ACCEPTANCE SPEECH BY DR JOHN BOYD ON TAKING UP THE POSITION OF FIDIC PRSIDENT ANT THE FIDIC GENERAL ASSEMBLY MEETING, SINGAPORE, 13 SEPTEMBER 2007.
1. VOTE OF CONFIDENCE Thank you for this incredible vote of confidence. FIDIC is a key part of our industry’s past and will play an even more important role in its future as our world continues to shrink and our industry continues to carry out projects on an international basis. I feel both humbled and somewhat nervous to join that very select group of people to whom you have entrusted the leadership of this organization in the past. Several of those past leaders are here today – Eigil, Dick, and of course now Jorge. Thank you gentlemen, for your past stewardship. FIDIC will be 100 years old in 2013 – just six short years from now. When Jorge spoke at his inauguration two years ago he reviewed some of FIDIC’s history and I too have enjoyed reading the excellent book prepared by Ragnar Widegren from Sweden to commemorate its first 75 years. Interestingly, many of the issues that have preoccupied the industry historically are still with us today – indicating either that we have had limited success in dealing with them or that they have to be re-fought every generation. I suspect the latter. Gentlemen members of the Past President’s committee, just in case you thought we would let you hang up your skates now that you have handed the podium to someone else, I have a challenge for you. In preparation for the centenary I would like the past President’s committee to undertake the task of initiating a new history book to bring the accomplishments of FIDIC up to date in time for its centenary. 2. STRENGTHS AND CHALLENGES OF FIDIC In preparation for taking on the President’s role I have been looking at FIDIC’s current strengths and challenges and would like to briefly highlight some of the areas on which we need to focus over the next couple of years. Clarity We have a clear vision of who we are, what we do, and what we provide to our membership – and an equally clear statement of our governing principles and philosophy. So we can take that as the basis for the important issues on which to focus our attention. Representation The industry all over the world has been participating in the biggest boom in years yet our membership numbers are static or even slightly declining. The accuracy of the numbers is therefore questionable and it becomes hard to argue for the integrity of the industry in the face of those statistics. We need to get a more accurate representation of our membership – not because of any need to increase the funds raised through membership – at this point in time we do not need more membership cash - but because the higher the membership number the more credible we are when we argue for the importance of the industry. Structure Over the past few years we have put considerable emphasis on regional groupings. GAMA has flourished under this emphasis and shows signs of becoming a significant voice for the regional interests of our African members. We need to pay a similar level of attention to ASPAC to see if we can make it stronger or, if that fails, restructure it to give it the coherence that would allow it to become a more vital part of the interests of
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our Asia Pacific members. Neither EFCA nor FEPAC are currently part of the FIDIC structure and that is a limiting factor in our activities in Europe and in Latin America, even though our relations with those two groups are strong. We have a joint task force that is working with EFCA to determine the best way to provide industry representation in Europe and I strongly support that initiative, and will vigorously push to implement their recommendations. We will continue to work with FEPAC to develop our mutual activities but we will also continue to target countries in that region to join FIDIC directly. Industry Enhancement and Development A couple of years ago we concluded that the publication of our documents and guidelines should be supplemented with training. We have experimented with the use of outside suppliers or trainers and with FIDIC volunteers to deliver courses and seminars, and we are now beginning to experiment with electronic internet based delivery. These training activities present huge opportunities for the Member Associations to help their member firms develop capacity in internationally recognized best practices. They are popular and profitable particularly where the local MA does not have the resources to operate their own programs of seminars and workshops. Training will be a growing part of our activities in future, an effort that I strongly support. 3. VALUES – QUALITY, INTEGRITY, SUSTAINABILITY Now let us consider the three values of the Federation – quality, integrity and sustainability. In each case we have a framework and a set of tools to reinforce our message. What do we plan to do in each of these areas? Sustainability Consider sustainability. The tool, PSM, was introduced at the 2004 conference, and we have been carrying out training courses ever since. It has now been in circulation long enough for some projects experience to be collected. We have half a dozen initiatives underway to further develop our thoughts on how sustainability will affect our industry as we proceed. Integrity The two integrity tools are Business Integrity Management System for the industry and Government Procurement Integrity Management System for procurement groups. Both are good tools but they are not having the impact that we would expect them to have. There is a disappointing number of firms that are using BIMS, in part I suspect because there are no contracting authorities who give any credit to the use of this tool in their competitive evaluations of companies. We