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VOLUME 56, NO.5 / AUgUst 2012
cover story 24 Canada’s “Big Hooks” Why crane operators are a breed apart
Departments Comment 7 Lights, camera, action
10
News Industry news
16
Construction Statistics
29
The latest news on building permits and construction employment
18
coLUmns 42 Risk Choosing a risk advisor
44
Funny Photo Funny Photo contest
46
Contractors and the Law Top 10 ways to lose money to fraud
46
41
Index of Advertisers
features 18
29
33
36
Clarity, accurate risk allocation are keys to effective contracts.
Getting the Athletes’ Village ready for the 2015 Pan/ Parapan Games.
Excess construction soils pile up added costs for Toronto-based projects.
Machine control adds precision and versatility to compact equipment.
Better bids
Preparing for Pan-Am
Soil storage
Pimp your ride
on-sitemag.com / 5
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EDITORIAL
Lights, camera, action!
I
Get the latest construction news! Follow us on Twitter @OnSiteMag
f a picture is worth a thousand words, then a video must be worth at least a million. Last month in conjunction with our annual Top Contractors report, we launched On-Site Interviews. This series of short videos will feature one-on-one conversations with Canada’s leading industry experts on challenges, triumphs, projects and trends that directly impact commercial contractors. The first video in the series is an interview with PCL’s Brad Nelson, president and COO of Canadian Buildings. Since PCL has been Canada’s Top Contractor (based on revenues) for many years, it seemed appropriate to talk to the industry leader and find out what exactly it takes to be profitable year after year. You can view this video by visiting www.on-sitemag.com and clicking on the video link on the homepage. Coming up in September, we have an interview lined up with BOT Construction to learn more about the Environmental Management System that won the company an Ontario Road Builders’ Association Green Leadership and Sustainability Award earlier this year. And after that we’ll visit the site of the 2015 Pan/Parapan American Games in Toronto and talk to EllisDon about the challenges of such a large-scale project,
and how the Athletes’ Village will be transformed after the event to market and affordable housing.
On-Site interviewS
Have an idea for a video? Working on an interesting project you think On-Site readers would be interested to learn more about? Please e-mail your great ideas to editor@on-sitemag.com.
Corinne Lynds / Editor CLynds@on-sitemag.com
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contributors www.on-sitemag.com / Fax: 416-510-5140
meet our contributors
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Bidding and contracts are the lifeblood of construction in Canada. So why do so many projects end up in chaos?
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Dialogue on risk is gaining greater emphasis within the construction community as new models are being adopted. Your choice of risk advisor is vital and I’m often asked what are the criteria a contractor should look at when choosing a risk advisor.
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service and it’s because of this that they’re considered a breed apart. Tower crane operators, in particular, belong to a kind of informal fraternity.
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INDUSTRY NEWS
Advisory panel: Turn Ontario Place into a mixed-use facility The Ontario Ministry of Tourism, Culture and Sport’s advisory panel on Ontario Place Revitalization released its final report on July 26. The report recommends turning the 155-acres of land-water lot property into a multi-use site that features waterfront and parkland for the public, gardens, urban plazas and interpretative nature paths; as well as areas for public art and community play—such as splash pads, skating rinks, and residential units. It also suggests exploring ways to include the Cinesphere and pods into the land’s revitalization. The recommendations are designed to take into consideration financial realities and responsibilities and that the new Ontario Place will need to leverage a wide range of pubic and private partnerships to ensure it is financially sustainable and operates efficiently. The report suggests having a central gathering area that would operate 365 days a year, to change Ontario Place from an amusement park summer destination to an all year round destination; and that the meeting place be similar to the original Forum, which would be used for concerts, theatre performances, local festivals and
community fiestas. Also suggested is the use of some of the land to develop a hotel or resort that would function as a tourist destination. One type of development not recommended is the building of “a wall of highrise buildings,” that prevent waterfront views and disconnect Ontario Place from the rest of Toronto. The report recommends only using a small portion of the land (10 to 15 per cent) for residential development; and any buildings that are constructed must demonstrate design excellence, sustainability principles and be sized appropriately. There are 18 recommendations in total in the advisory panel report.
Back on track: LEED Canada certification backlog eliminated The Leadership in Energy and Environmental Design (LEED) Canada’s certification process experienced a significant backlog in 2010, but since that time the CaGBC have implemented a variety of initiatives to get the process back on track. Mark Hutchinson, director of green building programs for the CaGBC, said the backlog could be attributed to two things—the launching of the new rating system and changes to the price structure for LEED certification,
which generated an unexpected rush of projects. “We ended up with about nine months worth of projects coming in one month,” he explained. “By the end of 2010 we had about an eight, nine month delay for the worst of the projects.” The CaGBC focused on addressing the backlog in 2011—and with a few exceptions, were able to catch up. Hutchinson said his organization’s capacity for LEED Canada for existing buildings was still being built up in 2011, so there were some delays in certifying those projects. He also cited some delays in French projects, due to a limited number of internal people and consultants available to certify those projects. To counter those backlogs, the CaGBC initiated several changes, including hiring more staff and doubling the number of consultants available to review files. At present time, almost all backlogs for both French projects and for LEED Canada for existing buildings have been eliminated. Backlogs for LEED Canada certification for new buildings were also addressed for the majority of Canadian companies by the end of 2011. In the first five months of 2012, the organization has been able to complete nearly 400 reviews and certify about 100 projects. At the end of July, the CaGBC launched two new options available in the marketplace that will apply to different projects. The first one applies to older projects that registered under LEED Canada for new construction (LEED Canada NC v1.0). It involves providing more materials page 12
Check out the latest industry news, events and On-Site Interviews at: www.on-sitemag.com
10 / August 2012
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INDUSTRY NEWS from page 10 up front that demonstrate what has been done, eliminating one round of review— certification is complete in two rounds of review instead of three. The second option is for some of the newer projects seeking certification—those registered under LEED Canada for New Construction 2009, which already has a certification process that is completed in two stages. A split review will be introduced, allowing reviews for design work and construction work to be performed at different times. One of the advantages of the split review is that it will allow for the design aspects to be reviewed while the design team is still involved with the project. Currently, the certification process takes place after construction, at which point the design team has often moved on to other projects; or members of the team have changed roles or companies. This leads to delays in the certification process when the CaGBC and the consultants try and go back to the original design team to ask questions. Another advantage of the split review is its role in risk mitigation. It allows the project team and building owner to get a strong sense of how the project is moving along after the design phase, before construction is complete.
MHCA emphasizes importance of infrastructure programs Permanent, long-term infrastructure programs (LTIP) are good for Canada. That was the message from the Manitoba Heavy Construction Association (MHCA) at a recent roundtable meeting in Winnipeg, Man. Industry stakeholders discussed the possibility of a permanent LTIP, which would extend beyond the Building Canada plan set to expire in 2014. According to the MHCA, there is a clear link between investment in infrastructure and Canada’s economic productivity, competitiveness and growth. “Infrastructure investment is Canada’s economic healthcare program,” stated Chris Lorenc, president of the MHCA.
The MHCA offered various recommendations to Canada’s Minister of State for Transport Steven Fletcher, including encouraging LTIP projects to be tendered between October and December and have them awarded in a timely manner. The MHCA suggest this would extend the construction season, as well as reduce workers’
Bert Clark named president and CEO for Infrastructure Ontario Infrastructure Ontario (IO) recently announced Bert Clark as its new president and CEO. He will begin his new role on Aug. 7, 2012 and was also nominated to the IO’s board of directors. Clark spent the past four years as the managing director of Scotia Capital’s Global Infrastructure Finance Group. Previous to that role, he worked for IO as its senior vice-president of
dependence on EI benefits. According to Lorenc, the Province of Manitoba currently releases schedules of tenders in November and that creates delays to the tender ad date; the awarding of contracts and pushes project start dates later into the construction season. He said it also clusters projects, which drives up demand for building products, which increases project costs. Other recommendations offered by the MHCA included: educating Canadians about the advantages of public-private partnerships (P3s); transition, over three years, of all federal gas tax revenues dedicated to municipalities to address their collective municipal infrastructure deficit; recognizing the clear link between investment in infrastructure and economic growth; and that LTIPs should reflect, “Canada’s commitment to reinvest in the growth of our economy and the capacity to generate wealth with which to fund core social programs that enable our envied quality of life and standard of living.”
