjudication both theoretical aspect of the adjudication regime and how it works in practice including a section on ‘is it worth adjudicating?’ Two chapters of the book deserve special mention. In chapter 4 it takes on an overview of standard forms of professional appointment, where it provides detailed analysis of the RIBA Standard Conditions of Appointment for an Architect 2010 (2012 revision). This would be particularly useful to Architects especially the commentary on clauses that provides the reader with an understanding of the purpose of the clauses and the possible objections that may be raised by clients against these clauses.

Surprisingly the overview of other standard forms of appointment does not cover the CIC Consultants’ Contract (often recommended by the RIBA as a suitable alternative for large development projects), however it includes a brief overview of the NEC 3 Professional Service Contract, the Association of Consultant Architects Standard form of Agreement for the appointment of an Architect 2010 (ACA SFA/10) and the FIDIC Client/Consultant Model Services Agreement Fourth Edition 2006. Probably the gem in the book is Chapter 5 which deals with bespoke professional appointment wording. This chapter goes through a series of typical clauses that may be proposed for a bespoke appointment contract uncovering the many dangers that seemingly harmless clauses may hold, thereby providing the Architect with knowledge to negotiate against them. This is very important in the light of NBS survey results indicating that majority of professional appointments in the industry are undertaken using a bespoke form. Typical clauses covered include additional services clauses, definition of documents and its possible copyrights implication, definition of losses in relation to liability for breach of contract, pre-existing design clauses. In conclusion, the book certainly meets the author’s objective of providing a book that describes as simply as possible the law an Architect should know and providing tools to enable Architects work through construction law queries successfully. As can be deduced from the foreword written by Angela Brady (President, RIBA), the current title ranks in the same class as the Architect’s Job Book and Architects Handbook of Practice Management and is an invaluable asset for the Architectural professional. Law in Practice: The RIBA Legal Handbook, written by John Wevill, Head of Non-Contentious Construction Law at Fishburns LLP, published by RIBA Publishing, is priced at £35.95, and is available from www.ribabookshops.com.

RIBA Chartered Practice Newsletter 3


Working to improve better public sector procurement – an update

Business Watch

“The effectiveness of public procurement is vital to our economy, our environment and most importantly, to the users of buildings. We need procurement that delivers buildings of the best value and highest quality. Angela Brady, RIBA President, has plainly stated that she sees this issue as her number one priority. The UK public procurement process is expensive and inefficient. Not only that, it all too often delivers buildings that are of substandard design quality and sustainability – all the while locking out a large proportion of design talent by simple dint of practice size. A totally effective procurement process has long been recognised as an industry ideal – albeit one that’s a long way from realisation. However, the ongoing economic downturn has brought the issue very much to the forefront of the Government’s Construction Strategy with a drive to reduce the cost of procurement. The RIBA has taken a strong line in the debate. Angela Brady stresses that, “It’s important that we don’t just analyse the problems of the past. We need to look to the future and see how we can improve and streamline the procurement procedure and strive for better outcomes. We need construction procurement that is better, leaner and greener, that discourages waste, encourages innovation and promotes a more collaborative and efficient way of working across the whole construction team.” Significant reforms are already afoot at both EU and national level. In Brussels, a revised EU public procurement Directive to reform the framework of national regulation is being negotiated. In the UK, significant reforms are being undertaken in line with the Government Construction Strategy, with the central aim of reducing costs by up to 20% by 2015. Alongside this, the Low Carbon Construction Action Plan sets out ambitions to lower drastically the built environment sector’s carbon emissions by 2050.

“Survival of the fittest does not necessarily mean survival of the biggest. Thankfully, it now seems that Government might be actively challenging its mindset of Big Is Beautiful.” So how is the RIBA responding? Last autumn, an RIBA Procurement Reform Group was set up to support the Institute’s determined efforts in the area. A report with tangible recommendations for change at an EU, UK and industry level was consulted upon by a diverse spectrum of member groups across the country. There was also vigorous debate among other professionals within the construction industry and their representative bodies. The combined result, recently published, is a comprehensive report and set of recommendations, “Building Ladders of Opportunity: How reforming construction procurement can drive growth in the UK economy.”

