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FINAL REPORT BY THE HOLYROOD PROGRESS GROUP

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									SPCB(2004)Paper 167 14 December 2004

FINAL REPORT BY THE HOLYROOD PROGRESS GROUP TO THE SPCB

Purpose 1. The SPCB is invited to note the attached Final Report from the Holyrood Progress Group.

HPG Secretariat Decemebr 2004

FINAL REPORT BY THE HOLYROOD PROGRESS GROUP TO THE SPCB
NOVEMBER 2004

FOREWORD

The New Parliament Building has been an incredibly demanding task for the Holyrood Progress Group and for the Project Team. But despite all the problems that we have experienced, we take some pride in our contribution to the construction of the home for Scotland’s new democracy. The Holyrood Building has been built in a climate of unremitting hostility from most of the Scottish media, and they are beginning to acknowledge that it is a world-class architectural achievement and a great new asset for Scotland. The Resolution of 5th April 2000 delegated responsibility for the completion of the Project to the Clerk, acting on the advice of a ‘Holyrood Progress Group’ consisting of three elected Members and four professionals. The Holyrood site, the Miralles design concept and the form of building contract, known as Construction Management, had been decided before the establishment of the Group. Our task has been to drive the Project to completion without compromising quality. Since our first meeting in June 2000 we have met fortnightly to consider reports from the architects, cost consultant, construction manager and the Holyrood Project Team, and to make recommendations to the Clerk or the SPCB, as appropriate, on behalf of the Parliament. Construction Management requires pro-active co-operation amongst the design team, the construction manager, the package contractors and the client. Above all it depends on prompt delivery of design information and efficient management of package contracts. As the Parliament’s representatives, we have kept client-initiated changes to an absolute minimum and we have made decisions as quickly as possible. However, as the Auditor General’s reports and Lord Fraser’s Inquiry have confirmed, this Project has been bedevilled by problems which have caused delays and cost increases. I could cite all sorts of examples including disputes between the architects; repeated failures to achieve programmes promised by the construction manager; late reporting of cost problems; the insolvency of Flour City Architectural Metals; and the blast protection criteria. Despite all the problems and the intense media scrutiny of them, members of the HPG knew that Enric Miralles’ design was an exciting vision for our new Parliament and we were determined to see this important Project through to completion. It has been hard work punctuated by disappointments and dramas, but the completed building is magnificent. I am extremely grateful to Linda Fabiani and Jamie Stone, and to our professional colleagues John Gibbons, Andrew Wright, David Manson and Robert Gordon for their commitment to this task. Also, all the members of the Holyrood Project Team have served the Parliament extremely well. The HPG's responsibility was to get the job completed, and we have achieved that

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objective. We have had the benefit of excellent support from the Group’s secretaries – first Sarah Davidson and then Judith Proudfoot. I believe that we can take some pride in our contribution to the construction of the Holyrood Parliament, and we are confident that it will be a tremendous asset for the people of Scotland and an excellent environment for wise decisions and good legislation. The Convenership of the Holyrood Progress Group has been the toughest assignment in my twenty-six years in Parliament but I am grateful for the trust and support of colleagues in the Scottish Parliament who have made it possible for us to complete this task. Enric Miralles’ and Donald Dewar’s visions of a people's parliament set in the landscape of Scotland now stands as the permanent home of Scotland's hard-won new constitutional settlement.

JOHN HOME ROBERTSON MSP Convener

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BACKGROUND

The Holyrood Progress Group was established following a recommendation in the Spencely Report in April 2000. The provisions of the Scotland Act 1998 (with respect to delegation of functions) prevented the SPCB from establishing the Group with executive functions. Accordingly, the SPCB, whilst retaining legal responsibility, delegated responsibility for completing the Holyrood Project to the Clerk subject to the following stipulation : “In his day-to-day management of the project, the Clerk will seek the advice and assistance of the HPG and is expected to act on this advice. If, exceptionally, the Clerk considers that any advice is inappropriate and should not be implemented, he will refer the matter to the SPCB.” While the nominal function of the HPG was advisory and consultative, it was clearly understood by all concerned that the Clerk would act on advice from the Group. The only decisions made by the Group related to the nature of its recommendations. Remit of the Progress Group The HPG was the principal advisory body to both the SPCB and the Clerk in the management of the Holyrood Building Project. It was a source of political liaison with the Parliament and provided high-level authoritative advice on technical, professional and administrative issues relating to the project. In particular, its remit included: • • • • • • To advise the Clerk on all issues relating to the progress of the project. To monitor and report periodically to the SPCB on progress towards achieving the targets prescribed by the Parliament. To be available for consultation by the Clerk and the SPCB on any aspect of the project. To promote good communications with MSPs and the public and to optimise presentation of the project. To make recommendations on matters within its remit. To take formal minutes of its meetings and to inform the SPCB of key decisions/recommendations.

