Built Environment Economist - Australia and New Zealand

JUNE - AUGUST 2020

The text pages of this publication have been printed on paper manufactured in Australia and produced from responsibly managed forests.

19 IMPORTANCE OF THE QUANTITY SURVEYORS BEING PART OF THE CLIENTS EARLY STAGE CONSULTANTS TEAM

3 RESILIENCE Q&A

36 WHAT WILL BE THE IMPACT OF COVID-19 ON THE NEW ZEALAND CONSTRUCTION INDUSTRY?

42 THE RISING IMPORTANCE OF DATA MANAGEMENT

CONTENTS 2 CEO Letter

33 2020 Change, Adapt and Evolve

3 Resilience Q&A

36 What will be the Impact of COVID-19 on the New

8 New Zealand Construction’s United Front Supporting Sector Recovery Through COVID-19

Zealand Construction Industry?

39 Queen’s Wharf Brisbane Demonstrates the Power

14 Quarantine Delivered

of BIM

19 Importance of the Quantity Surveyors Being Part of the Clients Early Stage Consultants Team

42 The Rising Importance of Data Management 44 Wallbot a Must for a Green Wall

22 Counting the Cost

49 The Quantity Surveyors and COVID-19

25 Identification of Backlog Maintenance Items and

52 The Role of the Quantity Surveyor in the Sub-

Funding Requirements or Public Assets 29 Unlocking Facility Value Through BIM and Advanced

Contractors Arena 54 Building Construction Index (available in print edition only)

Data Analytics About Built Environment Economist is the flagship publication of Australian Institute of Quantity Surveyors (AIQS). Produced quarterly, Built Environment Economist seeks to provide information that is relevant for quantity surveying, cost management and construction professionals.

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Disclaimer AIQS does not take any responsibility for the opinions expressed by any third parties involved in the writing of Built Environment Economist.

ISSN 2652-4023

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 01

CEO LETTER

WORKING FROM HOME IN A POST COVID-19 ENVIRONMENT The advent of COVID-19 (Coronavirus) has meant that significant numbers of us have been working from home since mid-late March and will probably continue to do so, to some extent, over the next few months or even longer. There have been a lot of discussions (not necessarily relating specifically to the quantity surveying profession) in recent times about the pros and cons of working from home with both employee and employer levels indicating that this could be the new norm in a post COVID-19 environment.

What does this mean for employees and employers? What are the risks and rewards that need to be considered and how should these be assessed? The ability to work from home will largely be dependent on the industry sector and the type of work undertaken. Working from home is obviously best suited to office type roles.

For employers, enabling staff to work from home provides greater flexibility for staff at little extra cost. Work Health & Safety (WH&S) laws state that employers have a duty of care for the health and safety of their employees and others at the workplace. This includes where the employee is working from home.

Employers must consult with employees and take all reasonable steps to ensure an employee’s work area at home meets WH&S requirements. An assessment of the work area should be carried out, where possible, before the employee starts working from home.

Employees also have a duty to take care for their own health and safety while working from home and must follow any reasonable policies or directions their employer gives them. Safe Work Australia provides details

and checklists for assessing an employee’s ‘at work’ environment at home.

Other issues that have come to light recently is whether companies will leverage off employees working from home and subsequently downsize office space requirements, saving on rent and fit-out costs. The risks here are ensuring that all staff working from home are doing so in compliance with WH&S laws, as the liability will rest with the employer. In addition, the impact of a massive roll-out in working from home is likely to result in a falling demand for both housing and office space in the centre of cities in the long term.

Critical to working from home is the workspace environment of the employee and the associated costs. While a significant number of employees would have borrowed equipment from their employers’ office to enable them to work from home, many employees would have purchased desks and other office equipment at their own expense. There is an ethical question concerning employees purchasing items that the employer would normally provide.

The same could be said for the cost to the employee of increased utilities. While these can be claimed by the employee on their tax return, this only offsets any tax obligation rather than reimbursing the employee for 100% of the costs.

Managing employee productivity is another aspect, with one Stanford University study finding that employees who work from home are 13% more productive compared with their in-office counterparts¹.

On the positive side, working from home should help ease the congestion on our roads and rail network during peak hours. Unfortunately for governments

¹Source: Stamford University - Does Working from Home Work? Published 2015.

02: JUNE - AUGUST 2020: BUILT ENVIRONMENT ECONOMIST

and operators of toll roads, this equates to lower revenues for those services. It is likely that local suburban cafés will benefit from increased working from home levels, conversely city-based vendors may see reduced turnover.

For employees, working from home saves time, money and the stress of travelling between home and the office.

Working from home may be particularly beneficial to those employees with families or in a carer role, thereby enabling a greater work-life balance.

Utilisation of Zoom and Microsoft Team meetings along with the networking infrastructure that allows secure remote login has meant that employees can interact remotely and share documents without the necessity of physically being in the same office environment.

Far more difficult to measure, but equally as important, is the mental health of employees and the benefits associated with office socialisation. It may be that a mix of carer’s role and in-office work will provide the best outcomes for both employee and employer.

As well as surveying members later this year, AIQS will be providing more comprehensive information in respect of working from home, including input from Fair Work Australia, Work Safe Australia, St James Ethics Centre, specialist HR lawyers, and economists.

Grant Warner

CEO Australian Institute of Quantity Surveyors

Q&A

RESILIENCE We asked AIQS and NZIQS members to provide their insights into why resilience is critical and the expertise built environment cost professionals can provide in the delivery of resilient buildings and infrastructure.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 03

Q&A

AMANDA NG MAIQS, CQS Assistant Vice President, Head of Cost Control, Frasers Property Holdings Thailand

"The impact of COVID-19 has caused rapid and drastic changes to the construction industry. Developers are re-evaluating their needs and business case to cope with the changes and market direction that may become the new norm. This includes impacts to future construction activities, processes as well as design changes to incorporate higher hygiene standards and social distancing measures.

Technology will be fundamental.

Increased considerations for applying SMART technology, AI assisted building operations, automation and robotics will feature in the design and operations of buildings and infrastructure.

Cost control and cashflow management will be the main agenda within the short

"New Zealand has been dealing with resilience issues with leaky buildings, major earthquakes, and upgrading infrastructure to meet changing demographics.

Anything to do with addressing insufficient resilience can be disruptive, and costs time, resources, money, reputations, and impacts other opportunities.

ALEC CALDERWOOD MNZIQS, MNZIBS Director, Calderwood Consultants Ltd, Hamilton, New Zealand

Operational disruption can be significant to be likes of housing, business, manufacturing, hospitals, key transport routes, and key infrastructure services.

Infrastructure may need alternative provision during permanent works. Any temporary measures cost money.

Funds spent are not always recoverable from insurance or legal processes. Loss of confidence in construction, insurance,

04: JUNE - AUGUST 2020: BUILT ENVIRONMENT ECONOMIST

to medium term period. Expert advice in dealing with contractual claims, procurement strategy restructuring and enhancement to monetary securities such as bonds and insurances will be highly sought after by stakeholders to better protect themselves and cope with potential financial challenges.

Whilst the bulk of our core services may continue to support project developments, cost professionals need to be open minded and quick to adapt in order to keep up with changing requirements and to stay relevant.

During these trying times, commercial processes, due diligence and accurate reporting will be depended upon more than ever."

and government. Opportunities may be taken to improve the built environment for the long term.

Construction cost professionals are working at all levels of the construction industry and can proactively influence early decision making with their skills across design analysis, costing options, value engineering, and problem prevention.

A good example presented at a NZ Surveyor’s conference was a public hospital building designed for current population. During the design value engineering, an extra storey was added, which would remain as a shell, but could be fitted out several years later, to accommodate future population/health needs."

Q&A

DAN BURRELL Quantity Surveyor, Savory Construction Ltd, Auckland, New Zealand

"Climate change will continue to put pressure on our built environment through the increased frequency and power of natural disasters. This will force clients to look at ways to adapt so they can continue to function during adversity.

They invest a vast amount of capital into buildings and infrastructure so it would make sense to consider Resilient Design principles and take a long-term view.

We need to ask this question early in the design process: How will the asset function when a disaster or disruption inevitably occurs?

If implemented properly, Resilient Design will add value to an investment. Early stage planning is important to ensure the design incorporates robust solutions that fit the risk profile specific to the project. By engaging cost professionals

"Resilience is fundamental to success.

The ability to solve problems, adapt, and ultimately overcome obstacles leads to quality outcomes.

SHARON YAP, BSC (HONS) BLDGCONSTMGT, AAIQS, MRICS, ACIARB State Manager WA, Altus Group, Australia

Infrastructure projects are complicated by their very nature - multiple stakeholders, differing goals, long-term financial commitments and public opinion all contribute to planning and delivery. Cost will always be a vital factor in the early decision-making processes, no matter the size or scale of the project.

Quantity surveyors can help set, monitor, control and ultimately achieve realistic and predetermined budgets. Managing a budget throughout the design process demands resilience. Projects become vulnerable when change goes unnoticed, adding strain to the feasibility of a project and finances. Without resilience these projects are at risk.

early in this process, they are able to advise on budgets tailored to a specific design solution, which will in turn give confidence to the client.

A Resilient Design solution may have a higher build cost but can save money over the life of the project with reduced maintenance or lower insurance premiums. The guidance that a cost professional can give in this area is important to consider when assessing the initial build cost.

Resilient Design is already an important part of some areas of construction, such as healthcare. And with higher natural disaster frequencies, it is important that these principles be incorporated into other areas of the built environment as well."

Being prepared to pivot, knowing your alternatives and defining the efficiencies is important. Quantity surveyors help project stakeholders understand the most cost-effective building methodology to deliver the desired project and stay on budget. Efficiencies around unit sizes, façade finishes, life-cycle cost, and car parking are all early items to consider that can make a big difference to your bottom line.

Finally, cultivating a culture of cooperation and genuine collaboration is vital to the delivery of resilient buildings and infrastructure. Regular and clear communication breeds confidence – with confidence we ‘bounce-back’ from challenges. A quantity surveyor will foster transparency between stakeholders, offering objective expert advice and oversight."

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 05

Q&A

LIAM MURRAY MAIQS, MRICS National Commercial Manager – Project Support, Downer, Australia

"Resilience is the ability of buildings or infrastructure to adapt and respond to adverse events such as natural disasters, changes in environmental conditions or other external forces. Resilience based approaches to the planning, design, construction and operation of buildings and infrastructure are critical to support the quality of the built environment and the overall resilience of people and cities, appreciating these provide the services and functions that support society.

The principle centers around assessing threats and consequences prior to an event occurring and embedding solutions within planning and design processes as opposed to when it becomes necessary, albeit an uncertain time in the future.

In delivering buildings and infrastructure,

NATASHA POSSENNISKIE MNZIQS, REG QS Director, Urban Outcomes Ltd, Wellington, New Zealand

"The two most significant risks we face to the resilience of our built environments are also inextricably linked - the Internet of Things and climate change. Our reliance on the Internet of Things in the provision of services to buildings make them susceptible to technological interference, however the Internet of Things also allows for the much more economical operation of buildings with real time information on building efficiency and running costs.

Traditionally, the Internet of Things is not integrated into our buildings at the design stage, but it should be. Similarly, climate change is seeing us needing to adapt quickly in design to changing environmental conditions which often can’t be predicted.

This is where cost professionals can offer value added services – by buildingin resilience through offering practical

06: JUNE - AUGUST 2020: BUILT ENVIRONMENT ECONOMIST

looking beyond minimum requirements established by institutions and governments, the emphasis should be on establishing a client’s appetite for resilience and in weighing short-term increases in cost against its benefits.

Quantity surveyors possess the skills to evaluate the effective cost of resilience, conducting cost analysis and optioneering in planning and design stages, in conjunction with cost planning, to allow client’s to objectively assess cost increases in comparison to the benefit of resilience.

Unfortunately for society, until resilience is embedded within policy framework and minimum requirements shift to suit, the focus within private sectors will remain on generating maximum return on investment."

cost advice at the early design stages to ensure the digital and physical build elements of a project are integrated.

The industry must adopt a long-term adaptable approach to risk management which cost professionals can play a key role in.

Quantity surveyors can assist clients by continually assessing and identifying the resilience of their infrastructure and the risks to this resilience, along with the costs associated with mitigating these risks. They can also assess the value of an asset versus the cost to upgrade that asset to protect it from change.

Resilience requires continual risk management and adaption, so considering the costs of building-in flexibility to a space or a building against the costs of adapting it later is also critical."

Q&A

"Resilience is the capacity to prepare, adapt and recover from major hindrances, be it from long term effects of over population, aging infrastructure, natural or man-made disasters, pandemics, economic downturns or any such obstacle that severely affect the ordinary way of life.

KASUN GUNASEKARA MAIQS, CQS Doctoral Researcher, Centre for Smart Modern Construction, Western Sydney University, Australia

With resilience becoming a growing concern, cost professionals are expected to impart their expertise to protect people and investments in the built environment. Where infrastructure is aging and struggling to meet the demand, life cycle costing is crucial to forecast the maintenance and replacement costs. Cost modelling and value management help in adopting technological advancements that are meant to provide affordable housing to accommodate the population growth.

In terms of environmental resilience, the cost professional has a significant role in achieving net zero carbon by incorporating carbon costing in the estimates. Apart from the various proactive steps undertaken, reactive

"An increase and change in severity of natural disasters and hazards over the years has established climate change at the forefront of our minds; steering government policies and decisions as it has become increasingly recognized how vulnerable our buildings and infrastructure are to the everintensifying natural hazards they face.

TRACY KEOHANE HH Bunckenburg Memorial Trust Scholar 2019 Estimator, Second Nature, Auckland, New Zealand

Cost professionals play a key role in the delivery of high performing buildings.

