Construction Economist Journal - Spring 2016

CONSTRUCTION ECONOMIST SPRING 2016

The Journal of the Canadian Institute of Quantity Surveyors Le Journal de l’Institut canadien des économistes en construction

2016 CIQS Congress

Toronto June 24-26

PM 40065075

Human systems in organizations

BEST PRACTICES for PROJECT DELIVERY – STRIVING for EXCELLENCE

ciqs.org

CONSTRUCTION ECONOMIST SPRING 2016

The mission of CIQS is to promote and advance professional quantity surveying and construction estimating; to establish and maintain national standards; to recruit, educate and support our members.

Canadian Institute of Quantity Surveyors 90 Nolan Court, Unit 19, Markham, ON L3R 4L9 t. 905/477.0008 f. 905/477.6774 toll free. +1 866/345.1168 e. info@ciqs.org www.ciqs.org

Executive Director Lois Metcalfe. ........................... . . . . . . execdir@ciqs.org Editor Arif Ghaffur, PQS....................... . . . . . . . editor@ciqs.org Send Change of Address to: Canadian Institute of Quantity Surveyors 90 Nolan Court, Unit 19, Markham, Ontario L3R 4L9

CIQS Board Chair: Craig Bye, PQS Vice Chair and Secretary/Treasurer: Matthew K. Weber, PQS Past Chair: Dave Burns, PQS(F)

The Journal of the Canadian Institute of Quantity Surveyors Le Journal de l’Institut canadien des économistes en construction

Features Another successful RICS and CIQS joint event . . . . . . . . 10 3rd annual CIQS Congress. . . . . . . . . . . . . . . . . . . . . 12 Project Overview – Surrey Biofuel Facility Achievement of Financial Close . . . . . . . . . . . . . . . . 17 Member Interview – Guy Smith, PQS. . . . . . . . . . . . 18 Escalation remains low, workloads steady – An overview of Canadian markets. . . . . . . . . . . . . 22

Registrar and CIQS – Prairies and NWT Rep: Wendy Hobbs, PQS CIQS – British Columbia Rep: Angela Lai, PQS CIQS – Maritimes Rep: David Dooks, PQS CIQS – Newfoundland and Labrador Rep: Colin Penlerick, PQS CIQS – Ontario Rep: Sheri Thompson, PQS CIQS – Quebec Rep: Guillaume Robitaille, PQS Education Administrator: David Lai, PQS(F)

Statements of fact and opinion contained within this journal are those of the authors, including subject matter experts. CIQS assumes no responsibility or liability for the content of such fact and opinion, nor do they represent the official policy of CIQS. Published four times a year on behalf of the Canadian Institute of Quantity Surveyors by

17

Corners

Messages 9

Chair’s Message. . . . . . . . . . . . . . . . .

4

Aspiring Professionals Corner . . . . . .

23

Executive Director’s Message. . . . . . .

6

Professional Sustainability Corner . . .

24

Editor’s Message . . . . . . . . . . . . . . . .

7

Education Corner . . . . . . . . . . . . . . . .

Congratulations.

Third Floor - 2020 Portage Avenue Winnipeg, Manitoba R3J 0K4 Tel: 866-985-9780 Fax: 866-985-9799 info@kelman.ca www.kelman.ca Managing Editor. ........................ . . . Chris Kelman Art Design/Production. ............. . . . Tracy Toutant Advertising Coordinator...... Stefanie Hagidiakow Marketing Manager. .................. . . . . . . . . . Jeff Kutny jeff@kelman.ca 866-985-9789 Publication Mails Agreement #40065075 Send undeliverable addresses to: lauren@kelman.ca

. . . . . . . . . . . . . . . 29

In Memoriam . . . . . . . . . . . . . . . . . .

OUR CONCERN FOR THE ENVIRONMENT IS MORE THAN JUST TALK This document is printed on paper certified to the standards of the Forest Stewardship Council® (FSC®).

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Chair’s Message

CIQS continues down excellent path

A

s we all know, the CIQS has gone through many progressive changes over the last few years.

During this time, we have become an Association of Associations. We restructured our staffing to handle matters including membership, diary reviews, fee collections, website updating and maintenance. Our Membership Coordinator, Sophia Chin You, and the CIQS Membership Committee are reviewing numerous membership applications every month and have processed approximately 400 since April 1, 2015.

In parallel with managing our growth, the succession plan to replace our Executive Director, Lois Metcalfe, is in full swing receiving applications and conducting interviews. In addition, David Lai, CIQS Education Administrator, has recently completed the review of six programs for Level 3

accreditation, so continuing to progress our objectives to review and enhance our education initiatives.

Also, the CIQS continues to be strong internationally, with ongoing dialogue with PAQS, CEEC, ICEC and ICMS. CIQS and RICS have recently issued a project monitoring guidance note which will soon be the subject of a separate announcement. Once announced and available for general consumption, the guidance note will be posted on our website for easy access.

At the governance level, the CIQS Board of Directors continues to work towards an even better future for the CIQS and its Affiliates. Whilst much has been achieved, we want to continue this excellent progress to provide more for our members and Designation Holders. Over the next year, the CIQS will provide the Affiliates with resources and materials to put ‘boots to the pavement’ in their

The CIQS Board of Directors continues to work towards an even better future for the CIQS and its Affiliates.

Craig Bye, PQS

regions to promote the Institute and provide their members with further CPD opportunities.

In an attempt to continue our initiatives to provide broader coverage for the CIQS, we will carry on with our marketing plans, which will include the launch of additional videos. Such coverage will also involve an increase in lobbying to have Professional Quantity Surveyors a requirement of more Requests for Proposals and professional lists. We are also planning to hire an education/ marketing resource staff member to assist with these initiatives.

The 2016 CIQS Congress in Toronto includes a robust technical program including presentations from senior industry professionals. Many activities are available including the annual Clive Evans Living Golf Tournament.

The congress is to be held June 2426, 2016 at the Old Mill in Toronto (see page 12-15 in this issue). I hope to see you there. Please join us at the Presidents Dinner/Lois Metcalfe’s Retirement Celebration to wish her all the best and thank her for being the soul of CIQS all these many years.

Did you know that attending the 2016 CIQS Congress Technical Session on Friday, June 24, 2016 qualifies for 12 CIQS Continuing Professional Development (CPD) points? Register now at www.ciqs.org/english/congress. Time is running out as the last day to register is June 6, 2016.

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Message du Président du Conseil

L’ICÉC continue vers le bas un excellent chemin

C

omme nous le savons tous, l’ICÉC a connu de nombreux changements au cours des dernières années. Au fil du temps, nous sommes devenus une association d’associations. Nous avons restructuré notre personnel pour traiter des questions relatives à l’adhésion, la revue de journaux, la collecte des cotisations, la mise à jour et l’entretien du site Web. Notre coordinatrice de l’adhésion, Sophia Chin You, et le comité d’adhésion de l’ICÉC examinent de nombreuses demandes d’adhésion chaque mois, et ont déjà traité approximativement 400 demandes depuis le 1er avril 2015.

Parallèlement à la gestion de notre croissance, le plan de relève pour remplacer notre directrice générale, Lois Metcalfe, est en pleine réalisation tandis que nous recevons des candidatures et réalisons des entrevues. De plus, David Lai, administrateur à l’éducation pour l’ICÉC, a récemment complété un examen de 6 programmes pour l’accréditation de niveau 3, tout en continuant d’avancer vers nos objectifs d’examiner et d’améliorer nos initiatives d’éducation.

De plus, l’ICÉC continue de faire preuve d’une force intérieure en maintenant un dialogue continu avec l’APEC, le CEEC, l’ICEC et l’ICMS. L’ICÉC et le RICS ont récemment

Le Conseil d’administration de l’ICÉC poursuit ses efforts afin de garantir un avenir meilleur pour l’ICÉC et ses affiliés. émis une note d’orientation portant sur le suivi de projet, ce qui fera bientôt l’objet d’une annonce distincte. Cette note d’orientation sera prochainement affichée et facilement accessible sur notre site Web. Au niveau de l’administration, le Conseil d’administration de l’ICÉC poursuit ses efforts afin de garantir un avenir meilleur pour l’ICÉC et ses affiliés. Même si bon nombre d’objectifs ont déjà été réalisés, nous désirons continuer à progresser dans cette direction afin d’offrir encore plus à nos membres et détenteurs de désignation. Au cours de la prochaine année, l’ICÉC fournira les ressources et les outils nécessaires à ses affiliés afin qu’ils puissent mieux promouvoir l’Institut et fournir plus d’opportunités de DPC à leurs membres dans chacune de leurs régions.

