ISSUE 32
Supporting
Michelin’s
global standards Also in this issue: Succeeding with mentor-protégé program New HQ for Canada’s RCMP Supporting BP refinery turnaround Rolls-Royce maximize portfolio efficiency
CONTEnTS 4 BP Cherry Point Supporting refinery turnaround efficiency
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Mentor-Protégé Program Faithful+Gould and Cinnovas: teaming for success
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Pharmaceuticals sector
Optimizing property portfolio strategies
Royal Canadian Mounted Police 10 National HQ procured via Public Private Partnership (PPP)
Supporting Michelin’s global standards 12
Improving Project Controls in South Carolina
14 Rolls-Royce
Maximizing the benefits of the real estate portfolio
Qatar 16
Middle East’s fastest growing economy
Singapore 18
Top award as Faithful+Gould celebrates 25 years
Whole Life Costing Evolves in Middle East 20
Maximizing long-term value in maturing markets
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CMAA National Conference Sharing our constructive expertise at Chicago conference
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A warm welcome to our latest edition of Solutions, which showcases some of our most exciting projects and services. I very much hope you’ll find it of interest. With the election over, it’s back to business as usual, and like most organizations we are hoping that the stalled economy will now see some movement. Here at Faithful+Gould we continue to do well in difficult times and we had cause for celebration recently with our North America twentieth anniversary. Since establishing our business here in 1992, when consultancy cost and project management were largely unheard of in the American construction industry, we have built up longstanding client relationships with global majors and we are proud to profile some of these in this publication. Our success could not have happened without our excellent team, whose dedication and best practice continues our endeavor to deliver constructive expertise to our clients. Our project management services for Michelin in North America are featured on page 12. Additionally we are supporting Michelin’s global standards in several countries, including its world headquarters in France. Page 4 discusses our role with BP, where we are providing a range of services at the Cherry Point refinery in northwest Washington, just one example of our healthy workload in the energy sector.
For further information contact Donald Lawson in our London office. Scan the QR code for full details.
We are very pleased to be supporting the U.S. Small Business Administration (SBA) Mentor-Protégé program to encourage 8(a) certified small businesses to compete more successfully for federal government contracts. In Washington D.C., we have partnered with local contracting and construction management firm Cinnovas under the program. We successfully harnessed the talents of Cinnovas and our in-house team; our article on page 6 outlines how both mentor and protégé can get the best from these collaborations.
Asia Pacific is a key growth area for Faithful+Gould and we have developed a firm foothold in several regions. We have recently celebrated 25 years in Singapore and we were delighted to welcome clients from every sector to our celebratory event, alongside support from Singapore’s Economic Development Board (EDB). We also held a Chinese good luck ceremony to mark our office relocation, described on page 18. This has already brought us good fortune in Singapore, with our success in the recent British Chamber of Commerce Annual Business Awards. We were delighted to be chosen as the winner for the Outstanding Professional Services category, a real tribute to our great team in Asia Pacific. In the Middle East we are finding that the advent of PPP is influencing the need for better information on the total costs of construction, and an interest in whole life value is emerging. Page 20 looks at the advantages and challenges of a whole life costing approach in the Middle East market. I hope you’ll read on and find something of relevance to your interests and concerns right now. If you’d like to know more, you can make contact with any Solutions contributor by using the QR code on each page, calling the office numbers on the back cover or via our website. Why not also follow us on LinkedIn and Twitter to keep your finger on the pulse of constructive expertise? My team and I appreciate your interest in Faithful+Gould and we would be delighted to hear from you.
Donald Lawson, CEO Worldwide Operations
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BP Cherry
Point Supporting turnaround efficiency
Changing trends in global demand for gasoline caused BP to re-examine its refining portfolio, focusing its future downstream investment in the U.S. on improving and upgrading its most advantaged refining and marketing networks. Working in collaboration with BP Faithful+Gould has aligned industry experience with BP’s strategic objectives.
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BP’s Cherry Point refinery is being positioned to meet the challenges of a diverse and rapidly changing energy market.
