Many major projects are not delivered within budget or on schedule and exhibit distinct signs of procedures that do not represent value for money. To ensure that the public develop greater confidence in major projects, that public funds are spent efficiently and that the good international reputation of the German planning and construction industries is preserved, the former Federal Ministry of Transport, Building and Urban Development founded the "Construction of Major Projects Reform Commission” in April 2013.
The Reform Commission comprises 36 high-level experts from industry, academia, the public sector and associations. It has identified shortcomings and developed proposed solutions and recommendations for action as to how true-cost pricing, cost transparency, efficiency and the ability to meet deadlines can be improved in the field of major projects.
In June 2015, after two years of intensive review of current practices and policies, the commission has released a range of recommendations for improvements in major projects delivery.
There is widespread acknowledgement across Government and within industry that no single cause can be made solely responsible for failures in major project delivery, such as overrunning costs or time. The complexity of construction of major projects comprises a more informed and better co-ordinated client, more thorough planning making best use of digital technology and processes, transparent and sufficient visibility of project cost, time and risks, an alignment of interest between all parties involved through financial and other incentives as well as an open communication with the public. A collaborative culture is needed instead of the current adversarial one from the very early stages of user needs analysis to operations across the entire supply chain from the client, planners, contractors, consultants to the end users.
The report of the Construction of Major Projects Reform Commission therefore calls for a profound change in the relationship between public authorities and the planning and construction industries to create a strong, fair and aligned framework for procuring, planning, constructing and operating assets in the built environment. In particular, this involves complying with the following ten recommendations:
- Cooperative planning in a team
- First plan, then build
- Risk management and capturing risks in the budget
- Contract to be awarded to the tenderer who represents best value for money, not to the cheapest
- Cooperative project partnership
- Out-of-court-settlements of disputes
- Mandatory value for money assessment
- Clear processes and responsibilities / centres of excellence
- Greater transparency and control
- Use of digital methods – building information modelling
The recommendations relate primarily to major public sector projects with a high level of investment. In addition, many of the recommendations for action can be applied to major private sector projects.
The Federal Ministry of Transport and Digital Infrastructure has already started several measures to address the issues identified by the reform commission. In particular, pilot projects with respect to building information modelling, risk management and cooperative project partnership have been initiated.
The work of the commission will continue in order to maintain a strong, innovative and high quality construction in Germany.