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WINTER 2015

More for Less Minimum design for maximum output

100 Days into our Campaign for Better Procurement


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Consulting Matters

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November 2014

CONTENTS

30

Strategy for Diversity and Inclusiveness

14 32 Australia Post puts an environmental stamp on headquarters Industry updates Industry updates

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What’s happening in Consult Australia From the President

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From the CEO

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Champions of Change

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More for Less: 100 Days into our Campaign for Better Procurement

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State Division updates

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Getting more for more Industry comment

How government policy on super can have downstream affects for infrastructure

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More for less: let’s look inside our firms too!

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Protecting your business Liability for Subconsultants

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Corporate social responsibility AECOM partners with the Red Cross to improve disaster resilience

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Minimum design for maximum output - the psychology of project development

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More for less or how to optimise business outcomes through a modern asset management approach

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Not a member of Consult Australia?

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Features Champions of Change endorse Strategy for Diversity and Inclusiveness

Getting more for more

Project case studies Creativity combines with know-how to provide more for less

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Australia Post puts an environmental stamp on headquarters

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To find out more about how your firm can benefit from membership contact Consult Australia’s Business Development Manager, Jennifer Kelly on (02) 8252 6712 or email membership@consultaustralia.com.au www.consultaustralia.com.au


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Consulting Matters

Industry updates

Industry updates NEW APPOINTMENTS Waterman 2015 and beyond After 21 years as Chairman of Waterman (Australia) John North has retired with effect from May this year. With John’s departure Waterman’s new senior management team comprises of Ben North as Managing Director and Richard Nicoliello as Director of Operations. Both Ben and Richard have a long record of service with Waterman having been with the company for 16 and 15 years respectively. During that time Ben has spent the past eight years as Director, working in the Sydney, Brisbane and London offices while Richard has been a Director for the last six years in the Sydney office. Client focus facilitates NDY management restructure Norman Disney & Young’s (NDY) recent shareholder’s meeting has seen the promotion of a number of Directors to strategic positions. Sam Aloi (top) has been promoted from Melbourne Office Manager to the role of Australian Regional Director, with responsibility to overview the strategic direction and operations of NDY’s eight Australian offices with fellow Director and Perth Office Manager Alan Edler appointed as a second Australian representative on the NDY group Executive. Tim Spies (bottom) has been appointed as the incoming Sydney Office Manager and NDY board member Patrick Fogarty is now Director, Clients & Strategy, with fellow Director George Balales heading up the newly created role of Director, Engineering & Operations. SLR appoints Peter Smith as Technical Director SLR Consulting has recently appointed Peter Smith as its Technical Director in the Environmental Management, Planning and Approvals team. Peter has been responsible for managing and overseeing environmental management matters on a wide range of successful mining, industrial and power and energy projects within the public and private sectors over the past 20 years.

Hyder appoints Rob Dagnall as Business Leader for Building Services Group Rob Dagnall has been appointed to the position as Business Leader - Building Services Group in Hyder Consulting’s Australia Pacific region. Rob joins Hyder from his previous position as MEP and Specialisms leader and Technical Director for Aecom. Rob is a Mechanical Services Engineer with over 20 years’ experience in Europe, Asia, Australia and the Middle East. He has held key positions in or led the Building Services design teams of several high profile, Commercial, Mixed-Use, Healthcare and Transportation projects.

status. These are organisations which not only record high employee engagement scores but also deliver outstanding people practices. The Aon Hewitt survey was completed by 329 employees at WGE. In Aon Hewitt’s Best Employers study for 2014-15, 148 organisations and over 92,500 employees participated. “We did not start this journey to win awards. We did it because we really wanted to make this a great place to work”, WGE’s CEO José Granado says.

