Engineering the - Association for Consultancy and Engineering

Impact
Issue 39 September/October 2011
The voice of consultancy and engineering
Engineering the
message
FIDIC 2011 looks at opportunities and challenges
Political interest in infrastructure grows
Viewpoint – Taking the psych out of psychometrics
www.acenet.co.uk

YOUNG PROFESSIONALS,
DEVELOP YOUR BUSINESS SKILLS
Are you a young professional under 35?
Are you working in the built and natural
environment?
Do you want to improve your business
skills and have a better understanding
of your industry?
ACE Progress Network ticks all the boxes.
Sign up now and get connected.
progress@acenet.co.uk
www.acenet.co.uk
ACE represents the business interests of the consultancy and engineering industry in the UK. ACE is the leading business
association in the sector, with around 650 firms – large and small, operating across many different disciplines – as its members.

Contents
Association for Consultancy and Engineering
Alliance House
12 Caxton Street
London
SW1H 0QL
T: 020 7222 6557
F: 020 7990 9202
consult@acenet.co.uk
www.acenet.co.uk
8
13
15
20 28
30
Chief executive
Nelson Ogunshakin OBE
Head of policy and external affairs
Michael Hall
T: 020 7202 0256
mhall@acenet.co.uk
Operations director
Naz Choudhury
T: 020 7227 1889
nchoudhury@acenet.co.uk
Legal and compliance director
Sally Partridge
T: 0207 227 1887
spartridge@acenet.co.uk
Impact
Editor
Gavin Pearson
T: 020 7202 0255
gpearson@acenet.co.uk
Art and photo editor
James Dixon
Advertising
Gary Bullett
T: 020 7202 0257
Impact welcomes articles and features on issues
relating to the business of consultancy and engineering.
Contributors should send material to the editor at
impact@acenet.co.uk or to the address above. Phone
Impact on 020 7202 0255.
Disclaimer
This document was produced by ACE and is provided
for informative purposes only. The contents is general
in nature and therefore should not be applied to
the specific circumstances of individuals. Whilst we
undertake every effort to ensure that the information
within this document is complete and up to date, it
should not be relied upon as the basis for investment,
commercial, professional or legal decisions.
Impact is the magazine of the Association for
Consultancy and Engineering. It is published bi-monthly.
Printed in the UK by Russell Press. © 2011
ISSN 2045-0141
5 Nelson’s Column
ACE chief executive Nelson Ogunshakin OBE looks at growing interest in BIM.
9 A new voice for the North West
Six of the UK’s most influential construction and engineering bodies launch the NWCIA.
10 Legal column
ACE’s Sharon Akumiah looks at the implications of new agency worker rules.
12 Information security risk
BSI’s Lorraine King looks at information security risks to your business.
13 Improving your bottom line
Deltek’s Neil Davidson looks at how efficient resource utilisation can benefit business.
16 FIDIC looks at African opportunities
Mott MacDonald’s Warren Bradley reports on FIDIC’s discussion on Africa’s potential.
18 FIDIC Presidents
Impact editor Gavin Pearson catches up with FIDIC’s outgoing and incoming presidents.
20 Viewpoint: Taking the psych out of psychometrics
Thomas International’s Paul Gilbert looks at the developing world of psychometric testing.
24 The three line defence
ACE’s Joseph Mayungbe looks at how firms manager their business risks.
26 Successful tendering
Karen Douglas from Tenders Direct offers Impact readers advice on tendering effectively.
28 Engineering the political climate
ACE’s public affairs manager, Crispin Oyen-Williams, outlines party conference season.
30 Green light for light rail
Impact looks at the government’s proposed changes to support light rail investment.
32 Economic update
Graham Pontin reports on the economy as seen by ACE’s member firms.
Impact • September/October 2011 | 3

News
Pylon design winner announced
Bystrup’s innovative T-Pylon
design has been unanimously
agreed by the judging panel
as the winner of a major pylon
design competition set up
by the Department of Energy
and Climate Change, National
Grid, and the Royal Institute of
British Architects.
The contest had six
shortlisted entries from more
than 250 entries originally.
These were then judged as
possible alternatives to the
current standard pylon design
that has been in place for
nearly one hundred years.
Energy and Climate
Change Secretary Chris
Huhne commented: “This
competition has been a great
success in bringing forward
new and creative approaches
to a pylon model which has
not changed since the 1920s.
We are going to need a lot
more pylons over the next few
years to connect new energy
to our homes and businesses
and it is important that we do
this is in the most beautiful
way possible.”
As a result of this contest
National Grid will now work
with Bystrup to develop
their T-Pylon design further.
National Grid have also said
they want to do further work
with Ian Ritchie Associates
on their Silhouette design,
and New Town Studio’s
Totem design. The winner will
receive £5,000 prize money
and the 5 other finalists will
each receive £1000.
Sandberg acquires
Building Testing Ltd
The Sandberg Partnership has
announced the acquisition of
Building Testing Ltd.
Woking based Building
Testing Ltd, founded in 1999
by Paul Nice, is a specialist
technical consultancy. It
provides advice and testing
principally in connection
with raised access flooring
systems, expert witness
services, air tightness,
consumer products, energy
conservation, load testing
and product appraisals.
The company holds UKAS
accreditation for a range of
tests.
It is hoped that the
combination of Building
Testing Ltd and the Sandberg
Group will strengthen the two
firms’ building consultancy
capabilities as they seek to
build business further.
The Building Testing brand
will be maintained as part of the
acquisition and Ian Collins and
Doug Nice will continue to run
the firm from its Woking location.
Sika puts seal on Woodhead Tunnel
Sika has undertaken work to
waterproof the decommissioned
railway tunnel, the Woodhead
Tunnel, for use as an electric
cable tunnel for National Grid.
The tunnel was built in 1953
and is the youngest of three
decommissioned trans-Pennine
railway tunnels. The older two
tunnels have been used for
carrying electricity cables from
east of the Pennines to Greater
Manchester, but have reached
the end of their operational life.
To make the Woodhead
Tunnel ready for use, work
had to be done to resolve
signs of water ingress and
structural deterioration.
This was achieved using
a concrete repair and
waterproofing system, and
was completed for the five
kilometre tunnel in 16 weeks.
4 | Impact • September/October 2011

BIM - improving the future
of the engineering industry
BIM – building information
modelling – is one of the hot
topics of the moment for the
construction world. There is
a great deal of activity going
on in the consultancy and
engineering sector, much
of which is asking whether
our industry is ready for the
challenges and opportunities
that BIM will bring.
Wider uptake of BIM will
undoubtedly bring benefits
to the construction sector:
better sharing of information;
compatibility between
systems; perhaps fewer
misunderstandings between
teams.
Fundamentally, this means
a closing of gaps between
design and construction. By
modelling more accurately
how design changes impact
on real world issues, projects
can move more quickly from
conception to commissioning.
All of this could lead to
significant cost savings and
efficiencies. I have seen
estimates of savings as
high as 40% elimination of
unbudgeted change, cost
estimation accuracy within
3%, and 10% savings of the
contract value. 1
The Government
Construction Strategy makes
clear that BIM is central to
improving the delivery of
public sector projects. Yet a
construction industry driven
via BIM will also require
a change of operating
culture – and with that a
new perspective on risk
management.
Back in 2008, insurance
giants and ACE affiliates Willis
highlighted BIM as a game
changer in the underwriting
environment. BIM will provide
challenges to suppliers,
clients and the insurance
industry because it is not
always clear where the risks
lie.
This will mean that
procurement and contracts
will need to be adapted to
suit this new environment.
The implications of working
at full integration will require
contractual and insurance
requirements to be brought
into line with the demands of
integrated working.
Nelson’s column
For the construction
sector, this implies greater
transparency and a
greater sense of shared
responsibility. No longer
will suppliers be able to
sit within their traditional
domains; we will all be in it
together.
There will also need to be
work on capacity building,
education and skills within
the supply chain. New
professional protocols will
need to be established
– perhaps leading to a
challenge to the existing
structure of the supply
chain.
To think in terms
of consultants versus
contractors would therefore
be a recipe for failure.
This was spelt out by Paul
Morrell earlier this year:
“If you think this is a race
between institutions then
you’re in the wrong sport”. 2
As a report to the
Government Construction
Clients Board in March this
year made clear, a realistic
programme for change
will be required to realise
the benefits of BIM while
managing the risks.
ACE sees BIM as a
topic of great importance.
If embedded correctly, it
has great potential to drive
efficiencies and improve
risk management in
construction – which will be
of great benefit to all of us.
Just as social media is
transforming the way we
communicate, do business
and live our lives, so too
will BIM transform the way
the construction industry
delivers. BIM has to be
market-driven. It is not for
government to tell us how
BIM should be done – it
is for industry to push the
boundaries of what can be
achieved.
1 Stanford University Center for Integrated Facilities Engineering (2007)
2 NBS press release, 13 May 2011. Paul Morrell dismisses talk of a BIM
race and ramps up call for ‘irresistible’ integration. www.thenbs.com
Impact • September/October 2011 | 5

Appointments
Impact keeps you up to date with who’s who in the consultancy and engineering sector…
Network Rail makes capital
projects business unit appointments
Minister announces
offshore wind task force
Network Rail makes capital
projects business unit
appointments
Network Rail has
announced the appointments
of regional directors and
programme directors ahead of
their introduction in April 2012.
The move has been made
to help to shape the new
organisation being developed
for the delivery of capital
projects.
Roger Dickinson will be
director responsible for the
North, including Scotland and
LNE.
Neil Thompson will manage
the central region which
covers LNW North, LNW
South and the Birmingham
Gateway and King’s Cross
projects.
Nick Elliott will look after
the southern region including
Sussex, Kent, Wessex, Anglia
and the National Platforms
Extensions Project.
Robbie Burns will take
regional responsibility for
Western and Wales, including
Western, Wales, Crossrail,
Reading redevelopment and
electrification.
Reporting to Robbie will
also be Jorge Mendonca
who has been appointed
as programme director for
Crossrail.
The regional directors will
be responsible for delivery
of major renewal and
enhancement projects and
programmes, excluding track
renewals, in their area. They
will also be charged with
winning new work under the
competitive infrastructure
being proposed.
The roles will also
include liaising with route
managing directors (RMDs)
and directors route asset
management (DRAMs).
They will report to Simon
Kirby, managing director,
Investment Projects.
Programme directors have
also been appointed as part of
the changes underway.
On 31 October Mark
Southwell will join Network
Rail as programme director,
signalling.
Mark will be responsible
for the delivery of all major
signalling projects in CP4 and
thereafter. This will involve
programme and project
management, signal project
engineering and signalling
design. He will also report to
Simon Kirby.
Jim Crawford will continue
in the role of programme
director – Thameslink.
Graham Greener will also
continue as programme
director – GSMR/FTN –
national telecoms project.
Charles Hendry today
announced the membership of
the industry-led Offshore Wind
Cost Reduction Task Force.
The task force was announced
as part of the government’s
renewable energy roadmap
in July and will begin work by
Spring 2012.
Andrew Jamieson has been
named chair of the group. Mr
Jamieson is the current chair of
Renewable UK.
Additional members of the
group are:
• Thomas Arensbach,
offshore markets and
project development
director at Gamesa
• Steve Burgin, president of
Alstom UK
• David Clarke, chief
executive office of Energy
Technologies Institute
• Ron Cookson, senior
vice president of Technip
Offshore Wind
• Tom Delay, chief executive
officer of The Carbon Trust
• Christoph Ehlers,
managing director of
Siemens Wind UK
• Andrew Garrad chairman
and CEO of GL Garrad
Hassan
• Chris Hill of general
manager of SMart Wind
Ltd
• Chris Jones, technical
director, networks for
Sinclair Knight Merz (SKM)
• Flemming Ougaard, chief
operating office and
senior vice president,
Vestas Offshore A/S
• Christian Skakkebaek,
senior vice president,
DONG Energy
• Mike Straughen, group
board director with Wood
Group
• Michelle T Davies,
partner and head of clean
energy and sustainability,
Eversheds
• Alan Thompson, director of
renewable energy, Centrica
• Ed Wilson, head of
renewable energy, Lloyds
Banking Corporate Markets
As he made the
announcement, Charles
Hendry commented: “Offshore
wind not only makes sense
for our energy security and
the environment, but the
economy too, bringing jobs and
economic growth. I am pleased
to be able to announce the
members that will spearhead
this vital work to drive down the
costs of delivering our offshore
wind ambitions.
“This task force will provide
the strong leadership and
vision required to grow our
offshore wind sector in the
next decade and beyond”.
Have you recruited somebody new to your team that you want to announce?
6 | Impact • September/October 2011

