Construction Industry Norms

The data sample has been shown to be a cross section of the industry with all major sectors represented and a range of company sizes also included. Although this research makes no attempt to generalise the findings across the wider industry it is important to consider the norms of the sample under investigation and how these may influence the findings. These norms will be considered in four distinct aspects, namely procurement approach, which has a direct impact on the responsibility and liability of any

quantification, measurement practice, which is concerned with the actual act of quantification itself, communication channels, which as identified in chapter three are essential for the diffusion process and finally professional body influence, as the RICS is the most represented professional body within the QS profession.

5.3.1 Procurement

D&B procurement was reported as being the most common, with any traditionally procured projects being of the drawings and specification variety. Only two CQS respondents have seen a BQ in NRM format. SW – CM-RICS-C-£M-M had a poor experience with it, and the other was MR – Dir-RICS-C-£S-S who had seen a project in NRM format but was unsuccessful at tender stage. Of the other traditional schemes mentioned by respondents all BQs were produced using SMM7.This has significant implications on the responsibility for measuring quantities as it means that the contractor is now responsible, and that the PQS has no requirement to provide any quantities at all, a position that is recognised by the RICS (2013d) within the NRM2 which clearly suggests that the NRM2 is not purely for the PQS to produce BQ’s with.

Not all respondents were particularly complimentary of D&B with DM – CE-C-£M-M stating that is had “ruined all our lives” with particular reference to the amount of risk transfer and the shorter tender periods, and several respondents referring to D&B as

‘Design and Dump’. GS – CM-C-£M-M states that with regard to the design aspect there is little to no flexibility and that “They know what they want; they just want

somebody else to have the risk”, but they are working in an environment where they do not get any choice. These findings are in line with those of the RICS contracts in use survey (RICS 2010) and the use of D&B shows no signs of slowing down.

This responsibility for the quantification of work has had a direct impact on the

diffusion of NRM across the industry, and in particular with the CQS respondents who had all rejected the NRM. This is a direct result of the current nature of main contractors who sub-contract the majority of the work to specialist sub-contractors and this in turn adds another layer of responsibility for quantification as it can now be undertaken by the main contractor or pushed down to the sub-contractors. This in turn has a direct influence over the measurement process and therefore the diffusion of any new practice.

All CQS respondents highlighted this as their largest risk when contemplating using a new standard method of measurement. The supply chain itself is temporary by nature as it is project dependent, although many main contractors do utilise the same

sub-contractors regularly, there is no guarantee and the project type, location and size all play their part in the selection process. What this means is that main contractors are constantly requesting price data on projects from numerous sub-contractors and have to rely on this data when they are tendering for the work, often within tight timescales.

This was universally cited as a significant risk for the main contractors and is one of the main reasons why they are currently happy with their current working practices, with the term ‘if it isn’t broken don’t fix it’ being heard several times to support this. There was no consistency identified in the allocation of quantification with most CQS’s reporting that they provide quantities where possible, but not always, while a few reported that they always leave the quantification to the sub-contractor to avoid any liability issues with the measure. One respondent even suggested that they provide quantities, to increase the chances of getting prices returned, but then state that they are indicative and will not form a part of the contract, leaving all responsibility with the sub-contractor. This individual approach of the CQS respondents supports the findings of Kale and Arditi (2010) who suggested that construction companies are more

influenced by their own internal operations and workload than that of other companies within the same social system.

What is clear from this is that predominantly the responsibility, and therefore liability, for measurement rests with the main contractor and that they are often willing to pass this responsibility down their supply chain. This helps to understand the social

structures involved in the measurement of building works and therefore forms a part of the social norms that influence the QSs in their daily activities, and subsequently the diffusion process.

5.3.2 Measurement

As identified above, the main contractor determines the current dominant measurement practice within the industry. This highlights several aspects that contribute towards the diffusion of the NRM and also how those main contractors deal this with on a practical level.

All but one respondent was not using a standard method day to day. The actual methods will be discussed separately, but the main consensus among the PQS respondents was that they were putting together a pricing document, and that ultimately this was reflective of their previous projects with some possible project specific amendments.

