Built Environment Economist - Australia and New Zealand - June - August 2021

JUNE - AUGUST 2021

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

16 THE CONSTRUCTION COST OF RESEARCH

22 THE CHANGING MARKET AND SUSTAINABLE CONSTRUCTION

27 TIME TO THROW AWAY THE DISPOSABLE BUILDING MINDSET

42 FUNCTIONAL ANALYSIS AS A CATALYST FOR PROJECT SUCCESS

CONTENTS 2 CEO Letter

27 Time to throw away the disposable building mindset

4 Blockchain paves the way for the next generation of

30 What is Concurrent Delay?

34 Negotiating the BIM Learning Curve

construction procurement 9 Why Quantity Surveyors are more valuable than ever

38 Machine Learning for Quantity Surveyors

12 Q & A

42 Functional Analysis as a catalyst for project success

16 The Construction Cost of Research

45 Enhanced policing of NSW Residential Apartment

22 The Changing Market and Sustainable Construction 26 Could our oldest construction material also be our most

Builders 50 Building Cost Index

advanced

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.

Subscribe Visit www.aiqs.com.au and click on the Shop button. You can purchase a copy of this edition or subscribe for 12 months.

(available in print edition only)

Contribute AIQS encourages readers to submit articles relating to quantity surveying, the built environment and associated industries including; construction economics, cost estimating, cost planning, contract administration, project engineering. Contact AIQS.

Advertise Contact AIQS to discuss available opportunities.

Contact at AIQS Anthony Lieberman Communications and Marketing Manager T: +61 2 8234 4009 E: marketing@aiqs.com.au

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 2021: 01

CEO LETTER

ADVANCING BUILT ENVIRONMENT COST PROFESSIONALS CONSTRUCTION RISK Continuing from the March 2021 edition of the Built Environment Economist (BEE), in this letter I outline the issues that are adversely impacting the cost of tendering on Government projects for construction companies as well as potential solutions.

• project costing

Point five of the ‘New South Wales (NSW) Government 10-Point Commitment to the Construction Sector’ is to ‘reduce the cost of bidding’.

While proactive steps have been taken

by Infrastructure NSW (INSW) on behalf of the NSW Government (noting that these issues are common across all jurisdictions and AIQS is engaging with the NSW Government in the first instance), there are additional topics which we are addressing with INSW to further reduce tendering costs and deliver improved project outcomes including:

• tender evaluation guide

• documentation • addendum • returnable schedules • bills of quantities • most appropriate consultant • unrealistic timeframes • risk allocation • standard form contracts.

This column focuses on the first four items noted above, with the other matters to be included in the September and December 2021 editions of the BEE. There has, for some time, been a disconnect between how contractor firms cost potential projects (documentation required to accurately develop costs) and

02: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

the level of information (project brief or scope of work) provided by Government agencies. In addition, Government project budgets do not typically account for risk. Consequently, differences in tender pricing are usually based on changes/understanding of the project scope by tendering contractor firms, rather than the actual cost of the works.

To assist with this, AIQS is developing an information paper for Government on how projects are costed by industry based on the project brief or scope of work provided. In addition, it is hoped that INSW will assist by outlining how they develop budgets for various projects.

An inadequate project brief/scope of work (design and documentation) invariably results in increased tender time and costs, risks to the successful tenderer, and costs exceeding those in

CEO LETTER

guidelines for projects over $1bn which has as one of its eight aims to; minimise the number of clarifications and addenda, and eventual technical/commercial departures to RFP documents.

The question is whether this approach should be extended to cover projects of a lesser value. We will be seeking feedback from AIQS members in due course.

The NSW Auditor-General’s report ‘Delivering School Infrastructure (April 2021)’ noted that, if the project is not appropriately scoped in the planning phase because of efforts to fit the project within a predetermined amount, then there is greater risk that items will be added later, increasing costs. This could lead to draw downs on contingency funds, which are intended for unanticipated extra costs rather than those that could have or should have been identified at the planning stage. the initial budget. Here, a base level scope of work should be provided by Government agencies prior to going to tender, to provide consistency and the ability for contractors to provide accurate costing and risk assessment.

Contract documentation should be based on a minimum of 80% design documentation for all disciplines or LOD 300 (Level of Development of the BIM Model). Project budgets should detail all assumptions, framework, qualifications, and exclusions.

In addition, poor design and documentation results in contractors seeking clarification through requests for information resulting in the client issuing an increasing number of addendum to each tenderer, often including commercially sensitive information. It is worth noting that INSW has established interactive tendering

Engagement of a Certified Quantity Surveyor throughout the project design and delivery phases for a full cost management services role to establish the construction budget, cost manage the design development, assist with the tender process, contract sum agreement and post contract cost administration of the contract, opposed to ad-hoc limited engagements at specific points in time, would go a long way to rectifying inadequate project documentation.

Another issue impacting contractors is in relation to returnable schedules, which are time consuming to complete and vary in format across Government agencies. Returnable schedules can take many hours to update, with each Government agency having a different type of document, requiring different information. While some agencies have commenced streamlining schedules,

this is likely to take some time. A consistency of approach will also benefit Government by enabling data mining to compare project tenders and allow the Government to establish baseline cost data. To address this, AIQS will be engaging with Government agencies to develop a more uniform approach to returnable schedules.

From a whole of procurement perspective, a solution being promoted by the Australian Constructors Association is the establishment of an Australian Construction Playbook (a best practice guide for procuring and delivering projects). Based on the UK model, an Australian Construction Playbook would set out how both Governments and the private sector would work together in the procurement and delivery of infrastructure projects.

AIQS is supporting this proposition and will be joining a coalition of other construction related associations to engage with Government in the establishment of an Australian Construction Playbook. In the absence of any viable alternative this proposal is to be applauded and should be adapted to suit Australian conditions.

GRANT WARNER CEO Australian Institute of Quantity Surveyors

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 03

BLOCKCHAIN

BLOCKCHAIN PAVES THE WAY FOR NEXT GENERATION OF CONSTRUCTION PROCUREMENT

BY PROFESSOR SRINATH PERERA AAIQS

04: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

BLOCKCHAIN

In many respects, Australia is leading in blockchain adoption. This is evidenced by the fact that the Australian Stock Exchange (ASX) has adopted blockchain technology for its operations. However, for many, blockchain is a black box where there is much discussion about it, but most do not understand its relevance nor what this technology offers. Here, I try to make it simple and contextualise blockchain technology to construction indicating its relevance to the modernday Quantity Surveyor.

Blockchain is the technology that underlies popularly known cryptocurrencies such as Bitcoin.

Essentially, it is a distributed ledger technology using a concept of distributed databases where data is stored in multiple locations and validated through a complex series of consensus algorithms and secured through cryptographic authentication procedures. Thus, provides an opportunity to significantly enhance transactional trust between parties.

Many predicted the demise of the Quantity Surveyors nearly 50 years ago. On the contrary, the role of the Quantity Surveyor has somewhat enhanced world over.

THE STATE OF THE SECTOR The global economy is currently in a state of rapid transition which is heavily influenced by facets of the 4th industrial revolution happening at present albeit dampened by the COVID-19 pandemic. It means there are massive changes induced by advancements in technology where we see greater levels of integration of the physical world to the digital world known as cyber-physical integration. Blockchain technology is part of this revolution that provides a clear narrative to the commercial and business sector of the construction industry in this context.

Looking at the current state of the construction industry many points out that it is one of the least digitalised sectors in the economy globally.

McKinsey (2015)¹ identified it as the second least digitalised sector, but it has been the case for last 30 years.

1980/90s

1990/2000s

Nevertheless, the industry is realising this and there are significant efforts in pushing for greater digitalisation of the sector globally (Forbes 2018², CBINSIGHTS 2020³).

THE CHRONOLOGY OF DIGITAL PROCUREMENT The advancements in digital media helped commercial sectors to move towards more digitally oriented procurement in the late 80s and 90s (Figure 1). My first digital tender using diskettes was in the late 90’s. As with many other sectors, the advent of the internet pushed procurement to the internet. Many electronic platforms and internet e-tendering and e-procurement solutions came up for the construction industry in the new millennium. Towards the end of last decade these technologies became more streamlined with cloudbased applications ran by Software as a Service (SaaS) providers.

2000/2010s

2010/2020s

Digital media based e-proc

Internet based e-proc

Cloud -based e-proc

Blockchain based e-proc

• Diskettes • CDs • Thumb drives

• E-invoicing • E-auctioning

• SaaS • Extranets

• Private • Public • Consortium

Figure 1: The chronology of digital procurement

References ¹ https://www.mckinsey.com/business-functions/operations/our-insights/imagining-constructions-digital-future ² https://www.forbes.com/sites/smartsheet/2018/11/29/how-technology-is-transforming-the-construction-industry/?sh=794b06323e84 ³ https://www.cbinsights.com/research/construction-tech-funding-trends-2020/

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 05

BLOCKCHAIN

The next stage of advancement in procurement will be inevitably in the adoption of blockchain technology. Its application potential is enormous in the construction sector. This will be explored briefly in the next few sections.

WHAT IS BLOCKCHAIN? Blockchain is a technology that aims to remove the middleman in transactions with digital trust. In most cases, the middleman is there to induce trust into these transactions. For example, when you borrow money for your business, you have to do it through a bank who acts as the trusted intermediary between the

borrower and lender. The lender provides the cash required to the bank who in turn provides to this to the borrower keeping a fee for the service. Direct transaction is not possible because the lender may not trust the borrower to pay back while the borrower does not trust the lender for fair charge and provision of funds.

Blockchain ensure these transactions between the lender and the borrower happen in a trustworthy and secure manner indemnifying both parties from unfair practices through digitally executable series of smart contracts.

Smart contracts are autonomously executable condition-based algorithms that incorporate business logic.

Data in the blockchain is stored in multiple locations (nodes), which removes the possibility of a single point of control which is referred to as the peer-to-peer network (Figure 2). Data is stored in blocks starting from the Genesis block where a block may contain several related transactions. Hashing algorithms connect blocks in the network. The data stored is digitally signed using publickey cryptography (used to encrypt and decrypt data) which enables protection against unauthorised access. New data that is added to the network is verified and coordinated through a democratic process of consensus between multiple gatekeepers (nodes).

Figure 2: The blockchain concept (Perera et. al 2020)

06: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

BLOCKCHAIN

It is achieved through consensus algorithms such as ‘Proof of Work’ or ‘Proof of Stake’ among others. This is some essential jargon that is required to understand the complicated procedures employed to protect and secure the blockchain. In turn, it helps us to understand the concept of digital trust brought forward by foolproof secure technology.

WHY USE BLOCKCHAIN IN CONSTRUCTION? It is important to ascertain what benefits blockchain will bring to the construction industry in its applications. This requires looking at the key features of this technology: • Decentralisation: Blockchain stores data in multiple locations and as such decentralises its data storage.

It is a distributed ledger where all transactions of the ledger are stored different locations and scan span to different countries (not essential). This helps in achieving greater authenticity of records enhancing trust.

• Immutability: Data in the blockchain cannot be changed. It is always set in stone. Transactions can be superseded by new ones, but it is always possible to trace and track entire history. This generates significant benefits to the construction sector where all transactions are tracked and leaves less room for disputes and subsequent claims.

• Transparency: All transactions are recorded in all nodes and can be reviewed by participants. Thus,

in a construction application, all stakeholders will be able to view relevant transactions allowing greater transparency.

• Security: Hashing algorithms and public-key cryptography enables state of the art digital security for the data stored in the network.

• Auditability: All transactions in the network can be tracked and reviewed by authorised personnel allowing auditability. Transactions are validated and timestamped enabling tracking and chronological view.

• Trust: This is by far the most important net benefit. The secure systems provided in the blockchain network enables digital trust.

• Scalability: Blockchain systems can be implemented as a private, consortium or a public network application. This enables to alter the primary features of blockchain to achieve corporate objectives as required.

APPLICATIONS IN QUANTITY SURVEYING AND CONSTRUCTION The role of the Quantity Surveyor will be positively impacted by the use of blockchain in procurement of construction work both at project level and product level. Most construction sector-related blockchain applications are currently at experimentation level.

We, at the Centre for Smart Modern Construction (c4SMC) conduct research in developing many world leading applications of blockchain technology in construction. These applications

focus on providing solutions for payment issues, certification and assurance related issues, product tracking, ensuring compliance, among others. These projects currently undertaken by the c4SMC are briefed below.

