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METHOD OF PROCUREMENT ISSUE

THE SCOTTISH PARLIAMENT BUILDING PROJECT FAILURE

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CONTENTS

PAGE

1.

Content

2.

Introduction

3.

The Scottish Parliament Building an overview

4.

Project Schedule Delay

5.

Project Cost Over-run

6.

Roles of Project Management

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7.

Conclusion

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8.

Recommendation of Alternative Method of Procurement

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9.

Bibliography

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2. INTRODUCTION

Many government initiated massive constructions of public building projects have failed over past many years.
For example, projects such as British Library, the Scottish Parliament, the Channel Tunnel and the New
Wembley Stadium were highly criticized for its cost over-run and huge delay in final handing over which
resulted in unfulfilled project objectives the stakeholders expectation. Form the lessons learnt from the failed
projects, application of project management techniques could have been successful to deliver the projects on
time and within the budget. Even thought for the last 50 years, there have been lot of research and development
(R&D) on the subject of Project Management to improve the performance of the construction industry together
with the collective construction industry experience gained over years, the projects failure continues.
The new Scottish Parliament Building project is an example. The project failed in terms of cost, time and
stakeholders expectation however the finished project achieved a high quality criteria and the project on
completion in 2004 was welcomed by the millions of Scottish and visitors. The project cost approximately 414
million against the initial cost of 40 when it was completed in August 2004 that is 42 months later than original
completion date.
There were many reasons inflicted to the cost overrun of the Scottish Parliament Building Project. First of all,
none except one of the shortlisted architect adhered to the proposed budget and brief and all others failed and the
one who adhered was not awarded the Project. Initially the cost estimates were prepared for an incomplete
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design. During the course of the project, the architect added another 4,000 m to the initial scope of work which
increased the cost. Therefore the original budget of 40 million was not realistic for the original scope at that
time and that cannot be compared with the final project cost. The increased scope, the complexity of the design
consumed a lot of time and the project delayed. Project Cost and Project Delays are always come together,
This

report

analyses

the main

reasons

for the new Scottish

Parliament

Building

failure. And

Recommending an alternative method of procurement method that may have been considered. Section 2 outlines
overview of the project. The following two sections detail the numerous delays occurred in the project from
inception to completion and associated cost overrun due to additional design development and prolongation.
Section 5 and 6 describes the project management roles and strategic project management techniques that could
have been adopted to have delivered the project with a success. The last sections brief about the lessons learnt
from the project failure following a conclusion at the end

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3 . The Scottish Parliament Building an overview


The Scottish Parliament Building was built in an area of 1.6 ha and located 1 km east of Edinburgh city centre on
the edge of the Old Town constructed from a mixture of steel, oak, and granite, the new Scottish Parliament is a
striking and very complex building with high quality materials and some unusual design and construction
features. The parliament was procured using Construction Management Procurement in which the most of the
risks remains with the Client. The cost of the new parliament was originally estimated at 40 million back in
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July 1997 with gross area 20,740 m . Final cost of the project was 431 million and completed in August
2004
after 42 months delay. Total trade contracts awarded were 58 numbers.

Fig 1. Site Plan


Key Dates
Commencement Date

: June 1999

Date for Completion

: March 2001 (Original Duration 21 months)

Completion Date

: August 2004 (42 months delay)

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3 . The Scottish Parliament Building an overview (Continued)

Main Buildings
MSP Building
Queensberry House
Tower 1 and 2
Tower 3 and 4
Canongate Tower
Debating chamber
Lightwell/Public stair
Key Project Team
Client

: Scottish Parliament Corporate Body (SPCB)

Project Architects

: EMBT & RMJM

Structural Engineers (Consulting Engineers)

: Ove Arup & Partners

Planning Supervisor & Project Managers

: Turner & Townsend

Quantity Surveyors & Cost Consultants

: Davis Langdon & Everest (DLE)