Some respondents said that their pricing schedules were comparable to the NRM, but based on their apparent lack of knowledge of NRM this is unsubstantiated. The PQS respondents did say that they would usually ask for quantities from the tendering contractors, but that they would not be specific about the format they were provided in.

The main concern revolved around the contractors cost data being able to map with the original pricing document, so that comparisons could be made with pre-tender estimates and also across projects within the company. There was no common consensus among the PQS respondents about what this pricing document should contain or its structure, which is understandable as the PQS are only responsible for monitoring the cost, not determining it and therefore they have a very different perspective to the role of the quantification of the works.

The first key finding was that the contractors interviewed all had experience of having their quantities produced by a third party. Some utilised these services on all projects, while others only when there was a particular need, for example if there were resourcing issues during a tender period. Universally the CQS’s interviewed highlighted issues with the quality of the quantification produced by these third parties and that it then

became an exercise in checking someone else’s work for errors before it could be priced. This is just moving the quantification of work further down the supply chain with little benefit to either of the main parties, but the CQS’s cited the tight timescales for tendering projects as being the main rationale for this type of decision.

DM – CE-C-£M-M suggested that although he had found a mixed quality of work being produced, he still preferred to undertake the work in house. Other CQS

respondents preferred to undertake the quantification in house as this allows them to become more familiar with the project which in turn can increase their competitive advantage and also give them more knowledge of the project if they are required to partake in contractor selection interviews, for example. Again, this was dependent upon current workload and staffing levels.

Both GS – CM-C-£M-M and VR – CM-RICS-C-£M-L stated that they had to provide something for the sub-contractors in terms of quantities, as if they failed to do so then this would adversely affect their chances of receiving a quotation back from the sub-contractor, and therefore impact on their own pricing and ultimately the chances of winning the project. This was attributed to the lack of time that a sub-contractor would have to be able to sit and measure the works before pricing it. To some extent this situation contradicts the earlier comments about the standard methods not being sufficient for contractors to price from – one minute they are stating that sub-contractors will produce their own measures as the ones provided are not detailed enough, and the next they are stating that the sub-contractors will not price works without quantities being provided. It is suspected based on previous experiences of the author that this is quite trade specific and consequently a more detailed exploration of this issue is needed, but is beyond the scope of this research. For now, it is important to realise that whatever the preferences of an individual sub-contractor, no one can price works without first completing a measurement of some kind.

What was common to all respondents was the level of detail in which they were willing to discuss measurement and their own histories and stories associated with it. The level of technical knowledge that was demonstrated was impressive and fascinating at the same time, which supports the need for a standard method of measurement of some kind, but doesn’t answer the question as to whether the NRM fits the bill or not.

The dominant method employed amongst respondents was that of builder’s quantities.

Chapter two highlighted the need for standards, and all of the current texts (Cartlidge 2011, 2013b, Towey 2012, Lee et al 2011) regarding measurement talk at length about the SMM7 and more recently the NRM, while also briefly describing the concept of builder’s quantities with Cartlidge (2013a p.282) defining them as: “quantities measured and described from the builder’s viewpoint, rather than in accordance with a set of prescribed rules, such as SMM7 or NRM2.”

What became clear from the respondents is that the use of builder’s quantities is universal, but that there is no fixed definition and that is why they work because they can be adapted to suit the current situation. All respondents cited SMM7 as being the main basis for their builder’s quantities as this is the most well know standard method and gives a good basis to be adapted to suit the particular circumstances. One of the other influencing factors of the use of builder’s quantities is that the measurement and estimating software being used by the respondents had SMM7 libraries included, and it is these that have been adapted and modified over time to be as useful as possible to the current needs of the business. What is clear from these discussions is that although most respondents have access to an NRM library, this comes at an additional cost and hasn’t been adapted to suit their needs, so they would need to start again for utilisation as builder’s quantities.

This re-invention of the SMM7 into a tool that is fit for purpose, and its necessity within the current construction industry, is now identified as not only the main form of

measurement practice within the construction industry, but also the main reason for the rejection of the NRM, and in many respects an innovation in itself.

