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CANADA’S LARGEST BRIDGE REHAB APPROACHES COMPLETION
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PHOTO CONTEST
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$%# ! THINK IDLE TIME IS A DIRTY WORD? SWEAR BY EQUIPMENT MANAGEMENT.
Excess idle time is a curse on construction job sites. Some machines can spend fully half of their time idling rather than working. Good equipment management can do a lot to cut idle time to the bare minimum, helping you get more work done with fewer machines while increasing their resale value. Visit www.cat.com/swear to learn more. Then see your Cat® dealer for some polite talk about the many ways equipment management can build more value into your business every day.
© 2014 Caterpillar All Rights Reserved. CAT, CATERPILLAR, BUILT FOR IT, their respective logos, “Caterpillar Yellow,” the “Power Edge” trade dress and Product Link, as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.
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VOLUME 58, NO.5 / SEPTEMBER 2014
COVER STORY 23 Lifting the curtain on underground construction
In this issue we pull back the curtain on the people whose job it is to give us more power, more precision and more control in underground technology.
DEPARTMENTS Comment 5 We need to close the gap
8
16
News Industry news
14
Construction Stats The latest news on building permits and construction employment
29
COLUMNS 32 Software Navigating the construction journey
34
Risk Project risk matrix
36
Funny Photo Funny Photo contest
38
Contractors and the Law Understanding arbitration agreements
36
Index of Advertisers
32
features 16
Hybrid hopes run high Major manufacturers are putting hybrid machines in the spotlight to promote productivity and energy efficiency.
29
Canadaâ&#x20AC;&#x2122;s largest bridge rehab project approaches completion Rehabilitation of the HonorĂŠ Mercier bridge represents a three-way agreement between the governments of Canada and Quebec and the Mohawk Council of Kahnawake.
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COMMENT
We need to close the gap
A
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record 1.3 million Canadians now make their living in the construction industry. And the sector accounts for more than 7 per cent of gross domestic product. It is one of the country’s leading and fastest growing industries, hiring 600,000 new workers since 1996, according to BuildForce Canada. Doesn’t look like that pesky skills shortage is going away anytime soon! So, what is the Canadian construction industry doing about it? Not enough. There have been significant strides made to develop programs and competitions to entice more young workers to the construction sector, but it’s not happening quickly enough, nor driving the numbers we are going to need to keep machines humming. A great example of one of these programs is Canada’s involvement in the WorldSkills Competition. Thirty-one young men and women will take part in the WorldSkills Canadian Trials taking place across the country in January and February 2015. The competitors that meet pre-determined Canadian standards will go on to represent Canada in Sao Paulo, Brazil next summer. This type of program provides opportunities for students and generates an increased excitement about careers in the construction industry, but we still need to get more kids involved. The Canadian Association of Women in Construction (CAWIC) is also doing its part. Recently it launched a three-year project in St. John’s, N.L. to promote women’s advancement in the construction sector. The federal government, through the Status of Women Canada, awarded CAWIC a grant for $249,900. Working with industry partners, CAWIC will use the money for the Women’s Advancement project to develop an action plan to open doors for women in construction. These are just a couple of programs that made headlines recently. There are many more being initiated by large construction firms, associations and post-secondary institutions,
but the challenge is a lack of unification. There is still a significant gap between the skills graduates have, and those that are needed for construction. According to Rosemary Sparks, executive director of BuildForce Canada: “Building and maintenance is becoming more technical and complex, and that opens the field to a whole new generation of skilled workers. People with math, science and technical backgrounds are increasingly in demand in our industry. There’s tremendous opportunity.” That being said—something doesn’t quite add up. In a recent research study conducted by the Fraser Institute (Do Labour Shortages Exist in Canada?), it was pointed out that a record gap exists between unemployment for adults and youths. The reason for this high level of youth unemployment partly reflects the skills youths have acquired, especially their marked shift from community college to university education over the past decade. The unemployment rate for high school graduates with a post-secondary certificate or diploma is 7.3 per cent. For university graduates it is 9.1 per cent. Although there is a greater demand for workers with higher levels of expertise in technologies and building material, and there are higher numbers of more educated graduates—there remains a significant mismatch in the skills that are being taught and the skills that are needed. The construction industry is on the right track in promoting skilled trades and developing programs to attract new recruits, but more work needs to be done at the high school and post-secondary levels. Graduates need to be counseled to pursue courses that provide the sought-after skills that will land them good, high-paying jobs in the future. Corinne Lynds / Editor CLynds@on-sitemag.com
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CONTRIBUTORS
MEET OUR CONTRIBUTORS FOR THIS ISSUE
www.on-sitemag.com / Fax: 416-510-5140
PUBLISHER | Peter Leonard (416) 510-6847 PLeonard@on-sitemag.com
JIM BARNES / Contributing Editor, On-Site
EDITOR/EDITORIAL DIRECTOR | Corinne Lynds (416) 510-6821 CLynds@on-sitemag.com
On hybrids: As most of us recall, 2008 was not the best year to be introducing construction equipment of any kind, let alone new technology that involved a price premium over the other models out there. Despite the recession, hybrids have slowly won interest in the marketplace.
ASSISTANT EDITOR | Patrick Callan (416) 442-5600 x3524 PCallan@on-sitemag.com
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DAVID BOWCOTT / Senior vice-president, national director large/strategic accounts, construction and infrastructure services, Aon On risk matrix: Everybody has a risk matrix these days. Often every major stakeholder in a project will develop their own risk matrix in order to identify, quantify and treat risks associated with the project.
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MATTHEW SWANSON / Associate lawyer at Borden Ladner Gervais LLP (BLG)
CONTRIBUTING EDITOR | James A. Barnes ART DIRECTOR | Melissa Crook (416) 442-5600 x3260 MCrook@bizinfogroup.ca ASSOCIATE PUBLISHER | David Skene (416) 510-6884 DSkene@on-sitemag.com SALES & MARKETING COORDINATOR | Kim Rossiter (416) 510-6794 KRossiter@bizinfogroup.ca PRODUCTION MANAGER | Barb Vowles 416-510-5103 BVowles@bizinfogroup.ca CIRCULATION MANAGER | Selina Rahaman (416) 442-5600 x3528 SRahaman@bizinfogroup.ca Published by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. 80 Valleybrook Drive, North York, ON M3B 2S9 BIG Magazines LP Executive Publisher | Tim Dimopoulos Vice-President of Canadian Publishing | Alex Papanou President of Business Information Group | Bruce Creighton SUBSCRIPTION RATES Canada $81.00 per year, Outside Canada US$139.00 per year, Single Copy Canada $13.00. On-Site is published 7 times per year except for occasional combined, expanded or premium issues, which count as two subscription issues.
On arbitration agreements: Understanding the effect of arbitration agreements on ones’ legal rights is critical for any person or business entering into a commercial contract. These agreements dictate how certain disputes can be resolved and may prohibit recourse to the courts.
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On navigating the IT journey: Many construction firms are caught between two realities: the world of local computing, where data resides on servers and personal computers, and the online world, where data is collected and managed by cloud-based hosts and application providers..
