22 minute read
How Sydney Water is Leading the Way Using
HOW SYDNEY WATER IS LEADING THE WAY USING NEC4 CONTRACTS
By Mark Simister
AN AUSTRALIAN FIRST FOR NEC4 CONTRACTING
Australia’s largest water utility Sydney Water recently entered a new era in its business partnership story and became the first in Australia to use NEC4 contracting. From January 7, Sydney Water began a first-time partnership with three Regional Delivery Consortia – or RDCs – who are tasked to deliver design, construction and maintenance services across its water, wastewater and recycled water systems. The Regional Delivery Consortia will work across Greater Sydney, each managing one of the city’s regions. Announced on 19 December 2019, the three successful consortia across the North, South and West RDC are:
NORTH RDC BDJK (Confluence Water)
Broadspectrum (Australia)
SOUTH RDC Delivering for Customers (D4C)
Comdain Infrastructure
Downer Utilities Australia
Jacobs Group (Australia)
- John Holland
Lendlease Services
WSP (Australia)
WEST RDC Better Together (B2G)
Stantec (Australia)
Atlas Personnel Services
Abergeldie Contractors
Fulton Hogan Industries
Programmed Facility Management
Sydney Water’s new partnership framework, Partnering for Success (P4S), has adopted the full suite of New Engineering Contract 4 (NEC4) contracts to source all services and materials for the next 10 years. NEC4 was selected because it brings plain english and a collaborative way of working right up front in the relationship with the supply chain.
WHAT MAKES NEC4 CONTRACTING SPECIAL
At its core, NEC4 incentivises efficiency, consistency and innovation in working together, as opposed to more traditional adversarial contracting. Bringing a whole new way of working and doing business to Sydney Water and the Australian infrastructure delivery space. The intent
is to establish an environment where issues are made visible early enough to resolve them collaboratively; reducing, and potentially eliminating the need to take expensive, protracted and litigious dispute resolution processes. The NEC4 suite was also selected as it is just that, a suite of contracts. From professional services, engineering construction, supply and term services contracts. The beauty is that, not only do they use plain english so mere mortals can understand them, but all the contracts have shared terms, conditions and clauses. Each one can be used in tandem with another, and everyone involved can understand how they work: together. Flexibility is also built into the contract suite, such that the standard forms can cover major frameworks, small-scale professional services and be applied to alliances, hard dollar design and construct and facilities management. They also provide a much more balanced allocation of risk.
HOW WE ARE PARTNERING FOR SUCCESS (P4S)
Through P4S, and establishing long term partnerships, Sydney Water is also looking to not just change the way it procures services, but to transform the way it does business. The NEC4 contract is not the only reason why the P4S framework so innovative. The vision of the future is to have a simplified supply chain, business processes, contracts and contract management. Integrated regional teams will focus on outcomes that customers value, promote innovative new ways of working and developing a flexible model that provides long term stability. A unique aspect of these integrated teams which enables a high level of cross business interaction is the scope covered. RDC’s will deliver design, construction, maintenance and facilities maintenance for each region. This encourages closer interaction of the Sydney Water operations and asset planning teams with the RDC’s, enabling improved communications, smoother flows of information and simplified / quicker decision making. The new partnerships are engineered to benefit both Sydney Water and our RDC partners - and ultimately our millions of customers - by incentivising high performance, increasing productivity and offering certainty of supply.
Sydney Water’s customers can expect to benefit greatly, as these arrangements deliver our multi-billion-dollar capital program and some maintenance services. These 10-year partnerships will reap many benefits for the five million Sydney Water customers by delivering value through efficiency, innovation, collaboration and shared knowledge. Our RDC will work hand in glove with our talented in-house workforce, including our existing maintenance and operations team. The longevity of the frameworks also encourages investment in innovation, diversity and a long-term view of resourcing and succession planning. With this secure pipeline and engagement, the RDC’s are building pathways for graduates and apprentices to support the future needs of the water infrastructure sector. At the same time, we are bringing our project management function back inhouse, recognising we need to remain an agile, intelligent client to help realise the financial and other benefits of the new arrangements. Talent pipelines and clear opportunities for career progression, challenge and interesting diverse work add to the dynamic culture the P4S model enables.