Civil Nuclear Police Authority
appoints permanent chair
Lieutenant General Sir Philip
Trousdell KBE CB has been
appointed as chair of the Civil
Nuclear Police Authority for a
two year term. He has served
as as interim chair since May
2011.
Lord Marland of Odstock,
Minister for Energy and
Climate Change, commented:
“I am delighted General
Trousdell has been appointed
to this vitally important post.
With his wealth of experience
I am confident that he will
make a major contribution to
ensuring our national security.”
Sir Philip Trousdell
added: “I am delighted to be
appointed to this important
role. I very much look forward
to continue working with
the men and women in this
organisation who do so
much to ensure our national
security.”
Clancy
Consulting
appoint new
director
Mike Powers
has accepted
an invitation
to join the
board of directors at Clancy
Consulting, with effect from
the beginning of October
2011.
Mr Powers joined Clancy
Consulting in August 2005
and has responsibility for the
building services department
at the firm’s Birmingham
office.
Mike has been with Clancy
Consulting for six years since
joining as an associate and
has over 24 years’ experience
across public and private
sectors, having worked on
a number of high profile
projects.
Parsons
Brinckerhoff
appoints fire
consultant
Parsons
Brinckerhoff
has appointed
leading
industry specialist Dr Nicole
Hoffmann as UK principal
fire engineer for its transport
business. The role covers
rail and road infrastructure,
airports and ports.
With over 25 years in fire
engineering, Dr Hoffmann
was instrumental in the
development of the industry
standard STEPS model
(Simulation of Transient
Evacuation and Pedestrian
movements) which she initially
helped design and develop.
Darren Read, director of
rail at Parsons Brinckerhoff
for Europe, Middle East and
North Africa, commented:
“We are very pleased to
welcome Dr Nicole Hoffmann
to Parsons Brinckerhoff.
She brings exceptional
experience and understanding
of fire engineering and risk
analysis which is a critical
area for modern infrastructure
planning, as transport
systems become increasingly
complex.”
Hoare Lea
appoints new
partner
Hoare Lea has
announced
that Matthew
Warner, BEng
(Hons) CEng
MCIBSE MIET, has accepted
an invitation to join the
partnership.
Matthew joined Hoare
Lea in 1998, having gained
a degree in building services
engineering from the
University of Manchester
Institute of Science and
Technology (UMIST). He
has more than 17 years’
experience in environmental
engineering building design.
Miles Freeman, partner,
Hoare Lea, commented:
“As well as experience in the
student accommodation sector,
Matthew has experience in the
commercial office, financial,
residential and mixed-use
sectors. This expertise,
combined with his exceptional
ability to communicate complex
engineering solutions clearly to
clients and his ability to deliver
projects on time and to budget,
makes him a key member of
our leadership team.”
Baringa promotes two new
partners
Baringa Partners has
announced the promotion
of Claire Paisley and James
Beverley to partners in
the business. The internal
appointments recognise Claire
and James’s exceptional
contribution to Baringa, both
in their leadership within
the firm, and in their client
work across the financial
services and energy sectors
respectively.
Managing Partner,
Mohamed Mansour, said:
“It gives me great pleasure
to promote both Claire and
James to Partner. Both have
demonstrated exceptional
expertise and commitment
in their respective fields,
excelling in the delivery of
client work to the highest
quality.”
Waterman building services
appoints managing director
Neil Lewis has been appointed
managing director of
Waterman Building Services.
Neil has been employed by
Waterman Group since 2005
and brings over 30 years of
experience to Waterman’s
UK management board, all
of which has been spent
exclusively in the design and
management of engineering
services.
A passion for environmental
issues has seen Neil lecture
throughout the UK on low
carbon, energy saving
technologies on behalf of
industry bodies such as RIBA,
CIBSE and CIOB.
Mark Terndrup has been
promoted from regional
director to board director of
Waterman Building Services.
Mouchel appoints new chief
executive
Grant Rumbles has been
appointed as chief executive
at Mouchel, succeeding
Richard Cuthbert who left the
company on 6 October after
eight years in the role.
Grant Rumbles, said: “I am
delighted to become the chief
executive of Mouchel. Prior to
my appointment, I have spent
time with the board discussing
the business and its future
prospects. I believe Mouchel
has a strong customer base
and dedicated talented staff.
Despite recent reductions in
UK government spending,
the future of government
outsourcing both in the UK
and overseas is assured and
will continue to grow.
Contact the editor on gpearson@acenet.co.uk or call 020 7202 0255.
Impact • September/October 2011 | 7

RedR trains food
crisis aid workers
As the devastating food crisis in East Africa worsens, disaster
relief charity RedR is already on the ground to help train local aid
workers in essential humanitarian skills, thanks to a new training
programme based in Nairobi. And, with the long-term support of
patrons like ACE, RedR will be able to do even more to equip aid
workers with the technical knowledge they need to respond to
emergencies in the months and years to come, writes RedR chief
executive Martin McCann
Since the food catastrophe in
Africa’s eastern Horn first hit the
headlines in July, the situation
on the ground has spiralled into one of
the most pressing humanitarian crises
seen in the region for many years. More
than 13 million people are now at risk of
malnourishment. Famine conditions have
been reached in six regions of Somalia.
Each day thousands continue to leave
their homelands in search of help.
Crossing the border into Kenya,
many Somali refugees end up at what is
now the world’s largest refugee camp,
Dadaab. Located about 100 kilometres
from the Kenya-Somalia border, life for
Dadaab’s 370,000 residents is one of
long queues, countless tents, makeshift
toilets and palpable despair.
“We have a lot of new arrivals – about
500 families each day”, says Peter
Murithi, a Kenyan aid worker with the
National Council of Churches in Kenya
(NCCK). “The state they come in from
that end [Somalia] is really horrible. They
are so desperate, you even shed a tear.”
Walking for days
Many refugees walk for days and nights
to reach the relative safety of the UNHCR
camp – though often they have no idea
what to expect when they arrive.
“People have to adapt to live like this,”
Peter says. Despite the best efforts of
aid workers like Peter – and scores of
agencies working to support each and
every new arrival – ‘adapting’ still means
living in crowded conditions with limited
access to basic commodities like water
and sanitation.
As a trained water and sanitation
officer, Peter knows all about the
challenges of meeting the needs
of 370,000 in a camp designed for
90,000. “Sanitation is the key issue we
are facing,” says Peter. “As a human
being, you need a toilet – and you need
to drink.”
In response, Peter and his colleagues
have been working tirelessly to help
improve the situation on the ground. As
well as trucking in tens of thousands of
litres of water to fill temporary plastic
Participants learn vital water, sanitation and hygiene skills on RedR’s training course in Kenya © RedR
tanks, Peter is tackling the issue of
communal toilets.
“At the moment, there is one latrine for
every five households,” Peter says. “We
need to ensure more people have access
to more toilets.”
Right people, right skills
Thankfully, Peter knows exactly what he
is doing. Last year, he was a participant
on a week-long RedR training course
in Nairobi where he learnt the latest
technical water and sanitation techniques
to build on the years of practical
experience he already had.
“We did so many things that week”,
Peter says. “Everything from the latest
methods for pumping water from the
ground, to excreta disposal, to disposal of
dead bodies, to containing water-related
diseases like cholera. A lot of what we
were trained on we are now using.”
“Thousands
continue to
leave their
homelands in
search of help”
Peter knows his new skills are making
a difference to aid delivery on the ground.
“Now when I say I am going to do a
‘needs assessment’ (to find out exactly
what people in the Dadaab refugee camp
need) I go back to what I learnt. Training
on the ground enhances quality and
performance – we were just implementing
before, but now we’re applying. At the
end of the day, I know I’m making an
impact.”
RedR’s new humanitarian training
programme in Nairobi, East Africa,
has already begun to train aid workers
like Peter in essential humanitarian
skills. The training will mean hundreds
more aid workers have the water
and sanitation techniques, shelter
knowledge, security know-how and
project management skills to ensure aid
delivery is more effective – and more
lives can be saved in Dadaab camp and
further a field.
If you would like to find out more about
the positive impact your company
can have on improving humanitarian
efforts globally, please contact Amirtha
Winslow (amirtha.winslow@redr.org.uk;
020 7840 6000).
8 | Impact • September/October 2011

A new voice for
the North West
A powerful new alliance has been launched for the North
West, bringing together six of the UK’s most influential
construction and engineering bodies
The North West Construction
Industry Alliance has formed,
comprising the Institution of Civil
Engineers, Civil Engineering Contractors
Association, Chartered Institution of
Highways and Transportation, the
Chartered Institution of Civil Engineering
Surveyors and the Association for
Consultancy and Engineering.
Together these groups represent the
region’s £9.5 billion construction and
engineering sector. The six groups have
a combined membership covering 8000
professionals involved in the construction
and civil engineering profession across the
North West
NWCIA will aim to emphasise how
the industry can and should be a major
driving force in the region’s economic
recovery.
NWCIA chairman Ian Robinson is
pleased to say that the new alliance is
committed to ensuring project planning
and delivery continues to function
effectively as the sector deals with
changing legislation and the nation’s
NWCIA was officially launched at the
annual debate and dinner of the Civil
Engineering Contractors Association,
Liverpool.
current financial constraints.
He said: “We aim to achieve this by
offering the benefit of proven industry
advice and expertise to customers
and clients such as Local Enterprise
Partnerships, Local Authorities, utility
providers and public and private sector
organisations,” said Mr Robinson.
“As planning laws are being relaxed,
and while Local Enterprise Partnerships
are taking shape across the region,
this will bring significant changes in the
way vital infrastructure like schools and
hospitals will be procured, delivered and
maintained.”
NWCIA is already in dialogue with the
developing Local Enterprise Partnerships
and key customers across the North
West with a view to sharing information
and developing best practice.
Government has been keen in recent
years to see groups work together
to represent whole industries where
possible, and this move reflects that in
the North West.
Mr Robinson acknowledged this,
noting that the alliance provides an
overdue single point of contact for
industry customers across the North
West. It can serves as a one stop
shop, offering impartial professional
advice and promoting partnership
and best practice for effective and
timely project planning and delivery.
The chairman said: “We’re
committed to working with
our customers and partner
organisations like LEPs, local
authorities and community groups
to find the most cost effective ways
of delivering the infrastructure and
amenities that will assist economic
growth and maintain the collective
quality of our lives.”
For more information on NWCIA, visit
www.nwcia.org or email info@nwcia.org
Impact • September/October 2011 | 9