Commercial management: The Quantity Surveyors’ role in commercial management involves dealing with multiple parties, obtaining quotations, dealing with subcontract bids, among others. These activities involve numerous transactions, communications, and payments. These activities lend well to blockchain development which provides a secure and trustworthy platform for such numerous types of transactions.

Goods and services can be tracked to ensure compliance. It aids in activities such as e-procurement and e-tendering where transactions made on internet are recorded in the blockchain.

Payment certification: Quantity Surveyors are involved in valuing work done and issuing certifications indicating payments made. The processes involve dealing with contractors, project managers, subcontractors, and suppliers.

It may also involve dealing with other building designers. A blockchain network can securely capture all such communications and transactions providing a chronological account of all activities. It will also help in maintaining copies of documents while being transparent avoiding disputes.

Supply chain management: Construction supply chains are multifaceted and complicated. Often there is no good level of trust in the

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 07

BLOCKCHAIN

supply chain. Consequently, there are significant delays in payments often exceeding six months for work done or goods supplied for construction activities.

These cascading payment delays in a construction supply chain can be avoided by the use of blockchain and smart contracts. All transactions are tracked and recorded in the blockchain and with the aid of sensors and other tracking technology delivery is ensured. Smart contracts will automate the process of compliance checking and payment.

" The role of the Quantity Surveyor will be positively impacted by the use of blockchain in procurement of construction work both at project level and product level."

Dual currency estimating: Most developed and sustainability conscious economies often consider carbon emissions from building both at construction and use. These are often accounted as carbon estimates and are presented along with cost plans for buildings as carbon and cost (dual currency) estimates. c4SMC has developed a blockchain based methodology for carbon estimating in buildings that uses principles of value chains in construction supply chain transactions.

Claims management: Construction complains often arise due to miscommunication, misinterpretations

08: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

and misunderstandings caused by inadequate design details or changes to designs, among others. Blockchain systems provide a methodology to securely track all transactions that then aid in avoiding such and making the relevant party responsible for their actions. There is less scope for errors in such evidence-based systems.

These are some applications of the future of digital procurement. Many predicted the demise of the Quantity Surveyors nearly 50 years ago. On the contrary, the role of the Quantity Surveyor has somewhat enhanced world over. Unfortunately, the way I can see in comparison to UK, Asia and the Middle East, the role of the Quantity Surveyor has not been significantly enhanced, unlike in Australia.

However, the Australian construction industry is increasingly seeing possible benefits and I expect it to change in the near future. The future quantity surveyor will be supported by many digital tools such as BIM integrated estimating and quantification (5D BIM) and blockchain integrated tracking of transactions where smart contracts will aid the Quantity Surveyor in their decision-making processes as well as estimating, cost control, and contract management tasks.

Professor Srinath Perera PhD MSc IT BSc (Hons) QS FRSN FAIB MRICS AAIQS ICECA MICCPM MAIPM is the Chair Professor in Built Environment and Construction Management at Western Sydney University and the Founding Director of the Centre for Smart Modern Construction (c4SMC).

PROFESSION

WHY QUANTITY SURVEYORS ARE MORE VALUABLE THAN EVER

BY JASON SHEPHEARD FAIQS

Moving beyond the challenges and changes through 2020, the construction industry and key policy makers face many multi-faceted decisions that will be required to maintain growth, stability, and sustainability.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 09

PROFESSION

Never has it been more important for capital works projects and the decision makers involved to incorporate accurate and realistic budgets, provide funding that is adequate and appropriate in its response, and one that includes a program of works that is achievable when considering resource and infrastructure demands.

With growing budget constraints, evolving challenges at all levels of government and businesses, small and large, it has never been a more critical time for clarity and assurance through Quantity Surveying.

THE QUANTITY SURVEYOR (QS) The QS can play a vital role in enabling the construction industry to meet the needs of policy makers. Public sector capital works projects, especially ‘fast tracked’ stimulus programs, have the responsibility to ensure the focus and efficacy of the inputs, making sure they achieve the greatest possible outcomes for the greatest number and widest demographic in the community.

This is a time when value for money is paramount and the need for a clear and defined focus of funding is on the areas which are most in need of support and investment. We need to consider the triple bottom line, encompassing the social, ecological, and financial aspects of decisions when determining where and how funding is allocated, what developments are progressed and when to commence.

The QS is therefore essential in ensuring policy makers achieve value for money.

THE ROLE OF THE QS QSs help the construction industry to meet the needs of policy makers, based on key functions including: • setting realistic budgets, to ensure funding is appropriate to program goals • pricing risk at the early stages in a project, which is essential for Early Contractor Involvement (ECI) delivery and other fast-tracking approaches • providing the policy makers with a ‘shopping list’, so they can make an informed decision of cost versus value delivered.

The QS is therefore essential in ensuring policy makers achieve value for money.

However, if the QS is to facilitate this role, they need to be part of the governance process for the project.

Communication is a critical component of any project. Ongoing and collaborative communication between the client, end users, project design team, project delivery team, including head contractor, at all phases of the program is imperative.

Strangely enough, this is where many projects struggle from the perspective of time and cost. Often as a result of limited input from QS and/or receipt of key cost advice too late in the process.

For the QS to provide the required level of service with a level of diligence that meets the needs of the project and key decision makers, certain requirements need to be considered and met: • early engagement in the process/ program/project

• allocation of adequate timeframes and programming for the execution of key cost planning and cost management tasks including consideration of these outputs.

ENGAGING THE QS IS JUST GOOD BUSINESS The QS IS THE ONLY ONE WHO CAN PRICE FUNCTION, rather than scope in the construction industry, which is essential for value engineering. This is why the QS is essential to keep a project on track. Without clear goals and sound methodology in the establishment of budgets, or the adequate allocation of risk, and if cost planning limited phases of the design process, the key decision makers and their selected design team often embark on a journey with limited oversight of time and cost.

With communication on any project a constant challenge, and the risk of potential ‘disconnects’ increased under the ‘post-COVID’ operating environment, it is now even more critical that clear and transparent communication on cost is embedded into the project. One of the best ways of ensuring transparency in relation to time and cost is the direct appointment of the QS. The QS is most appropriately a governance function, so must report direct to the Principal.

The QS profession has a lot to offer the key decision makers in the construction industry and the wider economy.

Looking to the future, the QS will play an integral role in ensuring successful project delivery.

• the provision of accurate, up to date data and documentation • consistent, clear, and regular communication • establishment of agreed key ‘cost planning’ hold points

10: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

Jason Shepheard FAIQS is the ACT Director of Donald Cant Watts Corke (DCWC).

ACCUMULATE KNOWLEDGE ACCESS 100 ONLINE TOPICS TO HELP YOU DEVELOP YOUR QUANTITY SURVEYING SKILLS www.aiqsacademy.com/aiqs

Q&A

WHO OR WHAT IN THE CONSTRUCTION INDUSTRY INSPIRES YOU AND WHY? CLARE ALLENDER MAIQS “For me, the most inspiring part of the construction industry is seeing the development of different architectural styles over time. It makes me excited for the future of architecture to envisage what possibilities are head of us, particularly in the areas of urban regeneration, heritage, and biophilic design.

Urban regeneration projects, namely combining heritage facades with

functional modern features, first peaked my interest in the construction industry.

Over the last decade and having had the opportunity to travel to different cities around the world, my love and appreciation of architecture has grown.

From the old town of Cartagena in Colombia to the lush green cityscapes of Singapore, the art in architecture is endless.

Understanding the practical challenges that need to be overcome to produce a functional space, which also has a high aesthetic payoff, makes you appreciate the work more so. As a Quantity Surveyor the prospect of working with complex designs can sometimes be intimidating, however the excitement to experience a finished product can turn them into a welcomed challenge.”

does affect the experiences of everybody who is working with them. I love it.

passion involved, and on a basic human level it also just makes the day more enjoyable for everybody.

ANNABELLE WELLS MNZIQS “Passion is my inspiration. I find it inspiring when people are passionate about the projects they do, and the things happening around them, and get genuinely excited about being involved. There are a lot of people in the construction industry who are enthusiastic about their work and it really

I interact with many different people in my work, from all walks of life, and dealing with someone who is passionate about a certain topic, project, or even a product is an inspiration to me. I get more invested in something when there is

12: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

I love the construction industry and the people in it. Sharing the industry with people excited by what they do makes it rewarding for the whole team.”

Q&A

BRENDAN GRAY MNZIQS “My dad is and was my inspiration. He was the person who inspired me the most within the construction industry.

My dad was a carpenter for most of his working life. He built a thriving business from his attention to detail and unwillingness to accept anything less than the absolute best of himself and those within the industry.

From an early age, my brother and I were labouring alongside him during the school holidays and witnessing firsthand his amazing skills. The idea of a career like dad’s, where you get to create something physical and something that truly benefits so many people in so many ways, developed from being on hand, and onsite with dad.

He encouraged me to take the practical experience that I saw and learnt firsthand from him and apply it to working within the industry, using those skills of being strategic, planning ahead, practical, objective, and patient with the willingness to work hard. I have done this over the years and honed those skills, and I now apply them to dealing with teams and people on a larger scale.

I enjoy the challenge of the everchanging construction industry, and that every day can be different, but there is nothing more satisfying than when you complete a job that exceeds your client’s expectations, and you are proud of what you handed over to them.”

JACOB JOBY VARGHESE FAIQS “Construction will always remain a happening industry as humans thrive only in-and-around built environments. It is a necessity that redefines a sector that underpinned economies for generations.

Today, there is a great opportunity to design the golden thread and collective roadmap with digital twins, a machinelearning technology-driven change in the industry.

I am particularly inspired by the way this industry resurrected itself in a short span of time in response to the recent trying times. However, it needs some time to align with the objectives of the UN Sustainable Development Goals around ESG policies and frameworks which helps to build stronger societies, communities, and businesses. It also seeks to illustrate the need to invest in our world’s greatest natural resource – people – and build sustainable spaces.

With manufacturing at its core, the construction industry is committed to digital transformation to improve economic growth and evolve as a key revenue-generator, job creator, and an essential spoke in the wheel of global prosperity.

The fourth industrial revolution has shaken the world’s economic kaleidoscope, so the future of the construction industry starts with a vision to repurpose digitisation and embrace it. This redefined purpose engenders a prosperous built environment where Al meets IQ to transform this industry to be future-ready.”

NICK MOULDING, LLM, BSC (HONS), ACIARB, MAIQS “The bespoke, multi-disciplinary and complex nature of construction projects often, and unfortunately, results in disputes which adds unnecessary costs to projects and the industry as a whole, not to mention the strain it puts on the professionals involved.

In my experience, disputes can often be resolved or avoided by simply, clearly, and succinctly communicating the complaint to the other contracting party. Unnecessary expenditure on dispute resolution can sometimes be circumvented, thereby leaving contractors and clients to do what they do best - build and deliver remarkable projects.

As a claim consultant, I am often introduced to a project at an advanced stage with the project facing significant delay, overspend, and emotions are running high. At the outset, the introduction meeting with the project team is often embryonic. It is a matter of listening to how obstacles were presented during the project duration, so I can ascertain which project documents are to be interrogated in order to establish the facts and identification to contract entitlement. The end goal is to produce a well substantiated, articulated, and project team endorsed submission to be used as a vehicle for discussions to commence and develop between the contracting parties.

This process is never to be underestimated. It requires close involvement and collaboration as one team and ultimately, at its successful conclusion, one that always inspires me to keep doing what I do.”

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 13

Q&A

ELIZABETH TAGGART MNZIQS “Sustainability is an area that has been growing over the last decade or more and it has interested myself and a growing number of people, both within the industry, clients and end users alike.

Sustainable construction considers the environment along with economic development and social equity, bringing a more holistic approach to building and the built environment in which we all interact. I am excited to be part of caring for the now, as well as the future, ensuring that future generations are not adversely influenced or impacted by the decisions of the current generation.

The New Zealand Green Star rating system has successfully achieved a way in which to measure sustainability while increasing both people’s understanding and expectations of sustainability. This has led to sustainable innovations that are now considered mainstream, either driven by building code, client, or end user expectations.

Over time Green Star has seen a decrease in cost and time involved to achieve a rating while seeing an increase in the value and benefits. This, along with an increase in understanding and expectations, will see more clients and end users expecting sustainable innovations within their built environments. This inspires me and can only bode well for current and future generations.”

