Built Environment Economist - Australia and New Zealand - March-May 2022

MARCH - MAY 2022

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

08 CASE STUDY: COLLINS ARCH

20 EXPECT BIG CHANGES FOR HOSPITAL PROJECTS AFTER COVID-19

47 RETHINKING HOME DESIGNS – SUICIDE PREVENTION

65 THE STRATA BUILDING BOND AND INSPECTIONS SCHEME AND THE EVOLVING ROLE OF THE QS

CONTENTS 2 CEO Letter

42 Cost Management vs. Cost Control – What is the

4 The Measure of a Man: A Tribute to Peter Slattery

Difference?

8 Case Study: Collins Arch

45 Visionaries

14 Q & A

47 Rethinking Home Designs – Suicide Prevention

20 Expect Big Changes for Hospital Projects After COVID-19

54 The Crisis of Defects in Residential Buildings: Why

24 Assessing Risk Procuring Engineered Wood Products 30 Creating Smart Cities to Help Build the Future – Embracing Digitalisation and Suitability

Reform is Needed 60 Is Your Business Legally Compliant?

65 The Strata Building Bond and Inspections Scheme and

35 Perspectives with Debbie Marsh MAIQS 38 Adding Value for Construction Clients - Taking the Next

the Evolving Role of the QS 68 Expert Witness 71 Emerging Risk Management Approaches on Mega

Step 39 Do We Need a Viable Alternative to Australian Standard Forms of Contract to Cure All Industry Ills?

Construction Development Projects – Part 1 76 Building Cost Index (available in print edition only)

About Built Environment Economist is the flagship publication of Australian Institute of Quantity Surveyors (AIQS). Produced quarterly, Built Environment Economist seeks to provide information that is relevant for quantity surveying, cost management and construction professionals.

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

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

Advertise Contact AIQS to discuss available opportunities.

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

Disclaimer AIQS does not take any responsibility for the opinions expressed by any third parties involved in the writing of Built Environment Economist.

ISSN 2652-4023

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 01

CEO LETTER

ADVANCING CERTIFIED QUANTITY SURVEYORS Since AIQS established the Certified Quantity Surveyor (CQS) designation in late 2016 over 700 members have takenup the certification. Ideally, we would like to see more members take-up this designation as a mark of professionalism across the quantity surveying profession.

Why should you take-up CQS and what are the benefits? To answer these questions, we need to firstly look at why CQS was introduced.

BACKGROUND Outside of Victoria (through the Victoria Building Authority) there are no regulations defining the educational

and professional experience required for a person to call themselves a Quantity Surveyor. In addition, there are people without the requisite education (no relevant or recognised qualifications) and experience who call themselves Quantity Surveyors. Unfortunately, users (potential and actual) of quantity surveying services are often unaware of this, or indeed how to ascertain whether a person has the requisite qualifications, experience, and skills to undertake the quantity surveying service required (to the appropriate professional level). This creates significant risk to the clients of those persons, as well as potentially establishing a negative perception of the broader quantity surveying profession.

02: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

Whilst it may be argued that professionals with AIQS Member or Fellow grade should solve this, clients of AIQS members are largely unaware of the differentiation between being a member of the AIQS (as this would include Students, Graduates, Affiliates, Members, Fellows, Life Fellows, Retired and Honorary membership grades) and Member or Fellow (both of which are Voting grades of membership). AIQS has come across instances where persons, that are no longer members, highlight that they are members which is misleading to clients. To help address this, AIQS established and trademarked the CQS designation which is marketed to clients.

CEO LETTER

CQS designated members are able to use CQS in their postnominals (e.g., MAIQS, CQS), have access to the CQS logo, and use the title Certified Quantity Surveyor.

Certified Quantity Surveyors are marketed to all levels of Government (Commonwealth, State/Territory, and Local), financial institutions, insurance companies, developers, contractors, and the public as the mark of expertise that should be engaged for the provision of quantity surveying and related services on all construction projects.

A number of councils currently mandate requirements for a CQS to sign-off on costing schedules attached to development applications.

The CQS designation is reserved for AIQS Voting members (Associate/ Member, Fellow, or Life Fellow). To attain CQS, members must have had a minimum of five years demonstrated professional experience and prove that they have the technical skills and experience to deliver the full complement of core quantity surveying services.

offerings outside of AIQS which members can undertake and enter into their CPD diary. It is worth noting that participation on AIQS Chapter/Region Councils and AIQS Committees/Working Groups as well as writing articles for our Built Environment Economist earn CPD points.

To maintain the CQS designation, members obtain a minimum of 20 Continuing Professional Development (CPD) points each year as opposed to the 15 points which is the amount required by non CQS designated members.

There are many avenues to obtain 20 points. Whilst AIQS offers a variety of CPD activities, there are plenty of CPD

BENEFITS OF ATTAINING THE CQS DESIGNATION Commencing in May of this year, AIQS will be undertaking a PR campaign to raise the profile of the quantity surveying profession and AIQS. This campaign will include the importance of engaging a CQS.

Apart from inclusion on the CQS Register on the AIQS website, only members with the CQS designation are eligible to apply for the AIQS Expert Witness Register and AIQS Strata Defects Inspection Panels as well as participating in the AIQS Expert Determination Nomination/Appointment service. CQS designated members are also able to participate on Construction Finance Report (financial institution) panels. AIQS will continue to drive recognition of the benefits of engaging a CQS to the broader construction sector.

I encourage all Voting members to apply for the CQS designation, your clients may require it.

GRANT WARNER CEO Australian Institute of Quantity Surveyors

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 03

VALE

THE MEASURE OF A MAN: A TRIBUTE TO PETER SLATTERY Some of Australia’s most daring architectural designs may still be dreams on a drawing board, if not for Peter Slattery’s pioneering approach to cost planning.

04: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

VALE

An astute businessman who built one of Australia’s most successful quantity surveying firms, Peter passed away, aged 77, on 9th January 2022. During his long career, he provided strategic advice on some of Australia’s most experimental and eye-catching public buildings, including the Melbourne Recital Centre and the Australian National Museum in Canberra. He also cost-managed groundbreaking projects like RMIT’s Storey Hall and Building 8, to name a few.

All buildings require a budget. Peter, as an advocate of architecture and a skilled technician, challenged the traditional role of the Quantity Surveyor. He transformed the task of cost estimation from finding savings to uncovering new value. In doing so, he helped to elevate his profession, champion the role of architecture in the life of a city and reshape the streetscape of Melbourne.

As architect and long-time friend, Ian McDougall reflects: “Peter was in a league of his own. He not only had an intuition for estimating. He had a powerful instinct for the cultural impact and significance of the work.”

Peter was as passionate about people as he was the built form. He was committed to championing his profession and the people who upheld its values. His contribution to the Victorian Chapter of the Australian Institute of Quantity Surveyors (AIQS) spanned well over a decade and culminated in his appointment as president from 1996 to 1998. “He was, in the best possible way, an impatient man. He was keen to get things done,” remembers Gary Crutchley FAIQS, Director of Wilde and Woollard, who was Peter’s vice president and succeeded him in the role.

With his characteristic commitment to people, Peter understood that AIQS was an “institute of individual members,

not firms,” Crutchley observes. He encouraged young people to sign on as members, expanded the number of professional development and social committees and was a zealous promoter of the profession with government. “He played an instrumental part in the cultural change that transformed the institute from an older-era club to a contemporary association.”

Peter had what long-time colleague Steve Higginbottom calls a “basic instinct” for cost estimation. “He knew whether a project would stack up just from seeing the site. But he also had a talent for building real rapport with people. He had an honesty and forthrightness that commanded respect.”

From those early days, Peter expanded the scope of the quantity surveyor beyond cost counting. He pushed boundaries by questioning funding models, procurement processes and structural designs. But most importantly, he showed institutions and governments how they could relate to the people they serve through good design.

As Peter’s reputation grew, he used his influence to champion rising stars of the architecture world. Ian McDougall, the M in acclaimed architecture firm ARM, shared a space on the same floor of Slattery’s first office at 10 Peel Street in Collingwood and remembers his enthusiasm for emerging designers. “He was a mentor to many experimental and courageous young architects, and his innate understanding of risk – or lack of risk – meant architects could achieve interesting designs.”

Among those designs is ARM’s iconic Storey Hall. Inspired by an amethyst geode, the building’s RMIT jewel-like façade and whimsical ‘green brain’ crown set the university’s precinct apart from the rest of Melbourne. Another RMIT

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 05

VALE

project, Edmond and Corrigan’s Building 8 on Swanston Street, presented a colourful, almost chaotic front that was in stark contrast to its monochromatic neighbours. Buildings like these, all the better for Peter’s skilled cost planning, have put RMIT on the map as a university of modern architecture and design.

Even more, they have inspired other universities and government agencies to adopt a new type of architecture.

Peter was the architect’s ally. “Peter was known as the best QS in the business,” says Kerstin Thompson, the principal of Kerstin Thompson Architects, or KTA. “The role of the quantity surveyor is often associated with number crunchers, bean counters or penny-pinchers. And then there was Peter. He was a ‘larger than life’ character, full of joy and enthusiasm, who transformed the task of finding value with his professional generosity and personal warmth.”

Peter understood and articulated value in new ways, and this trait helped KTA to develop its dynamic and award-winning approach to residential design. “It was never just about the bottom line with Peter. He challenged the notion that a Quantity Surveyor’s role was to say ‘no’,” Thompson adds.

Callum Fraser, director of skyscraper specialists Elenberg Fraser, agrees. “When I was studying at RMIT, I remember the Vice Chancellor saying that one figure – Peter Slattery – had been central to the university understanding its value proposition in a new way. Walking through a city can be a generic event because commercial developers see risk everywhere. But Peter created a space for architecture to redefine value. It was an amazing achievement.”

He was curious about people and their stories, and this inclusive approach was good for business. As a young female

architect in a male-dominated field, Kerstin Thompson remembers feeling “trepidation” at the prospect of working with someone of his standing. “But Peter was respectful from day one, extremely encouraging and treated me as a peer.”

Peter’s charisma belied the traditional values of cost estimation. He was a mountain of a man who dominated the room. He had a fiery temper but was also quick to chuckle. As Steve Higginbottom says: “Working with Peter was like living under a volcano. It was rich and enlivening with the occasional dangerous moment.”

Peter was not perfect, and his mistakes could be, in the words of his family, “Shakespearean” or “colossal” but also “endearing”. He loved exploring ideas – whether that was around the dining room or boardroom table. His six children remember a man who “always wanted to learn new things, take on challenges, change his opinions, begin new chapters”.

He was a practised raconteur who enjoyed a good story and a glass of red wine, and this would open another chapter and leave another legacy.

After handing the baton of his quantity surveying firm to two of his six children, Josh and Sarah, in 2000, Peter and wife Cate purchased Terindah Estate on the Bellarine Peninsula as a property with potential. With the same characteristic combination of dreaming and doing, Peter planted grapes, opened a restaurant, cellar door and function centre, created a destination for glampers and newly-weds, and collected several gold medals for his wine. In 2016 Halliday’s named Terindah Estate the “Dark Horse of the Year”.

Every person who crossed his path recalls a memorable encounter – whether that’s his red Ferrari or newest Citroen, finely tailored suits and ties or big smile.

Peter was more a phenomenon than a

06: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

single person. Aside from his physical size and enormous mental capacity, he was able to transform his ideas about the built environment into a practice that endures today.

“Peter helped Melbourne, as a city, to take its architects seriously,” says Callum Fraser. “It doesn’t seem like something that a Cost Planner should do. But he did.

A lot of architects are rightly grateful for Peter’s influence on Melbourne’s built environment. But everyone who lives in the city should share this gratitude.”

Peter leaves behind Cate, his wife of 53 years, his six children Rachel, Sarah, Josh, Ruth, Hannah, and Miriam, and his 17 grandchildren. But his spirit lives on in his practice, which continues to embody the ideas and values he championed with passion and purpose for more than 45 years.

TR Y ING TO R U Y O TR IM N G T I A I M EST T IME?

cost , h it W tim e e r m e o v h l l a ’ you nj oy! e u y s o g in h t fo r the

FIND THE 10 BUILDING AND QUANTITY SURVEYING TERMS!

The first 5 people who email us at the address below with the 10 correct wordsearch terms will receive a free iTWO costX Online Training Bundle, valued at up to A$395!

iTWO costX® is the software of choice for leading quantity surveyors across Australia, combining 2D and 3D/BIM estimating with spreadsheet-based workbooks, auto-revisioning, subcontractor comparison, a custom report writer and more!

www.itwocostx.com

To find out more about iTWO costX®, feel free to contact our local team on 1300 006 222, or email sales.aus@rib-software.com.

CASE STUDY

COLLINS ARCH MELBOURNE’S MIXED-USE MASTERPIECE

08: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

CASE STUDY

Located at 447 Collins Street in Melbourne’s CBD, Cbus Property’s $1.25 billion Collins Arch is a worldclass mixed-use development. The development encompasses luxury residences, the five star W Melbourne hotel, office space, retail and dining offerings, and approximately 1,900sqm of public open space. Combining residential, commercial and hotel uses added extra layers of cost complexity, but the Rider Levett Bucknall (RLB) team relished the challenge.

Collins Arch spans an entire 6,000sqm city block, and is bounded by Collins Street, William Street, Market Street and Flinders Lane. Its location, on a prominent block in Melbourne’s CBD, demonstrates how a once underutilised area of the city can be transformed into a vibrant urban community. Not only has Collins Arch delivered new public spaces, it has reconnected the CBD with the Yarra River.

Designed by Woods Bagot and SHoP Architects, and constructed by Multiplex, the twin towers of Collins Arch rise 160m and each comprise up to 40 storeys. The towers are joined by an eight-storey sky bridge that spans 14m. The sky bridge is not just decorative; it maximises views and sunlight and creates space for a spectacular public park below. Though the form of each tower differs slightly, they both taper upwards, affording room for a series of spacious stepped terraces.

Collins Arch Sky Bridge image by Trevor Mein (2020).

The west tower comprises approximately 49,000sqm of Property Council of Australia premium grade, WELL-rated commercial office space. The east tower is home to the W Melbourne hotel by Marriot International, which boasts 294 guest rooms across 15 storeys.

Over 180 luxury residences occupy the upper levels of both towers, which range from one-bedroom apartments,

through to penthouse suites. Resort style amenities are on-hand for residents, including a pool, gym, yoga studio, wine cellars, and a sky garden.

Back at ground level, Woods Bagot and SHoP Architects collaborated with Oculus Landscape to develop 950sqm of retail space, as well as open and green public spaces. These spaces include a lush central courtyard, a covered tiered amphitheatre, and the 1,900sqm Market Street Park—the first new urban park created in Melbourne’s CBD since the 1980s.

CLEAN, GREEN AND ENERGY EFFICIENT Cbus Property is working towards net zero emissions by 2030 - a commitment that was embedded into the design of Collins Arch.

The development features a range of cutting-edge clean energy technologies, such as high-efficiency air conditioning, energy efficient façade fabric insulation, real-time energy monitoring, and electric vehicle charging stations.

Collins Arch is the third development in Australia to receive a platinum level WELL pre-certification, where nutrition, fitness, mood, sleep patterns and cognitive performance of occupants are key considerations in the overall design.

This has been accomplished through indoor air quality monitoring, superior natural lighting and ventilation, an emphasis on bicycle access, and more.

These features, and many more, earned Collins Arch a 5 Star Green Star Design & As Built rating from the Green Building Council Australia. What’s more, the innovative and integrated design of Collins Arch is expected to cut carbon emissions by approximately 25% when compared with business-as-usual buildings.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 09

CASE STUDY

COST MANAGEMENT CONSULTANCY In 2014, Cbus Property conducted a competition for the design of Collins Arch. The design brief was ambitious from the outset: an iconic development that would set a new standard for mixeduse development in Australia.

RLB was involved in the project from its inception—even before the winner of the design competition was announced.

Cbus Property engaged RLB to provide full cost management and quantity surveying services throughout the design and construction phases of the project.

According to RLB Director, Domenic Schiafone MAIQS, RLB collaborated closely with Cbus Property throughout the design competition. “There were four shortlisted design submissions on which RLB completed around a dozen cost plans, one of which was the winning design of Woods Bagot.”

EARLY INVOLVEMENT While Woods Bagot and SHoP Architects won the design competition for Collins Arch, icons are not always easy to bring to life, and the project team faced several planning setbacks before a sod was turned. Potential overshadowing of the nearby Yarra River, and height and plot ratio restrictions, were some of the first challenges to be overcome by the project team.

“Initially, the winning design was a single, tower with over 70 storeys, with the commercial, hotel and residential spaces stacked on top of one another.

The rationale behind this design was to create as much public space at ground level as possible. The design failed to secure planning approval because it overshadowed the Yarra River. It was then that the project team considered twin towers,” said Schiafone.

“The twin tower design pushed the development to its limits in terms of height and built in as much floor space as possible. However, it slightly overshadowed the Yarra for a few minutes each day over a couple of months.

This meant that planning approval was secured, minus the top three or four floors.

As these floors housed the penthouses, their loss represented a significant drop in saleable area and revenue. This put pressure on cost planning and brought value management to the fore.”

“We went back to the drawing board several times. Each time we started the cost planning, design, and feasibility work from scratch. We delivered over 20 versions of the cost plan. One of the main challenges on such a large project is its long gestation period, particularly with all the planning setbacks. RLB had to ensure that each cost plan was relevant within a changing market, allowing for two to three years’ worth of inflation on elements such as construction materials and labour,” said Schiafone.

With the Collins Arch sky bridge, it was not about pricing structural elements outlined in the architectural plans - it was about pricing a process.

COLLABORATION WITHIN A LIVE ENVIRONMENT One of most challenging aspects of the project was the three very distinct uses of the development: residential, commercial and hotel.

10: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

“The building had to work as one, but four separate design teams - responsible for the building fabric, commercial interior, residential interior and hotel fitout - were on site, all operating at different paces,” said Schiafone.

“Everything moved very quickly and, because all elements intersected at various points - whether in the lobby, or plant rooms, or floor layouts - a little change here or there could cause a ripple effect across the entire development. For example, a change to the lift configurations for the commercial floors would impact the residential floors, and vice versa.”

“RLB’s cost plan needed contingency and flexibility so that design changes did not blow the budget. We also embedded team members in each of the different streams and had one person overseeing all three of the streams.

This configuration ensured nothing overlapped and helped keep RLB abreast of every aspect of the project,” said Schiafone.

“RLB also attended various design workshops. Often, we would have no input in these workshops, but the insights we gained in terms of the design intent and the architects’ thought process were gold.”

RLB also maintained their cost plan as a live document. While static cost plans were delivered at all the major design milestones, RLB’s live document was continually updated, effectively eradicating the element of surprise.

“We knew exactly where we stood at all times,” said Schiafone.

RLB was also able to use the live cost plan in meetings to demonstrate to Cbus Property and the design team how design changes would impact costs - all in real-time.

CASE STUDY

“Our approach enabled us to deliver highly accurate cost plans and informed value management advice as design ideas arose - often before they appeared on a drawing,” said Schiafone.

MAXIMISING EVERY SQUARE METRE OF BANKABLE SPACE “Feeding construction costs into the feasibility process is an endless balancing act; if one area is off balance then the project won’t stack up financially. The challenge was value management without cutting corners—it was about doing things smarter.”

Value management was a key theme throughout the project. “Creating value for Cbus Property, and achieving commercial certainty, were central to RLB’s service delivery on Collins Arch,” said Schiafone.

In just one of many examples, back-ofhouse areas, such as plant rooms, were economised to maximise every square metre of bankable space.

PRICING A PROCESS As Schiafone explained, pricing the eight storey, 14m span sky bridge posed some challenges for RLB. “From a quantity surveying point of view, the pricing process is generally based on what you can see on a drawing. With the Collins Arch sky bridge, it was not about pricing structural elements outlined in the architectural plans - it was about pricing a process. We had Multiplex step us through the construction process for the sky bridge, which enabled us to ‘build-up’ an accurate price,” said Schiafone.

Collins Arch image by Trevor Mein (2020).

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 11

CASE STUDY

costings and enables informed advice as new design ideas arise.

3. The incorporation of new design elements within the cost plan must be raised with the client and building contractor—and a solution reached— as early as possible. This helps ensure project feasibility and prevents delays within the construction schedule.

4. Collaboration with all project stakeholders helped ensure seamless delivery of all project and cost management objectives. In particular, the close working relationship established with the Cbus Property leadership team, including Victor Istanto, James Mauceri and Andrew Potter, was extremely beneficial.

FAST FACTS • Client: Cbus Property • Location: Melbourne, Australia • Value: AU$1.25 billion • Size: 49,000sqm

Collins Arch image by Trevor Mein (2020).

