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227. This research project has revealed a series of systemic risks that affect, or are likely to affect, the architectural sector in Australia. These risks are largely linked to current market conditions, including intense competition, endemic disputes and disruptive change, although some risks are associated with the way some architects operate. There is no evidence to indicate that the systemic risks identified in this report have resulted in generalised non-compliance by architects with the regulatory framework. Nonetheless, the ARBV and NSW ARB want to ensure that architects are well-placed to manage these risks while ensuring regulatory compliance.

228. The main sources of systemic risks identified in the research project relate to:

  • Exposure of architects to undue risk in the context of D&C procurement models: There is clear evidence to indicate that the D&C procurement model can lead to adverse outcomes for architects, including unfair contract terms, increased exposure to legal risk and limits on access to professional indemnity insurance. Industry bodies have already invested much effort in tackling these issues. However, ongoing support for architects is needed as the risks do not appear to have abated.
  • Challenges associated with complying with the NCC: The NCC is a complex document and may be challenging for some architects to interpret and apply in practice. These challenges highlight the need to ensure that the NCC is well-understood, particularly the roles and responsibilities of the various sectoral players in ensuring compliance with the NCC.
  • Management of client-architect relationships: There are many factors that can affect the client-architect relationship, including factors that are outside the control of architects such as the procurement model. However, the evidence indicates that architects can do better in managing their relationship with clients, particularly in relation to the way they communicate with clients. Greater effort is also required by architects and their clients to understand client-architect agreements, which are designed to provide clarity about the parameters for client-architect relationships and can help to keep these relationships on track.
  • Disruptive change: Disruptive change caused by climate change and technological developments will change the risk profile of many construction projects. Architects will need to ensure that they are prepared for this change. Education and training providers will play an important role in supporting architects to navigate change.

229. Notwithstanding the challenges created by the sectoral systemic risks for architects, there are also opportunities. Architects will be best placed to embrace and realise these opportunities if they commit to regulatory compliance and, particularly, to use professional standards as the means to guide them through disruptive change. The ARBV and NSW ARB also remain committed to supporting architects in this journey and call on governments, industry bodies and other relevant stakeholders to do so as well. Ultimately, this will generate benefits for the entire construction sector, but particularly clients of architectural services and end-users.

Appendix: Main surveys and studies cited in report

Abbreviation

AIA Client Survey (2021)

The survey involved senior professionals across a range of sectors that had engaged the services of an architectural firm for at least one project across the last three years. Over a three-week period, through direct conversations and survey responses, clients across Australia provided insights drawn from their experiences engaging architectural services on a wide range of public and private projects.[1]

AIA Novation Contract Survey (2019)

A national survey was undertaken by the AIA of its members to provide an initial indication regarding the pitfalls and positive outcomes of the ND&C procurement method. The findings from the survey for Victoria are set out in the AIA report.[2]

Australian Construction Industry Research Report (2020)

The research for this report was based on a literature review, a web-based survey and a number of interviews with participants in the construction industry in order to examine the health of the Australian construction industry.[3]

CIE Study for the ABCB (2021)

The Centre for International Economics (CIE) was commissioned by the ABCB to conduct a high-level assessment of implementation of the Building Confidence Report recommendations. The assessment involved consultation with and surveys of relevant industry stakeholders combined with a review of available evidence.[4]

Deakin University Study of Residential Multi-owned Properties (2019)

This study involved analysis of building defect audit reports, stakeholder and end-user interviews, and a regulatory review to investigate the types of defects reported, the reasons why defects are so prominent, and the impacts of these defects.[5]

NZ Architect Survey (2016)

Data for this study was collected through an online questionnaire survey of 82 practising architects in New Zealand regarding risk assessment in project budget development.[6]

NSW Architect Survey (2019)

The survey involved qualitative interviews with 50 architects across four large multidisciplinary professional service firms located in Sydney, Australia, which were supplemented by ethnographic observations.[7]

NSW Building Survey (2021)

The survey involved a questionnaire, which was issued to over 1,400 strata managers for multi-storey buildings completed in the last 6 years to examine serious defects in these buildings.[8]

UK Residential Architecture Study (2019)

This study involved a combination of qualitative online survey, semi-structured interviews, and online focus group discussions among architects and non-architects to examine value addition by architects in residential projects.[9]

UK RIBA Survey (2011)

Interviews were conducted with over 40 individuals from across the built environment professions, with an aim to compare their long term views of the supply and demand side of the built environment industry. The study aims to examine the breadth of those who shape the built environment, encompassing those who have taken the traditional route through the profession and those who are working in expanded and experimental fields of practice, as well as those working elsewhere in the wider construction industry.[10]

[1] Australian Institute of Architects, n. 74 above, p. 7.

[2] Australian Institute of Architects, n. 61 above.

[3] J. Sharkey et al, n. 4 above.

[4] The Centre for International Economics, n. 176 above.

[5] N. Johnston & S. Reid, n. 154 above.

[6] J. Adafin, J.O.B. Rotimi, & S. Wilkinson, n. 96 above.

[7] S. Ahuja, N. Nikolova, & S. Clegg, n. 84 above.

[8] Office of NSW Building Commissioner & Strata Community Association NSW, n. 173 above.

[9] A. Angral, n. 103 above.

[10] C. Jamieson, n. 22 above.

Reviewed 20 December 2022

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