Sir John Bourn, head of the National Audit Office, has published his report on the construction of Portcullis House, the new Parliamentary building. Portcullis House, which provides offices for 210 Members of Parliament and 400 staff together with committee rooms and other facilities, was completed in August 2000 at a cost of £234 million. The NAO examined the management of the building’s construction from initial approval1,2 in 1993 through to completion in August 2000, to see whether the building was completed to the time, cost and specification agreed or forecast at the outset of the project.
The NAO found that the House obtained the high standard of architectural design, materials and workmanship that it had specified, and the building was completed broadly to time. While the 1993 forecast of costs was exceeded, the 1998 construction budget approved by the House of Commons Commission was not. In these terms, therefore, the House achieved value for money in the project to construct Portcullis House.
Sir John highlights the points arising from this case that are relevant to public bodies undertaking major construction projects. In particular he emphasises that bodies should:
- recognise the importance of managing the risks associated with innovative design;
- establish at an early stage a board of senior officials, chaired for larger projects at the highest level, to oversee the project;
- provide appropriate training, advice and support to key decision makers;
- carry out investment appraisals or lifetime costing exercises prior to approval;
- use value engineering to explore the scope to meet the requirement at lower cost;
- maintain a clear distinction between forecasts made at the time of the initial decision to undertake the project, and later forecasts incorporating agreed changes in costs;
- consider regularly publishing information on the cost of major projects;
- ensure that liquidated damages clauses are based on sound estimates of likely costs;
- ensure that there is adequate control of professional fees and expenses when selecting and appointing professional advisors; and
- undertake a review of the operation of the building in use.
The House took action in line with a number of these recommendations.