Legal update
Impact columnist Sharon Akumiah provides her routine rundown on the legal
changes affecting the industry. Sharon Akumiah is the senior legal assistant
with the Association for Consulting and Engineering.
Agency Worker
Regulations 2011
The Agency Workers Regulations
2011 saw agency workers benefit
from new rights in the workplace
to bring them into line with other staff as
of 1 October. This will have significant
implications for employers as they update
their hiring practices and adjust their
conditions accordingly.
The new rules require employers
to match the pay and basic working
and employment conditions of agency
workers with full time staff after 12 weeks
of service. These rules cover workers
who find work through any agency.
However, self employed contractors, staff
from in-house temporary staffing banks
and secondees are not subject to the
new rules.
Day 1
While the widest focus has been on rights
due to agency workers after 12 weeks,
the new rules confer certain rights from
day one of their employment and this has
to be considered by hiring firms.
From the first day of employment,
agency staff must be provided with
access to job vacancies in line with
the access offered to permanent staff.
This can be accommodated through
displayed vacancies in public areas and
on a firm’s intranet.
However, while access to vacancies
must be provided, this does not
prevent firms from processing the
application subject to qualifications or
other requirements. If an agency staff is
unqualified for an advertised position,
there is no expectation on the company to
interview the applicant despite this.
There is also no requirement to provide
equal access to vacancies for jobs
created during an internal reorganisation.
From day one , firms are also required
to provide agency staff with access
to facilities and amenities such as car
parking, transport services, canteen,
common room, mother/baby room,
prayer room, food and drinks machines
and toilet or shower facilities.
Day 12
Following these rights from day one,
further key rights come into force from
week twelve.
Agency workers must be provided
with terms and conditions equivalent to
a permanent member of staff. This will
require firms to ensure that their basic pay,
holiday pay, overtime and bonuses are
aligned with normal practice for equivalent
roles within the company.
Agency workers will benefit from
limits to working time. So if other staff
are protected from working 48 hours per
week, agency staff will be as well.
Agency staff will also benefit from rights
to annual leave or pay relating to night
work, rest periods or breaks, and paid
time off for antenatal appointments.
It should be noted that these rights
are based on those of a comparable
employee doing the same job or broadly
similar work. Usually this will be someone
at the same workplace, but sometimes
will be located elsewhere.
Pay
Regarding pay, firms should be aware that
where the regulations relate to pay, this
includes more than basic salary.
The rules cover basic pay, overtime
payment, payment for annual leave (where
it is above the statutory entitlement) and
10 | Impact • September/October July/August 2011 2011

onuses or commissions that are directly
attributable to the amount and quality of
work done.
Bonuses linked to personal
performance or non-contractual
payments that are made with such
regularity that they are a matter of
custom and practice are also covered.
Vouchers with a monetary value that can
be exchanged for goods and services
are also covered. This may apply to
things like luncheon vouchers and child
care vouchers, but does not include
salary sacrifice schemes.
It is worth noting, however, that
where the eligibility for payment requires
staff to reach a period of service, the
worker will need to achieve that period
of service to become eligible, the
same as someone directly recruited.
As such, where a payment is available
to permanent staff only after twelve
months of service, then it is also only
available to the agency worker after
twelve months of service.
Exceptions on pay
The rules include a number of exceptions
on pay equality that companies must
know about.
Flat rate bonuses paid to the workforce
to encourage loyalty and reward long
service are not included under the new
rules. Neither are occupational schemes
such as sick pay, maternity, paternity and
adoption pay, though an agency worker
may be entitled to statutory payments via
their agency.
Agency workers will be covered by the
new automatic pension enrolment that
is to be phased in from October 2012,
rather than by the rights in the Agency
Workers Regulations 2011.
Exceptions are also made for
redundancy and notice pay, payment
for time off for trade union duties and
advances for things like travel season
tickets. The majority of benefits in kind
are also excluded. These might be
reduced-rate mortgages or employer
funded training allowances, though
benefits with monetary value are
included in pay.
Agency staff will also not be entitled to
the same guarantee payments that may
apply to directly recruited staff being laid
off, or to payments or rewards linked to
financial participation schemes such as
share ownership.
Qualifying periods
Time spent on an assignment before
1 October 2011 does not count
towards the qualifying period, but the
entitlement after twelve weeks applies
whether the agency worker works
full or part time. This means that an
agency worker that works one day per
week, for 12 weeks, would qualify for
the rights in the legislation.
If the agency worker changes agency
during their time with the company, this
does not alter their qualification under the
rules. Six weeks with one agency, and six
weeks with another agency, but all twelve
weeks in the same position, would qualify
as 12 weeks of service.
Time on annual leave does not count
towards the twelve weeks. However, it
does not reset the twelve week qualifying
period either. In effect annual leave
pauses the clock. Only an absence of six
weeks or more would break the qualifying
period and so reset the clock.
From week 12, basic terms and
conditions including:
• Holiday pay, overtime and bonuses
linked to performance
• Duration of working time
• Annual leave
• Night work
• Rest periods or breaks
• Paid time off for antenatal
appointments
Legal update
Responsibility for compliance
Responsibility for ensuring compliance
with the Regulations mainly lies with
employment agencies who can request
information from employers.
Workers who believe they are not
receiving their entitlements under the
Regulations can request a written
statement from their agency. If this
statement is not provided within 30 days,
the worker can make a request for the
information directly to the employer.
Compensation
Where a case comes to deciding
compensation, there is a minimum award
of two weeks’ pay with no maximum
award set in law.
The figure set will be decided on
the basis of actual loss suffered by the
agency worker, or at an appropriate level
of compensation in cases such as an
agency worker denied access to facilities.
Payments covered by the new rules:
• Basic pay
• Overtime payments
• Payment for annual leave
• Bonuses or commission payments
• Vouchers with a monetary value
that can be exchanged for money,
goods or services
Impact • September/October 2011 | 11

Information security risk
Lorraine King, sector marketing manager for the risk portfolio at BSI, tells Impact how
crucial information security has become to modern business
In an environment of growing concern
over the global economy and business
survival, one hot topic that features
strongly in the boardroom is information
security. Where do the mains threats
come from? How can an organisation
effectively protect data and keep
spending within means? Where do
standards fit into this?
The main threats to information security
In the 2011 *CMI survey into business
continuity management, both malicious
cyber attack and damage to corporate
brand/reputation ranked more highly
among the list of perceived threats to
business than industrial action and
pressure group protests.
The report also highlights that 32%
of organisations were aware of being hit
by a virus or malicious software attack.
The figure including unknown attacks is
almost certainly higher.
Information can be defined as
anything from the main IT databases to
a piece of paper containing the minutes
of a meeting. Threats are categorised
as technological or human in nature and
can be internal or external in cause.
Truly technological causes may be
dealt with through effective business
continuity e.g. back up servers and
power supplies. The real challenge is
dealing with the human factors; which
can be anything from a direct hacking
attack (external) to the loss of an
important paper document or mobile
electronic device (laptop, smartphone)
by a member of staff (internal).
Many organisations can ill afford to
implement every single available piece
of hardware or software to protect
themselves and are forced to choose.
However a well worded email, opened
by an employee, who then clicks on a
link, is almost impossible to prevent using
technology.
The CMI report also shows that the
top six causes of loss are human factors.
So how can business approach this
‘human’ challenge, without spending
beyond the budget?
Globally recognised best practice
ISO 27001 is the international standard
for information security management.
The standard seeks to provide best
practice in information security
by providing organisations with a
framework described as an information
security management system (ISMS).
A successfully implemented ISMS is
instrumental in tackling the cultural
issues surrounding information security
and dealing with that all important
human factor. By the end of 2009
nearly 13,000 organisations were
certified to ISO 27001(**Official ISO
survey).
Recent independent research
conducted by the Rotterdam School of
Management (RSM) demonstrates that
the use of this international standard
for information security management
– ISO/IEC 27001 – is delivering
effective protection for hundreds of
organisations around the world. Over
640 organisations responded to the
research survey, ranging from large
multinational corporations to those with
less than five employees. Organisations
span a wide number of industry sectors
and are based in countries on all
continents.
12 | Impact • September/October 2011

How do information security
management systems actually work?
In the RSM research 87% of the
respondents reported that using ISO/IEC
27001 and its partner standard ISO/IEC
27002 (the code of practice supporting
ISO/IEC 27001) had a positive or very
positive impact on their organisation.
Some of the key results they had
achieved included; an increase in the
quality control of information security
processes and procedures, a reduction in
risk and an increase in both internal and
external customer satisfaction.
Respondents whose organisation
had certified to ISO/IEC 27001 were
generally twice as likely to report benefits
as those who had not. External customer
satisfaction, competitive advantage and
increased ability to respond to tenders
were flagged as key additional benefits of
organisation to the next, but where
choice was possible (sufficiently sized
organisation), a manager within the IT
department was favoured.
How can using these best practice
standards help organisations save
money?
One of the early steps in implementing
the ISMS is to conduct a risk assessment
(RA). The RA allows an organisation to
identify where it feels its biggest risks are
and for senior management to agree a
particular appetite for risk when managing
the outputs of the RA. An organisation can
choose to simply accept a risk; mitigate a
risk; neutralise or transfer a risk. How the
risk is managed should always take in to
account the impact and the likelihood of
something occurring. Of course there will
always be a financial threshold.
ISMS, in the RSM research 60% of
respondents reported that awareness of
information security in their organisation
was now high or very high. This figure
rose to 75% within certified organisations.
“Threats are
categorised as
technological or
human and can
be internal or
external”
Summary
In summary when you consider the
research and the expert views, the biggest
area of information security weakness in
any organisation is its employees and most
importantly their attitude and awareness.
Taking simple steps to raise awareness
and drive a culture of information security
throughout the organisation does reduce
the number of incidents.
Conducting a thorough risk
assessment permits the careful targeting
of spend in the most appropriate
direction, rather than responding to gut
instinct or pet passions of management.
Implementing an ISMS such as that
described in the international standard
ISO/IEC 27001 does provide a framework
for success.
certification. What was most noticeable
was the hugely increased ability in certified
organisations to measure and monitor
activities and impacts (e.g. number of
security incidents). Very few certified
organisations gave ‘unknown’ responses.
This compares to those who had barely
commenced implementation where the
majority would give ‘unknown’ responses.
In the majority of cases where
organisations had used a top
down approach to implementation;
respondents reported that success
was highly dependent on active,
visible senior management buy-in.
The choice of individual to actually do
the implementation varied from one
What about those all important
human factors?
Embedding information security as part
of business as usual and conducting
training and awareness amongst staff
at all levels are both key to success.
Leading by example is important as is
maintaining the momentum after the
initial rush. The basics are often the
most effective: tidy desk policy, effective
password use (including minimising the
number of passwords staff are required
to remember), entry security and a
requirement to display identification at all
times. Internal games and competitions
can be used to enthuse and engage staff.
Demonstrating the success of the
If you wish to see a full summary of
the RSM report referred to in this
article please email
Lorraine.King@BSIGroup.com
*CMI - http://tinyurl.com/6l5cwu5
**ISO - http://tinyurl.com/4qzmfk
Impact • September/October 2011 | 13

