Architecture is undergoing rapid change – the challenge for architects is how to work within new procurement and fee environments while maintaining financially viable businesses. These topics were addressed at the ACA – WA’s November 2014 discussion event.
Neill Stevens of NS Projects facilitated the discussion, with panellists Chris Palandri of Brookfield Multiplex; Geoff Warn, WA Government Architect; Richard Mann, from the Strategic Projects division of the WA Government; and Graeme McLean of the Department of Building Management and Works.
Richard Young, ACA – WA President, began the evening with a brief overview of the contractual changes he has witnessed in the industry over the past 35 years. He recalled more informal and relaxed times – days, where contracts were often only handshakes or, if they were formal, were generally the standard RAIA client/architect agreement. These were also the days of fee scales, with 6% being the norm prior to the intervention of the Trades Practice Act.
There has been a fundamental shift over the years, especially in major projects – the contractor is now often also the client and the architect is frequently separated from the party for whom they are designing. Bespoke contracts and procurement methods have also changed, particularly in the last 10 years. There has been a move away from the traditional design-tender-construct process and we now have a variety of contract procurement formats including, but not limited to D+C and PPP.
So, how might architects operate effectively in this changing professional world? Geoff Warn got the session underway by pointing out that architects need to adapt to these changes and meet the many challenges and opportunities presented. He argued that the architect will remain a key component in the delivery and procurement process even if their traditional role is presented differently. Geoff also suggested that we may see a move away from the larger practices that have evolved over the past 10 years and that we may see firms fracturing into smaller practices once again. There is evidence that this is already happening in Europe in response to a struggling economy post-GFC.
Another component of this shift away from traditional procurement contracts is that the architect is not always the primary consultant and there is a far greater range of other specialist consultants now involved in projects. This is coupled with the fact that projects are also moving faster, are generally more complex and more expensive too.
Geoff argued that architects will always remain an important part of the team but they must embrace these changes to retain their position in the chain.
Chris Palandri, of Brookfield Multiplex, provided a contractor’s perspective on the advantages of new forms of procurement, especially in the area of major projects. Brookfield has been managing D+C contracts for 20 years and they believe that their projects work best when they are managing the architect and consulting firms. In their experience, architectural firms that have done repeat work with Brookfield have developed their skills and adapted to the requirements of the D+C environment. This means producing designs quickly to meet the brief and the budget parameters. The key advantage to the client is in the area of risk – as the risk is transferred to someone who is better placed to understand the risk, there is more certainty about the budget and variations are minimised.
Richard Mann, from Strategic Projects, presented the government’s view on the advantages of these new procurement methods for major projects.
He argued that clients are becoming more sophisticated, as are contracting and procurement methodologies, and that architects need to adapt. To seize the opportunities, architects should sharpen their time and cost management skills as a complement to existing design and technological capabilities. Richard also argued that the design profession will need to be more flexible to be able to manage the intricacies of hybrid procurement models and the different risk allocation involved.
He commented that government looks to the architect to drive the design and consultant teams to ensure that the initial design concept is translated into the finished product. In his opinion this is fundamental and is unlikely to ever change.
However, very complex projects require complex contracts. This gives rise to the modification of standard forms of contract with so many special conditions that they effectively become bespoke contracts.
The final panel member, Graeme McLean from BMW, provided a similar view. He supported the view that the value of good design is still paramount in these various delivery methods but they must deliver `value of money’.
Graeme pointed out that the government’s commitment to getting a quality design outcome has not changed. However, this needs to be balanced with the other key drivers such as `whole of life’, `value for money’ and the increasing legal scrutiny of contracts, with key provisions and unfair risk being passed down the consultant chain. The government will need to ensure they have the variety of procurement methods available for a range of project types and sizes so that the smaller firms are not ruled out.
The seminar provided a useful overview of how the profession is changing in terms of the procurement and delivery of key projects. Concerns still exist with respect to the unfairness of conditions incorporated into bespoke contracts and the rise of D+C type contracts where the architect is distanced from the client.
Leigh Robinson is a director of Taylor Robinson and a member of the ACA – WA Committee. The Changing World of Architecture was held on Wednesday, 12 November, 2014, in front of a full house at the Australian Institute of Architects headquarters in Nedlands.
The ACA leads the discussion on business and employment matters in Australian architecture, providing timely advice, information and resources; promote debate and advocate for better business practices and legislative frameworks. Visit their website for more information.
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