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If the in-depth findings make for somewhat predictable reading, the statistics themselves are nothing short of a wake-up call. While the construction industry has an annual turnover of more than £100 billion and represents almost 10% of British GDP, a full third of all professional fees earned were found to be procurement-based. And, while the UK has by far the highest average contract values in the EU, procurement is at least 20% more expensive than elsewhere in Europe and the average process a full 50% longer that the EU mean. Within the report, the RIBA condenses these extensive findings down to three key recommendations.

Recommendation 1: Further examine the best ways to drive efficiencies and savings to ensure the public procurement system functions in the best interests of all those it serves. Many aspects of procurement conducted in the UK are simply not in line with good practice elsewhere in the EU – and much more can be done to streamline and remove complexities from the system. Alongside that, better commissioning at the outset and guidance for clients on how to do this – as well as a muchneeded simplification of the PQQ system – would all improve the quality of the outcomes for clients. After all, the public procurement system must function in the best interest of all those it serves; namely, the public, public clients and those businesses that tender to undertake this important work.

Recommendation 2: Embed processes that ensure buildings are sustainable by focusing on design outcomes. Whilst work under the Government Construction Strategy is progressing quickly, implementation of the Low Carbon Construction Action Plan – and wider work on social value – is not progressing in tandem. The drive under the former, towards cost efficiency, has caused concerns that design quality (including sustainability) is just not being given enough attention. The RIBA strongly calls for greater focus on outcomes and value in the longer term. This could be achieved by looking to contracts being awarded for ‘the most economically advantageous tender’, and by defining whole-life costing as well as better post-occupancy evaluation. It’s hoped that the European Parliament’s amendments to the draft EU Public Procurement Directive will drive a greater focus on sustainability. But focusing processes at home on understanding how to ensure quality of outcomes – as well as to lower costs – is crucial if the Directive is ever to get close to the RIBA’s ideal for it.


Recommendation 3: Create a competitive market by increasing access and allowing the public sector to take full advantage of UK design talent. Whilst the Government Construction Strategy favours aggregation of procurement, to help reduce administrative burdens and achieve cost efficiencies, a vast swathe of the profession is therefore automatically shut out of the procurement process. The RIBA is adamant on this point. Namely, that the perennial failure to deal with how best to ensure the participation of smaller businesses has undoubtedly seen innovation and design quality degraded. One part of this is obviously caused by a failure to define proportionality properly, so that disproportionate and unnecessary procurement practice can be challenged and refined. With 80% of its membership in practices with 10 staff or fewer, the RIBA knows it’s absolutely crucial that better ways are found to guide public clients on what sort of requirements are proportionate to what sort of project. Put simply, this is the only way to enable the majority of UK architects to provide their services to the public – and thus foster a more competitive market. A competitive and dynamic market is surely the best way to ensure the right balance of cost and quality. Survival of the fittest does not necessarily mean survival of the biggest. Thankfully, it now seems that Government might be actively challenging its mindset of Big Is Beautiful.

What is the RIBA doing now? Together with the Architects Council of Europe, the RIBA has highlighted a number of areas of the draft Directive that need amending. These proposed amendements have been put forward to the European Parliament and Brussels will be negotiating on them in the autumn. Once parliament agrees a package of amendments, there’ll be negotiation between parliament and the Council

of Ministers. The current aim is to publish a final Revised EU Directive before the end of 2012 (although the beginning of 2013 is a more realistic timescale.) These measures would be rolled out in 2014/15 and the Directive should have a shelf life of at least ten years. To advance changes at a UK level in the meantime the RIBA will be meeting with government officials to discuss various areas of the RIBA’s report. The issue of Intelligent Commissioning is key – the need to put in place support and guidance systems for public sector clients on how to put together the right brief for the right design outcomes. What can RIBA members do? Whilst the UK Government and the EU is committed to refining and redrafting some of the existing policy and legislation, much of the interpretation of this policy – by bodies such as Local Authorities, Housing Associations and Healthcare Trusts doesn’t follow good practice. The Cabinet office has instigated a Mystery Shopper service in order to make it easier for suppliers, and those bidding for contacts, to report poor procurement practice within public bodies. The Government has pledged to investigate each complaint received and take action where possible, to ensure practice is improved. To find out more, just visit www.architecture.com/procurement The RIBA strongly encourages RIBA members to use this service. It presents a good opportunity for members and practices to make themselves heard. It’s also a chance to engage with local authorities and other bodies through RIBA branches to highlight good practice. An RIBA regional road show, to support engagement with local authorities, is planned for later in the year. The UK government has the opportunity to aid the country’s economic recovery and growth by reforming the construction procurement system. The RIBA’s recommendations play an important part in that. The end is one that everyone can gladly aspire to – a more efficient, more sustainable and more equitable system for all.