STEPPING INTO THE PARTNERING FOR SUCCESS (P4S) JOURNEY
Sydney Water’s Partnering for Success (P4S) program is designed to offer integration, consistency and value for our 5 million+ customers.
Sydney Water has worked collaboratively with its supply chain to define, develop and implement this new model during a robust market sounding and engagement process that kicked off in 2017. In developing the P4S model, Sydney Water also undertook extensive global research into alternative, better / best / good practice in infrastructure intensive industries. Testing ideas and options to challenge standard thinking, looking for opportunities to generate greater customer value, improve lean program delivery and enhance collaborative ways of working.
In early 2018, Sydney Water reached out to, and engaged with, the Institution of Civil Engineers Infrastructure Client Group who sponsored the Project 13 initiative (http://www.p13.org.uk/). We became a member of the Project 13 Early Adopter group later that year. Project 13 is an industry-led response to infrastructure delivery models that fail not just clients and their suppliers, but also the operators and users of infrastructure systems and networks. It is also about creating a new business model – based on an enterprise, not on traditional transactional arrangements – to boost certainty and productivity in delivery, improve whole of life outcomes in operation and support a more sustainable, innovative, highly skilled industry. Sydney Water saw genuine alignment of goals between Project 13 and its own future delivery framework, P4S. Benefits of adopting and engaging were very clear too. The Project 13 community is alive and well, sharing openly what works, doesn’t work, challenges and successes in open forum. With parties from a wide variety of industries, it’s not a onedimensional community. Membership is drawn from water, power, nuclear, roads, rail and airports; all pulling together to continue developing a blueprint for the future of the industry. In line with Project 13, P4S is an enterprise level framework and new procurement model. Designed to simplify the supply chain, helping Sydney Water to integrate with industry partners and deliver consistent customer outcomes. The new model is based on industry best practice for capital works projects, covering design, construction, maintenance (excluding existing insourced civil maintenance) and facilities management. A pool of specialist suppliers will also be selected in shared purchasing, from which Sydney Water and each of the three RDC can procure asset-related goods and services in a quick, consistent and more transparent way. The rollout of P4S in December 2018 meant entering an exciting new phase of Shared Purchasing, and a request for tenders (RFTs) to market.
Based on our priority category plan, which was developed in consultation with key internal stakeholders, the first two RFTs were pipes and fittings and valves and actuators. The months that followed saw RFTs issued for: • pump supply and servicing • plant equipment and hire
• waste management services • electrical goods and services • network support
• industrial cleaning. Shared purchasing simplifies how we and our partners will procure certain defined goods and services that can’t be selfperformed. By pooling our purchasing in this manner, we’ll achieve economies of scale, increase our buying power and develop deeper relationships with preferred suppliers throughout the entire asset lifecycle.
Under our new P4S model, Sydney Water and our partners have used the latest NEC4 Shared Purchasing contracts to procure these and other goods and services that can’t be self-performed. We are now implementing a new contractual arrangement through NEC which facilitates improved collaboration between suppliers and Sydney Water.
WHAT BENEFITS WILL P4S DELIVER
For Sydney Water and its partners, the P4S program wins include: • having the three regional delivery consortiums (RDCs) on long term, 10-year contracts. In selecting the best consortia, we account for safety, environmental compliance, quality, risk, ability and commitment to engage community members and price
• being committed to finding the highest quality services available that can work with us effectively to meet needs of customers in a city with an increasing need to be resilient, nurturing and innovative • ensuring we have an annual integrated work plan (AIWP), comprising business planning inputs from capital and maintenance • suppliers, including RDCs, will become responsible for project management lifecycle from design to plan, build and maintain - this facilitates more collaboration from end-to-end
• P4S will enable Sydney Water to create a pool of additional specialist suppliers to make procurement quicker, easier and better for customers. We value consistent processes within the regional consortia to ensure quality customer outcomes every time. The three regional consortia are accountable for project management lifecycle from design to plan, build and maintain. This means we will have a vetted pool of additional specialist suppliers in shared purchasing to make procurement much quicker and easier – saving money and improving efficiency. While we have more hard work to do ahead of 1 July 2021, announcing these new partnerships is the next step in the Partnering for Success program, which started when Aurecon and Arup signed
IMAGE OF P4S MODEL
on as Sydney Water’s Planning Partner in December 2018. Ultimately, Sydney Water want to foster long-term partnerships with industry best people and suppliers, ensuring security for both Sydney Water and its industry partners to focus on delivering our 30-year infrastructure plan to meet the needs of a growing city and population.