BEVAN MURDOCH MNZIQS

ANTHONY FAWCETT MNZIQS

There are two things that drive and inspire me in construction.

“Inspiration within the construction industry is not lacking.

Firstly, the pace at which things change.

Materials, methods, products, designs, roles of those involved, and methods of communication have all changed in the time that I have been in the industry.

They need to change to keep up with the constantly evolving trends, lifestyle, and available resources. When I started one of the old heads said, the day you stop learning in construction is the day after you retire. So far it has proven to be correct!

Particularly inspiring is the rate at which technology continues to have drastic impacts to the way we do things. Ongoing technological improvements offer futuristic augmented reality opportunities to coal-face construction staff, while the advance of BIM and onsite 4D scanning options already seem to blur the lines between reality and science fiction.

The stories continued about the tasks they were required to complete when they started. One day, I hope to be the old head regaling stories of old dated practices that today seem cutting edge.

The second and more important aspect is the people involved. Construction requires people with vastly different skill sets, abilities, and priorities to come together. They need to find common ground, problem solve, build trust, and be accountable to each other.

It really is inspiring to think of all the communication that is required to turn a project from an idea into a finished product.”

14: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

If we had said not too long ago, that we can literally watch a building grow from 2D paper plans in real time, they may not have believed us.

I recall something my father told me when I was young - I’ve seen more technological change in the last 10 years than my father saw in his whole life.

It is beginning to look like we can say something similar. The rise of drones, laser scanning, artificial intelligence, imaging software and more, begs the question ‘what will the future look like?’.

One thing is for sure, if things carry on like this, I doubt any of us can foresee how far we will go.

Those of us involved in the industry now will be able to say ‘I was there’.”

Q&A

LAI YENG LOH MAIQS, CQS “Ever since I joined my company, I am very fortunate to be involved in a variety of projects allowing me to gain valuable experience and interaction opportunities with a multitude of professionals. My mentor, Mr Michael Ng MAIQS, has been the constant guide through it all.

Michael has been teaching me, answering my numerous questions, and reinforcing the technical skills a quantity surveyor should possess. The topics which I mainly seek his guidance nowadays are about cost estimating and contract administration. This is due to the unusual circumstances in which the issues occur in my projects.

In addition to technical knowledge, Michael has been advising and discussing with me the appropriate approach to resolving work issues when they appear. I find his constant encouragement and reminders to look at issues from the point of view of the project’s other stakeholders particularly inspiring. This has, on multiple occasions, enabled my learning and understanding of the rationale behind their actions and decisions.

Michael has always been inspiring me to be a better version of myself with the sharing of his opinions and experience.

For this, I am very thankful.”

CHRIS PERRINS MNZIQS, REG. QS

BONGANI NDLOVU MNZIQS, REG. QS

“I think what inspires and motivates me has changed throughout my working life.

“What inspires me to achieve great things comes in many forms.

In 1991, when I started out as a trainee QS, it was the directors and partners of a firm who could hold the attention of a room when talking. People whose counsel was sought by clients and whose advice was respected.

As a chartered and registered Quantity Surveyor, I have been fortunate to have had highly intelligent and compassionate career mentors and have worked with some of the most influential organisations and clients in the industry. There is a long list of people who have changed and continue to change the trajectory of my career, while some have been ever present others have influenced me in fleeting moments.

Now, some 30 years later, and as a director myself, what inspires me is the dedication of those attempting to enter the industry for the first time. New graduates and those individuals who may be slightly older and are looking to retrain as Quantity Surveyors.

It is crucial, now more than ever, that experience in our industry is offered to these trainees in order that they get the opportunity to learn, not only about the practical application of the skills and methods learnt in the classroom, but also about the importance of interpersonal relationships within an office, with other consultants and with clients. Seeing these people grasping an opportunity with both hands, asking lots of intelligent questions, and increasing in confidence over, what is usually a relatively short space of time, is inspiring to me.

I hope that in turn, by giving them the work experience opportunity, my colleagues and I inspire them to continue their journey into the industry with added enthusiasm.”

The construction industry offers endless possibilities to push boundaries, no day is the same and each day is a catalyst for creativity and growth. Whether it is balancing client aspirations with their available funds, mentoring and empowering others, bringing a smile to a client, connecting with people from diverse cultures and identities, travelling to new destinations, solving big and meaningful problems, or that reward and sense of achievement of having built something with a legacy that will transcend generations.

I am highly inspired by these ever-present opportunities and the responsibility of delivering sustainable projects for the comfort and wellbeing of society.”

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 15

CONSTRUCTION COST

THE CONSTRUCTION COST OF RESEARCH

BY MARK CATHIE MAIQS

16: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

CONSTRUCTION COST

2020 and COVID-19 have affected all industries globally. Positivity is returning as governments and organisations begin to develop means of societal and economic recovery through innovation.

In September 2020, the Group of Eight universities released a blueprint aimed at preserving the research capacity and capabilities of Australia’s world-leading universities. The blueprint highlighted the importance of ‘excellence’ in research and the importance of continued strategic support - transparent and full-funding of research initiatives to ensure maximum return on investment. More importantly, it confirms that government expenditure in innovation, health and research will play a crucial role in the economic and COVID-19 recovery.

In this article, Slattery considers the cost considerations when constructing a research laboratory and the steps that can be put in place to mitigate cost risk.

With many universities and research agencies enhancing their focus on research capabilities, it is important to understand these cost drivers prior to undertaking a new laboratory project.

REFRESH ON LABORATORY PHYSICAL CONTAINMENT When discussing laboratories, the term ‘PC’ is often discussed. PC or Physical Containment refers to a facility’s ability to prevent potentially dangerous microorganisms from entering the world outside the laboratory they are contained within. In Australia, there are 4 levels of Physical Containment. This ranges from

PC1, being for the lowest risk activity, to PC4 for extremely dangerous and life threatening activities. Therefore, as PC levels increase, cost also increases.

In accordance with federal government guidelines, features of each PC level includes: PC1 • Activities that do not pose a threat or disease to laboratory workers and users • Areas are not required to be isolated from the building they are contained within • Work is generally undertaken on open benches • Appropriate PC level for primary and secondary student, and undergraduate tertiary activities.

PC2 • Activities that pose a moderate hazard to laboratory workers and users and a limited community risk • Requires greater control including access control, airlocks, etc • Requires greater levels of safety measures including safety showers, fume cupboards, etc • Work is generally undertaken on open benches.

PC3 • Activities that pose a high hazard to laboratory workers and users and a limited community risk • Greater design requirements including air locks, no recirculation of air, equipment sterilisation, specialist

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 17

CONSTRUCTION COST

without understanding the unique requirements for a particular space.

Mechanical services is one of the largest variables and is one of the main reasons why we see such large variances in overall $/m2 perspective. For example, within the PC2 laboratories, mechanical services alone range between $925/ m2 to $4,010/m2. We provide more commentary later in this Kaizen on the importance of understanding the mechanical requirements early in the design phase.

University of Melbourne, Bio21 Level 4 Refurbishment, Image courtesy of Arete

waste treatment, biological safety cabinets, etc.

PC4 • Activities that are extremely dangerous and life threatening • Requires the highest level of protection and containment • Complete isolation of spaces including being bound by a sealed internal shell, sealing of all penetrations, etc.

BENCHMARK DATA Slattery has analysed its extensive database of laboratory refurbishment cost data to understand whether any trends emerge between the various physical containment levels. The following graphs identify the Total Construction Cost (TCC) as an overall $/m2 rate as well as the mechanical services $/m2 rate.

TCC excludes consultant fees, loose furniture, specialist equipment and other non-construction related costs.

COST INSIGHTS The benchmark data indicates that despite a general upwards trend in cost based on the PC level, there are many inconsistencies. For example, the lowest project in the PC2 data range is less than any of the PC1 projects. The data shows that PC1 laboratories can range from $4,626 to $5,822/m2, PC2 from $3,472/m2 to $8,884/m2 and PC3 from $12,667/m2 to $19,593/m2. It is also likely that there are many examples around Australia where costs lie outside of these ranges.

Whilst these ranges offer some insight as to the likely cost premium of a PC2 lab over a PC1 (for example), the ranges are significant indicating that the application of benchmark data at business case or feasibility stage can be problematic

18: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

Other elements which range wildly across the projects we have benchmarked include electrical services and joinery.

OTHER KEY COST CONSIDERATIONS Considerations that have significant impact upon project costs include: Mechanical Services The engineering and costing of mechanical services within laboratories can be complex. Generating cost estimates for laboratories at the feasibility stage can be challenging, and there is no magic formula or square rate to apply.

Understanding the activities conducted within a laboratory is paramount.

The designated use of the laboratory should be reviewed in detail during the early design process to capture costs associated with the sophisticated HVAC environmental control needed to maintain comfort and occupational health.

Mechanical services in a laboratory are designed to meet stringent design

CONSTRUCTION COST

constraints and complex criteria, this is reflected in the high construction costs.

The internal environment requires close control and conditioning. Typically, the installation comprises specialist mechanical services items of equipment with items selected to meet very specific demands and precise control of the temperature, humidity, room pressure, movement of air and air changes. Very often the mechanical systems run 24/7 to ensure that the laboratory environment is kept stable. Given these nuances, mechanical services can have significant impact on costs.

$5,822

$6,000 $5,521 $5,000

$4,796

$4,666

$4,626

$4,000 $3,000 $2,000

$1,340

$1,250

$1,250

$1,000

$1,004

$750

$ Project 1 (PC1)

Project 2 (PC1)

Project 3 (PC1)

Project 4 (PC1)

Project 5 (PC1)

Purpose Built vs Refurbishment The efficiencies of building a new purpose-built facility is far greater than the adaptable reuse and refurbishment of existing buildings. However, as many laboratories are bespoke and do not occupy a large area, the refurbishment of an existing building is more feasible.

When refurbishing an existing building for laboratories, it is important to consider: • Hazardous materials • Floor to floor heights due to additional complex service zones

TCC $/ m2

Figure 1: PC1 Laboratories

$8,419 $8,000

• Riser locations

$4,000

• Floor strengthening and anti-vibration

$3,000

Our cost data indicates that the construction cost of a laboratory becomes greater as you increase the

$7,701

$7,464

$7,000

$5,000

Containment

$8,884

$9,000

• Services infrastructure upgrade requirements

• Acoustics and vibrations resulting from future activities

Mechanical $/m2

$6,000

$4,227

$4,010 $3,631

$3,673

$3,472

$2,000 $1,000

$1,157

$1,245

Project 6 (PC2)

Project 7 (PC2)

$3,977

$1,471 $925

$ Project 8 (PC2)

Project 9 (PC2)

TCC $/ m2

Project 10 (PC2)

Project 11 (PC2)

Project 12 PC2)

Mechanical $/m2

Figure 2: PC2 Laboratories

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 19

CONSTRUCTION COST

$18,000

$19,593

$20,000 $18,000

$16,000

$16,000

$14,000

$14,000

$12,000

$16,130

$6,263 $12,667 $12,000

$10,000

$10,000

$8,000

$8,000

$6,000 $5,763

$6,000 $4,000

$4,000

$5,086

$4,882

$4,000 $2,345

$1,245

$2,000

$2,000

$1,119

$

$

PC1

Project 14 (PC3)

Project 13 (PC3)

TCC $/ m2

PC2

TCC $/ m2

Mechanical $/m2

Mechanical $/m2

Figure 3: PC3 Laboratories

physical containment. It is therefore important to understand the PC levels required for each project, and the consequential requirements of each categorisation.

Area / Efficiency In conjunction with cost increases due to containment requirements, the cost of a laboratory becomes greater with increases in area and containment.

Client Requirements Understanding the requirements of the client or researcher is paramount to cost implications. When developing research and innovation hubs/districts, there is an imperative to create collaborative communities to solve problems that individuals on their own cannot solve.

This requires a reimagining of the labs, including their supporting functions, and their operations. By creating these

collaborative communities, we are asking the researchers to work differently; asking them to change. This proves to be an initial challenge, therefore it is necessary to understand what this means to them. When we create these new labs and innovation ecosystems, we need to bring the researchers along on the journey and simultaneously support their “change journey”. The touring of other facilities and allowing their input into the return brief can also assist.

Specialist Equipment Some research requires very expensive equipment that may not be able to provide a variety of tasks. It is important that these requirements are known early in the project to ensure an appropriate Specialist Equipment budget is considered and developed.