Installation of the sky bridge also required the use of up to four cranes.

This reliance on heavy-duty machinery skewed construction industry costing benchmarks, which impacted the construction feasibility. This challenge was compounded by a lack of similar projects in Australia; RLB had no other sky bridges against which to benchmark costs.

“Our propriety software helped us overcome this benchmarking challenge.

A flexible, robust system, RLB ROSS 5D estimating software allows us to set out multiple zones within a project, and cost plan these zones simultaneously to see their overall effect,” said Schiafone.

• Property Type: Mixed Use (Residential, Commercial, Retail and Hotel)

LESSONS LEARNT Collins Arch delivered four key lessons for RLB: 1. A live cost plan is essential. It delivers cost certainty for accurate budget management and risk mitigation.

New design elements that may cause cost issues can be quickly and easily modelled, and then raised with the client and design team immediately for value management.

2. Early involvement in design workshops is beneficial. It delivers a better understanding of design intent, which translates into more accurate

12: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

• Completion: Q1 2020 • RLB Project Leadership: Domenic Schiafone (Director) and David van der Staal (Senior Quantity Surveyor) • Design Team: Woods Bagot, SHoP Architects, OCULUS Landscape, AECOM • Building Contractor: Multiplex

This case study has been written and supplied by the team at RLB. Photos supplied by RLB.

Accelerate your development pipeline.

Maximise your return on equity.

PA R T N E R W I T H PAY T O N C A P I TA L .

At Payton Capital, we are driven by a desire to see our clients succeed. Our reputation is built on our ability and proven capability to create tailored and competitive finance structures to maximise developer’s return on equity.

Motivated by service excellence, our approach is built on providing clients with financing solutions that allow them to accelerate projects within their pipeline, by accessing higher leverage, and lower pre-sale requirements.

Speak to one of our Relationship Directors to see how Payton Capital can assist in funding you or your clients’ next project.

P AY T O N . C O M . A U / B O R R O W

Q&A

WHAT WORDS OF WISDOM OR ADVICE RELATING TO QUANTITY SURVEYING, THAT SOMEONE HAS GIVEN YOU, HAS STUCK WITH YOU? HOW DID THESE WORDS IMPACT YOU? 14: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

Q&A

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 15

Q&A

REBECCA HEARN MAIQS, CQS “Very early on in my career, I was told to make sure that I priced the full scope of a project.

Initially I was baffled because I had assumed this was a given, we are provided with drawings and specifications for exactly this reason.

However, as I made my way through my career, I came to learn that we don’t always have the information, especially in the early stages of a project.

There are many Quantity Surveyors who will just exclude scope because there is no detail on what should be included. This is not providing a client with a true cost of the works and will lead to issues with budgets later. I take the time to discuss scope assumptions with the wider client and design team to ensure my cost plans reflect what will be delivered.

a new highway. In an early estimate, the noise modelling may not have been undertaken to know how much wall is needed, but instead of excluding you can make an informed assumption that it will be needed alongside built up/residential areas. This means when you get to delivery stage you are not over budget because scope was excluded.”

Take for example whether or not there should be noise barriers to the side of

LUCY ENG MAIQS, CQS, MNZIQS, REG QS “Go for it!

Three words that have stuck with me and given me the confidence to pursue my next steps every time I seek affirmation on a new challenge.

Admittedly, quantity surveying was not my first choice of profession. I completed a Bachelor of Environmental Management prior to pursuing a qualification in Quantity Surveying and Construction Management. Upon completion of my first Bachelor, I was curious and eager to experience the opportunities within the construction sector. As I was debating my next steps,

I shared my aspirations with my dad who is an established and successful construction professional. He told me, Go for it, you have nothing to lose.

The rest they say is history.

This pivotal decision transformed my career pursuit and landed me various roles which continuously challenge and shaped me as a construction professional.

My early years as a Consultant Quantity Surveyor not only provided me a solid foundation to my future endeavours but it has opened up various opportunities for me in New Zealand and Australia. I progressed into project management and

16: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

eventually into client-side management and developmental role as Principal Project Manager in Homes Victoria.

Each role was different, yet I find myself constantly applying my quantity surveying knowledge in all my projects.

I am humbled and grateful to have been given the opportunities in my career trajectory and this experience was made possible by a simple go for it! advice many years ago. I am also excited for the future and look forward to sharing more of my experiences and continuing contributions to the built environment and shaping the city skyline.”

Q&A

MARTIN BISSET FNZIQS, REG QS “Everything a QS does needs to be accurate and professional, and I learnt from an early stage of my career, the importance of these two, as well as the mantra if you don’t understand or know, ask.

This can be summed up by a ten-storey office development in London, that I was working on a few months after graduating. The preliminary design had been issued, and I had to measure the floor areas, including the rentable floor area, using A2 drawings and a digitiser.

I measured these and gave them to my boss, to prepare the estimate. At the end of the day, he asked me, did I deduct the lift well from the rentable floor area?

It wasn’t!!! I was then informed that if this mistake had not been found before it went to the developer, how would the QS company’s professionalism would have looked and how would they have explained the error to them. Also, the developer's future income would be less!

From that moment, I have always checked my measures, estimates, letters,

etc. before issuing. To take this further, I have a rule not to send anything out if I finish it at the end of the day, unless I have checked it. So, I tend to issue everything in the morning, as I have had a chance to check and double check what I am sending out.

I have had many exceptional mentors and other words of wisdom including admit when you’re wrong, be honest and ensure you always state the basis for your calculations.”

DON LEELARATHNE FAIQS, CQS “I believe that the most important piece of advice that someone has given me was to be open-minded in my approach to challenges while working on projects.

Early on in the field as I was developing my knowledge as a Quantity Surveyor, I became quickly overwhelmed with the amount of knowledge that I had yet to learn. As a young Quantity Surveyor, working with experienced Architects, Engineers and Project Managers, I continuously faced difficulties trying to build up my technical knowledge whilst applying my limited ‘on the job’ experience to reach the best outcome for our clients. One of the Senior Directors I worked under as a Junior Quantity

Surveyor never stopped encouraging me to ask questions not only to those around me but to myself as well. He motivated me to put forward possible solutions to my own questions by thinking of the bigger picture. This practice not only improved my quantity surveying techniques but also sharpened my understanding within the industry.

It allowed me to get my work done quicker and my colleagues appreciated the proactive approach I had to tackle challenges in our work. More than all, looking at the bigger picture and providing correct advice to our clients.

I would not have gotten to the position I am today without the support of many

colleagues and mentors that took me under their wing and shared their wisdom.

I learnt that in every challenge there is an opportunity to learn from others and expand my knowledge from their insights.

Even today, I continue to learn copious amounts from my colleagues, particularly young industry professionals. In this day and age, I find that we often limit our opportunities to learn and develop as we remain stuck in what is comfortable to us. Listening to the way others value the industry and their perhaps differing perspectives will truly make us better Quantity Surveyors and contribute positively towards our industry.”

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 17

Q&A

HEIDI VAN EEDEN MNZIQS, REG QS “Don’t bother studying for your degree, you won’t need it and you will never make it in this industry were the pieces of advice I received during my first months in the construction industry.

I could have taken these words as a warning but preferred my narrative that it will be a challenge.

We all face challenges daily. Challenges are what makes goal attainment sweeter. Set your goals and work hard at achieving them. You will not always get the support that you desire, but you can be the support someone else needs.

Reach out to others, help where you can.

A kind word can make all the difference in someone’s life and career.

Keep your voice. You might be the only person in the room with a different opinion, but it is important to speak up.

Research shows that diversity makes companies more profitable and able to reach new markets. Don’t diminish your ability to make a difference by keeping silent.”

appreciation for cost, time and quality parameters. They have an engrained skillset and mindset that every dollar is their own dollar; integrity; possesses professional accountability; forensic attention to detail; and has an appreciation for building methods and trade methodologies in respect to understanding qualitative work-flow processes illustrated in architectural, structural, services drawings, and specifications.

a Developer, Builder or Independent Certifier, your task and conduct is based on actual science with a method of measurement that applies to engineered/ market rates to derive an outcome.

DAVID NGO FAIQS, CQS “Every line on that drawing is a dollar and assume every dollar you miss comes out of your wallet.

This statement has had a profound impact on developing my QS mindset and attitude towards being an effective Quantity Surveyor/Estimator and Builder.

I find these words highlight the importance in our building and construction industry, the direct relationship on two fundamental principles of quantum and rates.

A competent Quantity Surveyor, in my opinion, is someone that has an

As Quantity Surveyors, our role serves an important purpose depending on which perspective you are from. Whether

18: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

Simply pulling figures out of thin air is not in the spirit of this well-regarded profession, and concerningly this tends to happen and can affect project success and stakeholder’s eventual bottom line.

Hence why, since my journey from a cadet, I have instilled this notion in my mindset and apply it proficiently in my career today.”

Q&A

KAM CHENG MNZIQS, REG QS “There is no road, the road is made by walking it was what a professional QS institute ex-chair advised me during a seminar 20 years ago when asking him how to prepare for a career in QS after graduation.

This advice was made 20 years ago, but the quote seems almost prescient given the changes in the QS practice in the past 20 years and during pandemics, as we wonder what new paths will emerge

during and after this pandemic.

Our industry keeps changing, and we keep facing new demand for changing workforce capability and challenges such as supply chain, skill shortage.

Facing a disruptive period in the past two years, our industry has played its part in keeping the whole economy afloat. In recent years, our construction industry is also called on to play a part in digitalisation, climate change,

carbon footprint, circular economy, and sustainability. Be persevering, be resilient, keep learning, then you can find your own path. These works ahead can only be achieved with our whanau, our community, and our construction sector; even though we are not quite sure what this will look like or what it will take.

And we, as QSs, each have an essential role to play in reshaping and shaping our future construction industry in Aotearoa, New Zealand.”

CRAIG MASTERS FNZIQS, REG QS “Possibly the single biggest influential words I received were from probably the smallest man I ever worked with….

But boy did he bellow those words in his deep Irish voice in front of 100 plus workers on site and a small portion of the Wellington public!

The scenario was a tall shy QS trainee emerging from the cool of a basement carpark on to a hot sunny wellington street, where the site operatives were all packing up for the day. The words MASTERS what are you doing on my site bellowed down from the gantry site office to which I naively replied I was just

wandering around the site…. I was then told in a colour array of Irish language to remove my hands from my pockets, stop wandering and to walk the site with a PURPOSE! Passers-by on the street found this amusing enough but the roars of laughter from the site rang in my ears for what seemed like hours, and I went redder than the red colour of the site hoardings.

The next week it was like I had joined a select club with everyone on site telling me of similar advice and embarrassment they had received. The impact helped me realise that no matter what my position with the company was, we were all

treated equally, fairly and nobody was better than the collective team.

I was lucky enough to work with a company that had a great ethos in training and development, where words or wisdom and advice came freely from our managers, and they provided challenges and opportunities for us to learn.

My main take away, which I have tried to impress on my staff is to treat everyone with similar levels of respect, speak up, listen, and have a bit of fun along the way, but make sure that whatever you do has purpose and understand what that purpose is.”

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 19

HOSPITALS

EXPECT BIG CHANGES FOR HOSPITAL PROJECTS AFTER COVID-19

By Dr. Rhonda Kerr

20: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

HOSPITALS

Costing medical and other technologies for hospitals will require refined costing methods to address the costs of specific technologies, data management systems, data systems supported by artificial intelligence and communications systems.

We live in uncertain times, yet clients continue to expect certainty about the costs of building for an uncertain future. Certainty is slipping away as the promises of safety and security from vaccines is tested by the Omicron and newer variations of COVID-19 are emerging(WHO International Health Regulations Emergency Committee 2022)¹. There is evidence that the effects of COVID will be with the health system for many years. Concerns are also growing about the effects of climate change on health delivery and healthcare buildings.

This article presents some of the key factors that are expected to influence costing new and redeveloped hospitals across Australia over the next few years.

For the design and costing of hospitals and health facilities there are some lessons that have been learned(Kelly 2021)². The first is that infection control is a fundamental consideration. Patient safety and staff safety are the key issues.

New or redeveloped health facilities will be expected to manage four types of patients: • those with an existing health issue (medical, surgical, mental health and obstetric) • the above group at risk of also having a COVID infection • people with COVID but no other existing issues • those rehabilitating from COVID often called Long COVID. To keep these patients from infecting each other and from infecting staff new or redeveloped facilities will be required.

Some of the early lessons from COVID are the need for:

• enhanced HVAC systems • hard barriers between emergency department bays • redesign of waiting areas • individual patient rooms and bathrooms rather than shared rooms, particularly for the elderly, and immunocompromised patients in cancer areas and potentially dialysis places • changed design for outpatient clinics and waiting areas • larger more flexible pathology and imaging services • revised waste management arrangements • new triage spaces.

New lessons continue to be learned and are being translated into clinical guidelines, operational guidelines, and physical facilities in Australia and overseas. These changes will make costing hospital facilities less reliant on historic data and benchmarks and more responsive to contemporary costing.

COSTING NEW CLINICAL STAFF AREAS Staff shortages and staff burnout have been evident across healthcare and hospitals in recent months. Health facilities and particularly hospitals will have a greater emphasis on staff welfare, expressed through more spacious staff facilities, break out spaces including to outdoor areas and uniform/ PPE areas.

Staff areas may change from open plan to smaller office hub-based systems.

There will be competition for staff and hospitals will need to enhance the quality of staff areas to retain them. So

¹ WHO International Health Regulations Emergency Committee. 2022. 'Statement on the Tenth Meeting of the International Health Regulations (2005) Emergency Committee Regarding the Coronavirus Disease (Covid-19) Pandemic 19 January 2022, .' edited by World Health Organization, Geneva https://www.who.int/news/item/19-01-2022-statement-onthe-tenth-meeting-of-the-internationalhealth-regulations-(2005)emergencycommittee-regarding-the-coronavirusdisease-(covid-19)-pandemic. ² Kelly, C, Marshall, C. Buising, K.Macisaac, C. Orr, E. Keogh, N. Simpson, A. 2021. "In-Hospital Transmission of Sars-Cov-2 in 2020 and 2021." MJA Insight (30 August 2021).

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 21

HOSPITALS

higher levels of fitout and services may be included in costings.

It can also be expected that the staff shortages will result in an expansion of clinical education with larger spaces for medical, nursing, and allied health education within hospitals. Office areas for quality and infection control are also likely to expand. Clinical staff are less able to work from home so the decrease in office space experienced in other professions is unlikely to translate into clinical office areas.

COSTING TECHNOLOGY Information systems and data collection have been critical within hospitals during COVID. Slow results and paperbased systems have proven inadequate in delivering timely diagnostic patient information to doctors, patients, and the health system. In the next iteration of hospital building, it can be expected that costs for better data collection systems supporting artificial intelligence and smart machines delivering a constant stream of data will be expected. Technology costing will be a critical issue as these applications expand and become linked to the quality of patient care dashboards.

Telehealth for outpatients may provide an opportunity for outpatient departments space to be decreased, but these areas may need to be technologically enhanced to receive real time patient monitoring, secure data and communications systems.

Clinical control rooms (like air traffic control areas for monitoring patients outside the hospital) may replace some clinic rooms.

These changes will make costing hospital facilities less reliant on historic data and benchmarks and more responsive to contemporary costing.

SPECIALIST AREAS- ICU A key lesson has been the importance of access to ICU for a wide range of patients, including those with infectious disease.

To ensure patient and staff safety, ICU facilities are likely to change to individual rooms and decentralised treatment and staff areas within the ICU. ICU areas are expected to increase in line with patient demand(Litton 2020)³. Dedicated entry to ICU from a triage area for infectious patients may become a requirement.

The relationship between ICU and the wards may also change with some wards having more isolation facilities with negative pressure areas and high dependency patient rooms with similar infrastructure to an ICU. Such an increase in acuity of patient areas on the wards will involve additional areas, systems, and infrastructure. Access to outdoor areas for ICU staff and patients is being recognised as important.

Genomics and genomic medicine have become more widely understood of late and will be expected by most clinicians and patients.

FLEXIBILITY The need for surge capacity (fully supported by HVAC, oxygen, data, and systems) has been a significant issue in hospitals over the past two years. So future hospitals can be expected to have additional costs associated with creating flexibility of spaces where emergency departments can expand, additional beds brought into play and ICU beds be created from individual patient rooms.

It is unlikely that the conversions of operating theatres and recovery spaces into ICU’s will be seen as a strong long term solution(Søreide et al. 2020)⁴. So, there will be additional costs loaded onto some patient rooms for surge capacity and infection control. Flexibility will come at a cost including for infrastructure.

CLIMATE CHANGE There are two major issues arising from the increase in temperatures and changing weather patterns caused by climate change. These are the carbon costs associated with hospital building and operations, and the changes necessary to hospitals due to climate change.

Hospital buildings have been estimated to generate around 8% of total health emissions(Malik 2018)⁵. It is estimated that 5.5% of all carbon emissions come from healthcare operations mainly hospitals and pharmaceuticals(FitzGerald 2019; Beggs 2021)⁶. The challenge of adapting hospitals to be sustainable is being addressed differently in each state and territory. Additional capital costs will be added to construction of

³ Litton, E. Bucci, T. Chavan, S. Ho, Y. Holley, A. Howard, G. Kwong, P. Millar, J. Nguyen, N. Secombe, P. et al. 2020. "Surge Capacity of Australian Intensive Care Units Associated with Covid-19 Admissions." Medical Journal of Australia 30 March 2020, 6 April 2020 (https://www.mja.com.au/ journal/2020/surgecapacity-australian-intensive-care-unitsassociated-covid-19-admissions). ⁴ Søreide, Kjetil, Julie Hallet, Jeffrey B. Matthews, Andreas Anton Schnitzbauer, Pål Dag Line, Paul B. S. Lai, Javier Otero et al. 2020. "Immediate and Long-Term Impact of the Covid-19 Pandemic on Delivery of Surgical Services." British journal of surgery. ⁵ Malik, A.Lenzen, M. McAlister,S. McGain, F. 2018. "The Carbon Footprint of Australian Health Care." Lancet Planet Health 2: e27-35. ⁶ Beggs, P. Zhang, Y. McGushin, A. Trueck, S. Linnenluecke, M. Bambrick, H. Berry, H. Jay,O. Rychetnik,L. Hanigan, I, Morgan, G. Guo, Y. Malik,A. Stevenson,A. Green,D. Johnston,F. McMichael, C. Hamilton, I. Capon, A. 2021. "The 2021 Report of the Mja–Lancet Countdown on Health and Climate Change: Australia Increasingly out on a Limb." Medical Journal of Australia, 215 (9): 390-392.e22.doi: doi: 10.5694/mja2.51302.

FitzGerald, G. Capon, A. Aitken, P. 2019. "Resilient Health Systems: Preparing for Climate Disasters and Other Emergencies." Medical Journal of Australia 210 (7): 304-305. https://www.mja.com.au/journal/2019/210/7/resilienthealth-systems-preparing-climatedisasters-and-otheremergencies.

22: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

HOSPITALS

new hospitals and the redevelopment of existing facilities for carbon mitigation.

More frequent heatwaves, storms and fires are expected to increase the number of people with health events requiring hospitals, so demand is expected to increase. At the same time the resilience, fitness-for-purpose and fabric of hospital buildings and engineering will be tested in new ways. Some states have initiated climate change policies, the Australian Health Facility guidelines have incorporated carbon reducing options, but there remains no national strategy to fund the transitions for hospitals to become sustainable during building and operations. This is an area to watch and cost based on client advice.

CONCLUSION For a wide range of reasons, it has never been more difficult to provide confident costings for building and particularly healthcare buildings. Politicians and communities seek confidence that when access to a hospital bed is necessary, it can be delivered. For that reason and the tragic experiences of the past two years, it is probable that there will be a significant increase in public hospital building and redevelopment over the next five to eight years.

However, hospitals will be different in some important ways. Single patient rooms with ensuite bathrooms will become the new normal and shared facilities in multibed wards will be phased out. ICU and high dependency Units will be more common and larger.

Emergency departments will expand

to manage potential infectious patients in waiting rooms and treatment and diagnostic areas. Shared spaces will be less common. Additional space for managing surges in demand, particularly for infectious diseases, will be built into hospital projects. Beyond bed numbers will be significant expansions for pathology, imaging, medical testing, waiting areas, biomedical engineering, technical support and data storage, cleaning, engineering, and waste management. Outpatient departments and diagnostic areas will have a greater emphasis on communications technologies and data management.

Costing medical and other technologies for hospitals will require refined costing methods to address the costs of specific technologies, data management systems, data systems supported by artificial intelligence and communications systems.