Hyder appoints Andrew Kyriacou as Director for Rail Andrew Kyriacou has been appointed to the position of Director for Rail in Hyder Consulting’s Australian Transport team. Andrew joins Hyder from his previous position as General Manager for Rail, Road and Freight Group at Vic Track leading capital projects throughout Victoria and freight logistics & operations at the Dynon rail precinct. Andrew was previously responsible for building and leading the Victorian rail engineering and project management team at Parsons Brinckerhoff as Rail Executive for VIC/SA/NZ. Jon Clements to drive strategic reform as 76th National President of Australian Institute of Architects Jon Clements has been inaugurated as the 76th National President of the Australian Institute of Architects at their Annual General Meeting. Melbourne-based Clements is a founding director of multi-award winning practice Jackson Clements Burrows Architects (JCB) and takes up the role following nine years on the Victorian Chapter Council and three years on National Council including a tenure as the Victorian Chapter President, 2012-2014. Ken Maher, former NSW Chapter President and 2009 Institute Gold Medallist, has been appointed President Elect.

Editor Kisanne Dulin

President Matthew Harris

Chief Executive Officer Megan Motto

Director – Policy & Government Relations Jonathan Cartledge

Director – Marketing & Membership Kisanne Dulin

Senior Advisor, Policy & Government Relations Robin Schuck

Business Development Manager Jennifer Kelly

Manager – Events & Education Alexandra Hopper

Corporate Designer Voltaire Corpuz

OTHER NEWS Congratulations to Wood & Grieve Engineers (WGE) for achieving Aon Hewitt “Best Employer” status for the 4th year in a row! Each year an elite group of organisations across Australia and New Zealand achieve Aon Hewitt Best Employer accreditation

Editorial submissions kisanne@consultaustralia.com.au

Advertising enquiries info@consultaustralia.com.au Consulting Matters is produced by Consult Australia. Phone: (02) 9922 4711. Website: www.consultaustralia.com.au


Consulting Matters

June 2015

For consulting firms in the built and natural environment by Phil Ruthven

On sale now To purchase your copy go to http://bit.ly/2015snapshotandforecast

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Consulting Matters

Industry updates

From the President chain and the demonisation of risk in the construction and infrastructure sectors. This has resulted in risk being misunderstood, underestimated, and poorly managed (usually through arbitrary shifting it via the contract onto other parties). It is critical that we improve our productivity as a sector, yet our report demonstrates clearly that these trends, and the procurement behaviours that are resulting from them, are only serving to add costs to projects and subsequently the community through lost GDP.

As a quantity surveyor, much of my professional life has been focused on the numbers. Getting them right is critical to restoring confidence in the construction industry’s ability to deliver. But as my career has progressed, I have come to realise that getting the people and behaviours right is more of a game changer when it comes to project success. This is why Consult Australia’s campaign around our More for Less report is so important. For decades now, the shifting sands of the delivery model of major projects has seen a number of worrying trends; the gutting of capability from public sector clients, the segregation of proponents in the supply

This is why our industry needs a massive mentality shift from our business as usual model. Typically “more for less” translates for the consulting sector as more hours and risk for less compensation. The focus on commoditisation of hours in a sector that delivers its prime value through complex thought and problem solving is damaging to sustainable business models, but more importantly, crushes the spirit of innovation and creativity which makes our industry a great place to work for young professionals. The future is in good hands…so long as they stick around. We need to consistently challenge and expand on the understanding of value for money which is still too often seen as lowest cost…resulting in a race to the bottom. In the same way that industry is starting to appreciate the need for a structured methodology for a broader cost benefit analysis for substantial infrastructure projects (to assess benefits such as social cohesion and improvement, long term economic uplift, national reputation and other intangible factors), so too must we consider the bigger picture of project outcomes when embarking on the procurement process.