Pour faire progresser nos initiatives visant à assurer une couverture plus large à l’ICÉC, nous poursuivons notre plan de marketing, qui comprendra le lancement de vidéos additionnelles.

Une telle couverture saura également stimuler une augmentation des

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pressions pour l’exigence d’économistes en construction dans un plus grand nombre de demandes de propositions et de listes professionnelles. Nous planifions également engager une personne ressource en éducation et marketing pour nous assister dans ces initiatives.

Le Congrès 2016 à Toronto vous réserve un programme technique vigoureux incluant des conférences de professionnels chevronnés de l’industrie. Plusieurs activités sont offertes incluant le tournoi de golf annuel, Clive Evans Living Golf Tournament. Le congrès aura lieu du 24 au 26 juin 2016 à l’hôtel Old Mill de Toronto (voir les pages 12 à 15 de cette édition). J’espère que vous serez au rendez-vous! Joignez-vous à nous pour le diner des présidents où une fête spéciale sera organisée pour souligner le départ à la retraite de Lois Metcalfe. Vous pourrez donc en profiter pour lui souhaiter vos meilleurs voeux de succès et la remercier d’avoir été l’âme de l’ICÉC durant toutes ces années.

Did you know the CIQS is now on Twitter and LinkedIn? If you want to stay connected and contribute to discussions across Canada, follow us on Twitter or join our LinkedIn Group.

We look forward to hearing from you.

Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 5

Executive Director’s Message

A time to start reflecting

Lois Metcalfe

A

s I write this penultimate Executive Director’s message for the Construction Economist, I find myself reflecting over the last 38 years of my tenure with the CIQS. As characterized by a general evolution of time, this period has seen some things remaining the same whilst much else has changed. It is now truly a time to continue capturing those wonderful memories.

Technology has undoubtedly been one of the biggest changes since I started with the CIQS in 1978. At that time, our office equipment consisted of a typewriter, telephone and a dinosaur of a copier. No computer, no fax, no internet, no email, no website, no cell phones or social media. What we had then now seems archaic - but it was critically important at the time.

Our membership information was kept in a Rolodex. Everything important was recorded on those little Rolodex cards – addresses, diploma numbers, payments, etc. White-Out was my best friend! Minutes of meetings were recorded in shorthand and transcribed on a typewriter. The volume of paper was certainly high!

In the late eighties, one of our founding members, Frank Helyar, loaned the Institute our first computer; I clearly recall that it was a Hyperion computer with a 7” amber screen. The Hyperion, which sold for some $5,000, was considered the first ‘portable’ (weighing in at just under 20lbs) MS-DOS computer system released to the market in 1982, a month or so before Compaq released

its ‘portable’ computer, (weighing in at almost 30lbs!).

How wonderful it was, to switch from the electric IBM Selectric typewriter to a machine that that would actually make changes without starting from scratch! No more carbon paper, onionskin or White-Out! Subsequently, our first website was launched; this was indeed substantial progress in an era of continually evolving technology. Initial hesitance to use the technology was fast overtaken by disbelief in how we ever did without it!

Although another major change has been the number of staff resources, which grew from one part-time person to three full-time and two part-time, one thing that has not changed is the dedication of our volunteers who devote endless hours to serve on boards and

Don’t ever question the value of volunteers.

Noah’s Ark was built by volunteers; the Titanic was built by professionals.

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committees, attend career fairs, set and mark examinations, become editors of newsletters and journals, and to help out wherever there is a need. These are the efforts of individuals who characterize the nature of the quantity surveying and estimating profession.

Whilst the CIQS recognizes some of these volunteers through the annual Gordon Pattison Award of Merit and Fellowship, an award such as this simply cannot honour them all. It is through the combined efforts of our many volunteers that the CIQS has been successful, grown strong and progressed to where we are today.

A heartfelt thank you to each and everyone one of you.

In closing, may I repeat a quote from my message in the 50th anniversary book - “Don’t ever question the value of volunteers. Noah’s Ark was built by volunteers; the Titanic was built by professionals.” This applies today, every bit as much as it did when I started with the CIQS, and my sentiment towards volunteers has remained steadfast.

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Editor’s Message

Arif Ghaffur, PQS

The Quantity Surveying Value Proposition – perspective & future

T

oday’s economic climate breeds uncertainty that even Quantity Surveyors providing services in Canada cannot escape. Whilst the supposed demise of the Quantity Surveyor has been predicted for many decades, the profession continues to show resilience in adapting to changing market dynamics. As construction and economics remain interlinked, there will continue to be a demand for the services provided by Quantity Surveyors; however, the question now is whether Quantity Surveyors will be the ones providing these services in the future. Firms offering Quantity Surveying services have seen an erosion of their traditional role, an inability to persuade clients that they are significant contributors to the bottom line, the ever diminishing fees entrenched in a culture of competitive pricing, and the threat posed by full-service rivals seeking to swallow specialist service providers.

The latest recession brings with it a new ‘conventional wisdom’ – that clients no longer require Quantity Surveyors to quantify the cost of a project as new computer software increasingly performs this task. Unless Quantity Surveyors adapt and begin to offer a broader range of services, business will be absorbed by other professionals, (accountants and management consultants cited as notable predators), irrespective of the self-fulfilling notion that only Quantity Surveyors can do Quantity Surveying.

Optimists in our profession believe that their networks, unique expertise and ability to offer lower fees give them a competitive advantage over emerging competitors. Several Quantity Surveying companies have adopted the philosophy “if you can’t beat ‘em, join ‘em”, by expanding professional service offerings to match their new competition.

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Unless Quantity Surveyors adapt and begin to offer a broader range of services, business will be absorbed by other professionals… irrespective of the self-fulfilling notion that only Quantity Surveyors can do Quantity Surveying.

There is of course the ongoing notion of Quantity Surveying businesses in Canada becoming concentrated in the hands of larger companies seeking to dominate market share as they leverage relationships to buy out and build up.

However, this trend has not materialized in Canada as it has internationally, instead creating a referendum on the Quantity Surveyor brand as Canadian customers increasingly reach for the quality of personnel rather than the size of organizations. In an environment of competitive pricing, the value of Quantity Surveying services is declining. The Quantity Surveying and Cost Consulting Services, Schedule of Services and Recommended Charges (Sixth Edition, 2012) suggests fee scales for cost consulting, loan monitoring, value management, life cycle costing and other services ranging from reserve fund studies to dispute resolution and material take-offs. The guide sets out recommended fee scales and

hourly rates, applied to seven different categories of buildings and provides clarity of the framework for Quantity Surveying fees.

Irrespective of such fee guides, in an attempt to reposition themselves to attract clients, some practices have simply stopped calling themselves Quantity Surveyors, whilst others call themselves Quantity Surveyors and offer a myriad of services that encompass a broad service offering and fee structures.

Some however, continue to practise ‘price cutting’, which arguably degrades the value of the services being offered by Quantity Surveyors, industry-wide. What is perhaps undisputable is that Quantity Surveying is an important contributor in the process of delivering projects at multiple points in the construction process, and represents the full spectrum of the construction supply chain. This contribution has to be solution-oriented, be appreciable, and have utility.

Therefore, I would advance the following as a definition for Value Proposition: “A promise of quality delivered by engaging services that solve problems to improve situations (solution-oriented), provide specific benefits (appreciable) and make the service provider a necessity (utility).”

There is a clear need to develop a value proposition attached to our profession, to be seen less as a commodity and more as a professional skill. Moving towards a value driven proposition is the desired approach as, arguably, the future of our profession is at stake. We can either lead the way with a bold new approach, or we can become obsolete as customers and competitors take the lead to define the value of our skill set. This is of course one step of many steps that have been,

Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 7

Editors’s Message

Moving towards a value driven proposition is the desired approach … we can either lead the way with a bold new approach, or we can become obsolete as customers and competitors take the lead to define the value of our skill set. and must continue to be, taken to ensure the progress of the profession.

I was recently reminded of an adage Einstein apparently advocated – one cannot solve problems with the same level of thinking that created the problem, otherwise they risk repeating errors thinking that somehow they will get a different result. A shift is necessary and, I believe, possible.

