Engineering Close Out
Major projects are typically technically complex, have fixed programme milestones and a high public profile.
Large design and build contracts are usually let based on limited design information. As a result, GRIP Stages 5 and 6 (detailed design and construction respectively) must be allowed to overlap one another so that programme milestones are met. The effect of this overlap is that the ability to estimate costs accurately, let contracts early, procure smartly and plan works sufficiently in advance of construction are reduced.
The result is often that works are not undertaken efficiently, quality is reduced and issues which were not addressed in a timely manner prior to Entry into Service are corrected expensively post substantial completion. Resolution of quality issues, commercial administration and assembly of handover documentation are a lower priority during delivery and then become a major area of backlog post Entry Into Service. Preliminaries continue to be expended on these tasks with no tangible increased construction output.
The cost of closing out defects and residual works after substantial completion, where preliminaries are not included in the contract costs, has the potential to be extremely significant. Closing out defects post substantial completion can be as much as eight times the cost of completing works within the contract period. It is difficult to estimate exactly what the costs of these activities are likely to be at the end of the project as the backlog that may be outstanding at that time is unknown. However, through analysis of other major projects, it has been found that typically up to 20% of the total cost of projects has been incurred after substantial completion.
The close-out for Thameslink Programme Key Output 1 had the advantage of retaining many of the personnel and much of the knowledge on the Thameslink Programme for the implementation phases of Key Output 2. Thameslink Programme’s approach to close out was to ensure that, as far as practical, issues were identified early and addressed within the contract period, ultimately saving time and cost.
This case study considers the importance of early contractor involvement as part of collaborative planning, management and delivery of the Thameslink London Bridge Area Partnership works.