Membership of the Progress Group In June 2000 letters of appointment were issued to the original members of the HPG. They were – Lewis Macdonald MSP(Convener); Linda Fabiani MSP; Tavish Scott MSP; John Gibbons Architectural Adviser to the SPCB; Andrew Wright, Conservation Architect and Past President of the Royal 5

Incorporation of Architects in Scotland; David Manson, Quantity Surveyor and Past Chairman of the Quantity Surveying Division of the Royal Institution of Chartered Surveyors in Scotland; and Robert Gordon, Scottish Executive. In November 2000, Jamie Stone MSP replaced Tavish Scott and in March 2001 John Home Robertson MSP replaced Lewis Macdonald and took on the role of convener.

Meetings of the Progress Group The Group met fortnightly including, as far as possible, during periods of recess. The Group required two of the elected members to be present in order for the meeting to be quorate. On the few occasions when this was not possible, any decisions or recommendations were ratified by the full Group at the next quorate meeting. Between June 2000 and October 2004 the Progress Group met on 106 occasions. These meetings were formally minuted. Representatives of the Group also visited package contractors’ premises to view ongoing works, Spadeadam in Cumbria to witness blast testing exercises, and the offices of the Edinburgh and Barcelona based architects. The majority of meetings took place on-site and inspections of the building formed an important and integral part of monitoring progress. Reporting The Progress Group reported any recommendations or issues of concern to the Clerk formally in writing. It also provided written and oral updates directly to the SPCB. This reporting structure was supported by regular reports to the Finance Committee, Newsletters and informal Q&A sessions to which all MSPs, the media and members of the public were invited to attend.

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KEY ISSUES ADDRESSED BY THE HPG

Death of Enric Miralles and Donald Dewar The effect of the loss to the Project of two key driving forces should not be under-estimated. However, the main elements of Miralles’ signature design were already in place and the architects of the joint venture company, EMBTRMJM were able to develop his ideas, build on them and translate his vision into reality. The integrity of the design concept was a key priority for the Group, as was maintaining quality throughout the course of the project.

Structure/roles of members of HPT The membership and structure of the Holyrood Project Team was established by the Scottish Office and consisted primarily of civil servants, complimented with additional project management resource from the external consultants Turner & Townsend. These staff were seconded to the Scottish Parliament in 1999. The Progress Group did not have any formal remit or authority in relation to the membership of the Project Team. At various intervals, however, the Progress Group made enquiries of the Project Director to ensure that the Project Team was adequately resourced and, if necessary, offered support in any representations to the Clerk for additional staff. Programme The Progress Group acted on the information and advice in the programmes presented to the client by the Construction Manager and other consultants. While it is apparent, with hindsight, that there was a common theme of ‘overoptimism’ the Progress Group could only act on this advice and information. The Group consistently and vigorously questioned and interrogated these programmes and supported the employment of a specialist ‘forensic programmer’ in 2002 to review the programme. Members were regularly assured that the dates could and would be achieved and it was that information that the Group reported to the SPCB and the Parliament.

Fees In the first part of 2001 the Progress Group requested a breakdown of the whole fees package and an explanation behind the fee arrangements. This resulted in a recommendation that the Project Team initiate negotiations with the main consultants on their fee levels. By 2003 negotiations were still ongoing with 3 of the main consultants. The situation with the architects had been exacerbated by a disagreement within the joint venture with Benedetta Tagliabue arguing that Brian Stewart did not

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have the authority to negotiate on her behalf. At the same time we were told that Mr Stewart was experiencing difficulties getting payments processed through the joint venture. Following the elections in May 2003, the new Corporate Body added their weight to negotiations and by August agreement had been reached. These were fixed lump sum agreements and did not amend any other terms of the contracts.