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On the Honoré bridge project: With 30 million vehicles crossing over it every year, the Honoré Mercier bridge is one of Canada’s busiest... The rehabilitation project is the first of its kind, as it represents a three-way agreement between the governments of Canada and Quebec and the Mohawk Council of Kahnawake.
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Displacement Power Output Weight Max. Wheel Size Max. Cutting Depth
TS 480i & TS 500i STIHL Cutquik® STIHL’S EXCLUSIVE TECHNOLOGY If you work on a construction site, you’ll know that delivering a fast, quality cut is what really counts. The STIHL TS 480i and TS 500i with STIHL’s fuel injection technology are the most reliable workmates you could hope for. They combine precision, efficiency and user-friendliness with cutting-edge technology. So you can focus on what matters most – your work.
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INDUSTRY NEWS
INDUSTRY>NEWS With openings for more than 250,000 new construction workers to replace retiring baby boomers over the next decade, BuildForce is also doing its part to attract young skilled workers. It will launch its redesigned Careers in Construction website at www.careersinconstruction.ca this fall, with more youth- and parent-friendly trade-by-trade information. BuildForce Canada is a national industry-led organization that represents all sectors of Canada’s construction industry.
Canada’s construction workforce reaches all-time high A record 1.3 million Canadians—or 1 in 14 workers—now make their living in the construction industry, according to BuildForce Canada. Canada’s construction industry accounts for more than 7 per cent of gross domestic product. It is one of Canada’s leading and fastest growing industries, hiring 600,000 new workers since 1996. That’s an employment growth rate of 86 per cent. “Canada’s construction industry not only builds, it maintains and repairs more than $4 trillion worth of assets, and it’s our skilled workforce that makes it happen,” said Rosemary Sparks, executive director of BuildForce Canada. “Workers are the driving force behind our industry and we’re very proud of that.” As Canada’s construction industry grows, it also becomes more specialized, requiring workers with higher levels of expertise in technologies and building systems. “Building and maintenance is becoming more technical and complex, and that opens the field to a whole new generation of skilled workers,” added Sparks. “People with math, science and technical backgrounds are increasingly in demand in our industry. There’s tremendous opportunity.”
will supply cash for essential road, bridge, water and wastewater projects. The Ontario government will allocate half of the funding annually and distribute the other half through an application-based process. The funds are available to municipalities with less than 100,000 people according to the 2011 census. Grants are expected to be awarded in early 2015.
$100M infrastructure fund announced for rural Ontario Ontario’s Premier Kathleen Wynne and Agriculture, Food and Rural Affairs Minister Jeff Leal recently announced the provincial government will provide small, rural and northern municipalities with an annual $100-million infrastructure fund. The Ontario Community Infrastructure Fund
CAWIC launches project to promote women in construction The Canadian Association of
women’s roles in the industry,”
Women in Construction (CAWIC)
said Tammy Evans, CAWIC’s director.
has launched a three-year project in
“We are proud to work with the
St. John’s, N.L. to promote women’s
Government of Canada to address
advancement in the construction
Canada’s skilled trades shortage
industry.
and to attract more women to the
The federal government, through the Status of Women Canada, award-
construction industry.” CAWIC is looking for employers,
ed CAWIC a grant for $249,900 earlier
unions and educational partners
this year. Working with industry
who share its vision to promote
partners, CAWIC will use the money
change and break down barriers
for the Women’s Advancement Project
for women in the construction
to develop an action plan to open
industry. CAWIC believes the
doors for women in construction.
provinces of Alberta, Ontario
“This is an important step for
and Newfoundland/Labrador
the construction industry. Working
are the best candidates to get
collaboratively, we will advance
involved in this initiative.
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Down to the finest detail.
Find out more about how we dig deeper. Visit KellerCanada.com â&#x20AC;&#x201C; formerly North American Caisson Ltd.
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INDUSTRY NEWS 7,500 tons of bulk liquid asphalt arrives at Port of Hamilton Yellowline Asphalt Products Ltd. recently welcomed the terminal’s first vessel, which was carrying 7,500 tons of bulk liquid asphalt. The asphalt will be used for road construction projects throughout Ontario. The vessel load is the equivalent to about 100 rail cars. The tanker MV Thalassa Desgagnes docked at the Port of Hamilton’s Pier 23 and used a new aboveground pipeline from the vessel to transfer the asphalt directly to Yellowline’s storage tanks at Pier 22. “The ability to bring product in by vessel adds a dimension of efficiency. Our terminal location at the Port of Hamilton gives us the flexibility to use road, rail and marine, depending on our needs,” said Suresh Daljeet, operations manager. Dufferin Construction, a division of Holcim Canada Inc., and Aecon Group Ltd. joined forces in 2011 to streamline their supply chains for asphalt cement. The companies launched a joint venture, Yellowline Asphalt Products Ltd., constructing a new asphalt cement tank farm and mixing facility on Pier 22.
Asphalt pavement is made up of 95 per cent aggregate and five per cent asphalt cement. The asphalt cement binds the aggregate together and helps resist rutting and cracking. The new tank facility offers 30,000 tons of capacity, or about three months’ supply. There is also a mixing tank to produce a range of grades and four 1,000-ton day tanks to hold the asphalt cement immediately prior to shipping. An in-house lab allows Yellowline to produce numerous, precise formulations for modern construction projects.
Construction of Edmonton's tallest tower to begin this fall The Edmonton Arena District joint venture of the Katz Group and WAM Development Group will start construction of Edmonton’s tallest tower this fall. Stantec will be the anchor tenant of the 62-storey building located in the Edmonton Arena District on the corner of 102 Street and 103 Avenue. This one million sq. ft. mixed-use office, retail and residential tower will meet LEED gold standards. It will stand 746 feet tall and host 26 storeys of offices and close to 320 residential units. When it opens in the summer of 2018, it will be one of the tallest structures in Western Canada. “This new building will revolutionize the downtown landscape in Edmonton and will set expectations for future buildings in the city,” said Darren Durstling, president and CEO of WAM Development Group. “This tower is being designed, engineered and project managed entirely by Stantec, showcasing their vast capabilities and experience.” Some of the tower’s key features include the lobby opening
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Formerly...
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INDUSTRY NEWS
directly into the public plaza, providing direct access for all office employees and residents. The top of the tower will also include an iconic design element, representing the personality of the Edmonton Arena District. “We are very proud to be partnering with one of Edmonton’s most successful and most respected companies on what is surely going to be an extraordinary addition to our skyline,” said Daryl Katz, chairman of Katz Group. “I have every confidence this tower will be the cornerstone of Stantec’s continued success, and that it will drive the ongoing development of the Edmonton Arena District in a very powerful way.” Currently located in office buildings across downtown Edmonton and headquartered
at 10160 112 St. NW, Stantec will lease approximately 450,000 sq. ft of the new tower. “We are proud to have both our people and our designer’s work play a role in enhancing the vibrancy of the Edmonton Arena District,” said Bob Gomes, president and CEO of Stantec. “Stantec, WAM Development Group and Katz Group all have deep roots in this city, and it’s exciting to see the creativity of our companies come together to contribute to the revitalization of our downtown community.”
