Excerpt from the danish business and construction authority, SBI report 2004
Failures, errors, and defects in construction are undesirable and often costly (Danish Business and Construction Authority, 2004). The costs associated with remedying failures in construction are estimated at 12 billion DKK per year, which accounts for approximately 10% of the production value.
Failures, errors, and defects that can be avoided through project review amount to 2-3%.<
The cost of conducting a project review is 0.2-0.3%.
Total savings: 1.7-2.8%
Excerpt from the BYGGESKΔDEFONDEN external project review guidelines for clients, march 2015
External review – a fresh perspective
“The Building Damage Fund recommends that general clients also have an external review conducted by an independent advisor who examines the project with fresh eyes.
The cost of such an external review typically represents a negligible portion of the overall construction budget but can have a significant impact on the overall quality and economy of the construction project.“
External review is a good investment
“SBI has estimated in a report that the costs of remedying failures, errors, defects, and damages amount to approximately 10% annually of the construction production value (source: ‘Failures in Construction – Economic Consequences and Opportunities for Reduction,’ Danish Business and Construction Authority 2004). A significant portion of these costs arises from errors in the projects themselves or from the challenges in executing the projects without issues and mistakes. The Building Damage Fund estimates that the cost of external project review will be only about 0.2% of a construction project’s acquisition cost, and that project review can reduce expenses for rectifying failures and errors by at least one-fifth.”
Client requirements for the external reviewer
“The client should never choose a reviewer who has been involved as, for example, an advisor or designer in the project.
The reviewer must also be independent and impartial with respect to the organizations involved in the design of the construction. Therefore, the client should not delegate the review to any potential client advisor, as this could raise concerns about the reviewer’s independence.”
External review ensures coherence
“The quality of a construction project is determined through the interaction between many parties based on the client’s requirements for design, functionality, construction techniques, cost, and time. External project review is a means to reveal whether the internal controls of the individual parties are effective or if something has been ‘forgotten,’ as well as to identify any lack of coherence in the interfaces between different parts of the project.
If the internal controls of all parties during programming, design, and execution are effective, the external project review becomes a formality.”
Excerpt from SBI 246: Review of Construction Projects
A construction project may undergo multiple reviews throughout its progress; consequently, it is essential to establish a review plan.
The review plan can be subdivided into Phases A–E according to SBI 246 and into Phases 1–4 according to the BYGGESKΔDEFONDEN – “External Project Review: Guidance for the Client,” March 2015.
The Byggeskadefonden recommends that a project review be carried out in each of the project’s main phases, with the primary focus of the review placed on the period immediately prior to tender. The project review should pay special attention to late-stage changes in the design, as experience shows this is where most errors arise.
See the different phases:
PHASE A-E
PHASE A
[planning]
PHASE B
[screening]
PHASE C
[Systematic Review at the Principle Level]
PHASE D
[Communication]
PHASE E
[Follow-up]
PHASES 1-4
PHASE 1
[Building Program/Disposition Proposal]
PHASE 2
[Project Proposal/Regulatory Project]
PHASE 3
[Udbudsprojekt]
PHASE 4
[Execution Project]
Purpose of review according to SBI 246
The purpose of an external project review is to identify significant errors, deficiencies, and unsuitable conditions in the construction project before they are built in. Its aim is to enhance the quality of the work, reduce the incidence of failures and damages, lower costs during both construction and operation, and ensure both a safe working environment and good constructability.
The purpose of the external project review is not to propose solutions, but rather to provide recommendations on issues that should be further investigated or clarified.
Byggeskadefonden refers to the following guidelines and directives:
See BYGGESKΔDEFONDEN’s guidance on external project review here
See the schematic overview of quality assurance in construction here
SBi Guideline 246: Review of Construction Projects
Our Experience with External SBI 246 Reviews
Our experience with independent SBI 246 reviews shows that there is always a reduction in errors and deficiencies and a “closing of gaps” in the project or tender documents.
We offer independent advisory services as we do not engage in design work, meaning that the client is our closest partner. By not being involved in design, we can focus on optimizing and addressing the project rather than pursuing our own interests as part of the design process.
We have extensive experience with impartial external SBI 246 reviews for both small and large projects, covering both new construction and renovation projects.
We leverage our “lessons learned” from risk management and technical and environmental due diligence from other projects, along with our contractor experience. This provides a substantial knowledge base and insight into the values and errors of many projects, which can help create value for the client and the project we are reviewing.
Each project is unique, and therefore, for each case, a review plan and team will be assembled that best address the Client’s focus areas/risk mitigation.