Queensberry House The decision to retain and redevelop Queensberry House was made before the establishment of the Progress Group, but the consequences of that decision ran through the entire period of the Project. The full condition of the building was not realised until after the Scottish Office had taken ownership and physical surveys were carried out. The listed status of the building necessitated working closely with Historic Scotland and it became clear that their aims and priorities did not always match with those of the Project Team, adding time and cost. For example, the discovery of the remains of a “belvedere tower” and the requirement to recreate that feature was time-consuming and expensive. In addition to this, the cost for reinforcing an old structure such as Queensberry House for bomb-blast protection was formidable - the massive roof could never have been described as traditional construction, which would have been achievable at a fraction of the cost; the requirement for bomb-blast inner windows/doors as the external windows had to comply with the building’s listed status criteria; and the grouting of external walls etc. Renovation of this building presented a huge challenge, not least because every effort was made to retain links to its past while still providing suitable accommodation for the staff and work of an organisation in the 21st century and beyond. The costs incurred made this, in terms of cost per square metre, the most expensive part of the entire project.

Cost Plan/Risk Register At the time the Progress Group took on the management of the Project in 2000, the reported overall cost stood at £195m. Based on the cost report received from Davis Langdon at the Group’s final meeting in October 2004, we were assured that the final cost will be within £430.5m. The quality of the cost information provided was of ongoing concern to the Group. Reports frequently contained statements without supporting advice or figures in relation to outcomes. The Group regularly had to chase for information to be provided and the format in which it was presented was often confusing. The Group believed strongly that the lack of predictive information

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from the consultants prevented the Client from getting ahead of the game and considering what action might be taken to avoid incurring additional costs.

Fit Out (MSP accommodation, committee rooms) As previously stated, the quality of key elements of the building was a prime objective of the Progress Group. There was a clear understanding, however, that this did not equate to over-elaborate or superfluous finishes. With this in mind, the Group made a number of recommendations to the Chief Executive in relation to fit out and finishes, such as the rejection of lightwalls and of timber finishes to committee room ceilings and walls. The Group did make some recommendations which involved potential additional costs or negated potential savings. These recommendations were based on careful consideration of the quality of significant parts of the building, or, in some cases, on circumstances where possible savings would have been outweighed by costs and delays arising from changes to the design. To take one example, we rejected the potential cost-saving option of Portuguese granite, and endorsed Miralles’ specification of Kemnay granite, not least because of the desire to incorporate Scottish materials wherever possible.

Debating Chamber The shape of the chamber had already been agreed at the point the Progress Group was established. The complexity of the structure inevitably caused difficulties for the design and engineering contractors which in turn led to delays. This process was taxing but the result is impressive. One of very few disagreements between the Progress Group and the SPCB arose about the layout of the MSP desks in the chamber. A partial mock-up of the chamber was produced in a warehouse at Rosyth. This proved highly beneficial to everyone enabling sightlines to be assessed and a feeling to develop for the interaction between the different groups of people in the chamber, eg PO, Members, Broadcasting, Official Report, etc. It was following a visit by the PO and some Corporate Body members that the instruction was given to reduce the space between the 3rd and 4th rows of seats to improve the ‘feel’ of the chamber and bring the Members a bit closer together. There is little doubt that this aim was achieved but, unfortunately, it also had the effect of reducing the number of MSP seats accessible to wheelchair users. The Progress Group saw this as being contrary to one of the key aims of accessibility and recorded its dissent.

Performance of Design Team It was immediately apparent to the Progress Group that there was a lack of cohesion between members of the Design Team and that they did not appear

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to co-ordinate their presentations to the Group. The cost saving exercise in early 2001 was a prime example of the lack of collaboration between members of the Team with the architects producing designs for which they had no costs; the cost consultants reporting that they had not seen full specifications; and the construction manager advising of knock-on effects to other areas of the site. In addition, the Project Team frequently reported frustration that the consultants would express one opinion to them and then another to the Progress Group. Despite numerous statements by both parties of EMBT-RMJM that there were no difficulties in the relationship, the Group was regularly confronted with evidence that there were significant problems. On occasions this became such an issue that termination of the contract was considered. However, this was not pursued given the serious impact such action would have had on the Project. Key examples of some of the problems were: the separate responses to a request in October 2001 for a note on impediments to achieving programme; the difficulties experienced by RMJM in receiving payment from the joint venture; and the stance taken by EMBT in relation to the fee negotiations. The original contract had always recognised that while Enric Miralles was the lead architect in the Project, the point would come where his input was minimal and RMJM would take on the lead role to make the design a reality. This point was already close at the time of Miralles’ death but Benedetta Tagliabue was suspicious and resistant to any change in emphasis which might appear to “side-line” EMBT and place more emphasis on RMJM. While the Progress Group did not feel it was part of its remit to mediate in this relationship, it became necessary for us to intervene because failure to resolve such issues quickly was having a detrimental effect on the Project.