Staff shortages in recent years indicate there will be intense completion for doctors, nurses including specialist nurses and clinical staff. Areas for staff welfare, amenities and support will be critical to each hospital to retain and attract medical and nursing staff.

Education and training areas in hospitals can also be expected to increase in size.

change but there is no national approach to create more certainty about the costs of climate change on Australian hospitals.

These are some of the emerging trends that will require careful costing to enable the next generation of public hospitals to respond to the twin challenges of pandemics and business as usual.

Dr. Rhonda Kerr B.A.(Econs)ANU, Ph.D. (Public Health) Curtin University of Technology Health Economist, Clinical Service & Health Facilities Planner, Rhonda Kerr and Assoc. Health Planners Director, Economics, Health Services and Planning, Guidelines and Economists Network International (GENI) Hon. Research Fellow, University of Western Australia.

However, there is less certainty about the transition costs for hospital buildings due to climate change. Patient numbers are expected to increase while the fabric and technology of hospitals will be tested by hotter and more dramatic climatic situations. Some states and territories have programs addressing climate

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 23

BUILDING MATERIALS

ASSESSING RISK PROCURING ENGINEERED WOOD PRODUCTS

By Paolo Lavisci

24: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

BUILDING MATERIALS

The AVEO Bella Vista building, completed in Norwest, Sydney in 2018, breaks the mould of the typical mass timber designs for residential buildings we have seen internationally over the past decade.

The short delivery time requirement made it an ideal project for a CLT design, enabling Strongbuild to complete it 13 weeks earlier than with the concrete program. Photograph credited to Brett Boardman @ Brett Boardman Photography.

While many risks are common across all building materials and systems such as taxation, legal, and planning, it’s important to understand where and how Engineered Wood Products (EWPs) may be different and what you should be aware of when costing a project and assigning contingency sums.

Some risks may be applicable just for a given product, source and/or moment in time.

The rapid growth of EWPs in Australia has been supported by the National Construction Code (NCC) which, since 2016, has provided Deemed-to-Satisfy (DtS) solutions for fire-protected timber construction to an effective height of 25 metres, and backed by WoodSolutions’ free advisory program¹. When we refer to EWPs, it includes all the wood-based products where there is some form of engineering and off site prefabrication, from stud frames, I-joists, and cassettes to mass-timber components such as CLT, GLT, LVL and NLT. Here’s what you need to know when procuring EWPs....

PROCUREMENT The risks associated with procuring EWPs are generally similar to those encountered with any other prefabricated elements, such as precast panels, fabricated steelwork, and glazed curtain wall units.

Quality assurance is a simple task with EWPs, because highly automated processes are normally used, in which all the materials are tested, recorded, and tracked throughout the production line. As with any other products, it is important for the contractor to ensure that all elements installed are compliant with the specified design. The Annex to ¹ https://www.woodsolutions.com.au/mid-rise

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 25

BUILDING MATERIALS

the WoodSolutions Technical Guide #51, “Cost Engineering of Mid-rise Timber Buildings”² provides specific guidelines on how this should be planned and implemented, while the main part of the guide describes many other aspects of procurement, from the understanding of suppliers’ capacity, visual grades and finishes, moisture variations and their effect, logistic, and storage.

One of the main causes of concern for first-time users of EWPs is relative to the appearance of blue stains on unprotected wood surfaces when the moisture content level exceeds 1516% for a significant period. These stains are significantly different from rot (no structural damage), so it is simply advisable to apply a finish with an anti-mould in it, either before shipping from the factory or when destacking the elements from the truck or container, then apply a second coat after installation. A similar concern is the suninduced colour changes that can happen rather quickly and can be prevented by temporarily wrapping the elements in plastic, paper, or wood-based panels.

On the other hand, it is not a problem for non-visual grade elements to be exposed to the weather for short periods, although it is important to prevent pooling of water for extended durations. Our Cost Engineering guide and the producers provide information on how to deal with temporary exposure to rainy weather during the construction period.

Figure 1: Multiplex completed the LaTrobe Uni Student Accommodation in Bundoora with zero accidents, 2.5 days/floor faster cycles than with concrete precast elements, and zero variations. Without touching the trees on site. Architecture and images: https://jcba.com.au/ Image is authorised for the promotion of FWPA only. For non-FWPA usage you must obtain permission from photographer at: http://glennhester.com.au

As for the financial risks, when the level of off site manufacturing increases, suppliers may require a substantial deposit well in advance of delivery. But for EWPs this may be balanced by the time savings that, in most cases, will mitigate this risk.

EWPs have historically shown less price volatility than other materials and,

² https://www.woodsolutions.com.au/ publications/cost-engineering-mid-risetimber-buildings

26: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

BUILDING MATERIALS

although this is a hot topic at the time of writing this article, there are already signs of a decrease in the future price indexes, therefore most analysts expect that the associated supply crunch will soon start to progressively ease, while the industry is already investing to improve its capacity.

Luckily wood is a renewable resource, which grows slowly but steadily and can assure the future of mid-rise construction with some forward-looking planning.

CONSTRUCTION SAFETY, SPEED AND QUALITY These three areas are tightly interconnected, and the “business as usual” adagio says “you can’t have them all, at the same time”. But several projects we have provided advice for prove it’s feasible because of the synergy between these components that EWPs bring into the mix. As shown in Figure 1, a 624-bedroom student accommodation project was recently completed in two years from the conceptual design, with zero site accidents, significantly faster floor cycles than with concrete precast elements, and zero variations. A big plus for both the builder and the client.

Using EWPs, rather than concrete or steel structures, has been demonstrated to enhance the site safety because larger working platforms and pre-installed edge protection are used, anchoring for safety harness is simpler and easier, fixing of components and services uses smaller and lighter tools with no trip hazards from cables, and there’s no need for hot works or welding on site.

Significantly high levels of construction safety are the major driver for both efficiency of installation, and absence of defects. But quality cannot be controlled, if it hasn’t been designed, therefore it is important that design resolution and

Figure 1.1: Multiplex completed the LaTrobe Uni Student Accommodation in Bundoora with zero accidents, 2.5 days/floor faster cycles than with concrete precast elements, and zero variations. Without touching the trees on site. Architecture and images: https://jcba.com.au/ Image is authorised for the promotion of FWPA only. For non-FWPA usage you must obtain permission from photographer at: http://glennhester.com.au

clash detection are completed before shop drawings and production, and this normally comes easy with EWPs because of their accurate dimensional tolerances, while minor on site adjustments are still very simple to carry out.

With the fabrication of structural elements occurring in an off site facility, on site activities centre around the assembly of the structure and the rate at which this can occur. Analysis of the 26 projects within our database shows the following “average project” data: the wood carpentry for a 7-storeys building, with a gross internal area of approximately 8,000m2, is installed by a crew of seven at a rate of 92 m2 per day.

Of course, installation rates can vary and are very project-specific, but in general terms they are significantly faster than with other materials. WoodSolutions’ Cost Engineering guide reports the full dataset, a description of a construction risk assessment methodology that has

been specifically developed for midrise timber structures (Figure 2) and an Annex that describes the main methods and metrics to plan, execute and assess for a good quality of installation, which is consistent with the relevant risk and consequence classes.

FIRE SAFETY Both during construction and in the building lifetime, fire safety is the first concern in most projects. Fully encapsulated EWPs will behave like noncombustible materials for the prescribed fire resistance levels, and the DtS provisions illustrated in WoodSolutions guides 37 & 38³ describe how to achieve them in different building classes, while the test certificates and assessment available from both WoodSolutions’ fire test reports and the suppliers cover a broad range of construction details.

³ https://www.woodsolutions.com.au/mid-rise/technical-design

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 27

BUILDING MATERIALS

Project Summary Weeks on Days on site site

Hook time per day Lifts

Lifts per day

GIA [m2]

GIA per day

SW1797-14

12

60

8

936

15.6

4682

78

NW2619-17

10

50

6.5

994

19.88

3072

61

SE2261-16

16

80

7

1299

16.2375

6154

77

N11090-10

14

70

8

1323

18.9

4154

59

Figure 2: Example of risk assessment matrixes and graphs (courtesy: http://www.eurban.co.uk/).

But in many cases, it is desirable to expose some of the structural timber, and therefore a Performance Solution is needed. The approach that a professional fire engineer will apply to an exposed timber structure is fundamentally the same as for any other exposed structure; moreover, EWPs have a very predictable and well documented fire behaviour and maintain their strength and stiffness while the temperature rises.

Understanding and designing for these factors is critical to demonstrating that a performance-based fire strategy will meet building code requirements and has successfully been done in several cases: in Australia, for projects up to 10 storey (built) and 15 storeys (approved), while in North America and Europe even taller buildings have been completed (18 storeys fully in EWPs, including the core; 24-storey in hybrid construction).

DURABILITY AND MAINTENANCE

WoodSolutions has a collection of test reports⁴ available to Fire Engineers and is coordinating a Fire Engineering Leadership Group that meets regularly to exchange information and comments.

Australian projects have been observed to require equal to lower maintenance when compared to similar buildings in the same vicinity constructed of heavier and/or more brittle materials.

Remarkable examples are Melbourne’s Forte’ Living and the Library at the Dock, both of which have reported reduced maintenance requirements compared to a typical construction of similar class, size and location.

The precautions during construction do not differ significantly from what is applicable to other materials, and are described in the WoodSolutions guide Fire Precautions During Construction of Large Buildings.⁵

If designed and built correctly, timber projects can stand for hundreds of years.

While this has been well demonstrated overseas, it is also the case in Australia with a nine-storey timber frame structure standing in central Brisbane since 1913, Perry House. It was then the tallest building in Brisbane, with an extra storey added in 1923. Perry House is still believed to be the tallest timber structure in the Southern Hemisphere that's built on wooden foundations. Its timber structures were kept in the 1996 renovation and are still efficient and beautiful in its new life as the Royal Albert Hotel. WoodSolutions guide on service life design⁶ is a useful tool for anyone seeking to understand the better way to minimise risk and associated costs in a given project.

SUMMARY OF THE SPECIFIC RISK ASSESSMENT CONSIDERATIONS FOR EWPS IN A MID-RISE PROJECT Fire Design (Encapsulated EWPs): Deemed-to-Satisfy provisions make a project safe and ready to approve, when: • The “effective height” from the ground is less than 25m (8 or 9 levels, depending on the floor-floor height).

• All the structural EWPs are encapsulated (still, a wood fit-out is possible).

• It is fully sprinklered (this is applicable also for non-combustible materials).

Fire Design (Exposed EWPs): A Performance Solution from a fire engineer will consider that: • Mass timber elements have predictable, inherent fire resistance, forming a char layer on their surface while the interior remains structurally sound, retaining their load-carrying capacity and shape in situations where some noncombustible materials may lose them.

• Different full-scale compartment tests have demonstrated that, even in extreme scenarios of sprinklers not functioning and no fire service intervention, the fire spread was

⁴ https://www.woodsolutions.com.au/fire-test-reports-1 ⁵ https://www.woodsolutions.com.au/publications/fire-precautions-during-construction-large-buildings ⁶ https://www.woodsolutions.com.au/timber-service-life-design-guide-5

28: MARCH MAY 2022: ECONOMIST Eurban- Limited, 3rdBUILT Floor,ENVIRONMENT 59 Lafone Street, London SE1 2LX +44(0)20 7378 8476 | info@eurban.co.uk | www.eurban.co.uk

BUILDING MATERIALS

contained, there were no structural failures, and the exposed EWPs did self-extinguish.

• EWPs are very easy to repair after a fire and, unlike other materials, have no hidden defects outside the areas which have burned.

Fire Safety During Construction:

• Lifting is quicker and can be achieved with either bundles of materials, smaller cranes and/or shorter equipment rental times.

• Shorter programs result in reduced costs of temporary works.

• Storage areas are reduced in size and can be easily organised on floors.

Safety comes from the same measures that apply to every building material, and are easy to achieve with clean and wellorganised sites:

• Follow-on trades can start immediately, with no props and curing time, because the floors are readily stable and load bearing.

• No welding, brazing and heat-applied components.

• Site accommodation is reduced as the crews are smaller, with more work happening off site.

• All cordless, low-voltage tools.

• Almost no construction waste on site.

• Sprinklers protection plans for construction and final phases, including activation plans and coordination with the local fire department.

Construction Site OH&S: High safety levels are typical, because of: • Significantly lower crews on the live deck (7-8 instead of 35-40 for concrete).

• Large working platforms with preinstalled edge protection, or safety nets.

• Simple and easy anchoring for safety harness in most points.

• No trip hazards from cables and reinforcement bars.

• Easier handling and fixing, with smaller and lighter tools.

• No hot works or welding on site.

• Scaffolding can be limited or even avoided in some instances.

Construction Times and Related Costs: Higher safety results in higher efficiency, therefore:

• Higher number of panels for each truck delivery.

• Fewer variations and defects are typically achieved thanks to tighter dimensional tolerances.

• Accelerated construction programs lead also to lower cost of finance.

• Weather protection measures differ from other materials but can be easily managed without delays.

Reduced Weight: • Lighter above-ground structures, significantly improving design of foundations in weak soils and vertical extensions over existing buildings.

• Higher built volumes are typically possible.

Lower Impacts: • Less noise, dust, vibrations, and truck movements result in less disruption of neighbourhoods and existing activities and tenants.

• CO2 storage (low carbon footprint) and fully renewable.

• Demonstrated benefits on occupants’ health and wellness, that may even justify higher rental fees.

• Increase in net sellable or rentable areas has been obtained in some cases, with reduced wall depths for equivalent structural, fire and acoustic combined performances.

CONCLUSION Building projects are often carefully planned and monitored. Despite this, some are completed late and/or generate unforeseen variations claims. If delays are compared to budget over-runs, the former play a much greater role in affecting the profitability of a construction project.

Indeed, time performance has been identified as the most important factor defining whether a construction project has been successful or not, surpassing both cost and quality performance.

As wood-based projects require design to be largely resolved before the elements can be produced, projects often experience fewer variations than is common with other materials that have larger tolerances and require more site work.

In general terms, significant advantages can be found in a fast and predictable building process, where the accuracy of EWPs plays a major role, and this should be reflected in the risk assessment matrix and in the related cost allocations.

Paolo Lavisci is the Program Development Manager at WoodSolutions, if you wish to contact Paolo regarding this article, please email him on Paolo.Lavisci@ WoodSolutions.com.au.

All guides referenced in this article can be found on the WoodSolutions website https://www.woodsolutions. com.au/publications Woodsolutions have paid for, and written, this advertorial.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 29

SMART CITIES

CREATING SMART CITIES TO HELP BUILD THE FUTURE

EMBRACING DIGITALISATION AND SUSTAINABILITY

By Zari Subhlok

30: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

SMART CITIES

INTRODUCTION For most people living in urban regions of the world, a usual day starts with their smart devices to help make some of the most basic decisions for the day. For example, to travel safely from point A to B, a combination of apps like Google maps, public transport apps, e-hailing services like Uber or Ola, digital payment systems, parking apps, etc are used.

The same technology is also applied for more complex activities such as energy consumption tracking, telemedicine or even gunshot detection by the more advanced cities. Technology adds value to people’s lives by providing them with the power of live data visualisation at the palm of their hands. A combination of disruptive technologies such as AI, IoT, Big Data, Drone, Digital Platforms, etc allows people to make informed decisions and that has an impact on the way cities function and humans behave on a daily basis.

A framework comprising of many such technologies which aim to ‘develop, deploy and promote’ sustainable development practices to address urbanisation challenges is what creates a Smart City.¹

CITIES AND LIVEABILITY Cities are where more than half of the human population currently resides. The share of the human population that cities will host will be 68% or 6.7 billion people by 2050 as per a recent projection by the UN. It should be known that rapid urbanisation does not ensure quality of life or better liveability. Liveability can be defined as the extent to which a city supports quality of life, health and wellbeing for the people who live, work or visit.² As per the UN Department of Economic and Social Affairs – providing

housing, transportation, energy systems infrastructure, employment and essential services like education and health care will become incredibly challenging in the future. A city with economic growth, high liveability standards and sustainable development should be the goal of the future.³

WHY BECOME A SMART CITY? Population increase is expected to be contributed greatly by the developing and underdeveloped parts of the world.

More than 30% (3 billion) of the world population will be living in the slums of cities by 2050. The UN says inequality intensifies divisions and hampers economic and social development.⁴ There will be a need, more than ever before, for an equitable world especially after it continues to face the devastation caused by COVID-19.⁵ Every city contains a sophisticated network of hard, soft and critical infrastructure acting as its backbone.

With the number of people increasing, the pressure to manage these systems will be high. Sustainable development of the future world will depend on how successfully cities are able to lead urban growth and thrive.

Disruptive digital technologies have the potential to solve major metropolitan challenges.⁶ Data-driven technology serves as a powerful tool to accelerate evidence-based city planning & management. By enhancing connectivity, financial inclusion, access to trade and public services, technology can be a great equaliser.⁷ A study finds that following the Smart City development agenda is not a mere alternative but a crucial strategic imperative for the developing world.⁸ Hence, the developing countries should prioritise Smart City

initiatives over other development alternatives especially if they can afford a digital infrastructure.⁹

YOKOHAMA A great example of remarkable development is the Yokohama city of Japan. In the 1960s the city struggled with issues such as air pollution, heavy traffic jams, excess emissions, etc. After formulating “The Yokohama Smart City Project” in 2010 and undertaking development initiatives like grid energy management systems¹⁰ along with the involvement of its people, private companies and the government, Yokohama became a model for the development of sustainable cities.¹¹ Yokohama was able to reduce its CO2 emissions by 29%. The city now provides valuable insights for developing countries to apply smart solutions to address their urban challenge.

POWER OF DATA (TO RESPOND TO EXISTING PROBLEMS) To move towards ‘smartness’, cities from developing countries can start with a framework that utilises people-centric pilot programs and a low-cost technology base to deliver outcomes that enhance liveability. These initiatives can target the following sectors: Traffic management: Smart traffic signals, car sharing, bike hire, real-time public transit information, smart parking, etc can make it possible to respond to live traffic volume, reduce congestion and promote improved transport.

Waste management: Waste collection optimisation using sensor-based smart bins, waste management apps can control sanitation and solid waste pollution.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 31

SMART CITIES

Public Health: For areas where specialised medical facilities are not available, telemedicine can be availed for remote healthcare and treatment.

Telemedicine also saves hours spent on paperwork and maintains records digitally. Additionally, M-health (mobile health) interventions have been shown to improve health outcomes and reduce healthcare costs.¹² Aged Care: To keep the vulnerable

sections of society connected, social media networks, digital citizen programs can be set up.

Crime Tracking: Data can be used to counter crime, for example, predictive policing, real-time crime mapping, smart security systems, crowd management apps can all help in making a city safer for its people.

Energy and Water Consumption: To control emission levels as well as reduce

personal expenditure, applications like smart streets, quality and leak detection, smart irrigation, home, and office monitoring systems, etc can be deployed.

Employability: To ensure citizens can find employment, e-career and online training facilities can be hosted.

It can be estimated that Smart City initiatives deliver 10-30% improvement in various sectors as shown in the image below.¹³

Image 01: Smart City Impacts on people (McKinsey Global Institute analysis) (DALY stands for Disability-adjusted life years)

32: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

SMART CITIES

DEMOCRATISE THE FUTURE

WORKS CITED

Urban advancement and technological development can no longer be limited to selected countries. For the future to be bright, the world must be seen as one. The pandemic is a reminder of how interlinked everyone is, and equality is essential. Smart City initiatives are enablers for designing cities of the future in a sustainable manner. Set goals can be achieved with technology; hence a start should be made as soon as possible.

www.thalesgroup.com. (n.d.). What is a smart city? Technology and examples. [online] Available at: https://www. thalesgroup.com/en/markets/digitalidentity-and- security/iot/inspired/smartcities.

IMPLEMENTATION AND THE QUANTITY SURVEYING PROFESSION

Chapter 6 SOAC Liveability of Australian Cities, available at https://www. infrastructure.gov.au/infrastructure/ pab/soac/files/SOAC_Chapter_6.pdf, accessed 9 July 2021.

Conception and implementation of Smart Cities will essentially be a four-step process consisting of planning, feasibility, implementation and maintenance. The four-step process will need cost experts equipped to measure, value, protect and enhance¹⁴ the assets of the city. Disruptive technologies like big data, artificial intelligence, and machine learning, will require the QS professional to adapt.¹⁵ A QS will be required to flexibly transition to the specific needs of a Smart City, for example understanding sustainable performance of cities, embodied carbon analysis, like materials and their carbon and emission impacts.¹⁶ Asset Intelligence for understanding digital infrastructure like sensors, platforms will be vital. A QS can provide value by managing the future maintenance requirements, optimisation of cost of maintenance and repair of a Smart City.