What is the RIBA doing next? We will be: • continuing to work with ACE (Architects Council of Europe) and MEPs on input to the EU legislative process • continuing to work with and lobby UK Government in respect of input into the Government’s Construction Strategy and government procurement reform • promoting RIBA regional roadshows on procurement reform proposals and outlining how RIBA members can work with local authorities and other public bodies to improve procurement practice • inputting into the review of PAS91 (Publicly Available Specification) and its application to prequalification services and processes • promoting the government’s ‘Mystery Shopper’ service via the Cabinet Office website www.cabinetoffice.gov.uk/content/cabinet-office-mystery-shopper-scheme

RIBA Chartered Practice Newsletter 5


NBS

Figure 1 – The NBS Domestic specification writing user interface

NBS for small domestic building projects Dr Stephen Hamil, Director of Design and Innovation at NBS

When most people in the construction industry think of NBS they immediately think of large projects. However, more and more practices that work on small domestic building projects are now using the NBS Domestic online specification writing tool. Since its release at the end of 2010, almost 1,000 practices have used the service and hundreds of these have used it on a number of projects. The specification content is designed especially for work on small domestic buildings and it includes clear and concise work sections of the type typically needed on projects of this nature.

One of the key differences between NBS Domestic and the more traditional NBS specification products is that the tool runs through the web browser. This means that there is no need to purchase or install any software. It also means that it may be used on any platform, PC or Mac, using Google Chrome, Apple Safari or Microsoft Internet Explorer. Another fundamental difference is that NBS Domestic has a ‘pay-per-project’ payment model. The user simply registers for an account, pays a small amount and then completes the specification within a very intuitive user interface. Writing your specification The first task that is required when starting to write a specification is to select the work sections and the contract particulars for the relevant construction contracts, which include JCT Home Owner, JCT Minor Works and SBCC Minor Works. The 22 work sections provided cover site preparation, building fabric, landscape and services for domestic building projects. Figure 1 shows how the user may edit the template specification clauses that are within each work section. In the example given, the user simply goes through the clause items within the Wood Weatherboarding system outline clause. They remove items that are not relevant to the project and complete the items that are. Suggested drop down values and expert technical guidance are provided to help with the completion of each clause.

NBS National Construction Contracts and Law Survey 2012 By Adrian Malleson, Research and Analysis Manager, RIBA Enterprises “We could see a real desire for construction to be a collaborative, team-basedenterprise where extra value is generated through cooperation.”

From March to April 2012, NBS ran its first survey about contracts and legal issues within the UK construction industry. The objective of the survey was to understand: • The different contracts and procurement methods being used • At what point in the process contracts are signed • The number and kinds of disputes taking place • How frequently partnering or collaborative working are used in construction projects More than 20 industry bodies, including the RIBA, assisted in disseminating the survey and we received over 1,000 responses from across the industry. This cross industry participation has meant that, for the first time, the UK now has had a broad based, independent survey of these areas. The responses weren’t just from architects and other consultants: clients and contractors took part too and the report breaks down responses by each group. The findings give a full and at times startling picture of the UK construction industry’s relationship

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with contract and law. In some ways, the industry remains rather traditional. The future envisioned by Latham and Egan of high levels of collaboration, team integration and partnering have, at best, only been partially realised. The survey results show that traditional forms of contract still dominate the industry, with 65% of respondents choosing JCT Contracts as their preferred contract choice and 72% of respondents having used a JCT Contract at least once in the last year. That said, NEC Contracts, which are more associated with non-traditional, collaborative working and procurement, have a firm place in the industry. 16% of respondents state that NEC is their preferred choice and 29% have used an NEC Contract at least once in the last year. For standard forms of contract, JCT and NEC dominate; together they are used more than all other standard contract types combined. “Bespoke” contracts are also widely used with almost one quarter of respondents having used them in at least one project in the last year. Twenty years ago, the Latham Report concluded: “Endlessly refining existing conditions of contract will not solve adversarial problems. Public and private sector clients should begin to phase out bespoke


