London 2012: will it leave a lasting legacy for construction?

It’s finished on time, on budget and has a safety record that’s second to none. Denise Chevin speaks to key Olympic and industry decision-makers to find out whether the Olympics could change construction forever, or whether its achievements are set to become Olympic memories.  

It’s our finest hour, a great PR coup and a wonderful boost of confidence for the sector. No matter how well our athletes do in the London Games, the industry is already bathing in reflected glory of the construction achievements in Stratford.

Europe’s biggest regeneration project — which at one level is what London winning the Games was all about — has come in on time and nearly £500m below its £9.3bn budget. It has met ambitious green targets for recycling, carbon and water reduction. Nearly 6,000 people, many of whom were previously unemployed, have had some form of training on the site — including 255 women who have been helped into construction. And its record on safety takes the industry to a whole new level — not just in terms of the impressively low accident rates, but the way the workforce has been engaged.

There have been plenty of innovations along the way, and the result is a suite of venues that has impressed many architectural critics. As Gordon Masterton, chair of the CIC and Major Projects Association, says: “It will become a beacon of good practice. Programme and risk management, design quality, approach to inclusion, sustainability, health and safety — all of these things will be looked at as points of reference in the future.”

It’s an exemplar project, but the big question is: will it be a game changer for construction? Will we see the baton of excellence passed on to projects that follow? Or will the high standards disappear with the Olympic flame?

“The world won’t change overnight because of what’s gone on on a project worth 2% of the annual turnover of the sector,” Olympic Delivery Authority chairman Sir John Armitt told CM. “But it has thrown the spotlight on what can be done. It’s shown that the British construction industry can deliver to time and to budget on major projects and it has helped us grow in confidence as a society as well as an industry.

“I think our biggest achievement is seeing what can be achieved in terms of training and, most importantly, safety.

“Often when you look at what causes accidents on site, you hear some very tragic stories. It really has to come back to the employer — did they create the right environment? You really can’t say it’s down to the individual.

“I’m not sure what the industry will do if the client is not there applying pressure. But we could find that there is a groundswell of pressure from the bottom to change things more widely.”

Peter Jacobs FCIOB, Morgan Sindall regional managing director for London, agrees: “Enough people have worked on the Olympics and they now know what good is.” Jacobs was involved with the Olympics as delivery director of the Olympic Village with Lend Lease. In fact, 46,000 people were involved during the four-year construction phase, which has involved more than 30 principal contractors and hundreds of specialists.

The ODA is doing its best to ensure the learning lessons are available to all via its electronic library of best practice consisting of 200 papers covering all aspects of the construction from the disposal of demolition waste to team-working to prevent accidental damage to cables once they’d been laid.

According to Armitt, the learning legacy, unlike the regeneration legacy for east London, was not part of the original plan. It came along when it became apparent just how much knowledge worth sharing there was. Simon Wright, the ODA’s director of venues and infrastructure, was tasked with setting up the programme and working with four key organisations, including the UK Green Building Council and CIOB to help disperse this learning legacy. The library will pass to the Major Projects Authority, run by the Cabinet Office and the Treasury, when the ODA is eventually wound up.

Meanwhile, the government is looking at what can be taken from the Olympics and used as part of its procurement strategy. One approach may be to increase its set of minimum standards for public projects. Any proposals are likely to be announced when culture secretary Jeremy Hunt publishes a report written by Armitt focusing on how opportunities for the UK industry can best be capitalised. It is expected to emphasise the benefits of good procurement and client leadership.

Another factor that bodes well for making permanent change, says Don Ward, chief executive of Constructing Excellence, is that many senior ODA people have now moved to other major client organisations, including Network Rail, Crossrail, and the Ministry of Justice. Philip White, the HSE’s chief construction inspector, says that the next big projects such as Crossrail, High Speed 2, the Thames Tunnel and the new nuclear programme “will take on the culture and take it on even more”.

So where and how did it all go so right? And how can it be replicated? Broadly speaking, it came down to a number of key ingredients, but most importantly the will of the client. Howard Shiplee FCIOB, ODA construction director, remarks: “I think we’ve set the bar and shown that the industry can step up, if that’s what customers want. If customers want cheap as chips, quick as possible, it doesn’t give the impetus for the industry to push the boundary on other things. Contractors don’t set the market conditions.”

However, it is this very fact of the ODA having such a crucial role that makes chief construction adviser Paul Morrell question whether the Olympics really is a game changer. “It shows how to do construction well,” he says. “It followed a clear set of principles founded on strong client leadership. It generally applied all that we think works, and it did work. But industry leaders are not taking the lead outside their part of the sector and developing a shared agenda. So for me, we know we’ve really broken through when the supply chain doesn’t need a good client setting the culture.”

The Aquatics Centre typifies the commitment to quality construction and finishes photo: London 2012

Managing the politicians

Unlike major projects that have gone before it, the Olympic project hasn’t suffered the terrible fate of always having  a lower budget than everyone knew it was going to cost — the problem that beset the Scottish Parliament. In 2007 the government set the budget at £9.3bn — including a contingency of £2.7bn — a far cry from the estimated original bid cost of £2.4bn.

“This realism was crucial,” says the CIC’s Masterton. “The senior team at the ODA did a fantastic job managing expectations. It didn’t have to keep going back to parliament and asking for more money and persuaded the Treasury that sensible contingency is essential. I think that’s one of the strongest messages from the whole project.”

How the government could learn from the approach to the Olympics for major projects was highlighted last month by Sir Keith Mills, deputy chairman of the London Organising Committee of the Olympic Games (LOCOG), speaking at The Times CEO Summit. He said the mantra that the government should learn and adopt from the Games, particularly as it debates a third runway at Heathrow, was: “Buy into a vision, find the right people, give them the money and get on with it.”