So it’s not just the added direct costs to projects due to risk premium pricing or reduced competition (which the report measures) that we should be worried about. It’s the consequential breakdowns in relationships and adversarial behaviours that add direct costs through miscommunication (at a minimum) and disputation (at the extreme), as well as intangible outcomes such as loss of reputation and increased stress/reduced happiness (which this report does not measure) that should concern us. We should be concerned because it stifles innovation and productivity improvements in our industry…the economics are important. But even MORE important in my opinion is that it makes us a less attractive career option for bright young minds looking for future work opportunities. If we are to be an industry of first choice for young graduates, we need to establish more productive, collaborative and innovative cultures in our businesses and on our projects. This will never happen while we continue to promote the opposite through the risk shifting blame game that our current procurement and contract regimes imply.

Matthew Harris President

For decades now, the shifting sands of the delivery model of major projects has seen a number of worrying trends; the gutting of capability from public sector clients, the segregation of proponents in the supply chain and the demonisation of risk in the construction and infrastructure sectors.


Consulting Matters

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From the CEO Our program of activity will be geared towards tangible outcomes, and we will be accountable to our members to achieve them. We will face a wall of cultural change and perverse incentives, but the first step of making the case for change is now complete. Perhaps it was unfortunate that the GFC and resulting downturn was not severe enough to wake us from our malaise. It seems creativity and leadership are best bought to the fore when you have your back against the wall.

Australia’s government and economy find themselves at a crossroads. Having ridden on the coat tails of political reformists of the 80’s and 90’s, a period coinciding with a 20 year resources boom and the resulting economic prosperity, we now find that what was working in the past is unlikely to help us in the future. We know that we need to embark on a fundamental reform program to affect seismic shifts in our national productivity, but the pathway to get there is not so clear. Albert Einstein once said “The definition of insanity is doing the same thing over and over again and expecting different results”. Yet we still expect that we can deliver better value for money and productivity outcomes on projects in the building and infrastructure sectors using largely the same procurement attitudes, processes and documentation that we have been using for the last 50-100 years. There have been countless reports on this over the last 30 years (and more), many of them saying the same or at least similar things, yet the cultural inclination for status quo has left us in a quagmire. We know there is waste, we know what the challenges are, we know there is a better way of doing things, and yet we struggle to make any real progress. Like the frog in the frying pan, we are yet to encounter the catalyst for real change.

The UK, for example, supported a construction industry reeling from the European slowdown by looking at the problem from a fresh perspective. Rather than seeking to boost a struggling industry through pump priming alone, they set themselves a momentous productivity target, and then got to work figuring out what key initiatives would get them there the quickest, resulting simultaneously in a more productive, attractive and sustainable industry. Mandating BIM means there will be some pain in the industry for laggards that struggle to adapt, but by and large the mid to long term benefits will be faster, cheaper, better quality buildings and infrastructure, as well as the development of a critical mass of superior expertise that becomes a massive generator of export dollars. In Australia we have seen no such blood on the floor…yet. But we are aware of the lead indicators, as well demonstrated through the 2015 Intergenerational Report. What we need is step change in the way we do things - radical innovation (like disruptive technology and business models) rather than incremental change which never seems to stick beyond political cycles. But to achieve this we need vision and leadership. Consult Australia is incredibly proud to have commissioned our More for Less report (featured on page 7), which not only quantifies the costs associated with current inefficient procurement methodologies (to consulting firms, projects and the broader Australian economy), but importantly offers practical suggestions for starting on the path

of reform. We will be producing more work in this area over the coming months, so stay tuned. The task ahead of us now is to take this report and its recommendations and ensure that they become more than just a dusty reference document. We need to affect action. Our program of activity will be geared towards tangible outcomes, and we will be accountable to our members to achieve them. We will face a wall of cultural change and perverse incentives, but the first step of making the case for change is now complete. The Australian government is facing a number of reform challenges, such as the review of the Taxation System. They too will need to make the case for change. This is especially true in an area which is: a) hardly a sexy subject of the average Aussie; b) being contemplated within a context of skepticism and mistrust of the political process and Politicians in general; and c) a consequence of two decades of uninterrupted economic growth which has resulted in a history of “no losers” policy reform leading to a sense of entitlement and compensation. Communication and leadership will be critical. Radical reform can be achieved. But it needs to be substantiated by clear evidence and communicated with sophistication and simplicity simultaneously. Your association is up to the task.