recently received a rather impassioned response arising from a BIMS questionnaire we sent around to our member associations. The respondent (a very experienced international consultant) made the point that in many parts of the world, bribery and corruption are structural – that is they are hard wired into the regular operations of the government. “As long as government officials around the world are paid only a small fraction of what they need to make a living, there will be major corruption.” Perhaps we need to change our approach to this issue. In addition to promoting our tools, perhaps we also need to be more direct in publicising the existence of structural corruption and the specific steps that the funding agencies need to take to combat it. This is effectively GPIMS in a different form. Singling out individual firms for making a mistake in an environment of structural corruption is a complete waste of everybody’s time – and accomplishes nothing. If there is no incentive provided to encourage firms that attempt to educate staff in business integrity (through a systems approach such as BIMS) it sends the wrong message about how seriously the financial institution takes the issue. Quality The third value is quality and our message is very clear on this issue. If you procure engineering services on
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the basis of quality then you have the right to expect a quality product. If you procure engineering services on the basis of cost then you have the right to expect a cheap service – with unknown quality. If you procure services on the basis of a combination of the above then, too often the selection fails to discriminate sufficiently on the quality criteria and effectively reverts to a cost selection. A recent World Bank study of a number of their projects demonstrates the latter statement quite convincingly. If we examine why QCBS = CBS there are perhaps three fundamental reasons. 1) Cost discrimination is simple – anyone can tell which of a set of numbers is lower than the rest. 2) Quality discrimination is complex unless the procurement official has enough knowledge and experience to recognize the important parts of the project. Increasingly we see that Government clients involved in procurement of engineering services are not as experienced in the industry as they were in the past. We recognize this problem as we receive increasingly incoherent or incomplete requests for proposal from these clients. 3) The idea of selecting a consultant on quality and then negotiating price is one that fills the average procurement official with a sense of conflict and dread. We need some additional tools in our arsenal to carry on this fight. We need some well documented case histories showing the results of cost based selection. We need the release of the full World Bank report. We need training materials to help procurement officials to distinguish submissions on quality. We need a description of the process of price negotiation to show that it is not a blank cheque but rather a rational way to balance project needs with client and engineering resources. Finally and most importantly we need members of the industry to refuse to work for clients who do not select their services appropriately. So there are many things to do. 4. INDUSTRY CONCERNS You know, every time I come to one of these annual meetings or go to an MA meeting, I hear the same complaints. Many of them have to do with the way we operate our businesses – issues of profitability, clients attempting to use us as an insurance company, cutthroat cost competition and the like – issues that we control ourselves and can address, particularly at a time when business is plentiful. I don’t propose to talk about that. The other concern however relates to the image, or should I say the lack of image of our profession and our industry. If you were to go out on the street and pick a member of the public at random and ask them what engineers do or what consulting engineers contribute to society, you would be rewarded with a blank look of complete non-comprehension. If you were to look at the careers that the best and the brightest students were intending to follow you would find that most of them were going into other industries and other professions. We are almost invisible and we work very hard to remain invisible. We dislike public interaction and we run away from it but as sustainability becomes more of an issue good engineering will require us to include public considerations in what we do. At the moment we fail to engage with society on the major issues of our day. Society makes decisions about many issues that have a technological basis and about which we have critical knowledge and understanding but we don’t stand up in public and debate these issues and let our voice be weighed on the scales of public opinion. In the absence of that voice, society still makes the decisions but they are made without the perspectives that we can bring, and sometimes the wrong choices get made for that reason. If we want to be respected and given a significant role in society, we have to engage with society and we have to start that engagement with an idea of where we belong that is big enough for the role we would like to have. Historically we have always wanted our role to be that of trusted advisor to our clients. In future I would like to suggest that we expand that vision and we seek to become the trusted advisor to society. Next year we will meet in Quebec to discuss and debate our role in society – ways that we influence it and our obligations in delivering services to it. Until then, I will be very busy on your behalf pushing forward with your mandate. I look forward to seeing you there.
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