Apprenticeship training program registrations hit record level According to a recent Statistics Canada report, Canada experienced its highest level of apprenticeship training registration in 2010. In 2010, there were 430,452 registrations for apprenticeship training
projects. While working for IO, Clark established procurement practices designed to ensure the IO’s public infrastructure projects were completed on time and on budget. Clark held the role of senior policy advisor to the Premier of Ontario from 2003 to 2005 and assisted in the creation of Ontario’s first long-term infrastructure investment plan. He worked at Toronto law firm Osler, Hoskin & Harcourt LLP for five years, before taking on the senior policy advisor in 2003.
nationwide, up 5.2 per cent (409,041 registrations) from 2009; following a 4.7per cent increase from 2008 (390,705 registrations). New registrations for training programs also experienced a significant boost in 2010, up 9.1 per cent for a total of 92,568 registrations, rebounding from a 13.9-per cent decrease (84,885) in 2009. However, total new registrations are still below the 2008 level of 98,553. page 14
12 / August 2012
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INDUSTRY NEWS from page 12
Algonquin building ACCE’s CaGBC Leadership Awards The Ottawa, Ont.-based Algonquin Centre for Construction Excellence opened in late 2011, and it is already building a name for itself in sustainability. Algonquin College’s new home for skilled trades students was awarded the Canadian Green Building Council’s (CaGBC) 2012 Academic Leadership Award at the CaGBC National Conference and Expo, held from June 11 to 13, at the Metro Toronto Convention Centre. Thomas Mueller, president and CEO of the CaGBC, presented the award. The Ottawa, Ont.-based, 190,000-sq.-ft. facility houses upwards of 2,500 full-time students and 5,000 part-time students in construction, design, engineering and various skilled trades. The facility is designed to be LEED Platinum certified and has a variety of green features, including: a stormwater recovery system for flushing toilets, solar
Award); Vivian Manasc (CaGBC Green Building Champion Award); Gord Hicks (CaGBC Industry Leadership Award); and Kevin Hydes (CaGBC Lifetime Achievement Award).
Correction: In the June 2012 issue of
panels for heating water, an R50 insulated roof, air conditioning and heating provided by heat pump technology, a five-storey living green wall covered with plants and a green roof designed to offset heat from the sun. Other CaGBC 2012 Leadership Award recipients included: Simon VanGrootheest (Andy Kesteloo Memorial Student Project Award); Aaron Short (CaGBC Emerging Green Builder Award); Infrastructure Ontario (Government Leadership Award); Sue Clark (CaGBC Volunteer Leadership Award); John Crace (CaGBC Chapter Leadership
On-Site, Pomerleau was incorrectly listed in “The Top 40 Canadian Contractors” chart (page 19). Pomerleau’s correct reported 2011 sales volume is $1038.0 million, placing them 7th overall. We apologize for the error. To view the updated Top 40 Canadian Contractors report, check out page 19 of the June 2012 digital edition of On-Site at www.on-sitemag.com.
News Briefs
> Foulem Construction Ltée, based in Caraquet, N.B., won the bid to build a $22.7-million, two-storey, 118,898 sq. ft. francophone school on 25.4 acres of land, located at 701 Ryan Rd. in Moncton, N.B. The K-8 school will be built in accordance with the Province of New Brunswick’s Green Building Policy and feature: two gymnasiums, 27 classrooms; a library; a cafeteria; rooms for art, music, science and technology; a sports field and a playground. The school is scheduled to open in the fall of 2013. > Western Canada-based union CMAW and Quebec-based union CSD Construction recently signed a Mutual Agreement for Cooperation to increase job opportunities for their combined 27,000 members across Canada. Their goal is to provide CMAW with access to additional skilled construction tradespeople to work on its projects in the west, particularly in the Alberta oil sands. > A ceremonial sod turning to mark the start of construction of the $42.6-million Agrium Western Event Centre in Calgary, Alta. took place on July 8. The 150,000-sq.-ft. facility will feature a main arena with 2,500 spectator seats, a show arena with a show floor of 125 ft. x 250 ft., large amounts of concourse space, an exhibition hall, and a 20,000-sq.-ft., clear-span space. > EllisDon purchased the Fort Saskatchewan, Alta.-based PME Group of Companies on July 10. The company performs civil site work and general construction services for the oil and gas industry throughout Western Canada, with its main focus
on the northern Alberta region. PME has focused largely on the oil refineries, oil sands development and oil and gas pipeline sectors in the greater Edmonton, Fort Saskatchewan and Fort McMurray areas. > Canada and the United Kingdom are working together to upgrade Canadian Forces Base (CFB) Suffield in southeastern Alberta. The two countries are investing a total of $17.3 million to build a fire hall building, range control facility and various other improvements throughout the base. The U.K. will contribute 78 per cent of the costs for the range control facility and fire hall while Canada will pay 22 per cent. CFB Suffield’s facilities are used by British Army Training Unit Suffield and Defence Research Development Canada—Suffield. > Alberta Infrastructure recently awarded Bird Construction with a $95-million contract to build the new Alberta Public Safety and Law Enforcement Training Centre located in Fort Macleod, Alta. The centre will be built on 320 acres of land in the southeast corner of Fort Macleod with construction starting this summer and an anticipated completion date of the fall of 2014. > The PCL Aquatics Centre 2012 team will design, build and finance the facility that will house the aquatics centre, field house and the Canadian Sport Institute Ontario (CSIO) for the Toronto 2015 Pan/Parapan American Games. The project’s expected completion date is the summer of 2014.
14 / August 2012
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CONSTRUCTION STATS A selection of data reflecting trends in the Canadian construction industry
Building permits down Employment Employment
Building permit values fell 2.5 per cent to $6.8 billion in June, after hitting a five-year high in May. The decline was mainly fuelled by decreases in non-residential and residential construction in Alberta and B.C. The value of building permits issued in the non-residential sector valued $2.5 billion, down 12.3 per cent from the previous month.
thousands 17,600
17,400 17,200
17,000
Total value value of of permits permits Total
16,800
16,600
J
J
2008
J
2009
J
2010
J
2011
2012
J
Construction employment down The construction sector experienced little change in employment levels, down approximately 3,000 jobs, or 0.2 per cent in June. Despite the decline, employment in the construction sector over the 12-month period was up 0.5 per cent or approximately 6,400 jobs.
Investment in non-residential building construction
$ billions 7.4 7.0 6.6 6.2 5.8 5.4 5.0 4.6 4.2 3.8 3.4 3.0 J J 2007
2008
J
2009
J
2010
J
2011
J
2012
J
Non-residential building construction up in Q2
$ billions of dollars, seasonally adjusted 13.0
Increased investment in commercial and industrial components pushed non-residential building construction up to $11.2 billion in the second quarter of 2012, for an increase of 1.8 per cent. The increase follows three consecutive quarters of decline, with Ontario, Alberta and Quebec experiencing the largest gains. Investment increased in 17 of the 34 metropolitan areas, with Toronto, MontrĂŠal and Vancouver experiencing the largest gains.
12.0 11.0 10.0 9.0 8.0 7.0
ll lll lV 2007
l
ll lll lV 2008
l
ll lll lV 2009
l
ll lll lV 2010
l
ll lll lV 2011
l ll 2012
Source: Statistics Canada
16 / August 2012
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BIDDING
r e t t Be s d i b Clarity, accurate risk allocation are keys to effective contracts BY JIM BARNES
B
idding and contracts are the lifeblood of construction in Canada. So why do so many projects end up in chaos? Without plumbing the depths of game theory, contracts work best when “information asymmetry” is minimized. When one party to a transaction knows a lot more about it than the other, the results can be chaotic. One risk, “moral hazard,” can see either the buyer or seller maneuvering to benefit unfairly. Another, “adverse selection,” sees inferior products or services being selected. These are real-world concerns. All the sources we interviewed for this article called for “transparency” and “clarity” in contracts as being crucial to effective management.
risKY VeNtUres Risk is a common concern. While risk should be allocated to those best able to control the underlying variables, some see it in their interests to offload risk wherever possible. There are penalties for that. Faced with liability for a risk he
or she cannot control, a contractor will raise the bid to compensate. “The owner, in effect, penalizes himself for improperly allocating that risk,” notes Terry Brown, owner, STBR Consulting Ltd. of Kelowna, B.C. Another potential penalty is that qualified contractors simply will not bid on the contract, reducing the pool of competitors. Even if a contract is accepted, a contractor may find ways of managing the risk. “Contractors are very good at taking care of themselves,” notes Walter Strachan, vice-president of Risk Management at CBCL Ltd. Consulting Engineers in Halifax, N.S. and chair of the Canadian Construction Documents Committee, Ottawa, Ont. “Talk to anyone in the industry and you’ll hear about projects that didn’t work out quite the way anyone hoped,” notes Ron Devries, Devries Contract Solutions, Gananoque, Ont. “I ask owners, ‘Do you really think that contractors want to contribute money to your projects?’”
loW-bid The low-bid contract model remains very common, especially in the public sector.
