Building Organisation and Procedures

George Forster

• Publisher: Routledge
• Year: 2013
• Print ISBN: 9781138835849
• eBook ISBN: 9781317876731
• Edition: 2
• Topic: Technology & Engineering
• Subtopic: Construction & Architectural Engineering
• Index: Technology & Engineering

Topics discussed include the structure and magnitude of the construction industry, responsibilities and roles of the organisations and people within the industry.

Chapter 1
Structure of the building and civil engineering industry

1.1 Types of work undertaken by construction firms

Construction firms either operate as building or civil engineering concerns, or both.

Limitations are placed on many construction firms because of their size, small firms being unable to tender (bid) for larger contracts because of their limited resources regarding capital and experience. On the other hand, large firms prefer to be involved primarily with major contracts as they are not normally geared to deal with small works of less than £1 m. The larger companies, however, are sometimes forced by circumstances to tender for any type of work outside their normal range during a recession on the home market, or seek more work abroad.

With the different legislation which is forever being introduced, particularly the Employment Protection Act 1975, the Employment Protection (Consolidation) Act 1978 and the Employment Protection (Amendment) Act 1979, also the Employment Act 1980 and 1982, work must be plentiful in order to retain a company's carefully built up workforce, otherwise the consequences when redundancies occur is an added unnecessary expense to a contractor. Also, when work becomes plentiful the contractor needs to be able to respond immediately when new contracts are won by having the correct number of key employees available at a moment's notice. It is obvious that too many firms now rely heavily on labour-only subcontractors to limit the need to worry about redundancy and employment protection, as the subcontractors can be dismissed at the end of a contract without legal or union repercussions, which it is believed by many, is an important advantage to the main contractor.

The work which is undertaken by contractors for clients is usually divided into two sectors, which are:

1. Private sector.
2. Public sector.

The contract work carried out in the private sector is for private individuals, sole traders, firms of partners, companies and corporations. In the public sector the clients can be the National Government, Local Authorities and other public bodies — British Rail, British Telecom, CEGB, Gas, Water, the National Coal Board and many others.

Numerous contracts for local authorities are undertaken by their own direct labour departments, the contracts usually awarded being in the field of new house construction, and maintenance of their existing houses. This practice is repeatedly condemned by the Building Employers Confederation (BEC) because it naturally partially deprives them of their 'bread and butter'. It is argued, however, that while some authorities' direct labour departments are unsuccessful in doing the work economically others are succeeding in operating as viable concerns.

The value of output for new public dwelling in 1983 was £1129 m. Contractors undertook about £1000 m. of this work, leaving the remaining £100 m. to direct labour departments of the various local authorities.

Housing, in both the public and private sectors, accounts for approximately one-third of the construction output of the United Kingdom. The value combines the building of new and the maintenance of old houses. See Fig. 1.4.1.

With the building of huge housing estates particularly for local authorities, including New Town Development Corporations, the whole spectrum of construction work is brought into being; for example: roadworks, sewers, street lighting and other services. Also, the types of buildings and structures required for the intending inhabitants increases depending on the density and size of the development. Shops of all types may be needed and can be situated with access from pedestrian precincts, along with community centres, churches, various schools, medical centres, libraries, public houses, sports areas or centres and play areas. Light industrial complexes may then be situated within easy access from the housing estates to provide local work.

System building has played a major role in the output of the industry and local authorities have tended to use industrialised components in their building programmes. The systems have been best used for dwellings, such as: detached, semi-detached and terraced houses; flats built on the high- or low-rise principles; schools; community centres and office blocks. The Easiform, Skarne, and Jesperson systems, to mention but a few, are systems which have been used extensively in the past.

Timber-framed housing is now a more popular type of construction process and has developed rapidly since about 1975. There have been problems with the earlier timber-framed houses, but better design and workmanship, it is assumed, have solved many of the problems.

To help offset the costs in their development programmes, numerous local authorities have formed consortia, particularly when it was necessary to build schools, colleges and community centres. This meant that through their collaboration they exchanged ideas and information and also arranged to choose suppliers for building materials and components. The whole design problems were also discussed and modified in the light of each authority's experiences. These collaborations still exist along with the systems designed, and they operate under such names as: the Consortium of Local Authorities Special Programme (CLASP), the Second Consortium of Local Authorities (SCOLA), the Metropolitan Architectural Consortium for Education (MACE), the South-East Architects Collaboration (SEAC), the Consortium of Method Building (CMB), the Organisation of North-West Authorities for Nationalised Design (ONWAND), the Anglian Standing Conference (ASC) and the Consortium of Local Authorities Wales (CLAW).

It can be easily appreciated that if a consortium of local authorities designs one basic structure, and all have access to it, cost savings can be considerable.

The centres of many towns are controlled by the local authorities and the land is leased to the various traders in the high streets. When the lease expires certain areas are allowed to run down and slum clearance and demolition work forms a considerable value of a contractor's output. Authorities usually have plans for new development leading to the replacement of the old Victorian shops, fire and police stations, swimming baths and schools. These, invariably, are replaced by constructing ultra-modern town or city centres with shopping precincts, supermarkets, hotels, theatres, sports centres, bus stations, underground and multi-storey car parks, offices and other commercial buildings. Each authority appears to attempt to out-develop the other, or at least tries not to be left too far behind. Prestige buildings and development are encouraged which would add to the influx of visitors, thereby bringing business into the community. Such buildings are universities and colleges, hypermarkets, exhibition halls such as the National Exhibition Centre in Birmingham, cathedrals (similar to that most recently built in Liverpool), and marinas like Brighton's. In 1985 a new Stock Exchange in London was completed costing £157 m.