There is a sustainable argument that our profession is heading towards a management consultancy model which advocates that employees are properly rewarded for their efforts and provides for ownership in the consultancy business based on progression.

The value proposition offered by Quantity Surveying is an ongoing discussion with many parts, which this publication has alluded to before, and which we will continue to analyze as we look at the ‘new normal’ and establish new ways to do business.

Fundamentally, however, I believe that Quantity Surveyors possess an advantage over competitors due to our knowledge of construction, and we must have a concerted value proposition to reflect that. Changing market conditions will require us to adapt, and we are equipped to do so. If for example, it is

all in a name, perhaps we will soon be calling ourselves Construction Economists or some other name that better explains the value proposition.

Talking about the future, please do not forget the 3rd CIQS Congress which will be hosted by CIQS – Ontario on Friday, June 24, 2016 at the Old Mill, Toronto. The theme will be Best Practices for Project Delivery - Striving for Excellence. Accomplished speakers will present at four sessions entitled: 1) Business Case & Financing; 2) Project Budget & Cost Control; 3) Project Execution Plan & Project Case Study; and 4) Completeness of Contract Documents & Issue Management.

The Technical Sessions will involve six ex-CIQS Presidents and presentations/ panel discussions comprising of 12 senior industry professionals who will share their subject matter expertise. The Technical Sessions will be presentations in the context of engineering and construction projects that are facing increasing challenges to be delivered within tighter timelines and increasing budgetary constraints.

Each session will have an interactive component aimed at engaging attendee participation.

Also, on the following evening (Saturday, June 25, 2016) there will be the President’s Dinner and Reception which will honour the President of the CIQS and celebrate the forthcoming retirement of our

If it is all in a name, perhaps we will soon be calling ourselves Construction Economists or some other name that better explains the value proposition.

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Executive Director, Mrs Lois Metcalfe who will have faithfully served the Institute for 38 years and has been the backbone during its formative years and subsequent expansion.

Lois will officially retire in 2016, so this is a fitting event to celebrate her tremendous impact on the Institute among the many friends and colleagues she has touched during her tenure. The 3rd CIQS congress will be one not to miss – this is sure to be a sold out event so please book early!

Lois will officially retire in 2016, so this is a fitting event to celebrate her tremendous impact on the Institute among the many friends and colleagues she has touched during her tenure.

In closing, I hope that you and your families have a wonderful spring. If you have feedback, suggestions and, of course, any articles that you would like to be considered for publication, please reach out to us at editor@ciqs.org.

Journal Online – The Construction Economist is also available in electronic format. Please visit the CIQS website – www.ciqs.org - and press the Publications tab.

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Education Corner

David Lai, PQS (F)

Notes from around the CIQS

1) The CIQS examinations: • The November 2015 examination final result is 81% pass, 19% fail with 20 examinations rescheduled or cancelled.

• The overall examination result for 2015 is 78% pass with 22% fail.

• Based on the May 2015 and November 2015 examination results, the winners of the CIQS annual awards are: • The Frank Helyar Memorial Award (subject 302) – Geng Cao of Prairies & NWT, • The Buster Vermeulen Memorial Award (subject 303) – Mike Watkinson of Ontario, and • The Graham Randal Award (subject 308) – Eric Racine of Ontario.

Congratulations to all three recipients!

Management and Certificate in Economics & Estimate Construction Projects. d) Northern Alberta Institute of Technology (NAIT) – Bachelor of Technology in Construction Management (BTech-CM). e) Sheridan College – Construction Estimator Program.

For details relating to these reviews, please contact the Institute.

3) Membership assessment: Please see the attached membership application summary.

4) Membership Literature: • The Career Book (including the student version) are now updated to reflect the changes to the Education Policy Guidance Notes. Both documents are now posted on our website.

2) Educational initiatives: The following programs were assessed to determine the level of accreditation: a) Campus Notre-Dame-de-Foy – Building Estimation Technology. b) Centennial College – Graduate Certificate in Construction Management. c) Ecole de Technologie Superieure (ETS) – Certificate in Construction

Continuing Education at George Brown College Discover our courses and certificates in construction and estimating. Take advantage of the variety, quality and convenience of our courses. Courses are offered in the evening, on weekends and through distance education.

Our series of CIQS accredited courses, taught by industry professionals, provide opportunities to develop your skills and expand your career potential.

coned.georgebrown.ca/technology Register now!

For more information, contact us at 416-415-5000, ext. 4861, 1-800-265-2002, ext. 4861 (toll-free), or cetechnology@georgebrown.ca.

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Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 9

3rd Annual Construction and Project Management Seminar

Construction Contract Documents

Another successful RICS and CIQS Joint Event Senior industry professionals gather for annual event The CIQS and RICS held their third annual joint event on Thursday, November 19, 2015, with a focus on Construction Contract Documents and the selection of appropriate forms of contract. Arif Ghaffur, chair of the organizing committee, invited Neil Shah, Managing Director of RICS Americas, to provide opening comments. Neil emphasized the ongoing initiatives among the RICS, CIQS and CACQS to advance the profession of quantity surveying in Canada, and introduced this year’s event chair, Alison Castellano, a Director with Altus Group.

Insightful presentations on current developments provided valuable information, ensuring the attendees were focused and engaged. The event offered attendees the opportunity to discuss concerns and emerging trends in the construction industry across

Canada. The sold-out event of over 140 attendees included three presentations by a distinguished panel, including one

by Richard Venerus (Principal, Lawyer & Procurement Leader of RV & Associates).

Richard spoke about the relevance of documents, project outcomes based on selection of contracts documents, and the importance of business relationships.

This was followed by Richard Wong, (Partner, Energy, Construction and Infrastructure, of Osler, Hoskin & Harcourt LLP), who provided attendees with an insightful presentation on the choices ranging from standard forms to bespoke forms of contracts, and associated documents. Richard presented an interesting case study on the Union Station Revitalization Project in Toronto. Union Station will offer many benefits to commuters, including: bigger, brighter transit concourses; more station

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exits and entrances; new PATH connections; repair and rehabilitation of an aging facility; and the introduction of an exciting and revitalized retail presence. The range of improvements requires an assortment of appropriate contract forms, and he illustrated some high-level examples.

Robert Pool, (Senior Director, FTI Consulting) rounded off the presentations with typical issues that arise, and he shared thoughts on reducing negative impacts on the construction process.

Arif Ghaffur, Chair of Organizing Committee

Neil Shah, Managing Director of RICS Americas

Alison Castellano, Event Chair & Director Altus Group

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“Insightful presentations on current developments provided valuable information, ensuring the attendees were focused and engaged.”

Richard Venerus, Procurement Leader, RV & Associates

Richard Wong, Partner, Osler, Hoskin & Harcourt LLP

Robert Pool, Senior Director, FTI Consulting

Ian Duncan, Principal, Atrium Consultants

Sheri Thompson, Chair of CIQS Ontario

David Lai,Director of BTY Group

The flow of the three presentations, entitled Impact of Choices, The Choices and Typical Issues & Approaches, outlined the potential impact of selecting forms of contract and ensuring that contract documents are complete. Presenters discussed the importance of establishing and identifying the appropriate form of procurement method based on the design responsibilities on a Project. The event was concluded by Alison Castellano inviting Ian Duncan (Principal, Atrium Consultants) to provide closing comments. This was a particularly special moment, as Ian and Sheri Thompson, President of CIQS-Ontario presented David Lai (Director, BTY Group) with the Volunteer Award of Excellence.

David was born and raised in Montego Bay, Jamaica and immigrated to Canada in 1986, where he continued to practice as a consulting electrical Quantity Surveyor. He has been an active member of the CIQS for the past 29 years, serving in numerous voluntary initiatives and has participated actively with the CIQS, from Chapter level to Provincial and National

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Boards. David became the Education Administrator for CIQS in 2005. In 2008, he became a CIQS National Board Member and holds that position for 2016, in addition to several other regular duties within the CIQS. David has proudly represented CIQS at the Pacific Association of Quantity Surveyors (PAQS) from 2008 until 2012, which has significantly enhanced the profile of the

Canadian Quantity Surveying profession.

He has been intensely involved in the PAQS initiative to accredit universities internationally, ensuring compliance with QS standards and equivalency in other regions. As Ian stated, “There is not a more deserving person of the Volunteer Award of Excellence.” Congratulations again David Lai, and we look forward to another successful event this year.