Each work section has a logical structure starting with system outline clauses, then the product clauses and then a number of workmanship clauses to provide a concise yet robust specification. The content within NBS Domestic is updated by the Technical Team at NBS throughout the year. This means that when a work section is added to a project, a user may be confident that it is up to date and will reference the latest construction standards and regulations. Publishing your specification Once the specification is complete then a professional looking PDF may be generated that can be downloaded to create part of a tender package. The finished document looks just like a traditional NBS specification, with cash columns to the right of the page that allow for easy pricing by the contractor. Free software downloads are also available so that the information from a specification can be used for different tasks. The free NBS Annotator tool works with the data output from an NBS Domestic specification so that CAD drawings and schedules can be quickly annotated with the NBS project clause references. The NBS Cost Tracking tool can also work with this data so that pre-tender cost estimates can be prepared, tender comparisons can be made and costs can be tracked as they progress throughout the construction stage. In little over twenty months NBS Domestic appears to becoming the defacto standard specification for small domestic construction jobs in the UK. It is really nice to see a simple, low cost tool, which works through modern internet technology, satisfying a real construction professional need.

documents”. That “phasing out” is therefore turning out to be a long process – but one we’ll be able to track with subsequent surveys. The adoption of electronic working also shows the traditional ways of working still remain. Whilst we continue to envisage an electronic future of BIM orientated, collaborative working, more than 40% of consultants and clients are still not using electronic tendering at all. There’s work to be done. The report also gives an understanding of the number of disputes: both the perceived trend in the number of disputes in the industry and the number of disputes actually gone into by respondents. 92% of the respondents agreed that the number of disputes in the sectors had either increased or stayed at the same level, with the current state of the economy being most often described as the cause. This somewhat dark assessment is borne out by almost 25% of those taking part in the survey having been involved in a dispute during 2011. It is significant that 49% of contractors who completed the survey tell us that “poor specification” is a “most difficult or recurrent issue” leading to dispute. Together, the issues people gave as the causes of dispute make clear the need for jointly owned, standardised information. A clear information model including tight specification and variance tracking can help prevent legal action later.

What our users say “The start-up process involves a very simple online purchase and form that incorporates the JCT Home Owners Contract and as such is good value in this respect. The process of completing the preambles and initial sections is very user friendly and it is simple then to move onto the specific sections, if you have your drawings to hand it’s very easy to use standard clauses or add in specific information from the drawings as well as some spec obtained directly from the suppliers / manufacturers. My one suggestion to NBS would be that a little more template content would be useful as more and more domestic projects involve new materials and finishes more akin to commercial projects. But on the whole a good experience and hopefully it will be of great benefit to the client in terms of product specification and call-off on site (self-build).” Adrian Williamson Director at WM Design & Architecture Ltd For further information go to theNBS.com/Domestic

So, the overall picture that emerges is one of an industry that still makes use of traditional methods but which sees the place for more innovation. In many of the comments people made when completing the survey we could see a real desire for construction to be a collaborative, team-based enterprise where extra value is generated through cooperation. We hope to be moving towards a more collaborative industry. This move towards collaboration goes hand in hand with the move towards shared, co-owned information as well as in the choices of contracts and working methods. One of the most, if not the most, significant impediments to true team working and collaboration is legal dispute whether actual, threatened or envisaged. The survey uncovered these disputes are disruptive, expensive and not uncommon. That’s why from the outset, projects need standardized, shared information models that are easy to update, maintain and act upon. These need to clearly delineate where risk and responsibility lie. That’s not to say the solution is just a technical one, or one of keeping records, though doing these things well can only help. Any information model, any discharge of a contract, can only be as successful as the team that creates and uses it. The first National Construction Contracts and Law Survey is now available to read at www.theNBS.com/Topics/ContractsLaw.