Improving your
bottom line
Through improved resource utilisation and effective use
of subcontractors. Neil Davidson, managing director of
Deltek UK, writes for Impact
“In today’s challenging economic
climate…” How many times have
you read that opening phrase in
media articles? Yes, things have been
challenging fiscally, and indeed remain so,
not least for engineering consultancies.
But through good or bad times,
business success for engineering firms
remains the same: optimising resource
= increased profitability. While the maths
may be simple delivering the optimisation
can prove more challenging.
Resource management (RM) is
emerging as the solution to solving
this equation. It effectively provides a
framework within which engineering firms
can easily and effectively plan, implement
and deploy their people skills.
What is resource management?
In my experience, only around 20 percent
of engineering firms actually recognise
and use RM as a high-value, standalone
discipline in its own right – which
is surprising given that the management
of resources is, by definition, engineering
firms’ raison d’etre.
And a surprising 75% of companies
surveyed by The Aberdeen Group
admitted to having no overview of their
resource situation more than one month
ahead. In engineering firms, planning
resources at least six months in advance
enables you to get the most out of their
employees and improve the bottom line.
unsatisfactorily low level. You may also
experience a complete disparity across
the resource pool, with some people
overloaded, while others remain underutilised.
2. Don’t base projects on ‘guesstimates’.
All too often, engineering firms do not
align project estimation, execution and
existing capacity. Making ‘guesstimates’
on projects is often the key driver in
resource under- or over-utilisation.
Under-estimate and you will be
scrambling to find additional resources. If
you are in danger of missing a deadline on
a project, because resource management
has not been at the top of the agenda,
you can either recruit additional staff or
hire external subcontractors.
Either way, the impact on project costs
and profitability can be significant. The
lesson? Short-term resource management
and planning, combined with a narrow
siloed view, can seriously impact the
bottom line. By integrating your sales
pipeline system with RM you can achieve
a better understanding of resource
impacts, both short- and long-term.
3. Avoid different versions of the truth
Having a uniform RM system that spans
all departments and all resources will
help ensure consolidation of all account
and project information. And, more
importantly, it will provide you with a single
and accurate version of the ‘truth’.
4. Regard resource management as the
ultimate in business intelligence
Managers should have a dashboard that
they look at every day when they log
into the system, displaying KPIs such as
utilisation, billability, project resource load
3/6/12 months out, and subcontractors’
usage.
5. Take traditional ERP, CRM and PM
systems to the next level
You might be thinking – we already have
a traditional ERP, CRM or PM system
to manage our client and project-based
operations. Why should we bother with
RM? The fact is that, while some RM
functionality can be found in traditional ERP
systems, it tends to be very much focused
on managing resources on single projects,
rather than looking at resources overall.
Conclusion
The return-on-investment story is
compelling. For example, if you have a
resource pool of 100 people, with an
average hourly rate of £150, finding just
one extra hour per month, through the
use of RM, will result in £180,000 extra
revenue per year. With acquisition and
implementation costs a fraction of this, a
payback period of less than six months is
common.
Resource management – key best
practices
So what are the ‘key best practices’ that
engineering firms should be aware of,
and adopt, in order to increase people
utilisation and attain higher profitability?
1. Recognise that ‘busy’ doesn’t
necessarily mean billable
There is a very big difference between
staff being busy and being billable. Look
around your organisation and you will
probably see people who seem to be
busy, yet their utilisation rates – and
therefore their billable hours - are at an
14 | Impact • September/October 2011

FIDIC 2011
Paul Jowitt of Heriot-Watt University:
“The recent FIDIC conference in Davos
demonstrated engineering professionalism
at the global scale and spanning all
the major issues from technology to
business practice. The conference was
well-organised with plenty of scope for
discussion. It was a particular pleasure
to be there to support incoming FIDIC
president Geoff French.”
Gavin English, managing director, IMC
Worldwide:
“Some great ideas came out of the
FIDIC conference this year on how
the global engineering community can
work together to harness the best skills
and experience to supply better, more
innovative and sustainable solutions to
the global development and infrastructure
challenges we face in the future. The
plenary session on business opportunities
in Africa chaired by Baroness Lynda
Chalker highlighted the chronic need for
infrastructure in Africa and the positive
impact infrastructure development can
have on the economy of developing
countries.”
FIDIC this year welcomed Palestine and Mozambique
as its newest members, elected its new chair, and
addressed issues around integrity, communication and
global opportunities for development
FIDIC welcomed a new president,
Geoff French, as he started his two
year term. As it did so engineers
from around the world emphasised the
need for further focus on sustainability,
integrity and innovation as the industry
seeks to emerge from the global
downturn.
While the conference stressed that
FIDIC must focus on its core values,
there was also strong awareness that the
federation must move faster to address
challenges facing the industry globally.
FIDIC’s annual three day conference
was relocated to Davos, Switzerland,
from Tunis in Tunisia because of the Arab
Spring, during which time many British
engineering firms faced difficult decisions
about projects they were working on.
The event bought together many of the
most significant figures in the industry and
the message was clear. For the sake of
long term growth in the global economy
we must ensure our industry emerges
stronger from the economic downturn.
The UK in particular was well
represented throughout, with key
speakers and attendees alongside ACE.
“With 70
countries
represented the
conference was
a showcase for
the worldwide
consultancy
sector.”
Graham Nicholson, executive managing
director at Tony Gee and Partners:
“The FIDIC conference in Davos this year
looked at two major global concerns,
those of capacity building and integrity
management. Over three days the
delegates debated how our industry
can safely share spare resource with
developing nations where resources are in
short supply. There was a clear message
that professionalism and leadership
against corruption must be adopted by
everyone, from government ministers to
junior engineers.”
Baroness Chalker of Wallasey, chair of
Africa Matters:
“I found the FIDIC conference and
thinking for the future both informative
and stimulating. The new leadership is
wisely committed to develop the
capacity building of engineering in Africa
with new energy and determination.
Given the urgent need for new
engineers everywhere, but especially
in the developing world, this should
be a very positive step for FIDIC and
ACE. Additionally the determination
to continue to fight corruption and
do better due diligence is a very
welcome initiative.”
Impact • September/October 2011 | 15

FIDIC looks at
opportunities in Africa
Mott MacDonald’s Warren Bradley reports for Impact on an enlightening discussion on
Africa at this year’s FIDIC conference
FIDIC may have moved its conference
this year from Tunisia to Switzerland,
but uncertainty caused by the Arab
Spring did not diminish interest in Africa.
The second day of the conference saw
a panel convene to discuss opportunities
in Africa. Those speaking included
Trevor Manuel from the South African
government, Hassen Chourabi from the
Tunisian government, and Baroness
Lynda Chalker from Africa Matters.
Trevor Manuel
Trevor Manuel, minister in the Presidency
of South Africa, stressed to FIDIC contrary
to negative perceptions, Africa provides
a great opportunity for development of
physical and human infrastructure. He
said there was an urgent need for bold
and committed investment but that this
had to be balanced with avoiding trying to
over-reach. Instead he suggested it would
be better to take collective ownership of a
limited number of projects.
Mr Manuel recognised the FIDIC
Infrastructure Report and particularly
recognised the need for FIDIC to have
effective dialogue with decision makers and
noted the challenge that population growth
presents for the continent. He also spoke
about the urgent need to address the issue
of climate change, which is the number one
cause of increased natural disasters and a
consequent need to spend repeatedly on
replacing damaged infrastructure.
He posed the challenge that 50%
of wastage can be eliminated by
good design and that investment in
infrastructure can create opportunity for
innovation in deign and help achieve a lot
of the transformation required in Africa.
Trevor Manuel then identified the
huge shortage of infrastructure in Africa.
This amounts to $95 billion per year and
consequently reduces growth by 2% per
year. He also said that $45 billion has
been funded locally in the past, and a
study confirmed wastage of $17 billion
within this expenditure.
Next, Mr Manuel identified the four
key areas for growth, highlighting energy,
water, transportation, and information and
communications technology.
He suggested that there were
significant opportunities in water through
the development of hydropower. Hydroelectric
power, he said, was important
for low carbon development and
sustainability across the continent.
Finally, the minister stressed that
growth needed to come from trading
within Africa as well. He said that the tripart
agreement should help to promote
this. Appointment of political champions
would also help this process and there
needed to be market integration across
borders within Africa. The shortage of
east-west transportation was highlighted
as a constraint to making this happen.
Baroness Lynda Chalker
Baroness Lynda Chalker, chairperson of
Africa Matters, reiterated Africa’s challenges,
and particularly that Africa’s biggest
constraint is a lack of infrastructure.
The Baroness quoted a McKinsey report
that confirmed that African projects, which
include infrastructure and other industries
together, could generate as much as $2.6
trillion in revenue annually by 2020, and this
will correspond to an estimated population
of 1.3 billion. The current level of output was
approximately $1.6 trillion.
Foreign direct investment has
increased significantly, she said, but only
from 1% to 4%, which remains far less
than elsewhere around the world. The
rate of return for this investment is higher
than any other developing region, but
75% of this foreign direct investment was
focused on 15 countries and the largest
investment share went into extractive
industries.
Baroness Chalker identified that getting
the private sector properly involved was
key to infrastructure development. She
also said that work done by government
ministries was crucial too.
The Baroness then highlighted the
problems of inappropriate construction.
She said that the costs of correcting this
was high. Infrastructure needs investment
of $92 billion per year. Two thirds of this
should be for new build, with over $30
billion needing to be spent on operation
and maintenance.
Of this required yearly investment, she
said that $40 billion had to be spent on
power, $22 billion on water, $18 billion on
transport, $10 billion on information and
communications technology, and $3.5
billion on irrigation.
However, she said a lot more was
needed, offering concerns that storage
of energy has not been afforded the
investment it needs.
16 | Impact • September/October 2011

Hassen Chourabi
Hassen Chourabi, from the Ministry of
Agriculture and Environment in Tunisia,
spoke about the adoption of a participatory
approach in the realisation of projects to
achieve sustainable development.
Following several development projects
that did not achieve the expected results
after Tunisia’s independence in 1956,
Tunisia developed the participatory
approach to better involve the community.
Mr Chourabi set out the important early
phases in achieving this. He said that
the first step was the preparatory phase,
focused on training, informing regional
and local leaders, data collection, entry
into contracts and presentation.
Following that he stressed that the
zoning phase was important, in which the
area should be visited and assessment
should take place.
Participatory approach
1. Preparatory phase (training,
informing regional and local leaders,
data collection, entry into contracts,
presentation and approach)
2. Zoning (visit of area, assessing)
3. Prioritisation (approach, criteria,
assessment and recommendations)
4. Diagnosis (approach,
recommendations, presentation),
5. Planning and programming
6. Execution
7. Follow up evaluation.
What needs to happen?
The panel set out the need for a linkage
across the engineering community
with African governments. FIDIC and
Member Associations also have role to
play in helping to shape the strategy of
infrastructure development, disseminating
best practice, regularly engaging with policy
makers, and engaging in key policies and
helping to ensure effective implementation.
They also suggested efforts would
be needed to identify significant gaps in
provision and key bottlenecks for growth.
There should, they agreed, be the
development of project pipelines. This
would help engineers to influence
programmes while investment should
not be considered as a tap that can be
turned on and off. Smoothed investment
would provide the best results.
Consideration would also need to be
given to the raft of infrastructure interconnections.
Roads would be important,
but the slow down at border points needed
to improve. The panel also suggested that
ports were not well connected.
There was agreement that corruption
had to be tackled effectively and that
this needed to be by both holding
public sector officials accountable for
any bribery, and by penalising private
sector organisations that supported and
engaged this activity.
Policy predictability was highlighted as
another issue to be addressed. Appointed
champions should liaise with ministers
from all countries and systems should not
just be engineering dependent, but also
involve finance and others stakeholders.
There was also a suggestion that
financing institutions such as the African
Development Bank had to take a lead role
in driving investment.
“The conference
demonstrated
that opportunities
exist for UK firms
of all sizes to
develop business
overseas.”
Graham Nicholson,
Tony Gee and Partners
Finally, there was something of a plea
to engineers to help policy makers. It
was made very clear that engineers are
integral to the solving the huge challenge
of infrastructure development in Africa,
and that this needed to be combined
with effective champions and individuals
within the government and public sector
organisations that are accountable for
delivering the selected priorities.
Impact • September/October 2011 | 17