CEO of Bird Construction to retire at end of year The president and CEO of Bird Construction will retire on December 31, 2014 after
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more than three decades with the company. Tim Talbott began his career with Bird 33 years ago in Edmonton as a project co-coordinator. He progressed to more responsible roles in the district before moving to Winnipeg as the district manager in 1992. In 2001, he relocated to the Toronto corporate office to assume executive operational roles, which led to him becoming president and CEO in 2010. Ian Boyd will succeed Talbott as president and CEO, effective January 1, 2015. Boyd joined Rideau Construction in 1996 as a project coordinator after completing his civil engineering degree at the University of New Brunswick. Rideau promoted him to manager of the small projects division and later to Halifax district manager. Boyd was a partner in Rideau and participated in the transaction when Bird acquired the company in February 2008. Next, Boyd was the project director for the Bird Graham Schools joint venture, a large public private partnership project in Alberta. Following the project, he returned to New Brunswick as vice-president of Bird’s Atlantic operations. After being involved in the company’s acquisition and integration of H.J. O’Connell, Bird promoted Boyd to executive vice-president and COO in 2013. “The company appreciates Mr. Talbott’s dedication and service to Bird throughout his career, and in particular, his leadership over the last five years. We wish him and his family all the best in the future,” said Paul Charette, chairman of Bird Construction’s board of directors. “The board looks forward to working with Mr. Boyd in his new role. We are confident in his well-rounded abilities to lead Bird and our employees as the company continues to be a significant provider of innovative services to the Canadian construction industry,” he added.
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Y B
B a o b o IS h
Untitled-1 1
YOUR VISION. BUILT TO SPEC.
Building your construction business together. You have pretty clear ideas about the equipment you need to succeed. So we used them as a blueprint for our E-Series Skid Steers and CTLs. You wanted more foot room. We achieved it by making the foors fat. You wanted more horsepower. We upped it by 10% on our large-frame models. You wanted switchable controls. We offer selectable ISO, H-pattern, and foot controls on all models. You wanted easier attachment hookup. We hooked you up. To learn more, see your dealer or visit our website.
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JohnDeere.com/Eskid
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CONSTRUCTION STATS A selection of data reflecting trends in the Canadian construction industry
Total value of permits $ billions 8.5 8.0 7.5 7.0
Building permits, June 2014 Contractors took out building permits worth $8 billion in June, up 13.5 per cent from May. The June increase was mainly due to higher construction intentions for institutional and industrial buildings in Quebec and commercial buildings in Alberta. The value of non-residential building permits rose 32.5 per cent to $3.8 billion in June, a third consecutive monthly gain. Quebec was responsible for most of the growth at the national level.
6.5 6.0 5.5 5.0 4.5
J 2009
J
2010
J
J
2011
Seasonally adjusted
2012
J
2013
J
J 2014
Trend
Note(s): The higher variability associated with the trend-cycle estimates is indicated with a dotted line on the current reference month and the three previous months.
Employment
Average weekly earnings up in construction sector
thousands 18,000 17,800
Compared with 12 months earlier, average weekly earnings in construction increased 5.3 per cent to $1,215, with most of the growth occurring from July to October 2013. Note that earnings were lower in this sector in June 2013, in part as a result of the construction strike in Quebec. Compared with the same month a year earlier, earnings growth was widespread across the construction industries.
17,600 17,400 17,200 17,000 16,800 16,600
J 2009
J
J 2010
J 2011
J 2012
J 2013
Labour force survey, July 2014 Employment rose by 42,000 in July, the result of an increase in part-time work (+60,000). The unemployment rate declined 0.1 percentage points to 7 per cent. The number of people employed in construction declined by 39,000 in July, offsetting an increase in the previous month. Compared with 12 months earlier, employment in this industry was down by 46,000 (-3.4 per cent), the result of declines in the fall of 2013.
J 2014
Year-over-year change in average weekly earnings in the 10 largest sectors, June 2013 to June 2014 Construction Wholesale trade Professional, scientific & technical services All sectors Accommodation & food services Health care & social assistance Retail trade Manufacturing Public administration Educational services Administrative & support services -2
0
2
4
6
%
Source: Statistics Canada
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WE’RE CUT FROM THE SAME CLOTH.
s
Integrity. Generation After Generation.
6
After being in business for almost a century, we’ve learned a thing or two. We know what it takes to keep your operation running smoothly: Commitment from your crew, quality equipment that works as hard as you do, and people that you can count on. Generation after generation, we continue to meet the demands of the job by building innovative products. We’ve led the way since 1928, and that leadership shows through in the integrity of our team. We’re proud to still be doing business the way we did back then. For the KPI-JCI & Astec Mobile Screens dealer nearest you, visit kpijci.com/dealer-locator.
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HYBRIDS
Hybrid hopes run high BY JIM BARNES
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Major manufacturers put hybrid machines in the spotlight
A
re the glory days of hybrid construction equipment finally arriving? It’s hard to argue with a technology that offers reductions in fuel consumption and increased functionality, but most users still focus closely on ROI in evaluating the machines. Hybrid technology has a long history, depending on how you define it. Rather than struggling with semantics, two technologies are commonly viewed as “hybrid” in the construction equipment arena. One is the diesel-electric approach, in which a diesel engine running at optimum rpm supplies power to an electric motor that does all the heavy lifting. It’s not a new concept; for example, it has been used in locomotives since the 1920s.
Another concept involves the use of capacitors to capture waste energy from equipment operations such as boom deceleration and supplying it quickly to the machine for reuse. Considerable development resources were being applied to construction machinery in the 2000s, with machines appearing on the market later in the decade. As most of us recall, 2008 was not the best year to be introducing construction equipment of any kind, let alone new technology that involved a price premium over the other models out there. Despite the recession, hybrids have slowly won interest in the marketplace. Many equipment OEMs showed interest in the concept. Volvo Construction Equipment, for example, unveiled the prototype of a sophisticated hybrid wheel loader at CONEXPO 2008 that turned a lot of heads. Ultimately, the
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HYBRIDS
cent more material per gallon of fuel than a 336D under a variety of operating conditions. Three technologies are responsible, says Cat. The Electronic Standardized Programmable pump conserves fuel with engine power management by smoothing transitions between the hydraulic pumps and the accumulator; the Adaptive Control System optimizes performance using restriction management; and a capacitor that enables the machine to reuse brake energy and then release it during swing acceleration.
Kinetic energy generated “during swing braking is converted to electricity, which goes to an inverter and is then captured by the ultracapacitor.
