Egan's agenda is no longer relevant.

Procurement & Management of Construction

MSc Construction Project Management

Semester 1: Unit BPG-M-523

Coursework Assignment

Discuss the premise that
“Egan’s ‘Rethinking Construction’ agenda is no longer relevant”.

November 2009

Contents

1. Introduction.
2. Egan’s ‘Rethinking Construction’ agenda.
3. The ‘credit crunch’ and its effects on the constructionindustry.
4. The relevancy of Egan’s agenda nowadays.
5. Conclusion.
6. References.

1. Introduction.

"Rethinking Construction" is the name of the report produced by Sir John Egan and the Construction Task Force. The Report commissioned by John Prescott, the Deputy Prime Minister, was published in July 1998.

This report highlighted many of the problems within the constructionindustry and looked at how lessons could be learned from other industries in improving performance and delivering value to the customer.

During the early years of this decade the construction industry seemed to be improving performance but the current recession has deeply changed the global economic landscape.

This essay aims to critically discuss the premise that “Egan’s ‘RethinkingConstruction’ agenda is no longer relevant.

With this purpose it will firstly analyse Egan’s report. Especially the problems within the construction industry, the five ‘drivers of change’ stated in the report, the targets for this change, the concept of ‘integrated project process’ and the recommended changes in the culture and structure of the industry in order to get a better performance.

Then, it willevaluate some of the effects of the ‘credit crunch’ on the construction industry.

Finally, this essay will discuss the relevancy of Egan’s ‘Rethinking Construction’ agenda in the context of the current recession.

2. Egan’s ‘Rethinking Construction’ agenda.

Egan’s ‘Rethinking Construction’ is the report on the state of the UK construction industry produced by the Construction Task Forceto the Deputy Prime Minister, John Prescott. It was published in July 1998 and it concluded that the industry as a whole was under-achieving and that inprovements had to be made. In fact, and looking at the example of other industries, the conclusion of the report was that the construction industry had to perform not just better but entirely diferently. (Egan, 1998)

The report focused on themain problems of the UK construction industry:

- The unreliable rate of profitability, with too low margins for the industry to sustain healthy development.
- Little investment in research and development.
- The deficient training of the workforce.
- The tendency of too many clients to equate price with cost, selecting designers and constructors almost exclusively on thebasis of tendered price.

The report claimed that the under-achievement of the construction industry can also be found in the growing dissatisfaction among its clients since projects are seen as unpredictable in terms of time, costs and quality.

Additionally and in line with Sir Michael Latham’s report ‘Constructing the Team’ (Latham, 1994), Egan’s report recognised that the fragmentation of theUK construction industry inhibits performance improvement.

Looking at the experience of other industries, ‘Rethinking Construction’ stated five ‘Drivers of Change’ in order to modernise the UK construction industry.

- Commited leadership. Construction industry’s management must be totally commited to raising the improvement in quality and efficiency that is needed and communicating therequired changes throughout the whole of the organisation.
- Focus in the customer. Construction industry must provide precisely what the end customer needs, when the customer needs it and at a price that reflects the products value to the customer.
- Integrate the process and the team around the product. Construction industry must integrate the construction process and the whole...