Megan Motto Consult Australia


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Consulting Matters

What’s happening at Consult Australia

Champions of Change Signatories to the Charter of the Consult Australia Champions of Change

Charter of the Consult Australia Champions of Change Our role as leaders, both individually and collectively, is to intervene and disrupt the norm, and make a material change to the unacceptably low levels of women in leadership in Australia’s consulting industry. Since the inception of the Champions of Change over two years ago, we have learned much about the issues facing women in our industry. Whilst our individual companies may have made some progress, as an industry our progress toward gender equity is still unacceptably slow. Being a Champion of Change requires time, investment and above all commitment. To bring about the change we desire we need to work together, step up and lead with visible action.

Lara Poloni, AECOM Australia Pty Ltd Chief Executive

Peter Bailey, Arup Chair and Chief Executive Officer - Australasia Region

James Wright, Beca Pty Ltd Managing Director – Australia

Will Wright, Douglas Partners Pty Ltd Principal

Phillip Duthie, GHD Pty Ltd General Manager - Australia

Adam Kilsby, Golder Associates Managing Director and Principal

Greg Steele, Hyder Consulting Pty Ltd Managing Director - Australasia

Michael Shirley, Jacobs Group (Australia) Pty Ltd Group Vice President, Infrastructure and Environment

Mark Bruzzone, MWH Managing Director, Government & Infrastructure, Australia

Stuart Fowler, Norman Disney & Young Chief Executive Officer

Melvyn Maylin, Opus International Pty Ltd Managing Director Australia

John Pitt, pitt&sherry Managing Director

Matthew Harris, NSW Managing Director Rider Levett Bucknall

Hari Poologasundram, SMEC Australia Pty Ltd Chief Operating Officer, Australia and New Zealand

Bob McGowan, URS Australia Pty Ltd Managing Director Australia

Andrew Mather, WSP | Parsons Brinckerhoff (WSP) Managing Director: Property Environment & Resources

We agree to take the following actions to achieve the change we all desire:  Agree a shared purpose, clear priorities and publicly commit to using our individual and collective leadership and resources to advance gender equity and women in leadership  Work together to create peer pressure – to build our network of consulting CEO champions  Through the Champions of Change network, share experiences, best practice, data and strategies for advancing gender equity and women in leadership  Work together to identify and implement visible high impact actions that move the dial with respect to women in leadership in our industry  Lead with action and advocacy, working within our organisations and collectively to: • Sponsor and/or mentor women into leadership positions • Partner with schools and universities to raise the level of women in our industry • Encourage a greater focus on STEM subjects in schools  Reflect on our own leadership, holding ourselves accountable for the results we achieve

Taking their lead from the Founding Male Champions of Change established by Elizabeth Broderick (Australia's Sex Discrimination Commissioner), a group of Consult Australia's large member firm CEO's formed the Consult Australia Champions of Change in 2012, to take collective action in an attempt to substantially shift the dial with regards to the participation and promotion of women in our industry. Recognising that in the war for talent, our sector needed to up its game in attracting and retaining women, the group formed to share best practice, learn from experts and lead by example. Diversity, like safety, is a leadership issue. It is therefore critical that the leaders in the business community (mostly male) own this issue

as a driver of business success. Importantly, it is about changing workplaces to make them more inclusive, rather than remediation training for women. The Champions are now in their third year, and under the Chairmanship of Greg Steele, Managing Director of Hyder, have recently strengthened and renewed their Charter, aiming to drive change through strategic action and personal accountability. They will shortly be developing a benchmark report to measure their individual company progress in a range of areas of activity. Consult Australia is proud to be part of this important initiative and support a range of best practice activities in this area.