Landscape The budget for landscaping was transferred from the Scottish Executive and as such it was separate from the main construction budget. However, the Progress Group felt it was important to report these costs in order to provide a more complete picture of the cost of the Project when reporting to the SPCB and Finance Committee. Contrary to popular belief, this budget did not simply apply to trees and shrubs but covered works such as the creation of a new road and roundabout off Queen’s Drive; the new road layout at the foot of Holyrood Road; the upgrading and re-alignment of Horse Wynd; the upgrading of footpaths on the Canongate and Reid’s Close; the creation of a large paved area between the Palace and the Parliament building, including a number of water features, public seating and lighting; installation of drainage and other services infrastructure; and the creation of footpaths leading out into the Park.

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One of the more difficult aspects of the landscape work was the relationship with the City of Edinburgh Council, particularly in relation to road closures and the specification for finishes. The question of the road surface material for Horse Wynd gave rise to prolonged difficulties. It emerged that the specification stipulated by the Council for resurfacing the road with setts could not be met by any contractor, so it became necessary to reinstate the asphalt road surface. Considerable time was spent by Project Team members, Progress Group members and consultants negotiating with various departments of the Council on this and other points concerning superior finishes and materials preferred by the Council.

Flour City (UK) Ltd One of the most problematic trade package contracts was for the cladding contract. Initial interest in this package was fairly high with 36 contractors expressing an interest and being evaluated. However, only 2 contractors actually submitted tenders. As neither of these was compliant, negotiations took place with both and Flour City (UK) Ltd was selected as the preferred bidder. Problems arose with the performance of Flour City. A number of targets were agreed and set but they failed to meet these resulting in a Note of Termination being served on them in October 2001. The company went into liquidation soon after. Our Legal Services are currently working with the Project Team to evaluate the extent of additional costs associated with this issue and will consult with the SPCB on how best to take the matter forward. This situation was regrettable but not particularly unusual in a project of this size and nature. The Auditor General’s 2002 Report concluded that the award of the contract to Flour City had not been improperly made.

Savings exercise A substantial exercise was carried out in the early part of 2001 to investigate possible savings across the site. When the report was presented, the Group recorded its concern and frustration that some of the items included were already beyond the date at which they could be accepted/implemented. The Group recommended rejection of two of the more substantial proposals, relating to the vaulted ceiling at the public entrance and the structure of the Garden Lobby roof on the grounds that these elements were fundamental features of the design. The recommendation was accepted by the Clerk. Examples of some changes which were recommended and which resulted in savings are referred to above under the heading - Fit Out (MSP accommodation, committee rooms).

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Garden Lobby roof Development of the design of this important part of the building led to one of the most substantial escalations over cost plan. The original cost estimate was for a relatively simple structure. The architects made major changes to the detailed design without taking any account of the cost plan. The architects were instructed to review this element and they simplified the design in ways which produced some savings. However, it was also reported to the Group that possible ‘off-the-shelf’ components had not satisfied the blast requirements so this avenue for possible savings was closed. It was agreed that further redesign at that stage would have serious implications for programme. Once again, the late provision of design information and late reporting of costs made it impossible for the Group to take steps to mitigate the problem at the appropriate time.

Specialist glazing (Schneider/Mero) Due to the complexity of this package, BLL recommended a 2-stage tender process. The package was advertised in the OJEC in November 1998 and then issued for tender in March 2001 (the intervening time taken to establish the details of the package). Three tenders were received, all of which were poor, containing inadequate pricing information and a significant number of qualifications. One company subsequently withdrew due to lack of capacity and another (Flour City) was, by that time, not a viable option. This left Schneider who had submitted the lowest tender and had the best technical expertise. On advice from BLL it was agreed to pursue negotiations with Schneider. These commenced in July 2001. In April 2002, after many months of protracted negotiations and ‘false-starts’, Schneider was unable to accept “final” contract documents issued by HPT. The Group agreed that negotiations with that company should be terminated and the contract was subsequently awarded to Mero. Inevitably, the effort and resource allocated to negotiations about this package led to delays to other packages.