Gregs Thomopulos
Gregs Thomopulos has served for two years as president
of FIDIC, standing down at this autumn’s conference in
Davos. Impact editor Gavin Pearson finds out how he
views his term of office
After a two year presidency that
member associations consider very
successful, how does the outgoing
president assess his time in charge of
FIDIC?
“When you step into a position you
want to leave it at least no worse than
when you stepped in. Hopefully you
leave it improved. I always maintain the
objective to take the organisation up a
notch in its activities. And I’m pleased to
say that in many ways that seems to have
happened.
“FIDIC is in a strong position thanks to
its financial stability and it has continued
to expand activities that generate revenue
along with those that support member
associations. We have also been able
to keep the subscription rate at the
same level for seven years, which is very
pleasing.
“But the big issue that was looming two
years ago was the relationship between
FIDIC and EFCA. That relationship had
created some unease among some
European associations and they were not
sure if they would have to choose between
FIDIC and EFCA, or whether they could
remain in both long term.
“I’m pleased to say this has been
successfully defused in my second year in
office. We reached some agreement with
EFCA as to how we could co-ordinate
activities and not duplicate each others’
work and EFCA is now co-branded
with FIDIC. It was very important to me
that we should not have two competing
organisations operating in Europe as
that would be a weaker position for
the industry. But if things had gone
wrong over the last two years, we could
have ended up with EFCA running
independently while FIDIC had to create a
FIDIC Europe.
“I’m also pleased we have seen rising
prominence of the importance of young
professionals in FIDIC each year. More
and more young engineers are getting
involved in our training programmes and
attending our conference each year. That is
something FIDIC should be very proud of.”
Gregs Thomopulos served two years
of presidency as the world struggled to
recover from the credit crunch. How was
this reflected at FIDIC?
“In Europe and North America it has
been quite difficult for member firms.
That in turn has been quite a challenge
for the national associations that
represent them. On the other hand, we
have places like China, India, Australia
and New Zealand that have not been
so badly affected by the world wide
situation. At the same time South Africa
has not been impacted so heavily,
though Africa has been. So it varies
geographically.”
While the economy is a focus, Mr
Thomopulos is clear that sustainability
remains a core FIDIC concern.
“Unfortunately too many countries
have their own approach to sustainability.
They have different rating systems and
what we lack is a universal international
standard. This is something FIDIC will
seek to address in future.
“We have to hope we can avoid
having divergent rating systems for every
country.”
And does the outgoing president have
any advice for his successor?
“As I said in my closing remarks to the
general assembly, I am very pleased to
be handing over to someone for whom I
have a great deal of respect. I know Geoff
is very competent and will take FIDIC
up another notch. We also elected his
eventual successor Pablo Bueno as vice
president.
“I think we can rest assured that we
have two future leaders who will manage
and lead FIDIC in a very effective manner.
So I don’t have any specific advice
to offer Geoff. He has a great deal of
experience internationally and executive
experience with Scott Wilson. So I’m
sure he doesn’t need any advice from
me and will tackle all issues very well as
they come up.”
So what does a FIDIC president do
when he steps down?
“As CEO of Stanley Consultants I can
probably spend more time focused on
my company. There is a lot to be done
both worldwide and in the USA, and
where I’m asked to head initiatives and
committees to support the industry and
the community I will continue to do that.
So I’ll be quite busy.”
18 | Impact • September/October 2011

Geoff French
FIDIC elected Geoff French for a two year term as its
president at this autumn’s annual conference in Davos.
Impact editor Gavin Pearson caught up with him as he
travelled home
Geoff French had only been president
for a few hours when Impact spoke
with him, and he was already
looking at key challenges to address.
“I’m honoured and delighted to have
been elected. But I feel a little humble
actually. To have a lot of people say to
you that they think the organisation will
be safe in your hands is an excellent
reminder of my responsibilities.
“We know there are things that
have to be addressed and there is
no magic wand here for FIDIC’s core
issues of sustainability, integrity and
quality. Communications came up at the
conference a lot as well. Today’s world
demands that we address these issues all
the more urgently than we have managed
to in the past. That’s the challenge going
forward. We have to respond and react
faster.
“We can start at one end of that issue
and say the website is in urgent need of
upgrading. But we are happy to accept
that as we have already set improvements
in motion. We haven’t really exploited
social media yet. That is increasingly
important, offering the ability to use
modern communications to contact faster
not only our member associations but
member firms and key individuals within
them.
“Making sure we send people
information that is of interest to them
is exactly the same challenge as faced
by ACE, but with a global dimension at
FIDIC. The old days of sitting back and
sending around regular circulars have
long gone. But we’ve yet to come up with
a methodology that definitely gets our
message to as many people as possible.”
With the global economy struggling
with its return to growth after the credit
crunch, now is a tough time for FIDIC to
bring together 89 member associations
from around the world. However, Geoff
French is pleased to report that attitudes
in Davos were still reasonably positive.
“There was optimism at the conference
this year. There was a view, especially
in the western associations, that things
are not great. But people were far from
downbeat about the medium term future.
Some of the fast growing countries, like
China and India, are much more bullish
about their prospects and those of our
global industry.”
Of course, delegates had some
concerns about wider implications of the
downturn.
“People were still very concerned that
the downturn must not mean we take
our eyes off over-riding issues, things like
sustainability, like the importance of quality
and the issue of integrity.
“There was a feeling at the conference
that the issue of integrity is now much
higher on the agenda everywhere. We
hope that that this awareness will result
in more action. That higher focus comes
about because of things like the position
that the multi-lateral development banks
are adopting on this issue.
“What FIDIC wants to do is introduce
a system of integrity management. That
would be one measure for demonstrating
that a firm is serious about integrity
and serious about fighting corruption.
So FIDIC is introducing a new integrity
management system and we are talking
to the banks about how to get recognition
for the new system.”
The multi-lateral banks were well
represented in Davos this year. While
Geoff recognises that FIDIC’s focus is
very much its own industry, he is already
planning to widen discussions for the
centenary in 2013.
“What we are trying to do for the
centenary conference in Barcelona in
2013 is to attract clients, developers and
funders to come along to make it an even
more comprehensive event.”
As the voice of an historically global
industry, FIDIC continues to grow and
was pleased to add both Mozambique
and Palestine as its newest member
associations this year. The new president
takes this as a big sign of success.
“I think it is interesting that FIDIC
attracts member associations from both
ends of the spectrum. We have members
like ACE that have been established for
nearly one hundred years who still find it
very useful to be members. And we have
very young associations with very young
firms as their members who also want to
be part of FIDIC’s global community. That
is a very strong endorsement for FIDIC.”
Impact • September/October 2011 | 19

Viewpoint: Psychometrics
Taking the
psych out of
psychometrics
Psychometrics is the field of study concerned
with the theory and technique of psychologica
measurement. This includes the analysis of knowledge,
abilities, attitudes, personality traits, and educational
measurement. The field is primarily concerned with the
construction and validation of measurement instruments
such as questionnaires, tests, and personality
assessments. Paul Gilbert at Thomas International tells
us how this works and why it matters.
As business leaders and managers I
am certain you will agree that your
organisation is only as strong as
the people you employ. The objective of
this article is to give you a broader insight
and overview into the often unknown and
mysterious world of psychometrics. In
other words: people assessment tools
and how these tools can help you to grow
your business.
Your biggest resource is your people!
So how exactly can self-assessments
aid you through the employee lifecycle,
“Why are
successful
people
successful?
They seek more
feedback on
what they and
others around
them need to do
to improve and
perform better”
helping you to hire, manage, develop and
retain the best people for your business?
A specific challenge within the
engineering sector is how to differentiate
between similarly qualified and highly
specialised skilled workers:
• Who really stands out from the crowd?
• Who has greater development
potential?
• Who will best fit into your
organisation and team culturally?
• Who has the most potential to drive
the organisation forward?
I shall address these questions and
attempt to explain how a range of simple
assessments can assist in identifying
these important areas of consideration.
There are numerous providers of
people assessments on the marketplace
today; some have been around since
the inception of psychometrics to the
business market, others more recently
formed. All claim to offer scientifically
robust and reliable solutions to their
prospective clients and all have the grand
aim of helping organisations through the
full employee lifecycle.
The right psychometric assessments
will empower you to transform the
performance of your teams and your
individuals and deliver an immediate
impact on your organisation.
The best psychometric assessments
give you a high level of certainty in all of
your people decisions.
Recruit
The right hiring decision can have a
huge impact on the performance of your
team, function or line of business. Get
it wrong and you are looking at a cost
of up to 2.5 times the individual’s salary,
and the disruption to your business and
your teams can be considerable. Get it
right and you can develop teams that
function well together so that the whole
of the team is greater than the sum of
its parts.
“Our people are the foundation of
our business success. Recruiting the
‘right’ people and ensuring teams
work together efficiently is crucial
to maintaining our competitive edge
and to the continuing growth of our
company.”
HR manager,
Martek Marine
The right assessments will help you to:
• Identify the candidates with an ideal fit
• Speed up your recruitment process
• Make your selection decisions clearer
• Hire people who will stay with your
company
20 | Impact • September/October 2011

Retain
Develop
Manage
With one in four employees stating they
intend to leave their employer in the next
year, retaining staff is critical to delivering
success in any organisation.
Get it right and you are delivering
consistently on your business targets
with a happy, loyal workforce. Get it
wrong and you are investing cash in new
recruits and dealing with disruption to the
business. With the present pressure on
cost right across the industry this can be
the difference between winning contracts
or losing them.
“Three years after introducing
psychometric profiling FedEx
reported staff turnover had fallen
from 29% to just 7%.”
Senior manager,
FedEx
The right assessments will help you to:
• Motivate your people
• Ensure morale is high
• Create engagement
• Optimise performance
• Reduce attrition
Employers say they need to focus
on leadership and front-line people
management in order to meet their business
objectives over the next two years.
With training budgets under more
pressure than ever, how do you make sure
your learning and development investment
counts? How do you ensure that the training
you provide is directed to the people best
able to make use of it and best able to give
you a return on money you dedicate to this?
“We wanted to use a tool within the
department that would help the team
understand each other better as
well as identify their own personal
opportunities. The team liked PPA,
they found it very visual, and with no
jargon or hefty terminology.”
Training & development manager,
Virgin Trains
The right assessments will help you to:
• Identify each individual’s exact areas
for development
• Give your training more impact
• Be a more effective people manager
• Transform the performance of your
teams and individuals
On average, 80% of management time
is spent on poor performers. But with so
little attention directed at top and good
performers, how do you ensure you are
investing the right amount of effort to
get the maximum results? How do you
identify the causes of poor performance
and how do you enhance the type of
support that will best strengthen your
strongest performers?
“By helping managers to understand
themselves better and identify their
strengths and limitations, we help
them to perform better – this benefits
their own careers and our business.”
Head of Human Resources,
Willmott Dixon
The right assessments will help you to:
• Very quickly get an in-depth
understanding of your people
• Pinpoint why your people do – and
don’t – perform well
• Manage your people performance
effectively
• Free you up to focus your time on
adding real value to the business
Impact • September/October 2011 | 21

What good psychometrics
looks like
Firstly, you should not need to be an
expert yourself. The information should be
straightforward and easy to understand
with no psychobabble. It should make
sense in the real world as the focus is on
you and your staff, not test subjects in a
PhD research paper.
Clearly, results should be accurate
and easy to use, and you should be
able to have confidence in what you are
being told. Thomas International itself
has assessments validated by the British
Psychological Society to help ensure that
this is the case.
Psychometrics should also not be
time consuming. An activity designed
to help you strengthen your business
performance should not take your
valuable time away from other vital
business activities. As such, results
should be available quickly and the tests
themselves should be quick to undertake.
Assessments should work collectively
to give you a full insight into what makes
people successful:
• Core strengths
• Motivations
• Potential for development
• Communication and relationships
• Skills and competencies
Understanding behaviour
“We hire people for their technical
skills, however, we fire them for their
behavioural faults”
PPA (Personal Profile Analysis) is
underpinned by DISC theory, looking at
Dominance, Influence, Steadiness and
Compliance and can provide an insight
into how people behave at work by
answering the following questions.
• What are this person’s strengths and
limitations?
• How do they communicate?
• Are they self-starters?
• What motivates them?
• How will they behave under
pressure?
• Will this person ‘fit’ with my
organisation?
These four behavioural characteristics
shape a person’s work style. PPA
measures which mixture of these
characteristics an individual has in their
make-up, determining how the individual
will potentially fit-in behaviourally into an
organisation.
1. Work Mask 2. Behaviour Under Pressure 3. Self Image
D
I
S
C
D
I
S
C
D
I
S
C
Ability and aptitude
“Identifying those with the most
potential to lead and who can learn
something differently requires a
unique measurement – one that looks
at learning agility”
A GIA test measures a person’s mental
horsepower and gives you a prediction
of their potential to grasp a new role
or respond to training by answering
questions such as:
• Can this person think on their feet?
• How adaptable is this person to
change?
• Can they cope with the mental
demands of the job?
• Could this person be a high flyer?
• Is this person a problem solver?
• To what extent can we develop this
person using training?
7
10
1
5
1
0
11
11
6
10
-10
-6
To achieve this it assesses key areas
of cognition covering reasoning, word
meaning, spatial visualisation, perceptual
speed, number, speed & accuracy.
With careful analysis of the areas of
cognitive ability most appropriate for the
specific roles within your organisation,
you are able to recruit and develop much
more effectively.
22 | Impact • September/October 2011