It is also crucial to understand the design requirements of such specialist

20: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

PC3

Figure 4: Average $/m2

equipment including infrastructure requirements, services requirements, various special requirements, etc.

RECOMMENDATIONS A collaborative approach is key to ensuring success when constructing research laboratories. As laboratories are being reimagined, its users must be part of the journey from concept to implementation. Key ingredients of a successful laboratory project include: • Gain input from stakeholders and researchers - it is necessary to understand all bespoke requirements and the nature of research being or intended to be undertaken.

• Present options to the relevant academics for feedback

CONSTRUCTION COST

• Ensure early due diligence, especially when undertaking an adaptive reuse of an existing building.

• Early consideration of specialist equipment and their specific requirements.

• Engage a consultant team with strong research and laboratory experience.

• Provide clear and cohesive communication of the design and construction process to researchers, as many are unfamiliar with the process

University of Melbourne, Bio21 Level 4 Refurbishment, Image courtesy of Arete

• Select a contractor tender list with relevant experience through an early EOI process • Engage professionals including Architects, Quantity Surveyors and MEP Consultants early in the design process to enable accuracy in the planning, design, and costing

Mark Cathie MAIQS is a Director at Slattery Australia.

La Trobe Institute of Molecular Science (LIMS)

Monash University, Burnet Tower BC2 Laboratory

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 21

SUSTAINABILITY

THE CHANGING MARKET AND SUSTAINABLE CONSTRUCTION: FUTURE OF QUANTITY SURVEYING A UNITED ARAB EMIRATES PERSPECTIVE

BY A.M. MANJU SRI NANDANA FAIQS, CQS

The current construction market in the United Arab Emirates (UAE) is experiencing a revolutionary change by adapting new technologies towards a greener environment.

22: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

SUSTAINABILITY

Human existence in the modern world, to achieve rapid economic growth, have over-utilised lands, seas, rivers, forests, etc. Not only are these renewable natural resources but they are also creating a huge impact on non-renewable resources (fossil fuels, minerals, etc.). The entire ecosystem suffers due to pollution (air/water/soil), and the emission of carbon dioxide significantly exceeds the capacity of natural carbon to regenerate, leading to the depletion of the ozone layer.

Estidama, meaning ‘Sustainability’ in Arabic, was launched in 2008 by the International Renewable Energy Agency (IRENA) in Abu Dhabi, as a part of Abu Dhabi Vision 2030. The planning council of Abu Dhabi developed the Estidama Pearl Rating System (PRS) for the purpose of green building ratings introducing the 5-Pearls system. Since 2010, the Abu Dhabi Government has mandated the requirement of a minimum of 2-Pearls for Government buildings and 1-Pearl for all other new buildings.

In the Middle Eastern construction industry, especially in the building sector, the current trend is to focus on sustainability. This has resulted in Dubai being ranked among the top 10 cities globally with the highest number of green certified buildings.

As a part of Dubai’s Smart City Strategy, in 2016 the Dubai Municipality mandated the implementation of a green building standard for all buildings in Dubai.

Al Sa'fat, as a green building rating system, was approved by His Highness Mohammed Bin Rashed Al Maktoum, the Ruler of Dubai in 2016, and replaced the Dubai Green Building Regulations and Specifications in October 2020. To obtain Silver Sa’fa for all new buildings in the Emirate, this system comprises a set of mandatory requirements. If building owners intend to obtain Gold or Platinum Sa’fa, they may apply a set of additional requirements.

…traditional roles of Quantity Surveyors will not be sufficient enough to meet the environmental performances, social responsibility, significant advancement, architectural quality, and economic efficiency.

The aim of the Al Sa’fat system is to improve the safety of building users and to create promising sustainable environments for present and future generations. A collaborative approach of integration between new technologies and green systems is also one of the major encouragements of this new system. The Dubai Integrated Energy Strategy aims to achieve a 30% reduction in energy and water consumption by 2030 and, in 2050, it is planned to achieve clean energy fuel mix by 75%.

LEADERSHIP IN ENERGY AND ENVIRONMENTAL DESIGN (LEED) IN DUBAI In Dubai, there are more than 1500 certified and registered LEED projects.

Dubai has achieved Platinum LEED city level rating, the first in the region to achieve this milestone. ICD Brookfield Place at the Dubai International Financial Centre (DIFC) comprises 1.1 million square feet (53-storey) and was awarded LEED-Platinum. This is a first in the region to achieve such status for a large and tall building and it is ranked in the list of 20 largest buildings globally recognised as LEED-Platinum certified.

QUANTITY SURVEYING AND SUSTAINABLE BUILT ENVIRONMENT Sustainable construction is rapidly growing in the region with an innovative approach collaborating with new construction technologies and materials.

As Quantity Surveyors play different roles in various sectors of construction and real estate industry, the foremost responsibility is to make people aware about the importance of sustainable buildings. This concept must be included in marketing strategies for new clients and customers.

The Quantity Surveyor’s role is evolving, and traditional roles of Quantity Surveyors will not be sufficient to meet the environmental performances, social responsibility, significant advancement, architectural quality, and economic efficiency. As a profession, Quantity Surveyors are actively engaging to establish a base to ensure that owners and developers are getting sustainable construction advice in terms of cost and

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 23

SUSTAINABILITY

time. To do so, the Quantity Surveyor’s role has expanded to the following areas and form part of current services that can be offered to owners and clients: 1. sustainable life-cycle management and promoting the benefits 2. sustainable strategies and cost effectiveness 3. green capital costs - analysing and advising 4. green leasing and green financing 5. value engineering and value management of sustainable solutions 6. sustainable building property performance appraisals.

In addition, Quantity Surveyors can focus on eco-friendly construction advice by considering the following: 1. carbon footprint 2. green building rating systems/ assessments 3. green costing 4. BIM.

CARBON FOOTPRINT Carbon footprint is the unit that measures current levels of carbon emissions.

Measuring current carbon levels of a building can accurately establish the initial carbon management strategy. Creating benchmarks of these carbon footprints, building owners can compare carbon performance with the other properties in the region. Identifying energy efficient areas by developing carbon management strategy, building owners would have the opportunity to maximise returns and energy efficiencies in lone run.

GREEN COSTING With the requirement of green building ratings in the UAE, competencies of Quantity Surveyors enriched with the knowledge of advanced technologies and green building materials are being developed in the region. To manage extra over costs, which arise at different levels of green building certification, Quantity Surveyors have to develop cost models to fulfill client’s requirements.

BUILDING INFORMATION MODEL (BIM) Most government funded projects in the region are now adopting BIM for better construction and maintenance processes. Where visual presentation is required, the best current solution is to develop a BIM model. A major advancement of BIM is Quantitative Information Model (QIM) which enables Quantity Surveyors to generate Bill of Quantities (BOQs) automatically.

Moreover, this is an advantage to Quantity Surveyors who can concentrate in other more important cost estimating and commercial activities, since BOQs are generated automatically. Depending on the data within the BIM model, QIM can harvest information to generate BOQs. BIM is a useful tool to demonstrate green assessment points in an object orientated CAD, lifecycle assessment related to carbon (green costing/carbon footprint), generating project related specifications, intelligent advice on construction/usage/maintenance, and real time costing.

24: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

QUANTITY SURVEYING AND CHALLENGES IN SUSTAINABLE BUILT ENVIRONMENT The role of a Quantity Surveyor is always challenging due to various reasons in this unique industry. Implementing sustainable built environment principles requires a doubling of efforts since the region is still evolving its way to adapting sustainable properties in their developments.

Challenges of implementing sustainable built environment can be identified as follows: 1. lack of awareness in sustainable construction and importance 2. lack of awareness in social responsibility and goodwill towards society 3. cost of acquiring knowledge related to the sustainable built environment such as seminars, courses, and conferences 4. lack of opportunities to get hand on experience in sustainable built environment.

SUMMARY Quantity Surveyors within the region are seeking knowledge related to sustainable built environments such as new technologies and green building materials. Trends in attending seminars and conferences aid young Quantity Surveyors to develop awareness of society at all levels. Also, companies building new cost data bases for sustainable building try to create best value for money.

Most importantly, a collaborative approach of working with other professionals such as IT developers within the construction industry is creating more reliable cost advice to owners and developers.

Accurate costing information is priceless. It’s free too.

Free downloads at woodsolutions.com.au The increasing use of wood and wood products in larger and more diverse projects is demanding a more informed professional team.

Cost-related WoodSolutions Technical Design Guides contain practical examples and in-depth information, written by experts in each field.

Download your free copies from woodsolutions.com.au/publications and add to your priceless professional knowledge.

BE SEEN ON THE AIQS FIND A QUANTITY SURVEYING FIRM DIRECTORY*

www.aiqs.com.au Email marketing@aiqs.com.au for more information * Fees and Terms and Conditions apply.

TIMBER

St Andrews Beach House, Architect: Austin Maynard, Photographer: Derek Swalwell

Clipper Quay, Architect: Quin Wyatt, Photographer: Robert Hamer

COULD OUR OLDEST CONSTRUCTION MATERIAL ALSO BE OUR MOST ADVANCED? For what is one of human-kind’s oldest construction materials, timber is mighty high-tech. Over the years we have seen the humble tree grown, harvested, and processed into a wide variety of products and materials, and now a quickly growing market appetite for tall timber buildings is driving an extensive assortment of innovations.

Lightweight framing constructions systems are quickly becoming easier and more efficient to build – whether stick framing on site with the aid of a wide range of new connectors and brackets, or prefabricating wall and floor panels offsite for a speedy on-site assembly. In the same breath, engineered wood products such as cross laminated timber, glulam, and laminated veneer lumber to name a few are being produced and fabricated utilising state of the art machinery.

Prefabricated elements are typically processed using large format CNC

cutting machines programmed to cut, drill, and chase as required to achieve a digital design with better than millimetre accuracy. These gargantuan automated machines pre-cut penetrations, pre-drill holes, and fabricate complex connection interfaces long before the element gets to site, drastically reducing on-site labour while improving both on-site safety, and providing higher quality building envelope for the end-user.

Meanwhile, lightweight framing systems have progressed in leaps and bounds over recent years. Carpenters framing a house now have a choice of dozens of highly engineered and rigorously tested screws, connectors, hangers, brackets, rods, and straps. Where two screws were once required one screw will now suffice, and where sheets of plywood bracing were once called for now a single prefabricated wall brace is effective. These innovations may be incremental in nature, but their

26: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

combined effect can be seen in faster, safer, and higher quality timber frame builds around the country.

While there is plenty of innovation in Australia’s construction industry, timber construction systems are well and truly leading the charge. For our only renewable building material to have reached current levels of technological sophistication is exciting, but with a wide range of new wood-based products, connectors, and construction systems on the horizon the future is looking high-tech!

Learn more about the world’s leading resource for design and building with wood by visiting www.woodsolutions. com.au. Woodsolutions has paid for and written this advertorial.

CARBON EFFICIENCY

TIME TO THROW AWAY THE DISPOSABLE BUILDING MINDSET

BY NIALL MCSWEENEY

Our buildings have become as disposable as TVs or smartphones. But as we begin to count the true cost of embodied carbon, the way we design, construct and value our buildings will come under scrutiny.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 27

CARBON EFFICIENCY

According to the World Green Building Council, buildings are responsible for 39% of global carbon emissions, 28% from operations and the remaining 11% from materials and construction.

Would a price on upfront carbon impact the value of my asset?

As guardians of the purse strings, Quantity Surveyors know the cost of every screw and nail that goes into a building. So how can we apply this scrutiny to embodied carbon? There’s no real reason why value engineering decisions shouldn’t also take embodied carbon into account. Structural tweaks could reduce both costs and embodied carbon simultaneously, leaving Quantity Surveyors uniquely positioned to determine carbon efficiency.

Until recently, our industry’s focus was fixed firmly on operational carbon. But as the world’s population approaches 10 billion by the middle of the century, and as the global building stock doubles in size, embodied or ‘upfront’ carbon will be responsible for half our carbon footprint.

Some estimates suggest embodied carbon can account for up to 75% of a building’s total carbon footprint over its lifetime.

As the construction sector starts a new sustainability conversation, investors are beginning to ask: Would a price on upfront carbon impact the value of my asset?

THE SIGNPOSTS POINT TO GREATER SCRUTINY Environmental, social and governance (ESG) factors are increasingly influencing

operational and financial performance.

Investors are aligning their portfolios with the Paris Agreement, and are prioritising ESG and climate change in their investment strategies.