About the author Natalie Dione Alexander, PQS, AssocRICS, LEED-AP Professional Quantity Surveyor & LEED Management Member of Organizing Committee

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Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 11

3rd Annual

CIQS Congress BEST PRACTICES for PROJECT DELIVERY – STRIVING for EXCELLENCE

June 24-26, 2016

The Old Mill Toronto • Toronto, Ontario

2016 CIQS Congress Event Program Friday, June 24, 2016 8:00am to 9:15am

Event Registration and Full Breakfast

Guild Hall

3rd Floor

9:15am to 11:00am

Technical Sessions – Breakout #1: “Business Case and Financing”

Balmoral

3rd Floor

9:15am to 11:00am

Technical Sessions – Breakout #2: “Project Budget and Cost Control”

Westminster

3rd Floor

11:00am to 1:00pm

Networking Lunch with Guest Speaker

Guild Hall

3rd Floor

1:15pm to 3:00pm

Technical Sessions – Breakout #3: “Project Execution Plan and Project Case Study”

Balmoral

3rd Floor

1:15pm to 3:00pm

Technical Sessions - Breakout #4: “Completeness of Contract Documents and Issue Management”

Westminster

3rd Floor

3:30pm to 4:30pm

CIQS Information Session (Designation Holders only)

Westminster

3rd Floor

5:00pm to 8:00pm

Cocktail Reception

Guild Hall

3rd Floor

Saturday, June 25, 2016 8:00am to 1:00pm

Clive Evans Living Golf Tournament

Royal Woodbine Golf Course

2:00pm to 4:00pm

Afternoon English Tea

Terrace Room

All Day

Free Day OR Group Activities • Tennis

York Old Mill Tennis Club

• Kayak or Canoe Tour of the Humber River

King’s Mill Park

• Bicycle Tour or Hiking on the Humber River

Humber River

• Scavenger Hunt on Bloor Street

Bloor Street

• “Pub-Hopping” on Bloor Street

Bloor Street

• “Russell’s Runners” in the Humber Valley

Humber River

6:00pm to 11:00pm President’s Dinner / Lois Metcalfe’s Retirement Celebration

1st Floor

Brule A and B

1st Floor

Humber Room

2nd Floor

Sunday, June 26, 2016 8:00am to 10:00am

Farewell Breakfast

For full program details please visit www.ciqs.org/english/congress.

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Morning Sessions Technical Session – Breakout #1: Business Case and Financing Friday, June 24, 2016 from 9:15am to 11:00am • The Balmoral Room, 3rd Floor Session Introduction By: Mr. Joe Pendlebury, PQS(F), CIQS Past President 9:15am to 9:20am Moderator: Mr. Guy Smith, PQS(F), CIQS Past President 9:20am to 9:40am Presenter #1: Mr. Paul Hughes, Senior Director, Cost Consulting & Project Management, Altus Group:

The Process and Components for Establishing a Business Case to allow a Project to be deemed viable 9:40am to 10:00am Presenter #2: Mr. Sashen Guneratna, Managing Director, Infrastructure & Project Finance, PwC Canada:

Considerations, Mechanisms and Sources for Obtaining Timely and Appropriate Project Financing 10:00am to 10:15am Coffee/Networking Break 10:15am to 11:00am Panel Discussion, Q&A Session and Session Close-Out:

Guest panellist, Mr. Domenic Leadsom, PQS, Director, Turner & Townsend CM2R

Technical Session – Breakout #2: Project Budget and Cost Control Friday, June 24, 2016 from 9:15am to 11:00am The Westminster Room, 3rd Floor Session Introduction By: Mr. Ian Duncan, PQS(F), CIQS Past President 9:15am to 9:20am Moderator: Mr. George Evans, PQS(F), CIQS Past President 9:20am to 9:40am Presenter #1: Mrs. Susan Neil, PQS, Executive Vice President, Hanscomb Limited:

The Process of Establishing and Updating the Project Budget 9:40am to 10:00am Presenter #2: Mr. Darren Cash, PQS, Director, BTY Group:

The Cost Control Process During the Construction Stage of a Project 10:00am to 10:15am Coffee/Networking Break 10:15am to 11:00am Panel Discussion, Q&A Session and Session Close-Out:

Guest panellist, Mr. Glenn Hultzer, PQS, Partner, A.W. Hooker

Afternoon Sessions Technical Session – Breakout #3: Project Execution Plan and Project Case Study Friday, June 24, 2016 from 1:15pm to 3:00pm • The Balmoral Room, 3rd Floor Session Introduction By: Mr. Joe Pendlebury, PQS(F), CIQS Past President 1:15pm to 1:20pm Moderator: Ms. Linn Marron-Marshall, PQS(F), CIQS Past President 1:20pm to 1:40pm Presenter #1: Mr. David Stewart, Director, Project Management, The Cadillac Fairview Corporation Limited:

Key Components of Developing a Project Execution Plan and How This Interacts with Other Plans 1:40am to 2:00pm Presenter #2: Mr. Damian Joy, President, MHPM Development Solutions:

Project Case Study of a Successful Landmark Project 2:00pm to 2:15pm Coffee / Networking Break 2:15pm to 3:00pm Panel Discussion, Q&A Session and Session Close-Out:

Guest panellist, Mr. Clarel-David Flavien, Director, Macogep

Technical Session – Breakout #4: Completeness of Contract Documents and Issue Management Friday, June 24, 2016 from 1:15pm to 3:00pm • The Westminster Room, 3rd Floor Session Introduction By: Mr. Ian Duncan, PQS(F), CIQS Past President 1:15pm to 1:20pm Moderator: Mr. Harland Lindsay, PQS(F), CIQS Past President 1:20pm to 1:40pm Presenter #1: Mr. Richard Wong, Partner, Osler, Hoskin & Harcourt LLP:

How to Ensure Completeness of Contract Documents 1:40am to 2:00pm Presenter #2: Mr. Glenn Ackerley, Partner, WeirFolds LLP:

Various Issues that Occur During the Life of a Project and the Approaches to Issue Management 2:00pm to 2:15pm Coffee / Networking Break 2:15pm to 3:00pm Panel Discussion, Q&A Session and Session Close-Out:

Guest panellist, Mr. Sergio Callocchia, PQS, Vice-President, LCO Construction and Management Consultants Ltd.

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Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 13

3rd Annual CIQS Congress

Sponsorship Opportunities

**For sponsorship information, please contact Mrs. Lois Metcalfe at lois.metcalfe@ciqs-ontario.org.

The Old Mill Toronto 21 Old Mill Road, Toronto, ON, Canada M8X 1G5 www.oldmilltoronto.com Te: (416) 236-2641 Toll-Free: 1-(866) 653-6455

facilities, with 16 function rooms and a private chapel, provide one of the largest and most flexible venues in Toronto, attracting a great number of weddings, social events and corporate functions all year round.

The Old Mill Toronto is a heritage boutique hotel with 57 deluxe rooms and suites complete with a luxurious on-site spa. The Old Mill 300-seat fine dining Restaurant has been in operation for 100 years. The banquet

Luxury King Room Traditional Double Room Premium Queen Room

$229.00 $229.00 $229.00

The above room rates are quoted in Canadian funds and are subject to

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13% HST. A Hospitality Fee of $8.00 per room, per night, will be added to the guest room rate and includes daily parking, in-room WiFi, local and toll-free calling, in-room Keurig coffee/tea brewer, 2 bottles of water, evening down-turn service, limited business services, 24-hour access to fitness centre and select concierge services.

The cut-off date for room reservations is June 6, 2016.

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Sponsors of the 2016 CIQS Congress Platinum Sponsors

Gold Sponsors

Silver Sponsors

Bronze Sponsors

Friends of the Institute Sponsors

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Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 15

Project Overview Surrey Biofuel Facility Achievement of Financial Close

The City of Surrey, British Columbia (BC) is implementing the second phase of its Rethink Waste program and its goal is to create a fully integrated model for organic waste management that maximizes the diversion of household organic waste from the landfill and is both economically and environmentally sustainable.

The City of Surrey is procuring a biofuel facility under a Design-Build-Finance-Operate and Maintain model and is receiving PPP Canada funding support. When completed, the facility will be designed to receive and process 115,000 tonnes of organic waste annually and will be the largest of its kind in Canada with a capacity to process 100% of the City’s organic waste, along with commercial organic waste, helping Metro Vancouver achieve its regional 70% waste diversion target. Once established, the facility will process the city’s organic waste into a 100% renewable fuel. This fuel will then be used to power Surrey’s waste collection vehicles, creating a sustainable closed-loop system. The facility will be situated on City-owned property.