Costings that assess and incorporate resilience over the buildings life-cycle can allow high performing buildings to evolve and adapt to new challenges and risks they may face.

Cost professionals can also draw on some of the principles of sustainability that complement resilience. Exploration

steps such as post-disaster recovery assessments, insurance assessments, managing claims and disputes due to disruptions are some of the fields where cost professionals are meant to provide their expertise.

Significant changes could be expected when ‘The Great Lockdown’ is over as it will not be ‘business as usual’, rather a new normal, across all industries including the construction industry. For an example, apartment designs could be reassessed anticipating possibility of long-term lockdowns in the future. Commercial buildings will need to be retrofitted with mechanisms to counter disease transmission. Similarly, the infrastructure will have to be improved in many aspects.

However, all of this will have to be achieved through troubled economic conditions throughout the globe. This is where resilience becomes most critical and built environment cost professional’s expertise will be essential in the delivery of resilient buildings and infrastructure."

of effects on the environment, innovative energy and water independence whilst weighing the benefit and cost implications of the use of these systems over more traditional practices.

Whilst the capital cost of these buildings will be higher initially; the long-term benefit can be seen in lower future building operating costs, a functional asset when a hazard occurs, improved environmental outcomes and increased occupant productivity through reduced tenant and staff turnover.

Ultimately the owners of these high performing buildings benefit from their increased early investment by gaining a future-proofed asset that can perform in times of crisis."

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 07

COVID-19

NEW ZEALAND CONSTRUCTION’S UNITED FRONT SUPPORTING SECTOR RECOVERY THROUGH COVID-19 08: JUNE - AUGUST 2020: BUILT ENVIRONMENT ECONOMIST

COVID-19

The Construction Sector Accord responded to COVID-19 with an incomparable level of industry collaboration, leadership and urgency.

Just days after the country entered Alert Level 4, and construction activity grinding to a halt, the Accord worked with Government to develop a comprehensive and pragmatic COVID-19 Response Plan.

The result? A united and resilient construction sector that is ready to carry out its important role in kick-starting the economy. Members of the Accord group provide an insight into the response below.

CONSTRUCTION SECTOR ACCORD – BOLDLY TRANSFORMING A DISENFRANCHISED SECTOR

sector and bring about much-needed change,” says Peter Reidy, Co-Chair of the Accord Steering Group and CEO of Fletcher Construction.

Prior to April 2019, when the Construction Sector Accord was officially launched, the industry was fragmented and underperforming. A range of systemic problems – such as high-profile building collapses, unclear regulations and skills shortages – were having implications not just for the sector, but the wider New Zealand economy.

“It recognises that the way the industry, its clients and government have behaved in the past created systemic problems that were having an impact on the economy and the wellbeing of New Zealanders.”

The Accord was established to ‘change the rules of the game’. Jointly developed

by Government Ministers, agencies and construction sector leaders, it was an unprecedented and bold step towards strengthening the partnership between government and industry.

Priority areas include improving culture and leadership, growing workforce capability and capacity, improving health and safety, and establishing better procurement and consenting processes.

“The Accord is a joint commitment from government and industry to work together to transform the construction

Peter’s fellow Co-Chair on the Accord Steering Group is Chris Bunny, Deputy Chief Executive of the Ministry of Business, Innovation and Employment.

“Changing the picture required us to work together and focus on the shared outcome we’re trying to achieve – which is a high-performing construction sector capable of delivering great homes, buildings, infrastructure and jobs for New Zealanders. The Accord provided a vehicle for us to start doing that,” says Chris Bunny.

The Accord Steering Group is made up of 24 leaders from across the public and private sectors including major commercial, vertical and residential construction companies, property

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 09

COVID-19

developers, industry and professional bodies and unions. From the public sector membership includes chief executives from local government, the Ministry of Education, Ministry of Health, Ministry of Housing and Urban Development, Ministry of Business, Innovation and Employment engaged at the table.

The Accord programme is supported by seven government Ministers – Jenny Salesa (Minister for Building and Construction), Phil Twyford (Minister for Urban and Economic Development), David Clark (Minister of Health), Dr Megan Woods (Minister of Housing), Iain Lees-Galloway (Minister for Workplace Relations and Safety), Shane Jones (Minister for Infrastructure), and Chris Hipkins (Minister of Education and State Services).

“What I've been most impressed with is that both parties, government and the industry, have over the last year actually been having a really good look at what we can do and what we are accountable for to drive change,” says Peter Reidy.

“For the first time, we are seeing leaders across the sector talk with each other about common problems, collaborate on ideas and ways to transform the sector.”

In the months following the Accord’s official launch, significant progress was made to put it into action. An ambitious three-year Construction Sector Transformation Plan was presented by the Accord Steering Group in January 2020, identifying six workstreams to lift sector performance.

In March, the Accord’s plans were rapidly reoriented as the group responded to the significant challenge of COVID-19.

RAPID RESPONSE The Accord Steering Group responded with urgency to COVID-19’s impact on the construction sector. It has now temporarily shifted focus from industry transformation to industry resilience and recovery.

Just days after the country went into lockdown, the group pioneered a Construction Sector COVID-19 Response Plan. The objective is to advise Ministers and agencies on actions that will support the sector, while meeting the new COVID-19 related challenges of workforce retention, health and safety, additional pipeline uncertainty and a lack of cashflow.

The Accord Steering Group is meeting once or twice weekly via video link, and more than ten additional sector leaders have been brought into the group to broaden the perspective and ensure greater sector coverage.

Accord Programme Director Dean Kimpton says, “The construction industry is a major contributor to our economy and, as the fifth largest industry by GDP contribution, will play a leading role in New Zealand’s recovery from COVID-19.

“It was imperative we had a Response Plan in place and agreed, the full supply chain ready to quickly restart on an accelerated work programme, and we continue to work as collaboratively as we have been.”

The COVID-19 Response Plan is divided into three distinct phases – maintain, restart and transform. Actions across the phases are focused on: • Keeping cash flowing in the sector.

This means ensuring contractors and subcontractors are still being paid, and continuing as usual with off-site work such as procurement, design and consenting.

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• Ensuring fair and consistent contractual conditions. Government agencies have produced a standard model for the fair treatment of the cost of site shutdowns and are developing other procurement and contract guidance.

• What additional financial support can be provided for construction sector employees, employers and business owners.

• Identifying the projects already in planning that can be bought forward and made ready for when works can begin again. The focus will be on both urban and regional projects.

• Advising on legislative and policy changes needed to allow projects to start quickly. This may include some temporary relaxing of the Government Procurement Rules.

• New health and safety guidelines for construction sites that allow the safe restarting of works. The group has collated best practice from throughout New Zealand and the world.

DEMONSTRABLE ACTION The COVID-19 Response Plan was launched during the first week of April. It has since resulted in tangible, real action to ensure a resilient and sustainable sector that can help buoy the economy.

Specifically, new health and safety standards for working on construction sites at Alert Level 2 and above have been released, and the Government has directed public sector agencies to pay contractors promptly.

New procurement guidance has been issued to help government agencies communicate with construction suppliers

COVID-19

and keep cash flowing in the sector through prompt payments and the early release of retentions. Similarly, guidance has been given to government agencies to help them respond fairly and consistently to the legal and commercial issues associated with the lockdown period.

Other emerging issues being considered include questions around director’s liability, site works insurance, and the impact of weather on closed sites and compliance with regulations.

"Perhaps the most significant outcome", says Chris Bunny, "is the group has strengthened its connection to government, and Ministers have been attending and contributing to our meetings.”

“We moved quickly to develop the Construction Sector COVID-19 Response Plan. That the Accord Ministers support the direction of the plan is incredibly positive for the further credibility of the Construction Sector Accord."

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 11

COVID-19

“We have become trusted advisors, with Accord Ministers asking ‘have you talked to the Accord Steering Group?’ when presented with ideas and information about the construction sector. We are a credible channel for Ministers to access information on what the construction recovery should look like. There is tangible value in this for the whole industry.”

Dean Kimpton says the group’s response to COVID-19 has also been recognised by other sector leaders. The new Chief Executive of the Waka Kotahi NZ Transport Agency, Nicole Rosie, listed the Accord response among a range of “behaviors and interventions that can only be good for the future of New Zealand”.

Graham Burke, Chair of the New Zealand Construction Industry Council (NZCIC), says the industry is “extremely fortunate” to have had the Accord in place during the COVID-19 crisis.

“The group has been an immediate and effective interface between industry, key government officials and ministers,” says Graham, who is also a member of the Accord Steering Group.

“This has been hugely beneficial in passing key messages from government

through industry organisations right down to individual businesses, as well as providing effective feedback to government on issues requiring attention.

“Involvement with the Accord has allowed NZCIC to keep our members up to date with the very latest information, as well as ensuring their voice is heard by government. Now construction has returned to work under Level 3, we are providing input into plans for recovery, including government stimulus projects which need to be hammer ready as well as shovel ready.”

SHARING THE BURDEN In the spirit of the Accord, the group is promoting the principle of ‘we are all in this together’.

“If all parties act in a fair and reasonable manner and are prepared to share the burden, then the sector as a whole can emerge intact and be in a strong position operate effectively in this disrupted and uncertain environment. ,” says Dean Kimpton.

“Every part of the building and construction industry is vitally important to the Government. We are focused on ensuring there is a cohesive plan that can be implemented across the sector, continuing our collaborative approach that has been in place from day one.”

“Through the Response Plan the Accord has an opportunity to enhance its leadership and increase collaboration within the wider sector, which will bode well long past the current COVID-19 situation. It is important we keep the momentum going.”

The construction sector matters to New Zealand, adds Dean.

“As one of our country’s largest employers, nearly 10 percent of all New Zealand’s workers are involved in construction.”

“Our people matter – whether worker or employer, or large or small contractor. Our future depends on us coming together like we do under the Accord and getting the recovery well underway, and building in the long term change needed for a thriving construction sector and thriving New Zealand.”

People working within the industry are invited to contact the Accord with their suggestions for actions to support the sector, either by connecting with their relevant representative on the Steering Group, their industry body, or through emailing accord@mbie.govt.nz This article has been supplied by the New Zealand Institute of Quantity Surveyors.

12: JUNE - AUGUST 2020: BUILT ENVIRONMENT ECONOMIST

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CASE STUDY

QUARANTINE DELIVERED

By Peter Karos, Associate Director- Cost Management, AECOM

Post Entry Quarantine Facility site aerial photo taken from North/East

INTRODUCTION Feeling anxious about biosecurity? Well, don’t worry. The future is here NOW and totally safe!

Just as we are all apprehensive about the spread of Coronavirus (Covid-19), our nation has an important obligation to protect its borders from other unwanted invaders. Australia is one of only a few countries on the planet to be currently free from the world’s most severe pests and diseases. We want to keep it that way. While our geographical isolation plays a key role, our 60,000km of

coastline exposure offers many avenues for exotic pests to enter the country, not forgetting international travel and trade.

Australia’s $42b agriculture industry is now guarded by the new Post Entry Quarantine (PEQ) facility situated at Mickleham, 30km north of Melbourne.

This A$380m purpose designed and built facility takes over from ageing infrastructure and technology, using lessons learnt and user inputs to provide bio-secure quarantine services for at least the next 30 years.

AECOM Australia was awarded the PMCA (Project Management, Contract

14: JUNE - AUGUST 2020: BUILT ENVIRONMENT ECONOMIST

Administrator) role which combines both Project Management (PM) and Cost Management (CM) services.

This combined service proved to be an invaluable resource for the client, contractor and the facility operator.

HISTORY The Department of Agriculture, Water and the Environment (Agriculture) previously leased and operated five PEQ facilities in four states for the management of imported animals and plants under the Quarantine Act 1908.

CASE STUDY

The outdated, end-of-life (over 25-yearold) facilities and their services were:

• Torrens Island, near Adelaide (fertile avian eggs)

• Eastern Creek, Sydney (dogs, cats, bees, horses, ruminants & plant material)

• Byford, Perth (cats and dogs).

• Knoxfield, Melbourne (plant material) • Spotswood, Melbourne (dogs, cats, ruminants & live birds)

for high risk species. Its design needed to be robust, exemplify the highest containment standards and provide total flexibility for unknown future eventualities.

Existing leases on all sites were due to expire between 2015 and 2018 with no opportunity for lease extensions in the medium term. New PEQ facilities and infrastructure were required to satisfy contemporary quarantine standards and meet future demands, especially

The PEQ facilities project was delivered by the Department of Finance (Finance).

Finance is the owner of the project site and owns the facility, while Agriculture will operate and manage the PEQ facility.

Figure 1. The four existing PEQ facilities around Australia

EASTERN CREEK Size 22ha

DARWIN

TORRENS ISLAND

Imports Cats - 1,100 - 1,450 (per year) Dogs - 2,400

Bees - 1 consignment

Horses - 450

Plants - 25 consignments

Size 2.7ha Imports Hatching eggs - 38,000 (per year) (average unit) Purpose Genetic improvement

Purpose

NORTHERN TERRITORY QUEENSLAND WESTERN AUSTRALIA

NEW SOUTH WALES ADELAIDE

SPOTSWOOD

Purpose Genetic improvement,

companion animals, military

dogs, racing & recreation animals

SYDNEY

MELBOURNE

Size 2ha Imports Birds - 300 - 500 (per year) Cats - 650

Dogs - 1,100

Ruminants - 40

BRISBANE

SOUTH AUSTRALIA

PERTH

Genetic improvement, nursery stock, companion animals, military dogs, racing & recreation animals

KNOXFIELD

HOBART

Size 1ha

FUTURE PEQ SITE Size 144ha

Imports Plants - 48 consignments (per year)

Imports All existing and potential

future commodities

Purpose Genetic improvement,

nursery stock

Purpose Consolidate all current purposes

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 15

CASE STUDY

GREENFIELD PROJECT The final government conclusion identified that a single consolidated facility was the best option for this project. This approach would streamline administration, security management and operating practices to run the facility to one high standard, while also achieving associated cost efficiencies.