Bomb blast testing The Progress Group would not suggest that the actual criteria for blast protection in public buildings changed following the events of 11th September 2001. However, we found that that the existing requirements were more vigorously applied following major terrorist incidents around the world. Guidance about blast protection is necessarily confidential, and it is subject to revised interpretation in the light of changing circumstances. We were faced with an evolving process whereby elements had to be constructed and tested in accordance with MOD procedures before detailed designs could be finalised. Between some specifications from the architects being a bit ‘loose’ (and therefore open to interpretation by the specialist contractor) and the

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difficulty in predicting the requirements of the tests by MOD, there were recurring problems with elements of the building failing tests and having to be refined and tested again. In November 2002 we considered the case for opting out of further blast testing of some elements to avoid further costs. Following discussion and advice about risks to the public, the Progress Group recommended that the tests should be completed. The cost consultants identified a considerable number of packages where the requirements of blast protection had impacted on the final costs although the prediction of these requirements was never systematically presented. Construction management allowed for the evolution of the design that was necessary to withstand these tests. Had a traditional lump sum contract been adopted, the ‘on costs’ arising from evolving blast requirements would have given rise to greater cost risks and unquantifiable claims.

2 Audit Reports and the Holyrood Inquiry Seldom can a building project have been subject to so much scrutiny during the actual construction phase. In addition to the Spenceley Report in April 2000 which led to the formation of the Progress Group, there were two audits by Audit Scotland which reported in September 2000 and June 2004 as well as Lord Fraser’s Inquiry which reported in September of this year. In each case, the final reports were preceded by several months of investigation which required considerable time and staff resource from the Holyrood Project Team and the consultants. The Progress Group wish to record that, despite assertions to the contrary, these exercises did impact on the Project both in terms of time and cost. The effects of Brian Stewart’s daily attendance at the Inquiry at the critical finishing stages of the Project and the ongoing requests from some of the consultants for additional fees to cover their time and costs for work done in relation to Lord Fraser’s Inquiry bear witness to this.

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KEY ISSUES FOR CONSIDERATION BY THE SPCB

Management of changes and retention of design ethos

The creation of the Holyrood Parliament building has been a difficult, controversial and costly exercise. Built as the result of an international architectural competition it represents a significant public investment and is destined to become a national and international tourist attraction. It is already recognised as an eminent work of world architecture. The design brief for Holyrood placed great emphasis on functionality and the need to create a new working environment that would meet the needs of its occupants. The design response to that brief has created a unique set of buildings symbolic of Scotland’s faith in the future and in democratic government. However, although built to last 100 years without a major refit, it will need to adapt to changing functional requirements. In responding to the need for change, the Holyrood Progress Group hopes that due consideration will be given to ensuring that such changes embrace the original detailed and general design concepts. The integrity of the Holyrood design needs to be maintained and careful consideration given to proposals for change before they are initiated. Similarly, maintenance regimes will be important if the 100 year life of the project is to be achieved. The Progress Group strongly recommends that consideration is given to establishing a strong Facilities Management unit.

Snagging and Defects The design team have prepared a detailed schedule of snagging which will be actioned by the relevant Trade Packages Contractors. On the whole this should be completed by Christmas but there will be a number of issues which will have to be resolved in the New Year. With all new buildings there is always a period of ‘bedding in’ and Holyrood is no exception. As the building is operated by the Parliament, there will be a number of changes required to ensure needs are being met. In order to minimise the cost of such issues, a rigorous change control mechanism is in place. It is vital that all works carried out, either the current ongoing snagging works or new works resulting from change requests, are carried out to the same high level of quality as the original works. It is essential that this process is closely monitored.

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Post HPG It was agreed that the role of the Holyrood Progress Group would be complete with the completion of construction of the building. This has now been achieved. It is clear that the Holyrood Project itself is far from complete, with settlement of final accounts a major ongoing issue. We welcome the establishment of the Post Completion Advisory Group with its blend of existing project knowledge and experience supported by additional legal, project management and arbitration specialists. We trust the new Group and the SPCB will be robust in their dealings towards achieving final settlements.

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