PLAN DESIGN CONSTRUCT MAINTAIN OPERATE DESIGN CONSTRUCT MAINTAIN OPERATE PLAN DESIGN CONSTRUCT MAINTAIN OPERATE
P4S ENTERPRISE -EXECUTIVESTEERING COMMITTEE P4S ENTERPRISE -EXECUTIVESTEERING COMMITTEE
S TRATEGIC PLANNING
TECHNICAL ASSURANCE
SPECIAL PURPOSE VEHICLES (HPHR PROJECTS) PROJECT ENGINEERING P4S PROGRAM & CONTRACT MANAGEMENT
CUSTOMER DELIVERY MANAGERS -NORTH INVESTMENT ASSURANCE
(IN HOUSE) INTEGRATED INTO DELIVERY MODEL ASSET DELIVERY MANAGER-NORTH TECHNICAL ASSURANCE
SPECIAL PURPOSE VEHICLES (HPHR PROJECTS) PROJECT ENGINEERING P4S PROGRAM & CONTRACT MANAGEMENT
CUSTOMER DELIVERY MANAGERS - NORTH INVESTMENT ASSURANCE
(IN HOUSE) INTEGRATED INTO DELIVERY MODEL ASSET DELIVERY MANAGER- NORTH
NNING TNER EARLY DESIGN EARLY DESIGN REGIONALDELIVERYCONSORTIUM REGIONALDELIVERYCONSORTIUM (IN HOUSE) CIVIL MAINTENANCE FUNCTION (IN HOUSE) CIVIL MAINTENANCE FUNCTION
CUSTOMER DELIVERY MANAGERS -SOUTHASSET DELIVERY MANAGER-SOUTH CUSTOMER DELIVERY MANAGERS -SOUTHASSET DELIVERY MANAGER-SOUTH
REGIONALDELIVERYCONSORTIUM REGIONALDELIVERYCONSORTIUM (IN HOUSE) CIVIL MAINTENANCE FUNCTION (IN HOUSE) CIVIL MAINTENANCE FUNCTION
CUSTOMER DELIVERY MANAGERS -WESTASSET DELIVERY MANAGER-WEST CUSTOMER DELIVERY MANAGERS -WESTASSET DELIVERY MANAGER-WEST
PLANNING PARTNER REGIONALDELIVERYCONSORTIUM REGIONALDELIVERYCONSORTIUM (IN HOUSE) CIVIL MAINTENANCE FUNCTION (IN HOUSE) CIVIL MAINTENANCE FUNCTION
SPECIFICATIONS STANDARDS OPERATIONAL TECH SPECIFICATIONS STANDARDS OPERATIONAL TECH
SHARED PURCHASING SHARED PURCHASING
Mark Simister is the Head of Delivery Management at Sydney Water.
FUTURE REALITY
AIQS asked a selected number of its members to respond to the question: What is your vision for built environment cost professionals?
SIOBHAN MADDEN
Graduate Quantity Surveyor, WT Partnership (ACT)
As building cost professionals, it is our responsibility to be constantly looking at new ways to add value to any project we work on. We must be looking at ways to improve labour productivity, through implementing environmental design and materials to lower our carbon footprint, harnessing BIM, IoT and ourselves! We must be willing to adapt and learn constantly, without this mindset our industry will not be at the forefront of an everconnected world.