Historical evidence shows that the role of a QS has with ease evolved from conducting traditional services to contractual and financial expertise.¹⁷ Hence with the required agility and upskilling, the QS profession will be at the forefront of the Smart City innovation across the world.

European Innovation Partnership on Smart Cities and Communities Strategic Implementation Plan; European Commission, 2014, available at http:// ec.europa.eu/eip/smartcities/files/sip_ final_en.pdf, accessed July 20, 2021.

Deloitte The Netherlands (2015). Smart Cities How rapid advances in technology are reshaping our economy and society. [online], available at https://www2.deloitte. com/content/dam/Deloitte/tr/Documents/ public-sector/deloitte- nl-ps-smart-citiesreport.pdf, accessed 8 July 2021.

UN News (2020). Rising Inequality Affecting More than two-thirds of the globe, but It’s Not inevitable: New UN Report. [online] UN News, available at https:// news.un.org/en/story/2020/01/1055681, accessed 16 July 2021.

World Smart Cities Forum (2019). Smart Cities in Developing Countries. [online], available at https://worldsmartcities.org/ smart-cities-in-developing-countries, accessed 3 July 2021.

THE IMPACT OF DIGITAL TECHNOLOGIES. (n.d.). [online], available at https://www.un.org/sites/un2.un.org/ files/un75_new_technologies.pdf, accessed 2 July 2021.

Vu, K. and Hartley, K. (2018). Promoting smart cities in developing countries: Policy insights from Vietnam.

Telecommunications Policy, 42(10), pp.845–859. www.c40.org. (2014). C40. [online] available at: https://www.c40.org/profiles/2014yokohama, accessed 2 July 2021.

World Bank. (Jan 2021). Yokohama. [online] available at: https://www. worldbank.org/en/programs/tokyodevelopment-learning- center/program/ cpp/yokohama , accessed 2 July 2021.

World Smart Cities Forum (2019). Smart Cities in Developing Countries. [online], available at https://worldsmartcities.org/ smart-cities-in-developing-countries, accessed 3 July 2021. www.mckinsey.com. (2018). Smart cities: Digital solutions for a more livable future | McKinsey. [online] available at https:// www.mckinsey.com/business- functions/ operations/our-insights/smart-citiesdigital-solutions-for-a-more-livablefuture, accessed 3 Aug 2021 Sharma, A. (2016). Smart cities need smart professionals. [online] hub.ricssbe. org, available at: https://hub.ricssbe.org/ smart-cities-need-smart-professionals, accessed 1 Sep 2021.

Seidu, R., Young, B., Clack, J., Adamu, Z. and Robinson, H. (Jan 2020). Innovative changes in Quantity Surveying Practice through BIM, Big Data, Artificial Intelligence and Machine Learning. [online], available at https://openresearch. lsbu.ac.uk/download/7d360da43f0b06b6c bfc79eab0a1aef267cb266d2c943248c6bc0 75221a8674f/362348/Innovative%20 changes%20in%20QS%20-%20Bahrain_ Final.pdf.

Anon, (Aug 2021). Quantity Surveyors Will Be a Key Arbiter of Sustainability and Smart City Technology - BuildTech Asia. [online], available at https://buildtechasia. com/quantity- surveyors-will-be-a-keyarbiter-of-sustainability-and-smart-citytechnology, accessed 1 May 2021.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 33

SMART CITIES

Zari Subhlok is a Graduate member of AIQS and was the winner of the PAQS IWATA Competition 2021 for this essay.

Published with the permission of PAQS.

REFERENCES ¹ www.thalesgroup.com. (n.d.). What is a smart city? Technology and examples. [online] Available at: https://www. thalesgroup.com/en/markets/digitalidentity-and-security/iot/inspired/smartcities. ² Chapter 6 SOAC Liveability of Australian Cities, available at https:// www.infrastructure.gov.au/infrastructure/ pab/soac/files/SOAC_Chapter_6.pdf, accessed 9 July 2021. ³ Deloitte The Netherlands (2015). Smart Cities How rapid advances in technology are reshaping our economy and society. [online], available at https://www2. deloitte.com/content/dam/Deloitte/tr/ Documents/public-sector/deloitte-nl-pssmart-cities- report.pdf, accessed 8 July 2021. ⁴ UN News (2020). Rising Inequality Affecting More than two-thirds of the globe, but It’s Not inevitable: New UN Report. [online] UN News, available at https://news.un.org/en/ story/2020/01/1055681, accessed 16 July 2021. ⁵ World Smart Cities Forum (2019). Smart Cities in Developing Countries. [online], available at https://worldsmartcities.org/ smart-cities-in-developing-countries, accessed 3 July 2021. ⁶ Deloitte The Netherlands (2015). Smart Cities How rapid advances in technology are reshaping our economy and society. [online], available at https://www2. deloitte.com/content/dam/Deloitte/tr/ Documents/public-sector/deloitte-nl-pssmart-cities- report.pdf, accessed 6 July 2021.

⁷ THE IMPACT OF DIGITAL TECHNOLOGIES. (n.d.). [online], available at https://www.un.org/sites/un2.un.org/ files/un75_new_technologies.pdf, accessed 2 July 2021. ⁸ Vu, K. and Hartley, K. (2018).

Promoting smart cities in developing countries: Policy insights from Vietnam.

Telecommunications Policy, 42(10), pp.845–859 ⁹ Vu, K. and Hartley, K. (2018). Promoting smart cities in developing countries: Policy insights from Vietnam. Telecommunications Policy, 42(10), pp.845–859. ¹⁰ www.c40.org. (2014). C40. [online] available at: https://www.c40.org/ profiles/2014-yokohama, accessed 2 July 2021. ¹¹ World Bank. (2021). Yokohama. [online] available at: https://www.worldbank. org/en/programs/tokyo-developmentlearning- center/program/cpp/yokohama , accessed 2 July 2021. ¹² World Smart Cities Forum (2019). Smart Cities in Developing Countries. [online], available at https://worldsmartcities.org/smartcities-in-developing-countries, accessed 3 July 2021. ¹³ www.mckinsey.com. (2018). Smart cities: Digital solutions for a more livable future | McKinsey. [online] available at https://www.mckinsey.com/businessfunctions/operations/our-insights/

34: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

smart-cities-digital-solutions-for-a-morelivable-future, accessed 3 Aug 2021 ¹⁴ Sharma, A. (2016). Smart cities need smart professionals. [online] hub.ricssbe. org, available at: https://hub.ricssbe.org/ smart-cities-need-smart-professionals, accessed 1 Sep. 2021. ¹⁵ Seidu, R., Young, B., Clack, J., Adamu, Z. and Robinson, H. (Jan 2020). Innovative changes in Quantity Surveying Practice through BIM, Big Data, Artificial Intelligence and Machine Learning. [online], available at https:// openresearch.lsbu.ac.uk/download/7d36 0da43f0b06b6cbfc79eab0a1aef267cb266 d2c943248c6bc075221a8674f/36234 8/ Innovative%20changes%20in%20QS%20 -%20Bahrain_Final.pdf. ¹⁶ Anon, (Aug 2021). Quantity Surveyors Will Be a Key Arbiter of Sustainability and Smart City Technology - BuildTech Asia. [online], available at https:// buildtechasia.com/quantity-surveyorswill-be-a-key-arbiter-of-sustainabilityand-smart-city- technology , accessed 1 May 2021. ¹⁷ Seidu, R., Young, B., Clack, J., Adamu, Z. and Robinson, H. (Jan 2020). Innovative changes in Quantity Surveying Practice through BIM, Big Data, Artificial Intelligence and Machine Learning. [online], available at https://openresearch.lsbu.ac.uk/ download/7d360da43f0b06b6cbfc79eab 0a1aef267cb266d2c943248c6bc075221a8 674f/36234 8/Innovative%20 changes%20in%20QS%20-%20Bahrain_ Final.pdf.

DIVERSITY AND INCLUSION

PERSPECTIVES AN INTERVIEW WITH DEBBIE MARSH MAIQS

WHAT IS IT LIKE AS A FEMALE WORKING IN THE CONSTRUCTION INDUSTRY? My perspective is from my point of view as one person who has worked in construction for a long time, for the most part as a Quantity Surveyor for builders.

This industry provides some fantastic opportunities to everyone, how you progress and how far you progress is entirely up to you.

I have come across a few petty issues that have arisen because I am a woman.

Two companies have re-written their (unwritten) rule that female staff shouldn’t wear trousers (or pants) for example. But that was the 1990s in the UK, which in itself is somewhat of a disgrace in that it was the 1990s and not the 1950s.

I have generally found that if you show confidence and ask questions, the men on site and in the office treat you with

respect and will be happy to answer your queries. If you can have some banter with them, then even better. Working with head contractors, I have been fortunate enough to work with the full spectrum of people - from clients to project managers to site managers to the trades on the ground. I have been able to figure out (most times) how to talk and to who to gain the best outcome for yourself and your project. No one, male or female,

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 35

DIVERSITY AND INCLUSION

can be a full-on introvert in this industry.

There are too many variables, and every day brings new challenges.

The change to greater inclusion and diversity can only be for the better.

HAVE YOU FACED ANY OBSTACLES WITHIN THE INDUSTRY BASED ON YOUR GENDER? Other much less qualified men have got a promotion over myself, and I have had to speak up when I felt it was about time that I got a promotion.

Once, when reporting that a project I’d inherited wasn’t going as well as my predecessor had reported, my managers didn’t like it. When I handed in my resignation, I was told by my manager that I was employed as an ‘experiment in employing women QS’s but they don’t think they will be doing it again’. Wow! If you come up against that type of insurmountable obstacle, move on as you are worth more than they will ever see.

Women can be their own obstacle. Few apply for roles if they don’t tick every box, most won’t promote themselves when plenty of men do it all the time. I have felt that imposter syndrome when you walk into a new role as a leader or stand up in front of an expectant crowd to give a speech or said yes when a new client asks if you can help them but you’re not really sure. Breathe in, front up and walk in with confidence. Most times you will find you know more than you think you do, and all those years of experience will be your ally. Do a good job and you will find many obstacles disappear.

I have probably come up against unconscious bias but not known it. But the learning and moving away from the ‘we don’t know what we don’t know’ will mean we’ll take away those small obstacles.

OVER THE COURSE OF YOUR CAREER, HOW HAVE YOU SEEN THE INDUSTRY CHANGE IN TERMS OF INCLUSION AND DIVERSITY? I am pleased to say that the industry is changing for the better and I am no longer normally asked if I am the architect or from the council when I walk on site. Over the last couple of years, I have seen females working on site in civil, plumbing, fire, and carpentry trades and I applaud them. The men still know who I am without asking as I’m usually the only female project manager/contract administrator etc working on site but this is gradually changing, particularly with the larger projects where there is scope for more than one person to be doing a role. This change has accelerated only over the last few years, probably because there has been a wholesale focus across the social spectrum to increase diversity and inclusion and many companies are keen to be seen doing ‘the right thing’.

There are many more females in leadership roles in the general workforce, but this hasn’t changed too much within construction and there are a just a handful in the quantity surveying profession. This will change as we see a greater pool of talent to choose from as more females join the industry.

It is hoped that the advent of the pandemic and the change to having people work remotely and/or work from home will mean greater inclusion for everyone, particularly women that have families.

36: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

Flexibility is highly sought after by many, men included, and if employers can continue being flexible then inclusion will follow at a greater speed than it is now.

WHAT DO YOU FEEL IS A WAY FOR US TO ACCELERATE THIS CHANGE? We are not going to achieve rapid change within the next one to two years, but we can aim to achieve positive change in the next five years. If we promote quantity surveying as a profession with great opportunities for females to the career advisors at schools, then we’ll see more young women coming through the universities and into the workforce, giving employers a more diverse workforce to promote from. Employers with none or few female leaders should be called out as they do not provide the impression of a ‘profession for all genders’ if the leadership team section of their websites has photos of a group of men in dark suits, or the only female managers are in marketing and HR. We need to encourage younger managers to embolden their female workforce, not at the expense of males, and give them a push when a young quantity surveying professional isn’t promoting herself because she doesn’t feel she ticks all the boxes for the role or is suffering from imposter syndrome.

There is no reason why a female quantity surveying professional can’t do the job as good as, or better, than any of her male colleagues. Our profession doesn’t require greater strength or to do anything physically faster. In fact, a woman’s ability to be more empathetic in potentially confrontational situations can prove to be highly useful. The change to greater inclusion and diversity can only be for the better.

NZIQS CONFERENCE WHEN A CITY RISES BIGGER, BETTER, MORE RESILIENT! 6 – 9 July 2022

WHAT’S

ON?

Te Pae Convention Centre Otautahi Christchurch

THE

SPEAKERS

Great speaker line up Chance to network with over 300 fellows QS A mix of contractor and PQS, those starting out in their careers and seniors members

David Downs Motivational Speaker

20+ Exhibition stands Melissa Clark-Reynolds Fantastic social programme

Futurist

Including mountain biking, wine tours, partners programme and more

Brad Olsen Economist

REGISTRATION AIQS members get NZIQS delegate rates!

Email events@nziqs.co.nz for a registration link

Jehan Casinader MC

CLIENTS

ADDING VALUE FOR CONSTRUCTION CLIENTS ‘TAKING THE NEXT STEP’

By Matt Gorinski NZIQS (Affil)

As a senior project manager who has transitioned into a full-time quantity surveying role, I have been constantly surprised by the number of clients I work with who simply take an estimate that is provided to them and expect to make ‘$X’ amount of profit from a given job or project. While pricing work is an important function, when viewed in the wider project perspective, it is one of many functions in the project life-cycle leading to the client eventually profiting from the job or project.

This has led to our firm ‘taking the next step’ with our construction clients, understanding not just the work they do, but the way in which they work and the way their business is structured.

In order to understand our client’s business, inter alia, we need to understand the following: • Do they employ all staff in house, or will they be subcontracting out portions of the works?

• How is their internal procurement structured?

• What are their gross profit expectations?

• How is their offsite overhead structured?

• Are there any preliminary and general items specific to this business?

• What is their current wage/salary structure?

Yes, these conversations take some additional time at the beginning of the client relationship, however, they set important cost parameters that enable us to prepare tenders and estimates that are accurately aligned with the specific business conditions and operating

structure of our client’s enterprise.

Once we understand how our client’s business operates, we are in a better position to evaluate the appropriateness of tenders and prepare documentation for them that will be accurate and relevant to their business, not just a generic ‘estimate based off a rate book’.

When our clients win tenders, and more importantly, make a profit from completing the works, they are more likely to remain using our services, therefore we have a vested interest in ensuring our clients continue to win business and show a profit from the works they complete. The issues the construction industry faces moving into 2022-2023 are well documented and these market conditions make it increasingly important that Quantity Surveyors work closer with their clients to ensure the documentation they provide to them is accurate, relevant, and monitored for currency.

In order to assist our clients in this regard, we have ‘taken the next step’, by providing a wrap-around cost management service to ensure our clients have the best chance of success in the prevailing market conditions.

So how does this actually work?

Let’s look at one of our painting and decorating clients, Painter X. We prepared a commercial tender for Painter X with a total value circa $350,000. In addition to providing the relevant documentation for the tender process, we also provided them with an ancillary document package including the following: 1. A detailed material order list of paint quantities based off the tender. This

38: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

enabled the painter to control material costs based off a known quantum.

2. A detailed labour hours breakdown based off each area within the tender.

This enabled the painter to set labour hour targets for his team and track actual hours against target hours.

3. A subcontractor calculation enabling the painter to calculate how much to pay the painter’s subcontractors for the relevant portions of the tender, in order to show the required level of profitability for his business.

The outcome was that Painter X had a data set which enabled job cost control at an operational level, leading to a final gross profit percentage that exceeded any previously recorded result for Painter X’s company.

There are of course legal, operational, and contractual issues to be considered when engaging closer with a client and these need to be considered and managed appropriately on a caseby-case basis, however the value of providing these wrap-around services to clients is both significant and tangible.

The take home for our consultancy has been the better we understand our client’s business, their structure, the way they operate and their profit expectations, the better the service we are able to provide to them. ‘Taking the next step’ in the provision of a wrap around service is leading to better long-term outcomes for our client’s business, which is after all, why we are here.

Matt Gorinski NZIQS (Affil), Director of MK2 Consulting.

CONSTRUCTION CONTRACTS

DO WE NEED A VIABLE ALTERNATIVE TO AUSTRALIAN STANDARD FORMS OF CONTRACT TO CURE ALL INDUSTRY ILLS?

By Jacqueline Barker, MAIQS

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 39

CONSTRUCTION CONTRACTS

Over recent years there have been growing calls for change in the construction industry, particularly in relation to, amongst other things, capabilities, culture, procurement, and commercial frameworks.

Last year a joint letter, signed by a number of organisations involved with the industry including AIQS, to the House of Representatives Standing Committee on Infrastructure, Transport and Cities stated: “… the infrastructure industry faces several structural challenges that are threatening its very sustainability.” ¹

report on megaprojects³ which identified that the apportioning of risk and contract selection as key elements that can exacerbate problems on projects, is another. The Australian Constructors Association (ACA), who represent a large number of construction and infrastructure companies, is also worthy of a mention. ACA identifies three pillars that are essential to achieve a sustainable construction industry in Australia⁴: • equitable and aligned commercial framework • positive industry culture

The letter goes on to state all signatories agree there is an:

• sufficient capability, capacity, and skills.

“… urgent need for reforms that drive an improved industry culture, create increased capacity/capability, and ensure that project commercial frameworks are equitable and align the interests of all parties.”

A clear take away from all of this is there is a significant body of opinion pushing for change within the industry.

These sentiments have been echoed by many involved with the construction industry over the past few years and calls for change are growing despite the significant number of construction and infrastructure projects currently underway or in development. The Australian Government’s commitment to a $110 billion infrastructure pipeline as part of the country’s economic recovery, although widely welcomed, has helped to highlight the need for change.

There are many reports, articles, and commentaries that I could reference in this article to further illustrate the growing calls for change. For example, a recent research report², published by the University of Melbourne found that risk allocation and collaborative contracting were identified as the two issues most commonly mentioned as having the potential to improve the industry. The Grattan Institute’s 2021

There are also examples of positive steps being taken to address some of the key issues identified, for example, in 2018 the New South Wales Government published a 10-point commitment to the construction industry. The first three of the ten commitments identified were: • procure and manage projects in a more collaborative way • adopt partnership-based approaches to risk allocation • standardise contracts and procurement methods.

The Standing Committee on Infrastructure, Transport and Cities mentioned at the beginning of this article, in May 2021 commenced an enquiry into procurement practices for government-funded

infrastructure. The terms of reference for this enquiry include reporting on the challenges and opportunities with existing procurement practices and alternative procurement models.

A clear take away from all of this is there is a significant body of opinion pushing for change within the industry. Although there are many elements driving the calls for change, amongst them is a need to move away from complex bespoke contracts and heavily amended standard forms, currently still widely used across Australia that do not address key industry wide issues.

The Australian Standard (AS) contracts, such as AS2124-1992 and AS4000-1997, are still commonly used across many industry sectors and can often be heavily amended with attempts to significantly shift risk profiles amongst other things.

Even when not amended, the AS forms of contract have changed little since they were first written over 25 years ago and do little to encourage collaboration and active equitable risk management.

Work on updating the AS2124-1992 and AS4000-1997 by Standards Australia had identified serval proposed changes which included the need to support a more appropriate balance of risk and additional options in dispute resolution, but unfortunately despite the AS11000 being almost complete, work on the updated form was cessed in 2017 identifying a lack of support as the reason. Surely, given the growing calls for change across the industry, this would not still be the case?

With the lack of an up-to-date AS form contract available, that drives collaboration and reflects the current trends in project delivery we need to look elsewhere. Luckily, there are options widely used internationally that provide a viable alternative. The NEC⁵ 4 suite from the UK Institute of Civil Engineers (ICE) is one.

¹ Refence letter dated 15 July 2021 – Inquiry into procurement practices for government-funded infrastructure ² The Health of the Australian Construction Industry, September 2020 ³ Megabang for megabucks: Driving a harder bargain on megaprojects – Grattan Institute May 2021 ⁴ About Us | ACA Corporate | Australian Constructors Association ⁵ Originally known as the New Engineering Contract (https://www.constructors.com.au/about-us/)

40: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

CONSTRUCTION CONTRACTS

When the NEC contract was first developed in the UK in the 1990’s, the philosophy “.. was to produce something which cured every known ill of the traditional contracts.”⁶ A big aim that, in the intervening 30 years, has remained a corner stone of the NEC evolution. The suite of contracts has been developed and updated several times since their inception to address feedback from users, industry developments and best practice, as well as seeking to improve flexibility and clarity. Importantly at its core, the NEC seeks to encourage and develop trust and cooperation which in turn helps parties to work collaboratively.