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“That model worked and the industry liked it because winners and losers were clear. It all comes down to a number—it’s dollars and cents,” says Devries. “But from an owner’s perspective, low cost doesn’t mean best value.” Those who argue in favour of low-bid contracts say that the quality is designed in and the materials are predefined—all they need is the lowest price for construction, according to Devries. “Here’s the fallacy: Yes, design will determine the quality of the materials and the functionality of the building and so on. But it doesn’t deal with other quality aspects, like the quality of the workmanship, the time, the methodology that is being used—all those things.” Eric Lee, senior director, Industry Practices, Canadian Construction Association, Ottawa notes several challenges in the low-bid environment. “For one, contractors often find that the bid documents are not complete,” he notes. “Everybody is bidding the job on the basis of the bid documents provided to them. However, if the bid documents are not clear, then you are trying to compare apples to oranges. Everybody bids the project based on different assumptions. Then clarifications go into the addenda. You have so many addenda coming out, it is just a mess. It leads to a lot of disputes.” Another challenge is variation in construction materials pricing, particularly when the owner delays a decision on awarding the contract.
NoN-traditioNal bids “Low-bid has its place, but there is a discussion occurring in the industry at all levels about using best-value as an alternative procurement method,” says Brown. “As we come to better understand life-cycle costs for buildings—for instance, energy efficiency—you can find that a higher-priced bid might cost more at the front end, but then operating costs are lower all the way through the life of the building.” A variety of other approaches to construction has emerged over the years, including cost-plus, construction management, designbuild, integrated project delivery and public-private partnerships (P3s). “Each of the dozen or so procurement methods fit different circumstances,” notes Brown. What all these approaches have in common is that the contractor is providing services beyond just construction. This might include advisory services on pre-construction, budgeting and scheduling, notes Lee. “In an ideal world, integrated design is the preferred model, because of the close collaboration,” says Jim McKee, executive
Rule by consensus The CCDC, operating under the auspices of the Construction Industry Consultative Committee (CICC), has no real international peers. Since its foundation in 1974, it has generated a couple of dozen standard documents that are reviewed for utility approximately every five years. Besides standard contracts, the group also publishes guideline documents. The committee comprises a spectrum of stakeholders, including: owners, architects (RAIC), engineers (Association of Consulting Engineering Companies— Canada Specifiers (Construction Specifications Canada) and construction contractors (CCA)). “We have all the disciplines plus the owners at the table in a non-confrontational environment, trying to work out a risk-balanced approach to contracts... That is unique,” says Strachan. The group also attempts to maintain contact with local industry through a series of symposia around its revisions. A common misconception is that CCDC is biased toward contractors. “There are four contractor members on the committee, out of 14 people who make decisions,” notes Strachan. “All decisions are by consensus, so four people would have to convince 10 people.” “We work pretty well with absolute consensus,” notes Brown. All the stakeholders have to be satisfied with the document. “That’s one of the reasons why it does take some time to get a document out,” he notes. For more information on the guides and standard documents available from CCDC, its mandate, activities and committee members, visit: www.ccdc.org.
director, Royal Architectural Institute of Canada, Ottawa. “The move towards factors like LEED (Leadership in Energy and Environmental Design) and building information modeling are drivers of that.” However, he notes, satisfying the user’s needs remains the architect’s highest priority and in the evolution toward the potential multi-party contractual framework, “We’re still in the early days. It’s kind of an unknown beast in Canada.” Sustainability is becoming a hot topic in construction contracts, as liability related to third-party certifications such as LEED appears. “That is an awfully onerous obligation to take on, especially if they don’t have complete control of it. That causes great grief in the construction community,” notes Devries.
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BIDDING
“The only thing our members can control is to perform the work in accordance with the construction contract and the drawings,” notes Lee. They cannot control the certification process. “It’s not like the building code. Whether you make [the certification] or not is quite subjective,” says Lee. For example, delays or problems may result from the way the owner handled the certification documentation.
get back on track, rather than falling into an adversarial dynamic.” The savings in time and effort can add up. “If you have a custom contract each time, then you have to read the 35 pages every time. With CCDC [standard documents], you only have to read the supplement, because you are already familiar with the base document,” says Strachan. Some are concerned about the choice of language in such documents. “There are certain key issues where, for a variety of reastaNdard docs sons, the language cannot and should Faced with this complexity, many have not be too rigid,” says Devries. “If it’s too Having standard documents is turned to standard contract documents rigid, you will not get the consensus of all not about saving money for the such as those supported by the CCDC. the parties. If it’s a little bit flexible, you architect. It can save money for “Having standard documents is not can get everyone on board and say, ‘This about saving money for the architect. It allows us to interpret it based on the situthe owner, but more importantly can save money for the owner, but more ation we find ourselves in,’” he says. it can simplify the process importantly it can simplify the process for Standard documents also address the for everyone. everyone because they’re working with a demographics problem. Many knowledgedocument that they are familiar with,” able staff in the bid-calling organizations says RAIC’s McKee. “We want clarity of roles and transparency. If are nearing retirement, notes Lee. As well, the bid-calling authority you run into a problem with the project, you want to be able to use might have had its staff downsized. Some management functions the CCDC document or other contracts to re-establish clarity and might even have been outsourced. “If you don’t understand the process and the principles, very strange decisions can be made by the bid-calling authority,” says Lee. “It can cause a lot of confusion.” Supplementary conditions can be used to flush out the standard documents, where necessary. PTS – Parallel to Surface WIDRIVE – New control In B.C., for example, the government mansolutions dates a number of standard supplementary conISC – Intelligent speed control ditions—how the contractor handles its insurLEVEL PRO – Designed for ance, how it handles its risk, how it pays its the crew bills… because that is embedded in the legisVCS – Everything clean lation and the practices of the province. When 3DS – Flexible application they use a CCDC document, they have to amend drum speed some of the universal language. “There are a lot of things you can do with a supplementary condition. We don’t like them, but we know they are a reality,” says Strachan. “You recognize the document—you’ve seen it many times before—and then you can read the supplement and quickly understand what Rely on the Wirtgen Group’s full range of products for new construction and makes it unique.” rehabilitation of roads. SMS Equipment’s sales and service experts, based close
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Canada has one of the most complex bodies of legal precedents surrounding construction bidding and tendering in the world, says Devries. The concept of Contract A and Contract B is unique. “That’s a huge milestone in Canadian
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BIDDING
procurement, and it generated a host of other legal precedents.” “It sets the stage for fairness,” he says. “The idea that you can’t just take my bid and do whatever you want with it is very important.” “Construction is a litigious business, and it’s becoming more litigious as time goes on,” notes Strachan. “Lawyers are advocates for their clients. When they write a contract, they want to protect their client in every way possible. The fact that other partners in the construction transaction feel that it is too risky or too biased is not their concern.” You have to be pragmatic, as well as protect yourself legally. “Legal representation cannot do construction procurement. If you leave it to them, contracts tend to become far more complicated and unbalanced,” notes Devries. “You need a legal opinion to guide you and you need to understand the risks. But it is up to procurement professionals to weigh all of these risks and legal issues and come up with what they think are the best procurement processes and documents.” The CCDC standard documents offer an alternative to legal action with the opportunity for final and binding arbitration in contract disputes. “Typically, 90 per cent of the disputes get resolved
through negotiation,” says Brown. “If for any reason that doesn’t work out, you can go on to the next stage, mediation, and ultimately— if needed—binding arbitration.” There are a few advantages of binding arbitration over litigation. For one, the process might be quicker and cost less. As well, the affected parties choose the judge. “If they go to court, they get whatever judge is assigned to the case,” notes Brown. In addition, arbitration offers the potential for confidentiality.