”
Caterpillar’s 336E H hybrid excavator.
company decided not to proceed to market with it, citing concerns about payback for the customer. Caterpillar’s D7E bulldozer was launched in 2008. Energy from a Cat C9.3 diesel engine is converted into AC electrical current to power the final drives as well as DC to power accessories. The electric drive permits a simplified transmission and an engine that runs at optimum conditions. Since then, Cat has introduced what some would call “true” hybrid equipment with the 308-horsepower 336E H hybrid excavator that uses a hydraulic hybrid system to improve fuel efficiency up to 25 per cent. According to Cat, the 37-ton machine will move up to 50 per
According to a Cat spokesperson, the company is actively researching ultracapacitors with even higher capabilities. Komatsu America Corp., too, was an early market leader. In 2008 it launched the PC2008E0 hybrid excavator. It claims to have sold more than 2,500 hybrid excavators worldwide. The firm is now up to the third generation of the technology, with the HB215LC-2 excavator. A larger machine, it has an operating weight of 49,383 pounds. and a bucket capacity of 1.57 cubic yards. Komatsu’s Hybrid System includes an electric swing motor, a power generator motor, an ultracapacitor and a 139-horsepower SAA4D107E-2-A diesel engine. Kinetic energy generated during swing braking is converted to electricity, which goes to an inverter and is then captured by the ultracapacitor. This energy is released quickly for upper structure rotation and to assist the engine as determined by the hybrid controller. That means the system supplies about 60 additional horsepower to support the engine or the swing power. Komatsu estimates an approximate 20 per cent reduction in fuel consumption for
18 / SEPTEMBER 2014
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YOU CAN HAVE IT ALL
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HYBRIDS
John Deere’s 644K hybrid wheel loader.
While hybrid automobiles tend not to be high-level “performers, a hybrid excavator will outperform its conventional counterparts in productivity. ”
many users along with commensurate reductions in carbon dioxide emissions compared to an equivalent conventional excavator. There are actually two sources of energy recovery in this excavator, explains Rob Orlowski, product manager, excavators, at Komatsu America. The first is energy captured from the swing. “You have a great deal of momentum with the arm carrying a bucket full of dirt. Stopping it takes a tremendous amount of force—force that can be quickly captured and temporarily stored in an ultracapacitor.” The second source of energy is the engine. “There is a motor generator sandwiched between the engine and the hydraulic pumps that collect energy that would normally be wasted.
You can capture that energy when the engine is not being used to capacity,” says Orlowski. “The ultracapacitor in the excavator lets you capture huge amounts of energy very quickly, store it temporarily and release it quickly,” says Orlowski. While hybrid automobiles tend not to be high-level performers, a hybrid excavator will outperform its conventional counterparts in productivity. Orlowski says some customers have noticed faster swing speeds than those of a comparable conventional excavator. Fuel savings are posited at 25 per cent, though Orlowski adds that it depends on the application. “You have some applications where you have more swing speed and users claim more than 25 per cent savings.” However, he notes, “If you have an application where you’re not swinging the boom much, you’re not capturing that energy.” “There’s no magic answer on whether to choose hybrid or conventional technology, but certainly an operation that requires a heavy
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HYBRIDS
amount of swing use and long hours lends itself to a hybrid excavator.” Payback depends on the kind of operation you have, how you use your equipment, your cost of operations including the cost of fuel, amount of swing, numbers of hours that the machine is working, etc. “It’s a performance issue, as well,” says Orlowski. “You’re using two types of energy— hydraulic and the electric swing motor. In the electric swing motor, that energy is separate from the hydraulic pump. We have a lot of hybrid customers who are very pleased with how quick the machine is, just because it has two different sources of energy.” There are some common misunderstandings about the technology. “Some customers think there’s a battery in the machine. That’s a common misconception,” says Orlowski. “Another one is the customers think that this is new technology. In fact, we’ve been developing this technology since the 1990s.” He notes that use of this technology is
relatively strong in Eastern Canada, particularly in Quebec. “For one thing, they really seem to care about the environment. There seems to be a greater awareness of that, and customers tend to like that green image.” Another factor is the higher cost of fuel. “It’s exciting. This technology is certainly scalable. You could potentially use it in different sizes of excavator—who knows what the future might bring?” notes Orlowski. John Deere very recently introduced its 644K hybrid wheel loader. This machine comes with a 229-horsepower PowerTech 6.8-litre IT4/Stage IIIB engine that runs at an operator-selected constant speed between 900 and 1,800 rpm. The engine’s constant operating speed maintains continuous hydraulic flow at all times, which delivers crisp hydraulic responsiveness and reduces cycle times. The electric motor smoothly delivers torque resulting in fluid operation and a smoother ride.
EMISSIONS TESTS The California Air Resources Board commissioned the
in CO2 emissions.
University of California at Riverside’s Center for Environ-
The NOx impact of the
mental Research and technology (CE-CERT) to study emis-
excavators ranged from
sions from hybrid equipment. The $2-million Hybrid Off-
an 18 per cent decrease
Road Equipment Pilot Project was completed in June 2013.
for demolition work to an 11
It examined the emissions benefits of the equipment in
per cent increase for general
real world applications. The Caterpillar D7E hybrid dozers and Komatsu
construction. These results are interesting but
HB215-LC-1 hybrid excavators were part of the study.
should not be considered universal and
Not surprisingly, emissions benefits depend heavily
definitive. Kent Johnson, principal investigator, Emissions
upon the type of work being done.
and Fuels Research at the university, offered some insight.
In the tests performed on the dozers, researchers
“After discussing the NOx difference with Cat, it
recorded a two to 28 per cent increase in CO2 emissions,
appears the variability can be explained by their engine
and a NOx increase of between 7 and 21 per cent, with
ratings methods. Thus, I could make the same statements
lighter loads providing the greatest efficiencies and
about two conventional machines… This doesn’t mean the
fewest NOx.
difference we measured isn’t real, it just says there can be
The excavators provided between a one per cent
differences between engine ratings.”
increase to a 28 per cent decrease in CO2 emissions in
There is a correlation between NOx and fuel efficiency
the tests, with demolition work providing a 23 per cent
in any construction equipment, so in effect emissions seem
decrease and general construction a 13 per cent decrease
to be a bit of a balancing act for the user and OEM.
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HYBRIDS
According to Deere, the 644K hybrid can reduce fuel consumption up to 25 per cent. Another benefit is noise reduction, since the engine runs at a constant speed that is continuous and less noticeable, according to John Chesterman, product marketing manager, Four Wheel Drive Loaders, John Deere Construction & Forestry.
A powerful pair of saws.
Four main components are involved: A brushless generator supplies engine energy to an inverter, which in turn delivers electrical energy to the single electric brushless motor. The motor does much the same job as a torque convertor, but also works as a generator to recycle energy back into the system. A water-cooled brake resistor passively consumes excess energy as required. Deere suggests a figure of 25 per cent fuel savings for many users, with even better numbers depending on the application. “How many hours are you running the machine?” Chesterman asks. Heavy use has a big impact on payback. The opportunity goes beyond fuel efficiency, he emphasizes; it’s a question of the longevity of the machine. “Electric motors are extremely durable,” he notes, and transmission wear is significantly reduced. For example, the machine does not have a reverse gear… the electric motor runs backwards to move in reverse. And since the machine runs at constant rpm, it gets fewer stress loads. You won’t be revving the engine. The user can adjust the engine’s constant operating speed to match his own requirements for productivity versus power, for example. “As soon as you use the word ‘hybrid,’ some people assume that there’s going to be a sacrifice in performance or efficiency. That is not the case at all,” says Chesterman. While the power specs might resemble those of a conventional machine, the user experience is quite different. “Highly skilled operators, can make our conventional wheel loader perform similarly to the hybrid. However, the below-average operators have a much easier time operatHusqvarna’s all-around power cutters, ing the hybrid. And even the highly skilled the K 760 and the more powerful K 970, are guys find the hybrid very easy to operate, the perfect solutions for most jobs. The K 760 so it’s a question of fatigue as well,” says boasts the lowest vibrations, below 2.5 m/s2, Chesterman. on the market and both feature a fuel-sipping Coming soon will be a larger, 944 X-Torq® engine. The K 970 features a more model. “It will only be available as a hybrid powerful engine, 6.4 hp, perfect for highway or electric. We are very committed to this demolition work. To see more features, visit technology,” says Chesterman. www.husqvarnacp.ca.