The United Nations’ Net Zero Asset Owner Alliance, for example, now represents roughly $7.2 trillion in assets under management. Members of the alliance have pledged to transition their investment portfolios to net zero emissions by 2050.

Meanwhile, the Climate Action 100+ group, representing more than 500 global investors with $61 trillion in assets, is calling out the world’s big companies for not moving fast enough on climate change.

At the building scale, Bill Gates is championing the use of embodied carbon calculators, and has promised Microsoft’s massive overhaul of its 30-hectare campus in Redmond, Washington, will cut embodied carbon in building materials by at least 30 per cent on business-as-usual.

Regulation is slowly on the move in the US and Europe, with decarbonisation targets and Building Code amendments set to limit embodied carbon in construction.

Australia will have no choice but to follow suit if we are to meet our obligations under the Paris Agreement.

MEASURING THE IMPACT OF MATERIALS We have been talking about how to quantify the true carbon footprint of a building for decades. In Australia, the industry was scratching its heads as far back as the Sydney Olympic Games in 2000. But we have made little headway because the challenge is so complex.

Buildings are constructed with three primary materials: concrete, steel, and timber. Let us take a closer look.

28: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

CEMENT The cement sector is the thirdlargest industrial consumer in the world, responsible for around 7% of global carbon emissions. Cement is the key ingredient of concrete, and consumption is projected to increase by 12-23% by 2050.

Cement (and steel, explored below) is produced at very high temperatures, making it energy intensive. The chemical reaction that occurs during manufacture also releases carbon dioxide, making it a material that is hard to abate.

The alternative to concrete is polymer, but the cost of polymers ranges from 10 to 100 times that of cement. Recent trials of self-healing polymer cement in the US could extend the life of concrete-based structures by 30 to 50 years, addressing the cost gap while reducing the volume of cement sent to landfill.

STEEL Responsible for 7-9% of emissions, global steel production is forecast to grow by 30% over the next 30 years. Recycled secondary steel is expected to grow faster than primary production. The steel industry is making headway to reduce carbon intensity through hydrogen technology and carbon capture. But currently, the best way to reduce the carbon footprint of steel is to use less of it.

TIMBER Engineered timber options, like crosslaminated timber (CLT), laminated veneer lumber (LVL), and glue-laminated timber (glulam) can be effective carbon reduction solutions, as a tonne of wood locks in around a tonne of carbon over a building’s lifetime.

CARBON EFFICIENCY

Timber construction can offer other benefits: a compressed construction schedule, reduced labour costs and enhanced safety from manufacturing offsite among them. Lighter-weight construction also minimises the amount of concrete needed in foundations.

In 2016, Australia’s National Construction Code introduced new ‘deemed-to-satisfy’ provisions for timber buildings up to 25 metres, or eight storeys high, provided they feature a raft of requirements, like fire sprinklers and fire-resistant cladding.

But that does not mean timber is always the go-to solution. Tall towers may require 100,000 cubes of CLT – and trees do not grow fast enough to meet that sort of demand.

…a new value engineering opportunity is emerging – one that goes beyond the traditional cost, time, and quality.

NO LONGER DESIGNED FOR DISPOSAL We also need to discard the idea of disposable buildings. Despite being made from materials that last millennia, many of our modern buildings have a lifespan of half a century.

There are lighthouse examples of leadership. AMP Capital’s decision to retain around two-thirds of the original core of Quay Quarter Tower saved 6.1 million kilograms of carbon – equivalent to around 35,000 flights between Sydney

to Melbourne air flights.

But for many asset owners, there remains a tipping point at which any building upgrade becomes unfeasible – especially when valuations do not currently take into account demolition or recycling costs. Expect this to change as international standards elevate. The draft London Plan, for example, requires a whole life carbon assessment, which means new development proposals will need to consider both the embodied carbon impacts and operational energy performance.

With the right approach, tackling upfront carbon can become central to the cost management process.

There are big hurdles ahead, including standard methods of measurement of embodied carbon, incentives for the leaders and regulation for the laggards.

But as building tenants increasingly assess their choices against their commitments to the Paris Agreement, we expect the embodied carbon content of a building will impact its value.

As we move towards a net-zero carbon world, and as we throw away the disposable building mindset, a new value engineering opportunity is emerging – one that goes beyond the traditional cost, time, and quality.

1. Optimise existing structures: develop design strategies that repurpose existing assets through renovation and reuse 2. Choose materials with care: consider embodied carbon emissions from the outset, evaluating each material against its true lifecycle cost and lowcarbon alternatives 3. Plan for the future: consider the asset’s end of life, designing for disassembly and deconstruction to support future reuse and recycling 4. Embrace efficient construction: apply construction technologies and techniques that minimise waste on site 5. Collaborate to innovate: no one company or sector can solve this complex challenge alone, so work with industry groups, and establish partnerships with suppliers, clients, and customers 6. Support regulation: back progressive but predictable policies that incentivise leadership and encourage market movement towards net zero emissions.

With the right approach, tackling upfront carbon can become central to the cost management process.

Niall Mcsweeney is a Senior Director of Altus Group Asia-Pacific

The secrets to solving the embodied carbon conundrum include:

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 29

CONSTRUCTION DELAY

WHAT IS CONCURRENT DELAY? AN OVERVIEW

BY ROBERT GEMMELL

30: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

CONSTRUCTION DELAY

WHAT IS CONCURRENT DELAY?

CITY INN

There is no single definition of concurrent delay. Various definitions have been put forward and, in this article, I will review a selection of the definitions and descriptions of concurrent delay put forward by Marrin, Keating, the court in City Inn, the court in Adyard, the SCL Protocol 2nd edition, and some views from the United States. There are others but it is beyond the scope of this article to review them all.

In City Inn v Shepherd Construction, the court emphasised that there are problems in using expressions such as ‘concurrent delay’ or ‘concurrent events’ and said:⁴

MARRIN Concurrent delay has been defined by Marrin as project delay caused by two or more effective causes of delay which are of approximately equal causative potency. In this case, there would only be concurrent delay if the effect of the delay by the employer and contractor event is felt at the same time.

Only in exceptional circumstances is concurrency of the kind Marrin defines likely to occur and this narrow definition is therefore possibly too limited.²

KEATING Keating says that it is probably sufficient to say:³ • each delay event, in the absence of any competing event, has caused delay • each delay event is on the critical path • the delays caused by the employer and the contractor overlap.

“One of the problems in using such expressions as “concurrent delay” or “concurrent events” is that they may refer to a number of different situations.

Confining attention for a moment to concurrent delaying events, which may be taken to mean relevant events and other events, or causes of delay, which are not relevant events, there would seem to be several possibilities. Such events may be described as being concurrent if they occur in time in a way in which they have common features.

One might describe events as concurrent on a strict approach only if they were contemporaneous or coextensive, in the sense that they shared a starting point and an end point in time. Alternatively, events might be said to be concurrent only in the sense that for some part of their duration they overlapped in time. Yet again, events might be said to be concurrent if they possessed a common starting point or a common end point. It might also be possible to describe events as concurrent in the broad sense that they possessed a causative influence upon some subsequent event, such as the completion of works, even though they did not overlap in time. In other words, they might also be said to be contributory to or co-operative in bringing about some subsequent event.”

References ¹ John Marrin QC, “Concurrent Delay” (2002) 18 Construction Law Journal 6 at 436, approved in Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm); J Marrin, “Concurrent Delay Revisited” (February 2013, SCL Paper No 179), M Cocklin, “International Approaches to the Legal Analysis of Concurrent Delay: Is There a Solution for English Law?” (April 2013, SCL Paper No 182); V Moran, “Causation in Construction Law — The Demise of the Dominant Cause Test?” (November 2014, SCL Paper No 190). ² Stephen Furst and Vivian Ramsey, Keating on Construction Contracts (10th ed, Sweet & Maxwell, 2016), [8-025]. ³ Stephen Furst and Vivian Ramsey, Keating on Construction Contracts (10th ed, Sweet & Maxwell, 2016), [8-025]. ⁴ City Inn v Shepherd Construction Ltd (2010) CSIH 68 CA101/00 at [49]

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 31

CONSTRUCTION DELAY

To summarise, the court in City Inn said: • On a strict approach, • events are concurrent only if they were contemporaneous or coextensive, in the sense that they shared a starting point and end point in time.

• Alternatively, • Events may be concurrent: • if part of their duration overlapped in time • if they possessed a common starting point or a common end point • if they possessed a causative influence upon some subsequent event, such as the completion of works, even though they did not overlap in time.

Although the court in City Inn refers to the “events” being concurrent, it is submitted that the court is referring to the delay to progress rather than the event that caused the delay.

ADYARD Sebsequent to City Inn, in Adyard,⁵ the court considered that: “…there is only concurrency if both events in fact cause delay to the progress of the works and the delaying effect of the two events is felt at the same time.”

The court in Adyard also said:⁶ “… act relied must actually prevent the contractor from carrying out the works within the contract period or, in other words, must cause some actual delay.”

SCL PROTOCOL 2ND EDITION The SCL Protocol 2nd edition contains various definitions and examples of how the analysis of delay events sould be considered, including matters on ‘delay’ and ‘concurrent delay’. It should be noted however, that each project including the applicable contract, will have its own unique variables and delay events, which may not be relevant to the models and procedures detailed for guidance in the SCL Protocol 2nd edition.

The SCL Protocol 2nd edition defines concurrent delay as follows:⁷ “10. Concurrent delay – effect on entitlement to EOT True concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event, and the effects of which are felt at the same time.

For concurrent delay to exist, each of the Employer Risk Event and the Contractor Risk Event must be an effective cause of Delay to Completion (i.e. the delays must both affect the critical path).

10.1 Concurrency is a contentious issue, both because there are differing views on the correct approach to dealing with concurrent delay when analysing entitlement to EOT and because there are differences about the meaning of concurrent delay itself.”

The SCL Protocol 2nd edition definition of ‘true concurrent’ delay is similar to Marrin’s ‘narrow’ definition; that is, the occurance of two or more delay events at the same time, one an employer risk event and the other a contractor risk event, the effects of which are felt at the same time. However, the SCL Protocol adds to Marrin’s definition that “True

References ⁵ Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm) para 279 ⁶ Adyard Abu Dhabi v SD Marine Services [2011] EWHC 848 (Comm) para 282 ⁷ Scl Protocol 2nd edition, guidance part B: Guidance on core principles page 30 to 32

32: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

concurrent delay is the occurrence of two or more delay events at the same time, one an Employer Risk Event, the other a Contractor Risk Event” in addition to the effects of the delaying events being felt at the same time.

The SCL Protocol 2nd edition also clarifies that for concurrent delay to exist, the employer and contractor delay events must both affect the critical path.

The SCL Protocol 2nd edition also acknowledges: “10.4 In contrast, a more common usage of the term ‘concurrent delay’ concerns the situation where two or more delay events arise at different times, but the effects of them are felt at the same time.”

AN SCL PROTOCOL 2ND EDITION SCENARIO The SCL Protocol 2nd edition gives the following scenario as to whether an employer delay is an effective cause of delay to completion if that employer delay occurs after the commencement of the contractor delay to completion but continues in paralled with the contractor delay: “10.7 From a legal perspective, there are two competing views as to whether an Employer Delay is an effective cause of Delay to Completion where it occurs after the commencement of the Contractor Delay to Completion but continues in parallel with the Contractor Delay. This can be illustrated by the following example: a Contractor Risk Event will result in five weeks Contractor Delay to Completion, delaying the contract completion date from 21 January to 25 February. Independently and a few weeks later, a variation is instructed on behalf of the Employer which, in the absence of the preceeding Contractor

CONSTRUCTION DELAY

Delay to Completion, would result in Employer Delay to Completion from 1 February to 14 February.”

In relation to the two competing views in the above scenrio, the SCL Protocol 2nd edition says: “10.8 On one view, the two events are both effective causes of Delay to Completion for the two-week period from 1 to 14 February because they each would have caused Delay to Completion in the absence of the other (with the subsequent delay from 15 February to 25 February caused by the Contractor Risk Event alone). This view may be supported by older English appeal court cases (no doubt predating critical path analysis) which provide that if the failure to complete the works is due in part to the fault of both the Employer and the Contractor, liquidated damages will not be payable. In a situation like the example described in paragraph 10.7 above, it can be argued that both the Employer Risk Event and the Contractor Risk Event are in part the cause of the Delay to Completion.”