RIBA Chartered Practice Newsletter 7


Practice Issues

Benchmarking: providing invaluable data to RIBA Chartered Practices… and to the RIBA By Caroline Cole, founder and director of Colander undertakes to improve perceptions of the role and worth of architects will be greatly enhanced if it is founded on evidence based research: about the profession, the value that it brings to the country in general and to the world of corporate and domestic construction in particular. In today’s market, if the RIBA’s lobbying voice is to be heard then it needs to have at its fingertips hard information about the profession: its size and value; the way it is structured; the sectors of life in which it is influential and those where it is less so; its strengths and weaknesses and the opportunities that it offers to individuals, to the built environment, to society and to the greater good. This is one of the reasons why it is so important that each RIBA Chartered Practice completes its business benchmarking questionnaire. The collective knowledge that the RIBA gains from

While the RIBA’s latest employment and earnings figures show the tentative beginnings of an upward trend in earnings across the architectural profession, it still paints a pretty gloomy picture for sole principals who account for more than a fifth of architectural practices in the UK but average the lowest earnings across the profession. It is especially gloomy to see that those aged between 35 and 39 – an age when outgoings on home and family are likely to be peaking – average less than £25,000 per year. Even for the most dedicated professional, after some seven years of training and a similar number of years in practice, this really is scant financial reward. The reasons why architects are often so poorly rewarded has been the subject of many a debate and while some are the result of market forces that

Average expenditure and profit per fee earner For practices with fewer than five headcount

£14,270

For practices with more than 50 headcount

£35,576

£15,276

£44,484

Average Expenditure per Fee-Earner Average Profit per Fee-Earner

“In today’s market, if the RIBA’s lobbying voice is to be heard then it needs to have at its fingertips hard information about the profession.”

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are beyond the profession’s control, others can be influenced both collectively through the RIBA and individually, by each practitioner. There is increasing competition from people outside the profession; this is fuelled by public ignorance of how an architect might add value and perceptions that architects are an expensive luxury; to make matters worse, fees are being scrutinised as the age of austerity takes hold and practices therefore need to ‘work smarter’ if they are to turn anything that approximates to a healthy profit. But there are huge inefficiencies in the way many projects are run and an endemic lack of business acumen within the profession, which means that many architectural offices simply waste large portions of their hard fought fees without realising that small changes to the way they operate could make a substantial difference to the bottom line. As with everything in life, knowledge is key and any marketing or lobbying activity that the RIBA

this survey goes a long way towards furnishing the hard facts that are needed to strengthen its hand when lobbying Government and influencing private industry, the construction world and the public at large. This information also helps the RIBA focus attention on the most critical areas of architectural business for its members and for the profession. However, the RIBA’s use of the survey data is in many ways secondary to the value that the survey brings to individual practices. It furnishes even the smallest of practices with valuable information that should help sharpen business acumen. Of course, every architect is entitled to be less than efficient in the way that he or she runs their business and it is true that, for many, creating a piece of architecture of which they can be proud is more important than turning profit. However, it also makes sense for practices to avoid wasting money without any tangible return, after all there are so many ways


Percentage breakdown of expenses (excluding salaries) For practices with fewer than five headcount

For practices with more than 50 headcount

37

Premises

34

“The more that is known about how a practice operates, the easier it is to hone its performance and balance effective business management with professional creativity.”

IT, telecoms and equipment Marketing Other 34 16 21

8

43 6

that a good profit can be invested: visits to exemplar projects; training in new technology; research into new materials or a given building type; investment in competitions that will stretch the imagination and bring intellectual debate to the office; and that’s all before thinking about paying an above average, professional wage for the professional job that architects do. Without an income that does more than simply pay the bills, these sorts of aspiring, professional ambitions are hard to achieve. The more that is known about how a practice operates, the easier it is to hone its performance and balance effective business management with professional creativity. The business benchmarking survey for RIBA Chartered Practices addresses a number of different business measures and

benchmarks that can pinpoint where individual practices might be losing profit and highlight areas for concern or where there is an opportunity to develop the business further. Each practice receives a comprehensive benchmark report that looks at the profession across the UK – focusing on statistics and trends by location in the UK and also by size of practice, so it is tailored to give as much pertinent information to as many practices as possible. In addition each practice receives its own practicespecific report that identifies how the practice is performing against a number of key business benchmarks. If further practice specific detail is required, then a more detailed report can be commissioned from info@colander.co.uk.