The end result was a project site area of 144 hectares (four times the size of the previous largest facility) comprising a total of 11 functional zones: • Administration - 3,100m² (Offices, meeting rooms, breakout and changerooms) • Dispatch and Security - 1,800m² (Sitewide security and inward goods storage and distribution) • Cat and Dog Receivals - 2,100m² (Cat and dog inward deliveries and pick-up by owners) • Dog Compound - 13,000m² (400 Kennels and support facilities surrounded by a precast acoustic wall) • Cat Facility - 3,000m² (240 Cat pens and support facilities) • Plants Compound - 8,000m² (Diagnostic laboratory including QC2 and QC3 labs, three greenhouses and one shadehouse) • Horse Compounds (two) - 10,000m² (Each comprising vet and support facilities, two stables for 40 horses, exercise areas and truck wash) • Avian Facility - 4,200m² (Laboratory comprising five QC3 containment areas) • Bee Facility - 300m² (Six flight rooms and support facilities)

• Ruminants - 800m² (Lamas and Alpacas - Support building with fenced pen areas)

to ensure goods and services (peak sub-contractor workforce of 400 per day) were delivered to the construction site.

• Central Utilities Building - 1,700m² (Supplying Administration, Cats, Dogs, Plants, Avian and Dispatch)

The completed facility occupies just over half of the site. The remainder is home to local kangaroos and wild goats with the option to expand the facility further south in the future.

• Total Facility Buildings - 48,000m², Total Site 144ha.

Supporting the above building zones is an extensive array of external works and services, including the new Polaris Road and internal roads totalling 6km, perimeter fire track of 3.5km, power, comms, gas, water, recycled water, two storm water basins, excavated material landscaped stockpiles, security fencing, firefighting infrastructure and even a native grassland habitat area. The temporary haul roads and car parks are now just a memory but were necessary

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A scheme such as this is constructed only once in a lifetime. The Managing Contractor’s (MC) early involvement commenced with the 50% schematic design cost plan in late 2013. Their construction contract overall fundamentals were to deliver the project aligning with lease endings between 2015 and 2018, impart their expert advice, skill and judgement plus achieve Whole of Life (WOL) objectives while ultimately delivering within the Target Cost.

CASE STUDY

THE FOCUS AECOM acted as client representative and administrated the separate Design Services Consultant and MC contracts to deliver the facility on behalf of the Commonwealth of Australia.

By understanding the drivers to success and applying them to the project, AECOM was able to provide clear leadership and create a collaborative and trusting environment. This required an ability to step back sufficiently on a project of this size and complexity to understand the real issues, provide open communication with all stakeholders and deliver a clear strategy to mitigate any project risks and issues.

The magnitude, significance and complexity of this project was unparalleled, encompassing a

greenfield conception, multiple and complex user requirements, high-level biocontainment design legislation, non-repetitive building functionality and consequently construction methods, plus overall high expectation levels focusing on value for money.

In addition, AECOM had to navigate the complexities of two departments, Finance and Agriculture, to deliver concentrated motivation and cooperation.

COMBINED CONSULTANCY SERVICES AECOM is a diverse and multidisciplinary infrastructure consultancy.

We know our clients receive better value through combining disciplines to deliver services that are fully integrated.

With this comes dynamic teamwork

and added value to deliver enhanced outcomes.

For the PEQ project the interaction between the PM & CM teams created synergies which coincidentally aligned with the MC contract. The goal to provide operational facilities before existing leases ended was the role of our PMs, while managing the construction cost within the MC Target Cost as well as handling the overall project budget fell to the CMs. The two AECOM service disciplines moulded into a single homogeneous team. Numerous AECOM team meetings and interactions eventuated over the nearly eight-year project duration, spanning from very early cost planning to final commissioning, combining project and cost management aspects which often

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CASE STUDY

overlapped. Most discussions involved programme and cost, hence the team became inseparable.

AECOM team members, from both disciplines, involuntarily undertook reviews and sense checks regarding PMCA activities leading to maximised quality. One example was the CM team, following a progress claim recommendation, would verify the PM’s payment certificate before it was issued to the MC for invoicing. This was a quick process for the CM, who prepared the recommendation, to confirm the correct figures were certified and subsequently invoiced. This method of multiple checkpoints held us in high regard with the Commonwealth.

The PM could also, at any time, rapidly access and rely on the CM who had intimate project scope knowledge having undertaken the 5% Master Plan / Feasibility, 30% Concept Design and 50% Schematic Design cost plans plus the WOL report for the entire facility.

AECOM’s multi-disciplinary consultancy also complemented the PMCA team by being able to offer additional technical support to Finance. The PMCA on one occasion was requested to provide further confidence that the HVAC (Heating, Ventilation, Air Conditioning) Strategy was sufficiently resolved during the design process. One of AECOM’s Industry Directors, together with a specialist mechanical engineer, reviewed the report and completed an independent analysis demonstrating the HVAC strategy was appropriate and required some further articulation. For this and numerous other similar circumstances AECOM was equipped to maintain client assurance with inputs beyond our principal PMCA role.

THE PERSONAL TOUCH This complicated project witnessed large volumes of digital information and correspondence during the delivery phase. In addition, each consultant retained individual document files for the project. But how do you transfer what is stored in a team member’s memory?

Key personnel retention was paramount to AECOM for this technically challenging project. Our team maintained both project and cost management focus for eight years with minimal personnel changes. If a team member did leave a very detailed handover process was undertaken, but project familiarity from an individual is never fully transferred.

It was important for Finance and Agriculture that AECOM maintained a high knowledge presence to be able to swiftly action any request from either upstream or downstream sources and maintain project flow.

When complex issues did arise they were quickly solved, without the need for laborious research to understand backgrounds and details in order to identify the correct course of action.

Reviews were often undertaken with original personnel to confirm our intended direction. The PM also exceeded contractual obligations to assist Agriculture operating their new facilities completed in Phase 1, while continuing to deliver Phase 2.

AECOM took pride in maintaining project attention and emphasis when staff from other contracted parties altered. When key team members moved off the project, we boosted our presence plus indirectly assisted new members by providing fundamental references for them to understand formalities, past issues or

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project specifics. Our proven project procedures were quickly embraced when re-introduced to new employees.

AECOMs steadfast project approach was relentless for best-for-project solutions regardless of the additional effort required.

LESSONS LEARNT AECOM took away numerous experiences which proved to be priceless during the PEQ facility project, with the highlights being: • client focus – understanding and managing the client(s) directions while striving for best project outcomes • combined services – teamwork resulted in many client benefits, including value adding via our multidisciplinary consultancy • co-ordinated solution driven team – to achieve the client program and cost targets • team resource continuity – maximising knowledge retention lead to efficient project deliverables • relationship building – the PMCA worked closely with Finance, Agriculture, the MC and the Design Services Consultant to promote transparent and co-operative communication.

Ultimately, collaboration was key in creating a truly extraordinary project conclusion for the Commonwealth.

AECOM was delighted and humbled to receive multiple favourable client feedback survey results from Finance by having provided high-quality enhanced outcomes to this essential PEQ project, further reinforcing our industry reputation.

QS ENGAGEMENT

IMPORTANCE OF THE QUANTITY SURVEYORS BEING PART OF THE CLIENTS EARLY STAGE CONSULTANTS TEAM

By Trevor Moseley AAIQS., ICECA

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 19

QS ENGAGEMENT

I think it’s important to discuss the role of quantity surveyors in the building process and shed some light on how they can add value for the client. There have been some suggestions, from certain quarters, that the client could perhaps dispense with the engagement of this consultant and let the builder take on this role as part of the tender process. Clients need to be clear on the implication that this could pose to the success of their projects where these projects are designed way outside the client’s cost guidelines. Sometimes, without expert early intervention, these projects can go belly up, and no amount of later intervention will save the project from increased cost resulting in losses.

It is therefore prudent at this time to take stock of where we are in these difficult times of COVID-19 and the impact it will have on the decline of housing prices and reduction in commercial buildings due to lockdowns. For clients, it’s time to rethink their strategies, if they want to survive and move forward into the future. No one has a crystal ball showing what’s going to happen after COVID-19, but too fast of a recovery could probably cause a sharp increase in construction cost, whilst too slow of a recovery could equally affect the willingness of developers to invest in new construction.

We have to get this right if we are indeed to regrow the economy.

With this in mind, let’s take a closer look at the role of the quantity surveyor and how they can help on construction projects when integrated as part of the clients ‘construction consultants’ team.

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Quantity surveyors are sometimes overlooked in the early stages of the ‘project design and development phase’.

This can often spell disaster for the client as a result of inadequate consultation on costs, selection of materials used, and co-ordination of services between architecture, structural, mechanical and electrical drawings, to name but a few.

It, therefore, makes sense that early intervention by the quantity surveyor should be sought at cost planning stage to produce accurate numbers that the client can rely on when preparing feasibility.

Clearly identifying areas of concern in the use of specified materials where these appear to be expensive and risk blowing out the budget, they can suggest other equal or better than the specified alternative products as a more costeffective solution.

They can also provide advice on coordination issues on drawings that are produced by the architect, structural and services consultants, where issues arise because of differing locations of details on the plans. For example, the architectural drawings could show one location of a detail on the architectural plans and another location on the structural engineer’s drawings.

Because quantity surveyors are at the coal face measuring these in their cost plan, they can readily identify disparity between what’s shown at one location on one drawing and another location on a different drawing, which can, if not corrected, prove to be a costly mistake once on site, if indeed it gets that far.

QS ENGAGEMENT

So, it should go without saying that quantity surveyors should follow through with producing the tender bill of quantities (BOQ) on behalf of the client, as this also gives them the ability to pick up items not always readily identifiable by the builders in the completed documentation when preparing their own BOQ. Reliance of one BOQ produced by the clients appointed quantity surveyor provides more of a level playing field for the tenderers insofar that all the builders are using the same BOQ rather than producing their own, which can lead to confusion in the marketplace for subcontractor pricing.

It, therefore, makes sense that early intervention by the quantity surveyor should be sought at cost planning stage to produce accurate numbers that the client can rely on when preparing feasibility.

Quantity surveyors also have the expertise to track and modify (in conjunction with the other consultants) areas of risk that can possibly cause overruns in cost on the project during the construction phase, and adding value by keeping the builders honest, by vetting variations during the project (and yes, you can expect some variations, don’t kid yourselves). As quantity surveyors have already produced a cost plan for the project,

they would be better placed to also prepare the tender BOQ. One BOQ at tender time leads to a more precise tender summary from each builder knowing that they are all pricing the same items. Checking of tender prices where builders have produced their own BOQ can be somewhat troublesome and difficult to analyse and as such, have further financial consequences for the client.

In this day and age, it seems that clients think that not engaging a quantity surveyor for the preparation of the cost plan and tender BOQ will save them costs in fees. Do they think that because they can’t see these costs at their end that they don’t exist? Remember the ostrich that buried his head in the sand in the hope that if he didn’t see the lion waiting to attack him, he would be safe.

Well, he got a rude awakening, didn’t he! These costs go into the tender, so you pay for them anyway, and their cost will usually be higher than what the client would be paying from the quantity surveyor because of increased overheads and the ratio of the amount of tender that each builder is likely to win.

Quantity surveyors have been around for a long time, both client side and builder side. I can assure you that builders wouldn’t engage them if they didn’t see the advantage of having them on board.

Clients need to think seriously about the services that quantity surveyors provide in safeguarding ‘as much as possible’ their bottom line. No one wants an unprofitable project, client nor builder, and this needs to be, and should be, a team effort by both parties. As such, employing the right consultants and

builders for the project, will result in a more successful outcome for all parties.

Let’s take the next step and re-educate clients not only to the advantages of engaging a quantity surveyor for their project, but also the disadvantages of not engaging one at all. I think on balance the advantages far out way the disadvantages.

Perhaps it’s time to bring the quantity surveyor back into the fold so the client can rest more easily in the process of knowing that the quantity surveyor is working hard for him to maintain his bottom line.

This article is provided on an ‘as is basis’ to shed, at least some light on the current position of the role of the quantity surveyor in the built environment and does not necessarily express the views of the Australian Institute of Quantity Surveyors or its affiliates. It is merely one quantity surveyor’s opinion who has spent over 40 years in the industry.

Trevor Moseley AAIQS., ICECA is the Director of QS Project Services

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EXACTAL

COUNTING THE COST

SHORT-TERM CHALLENGES AND CONTINGENCIES FACING THE LOCAL QUANTITY SURVEYING MARKET

All parties involved in the construction industry are well-aware of the volatility of our business. We’ve all witnessed the peaks and valleys, driven by a myriad of factors and competing influences.

In mid-2020, the Australian quantity surveying and estimating market is staring down the barrel of a significant downturn. COVID-19 has brought about mass uncertainty, at a level without precedent in modern construction. No amount of crystal ball gazing will give a

clear indication as to where things are heading overall, and some sectors may well be hit harder than others.

ADJUSTING TO REMOTE WORKFLOWS FOR COLLABORATION

So, how do we handle the weeks and months ahead? For enterprises looking to grow or maintain their standing in the marketplace, we’re in the midst of a crucial period. What follows is a summary of the hurdles that businesses and individuals in the estimating field may face, as we work to reignite the construction economy post-pandemic.

While we can expect to see a slow return to office-based employment over the next few months, most site visits and in-person client meetings are probably off the table for the foreseeable future. This means that we’ll need to find methods to maintain communication and productivity while working from home.

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EXACTAL

Quantity surveyors and estimators are better equipped than most when it comes to working from home successfully. We are required to be thorough, analytical and precise with details, all of which are valuable qualities for fostering a disciplined work environment.