BP’s Cherry Point refinery has quietly provided a significant portion of U.S. energy needs for more than 40 years. Now it’s being positioned to meet the challenges of a diverse and rapidly changing energy market. The refinery was commissioned in 1971 to process 100,000 barrels of crude oil each day from the Alaska North Slope. Situated on 2,400 acres and employing an 825-strong team, production capability today stands at 230,000 barrels of crude oil a day, primarily transportation fuels. It provides approximately 20 percent of the gasoline market in Washington and Oregon and the majority of jet fuel for Seattle, Portland and Vancouver, BC international airports. For several years, Faithful+Gould has been an integral part of Cherry Point’s project controls organization, providing portfolio, project and turnaround cost management and scheduling. We have provided support across a diverse range of projects including the small project group portfolio, infrastructure schemes, and the $350 million refinery upgrade to produce cleaner burning diesel fuel which is scheduled for completion in 2013. We utilize a range of tools including Epoch, our best practice industrial cost and performance management system. With extensive experience in the energy sector, working for major petroleum and petrochemicals companies, we understand the challenges of working in refinery environments. We also provide support to the turnaround group and were asked to assist with the 2012 hydrocracker turnaround, the largest Cherry Point had undertaken to date. The turnaround period shuts down operations for scheduled planned maintenance and capital works that cannot be performed when the plant and equipment are running. As this may interrupt the overall production process, the planning and success of the turnaround is critical to the refinery. The 2012 hydrocracker turnaround included a capital program of 20 projects of various sizes that spanned either side of the turnaround, which itself involved activities to be carried out on process units after shutdown.
This sizeable turnaround required a lot of planning. More than 2,500 trade personnel were sourced to this corner of Washington to fulfil the scope of work. Challenges included accommodation for the influx of labor, shortages of cranes which came from as far away as California, and competing priorities for many of the vendors and contractors. In February 2012, as these challenges were being addressed, fire broke out in the crude vacuum distillation unit. The fire was quickly under control and extinguished within an hour, thankfully with only one minor injury, but the damage to the crude vacuum distillation unit was significant. As the fire had shut down the refinery, BP decided to start the turnaround several weeks earlier than scheduled. This presented challenges in providing labor, material and equipment on site ahead of the original plan. The turnaround continued in parallel with the fire remediation works, and the turnaround team provided daily reporting of cost and schedule, highlighting status and identifying areas of potential concern. There was an emphasis on providing timely cost and schedule information which reflected the overall status of the turnaround up to the previous day’s activities. The turnaround portion of the work wound down as equipment was brought back on line, and the capital program works continued to completion. The fire and the associated disruption had an impact on all the turnaround activities, and highlighted the team’s ability to successfully contribute in a challenging and rapidly changing environment. Faithful+Gould is a strategic partner with BP for the provision of project management services, supporting multiple business units with work scope covering their North American refineries, exploration and production teams and, more recently, supporting their design and construction facilities teams. Our goal is to align our experience and tools with client strategic objectives, even in challenging circumstances, to ensure successful project outcomes.
For further information contact Melvin Earley in our Los Angeles office. Scan the QR code for full details.
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8(a) Mentor-ProtÉgÉ Program
Teaming for
success Small businesses provide America with a powerful engine of opportunity and economic growth. In Washington D.C., Faithful+Gould has partnered with Cinnovas under the Mentor-Protégé program. The U.S. Small Business Administration (SBA) introduced the Mentor-Protégé program to encourage 8(a) certified small businesses to compete more successfully for federal government contracts. Martin Jacobs, Vice President at Faithful+Gould and Managing Director of its Washington, D.C. operations, understands the benefits from a business point of view as well as the ongoing responsibility of large businesses to mentor and assist the small business community. The mentoring encompasses collaboration between the mentor and the protégé in developing business strategies and improving service delivery. Earlier this year, Martin attended a local SBA expo and workshop which offered parties the opportunity to discuss expectations and consider whether the program fit with business goals. 6
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Myles Clark, President of Cinnovas Development Group, was already successful with his general contracting and construction management firm. As a Washington D.C. based minority-owned organization, Cinnovas delivers services to private, institutional and commercial clients, and had won a variety of government contracts. Myles was keen to explore ways of further developing his business, enhancing its capability to handle larger government commissions. Faithful+Gould had experienced a positive working relationship with Cinnovas on various projects for the federal government, specifically for the General Services Administration (GSA). Exploring the mutual benefits of the Mentor-Protégé program was the next step to extending the relationship and figuring how best to formalize it. The partnership commenced in June 2012, with Martin spearheading the deal for Faithful+Gould. He emphasizes the importance of both parties’ firm commitment and realistic aspirations if the program is to be a success:
“For the mentor, understand that the primary aim cannot be a springboard to winning contracts. If you go looking for quick commercial success, it won’t work. It’s wise to see the bigger picture of contributing to the industry and the wider economy. A larger firm can draw on broader experience, as well as more established systems and intellectual property, and invest some of that back into the industry via this program. Supporting diversity in the industry is good for us all. Clearly a commercial decision has to be a part of this, but not the main part.” The program requires that the mentor is a federal contractor of good standing, and can provide support to a protégé through lessons learned from experience of government projects. Martin Jacobs underscores the need to make informed choices: “You have to commit to the protégé firm, offering your time and expertise. You need to be able to get along as people. A lot of trust is involved. Look at the protégé’s business vision, their standing in the local market and their ability to capitalize on your input. Ideally they are a good small business with plans to be better.