2077 Bond Street • North Bay, Ontario P1B 4V7 • T 800-461-9589 • F 800-825-0028 • www.husqvarnacp.ca Copyright © 2014 Husqvarna AB (publ.) All rights reserved. Husqvarna is a registered trademark of Husqvarna AB (publ.).
Jim Barnes is a contributing editor to On-Site. Send comments to editor@on-sitemag.com
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UNDERGROUND WORK
Underground Work LIFTING THE CURTAIN ON UNDERGROUND CONSTRUCTION
BY DAVID GODKIN
E
quipment manufacturers tell us the same thing every day: choosing the right equipment will improve productivity, profit margins and offset costs. Naturally, this requires that we first understand our current productivity limits, i.e. what we can do and what we cannot. The next question is: what’s required of manufacturers? In this issue we pull back the curtain on the people whose job it is to give us more power, more precision and more control.
KING OF THE FOREST It’s true: there’s a forest of underground technology companies out there willing to sell you augurs, small and large trenchers, and horizontal drilling machines. But this particular forest has not one king but two—Vermeer and Ditch Witch. Each has taken steps to enhance their trenchers and horizontal drilling equipment for faster and more productive performance. “How do we get better? How do we get our customers more productive and profitable?” poses Vermeer’s senior product manager John Kuyers. “We’re asking those questions every day.” Horizontal directional drilling is first and foremost a push and pull business. But as Kuyers explains, drilling a single bore hole and then back reaming to enlarge the hole is not always necessary.
Ditch Witch’s patented dual pipe system eliminates our reliance on mud motors and large reclaimers.
“If the soil is easy to work in and the pipe is relatively small, the old chain and motor directional drills may suffice,” he says. In larger applications, where rack and pinion HDDs have become standard for productivity and durability, you’ll need something quite a bit bigger. A good example, Kuyers says, is Vermeer’s D60x90 Navigator HDD, tailored to each application with three firestick drill rod options, using single-piece, high-carbon alloy steel rods and a quick-change rod box to reduce the need for manually loading a drill rod. Kuyers’ real excitement though is reserved for a new HDD introduced this July, the D20x22 S3 Navigator, a smaller machine designed for very tight, urban jobsites. “It’s for our customers in fibre/telecom and gas service installation who told us they wanted more precise control,” says Kuyers. The D20x22 S3 features a new hydraulic system design with superior rotation, thrust and tracking performance over its predecessor, the D16x20 Series HDD. The D20x22 S3’s faster carriage speed (167 feet, or 50.9 metres per minute) has placed the D20x22 S3 “at the front of its class,” says Kuyer. Wanna go bigger? Vermeer will help you do that, too, but why not travel further west to product manager Seth Matthesen at Ditch Witch’s head office in Perry, OK. Last year Ditch Witch introduced its AT60 horizontal directional drill, a 200-horsepower all-terrain machine with a patented dual-pipe system, i.e. an outer pipe
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UNDERGROUND WORK
“It might not sound like much but if you can save one minute per drill pipe making and breaking it this way and you have sixty drill pipes out there, that’s an hour’s transition time. And that saves revenue.”
Vermeer’s D60x90 Navigator features single piece, high-carbon alloy steel rods and a quick-change rod box for faster drill rod loading.
GIVE ME A MACHINE WITH HEART
Vermeer’s D20x22 S3 Navigator: small but mighty.
that places the drill head in the proper position for steering and an inner pipe that mechanically drives the bit. Matthesen says this provides the contractor with a distinct advantage over larger rigs that normally rely on mud motors. “Instead of using a mud motor, pumping 200 gallons a minute and also having a large reclaimer on the site, the AT60 reduces your overall capital expenditures on the job site.” Vermeer has a dual-pipe system, too. However, Matthesen maintains its one disadvantage is a threaded inner pipe that increases the time it takes to disconnect the pipe once the job is complete. Instead, Ditch Witch uses a dither system with a hex connection. Imagine you’re shaking someone’s hand, Matthesen says. Now rotate it from 10 o’clock to 2 o'clock back and forth. “That’s what that inner drive does; it connects and disconnects automatically.”
Yes, lots of power. Just make sure it’s properly matched to the job, i.e. high-output/ high-torque equipment tailored to whatever you’re working in: silt, sand, cobble or rock. Here’s where the rack and pinion design again helps. “Actually it gives you more power because of the way it was designed,” explains Mike Sequino, an engineer and vice-president of Directional Technologies Inc., in Wallingford, Conn. “Rack and pinion allows you to transfer your push and pull pressures in a way the chain design can’t.” Another key, adds Matthesen, is torque—and not just any torque. When you’re back reaming at 180 rpm, he says you want sustainable torque. “You don’t need torque at 10 rpms; you need it at working rpms.” While acknowledging the importance of static torque when you’re steering and want to break out of that steer, he adds: “when you’re back reaming sustainable torque is vital. Otherwise, the job is slower and your production rates lower. Who can argue with ample power and torque? asks Jeff Lyons, owner and president of Trenchless Utility Equipment Inc. Just don’t forget this: “You want ample push and pull but these are also very self-destructive machines. Drilling practices are even more critical.” Over-steer a drill rod by more than eight per cent “and you’re going to damage the drill rod, shorten its life and potentially lose tooling down hole.” The best way to avoid this is proper training. The operator can’t just apply maximum power whenever he wants it. “Often this means finessing the drill head by rocking and sawing it, rolling it properly, working longer in an area rather than trying to ram right through,” says Lyons. Optimizing horsepower to weight ratio is vital to any machine, but this is especially so when assessing the capacities of a brand new trencher, i.e. hydraulic circuits, cutting capabilities, depths and widths. Vermeer describes its T655 Commander II trencher, for example, as “a small machine with big power.” But Vermeer also knew, says Kuyers, that to exceed 225 horsepower would spell disaster. “If we put a 400 horsepower engine in there we would have virtually destroyed the machine.” “By contrast, we wouldn’t go with a 20-foot boom, three-feet wide on a machine with 200 horsepower; we’d need a machine with 400+ power.”