Construction prices are a lot higher than they were a decade ago, and with it brings more opportunity to lower these costs through the 5th industrial revolution. AI (Artificial intelligence), AR (augmented reality) among other things are not new concepts, with the first AI paper being published by Alan Turing in 1950. It will be our ability as cost professionals to harness these on a commercial level that will bring the ultimate value to our clients.
It will be important that multilateral agreements also begin to take shape within our industry. There is much we can exchange and learn from other countries, their projects, methods and, their perspectives. My vision for building cost professionals is shared; shared with our design team, engineers, builders, consultants and our clients. We must keep an open mind and challenge ourselves to do better - if not, why not?
JESSICA LING MAIQS Quantity Surveyor, Wilde and Woollard (WA)
I do not ever regret choosing quantity surveying (QS) as my career pathway. I find the QS profession, fascinating, exciting, and yes, challenging but each day so much to look forward to. There is so much to learn due to the rise of new and emerging technologies in construction. The QS has not escaped disruptive changes - the methodology to measure has changed greatly to a point where our measurement platforms and our projects can be global. There is greater flexibility in our workplace. Physical location should no longer be an issue as we are able to communicate, collaborate and work together as a team regardless of distance. While benefitting from the technological revolution, there have always been mutterings and criticisms about the need for QS services. It should be understood that quantity surveyors are multi-skilled / all-round professionals who understand how buildings fit together and are able to collaborate with all project teams such as the engineers and other services consultants as well as the architect. In the most desirable situation, quantity surveyors need to know about everything from construction, planning, building codes, management, financial costing, contract administration to construction law. In short, there is always the excitement of taking on a new challenge within QS profession.
TOM CHATTERTON MNZIQS Associate, Rider Levett Bucknall (NZ)
In a world where there is more demand for construction, but skilled resources are rising to the same degree therefore increased efficiencies will be necessary to deliver projects on time and budget. Where there’s a need for efficiency, technology can be the perfect facilitator. I personally see cost professionals adapting their traditional value-added services to the digital arena. We are already seeing this with BIM. However, this may be applicable to other new emerging technologies too, such as administrating smart contracts, creating and setting up blockchains for open book ledgers from manufacturer to the financier of a project, or even providing quality assurance to deliverables from artificial intelligence software taking on the repetitive and time consuming tasks that we have undertaken in the past. I don’t think the cost professional will ultimately become redundant to machines, but our integration with new technology will become much more prevalent in our day to day business. The challenges I see for the cost professional is adequately training for emerging technologies, whether this is in academic institutions, professional bodies, or within the workplace. The rate in which technology is coming to the industry will be quicker than individuals can train. There will be plenty of opportunities if companies and individuals are willing to embrace change and learn new skills whilst coupling traditional value-added skills of our profession. This, I believe, will be our ticket to servicing increased global construction to an even higher standard than we do today.
MATT DUNCAN AIQS (AFFIL.) Senior Cost Planner, Wilde and Woollard (ACT)
My vision for the future of cost professionals in the built environment is that we continue to develop and adapt to a changing environment. We can get stuck in the rut of looking at the past and following the same principals, which at times has its merits, however we are in a position in which we can help to drive change in our industry. We have the ability to push for a more sustainable and environmentally aware industry where the inevitable increase to the built environment does not follow current unsustainable behaviours, thus increasing strain on already strained systems. I would like to see a future that learns from past mistakes and works together to create a healthier more resilient environment. Cost professionals cannot do this on their own, however, by taking a stand, we can promote other professionals within the built environment to follow suite.
ZIQI CHEN MAIQS
Senior Quantity Surveyor, Rider Levett Bucknall (ACT)
I see the quantity surveying profession become increasingly demanding with various emerging building technologies, highly connected world economy and market conditions.
To be able to provide accurate cost advice, quantity surveyors would need to stay up-todate with the latest products, construction methods, be familiar with the new technology such as point cloud, 3D printing, AR, BIM etc., and pay close attention to both local and global events that may impact the market conditions for projects.
To compete with the fast-emerging technology such as BIM and even artificial intelligence, as cost consultants we would need to be able to provide value-add services to clients about projects. In my view, I would see us shifting our focus on more market research, cost analysis and cost management.