Emotional expression
and control
“Experienced business leaders rank
so-called ‘emotional intelligence’
capabilities as critical to the success
of today’s leaders”
TEIQue tells you how well your people
understand their emotions, react to
pressure and manage relationships. It will
answer questions such as:
• How aware is this person of their
strengths and limitations?
• Do they modify their behaviour?
• How do they react to pressure?
• Can this person control their impulses
when under stress?
• Do they excel at developing
relationships?
• How self-motivated and adaptable is
this person?
What internal values, beliefs and attitudes
are required for specific roles within your
organisation? Emotional intelligence allows
you to understand what drives an individual
and how they will cope with other people,
pressures and changing environments.
As per the introduction to this
viewpoint piece, the purpose of this
article was to give you an insight into
psychometrics in general. Thomas
International, an experienced provider of
the assessments outlined, is just one of
many companies which provide effective
assessment solutions to organisations.
Areas of emotional intelligence measured include:
Well-Being Happiness, Optimism, Self-Esteem
Self-Control Emotion Regulation, Impulse Control, Stress-Management
Emotionality Empathy, Emotion Perception, Emotion Expression, Relationships
Sociability Emotion Management, Assertiveness, Social Awareness
Independent Adaptability, Self-Motivation
Learn more about how people assessments can help
your organisation. Contact Paul Gilbert on 02072572810
or paulg@thomas.co.uk for more information and a
complimentary assessment. Or simply visit www.
thomasinternational.net
Thomas International is a global leader in the field of
behavioural and psychometric profiling, at the forefront
of assessment innovation for 30 years. Thomas provides
assessment solutions in over 60 countries, profiling in over
56 languages. Over 1.5 million Thomas assessments are
completed annually.
Impact • September/October 2011 | 23

The three lines
of defence
Firms are adopting three lines of defence to manage
risk in their business. ACE’s finance manager, Joseph
Mayungbe, looks at how this works
The challenges arising from the
current economic situation, and
potential challenges in legislation,
will increase the pressure for companies
to adopt a robust governance
framework. It will also raise the need
to sustain a good relationship and
communication between management,
internal audit and the audit committee.
In a marketplace where one person can
undermine the reputation of a regulated
entity, all parts of the organisation must
be aware of and take responsibility for
compliance-related risks.
An organisation is as strong or as
ethical as its weakest link; the blame
for a poor control environment must be
shouldered throughout the organisation.
Whilst the board and senior management
must set the tone at the top of the
organisation for a corporate culture,
which acknowledges and maintains an
effective control environment, each and
every person within the organisation
should be “tuned in” to internal controls.
Rules are meaningless in a culture of noncompliance.
There are enhanced public
expectations for economic actors to be
more proactive in risk control. Article
41 of the eighth EU Company Law
Directive assigns a duty to “monitor the
effectiveness of risk management and
control systems.”
The three lines of defence
Increasingly, organisations are adopting
“three lines of defence” in embedding
risk management capability across the
organisation. The model distinguishes
between functions that own and
manage risks, functions overseeing risks
and functions providing independent
assurance.
First line of defence: business
operations - risk and control in the
business
The first line describes the controls
an organisation has in place to deal
with the day-to-day business. Controls
are designed into systems and
processes. Assuming that the design
is sound to appropriately mitigate risk,
compliance with process should ensure
an adequate control environment.
There should be adequate managerial
and supervisory controls in place to
ensure compliance and to highlight
control breakdown, inadequacy of
process and unexpected events.
The first line of defence provides
management assurance, and informs
the audit committee by identifying risks
and business improvement actions,
implementing controls, and reporting on
progress.
“This third
line role likens
internal audit
to that of a
goalkeeper in a
football match”
24 | Impact • September/October 2011

“An organisation
is only as strong
or as ethical as
its weakest link”
Second line of defence: risk
management and compliance functions
As a second line of defence, the risk
management functions facilitate and
monitor the implementation of effective
risk management practices by operational
management. It also assists the risk
owners in reporting adequate risk-related
information. This provides oversight over
business process and risks.
Now is an opportune time to stand
back and re-think how risk management
activities combine within the wider system
of internal control as part of an efficient,
effective, integrated assurance framework
The second line is re-enforced by
the advisory and monitoring functions
of risk management and compliance.
Risk management defines and
prescribes the financial and operational
risk assessment processes for the
business, maintains the risk registers
and undertakes regular reviews of
these risks in conjunction with line
management. Compliance advises on
all areas of regulatory principles, rules
and guidance, including leading on any
changes, and undertakes monitoring
activity on key areas of regulatory risk.
There are many functions in companies
tied to risk management and compliance
roles including:
• Enterprise risk management
• Quality functions
• Environmental
• Health and safety
Third line of defence: internal audit
and other independent assurance
providers
This describes the independent assurance
provided by the board audit committee,
a committee of non-executive directors
chaired by the senior independent
director, and the internal audit function
that reports to that committee.
Internal audit undertakes a programme of
risk-based audits covering all aspects of both
first and second lines of defence. Internal
audit may well take some assurance from the
work of the second line functions and reduce
or tailor its checking of the first line.
Clearly the level of assurance taken
will depend on the effectiveness of the
second line, including the oversight
committees, and internal audit will need to
coordinate its work with compliance and
risk management as well as assessing the
work of these functions. The findings from
these audits are reported to all three lines,
i.e. accountable line management, the
executive and oversight committees and
the board audit committee.
This third line role likens internal audit
to that of a goalkeeper in a football match.
When the ball is lost in midfield (first line)
and the defence (second line) fails to pick
up the opposition’s attack, it is left to the
goalkeeper (third line) to save the day.
There is a reasonable expectation that
internal audit will identify the weaknesses
in both first and second lines and failure to
do so may lead to significant loss to the
organisation.
Conclusion
As indicated in the model, all three
lines of defence have specific tasks
in the internal control governance
framework and could be applied to
any sector or industry. The model of
management control in the first line,
oversight challenge in the second and
independent assurance in the third is
universal in application and one well
worth considering. Recent surveys show
the internal audit function becoming
more standardised throughout the world
and is predicted to expand its role in
organisational governance and risk
management - based on results released
in July 2007, of the most comprehensive
global study ever conducted by the
Institute of Internal Auditors (IIA),
involving the participation of more than
9,300 internal auditors in 91 countries.
Impact • September/October 2011 | 25

Successful Tendering
Karen Douglas, head of learning and development for Tenders Direct, offers Impact
readers some valuable inside advice on making the most of tendering for contracts
With increasing publicity over the
difficulty of winning tenders
businesses need to invest time
and effort to achieve success.
The tendering process has become
more competitive over the last couple
of years and it is now essential that you
are organised, skilled and knowledgeable
to be able to compete on a level playing
field. However, following some basic
principles can reap reward.
Finding opportunities
Finding the right opportunities in the
first place is a mixture of successful
business development, efficient sourcing
and luck. Devote time to knowing and
understanding your existing clients
and their work requirements, as well
as building relationships with new and
prospective clients, including their
procurement professionals. Understand
their current contracting situations, what
work is likely to be available when and
keep a tracking database. Being in the
buyers’ minds when they are writing
tender documentation could significantly
increase your chance of success; this
requires them to have knowledge of your
business and product/service options
before the tendering stage. The increasing
amount of meet the buyer events and
networking forums throughout the country
supports this practice.
With regards to efficient sourcing,
the increased amount of procurement
legislation affecting the public sector,
coupled with tighter scrutiny over
public funding, has resulted in more
transparency, visibility and bureaucracy
regarding public contracts. A large
majority of all public sector contracts
are now advertised, with it being a legal
requirement to advertise high value,
or above the threshold, opportunities
in OJEU (the Official Journal of the
European Union).
Unfortunately, because of the volume
of available tenders, the inaccuracies
of common procurement vocabulary,
and the sheer volume of websites
advertising lower value tenders, you are
likely to spend considerable time tracking
down the right opportunities for your
business. You can become more efficient
in your sourcing by subscribing to a
tender tracker service, such as Tenders
Direct This service will take the time to
understand your business needs and
will source opportunities that best match
that need, both above and below the
threshold. You are then updated regularly
with contracts specific to your business.
Organise internally
Organise yourselves internally so that
when a bid does present itself you
are ready to go. If possible organise
a bid team who are knowledgeable
and trained in the business and the
tendering process. Ensure that each
team has someone performing the roles
of bid manager, editor, and someone
responsible for the pricing elements of
the bid. Make sure that all key documents
are available and stored in a library. Public
sector pre-qualification questionnaires or
tenders will require you to demonstrate
26 | Impact • September/October 2011

key policies and procedures. These
should be updated, relevant and evident
in your business. Know in advance what
clients are looking for and prepare your
organisation. Most clients will be looking
for evidence of quality systems in place
so make sure these are up to date,
monitored and reported on. Consider
appropriate accreditations such as ISO
9001. Whilst you may not be specifically
asked for it, in the majority of cases it
is much easier to evidence and answer
questions than having your own systems.
Choosing to tender
Make a “go or no go” decision with all
the appropriate people. You should have
a process internally as soon as a suitable
tender is sourced, then this is reviewed
by all key parties and as a minimum the
following questions asked:
• Can we do this contract?
• Can we evidence that we have
the right skill, experience, financial
standing, and organisation to meet
this need?
• Is the contract in a realistic timeframe
for our resource budget?
• Are we likely to make a suitable
return or are there other reasons for
winning this contract?
• Who is the competition likely to be?
• Do we have the time available to
write the bid to our satisfaction?
Only when these key questions have
been answered should you start to
move forward with the bid. All parties
should know the role they should play
in the bid team and be fully supportive
and engaged in the tender process.
They should completely understand the
requirements of the tender by thoroughly
reading all of the necessary documents at
least twice and create a bid strategy. This
should involve creating a project plan,
including key milestones and delegated
responsibilities. Included in this should
be regular reviews, co-ordinated asking
of questions, if applicable, filtering of
replies and the organisation of key shared
documents so you are all working from
the same template.
Answering the questions
Answering the questions in a tender
document takes some practice. To ensure
top marks the answer must firstly confirm
that you can meet requirements and then
proceed to outline how you can exceed
compliance. It should state what and how
the requirement will be met and include
the benefits and value of the solution.
Make sure to substantiate claims with
facts and provide demonstrable evidence.
Also ensure you fully understand how
each question will be evaluated and how
many marks are allocated if relevant –
knowing how many marks each question
is worth will help you understand what
sections of the tender are deemed most
important and therefore where you should
concentrate more of your time.
Make sure you know what is
important to the buyer. The buyer is
key to this whole process so answering
the questions from their perspective
works in your favour and will ensure the
highest marks. This is where relationship
building comes in to its own. If there
is a question about environment and
sustainability and you know that they
have awards or standards for this
ensure that you meet or exceed these
standards in the answer. The buyer is
looking for confidence in your ability to
deliver and minimal risk from a service
delivery and commercial perspective.
With every answer you give, ask yourself
“so what?” If you are saying that you
are going to deliver ahead of time, what
does this mean for them as a client?
Review and amend
Make time for review and amendment.
If possible include an external person in
this review – they will be able to run a
fresh eye over the tender. Finally ensure
there is time to collate, print and bind (if
required) your tender and then courier
or electronically submit. Remember
always follow instructions to the letter
and never miss the deadline as nothing
will be accepted after this time. If you
have been asked to provide three hard
copies, provide three hard copies. If you
are asked to deliver the document in an
unmarked envelope make sure that this
is adhered to, and the courier company
understands the importance in this. Due
to the increasing number of challenges
and pressure being put on public sector
professionals it has been known for
them to discount bids for reasons such
as labelled envelopes, even if done
inadvertently by a courier. There could be
concern that this has been labelled for
preferential treatment and this technically
is a non-compliant bid.
Feedback
Obtain feedback at the end of the
process whether you are successful
or unsuccessful. This will ensure you
captured what worked and what didn’t
for the future. There are also a lot
of opportunities to be had by acting
professionally and asking the buyer
for this feedback and also if there are
likely to be other opportunities in the
near future. This can form the start
of an excellent relationship from a
business development perspective, or
be an excellent way of identifying key
learning needs for the team for the
future. In the public sector there is a ten
day standstill period before a contract
is awarded, to allow for any legal
challenges to be made.
Karen Douglas is head of learning and
development for Tenders Direct. ACE
have partnered with Tenders Direct
to allow our members a significant
discount. For more information visit
www.acenet.co.uk/td
Impact • September/October 2011 | 27

