There has been much discussion in recent years about construction quality, especially in apartment buildings. The significant interest has grown from high-profile failings and disasters such as the Grenfell Tower fire in London (June 2019), the Lacrosse fire in Melbourne (November 2014), The Opal Towers structural defects (December 2018) and Mascot Towers structural defects (June 2019). These cases have prompted concerns about the quality of construction of people’s homes, which commonly represents their largest investment. These instances have also prompted concerns with the Design and Construct (D+C) procurement of these important buildings, and whether this is leading to the substitution of inferior building materials and inadequate inspections, ultimately leading to a reduction in building quality.

While these are high-profile cases, investigations have identified that these are the tip of the proverbial ‘ice-berg’. Analysis conducted by Deakin and Griffith Universities in 2019 identified that approximately 85% of all apartment buildings across the country have defects†. The rates in NSW were even higher. This has prompted the NSW government to establish the role of the ‘NSW Building Commissioner’ who has prescribed powers under the Residential Apartments Act that came into effect on September 1, 2020. So, the future is hopefully looking brighter, but how did we get here, and how can things improve?

When many older building professionals started their careers (myself included), procurement of large-scale buildings was often quite different from what we see today. While D+C contracting existed, it was typically used in particular sectors. These sectors were structured around the D+C processes, the sector knowledge that the D+C contractors carried in house, along with understood expectations of developers/clients. The main sectors involved included infrastructure works, industrial development and certain portions of commercial development.

At university, we were told that D+C contracting placed the cost-fluctuation risks on the builder, while in turn reducing the opportunity for high-quality outcomes (fancy finishes and complex detailing) that traditional lump-sum or cost-plus contracts would allow. As eager architecture students, we all dreamed of designing amazing buildings with great details and put D+C to the side and went for Cost-Plus and Lump-Sum…in our heads at least.

On the face of it, D+C for building roads, bridges, car parks, warehouses and simple office buildings seems pretty reasonable – A sensible way of managing costs and risks versus quality expectations – If you’re not looking for high-quality, why pay for it?….just please make sure you still follow the rules!

“Back then” the Contractors working in this way on buildings had Architects working in their offices doing all the design and documentation that was needed. It was just cheap and cheerful design, not high-end, but done with appropriate skill, appropriate documentation from the in-house team and constant dialogue between the design team and the building team. In many ways, the ‘D+C buildings’ of old were not dissimilar to the ‘lump sum buildings’ of the day – The buildings were designed and documented by Architects with the appropriate skill for the type of building, the appropriate level of detail and the quality of finish that was desired by the end-user….and the Architects kept a close eye on the construction, whichever sector they were in.

D+C in the apartment game, didn’t really exist as it does today. So, what changed? Unfortunately, quite a bit, but it happened slowly, with not enough people paying attention…It’s easier to see the problems with the system when you look at where we’ve got to. So, let’s jump to the end….

What is D+C procurement of apartments like today?

For starters, the Design part of the D+C procurement often doesn’t occur at all. What does that mean? Well, when Developers ask Architects to document a building for a D+C Tender, they don’t ask Architects to document the building fully. That’s the point of a D+C contract – to leave some of the design for the Builder to manage with their knowledge of efficient building practices. Architects are asked to document to say, 70% or 80%, or maybe even just 50%. In some cases, the D+C contract is tendered after the Development Application (DA). That’s not literally 0% documentation, but it is not enough to control much of the design outcome.

So, what does that mean for a D+C Contract? When a Builder is contracting with a Developer to build an apartment building and they receive incomplete documentation, you would expect the Builder is then required to ‘complete’ the design under the contract wouldn’t you?….well….not in practice.

Did the Developer or Project Manager check that the Builder had the appropriate “Design” skills?….well generally no, they didn’t….If you’ve got any questions, call the architect!…if you want… So, is this really a D+C Contract? – Surely not.

And this is the crux of it – The D+C Contract is no longer being used to get the Builder to complete the design in a traditional sense. The contracts don’t say “the Builder is to get the rest of the Design drawings done”. These Contracts are simply being used to shift the responsibility for design decisions and ‘ownership’ to the Builder. A clever way of shifting “financial risk”, courtesy of the legal wording, but not much of an eye on any other implications or the processes that should occur to achieve a good design outcome. The Builder is not progressing the design or documentation, they are just left with the ‘responsibility’ to make decisions on what to do with the rest – and that’s what they do!

So, what has been lost with this form of contracting for apartment buildings (and others for that matter), and what are the implications for end users or owners?

Buildings, and in particular apartment buildings, are no longer being fully ‘Designed’ and documented. Furthermore, since the completion of the design has been handed to the Builder, the original Architect is just as likely to have been removed from a role during the construction. The disconnect between the Architect and the constructed building is almost complete! (Not good for our next generation of Architects either!)

The Architect’s design has been reduced to the bare minimum under the D+C contracts of today, but the skill the Architect can bring to a project in bridging compliance, functionality, aesthetics and QUALITY has largely been lost from these sorts of buildings. It was undervalued along the path from “back then” to “now”, and it’s all but gone.

That’s where the problem lies. Builders often make decisions to substitute materials because they think they were only chosen for how they “look”. More likely than not, they were chosen for their QUALITY or their PERFORMANCE ahead of their ‘look’. For example, Architect’s often specify thicker studs at closer centres than project home builders. And the resulting buildings are stronger, last longer, with reduced movement and they even sound different. The plasterboard-lined stud walls don’t look any different. That wasn’t the reason for specifying the thicker studs at closer centres. It’s about the QUALITY, not the ‘look’. Glass is specified as much for it’s thermal and glare performance as it is for it’s look. But an early schedule of finishes doesn’t always capture that.

Marginalising the Design Professionals’ roles (including Engineers) during the latter stages of the design development and Construction has led to many of the problems. Keeping the Architect’s and Engineers away from site unless absolutely necessary, seemed ‘efficient’, once upon a time, but guess what? Architects are the ones who are looking out for QUALITY.

If an Architect sees a poorly constructed concrete column, they’re likely to say something….if they get to see it at the right time. A patched and painted concrete column at the end of the project, is not the same as a properly constructed concrete column without a defect. But you can’t often tell the difference at the end. You have to see it when it’s just happened. That takes regular and frequent inspections. That’s what Architects used to get paid to do. No-one else did it. Not certifiers. Not even Engineers. That’s what needs to happen now if we want building quality to improve. But Architect’s aren’t getting paid to do these inspections, except on the very highest spec projects. Similarly, if an Architect is engaged throughout the construction stage, they will be involved in the discussion about any substitution. This can prevent inferior substitutions like those associated with Aluminium Composite Panels (ACPs).

D+C contracts are likely to continue being used for Apartment Building construction but providing a regulatory requirement for Architects to continue to be involved, to complete building designs, and to conduct regular and frequent inspections is what will make a difference to the QUALITY of apartment buildings. The regulatory requirement for Architects to be involved in substantial Apartment Buildings under SEPP 65 in NSW has directly led to the improvement in apartment building design. Similar reforms for the ongoing involvement through documentation and construction is the missing piece of the puzzle to achieve QUALITY outcomes for the completed buildings, not just the designs on paper.

† An Examination of Building Defects in Residential Multi-owned Properties (Nicole Johnston with Sacha Reid)