PATRICK LOUEY AIQS (AFFIL.) Quantity Surveyor
Emerging technologies are quickly being implemented in the construction industry, such as 5D BIM and automated take-offs, making the future role of a built environment cost professional / quantity surveyor look bleak. However, if cost professionals can embrace and adopt these technologies to further develop their skillset, built environment cost professionals will stay relevant. While tools like automated take-offs may prove more efficient; there are intricacies in the tender processes, contractual issues, payments, site visits and construction processes which require the experience and input of a cost professional. Current emerging technologies like BIM, augmented reality and surveying drones have a synergy to collectively provide new forms of data, but this data will need to be prepared, analysed and made sense of. I believe this will be incorporated into the role of a cost professional / quantity surveyor, in-turn allowing the provision of better-informed advice and decisions. More advanced data and documentation can lead to an increased integration and collaboration between different disciplines within the construction sector. Technologies like BIM and drone surveys can be shared between multiple disciplines and enable them to interact, solve issues, make changes and value manage a live document. The pressure of learning and incorporating new technologies may seem intimidating, but I envision that the adoption of these new technologies will make cost professional even more relevant.
KELSEY TELFORD
Quantity Surveyor, Naylor Love
In an industry that is booming, we are seeing a significant number of construction companies – including industry leaders – struggling or falling into liquidation. It appears there is a systemic problem in the procurement process. The so called ‘race to the bottom’ doesn’t add longevity to industry participants, even though it’s a longstanding fact that cheapest does not equal the best quality.
Steps are being made to address this issue with the government's new construction procurement guidelines coming into effect in the later stages of 2019. It’s encouraging to see the government take a lead on this as they have been some of the worst offenders of onerous contracts, lowest price and risk avoidance.
I can see, providing greater attention to scrutinising/pushing back on unfair or onerous contract conditions and encouraging risk be allocated to the party best placed to bear it as being an important part of the built environment cost professionals role.
SAM STEVEN Quantity Surveyor, NZ Strong Construction
Having only been working as a quantity surveyor for the past four years, my impression of the New Zealand construction industry is that, for many, it can be devastating, much like an inferno - destroying businesses and people’s livelihoods. Fletcher’s, Ebert, and Arrow Construction are just some examples that have been caught in the path of our industry inferno, with rippling effects throughout the industry’s supply chain.
Subsequently, my vision for the built environment is specific to the New Zealand industry crisis. In particular, this includes an industry with transparent procurement and contracting approaches, retracting the current system which forces as much risk as possible onto the contractor. The NZIQS has already taken a lead on this, with some of their latest strategic focus’ set out to combat this.
I recognise my opinion may be slightly bias here due to the enjoyment of measuring, but I believe there is value in returning to the traditional method of procurement and contracting with guaranteed bills of quantities (BOQ), with re-measurable items, rather than a stiff fixed price model based on often flawed documentation. However, with the exponential developments in BIM in recent times, my dream vision and one that I hope isn’t a pipe dream is to see BOQ’s and BIM work in harmony with one another with BOQ’s being derived from BIM models and used as the procurement and contracting approach.
STELLA LEE AIQS (AFFIL.)
Assistant Project Manager, DCWC
A wholesome culture.
Oxford defines wholesome as ‘conducive to or characterised by good health, physical and moral well-being’. The construction industry ranks high as one of the most fraudulent industries all over the world. When a party gets caught in a compromising situation, there is a temptation to lean towards unethical practice. Even as professionals, at times we tend to believe that our responsibilities to the client far outweighs the public. Where I am coming from is that my vision, of
MATT CAPONE Building Cadet, Shape
I think that, in the future, cost professionals of the built environment will have to embrace further advancements in technology. At the moment, there are a lot of people who work in the industry that are struggling to keep up with the advancements that are being made, as they feel more comfortable doing things the way they were taught when they first started in the profession. In order to make the move more seamless in the future, a willingness from the professionals themselves as well as additional training from industry bodies is required to keep up with the times. a cost professional, stems from something more than merely doing our ‘jobs’ well. There is more to saving your client a large sum of money if it means a subcontractor goes under in the process. There is more to flawlessly dishing out estimate after estimate if it comes at the expense of precious time spent with your family/friend/spouse or even yourself.