Engineering the
political climate
ACE joined with CECA, CPA and ICE this party
conference season to promote the importance of
infrastructure investment ACE’s public affairs manager,
Crispin Oyen-Williams, reports back for Impact
There was a shared theme across all of
this year’s conferences. Despite the
varying rhetoric and the insults thrown
between parties, all focused on the need to
stimulate the economy to achieve growth.
Because of this focus, infrastructure, and
the industry behind its delivery, has gained
a new level of prominence in the political
realm as the primary driver for economic
growth and recovery.
ACE has thus been keen to exploit
this opportunity for our sector and the
wider construction industry at all three
party conferences.
Teaming up with other organisations in
the £20 billion a year infrastructure sector,
ACE took part in three cocktail receptions
as part of the Infrastructure Alliance (ACE,
the Civil Engineers Contractors Association,
the Construction Products Association and
the Institution of Civil Engineers) and our
conference partner CITB-ConstructionSkills.
These receptions, promoting a joined-up
message from industry on the crucial role
that infrastructure plays in the economy and
in our communities, were ACE’s main input
into the conferences. However, there was
much more of interest to the infrastructure
sector and the wider construction industry
at all three conferences.
The Liberal Democrats
The most prominent infrastructure
announcements came at the Liberal
Democrat conference. The Deputy
Prime Minister, Nick Clegg, used a preconference
speech to announce that
40 infrastructure projects would be
prioritised to stimulate growth. There
was also an announcement of £500
million extra for capital projects from
Chief Secretary to the Treasury, Danny
Alexander, to further boost growth.
The Infrastructure for Growth
reception at the Liberal Democrat
conference saw speeches from John
Hemming MP, Steve Withers of CECA,
and guest speaker Julian Huppert MP
(chair of the Liberal Democrat Transport
Committee).
Julian spoke of the Liberal Democrat
commitment to infrastructure both as
a driver for economic growth and as a
means to green the environment.
In general, commentators agreed that
the Liberal Democrat conference felt
flat. But with the party sitting at around
10% in the polls, the leadership must
have been pleased that there was no
large-scale negative reaction from their
activists.
Labour
Labour’s conference was more policy–
light than the other conferences. This
was somewhat to be expected from the
opposition at a stage of the political cycle
more than three years away from a likely
general election.
Although Labour supports the calls for
investment into infrastructure, the focus
at Labour was on other ideas to help
growth. VAT reductions were mentioned,
as well as an interesting idea from Lord
Sidelsky to develop the Green Investment
Bank into a State Investment Bank.
The Infrastructure for Growth reception
at Labour saw speeches from Nick
Raynsford MP, Nelson Ogunshakin OBE
(ACE) and guest speaker, Ian Lucas MP,
Shadow Construction Minister. Ian Lucas
spoke of Labour’s continued support
for infrastructure and the construction
industry.
Overall the Labour conference felt
slightly smaller than previous years.
Whether this was due to being in
opposition, or costs in the midst of a
recession, the conference did feel like the
meeting of a party - and a new leader in
Ed Miliband - trying to find its identity in
opposition.
28 | Impact • September/October 2011

Conservatives
The Conservative conference took a
more macro economic view than the
other conferences when it looked at the
growth agenda, although capital and
infrastructure were again mentioned
throughout.
The Conservative agenda was best
summarised in George Osborne’s keynote
speech, in which he told the country that
we must stick to the economic course
and not cut taxes or spend more. This
was a direct response to the calls of
Liberal Democrats and Labour for more
large scale spending on growth, and to
the Conservative right, which has been
calling for tax cuts.
The most interesting announcements
included the Conservatives’ housing
revolution, where social housing will be
available to buy from its residents at
reduced prices, with generated funds
put into more house building. This is a
precursor to the year ahead, in which the
housing shortage is likely to form a key
battleground between the political parties.
However, question marks were
raised by some at conference by the
Chancellor’s speech, where he seemed
to portray sustainability and the drive to
the low economy as a threat to growth
rather than a catalyst for innovation
in renewables technologies. This was
vigorously denied by Conservative
Environment Minister Greg Barker MP
at a fringe event. It is likely that the
Conservatives will need to give more
clarity on their views on the environment,
and in particular their views around
keeping the current reduction rates for
carbon emissions in 2020, 2030 etc.,
to maintain certainty in industry around
renewable development.
The Infrastructure for Growth reception
at the Conservative Party conference
saw speeches from Mark Garnier MP,
the CPA’s Michael Ankers OBE, and
guest speaker Esther McVey MP, PPS
to the Employment Minister. Esther
herself comes from a construction family
business background and spoke about
how the Conservatives understood
the importance of infrastructure and
construction.
An infrastructure lunch was also held
at the Conservative conference, with
the likes of Peter Aldous MP and Marc
Garnier MP attending.
In total, the Conservative conference
was very steady and to plan, with no large
ups or downs from those attending, again
something that must have pleased the
Prime Minister.
In truth, the conferences did feel a
little underwhelming this year. But this
is because they felt like the warm up
act to what will be the big event on
the immediate political horizon, the
Chancellor’s autumn statement on 29
November.
Here we will hear the details on how
the coalition government hopes to bring
about growth, with the likely release of
the Plan for Growth phase two and the
second National Infrastructure Plan to
name but a few of what is likely to be a
long list of announcements.
Infrastructure should feature heavily
in the statement and, with conference
season complete, we now wait with bated
breath for 29 November and will continue
working with decision makers to support
that agenda.
“infrastructure, and the industry
behind its delivery, has gained a
new level of prominence in the
political realm”
Impact • September/October 2011 | 29

Green light for light rail
The Department for Transport has published a new paper entitled “Green light for light
rail”, looking at measures to support development of urban light rail and tram services
rail is good for passengers,
good for local economics,
“Light
good for the local environment
and it’s a mode of public transport that
passengers really enjoy using.” These
were the words of Local Transport
Minister, Norman Baker, as he launched
the government’s new policy drive on
tram and light rail investment. And who
can argue with him? Light rail has enjoyed
something of a renaissance in the UK
over the last thirty years after decades
of decline as buses dominated public
transport policy.
While light rail has been established
and extended in several major cities,
its development has still been limited
compared with successes across
Europe. Norman Baker wants to change
that, saying: “I’m committed to doing
everything we can to bring costs down
to make it a viable option for more
communities.”
The need for investment is clear. Not
only has the government started to focus
heavily on infrastructure as the route back
to economic growth in the UK, but cities
need new ways to move increasingly
dense populations around their centres.
Andrew Boagey, business director
with SYSTRA, the railway engineer and
transport specialists, explained: “We
can see the direction in which urban
transportation is headed. Congestion
in towns and cities increases and yet,
in many cases, there is a legacy of
unused heavy rail infrastructure. With
careful attention to safety and innovative
engineering, this can be put into use to
serve new passenger markets and bring
economic development.”
The DfT paper recognises that along
with the economic activity created by
building new light rail routes in urban
areas, existing light rail systems have
had significant positive knock-on effects
on the areas they serve. However, it
also notes that there are difficulties for
local authorities looking to finance such
projects.
There are strict limits on what
proportion of a project cost can be met
locally. The government is proposing to
ease these limits by bringing the rules
for light rail and trams into line with other
forms of public transport. Since 2000, the
DfT has required that 25% of the cost of
new light rail projects be met through local
contributions, compared to 10% for other
modes.
Government is also keen to see the
overall cost of light rail bought down.
Alongside concerns that infrastructure
costs more to build in the UK than
across Europe, the report highlights wide
variations in the cost of light rail projects
within the UK.
While the report itself focuses on how
a more uniform approach to design may
help reduce costs overall, figures included
on cost per mile of track suggest that
very short projects may not maximise
outcomes. Projects of around five miles
in length appear disproportionately
expensive, though once a project reaches
ten miles of track, the economies of scale
no longer appear strong, suggesting there
is little additional cost saving from very
long lengths of track.
“Projects of around five
miles in length appear
disproportionately expensive”
(c) Transport for London 2005
Government also recognises that there
have been specific problems with the
procurement process for some projects in
the UK. To help to overcome this, a new
centre for procurement excellence will be
established within UKTram. Procurement
can prove complex, time consuming
and costly for major infrastructure works
and moves to resolve that in any sector
is a welcome recognition that efficient
procurement leads to better outcomes.
One area that the paper leaves
unanswered is that of moving utilities such
as water pipes and electricity cables away
from the routes along which trams will
run. However, the concern is not entirely
unaddressed. The DfT has announced
plans for a consultation on the subject
to help bring business, local government
and the utility companies themselves to
examine possible solutions to a problem
that can significantly raise the cost of light
rail and trams.
30 | Impact • September/October 2011