The Vancouver Infrastructure and Project Finance practice of PricewaterhouseCoopers LLP provided financial advice to the City of Surrey as follows: ✓ Financial modelling of the public sector comparator (traditional procurement option) and the shadow bid (the P3 option); ✓ Determining value for money to the City of Surrey; ✓ Reviewing the risk analysis in order to assess the appropriate risk transfer and risk sharing between the public and private sectors; ✓ Assisting with the negotiation of the funding agreement between the City and PPP Canada; ✓ Participating in a market sounding to determine the market appetite for the project structure, procurement model and bankability of the envisioned solution;

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✓ Developing a project specific payment mechanism that took into account the implications of a project that includes some merchant risk; ✓ Providing advice on the implications for, and changes needed to, the Project Agreement to allow for proponents to offer a Corporate Finance Solution as an alternative to a Project Finance solution; ✓ Financial modelling to assess the sensitivity of the economic analysis to changes in unit pricing for gas offtake; ✓ Providing assistance in the drafting of the procurement documentation (Request for Qualification (“RFQ”), Request for Proposals (“RFP”) and Project Agreement (“PA”)); ✓ Financial evaluation of RFQ and RFP submissions; ✓ Assistance with negotiations and completion of the project documents through financial close.

The project is currently under construction and the major project milestones were as follows: ✓ May 2013: RFQ launch ✓ May 2013 to Feb 2014: RFQ evaluation, site visits and selection of three proponents ✓ Feb 2014: RFP launch including a series of three collaborative meetings with each shortlisted proponent ✓ Dec 2014: Identification of preferred proponent ✓ Feb 2015: Contract Award ✓ Feb 2015: Construction commencement Members of PwC’s Vancouver team are David Egan, Partner, Catherine Peacock, Managing Director, John Haggett, Director and Joe Hickey, Director and can be reached at their Vancouver office at 604-806-7000.

Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 17

MEMBER INTERVIEW

Guy Smith Guy Smith, PQS(F)

When was your first introduction to construction?

My life in the construction industry began at a very early age – probably when I was about six years old. My father, though originally trained as a quantity surveyor, operated a small residential construction company, and he used to bring me along to his construction sites (safety was not as big a concern in the mid-20th century!). I think those visits to dad’s housing projects planted the seed for my involvement in the industry.

I must admit, however, that a career in construction was not my first choice: my original career plan was to be a fighter pilot in the Royal Air Force, but when that did not work out, it was not much of a stretch for me to make the jump into quantity surveying instead. It was in my blood – literally.

When did you begin your Quantity Surveying career?

Again, I started in quantity surveying very early. After my father left the building profession and resumed his career as a quantity surveyor, he often used to bring his work home with him.

In an effort to help me improve my mental math skills in my early teens, he used to give me stacks of dimensions to extend, and I guess I caught the bug. My official quantity surveying career, however, started when I was accepted into the trainee quantity surveying program with George Wimpey Construction (now part of Carillion plc) in London, embarking on a series of cooperative (“sandwich”) courses in the Higher National Diploma program at Willesden College of Technology in 1973. Wimpey treated me very well: in my various assignments with the

In an effort to help me improve my mental math skills in my early teens, my father used to give me stacks of dimensions to extend, and I guess I caught the bug. company, I got to work as a Trainee (later Assistant) Quantity Surveyor on numerous social and speculative housing projects throughout the United Kingdom, later moving to Canada with the company and continuing my career in housing and small commercial, industrial and engineering projects in Toronto and Edmonton.

What types of role and responsibilities have you held?

After moving to Edmonton in 1979, I had the opportunity to resume my ‘partnership’ with my father (who had moved to Canada in 1976) in a small quantity surveying consulting practice.

I became one of dad’s two partners in the practice, eventually assuming a whole lot more responsibility when he died suddenly in late 1981. My surviving partner and I parted ways in 1983 and I operated the practice as a sole practitioner until the Fall of 1985, when a chance phone call from John Pettie, who was then the leader of the Cost Control and Analysis Branch at Alberta Public Works, Supply and Services, led me into my next role as a Cost Analyst in the branch. My role there was to support cost managers and project managers on a wide range of institutional buildings, including provincial buildings, courthouses and other facilities for our public sector clients. As I progressed into a management role in the department, I

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became responsible for tracking and projecting cost trends and developing construction cost models.

In 2000, I made yet another career change, assuming the role of Regional Manager in the Learning and Housing Facilities Branch in the same department, which by now was known as Alberta Infrastructure. In this position, I worked closely with facilities managers from more than 20 school boards in the northern sector of the province to help them plan their capital and maintenance construction projects. By 2004, I was appointed the Regional Director in the same branch, providing support to the school boards as they planned their annual capital funding requests and leading a team of managers and facilities technologists.

In June 2007, I left Infrastructure to assume the role of Director of the Alternative Capital Financing Office at Alberta Treasury Board. In this role, I was responsible for developing the process and framework for the first public-private partnership project for social infrastructure – a project which would lead to the highly successful Alberta Schools Alternative Procurement (ASAP) program, the first two projects of which I served on as the assistant project director. Through the ASAP projects, we were able to build more than 50 new schools throughout Alberta, two years faster

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and over $150 million less costly on a life-cycle basis than using traditional procurement methods.

In September 2010, I returned to Alberta Infrastructure as the Executive Director of Learning Facilities, leading a team of nearly 50 directors, managers, project coordinators and facilities technologists in delivering a highly ambitious capital construction program for schools, colleges and universities; and managing the expectations of 64 school jurisdictions and 22 post-secondary institutions.

The program continues, and will do so until at least 2018, at which point we will have delivered, or presided over the delivery of, more than 240 projects in a very short period of time.

When I started to plan for my retirement in 2015, I vacated my position at Learning Facilities, moving into the vacant position of Executive Director of Procurement Operations.

In this, the final engagement in my 30-year career with the Government of Alberta, I was responsible for leading a team of procurement professionals to support all the project delivery branches throughout Alberta Infrastructure. In addition, I was responsible for leading the department’s emergency response and business continuity team, as well as records management and freedom of information administration. It was certainly an interesting and fast-paced portfolio with which to finish off my career.

What types of projects have you worked on?

I think the above response demonstrates the wide variety of projects in which I have been involved over the years – everything from social and private housing, through commercial and industrial construction, to a range of institutional projects serving the citizens of Alberta.

Is there a particular project that you would like to tell us about?

Every project has its high and low points, but the one that will stick in my mind the longest will be the first ASAP

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CIQS has been a tremendously strong voice for the quantity surveying profession over the past 50 years and beyond. schools project to build 18 schools in Edmonton and Calgary under a public-private partnership arrangement.

We started out the project as a highly secretive ‘black ops’ project, where we were not permitted to discuss what we were up to during the planning stage.

At that point, we were not even able to discuss the planned projects with the school jurisdictions that would be receiving the new schools, because it all fell under a budget that had yet to be approved.

When the project was finally approved to move ahead, we had a real flurry of activity as we finally started working with the school boards to make sure their needs were met. What we were not aware of at the time was that the Minister of Education of the day was about to announce that we had to shave a year off our planned project schedule; when we heard the announcement, instead of saying “it cannot be done”, we set to work finding a way to make it happen. As it turned out, the project was completed under budget, more than a month ahead of the accelerated schedule, and two years faster than it would have been completed under a traditional approach. We learned a great deal on that project, not only about P3s (this was the first P3 project of its kind in western Canada, so we were developing a lot of the processes as we went along), but about the ability of a well-structured and motivated team’s ability to take on and meet a challenge.

How do you see the CIQS as being the advocate for our profession?

CIQS has been a tremendously strong voice for the quantity surveying profession over the past 50 years and beyond. From the ‘founding fathers’ of our profession, all the way through to our current leaders, there has been a gradual, but positive increase in the level of understanding and

acceptance of our role in the industry.