Adjoining buildings to development areas, while structurally sound, are sometimes modernised by the lessee (tenant) or owner by refurbishing the building, which is to say, to completely up-date the structure regarding in particular the doors, windows, and the full range of interior fittings and services. The complete interior layout may even be altered with a wall being removed here and a floor strengthened there. A refurbishing contract can amount to millions of pounds worth of work for one building alone in the heart of London. Old structures are preserved and the surrounding areas are developed in an attempt to maintain our historical heritage and as an attraction to tourists, such as: Thomas Telford's old London Dock — now a marina; the old Covent Garden - now a small business and entertainment area, etc.

Warehouses, factories, breweries, distilleries, prisons, garages and hospitals for the public and private sectors adds to the builders' and civil engineering contractors' workload. There are, however, other more spectacular contracts which swell the turnover of contractors' businesses, namely: power stations (Dinorwig), airports, and military establishments and installations. This work usually requires the exceptionally organised contracting firms' services. Bridges such as the Humber one costing £500 m., and projects such as the Thames Barrier, which cost £400 m., are other types of work.

More recently, due to Britain's sea-bed gas and oil exploration, a new technology has arisen — that of the design, construction and anchoring of off-shore drilling platforms, oil storage chambers and associated work. The platform construction yards in themselves, while being constructed, are major civil engineering projects. These are new industries to this country, and the techniques used are still in a state of infancy throughout the world. It requires very experienced specialists and contractors to undertake the work. Some of the platforms are made of concrete built on the caisson principle, but the great majority are of steel. Computers are used to successfully predict the weather to be expected for the final transportation of the platforms to their destination in the North Sea, and they may be eventually positioned accurately using Space Reliability techniques which are used by the space flight industry. When the platforms are finally allowed to settle on to the sea-bed, work begins immediately on the anchoring of their legs to piles which have to be driven deep enough to counteract the rough seas expected in the North Sea.

Other special work which can be expected by contractors, after the recent serious droughts, is for the construction of more reservoirs, and the possible formation of a national water grid (or at least a semi-national grid) similar to that which operates for electricity and gas. Nuclear waste bunkers must figure in construction work in the future, as must on-shore/off-shore windmills for generating electricity. Finally, it is expected that a new Severn bridge will be required due to serious structural faults which may make the existing bridge a limited means for crossing the river.

1.2 Financing the industry

If sole trading contractors require to finance work in the construction industry, the first sources (1—5) which are automatically available are:

1. Personal capital

One's own capital in the form of personal savings or fixed assets (premises, vehicles or plant).

2. Profits

Profits from past contracts.

3. Arrears

The use of heating, lighting and telephone systems which requires payment in arrears; therefore, credit facilities are afforded by the public services undertakings.

4. Employee advance work

Work in advance of payment by own employees.

5. Advance work — outside labour

Work in advance of payment by subcontractors, nominated subcontractors, labour-only subcontractors.

It is of course wrong if an employer expects his workforce to labour all week or month if he knows that at the end of these periods there are insufficient funds to pay the wages or salaries. Employees normally, however, have a reasonable amount of protection in law, and are safeguarded against loss of earnings due to the employer being unable to meet the demands of the payroll costs. Wages and salaries are one of the first payments made in the event of the employer going into liquidation. The assets of the business are sold off to help pay the debts to the creditors — the employees who are owed wages or salaries being in this category.

Further methods (6—7) of raising and using finance requires a degree of effort and personal tact on the part of the entrepreneur (sole trader or risk taker). Approaches could be made to various bodies to obtain credit facilities. These can be outlined under the following:

6. Trade accounts

Agreements to open trade accounts with merchants and manufacturers, which allows the contractor to purchase goods at any time without paying for them until the 'statement' is received at the end of the month.

7. Plant hire

Plant-hire firms could give a similar service, i.e. the use of plant and vehicles on credit terms, the account being settled at the month's end.

In both of these methods trade and cash discounts could be arranged.

• (a) Trade discounts: These are usually offered to those in business, the amount varying from 5 to 40 per cent, depending on the type of business and the quantity purchased or used.
• (b) Cash discounts: These are offered as an inducement to pay debts promptly, the amount being in the region of 2—5 per cent. If the contractor is careful to pay his debts as soon as the 'statement' for the goods is received, the cash discount savings could be put to further use within the business. This is an additional financial source.

When ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Acknowledgements
• Chapter 1 Structure of the building and civil engineering industry
• Chapter 2 Organisations
• Chapter 3 Clients and the building/construction team
• Chapter 4 Design principles and procedures
• Chapter 5 The town planning situation
• Chapter 6 The building act/regulations
• Chapter 7 Safety, health and welfare on site
• Chapter 8 Measurement procedure
• Chapter 9 Contractor's pre-tender work
• Chapter 10 Contractor's pre-contract work
• Chapter 11 Contract work and other considerations
• Index