Construction Manager

: Bovis Lend Lease

Service Engineers

: EMJM

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4. PROJECT SCHEDULE DELAY


The main cause of the project schedule delay were delays in completing the detailed design required for this
challenging project that needed to be delivered against a unrealistic target dates using an unusual construction
management (procurement) route and the interrupted supply of information throughout the construction process.
In addition to the above, the other reasons for the delay are communication problems with the involved project
teams and political intervention on the project also disrupted the progress of the progress.
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The client requirement for additional net usable area of 4,000 m in August 1999 required an extended design
period. This caused the Architect to issue almost 2,000 design changes and also for the original incomplete
design. The Architect was also facing a pressure in progressing against unrealistic target dates assigned by the
Client.
Effective communication in construction project is very important skill required for a delivery of projects on
schedule. This was not the case in the Scottish Parliament Building. The both Project Architects, EMBT from
Spain and RMJM from Scotland from two different cultures and working from their own locations added
problems in communication to resolve the issues arising at the Holyrood Site. The problem became much more
when the Client changed from the Scottish Office to Scottish Parliamentary Corporate Body (SPCB) in 1 June
1999 and introduction of Presiding Officer and Architectural Advisor.
Another major reason was the selection of construction management as a procurement route. This was
considered as unusual in the Scottish Construction Industry. None of the advantages and disadvantages was
reviewed by the Client before adopting it to deliver this complicated project. The following are some of the
disadvantages of Construction Management that contributed to the schedule delay;

Since there is no main contractor present, the client must carry all the risk of the activities of almost 60
individual trade contractors deployed at site at a peak time thus delaying or disrupting each others
activities.

The construction management primarily doing a coordination roles between trade contractors, the Client
and the Architects and never assume risks other than his negligence and again he put the risk on the
client.

The Client was responsible for design coordination and bears the risk of delays and disruption caused by
the trade contractors.

It was not possible to conclude the final project cost until the last work package was awarded.

The political interventions time to time throughout the project put pressure on the Architects and
other trade contractors delaying the project even worse.

5. PROJECT COST OVER-RUN


The main reasons for cost increases are prolongation due to delays, disruption and design development, inflation,
and client management to brief.
Time was of essence. The delays for the project discussed above prolonged the completion till August 2004.
This cost a lot of money to be spent on site general requirements (site preliminaries). After 9/11 attack, the
security of public buildings became paramount so as to implement mandatory security measures which
contribute a part of the cost overrun. Another reason for the increased cost was that the addition of variations for
high level design development in September 2000 which added 80 million and delay and complexity in the
construction process.
The increase in the scale of the building, increase in construction costs and other dependent costs, increased fees
to advisors and site organisation costs are the some other reasons for cost overrun. In most of the trade contracts
the estimated final cost greatly exceeds the original cost plan allowance due to uncompetitive procurement of
trade contracts with scope uncertainty. The remaining fit out works, additional landscaping, and site acquisition
and programme contingency costs accounted for some smaller increase of the project cost. The following is a
tabulation of project cost during the duration of the project.

Date

Project Cost in million

Date

Project Cost in million

Jul 1997

40 50

Mar 2002

266

Apr 1998

50

Oct 2002

294

Jun 1999

109

Jan 2003

323

Apr 2000

195

Jun 2003

375

Aug 2000

209

Sep 2003

401

Nov 2001

241

Aug 2004

414

6 . ROLES OF PROJECT MANAGEMENT

A project success is always linked to time, cost, quality, scope and risk parameters. As discussed above the
Scottish Parliament failed in terms of Time and Cost. The project cost increased by more than 350 million
and delayed by 42 months due to failure of managing the scope and risk. But the quality was achieved.
Selection of construction management procurement route without a proper understanding of the risks involved
was adversely affected the complete construction process later on since all the risks were transferred to the
Client. This is a procurement management failure of project management roles.
Construction Management was not suitable for the project since it does not take full responsibility of huge risks
involved, complexity of the project and managements of tens of subcontractors. The overall role was just a
management and coordination only. The more the Construction Manager stay in the project, the more he earned
his fees. And also Bovis was rejected and excluded in the shortlist but appointed later for the Construction
Management role with political influence.
It was clear that key stakeholders such as Members of the Scottish Parliament, Scottish Executive civil servants
and Scottish Parliament official were not involved in procurement selection, and approval of revise budget and
scope changes. This affected the lack of monitoring and controlling of the complete construction process
Communication management was failed due to lack communication between the key players such as
Project Architects EMBT and RMRJ. The Lead Architect was working outside the country where the
project was located.
Value Engineering (VE) exercise is a process during any stage of a projects design development cycle that gives
all stakeholders the opportunity to be involved in the decision-making process and seeks to achieve the essential
functions of a project at the lowest total cost, consistent with required levels of performance and quality. It
constitutes an examination of all relevant options for the design and construction of the project, leading to a
refinement of the design brief and identification of any budget constraints. The VE exercise carried out in the
Scottish Parliament Building project suggested many recommendations that could have saved at least 25
million but it was failed because of successive new design variations

6 . ROLES OF PROJECT MANAGEMENT (CONTINUED)