IF I ONLY HAD A BRAIN Ok, so just how smart are all these smart machines? You know, the ones uploaded with GPS, lasers and the latest in monitoring
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B
UNDERGROUND WORK
E
No self-respecting trencher should be without dual path, hydrostatic drives.
systems? Very smart, says Kuyers. He barely misses a beat before launching into a description of a new feature aboard Vermeer’s utility trenchers called TrenchSense. Your chain gets latched onto a large rock or other obstacle slowing you down? No worries. TrenchSense stops the trencher, reverses slightly to dislodge the object and starts the chain back up again “all without the operator touching a button or lever,” explains Kuyers. “It does that within a split second, where generally what happens when a human is operating the machine is the chain would grab and they would have to turn a dial or grab a lever to neutralize the chain and physically back up the machine.” Not to be outdone, Tesmec in Alvarado, Texas features Techtronic 3.0, an electronic control system to be used on a range of machines from the TRS-885, an entry-level 20-ton trencher powered by a 152kW Caterpillar diesel engine up to and including the 267,000 pound (121, 563 kilograms) TRS 1675 (trenching depth 3.05 meters – 7.3 meters; width up to 4.8 meters). Both are equipped with dual-path, hydrostatic drives. But the best parts are those automatic controls. “The machine itself is capable of digging automatically,” says Tesmec’s national sales manager, Bryan Blankenship. “In addition, the machine can handle depth requirements by itself and also does self-steering using laser or GPS.” Automatic trencher controls simplify the process for the operator as well, which is particularly important because finding operators qualified to handle conventional machines is as hard as recruiting people for space travel. Another important component are hydrostatic drives. Blankenship says Tesmec is proud of the fact its first trencher, a mechanical drive machine introduced in 1984, is still in operation today. But things have changed since then. A case in point: Tesmec’s rock saw trencher suitable for narrow and deep cuts and normally used for installing fibre optics. Picture the circular saw on your work tool bench at home; now
imagine it at least a hundred times larger and you’ll have a good idea of both this trencher’s size and capacity. It cuts up to 60 inches in depth and eight inches wide, but it also has a dual-path, hydrostatic drive. This machine is particularly helpful in hard rock environments like those found in San Antonio, Texas. Monolithic rock requiring
Dig this: A modern trencher that digs on its own and self-steers.
10,000 psi of pressure before it chips will barely budge using a smaller hydrostatic trencher better suited to light or slightly rocky soils found in Kansas, says Blankenship. “If you came in with a hydrostatic machine where the chain turns very fast you would have high tool wear, excessive cost and reduced [progress], maybe one foot a minute.” Another option is to go to a mechanical machine, slowing the chain speed down to 100 feet per minute from 350 feet per minute to “get a higher level of productivity and major reductions in wear.” “Your productivity almost quadruples; but you can also get four to seven feet per minute using our mechanical machine.”
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UNDERGROUND WORK TOTO, I’VE GOT A FEELING WE’RE NOT IN KANSAS ANYMORE Yes, you’ve heard this before, but it bears repeating. To help you get a clear picture of what’s underground you need a well-detailed, up-to-date utility map. In a heavy utility corridor, Lyons points out, you can face a sanitary sewer
12-feet deep, a three-foot, eight-inch gas main, a 12-inch water main at five-feet deep and an electric bank and a large telecom duct bank, each anywhere from three- to five-feet deep. “Having your locates and a good understanding of what infrastructure you’re going to be passing or running parallel to is imperative.” Trenchless Utility Equipment specializes in both trencher and horizontal directional drilling, notably the Toro DD2024 and DD4045. These benefit not only from a current and detailed utility map but “daylighting” to expose underground services, i.e. vacuum excavating “so that you can actually see the drill head pass
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by the utility,” says Lyons, “especially natural gas being as volatile as it is.” Mike Sequino agrees. But another problem underground contractors run into are municipal officials who don’t want you to complicate their utility map by adding yet another underground service. A city will sometimes nix the idea of a fibre-optic cable crossing above a sanitary sewer at an intersection to avoid the cable interfering with the repair of a sewer line. Go deeper and work underneath everything, you’re told. Gas and water companies are especially “squeamish,” says Sequino. “They don’t want you going too deep because if something happens they have to repair it. That’s where directional drilling comes in. It gives utilities project flexibility. Each project is designed to meet everyone’s needs.” David Godkin is a B.C.-based freelance writer and editor. Send comments to editor@on-sitemag.com.
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BRIDGES
Montreal’s Honoré Mercier bridge is undergoing extensive repairs to its bridge deck.
Canada’s largest bridge rehab project approaches completion
W
ith 30 million vehicles crossing over it every year, the Honoré Mercier bridge is one of Canada’s busiest. And with at least one person inside each vehicle, the total number of people who annually traverse the bridge is comparable to Canada’s entire population of 34 million and change. Named after Quebec’s ninth premiere, the Honoré Mercier bridge spans the St. Lawrence River between LaSalle on Montreal Island and the Mohawk Territory of Kahnawake on the south shore. It consists of two structures: 1) upstream, which was built in the 1930’s and carries traffic westbound towards the south shore, 2) downstream, which was built in the 1960’s and carries traffic eastbound towards Montreal. The original bridge celebrated its 75th anniversary in 2009; the same year it began the largest bridge rehabilitation project in Canada’s history. The purpose of the project is to replace the old bridge deck with new pre-fabricated concrete deck panels designed to last 75 years. This process is more efficient and prevents extended lane closures. The panels are the same kind that were used to replace the bridge deck on Montreal’s Jacques-Cartier Bridge in 2001, as well as several other notable bridges throughout North America, including Lion’s Gate in Vancouver, Halifax Suspension Bridge in Halifax, Laviolette Bridge in Trois-Rivières, George Washington Bridge in New York and Golden Gate Bridge in San Francisco. The Honoré Mercier bridge project marked a significant milestone in August following a seven-week “blitz” on the federal section of the bridge between piers 14 and 27 (see
BY PATRICK CALLAN
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BRIDGES
1 TOP PHOTOS: 1 and 2: Crews use a 650-ton crane to replace the old bridge deck with new pre-fabricated concrete deck panels. 3) Crews wrap up repairs following the blitz period this summer. 4) A portion of the bridge deck, on the island section, is completed using the new concrete panels.
St. Lawrence River Pier 14 Pier 27 Pier 28 Pier 32
Ramp 3
2
map below). During the blitz construction crews of 80 to 100 worked 20 hours per day, closing two lanes out of four, and finished $10 million in repairs. Major works completed included 193 concrete slabs, 15 expansion joints, 666 bearing devices, more than 3,400 metres of post-tension slabs, 3,988 square metres of waterproofing membrane, 550 metres of paving and road markings, and 125 square metres of concrete surface for the new strip.