Percentage of each client type, by number of clients For practices with fewer than five headcount

6

For practices with more than 50 headcount

52

4

5

41

Domestic Clients

7

Private Clients 10

Public Sector Clients

23

Contractor Clients

25

27

Other Client Types All charts show results from the 2011/12 survey

RIBA Chartered Practice Newsletter 9


NBS

Procurement: To buy or not to buy... By Roland Finch BSc FRICS, ACI. Arb, Technical Author, NBS

Procurement is described as the acquisition of goods or services and there are many ways by which goods and services may be acquired. Most organizations will have a procurement strategy of some kind, although they may not know it by the same name. Often, procurement of built assets will simply involve acquiring completed ones, either by purchase or lease. Where, however, the construction of a new asset is involved, or the maintenance of an existing one, the appointment of a third party to carry this out is usually achieved through a process of Tendering. Tendering is essentially a bidding process. The person commissioning the work states precisely what they want, including specifications of materials, workmanship, terms and conditions, and each Tenderer states the price that they offer to do it for. The offer is then accepted, using the legal principle set out in Carlill v Carbolic Smoke Ball Company [1893] EWCA Civ 1, and the two parties become “Employer” and “Contractor” respectively (or whatever the terms of their contract calls them). Simple, you might think. But there is a steady stream of court cases, alleging that a Tendering process has been administered unfairly, or the rules not observed correctly.

Roland Finch BSc FRICS, ACI. Arb is the author of the NBS Guide to Tendering for Construction Projects which is available from www.ribabookshops.com

Legislation So what needs to be an integral part of the procurement process? Probably the most important item is who the Client is. If they are a public sector organization, or the project is funded by one, then it is likely to be governed by the Public Contracts Regulations 2006. Much of the content of the regulations is good practice, but for public contracting authorities, central purchasing bodies and economic operators (as defined) they have statutory effect, and the penalties for contravention may be far-reaching. In the case Mears Ltd v Leeds City Council [2011] EWHC 2694 (TCC), the court instructed a financial payment to Mears, as a consequence of alleged unfairness in the process, but it is not uncommon for orders to be made to suspend or re-run the entire proceedings, irrespective of the disruptive consequences of such an event. The Public Contracts Regulations were made in ten parts; but section two is perhaps the most crucial, as it deals with technical specifications, and requires: A contracting authority shall ensure that technical specifications afford equal access to economic operators and do not have the effect of creating unjustified obstacles to the opening up of public procurement to competition. It makes perfect sense that if tenders are to be prepared on an equal basis, then it means each Tenderer is preparing their bid based on the same information, but it is still possible to specify requirements that some will be able to satisfy more easily than others, and this is what the legislation seeks to outlaw. It’s also worth remembering that the legislation is also designed to increase competition, despite the argument by many that a collaborative approach leads to improved efficiency and better out turn costs. However in the UK there

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are a number of specific exemptions which relate to Public/Private Partnerships (PPP) or Private Finance Initiative (PFI) arrangements, where more detailed solutions are usually developed once a preferred bidder has been appointed. There are some overarching requirements to consider, most notably sustainability. The JCT Sustainability Working Group, for example, is reviewing their documents with the intention of embedding things like responsible management and resource use into all processes. Many commissioning bodies already incorporate sustainable measures into their selection and evaluation processes. Similarly, as well as a statutory duty to make arrangements for proper administration of financial affairs under Section 151 of the Local Government Act 1972, many public sector bodies were also placed under a statutory to provide “Best Value” under legislation brought in during the late 1990s. For private sector organizations the rules are more relaxed, but not much. Although private sector organizations are not bound to follow the Public Contracts Regulations, recent legislation such as the Bribery Act 2010 have brought into sharp focus, the consequences of behaviour which might cause a person to “perform improperly a relevant function or activity”. Many of these organizations will have procedures which govern procurement. Directors of publicly listed companies are under similar duties of financial probity to their shareholders. Review of Procurement practice The Public Contracts Regulations 2006 is based on EU legislation – specifically in this case, Directive 2004/18/EC. Since the Directive was issued, a further twelve states have joined the EU. There have also been a number of recent developments and legal cases concerning interpretation of the Directive and its implementation into Member States’ law. The number of challenges also reflects increased understanding and sophistication of clients and contractors alike when it comes to observing the procedures laid down under the legislation. As a consequence, the European Commission is currently consulting on the wording of a revised Procurement Directive, currently expected in 2014. The RIBA has also published a report: Building Ladders of Opportunity – how reforming construction procurement can drive growth in the UK economy (RIBA 2012). Summary Procurement is fundamental to many industries, but particularly construction. Because of its disparate nature – more often than not, much of the work is carried out by specialist subcontractors, there are a number of links in the supply chain, so procurement figures prominently, as does the potential for problems. So it is correct to focus on procurement as an area for investigation. The RIBA report is the first part of a new programme of work by the Institute on construction procurement, and is to be commended for its effort.