Our educational standards and codes of ethics are strong, and we are now gaining footholds in the academic community across Canada. None of this would have been possible without the dedication of our leaders, both at the corporate and at the regional level, through the years. We may not always agree with the directions that our organization’s leaders have chosen for the profession over the years, but I think we can all agree that CIQS has made great strides as a recognized profession in a comparatively short timeframe. I look forward to a time when CIQS is acknowledged as an organization to which governments listen when developing policy directions and capital development strategies, much as the RICS is a leading advocate for the industry in the United Kingdom.

What has been your approach to Continuing Professional Development?

If we are to continue to grow as a recognized profession, it is essential for us to continue to grow as individuals within the profession.

Therefore, a strong, well-administered Continuing Professional Development program is essential to the ongoing healthy growth of our professional capacity. But my belief is that growth does not necessarily have to be restricted to reading more and attending more courses on quantity surveying-related subjects; indeed, our profession is so widespread and diverse across so many disciplines that it behooves us to stay current on many different aspects of the construction industry, on management and leadership trends, on marketing, on climate issues, and even on the political and economic environment.

The more well-rounded our professional education is, the better we can serve our customers.

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I worry about the dilution of the profession if we do not pay constant attention to our education standards and to making sure that we continue maintaining strict admission and qualification standards.

What challenges do you see for Quantity Surveying?

Moving to formal recognition as a recognized profession, in the same way that accountants, lawyers, architects and engineers are recognized, continues to be a slow and challenging process. I believe this is a challenge that will eventually be overcome, but the process is extremely painstaking and time-consuming.

We also have to be sure that the work that our professionals do is wellgoverned and well-protected. Many times over my career, I have seen unqualified people hang up their shingle and bring the profession into disrepute when they do work that they are not qualified to do, then disappear, leaving the profession to clean up the mess.

As the profession matures, we have to pay attention to the fact that many of its most senior members are ‘baby boomers’ and as such are preparing to leave the profession; this is going to leave a large ‘knowledge gap’ if the transfer of knowledge is not wellconducted by the departing leaders.

I worry about the dilution of the profession if we do not pay constant attention to our education standards and to making sure that we continue

maintaining strict admission and qualification standards. So, my advice to the leadership of the profession would be to ensure that we stay the course on making access to Designation Holder status accessible, but highly challenging, for those who would seek to move forward in the profession.

What opportunities do you see for Quantity Surveyors?

Access to technology and to solid educational programs related to the profession improves every year.

We, as a profession, need to remain on the leading edge of development of these tools.

We are on the forefront of a wave of property development across the country, even though the economy remains somewhat in the doldrums.

This is a perfect time for our profession to be marketing itself and branding itself, as our partners in the RICS have done, as the leaders in the planning and development of property across North America and the Caribbean. I believe we must leverage our connection with RICS to support the growth of our shared profession to enable the continued growth of both organizations.

Do you have any concluding thoughts?

We must carefully monitor the progress of the post-secondary educational programs geared toward Designation Holder status to ensure that we continually improve them to make them attractive to the young men and women seeking to make quantity surveying a viable career option. It is about the people: I have had the great fortune to work with some fantastic, motivated, highly professional, intelligent and witty people over my years in the construction and property industry, and particularly in the quantity surveying profession. In over 40 years in the ‘property business,’ I can honestly say I have never wanted to change my career path – probably because I have had access to so many diverse and challenging branches of the profession throughout my career.

My last word has to be about our Executive Director, the beating heart of this institute. In a very short time, the Executive Director of this organization, Lois Metcalfe, will be retiring from her role. Nobody, whether intimately connected with the leadership of the profession, or indirectly connected as a client or consultant, should ever underestimate or overlook the tremendous contribution that Lois has made to our profession over the past four decades. Lois grew up in the organization, and the organization grew up because of Lois. She will be missed, and very difficult to replace.

Best wishes for a long and happy retirement, Lois!

Mr. Guy Smith, PQS(F), was elected as the 28th CIQS President in 1996. He has over 40 years of experience in the property development industry. Prior to immigrating to Canada in 1977, Guy worked with one of the largest construction corporations in continental Europe. He joined the Government of Alberta in 1985 and was the Executive Director, Learning Facilities and Alternative Procurement at Alberta Infrastructure. He retired from the Alberta Public Service in October 2015.

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QUANTITY SURVEYORS, ESTIMATORS, PLANNERS A leading Cost Consulting and Project Management firm requires the following candidates for its Montreal and Ottawa offices: Junior, intermediate and senior level Q.S.’s, Estimators and Planners with experience on: • Commercial and institutional projects • Industrial projects (oil/gas, refineries, mining, metallurgical).

We offer competitive salaries, benefits, training and potential for growth. Relocation assistance will be provided.

We sincerely thank all applicants, but only those candidates which meet our requirements will be contacted.

Please send resume in strictest confidence to: LCO - Construction and Management Consultants Inc. Fax: 514-846-8913 | Phone: 514-846-8914 | E-Mail: MONTREAL@LCOGROUP.COM

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Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 21

Escalation remains low, workloads steady – An overview of Canadian markets

By Michael Gabert PQS, Director, BTY

Increased infrastructure spending will strengthen construction across Canada in 2016, as overall economic growth remains slow but steady in the lowoil-and-commodity price, and lowervalue dollar environment. The added infrastructure spending, led by the federal government and oil producing provinces, will help offset moderation in residential sector and lower private-sector investment in non-residential construction. Low interest rates and low-cost oil make this an opportune time for increased spending on infrastructure projects. Low rates make borrowing more attractive, and low energy costs are especially beneficial for energy intensive engineering projects such as roads, bridges, transit, and water and wastewater treatment facilities.

The federal government has pledged to double existing infrastructure spending from $5b to $10b a year for the next two fiscal years. Over 10 years, its infrastructure spending would almost double, from $65b to $125b. Canada’s high immigration – in the range of 250,000 people annually – will continue to bolster population growth, which drives both construction demand and economic growth. Canada’s ability to attract high levels of foreign direct investment also augurs well for stable near-term construction activity – and more robust levels in the longer-term.

“The federal government has pledged to double existing infrastructure spending from $5b to $10b a year for the next two fiscal years.”

British Columbia will be one of the provinces at the fore front of growth in Canada, with still-strong residential and commercial activity complemented by large energy projects that are ramping up. Alberta’s major spending increases on infrastructure will cushion the impact of sharp declines in oil and gas investment.

Saskatchewan is making a record investment in infrastructure projects to counter the softness in the oil, gas and mining sectors. Manitoba will surge on energy projects and Canada’s second highest rate of population growth.

Boosted by rising U.S. demand and a lower-value loonie, Ontario will also be a front-runner with stronger performance in almost all construction sectors. Quebec is expected to accelerate growth with improving exports and a new round of major transportation and social infrastructure projects. Atlantic Canada will see modest growth overall, with Nova Scotia leading and Newfoundland and Labrador lagging due to reduced oil and gas revenues.

Major banks forecast that Canada’s GDP growth will range from 1.8 to 2.2 per cent in 2016 and 2.0 per cent

to 2.5 per cent for 2017. The Bank of Canada is expected to continue keeping interest rates at or near historic lows of the last decade, but may be forced to raise them if the U.S. announces a rate hike. A higher rate would help to dampen inflation, which should also help keep overall construction escalation low in 2016.

Downward pressure on pricing is coming from: • Forecast for continued modest growth • Lower oil prices • Softer commodity prices Upward pressure on pricing is coming from: • A still weakening Canadian dollar • Increased spending on infrastructure • Continuing high immigration • A still strong residential sector Escalation Summary Ontario: 2016: 1% – 2% British Columbia: 2016: 1% – 2% Alberta: 2016: 0% – 1% Saskatchewan: 2016: 1% – 3% Manitoba: 2016: 1% – 3% Quebec: 2016: 0% – 1% Atlantic Provinces: 2016: 0% – 1% About the author

Michael Gabert is a Professional Quantity Surveyor and a Director on the CIQS Board for the Prairies and Northwest Territories. He is also the Directorin-Charge of BTY’s practices in the Prairie region, which is one of Canada’s leading firms for Cost Management, Project Monitoring and P3 Advisory services.

Email: MichaelGabert@BTY.com

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Aspiring Professionals Corner

ASPIRING PROFESSIONAL QUANTITY SURVEYOR

GENG CAO

Junior Estimator, Universal Flooring Systems

H

aving received my Degree in Management and Science in China, and with the help of a $1,000 scholarship from the American Concrete Association in 2013, I graduated from the Civil Engineering Technology program at the Southern Alberta Institute of Technology (SAIT). I was very pleased to have received this scholarship which was recognition of my previous academic performance. As an international student, I always felt that I had to work twice as hard as usual in order to graduate from SAIT, as failing was not really an option. The first course of the year was really tough because I could not grasp what my instructor was saying during class, mainly because English was a second language to me.

