Rigorous and robust project management ensured that the delays caused by contractor insolvency were minimised.
Client: Home Group
Sector: Residential – Affordable Housing
Home Group’s new build development of 15 shared ownership apartments had only been constructed up to the first-floor slab when the contractor went into insolvency.
Home Group called on the services of RLF to help them develop out the project. There were several challenges facing the client including:
- The completed construction work did not have the necessary warranties or insurances in place.
- Getting a new contractor to accept responsibility for the works that had already been undertaken.
- Obtaining a price that represented value for money, especially as fixed price tenders were carrying high levels of risk allowance.
Decision support: We carried out a rapid site survey to assess the quality of the works to date and the costs to complete. We put the appropriate measures in place to secure the site and protect the asset. We facilitated the decision to build out and complete the project.
Innovative Procurement: The extent of risk pricing that Contractors were including through traditional tendering was significantly impacting on the viability of the project. We were able to guide our client to an alternative procurement solution, which was a target cost approach using the NEC3 contract. This enabled an appropriate balance of risk sharing and the introduction of a pain/gain mechanism meant that both parties were motivated to act in a collaborative manner to mitigate risk and drive best value. This was an approach that Home Group had never adopted and so from the outset we explained to them their obligations and responsibilities, as well as the risk context. We guided both Client and Contractor through the process, ensuring proactive and robust risk management and cost control. This resulted in a final construction cost significantly less than that identified via traditional tendering, with both parties seeing a share in the savings against the target cost.
Continuity of warranties/insurances: We organised the commissioning of a structural engineer to undertake a detailed analysis of the works completed and ensured their recommendations for remedial actions were followed through, enabling the new Contractor, NHBC and the relevant insurers to accept the entirety of the works. Without this it would have been unlikely that the units could be sold.
Proactive Risk Management: The nature of the project meant some significant residual risk remained. RLF took the lead in managing the process to resolve them. Our assertive approach enabled risk to be considered and dealt with well in advance of it becoming a major issue to the progress of the works.
Countdown to Handover: Given the history of the project we were driven to ensure a smooth journey to handover was achieved. We established a robust reporting regime to ensure all statutory matters were being resolved and created a timetable of deliverables to plot a clear course to completion. This approach allowed all parties to understand their obligations and pre-empted any obstacles to completion.
- Rigorous and robust project management ensured that the delays due to insolvency were minimised and the project was completed within budget
- We secured NHBC insurance for the complete building
- Our detailed handover procedures ensured that there was an excellent standard of completion
‘RLF were appointed following Contractor insolvency at first floor slab. They quickly orientated themselves, helping guide us through the complexities of procuring a new contractor, balancing the risks, and getting the works back on track, whilst assisting in maintaining value for money. Their risk, programme, and cost control management expertise really helped us to progress with confidence. Their team were engaged throughout, knowledgeable, and easy to work with. If we are unfortunate enough to find ourselves in a similar position we wouldn’t hesitate to working with RLF again’
Samuel Skitini, Senior Delivery Manager, Home Group
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