I recommend that the mentor selects a protégé offering the same or similar services, and not view them as competition. That way, you can offer meaningful training. “Above all, there needs to be transparency in the relationship so that each respects what the other brings to it. In Cinnovas, we recognized similar values and a great track record, together with realistic opportunities to secure work together. This is a complementary capability.” Myles Clark finds that Cinnovas is already benefiting from the program: “Being alongside Faithful+Gould is a great positive step for Cinnovas and aligns with our business goals for sustained growth. We entered into the program because our organizations felt like a good fit and I knew we could work well together. Our team of five is all benefiting. We’re now co-located and that gives us an even closer relationship, with access to productive networking opportunities. As a mentor, Faithful+Gould is very generous with the time they dedicate to Cinnovas. They really embrace the spirit of the program, going the extra mile to support us.”
For further information contact Martin Jacobs, in our Washington, DC office. Scan the QR code for full details.
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Spotlight on THE
Pharmaceuticals SECTOR The pharmaceuticals industry is poised for transformation as challenges surface in traditional markets and new opportunities arise in emerging markets. Although the sector has remained resilient during economic downturn, pharma companies are now under pressure from every direction. There are significant challenges to the established blockbuster drug business model. Most companies are experiencing revenue impacts as patent protection expires on their major drug lines, bringing increased competition from alternative brands and generic manufacturers. The potential loss of market share has caused many major pharma companies to explore leaner ways of working, new markets, strategic alliances and creative partnerships (sometimes with non-traditional players). This is an increasingly global market. The loss of patent protection in developed economies, and the rise of generics, have prompted pharma companies to seek growth opportunities in new areas. Demand for trusted brand medications is growing rapidly in emerging economies, with China, India and Brazil stepping up their healthcare expectations. Regulatory enforcement is in its infancy in these fast-growing markets and this also brings challenges. Lower margins and less productive research & development pipelines are forcing pharma companies to seek a leaner approach. Financing, taxation, asset utilization and capital allocation are all in the spotlight. In the face of changing market conditions, the industry’s real estate professionals are additionally challenged to cut operating costs and consolidate facilities. This is often as a legacy of the sector’s recent appetite for mergers and acquisitions,
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along with the associated consolidation and divestiture of under-utilized or unwanted assets. Outside of staffing costs, owning, operating and maintaining facilities constitute the largest expense faced by pharma companies. Ensuring that the property portfolio is fit for purpose and aligned with the business strategy is a top priority. Research & development and manufacturing facilities are typically complex buildings with tight regulatory constraints. Traditionally there have been long lead times for reconfiguration of these facilities, and also for laboratories and other scientific environments. In recent times there has been a move towards adaptability from the outset, designing facilities so that they can be easily reconfigured as needed. This brings cost and efficiency benefits. For many companies, defending and expanding their market reach will be critical to weathering these next few years. Real estate challenges include creating ‘centers of excellence’ in targeted therapeutic areas, locating research and manufacturing facilities in close proximity to the markets they serve, and accessing/ collaborating with research and related talent. Outsourcing of facilities management to a thirdparty provider brings further benefits, allowing pharma companies to concentrate on core business and reduce operating costs. Many major companies are opting for this approach, benefiting from cost savings of 10 to
20 percent, improved consistency of service levels, improved service delivery and potential for better procurement opportunities on an asset refresh. Recent years have seen a tighter regulatory landscape around approval of new drug lines, slowing new drugs coming to market. The US Food & Drug Administration (FDA) responded with an expedited approval process; 2011 saw New Drug Approvals increase to 35, compared with 21 in 2010. Against this background and with the changes initiated by the pharma companies themselves, there is room for optimism that challenges can be overcome and opportunities realized.