Advanced software options are available to Australian cost consultants looking to work productively in a remote team.

The advent of reliable cloud support has made it much easier to save and distribute files, while most new software solutions offer extensive file compatibility. Advanced platforms also allow for seamless import and export between programs and even advanced file merging. The ability to merge files has significant value when pursuing difficult deadlines, as two peers can tackle different project tasks within the same program before combining their efforts.

Remote workflows are tipped to be the way of the future for numerous industries. Traditional quantity surveying and estimating tactics will always have a place in modern cost consulting, but the digital software options now available have changed the game when it comes to collaboration.

MAINTAINING A FOOTHOLD IN A COMPETITIVE ENVIRONMENT It's not hard to envision greater competition for work among quantity surveying and estimating services in the near future, with planned builds postponed or cancelled due to COVID-19.

Australian residential and commercial sectors appear to be softening, and with less projects in the pipeline some businesses may struggle to maintain their status. The logistical challenges

posed by the need for social distancing on worksites are significant. Our industry is already struggling to improve productivity, and the additional costs incurred will certainly have an impact on cost consultancies.

To address this, businesses and professionals should be working to get a headstart on their competition. Those able to should take a realistic look at their own service offering, to identify feasible improvements that can be made in the short term. Quantity surveyors and estimators could look to network with prospective client companies and other industry professionals, to help understand how to best deliver value as circumstances recover. There is no shortage of valuable industry information on offer to those wanting to stay ahead of the curve.

CONTINUING YOUR PROFESSIONAL DEVELOPMENT Those who have had success in modern quantity surveying are likely to be wellversed in upskilling and future-proofing.

Ours is an ever-evolving role, where Continuous Professional Development (CPD) is often mandated to keep professionals up-to-date with the latest advances. CPD and networking options available to professionals can include face-to-face seminars, live webinars, conferences and other industry events.

Obviously, many of these opportunities are unavailable for the time being, with live events postponed en masse across the country.

Upskilling and networking of this nature can be an expensive investment, even though discounts are often available to accredited professionals. Those currently

in an uncertain employment situation will be looking to free options to meet their ongoing CPD requirements.

No matter what professional body you are a part of, there are resources and guidelines available to help you improve your professional repertoire. It's even possible to accrue CPD points and enhance your skillset by completing software training, with several providers such as Exactal offering online training that is CPD-accredited through AIQS and other bodies.

NAVIGATING TIGHT DEADLINES AND BUDGETS Meeting difficult deadlines is part of the job description in our industry, and professionals must be flexible enough to rise to the challenge when needed. It’s reasonable to expect that overall project budgets will shrink for many projects in the short term, so quantity surveyors may need to become even more efficient to maintain profit margins.

For those persevering with less efficient techniques or relying on multiple software solutions, now is an ideal time to re-assess. The best software solutions are fully-integrated and functional in your remote workspace, with interoperability a key consideration for those collaborating with others.

By consolidating your software needs into a single platform you can save time, assess your budget more accurately and mitigate the risk of errors when transferring data. You’ll also want to place your trust in software providers who are committed to further developing their product, as your requirements are likely to evolve as the industry recovers and strives for greater innovation.

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EXACTAL

AN ALL-IN-ONE SOFTWARE SOLUTION FOR YEARS TO COME

spreadsheet-based workbooks, autorevisioning, a custom report writer and much more.

As we’ve explored, those who make the correct investments in their professional development now will be well-prepared to navigate the future.

Our software is built to support efficient remote collaboration between team members, with extensive file compatibility and file merging available.

New software users can take advantage of comprehensive learning resources; Exactal is presently offering discounted rates for a variety of online training options, to aid companies who are committed to upskilling during this downturn.

Exactal has been supporting the QS and estimating community for more than fifteen years, since our flagship CostX® software was born from a small office in Brisbane. The fully-integrated software has been moulded by industry shifts and user feedback over the years, and now represents a complete estimating solution for professionals in over 90 countries worldwide. CostX® combines 2D/3D BIM takeoff and estimating with

As for early-stage and conceptual estimating, Exactal also offers CostX® Benchmark. The fully web-based platform allows users to create their own database

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of historical project information, which they can draw upon for quick and accurate conceptual estimating and benchmarking.

The ultimate impact that COVID-19 will have on construction is difficult to predict. It’s clear however that an era of improved efficiency lies on the other side of this challenge; and when we get there, our costing and estimating roles may be more important than ever before.

Exactal is a Corporate Partner of AIQS. This is a paid advertorial. All words and photos have been supplied by Exactal.

FUNDING

IDENTIFICATION OF BACKLOG MAINTENANCE ITEMS AND FUNDING REQUIREMENTS OR PUBLIC ASSETS

By Justin Noakes, Associate – Advisory, MBMpl Typically, maintenance activities for public sector assets are funded from agency budgets or grants and based on the anticipated costs to undertake the following types of activities including: • inspection and monitoring • preventative maintenance • reactive maintenance • minor works to remedy maintenance issues • major maintenance projects to replace an asset at the end of its service life or which is obsolete.

Funding constraints inevitably result in works needing to be prioritised. Even where additional funding is available through the current stimulus packages being developed, care needs to be taken to ensure that works undertaken match

the immediate and long-term needs of the asset.

Public assets such as health facilities, schools, social housing and heritage assets may also have complex structures and/or operational factors such as limited available access and high operational utilisation which limit the ability to undertake works.

The inability of agencies to defer funding for maintenance work that should have been undertaken in previous financial years has contributed significantly to the increase in scope and cost of backlog maintenance. Issues that may result in backlog maintenance being deferred include: • significant building elements which are likely to have reached or exceeded their expected service life and require major maintenance intervention

• planned maintenance which has not been completed due to increasing levels of utilisation or an inability to access required areas at appropriate times • refurbishment or replacement works necessary to meet increased tenant, user, community and visitor expectations • specialist works that may be needed to repair elements in line with the state, national and world heritage status • works to align with technological advancements and to address functional obsolesce.

Strategic asset planning will assist in prioritising works and ensuring critical maintenance work is undertaken.

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FUNDING

Identifying, prioritising and addressing the funding issue for backlog maintenance works in a robust, wellconsidered and clear methodology that can be communicated effectively to key stakeholders, is a key objective for many CEO’s or CFO’s of public sector organisations. This is especially relevant when you consider that the economic stimulus response to COVID-19 is likely to include a number of packages aimed at addressing the level of backlog maintenance in public assets. However, as Dr Penny Burns, Chair of the Talking Infrastructure Association notes, that if you ask the maintenance managers or facility managers to tell you what their backlog is, the chances are that this is interpreted as "What would you spend more money on if you had it?”

Without an analytical and independently valued approach there is a risk that the opportunity to address critical issues and maximise the asset lifecycle will be missed.

A comprehensive condition survey is one approach to identify a robust backlog maintenance list, however for large portfolios of assets or complex structures the time required to complete the survey and the cost may be prohibitive, especially if the intent is to undertake the work in a compressed timeframe.

In these circumstances a risk-based approach can be adopted.

The flow chart adjacent is based on a risk-based approach to the assessment of backlog maintenance for the NHS in the UK and encompasses a range of activities that would generally be considered good practice in the establishment of an ongoing backlog maintenance regime. Items highlighted in grey are considered the minimum that would be required in order to

develop a backlog maintenance manual and valuation report (noting these activities should feed into a wider backlog maintenance regime at the appropriate time). This accelerated process for verification, validation and valuation of backlog maintenance items has been adopted by MBM on previous engagements to expedite maintenance programs.

To implement this approach on a recent engagement MBM bought together three disciplines:

the organisation on building defects and required remedial works. Building consultants determined areas of the facility that required further investigation to determine backlog maintenance and assisted in the identification and verification of the scope of backlog maintenance items.

3. Our Quantity Surveying practice undertook independent cost estimating of construction and maintenance works to prepare the valuation report.

1. Our Advisory practice of asset and facilities managers advised on the planning and maintenance of the assets and facilities. They developed the methodology for planning and determining backlog maintenance through the development of a backlog maintenance manual.

The knowledge of primary stakeholders was essential in identifying the potential backlog maintenance items and assisting in providing documentation to support the verification and validation of the proposed backlog maintenance items and in understanding the scope of items for valuation purposes.

2. Our Building Consultancy practice undertook building inspections and condition assessments and advised

Using an established working definition of backlog maintenance, primary stakeholders developed a list of known backlog items.

VERIFICATION AND VALIDATION

DOCUMENT REVIEW ANNUAL REVIEW

SURVEY

MEDIUM TO LONG TERM INVESTMENT PLANNING

VALUATION

ANNUAL INVESTMENT PLANNING

VALUATION

RISK ASSESSMENT MBM proccess model

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FUNDING

In line with broad industry definitions, Backlog Maintenance was defined as Maintenance activities which are planned or identified as being necessary, but which have not been carried out. Maintenance works that have been funded may still be considered Backlog Maintenance if they should have been performed prior to the current financial year.

The backlog maintenance items included: • technology infrastructure • building controls • building fabric • electrical infrastructure • fire infrastructure • HVAC infrastructure • plumbing infrastructure

• security • vertical transport.

Documenting the methodology adopted to validate and value the items identified in the Backlog Maintenance list, ensured that the process could be clearly expressed to stakeholders and external parties with limited knowledge of the assets and ensured that the process was robust and defensible. The manual developed by MBM included guidelines for: • categorisation of backlog maintenance (e.g. upgrade & developments, building repairs, and lifecycle replacement, etc) • risk categorisation and prioritisation of backlog maintenance • method of pricing of recommended maintenance options, including identification of all assumptions

• assessments that should be undertaken to ensure that the backlog maintenance register remained up to date • additional expected backlog maintenance works that are not supported by existing reports due to unavailability of information.

A process to ensure that backlog maintenance items put forward by primary stakeholders was consistent with the definition was a key element of the validation stage and included: • reviewing appropriate documentation and interviewing primary stakeholders to categorise and scope the backlog maintenance items • undertaking visual surveys of specific backlog maintenance items in order to validate and provide where necessary, the scope of work.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 27

FUNDING

Key documents that were reviewed for the validation and verification exercise included: • a working list of building projects, which identified potential backlog maintenance works that were already funded • the asset register assisted in the identification and validation of scope for each backlog maintenance item • high resolution photos of the exterior of the building show building fabric anomalies and potential points of investigation for significant degradation of inaccessible building element • history of financial expenditure on assets was reviewed to assist in validating that recent expenditure excluded backlog list items and provided a benchmark for unit rates or trade requirements.

An independent valuation report, using established cost estimating principles, of existing backlog maintenance items was produced which documented: • location and work type of each backlog maintenance item • Assumptions made in valuing each backlog maintenance item • Summary description of the scope of each backlog maintenance item • Relevant primary stakeholder responsible for each backlog maintenance item • Documentation and benchmarks drawn on in valuing each backlog maintenance item • A detailed elemental breakdown of the works, allowances, fees and contingencies.

BACKLOG MAINTENANCE EXPENDITURE BY WORK TYPE ($, MILLIONS) TECHNOLOGY INFRASTRUCTURE BUILDING CONTROLS BUILDING FABRIC ELECTRICAL INFRASTRUCTURE FIRE INFRASTRUCTURE HVAC INFRASTRUCTURE PLUMBING INFRASTRUCTURE SECURITY VERTICAL TRANSPORT

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The following chart indicates the level of detail and breakdown of costs that were produced.

The outcome of this risk-based approach was a clear assessment of the facility’s backlog maintenance requirements independently identified, validated and valued and set within a prioritisation matrix and the organisation’s available funding envelope. Importantly, the valuation report provided stakeholders with a transparent and defensible basis for funding applications and the manual provided a reusable methodology that ensured that future assessments were conducted in a uniform and established approach.

UNLOCKING FACILITY VALUE THROUGH BIM AND ADVANCED DATA ANALYTICS

By Peng Wu, Rodney A. Stewart, Rebecca Jing Yang and Keith D. Hampson

The rapid development of a wide spectrum of new technologies, such as machine learning, internet of things, building information modelling and geospatial methods, have made the acquisition and processing of big data much easier and more accessible in recent years. These new technologies open the door to developing an automated and integrated approach that harnesses both human experience and big data to enable decision making in regards to data-driven asset management to unlock facility value.

Recognising the benefits of these technologies, the Sustainable Built Environment National Research Centre (Project 2.64) aims to demonstrate the capability and value of building

information modelling and machine learning, which are believed to have great potential in the built environment sector.

BUILDING INFORMATION MODELLING Building information modelling (BIM) refers to a catalyst for a major construction paradigm shift towards digitalisation in the construction industry. BIM is a set of technologies and solutions that enables threedimensional (3D) representation of geometric and non-geometric (functional) attributes of building elements. Its objective is to improve the collaboration of different stakeholders in the architecture,

engineering, and construction (AEC) industry and enhance its productivity and management throughout the constructed facility’s entire lifecycle¹.

BIM BENEFITS Implementation of BIM offers numerous benefits for stakeholders and clients throughout all stages of the project by decreasing construction and postconstruction maintenance net costs, delivering quality project outcomes, minimising negative impact on the environment, and improving productivity and coordination across multiple disciplines².

Through a detailed examination of 33

¹Ghaffarianhoseini, A., Tookey, J., Ghaffarianhoseini, A., Naismith, N., Azhar, S., Efimova, O. & Raahemifar, K. 2017. "Building Information Modelling (BIM) uptake: Clear benefits, understanding its implementation, risks and challenges". Renewable and Sustainable Energy Reviews, 75, 1046-1053. ²Gonzalez-Caceres, A., Bobadilla, A., & Karlshøj, J. 2019. Implementing post-occupancy evaluation in social housing complemented with BIM: A case study in Chile. Building and Environment, 158, 260-280.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 29

TECHNOLOGY AND INNOVATION

international case studies, a total of 31 potential benefits have been achieved.