As NRM was utilised as the main vehicle for examining the diffusion process, it is important to identify its adoption and use in practice. Of all the respondents only four have formally adopted the NRM, all PQSs, and two have not formally adopted, but claim to be working in accordance with its requirements, also both PQS’s. Having said this, only one respondent, SH – SA-RICS-P-£L-L, is using NRM2 for producing BQs, the others are using NRM1 for cost planning and CSA production but have not procured

a scheme using NRM2 yet, but all claim that if they had the need they would do. All PQS respondents that made this statement were members of the RICS.

There is no current research that clearly identifies this level of detail with regard to the industries measurement practices and therefore this is considered as adding to the existing knowledge in this specialist area.

5.3.3 Communication

When considering the norms of a social system with regard to diffusion it is important to consider the role and methods of communication employed, as this is a key factor in the diffusion process. Specifics with regard to communication between actors will be covered in more detail across the various discussions around the diffusion journey and the diffusion concepts later in this chapter.

For now, it is important to reflect on the findings of the primary research with regard to communication in a broader, social system focused manner, as opposed to the actor who will be the focus of the remains of this chapter. This will allow for some broader context to be provided in which further discussions can be based.

The structure and operation of the construction industry has a fragmented and temporary nature (RICS 2013a) and as such this has a direct impact on the

communication channels that can be employed to aid the diffusion process. It quickly became apparent through the interview process that respondents were proficient in communicating about the specific projects that they were involved with, but that very little discussion was taking place between actors of a more general type. Specifically, all respondents confirmed that they very rarely discuss any broader aspects of the industry or professional practice with other actors outside of their own company, and that when this does take place it is of a fairly meaningless nature and usually at a conference or other gathering of equivalent professionals.

One could think that this fragmented and temporary nature of the actor’s relationships could aid the diffusion process as one could utilise the weak links (Granovetter 1978) that are created to diffuse an innovation quickly and efficiently across the industry, but

what is actually happening is the temporary nature of the relationships is causing a project focused communication flow and network that disbands once the project is completed. This correlates with the findings of Kale and Arditi (2010) who found that construction companies are more influenced by their own internal operations and workload than that of other companies within the same social system.

This has a clear negative effect on the diffusion process as many companies are unaware of what others are doing which in turn prevents actors from being influenced by their peers outside of their immediate, usually company wide, social system. The following discussions will expand on this and consider this position from an individual actor’s perspective.

5.3.4 Professional body representation

The RICS featured in all interviews and the membership of the RICS for each

respondent was recoded as attribute data within NVivo. A total of eleven respondents were members of the RICS, and out of this four work as contractor QSs with the remainder working as PQS’s.

In addition to the membership being discussed the RICS was raised with regard to several other issues such as influence in terms of adoption, awareness of the NRM and even the relevance of the profession to the QS and the fact that annual subscriptions are quite expensive. What was most noticeable though was that the members were all made aware of NRM by the RICS, while the non-members did state that they felt they were missing out on information about NRM as they were not members. What was

unanimously agreed was that the RICS did not advertise or inform members particularly well of the NRM, particularly NRM2. MR – Dir-RICS-C-£S-S suggested that NRM1 had received much more coverage than NRM2 and suspected that the RICS had allocated more resource to the launch of NRM1. It was also stated that none of the respondents would know who to contact at the RICS should they have any queries on NRM and that there is no two-way communication. Overall this is an interesting

finding, as the RICS developed and publish these documents so to find a general feeling of unease and wonder about the documents from its members is somewhat surprising.

For those who work within the large PQS practices, there was a clear influence from the RICS with regard to the adoption of NRM. Certainly three of the respondents work for companies with very strong links to the RICS so this level of influence was expected.

The RICS is the main professional body that represents QSs within the UK construction industry, and they are also the developers and publishers of the NRM, so their influence on the diffusion journey cannot be underestimated. What is clear here though, is that they do not actually represent the entire QS profession, and as such, their reach is not all encompassing. This leaves significant parts of the QS profession without the potential awareness and knowledge of the NRM as they are not members. This in turn can only have a detrimental effect on the diffusion of NRM which can be seen from the findings presented here.