Faithful+Gould is responding to these challenges by providing an increased international capability and recruiting additional senior staff with specialist knowledge of the pharmaceutical sector. We provide our proven Rightsizing project and cost management services, including outsourcing, life cycle asset management, business driven maintenance, masterplanning, agile and flexible working, and the consolidation and sale of redundant assets. Our services address the whole asset lifecycle, encompassing operational as well as capital costs. We have 25 years’ experience in this sector, offering a managed service resourced by our career professionals. We are based in every primary location in the global pharmaceuticals market, and we continue to work closely with the top 15 players. Our aim is to help clients identify optimal property portfolio strategies to support their changing business needs.
For further information contact Iain McWhinney in our Philadelphia office. Scan the QR code for full details.
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9
Royal Canadian Mounted Police
NEW ‘E’ Division
Faithful+Gould strengthens its position as a world-leading provider of PPP consulting services.
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The Royal Canadian Mounted Police (RCMP) provide law enforcement services to all of Canada at a federal level, and also on a contract basis to the three territories, eight of Canada’s provinces, more than 190 municipalities, 184 aboriginal communities, and three international airports. British Columbia’s E Division is the RCMP’s largest, employing 9,500 employees, approximately one-third of the entire force. 2009 saw the start of a major Crown initiative to relocate and consolidate existing RCMP headquarters units throughout the Metro Vancouver area, to a new site in the City of Surrey. The new, integrated, purposebuilt facility will help the RCMP to improve teamwork, operations and community safety. Construction is scheduled for completion in December 2012. PPP project The project is being delivered as a Public Private Partnership (PPP), procured under a contract between the Canadian government and Green Timbers Accommodation Partners to design, build, finance, operate and maintain the new facility. The prime contract is in effect for 28 years, including three years of construction and 25 years of facility management. The project has a total net present value of $966 million, including $263 million for construction of the facility. Canada leads the North American PPP market, and utilizes procurement models similar to those developed in the UK and Australia. Several provincial organizations exist to assist the various governmental organizations in procuring their PPP programs. Market growth in the U.S. has been slower by comparison; however activity has increased greatly in recent years. New PPP models are developing to better align with the unique policy and political challenges presented from state to state. Since June 2009, Faithful+Gould has provided various consulting services for the RCMP project, including Lender’s Technical Advisor and Independent Certifier. Lender’s Technical Advisor (LTA) As LTA, Faithful+Gould is responsible for producing technical due diligence reports during the initial programming and design stages. This requires analysis of the accuracy and robustness of the capital cost estimates, construction schedule,
life cycle cost program, project management approach, facilities management approach, commercial arrangement and design. We have maintained monthly site visits to monitor construction progress, receive construction and design briefings, review and authorize any changes, authorize payments to the design-builder, and produce reports outlining general project progress and health. At the end of this year, we will assume an Operations Monitoring role, requiring periodic site visits to ensure that the facility is being maintained and operated properly, and assess whether there has been any change to the project’s risk profile.
For further information contact Ryan Brady in our Phoenix office. Scan the QR code for full details.
Independent Certifier (IC) Canadian provincial procurement policy requires that both the public and private partners in a PPP jointly engage an IC for the purposes of certifying that construction has been completed in accordance with the output specifications. This certification is required for the public entity to occupy the facility. It also signifies the point at which the public agency must begin service payments to the private partner, which cover the cost of maintenance, operations and portions of construction. For this role, we worked closely with our client and streamlined processes for the tracking of progress against project agreement obligations and created efficient reporting tools. Supporting PPP globally Faithful+Gould is actively engaged with a variety of international banks, sponsors and governments, helping them develop new projects.
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SUPPORTING
MICHELIN’s GLOBAL STANDARDS
The world’s largest tire manufacturer, Michelin has been a part of American industry since 1907. Headquartered in Greenville, S.C., Michelin North America employs more than 22,000 and operates 18 major manufacturing plants in 16 locations in the U.S., Canada and Mexico. Faithful+Gould is supporting the company with a range of project management services.