There is now an NEC suite of contracts covering all manner of contractual arrangements required within a projects supply chain from term service contracts, framework contracts, design and build and alliancing, consulting, subcontracting and so on. All easily adapted to suit a wide range of project types and sizes.

The common themes across all these NEC contracts include: • the use of plain language • aiming to provide clarity • supporting collaboration, communication, and flexibility • supporting easy and effective administration • providing a proactive approach to managing risks.

All with the intention of instilling mutual trust and cooperation.

The structure of NEC contracts may be unfamiliar to many but essentially they all have three elements: 1. Core Clauses – addressing such things as the obligations and responsibilities of the parties, payment, risks, and insurance.

2. Main Option Clauses – allowing the parties to determine the method of payment and risk sharing, for example, the parties have the option to have a priced or target contract with activity schedules or bills of quantities or the option to make the contract cost reimbursable.

Roads Western Australia, and Meridian Energy and with the Australian specific option added last year plus the vast array of guidance notes, template forms, training, and case studies available from around the world, this form is surely worth consideration as an “off the shelf” option for many projects.

3. Secondary Option Clauses – provide the parties with the option to add clauses in relation to such things as delay damages, bonuses for early completion, limitation of contractor’s design liability, KPI’s and so on.

A big positive I see with the NEC is that it provides a quicker and cheaper, tried and tested, standard form option when compared with the time and costs an organisation would have to invest to develop and implement their own bespoke frameworks to address industry wide issues. Obviously, the more widely used NEC becomes the more understanding and confidence in this contracting model will grow meaning less time, money and effort is spent negotiating and administering contracts which can be diverted into supporting the best for project outcomes we all desire.

Unlike the AS forms, the NEC has evolved over the past 30 years with the most recent revision being the NEC4 suite released in 2017 which aims to take into consideration the more recent changing environment, not just in the UK but internationally as well. However up until last year, the NEC contracts required a level of amendment to enable the contracts to be compliant with the various security of payment legislation requirements in Australia. This has now been addressed and the NEC4 Y(Aus) Clauses are available for use with every NEC contract.

With the lack of an up-to-date AS form contract available, that drives collaboration and reflects the current trends in project delivery we need to look elsewhere.

It is true to say the NEC contracts are not currently commonplace in Australia, but use of this contract suite domestically is gaining momentum. There are examples of organisations who already use NEC contracts including Sydney Water, Main

There are, of course, other contract models being used both domestically and internationally which may also be worth considering, such as FIDIC, however the key, in my opinion, is that whatever model is used there should be: i. consistency ii. clarity iii. flexibility iv. appropriate allocation of risk v. collaboration at all levels.

In this article I have only focused on one of the many issues currently facing our industry, but I like to think addressing key factors in the form of contract adopted for a project can play a significant part in changing things for the better.

Jacqueline Barker MAIQS is the Senior Manager at EY.

⁶ History of NEC - About NEC - NEC Contracts quote from Martin Barnes CBE

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 41

COST

COST MANAGEMENT COST CONTROL VS.

WHAT IS THE DIFFERENCE?

By Elmer Sachteleben

42: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

COST

It turns out that cost management and cost control really are two different things, yet they are equally important to have in place. In this article, we look at the difference and how they relate.

COST MANAGEMENT COVERING THE ENTIRE PROJECT LIFECYCLE Cost management is concerned with the process of planning and controlling the budget of a project or business. It covers the entire lifecycle of a project from the initial planning phase towards measuring the actual cost performance and project completion. This includes activities such as planning, estimating, budgeting, financing, funding, managing, and controlling costs so that the project can be completed within the approved budget.

Cost management is a continuous process that takes place during the project to determine and control the resources needed to perform activities or create assets. This process includes resource planning, cost estimating, cost budgeting, and cost control.

1.

RESOURCE PLANNING

In the initial phase of a project, you need to define the required resources to complete the project activities. Work Breakdown Structures (WBS) and historical information of comparable projects can be used to define which physical resources are needed. Here you can think of the required time, material, labour, equipment, etc. Once the resource types and quantities are known, the associated costs can be determined.

2.

COST ESTIMATING

Several cost estimating methods can be applied to predict how much it will cost to perform the project activities. The choice for the cost estimation techniques depends on the level of information available to you.

Analogous estimating using the actual cost of previous, similar projects can serve as a basis for estimating the current project. Another option is to use parametric models in which the project's

characteristics are mathematically represented. Estimates can be refined when more information becomes available during the course of a project.

Eventually, this results in a detailed unit cost estimate with a range of accuracy.

The remaining uncertainties in estimates that will likely result in additional cost can be covered by reserving cost (e.g. using escalation and contingencies).

3.

COST BUDGETING

Together with a project schedule, the cost estimate forms the input for cost budgeting. The budget gives you an overview of the periodic and total costs of the project. Whereas the cost estimate defines the cost of each work package or activity, the budget allocates the costs over the time period when the cost will be incurred. You can use a cost baseline – an approved time-phased budget – as a starting point to measure actual performance progress, which is the next point we will cover.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 43

COST

4.

COST CONTROL

Cost control is concerned with measuring variances from the cost baseline and taking effective corrective action to achieve minimum cost overruns.

Procedures are applied to monitor expenditures and performance against the progress of a project. All changes to the cost baseline need to be recorded, and the expected final total costs are continuously forecasted.

When actual cost information becomes available, an important part of cost control is to explain what is causing the variance from the cost baseline. Based on this analysis, corrective action might be required to avoid cost overruns. Tight cost control gives you considerable influence over your cash flows and reported profits. As a cost controller, you have to actively expedite the scope of work and analyse its progress.

Basically, you continuously have to be aware of these six points for project success: 1. Know what has to be done: Use a detailed budget estimate and track profiles, which provide cost control and scheduling bases. This is based on the information from the previous cost management steps; you rely on them for an accurate budget and detailed activities of which the performance can be measured.

2. Know what has been done: Setup reports providing actual performance data that is consistent with the detailed budget in a timely fashion.

3. Know how actual performance compares with performance norms: Make analyses of the performance to date. The quality of this comparison is only as good as the input you are receiving as the controller; the resolution and accuracy of the

baseline and the timeliness and correctness of progress reports.

4. Know what remains to be done: Forecast the potential result of the current situation in case no action is taken to the current performance.

5. Identify and implement corrective actions: Provide control in order to bring the project’s performance in line with the expectations. The output of this is an adjustment of the baseline plan; the resources, estimate, schedule, budget, etc., have to be adjusted, and the cost management circle continues.

6. Check the results of corrective actions: Verify if the goals of corrective actions were achieved. See if you really are in control.

THE EFFECTIVENESS OF COST CONTROL IS DETERMINED BY HOW WELL COST MANAGEMENT PROCESSES ARE IMPLEMENTED AND CONNECTED In a nutshell, while cost control seems to ‘limit’ itself to controlling the project during execution, its effectiveness is determined by how well cost management processes are implemented and connected.

If our people work on each step of cost management separately, without alignment and sharing of information, you might be ‘controlling’ your project, but you are not doing cost management.

Starting a project with cost management in mind will help you avoid certain pitfalls that may occur otherwise. If expectations of the project are not clearly defined at first or are changed during the course of the project, cost overruns will be more likely. If costs are not fully researched before the project, they may be underestimated, which might give false indications about the project’s success.

44: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

A dollar gained in revenue is a very good thing, but remember, only a small portion, in the end, reaches the earnings.

A dollar saved from cost, however, goes directly to the bottom line. Focusing on understanding and managing costs is a path to ensuring long-term value creation.

ABOUT CLEOPATRA ENTERPRISE Cleopatra Enterprise is the leading project cost management software that empowers companies to complete their projects on time and within budget.

As a fully integrated solution for project cost management, dedicated for complex projects and turnarounds, Cleopatra allows you to connect work package management, cost estimating, BIM, scheduling, cost control, form tracking, benchmarking, data analytics, and more.

For more than 25 years, Cleopatra has been used by industry-leading companies to control projects and improve project performance. For more information, please visit the website www.costmanagement.eu

Elmer Sachteleben is a Senior Cost Engineer and Head of the Cost Engineering Academy at Cost Engineering Consultancy (Cleopatra).

Cleopatra have paid for, and written, this advertorial.

FUTURE THINKING

VISIONARIES According to the Cambridge Dictionary, a visionary is a person who has the ability to imagine how a country, society, industry, etc. will develop in the future and to plan in a suitable way.

AIQS has handpicked two members to tell us about their visions for the construction industry and quantity surveying profession.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 45

FUTURE THINKING

SHARON YAP MAIQS Since its beginnings in the nineteenth century, the profession of quantity surveying has steadily evolved. From decade to decade it has responded to changing clients or industry demands, technology developments, and increased competition of services.

Quantity surveying in the modern era has even been referred to as a 'sunset industry' since the development of BIM and increased automation. With other professions such as project managers and architects now able to provide estimates of construction costs, the survival of the profession has been under question for some time.

In the face of change, Quantity Surveyors need to continue to advance their skills to avoid becoming obsolete. Advancements in BIM and automated measurement can help pave the way for more efficiencies within the profession and should be viewed as an opportunity rather than competition.

My vision for the technologies and techniques that we should focus on include: Cloud Computing The adoption of cloud-based software and data storing systems enables us to collaborate efficiently without being limited by location, time and space.

Collaborating and creating internal and external efficiencies is more critical than ever with the rise of remote working.

Data-Driven Decision Making Using facts, metrics and data to increase the accuracy of cost analysis and benchmarking for informed decision

making. Especially during the current unprecedented market conditions, gut instinct is no longer reliable. We need to collect the right data, analyse it and measure the result to better inform for decision making.

Environmental reporting Increased focus on the reporting of embodied energy during the delivery process will rely on a more accurate assessment of each item of componentry in the constriction phase to assess the environmental impact of each asset.

In short, the quantity surveying profession may be changing rapidly in the dawn of the digital era, but technology will never make it obsolete.

No single technology can replace human judgement. Quantity surveying is a client-led profession, and so long as we continue to respond to clients needs, we will continue to remain valuable partners within the industry.

MICHAEL DAKHOUL FAIQS, CQS “To improve is to change; to be perfect is to change often.” – Winston Churchill.

The construction industry is facing its biggest challenge to date; from a debilitating pandemic to determined legislators and regulators across Australia calling for much-needed improvement. Given the QS is a critical tool in the ecosystem, our response can pave the way for our profession to be universally viewed as an even greater facilitator to produce desired outcomes. Notwithstanding the obvious opportunities (yes, not difficulties) brought

46: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

on by the current climate, the solution lies in the opportunity to embrace change.

While the QS is not in the “trenches” (in fact, we are the key to devising functional trenches for victorious outcomes), our responsibilities start at the very beginning – as it should always be.

With increased pressures on our clients to deliver projects, we must remain meticulous in our preparation – we don’t want to see corners being cut. When the feasibility is wrong, repercussions are significant, affecting all stakeholders.

The QS industry has a responsibility to carefully dissect every document before giving the green light. The ultimate goal in addressing this challenge is to be able to provide clients with a personal, tailored service that exceeds expectations.

Helping clients understand the critical and immeasurable value of early, ongoing, and increased QS involvement is an exciting future opportunity.

We must be prepared to harness change and utilise technological advancements such as AI and data metrics – as other industries have. Challenging the status quo is never comfortable but there is enormous benefit in continuous improvement.

For us, having a national presence means we must continuously reflect, renew, educate, and advance ourselves for the good of our industry, work collaboratively to lead positive change and be innovative so we are truly an active part of the broader solution.

Sharon Yap MAIQS is a Director at Altus Group and Michael Dakhoul FAIQS, CQS is Founder and Managing Director of Construction Consultants.

MENTAL HEALTH

RETHINKING HOME DESIGNS SUICIDE PREVENTION

By Michael Booth, Pushpitha Kalutara, Neda Abbasi

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 47

MENTAL HEALTH

INTRODUCTION Built environment design has a common purpose to construct environments for society to enjoy and occupy. However, it requires combining work and home occupation in challenging situations like lockdowns recently incurred by COVID-19.

Home designs can benefit from further human wellness research impacts because numerous studies on improving workspace, productivity, and improving health and healing environments provide a substantial evidence base. Hence, this preliminary research will develop an economic cost-benefit analysis from its findings, to consider home design value aspects of safety, security, health, comfort, and family. Consequently, the considerations will lead to the recommendations of building standard changes required.

These can connect to value management by considering economic cost/benefits of design changes as suicide prevention planning design.

This research reviewed existing built environment research into health and healing spaces including psychology, economics, and architectural design. The review further indicated comfort, safety, education, and access prevention as main modes to improve mental health by design. The research effort has also combined education by cross-disciplinary

48: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

industries for improved societal wellbeing using environmental design for suicide prevention in homes.

‘A persistent challenge for built environment design approaches to similar designs for means restriction applies to statistics that 75% of suicide deaths occur at home’ (Pollock, 2019).

Work, leisure, exercise, child raising, home schooling, and manufacturing now exist alongside modern day-today residential activities, through home lock-down periods, which can trigger the forementioned statistics higher.

The issue stresses that home design methods require comparison against legislation and environmental psychology methods used in health spaces, and mixed-use health and residential spaces, to provide design information to ameliorate negative impacts of home confinement.

Legislation provides rectification and justice after an injury event in a built environment; however, this research will combine preventative design measures considering impacts of intensive occupation. By including legislation review research into building standards for mixed use environments, the study further incorporates safety design for more intensive uses to be considered for home designs.

The research hypothesis examines design methods and available theory to improve wellbeing in homes to reduce impact causes for suicide in homes (Wang et al., 2020). The current research will adopt a scoping review of building design studies that shows quantified methods for improving health effects (Jiang et al., 2021, Manzar et al., 2021, Pollock, 2019, Raby, 2018, Thodelius, 2018, Wang et al., 2020) surrounding ideation and suicide events.

MENTAL HEALTH

Building designs for improving health will support positive emotions and impacts, and current research reviews sensory impact of biophilia supportive healing environments, with social and spatial designs. These can connect to value management by considering economic cost/benefits of design changes as suicide prevention planning design.

capture, natural designs, and native species repopulation, to provide biophilic versatility in homes and surrounding areas (Newton and Rogers, 2020).

Designs can be considered for legislating green credits to encourage roof top community gardens for food security, inclusiveness, and human wellbeing (Newton and Rogers, 2020).

BIOPHILIA

COVID-19 has highlighted issues for mental health in homes, where fresh water, food security, safety, and restorative spaces for wellbeing are important design considerations to support mental wellbeing. Community planning governance is considerable for community stability and emotional wellbeing, as provided in urban development, building legislation, town planning and governance research (Newton and Rogers, 2020, Zuniga-Teran et al., 2020, Thodelius, 2018, Chrysikou, 2019).

Biophilia is the theory of connecting or preserving nature for inter-relatedness in construction designs, by relating to nature gaining benefits of nature connection. Research reviewed by Mata et al (2020) ‘Bringing nature back into cities’ evaluates human nature connection, including cultural relevance by locality, as experienced in Australian cities (Mata et al., 2020).

The article by Mata et al., (2020) provides considerable well-being improvement for homes and greater urban footprints with significant biophilic design methodology.

By including nature corridors and green space networks it serves greater society by improving biodiversity, to preserve endangered plant and wildlife species, with benefit to ‘country’ for cultural, individual, and societal wellbeing.

Environmental psychology designs influence people’s wellbeing and productivity as confirmed by biophilic design reviews of educational environments (Abdelaal and Soebarto, 2019, Egner et al., 2020, Herranz-Pascual et al., 2019, Mackett, 2021, McGregor et al., 2017, McLachlan and Leng, 2021, Peters and D'Penna, 2020).

Biophilic design provides restorative impacts to well-being as researched

by Newton and Rogers (2020), in their research ‘Transforming Built Environments: Towards Carbon Neutral and Blue-Green Cities’. Furthermore, Newton and Rogers (2020) show benefits of using renewable, sustainable, costeffective design measures, using smaller case studies in Australian communities.

A review of learning environments by Peters and D’Penna (2020) ‘The influence of the built environment on university students: emotional stress, happiness, stimulation, cognitive function, social support, belonging, places to study, lighting, and ventilation’ examines wellbeing by design, for learning environments and shows positive impact for students from:

In their study, Newton and Rogers (2020) identified positive wellbeing design using larger strategic built environment goals. An enormous number of homes can still benefit from solar and water

• nature views and nature images • natural colours and natural materials • auditory aspects of nature • water and water features

• indoor plants, campus landscapes • daylight access, thermal and environmental comfort for study spaces (Peters and D'Penna, 2020).

Mental health impacts by the design are demonstrated across reviewed literature indicating positive design for wellbeing to include: Biophilia (natural aspects), social and spatial (wayfinding, orientation) design arrangements to improve wellbeing.

Value management of projects provides opportunity to improve design benefits as presented in project life cycle and life cycle cost planning measurements.

HEALTH AND HEALING ENVIRONMENT A relevant area of research often overlooked in home design is mental health considering design impacts.

Design and history are born from experience associated by personal memory of sensorial experiences or impacts in public spaces, such as train stations, police stations, and health spaces as environments.

Form and space of design is evolutionary, and health spaces gained biophilic design attention for design theory by design impacts of Stress Reduction Theory (SRT) and Attention Restoration Theory (ART) as used to increase healing (Kaplan and Kaplan, 1989).

The article by Chrysikou, E., (2019) titled ‘Psychiatric institutions and the physical environment: Combining

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 49

MENTAL HEALTH

The focus of research by Chrysikou (2019) is on harm and self-harm minimisation (using safety and security) with social integration for wellness. Statistically, most persons are subject to poor mental health impact at some point through their lifetime (Chrysikou, 2019). Acute mental health research shows poor design to cause adverse reaction of stress, illness, or confusion.

Experiences of acute mental health can continue as resultant future sequelae from adverse experiences and impacts (Chrysikou, 2019). Therefore, more complex (density) home designs can improve on spatial design aspects such as wayfinding, safety, and security to improve user wellbeing. Social design for inclusivity, cultural impact, refuge, art as cues, signs, sculptures, colour, and themes provide benefit by ease of navigation that support sound mental health for residents.

Spatial design considerations provide methods to accommodate wellbeing for children; overcome crowding using colour for wellbeing and wayfinding ease, with purpose specific child metric spatial designs; include play spaces for distraction, with heightened aesthetic value using; art, music, and theme design for enjoyment (Gaminiesfahani et al., 2020). Inclusion of biophilic aspects and social design through photographs and family centredness shows wellbeing design methods useful for children’s wellbeing in homes.

shows positive designs for reducing suicide events (Connellan et al., 2013).

Themes of the research provide significance, as follows; security, light, gardens, impact of architecture on health outcomes, interior design, art, and adolescents (Connellan et al., 2013).

The systematic review by Connellan et al., 2013 shows evidence for suicide prevention using social, spatial and biophilic design methods, to improve health in homes.

structures for self-injury events. The article examines built environment placebased approaches for means restriction as suicide prevention; by considering connections between place, location, and suicide methods (Pollock, 2019).

The research (Abdelaal and Soebarto, 2019, Chrysikou, 2019, Connellan et al., 2013, Jiang et al., 2021, Pollock, 2019) shows examples of designs applied in institutions and hospitals for suicide prevention, by removing ligatures and anchor points for hanging deaths. Means restriction by using structural barriers, signage at bridges and train stations, education and education for support services in public spaces increases safety and prevents jumping (Pollock, 2019).

Work conducted by Pollock, N., (2019) titled ‘Place the built environment and means restriction in suicide prevention’ shows evidence to design for suicide prevention. Prevention methods can be used for residential designs or adjoining public spaces by restricting access to

Na onal Suicide Event Data (AIHW) 2018 2017 2016 2015

YEARS

medical architecture methodologies and architectural morphology to increase our understanding’ regards mental health design as a paramount design consideration to facilitate healing and improve experiences in confronting spaces.

2014 2013 2012 2011 2010 2009 0

500

The review of ‘Stressed spaces’ on mental health and architecture examines design impacts for health spaces and

50: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

1,000

1,500

2,000

2,500

3,000

3,500

SUICIDES Figure 1. Australian suicide data. (Australian Government, AIHW, 2021)

MENTAL HEALTH

Means restriction in building design as researched by Pollock, is a valid suicide prevention method that can be adopted for tall building spaces (carparks, bridges, towers) where designs can consider fall barriers, catch nets and signage in design planning (Pollock, 2019, Raby, 2018).

cycle and life cycle cost planning measurements. VM historically considers planning decisions for specified performance outcomes, such as legislative compliance (Kelly et al., 2014).