PreQUaliFicatioN “The owners want to make sure that they are working with qualified contractors on certain very specialized projects, and the contractors want to make sure that they are competing against their peers. You need to make sure that you are securing contractors with the experience and depth to work effectively on these specialized projects,” says Brown. “On certain projects, contractors have demonstrated that their experience and innovative ideas relating to constructability, schedule control, and so on are of great importance to owners. Owners will accept that one contractor may be significantly higher in bid price, but overall may be less costly in the end because of these attributes,” says Gary Hartman, president, Contraspec Ltd., Edmonton, Alta. “Owners sometimes consider RFPs instead from of stipulated price bids to capture this. However, the process needs to be made fair and completely transparent through properly identified evaluation processes,” says Hartman. More information has to be made available to owners and specifiers to ensure this. Generally speaking, CCDC has focused on standard contract documents to date, rather than standard bid documents,” notes Devries. “The whole public bid process is fairly complex. It is well worth their time. It would be very worthwhile to have a set of industry guidelines for owners and others.” The industry is undergoing rapid change and contracts are straining to keep up. Standard documents help keep everyone on the same page and still focus on what makes each project different. Regardless of the contract model, the stakeholders should work together effectively and transparently with equitable contracts.
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Photos by: Brad Beuermann
COVER STORY
Canada’s
Big Hooks By DAviD GoDkin
GoDkin D i v By DA
B
rad Beuermann’s morning begins the same way every day: up at 5 a.m., quick shower, quick coffee and the tower crane operator for Canadian Professional Crane Inc. in Waterdown, Ont. is off to the job site. This morning Beuermann has a word with the foreman before doing his morning circle check, examining the bolts at the base of the crane, and then makes his climb. Along the way he checks the ladder, gates and rails; watching for cracks, bent bars, anything that might jeapordize his safety or the
Why crane operators are a breed apart
safety of anyone else who might make the climb. Shortly after 6:30 a.m., Beuermann is in his cab; testing the electronics, making sure the limit switches all work—trolley in, trolley out, hoist switches up and down. “You’ll then grab your test block, which measures your weight limit at maximum radius. It’ll trip you out when it gets to be too much,” he says. Giving a final blast of his safety horn he’s ready to begin work. “I need to know that when I start my day, everyone’s going to go home safe at the end of it.”
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on any given day—from structural steel and precast concrete slabs to heaters and air conditioning units. Sometimes, his crane will operate in tandem with several others on denser downtown high-rise projects. It’s because of the complexity that tailboard meetings with the foreman and riggers are necessary before the work begins. “When I’m flying pre-cast floor slabs in, I’ll have a meeting with them just to make sure we understand the hand signals and everything.” The money is very good. He gets to travel and enjoy some great views of the cities he visits; and rules are in place to keep tower crane operators safe, although even he admits the temptation to skirt the rules is strong. Like the time years ago when Beuermann climbed 30 feet out onto his jib to scrape off the snow impeding his trolley’s mobility. “Of course I was just too young and rambunctious to tie off properly. I slipped but I didn’t fall, hung on and pulled myself up. That was a little scary.” Today, safety is paramount. Gone are the days when a young guy is thrown into operating a crane from day one because of a shortage of personnel, communicating solely by two-way radio with a supervisor hundreds of feet below. “We have people sit beside us for a hundred hours watching how we do things and seeing the job from our point of view,” says Beuermann. “You try to keep new operators working on the smaller and slower paced jobs so they can take the time and learn.”
Top: Brad Beuermann, tower crane operator for Canadian Professional Crane Inc.
Beuermann has followed the same routine every working day for the past six years. In that time, he has worked Bottom: Tower crane on rigs as high as 300 feet or 30 stoat dawn. reys above ground. How he got there is a testament to both the unpredictability of daily life on a construction site and the people who work there. An injury loading concrete, his reluctance to go on worker’s comp and his facility operating other machinery persuaded Beuermann’s employers to put him in the seat of his first tower crane. He’s been there ever since. A common question, does working at such great heights give him pause? Not one bit. “I grew up loving it. I grew up on a farm in Huron County [Ont.] and at first chance I climbed a concrete silo about a 100 feet high.” Later on, Beuermann’s challenges would increase; taking on higher, more complex jobs with the sense of humour common to virtually all tower crane operators. “It’s not so much the possibility of falling,” he says. “It’s that sudden stop at the ground when you hit it that bothers me.” Beuermann will “fly” a range of objects around the work site
Working together Nowhere is the crane activity and demand for qualified tower crane operators more intense right now than in Halifax. No fewer than 18 tower cranes dot its landscape—up high on one of them, Greg Walsh. A veteran tower crane operator, Walsh says an absolute requirement on any tower crane site is precise communication with the riggers or swampers below. “Trolley in,” crackles the voice in Walsh’s headset. “Swing left,” comes the second command followed by “Hoist down.” The words may seem ordinary, but Walsh trusts his riggers to use them with great care; any deviation from them can lead to a misunderstanding 20 storeys up, and potential disaster. “The rigger will give me a heads up, like when I’m swinging around blind. He’ll tell me where I was last time,” says Walsh, “or if I’ve got 10, 15 feet; he’ll always tell me how many feet I’ve got to go.” Particular care is taken around concrete pours. A typical concrete pour for columns and walls will take two days, including elevators and stairwells, followed by form construction for the deck and a floor pour that lasts another two to three days. Over a sevenday cycle the work can become pretty routine, says Walsh. That, he adds, is where danger lurks. “Sometimes complacency sets in and that’s how guys get hurt, just taking stuff for granted. But we’re lucky that we’ve got a lot of experienced guys.”
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COVER STORY
The greatest danger is posed by multiple tower cranes working on tighter footprints in a city’s downtown core. But avoiding each other’s pendant lines doesn’t compare with the need to avoid the spiderweb of commercial and residential power lines that loop around and sometimes across a job site. Walsh had first-hand experience of a city’s power lines on the second day of a job in Halifax two years ago. “The guy who was swamping for me, the rigger on the ground, trolleyed me out too far. I hit power lines and knocked a whole
You can take a basic rigging course, but knowing how to rig comes with time.” city block out. The crane was grounded thank Jesus, but shut everything down,” says Walsh. Crane operators tell us that no matter how well you prepare, accidents are going to happen. You minimize these on the ground by making sure the crews get the appropriate training accreditation. But Walsh says rigging courses alone are no substitute for raw experience. “It’s on-the-job training experience. You can take a basic rigging course, but knowing how to rig comes with time.” The risk, pace of work (a tower crane can make 200 lifts in one day), stiffness and lack of exercise sitting in a tower cab all day are foreign to most other workers on a job site. But for all that, and the lack of company 30 storeys up, Walsh says he wouldn’t change a thing about his day job. “When you start out it’s kind of demanding. But now I’m used to the pace and know what’s ahead of me when I get up in the morning to go to work. I love it.”
Flying Blind Matt Blackwell has done it all, from working 600 feet above ground at the Rogers building in Toronto to operating a 300-tonne, all-terrain crane on the prairies. The key for both, says the crane operator with DLB Cranes in North Vancouver, is developing precise eyehand coordination, something that only comes with experience. “You don’t get it right out of the gate, that’s for sure,” he says.
Tower crane operators get the best views.