Some of the significant benefits that can be achieved include³: 1. Asset management labour utilisation savings. For example, in the case of Stanford Neuroscience Health Centre, California a 60% to 70% reduction in time spent on maintenance and repair was achieved through BIM’s 3D visualisation⁴.

2. Better change management in the Pyrmont Bridge project, Sydney.

In the past, building inspectors had to undertake the annual condition assessment process of the 7,500+ structural components of the bridge via a manual paper-based process consisting of paper, pens and digital cameras. With a cloud-based 3D BIM based solution, a mobile inspection app was used to enter the data automatically synced with a 3D model used for bridge inspections⁵.

3. Faster regulation and requirement compliance. The use of BIM in the A556 road project in the North West of England enabled a quick compliance check with the UK Government planning process

(Planning Inspectorate), as well as compliance with industry standards such as BS 1192:20072⁶, BS110001:20103⁷, BS7000-44⁸, PAS1192-25⁹, ISO 90016¹⁰, ISO 550007¹¹, ISO 120068¹² and ISO 167399¹³.

4. Better programming/scheduling.

In the Wynyard Quarter Innovation Precinct in Auckland, digital dashboards quickly and clearly tracked the contracting team’s progress in uploading the required asset management data throughout the construction process. This gave the project management team real visibility of the progress of completed asset information and handover deliverables, helping to ensure that 100% of critical digital information was available at project completion¹⁴.

REMOTE HOUSING AND BIM Construction projects face a lot of challenges by their nature as they are highly complex, uncertain, and can sometimes be hazardous. These factors can result in errors across different lifecycle stages of construction projects

and can cause higher net costs, delays and unsatisfactory project outcomes.

When it comes to projects in regional locations, these challenges are exacerbated, generally due to the remoteness of the project and coordination difficulties between more sparsely located stakeholders and suppliers contributing to the project¹⁵.

An economic evaluation was conducted to assess the benefit of BIM for small remote housing projects with a group of experts from housing agencies and contractors, with a focus on the monetary savings and benefits of BIMenabled operation and maintenance in remote housing projects. The evaluation showed that the most critical assets requiring attention and constant condition assessment in remote regions are air-conditioning, building structure components, internal and external finishes, and site upgrades. It was also found that the primary monetary benefits derived from BIM-enabled asset management for the detached public and government housing in remote communities would come from reduced site visits to inspect reported asset failures and conduct condition

³For a complete list and description of BIM benefits and enablers, please visit the full research report available at: https://sbenrc.com.au/researchprograms/2-64/ ⁴Sacks, Rafael, et al. (2018). BIM for Owners and Facility Managers: BIM Handbook, John Wiley & Sons, Inc., Hoboken, New Jersey, pp. 130–174. ⁵Sahlman W. (2015). Best Practice Asset Management BIM – Pyrmont Bridge Case Study. Available at: http://buildingsmart.org.au/wp-content/ uploads/BIM-Pyrmont-Bridge_28APR2015-s.pdf [accessed 20 March 2019]. ⁶BS1192:2007 Collaborative production of architectural, engineering and construction information – code of practice ⁷BS11000-1:2010: Collaborative business relationships: a framework specification ⁸BS 7000-4:2013: Design management systems: Guide to managing design in construction ⁹PAS 1192-5:2015: Specification for security-minded building information modelling, digital built environments and smart asset management ¹⁰ISO 9001: 2015: Quality management systems – requirements ¹¹ISO 55000: 2014: Asset management – overview, principles and terminology ¹²ISO 12006:2015: Building construction – organisation of information about construction works ¹³ISO 16739: 2013: Industry Foundation Classes (IFC) for data sharing in the construction and facility management industries ¹⁴BIMINNZ (2016). Unlocking the value of BIM for asset management. Available at: https://static1.squarespace.com/ static/57390d2c8259b53089bcf066/t/5ab08c8a0e2e72e816fb2ac0/1521519765483/Think+piece+on+BIM+as+asset+management+tool.pdf [Accessed 10 March 2019 ¹⁵Sidawi, B. 2012. Remote Construction Projects. Problems and Solutions: The Case of Sec, 48th ASC Annual International Conference Proceedings, Birmingham, UK, April 11-14, 2012.

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TECHNOLOGY AND INNOVATION

assessments, reducing costs from poor design or using unsuitable material, noncompliance with codes and standards, lack of maintenance, and age, normal wear and tear.

Experts suggest that by implementing BIM, the average savings by detecting unsuitable material or design, and noncompliance with codes and standards are between 15-25%. Such cost savings can be achieved due to the closer control over the assets during the design stage.

The following key benefits are also identified for BIM implementation in the operation and maintenance stage of small public housing projects: • resource saving within the client delivery organisation,

model used before and during the construction phase, and an as-built model with updated BIM elements to match an actual building. The asset information model and subcontractor model can also be created with the desired level of information for facility and asset management.

These factors can result in errors across different lifecycle stages of construction projects and can cause higher net costs, delays and unsatisfactory project outcomes.

• resource saving for contractors, • reduced number of incidents with severe damage or damage caused by the fault of another element, • improved statistical data collection and evaluation, • a single easy-to-use “eco-system” within the organisation, • better understanding of assets, • improved asset management operations, and • enhanced quality of maintenance services for public houses.

IMPLEMENTING LIFECYCLE BIM This project also proposes a model for the implementation of BIM through the lifecycle of newly built houses in remote regions. Such a model ensures a maximum amount of information to be collected and this would be an ideal point to start the gradual adoption of BIM. The model includes a design model with the required Level of Detail (LoD) 350, followed by a construction

AUTOMATIC ROAD PAVEMENT MARKING DETECTION Pavement markings and signs constitute the most fundamental way to communicate with road users and they are, in most cases, the most effective way to regulate, warn and guide traffic.

Aiming at unambiguous comprehension and immediate response, markings are highly standardised. Four major types identified in existing manuals/standards include: (a) longitudinal lines; (b) transverse lines; (c) other markings; and (d) raised pavement markers. White is the most commonly used colour for most pavement markings.

Unfavourable visibility of these markings occurs on some occasions, for example, when the road is wet or dusty or when there are occlusions by traffic. Also, extensive traffic wear leads to the deterioration of pavement markings even though long-life materials have been introduced. For this reason, inspections are often required to check the current

worn conditions of roadway markings, inform managers of major changes and support a scientific maintenance program. The availability of extensive pavement video and archives collected from in-vehicle cameras provides an opportunity to exploit this video data for generating inventory data automatically, which will better support road management practices.

THE MACHINE LEARNING METHOD Today, artificial intelligence is gaining significant attention from academia and industry. Its capability to save tedious manual work, automate image processing, and generate reliable detection results has been widely recognised.

In this industry-driven Sustainable Built Environment National Research Centre project, a machine learning technique has also been developed to achieve automated and efficient lane marking detection. Three functions have been achieved, including: 1. identify different types of lane markings in each frame; 2. estimate their worn condition; and 3. identify the presence of audible markings.

The developed vision-based line marking detection method consists of four steps, namely, image pre-processing, feature extraction, segmentation and lane marking classification. Image pre-processing aims to prepare the raw pavement images for subsequent analysis, by removing noises. Feature extraction seeks to retrieve colour and shape features of line markings, which will be used for detection. Segmentation extracts individual lane markings in an image so that they can be categorised respectively. Finally, classification exploits the extracted features of each lane marking for categorisation.

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TECHNOLOGY AND INNOVATION

DETECTION RESULTS For each lane marking instance in an image sample, its colour, line type, presence of audible markings, and worn condition estimation can be identified automatically (see Figure 1 below). The accuracy for detection of lane markings, including dividing line, barrier lines (both one way and two way) and edge line, is 96%.

roadways. It is a computer vision technique that has the capability to save tedious manual work, automate image processing, and generate reliable detection results to inform road asset managers.

Moving forward, we encourage industry practitioners to implement these and other related digitally enabled models and work with industry researchers to develop, verify and implement pilot

projects that will help the Australian AEC sector to realise the full benefits available from these emerging technologies. The research team have recently embarked on a new related Australia-wide Sustainable Built Environment National Research Centre project with industry partners titled Project 2.72 -Leveraging an integrated lifecycle management framework – building and infrastructure sectors.

CONCLUSIONS AND NEXT STEPS This Sustainable Built Environment National Research Centre project completed in March 2020 has established the use of innovative approaches and technologies, including building information modelling, machine learning and whole-of-life costing to enhance value in the facility management process.

Specifically, this project has demonstrated industry value for housing, building and road transport agencies at various levels, including: • A comprehensive list of BIM benefits and benefit enablers evidenced from 33 international industry case studies. It is an evidencedbased resource related to the tools, actions or processes that can realise and maximise the benefits of implementing BIM. • Implementing BIM in remote housing projects. An approach to advance the use of BIM for remote regional government housing and related infrastructure to support proactive and efficient facilities management is proposed.

• An early machine learning proof-ofconcept for lane mark detection for

Figure 1. A demonstration of the automated process of lane marking detection

This article has been written by Peng Wu - Professor, School of Design and the Built Environment, Curtin University; Rodney A. Stewart - Professor, School of Engineering and Built Environment, Griffith University, Rebecca Jing Yang - Senior Lecturer, School of Property, Construction and Project Management, RMIT & Keith D. Hampson - Professor, Sustainable Built Environment National Research Centre, Curtin University.

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RAWLINSONS

2020

CHANGE, ADAPT AND EVOLVE 2020, the year that we will look back on and remember with awe of how quickly the world could be uplifted, overturned and shaken, all by a virus we can’t see.

Professionals across all industries have found themselves having to rethink work practices and restructure day to day business activities, all in an extraordinarily quick timeframe.

The majority of workplaces worldwide are operating remotely, with colleagues no longer being able to share data in print form, no longer brainstorming in face to face meetings, no popping your head in to just borrow a book, or have a quick chat. Our shared data is now all online, our meetings via video call complete with children scurrying across the screen.

Rawlinsons construction cost publications, despite launching a digital version three years ago, still has a solid and loyal customer base who purchase the hardcopy versions of the Rawlinsons Australian Construction Handbook and Construction Cost Guide. Whilst the demand for digital is growing, there is something stable about having a hard copy, a tangible staple passed between colleagues, a source of trustworthy information.

In this new world we have found ourselves in, the need for digital has surpassed the preference for traditional print. Working remotely, Rawlinsons customers need to be able to access data from their publications from home, and between many employees.

A VIABLE WAY TO SHARE COST ESTIMATING WITHIN YOUR TEAM Rawlinsons newly improved 2020 digital cloud based subscription contains exactly the same information our customers have known and trusted for almost 40 years, this version is simply web based.

After downloading a small piece of software you will be able to view and search your Handbook or Cost Guide via an online portal, with 'My Publications' showcasing all of your available titles.

2020 Construction Cost Guide

One license is equivalent to one hard copy book, so whilst all authorised users can access the data from any remote location, only one user can view the data at once.

Much like a traditional print book, you have to wait for someone to finish before

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RAWLINSONS

you can have a look. Multiple licenses are required if you need more than one person in your team to view the publication at once.

All editions, right back to the inaugural 1983 edition, can now be purchased for viewing online, or when you are offline, handy when your internet connection is unstable.

Rawlinsons improved 2020 editions also incorporate an extra level of bookmarking, which allows swift movement to each sub section, whilst still incorporating page reference hyperlinks throughout.

an enormous amount of data contained in these annual publications and, with two to choose from, there is a book for everyone. The Handbook deals with projects of a more complex nature covering values over and above $1.5 million. If your project is of a more domestic nature with a smaller project value that is below $1.5 million, the Cost Guide is more appropriate, also including a renovation section.

Additionally, Rawlinsons offers a Process Engineering Handbook, which has been developed as an aid to the experienced estimator or project manager for large infrastructure and process engineering projects.

WHAT IS IN THE PUBLICATIONS? If you are in the Australian construction cost estimating industry, you have more than likely either heard of the Rawlinsons publications, have used, or are currently utilising a copy. There is

Like all great sources of information, Rawlinsons publications are easy to follow and are divided into sections following the stages of construction.

For example, the cost per square metre section of the Handbook is a practical

Rawlinsons publications

tool to establish a project budget during the early stages of concept and feasibility when there is limited information available. A benchmark rate per square metre of the building is determined by parameters such as building function and size, as well as the quality of finish required. This ensures a realistic budget can be estimated for a client at this early conceptual stage in the overall process.

“Correctly used, the Rawlinsons Australian Construction Handbook and Construction Cost Guide becomes a cost control tool from the inception of a project to the project completion and handover.�

At a time where the world is changing hour to hour and we learn to adapt to a new landscape, Rawlinsons Construction Cost Guides continue to provide the industry with constant, reliable data, just as they have for almost 40 years. Whilst we do not know what the world will look like at the end of this pandemic, you can be assured that Rawlinsons will be continuing to provide Australian construction industry professionals with the tools they need, for many years to come.

Industry leaders, Rawlinsons (W.A.), are construction cost management professionals. Established 67 years ago, they are also the proud creators and editors of the Rawlinsons Australian Construction Handbook and Construction Cost Guide, the most comprehensive and current library of construction pricing information and data sources in Australia. Rawlinsons is an AIQS Corporate Partner.

This is a paid advertorial. All words and photos have been supplied by Rawlinsons (W.A.).

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DECREASING REVENUE? RISING INSURANCE? About the PI insurance market & rate increases: The professional indemnity market has come under pressure of late with premiums increasing, and insurers reducing capacity.

This has particularly affected any professionals involved in the construction space. Given the myriad of issues surrounding cladding, non-compliant building products, the Opal Tower, and Mascot Towers insurers have been reducing their capacity and seeking to increase premiums between 20%-40%.