“10.9 On the other view, the Empoyer Delay will not result in the works being completed later than would otherwise have been the case because the works were already going to be delayed by a greater period because of the Contractor Delay to Completion. Thus, the only effective cause of the Delay to Completion is the Contractor Risk Event. This is the consistent position taken in recent lower-level English court decisions.”

What view does the SCL Protocol 2nd edition recommend?

“10.10 The Protocol recommends the latter of these two views, i.e. where an

EOT application relating to the situation referred to in paragraph 10.7 above is being assessed, the Employer Risk Event should be seen as not causing Delay to Completion (and therefore there is no concurrency). Concurrent delay only arises where the Employer Risk Event is shown to have caused Delay to Completion or, in other words, caused critical delay (i.e. it is on the longest path) to completion.

The Protocol cautions that this recommendation would have to be reconsidered were an appeal court to take a different approach to this issue.”

The SCL Protocol 2nd edition recommends the view that the employer risk event should not be seen as causing delay and that therefore there is no concurrency. The SCL Protocol 2nd edition is saying, in line with current english precedent on the point, that concurrent delay only arises where the employer risk event is shown to have caused delay to completion.

THE U.S. The Court of Federal Claims in George Sollitt Co v U.S.,⁸ sets out the following definition of concurrent delay: “The exact definition of concurrent delay is not readily apparent from its use in contract law, although it is a term which has both temporal and causation aspects.

Concurrent delays affect the same ‘delay period’. A concurrent delay is also independently sufficient to cause the delay days attributable to that source of delay.”

The industry standard for delay analysis in the U.S., the American National Standards Institute/American Society of

Civil Engineers/Construction Institute 67-17 says “concurrent delay can be described as a situation where two or more critical delays are occurring at the same time during all or a portion of the delay time frame in which the delays are occurring.”

SUMMARY Terms and definitions used when referring to concurrent delay are, as illustrated above, variable, inconsistent and can be somewhat confusing.

However, the following, it is submitted, is consistent in all definitions: • two or more delay events (causes of delay) which delay work/activities that is required to complete the project • at least one delay is the responsibility of the employer and the other the responsibility of the contractor.

Question: for there to be concurrent delay, is it necessary that the delays, as a result of the delay events, commence at approximately the same time or have the same impact on the projected completion date? Put another way, is it possible to have concurrent delay where the delays, as a result of the delay events, commence at different times but at some point, they overlap, and hence each delay treated in isoloation to the other would have different impacts on the completion date.

In Adyard, the court said that “there is only concurrency if both events in fact cause delay to the progress of the works and the delaying effect of the two events is felt at the same time.” If this is correct, then in relation to the above question, isn’t the first delay merely creating, as a matter of fact, float for the second-in-line delay, meaning that, in such a situation there is no concurrent delay?

⁸ George Sollitt Co v U.S., 64 Fed. Cl. 229, 239 (2005).

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 33

TECHNOLOGY

NEGOTIATING THE BIM LEARNING CURVE CONSIDERATIONS FOR YOUR FIRST 5D PROJECT

34: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

TECHNOLOGY

Building Information Modelling (BIM) is fundamental to the long-term growth of Australia’s construction industry. Given the economic implications at stake for our broader economy, we simply must keep working to unlock the significant potential promised by BIM.

Information Requirements (EIR) and BIM Execution (BEP) or Management Plan (BMP) that is developed between the project team and client at the start of a project.

But what exactly is standing in our way?

As of mid-2021, many of the obstacles hindering BIM adoption across the Australian industry have been addressed, slowly but surely.

A CHECKLIST FOR GETTING STARTED

Bodies such as the Australasian BIM Advisory Board and buildingSMART Australasia act as champions for the BIM concept, working to promote useful frameworks and resources that can be adopted by businesses large and small. Progress has been made on open standardisation, while BIM is widely implemented commercially and often mandated on major infrastructure projects at a state level.

The trajectory of BIM in this country has made it more important than ever for quantity surveyors and estimators to build a working knowledge of the process. Being tasked with working on a 5D BIM project for the first time can be a daunting prospect. BIM is a collaborative methodology that requires all involved stakeholders to ‘buy in’ and take an active early role in order to guarantee success, but often the quantity surveyor/estimator is a mere afterthought in these discussions.

We have provided a list of helpful considerations and discussion points for those preparing to work on their first BIM project. The following points must be considered as part of the Employer

The Australia and New Zealand BIM Best Practice Guidelines state that “… the quantity surveyor’s input early in the process is imperative to ensure the model is set-up with proper geometry and contains key information for effective cost planning.” These Guidelines go on to say that establishing a BEP can help project members to understand their roles and responsibilities for model creation, outline additional resources that may be needed, provide a baseline to measure progress and more. The importance of this kind of proactive evaluation cannot be overstated, given that issues encountered on BIM projects in the past have often been caused by avoidable oversight.

We have divided this list of questions and thoughts into Fundamentals, Quantification and Wider Business Impacts. Quantity surveyors/estimators preparing for their first project may wish to pick and choose the discussion points most relevant to their role.

Building Information Modelling (BIM) is fundamental to the long-term growth of Australia’s construction industry.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 35

TECHNOLOGY

FUNDAMENTALS What will the model be used for?

This might sound simple enough on the face of it but is really the key driver that will inform everything else. Is it just a design tool, is it for clash detection/ coordination purposes, cost estimation, facilities management, etc.?

Will all disciplines be involved?

How are the Architectural, Structural and Mechanical & Electrical teams planning to work? Will they all be utilising BIM, or will some be providing 2D designs?

Will you use a different model for each discipline, or will you use a federated model?

How will revisions be handled?

There can be many thousands of revisions to the model during the design phases – how frequently will the quantification and costings be updated?

Advanced software can make it easy to track changes in quantity and cost through the revisioning functionality, but controls still need to be put in place.

What file formats will be utilised?

Leading software such as iTWO costX can open models in DWFx, RVT, CPIXML and IFC formats (among others). There are pros and cons to each option impacting upon computer hardware requirements, data completeness, proprietary vs open standards, etc. The quantity surveyor/estimator should satisfy themselves as to which format is best suited for the planned project, potentially requesting examples of each at an early stage.

How will the models be transmitted?

In accordance with the point above regarding revisions, how will the files be transmitted or stored? This particularly relates to when comparisons need to be carried out on the model to understand any cost changes. As some file-sharing options may incur costs, stakeholders must consider how these expenses will be shared if necessary.

What content will be modelled vs 2D detailed?

Frequently, not all aspects of a design will be modelled, and can just be manually drawn as detailing onto the 2D drawing outputs; for example, skirting boards within a building. The extent of this needs to be agreed upon beforehand and everyone is made aware so that the quantity surveyor/estimator can make appropriate allowances for it.

Will naming conventions be minimal or descriptive?

Rather than an object in the model being called something like “WallCavInsMsnry”, it can be useful for the names to be fully descriptive and more widely understood. These descriptions may also change over time between concept and detailed design phases, so the process for updating model content needs to be understood by all.

What is the contractual standing of the model?

What is the status of the model versus the 2D drawings, and can this be influenced at all?

36: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

QUANTIFICATION What coding is going to be applied to the model?

The model is frequently coded with Uniclass data, whereas the quantity surveyor may be preparing an AIQS elemental cost plan or an ANZSMM Bill of Quantities, and there isn’t a complete (public) mapping between these coding systems. It may be possible for the designers to easily add relevant coding to the model objects, making the quantity surveyor’s takeoff much easier.

What rounding will be applied for Project Units?

If every object is exported to zero decimal places for the quantity information, this can lead to discrepancies on large projects.

Cost consultants must ensure that the designers set the rounding appropriately to suit requirements.

Should work be split into individual parts or assemblies?

Rather than having a single object of a composite slab exported, it can be useful to have the individual components exported and quantified (e.g. blinding, concrete, rebar, screed etc).

What are the deliverables?

How will the resulting cost plan, estimate or Bill of Quantities be shared with the client or other stakeholders?

How will quality assurance be handled?

How will checks be carried out at various stages of the process? For example, the model needs to be checked upon the first

TECHNOLOGY

receipt, and the final deliverable needs to be cross-referenced against the model or drawings (depending on the contract).

WIDER BUSINESS IMPACTS How will success be measured?

Will the time taken for both the initial takeoff and future revisions be tracked and compared to other more manual workflows? What are the ambitions for quantification from the model versus 2D drawings – and is this calculated by item or by value?

How long is the learning curve allowed for?

The first time that teams undertake any new process there will inevitably be a learning curve, and this needs to be planned and allowed for to prevent staff returning to older methods. Will there be a senior sponsor within the organisation to support, promote and monitor progress?

How will this impact future work winnings?

How will this information be fed back to business development teams to be utilised in fee proposals, and how will fee proposals be written in future to specify minimum requirements for models?

How will you enable knowledge sharing?

The lessons learned on the initial 5D flagship projects need to be recorded and shared among the wider team to facilitate improved outcomes in the future.

conjunction with the design process, rather than waiting for weeks and months for the design to be completed and then rushing to carry out checking and quantification.

It may even be an option to request a sampling process, whereby the design teams provide the quantity surveyor/ estimator with samples of the content they are using. This can allow the quantity surveyor/estimator to check the proposed material in line with planned workflows and project-specific breakdowns.

Proactive planning of this nature can support a quick costing and quantification process once the final model is delivered.

5D BIM: A DRIVER OF DIGITAL TRANSFORMATION When looking at the industry through a wider lens, it is clear that many construction businesses are already enacting digital transformation plans to support their competitive future. Large and small enterprises have recognised the pressing need to innovate, given the untapped potential that has characterised our industry in recent years.

BIM is a key driver of digital transformation in construction, as stated by the World Economic Forum in an expansive series of reports published with The Boston Consulting Group, entitled “Shaping the Future of Construction.” It was noted that everything from improved cost estimation to effective sequencing and clash detection can be delivered through intelligent use of BIM.

The considerations covered in this piece merely scratch the surface of what quantity surveyors/estimators must be aware of before working with 5D BIM. While the learning curve may be steep, resources and industry knowledge are constantly improving to the benefit of those ready to get started.

Advanced software platforms such as iTWO costX are available to support complex 5D workflows, with users able to view and takeoff quantities from 3D models before automatically linking to user-defined rate libraries and workbooks.

Such programs are accessible to large and small businesses, with a variety of deployment options available to suit agile business requirements.

In any case, quantity surveyors/estimators who remain unconvinced about the commercial advent of BIM must reevaluate their thinking. BIM is a proven methodology, and it is here to stay. Given the vast importance of our industry, it is integral that professionals from across disciplines keep endeavouring to realise the manifold benefits on offer.

Learn more about iTWO costX by RIB Software by visiting the website www.itwocostx.com.

RIB Software has paid for and written this advertorial.

It is also worth noting that further discussions can be carried out in

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 37

TECHNOLOGY

MACHINE LEARNING FOR QUANTITY SURVEYORS

BY CONG (CODY) BUI MAIQS

Big data, artificial intelligence (AI) and machine learning (ML) have been popular buzz words recently. However, we have not seen much of their applications in quantity surveying (QS) works. This article will demonstrate a practical case study which hopefully will clear some mist around ML and suggest some applications for quantity surveyors.

First of all, let go through a quick introduction to Machine Learning.

According to IBM (IBM, 2021), “Machine learning is a branch of artificial intelligence focused on building

applications that learn from data and improve their accuracy over time without being programmed to do so.” The two main branches of ML (supervised ML and unsupervised ML) together with their typical applications are illustrated in Figure 1. Linear regression is a subclass of ML where data is pre-categorised. It is also the simplest ML algorithm and will be focused on in this article. The article will provide readers with a brief idea of how ML can be utilised by going through a data science competition that related to cost prediction which is a common challenge facing quantity surveyors.

38: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

…imagine the tremendous potentials of having a database of one thousand cost plans organised in a structured way

TECHNOLOGY

ABOUT THE CASE STUDY The case study is a competition called House Prices: Advanced Regression Techniques posted on website kaggle. com (an online community of data scientists and machine learning practitioners). In this competition, the participants are provided with data of more than 1,200 houses in Ames, Iowa, USA. The dataset is comprised of 79 explanatory variables which describe almost every aspect of residential houses in the area. The contestants will then develop ML models aiming to predict the sale prices of other houses based on their characteristics. This competition bears a close resemblance to QS works of project cost estimation, thus makes a great example to demonstrate the potential usage of ML in QS works.