The importance of the client

“What the ODA brought was a vision for what it wanted and then set about trying to achieve that,” explains Shiplee. “Performance comes down to client leadership — with a clear view of what it wants and being realistic about delivery and then working hard with the supply chain to make sure it happens.”

Armitt agrees: “The importance of the client has been reinforced for me. You realise the opportunity the client has to set the agenda and create the environment for the project to succeed. When things go wrong, everyone blames the contractor, or the architect or the engineer, but if you trace way back the problems often come back to the client.”

Shiplee says that as a client the ODA certainly had to take some tough decisions, citing one episode where tunnelling work for burying the power cables hit an unexpected obstacle. “We could either have investigated, which might have cost £10m to drill another hole down, or go round it. And that’s what we decided to do, even though the land above didn’t belong to us at the time.”

He also recalls how the ODA was under pressure at the outset from all sorts of stakeholders who wanted the Olympics to deliver different things for different communities. “For example, we were urged to use the T5 agreement [on risk allocation between client and contractor], but because we had lots of different projects we didn’t want to be tied down to having the same approach to all of them.”

In terms of the client structure, rather than employ a large team directly, the ODA took on a delivery partner in the form of CLM — a team consisting of CH2M Hill, Laing O’Rourke and Mace. The ODA set about getting what it wanted in terms of aspects such as training and sustainability by setting a clear set of priorities which it articulated via the 2012 Construction Commitments written with the Strategic Forum. These were then embedded as criteria in the selection process that would help deliver this, using a so-called balance score approach. It then ensured that its Tier 1 contractors used the same principles to select their subcontractors along the supply chain. The skill then was to set clear performance targets and then monitor them closely to ensure they were adhered to, Wright adds.

“It was like working in a goldfish bowl” was how one contractor described working under the scrutiny of it all. “We were very intrusive, but they got used to it in the end,” says Shiplee.

The ODA and CLM clearly fostered a culture of “we’re all in this together”. Tier 1 contractors were encouraged to put their natural competitive natures aside and to share ideas and experience. The contractual arrangements reinforced the approach of openness and collaboration. Contracts were procured on a target price, design and build basis. It was all done on an open book system, that is, where the client can see what the contractor is spending and if it’s less than the target price the savings are shared.

All the projects, which include five new permanent venues, an Olympic Village to house 17,000 athletes and officials, 30 new bridges and landscaping to form the largest urban parks to be built in Europe in 150 years, were procured like that. The exception was half of the contracts for the village, which were done on a traditional lump sum basis. The decision was made by the ODA, which funded the project after Lend Lease, which was to be the developer, struggled to finance the scheme. Lend Lease remained as the development and project manager for the whole Village, but only construction manager for half. The rationale for going to lump sum, says Shiplee, was that because the designs were fixed (each of the 11 blocks had different claddings on a similar design chassis) it posed less of a risk and therefore would lend itself to lump sum procurement.

Armitt acknowledges, however, that “lump sum contracting was where we had most of our commercial disputes. It’s inevitable, that’s the nature of lump sum contracting. I’m not a great fan of it. Clients and the design team rarely hone down design details sufficiently to make it work perfectly.”

The Athletes’ Village includes 3,000 new homes and landscaping

Safety in numbers

Where the industry can lay claim to an undisputed gold medal performance is in the area of health and safety. The workforce on the park peaked at 12,500, and the 46,000 people who worked on it clocked up more than 81 million hours. During this time there were only 126 reportable accidents, says ODA health and safety director Lawrence Waterman. The Accident Frequency Rate (AFR) equates to 0.15 across whole programme which came down to and 0.1 last year, he says. The current AFR for construction is two or three times that rate, he says, and for all UK employment is about 0.2.

Waterman says this came down to following a number of key principles. First of these was worker engagement — through daily activity briefings, extensive training for supervisors, away days and generally setting a culture where anyone was encouraged to report near misses and speak up if anything, even slight, wasn’t right, like mud on the site that could have caused an accident.

Another major difference was the importance attached to occupational health. A medical centre on site carried out pre-employment medicals, acted as a drop-in centre, and provided medical attention in an emergency. Two occupational hygienists were based on the site and visited projects regularly to discuss how risks could be managed.

Studies were carried on occupational behaviour and how it could be improved, explains Waterman. One showed that accident rates were higher mid morning because workers weren’t eating breakfasts, a problem rectified by canteens offering porridge for £1.

There was a huge amount of coordination and communication. For example, the head from each of the Tier 1 contractors met once a month at a Safety Health and Environment Committee, chaired by Bob Heathfield PPCIOB, a director at Appleyards with a wide experience of running major contracting firms. Heathfield says 35 to 40 people attended each time. “It was a really positive working environment and all were happy to share best practice. People may argue that things like this add to cost, but I would say it saved money, because time was not being lost because of accidents,” says Heathfield.

So do you need scale to translate the Olympic Park’s success across the industry? There is acknowledgement all round that everything can’t be rolled out across all projects. But Waterman says much of it can be. “When you think about daily briefings, it only takes a few minutes, so why wouldn’t you do that sort of thing?” Similarly, he says that having occupational hygienists visiting the site every few weeks made a huge difference and other projects could employ these sort of specialists on a freelance basis.

The HSE’s Philip White says: “What stood out for me was the engagement with the workers — rather than dictats from on high — the training of the supervisors and the no-blame culture. I think that can be translated to any size of project employing 20 or 2,000. All it requires is strong and active leadership.”