Is what's wrong with construction assurance sorting itself out?

The construction transformation reshaping the global construction industry is profound, and now it has its own momentum.

It points to a happier construction story for future construction customers who have often felt at the wrong end of the deal. The momentum to rectify the industry’s woes seems no longer reliant on the effectiveness of local regulatory and compliance systems. Banks and insurers are now stepping up with new solutions not previously imagined.   

Read about some of the here and now changes that are occurring in the UK's, construction traceability and assurance space. Since writing this article, interest in the Buildoffsite Property Assurance Scheme (BOPAS) continues to grow. Progress was previously restricted to the UK – but new off-site manufacturers have been assessed in Spain, Germany, Austria, Sweden, Turkey, Lithuania and China. The link is below;

I am increasingly confident that within a few years, assurance schemes such as BOPAS will become the new lending condition for construction finance globally. Yes that means in Australia, where our media regularly reports examples of construction material work and material failures, not to mention the public dissatisfaction with independent certification and home owner builder warranty schemes. Times are changing. My Sourceable article has a number of references and links that readers may find interesting. These evidence acceleration of the digitization of construction business.

Crucially the assurance scheme has also delivered business performance benefits as evidenced by some of the testimonials received from BOPAS-accredited off-site manufacturers. This Industry led initiative harbours no push-back by those resisting greater accountability or wanting to hide behind 'no-more-red-tape' defences.

UK based SIG Building Systems reported: “BOPAS took us on a journey that made us analyse the business in a way we had never done before. It presented many questions, some of which we would have not thought to ask. BOPAS has created the fundamentals behind our business model, is now an integral part of our culture and defines the way we operate on a day-to-day basis.”

B and K Structures attested: “Gaining BOPAS certification has had a positive impact on our business. This has been not only in the form of continual improvement through audit and review of our management systems, but has also given key stakeholders complete confidence in all aspects of our delivery. BOPAS certification has created greater business opportunities for us in a very challenging market and assured the integrity of our work for years to come.”

Stewart Milne Group added: “BOPAS accreditation has been invaluable to our company. Not just in terms of giving comfort to the major mortgage lenders and insurers that our Sigma II Build System is durable for at least 60 years, but also in providing advice on our systems and processes, which has enabled us to fine tune how we operate making us more effective as a business and ensuring we stand out in the industry.”

Based upon current enquiry levels and scheme take up, it is anticipated that BOPAS will report 100 per cent growth in accredited offsite providers for 2016 relative to 2015 performance. No doubt, this momentum will expand during 2017 as more in the UK, and those recently assessed in Spain, Germany, Austria, Sweden, Turkey, Lithuania and China deploy the assurance scheme in their own and new markets. Its interesting that this scheme has not been government or local regulator led. It responds to the construction industry's growing need to facilitate off-site construction payments as the pace of OSM gathers in the face of financier concerns that better surety was required ahead of them paying for goods fabricated off-site and often off-shore. It also embraces a global trend amongst insurers to provide products that better reflect the risk source.

When individual vendors (including designers) become risk rated, performance improvement becomes the winner. As a result, buildings composed by better , assured supply chains will enjoy lower whole of life insurance risk premiums. This trend is now well established in the motor vehicle insurance market where individual owner risk is now assessed and priced accordingly. Why should those who have hidden behind 'one-size-fits-all' schemes of the past, sustain unsustainable practices that everyone pays for.

The good news for 'first-mover' constructors minded to get ahead of the field like SIG Building Systems, B&K Structures and the Stewart Milne Group is, that they will be more competitive and attractive to clients. They will have been able to achieve measurable business system improvements across their operations to deliver better quality, faster, for less. As increased attention is being given to Early Contractor Involvement (ECI) procurement models, these contractors will have quantifiable value propositions to offer. This should avoid having to bid against less able competitors.

Readers may be interested to know that I have taken on a new role in the Construction Management program at Western Sydney University. In addition to helping shape and deliver new learning units in Modern Construction, the role of Industry Engagement Lead for a Centre for Smart Modern Construction (c4SMC) will be formally launched on the 8th August to coincide with the program's 25th Year Celebrations. Alumni and Industry interested in these development should save the date for a cocktail function that day. For more details contact me at: [email protected]