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Southampton Arts centre over budget


mightysaints
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The info given by the council and reported in the Echo that the new Arts centre is about £2m over budget due to labour increases is a complete lie. As a QS i deal with contracts everyday. Once a build cost is agreed and contracts signed off the cost is fixed. You cant go back and say half way through the job the cost of labour has gone up so i want more money, that's ********. Obviously what's happened is that the council did not have a clue what they wanted or have very poorly tendered the project and have left so many holes in the contract that the contractor has them over a barrel and the contract administrator has has issued so many instructions or change orders then the cost has risen. Once again a government/locally funded project is over budget. Dont worry its not their money so they don't care and no one will loose their jobs. If i make a massive mistake like this i would be down the rd

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The info given by the council and reported in the Echo that the new Arts centre is about £2m over budget due to labour increases is a complete lie. As a QS i deal with contracts everyday. Once a build cost is agreed and contracts signed off the cost is fixed. You cant go back and say half way through the job the cost of labour has gone up so i want more money, that's ********. Obviously what's happened is that the council did not have a clue what they wanted or have very poorly tendered the project and have left so many holes in the contract that the contractor has them over a barrel and the contract administrator has has issued so many instructions or change orders then the cost has risen. Once again a government/locally funded project is over budget. Dont worry its not their money so they don't care and no one will loose their jobs. If i make a massive mistake like this i would be down the rd
It just seems to be that the tenders came back higher than expected according to this http://www.bbc.co.uk/news/uk-england-hampshire-33543886 ?

 

These sorts of projects always overspend unfortunately.

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Thats still a massive cock up. Before any project goes ahead we have to do due diligence and feasibility costings. At each stage the costs are firmed up including a pre tender estimate. Its expected that this cost should be in the middle cost of the tender returns, inflation, labour and material costs are inc for jobs that are likely to run over a number of years. The company i work for runs a massive data base for costs for all sorts of projects so its not difficult to project. Funding is based on the predicted build cost so to be £2m out is very poor to say the least. Also it would be normal to have a risk register and a contingency of say 10%, this should have a significant sum of cash attached to for overruns etc so whats happened to that

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I don't know if it's the case here but, increasingly, local authorities outsource their projects from inception through to tender and project management. It's certainly the case with the NHS and some of the local authorities I've audited in the past.

 

So, the whole project is no longer in house but is in the hands of private contractors

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Thats still a massive cock up. Before any project goes ahead we have to do due diligence and feasibility costings. At each stage the costs are firmed up including a pre tender estimate. Its expected that this cost should be in the middle cost of the tender returns, inflation, labour and material costs are inc for jobs that are likely to run over a number of years. The company i work for runs a massive data base for costs for all sorts of projects so its not difficult to project. Funding is based on the predicted build cost so to be £2m out is very poor to say the least. Also it would be normal to have a risk register and a contingency of say 10%, this should have a significant sum of cash attached to for overruns etc so whats happened to that

 

Yeah, I know how it works thanks. What was your initial rant based on?

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The info given by the council and reported in the Echo that the new Arts centre is about £2m over budget due to labour increases is a complete lie. As a QS i deal with contracts everyday. Once a build cost is agreed and contracts signed off the cost is fixed. You cant go back and say half way through the job the cost of labour has gone up so i want more money, that's ********. Obviously what's happened is that the council did not have a clue what they wanted or have very poorly tendered the project and have left so many holes in the contract that the contractor has them over a barrel and the contract administrator has has issued so many instructions or change orders then the cost has risen. Once again a government/locally funded project is over budget. Dont worry its not their money so they don't care and no one will loose their jobs. If i make a massive mistake like this i would be down the rd

 

Not strictly true as there are fluctuating cost clauses in most construction contracts where a base date is set and costs are assessed upon fluctuating levies, indices, etc, with the most common being the BCIS indices of construction cost increases. And it is not unusual at the moment to have this provision. We won a job recently where the start was delayed by 4 months and we applied the forecast BCIS to the contract sum which increased by over 2%, which shows the amount of "heat" in the marketplace at the moment. We also tendered a 2 year project and wouldn't fix the cost for the last 18 months of the build.

 

And there could be any number of reasons why a project is "over budget", none of which are caused by poor tendering, although granted, the Public Sector have a fine record for general ineptitude when it comes to construction projects and budget control.

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My fellow Contracts brother in arms. While it looks like this was just bad market research, I'm reminded of the picture below.

 

Were different parts of the project bid at separate points in the schedule? I'm confused why bids were higher than expected but work has already begun. Also, novel concept, the Contracts Manager (or whatever their title is in this instance) could always negotiate, it's what we're paid to do.