Suicide prevention methods can include VM cost/benefit measures in residential projects, such as: means and access restriction measures, mental health, and emotional wellbeing design, for risk management.

VALUE MANAGEMENT (ECONOMIC COST/ BENEFITS FOR SUICIDE PREVENTION PLANNING DESIGN)

Risks of suicide can be reduced using design methods of, social, spatial and biophilic design identified by this

Value management (VM) of projects provides opportunity to improve design benefits as presented in project life

5 4.5 4

4

3.5 3

3

2.5

2.5

1.5

Urban Resilience design (governance)

Biodiversity (impacts)

Green Economy (reward/incen ves)

Educa on (signage)

0

1

Access (interven on)

1

1

Social

0.5

Spa al

1

CONCLUSION Preliminary scoping review research discovered existing low-cost suicide prevention building design methods research (Berman et al., 2019, Blaschke et al., 2020, Chrysikou, 2019, Connellan et al., 2013) in health and healing spaces, for use in Australian homes as depicted in Figure 2.

Building design methods of biophilia, social and spatial design can be used for suicide prevention home designs and provide superior economic values by demand for, comfort, safety, and restorative experiences (Abdelaal and Soebarto, 2019, Berg and Joye, 2012, Connellan et al., 2013).

This research discovered a comprehensive list of suicide prevention methods for Australian homes, shown below. They are then connected with VM economic values as benefits for adopting design planning for preventing suicides in homes, for further research development.

3

2.5

2

Biophilia

DESIGN METHODS AS COSTS BY SCALE 1 -5

Cost/Benefit Values Iden fied by Scoping Research

research for evaluation as VM planning, by considering cost/benefit of design measures, as ethical economic impacts of design.

This scoping review finds significant knowledge gaps for future design research to develop qualitative and quantitative design methods by linking economic impacts for value benefits.

The research considers the greater impacts of an individual loss of life and/or injury event impact to greater society, and for future generational sequalae to reduce suicides in homes by built environment design. All the outcomes will be correlated with the recommended building standard changes which is the major contribution coming out of this study.

The relevance of Mr Churchill’s following statement is best suited to the modern

SUICIDE PREVENTION METHODS BY ENVIRONMENT DESIGN PLANNING

Figure 2. Cost/benefit Values for design planning (Booth, 2021)

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 51

Wellbeing Benefit (1 Yes & -1 No)

1

Urban Resilience design (governance)

Biodiversity (impacts)

0 -1

Green Economy (reward/incen ves)

AUSTRALIAN GOVERNMENT, A. I. O. H. A. W. AIHW, 2021. Suicide & selfharm monitoring [Online]. Australian Government, Australian Institute of Health and Welfare. Available: https:// www.aihw.gov.au/suicide-self-harmmonitoring/data/

Cost Value Scale 1 to 5 ($$$)

2

Educa on (signage)

ABDELAAL, M. S. & SOEBARTO, V. 2019.

Biophilia and Salutogenesis as restorative design approaches in healthcare architecture. Architectural science review, 62, 195-205.

Preven on (1 Yes & -1 No)

3

Access (interven on)

REFERENCES

4

3

4

Social

Learned lessons by the recent pandemic, COVID 19, stress further impacts on building home spaces to improve societies wellbeing, increase lifespans, and boost productivity for improved economies.

5

Spa al

Winston Churchill (1943) once said: ‘We shape our buildings and afterwards our buildings shape us’.

Cost/Benefits Scale of Suicide Preven on Planning as Wellbeing Cost Values

Biophilia

day than 1940s further appealing a design change via building standards:

COST/BENEFIT SCALE OF DESIGN METHODS 1-5

MENTAL HEALTH

SUICIDE PREVENTION DESIGN METHODS FOR ENVIRONMENTAL PLANNING

Figure 3. Cost/Benefit Wellbeing Design Planning Values (Booth, 2021)

[Accessed 9/08/2021].

BERG, A. E. V. D. & JOYE, Y. 2012.

Restorative environments. WileyBlackwell.

BERMAN, M. G., STIER, A. J. & AKCELIK, G. N. 2019. Environmental neuroscience.

Am Psychol, 74, 1039-1052.

BLASCHKE, S., O’CALLAGHAN, C. C. & SCHOFIELD, P. 2020. Naturebased supportive care opportunities: a conceptual framework. BMJ supportive & palliative care, 10, 36-44.

CHRYSIKOU, E. 2019. Psychiatric Institutions and the Physical Environment: Combining Medical Architecture Methodologies and Architectural Morphology to Increase Our Understanding. J Healthc Eng, 2019, 4076259-16.

CONNELLAN, K., GAARDBOE, M., RIGGS, D., DUE, C., REINSCHMIDT, A. & MUSTILLO, L. 2013. Stressed Spaces: Mental Health and Architecture. HERD, 6, 127-168.

EGNER, L. E., SÜTTERLIN, S. & CALOGIURI, G. 2020. Proposing a Framework for the Restorative Effects of Nature through Conditioning: Conditioned Restoration Theory. Int J Environ Res Public Health, 17, 6792.

GAMINIESFAHANI, H., LOZANOVSKA, M. & TUCKER, R. 2020. A Scoping Review of the Impact on Children of the Built Environment Design Characteristics

52: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

of Healing Spaces. HERD, 13, 98-114.

HERRANZ-PASCUAL, K., ASPURU, I., IRAURGI, I., SANTANDER, Á., EGUIGUREN, J. L. & GARCÍA, I. 2019.

Going beyond Quietness: Determining the Emotionally Restorative Effect of Acoustic Environments in Urban Open Public Spaces. Int J Environ Res Public Health, 16, 1284.

JIANG, B., SHEN, K., SULLIVAN, W. C., YANG, Y., LIU, X. & LU, Y. 2021. A natural experiment reveals impacts of built environment on suicide rate: Developing an environmental theory of suicide. Sci Total Environ, 776, 145750.

MENTAL HEALTH

KAPLAN, R. & KAPLAN, S. 1989. The Experience of Nature: A Psychological Perspective, Cambridge University Press.

KELLY, J., MALE, S. & GRAHAM, D. 2014.

Value Management of Construction Projects, Hoboken, Hoboken: John Wiley & Sons, Incorporated.

MACKETT, R. L. 2021. Mental health and wayfinding. Transportation research. Part F, Traffic psychology and behaviour, 81, 342-354.

MANZAR, M. D., ALBOUGAMI, A., USMAN, N. & MAMUN, M. A. 2021.

Suicide among adolescents and youths during the COVID‐19 pandemic lockdowns: A press media reports‐ based exploratory study. J Child Adolesc Psychiatr Nurs, 34, 139-146.

MATA, L., RAMALHO, C. E., KENNEDY, J., PARRIS, K. M., VALENTINE, L., MILLER, M., BEKESSY, S., HURLEY, S., CUMPSTON, Z. & GENELETTI, D. 2020.

Bringing nature back into cities. People and nature (Hoboken, N.J.), 2, 350-368.

MCGREGOR, A., AGUILAR, A. M. & LOCKHART, V. 2017. Environmentally Smart Design: Designing for Social Wellbeing Across the City and in the Workplace. Architectural design, 87, 48-55.

MCLACHLAN, F. & LENG, X. 2021.

Colour here, there, and in‐between— Placemaking and wayfinding in mental health environments. Color research and application, 46, 125-139.

NEWTON, P. W. & ROGERS, B. C. 2020.

Transforming Built Environments: Towards Carbon Neutral and Blue-Green Cities. Sustainability (Basel, Switzerland), 12, 4745.

PETERS, T. & D'PENNA, K. 2020.

Biophilic Design for Restorative University Learning Environments: A Critical Review of Literature and Design Recommendations. Sustainability (Basel, Switzerland), 12, 7064.

POLLOCK, N. J. 2019. Place, the Built Environment, and Means Restriction in Suicide Prevention. Int J Environ Res Public Health, 16, 4389.

RABY, E., ALWANI, R., WEST, J., BICHARD, J. AND SPENCER, J. 2018.

Foyle Bubbles: How can design reduce suicide attempts using everyday social and civic spaces. 20-23.

THODELIUS, C. 2018. Rethinking Injury Events: Explorations in Spatial Aspects and Situational Prevention Strategies.

ProQuest Dissertations Publishing.

WANG, P., GOGGINS, W. B., ZHANG, X., REN, C. & LAU, K. K.-L. 2020.

Association of urban built environment and socioeconomic factors with suicide mortality in high-density cities: A case study of Hong Kong. The Science of the total environment, 739, 139877-139877.

ZUNIGA-TERAN, A. A., STADDON, C., DE VITO, L., GERLAK, A. K., WARD, S., SCHOEMAN, Y., HART, A. & BOOTH, G. 2020. Challenges of mainstreaming green infrastructure in built environment professions. Journal of environmental planning and management, 63, 710-732.

Michael Booth is a Masters by Research candidate in the School of Engineering and Technology, CQ University, Brisbane Branch. Dr Pushpitha Kalutara is the Head of Built Environment in the School of Engineering and Technology, CQ University, Rockhampton North Branch. Dr Neda Abbasi is a Lecturer in the School of Engineering and Technology, CQ University, Sydney Branch.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 53

RESIDENTIAL CONSTRUCTION

THE CRISIS OF DEFECTS IN RESIDENTIAL BUILDINGS: WHY REFORM IS NEEDED

By Associate Professor Ajibade A. Aibinu MAIQS and Dr. Vidal Paton-Cole

54: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

RESIDENTIAL CONSTRUCTION

Population growth in Australia has continued to generate an unprecedented increase in demand for residential houses. The need to produce more houses within a minimal timeframe to fill the gap in demand often comes with an underlying problem of deficient quality.

In a recent consumer survey, it was reported that nearly one in every three-building consumers reported experiencing problems that occurred due to poor workmanship (Auditor-General, 2015). The experience often leads to immense financial and psychological health impacts on consumers while they try to resolve matters with their builders/developers. Often, homeowners (consumers) don’t pursue remedy due to these psychological impacts and costs which raises serious questions about ease of access to justice in residential homebuilding.

Under-supervision of construction activities could be addressed by having a representative “clerk of works” to seek the interest of the homeowners and thereby improving construction quality.

While delivered residential homes must be safe and healthy for occupants, the issues involved are complex and they often spiral into desired or undesired outcomes. Ensuring satisfactory homebuilding experience involves various aspects including procurement practices

and methods, building techniques, regulation of the building process, legal framework to allocate risks, and protect the consumers concerning the performance of completed residential houses. Simultaneously, it is also true that overregulation creates red tape and can lead to increased costs to consumers.

Across Australia, most of the complaints associated with building defects are from Victoria (VIC) and New South Wales (NSW) (AWCI 2017), and residential buildings in these states have been under the spotlight in recent times.

Despite several legislative requirements implemented over the last few decades to curb defects and the rigorous process governing construction activities in residential buildings, there has been a continual increase in complaints associated with defective works.

We examine some of the key underlying issues here and make a case for the need to re-examine what effective instruments can be deployed to incentivise high quality in residential buildings.

WHAT ARE COMMON DEFECTS, WHAT IS THE TREND AND WHERE DO THEY COME FROM? As evident in the Victorian Managed Insurance Authority annual report (VMIA, 2017), 1,068 homeowners were assisted during the financial year to rectify bad workmanship or finish building their homes, and in the process were paid A$179M. The total number of building claims settled in the 2017-18 fiscal year significantly increased by 50% to 1,600 homeowners.

Subsequently, there has been a corresponding increase in the number of domestic building disputes referred to by the Victorian Civil and Administrative Tribunals (VCAT) in Victoria. Data from the VCAT report shows that over the

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 55

RESIDENTIAL CONSTRUCTION

past 20 years, the incidences of dispute resolution applications made to VCAT have doubled (refer to Figure 1). VCAT also reported that there is a rapid increase in defect disputes relating to water leaking through windows and doors and balcony waterproofing in highrise apartments generally.

An in-depth analysis of decision transcripts of ten defect disputes decided at VCAT showed that poor and defective workmanship is the most proximate source of defects and are often created by the root causes including poor supervision, incorrect design, and procurement arrangement for the homebuilding. Factors such as weather conditions, negligence of home occupants are triggers that can serve as defect catalysts. Generally, defects and dispute resolution places a significant burden on all parties involved and could drag on for years, with low-income earners usually unable to cope with the implied legal cost.

WHAT ARE SOME OF THE KEY ISSUES? Procurement of Residential Homes In the current home building procurement model, the quality of building works depends heavily on the competency and integrity of builders, especially in the volume building market which is the most popular in Australia.

Volume building provides minimal engagement between builder and consumer once the consumer has agreed on an approved standard design (including finishes and fixtures) and a contract is established with the builder.

The model saves the cost of consumers supervising the work by themselves and managing associated risks.

The builder conducts all the sales processes which may include land sales

and contracts for the homebuilding.

Sometimes consumers may have purchased land elsewhere before approaching the builders. All building permit approval is completed by the builder using a nominated “private building surveyor” who will approve the documented design by the builder and further provide oversight of the construction process.

The less popular approach is the use of a custom builder, where the consumer can customise their design and exercise control throughout the procurement process using a private project manager appointed by the consumer. The project manager provides independent supervision of the work as a representative of the consumer via a lump sum fee or a percentage of the total cost. This makes the use of custom builders cost-prohibitive. It is also common to find a significant percentage of new homes sold off the plan to fund the development. In this case, consumers have no right to oversee the construction phase of the project. They must rely on the regulatory controls and competence of practitioners to deliver a compliant and safe building.

Since many consumers, are not knowledgeable about the construction of a building and there is a lack of independent oversight, the reliance on the builder who is conflicted makes home building an arena for consumer dissatisfaction with their homebuilding experience especially concerning defects.

Building Site Management Structure and Building Inspection Research conducted by the authors has established that one of the root causes responsible for construction and latent defects is poor supervision which is influenced by the site management structure.

56: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

The site supervisors responsible for managing the construction of homes represents the builder on site while subcontractors are often represented by a trade gang or an individual. Hence, the entire workforce responsible for delivering homes built by either volume or custom home builders is dependent on a subcontracting system of numerous layered trades, where quality assurance of work is dependent on each trade correctly completing their task.

In the final report of findings from the Royal Commission into the Building and Construction Industry (ABCC 2003), it was reported that subcontractors normally provide 90%–95% of the labour for the construction work, while the head contractors (builder) provide little to no labour. This means a significant burden of risk is placed on the labour force to efficiently and correctly execute their integral tasks in the construction process, thus, having the relevant skillset is of uttermost importance.

… will have invaluable benefits especially when cost and noneconomic impact of defect and defect-disputes are considered.

Anecdotal evidence suggests that site supervisors are not always present on site, meaning subcontractors could complete their tasks unsupervised.

While subcontracting along with the integration of numerous trades’ provides more advantages to the builder in risk allocation, reduced overheads, and improved productivity, it offers

RESIDENTIAL CONSTRUCTION

disadvantages to the consumer (the homeowner) when often omissions/ incomplete and defective works could be embedded in the construction process unnoticed and thereby presents a complex scenario when common building defects and dispute arise.

Monitoring of Building Works for Compliance Pre-, mid-, and post-construction building regulations allow the building surveyor to provide independent oversight of the design and construction process.

Inspections and certification of every residential construction must comply with the Building Code of Australia (BCA), the relevant Australian Standards, local council guidelines, and relevant building permit documentation issued for the works to ensure structural integrity, health, safety and amenity and compliance with requirements for energy efficiency (ABCB, 2019).

Regulations require the building surveyor to complete quality assurance checks at specific milestones. However, homeowners cannot find too much comfort in the building surveyors’ quality certification role because the independence of the building surveyor is often compromised. The relationship between the builder and building surveyor presents a conflict-of-interest scenario as the latter is often appointed by the former to supervise works undertaken by the builder when they are supposedly meant to be independently working.

As the volume building industry cycle is streamlined to a standardised process, the builders tend to use the same building surveyors repeatedly across multiple projects as a means of cutting costs.

This subsequently enables a quicker turnaround of building approvals and the premise of “more work, less charge” could be often employed to ensure the builder

maximises their profits. This represents a scenario where the building surveyor can't be seeking the homeowners’ best interests when the building surveyor will be pursuing more work from the same builder they should be checking and qualifying their work. There is also a misalignment between the regulatory quality assurance checks milestones and the level of work activities across the construction lifecyle.

The building surveyor is required to complete quality assurance checks at: i. completion of excavations before placing the footing (foundation) ii. before pouring an in-situ reinforced concrete member (generally footings) specified in the relevant building permit iii. completion of the framework iv. final, on the completion of building works.

However, more construction trades are involved at the start of stage “iii” and end of stage “iv” transitioning from framework to final inspection during which stage most of the finishes are completed. Thus, poor supervision of trades once the frame has been approved by the building surveyor can create serious problems.

Also, since trades building the house frame are completely independent of those completing the finishes because of the required skillset, problems can arise on finishing trades when the frame is not perfectly squared and out of verticality.

Building Insurance and Performance Security In the low-rise residential home building, there is no use of retention monies to secure builders’ performance.

Any defects that arise during construction and defect liability period are an expense to be borne by the builder with no security in place to protect the

owner from any failure of the builder to rectify defective work.

In Victoria, the mandatory insurance protection available for any building works costing more than $16,000 under the Domestic Building Insurance (DBI) is inadequate. It only covers defective or incomplete work for up to six years only if the builder “dies, becomes insolvent or disappears” (also referred to as DID clause). The insurance cover is also applicable if the builder fails to comply with a final order from the VCAT or a court.

As most homeowners (particularly first homebuyers) often use well-established builders to build their homes and considering the several thousands of homes built across the State of Victoria annually, the DID clause is therefore not often triggered as the builders often remain in business.

Because builders do not normally have insurance policies in place to cover building defects during the statutory warranty period, the cost arising from defect rectification is an expense to reduce the builders’ profit. The issue that could arise is that with builders perceiving these rectification costs as cutting their profit margins while inflating their overhead, there is the likelihood that builders can try to evade undertaking defect rectification.

Skills, Training, and Certification The Vocational Education and Training (VET) system in Australia employs a competency-based approach to equip students with the necessary skillset required.

While earlier studies have reported that the number and skill level of those undertaking construction worker roles has declined, occupational skill shortage in the construction industry has also been a concern by employers.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 57

RESIDENTIAL CONSTRUCTION

In a report released by Infrastructure Victoria, the need for construction workforce development was highlighted, with recommendations to increase the quality and efficacy of training. There is a general sentiment that many of those who carry out building works lack suitable qualifications, skills, and experience to do so.

The training and certification requirements need to be re-examined. For example, in Victoria's low-rise domestic homebuilding sector, only the electrician and plumber are required to be qualified, certified, and licensed and must subsequently carry indemnity insurance to execute their tasks.

This means that concreter, for example, pouring the slab does not need to be qualified or understand the behaviour of concrete even though the footing is the most significant structural element in a building as it supports and transmits loads imposed on the structure and deficiency in its performance requirements that will result in any movement will affect the entire superstructure.

The Victorian Building Authority recognised that the lack of any registration and licensing requirements for subcontractors and employees do not incentivise trades competency needed to safely and skillfully carry out building work. Also, it limits accountability for defective work.

Reforms are now underway in Victoria to make registration and licensing mandatory for a wide range of trades over the next five years.

New South Wales has already implemented the trade registration system.

FINAL THOUGHTS Finding a lasting solution to defects in residential homebuilding is a complex task.

While several legislative changes have been implemented in Australian

58: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

jurisdictions over the years, with an underlining intent to improve the delivery and quality of housing to consumers, the current allocation of responsibility for defects among builders, suppliers, building surveyors, and homeowners need to be re-examined with the public interest in mind.

The arrangement, particularly in the volume building, does contribute to the poor quality of work that has led to the significant increase in latent defects and subsequent litigations in the residential building sector.

A study conducted on building quality (Georgiou, 2010) highlighted that changes in legislation in Victoria after 1996 has no effect in improving the quality of housing. There is no doubt that regulators need to further re-examine what effective instruments can be deployed to incentivise better quality.

Aspects that need to be revisited include performance security and insurance, the role of the building surveyor, site supervision and inspection of works, monitoring and quality compliance as well as skills and quality of training.

In relation to the supervision of works, the role of the site supervisor is much more of an “organiser” responsible for managing subcontractors and coordinating suppliers of materials per the approved building documentation.

Under-supervision of construction activities could be addressed by having a representative “clerk of works” to seek the interest of the homeowners and thereby improving construction quality.