For the sake of simplicity, some technical parts have been purposely left out and the article will demonstrate three general steps in the process of building a linear regression machine learning model, acquiring the data, and exploring the data and building a model.

ACQUIRING THE DATA Acquiring the data is the very first step that we need to do in order to build a ML model. Nothing can be done until a certain amount of good data is collected.

In this competition, the data has already been collected and processed. Most of the time, this may not be the case where data is readily available.

In fact, data professionals spend up to 60% of their time on cleaning and organising data (Forbes, 2016). Thus, it is

CLASSIFICATION

SUPERVISED (Data is pre - categorised or numerical)

(Predict a category)

REGRESSION (Predict a number)

CLASSICAL MACHINE LEARNING

CLUSTERING (Divide by similarity)

UNSUPERVISED (Data is not labeled in any way)

DIMENSION REDUCTION (Find hidden dependencies) ASSOCIATION (Identify sequences)

Figure 1 - Classical Machine Learning (Blog, 2021)

important not to underestimate the time needed to collect and process raw data in the initial stage.

The following are some variables extracted from the data: • LotArea - lot size in square feet • YearBuilt - original construction date • Foundation - type of foundation • Bedroom - number of bedrooms above basement level • Kitchen - number of kitchens • Heating - type of heating • OverallQual - overall material and finish quality • GarageCars - size of garage in car capacity • RoofStyle - type of roof.

As presented, some of the variables are

discrete and some are continuous. For example, RoofStyle, which can be flat, gable, gambrel, hip, mansard, or shed, is discrete. On the other hand, LotArea is continuous and can be any number ranging from 100ft2 to 1,000ft2. This is a good example to start building up our own database. The data is saved in a CSV file with columns and rows describing the characteristics of the data and data points respectively.

Most of the data available in QS firms, for example, cost plans and BOQs, are in the form of PDF, Excel or measurement software extracted files. As a result, great effort may need to be put in to make these data more structured and consistent as presented in the dataset of this case study.

However, once a well-organised database is acquired, insights can be gained almost immediately even without deploying

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 39

TECHNOLOGY

advanced technique such as ML. It is suggested that data collection should be integrated as part of daily workflow, thus eliminating the tiresome data entry works.

EXPLORING THE DATA Once a certain amount of data is obtained, non-programming visualisation tools such as Power BI or Tableau can be used to gain insights, spot trends, and detect outliers or potential errors. It is important to understand the nature of the data which then will help to choose the appropriate algorithms. For example,

Figure 2 shows the relationship between Lot Area and Sale Price. It is easy to notice that most of the records are from building type 1Fam with the Lot area ranging from 5000 ft2 to 30,000 ft2. This indicates that our model will have greater accuracy when predicting sale prices for houses within this range. Statistical analysis can be put into use in this part for a greater understanding.

algorithms. It is important to choose the appropriate algorithms based on the type and amount of data as well as the expected application. In this case study, linear regression is among the many suitable algorithms that can be used to predict the sale prices of houses.

Let’s dive in and explore a bit of theory.

Mathematically, the equation of Linear Regression is as follow:

BUILDING A MACHINE LEARNING MODEL

y = α + βx (1) Where y is the value to be predicted based on the given value of x.

As presented in the introduction, there are many different types of ML

Relationship Between Lot Area and Sale Price 700K

Bldg Type 1Fam 2fmCon Duplex Twnhs TwnhsE

650K 600K 550K 500K

Sale Price

450K 400K 350K 300K 250K 200K 150K 100K 50K 0K 2K

4K

6K

8K

10K

12K

14K

16K

18K

20K

22K

24K

26K

28K

30K

32K

34K

Lot Area

Figure 2 Relationship between Lot Area and Sale Price (author)

Works Cited Ashish. (2019, May 1). Kaggle. Retrieved from https://www.kaggle.com/ashydv/housing-price-prediction-linear-regression Blog, V. (2021, May 1). Machine Learning. Retrieved from https://vas3k.com/blog/machine_learning/?fbclid=IwAR0NjjOJlZt4-KiaBGi11DskcBHAa2d 6xaUchkPZdDch7pxS5sbcrZkUBJA Bremer, M. (2012, January 1). Cornell University. Retrieved from http://mezeylab.cb.bscb.cornell.edu/labmembers/documents/supplement%205%20 -%20multiple%20regression.pdf Forbes. (2016, March 23). Retrieved from https://www.forbes.com/sites/gilpress/2016/03/23/data-preparation-most-time-consuming-leastenjoyable-data-science-task-survey-says/?sh=6a9c2f146f63

40: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

TECHNOLOGY

With the same principle, a multiple linear regression model with k predictor variables x1, x2, ..., xk and a response y, can be written as: y= β0 + β1x1 + β2x2 + β3x3 + ... + βkxk + ε (2) (Bremer, 2012) In our case, the predictor variables x1, x2, x3 are the aforementioned variables including: LotArea (lot size in square feet), YearBuilt, Foundation (type of foundation), Bedroom (number of bedrooms above basement level), Kitchen (number of kitchens), Heating (type of heating), etc.

In principle, if we can best estimate the values of the coefficients β0, β1, β2, β3 and ε then we will have the formula for the prediction of sale price y.

Y

Data Points Dependent Variables

The black line in Figure 3 indicates the best fit straight-line based on the given datapoints. The line, or its equation, can then be used to estimate the values of the dependent variable.

Line of regression

Independent Variables

X

Figure 3 Line of Regression (Prasrahul, 2020)

There is a bit of mathematic theory involved in estimating the coefficients βx.

Fortunately, these days with the help of programming, the above formular can be solved in with just a little coding.

In one estimation (Ashish, 2019), formula (2) has been solved as: Price = 0.35×area + 0.20×bathrooms + 0.19×stories + 0.10×airconditioning + 0.10×parking + 0.11×prefarea

LOOKING FORWARD Although there is much more to be done until some real benefits can be drawn from Machine Learning, it holds a lot of potentials. There might be a great amount of data already existed

in organisations’ database such as cost plans, BOQs, quotes, variation assessments, and progress claims.

This data can be made used of and turn into new valuable assets. Two or three cost plans may not be of much significance but imagine the tremendous potentials of having a database of one thousand cost plans organised in a structured way.

Hopefully, this article has provided readers with some basic knowledge about Machine Learning as well as a new

perspective on the method and how to handle data.

The author is keen to be in touch with readers of the same interest. Please send any comments or suggestions to codybmcm@gmail.com.

Disclaimer: The information contained in this article is accurate to the best of the author’s knowledge. No warranty or guarantee is expressed or implied regarding the accuracy of any information or data.

IBM. (2021, May 1). IBM Cloud Learn Hub. Retrieved from https://www.ibm.com/cloud/learn/machine-learning Kaggle. (2021, May 1). Retrieved from House Prices - Advanced Regression Techniques: https://www.kaggle.com/c/house-prices-advancedregression-techniques/overview Prasrahul. (2020, August 20). Medium. Retrieved from https://medium.com/analytics-vidhya/hype-around-machine-learning-1a80283d7655

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 41

FUNCTIONAL ANALYSIS

FUNCTIONAL ANALYSIS AS A CATALYST FOR PROJECT SUCCESS

BY ADWOA ABBAN MAIQS, CQS

42: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

FUNCTIONAL ANALYSIS

Various industries, either private or public, always find alternative approaches to improve their output and resources in carrying out projects. The construction industry is no exception because it is one such industry that the result cannot be tested before completion, yet much is expected to be achieved. In the last few years, there have been notable changes in the approach in the construction industry.

It is imperative to understand that a project is a process, operating in parallel to the owner’s core business objectives, to deliver an asset within a planned time to effect a change or add value to the core objectives of the client organisation.

Functional analysis is defined as a technique designed to help appraise the value of the project by a meticulous analysis of the functionality of the project In the light of achieving value to the project owner, we look at the functionality of the project. Functionality is the understanding of how the project will eventually be used. So, in that regard, a project is functional if the output contributes totally to the defined core of the client’s business.

Clients develop projects to satisfy a

need, such as building more schools and filling a gap in the market, such as housing or demand for recreational centres or infrastructure. These projects must satisfy the organisation’s value proposition, which is true for all clients across various industries. Value is an integral part of every construction project and the final goal of every project owner.

Value maximisation is an essential part of value management in the industry.

Value management is a structured, multidisciplinary effort directed towards analysing the functions of projects to achieve the best value at the lowest overall lifecycle project cost.

Feasibility studies and development appraisal are carried out amongst other reasons to justify the requirement or the need for the project, in other words, if the project would add value to the organisation or the individual. It is the fundamental part of the project lifecycle.

Also, at this stage, an initial cost plan is carried out to indicate to the owner the cost of the project considering the project’s intended use, and as the project design evolves, the cost plan evolves to the requirements of the project.

It is clear that the function of the project drives value, and hence the introduction of functional analysis becomes not just an important element, but a significant ingredient in achieving value for the project owner. Functional analysis is defined as a technique designed to help appraise the value of the project by a meticulous analysis of the functionality of the project. It is the underlying justification of the project element being designed, and the project success heavily depends on it. It aims to accurately

describe the purpose of a project and its elements, systems, and components comprehensively and succinctly. Also, it seeks to understand the project’s purpose and ask the fundamental question of “what is the purpose of the project?”.

In the context of a Quantity Surveyor, it makes them think outside the “box” for the alternative processes, strategies, materials, and methods that can be used to achieve the project’s purpose. The ultimate end goal of functional analysis is maximising value.

Functional analysis has everything to do with the Quantity Surveyors’ role.

Consider value in the context of the following diagram.

The above triangle has evolved and has other known variations in the industry, and it is an important fact that cost, time, quality together help achieve value of the project.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 43

FUNCTIONAL ANALYSIS

The scope of works is at the forefront of every project’s success, ensuring that all the value elements are directed to ensure the project is fit for purpose. An undefined scope will be disastrous to any project and opens the project up to too many problems.

So, the introduction of functional analysis earlier in any project helps to avert any project pitfalls. Functional analysis goes hand in hand with value management - it complements the process.

The briefing process is the basis of every project, and it must be done right.

Problems such as continuous variations are amongst other things that arise from the lack of a proper briefing process and can cause a significant impact on the risk and value of the project.

Like any other sector, every organisation demands value for money for all projects, and it is especially critical for the public sector because the taxpayer’s money is being invested in projects. The best response to the owner and the public’s expectation is that projects are carried out in the shortest execution period and the optimal use of resources. Owners and consultants must have high knowledge of the overall service objectives early in the development process. As Quantity Surveyors, we must add value to the project regardless of the role. Functional analysis underpins value in the project feasibility stage and for all the stakeholders involved, it brings about continuity, conformity and upholds the objectives of the project.

Let us consider a recreational centre for a community. We need to understand how the community will use this facility and

hence our understanding of the use of the facility would help the design process and intend to help the costing of the project.

What has functional analysis got to do with the Quantity Surveyor, more specifically, in the project feasibility and developmental stage? Functional analysis has everything to do with the Quantity Surveyors’ role - our goal on each project is to add value. Let us put that into perceptive. Functional analysis is an integral part of the Quantity Surveyor’s thought process, and again, it helps the Quantity Surveyor put themselves in the mindset or frame of the owner using our services. At the project briefing and feasibility stage, understanding the role of functional analysis adds value to the process. The concept should be part of the discussion at the project feasibility stage report, where the architect is appointed, and the design elements of the projects are evolving.

On the other hand, the Quantity Surveyor produces various cost plans to match the design development stages. At this high level, the role of the functional analysis is to set the pace for the design and complement the quality of the project information being generated. It also puts the costing of each phase of the design into perceptive and helps to ask questions about the project’s purpose, how it will be constructed, and the requirements. It ensures the project is fit for purpose by enhancing the quality of the cost plan produced and the resource allocation.

Also, as the design progresses and at each phase of the project, every valueadded strategy used, such as value

management, value engineering, whole of life costing, is geared to provide a sustainable cost for each phase of the project in accordance with the requirements of the intended project.

The engagement between the owner and the Quantity Surveyor will drive value for the project in terms of cost completing the project within budget, time as in the completion of the project within the duration agreed and value in terms of quality of the project’s outcome.

SUMMARY Is your current project not going according to plan, and the scope is undefined and at large? It might be that the process of functional analysis was not detailed enough or the fact that it was ignored entirely.