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Faithful+Gould Team on site Michelin Cypress SC, T5 Project
Following Michelin’s robust interim 2012 earnings performance, September 2012 saw the Group review its capital expenditure program and 2015 financial outlook. The premium tire segment, in which Michelin sets the benchmark and is expanding faster than the overall market, represents a strong growth opportunity, with increased production capacity anticipated. To widen its leadership in its specialty businesses, Michelin embarked on two projects in South Carolina, the state where Michelin first began its U.S. manufacturing. The aim was to extend mining tire capacity at its existing Earthmover plant in Lexington and to build a new facility in Anderson County. Already underway, the new Earthmover tire plant will be adjacent to Michelin’s existing rubber processing plant in Starr, S.C., and will be the third Michelin plant in Anderson County. The two projects represent a $750 million investment and will create up to 500 new jobs. This reinforces Michelin’s importance as part of the economic and social fabric of South Carolina where 8,000 are employed by the company. In 2011, Michelin also committed to add an estimated 270 jobs and invest $200 million in its existing Lexington passenger and light truck tire manufacturing facility. The first tire rolled off the line at Lexington’s expanded operation in October 2012. Faithful+Gould is providing support for Michelin’s projects in Lexington and Starr, as well as their North America portfolio as a whole. Acting in an Owner’s Assistance role on the three project sites, the Faithful+Gould teams provide monitoring and control of the EPC contractor’s safety, quality, scheduling and cost management practices and procedures. Additionally, the team manages an
independent design review team who are charged with assuring that the Michelin requirements are met and their standards applied. At the portfolio level, a Faithful+Gould team supports the Michelin North America Project Office in standardizing scheduling and cost management practices and implementing our Epoch enterprise cost and performance management system. The aim is to improve schedule and cost predictability, increasing transparency and accountability across the broad range of major capital projects. By applying standard processes and technology, best practices can be applied efficiently and consistently across all locations through systems interfaces. This fosters the development of a continuous improvement culture, which is a key goal of Michelin’s Project Office. In addition to our work in North America, Faithful+Gould is supporting Michelin’s global standards in several countries, including its world headquarters in France. With the launch of the Global Project Monitoring Office (PMO), the Faithful+Gould program scope encompasses all major manufacturing facility construction within the Michelin global organization. The primary focus was squarely on the largest investments in China, Brazil, Thailand and India, representing multi-billion euro investments. The first PMO program rolled out in Shenyang, China in September 2010. With little respite, Brazil went live in May 2011, Thailand in June 2011, and India in August 2011. As 2011 drew to a close, the PMO extended its reach into new project locations in North America and Europe.
For further information contact Steve Plane in our Atlanta office. Scan the QR code for full details.
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ROLLS-ROYCE maximizing THE REAL ESTATE PORTFOLIO
Changing business needs dictate that assets must work harder and smarter. Faithful+Gould provides a range of services that support organizations seeking to align their business objectives within a defined strategy for their built environment. We have recently developed innovative solutions to enable Rolls-Royce to achieve even better performance on a significant real estate portfolio. Faithful+Gould’s comprehensive analysis of assets in Indiana and Ohio reinforced Rolls-Royce’s understanding of its real estate portfolio. As well as the design, production and after-sales support of gas turbine engines, Rolls-Royce’s North America operation also provides management direction and corporate support for all its companies and business units in the region. The portfolio therefore comprises a diverse mix of leased and wholly owned property, encompassing, more recently, substantial land ownership responsibilities. 14
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For major corporations, achieving maximum benefit from property investments is an ongoing priority. Rolls-Royce also aims to create the best facilities for its workforce. To assist decision-making, our asset analysis included the legal entitlements, condition, performance, capital, operating and lifecycle costs of both leased and owned property, together with an overview of maintenance, energy performance and security status. We then provided support to the company’s long-term strategic planning process, to explore different options, maximize asset potential and achieve added value. This helped Rolls-Royce to achieve a high performing property portfolio, reinforced by our service provision in these areas: Asset
portfolio analysis planning Master planning Facility condition assessment Project and construction management Personnel relocation planning and management Life cycle cost and value management Strategic
In December 2011, following the successful asset analysis program, Rolls-Royce announced a $22 million investment to redevelop a new state-of-the-art office campus in downtown Indianapolis as part of a consolidation of offices for 2,500 engineers and professional staff. Indianapolis is a key operations center for the company, producing more engines than any of its other sites. We supported Rolls-Royce in exploring ways of creating an improved environment that would ultimately contribute to maximum workforce efficiency/productivity. The company opted for a culture change, embracing an agile workplace concept after studying successful implementation in other organizations. This new ethos and landscape fosters creativity and efficiency in its workers, offering comfortable smaller meeting spaces rather than individual offices, in a collaborative and inter-connective environment. The enhanced space helps Rolls-Royce hire new talent, while building loyalty and morale in existing personnel. Cost savings and energy improvements are also evident. We are continuing to work with Rolls-Royce on developing innovative solutions that enable its real
estate to achieve even better performance. Together we are making progress on construction standardization, comprehensive process and project delivery approaches, alongside adaptive solutions for changing markets, cultures and technology platforms. Faithful+Gould has a global team of multi-disciplinary property and facilities management professionals, with experience of asset maximization in many countries. We advise our clients on how best to align the portfolio to meet the organization’s needs, securing best value on both capital and operating expenditure. We have achieved effective results for clients in a variety of sectors, including manufacturing, finance, aviation, pharmaceutical, energy and central government.
