FIG 6.0 (chapter opener) Flexible teaching spaces are formed by extra long span CLT floors to Harris Academy, Sutton, by Architype (2019). We cannot discuss cost and value without defining the terms. In this chapter we will talk about cost, not price, as these are totally different. Cost is generally defined as the amount of resource or opportunity (money) required to create something or deliver a service. There is then the value (and capital cost) at inception, whole life value throughout the life of the building and more recently, social value is considered increasingly important. CLT can create a less harsh environment within a building and wood is more aesthetically pleasing than other construction forms and it can be argued that the value to and wellbeing of a person in using the building is improved. It can be said that the value of something is subjective, but with assessment and benchmarking, increased objectivity can be created with less room for challenge. People are understanding more about the environmental impact of construction and carbon value benefits. Other structural materials are increasingly being recycled and reused, but once they are extracted from the ground in their raw forms, they are gone for ever whereas trees are renewable and therefore more sustainable. CLT can be used to form a whole building structural solution (external walls, floors, internal walls, roof) with a single point of responsibility for design, supply and installation. Designers have the flexibility to use CLT for only one element, say internal walls, if required, whether purely structural or to create a finished surface. FIG 6.3 Unaligned objectives.1 The current procurement model with many differing facets of project interfaces and stakeholders offers little incentive to align interests, leading to the repetition of errors, failure to innovate or adopt best practice and the delivery of inferior products. Whatever the approach, delivering the best procurement strategy in any project is critical to overall success, realising the right cost and value balance and not just simply transferring the risk. The typical project has the usual design team members with advice sought as required from further down the supply chain. Let’s instead capture the expertise and value from the CLT providers by inviting them to be part of the design team and work as an integrated team to deliver an efficient solution from the outset.1 Bringing on board the provider or specialist contractor early allows some of the differing facets of project interfaces to be managed efficiently with the expertise of the supplier. This will ensure all parties are moving in the same direction to the ultimate benefit and increasing the value in the successful project delivery. Cost certainty can be improved earlier on projects if collaboration and involvement of the CLT provider is adopted. The project cost manager will benefit from improved accuracy in estimating resulting in fewer challenges later in the procurement cycle when formal tenders are obtained. The future environmental agenda will impact on planning with the process possibly affecting programme and costs of projects. We cannot just focus on capital cost – whole life cost considerations have far more impact than the initial capital outlay. Mark Farmer in his report on construction ‘Modernise or Die’ stated the cost plan has to move away from the capex fixation if the end pre-manufactured value to the client is improved.2 One issue that does require addressing is where we obtain benchmark cost data for CLT use. Where do we acquire estimated rates for budget cost planning? Could this be hindering the increase in CLT use? It is an emerging method of construction with limited market expertise. The costs and risks, benefits and opportunities, may therefore not be fully understood compared to more established forms. Rider Levett Bucknall (RLB) is addressing this with their suite of Timber Estimating Guides: Timber Frame, SIPS and CLT. This will hopefully break down the perceived barriers and answer more of the important cost questions.3 Producing the CLT structural solution combines the close integration of design and manufacturer from one organisation in a controlled factory environment allowing efficiencies to prevail.
CHAPTER 6
COST AND VALUE
CAPTURING THE DESIGN VALUE IN PROCUREMENT INTEGRATION
COST
VALUE IN THE QUALITY