Interesting insights from the Commercial Director…

Gareth has worked as Colorminium Commercial Director for 2 years, prior to this he was Deputy Regional Commercial Manager at Sir Robert McAlpine and spent 12 years as a Cost Consultant at AYH/Arcadis.  He brings an enormous wealth of experience in to the leadership team, with his extensive industry knowledge. Holding a Bsc in Commercial Management and Quantity Surveying from Loughborough University, he comes from a background of cost consultancy and Main Contracting. Commencing his career at Arcadis UK and working through to Director level, his notable responsibilities included the delivery of the Emirates Stadium for Arsenal Football Club and the Olympic Stadium for the London 2012 Olympics.

Moving on from Arcadis to Sir Robert McAlpine in 2012, he took the role of Deputy Regional Commercial Director for London where he successfully led the commercial team on a number of high profile schemes and client frameworks.

He now takes responsibility for the Commercial Management of the business here at Colorminium from negotiation and agreement of our Subcontracts through to agreement of the Final Account.   He has also advised our Clients on more specialist basis, in particular in regard to Cost Planning and project specific procurement strategies.

 

What have you learnt at Colorminium which could have been of value in your previous Employment/roles?

Simply how sophisticated Facades can be. I have learnt that there are many complex variables which can affect the pricing point of the envelope. Every variable is of importance, and to ensure that pricing is accurate, each one of these variables needs to be given sufficient time to do it justice. This is a key area where clients and main contractors could do with some education, that it’s one of those packages that cannot be commoditised – it has to be procured in a collaborative and high trust environment with like minded businesses.

 

How would a greater understanding of these complexities have helped you in your previous roles?

Having worked as a PQS and a Main Contractor for a number of years, I would strongly believe I would have brought more value to my Client. I would have been better placed to advise on better value solutions whilst maintaining the integrity of the Architects vision, as well as providing a more robust Cost Plan.  I would have also been better placed to advise the Design Team on where the design is underdeveloped or under co-ordinated, which would in turn minimise the potential for risk monies needing to be incorporated within tenders. One thing that’s very clear, is that the longer co-ordination and engagement with the specialists is left for, the higher the price.

 

Now working as a sub-contractor, what do you feel are the greatest challenges facing the subcontract market?

From a Specialist Façade Contractors viewpoint, post Grenfell is certainly posing problems. Our PI premium has gone up significantly.

Regarding Subcontracting generally; Staying solvent, it’s a high-risk industry. It doesn’t get any easier, the influence of Legal and Finance profession appears to have got much greater especially inside Main Contractors and this has manifested its self in harsher terms/risk transfer and tighter control/governance on cash release.  We have been lucky and have been able to push back on these points, however it always comes with the accusation of “being hard to get into Contract” which is a constant frustration to me/us.

 

From a commercial perspective, do you feel façade contractors would benefit in terms of business stability by understanding the contract terms they often work under?

That’s a very good point. My experience as a main contractor is that when in the race to secure a project, specialist trades often sign the contract without understanding what’s in it and how it impacts them.  This can’t be a long term business strategy and whilst it’s a handy risk transfer position for the main contractor, it definitely isn’t a long term solution for the industry.  Going back to my point above of “being hard to get into Contract”, that’s because we care about our long term sustainability and want to be around to deliver the next project.

 

In your opinion, why do so many façade contractors fail financially?

  • Not understanding or being forced to accept unreasonable risk transfer.
  • Tight Main Contractor margins leading to unreasonable behaviours towards Subcontractors to reclaim what they should be taking up the line.
  • Diversification, moving away from what they are good at.
  • Poor financial management, in particular cash management.

What are your views from a client’s perspective of single sourcing?

Although I am not going to say that competitive tendering does not have its place, buildings and facades in particular are becoming more complex, and as such for these projects to be successful, early specialist advice is required and it makes sense that this comes from the company who is going to build the project and take the risk. The most successful projects we have been involved in over the last two years, and to be clear I mean in terms of success for Clients and Colorminium, have been those where we have had some input into the Cost Plan, developed the design under a PCSA and agreed a Contract Sum in an open transparent way.