When I attended the first class of the program which was a math class, I could not understand the terms ‘plus, multiply and divide,’ until the instructor drew the symbols on the whiteboard. This motivated me to study harder, so that I could understand such fundamentals, and I did much of this in my own spare time after class. When the second year started, I took the opportunity to become a tutor, which required me to answer questions of first year students. This significantly enhanced my English by allowing me to listen and speak more often, so that I became more and more fluent in written and spoken English.

I am very grateful to my instructors in SAIT. They understood how challenging it is for international students such as myself. They were always there when I needed them. I would like to particularly thank my instructor, David Pratt, who provided me with a detailed understanding of estimating and costing in the construction industry and introduced CLICK HERE to return to Table of Contents

I was very pleased to have obtained my Certificate of Engineering Technology (CET) in December 2015 and am really looking forward to advancing my career in Canada, and being a valued member of the CIQS. me as a student member of CIQS. David always provided me with great guidance, which I continue to follow as I progress in my chosen profession.

I would also like to thank Wendy Hobbs, whom I met for the first time at the industry night of Civil Engineering Technology in 2013. Wendy was working as a cost consultant and provided me with a more detailed description of estimating and cost consulting. Wendy provided me with the opportunity to move forward as an aspiring Professional Quantity Surveyor as the first step of my career. My educational background provided me with a solid foundation to further build my accomplishments and create a platform for my career.

Two days after having graduated from SAIT, I started my first full time job at Universal Flooring Systems Ltd. working as a Junior Estimator. Most of my work involved carrying out traditional quantity surveying such as establishing bidding documents, reviewing and pricing various aspects of construction projects.

This was very satisfying, as I built a reputation for assisting the company in achieving its goals, such as proactively implementing value engineering.

When I was a student, instructors would constantly tell us, “Time is money for the construction industry.”

I did not realize how true this was until I became an estimator. Most of

the time, an estimator is working on opportunities for future work with a particular characteristic of there being many deadlines. The bidding process is extremely competitive and the lowest price inevitably wins, usually meaning tight profit margins.

After a year of working as a Junior Estimator, I joined the CIQS as an associate member in 2014 with a particular objective of continuing my professional and career development.

I took ‘Exam 301’ in 2014 and ‘Exam 302’ in 2015 and was awarded with the 2015 Frank Helyar Memorial Award for receiving the highest mark in Subject #302 Measurement of Construction Works – Practical Exam in 2015. This was the first time in my life that I had taken an exam that lasted six hours!

I was very pleased to have obtained my Certificate of Engineering Technology (CET) in December 2015 and am really looking forward to advancing my career in Canada, and being a valued member of the CIQS. Geng Cao (also known as Allen) is a graduate of SAIT from the Civil Engineering Technology program. Allen obtained his CET in December 2015.

He currently works as a Junior Estimator at Universal Flooring Systems Ltd and is working towards the Construction Estimator Certified (CEC) designation.

Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 23

Professional Sustainability Corner

Administrative, Technical and Human Systems in Organizations

The Unknown System and Relevance to the Construction Industry

Craig Woodall

In the last edition of the Construction Economist we talked about change and the fact that, while we all recognize the need for change, it is often difficult to implement and to see through to completion. This article will build on that theme, looking at the systems that form the backbone of our industry and organizations, and ask the simple question – why are we choosing to ignore possibly the most important of the three systems – the Human System?

The Three Systems Administrative Systems are the essential, but bureaucratic procedures, and processes that allow our organizations to function. These encompass everything from human resource polices around vacation time, to the quality manuals that we rely on to ensure a consistent and predictable outcome to everything that we do.

Without our Administrative Systems we would struggle to operate. With no governance or rules to control actions, our organizations would quickly deteriorate into anarchy. As a result, the Administrative Systems are typically well established. Even in new organizations, we rely on our past experience to quickly create a solid Administrative System.

Countless books and research have been presented discussing the optimal system to allow your organization to run as efficiently as possible. In well-run organizations, the Administrative Systems are the most efficient of the three; while there is room for improvement, the impact on our business will be limited.

Technical Systems are the systems related to the tools that we use to perform our Work. For estimators,

this can be an automated take-off system for producing estimates or, for designers, a CAD system for producing deliverables. Whilst our Administrative Systems dictate what we will and will not do, our Technical Systems provide the tools to complete the Work. Technical Systems are similar to Administrative Systems in that they are typically wellestablished, although they change on a more regular basis due to advancements in technology. Our organizations are constantly looking at the emerging trends in Technical Systems and implementing change initiatives to incorporate them into our business, in order to give us a competitive advantage. Due to the constant drive to update Technical Systems, they are somewhat less efficient than the baseline Administrative Systems, but they are, none-theless, fairly efficient in a well-run organization.

Human Systems are the third type of system in organizations, are the least understood and therefore the least efficient.

These are the soft systems that are related to our people - how they act, their values and beliefs, what drives them

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Human Systems influence all aspects of our business, including safety, communications, quality and performance management. personally. Human Systems influence how our teams communicate, solve problems, stay motivated and achieve a sense of belonging. Human Systems, by their very nature are far more intangible than the other two systems; they do not follow rules and are susceptible to emotions and a whole host of other variables. Due to the difficulty in capturing the essence of Human Systems, they have been ignored for many years, overlooked and misunderstood. As a result we have been unintentionally harming our organizations by missing the opportunity to improve one of the three critical systems. The good news To return to Table of Contents CLICK HERE

Human Systems, by their very nature are far more intangible than the other two systems; they do not follow rules and are susceptible to emotions and a whole host of other variables. is that, as it is the least efficient of the three systems (probably less than 30%) it also has the most room for improvement. We just need to work out how to acknowledge, understand and improve these systems.

Interrelationship As a simple way of looking at how the three systems work together, let us consider how they interact, using automobile driving as an example.

If we consider the rules of the road, (created by government to determine what we can and cannot do on the highways), to be the Administrative System, without these rules a simple journey would involve huge risks.

Now consider the car itself, (engine, steering wheel and pedals) to be the Technical Systems, they are the tools that are used to make the vehicle go in a certain direction at a certain speed. In this analogy, both the Administrative and Technical Systems are the same in every vehicle in a particular model line.

The variable is the driver, i.e., the Human System. There could be a thousand identical vehicles on the road and each will have a different driver with emotions, fears, physical and psychological differences. The other interesting thing about the driver is that every time they sit behind the wheel there are multiple variables that impact their ability to drive the car, always changing and impossible to capture in a process or procedure.

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Relevance Now let us look at how these systems work in our industry and, more importantly, what we do when they do not work. I am sure we have all been involved in projects that have had some serious technical or commercial challenges. I have had more than my fair share. Our profession is often involved in the claims process that ensues when things do not go according to plan. Our investigations typically focus on the Administrative and Technical Systems that were in play: was there a lack of governance, were the technical checks carried out in accordance with procedures, was the project resourced sufficiently, and so on? Once the claims are resolved, most companies, after licking their wounds, will conduct a lessons-learned to identify what went wrong and the results normally lead to some change to the Administrative or Technical Systems, sometimes both. A committee will assign a task force to investigate, and the output is invariably a new process or procedure to ensure that the event cannot possibly happen again... and 12 months later it happens again!

How can that be? Surely our changes to the Systems removed the risk? The problem is that our industry rarely investigates the Human System, this is the equivalent of the police investigating a car crash and only checking the road signs and mechanical systems on the vehicle and not even talking to the driver or witnesses. If the police did that we would be appalled, yet we do exactly

the same thing, time and time again.

How can this happen, you ask?

The primary reason is that it makes us very uncomfortable to investigate, challenge and push for changes in the Human Systems. It is much easier to push for procedural changes as there is less likelihood that our egos will be exposed, and a procedural change is relatively easy to implement. A change to our Human Systems needs significant support and ongoing investment. By way of example, something that crops up in almost every lessons-learned output that I have seen is the issue of failed communication. At some point in the project, there will have been a breakdown in communication that contributed to a negative outcome. Our typical approach perhaps identifies: the need for some additional controls on the project, additional team meetings, implementation of an action-tracking tool, or a new procedure around the sharing of files using a new tool. It is unlikely that we will dig into the breakdown in communication and get to the root cause, what fear was present that prevented someone from speaking up, whose ego drove them to make a poor decision in order to protect their image etc. These are the real issues that play out in our Human Systems on a daily basis, yet we choose to ignore them rather than face the truth and take the difficult step of intervening to correct the wrong behaviour or misguided belief.