BUILDING BRIDGES This project is the first of its kind, as it represents a three-way agreement between the governments of Canada and Quebec and the Mohawk Council of Kahnawake. The federal section of the bridge is located in the Mohawk territory of Kahnawake, and The Jacques Cartier and Champlain Bridges Inc. is overseeing that part of the project. Repairs to the provincial section of the bridge, from Maline Island across the St. Lawrence, are being done as a separate project by the Ministère des Transports du Québec. Pascal Villeneuve, program director for The Jacques Cartier and Champlain Bridges Inc., says due to the joint-ownership of the bridge, the project involves collaborating with many different authorities—First Nations band council members, provincial and municipal police and politicians, and transportation bodies, to name a few. “We work very closely with all those members, and we work together, and it’s going very well,” he says. Repairing the federal section is being done in two contracts: Contract A and B, which create approximately 1,000 direct and indirect jobs annually. “Due to the particularities that we are working over Mohawk land, we have to use local personnel and workers,” explains Villeneuve. Contract A, which involved reinforcing the steel structure of the bridge and replacing the concrete decks on access ramps 2, 3 and 4, was completed in 2011. Contract B breaks down into three parts. The first part is the “island” Provincial section section of the bridge (between piers 14 and 27). Deck replacements on this section began in 2013 on one side Maline Island of the bridge structure and crews will complete the other side later this year. Concrete slabs used for the island part of the project were 8.8 metres long and 3.7 metres wide (including a Ramp 2 jersey barrier). They were made at a shop in Drummondville, Que. then transported to a spot underneath the bridge where crews used a 650-ton crane to replace the old deck Ramp 4 with the new slabs.
THE HOMESTRETCH So far, completing Contract A and the first part of Contract B has cost around $165 million. When all is said and done, Inside box = Federal section / Mohawk territory
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3
4
the total cost of the overall project will likely come in around $200-million, says Villeneuve. Replacing the bridge deck for part two (the “seaway” section from piers 27 to 28) and part three (the “mixed” section from piers 28 to 32) of Contract B is expected to be finished by 2017. (See map pg.30) Repairs on the two remaining sections also involves replacing the bridge deck, and the bulk of the work will take place during the summer blitz periods when there is less traffic. In the fall and winter months, work will shifts to things like ditch digging, prep work and steel reinforcement, since the new pre-fabricated concrete slabs are heavier than the ones they are replacing. 3D rendering of the seaway section of the bridge.
When it comes to sizing the slabs, accuracy is of the utmost importance. Working on such a busy bridge, with such limited time, there is no room for error, says Villeneuve. That’s why 3D imaging (see above) will be used to make sure the pre-fabricated slabs are the precise size. “Once we are in a blitz period, it is not time to make corrections on the slabs,” Villeneuve emphasizes. The size of the slabs for the second and third part of Contract B will differ than those used on the island portion, he adds. “Once we are on the seaway they will be a little bit smaller because you don’t have enough space to go and work underneath the steel structure,” he says. “When we go to the mixed section, where there is a merge, the slabs will be heavier and bigger. Not flat, but angular to fit the merge. This will be another challenge.” Nonetheless, Villeneuve says crews will continue to optimize their work periods in order to lessen traffic interruptions on the bridge. And he is hopeful that the project may even wrap up in 2016—one year earlier than expected. “We are trying to do as much work as we can in the shortest period we can,” he says. When asked for his thoughts on what it is like to work on such a significant project, which when complete will have spanned nearly a decade, Villeneuve, speaking on behalf of the entire team at The Jacques Cartier and Champlain Bridges Inc., says, “It has been a great experience for us.”
is the “firstThisof itsproject kind, as it represents a three-way agreement between the governments of Canada and Quebec and the Mohawk Council of Kahnawake.
”
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SOFTWARE By Jacob Stoller
Navigating the IT journey
A
s the IT world transitions from distributed contributing to internet-based systems, getting the right IT people has gotten more critical, and more difficult. Recently, a construction firm in Northern Canada devised an iconically Canadian connectivity solution for their cloud-based time card application. According to George Goodall, senior analyst for London, Ont.based Info-Tech Research, all the data was consolidated onto a laptop, then once a week somebody would drive south for an hour or two to the nearest Tim Horton’s and use the wifi there to upload the data into the cloud. Many construction firms are caught between two realities: the world of local computing, where data resides on servers and personal computers, and the online world, where data is collected and managed by cloud-based hosts and application providers. As firms struggle with the transition, workarounds such as multiple cloud accounts, email driver workflows and isolated standalone applications are creating data environments that are cumbersome and risky. The emergence of the cloud as the platform of choice for construction apps is changing how IT is delivered and used. The trend has brought enterprise-level computing power to the industry, making it possible for a contractor to acquire decision support and data management capabilities that only recently would have been found in a large corporation. “IT is becoming a differentiator, especially for a general contractor,” says Joe Jagodich, CIO of Toronto-based construction
firm EllisDon. “IT is relied on more heavily for decision support.” While consumer apps like Facebook have made it easy for individuals to store and manage data on the cloud, the task is far more difficult for a corporation. “If that data isn’t being managed properly, either from a security or a data architecture perspective, you are really putting the company at risk,” says Jagodich. Typical warning signs might be the inability to get timely information to make a critical business decision, or to respond to a litigation request.
NEW SKILL SETS The trend calls for a very different set of skills in IT departments. “A lot of people have not evolved from the distributed computing world,” says Jagodich. “That’s not IT anymore. Today, distributed computing is a commodity.” IT needs to become more than just a provider of support services. “Sometimes IT has to be proactive instead of waiting for a services request,” says Goodall. “It becomes a question of how IT works with the business to fix things and solve problems. And that can require a different kind of background, and a different skill set.” As Jagodich puts it, construction firms need to find people who will “listen to the needs of the business and then apply the solutions that are out there.” This is easier said than done, says Michael O’Neil, principal analyst of Toronto-based research firm Insightsaas. com, who notes many industries find it
difficult to recruit people with the right combination of skills. “There’s a pretty well recognized shortage these days of what are referred to as “double deep” employees—people who understand the business they are in as well as the technology.” Understanding the construction business is a tall order. Construction firms have to manage multiple contracts, equipment leases, complex schedules, as well as mobile access and compliance with a variety of regulations. Construction is so diverse that there are few ready-made solutions. “To do IT in construction, people have to be integrators,” says Jagodich. “There are so many different elements, platforms and devices. People who don’t understand how you integrate one to another are not of much use.” Jagodich believes engineering grads are best suited to this kind of role. “These folks can listen to business users and come up with solutions. Electrical engineers have the baseline discipline to see the network right from installation to execution.” As the transition to cloud computing continues, construction firms will have less need for traditional IT people who configure and support servers and local networks, and more need for business analysts who help the company make the right choices in a complex environment. The ultimate IT person will need the talent and predisposition to glean useful business information out of the enormous stores of data. “It’s rare that you need better data. You need better questions,” says Goodall. Jacob Stoller is principal of Toronto-based consultancy Stoller Strategies. Send comments to editor@on-sitemag.com.
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If you work in commercial construction then roll up your sleeves and get ready for World of Concrete, the largest annual event specifically for concrete and masonry professionals. More than 100 expert-led sessions—featuring hands-on training, interactive workshops and continuing education opportunities—help you build skills in concrete repair, flooring, project management, decorative concrete, finance, and much more. Sessions are presented in both 90-minute and 3-hour formats. Look closely and you’ll see—World of Concrete has the training you need to elevate your career and your business.