For further information contact Tim Hannaway in our Washington, DC office. Scan the QR code for full details.
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Qatar
Middle East’s fastest growing economy Qatar has become the most competitive economy in the Middle East. The World Economic Forum’s Global Competitiveness Report for 2011-2012, which ranks the world’s fastest growing economies, placed Qatar 14th, overtaking other countries in the region including United Arab Emirates (UAE), Bahrain and Kuwait.
Qatar’s construction sector continues to perform well and further growth is anticipated. Expansion is being driven by high hydrocarbon prices, a high volume of infrastructure projects in the pipeline and plans for major sporting events, all underpinned by the government’s development plan Qatar National Vision (QNV) 2030. 16
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The country is poised to spend $130bn on infrastructure projects ahead of hosting the FIFA World Cup tournament in 2022, and this immoveable deadline is proving a key catalyst for activity as Qatar prepares to present itself on the global sporting stage. There are plans for a $35bn rail and metro line, further development at Doha airport, a $7bn seaport, new
roads and stadiums, together with hotels and housing projects. The government wants Qatari firms to be involved in all World Cup related projects, further boosting the event’s diversifying effect on the economy. The FIFA World Cup is the largest single event sports tournament in the world by a considerable margin and will put Qatar on the world map. Qatar’s tourism and hospitality sector expects it to help propel the Gulf state into becoming a sought-after destination for international tourism while reinforcing its reputation as a host nation for major sports events. QNV 2030 includes the government’s first national sports sector strategy, a plan outlining the importance of sport, not only to the country’s business, tourism and leisure interests, but also in support of the population’s health. The future use of the event’s facilities should also provide good legacy opportunities. Healthcare, education, commercial, retail and residential markets are also seen as priorities, as Qatar has a growing population requiring improved world class facilities. Although planning permissions and building approval processes are more straightforward than other countries in the region, Qatar faces challenges in delivering the volume of construction forecast. Local supply chain capacity will need augmenting and barriers to entering the market will have to be overcome, to attract contractors, consultants and resources of sufficient scale and caliber to meet the growing demand. The industry is also constrained by materials availability, and the logistics involved in moving them to sites is exacerbated by the constraints of Qatar’s limited infrastructure. These challenges will take considerable effort to address within the required FIFA World Cup timescales – and in an environment where deadlines and budgets are not always adhered to. The aim is to provide all FIFA World Cup facilities by 2020, including infrastructure, mass transit systems, accommodation and the venues associated with the
event. There is a huge focus on delivery directed by the Supreme 2022 World Cup Committee and supported by all associated government ministries and agencies. There is also a drive to encourage efficient programming and logistics planning, to deliver the projects which have already started in Doha, and the pipeline for procurement is underway. Best global practice is being sought as an enabler to ensure delivery of the ambitious programme. One such tool is Building Information Modeling (BIM), increasingly transforming the way developments are being designed and delivered. BIM is not only a 3D design tool, but also a platform for programme, cost and asset management and a precursor to more robust design, programme cost and facilities management. BIM is not yet mandated by the government but there is support for its use in Qatar, among government agencies and private developers. The industry goal of a single integrated BIM model for construction projects is still a long way from being realized throughout the Middle East. Faithful+Gould is working on a BIM pathfinder project, the Shaza Kempinski Hotel in Doha. BIM is also being developed for use on highways, rail and associated civil engineering projects using 2D Civil and BIM measure. Faithful+Gould has identified Qatar as a core growth area for our Middle East operation and we anticipate that our staff numbers will rise to 100 over the next year. We have an expanding portfolio of work, some of it in conjunction with our parent company Atkins which has a significant presence in the region. Current projects include Bilal Pearl Suites, a luxury residential tower at The Pearl-Qatar development where we provided cost and construction services; and Lusail Light Rail Transit (LRT) system, where we provided quantity surveying services. We are now focused on providing support to the developers and contractors investing in and delivering the nation’s vision for 2022 and 2030.
For further information contact Mark Rudman in our Doha office. Scan the QR code below for full details.