This issue plays out in another area of our industry with potentially much more serious consequences, i.e., safety. We have created so many Administrative and Technical Systems to ensure that our projects are safe that we unintentionally create dangerous situations; we do not always allow the Human System to intervene. I recently witnessed this first-hand. I had a cable company at my residence to install a new phone line. The contractor reversed

Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 25

An area that can benefit significantly from increased awareness of Human Systems is the process around annual performance reviews. his vehicle onto my driveway and upon exiting his vehicle he promptly placed a traffic pylon behind his vehicle.

When I questioned why he did this he proudly told me that it was for safety, his company took safety very seriously and he had a procedure that stated that he must place the pylon every time he stopped at a work location.

What this procedure (Administrative System) actually did was create a trip hazard, an unintended consequence, but it was enforced with such enthusiasm from the highest level of the organization that the ability for the individual (Human System) to even comprehend the new risk and overrule it was severely diminished.

It was more than his job was worth to challenge the procedure so he instead spent four hours tripping over and walking around a completely redundant pylon. I am not suggesting for one moment that we do away with safety rules. (They are mostly well meaning and serve to protect us in the majority of situations.) I merely use it as an example of how our reliance on

Administrative and Technical Systems can have unintended consequences.

An area that can benefit significantly from increased awareness of Human Systems is the process around annual performance reviews. Some recent research that has been conducted highlights that in many of our organizations there is a procedure that states that every employee will have a performance review every 12 months (Administrative System). The company then focuses on filling in the form (Technical System) and diligently tracks the percentage completion and strives to drive it nearer to 100%. There is very little focus on the actual quality of the interaction between employees and their superiors. In fact, in one organization I visited, I asked two simple questions: 1) Have you had an annual performance review discussion in the past 12 months?

2) If the answer to question 1) is yes, was it a meaningful discussion or a check the box exercise?

Alarmingly, while the answer to

QS Online Cost Consultants Inc. Halifax, Nova Scotia p. 902 405-1504 halifax@qsonlinecostconsultants.com www.qsonlinecostconsultants.com

26 | CONSTRUCTION ECONOMIST | www.ciqs.org | Spring 2016

question 1) was over 80% positive, less than 30% of the respondents thought the review was meaningful.

Focusing purely on the metrics associated with a technical system mean we overlook the importance of the associated Human System. In this case the company was able to proudly announce that it had achieved its stated goal, while the employees were left wanting.

Challenge So enough with the examples, I am sure that by now you understand the concept. The more difficult question is, what can we do about it? One of the main reasons that Human Systems have been neglected for so long is that, in order to improve them, there is a different level of investment required.

A change in Human Systems cannot be achieved just by investing time and money. An organization, its people and leadership have to invest emotionally in it. They have to strive for a higher level of self-awareness and, to achieve that, they need to challenge their beliefs and question their behaviours. This is not something that can be achieved easily or quickly. We need support and coaching as we change our cultures to acknowledge the third system. It all comes back to change. Are you willing to give something up so as to create a better future for yourself, your people and your organization?

About the author Craig Woodall is the President and Owner of Byng Leadership Inc. He has over 25 years of experience leading teams, projects, organizations and individuals. His passion is Leadership Development, helping people and organizations grow by maximizing their leadership potential.

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CIQS Awards

io n t la u t a r g n o C

s!

Congratulations are extended to Geng Cao of CIQS – Prairies and NWT and Mike Watkinson and Eric Racine of CIQS – Ontario who were awarded the 2015 Awards. Geng received the Frank Helyar Memorial Award for receiving the highest mark in Subject # 302 Measurement of Construction Works - Practical Examination. Mike received the Buster Vermeulen Memorial Award for receiving the highest mark in Subject # 308 Cost Planning. Eric received the Graham Randall Award for the highest mark in Subject 303. All recipients receive $500 plus a certificate of achievement. Awards will be presented to Mike and Eric at the 2016 Congress in Toronto at the Information Session. Wendy Hobbs, CIQS Prairies and NWT President, will present Geng with his award in Calgary.

The CIQS Award Fund operates on donations and continues to grow due to the generosity of Designation Holders and firms. For more information on the CIQS awards or to make a donation, please contact Lois Metcalfe at execdir@ciqs.org.

CIQS Examinations The next session of CIQS examinations is November 2016. The early bird deadline to register ends June 30, 2016.

No registrations will be accepted after September 1, 2016 (no exceptions).

Designation Holders should register online in the member’s only section.

Important Dates re 2016/17 Membership Fees • 2016/17 invoices for membership fees were sent to all Designation Holders in February 2016 • Membership fees were due April 1 • A late penalty of $50.00 will automatically be added if fees are not paid by June 1 • Termination date for members who have not paid is September 30 Payment may be made online in the member’s only section, by telephone or by cheque. Payments made by mail must include accompanying licensing and CPD forms (if applicable).

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To qualify for a reduction in fees as a Retired PQS or CEC please note the CIQS definition of a Retired Designation Holder - “A Professional Quantity Surveyor (PQS) or Construction Estimator Certified (CEC) who has retired and does not accept employment or commissions within the quantity surveying profession during this retirement may transfer to the Retired category.” Designation Holders who are eligible for this discount please contact Aliya Karim at assistant@ciqs.org; telephone 905-477-0008; toll free 1-866-345-1168.

Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 27

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Épreuve # : 2

Congratulations to the following “Designation Holders” who have qualified as a PQS or CEC (including reinstatements): CIQS – British Columbia Brent Armstrong, CEC Andrea Bellisomo, PQS Qiong Huang, PQS Anastasia Kalinina, CEC Frank Lin, PQS Daniel Nakaoka, PQS Walter Schroeder, CEC Benjamin Thompson, CEC

CIQS – Maritimes Ian Anning, CEC Shawn Murchison, CEC Amanda White, PQS

CIQS – Members at Large Kaseem Adewumi, CEC Gnanasegar Angappin, CEC Victor Ayegba, PQS Asif Bashir, CEC Ramy Elbahnasawy, PQS Ashraf Hammadi, PQS Hakeem Lasisi, PQS

Ho Yim Li, PQS Sumira S. Munasinghe, PQS Olukayode Solomon, PQS Cecil Stegman, CEC

CIQS – Ontario Paimal (Al) Amin, CEC Rasha Al-Attar, CEC John Barrett, PQS Kevin Buchanan, PQS Paul Jardine, PQS Amir Kia, PQS Rajesh Kumar, CEC Vicky Wai Kei Lam, PQS Annie Liu, PQS Sornalingam Mahalingam, CEC Yeun-Sung Park, PQS Greymi Peralta, PQS Gerard Power, CEC Abdur Razzaque, CEC Taimoor Sheikh, PQS Shirley Tolentino, PQS

CIQS – Prairies and NWT James Anekwe, CEC Eduardo Cuaresma, Jr., CEC Dean Haw, PQS Ross Huartt, PQS Faizur Rahman Khan, PQS Dongwoo Kim, CEC Branislav Lapin, CEC Stephane LeBlanc, CEC Mark Mabao, CEC Robert Phelan, CEC Ken Pozdnikoff, CEC Sam Saleh, PQS Saeed Vafaei, PQS

CIQS – Quebec Michael Atalla, CEC Jean-Alexandre Bouchard, PQS Glen Malvar, CEC Claudiu Marosan, CEC Michel Ménard, CEC

W. John Porter, PQS It is with great sadness we announce the passing of W. John Porter, PQS on Friday, March 18, 2016 at the age of 61 from a battle with cancer. John was a long standing member of CIQS and respected by all who knew him. He was an Electrical Quantity Surveyor and was a Senior Director of Altus Group in Toronto for the last 25 years. Beloved husband of Anne King Chun. Loving father of Bryan and Elaine. Proud Grandad to Quentin. Dear brother of Frank, Shirley, Christine and Joy. Our heartfelt condolences to John’s family, friends and colleagues.

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Spring 2016 | www.ciqs.org | CONSTRUCTION ECONOMIST | 29

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