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29 April 2021
The financial cost of poor quality in construction

The concept of cost of quality (COQ) was first introduced in the 1950s by Romanian-American engineer and management consultant, Joseph M. Juran. The term refers both to the cost of attaining high quality in projects, as well as the cost of fixing errors arising from poor quality. In a sector that typically struggles with low profit margins, the cost of fixing quality errors can hit construction firms’ profits hard.

Systemic issues leading to poor quality

A 2019 study analysed five building projects that had suffered from quality control issues, and found a number of endemic issues leading to operational failures and, ultimately, poor quality builds. Poor drainage design on a £150m car park project cost £15m to rectify, for example, while issues relating to a £50m runway resurfacing project cost over £4m to fix.

The study, undertaken by Dr Diyana Abd Razak and supported by both the Chartered Quality Institute (CQI) and University College London, discovered the following issues:

  • The supply network is often fragmented due to different participants having separate responsibilities and becoming involved with the project at different times
  • Clients fail to identify the skills and capabilities needed at each stage of the project lifecycle
  • There is often a failure to learn from design and quality mistakes made on previous projects
  • Architects and designers are too far away from the project’s end point to feel the ‘pain’ of operational and quality failures.

According to research undertaken by a specialist Cost of Quality Working Group set up by the CQI, better quality management could save the UK construction industry between £7bn and £12bn.

So, whose fault is it?

It’s very easy to blame a designer or contractor for shoddy workmanship but, while they do of course have a significant role to play, it is the client who is ultimately responsible for hiring competent and resourced contractors with the skills needed to undertake the work, and checking they are fulfilling their duties throughout the project lifecycle. This argument is supported by the Construction (Design and Management) (CDM) Regulations 2015, which stipulate that the client has overall responsibility for the successful management of a project. An article from Construction Manager Magazine summed it up perfectly: “Clients cannot pass responsibility down the supply chain and sit back expecting all to be well; they need to lead on quality.”

So, what can clients do to promote high quality and reduce the risk of costly defects?

How clients can lead on quality

According to CDM Regulations, clients have a range of duties that ultimately have a large influence on the successful outcome of their project. The Construction Industry Training Board (CITB) has published guidance on how clients can fulfil their duties under the CDM Regulations, with advice including:

  • Prepare a client brief – this will outline the client’s requirements and expectations for designers and contractors. The CITB says: “A good brief can be essential to the success of your project, especially if it is clear and unambiguous, sets out key requirements, outlines your vision for the project and communicates your aims and aspirations.”
  • Make suitable arrangements for managing the project – it is the client’s responsibility to ensure that adequate consideration is given to health and safety at all stages of construction. This includes ensuring they appoint designers and contractors with the necessary capabilities for the work, allocating sufficient time and resources, and including project management requirements that take into account any risk to the public.
  • Select the project team and formally appoint ‘duty holders’ – the CDM Regulations stipulate that the client must appoint a Principal Designer and Principal Contractor if the project has more than one of each. They must demonstrate they have the necessary skills for the role, including basic health and safety knowledge. Clients can use a Safety Schemes in Procurement (SSIP) initiative to find designers/contractors who have been confirmed as meeting acceptable health and safety standards.
  • Check that duty holders are carrying out their responsibilities – as previously stated, it is not enough for the client to appoint duty holders and consider their job done. The client is required to check that health and safety arrangements are being successfully carried out and that designers and contractors are fulfilling their duties.

A long-term outlook

Many clients who try to keep costs low initially will find themselves paying over the odds to fix mistakes stemming from poor quality design and construction. Instead, consideration needs to be given to costs across the project’s entire lifespan, with a larger initial outlay and a focus on high-quality designers and contractors likely to save millions of pounds in post-build repairs.

Sources:

https://goleansixsigma.com/joseph-m-juran-grand-daddy-quality/

https://constructionmanagermagazine.com/clients-must-lead-on-quality/

https://journals.sagepub.com/doi/10.1177/8756972820928703

https://constructionmanagermagazine.com/cpd-quality-manag6ement-rou7te-bet4ter-profits/?_ga=2.157504378.1997137342.1619102250-522259051.1619102250

https://www.hse.gov.uk/construction/cdm/2015/index.htm

https://www.citb.co.uk/documents/cdm%20regs/industry-guidance-clients.pdf

https://www.globalconstructionreview.com/news/defects-cost-more-profits-ciob-launches-urgent-cou/

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