Management contracting looks good

News

25 January 1986

With more work to go around in an industry that is far from stretched at present, it will be some time before there is any substantial change in prices, although competition from the top jobs will remain keen.

The year will certainly be interesting for TWMC, who are currently involved in a number of projects, including the continuing restoration of the Alexandra Palace in north London, scheduled for completion in 1987, and the installation of the £135m computerised ticketing system for London Underground.

The increased competition in project management over the last few years, with a great variety of professionals — including quantity surveyors, general practice surveyors and architects — entering the fray, has little direct impact on the management contractor, who is offering a complementary service.

Mike Hinge feels that a quantity surveyor would find it difficult to offer the same service as TWMC. Indeed, many of the American-style project managers, such as Schall, who are having an increasing impact on the project management scene, will themselves use a management contractor on large jobs.

It is difficult to judge what influence the BPF manual is going to have during 1986, but it is certainly not the be-all and end-all of construction contracts, says Mike Hinge. There are a number of other approaches which provide as good, if not better, results. The manual is, however, a fairly clear sign from the client side of the construction industry that they have not been satisfied with the service they have received and the industry should take note.

Quantity surveyors E C Harris & Partners forecast that the average level of tender prices could rise by as much as 7% this year — last year’s lift was 6%.

In their quarterly Building and Construction Economics Survey they say defence spending, prison building, major road improvements and other plans for massive public and private capital expenditure have already given signs of pump-priming. They also say that if any significant funds flowing from privatisation are diverted by the Government to construction and capital works “the effect on building prices could be rapid and sharply upwards”.

This year should be a good year for management contractors: according to Mike Hinge, deputy general manager of Taylor Woodrow Management Contracting, there is every indication that the volume of management contracting will continue to increase steadily throughout the year in a tendering climate which will see much more activity. With more work to go around in an industry that is far from stretched at present, it will be some time before there is any substantial change in prices, although competition from the top jobs will remain keen. The year will certainly be interesting for TWMC, who are currently involved in a number of projects, including the continuing restoration of the Alexandra Palace in north London, scheduled for completion in 1987, and the installation of the £135m computerised ticketing system for London Underground. The increased competition in project management over the last few years, with a great variety of professionals — including quantity surveyors, general practice surveyors and architects — entering the fray, has little direct impact on the management contractor, who is offering a complementary service. Mike Hinge feels that a quantity surveyor would find it difficult to offer the same service as TWMC. Indeed, many of the American-style project managers, such as Schall, who are having an increasing impact on the project management scene, will themselves use a management contractor on large jobs. It is difficult to judge what influence the BPF manual is going to have during 1986, but it is certainly not the be-all and end-all of construction contracts, says Mike Hinge. There are a number of other approaches which provide as good, if not better, results. The manual is, however, a fairly clear sign from the client side of the construction industry that they have not been satisfied with the service they have received and the industry should take note. Quantity surveyors E C Harris & Partners forecast that the average level of tender prices could rise by as much as 7% this year — last year’s lift was 6%. In their quarterly Building and Construction Economics Survey they say defence spending, prison building, major road improvements and other plans for massive public and private capital expenditure have already given signs of pump-priming. They also say that if any significant funds flowing from privatisation are diverted by the Government to construction and capital works “the effect on building prices could be rapid and sharply upwards”.