Nevertheless, the challenge is that this could increase the cost of homebuilding to low-income earner customers but could be more beneficial than fixing recurring defects during occupancy. There is also a greater need for customers awareness and customer empowerment.

RESIDENTIAL CONSTRUCTION

The ongoing legislative reforms in NSW could be a strategy to increase customers awareness and customer empowerment, as well as help regulators, identify the specific issues and solutions. NSW is currently testing a formal builders rating system to represent a risk-based approach for profiling home builders and subsequently, empower homeowners when deciding on the choice of builders.

The rating system could provide intelligence monitoring by the building industry and can be used by regulators to set compliance requirements for builders with a high-risk profile. Builders performing below specified benchmarks can be advised to undertake requisite training in specific areas, mandated to develop processes to achieve compliance, or can be otherwise labelled as “dodgy” with the possibility of losing their building license.

To ensure better-performing residential buildings with the highest quality of work are delivered to consumers, the use of emerging digital technology provides an opportunity to achieve a reliable and transparent solution. The adoption and use of digital technologies were also incorporated in the recommendations offered in the Building Confidence Report (Shergold and Weir, 2018). The authors believe that digital technology will efficiently collect records and information at all stages of ongoing works, and would be a reliable record that building regulators and practitioners can readily access when poor practices are evolved into latent defects. The data can also increase accountability. Lessons learned from past experiences of defects can provide insight into how the recurrence of defects can be prevented.

With the significant growing increase in defective work with the associated growing increase in the number of defect-related disputes, minimising the incidences of defects will not only contribute to building efficient and more sustainable houses but will have invaluable benefits especially when cost and non-economic impact of defect and defect-disputes are considered.

Associate Professor Ajibade A. Aibinu MAIQS and Dr. Vidal Paton-Cole are academic professionals from the Melbourne School of Design, Faculty of Architecture Building and Planning, The University of Melbourne.

1753

2000

898

1195

1401

1328

1339

1016

756

800

825

831

825

839

866

829

855

1000

1036

1200

964

1201

1400

1253

1455

1600

911

NUMBER OF DISPUTE REFERRALS

1800

600 400 200 0

1998-1999

2000-2001

2002-2003

2004-2005

2006-2007

2008-2009

2010-2011

2012-2013

2014-2015

2016-2017

2018-2019

FINANCIAL YEAR Figure 1: Number of new building cases referred to VCAT (1998/1999 to 2018/2019)

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 59

LEGAL

IS YOUR BUSINESS LEGALLY COMPLIANT? In the face of a constantly shifting legal landscape that impacts all participants of the building industry, key industry participants such as Quantity Surveyors are well advised to ensure that they remain (and assist their clients and others remain) compliant with all the regulatory aspects that affect their and their clients’ business activities.

Keeping up to date and operating in conformance with legal and regulatory requirements, including industry standards, can of course be a rather daunting exercise.

industry participants in view of the complexity and scope of construction projects. Notably, infrastructure projects have the further complexity of extra state and federal legislation that apply to government procurement activities.

To assist in navigating what is often a confusing array of laws, regulations, and industry standards, below is a list of key compliance areas which Quantity Surveyors should monitor and manage so that their legal obligations are met, but also met in a demonstrable manner.

This is particularly true for construction

60: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

REGULATORY FRAMEWORKS Most Australian construction companies are expected to meet legal obligations in respect of the following areas:

1. BUSINESS REGISTRATION AND TAXES This pertains to an organisation’s compliance with the Corporations Act 2001 (Cth) as administered by the ASIC and other governing bodies, including with various relevant tax legislation applicable to various business activities of the organisation.

ABN and GST are two of the essential components of trading.

LEGAL

2. EMPLOYMENT

3. COMPETITION AND CONSUMER

4. ANTI-BRIBERY AND CORRUPTION

This area covers legislation governing all stages of workers’ employment, including fair treatment and respect at work requirements at the workplace, forming Australia's national workplace relations system as established by the Fair Work Act 2009 (Cth) and other laws such as the Sex Discrimination Act 1984 (Cth), the Australian Human Rights Commission Act 1986 (Cth), and the Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 (Cth).

This area refers to an organisation’s compliance with its obligations vis-àvis consumers and corporate behaviour in respect of avoiding unlawful trade practices including under Australia's core competition law (antitrust) provisions found in the Competition and Consumer Act 2010 (Cth).

Companies (even directors) failing to comply with this subset of regulations risk incurring significant penalties, reputational damage and shareholder action.

Of particular concern are misleading or unconscionable conduct in tendering and contracting.

Probity checks become even more important for government procurement, in which participants are expected to adhere to the Code for the Tendering and Performance of Building Work 2016 where they seek to be, or are, involved in Commonwealth funded building work.

The current concern as to wage theft applies to the industry as well.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 61

LEGAL

It should also be noted that domestic and foreign bribery are penalised under the Criminal Code Act 1995 (Cth).

The Anti-Money Laundering and CounterTerrorism Financing Act 2006 (Cth) is another piece of Australian government legislation that must be evaluated for potential relevant offences as the industry has ahistorical reputation for unregulated transactions.

5. ENVIRONMENT

Western Australia • Environment Protection Act 1986 • Pollution of Waters by Oils and Noxious Substances Act 1987 Australian Capital Territory • Environment Protection Act 1997 Tasmania • Environmental Management and Pollution Control Act 1994 Northern Territory • Environment Protection Act 2019

There is heavy regulation in this aspect especially where, probably next only to mining, construction activities naturally have the most impact on the environment.

• Marine Pollution Act 1999

Various licensing, approvals, auditing, certifications, and other requirements will need to be canvassed to ensure full and proper compliance with an organisation’s environmental obligations.

• Environment Protection Act 1993

Such laws include the following state or territory legislation and their respective regulations:

This aspect involves surveying the organisation’s obligations surrounding the secure collection, use, storage, management, protection and disclosure of personal information in the federal public sector and in the private sector within the Australian legal framework established under the Privacy Act 1998 (Cth).

New South Wales • Protection of the Environment Operations Act 1997 • Contaminated Land Management Act 1997

• Water Act 1992 South Australia

6. PRIVACY AND DATA PROTECTION

7. BUILDING INDUSTRY REGULATION

• Environmentally Hazardous Chemicals Act 1985

There is a substantial body of legislation specifically for the building industry, prescribing among others licensing requirements, contract formalities, statutory warranties, home building insurance requirements, and disputation between industry participants and consumers.

• Environment Protection Act 1970 • Pollution of Waters by Oils and Noxious Substances Act 1986 Queensland • Environmental Protection Act 1994

New South Wales • Home Building Act 1989 • Design and Building Practitioners Act 2020 • Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 Queensland • Queensland Building and Construction Commission Act 1991 • Queensland Building and Construction Commission Regulation 2018 • Building Industry Fairness (Security of Payment) Act 2017 • Building Industry Fairness (Security of Payment) Regulation 2018 South Australia • Building Work Contractors Act 1995 • Development Act 1993 Tasmania • Building Act 2016 • Occupational Licensing Act 2005 • Residential Building Work Contracts • Dispute Resolution Act 2016

• Waste Avoidance and Resource Recovery Act 2001

Victoria

The primary pieces of legislation regulating the business industry are the following, including their respective regulations:

Often, these laws distinguish between commercial and residential building works.

62: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

Victoria • Domestic Building Contracts Act 1995 (Vic) • Building Act 1993 (Vic) Western Australia • Building Act 2011 • Building Services (Complaint Resolution and Administration) Act 2011 • Building Services (Registration) Act 2011

LEGAL

• Local Government (Miscellaneous Provisions) Act 1960 • Home Building Contracts Act 1991 Australian Capital Territory

Victoria

Queensland

• Building and Construction Industry Security of Payment Act 2002 Western Australia

• Building Act 2004

• Construction Contracts Act 2004

• Construction Occupations (Licensing) Act 2004

• Construction Contract Regulations 2004

Northern Territory • Building Act 1993 • Building (RBI and Fidelity Fund Schemes) Regulations 2012 • Building (Resolution of Residential Building Work Disputes) Regulations 2012

8. SECURITY OF PAYMENT Security of payment legislation varies across Australian jurisdictions but are generally aimed at ensuring that contractors and subcontractors across the industry are paid for the work they carry out, are paid on time, and without need of expensive and protracted litigation. These are: New South Wales • Building and Construction Industry Security of Payment Act 1999 Queensland • Building Industry Fairness (Security of Payment) Act 2017 • Queensland Building and Construction Commission Act 1991 South Australia • Building and Construction Industry Security of Payment Act 2009 • Worker’s Liens Act 1893 Tasmania • Building and Construction Industry Security of Payment Act 2009

Australian Capital Territory • Building and Construction Industry (Security of Payment) Act 2009 Northern Territory • Construction Contracts (Security of Payments) Act

• Work Health and Safety Act 2011 • Work Health and Safety Regulation 2011 (Qld) South Australia • Work Health and Safety Act 2012 • Work Health and Safety Regulations 2012 Tasmania • Tasmania Work Health and Safety Act 2012 • Work Health and Safety Regulations 2012 Victoria

9. WORK HEALTH AND SAFETY

• Occupational Health and Safety Act 2004

This body of legislation refers to the appointment and obligations of a ‘principal contractor’ charged with managing WHS for construction work.

• Occupational Health and Safety Regulations 2007

These laws and their related regulations can greatly impact industry participants and stakeholders such as owners, tenants, developers, and contractors.

WA • Occupational Safety and Health Act 1984 • Occupational Safety and Health Regulations 1996

Commonwealth • Work Health and Safety Act 2011 • Work Health and Safety Regulation 2011 Australian Capital Territory • Work Health and Safety Act 2011 • Work Health and Safety Regulation 2011 New South Wales • Work Health and Safety Act 2011 • Work Health and Safety Regulation 2011 Northern Territory • Work Health and Safety (National Uniform Legislation) Act 2011 • Work Health and Safety (National Uniform Legislation) Regulations 2011

10. CHAIN OF RESPONSIBILITY (HEAVY VEHICLE NATIONAL LAW) Most Australian jurisdictions operate under the Heavy Vehicle National Law (HVNL) which ensures that everyone who works with heavy vehicles, from the supplier engaging the driver to the occupier of the place where goods are delivered, are held accountable for safety.

Everyone across the supply chain shares an equal responsibility to comply with the HVNL and a person is considered part of the road transport supply chain if they have any control or responsibility over any transport task, such as consigning,

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 63

LEGAL

packing, loading, or receiving goods as part of their business.

As the supply chain also extends to corporate entities, directors, partners and managers, who are all accountable for the actions of people under their control, it is important to ensure compliance with and take steps to prevent breaches of the HVNL.

11. MODERN SLAVERY Broadly, modern slavery is an umbrella term that involves a wide spectrum of activities generally comprising the illegal exploitation of people for personal or commercial gain.

On 1 January 2019, the Modern Slavery Act 2018 (Cth) established a statutory modern slavery reporting requirement for larger companies operating in Australia.

Covered companies are required to report that their labour and procurement practices, operations, or supply chain and those of their subcontractors and direct suppliers, do not engage in modern slavery. Imports from overseas require verification and prudent sourcing.

Some construction contracts now require express prohibition against modern slavery and mandates compliance with the Modern Slavery Act 2018 (Cth).

12. ANTI-DISCRIMINATION AND BULLYING In Australia, it is unlawful to discriminate on the basis of a number of protected attributes including age, disability, race, sex, intersex status, gender identity and sexual orientation in certain areas of public life, including education and employment.

Australia's federal anti-discrimination laws are contained in the following legislation:

• Age Discrimination Act 2004 (Cth) • Disability Discrimination Act 1992 (Cth) • Racial Discrimination Act 1975 (Cth) • Sex Discrimination Act 1984 (Cth) Bullying is prohibited by the Fair Work Act 2009 (Cth), which defines bullying as ‘repeated unreasonable behaviour towards another person or group which creates a risk to health and safety.’

Employers covered by the Fair Work Act have an obligation under OHS legislation to eliminate or reduce the risks to employees' health and safety caused by workplace bullying.

SUMMARY Being legally compliant is essential to the continued existence of any business organisation, especially where noncompliance can result in significant losses in time, legal costs and a negative reputation for the organisation.

It is therefore crucial that organisations ensure they have robust policies and guidelines in place to foster a culture of compliance and monitoring.

They should also be alert to the continuous development of relevant legislation and be adept at updating their compliance programs as and when such changes occur and be willing to adapt to legislative changes.

As renowned General Electric CEO Jack Welch has said: “Change before you have to.”

If you require assistance in respect of your organisation’s legal compliance program or wish to be advised in respect of the regulatory framework that applies to your business, best to consult your legal advisers as soon as possible.

64: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

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

DEFECTS

THE STRATA BUILDING BOND AND INSPECTIONS SCHEME AND THE EVOLVING ROLE OF THE QS

By Sarah Bozionelos

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 65

DEFECTS

I am an Architect who has also worked in the quantity surveying field for the past decade. In this dual role, I have seen many defective buildings that people call home and have an appreciation for what a quality driven industry could look like.

However, this is where my two worlds collide every day: where design is compromised for cost efficiency, and quality is compromised for time limitations. The result is an industry plagued with major defects that have degraded the public’s confidence, and increased litigation and insurance premiums.

So now it seems the entire industry is forced to answer. Answer to the call of the consumer and to the stance of the federal and state governments. With a host of research reports, recommendations and legal case studies over the past few years, the government has responded with a sweep of reforms at every level.

Amongst these changes where I practice in New South Wales is the Strata Building Bond and Inspections Scheme (SBBIS) which is set to ensure residential apartment buildings, that are four storeys or higher, are audited for defects by a third-party following occupation.

A building bond is lodged with the occupation certificate so that it may be utilised by the owner’s corporations to rectify defects if the developer has failed to do so, after 24 months from occupation certificate.

EVOLUTION OF THE SBBIS 1 January 2018 SBBIS came into effect under the Strata Schemes Management Act 2015 No. 50.

1 July 2020 Act amended under the Strata Schemes Management Amendment (Building Defects Scheme) Act 2018 No. 49.

1 July 2021 The operation of the scheme migrated to a wholly digital process (Planning Portal and Strata Hub).

Quantity Surveyors are in a position to make a positive and lasting contribution that may redefine our role by placing us in front of the consumer.

HOW THE SBBIS WORKS It is an eight-stage scheme. The first stage is during construction and the remaining stages occur within the first 36 months following occupation. Each stage is time-limited and four of the stages involve input from consultants (stages one, three, five, and six), and four of the stages do not.

Quantity Surveyors are unique as we are the only profession that is able to facilitate all stages of the scheme where input from consultants is required. This opens a window of opportunity for our profession to add value and expand our role. Perhaps we may also do away with any fear that we may be replaced by technological advances, and instead showcase our understanding for quality construction practice.

BREAKING DOWN THE STAGES Stage One: Building Bond Lodgement.

This stage seems to get all developers riled up as it is affecting their financial propositions. It is also forcing the defects

66: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

liability period to be increased to 24 months, in line with the maturity of the bond.

The bond amount is 2% of the project cost as built, including the taxes, variations, GST and all professional and authorities’ fees in the calculation.

For large projects, this is a substantial amount and needs to be considered in the feasibility and finance of the project up-front.

The calculation of the bond is required to be undertaken by a Quantity Surveyor if the project is procured by an owner-builder or a contract builder with connected entities. We essentially put together the package that is then uploaded by the developer to the NSW Planning Portal along with their application for occupation certificate.

Once the building bond is lodged and an occupation certificate is successfully obtained, the scheme then moves into the post-occupancy phase.

Stage Two: Inspector Appointment.

Again, a Quantity Surveyor has the opportunity to be an inspector. Under clause 44 of the Strata Schemes Management Regulation 2016, there is a list of authorised professional associations that are able to put together a Strata Inspector Panel (SIP). As of 2021, only two associations have jumped on board, one being our institute, the AIQS. AIQS have put together two panels affiliated with this scheme: the Defect Rectification Costs Panel which is required for stage six of the scheme, and the Building Inspection Panel which is required for stages three and five.

Under stage two, the Developer must appoint an inspector from a SIP within 12 months of occupation certificate. By selecting one from AIQS the developer is essentially enabling the inspector to potentially carry the scheme should it

DEFECTS

proceed to stage six, and inevitably save them consultant’s fees as we are already familiar with the project.

The Owners Corporation must accept the appointment. If they do not, NSW Fair Trading appoint someone. From this point on, the scheme is migrated to a different digital platform called the Strata Hub. All the project documents that were uploaded to the NSW Planning Portal during construction are transferred to the Strata Hub upon inspector appointment.

Once an inspector is appointed it is time for Stage Three.

Stage Three: Interim Inspection and Report. This stage must occur between 15-18 months after occupation certificate.

The inspector carries out a visual inspection of the building to identify defects to the original works. This is the only time in the scheme where defects can be identified and reported on. The inspector may also call upon specialist consultants to produce reports that will be uploaded along with their report.

The inspections are to be undertaken as per AS 4349.2:2018 Inspection of Building Part Two: group titles properties, and NSW Fair Trading require a ‘whole of scheme’ approach to ensure major defects are captured in the report.

Once the report is complete (on the Strata Hub and approved by Fair Trading), it is time for the developer to organise the builder to rectify the defects in accordance with the recommendations of the report. This must be carried out in 18-21 months after occupation certificate and is Stage Four: Rectify Defective Building Work. It is quite a tight schedule so if the original builder is not available the onus is on the developer to organise another builder to carry out the work.

Following rectification of works, the inspector must re-inspect the building for any outstanding defects or defects

that have arisen from the rectification work. This is Stage 5: Final Inspection and Report and is not an opportunity to identify new defects. The inspector must then produce a final report, again on the Strata Hub and obtain Fair Trading approval.

If there are still defects identified, then the scheme advances to Stage 6: Determine the Cost of Rectification. If the Owners Corporation and developer fail to come to an agreement as to the cost of the outstanding defects within 30 days of the final report, then here again a Quantity Surveyor is required to produce a ‘Cost to Rectify Defects Report’.

NSW Fair Trading appoints a Quantity Surveyor at random from the AIQS Defect Rectification Costs Panel.

This report assesses the cost to rectify the defects identified in the final report.

The amount specified is then released to the Owners Corporation from the bond. Any leftover amount following rectification works is then given back to the developer. If the amount is more than the bond amount, then the full bond amount is released to the owner’s corporation. This being one outcome of Stage 7: Paying the Building Bond. The scheme may mature at different stages depending on whether defects were identified in the reports.

cost of construction as well as making it not feasible for any person to develop and build. These costs will be passed on to the consumer and the value of property ownership will be transformed.

The era of defective buildings and subpar construction practice may be a thing of the past. We reached the precipice of negligence where lives were lost in building fires due to non-complying and non-conforming building material, families being displaced due to major building defects deeming their principal place of residence unsafe for occupancy, while others financially burdened by the exuberant costs of rectification works. All could have been avoided if quality was the driving force enabling our industry to flourish, instead of being burdened by stringent and often unachievable time and cost constraints.

So, although change is often daunting, we are living through a pivotal moment in history where things will hopefully improve for the better. And we, as Quantity Surveyors, are in a position to make a positive and lasting contribution that may, in turn, redefine our role by placing us in front of the consumer, a position where we drive quality standards and have an industry that we can be proud of.

The Owners Corporation can then move to Stage 8: Completing the Process where they must utilise the bond to cover the rectification work within 36 months of occupation certificate.

This scheme along with many other reforms seem set to boost the best practice standard of construction to encourage all developers and builders to get on board. These changes are only the beginning and soon the tightening of legislation will apply to all building classes. The outcome will increase the

Sarah Bozionelos is Senior Manager at Archi-QS. If you are interested in joining one or both of the AIQS Stata Defect Panels, please email marketing@aiqs.com.au.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 67

LEGAL

EXPERT WITNESS

By Paul Roberts FAIQS, CQS

INTRODUCTION This is the first in a series of articles intended to provide a general understanding of the roles and duties of

an expert witness and what assistance a tribunal (e.g., arbitrator or judge) expects from the expert witness when determining formal disputes between parties. This

68: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

article is limited to Australia and does not cover international arbitration or security for payment legislation in jurisdictions outside Australia.

LEGAL

WHO/WHAT IS AN EXPERT WITNESS? Expert witnesses have been used by tribunals in commonwealth jurisdictions for over 200 years¹ and the use of expert witnesses, particularly where technical matters are key to the outcome, is now commonplace. But who, or what, is an expert witness?

The overriding responsibility of an expert witness is to assist the tribunal on matters within their area of expertise.

The expert’s evidence must therefore be useful to the tribunal. Accordingly, the expert witness needs to demonstrate that, from a professional/technical perspective, they are truly an expert in the area within which the opinion is being given. This can be demonstrated through a combination of such things as formal training, qualifications, and relevant practicing experience.