To achieve value in any project, all stakeholders must understand the importance of collaboration with a common goal to understand the project’s purpose and put together strategies to achieve that goal. Functional analysis is the fundamental component of the project briefing process that sets the objectives of the project. Everyone involved in the feasibility studies must understand the goal of the functional analysis to ensure an effective contribution to the process.

The success of the project depends on conducting the process right.

Adwoa Abban MAIQS, CQS is the Principal Consultant/Director of Quantum Phases Consortium Pty Ltd.

References Ashworth, A. (2004). Cost Studies of Buildings. Harlow: Pearson Education Limited.

Brian R. Norton, William C. McElligott. (1995). Value Management in Construction: A Practical Guide. London: Macmillan International Higher Education.

John Kelly, S. M. (2012). Value Management of Construction Projects. Chichester: Wiley Blackwell.

Smith, N. J. (2002). Engineering Project Management. Oxford, United Kingdom: Blackwell Science.

44: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

LEGAL

ENHANCED POLICING OF NSW RESIDENTIAL APARTMENT BUILDERS THE RESIDENTIAL APARTMENT BUILDINGS (COMPLIANCE AND ENFORCEMENT POWERS) ACT 2020

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 45

LEGAL

THE ACT On 1st September 2020, the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (Act) took effect as part of the New South Wales (NSW) government’s suite of reforms to strengthen oversight of and improve public confidence in the construction industry.

Envisioned to improve the quality and compliance of NSW residential building work, the Act prescribes a collection of investigation, rectification, and enforcement powers to pre-emptively address serious defects in residential apartment building work. These powers are exercisable by the Secretary of the Department of Customer Service and its delegates including the Building Commissioner.

From 1st September 2020, the NSW Building Commissioner is able to prevent issuance of an occupation certificate, order developers to rectify defective buildings, and issue stop work orders against residential building projects in prescribed circumstances.

The Act introduces new responsibilities and potential liabilities for all owners or developers.

Who is covered by the Act?

• if the building work is the erection or construction of a building or part of a building—the owner of the land on which the building work is carried out at the time the building work is carried out • the principal contractor for the building work within the meaning of the Environmental Planning and Assessment Act 1979 (NSW) (EPAA) • in relation to building work for a strata scheme—the developer of the strata scheme within the meaning of the Strata Schemes Management Act 2015 (NSW) (SSMA) • any other person prescribed by the regulations.

It should be noted that the above definition is extensive and likely to cover most major participants in the construction industry including project managers and subcontractors.

What building work is covered?

Section 5 defines ‘building work’ broadly as ‘any physical activity involved in the erection of a building’ and includes ‘work involved in, or involved in coordinating or supervising work involved in’, one or more of the following: • the construction of a building or part of a building

The Act applies to developers as the term is defined under the Act.

• the making of alterations or additions to a building or part of a building

Section 4 states that any of the following persons is a ‘developer’ for purposes of the Act:

• the repair, renovation or protective treatment of a building or part of a building.

• a person who contracted or arranged for, or facilitated or otherwise caused, (whether directly or indirectly) the building work to be carried out

However, under Section 6, the Act applies only to residential building work in respect of a ‘residential apartment

46: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

building’ that is or was authorised to commence in accordance with a construction certificate or complying development certificate issued under the EPAA and has not been completed or has been completed within the period of 10 years before the exercise of any function under the Act. Under Section 3, ‘residential apartment building’ means a class 2 building within the meaning of the Building Code of Australia (BCA), and includes any building containing a part that is classified as a class 2 component but does not include any building or part of a building excluded from this definition by the regulations. This definition will likely involve multi-storey and/or multi-unit apartment buildings.

It is important to note that the Act provides for retroactive application to residential building projects that are: • about to be commenced • currently in progress and/or • completed within the last 10 years.

Mandatory Notification Scheme Part 2 of the Act establishes a mandatory notification scheme where the developer of residential building work must provide the Department of Customer Service with an ‘expected completion notice’ specifying the ‘expected date’, i.e., the date that the developer expects to make the application for the occupation certificate for the building or part of the building.

The ‘expected completion notice’ must be given at least six months but not more than 12 months before submitting an application for an occupation certificate

LEGAL

or for registration of a strata plan for a strata scheme (Section 7(1) and Section 7(2), Act).

But if a developer expects to make the application within less than six months of commencement of building work for a new building, that developer must give the notice within 30 days of commencement. (Section 7(3), Act).

A developer is required to give an ‘expected completion amendment notice’ within seven days of becoming aware of any changed circumstances that cause it to expect that an application for an occupation certificate for a residential apartment building or part of a residential apartment building will be made on a date beyond 60 days from the ‘expected date’ notified in its ‘expected completion notice’. (Section 8, Act) Prohibition Orders Under Section 9, the Secretary may issue a prohibition order against issue of an occupation certificate or registration of a strata plan for a strata scheme in relation to a residential apartment building if: • the ‘expected completion notice’ or ‘expected completion amendment notice’ was not given or was given less than six months before the application for the occupation certificate was made; or • the Secretary is satisfied that a ‘serious defect’ in the building exists (including if the building is the subject of a building work rectification order, or of a development control order under the EPAA); or • any building bond required under section 207 of the SSMA in relation to

the building has not been given to the Secretary.

Section 9(7) makes it an offence for a principal certifier (other than a council) to issue an occupation certificate in contravention of a prohibition order.

Serious Defects For purposes of the Act, Section 3 defines a ‘serious defect’ as: • a defect in a building element that is attributable to a failure to comply with the performance requirements of the BCA, the relevant Australian Standards, or the relevant approved plans, or • a defect in a ‘building product’ (i.e., any product, material or other thing that is, or could be, used in a building) or ‘building element’ that: • is attributable to defective design, defective or faulty workmanship or defective materials, and • causes or is likely to cause— • the inability to inhabit or use the building (or part of the building) for its intended purpose, or • the destruction of the building or any part of the building, or • a threat of collapse of the building or any part of the building, or • a defect of a kind that is prescribed by the regulations as a serious defect, or • the use of a building product defined in and prohibited under the Building Products (Safety) Act 2017 (NSW).

‘Building element’ is defined in reference to the definition in the Design and Building Practitioners Act 2020 (NSW),

Section 6 of which states that ‘building element’ means any of the following: • the fire safety systems for a building within the meaning of the BCA • waterproofing • an internal or external load-bearing component of a building that is essential to the stability of the building, or a part of it (including but not limited to in-ground and other foundations and footings, floors, walls, roofs, columns, and beams) • a component of a building that is part of the ‘building enclosure’ (i.e., the part of the building that physically separates the interior environment of the building from the exterior environment, including roof systems, above grade and below grade walls (including windows and doors) • those aspects of the mechanical, plumbing, and electrical services for a building that are required to achieve compliance with the BCA. Strong Enforcement Powers Part 3 of Act provides the Secretary, the Building Officer and other authorised officers with a broad spectrum of investigative, compliance and enforcement powers.

These powers include the power to carry out inspections of building work notified to the Secretary, investigate developers and residential apartment buildings, and essentially supervise compliance with the Act whilst the building is under construction and within 10 years of the date that the occupation certificate was issued.

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 47

LEGAL

INVESTIGATIONS Any authorised officer entering premises in lawful exercise of powers under the Act may do anything deemed necessary to be done for an authorised purpose, including powers to: • examine and inspect any thing (including the power to use reasonable force to break open or otherwise access a thing, including a floor or wall containing the thing) • take and remove samples of a thing • make examinations, inquiries, measurements, or tests that the authorised officer considers necessary (including to destructively test a thing or a sample of a thing, if that is a reasonable test in the circumstances) • take photographs or other recordings as the authorised officer considers necessary • direct a person to produce records for inspection and examine, inspect and/ or copy any records

• seize a thing (including a thing with respect to which the offence has been committed, or that will afford evidence of the commission of the offence, or that was used for the purpose of committing the offence) that the authorised officer has reasonable grounds for believing is connected with an offence under the Act or connected with a serious defect in a building • move a seized thing from the place where it is seized or leave it at the place where it is seized and take reasonable action to restrict access to the thing, or direct the occupier of the premises where a thing is seized to retain it at those premises or at another place under the control of the occupier • open up, cut open or demolish building work, if the authorised officer has reasonable grounds for believing that it is necessary to do so because it is connected with an offence against the Act or the regulations, or with a serious defect in a building.

48: JUNE - AUGUST 2021: BUILT ENVIRONMENT ECONOMIST

An authorised officer may also direct a developer in relation to building work being carried out on the premises to: • carry out building work at a specified time or in a specified manner to enable the authorised officer to exercise a further function under the Act for an authorised purpose, or • carry out specified building work only after giving the authorised officer notice in advance (as specified in the direction). (Section 24(3), Act).

The Secretary’s powers in respect of a thing under Section 24 may be exercised without the consent of the owner of the thing (Section 24(8), Act).

REMEDIAL ACTIONS Under Part 4 of the Act, the Secretary may order a developer to stop the building work if the Secretary is of the opinion that the building work ‘is, or is likely to be, carried out in a manner that could result in significant harm or loss to the public or occupiers or potential

LEGAL

occupiers of the building to which the work relates or significant damage to property’ (Section 29, Act).

The Secretary may also apply to the Land and Environment Court (LEC) for an order to remedy or restrain contraventions of the Act notwithstanding that proceedings have or have not been instituted for an offence under the Act and without the Secretary having to show a likelihood of damage (Section 31, Act).

Under Section 32 of the Act, the Secretary may, with or without having received any complaint for the same, investigate residential apartment buildings, their developers/former developers, the carrying out of building work including those carried out by subcontractors, and other matters that may constitute a breach of the Act or an order issued under the Act.

RECTIFICATION ORDERS The rectification scheme established under Part 5 of the Act allows the Secretary, after having identified a serious defect or potential serious defect in residential apartment building work, to issue a building work rectification order to a developer in relation to the building work (Section 33, Act).

The building rectification work order will require the developer in relation to building work to carry out building work or refrain from carrying out building work, or cause building work to be carried out or refrained from being carried out, as specified in the order to eliminate, minimise, or remediate the serious defect or potential serious defect.

A developer receiving a building work rectification order is allowed to carry out the required work without obtaining a consent or approval under the EPAA (Section 33(7), Act) and has the right to appeal the order to the LEC within 30 days after the order is given (Section 49(2), Act).

If an owners corporation is notified by the Secretary that a building work rectification order has been made relating to a strata building, the owners corporation must notify the owners of the lots in the strata scheme no later than 14 days after receiving the Secretary’s notice (Section 37(2), Act).

• monitoring action under the building work rectification order • ensuring that the building work rectification order is complied with • the investigation that led to the giving of the building work rectification order • the preparation of the building work rectification order • any other matters associated with the building work rectification order.

The Secretary may recover any unpaid amounts specified in a compliance cost notice as a debt in a court of competent jurisdiction.

A building work rectification order issued under the Act must be considered by the Civil and Administrative Tribunal for the purposes of determining a building claim under the Home Building Act 1989 (NSW) and by any other court in proceedings relating to the building work subject of the order but only if brought to the attention of the Tribunal or the court in the proceedings. (Section 43(1), Act)

If a developer served with a compliance cost notice is not the developer responsible for the situation giving rise to the issue of the notice, such developer must still comply with the notice but may recover the costs from the responsible developer as a debt in a court of competent jurisdiction.

COMPLIANCE COSTS

Quantity Surveyors involved in managing or supervising residential building projects should take note of the intensive investigation and enforcement powers conferred on the Secretary under the Act and encourage their client principals to carry out careful reviews of their developments to ensure that the compliance by the builders with the appropriate standards has been done and careful recorded and certified. Final Completion Certificates should only be given after a full audit of the constructed project.

The Secretary is also allowed to give a ‘compliance cost notice’ to recover from the developer the costs and expenses incurred by it in connection with the giving of a building work rectification order (Section 51, Act).

A compliance cost notice is a notice in writing requiring the developer to pay all or any reasonable costs and expenses incurred by the Secretary (including remuneration and other staff expenses) in connection with:

SUMMARY

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

BUILT ENVIRONMENT ECONOMIST: JUNE - AUGUST 2021: 49

BCI

BUILDING COST INDEX

JUNE 2021

THE BUILDING COST INDEX IS PUBLISHED IN THE PRINT VERSION OF THE BUILDING ENVIRONMENT 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

50: MARCH - MAY 2021: BUILT ENVIRONMENT ECONOMIST

ADVANCING BUILT ENVIRONMENT COST PROFESSIONALS

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