“[Sitting hundreds of feet in the air] you literally gotta put that concrete bucket six inches above that form so the guys can get their hands on the bucket and open it.” What complicates things even more for tower crane operators are those moments when they’re “flying blind.” That is when the operator’s view is obscured by other sections of the structure being built. “You’re dealing with someone on the radio 10-12 hours a day,” says Blackwell, “and you’re not able to see what’s going on at all as it comes up and over the edge of the building.” A tower crane operator’s job is aided by tremendous advances in controls design. Blackwell says as little as five years ago, operators relied solely on their knowledge of a crane’s capacity, the weight of the objects being lifted, and limit switches that cut out the moment a crane reaches its lift capacity. “Nowadays you’ve got computers that can tell you how far out on the boom the trolley is, how fast your line speeds are and there are wind meters to let you know which way the wind’s coming from. It’s really becoming a lot more user-friendly,” says Blackwell. With joysticks in either hand
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COVER STORY
the operator can move the trolley in and out along the boom, perform the swing and hoist functions faster and more efficiently without compromising the integrity of the machine or his own safety. “Some manufacturers have gotten into rheostatic or stepless drives, which enable you to be really, really precise with the speeds of the crane, the swinging, the trolleys and the hoist.” A case in point, Blackwell points to one crane manufacturer that provides infinite variable speed or stepless operation of the tower crane’s swing, trolley and hoist drives. But he’s just as impressed by the controls on the 130-tonne, hydraulic all-terrain crane he operates. Virtually all of it is done digitally. “The computer tells me that the crane is level and how much pressure is actually going through each outrigger into the ground,” says Blackwell. “That becomes a factor when you’re lifting heavy pieces. You don’t want to go through the asphalt.” Barry Deacon agrees. The “Big Hook”, as he is called by his colleagues at Sterling Crane in Edmonton, says the technology underpinning crane technology “has changed massively.” If there’s a downside it’s the loss of “feel” that crane operators have for their equipment. Listening to a machine’s hydraulics, for example, can tell you a lot about how it’s performing. “Some people don’t have the sense of that and go by their gauges,” says Deacon. “I go by those too, but a lot of times I can also feel the machine. Like bringing down a big tower for example, a lot of the times I can tell you if I’ve touched a stud on the way down just by the feel of the machine.” Crane operators provide a very specialized service and it’s because of this that they’re considered a breed apart. Tower crane operators, in particular, belong to a kind of informal fraternity. Perched high above the site all day long, with few opportunities to socialize with those below, tower crane operators make up for it by staying in touch with each other long after a job has finished. “It’s a real small community and I still talk to guys in the tower crane community that I haven’t seen in 10 or 12 years,” says Blackwell. “There’s only so many of us,” Walsh adds. “Everyone kind of knows where everyone is. They still call me up and we talk.” Tower crane operators have more in common than the average employee of a construction company—and a lot more stories, says Beuermann. “You understand what they’re going through.”
“You’re dealing with someone on the radio 10-12 hours a day... and you’re not able to see what’s going on at all as it comes up and over the edge of the building.”
Avoiding commercial and residential powerlines on a busy jobsite is top priority.
David Godkin is a B.C.-based freelance writer. Send comments to editor@on-sitemag.com
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COVER SITE STORY PREP
Preparing for
Pan-Am Photo: On-Site staff
Getting the Athletes’ Village ready for the Toronto 2015 Pan/Parapan Games
BY ANDREW SNOOK
A
s swimmers, archers, boxers and thousands of other athletes from 41 different nations make their necessary preparations to compete at the 2015 Pan American/Parapan American Games in Toronto, thousands of construction workers are performing their own prep work to ensure the nearly 40 new and existing venues for the Games are ready to go across the Greater Golden Horseshoe area. One of the largest projects being prepared is the CIBC Pan and
Parapan Am Games Athletes’ Village, which is being built on an 80-acre site near the Don River in Toronto’s Waterfront District. The $514-million design/build/finance contract was awarded to Dundee Kilmer Developments by the Province of Ontario and is being constructed by EllisDon Ledcor PAAV Inc. Construction of the village will consist of various facilities to serve as temporary homes and training areas for athletes, including: an 82,000-sq.-ft. YMCA facility, a new George Brown College student residence building, 787 units of market housing and 253
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SITE PREP
Budget breakdown > The overall budget for the 2015 Games: $1.441 billion > Contribution from the Government of Canada: $500 million > Contribution from the Province of Ontario: $500 million > Funds allocated to the renovation and construction of venues: $674 million > Funds allocated to the operation of the Games: $767 million > Investment by municipal governments, universities and venue owners: $288 million > Portion of budget estimated to be collected through sponsorship, ticketing and other revenue measures:
additional planning and specialized contractors to be brought in for the utilities’ safe removal. “These contained nasty stuff, like old gasoline pipes, diesel pipes, ammonia and a creosote line,” explains Zuker.
WARM WINTERS The start of the early works began when the site was turned over to the contracting firm back in September, which allowed for a lot of the deep underground municipal works inside the main
Fact The Games are expected to attract more than 250,000 visitors to the Greater Golden Horseshoe region.
site to begin. Thanks to Toronto’s unusually warm winter, crews were able to continue working uninterrupted, putting them ahead of schedule. “[It] allowed them to have their interior road system pretty well back to the sub-base, sub-grade level, so we could use it for access roads; which benefited the bringing in of materials and getting the work done,” says Dittmar. “Now the design teams are working very hard to keep up with the pace of construction.”
GOLD AND GREEN All of the buildings being constructed in the village will be built to the LEED Gold standard for new construction and be equipped with green roofs along with various other green features. The
Photo: On-Site staff
Photo: Mandy Downes, Infrastructure Ontario
$153 million
units of affordable rental housing (all of which will be used as temporary accommodations); offices, administrative and ancillary facilities. Site preparation for the Athletes’ Village began September 2011 and has gone relatively smoothly to date. Although the site was relatively clear in terms of existing structures, there was more going on beneath the surface than initially anticipated. The biggest challenges were encountered during the reconstruction of Cherry Street, such as issues with existing utility lines not being where they expected to find them and having to adjust their work accordingly. “We have a situation with an existing 600-mm water line that was put in place in 1902. [It’s] an existing cast-iron water line we have to work very close to and work around, and watch our own construction,” says Tim Dittmar, construction manager with EllisDon. Fortunately, the City of Toronto has been cooperative when the contractors require shutdowns, so it hasn’t created serious problems or delays. Jesse Zuker, project manager with Infrastructure Ontario, says the installation of services in that area can prove challenging. “It’s quite a dense spaghetti of underground infrastructure,” says Zuker. “Some of which is being installed while the old infrastructure remains in place; so you can have it done and switch it over. There’s certain timing and logistical challenges associated with that congestion and that sequence.” There are also several old, abandoned private utilities that are being discovered as the roads are being torn up. These required
Crews work on the site for the YMCA and George Brown College student residence.
Cherry Street reconstruction.
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SITE PREP
The design/build/finance contract for the Athletes’ Village also includes: the construction of West Don Lands infrastructure, roads and public spaces—including the reconstruction of Cherry Street and Eastern Avenue and a new streetcar route on Cherry Street; as well as the site preparation work needed to support all the Games’ temporary facilities set up by the Toronto 2015 Pan/Parapan Am Games Organizing Committee (TO2015). The site will be handed over to TO2015 in January 2015.
Construction crews work on sites for the Athletes’ Village.
roads will feature Silva Cell technology, which supports large tree growth. On a larger green scale, Zuker says Waterfront Toronto has applied for LEED Gold for Neighbourhood Development.
Affordable housing blocks being prepared.
With so many different sites to prepare for the 25-day, multi-sporting event, the key components of the Athletes’ Village were broken down into teams. “We’ve tried to pair up our construction teams with different architectural groups for this design-build project,” says Dittmar. The vast project has been divided into five groups: the main strategic planning team, the general superintendent, the lead safety people, accounting and administration and the designbuild managers. The project is also broken down into four construction teams: municipal works, the George Brown student residence and YMCA facility, the affordable housing blocks and the market housing blocks. “Our main administration team co-ordinates the four different groups together,” says Dittmar. “We use a detailed scheduling system to schedule the different blocks and their interface with the municipal works.”
LEGACY USE Once the Games are complete, the Athletes’ Village will be handed back to EllisDon Ledcor PAAV Inc. by TO2015 for the site’s final conversion, where the finishing touches will be put into the suites and some of the common areas will be
Photos: On-Site staff
KEEPING THE PROJECT ORGANIZED
converted back to their end-use requirements. When the construction work is complete, the village will be transformed into a mixed-use neighbourhood that will include: affordable housing units, new condominiums, a YMCA facility and George Brown College’s first student dormitory that will accommodate 500 students.
