July 16, 2015 │ Nick Hull
The impending 2016 BIM mandate for all centrally procured public sector projects has been well publicised. BIM will hit the government’s Construction 2025 target of delivering projects 50 per cent faster. How critical is BIM to UK construction companies and the way they deliver their contracts and projects?
From a risk governance perspective, the Wembley stadium Multiplex construction contract is an alarming case. The Guardian reported Multiplex incurred contract losses of £183 million, after a £517.2m overrun in costs. Wembley National Stadium Limited (WNSL) also incurred losses of £430 million. The stadium was completed eighteen months late and according to the Guardian, followed by a £253m lawsuit. Multiplex and WSNL were not BIM compliant.
If WNSL were embarking on a Wembley construction contractor bidding process in 2015, would Multiplex win the contract? Would Multiplex deliver the Wembley construction contract on-time and on-budget?
To deliver the savings targeted by Construction 2025, particularly if BIM processes are extended to include 4D (time-related information to visualise a project’s duration), and 5D (cost over time against budget), the industry will require a step-change in the way it thinks about investment in technology.
5D modelling of construction contracts is not just a “technical nice-to-have,” it is essential to delivering contracts on time and on budget. In a notoriously low margin industry, it’s critical that companies can accurately report and forecast cost and profit margin at any stage of a project. The greater the risk of project delays and cost variations, the greater the need for BIM. As a “best practice tool,” BIM mitigates that risk and identifies remedial action as early in the contract as possible.
There are now encouraging signs that BIM is being used on large, innovative engineering projects such as Crossrail, and is planned for HS2. However, the more innovative and in the case of Crossrail and HS2, unique, the projects are (neither of which have been embarked upon in the UK before), then the greater the risk of another “Wembley”.
Projects like Crossrail carry an inherent volume of risk. Crossrail is attempting to navigate the honeycomb lattice of the current London Underground and dig out a new line, linking the west and east of the city. On top of this minefield, tunneling itself is a risky venture. It is almost impossible to tell what you’re going to run into until you actually start digging. There is no way that this project could be managed as Wembley was. Instead, Crossrail is using BIM controls. BIM allows project managers to foresee issues whilst navigating the intricate network of existing tunnels beneath London, against time and budget. BIM also mitigates the risk of tunneling by forecasting for remedial action, both operationally and financially.
BIM 5D modelling of information can be embedded as commercial project management best practice, to ensure that the mistakes made on less challenging projects, such as Wembley stadium, are not replicated.
To effectively manage these innovative and high risk projects, it’s becoming increasingly critical that a construction company can regularly check the financial state of their contracts. When projects the size of Crossrail carry as much risk as they do, BIM becomes an absolutely critical business tool. BIM helps to ensure projects will be delivered on-budget, on-time and remain profitable.
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