What’s happening at Consult Australia

Consulting Matters

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More for Less: 100 Days into our Campaign for Better Procurement Consult Australia’s More for Less campaign, and our flagship report commissioned from Deloitte Access Economics’, The Economic Benefits of Better Procurement Practices, was launched in Parliament House in Canberra with Assistant Infrastructure Minister The Hon. Jamie Briggs MP and attended by 17 Members of Parliament from all major parties alongside representatives from the Department of Infrastructure, the Australasian Procurement and Construction Council and senior industry leaders. More for Less gives definitive answers as to how much extra public sector clients pay for less desirable procurement practices – including onerous contract terms – that our industry are frequently faced with. The report also offers concrete recommendations for improvement, which together with Consult Australia’s existing policy platform, provide a foundation for longstanding reform. Generating widespread media coverage the full report and summary version have now been downloaded over 2000 times: a great testament to the interest and value placed on Consult Australia’s thought leadership in this space.

The first 100 days of Consult Australia’s More for Less campaign has seen the report launched at events across the country which have served as the foundation for further engagement at the highest levels of government and with client agencies.

Advocacy across Australia In New South Wales: • Andrew Constance MP, Minister for Transport and Infrastructure; • Michael Daley MP, Shadow Treasurer together with Ryan Park, Shadow Minister for Transport and Infrastructure; • Health Infrastructure NSW; • Office of Rob Stokes MP, Minister for Planning; • Greg Pearce MLC, Member of the Legislative Council; • Office of the Small Business Commissioner; • Sydney Water;

OUR SEVEN RECOMMENDATIONS FOR BETTER PROCUREMENT: To improve public sector procurement outcomes: 1) Set up procurement teams with a mix of practical, legal and procurement experience.

• Department of Justice and Attorney General; • Department of Finance and Services; and • Sydney Opera House.

In Victoria:

2) Reallocate procurement resources towards better specification of project objectives, including early engagement with industry, identifying end user needs, and re-testing business case objectives.

• Jacinta Allan MP, Minister for Public Transport, together with Department of Economic Development, Jobs, Transport and Resources;

3) Remove contract clauses that don’t stack up, whether from a cost-benefit perspective, or through the behaviour shaped by the inclusion of those terms.

• The Department of Treasury and Finance;

4) Develop and apply limited liability guidelines to assist agencies with ensuring that liability requirements do not add unnecessarily to project costs.

• David Southwick MP, Shadow Minister for Energy and Resources, Innovation, and Renewables;

5) Verification of brief information by government to avoid costly duplication by tenderers.

• Municipal Association of Victoria; VicRoads;

6) Streamline compliance processes to reduce bid costs. 7) Evaluate and adapt procurement frameworks to encourage innovation, including being open to new delivery models, early market sounding options and continuing to provide opportunities for unsolicited proposals. Consult Australia has long been engaged in the policy discussion about improving procurement practices around Australia. More for Less shows reforms to procurement will not only support our industry, but will yield benefits for public sector clients and ultimately the broader public who use that infrastructure. It is critical that the procurers of public projects are aware of these benefits, and factor them into their decisions as our industry works to develop tomorrow’s infrastructure.

• the office of Treasurer Tim Pallas; • the office of Lily D’Ambrosio MP, Minister for Industry, Energy and Resources;

• Ryan Smith MP, Shadow Minister for Roads and Infrastructure; • Regional Development Victoria; and • Major Projects Victoria.

In Queensland: • Office of the Deputy Premier and Minister for Transport, Minister for Infrastructure, Local Government and Planning and Minister for Trade Trade Jackie Trad MP; • Rob Molhoek MP, Shadow Minister for Housing and Public Works; • Housing and Public Works Procurement Transformation Team; • Chief Procurement Office and Program Management and Delivery, Transport and Main Roads; • Jennifer Howard MP, Member for Ipswich; and • Trevor Watts MP, Member for Toowoomba.


