(This article first appeared in Caring Times April 2017 edition)
So, you want to build a brand new care home? That’s great. Let’s assume that you have followed my advice from last month and managed to acquire a fully-serviced, perfectly flat and square 1.5 acre plot of land in an area in desperate need of a 60 bed care home. Subject to planning, of course! Whilst we are dreaming…. let’s assume you have also applied for planning consent, the neighbours have all held a street party in your honour and written to the Council saying how much they are looking forward to your plans coming to fruition. Within the stated 8 weeks, the Local Council promptly deliver your planning consent (I said we were still dreaming) and you are ready to start building…
Your journey to this point has probably been overseen by your architect. If experience is anything to go by, your architect will either be (a) a woman called Liz with bright purple hair, a slogan t-shirt and red glasses; (b) an urban hipster with an ironic beard, no socks and trousers which need pulling up, or (c) a black polo-neck-wearing Saab driver of indeterminate sex. This is the person who has helped to realise your dreams thus far; this is the person who has created a beautiful design and brought to life your hopes and ambitions for your new building. What this is NOT, is the person you now want to oversee the process of getting your building built. No. What you need now is the exact opposite of this person. Where the architect was creative, you need someone practical; where they were free with your money in specifying expensive materials, you need someone with an eye on the bottom line. In short, what you need, is a Project Manager.
A Project Manager will not get caught up in the beauty of the morning sunlight glinting off a zinc roof. He will bluntly point out that this roof will only be seen by the window cleaner once a month. He will want to know why you aren’t using a single ply roofing membrane instead. Your architect will tell you the Project Manager is a Philistine and that he has no soul. Your accountant will thank you for putting someone in charge of delivering your project that isn’t ….well…an architect!
If you are new to construction and property development generally, it can be hugely daunting to move from the pretty, virtual images of your planning application to the reality of dealing with ground workers, builders and mechanical & electrical engineers. The enormity of what you have taken on will hit you like a speeding train. Meanwhile you will be telling the funding bank not to worry; that everything is under control and the budget and programme are all fine. Gulp! This is when your Project Manager becomes invaluable. A good Project Manager is like your big brother on the first day of your new school. He has been there many times before and will protect you from all of the potential hazards awaiting you.
Your Project manager will explain to you that there are, essentially, two main types of construction contract you can enter into to get your new care home built. (Extensions are often a different matter and we’ll assume for now that you are building a new, standalone 60 bed care home). The two approaches are known colloquially as ‘traditional’ and ‘design and build’. In a ‘traditional’ contract, the contractor simply constructs your building which has been fully designed by someone else (see above for main types of architect). In a ‘design and build’ contract, the builder is responsible for design. This is to hugely simplify the many variations on these themes, but it will suffice for now.
Under the traditional contract the design process is separate from construction, and full documentation is required before the contractor can be invited to tender for carrying out the work. Under these forms, you as the client would be responsible for producing the design and providing it to the contractor to build. The danger with this approach – apart from the flamboyant architect spending your money again – is that you, as the client, have full control over the design but little control over the way any changes or unforeseen events are dealt with. Your Project Manager will warn that this is where the costs can run away. It requires a huge amount of detail to be done up front with a very experienced design team who need to foresee all eventualities prior to the project starting. If problems are encountered with sourcing / supply of materials or delays with labour, or if there are problems with the design, the contractor will claim extra costs.
Under design and build, the contractor takes responsibility for the delivery of the project and any unforeseen events, problems with labour or materials supply, are all his to deal with. This is by far the best way to deliver a new 60 bed care home build. The trick is – and your project manager will tell you this – to give the contractor enough information so that you get the design you want but the liability for it rests with your builder and his sub-contractors and sub-consultants.
Your Project Manager will guide you through the minefield of important sounding documents like ‘collateral warranties’ and ‘conditions precedent’; he will act as your adviser dealing with the lawyers and funding banks. He will also undertake due diligence so that when your head is turned by a cheap price from a builder who is desperate to get the job, he will advise that all the signs are pointing to this contractor going bust – particularly if he tries to do your job too cheaply – and that is the last thing you want. When it comes to spending this much money on such a complex and lengthy process as building a new care home, you need someone with their shirtsleeves rolled up standing by your side, not someone with a bow tie and a faraway look in their eye.