THE GAMES The 2015 Pan American Games will take place from July 10 to 26, 2015 and the Parapan American Games will take place from August 7 to 14, 2015. For more information on the Toronto 2015 Pan/Parapan American Games, visit: www.toronto2015.org
Fact The construction of the Athletes’ Village is expected to create 700 new construction jobs and support 5,200 jobs in total.
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INFRASTRUCTURE
Toronto LRT project’s excess construction soils costs could reach $100 million
A
BY ANDREW SNOOK that will likely be able to accommodate fill quantities in excess of 100,000 cubic metres. That said, only 20 to 30 sites around the Toronto area are prepared to accept a few truckloads of soil. The remaining soil may need to be transported to landfill sites within the province that are far from the city, in areas such as Orillia, Kawartha Lakes, Dundalk or Owen Sound, according to the study. The challenge of managing excess soils in Toronto is not exclusive to the LRT project either; the city’s water and sewer capital program is expected to produce more than 800,000 cubic metres of excess soils by the end of the decade.
Photo: RCCAO
nyone who has ever commuted across the City of Toronto during rush hour knows how congested the roads and highways become. For that reason, improving public transit in Canada’s largest metropolitan area is always a hot topic. The creation of the two-phase, 33-kilometre long, Metrolinx Eglinton Crosstown Light Rail Transit Project, which will connect Pearson International Airport with the Kennedy subway station, has the potential to significantly ease congestion across the city. The first phase of the project began in 2010 and tunnelling is expected to commence this year. Phase 1 consists of a 19-km long stretch that connects the Kennedy subway station in Toronto’s east end to the intersection of Jane Street and Eglinton Avenue, including 10 km of underground tunnels between Keele Street and Laird Avenue. The project’s expected completion date is 2020. Although the project will assist in reducing congestion on the city’s highways and roads, landfills around the city cannot accommodate the volume of excavated soils the project will produce, and the result is costly. According to a recent study commissioned by the Residential Civil Construction Alliance of Ontario (RCCAO) titled, Eglinton LRT Project: Estimated Costs and Impacts of Addressing Excess Construction Soils, the total volume of soils and fills displaced during the first phase of the project will be approximately 1.5 million cubic metres. The study states that the cost of managing the excess soils for this project could range from $65 million to $100 million, depending on distance, loads and landfill costs. With the exception of using the excess soils to create artificial islands in Lake Ontario, landfills are the only large-scale sites
Eglinton Crosstown LRT project under construction.
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INFRASTRUCTURE
Frank Zechner, a consultant and environmental lawyer that prepared the RCCAO study, says the main issue surrounding soil disposal stems from regulations created by the Ministry of the Environment (MOE) designed to encourage the clean-up of brownfield and other contaminated sites. He says those regulations are being misapplied to excess construction soils that are relatively clean; and some municipalities currently restrict or ban the importation of soils from outside their jurisdictions due to uncertainties in applying the MOE’s regulations governing soil quality and placement. He says the same regulations for testing protocols for soils are being applied, whether the soil comes from underneath a roadway or an industrial site, and that creates added costs and time delays; often for soils that do not pose any serious hazards. “In 999 times out of 1,000 it is quite benign and the only higher level in the soil would be higher salt concentrations that would not pose any serious hazard, particularly if it’s not being used as a top-level, cultural soil,” Zechner says. The MOE are currently working with the RCCAO on an industryled working group, with a focus on helping industry develop solutions for excess soils movement. Kate Jordan, a spokesperson for the MOE, says municipalities and conservation authorities have the option of using MOE’s standards when issuing permits or bylaws for fill sites, but those standards may not always be suitable for a project. “If a municipality is using the ministry’s brownfields standards for overall soil management, they may not accept soil that exceed ministry standards, or in the case of road salt, contains contaminants associated with the use of road salt,” explains Jordan. “Soil that contains road salt contaminants may not be appropriate for certain land use, such as fill sites in rural areas with groundwater sources and well users nearby. In other cases, the ministry’s standards may not necessarily be appropriate.” The MOE is currently consulting with municipalities, conservation authorities and the construction industry on the draft version of a best management practices document and are working to educate municipalities on the intent of the Brownfields standards. The consultation process also involves optional uses for excess soils. “There may be other options for managing soils that may be impacted with salt, other than disposal in landfill; and as part of our consultation with stakeholders we will continue to discuss how best to manage excess soils with those involved in managing extraction and fill sites,” says Jordan.
Image: Metrolinx
NAVIGATING REGULATIONS
BANKING OPTIONS One optional home for excess construction soils is to create soil banks, where excess soils are stored temporarily. In a recent project involving the roadway interchange at Laird Road and the Hanlon Expressway in Guelph, Ont. The City of Guelph used 230,000 cubic metres of recycled fill on the project that it had collected by locally storing soils and gravel from 34 different road jobs over a three-year time period. Banking the soil saved the city approximately $900,000 in trucking and material costs, in addition to reduced greenhouse gas emissions from trucks. Zechner says soil banking is certainly an option, but it requires having someone step forward that is willing to hold the soil and current regulations under the Environmental Protection Act do not encourage banking or minimize liability for temporary storage. “They [MOE] are considering some regulations and some modifications to policies on a go-forward basis that might allow what they consider to be a temporary holding; but even those in the succession paper that they released back in April… they’re talking of a magnitude of two or three years of temporary storage, when you’re probably really looking at five to 10 years,” he says. Zechner says there should be some recognition of the costs associated with the transportation and disposal of soils. “I don’t think there’s recognition on a municipality-wide basis or a region-wide basis,” he says. “They might be able to shave off five, six or seven per cent of the capital costs accumulatively over years and years. It gets to be a significant dollar amount.” Whether it gets banked, sent to a landfill or used for another purpose, one thing is clear: a home needs to be found for Toronto’s excess soils/fills before infrastructure project costs spike from a different kind of gridlock.
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12-08-08 1:01PM PM 6/18/12 1:26
Machine control
Pimp your
Ride
Machine control adds precision and versatility to compact equipment
W
By Corinne Lynds
hether it comes as an upgrade installed by the OEM or aftermarket, machine control technology continues to grow in popularity across the construction industry. Boasting as much as 30 per cent in productivity improvements, significant fuel savings and glowing reviews from machine operators, it’s little wonder that machine control is becoming standard on many heavy equipment models. One area that has been slower to catch on, though, is the use of machine control on compact equipment (CE). Available for more than 30 years in laser-guidance models and more recently in single and dual solutions, the CE market is beginning to gain some ground according to Mike Reed, business manager of Leica Geosystems’ machine control division. “That growing interest is the result of an increased adoption of 3D machine control.” This, combined with tough economic conditions over the past three to four years has created more demand for contractors who are looking for cost savings and productivity improvements. Lacklustre demand for machine control in the CE category has been blamed on the fact smaller equipment doesn’t get the same non-stop usage that heavy equipment does. “With these compact machines, a lot of times they’re on-site, and they may not even be working because they are just used to do quick/odd jobs here and there,” explains Scott Crozier, segment manager, machine control at Trimble Navigation in Denver.
Eliminate over-excavating The X-22 is Topcon’s newest machine control system for hydraulic excavators. Available in 1D and 2D, it uses three wireless sensors to continuously measure the bucket’s position in real-time, displaying the desired grade and distance to get there. It eliminates over-excavating, is quick to set up and improves operator safety.
This reputation, as “jack of all trades and master of nothing,” combined with the fact machine control for CE isn’t exactly cheap, makes it easy to understand why contractors haven’t been scrambling to buy the stuff. “Costs will come down over the next few years,” assures Tony Vannerman, construction marketing manager for Topcon in Livermore, Calif. He says a combination of increased competition between machine control manufacturers, deeper market penetration
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Real-time grade guidance The DDS300 version 3.0 from Trimble is the manufacturer’s laser-referenced grade control solution for compact machines. It uses wireless communications, a laser receiver and angle sensors to provide dynamic positioning information for the excavator or backhoe bucket at all times. Real-time
and improved manufacturing procedures will eventually bring “lower price points to the industry.” Today machine control for compact equipment ranges from roughly $1,500 for a basic laser-guidance system, up to $15,000 for a dual automatic solution.