For example, where a dispute relates to matters of measurement and valuation of construction works, this would fall within the area of expertise of a qualified Quantity Surveyor (QS) and it is likely that the relevant tribunal would, in principle, rely on such opinion.

Conversely, a tribunal is unlikely to accept the ‘expert’ evidence proffered by a QS relating to a dispute concerning technical aspects of an architectural design because such matters are not recognised as being within a QS’s area of expertise.

ROLES AND DUTIES The roles and responsibilities of expert witnesses in Australian civil cases are set out in Makita (Australia) Pty Ltd v Sprowles.² The overriding responsibility of an expert witness is to assist the tribunal, regardless of whether the expert is

appointed by one of the parties (usually through its legal representatives/ instructing solicitors) or by the tribunal itself. Accordingly, it is necessary for the evidence adduced to be clear, appropriately substantiated and demonstrate independence and reliability, as briefly described below.

Independent (or unbiased and impartial) expert evidence is, and is seen to be, the opinion of an expert reached without influence and based only on the objective consideration of all material provided.

Reliable (or dependable and trustworthy) expert evidence states the main facts and assumptions relied upon, without omitting any material facts that may be relevant to conclusions reached.

Expert evidence informs the tribunal of what effect any relevant alternative assumptions may have on those conclusions.

CODES, RULES AND PRACTICE STATEMENTS Although expert witness roles and responsibilities referred to earlier have been established through case law, these roles and responsibilities, together with other specific requirements including the content, form and, in some instances particular wording, is explicitly stated in many tribunal rules, professional body practice statements and the like.

The main requirements contained in the various published rules and practice statements are similar and include the following: a) Statement identifying any past relationship with the parties (including legal advisers) and/or tribunal. b) Statement of no conflict with the parties or tribunal and no interest in the outcome.

c) Statement that the appointment is not under a conditional or success-based fee arrangement. d) Statement confirming an understanding that the expert’s duty is to the tribunal. e) Description of instructions pursuant to which opinions and conclusions are provided. f) Statement of facts and information upon which opinions and conclusions are based. g) Description of the methods used in forming opinions and conclusions. h) Statement that all opinions are the expert’s own opinions. i) Statement that the expert will notify its instructing solicitor if the report requires correction. j) Affirmation of genuine belief in opinions expressed. k) Signature and date.

Arbitral tribunals usually require expert witnesses to comply with one of the many published sets of rules. In the authors’ experience, two of the most used are “Australian Centre for International Commercial Arbitration Rules” and the “International Bar Association Rules on the Taking of Evidence”.

Where disputes are resolved through litigation, the expert is required to comply with the code of conduct or rules of the relevant State or Territory court. For example, expert evidence before the Northern Territory Supreme Court, must comply with “the expert witness code of conduct, Northern Territory Supreme Court Practice Direction 6 of 2015”.

In addition, some experts will be obliged to include a statement confirming compliance with any relevant practice statements mandated by their respective governing professional body.

¹ In Folkes v Chadd (1782) 3 Doug KB 157, the court allowed an engineer to give expert technical opinion on siltation ² Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 at [79]

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 69

LEGAL

FINDING A SUITABLE EXPERT WITNESS How parties’ and/or their legal representative brief experts varies significantly and there are numerous organisations that publish lists of experts and/or guidance on finding and briefing experts.³ The following comments and observations are based on the authors’ experiences of receiving enquiries to act as an expert witness from parties’ legal representatives and being asked to recommend experts in other technical disciplines.

Notwithstanding the foregoing, which describes what an expert ideally is and the roles and duties to be fulfilled, there are commercial and practical considerations that are relevant when choosing and engaging an expert witness. These include, but are not limited to the following: a) Size of Dispute For disputes which involve large sums of money, experts’ fees, even on very complex disputes which require the expert to engage a large support team over many months or even years, are likely to be relatively minor sums in comparison to the sums in dispute. In such cases, the instructing solicitor’s priority will usually be to engage an expert with the most experience and/ or the highest degree of expertise in the specific relevant technical area(s) possible. Furthermore, it is almost certain that the chosen expert will be required to have given oral evidence (i.e., have been cross-examined) in front of similar tribunals.

Conversely, where disputes involve relatively small sums of money, instructing solicitors will often seek to

minimise the fees their clients spend on experts. In these cases, it may be considered more appropriate for instructing solicitors to engage an expert with, for example, less experience who may not have given oral evidence. b) Forum The roles and duties expected of expert witnesses have been developed over time, primarily through litigation and the courts. Although the parties have flexibility to agree the way their arbitrations are conducted, the roles and duties of expert witnesses in arbitration are typically very similar to litigation.

In both arbitration and litigation, the evidence given by expert witnesses is tested orally, usually by experienced legal counsel, through cross-examined.

Across the various State/Territory security for payment legislation, adjudication has become a common forum adopted for determining disputes.

For adjudications where significant amounts are in dispute, it is common for parties to include reports by technical experts in support of their submissions.

These reports are usually similar in format to expert witness reports in arbitration and litigation proceedings.

However, in addition to adjudication’s short timeframes, which often make it difficult for an expert to thoroughly investigate all the facts, another significant difference is that expert evidence in adjudication is, rarely, if ever, tested orally by cross examination or even by the tribunal through the various conference provisions.⁴ Accordingly, as it is not necessary for experts in adjudication to be tested under cross examination, there is opportunity for less experienced technical experts to obtain instructions that would not arise in arbitration or litigation.

PARTY APPOINTED AND SINGLE JOINT In most disputes where expert evidence is required, the legal representatives for each party will brief their own expert.

Hence there are usually two expert witnesses giving evidence in respect of each technical discipline. These are referred to as ‘party appointed’ experts.

On occasion, usually with the intention that the parties are treated equally and costs are kept to a minimum, the tribunal will appoint what is referred to as a ‘single joint expert’. The tribunal’s expectations of the single joint expert are identical to those of party appointed experts.

However, there are practical differences between the two. Firstly, the single joint expert is under the direct instruction of the tribunal and the tribunal will usually instruct both parties legal representatives to jointly manage the evidence. Secondly, unlike a party appointed expert who typically meets its instructing solicitor before submitting a signed expert report and again before giving evidence, a single joint expert is usually limited to attending joint meetings with both parties’ solicitors unless all parties otherwise agree.

Paul Roberts FAIQS, CQS is the Managing Director of Secretariat Advisors and is on the AIQS Expert Witness Register.

³ For example: ‘The Practitioners Guide to Briefing Experts’, 1st Edition, by NSW Young Lawyers. See: lawsociety.com.au/sites/default/files/2021-05 ⁴ For example: Chapter 3, Part 4, Section 84(3) of QLD ‘Building Industry Fairness (Security of Payment) Act 2017’

70: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

RISK MANAGEMENT

EMERGING RISK MANAGEMENT APPROACHES ON MEGA CONSTRUCTION DEVELOPMENT PROJECTS PART 1 - RESULTS FROM INTERNATIONAL CASE STUDIES

By Jery Johnson MAIQS and Suranga Jeyasena

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 71

RISK MANAGEMENT

INTRODUCTION In this paper the word ‘PM’ refers also to the ‘Project and /or Development Monitor (acronym ‘P&D Monitor’).

Mega construction development projects (megaprojects) are large in size, complex, and volatile and are valued at US$1 billion and over. They are often executed in a Volatile-Uncertain-Complex-Ambiguity (VUCA) environment.

Megaprojects are considered to be the most complex of all the various types of projects¹. If you are able to manage risks on megaprojects, that knowledge can be effectively used to manage risks on any other complex or even medium-size/ small projects.

1.

Megaprojects often exceed the established baselines, with only one in a thousand megaprojects achieve all of their established cost, time and quality objectives². As risk management is an integral part of project management³, the Project Managers often use visualisation techniques to help understand the severity of the risks (e.g., colour light system as shown in Table 1) for providing schedule progress and cost status information. The well known saying ‘a picture is worth a thousand words’ is no less true than when communicating a project’s risks, progress, and current status.

The best megaprojects showcase the project management ability to manage risks more effectively, which in turn contributes toward positive outcomes

(and benefits) and results in safer projects, lower costs, and projects being completed on time⁴.

Despite the industry’s urgent need, the risk management research on megaprojects is not sufficient and this area continues to be an area of project management research that is still developing and expanding⁵. Thus, we consider this research to be impactful.

A snapshot of the risks and their frequency has been analysed and mitigation measures adopted by the Project Managers have been highlighted.

The focus of this paper is to explore the risk management strategies available to the PMs.

Development Budget (DB)

1.1 Overall Budget

1.2 Risk of Loss and expense claim by the Main Contractor

1.3 Developer’s Contingency

Based on the review of the DB submissions, it can be confirmed that the proposed budget is comparable with other 5-star hotels in the local region.

Due to provisional sums in the agreed contract with the main contractor cost certainty on the development will only be achieved once these provisional sums have been firmed-up and relevant variations issued.

It is understood that there is a potential risk for an extension of time and loss & expense claim from the Main Contractor as a result of client led changes/instructions. In the event that this issue is not resolved, there is a potential risk of a dispute between the developer and the Main Contractor which might affect the progress of the works.

The current available contingency amounts to $ 300 million which is 15.8% of the overall development cost to complete and 23% of construction cost to complete, which is considered sufficient to cater for any unforeseen variation costs during the period remaining.

MEDIUM

HIGH

LOW

Table 1: Colour Light system to flag risks (A sample extracted from a Project Management and Project and Development Monitor’s report)

¹ Sanchez-Cazorla et al., 2016

⁴ Grieman, 2013

² Flyvbjerg, et al., 2003

⁵ Sanchez-Cazorla, et al., 2016

³ Burcar, et al., 2013

72: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

RISK MANAGEMENT

THEORETICAL AND PRACTICAL APPROACHES TO MEGAPROJECT RISK MANAGEMENT

(= Potential Impact $ equivalent x Likelihood (%) to arrive at a $ equivalent risk allowance value) and Monte Carlo Simulation (MCS).

by Eisenhardt (1988-2021) has been used in this research.

Definitions of risk and risk management

The qualitative and simple quantitative assessments are usually carried out by project teams alone whereas the advanced MCS is usually carried out by the experienced risk management professionals. On a megaproject the MCS is commonly used to develop and present the initial development budget and/or risk and contingency allowance which is applicable to the Quantity Surveyor’s works.

Except the Project Finance risk (risk group no. 8) which received total weighting of six, all other nine risk categories received weighting of seven and above which indicates that those risks are more likely to materialise on a hypothetical megaproject.

RESEARCH METHODOLOGY

Of the risk mitigation strategies employed, the Front-end focused risk management involving BM, PM, and procurement management are the most impactful. It is imperative to devise strategies to manage risk at the critical tender evaluation and procurement stage to inform the key ‘partner’ selection decision.

Risk is the effect of uncertainty on objectives (ISO 31000:2009). On the other hand, risk management can be defined as ‘the systematic process of identifying, analysing, and responding to project risks.

On megaprojects, the risk management process involves risk identification (using a checklist and early warning system - EWS), assessment and analysis, response, monitor and control (using visualisation techniques and various trackers), and evaluation stage.

A sample of a very simple risk assessment is provided in Table 2.

The popular quantitative risk analysis methods used are Severity Assessment

Item Identified Risks

A focused literature review, purposive sampling research method⁶ and the multi-case study methodology proposed

Risk Rating Impact

Risk Owner

1

Client’s design changes

High

Medium

Developer

2

Late design deliverables

High

High

Developer

3

Design cost increasing

Low

Medium

Developer

4

Development budget increasing

Medium

Medium

Developer

5

Construction budget increasing

Medium

Medium

Developer

6

Client’s procurement changes

Low

Medium

Developer

7

Contractor’s procurement delays

High

Medium

Contractor/Developer

8

Authority approval risks

Medium

High

Contractor/Developer

9

Dispute between developer and main contractor

Low

High

10

Business management & PM

Low

Medium

Developer

11

Project governance

Medium

High

Developer

12

Finance

Low

Medium

Developer

13

Force-majeure events

Medium

High

Developer

14

Construction and supply chain

Low

High

Contractor/Developer

Developer

FINDINGS AND DISCUSSION

Though the six low rated risks (1,2,3,6,7, 8) did not occur across all ten case studies of megaprojects, but the management of these risks is also critical for the success of a hypothetical megaproject.

It is also found that not only the project level risk management strategies, but also program/portfolio level project management and risk management approaches are most effective, and the client’s PMs effectively utilise various best practices in this regard as documented in this paper.

This research finding is important as a force-majeure event tend to happen on almost every megaproject which needs to be understood and well prepared for by the PMs. We have analysed the risk management strategies implemented on megaprojects that were investigated. They are summarised and discussed in the next section (not in any order of priority).

Table 2: A Qualitative Risk Assessment (sample) ⁶ Black, 2010

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 73

74: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

$25,500,000,000 8%

$6,500,000,000

$6,000,000,000

1 yr

7 yrs

15%

$1,436,000,000

$1,250,000,000

4 yrs

2 yrs

3 yrs

A lump-sum contract with 40% Provisional Sums

A 5-star Resort, Hotel and Service Apartments with site infrastructure scope

CS4 A 5-star Resort, Hotel and Service Apartments with site infrastructure scope Two stage Construction Management contract

A VVIP Specialist Hospital Project with infrastructure scope

Fixed lump sum ‘Construct only contract with design portions’

A 5-star Resort, Hotel and Beach Villas with site infrastructure scope A lump-sum contract with 34% Provisional Sums

3 yrs 2 yrs $2,020,400,000 $2,381,167,075 18%

3 yrs 2 yrs $1,010,000,000 $1,110,000,000 10%

$1,202,300,000 $1,252,300,000 4%

No

2.7 yrs

2 yrs

2 yrs

6.5 yrs

CS7

CS6

CS5

2%

$8,437,500,000

$8,250,000,000

2 yr

7 yrs

20%

$6,018,750,000

$11,100,000,000 95%

$5,025,000,000

2 yr

5 yrs

1 yr

$5,700,000,000

1 yr

8 yrs

2 yrs

D&C Contractor

Alliance contract with over 50 sub-projects

Partnering and Alliance contracts

2 yrs

A city major transport project with tunnel and road works

CS10

Railway project involving Rail Crossing Removals

CS9

A major city Metro Project with stations and tunnel

CS8

Notes: CS9 – 1) The original budget is based on removing 50 Level crossings (LXRs) whereas the revised budget is based on 75 LXRs. 2) However, the original program suffered a cost over-run of 9.2% based on an approved BC budget of A$7.6bn and revised budget (2017/18) of A$8.3bn.

Cost Overrun %

Revised Budget Value (US$)

4%

$1,250,000,000

$25,000,000,000

2%

$1,200,000,000

No

Schedule overrun (yrs)

Original Budget Value (US$)

1 yr

10 yrs

Construction Schedule

5 yrs

3 yrs

3 yrs

3 yrs

A series of lump-sum large contracts (approx.

20) and one cost plus contract

A series of Lump-sum package contracts & Remeasured utilities works

A JV contract cost-plus contracts with site-wide infrastructure works

Contract Type

Design Schedule

A large size Mixed-use development including site infrastructure works

CS3

A medium size Mixed-use development including site infrastructure works

CS2

A large size Mixed-use development including site infrastructure works

CS1

Project Type

Case Study reference

Summary of Case Study Details

RISK MANAGEMENT

RISK MANAGEMENT STRATEGIES ADOPTED ON MEGAPROJECTS

The following is a list of risk management strategies that were deployed on those case study projects.

Risk 1: Schedule Overrun - The Mitigation Strategies:

• Develop a comprehensive and integrated master schedule based on the schedule information derived from post-evaluation of any similar projects and adjust considering design schedule, procurement schedule, authority approvals schedule, productivity calculations, constructability issues, build-in buffer time for uncertainties and complexities, site logistics, and specific issues, etc.

• Fast-track the project delivery by achieving over-lap between the design and construction phases with execution of early and enable works while the detailed design gets developed and subcontracts are then procured.

• Use of the master planning with the benefit of using expert early contractor involvement and pre-construction service provides to clearly flag risks and provide solutions early.

• Use program/portfolio PM approaches and assess weekly progress percentage, value of work done, and key performance indicators.

• Divide a megaproject into constituent components/precincts/sub-projects to enable micro-management.

• Build enough money into the budget to quickly handle unforeseen tasks/ delays.

• Have a flexible consultant scope of work including provisional sums for possible additional scope of works.

RISK MANAGEMENT

Risk Top 10 Risk Categories Group identified and anticipated No.

CS1

CS2

CS3 CS4

CS5 CS6 CS7 CS8 CS9

CS10

Total

1

Schedule and cost overrun

1

1

1

1

1

0

0

1

1

1

8

2

Authority approvals and environment

0

1

1

1

1

1

1

1

0

1

8

3

Contractual claims and disputes

0

1

1

1

0

1

1

1

0

1

7

4

Scope, design changes and QM

1

1

1

1

1

1

1

1

1

1

10

5

Procurement and contract design

1

1

1

1

1

1

1

1

1

0

9

1

1

0

1

1

1

1

1

0

1

8

1

1

1

1

0

1

1

1

0

0

7

Client’s Business management and PM expertise (pre and post contract) Client leadership, project governance and oversight (post-contract)

6

7 8

Project finance

1

1

0

1

0

1

1

0

0

1

6

9

Construction and SC management - CM, Resources, HSE, Operation and SC Mgt, and SC Bankruptcy

1

1

1

1

1

1

1

1

1

1

10

10

Force majeure events and VUCA market

1

1

1

1

1

1

1

1

1

1

10

Table 3 – Frequency of the identified risks on megaproject case studies (the score ‘1’ against the case study project here represents the fact that ‘yes’ the particular risk materialised on the project and ‘0’ represents the risk did not affect that project).

• Construction tender invitation might specify the requirement for two main contractors to form a project-based joint venture as a tender condition.

• Pre-purchase of long lead items and essential materials early.

• Establish a realistic schedule and provide high visibility to tracking progress and share information.

• Carry out weekly progress reviews to understand any critical issues and to design suitable programme recovery measures/action plans on a timely fashion.

TOTAL

83

AVERAGE

8.3

• Have options including cost allowances within the contract price/ budget to mitigate the schedule delays by adopting Design for Manufacture and Assembly to fast-track the project and recover any delays occurred.

• Look at potential design and construction overlaps (i.e., fast-tracked delivery as in one case). It is possible not only under partnership contracts, but also in traditional contracts if the PMs have the expertise to set-up and manage the process including contract design and site contract administration.

• A joint procurement schedule monitoring between the contractor and client (Project Management Consultants) and schedule transparency (e.g., visible milestones and moving targets). This is an intelligent tool that also protects the client from un-substantiated contractor’s claims by highlighting culpability for concurrent delays caused by the main contractor and subcontractors which can be recorded, notified, and further investigated.

• Client’s integrated working methodology with the contractors and subcontractors and resolving critical issues that slow down the project • Clearly establish and maintain scope of works (possibly ring-fence the concept design or freeze it further at the detailed design stage) and try to keep outside/additional scope separate and deal with it as standalone (e.g., landscape works).

Identify possible scope creeps arising from the infrastructure and utilities interfaces/diversion of services even located outside the current master plan that might affect this project as this is the major cause of additional scope/cost/time on megaprojects.

Jery Johnson MAIQS BSc (Hons) QS, MSc (Applied Science), MRICS, Director ABAC Pty Ltd. Suranga Jeyasena BSc (Hons) QS, MSc(Building), BSc(Hons)QS, Dip(Arbitration), MCIOB, AIQS.SL, Head of the Department of Building Economist, UoM, Sri Lanka.

This paper has been adapted from the Proceedings of the 44th AUBEA Conference, 27-29 Oct. 2021, Deakin University, Australia where the 1st Author Presented a research paper on the topic. Thus, the Authors take this opportunity to thank the AUBEA organisers and review panel members for the facilitation.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 75

BCI

76: MARCH - MAY 2022: BUILT ENVIRONMENT ECONOMIST

BCI

BUILDING COST INDEX

MARCH 2022

THE BUILDING COST INDEX IS PUBLISHED IN THE PRINT VERSION OF THE BUILDING ENVIRONMENT ECONOMIST. IT CONTAINS DATA THAT CAN BE USED AS A PREDICTOR FOR THE ESTIMATED TIMES FOR DESIGN AND CONSTRUCTION AND INCLUDES A SUMMARY OF THE PAST, PRESENT AND ESTIMATED FUTURE CONSTRUCTION COSTS.

BUILT ENVIRONMENT ECONOMIST: MARCH - MAY 2022: 77

ADVANCING BUILT ENVIRONMENT COST PROFESSIONALS

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