The better choice generally comes easily when it’s black and white, but the world we live in is layered in many different shades of grey. It is a call to dig deeper towards a wholesome mindset because this flows into our judgement and our choices, and in turn shaping our goals.
It would also be beneficial if the same or similar programs were used, and each industry professional used the same software and presented their data/reports in a similar manner. This makes it easier from the client’s point of view to interpret the information, eliminating the likelihood of misunderstandings and errors – which in turn cost companies’ money. It also makes it easier for professionals to move between companies without needing to be retrained using new software that they haven’t worked with previously.
BERNIE PITT
With the quantity surveyor profession in hot demand in the Australasian construction sector, and an unprecedented number of students, are academic institutes delivering quality with quantity and are they supported to do so? It’s widely recognised that the training delivered builds career foundations for the emerging professional. The skills and knowledge for the modern QS needs to be concurrently delivered with the nuts and bolts a traditional QS has built their career on. Delivering this technical skillset in a rapidly developing and demanding industry is nothing short of a tall order with a tight programme.
I hope our academic institutes recognise the areas they are not reacting to within the diverse demands of today’s and tomorrow’s construction industry. Increasingly, they struggle to deliver with the resources available, and the industry is stepping in to fill the gap post-qualification. By maintaining connections with recent graduates, academia could identify its shortfalls. The industry could be more proactive by increasing consultation and involvement on the programmes, or the re-introduction of ‘trade-based’ QS apprenticeships. It is blaringly obvious that to deliver quality, there needs to be commitment, involvement and support from government and industry. We have already recognised this, with the recent NZIQS Strategic Strategies identifying the development of students and emerging professionals are a national priority.
The influx in student numbers has notably strained industry support (such as mentor programmes, offering real insight and relevant advice), which has traditionally been provided by emerged professionals. This has created a demand for networks, such as Quantity Surveying Emerging Professionals, to build the bridges between the emerging and the emerged and facilitate opportunities, relationships and pathways which wouldn’t otherwise be available in this environment.
KIRAN VEMPATI AIQS (AFFIL.) Construction Estimator, ASKIN Performance Panels
One of the greatest challenges for built environment cost professionals is to understand the cost elements and construction methodology, as a whole, to achieve an accurate costing across the project life cycle.
To encourage and raise the awareness of costing in the built and construction fraternity, the following could be considered: • Uniform platforms to allow for easier sharing of information. • A collaborative approach rather than a competitive approach between cost professionals, head contractors and subcontractors.
• Serious education on elemental costing with trade specific perspective in tertiary education programmes. I am often surprised at the apparent lack on inclusion of first estimating principles at the university level. This will help emerging cost professionals to equip with knowledge on elemental costing across the construction project. To encourage and development of awareness of costing in regard to construction methodology, the following could be considered: • There is usually too much emphasis on costing and life-cycle cost and construction methodology takes second place. This situation can be improved by collaborating cost professionals with sub-contractors at the project delivery level. • In my opinion, we as emerging QSs, should be more realistic and absorbent to latest construction technology.
I believe that we, as professionals within the construction industry, should all be aware of the fact technology improves efficiency. At the same time, the construction industry is one of the most inefficient and outdated, with fewer efficiency increases due to technology over the past 100 years. My vision for built environment cost professionals is for us to lead through adopting new and innovative construction technologies and methodologies including, but not limited to, 5D BIM, autonomous equipment, and machine learning. For instance, we can send drones to inspect construction sites, especially for remote sites or unsafe areas, and receive real-time site information – eyes on the ground. We do not need to physically be on the site and can still assess the builder’s claim, saving travel time and costs. If we take full advantage of what technology can do, we could add value to projects a lot better and provide a better cost planning and management service to help clients achieve an ideal outcome. As a built environment cost professional, I do feel we have the obligation to embrace the possibilities and work together to create a better and more efficient construction industry.
