Commentary – Modular Construction – Why Modular Construction Techniques Continue to Languish and Why Procurement is Responsible.

I recently came across an opinion piece entitled “Behold the project of the future – but it needs your help“.  This article was written as an Expert Opinion piece by Jaimie Johnston in August 2018 in www.constructionnews.com.

Jaimie Johnston is a director and head of global systems at Bryden Wood which is a UK based design firm focused on Design for Manufacture and Assembly (DfMA).

If you frequent my blog, you know we have come across this topic before.   Recently a similar article from Neil Brearley caught my attention as well.

Johnston’s article is a little different in that it references a House of Lords Report dated July 2018.

Johnston writes a very nice piece describing what the future of construction could look like if the industry moved away from onsite construction towards offsite construction techniques.  Similar to Brearley’s article, Johnston focuses on procurement, citing it as “the obstacle to DfMA”.  Johnston writes, “DfMA cannot bolt on to existing processes. It’s part of a completely new way of doing things that encompasses not just the way structures are designed and built, but how they are financed as well.”

Johnston references the 43 page House of Lords Report.  The report goes on for 37 pages about all of the obstacles and challenges of DfMA, similar to Brearley, Johnston’s article calls out procurement citing, “procurement is singled out as a major obstacle: “Procurement models used in the construction sector, including the structure of contracts, assignment of risk and cash-flow, are designed for traditional construction.””

Once again proponents of DfMA want to focus on procurement and make it sound like procurement is the obstacle.

If you read the House of Lords Report, what it actually says about procurement is that “changes to public procurement criteria could help to increase the use of off-site manufacture”.

So what else does the House of Lords Report say?

Skills Gap

The first obstacle cited by the report is a Skills gap.

The report states, “there is a growing labor and skills shortage in the construction sector…while off-site manufacture could lessen the labor shortage…, the different skills required for manufacturing must be developed.

Specifically, the reports states, “digital skills are essential when using a Design for Manufacture and Assembly…Knowledge and understanding of digital technologies used for offsite construction is still limited.

In total, the House of Lords Reports identified 6 different skills that are lacking for DfMA to be successful.  Among the list of skills there are 5 technical skills associated with the execution of DfMA.  The sixth skill refers to skills needed by procurement to better understand how commissioning of DfMA differs from traditional construction.

Sector Barriers to Uptake

Chapter 5 of the report is all about the obstacles associated with the culture of the construction industry.

It cites, “the culture and mindset of the industry has limited expertise and experience in collaboration…our historical approach…has been to move as much risk as possible down the chain…there is a lack of trust, and therefore a lack of collaboration, between businesses within the sector”

Vendors Focus on Procurement and Financing

The rest of Chapter 5 is a series of quotes from various construction sector vendors such as Arup and Laing O’Rourke who go on to tell the House of Lords that the current government procurement system precludes them from putting forward DfMA solutions.

O’Rourke said, “that current business models are often based on lowest cost rather than value for money

Arup complained, “construction sector processes happen sequentially and in isolation, designers design, engineers engineer and as a result the industry delivers bespoke products and the process is inefficient

Real Estate Consultant Mott and MacDonald said, “It is very important to design the end-to-end delivery process around off-site manufacture rather than just bolting it on as an afterthought

Imagine that?  Vendors complaining about procurement?

I acknowledge that some change to traditional construction procurement would encourage more DfMA, but I would hasten to say that this is a major obstacle to DfMA.

As I have written before, if a builder were to come forward during a bid with an innovative solution that allowed a structure to be erected faster, cheaper, and more safely, any good procurement person would be able to see the value of that.

What these Consultants are saying is that they want procurement to release solicitations that specifically calls for DfMA and when they talk of financing they want payment terms that allow up-front payments.

With all of the other obstacles discussed in this report, it seems to me that DfMA is not prevalent enough to solicit work specifically requiring this model.  This would mean a very small pool of inexperienced (or uniquely experienced) Vendors would be allowed.  Not only would such a solicitation amount to a “closed” bid which would open the government to litigation, it would also impose onto the marketplace a model that is immature.

The obstacles that are truly holding DfMA back are far more complex than these Vendors would have you believe.

Closing

Both Brearley and Johnston are so focused on procurement that they seem to have completely overlooked the rest of the findings.

It seems to me that if DfMA is going to become a viable alternative delivery model, private sector will have to first embrace it as a better, faster, and cheaper alternative to traditional models.

Adoption of DfMA will take more time.  How much time – depends entirely on the adoption of modular and off-site techniques by larger firms.  I say “larger firms” because I assume they have the capital to invest in research, development, equipment, and training to make off-site techniques more mainstream.

Perhaps I will be proven wrong and some smaller firms will step up and leap ahead of all of them.  I hope this blog will still be around when that happens so I can write my retraction.

What do you think?  Is procurement a major obstacle to DfMA?  Is the industry ready for DfMA to become mainstream?  Tell me your stories.

Thanks for reading.  If you enjoyed this content, please feel free to browse my previous articles and please like, share, comment, and subscribe.  This helps promote my content and is greatly appreciated.

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