 

rku92h.jpg

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Not strictly true as there are fluctuating cost clauses in most construction contracts where a base date is set and costs are assessed upon fluctuating levies, indices, etc, with the most common being the BCIS indices of construction cost increases. And it is not unusual at the moment to have this provision. We won a job recently where the start was delayed by 4 months and we applied the forecast BCIS to the contract sum which increased by over 2%, which shows the amount of "heat" in the marketplace at the moment. We also tendered a 2 year project and wouldn't fix the cost for the last 18 months of the build.

 

And there could be any number of reasons why a project is "over budget", none of which are caused by poor tendering, although granted, the Public Sector have a fine record for general ineptitude when it comes to construction projects and budget control.

Good post despite that I'm glad its being built and a long term asset to the city, would have liked the building to have gone higher thow.

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I sent this to the council leader:

 

Read in the paper about Southampton City Council thinking about selling art to make up some money. I think it is a good idea to avoid the council getting into more debt, especially after watching the Dispatches documentary on LOBO loans which offer awful deal for city councils. (hopefully Southampton is financially ok)

 

Anyway, back to the art work, if it is sold it will be gone for good, which I don't really want, the gallery collection is a fantastic asset, and maybe better used in future. So I was thinking that the City may have other assets that maybe worth selling, that actually may enhance the cultural image of Southampton and save the council with money. I will list some thoughts / ideas , and I am sorry if they are not owned by Southampton:

 

Gods house (look how well the wool house is doing)

 

Bargate

 

The Old Royal Southern Yacht Club

 

City Vaults, including the old Royal Wine Vault / Castle Vault which will face the new West Quay, The Undercroft, Lancaster Vault, King John Palace, Canute's Palace,or any of the many others.

 

(I know they are used for walks, but they are also in a state, and the investment, as well as taking a burden off the council, they will be obliged restore buildings for future generations. The worst bit is that place above Canute's Palace, with the corrugated iron roof over what I can only imagine is an old archaeology dig. Surely it can be that any private investment has to preserve the past, which I'm sure many architects would love the challenge of while designing new innovative designs for a sustainable, forward thinking investment.

 

Chapel Mills (don't think its the councils, but in need of investment)

 

Just my thoughts, I'm sure they have been thought of, its just if we sell these physical buildings they can't be taken from the city like the art, but encourages long term investment.

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We had an architect who just loved changing things, the data base is only for proving what something should cost when we are discussing costs with the client and contractors. Architechs just love spending other peoples money

 

This is the nub of the problem. They are the bane of a Structural Engineers (and many other professions) life, they usually have very little concept of the effects of their constant meddling.

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I sent this to the council leader:

 

Read in the paper about Southampton City Council thinking about selling art to make up some money. I think it is a good idea to avoid the council getting into more debt, especially after watching the Dispatches documentary on LOBO loans which offer awful deal for city councils. (hopefully Southampton is financially ok)

 

Anyway, back to the art work, if it is sold it will be gone for good, which I don't really want, the gallery collection is a fantastic asset, and maybe better used in future. So I was thinking that the City may have other assets that maybe worth selling, that actually may enhance the cultural image of Southampton and save the council with money. I will list some thoughts / ideas , and I am sorry if they are not owned by Southampton:

 

Gods house (look how well the wool house is doing)

 

Bargate

 

The Old Royal Southern Yacht Club

 

City Vaults, including the old Royal Wine Vault / Castle Vault which will face the new West Quay, The Undercroft, Lancaster Vault, King John Palace, Canute's Palace,or any of the many others.

 

(I know they are used for walks, but they are also in a state, and the investment, as well as taking a burden off the council, they will be obliged restore buildings for future generations. The worst bit is that place above Canute's Palace, with the corrugated iron roof over what I can only imagine is an old archaeology dig. Surely it can be that any private investment has to preserve the past, which I'm sure many architects would love the challenge of while designing new innovative designs for a sustainable, forward thinking investment.

 

Chapel Mills (don't think its the councils, but in need of investment)

 

Just my thoughts, I'm sure they have been thought of, its just if we sell these physical buildings they can't be taken from the city like the art, but encourages long term investment.

 

God's House Tower is being gradually turned into a new arts and heritage space but it takes while for a project like it to be realised. http://www.aspacearts.org.uk/projects/gods-house-tower/#.Vazj1RNViko

 

A use really needs to be found for the Royal Southern Yacht Club it's such a nice building in a great location.

 

I think Solent Uni rent the gallery space in the bargate, and the vaults are all available to hire for events, unfortunately there isn't enough imagination and knowhow from the people of Southampton to utilise the vaults as much as they should be. Something like Southsea Castle's summer champaign bar would be good. http://www.visitportsmouth.co.uk/whats-on/southsea-castle-champagne-bar-p1162891

 

I don't think any of the above buildings should be sold, but the council should be able to get tenants in.

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