Scottish spending review
and draft budget
The Scottish Government has put jobs and capital spending at the heart of its new
budget and a spending review. Impact looks at the implications
Scottish Finance Secretary, John
Swinney, issued a warning as
he launched the first budget and
spending review of the current Scottish
Parliament. He stressed that his plans
came against a backdrop of deep cuts
to the Scottish capital budget by the
UK government, largely resulting from
the Barnett formula that sees cuts
in spending in England matched by
escalated cuts in Scotland.
In response to this warning, Mr
Swinney promised to shift Scottish
resources towards capital spending to
help maintain investment for the sake of
jobs and the economy.
Mr Swinney committed to bring
forward a pipeline of investments worth
£2.5 billion to strengthen the economy.
He also announced that £200 million per
year would be shifted from the Scottish
resource budget to pay for capital
investment.
The announcement came with
commitments on a number of key
projects across Scotland. The Forth
Crossing still has government backing,
and the New Glasgow Southern Hospitals
Project will also continue. In transport
he made clear support for the Glasgow
Fastlink, the Aberdeen Western Peripheral
Route and the Borders Rail Project.
Alongside this there was a commitment
to deliver 30,000 new affordable homes
over four years as part of efforts to sustain
economic activity and meet long term
housing needs.
The budget and spending review
looked at further pilots of Tax Incremental
Funding, suggesting that two will be
announced soon to further examine
this means of funding infrastructure
investment. Plans were also set out to
secure 250,000 apprenticeships across
Scotland and to link apprenticeships to
procurement requirements. Along with
this strong commitment to skills there
was an announcement that smarter
procurement practices would be sought
to help improve efficiency across public
sector activity.
Upton McGougan’s Jim Tod, chair
of the ACE Scotland Committee,
commented: “I am pleased that the
Scottish Government recognises that
reforms to procurement are essential.
We need to take a smarter approach to
investing in asset design and delivery.
We need public sector procurement
to focus on how better value can be
achieved in the design and delivery of
our infrastructure. Smart procurement
means defining a project’s needs
from the outset, having active client
participation through the process
and levels of investment in the design
process which optimise the value to the
client.”
While the budget was the key
focus, Holyrood remains keenly aware
that Parliament in Westminster is still
considering prospects for additional
spending powers to be granted to the
Scottish Government. These powers,
which have been put into legislation that
is to be discussed in the House of Lords,
would enable Scottish Governments to
invest borrowed money in capital projects
and to target that investment towards
specific Scottish needs.
The move would be supported by
the Scottish Government as a further
strengthening of devolution and an
opportunity to build the Scottish
economy over the long term. Indeed, the
proposed £2.2 billion borrowing facility
for the Scottish Parliament has been
described as a floor that may be raised
over time, allowing Scotland even greater
borrowing powers.
However, until the proposals for
additional borrowing powers for
Scotland are concluded, the Scottish
Government has indicated it will prioritise
consolidation ahead of launching new
projects. This will see it continue to use
the Non-Profit Delivery model, to push
through some of its capital funding plans,
rather than use new financing methods
to start up new activity.
Impact • September/October 2011 | 31

Economic update
Impact columnist Graham Pontin provides his latest analysis of the economic
climate and how this affects the industry. Graham Pontin is an economist
with the Association for Consultancy and Engineering
Is the market ready to
engineer economic recovery
This year’s State of Business report
coincides with challenging market
conditions for the consultancy
and engineering sector. The overall
market perception has moved on from
the 2010-11 report of decreasing fees,
order books, and staffing levels to
one of conditions remaining broadly
unchanged.
However, if the UK economy is to
recover, broadly unchanged conditions
will not be adequate. Given the scale
of the infrastructure challenge in the
UK, and government’s commitment to
infrastructure investment as a means
of achieving growth, this year’s report
concludes that there is still significant
work to be done to secure economic
recovery.
The economic updates over the
past few issues have explored whether
UK growth is lagging behind that of
its international competitors and how
far and fast costs are likely to drive
innovation. Within this wider context it
is vital that ACE draws on the opinions
and expertise of its members to provide
a view of conditions in the industry. The
State of Business report does this, and
this year’s survey reveals a number of
findings:
Flat prospects for UK economy over
the next 12 months
The overriding belief is that there will be
little change in the economy over the
next 12 months. Gross incomes, fee
levels, PFI/PPP activity, tender success
rates, staffing levels, cash flow, economic
stability, volume of bidding activity,
international new orders, UK margins
and international margins are all rated as
unlikely to change.
This reflects the current levels of
uncertainty within the market. The credit
crisis, recession and subsequent increase
in sovereign debt are at the forefront of
investors’ and businesses’ concerns.
Private client activity
UK new orders
Gross income
Fee levels
PFI/PPP deal volume
Tender success rate
Staffing levels
Cash flow
Economic stability
Volume of bidding activity
International new orders
UK margins
International margins
Public client activity
Increase Unchanged Decrease
Shift towards private sector work
The government has made rebalancing
the economy one of the key aspects of
its budget plans, moving activity from the
public sector to the private sector. This
year’s State of Business report reveals
that there is evidence of this occurring,
with public client activity reported by
65% as undergoing a decrease whilst
private sector activity was rated by
companies as improving, not only over
the past 12 months (42%) but also over
the next 12 months (49%).
Other positive prospects were reported
by companies for a number of sectors.
Sectors such as energy, utility and waste
are viewed as providing positive earnings
potential. These sectors, whilst having
some government intervention, also have
significant private involvement.
Respondents reported the commercial
property and housing sectors as being
their most profitable in our 2011-12
survey. Comparison with the previous
survey shows that, since the publication
of the Comprehensive Spending Review
and 2011 Budget, there has been a shift
from the most profitable sectors being
reported, from those that are more reliant
on public spending, to those with more
private involvement.
Significant interest in international
markets
This year’s State of Business survey
comes at a time of international volatility,
with a number of countries in Europe
struggling to control their fiscal positions.
In addition, the downgrading of the US
highlighted the wider contagion that has
taken hold of public accounts following
the financial crisis.
However, with sluggish domestic growth
in the UK, companies that wish to improve
margins, expand their operations and grow
out of the recession are looking towards
international markets. More importantly,
less traditional international markets have
a greater focus than they would otherwise
have had a few years ago.
Asia, China, Russia, Africa, Australasia,
32 | Impact • September/October 2011

Economic update
In addition to the analysis above this
years state of business survey also
has guest contributions from:
• Simon Kirby – director of
infrastructure projects, Network
Rail
• Angus MacNeil MP - SNP
spokesperson for transport and
rural affairs
• Michael Parkinson - head of
research - Brewin Dolphin
• Laurence Robertson MP –
former minister for Northern
Ireland
• Subhash Thakrar - chairman
of the London Chamber of
Commerce and Industry (LCCI)
and senior partner at Blackstone
Franks LLP
South and Central America and Eastern
Europe are all seen as providing some
degree of opportunity in terms of earnings
over the next three years, whereas
Western Europe has shifted to a position
of stability at best.
When asked about the markets
that companies intend to enter it is not
surprising that the Middle East is still
International markets
What are your expectations for fees earned in the following:
Western Europe
Eastern Europe
Russia
North America
South/central America
The Middle East
Central Asia
China
South Asia
South East-Asia
Australasia
Africa
considered a key market. Whilst the Asian
markets were considered to provide
growth opportunities, the number of
companies indicating they intended to
enter this market was significantly lower
than that of the Middle East. This may
reflect the unfamiliarity with the local
markets on issues such as politics,
planning, legal processes and regulations.
7% 7% 71% 14%
10% 40% 30% 20%
29% 57% 14%
25% 38% 25% 13%
10% 30% 50% 10%
11% 6% 56% 28%
43% 57%
44% 33% 22%
17% 58% 25%
20% 70% 10%
10% 20% 40% 30%
8% 17% 58% 17%
Decrease >10% Decrease 1-10% No change (+/-1%) Increase 1-10% Increase >10%
In terms of the sectors that
participants are likely to enter
internationally, there is a far greater
optimism and mix than domestically.
The utilities, energy/power generation,
industrial, commercial, transport and
housing sectors were all viewed by
more than half of companies as sectors
in which fee earnings are expected to
increase.
Early indications of a skills shortage
Since 2009, expectations regarding the
ease of recruitment have been shifting
towards being more difficult with only
5% indicating some level of difficulty
in 2009-10 compared to 27% in this
current survey. Interestingly, when asked
to provide expectations for the next
24 months, companies reported that
conditions will continue to tighten.
When asked more specifically about
the roles in which companies were having
difficult recruiting, respondents mentioned
a variety of skill sets. However, difficulties
tended to be in the area of engineers with
Impact • September/October 2011 | 33

a few years experience.
This is likely to be a particularly
vulnerable area given that recruitment
rates have fallen, leaving graduates
without the opportunity to gain experience
in the industry. Such gaps need to be
identified and targeted to ensure that a
shortage does not occur.
The government is taking the right
action to address the UKs deficit
In last year’s State of Business report
we asked companies if they felt that the
UK’s sovereign debt was of concern to
their organisation. Approximately half of
companies reported this to be the case.
However, since then we have seen the
US credit rating downgraded, Greece’s
position worsen considerably, a rescue
package implemented for Ireland and
the contagion spread more widely into
the Eurozone with countries such as
Italy, Spain and Portugal now seen as
potential risks. It is therefore unsurprising
that, as a result of this, the number of
companies that consider the level of
sovereign debt to be of concern has
increased.
Accompanying this increase in concern
over the UK’s deficit has been a rise in the
number of companies that believe that the
coalition government has effective policies
in place to deal with the deficit.
This emphasises that companies feel
that the UK can ill afford to have the
international community and investors
lose confidence in its economy and ability
to service its debt.
More priority is needed on delivery of
infrastructure
This year’s report provides more evidence
of companies’ belief that the UK’s
infrastructure is falling behind that of our
international competitors. This suggests
that further priority needs to be given
to the UK’s infrastructure to ensure
international competitiveness.
Given the government’s concern
surrounding economic growth, and
its commitment to infrastructure
investment, it is interesting to note that
70% of companies feel that delaying
infrastructure spending is having a
detrimental effect on future economic
growth. This would suggest that, if
the government were to bring forward
projects or to leverage private funding
more effectively to kick start projects,
there is real potential to improve the UK’s
growth prospects.
Since maintenance is also an
important part of ensuring asset
efficiency companies were asked if
maintenance cuts would push up
long run capital costs. Some 60%
of respondents agreed or strongly
agreed that this would be the case.
This suggests that cuts in maintenance
should not be made for short term gain
if it is found that they increase long run
costs.
“companies
may feel that
the UK can ill
afford to have
the international
community and
investors lose
confidence in its
economy”
Government policy
Is the UK’s level of sovereign debt of concern to your organisation?
Yes
No
Don’t know
30%
68%
Did you win an
Amazon Kindle?
Those who submitted a completed State
of Business survey were entered into a
free prize draw to win an Amazon Kindle.
To find out whether you won, visit
www.acenet.co.uk/sob
Government policy
Has the Government got effective policies in place to deal with the deficit?
Yes
62%
No
24%
Don’t know
14%
To download the full state of business
report pleas go to www.acenet.co.uk/sob
34 | Impact • September/October 2011

ACE Agreements
2009 Edition
The industry-standard documents for the appointment
of consultancy and engineering professionals
Continuity
The 2009 editions of the agreements maintain the original principles of the ACE
Agreements in an updated and simplified form. ACE has been producing legal
agreements for many decades and the latest form of agreements builds on this
expertise.
Modernity
The new suite includes a specialised Scottish suite of agreements to recognise recent
changes established by Scottish precident. All agreements are flexible in function,
enabling clients and consultants to tailor the services to match the project
Convenience
ACE Agreements are available immediately at any time of day from anywhere in the
world. Designed to be flexible to meet specific details of your project, you can fill in,
save, return and update your digital agreement when suites you.
Security
ACE digital agreements are hosted on a secure platform with maximum encryption and
data protection to offer users confidence in the integrity of their service.
Pricing
ACE members may be able to benefit from a discount on ACE Agrements. to find out
more contact ACE’s marketing manager Gary Bullett on 0207202 0257.
www.acenet.co.uk/aceagreements
ACE Agreements
Design
• Advisory, investigatory and other
services
• Design and construct
• Sub-consultancy
• Homeowner
• Expert Witness
• Adjudicator
Schedules of services
• Civil and Structural engineering
• Mechanical and electrical
engineering
Scotland Agreements
Design
• Advisory, investigatory and other
services
• Design and construct
• Sub-consultancy
• Homeowner
• Expert Witness
• Adjudicator
Schedules of services
• Civil and Structural engineering
• Mechanical and electrical
engineering
Impact • September/October 2011 | 35

London • November 3rd & 4th 2011
FIDIC, ACE AND ECV PRESENTs
Know-How for Working on
Future International Projects
a training course on International fidic Contracts
Two- Day Course on: “The Practical Use of the 1999 FIDIC
Conditions of Contract and Multilateral Development Banks’
Harmonised Construction Contract”
Register at www.ecvglobal.com