Small, but mighty One of the most significant factors contributing to the growing interest for CE machine control adoption is the increasing power and versatility of new model compact machines. In many incidences, these mighty little machines are coming in at over 100-horsepower. This added power and precision, when paired with a machine control solution, is enough to replace some heavier equipment on the job site. This is an added bonus for contractors who are looking to reduce costs in the areas of fuel economy and transportation of heavy equipment from job site to job site. Previously, CE with machine control technology were used primarily for fine grading applications. Fine grading continues to be predominant, but OEMs are now diversifying more than ever. Today, we frequently see machine control installed on mini excavators, skid steers and compact wheel loaders for a variety of applications. Typical jobs include: positioning rocks, drilling holes, use in tight working conditions around buildings, sidewalks, laying stone, utilities placement and parking lots. “Construction companies doing the final grading for concrete floors of a building is another area where there has been more demand for accurate and precise grading,” says Crozier. “With the past four years of the economy being tough, we are noticing more companies trying to find machines that can do more applications on smaller commercial site types of projects;
grade guidance is displayed on the in-cab display.
where they can be working inside a building, but then also go outside the building and do work,” explains Reed. Bryce Johnson, operations manager for Laramie, Wyo.-based Elk Ridge Builders and Design is a good example of a general contractor that’s using his compact machine to gain significant productivity improvements. The company is using a Leica Power Grade 2D dual laser system on a 332 John Deere skid steer tire machine. “This machine, in combination with the steel grouser tracks that we use, is very powerful; allowing not only final grading, but also a degree of subgrade cutting. The primary application is for dual slope grading,” explains Bryce. Since implementing the machine control technology, he reports “significant time savings and less man power and equipment [are needed].”
aftermarket inStallS If you’re not in the market for a new piece of compact equipment, but are looking to add a machine control solution, chances are you will need to visit a hydraulic specialist first. Although some of the newer, more powerful CE models are now outfitted with the necessary electric hydraulic valves as a standard feature, most equipment more than a year or two old, is not. According to Crozier, the cost of having these electric valves installed “is in the order of US$5,000 to $10,000 depending on the system and the machine, and whether you want single or dual control. So it almost doubles the cost of the system if you need to add those valves.”
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Machine control
Don’t let that deter you though. The majority of machine control systems currently installed go onto the attachment, rather than the machine itself. “Right now we’re focused on the fine grading attachment box blades, equivalent to a mini grader on the front of the machine,” says Crozier. “The blades on those machines are controlled from the skid steer, but often have their own control bank and are driven by auxiliary valves on the compact machine to drive the grade. These attachments often come standard with the electric hydraulic valve, so then it is just simply the OEM attachment plus our system, the compact machine doesn’t have to be modified.” Down the road, there’s a very good chance that machine control manufacturers and the OEMs will partner up and make machine control technology standard out of the factory. This is already quite common on paving equipment. Topcon has developed a partnership with John
Dual slope grading Elk Ridge Builders and Design use a Leica Power Grade 2D dual laser system on its 332 John Deere skid steer primarily for dual slope grading. The system regulates the elevation and cross slope of the grader blade through sensor technology. Fully automatic blade control ensures the desired finished surface is produced with speed and precision.
Deere; Trimble with Bobcat; and there are more in the works with other manufacturers. “Ultimately all types of contractors benefit from using machine control on CE. General, concrete, landscape, engineering, utility… they all use machine control on their grading and excavating equipment,” says Vannerman. “The size of the machine does not matter, because machine control systems will increase production, save fuel, reduce engineering expenses and help the contractor better control material costs.” As the price point for CE machine control solutions drop over the next few years and innovations in the technology continue, savvy contractors should take a second look at the power and versatility these systems have to offer.
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ADVERTISERS’ INDEX & WEBSITES ADRIAN STEEL .......... www.adriansteel.com ....................................... 38 CASE......................... www.casece.com ............................................. 15 CATERPILLAR ............ www.CatAllDay.com/excavators ......................... 48 CHEVROLET .............. www.chevrolet.ca ............................................ 13 CONSTRUCTION SECTOR COUNCIL ..... www.csc-ca.org ............................................... 17 DETROIT DIESEL ....... www.DemandDetroit.com ................................. 27 FORD ........................ www.ford.ca/WeOwnWork ................................... 6 FREIGHTLINER.......... www.FreightlinerTrucks.com/WorkSmart............... 2 HCSS ........................ www.hcss.com/apps......................................... 22 IMPERIAL OIL............ www.imperialoil.ca ............................................ 9 INTERNATIONAL SITES & SPILLS EXPO ............. www.sitesandspills.com ................................... 23 JOHN DEERE ............. www.johndeere.com/excavator .......................... 45 LEICA GEOSYSTEMS ....www.intelligent.construction.leica-geosystems.us ...39 MICHELIN ................. www.michelin.ca ............................................. 47 NEW HOLLAND .......... www.newholland.com ........................................ 4 SMS EQUIPMENT ...... www.smsequip.com ......................................... 20 STRONGCO................ www.strongco.com........................................... 32 TOPCON .................... www.topconpositioning.com/3DMC2 ................. 35 VIEWPOINT CONSTRUCTION SOFTWARE ................ www.viewpointcs.com/on-site ........................... 41 VOLVO ....................... www.volvoce.com/na ........................................ 11 WESTERN STAR TRUCKS .................... www.westernstar.com....................................... 21 WORLD OF CONCRETE ................ www.worldofconcrete.com ................................ 40
THE ADVERTISERS’ INDEX IS PROVIDED AS A FREE SERVICE TO OUR ADVERTISERS.
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12-08-10 11:36 AM
RISK By David Bowcott
C
Choosing a risk advisor
hange abounds within the construction industry. Never has your choice of business advisor been so important, and given the increasing level of risk dialogue going on in the Canadian construction marketplace, your choice of risk advisor could mean the difference between losing or winning jobs. Before we delve into the specific attributes you should measure your existing risk advisor against, lets start by defining the role. A risk advisor should be fully equipped to provide you with all your risk management advice, as well as access to all risk management tools available in the marketplace. This role has traditionally been defined as “insurance broker” or “surety broker,” but in recent years it has evolved into risk advisor. Now that we’ve defined what exactly a risk advisor does, we can delve deeper into the attributes that he/she should possess: Relationship – You need to have a close relationship with your risk advisor. You need to be able to talk straight to each other. Your risk advisor may tell you things you don’t want to hear, but if the advice saves your company in the end, you need to hear those things. Experience – Some call it “battle scars,” whatever it is called, it is the level of experience your risk advisor has with a myriad of issues. How big is the pool of construction activity that your risk advisor swims in (or has swum in)? Whether its new delivery models, contractual wordings, claims, or new products, the more they’ve seen it,
the better the chances they have a solution for your risk issue. Office Network – Does your risk advisor have the ability to serve you with global solutions and deliver those solutions through local offices? The office network of your risk advisor needs to be a consideration. Community – A local risk advisor that is involved in your community provides a measure of comfort when judging integrity. Industry-focused practice – The only way your risk advisor can truly advise, communicate and broker your risk is through industry focus. If they do not have a construction practice within their company and are handling your construction business along with a flower store and a hotel, then you should really consider how effective they are at maximizing your terms. Independence – There are some companies that market themselves as independent risk advisors/brokers, but are owned or financed by insurance carriers. Independence, especially with broking functions, is vital to ensuring you are achieving the best terms available in the marketplace. Your advisor should have minimal to no conflicts of interest. The individual advising your firm should be providing you pure advice on what is best for your company. Self-interests should not drive their advice. Knowledge of all delivery models – There are a multitude of delivery models that owners are using to develop (and operate)
their assets. Does your advisor have experience in all of them, especially those that are growing in market share, such as public-private partnerships or CM at risk delivery models? Benchmarking – How big is your risk advisor’s pool of construction business? The larger the pool, the better the benchmarking. Whether it’s insurance and surety terms and conditions, or it’s construction best practices, your broker’s pool size directly correlates to their ability to benchmark effectively. Respect and leverage – A primary reason for choosing a risk advisor/broker is the comfort provided to you that they have respect and leverage within the insurance industry. How well they know the markets and how much business they do with the markets does matter. The following represent key areas of respect and leverage your risk advisor should possess within the insurance industry:
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RISK
• Ability to get best terms and conditions. Both pricing and coverage. • Ability to get claims paid on a fulsome and timely basis. • Ability to stretch the insurance carrier’s appetite for a specific risk through their insurance/surety experience, relationship, respect and leverage. • Ability to ensure there are minimal issues when your exit an insurance relationship. • Respect and leverage with many markets. Track record of innovation – Does your risk advisor have a record of innovating solutions to meet the needs of the ever-changing construction marketplace? You will likely be asked for more constraining security on future projects, are you equipping yourself with a risk advisor that has developed and has access to less constraining solutions that satisfy owner and lender specifications? Transactional excellence – Is your risk advisor able to provide comprehensive, accurate and timely insurance documentation? This may include documents such as insurance prequalification letters, insurance certificates, insurance binders, insurance policies, surety prequalification letters, bid bonds, agreements to bond, performance bonds, payment bonds, contract reviews, etc. This documentation needs to be comprehensive, accurate and timely to ensure your company maximizes their opportunities.