How we can assist in managing down your insurance expense: To mitigate expenses during a downturn in business, we suggest reviewing the following:

• • • • •

Decreased wages and Workers Compensation Increased excesses to manage real cost Reviewing your Sums Insured against contracts and exposures Run-Off Cover, if you are a consultant now with zero current work Consider insurance you may temporarily have decreased need for, such as Travel or Property

Contact us to provide an insurance review.

We are also managing cashflow for clients via monthly funding arrangements to spread expense out until activity and revenues lift again.

Countrywide Insurance Group Pty Ltd T/As Member Advantage Insurance Broking AFSL 511363

Call now for a free insurance review Stay protected but manage your cost

1300 365 152 Or visit:

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1300 365 152 aiqs@abcountrywide.com.au abcountrywide.com/aiqs

LEGAL

WHAT WILL BE THE IMPACT OF COVID-19 ON THE NEW ZEALAND CONSTRUCTION INDUSTRY?

By Julia Flattery and Jonathan Forsey

Whilst it is difficult to predict with any certainty the impact that the COVID-19 pandemic will have on the construction industry in New Zealand there are some inevitable consequences and concerns already being identified within the industry.

The clause references in this article are to the unamended NZS3910 although there are similar provisions in the other NZS contracts and most bespoke commercial construction contracts. It is worth noting that the provisions mentioned are frequently amended and so it is necessary to check each contract for the precise terms. What follows is not designed to provide specific legal advice and cannot be taken as such, but highlights some of the common issues.

The position taken in New Zealand in order to mitigate the impact of COVID-19 provides the context in which the industry is now operating and potential impacts on the industry in the short to medium term.

New Zealand was placed into Level 4 lockdown on 26 March 2020. Prior to 19 March 2020 it was not widely known that the lockdown was likely to be invoked and the shutting down of businesses and mandatory isolation (except for essential services) was not communicated by Government until 21/22 March 2020.

These dates are important in terms of assessing the right for contractors to claim extensions of time and costs in relation to projects that were not in contract at that time.

Under clause 10.3.1(f) a contractor is entitled to claim an extension of time (but not cost) for delays caused by matters which were not reasonably foreseeable by an experienced contractor at the time of tendering. Therefore, any delays due to either supply chain shortages or the lockdown for contracts entered into prior to 22 March 2020 are likely to entitle the contractor to claim

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an extension of time. From 22 March 2020, the right for the contractor to claim under this provision will depend on when the tender was submitted and what was reasonably foreseeable at that time. It is unreasonable to think that an experienced contractor would not expect some delay due to COVID-19 restrictions post 22 March, but the impact of the site restrictions imposed under Levels 2 and 3 were not fully known until those Levels came into force.

As the lockdown required all sites to close (other than for essential services) many contracts were suspended either by the Engineer under clause 6.7.1 or by mutual agreement under 6.7.3.

Suspension under either of these clauses entitles a contractor to claim a variation, extension of time and costs. Alternatively, the change of law provisions in 5.11.10 have been relied upon in order for the contractor to claim the same rights.

LEGAL

There has been considerable debate within the industry as to the costs that a contractor can claim due to suspension during the lockdown period. Many contracts include a specified working day rate as the basis for calculation of these costs. However, there is also provision that where it would be inequitable to use the specified working day rate then a reasonable rate is to be used instead. It has been argued that the reasonable rate should be applied in these circumstances and equally that as the principal will not be entitled to liquidated damages for late delivery the contractor should not be entitled to any profit for the lockdown period. It is also necessary to consider any potential double recovery, for example where the wage subsidy was received. The usual mitigation measures that a contractor could invoke such as redeploying labour, plant and equipment were not available and again this will need to be considered.

Whilst contractors may be able to claim costs under the contract, establishing the value of these costs will be complex and require a case by case assessment for each project. There will inevitably be a period of time now that site works have recommenced whilst these costs are assessed, lodged, processed, agreed and disputed. This delay risks extending and exacerbating the financial hardship currently being felt within the industry.

The differing approaches being taken and the general uncertainty within the industry as to how these costs should be quantified will inevitably lead to disputes in the coming months where these sums cannot be agreed between the parties. One particularly contentious issue relates to whether contractors can claim cost for keeping its workforce, and that of its subcontractors, on-foot during the lockdown. Whilst some argue that these costs should not be recoverable as are of no benefit to the principal, there is

the counter-argument that keeping the workforce on-foot enabled projects to get back up and running more efficiently when the lockdown was lifted thus benefitting the project as a whole. Ministry of Business, Innovation and Employment have issued further guidelines which may assist a consensus being reached.

There are also claims being made in relation to damage to plant, materials and equipment during the lockdown period.

This is a complex area as will depend on the actual cause of the damage and insurance will also be a factor.

There has been considerable debate within the industry as to the costs that a contractor can claim due to suspension during the lockdown period.

Although site works can be carried out under Levels 3 and 2 the additional site requirements in operation will cause further delay to projects and additional cost to the contractor in terms of putting the required processes in place. There can no longer be numerous trades operating on site at the same time, sites should be zoned and physical distancing maintained. There are also strict requirements in relation to admittance to site, tracing of workers, additional site requirements and use of equipment and communal areas.

Contractors will therefore be claiming extensions of time, variations and costs due to complying with the Level 3 and 2 requirements which will lead to further disputes as to the entitlement to and quantification of these costs.

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LEGAL

Another concern is the potential impact on the supply chain of materials particularly those sourced from overseas. Prior to the Level 4 lockdown there had been some supply issues for example in relation to goods manufactured in China due to the lockdown imposed there. Effectively the transport of materials around New Zealand was put on hold during Level 4, other than for essential services or where items needed to be moved to allow for essential services’ materials to be processed. Under Levels 3 and 2 freight can be moved around New Zealand.

The economic impact of COVID-19 on all industries will lead to a reduction in active projects, certainly in the short to medium term and potentially for a longer period. Investment property owners are likely to defer capital expenditure projects and the impact on the tourism and hospitality sectors will impact planned projects in those sectors.

The Government’s announcements in relation to bringing forward infrastructure projects will help but will not completely make up for the reduction in private sector projects.

Whilst there does seem to be some minor supply shortages, we are not aware of any major supply chain shortages currently. Much will depend on the speed with which the overseas and domestic supply chains return to full capacity and there is concern regarding potential supply chain issues in the short to medium term. Some businesses are stockpiling against this which could exacerbate any supply chain issues.

There is also a desire to put measures in place on existing projects and amend contracts for future projects to try and mitigate against the impact of similar circumstances in the future. Arguably the biggest risk to the industry at the moment is another lockdown being announced or individual sites being shut due to an infected worker. Some of the practical steps that we have seen over the last few months have been to increase the payment cycle to fortnightly as opposed to monthly payments, early release of retentions, relaxation of bond requirements and the making of advance payments, so as to either improve contractors’ cash flow or allow them to raise additional security.

Additionally, some projects are exploring reprogramming the works and/or value engineering so as to mitigate the delay and cost impact to the project as a whole.

These will not be appropriate in all cases but are some of the options being considered.

There are also concerns regarding potential labour shortages due to the current border restrictions, particularly in relation to sites which have a reliance on overseas workers. It is anticipated that this will be mitigated in part by the use of local resource but there may be some impact particularly where there is a shortage of suitably qualified workers in specific skills.

This article has been written by Julia Flattery, Senior Associate, Duncan Cotterill and Jonathan Forsey, Special Counsel, Duncan Cotterill.

The content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose. While we make every effort to ensure the accuracy of the information contained in this article, this is a rapidly changing environment and the information will be subject to change.

The COVID-19 mitigation measures have resulted in a need for sites to operate remotely where possible. Whilst clearly this is not possible in relation to the actual works there are many other functions which are all integral parts of a successful project which can and are being carried out remotely, for example site inductions and inspections. This trend is likely to continue for some time resulting in the industry assessing what can be done off site and evaluate the risks of doing so.

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It is in everyone’s interests for projects to continue now that works have commenced again and not be delayed due to solvency issues or disputes. The key to this will be good communication between the parties and a pragmatic approach being taken throughout the industry.

CASE STUDY

QUEEN’S WHARF BRISBANE DEMONSTRATES THE POWER OF BIM

By Gabor Gulyas

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CASE STUDY

Expected to open in 2022, Queen’s Wharf Brisbane is a world-class integrated resort development that will transform the Central Business District (CBD) and river’s edge. The Destination Brisbane Consortium is delivering the $3.6 billion development, which will cover more than 12 hectares—equivalent to 10% of Brisbane’s CBD. The development encompasses 50 new bars, cafes and restaurants; 2,000 apartments across three residential towers; and more than 1,000 premium hotel rooms operating under four hotel brands, one with a casino. The existing Treasury Casino will close in 2022.

There is plenty of public space in the development as well: the equivalent of 12 football fields. This public space will help to accommodate the additional 1.39 million visitors expected in Brisbane as a result of the project.

Impressively, the development is also sustainable, having earned a 6-star Green Star Communities rating.

PROJECT DELIVERY: THE POWER OF BIM PDC, now known as DBM Vircon, was engaged by the Destination Brisbane Consortium in 2017 to deliver a Building Information Modelling (BIM) facilities management solution for the development.

DBM Vircon worked alongside the Consortium’s design consultants and contractors, based in the client’s office.

In delivering the project, 16 different pieces of software were utilised by 39 contributing organisations. DBM Vircon had over 340 models under management, with 215 individual models processed weekly.

According to Alastair Brook (Director, Digital Engineering, DBM Vircon), “Queen’s Wharf Brisbane is a flagship project for our company, pulling together a key team of highly skilled digital engineers to deliver a complex project with multiple interfaces, stages, programs, software and contributing parties. It was a true open BIM project.

This allowed us to develop an integrated model to use in operations planning, four years before project delivery.”

DBM Vircon collaborated with Rider Levett Bucknall (RLB) who was responsible for delivering all quantity surveying services to the Consortium throughout the project.

According to Matt Long AAIQS, CQS (Director, RLB), BIM technology was first employed to verify the project scope.

“Software was utilised to verify model object properties and attributes, which included location and zoning, design coding, materiality, specifications, lengths and areas. The BIM model also contained publisher information within each object’s property, allowing for smoother consultant’s feedback.”

The Queen’s Wharf Brisbane BIM management plan featured several procurement packages, each of which was input into each object’s parameters.

“By switching the layers in the BIM model on and off, we were able to quickly and easily verify visually, onscreen, that each package was correctly modelled,” said Long.

Quantity extraction was also streamlined.

“Having early involvement in the BIM process allowed RLB to utilise DBM Vircon’s management plan to integrate useful model attributes into consultant models, including lengths, areas, volumes, reinforcement ratios, and steel tonnages.

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Utilising a combination of DBM Vircon’s models, and our in-house ROSS5D software, we were able to extract accurate quantities from the models and apply these to our cost plans.”

“Employing this process, bulk checks of manual take-off were achieved through quantity extraction and layering investigations. This enabled efficient confirmation of measurements.”

Quantity extraction was also streamlined.

“Given the size of the Queen’s Wharf Brisbane development, BIM allowed the cost planning of complex structures, facades and fitouts, to be understood rapidly while enabling accurate take-off of quantities.”

With BIM models delivering visualisations that incorporate a component-based representation of building systems with lifelike textures, RLB’s team was able to view the development from every possible angle and get a feel for the overall size and layout.

“A combination of software enabled the BIM models to be viewed both in the office and on-site. Visualising the model greatly enhanced our understanding of the complex Queen’s Wharf Brisbane design,” said Long.

DATA RICH MODELS DELIVER A RAFT OF BENEFITS With digital construction technologies like BIM becoming more and more popular, the building and construction industry practice is undergoing rapid

CASE STUDY

change. New technologies are already boosting the construction industry productivity, as well as integration and collaboration between technical disciplines. As such, data rich BIM models can deliver a raft of benefits for quantity surveyors.

According to Brook, “The use of BIM offers a range of benefits for quantity surveyors, including efficient and effective quantity take-off and cost estimation, reliable and accurate quantities, and improved visualisation of individual elements for more accurate measurements.”

"BIM allowed the cost planning of complex structures, facades and fitouts, to be understood rapidly while enabling accurate take-off of quantities.”

This article has been written by Gabor Gulyas, Operations Manager – Digital Engineering at DBM Vircon.

BIM enables quantity surveyors to assess and affect the design and delivery process for better commercial outcomes. However, for the most effective utilisation of BIM, it is essential that quantity surveyors are involved from the outset of a project, and regularly communicate with the design team.

“RLB was involved from the outset of the design process. This helped ensure that the BIM guidelines and associated cost planning measurement parameters were included within the consultant models, and confirmed throughout design development,” said Long.

“Collaborating on the Queen’s Wharf Brisbane development with an integrated BIM manager worked well for the project team from a knowledge sharing and collaboration point of view. The development also has a 99-year lease and, as such, every design consideration has whole-of-life costs taken into account. This was a refreshing approach to the planning, design and construction experience.”

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DATA MANAGEMENT

THE RISING IMPORTANCE OF DATA MANAGEMENT

By Stuart Dowling MAIQS, CQS

The term ‘data’ describes discrete facts. Data can be structured to create information, organised to produce knowledge, and applied to give wisdom.

For example, allowing decisions to be made.

Data management might not be a term that’s often heard on a construction site.

However, everyone in construction is involved in data management, whether it’s creating a cost plan, keeping records as an overall business, or contributing to the flow of information on an individual project level. But while data is everywhere, managing that data isn’t always a priority for construction stakeholders. Figuring out how best to organise, and more importantly maximise, the numbers and insights called “data” can feel like someone else’s responsibility or isn’t even a consideration.

Owners, contractors and specialists

should take a proactive approach to data management and the benefits it can bring.