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SINGAPORE Top award
AS FAITHFUL+GOULD CELEBRATES 25 YEARS A traditional Chinese good luck ceremony marked the opening of Faithful+Gould’s relocated Singapore office. The lion is considered a guardian figure in many Asian countries and the lion dance, pictured right, accompanied by music, symbolized the arrival of good fortune in the new office. Forecast headcount growth in the region led us to relocate to larger offices in Singapore’s central business district. We are now housed on the 24th story of the PWC Building, a five-minute walk from Raffles MRT station and close to the diverse mix of restaurants that are such an important part of local culture.
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The building was well known to us as a construction project for its owner, our client DBS Bank. Co-located with our parent company Atkins, the open plan layout accommodates up to 90 staff, supports our agile working principles and enables us to achieve maximum efficiency from the space. This is an approach increasingly shared by our global client base, as companies use their property assets to enhance their business, by getting the best from the interface between people and space. Smarter workspace strategies can ensure that the space accurately reflects the business plan and actively enhances business performance. The ceremonial lion has already brought Faithful+Gould good fortune in Singapore, with our success in the recent British Chamber of Commerce Annual Business Awards Award. We were delighted to be chosen as the winner for the Outstanding Professional Services category.
The award honor reflects our substantial experience in the region, where we have built up a thorough understanding of the public and private sector markets. November 2012 marked our 25th anniversary in Singapore and celebrations. Contributing to thought leadership in the region is a top priority for Faithful+Gould, and in this month of celebrations we were delighted to participate in the British Chamber of Commerce event focused on The Changing Landscape of the Global Construction Market. Ian Metcalf, our global managing director for strategy and development, provided an insight into how the construction industry contributes to the economy. Topics discussed included an overview of the changing volume of, and demand for, construction in the major markets of the world; the factors that are driving this change and how the construction industry, as one of the key contributors to GDP growth for all countries, will be affected by these changes. Ian also outlined the way in which the
industry is likely to contribute to some of the mature and emerging economies in the current decade. Ian’s contribution stimulated interesting discussion and debate, as the audience shared their thoughts on how these issues affect Singapore and the wider Asia Pacific market. In practice, our thought leadership approach benefits our clients through our experienced and innovative service delivery. We have been an especially active participant in establishing Public Private Partnerships (PPP), playing a role in every social infrastructure PPP launched to the Singapore market. Singapore’s status as a PPP knowledge hub and finance center for the region is increasingly acknowledged and we have drawn upon our own global PPP experience to support these efforts.
For further information contact Martin Riddett in our Singapore office. Scan the QR code for full details.
Our project management, cost management and consultancy services are offered throughout the Asia Pacific region, from our offices in Hong Kong, Shanghai and Singapore.
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Whole Life Costing Evolves in Middle East
Maximizing
long-term value
A pre-recession Middle East construction industry focused on fast completion and maximum impact. Today’s more measured approach takes account of the building’s long-term prospects. Whole life costing offers tangible benefits to the region’s clients, developers and investors. Over a 30 year period, only 20 percent of a building’s total costs are incurred during the construction phase, with a huge 80 percent associated with the operation and maintenance of the building. It therefore makes sound financial sense to ensure that the total costs of ownership are known and understood.
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Whole life costing (WLC) has come of age in the UK market, shifting from a subject of mainly academic interest to a key business tool in the decision-making process of both development and approach to asset management. A culture change has shaped the way the industry views WLC strategies. Major public sector projects in the UK must now be based on whole life value, underpinned by industry accredited standards. As a less mature market, however, the Middle East’s property and construction procurement is only just beginning to recognize the benefits of WLC. In less austere times, capital expenditure is typically the focus at project outset. Lowest capital cost, however, is not a reliable measure of value, as it does not take into account how well buildings perform on a Whole Life basis. The ethos has changed in recession, with stakeholders becoming more discerning and an appetite for better long-term value emerging. Although there are currently no Middle East government led initiatives specifying a WLC approach, the advent of PPP is influencing the need for better information on all costs involved. Details of the project life need to be assessed and tied in to funding and operation plans. WLC enables informed decisions to be made at project outset, to ensure that the building continues to provide value for money and meets user needs throughout its lifetime. Construction, operation, maintenance and end of life costs should all be understood and quantified so that the respective value and balance between each can be established. Sustainability is also important; there should be an understanding of what the specification means for the future of the building and how it will affect the environment. This includes assessing how materials may perform and what allowances are needed from design concept evaluation through removal and disposal at the end of their life. This may include
The advent of PPP is influencing the need for better information on all costs involved.
