What's Happening?
The Building Safety Act (BSA) is significantly altering procurement processes within the construction industry, as discussed at the BESA Annual Conference in London. The Act mandates earlier and more transparent
collaboration among contractors, consultants, and clients. Lilly Gallafent, chief operating officer at Cast Consultancy, highlighted the Act's transformative impact, noting that it requires subcontractor input before contracts are finalized. This change is leading to more negotiated preconstruction services agreements (PCSAs), resulting in contracts where contractors have a clearer understanding of their responsibilities. The Act aims to address the 'race to the bottom' in contract pricing by ensuring more realistic contract sums and timelines. Remi Suzan, commercial director at Gratte Brothers, criticized the traditional contracting model for its unrealistic risk distribution, while Noble Francis from the Construction Products Association emphasized the role of clients in perpetuating these imbalances.
Why It's Important?
The Building Safety Act's impact on procurement processes is crucial for the construction industry, as it seeks to create a more balanced and realistic approach to project delivery. By requiring early subcontractor involvement and promoting trust-based procurement, the Act aims to mitigate the risks traditionally pushed down the supply chain. This shift could lead to more sustainable business practices, reducing the likelihood of contractors accepting untenable risks for the sake of turnover. The Act's emphasis on legal accountability for safety could also enhance overall project quality and safety standards. Stakeholders, including contractors and clients, stand to benefit from more equitable risk distribution and improved project outcomes.
What's Next?
As the Building Safety Act continues to influence procurement practices, stakeholders in the construction industry may need to adapt to these changes by fostering long-term, trust-based relationships. The use of PCSAs and frameworks with pain-and-gain incentives could become more prevalent, encouraging collaboration and value delivery. Industry leaders may also need to advocate for further legislative support to ensure the Act's principles are effectively implemented across all projects. The ongoing dialogue between contractors, clients, and consultants will be essential in refining these processes and achieving the Act's intended outcomes.
Beyond the Headlines
The Building Safety Act's push for more realistic procurement could have broader implications for the construction industry's culture and business models. By challenging the traditional risk allocation methods, the Act may encourage a shift towards more ethical and sustainable practices. This could lead to a reevaluation of how projects are priced and managed, potentially fostering a more collaborative and less adversarial industry environment. The emphasis on safety and accountability may also drive innovation in construction techniques and materials, as companies seek to meet the new standards set by the Act.