Many articles describe how the construction sector lags many other sectors in innovation, technology and change. The capture, analysis and management of data is no exception.

Despite this, the construction sector is waking up to the importance of data, whether it’s the use of cloud applications for commercial management, 3D BIM systems, or advanced onsite tools used to manage and capture as-built conditions.

However, because data management is just one part of any given construction team member’s job, it can be relatively invisible as a concept, and many organisations don’t have a specific data management strategy.

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Data management usually only comes to the foreground when something goes wrong. It’s even harder to spot when data management is failing to deliver the best value for a business, especially over the long-term.

General contractors are often the engine behind the collection and distribution of data on the construction site. The amount of data produced, from procurement through to handover, can be significant and the management of this can be a considerable challenge if there isn’t a way to easily access and manage this data. As computational power and data storage capabilities have increased and the cost of sensors has dropped, the amount of data that we are able to gather and process has risen significantly. We enter the realms of “Big Data”.

DATA MANAGEMENT

Once the project is complete, the data generated throughout the building process is also used to inform the handover, which can be a timeconsuming process at the end of the build. A more streamlined data management process starting from day one can not only deliver greater efficiency but provide higher quality, more dynamic data for the owner, and create a competitive advantage.

Collecting and analysing data on multiple builds can also help general contractors improve their processes, project management strategies, procurement methods and even the selection of subcontractors and partners. By centralising and analysing data, leaders can improve productivity and profitability in the long run.

We enter the realms of “Big Data” Today, data is often under the control of the general contractor who might not have an easy way to share it throughout a project team. Subcontractors are often highly dependent on having the right information at the right moment. Waiting for it can seriously damage efficiency.

Currently, 35% of all time in construction is spent on unproductive activities, with the average worker losing 5.5 hours a week just looking for information¹.

Subcontractors may not have their own data collection tools in place, unless these tools are specified for the job. A transparent project reduces the chance of disputes and litigation as well as protects valuable relationships with contractors.

For example, technology such as timestamped photos and project-based tasks can create a record of completed work to protect subcontractors from a liability perspective.

With their own tech tools to access up-to-date digital information on the construction site, subcontractors can better protect their margins and collaborate more effectively. Greater access to information can also help subcontractors learn how to improve their processes and productivity from every project.

The format of data used on a project is typically determined by the owner, written in the specs by the architect and delivered by the general contractor.

Historically, owners haven’t given much thought to data management on their projects and, as such, buildings aren’t being set up for ongoing maintenance and long-term success.

In short, construction is a relatively small part of the building lifecycle. The right data can improve the management of buildings for many years after a project is completed.

With data that’s easily accessible and usable on mobile devices, facilities managers both in the office and onsite can benefit from detailed information about how a project was actually built (again, not just planned!). For example, a maintenance team member running toward a water leak on the fifth floor could be checking for the exact shut-off valve location at the same time, rather than running back to their office to find this information. Similarly, a manager could check on the precise component specifications before scheduling a repair.

A richer digital record can also support future changes to the building. In sectors like healthcare, renovations might be

needed regularly to support the latest treatments for patients. A detailed, asbuilt digital record can enable owners to plan changes more effectively and even learn from past projects for future builds.

With greater input into data management strategies from the start of the build, owners can benefit for many decades from the information they need.

General contractors, subcontractors and owners need to take a view of how their own data is collected and stored at each stage of the process. While it’s often invisible, data impacts everyone in the building lifecycle.

It’s also critical to think about the systems that support data management at every stage. Choosing technology that delivers data that’s easy to understand, export, analyse, and share will ensure that data isn’t only accessible, it’s actionable.

Taking a more proactive and considered approach to data management will deliver benefits for many years to come—and create true value for the business.

With greater input into data management strategies from the start of the build, owners can benefit for many decades from the information they need.

Stuart Dowling MAIQS, CQS is a member of the AIQS Technology and Innovation Committee.

¹ Source - Construction Disconnected: The High Cost of Poor Data and Miscommunication, published 1 August 2018 https://blog.plangrid. com/2018/08/fmi-plangrid-construction-report

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 43

GREEN INFRASTRUCTURE

WALLBOT A MUST FOR A GREEN WALL

By Sara Wilkinson, Marc Carmichael, Richardo Khonasty

INTRO The UN forecast of a 3-degree Celsius global temperature increases by 2100, will further intensify excessive heat.

Population growth, urban densification, climate change and global warming all contribute to heat waves, which are more intense in high-density environments.

With urbanisation, vegetation is replaced by impervious materials which contribute to the Urban Heat Island (UHI) effect.

Concurrently, adverse health outcomes and heat related deaths are increasing where the old, young and those with reduced mobility are more severely affected. Heat stress affects labour

productivity, with the number of days people can work safely outdoors in Australia set to decline.

How can we reduce the UHI and ameliorate the accompanying issues? Increasing green infrastructure (GI) in cities; • attenuates the UHI,

urban forms of GI are parks and trees on streets. A Macquarie University study and 2014 UTS Institute of Sustainable Futures report showed 6-degrees Celsius heat mitigation is possible with good GI. However, despite known benefits, uptake of GI, particularly GW has been slow. The reasons include;

• reduces surface temperatures during daytime and air temperature at night,

• costs of ongoing maintenance inspections,

• improves air quality, and;

• monitoring plant health, and;

• enhances population health.

• OH&S issues for maintenance teams.

GI on buildings comes in the form of green roofs (GR), green walls (GW) and green facades (GF), which can be part of an original design, or, retrofitted. Other

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If inspection, monitoring and maintenance could be automated by a robot; a Wallbot, this argument may not hold in the future.

GREEN INFRASTRUCTURE

This article describes the development of a Green Wallbot by a transdisciplinary team of UTS researchers from Built Environment, Mechatronics and Horticultural Science. The UTS Wallbot project comprises the design and fabrication of a prototype Wallbot to monitor and maintain green walls. Working with Transport for New South Wales and green wall and roof company; Junglefy, two design workshops held in 2019, determined the design criteria for Wallbot1 which is being tested in a UTS robotics lab before field (or wall) trials in late 2020.

WHY WE NEED GREEN WALLS Many refer to a climate emergency, as mounting evidence of Climate change makes denial no longer tenable. The Australian summer of 2020 comprised unprecedented intensity in bushfires, followed by hailstorms, intense rainfall and flooding along the east coast.

The predictions are for increases in temperatures for some years, even if extreme mitigation actions are taken.

Another factor is population growth.

The built environment will expand its total footprint by 100% by 2060 to accommodate the human population.

Currently most growth is in the form

of high-density buildings typically requiring air conditioning. Lightweight external envelopes minimise loadings on structural forms and foundations, which historically, have not performed well thermally.

With increased temperatures and a growing aged population, health and heat stress issues mount. The old and young are most affected and, if our built form does not change, we can expect more adverse, acute health issues. These events strain health services and the economy.

In city centres there is a spike in temperature, known as the urban heat island (UHI) effect. The increase is

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 45

GREEN INFRASTRUCTURE

caused by heat being reflected from materials, such as concrete, used in built forms and being expelled from air conditioning systems typically into, narrow streets, where heat can be trapped below tree canopies exacerbating the problem.

In the 1950s, Rachel Carson wrote Silent Spring, a book highlighting the link between modern agricultural practices using chemical fertilisers and the devastating impact on nature. The bugs and birds died hence; the silent spring.

In high-density built environments, we fail to provide habitats for biodiversity; for the bugs and the birds. These

"This paradigm reduces requirements for human maintenance, OH&S risk and human maintenance costs. "

creatures pollinate plants and are essential for life on earth. Further, with a changing climate many species need to migrate to new areas to survive.

Plants photosynthesise; absorbing carbon dioxide and emitting oxygen. As such they attenuate some pollutants emitted from buildings and vehicles, improving the air quality. With highdensity built forms covering large areas, air flow can be impaired and; having green walls improves air quality.

Finally, humans have an innate need to experience the natural world and spending time in natural environments, we experience well-being labelled;

biophilia. These feelings enhance calmness and reduce anxiety. All issues above can be addressed through increasing GI. Table 1 summarises the issues and ways GW can mitigate adverse impacts and improve the environment.

TABLE 1: CRITICAL URBAN ISSUES AND GREEN WALL BENEFITS CRITICAL URBAN ISSUES

GREEN WALL BENEFITS

Climate change

Improves thermal performance of buildings reducing Greenhouse Gas emissions.

Urban Heat Island

Widespread uptake reduces energy loads and amount of hot air discharged from buildings.

Population growth

Improved thermal performance and attenuation of UHI will enable us to accommodate more people comfortably in cities.

Health and aging populations

Attenuation of UHI mitigates heat stress for young and aged populations.

Biodiversity habitat

Habitat is provided for species which ensure pollination of plants

Air quality

Absorb carbon dioxide and emit oxygen.

Biophilia

Provide opportunity for people to experience wellbeing.

DESIGN CRITERIA FOR WALLBOT Before designing the Wallbot the requirements and constraints associated with automating Green Wall maintenance had to be understood. After a comprehensive review of related existing technologies, two key stakeholder

workshops were hosted, which included green wall installers and designers, indigenous elders, landscape architects, building certifiers, urban planners, policy makers, construction companies, property developers, robot designers, IoT professionals and horticultural scientists.

Discussed in the workshops were potential embodiments of the Wallbot

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and the advantages and disadvantages in respect of social, economic, environmental, regulatory, legal and technological factors. Key technical considerations were how to facilitate motion across the side of buildings, and how maintenance such as planting, pruning, waste collection and plant health monitoring could be performed.

GREEN INFRASTRUCTURE

An outcome with the understanding that the form of the system would require different embodiments depending on the type of GW installation being maintained. For example, a large building with significant GI requiring frequent maintenance could be best maintained by a permanent installation integrated into the building, with the capital cost offset by savings on maintenance over time. Alternatively, a smaller GW may be better maintained by a system installed temporarily when maintenance is required, allowing costs to be shared across multiple GW installations.

Another discussion point was the capabilities of the Wallbot. A system physically interacting with the plants for operations such as; planting and pruning is significantly more complex than a system solely performing non-contact health monitoring. The advantage of this extra complexity again depends on the type of installation.

After the workshops, the Wallbot prototype scope was agreed, with a focus on developing a system that can be transported site to site, and with plant health monitoring capabilities. This reduced the complexity of development at this early stage, whilst resulting in a design that could be beneficial for stakeholders.

For measuring plant health, the Wallbot body is fitted with three vision-based sensors. An optical tracking camera (Intel RealSense T265) tracks the motions of the Wallbot body as it manoeuvres across the wall. A second camera (Intel RealSense D425) uses stereo infrared sensors to build a 3D map of the scene

it detects. Combined, these cameras allow a high-fidelity 3D map of the GW to be constructed. A third sensor, a multispectral survey camera (MAPIR Survey 3), calculates the normalised difference vegetation index (NDVI) of the plants and allows the general health of the GW to be measured.

Plate 5: The Wallbot installation at the University of Technology Sydney (UTS)

THE WALLBOT PROTOTYPE For the prototype, a concept utilising actuated ropes to manoeuvre the Wallbot’s body across the GW was chosen. This concept aligns with Wallbot being a system that is transported and installed on site. Using four computercontrolled winches operating in unison to control the length and tension of the ropes, the Wallbot is moved across the GW to perform plant inspection.

Plate 6: Reconstruction of the vertical garden by the Wallbot

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GREEN INFRASTRUCTURE

The Wallbot main body

Initial tests were performed at UTS on a GW containing five Junglefy planter boxes, four of which were populated with plants (plate 5 on the previous page).

Combining measurements from different Wallbot positions allowed a 3D map of the plants to be generated (plate 6 on the previous page).

FINDINGS AND WHERE TO NOW? Preliminary test results are encouraging, however, more work is needed before the Wallbot can maintain our Green Walls. One challenge has been the use of relatively low-cost, off-the-shelf

hardware to create the prototype. Future development will explore more suitable, probably custom-made components better suited to the application.

Despite the challenges, the Wallbot prototype has successfully created a 3D map of the GW to assist regular inspections. Once the system is installed plants can be monitored automatically and regularly without the need for manual inspections. Maintenance, such as pruning still requires human intervention, and a proposed solution is to combine regular Wallbot systematic monitoring of GW, with people performing targeted maintenance tasks.

This paradigm reduces requirements

for human maintenance, OH&S risk and human maintenance costs. Additionally, with regular systematic inspection the demise of plants could be detected early and potentially remedied if corrective action can be performed in time.

Future versions of Wallbot are envisioned with additional sensors for collecting temperature, humidity, wind and soil moisture data, providing maintenance teams with rich information about the health of green walls. Additionally, attachments to allow pruning or spraying nutrients may be added. Furthermore, the Wallbot concept could be extended to perform other related operations on the side of buildings, such as facade and other types of infrastructure inspection.

Acknowledgements The authors would like to thank all those who contributed to the Wallbot project, including Tim Schork, Callum McMaugh, Phillipa Cooper, Chi Sing Tse , Brooke Wells, Michael Daly, Joshua D’souza, and Hakan Day. References Jacobs, B., Mikhailovich, N., and Delaney, C. (2014) Benchmarking Australia’s Urban Tree Canopy: An i-Tree Assessment, prepared for Horticulture Australia Limited by the Institute for Sustainable Futures, University of Technology Sydney.

Ossola, A., Staas, L., & Leishman M., March 11th 2020. A solution to cut extreme heat by up to 6 degrees is in our own backyards https:// theconversation.com/a-solution-to-cut-extreme-heat-by-up-to-6-degrees-is-in-our-own-backyards-

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LEGAL

THE QUANTITY SURVEYOR AND COVID-19 Given that the COVID-19 pandemic is currently challenging business operations across the globe, it is no surprise that businesses are facing uncertainty in respect of their ability to comply with their contracts (in addition of course to the all-important question of whether they can continue to do ‘business as per usual’).