evaluations to ensure design and capital investment decisions are supportive of operational cost objectives. Examples of this may include the provision of photovoltaic electrical generation: although this incurs an initial capital cost, it reduces the increasing operational utilities charges. Following payback period, this results in a subsidized and more cost effective energy solution. The Middle East faces a number of specific challenges. A lack of enforced planning and building regulations can mean inadequate assessment of ongoing works on site, with a resulting negative effect on quality. The weather has a harsh effect on the lifetime of buildings, making the asset’s ability to perform to the required levels reliant upon a robust maintenance and renewal regime. This requires consideration of the asset needs and the provision of the associated funding program. WLC can be applied on existing as well as new buildings. The volume of building work undertaken during the previous economic climate has left a sizable legacy of issues to be addressed. Many buildings have a backlog of maintenance issues, often with no satisfactory way of
practically addressing these, due to inadequate planning for maintenance at design stage. Unless a regime of planned and renewal activities have been established and incorporated within the asset management plan, this will typically present unscheduled or, more significantly, unbudgeted/ unaffordable cost liabilities. If unaddressed these will lead to failures in the operation of the facilities. If this happens to critical components such as air conditioning plant or lifts, serious disruption could result. Faithful+Gould has been a pioneer and early adopter of WLC in the UK, and is acknowledged by BCIS as key contributors in the establishment of the Standardized Method of Life Cycle Costing for Construction Procurement BS ISO 156860-5 Part 5: Life Cycle Costing. We have already built up a significant body of global experience, applying WLC analysis techniques and strategies on many public and private sector appointments. In the Middle East we are demonstrating the efficacy of this approach with clients in several countries, providing greater clarity and certainty to technical, financial, and activity scheduling across the business term of the project.
For further information contact Stuart Baggaley in our Dubai office. Scan the QR code for full details.
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CMAA
Sharing Our Constructive Expertise Faithful+Gould joined industry colleagues at October’s Construction Management Association of America (CMAA) 2012 National Conference & Trade Show. Mike Dell’Isola and John Formes were part of educational sessions that shared our best practice constructive expertise.
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Issue thirty-two
Excellent opportunities for thought leadership, debate, interaction and networking.
The Chicago conference’s educational program stressed influential leadership, leading productivity and innovation, and managing today’s smarter buildings. Mike Dell’Isola’s session focused on Implementing Best Practices in Project Delivery at the New York School Construction Authority (SCA). Mike demonstrated how Faithful+Gould and the SCA have developed an organized approach to improve project delivery processes on this large and complex institutional building program.
Vega, PE, Los Angeles Unified School District; Claude Christner, Project Services Group, LLC, and Gregory White, Project Services Group, LLC. The panel highlighted the manufacturing industry’s use of benchmarking and key performance indicators (KPIs) to manage its facility-type projects. It contrasted construction management and engineering, procurement and construction (EPC) sectors, suggesting that these rely on negotiated contracts, an experienced project manager and office manuals for project delivery, missing the opportunity to add best practices.
Outlining Faithful+Gould’s problem solving methodology on the SCA organizational elements, Mike emphasized teamwork throughout the process. He highlighted the importance of the implementation process to the success of a project, cautioning that even excellent ideas can ‘die on the vine’ without rigorous and coordinated follow up and the demonstrative support of upper management.
The panel then presented mentor-protégé programs as representing benchmarking at its best: an established company coming together with an emerging company for one-on-one benchmarking. The team also presented a case study of a design-build project that successfully used benchmarking and Six Sigma metrics.
John Formes was part of a panel that addressed Benchmarking – Finding Construction Management Best Practices in Industry and Teaching Them to Others. John was joined on the panel by Michael F.
Both sessions were well received by the audience, providing a thought-provoking addition to the conference’s excellent opportunities for thought leadership, debate, interaction and networking.
For further information contact Mike Dell’Isola in our Washington DC office. Scan the QR code for full details.
For further information contact John Formes in our Dallas office. Scan the QR code for full details.
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north america
A project is only as good as the project manager ... ... And our projects are incredible. Faithful+Gould is one of the world’s leading project management consultancies. Together with our team of dedicated project managers, we specialize in protecting and maximizing our clients’ interests in the planning and delivery of projects. Our PM’s are industry experts in Program Management, Project Controls, Cost Estimating, Risk Management and Strategic Facility Consulting. But while we are proud of these core skills, it’s the passion for looking after their clients that really sets them apart. We call it ‘Constructive Expertise’. If your construction project needs a little passion, visit fgould.com
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