RIBA Initiatives

Guerrilla Tactics 2012 in association with HP: New Frontiers

RIBA CPD Events 2012

Tuesday 6 November 2012 Conference Day 9.30 – 5.30 followed by an evening Building Futures debate Wednesday 7 November 2012 CPD Day 9.00 – 5.00 Venue: RIBA, 66 Portland Place

For further information on the RIBA CPD Programme visit www.architecture.com/cpdprogramme or email cpdclub@riba.org

Tickets for the RIBA’s flagship annual conference are now on sale; see www.architecture.com/guerrillatactics. With changes to the political landscape and advances in technology, practices are being faced with new frontiers; Guerrilla Tactics will explore how architects can get the most out of these exciting opportunities. Alongside the conference, Hewlett-Packard will host a technology clinic for delegates on both days to show you the latest technology to aid your business. HP creates new possibilities as the world's largest technology company and brings together a portfolio to solve customer problems. Tuesday 6 November – Conference Day The conference will open with an overview of topical government policies and initiatives with confirmed speakers including senior civil servants Steve Quartermain, Chief Planner, Charles Phillips, Department of Energy & Climate Change and Terrie Alafat, Director of Housing Growth and Affordable Housing. Other sessions will explore: • Engaging with local communities • Punching above your weight in the international arena • Making the most of social and online media • The exciting Live Pitch 2012: Floating Cities – The Final Frontier? In the evening delegates will have the opportunity to attend a public Building Futures debate on the future and resilience of our regional cities with the motion: This house believes… that London will become more trouble than it’s worth. Wednesday 7 November – CPD Day A full day of 30 CPD seminars covering all ten topics from the RIBA CPD Core Curriculum and including sessions from expert practitioners on relevant issues including the business benefits of adopting BIM; preparing fee proposals that your clients can understand; and how to build sustainability into your practice. For the full programme go to www.architecture.com/guerrillatactics Book your place now to get the early bird rate, only available to RIBA Members!

RIBA Members can benefit from an early bird discount up until 30 September 2012!

RIBA Member Early Bird One Day: £135 plus VAT Both Days: £215 plus VAT Full price One day: £175 plus VAT Both days: £295 plus VAT For a full breakdown on the event including a list of speakers and to book online visit: www.architecture.com and go to GuerrillaTactics on the WhatsOn/Conferences menu, or contact: guerrilla.tactics@riba.org or call 020 7307 3714.

RIBA Core CPD Programme BIM: Compete or collaborate? 12 Sept – Cardiff, 27 Sept – Birmingham, 16 Oct – Exeter, 18 Oct – Cambridge, 5 Dec – Reading. The setting of heritage assets 13 Sept – Bath, 20 Sept – Crawley, 25 Oct – Birmingham, 14 Nov – Cardiff, 22 Nov – Cambridge. Understanding design risk management 13 Sept – Gateshead, 18 Sept – Exeter, 26 Sept – Nottingham, 17 Oct – Leeds, 21 Nov – Manchester, 22 Nov – Liverpool. Sustainable refurbishment projects: from concept to completion 13 Sept – Reading, 19 Sept – Leeds, 17 Oct – Manchester, 18 Oct – Liverpool, 13 Nov – London, 28 Nov – Nottingham. Inclusive design: what the guidebooks don’t tell you 13 Sept – Cambridge, 7 Nov – Crawley, 8 Nov – Reading, 29 Nov – Birmingham, 5 Dec – Cambridge, 6 Dec – Bath. Contract procurement strategy & awareness 18 Sept – London, 11 Oct – Gateshead, 8 Nov – Bath, 21 Nov – Leeds. Financial management for architects 19 Sept – Manchester, 20 Sept – Liverpool, 10 Oct – Reading, 11 Oct – Bath, 16 Oct – London, 24 Oct – Nottingham. Future thinking in building regulations 10 Oct – Cardiff, 18 Oct – Crawley, 8 Nov – Gateshead, 13 Nov – Exeter. RIBA Additional CPD Events September Asbestos Awareness, 18 Sept – Newcastle. Stylish architectural detailing, 19 Sept – Cambridge CDM & Design Risk management, 25 Sept – Haverfordwest. Future Leaders – Networking to generate business 26 Sept – Manchester. Handling conflict: managing customer, supplier & team conflict, 27 Sept – Cambridge. October Administration of defects under JCT/ NEC contracts, 4 Oct – Cambridge. The RIBA Conservation Register explained, 23 Oct – Haverfordwest. November Appointment Agreements & fees, 7 Nov – Cambridge. December Changes to the Building Regulations 2013, 6 Dec – Cambridge. RIBA CPD Provider Roadshows For further information email cpdroadshow@ribaenterprises.com RIBA Chartered Practice Newsletter 11