Identifying whether a project is a success or a failure can change with time. The new Scottish
Parliament Building was clearly a failure on the criteria of cost and time, yet the building later
became the amazing postmodern architectural achievement. In its first six months after opening in
2004, it attracted over a quarter of a million visitors. Within a year, it had become Scotlands number one
tourist attraction.
With the project is complete, the financial bleeding is over, the memory of disaster will fade, but it is
important that we remember the causes of project failures and apply the lessons learned. The following
items listed needs more consideration;
Procurement Route: The selected procurement route must be able to allow those who can manage
the risks involved. It must be not a criterion to allocate or transfer risk from one party to
another. Construction Management route allocate the complete risks on the Client and where the Client
lacks construction experience, this become e a worse case.
Milestones: To measure the progress of the project, it is important that milestones are introduced
throughout the project duration which will help to find out the area where there is a problem and to take
corrective action in a timely manner.
Communication and Leadership: The change of the Client, project sponsors, project directors and
appointment of Project Managers and their resignation showed a lack in leadership roles. Due to multiheaded clients, and their different perspective idea, they could not control the project. Therefore single
point of leadership will benefit the lack of leadership role and help control the project flow.
Budget: The initial budget was not adequate since it was planned for extending of an existing building but
later decided to for new building. The cost estimates was not complete and realistic since the design
was incomplete and design brief was not clear. It is so important first to make the scope defined and do
the costs estimate. And design to costing should be adopted.
Project planning: It is very important that at the beginning of the project, a realistic planning is
prepared particularly in projects where there is significant complexity or technical risk, or when there is
a tight schedule for completion. Due to the political intervention and urgency for a parliament building,
the schedule was tight and unrealistic and not revised as per the revised and additional scope of work.
Proper planning and monitoring of construction projects is a key to success and all the stakeholders
should be informed about inadequacy of project planning.
In addition to the above, it is advisable to avoid politician involvement in the construction process and
decision making, and secure the project funding and resources.

7 . CONCLUTION
The above report examined the most likely reasons for the failure of Scottish Parliament Building
Project in terms of time and cost even though it was successful in quality issues. Anyway the project
was criticised by many people and it was a real failure. Political intervention, not clear design brief,
multi-headed

clients, not having experience in construction management procurement route, wrong

appointment of project team, lack of clarity in project objectives at the initial stage are some many reasons
discussed.
The project management techniques could have been exercised to have completed the project on time and
within the budget. With the proper procurement route suitable to allocate the risks involved in such
complex project, assigning the roles and responsibilities to the right project team, preparing a realistic
project budget, defined leadership and communication skills would have been adopted.

8 . Recommendation of Alternative Procurement Method


Every procurement route carries its own advantages and disadvantages. The
strategy should be developed from an objective assessment of the clients needs
and project characteristics. A best-fit solution is looked for, with an informed client
making the decision based on sound judgement, giving due regard to the identified
criteria and the acceptable distribution of risk. risk/certainty of time, quality and
cost will largely govern selection of the approach
The initial budget was not adequate since it was planned for extending of an existing building but later
decided to for new building. The cost estimates was not realistic since the design was incomplete and
design brief was not clear. It is so important first to make the scope defined and do the costs estimate. And
design to costing should be adopted.
In considering unclear clients brief, lack of construction knowledge and incomplete design. And the project
needed to be completed within a short specified time thus forced client to choose management contracting a
procurement route.
but client could have controlled and achieved better result in terms of Time, Cost and Quality since they had
appointed
architect and cost consultant they should have allowed some more time at pre contract stage in order
to prepare good design brief and approximate quantity. In this view Traditional Re-measurement procurement
with bill of approximate quantity could have yield better result

9. BIBILIOGRAPHY
1. Fraser of Carmyllie Q.C., Rt Hon Lord (2004) The Holyrood Inquiry, Scottish Parliament
Body, September
2. Auditor General (2004) Management of the Holyrood building project: prepared for the Auditor
General for Scotland: Audit Scotland, June
3. Auditor General (2000) The new Scottish Parliament Building: An examination of the
management of the Holyrood project, Audit Scotland, September
4. Morris, P. W. G. Research at Oxford into the preconditions of success and failure in major
projects. Proc. Project Management Institute Seminars/Symp. On Measuring Success,
Montreal, 1986, Project Management Institute, Drexel Hill, PA, 1986.
5. William G. Ramroth, JR., AIA. (2007) Planning for Disaster, How Natural and Manmade
Disasters Shape the Built Environment,
6. Morris , P W G. The Management of Projects, Thomas Telford Ltd. 1994, ISBN: 0 7277 1693 X
7. http://www.building.co.uk/buildings/architecture-news/scottish-parliamentthe-true- story/1011961.article (last accessed on 20 March 2011)
8. Major Project Association (MPA, 2003), www.majorprojects.org