Essential Living scraps £1bn contractor framework

Aaron Morby 6 years ago

Essential Living is standing down its framework of main contractors for a direct procurement strategy on its £1bn development pipeline.

Brookfield Multiplex will no longer deliver the £90m Helix twin-tower contract in London’s docklands
Brookfield Multiplex will no longer deliver the £90m Helix twin-tower contract in London’s docklands

The private rented scheme developer will now directly engage with subcontractors and suppliers across its entire portfolio, expanding its in-house construction management capabilities.

This will enable different forms of package management delivery across forthcoming schemes at Greenwich, Acton and Swiss Cottage.

It is understood that the firm will no longer go-ahead with plans to use Brookfield Multiplex to deliver its £90m Helix twin-tower contract in London’s docklands.

Essential Living’s main contractor framework included Balfour Beatty, Brookfield Multiplex, Vinci and McLaren.

The company has developed a trade contractor framework, in addition to its core framework, delivering key elements of its branded standard specification, such as kitchens and bathrooms.

Ray Theakston, Essential Living’s construction director, said the firm would also increasingly use a range of modern methods of construction to reduce its reliance on labour-intensive on site trades and operations.

Today’s announcement comes at a time when many projects are increasingly suffering from viability challenges as construction costs spiral. Risk transfer is increasingly difficult and on site construction delivery has deteriorated.

Ray Theakston, construction director at Essential Living, said: “This is about giving us greater control and will allow us to have a more hands-on management of cost and crucially, risk, which we are simply no longer willing to pay for using a main contractor.

“Design and build contracts have been on the rack for a while now and we are of the opinion the market has now reached a tipping point.”

Mark Farmer of Cast, a development and construction consultancy which is supporting Essential Living with the implementation of its development programme, said: “This decision is all about recognising the changing dynamics in the construction supply chain.

“Certain clients, such as Essential Living, are able and willing to take a much more hands-on role in risk management and are structuring their supply chain to deliver at a portfolio level not just project by project.”

He added: “In a market where the appetite for taking risk in a conventional contracting environment has fallen away and clients are questioning the price of lump sum conversion, it no longer makes sense to force the issue and pay a premium that brings into question scheme viability when there might be a different method of delivering that generates better value.”

Latest news

£1.25bn Stonehenge tunnel job winner revealed

Spanish, Italian, and Austrian JV scoops A303 Amesbury to Berwick Down scheme
8 hours ago

Lendlease £140m hospital claim to hit High Court

Cramlington hospital trust claims for new temporary building while remediation works carried out
6 hours ago

Cash runs out on HS2 old Curzon Street station refurb

Laing O'Rourke/Murphy JV halts work on historic station renovation
10 hours ago

Balfour bags £50m Piccadilly Line upgrade

First award under latest London Underground High Voltage Power framework
6 hours ago

MPs call for cut in building demolitions to save carbon

Watchdog MPs set out urgent plan to prioritise retrofit and reuse of buildings over new build
10 hours ago

Structure Tone stems losses as order book grows

Fit out specialist racks-up £4m loss but is confident of turnaround this year after restructuring
11 hours ago

Construction leaders launch inflation busting taskforce

All sides of industry urged to work together rather than row over price hikes
1 day ago

HG Construction names next chief executive

Adam Quinn, son of one of the MBO founders, to take the reins in July
11 hours ago

Lendlease Stratford IQL blue towers approved

35- and 14-storey hexagonal blocks will provide 350 flats
10 hours ago

Track worker killed by train was controller of site safety

Distracted rail worker "lost awareness of his position relative to the line the train approached on"
1 day ago

MechFS went down owing £9.5m to supply chain

Subcontractors left holding millions in worthless invoices
1 day ago

HG Construction profit jumps 50% to £25m

Multi-storey homes and student accommodation jobs drive sales to record £243m
1 day ago

Go-ahead for Newcastle’s largest build to rent project

Work to start on 14-storey flats complex in the autumn
1 day ago

Contractors wanted for £288m Northumbrian Water frameworks

Ten lots up for grabs under latest major civils deal
1 day ago

Plans in for 142-room Exeter net zero hotel

RED Construction to build first of hotel developer's planned chain of net zero hotels
1 day ago

Rail workers vote to strike over maintenance job cuts fears

Network could grind to a halt next month
1 day ago

Race for £100m Immingham ferry terminal job

AB Ports aims to start work in mid 2023
2 days ago

Sisk wins Stockport £60m Weir Mill restoration

Work to start next month on 250 flats scheme
2 days ago

Developer swoops for 1,000-flats landmark Leeds site

Revised plans to be submitted by the end of the year for start soon after
3 days ago

Dominvs seals £173m funding for 713-bed student job

HG Construction to start major Hammersmith student complex in November
3 days ago

Briefings start for £1bn Midland Mainline Electrification plan

Market engagement starts for next seven sections covering 139km route to Sheffield
2 days ago

Forterra pushes back £27m factory refurb plan

Supply chain shortages hit project as brick prices rose another 12% last month
2 days ago

Speedy Hire results slowed down by KPMG

Hire giant left "frustrated and disappointed" by delay request from auditor
2 days ago

London office starts set to surge over next 6 months

Deloitte Crane Survey predicts jump in starts in Capital despite high building costs
3 days ago

Fit-out firm BW Workplace slips into the red

£5.2m backdated R&D tax credit deal lifts after tax performance
3 days ago

Hinkley Point delayed another year as costs rise by £3bn

Covid blamed for construction delays and cost increases
6 days ago

Competition probe launched into Bouygues’ Equans takeover

Bouygues is hoping to finalise acquisition later this year
3 days ago

TfL seeks developers for trio of over-station sites

Plum sites at Bank, Paddington and Southwark come with consent for 600,000 sq ft
3 days ago

Underwater drone used to check offshore wind farm foundations

Underwater robots deployed for inspection and maintenance work
3 days ago

DfE to unveil plans for school procurement shake-up

Supply chain summit to be held next month in Birmingham on future of schools frameworks
6 days ago

Contractor services