Culture and Events

Around the country

Exhibitions at 66 Portland Place

Talks from the experts in the East of England. Hear about four RIBA award-winning projects straight from the architects who designed them. Sessions include Q&A.

Design Stories – The Architecture behind 2012 Until 25 September 2012 With the world’s eyes on London this Summer, Design Stories examines the architecture and engineering behind the 2012 sporting venues through a unique collection of models, images and videos. The exhibition draws back the layers of complex engineering and reveals the principles behind the venues.

The Dune House, Thorpeness, with Meredith Bowles. Thursday 27 September, 6.00pm – 7.30pm Designed by Jarmund Vigsnaes Architects and Mole Architects. The Sainsbury Laboratory, University of Cambridge, with Alan Stanton. Thursday 4 October 6.00pm – 7.30pm Shortlisted for the 2012 RIBA Stirling Prize Stanton Williams.

The Sainsbury Laboratory, University of Cambridge. Stanton Williams.

After the Party – The Legacy of Celebration Until 27 November 2012 Drawing on the RIBA’s unique collections, it examines the lasting social and urban impact of buildings created to celebrate a particular moment in time.

Brentwood School Sixth Form and Assembly Hall, with Simon Tucker. Thursday 8 November 6.00pm – 7.30pm Cottrell and Vermeulen Architecture Ltd. Royal Veterinary College Student Village, North Mymms, with Russell Brown. Thursday 6 December 2012, 6.00pm – 7.30pm Hawkins\Brown. All talks take place at the Centre for Mathematical Sciences, Cambridge, Wilberforce Rd, Cambridge CB3 OWA except 4 October, which takes place at the The Sainsbury Laboratory, University of Cambridge, Bateman Street, Cambridge, CB2 1LR. £10/£5 for under 18’s. Tickets (per talk) include a glass of wine or soft drink. Advance booking essential at architecture.com/east For further details contact delyth.turner-harriss@riba.org 01223 566285.

Decorations for the Coronation of Queen Elizabeth II, Cirencester. Designer: Hill, Oliver (1887-1968) Artist: Wainwright, H. L. Architectural Press Archive / RIBA Library Photographs Collection.

FIVE by 5: David Morley Architects 20 September – 23 October Celebrating 25 years and marking the publication of their new book ‘Five by 5’ this retrospective exhibition by David Morley Architects brings together a diverse range of projects from the past quarter century.

This newsletter is printed on 100% recycled Forest Stewardship Certified stock using vegetable-based inks

RIBA Liverpool City Tours Walking Tours, until 31 October Join the RIBA guides on a walking tour which tells the story of Liverpool, past, present and future through its buildings and public spaces. ‘Gateway to the World’ runs 11.00am Sundays and 2.00pm Wednesdays and ‘City of Culture, Learning and Faiths’ runs 10.30am Saturdays. Various meeting points in Liverpool. A Winter tour programme will operate from November. www.architecture.com/liverpoolcitytours £7.50 / £4.50 concessions. To book please call 0151 707 0729. Contact anna.johnson@riba.org for more information.

12 RIBA Chartered Practice Newsletter

The Architecture Open 1 October – 3 November The Architecture Open exhibition showcases the wealth of creativity of RIBA members in London, who were invited to submit projects, paintings, drawings and models of conceptual, live and past projects. 21 Years, 21 Awards: The Work of Richard Murphy Architects 29 October – 24 November Ranging from arts and education buildings, to community spaces and housing, Edinburgh-based Richard Murphy Architects have worked in many varied areas.


RIBA Chartered Practice newsletter summer 2012