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Consulting Matters

What’s happening at Consult Australia

More for Less The economic benefits of better procurement

Seaford Rail Extension Photo courtesy of Aurecon

Around $43 billion is invested in public infrastructure each year. Around 53% is procured from the private sector, and professional services contribute almost 20% to the overall value of projects. As budgetary constraints compete with the public demand for enhanced infrastructure provision, the need for each dollar of public funding for infrastructure projects to go further is greater than ever. The procurement reform described in this report presents an opportunity to make this happen. There are big opportunities for more efficient procurement of professional services for public sector built environment projects. With improvements in briefs, delivery models and contracts, firms can:

Consult Australia engaged Deloitte Access Economics to undertake a study into the economic value of better procurement practices by public sector agencies undertaking infrastructure procurement. This document is a summary of the study’s key findings.

• Reduce the costs of projects by 5.4%, comprised of: o direct price increases of 3.6%; o indirect price increases of 1.5% from reduced competition; and o inefficient costs of bidding worth 0.3% of project prices. • Reduce delays to projects by 7%; • Improve the quality of projects by 7%. By implementing the recommendations of this report, government has the opportunity to achieve economic benefits of around $5.1 billion in additional GDP between 2015 and 2030 (real $2014).

DOWNLOAD THE REPORT LONG FORM http://bit.ly/betterprocurement-longform SHORT FORM http://bit.ly/betterprocurement-shortform

Download the full report at www.consultaustralia.com.au

In Nothern Territory: • Dave Tollner MP, Treasurer and Minister for Lands and Planning, Mines and Energy • Dave McHugh, Chief Executive, Department of Infrastructure In South Australia:

• Brendan O’Dowd, Chief Executive, City of Darwin

• South Australian Government Financing Authority; • Stephen Marshall MP, State Opposition Leader;

• Ewan McKenzie, Industry Engagement Officer, NT Power and Water Corporation

• Ian Nightingale, Industry Participation Advocate;

• Peter Chandler, Minister for Transport and Infrastructure

• SA Water; • Local Government Association of South Australia; • Department of Planning, Transport and Infrastructure; and • the Office of Industry Participation Professional Services Advisory Panel.

In Western Australia: • Department of Main Roads; • Office of Building Management and Works, • Department of Finance; and • the Western Australian Local Government Association.

In Tasmania: • Senator David Bushby; • TasWater; • and the Department of State Growth.

In addition to high-level and detailed meetings across government we have held additional private sector engagement on our key recommendations advanced through More for Less. These are ongoing and include productive discussions with senior representatives from: Society of Construction Lawyers; Laing O’Rourke; Lend Lease; Civil Contractors Federation; the Australian Sustainable Built Environment Council; the Australian Construction Industry Forum and Leighton Holdings. The advocacy outlined above has been extensive and represents just the start of our campaign. The majority of these meetings have generated increased awareness of the challenges our industry faces in dealing with poor procurement processes, and the opportunity for governments to get better value for money from every dollar they are spending. We are confident that this advocacy will translate into real wins for our industry and better procurement in the long-term. We encourage you to support the campaign, raise awareness and ensure your firm is an advocate for the recommendations we are taking forward with government. For more information on our More for Less campaign, contact Robin Schuck, Senior Advisor Policy and Government Relations.


