Bath Spa notes on the case PDF

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Bath Spa notes on the case study...

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Bath Spa case: possible solutions? This note draws on the discussions and analysis of the case from our seminars. It is not a definitive ‘solution’, but suggests ways to think about the situation that could inform future project management approach to situations that are, in whole or in part, similar to this one. Lloyd Fletcher, December 2019 We have to make a few key assumptions and speculate about what was going on in this case, so proposing a better approach in hindsight puts us on shaky ground. Caveats aside, the notes below suggest possible diagnosis of problems and options for solving them. If your assumptions and understanding are correct, then these are viable approaches. Our analysis can benefit from applying various theoretical or analytical lenses to it, both micro and macro: in addition to lenses like risk, stakeholder, and supply chain, we could invoke models like PESTEL, 7S, or MoDEST to try and make sense of the organisation and the broader environment of the project.

Design and planning We can see elements of the classic ‘design and build’ problem, i.e., splitting responsibility for the design/planning/costing phases from the actual construction. With complex/uncertain projects, the contractor may inherit risks created by the designer (architect), over which they have no control, and yet must base their contract price and work on this design. This, plus a fixed price contract, can produce the common adversarial relationships between customer and contractor and the inevitable ‘claims’ process as the contractor tries to rescue revenue from a failing project. Another factor may have been Grimshaw’s lack of experience with listed buildings; although some of this was outsourced to another designer, we must wonder what aspects of the design and the complex site created problems for the contractor. Solutions? Give architect an incentive to produce a design that is optimal for the contractor to implement, but at the same time realising the client’s desire for a high impact building. Some form of risk sharing? Enable the contractor to provide input into the design (difficult if the design is awarded before the build contract). Taking that thinking further, perhaps share risk for the entire project – concept, design, build, and then into operation (post project), such that a partnership has an interest in optimising overall, not just for their own phases? Note that giving the contractor responsibility for design as well, but without working to the client’s brief for a high impact building to attract tourists may not work: does the contractor have the architectural skills? Can they subcontract that to produce an ‘iconic’ design? Their interest would be to produce an ‘easy’ design that is low cost, and low risk, to implement. Understanding the ‘tension’ between the architectural vision and an efficient build is key.

Stakeholder management Some stakeholders were neglected, to the detriment of both project and stakeholders. Henk, the owner of the Spa operating company (TDC), had considerable expertise in Spa design, but his views were not really sought (e.g., the notorious peeling paint!). He could have been engaged, not just kept informed, brought into provide expertise/knowledge in design and build (quality control?) phases. If the Council’s own policies allowed it, perhaps some formal advisory position or a seat on the project board?

Locals, both business and domestic, increasingly felt frustration, and put pressure on the council, no doubt feeding the adverse media attention. Closer management could have kept them better informed, but also feeling more involved, even to the extent of soliciting their input to the design. Again, subject to what is ‘allowed’ some seats on a steering committee or focus group might have helped. A focus on what different stakeholders want/need from the project in terms of success and quality is essential. A management plan follows from that. Finally, did the council lose sight of its key definition of success: increasing tourism to deliver long term economic benefit? Everyone got bogged down I meeting the constraints of the iron triangle – and of course they had to be concerned about cost over-runs with public money. But how could they plan the project and measure it for the long term success they wanted?

Supply chain and contracting This was a fairly standard fixed price contract (with variations allowed). But these can be problematic when the project is not ‘fixed’, i.e., faces complexity, emergence, risk, uncertainty. Then everything hinges on how variations (customer requests for change, unexpected problems, etc.) are handled. This can end in dispute, arguments over who is responsible for what ‘variation’ and who should pay for it. Clear contract terms and careful contract and relationship management (GTMS had this role) are essential. But may not be enough. More detailed up front planning and design to try and uncover more risks sounds like a good idea, but is probably a bit idealistic: could they/should they have anticipated the mallards, the architectural finds, the need for more bore holes, the quality problems? At the very least, a larger contingency budget would have given them ‘buffer’ against these emerging issues. But would the project have been approved at that higher cost? A more flexible form of contract, leaning in the cost-plus direction, would not have been approved (clients always want a fixed price, even though reality is not fixed!); but perhaps some initial planning work before committing to the main project could have been used to tease out issues: but this is about trying to know the unknown unknowns! Could we make the engineers (Arup) responsible for not figuring out there would not be enough bore holes for the thermal water? Another contracting issue? Can we fold this into a risk sharing partnership? Whatever form is used, the contract can still be vulnerable/dependent upon subcontractors (risks).

Governance and control Real problems here. The council seems to have been dysfunctional in terms of oversight and decision making. Evidence: at least two council committees involved in the project, no major projects directorate, no internal project management expertise: control thus depended on outsourced experience (GTMS, Grimshaws). We can see evidence of group think, escpation of commitment, sunk cost fallacy and more! This disfunction was remedied late on, after the Mowlem horse had left the stable (literally). A better structure, council policy allowing, might entail a project board formed for this specific purpose of guiding this major project, drawn from council members, supported by officers (not relying just on a monthly oversight committee of politicians). Other stakeholders could be drawn in, at least in an advisory/consultation role. A director of projects from the start would put project management expertise at a high level into the council Executive and give it focus and status: this person would be empowered to intervene and escalate major issues and decisions, rather than allowing the project to ‘drift’ as problems emerged, schedules slipped, costs escalated. Better control and relationship management on a daily basis was lacking: GTMS, although experienced in contract administration, seemed to be

weak ‘middle men’, without the power and influence needed to either make the contractor behave, or escalate up the chain of command. A partnership form of contract might make governance simpler and control more effective, but it’s not a panacea, raising other issues and risks.

Other issues Most other problems and inefficiencies relate to combinations of the above, e.g., repeated vandalism, subcontractor deficiencies, legal dispute costs, uncontrolled payments....