On an almost daily basis, this unfortunate and rapidly developing situation is compelling state, territory and federal governments to issue clearly hastily written directives which directly impact businesses, even as the consequences of the pandemic cannot be surveyed with any accuracy at this time.

In these trying times, both principals and contractors should review their contracts for appropriate impact on the terms of the same, on the relevant works and on the costs. This article deals with the consultancy contract for quantity

surveying services, but the principles are capable of wider application.

CONSULTANCY CONTRACTS Quantity surveyors are well advised to have a look at their consultancy contracts and be mindful of how their contracts respond to the challenges posed by the pandemic, including: 1. unexpected changes to their work scope; 2. erroneous or delayed information or instructions from their client; 3. whether the liabilities accepted or indemnities provided by them under their contracts include bearing the time and cost consequences of the pandemic; 4. potential impairment of their entitlement to payments or make claims;

5. risk of incurring liquidated damages for delayed performance of their services even if these are due to authority approvals or delays; 6. the pandemic’s impact on head contract obligations which the quantity surveyor might have accepted under their own consultancy contracts; and 7. handicapped or impeded progress in service delivery arising from scaled down/work from home arrangements.

8. Actively seeking viable project outcomes for their clients by restructuring and re-negotiating At the very least, the quantity surveyor should ensure that notices of delay and claims for extension of time are issued to their clients as soon as possible, and subsequently reinforced with weekly reports on the continuing impact of the pandemic and their services delivery.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 49

LEGAL

Updated programmes should also be provided as per the usual requirement under most construction contracts.

where a party has adopted a position of accepting all risks (which could include the risk of force majeure events).

However, those quantity surveyors who are actively engaged in acting as superintendents or consultant valuers in construction contracts are likely to find themselves evaluating the reasonableness of certain extension of time / cost claims being submitted by contractors who find their operations hampered under the current business climate.

Force majeure clauses in a contract often operate where a party faces the impossibility or major hardship in the performance of its contractual obligations due to the occurrence of certain events.

Ultimately, fulfilment of the quantity surveyor’s role as an expert adviser to and representative of principals depend on the principals’ express contractual obligations and the usual duties in respect of the provision of timely certification of time and cost claims.

LEGAL IMPLICATIONS There are several legal avenues to be explored in respect of developing a firm's proactive approach for managing the impact to the pandemic.

A useful starting point would be careful scrutiny of the relevant contract to identify the scope of the quantity surveyor’s exposure to a claim for damages for breach of contract where the quantity surveyor is delayed in its performance of, or rendered unable to meet, its contractual obligations.

FORCE MAJEURE Whilst the pandemic could arguably be deemed a force majeure event, it should be borne in mind that this aspect would usually be governed by the express provisions of the relevant contract. i.e.,

Whilst the words ‘force majeure’ are commonly used in headings of certain provisions intended to provide relief to an affected party, the expression is not itself a legal doctrine in Australian law (even though frequent use of the same has resulted in Australian courts having to grapple with its interpretation).

In a classical sense, a force majeure clause is generally formulated in a contract as a list of events which upon occurrence will entitle the quantity surveyor as the party providing services to suspend the same or cancel the relevant agreement. Such a clause would usually require that the occurrence of the event be beyond the reasonable control of the party affected and that the affected party must take reasonable steps to minimise the adverse effects of the event.

A slightly different formulation would be where a force majeure clause is expressed to be an exception to a party’s liability for loss or damage arising from its failure to perform the contract. In this situation, the party might raise the occurrence of a force majeure event as a defence to a claim for damages for breach of contract.

In any event, the question of whether a force majeure clause applies to relieve a contracting party from performance of its contract (either by way of suspension of services or cancellation of the contract) is ultimately a question of contractual interpretation.

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And the approach adopted by the courts in Australia consists of the objective application of general principles of contract interpretation, i.e., that the meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean.

The approach requires consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract (Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at 35).

In respect of the interpretation of force majeure clauses, it has been recognised that an event may constitute force majeure where its occurrence: (1) is irresistible; (2) is unforeseeable; (3) is external to the party claiming discharge; and (4) has made performance impossible and not merely more onerous or difficult. Impracticability of performance is not generally recognised as a ground of discharge of a contracting party’s obligations. (Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd [2006] FCA 1324) Changes in economic conditions, which significantly alter the commercial aspects of an arrangement, even though in one sense they are ‘beyond the control’ of a party to a commercial agreement, may not fall within such a general phrase in a force majeure clause. Mere commercial impracticability may not be sufficient.

A more stringent test is likely to apply if a party asserts frustration of purpose.

(Gardiner v Agricultural and Rural Finance Pty Ltd [2007] NSWCA 235) Accordingly, the key points to bear in mind are that: (1) the application of a force majeure clause turns upon a question of

LEGAL

contractual interpretation; (2) the burden is upon the party affected by the relevant event to establish that it falls within the terms of the force majeure clause; (3) the clause will be construed as a whole; and (4) the matter of economic convenience is not the deciding factor as a party affected may still be able to perform but not without suffering with severe economic consequences (unless the relevant clause expressly provides otherwise).

There are several legal avenues to be explored in respect of developing a firm, proactive approach for managing the impact of the pandemic.

FRUSTRATION In the absence of a contractual clause governing the event, a further but rare avenue for relief could be the common law doctrine of frustration where a contract is automatically terminated by operation of law as the obligations contemplated by the parties under the contract are rendered impossible of performance.

The application of the doctrine does not require that the frustrating event be unforeseen or unexpected or uncontemplated. The only thing that is essential as far as the doctrine is concerned is that the parties should have made no provision in their contract for the event that actually occurred. (Ardee Pty Ltd v Collex Pty Ltd [2001] NSWSC

836; The Eugenia [1964] 2QB 226) A contract will be frustrated when the parties enter into it on the common assumption that some particular thing or state of affairs essential to its performance will continue to exist or be available, neither party undertaking responsibility in that regard, and that common assumption proves to be mistaken. (Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; [1982] HCA 24) Frustration occurs whenever the law recognises that, without the default of either party, a contractual obligation has become incapable of being performed because the circumstance in which performance is called for would render it a thing radically different from that which was undertaken by the contract. ‘It was not this that I promised to do’. (Davis Contractors Ltd. v. Fareham Urban District Council (1956) AC 696) It should be noted however that the test for frustration is rigorous and not easily satisfied. The doctrine is not lightly to be invoked to release contracting parties of the normal consequences of imprudent commercial bargains. (Pioneer Shipping Ltd v B.T.P. Tioxide Ltd [1982] AC 724).

Further, there would be no room for application of the doctrine to the extent that a contract provides for the frustrating event (whether by a clause governing force majeure or by any other provision).

to the pandemic are due to mandatory Occupational Health and Safety compliance with current pandemicrelated directives (i.e., beyond the quantity surveyor’s control), thereby entitling the quantity surveyor to claim variations and/or extension of times.

RECOMMENDATION It is therefore crucial at this time that the quantity surveyor survey its current contracts and evaluate whether, in the present circumstances, relief may be available for any failure or delays in performing its services under said contracts.

The quantity surveyor must also be prepared to reshape their business models to accommodate the so-called ‘new normal’ as it is highly likely that the economic hibernation being implemented by the government to address public health objectives will continue far beyond the next 6 months.

In any event, it is strongly recommended that in the interim, quantity surveyors should develop potential alternatives with a view to proposing the same to their clients and hopefully obtain, by way of cooperative discussions, some relief if they are labouring under otherwise very strict contractual obligations.

OHS Depending on the quantity surveyor’s circumstances, it may also be arguable that the extra time and/or costs incurred by the quantity surveyor due

This article has been written by the team at Doyles Construction Lawyers. www.doylesconstructionlawyers.com

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 51

SKILLS

THE ROLE OF THE QUANTITY SURVEYOR

IN THE SUB-CONTRACTORS ARENA

By Kiran Vempati, MAIQS

Limited project management and tender management skills (including limited financial management, underbidding tenders with limited detailed scope, procurement methods, and improper payment schedule practices) can lead to insolvency. However, this situation can be improved and prevented by sub-contractors employing the services of a quantity surveyor to look after cost estimation, material procurement, value management options, and monthly progress payments.

Quantity surveyors with knowledge of the various types of construction contracts, such as AS4000 and AS2124, can help sub-contractors understand any financial risks involved and dissipate them with risk mitigation strategies.

To assist sub-contractors to provide a cost-competitive and accurate estimate with a detailed scope breakdown, quantity surveyors are an excellent choice because of their cost management and logical skillset acquired through formal qualifications. Incorporating the first principles of estimating and preparing a detailed trade cost can provide a reliable bid, which would decrease the risk of under-pricing and variation claims to both head contractors and developers. On the following page, Figure 1 shows the detailed contractual chain in the construction industry.

Many Tier 2 and Tier 3 sub-contractors in the construction industry prepare their quotes based on square meter rates as opposed to applying first principles. If this

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trade cost is erroneous or goes unchecked, then it could lead to severe financial risk down the line. Quantity surveyors are equipped with the knowledge of the first principles of estimating and cost data.

This collaborative approach would help track scope creep and avoid unforeseen variations to the project's budget.

Quantity surveyors are equipped with the skills to present an elemental cost plan with all cost allowances and direct costs involved in the material, freight, and access requirements. Submitting a quote with detailed mark-ups, drawings, and scope allowances will allow the client or builder to include them in their budgets and consider any scope for additional works. For example, a small quantity of area with unique tiles is missed by

SKILLS

a subcontractor, the tender is awarded to the sub-contractor, and the error identified at the project delivery stage.

This situation could have been easily prevented if the scope mark-ups were presented at tender stage, and the client was made aware rather than providing a basic square meter quote.

A thorough tender process, handled by a quantity surveyor, will help to avoid room for error and misinterpretation of tender docs at an early stage. For instance, a tile skirting specified at 300mm high as per the architectural drawing in a medium-rise apartment project that isn’t interpreted correctly at the tender stage could result in a single 150mm high skirting been installed and thus requiring removal and rework. Detailed tender estimates with zero scope gaps can avoid rework and misinterpretation.

Value management is a proactive approach to increased cost savings across a project.

Quantity surveyors can research products, specification sheets, and find alternative products with similar functional properties that can help the client save on cost and delivery time. In a cost-competitive

scenario, this analysis can help them to improvise their procurement methods resulting in cost savings.

Quantity surveyors are skilled in utilising estimating software and reporting the critical parameters in terms of both time and cost. These skills are used daily and are extremely effective, especially in matters of preparing the budget costs with zero scope gaps. Quantity surveyors can prepare budgets with detailed costs and sell price breakdowns, margins, and other materials schedules.

The record-keeping of the project progress payments by quantity surveyors can enable sub-contractors to track and support the assessment of the original project payment schedule, credits schedule, and variation claims. The proper record keeping of payment schedules can be helpful to track the percentage of the remaining amount to be claimed and retention amounts of completed projects.

This documentation also helps subcontractors report to builders about overall payment claims. Builders can then prepare their payment schedule.

Quantity surveyors can apply their cost management skills to provide project management cost recovery to mitigate unforeseen over costs. Many medium and large projects require a full-time project manager and site supervisor. Based on my experience, 4% to 7% of the total project value of a specific trade can be estimated as project management cost recovery and included in the project value.

Many sub-contractors usually don’t allow time and delivery contingencies, and this type of risk can lead to quality and delivery issues. Construction time and material procurement delays can cause serious penalties such as liquidated damages to sub-contractors.

Finally, the contractual chain (Fig. 1) shows the reliance on sub-contractors to complete successfully. To achieve this goal, sub-contractors should consider seeking quantity surveyors to utilise their skills in cost management, tender management, and project management.

Undertaking detailed estimates and processing payment schedules can also play a significant role in reducing the insolvency rate and enhance the prosperity of the construction industry.

FIGURE 1: CONTRACTUAL CHAINS ON A CONSTRUCTION PROJECT¹

BUILDING DEVELOPER HEAD CONSTRUCTION CONTRACT HEAD CONSTRUCTION CONTRACTOR 1ST TIER OF SUBCONTRACTORS: MAJOR TRADE CONTRACTORS S/C1

S/C2

S/C3

S/C4

S/C5

2ND TIER OF SUBCONTRACTORS: MEDIUM/SMALL TRADE CONTRACTORS S/S/C1

S/S/C2

S/S/C3

S/S/C4

S/S/C5

S/S/C6

S/S/C7

S/S/C8

S/S/C9 S/S/C10

3RD TIER OF SUBCONTRACTORS: SMALL TRADE CONTRACTORS S/S/C1 S/S/C3 S/S/C2

S/S/C4 S/S/C5

S/S/C6 S/S/C7

S/S/C8 S/S/C10 S/S/C9

S/S/C11 S/S/C12

S/S/C13 S/S/C15 S/S/C16 S/S/C18 S/S/C14 S/S/C17

¹Coggins, J., Teng, B. and Rameezdeen, R. 2016. Construction insolvency in Australia: reining in the beast, Construction Economics and Building, 16(3), 38-56.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 53

BCI

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BCI

BUILDING COST INDEX

JUNE 2020

THE BUILDING COST INDEX IS PUBLISHED IN THE PRINT VERSION OF THE BUILDING ECONOMIST. IT CONTAINS DATA THAT CAN BE USED AS A PREDICTOR FOR THE ESTIMATED TIMES FOR DESIGN AND CONSTRUCTION AND INCLUDES A SUMMARY OF THE PAST, PRESENT AND ESTIMATED FUTURE CONSTRUCTION COSTS.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2020: 55

Level 3, 70 Pitt Street, Sydney, New South Wales, Australia 2000 +61 2 8234 4000 www.aiqs.com.au