Senior level insurance relationships – How high up the insurance company’s management structure does your risk advisor’s relationships run? Are they close with the local underwriters on your account? Are they close with the regional underwriting manager? Are they close with the national underwriting manager? Or do they know the top decision maker of that company for that line cover? If it is anything below top-level connections, you should be concerned.
Global knowledge — Is your risk advisor tapped into a global network for risk management solutions and is their global network an industry-focused leader in these global jurisdictions? Solutions to manage construction risk are coming from locations throughout the world (and likewise are being deployed into new countries throughout the world); does your risk advisor possess the knowledge of what these solutions are and how they will help your business?
A risk advisor should be fully equipped to provide you with all your risk management advice.
Network – Beyond the insurance company network your risk advisor has, do they know all parties to a project (owners, lenders, design firms, contractors, subcontractors, operators, etc.)? The more people they know, the better your chance their advice and connections will help your business.
Breadth of insurance relationships – Some risk advisors have strong relationships with an insurance carrier’s surety operation, but have virtually no relationship with that same carrier’s insurance operation. Having relationships across the carrier’s operations ensures your risk advisor has the ability to better integrate risk solutions. Total cost of risk services – A risk advisor that understands the total cost of risk and can help you identify and quantify your risk appetite is vital to success in the future construction marketplace. Furthermore, can your risk advisor provide you with detailed retention analysis services and captive solutions?
Transparency – To what degree does your broker transparently disclose how they operate? Their compensation, conflicts of interest, procedures, errors and omissions insurance, etc. Transparency is healthy and it builds confidence. Today’s construction marketplace appears to be migrating to more transparent dialogues between all project stakeholders and much of that dialogue is around risk. Proper risk management, and communication of risk management, could mean the difference between winning and losing. Choose wisely.
David Bowcott is senior vice-president, national director of large/strategic accounts, AON Reed Stenhouse Inc. Send comments to editor@on-sitemag.com.
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FUNNY PHOTO
SEND US YOUR FUNNY PHOTO CAPTIONS and if we think you’re the funniest, you will be the winner of a limited-edition die-cast model of a Mack Truck. (Comparable alternative model may be awarded.)
DEADLINE FOR ENTRIES IS
September 28, 2012
Ok a y f o r , I ’m r e t h p oo e l ab ad y l. W our h I s t en c an ar t ?
THIS MONTH’s winner is:
Don Del Vecchio, Mississauga, ON
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44 / August 2012
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MAXIMUM EFFICIENCY IS STANDARD, YOUR INPUT WAS ANYTHING BUT.
When we set out to improve the efƟciency of our excavators, customers like you raised some great points to help us raise the bar. All of which have led to the development of our new G-Series Excavators. Improved hydraulics, better visibility, fuel efƟciency, and a more intuitive cab layout are just some of the features that take efƟciency to a whole new level. Proving that switching to Interim Tier 4 can not only be a good thing, but a highly productive one as well. To Ɵnd out more, contact your dealer or visit our website.
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12-08-10 11:51 AM
CONTRACTORS & THE LAW By Chris Eagles & Ross McGowan
T
Top 10 ways to lose money to fraud
he construction industry could be described as perfectly constituted for commission of fraud. The contracts are typically unique and large value, the job sites are busy and sometimes chaotic and the opportunity for monitoring and controls are always challenging. Relationships between those that hand out the contracts and those that receive the work are sometimes opaque and poorly documented. Integrity amongst leaders in the construction industry is paramount to public confidence and ultimately, critical to the long-term financial health for all participants. Fraud losses erode profits in the short term, and ultimately lead to a loss of the open, competitive bid process that underpins the industry. We look at the leading issues and a few ways to fight back against fraud on the construction site:
The Top 10 1. 2. 3.
Accounting/bookkeeping frauds Secret commissions and collusion Billing for work/materials not performed or delivered 4. False applications for payment 5. Manipulating change orders 6. Manipulating schedule of values and contingency accounts 7. Substituting material from specifications 8. Diverting lump sum charges to time and material cost 9. Diverting purchases and theft of equipment/tools 10. Intentional non-payment of subcontractors and material suppliers
The impact of these schemes can be mitigated through appropriate controls, development and implementation of well-considered hiring, tendering and anti-corruption policies, a zero tolerance approach to participation in such schemes and a standard known policy that seeks to disgorge profits by careful use of litigation.
AccounTing frAuds The pen is mightier than the shovel when it comes to fraud. Most common schemes take place back at the office, through skimming receipts, double invoicing for expenses, false supplier invoices and interception of payments. Threats are external and internal and require an awareness of: the job site, material and supply contracts, timely reconciliation of invoices to contract, review of change orders, and close monitoring and reconciliation of banking deposits. The single most critical prevention/ detection method is to ensure there is a well trained accounting staff with an appropriate segregation and rotation of job duties. Those that do invoicing must not handle collections, those that handle receipts must not do the banking reconciliation, etc; and all must know that there is real and effective oversight of their work.
commissions And collusion Sometimes it is not better to give than to receive. Both are bad when it comes to kickbacks, bribes, secret discounts and secret commissions. These have a devastating effect on the construction industry, both locally and internationally, such that
Canadian firms must be vigilant of their obligations under Canadian law as well as an array of foreign legislation that applies to Canadian firms working here or abroad. Collusion comes in many forms, from bid rigging amongst â&#x20AC;&#x2DC;competitorsâ&#x20AC;&#x2122; to tipping confidential information to selected tender contestants. The effect is the loss of open, fair, competitive bids in favour of cronyism, creeping costs and loss of the open market. Individuals in a position of trust that are obliged to be loyal to another, are subject to duties to protect the beneficiary of the relationship, including the duties to avoid conflicts of interest, keep trade secrets confidential, and fully disclose to the beneficiary all material circumstances that might influence the individualâ&#x20AC;&#x2122;s decision making. The duty of loyalty is summed up by the stipulation that one must not make a secret profit or secret commission.
proTecTion And pursuiT Companies can protect against losses due to fraud and collusion through robust anti-corruption/anti-conflict of interest policies, zero tolerance for requests for secret payments, rebates or discounts, and transparency in all material contracts, including audit rights provisions for major sub-contracts and material supply contracts. If a party has reason to believe that they have been victimized, a targeted civil litigation investigation strategy can be used to obtain necessary court orders to disclose banking and other third-party records. The key is to act quickly and aim carefully in the pursuit of your civil remedies. This column is provided for general information only and may not be relied upon as legal advice. Send comments to editor@on-sitemag.com.
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2212
WHEN THE GOING GETS TOUGH,
THE MICHELIN X WORKS XDY TIRE ®
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KEEPS GOING
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It’s tough out there. That’s why the MICHELIN® X Works XDY® tire is your on/off road solution. It is built to the highest standards of reliability and durability. With better wear and exceptional traction, it offers more mileage and operational savings for your fleet.* The MICHELIN® X Works XDY® tire also features built-in Co-Ex Technology™, a double layer compound for added anti-cut, anti-chip protection and better performance in a variety of on/off road applications. From highway to construction site, the MICHELIN® X Works XDY® tire delivers performance to your bottom line.
*When compared to the MICHELIN® XDY®3 tire. © 2012 Michelin North America (Canada) Inc. All rights reserved. The “Michelin Man” is a registered trademark licensed by Michelin North America, Inc.
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