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RISK By David Bowcott
Project risk matrix
E
verybody has a risk matrix these days. Often every major stakeholder in a project will develop their own risk matrix in order to identify, quantify and treat risks. This tool is very helpful, as it ensures proper due diligence around project risk is performed and, once mapped to risk treatment solutions, can be used as a checklist to ensure contractual terms, risk controls, best practices and risk finance solutions are put in place. So what does a risk matrix typically look like? Often it is an Excel spreadsheet that contains the following columns: 1. Risk – A brief description of the risk in question. 2. Risk Rating – A section whereby each risk is quantified. Often you will see a column for probability rating, severity rating and some form of combined rating (derived from a mathematical formula involving the probability and severity rating). Once the ratings are completed the user can sort the combined rating column from largest to smallest in order to rank the project risks. 3. Risk Allocation – Who is currently carrying this risk via current contract forms? 4. Risk Treatments – Sometimes only carried out for major risks, but sometimes done for all risks on the matrix. The risk treatments are solutions that are going to be used to manage each risk. Often the risk treatments will be broken into two categories – i) Risk Control Solutions and ii) Risk Finance Solutions. Risk controls are contractual allocations, contractual warranties, best practices, etc., used to manage the risk. Risk Finance represents various forms of security to generate funding (or response) when
the risk manifests. Things “Risk like insurance, performance when security, letters of credit and cash reserves. 5. Residual Risk Ranking – It is one thing to quantify risk, but the purpose of the risk matrix is to identify, quantify and treat each risk. Once treated, the risk rating should decrease, and thus it is a good idea to have a residual risk ranking. There are other categories that can make your risk matrix more robust, but those are the key components. These risk matrices are effective tools to manage risk, however, they become truly powerful when developed collectively by all major project stakeholders. Having a risk matrix is good, having a risk matrix where all stakeholders agree on major risks, allocations and treatments of those risks, is better! Removing the silos in which each stakeholder identifies, quantifies and treats risk is the most effective way for your project to achieve a successful outcome. So who are these major stakeholders? The following represent key stakeholders that should participate in the development and execution of a shared risk matrix (bearing in mind this is the construction phase of the asset): • Owner • Lender (depending on the degree of financing) • Design firm • General contractor • Major subcontractors • Consultants to each major stakeholder, and the insurance/risk advisor OK, I promise you that I’m not being self-serving by giving the insurance/risk advisor its own chair at the table. Consider that a good insurance and/or risk advisor can bring the following key solutions to the table: 1. Data – Some insurance/risk advisors have access to significant claims data that can validate the risk identification and quantification process. They have the
matrices are...truly powerful developed collectively by all project stakeholders.” ability, if used properly, to provide true quantitative analysis of your risks. 2. Risk Controls – In order to place all the covers associated with a construction project, a good insurance/risk advisor needs to be very knowledgeable when it comes to risk controls, or best practices, associated with preventing and mitigating various risks. This library of risk control solutions should be applied to your project. 3. Risk Finance – The top insurance/risk advisors do not exclusively trade in insurance solutions. The top players are integrating insurance solutions with solutions from the banking sector and the capital markets to create the deepest toolbox of risk finance solutions. Don’t treat insurance like a checkbox product, as there are several new technologies that are more liquid and integrated in their design, and these solutions can provide your project greater certainty for success. 4. Risk Communication – A select few insurance/risk advisors actually help their clients communicate risk management strategies to other key stakeholders of the project. Through this transparent communications process, those key stakeholders can often release their best terms (i.e. project debt terms). In closing, you should definitely learn more about risk matrices and how to create a unified risk matrix including all key stakeholders. And finally, involve key stakeholders that may provide your project solutions beyond their perceived traditional role. David Bowcott is senior vice-president, national director of large/strategic accounts at AON Reed Stenhouse Inc. Send comments to editor@on-sitemag.com.
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CONTRACTORS & THE LAW By Matthew Swanson
A
Understanding arbitration agreements
rbitration agreements have become increasingly common in commercial contracts as parties strive for certainty and control in all aspects of their business relationships. These agreements, which often consist of a single clause in a larger contract, represent a decision to resolve issues privately rather than through the courts. This allows parties to tailor the dispute resolution process to suit their preferences. Understanding the effect of arbitration agreements on your legal rights is critical for any person or business entering into a commercial contract. These agreements dictate how certain disputes can be resolved and may prohibit recourse to the courts.
PURPOSE AND SCOPE Commercial parties may favour private dispute resolution over formal court proceedings for a number of reasons, including increased autonomy, perceived efficiencies in the resolution of issues and the confidentiality of proceedings. Like any term in a contract, arbitration agreements can be negotiated and drafted to suit the needs of the parties. For example, time limits may be set for starting a claim or mandatory negotiation. Mediation can also be included as a precondition to arbitration and the procedural rules that will govern disputes can be dictated. The scope of an arbitration agreement is defined by its terms. Parties may choose to submit all disputes related to the contract to arbitration, or they may specify that only a subset of disputes be subject to the arbitration agreement. Whether or not a specific dispute falls within the scope of an
arbitration agreement should be decided by the arbitrator. In some situations, a party may try to begin a court action notwithstanding the fact that the dispute in question falls within the scope of an arbitration agreement. When a court action is launched despite the existence of an arbitration agreement, the opposing party can apply to court to stay the court proceedings so the matter can be determined by arbitration.
“Understanding the effect of arbitration agreements on your legal rights is critical for any person or business entering into a commercial contract.” will cause a multiplicity of proceedings or overlap with issues in a court action. Lastly, an arbitration agreement is “incapable of being performed” if an obstacle beyond the parties’ control prevents performance, including where the arbitration agreement is vague or ambiguous.
JUDICIAL ENFORCEMENT In Canada, there are different legislative regimes for granting and refusing a stay of proceedings in favour of arbitration. For example, in Ontario and Alberta, a court may refuse to stay proceedings for a number of reasons, including where the application was brought with undue delay, or the matter in dispute can be properly determined by default or summary judgment. A court in these jurisdictions may also refuse a stay where a party entered into the agreement while under legal incapacity or because the arbitration agreement is invalid. For example, because it was induced by fraud or is an unconscionable bargain. In British Columbia, a stay will be refused if the arbitration agreement is found to be void, inoperative or incapable of being performed. Incapacity or lack of consent may render an arbitration agreement void, but procedural irregularities should not. An arbitration agreement is inoperative if the contract no longer has effect, such as when it is revoked or it is unenforceable. The Court of Appeal for British Columbia has made it clear that an arbitration agreement will not be inoperative merely because it
BEST PRACTICES Canadian courts have limited jurisdiction to refuse to grant a stay in the face of an arbitration agreement. This protects the need for predictability in commercial disputes and ensures parties are held to their contractual obligations. Given this, arbitration agreements should be drafted thoughtfully and carefully, with due consideration being given to the scope of the agreement and its impact on the ability of the parties to seek recourse from the courts. It is imperative that parties seek legal advice to ensure prospective arbitration agreements are tailored to meet the preferences of the parties. Matthew Swanson is a partner at Borden Ladner Gervais LLP. He practices in the area of commercial litigation with an emphasis on contract and construction disputes. The author acknowledges the assistance of Kalie McCrystal, articled student at Borden Ladner Gervais LLP. This article 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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