What’s happening at Consult Australia

Consulting Matters

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And in Other Policy News: While Consult Australia’s More for Less campaign has dominated our advocacy across governments in the first half of this year, those other key issues critical to our members continue to be addressed: FEDERAL BUDGET 2015 Consult Australia’s response to the Federal Budget highlighted the important package of measures for small firms, but noted the lack of new funding for infrastructure. Child care presented a mixed package with significant impacts for firms who will be forced to redesign their parental leave arrangements in lieu of the Government’s approach to ‘double-dipping’. A new infrastructure loan facility for Northern Australian investment may generate up to $5b in additional funds, and presents an opportunity for Consult Australia members to influence the design of a Northern Australia infrastructure pipeline as part of the Government’s whitepaper process. Consult Australia issued a Media Release cautiously welcoming the Opposition’s response to the Budget, in particular their commitment to wipe the HECS debt of 100,000 engineering students, to strengthen Infrastructure Australia, and to prioritise a stronger role for the Federal Government in our cities. AUSTRALIAN INFRASTRUCTURE AUDIT The much anticipated Australian Infrastructure Audit was released by Infrastructure Australia and provides a new strategic approach to assessing our national infrastructure needs. Consult Australia’s media release (Congestion yet to squeeze more dollars for infrastructure) welcoming the Audit can be read here. The Audit examines the drivers of future infrastructure demand, particularly population and economic growth, provides an assessment of the value-add, or Direct Economic Contribution of infrastructure; considers the future demand for infrastructure over the next 15 years, and delivers an evidence base for further gap analysis, long term planning and future investment priorities. Infrastructure Australia is inviting public comment on the findings from the Audit. Your ideas and suggestions on how to solve the issues raised will help to inform the development of the 15 year Australian Infrastructure Plan. Consult Australia will be developing our submission in the coming weeks. INQUIRY INTO ROLE OF REGIONAL CAPITALS IN AUSTRALIA Consult Australia was pleased to support the Australian Sustainable Built Environment Council submission to the Senate Rural and Regional Affairs and Transport References Committee Inquiry into the role of regional capitals in Australia. The Inquiry is considering current demographic trends across regional capitals, current funding, investment challenges and opportunities for growth. Consult Australia emphasised support for stronger investment across all our major cities based on broad cost-benefit analysis, smart urban design and good governance. Jonathan Cartledge is Chair of the ASBEC Cities and Regions Task Group. BUILDING QUEENSLAND BILL 2015 The establishment of Building Queensland by the Queensland Government aims to deliver greater independence to advice provided to Government on infrastructure priorities in Queensland. This has been a long-standing policy objective for Consult Australia in

Queensland, so reflects a win for our lobbying on this issue. Some work remains to ensure the powers granted to the agency provide for full independence and transparency in the advice provided. In advance of providing a submission to the Building Queensland Bill 2015, Consult Australia is pleased to be meeting with David Quinn, CEO of Building Queensland who will provide an intimate briefing on the Bill. SKILLED MIGRATION Consult Australia’s submission to the Australian Government Department of Immigration Review of Skilled Migration and Temporary Activity Visa Programmes emphasises the importance of a streamlined and flexible skilled migration program responsive to industry needs. Current requirements for Labour Market Testing (LMT) for 457 visas are strongly opposed by Consult Australia as an unnecessary regulatory burden on our member firms. Largely a political exercise, the parallel Senate Inquiry into the impact of Australia's temporary work visa programs revisits the well-trodden debate regarding the impact of 457 visa holders on domestic employment and is in addition to the Departmental review above. Consult Australia’s submission makes the case once again for the abolition of Labour Market Testing (LMT) noting the importance of a flexible skilled migration program able to meet industry needs across market cycles. Our submission counters that lodged by Engineers Australia which curiously ignores niche engineering shortages, suggesting only an oversupply and that there is no sustained need for skilled migration in the current market. SOUTH AUSTRALIAN GUIDELINES ON LIMITING LIABILITY Consult Australia has made a submission in response to the revision of the South Australian Guidelines on Limiting Liability, which is currently taking place. Pleasingly, other organisations have been using our recently released report, Economic Benefits of Better Procurement in their submissions. UNFAIR CONTRACTS AND SMALL BUSINESS Our submission was made in response to draft legislation released to give effect to the Federal Government’s proposal to extend existing consumer protections against unfair contracts to small businesses. While on face value this proposal looks appealing, there are potential unintended consequences that may harm our industry. Our concern is that as drafted, the legislation will simply create a red tape burden for large and small firms alike. We have suggested changes that could overcome this issue through our submission. Consult Australia is meeting with the Hon Bruce Bilson, Minister for Small Business later this month to discuss our concerns in more detail. UPCOMING THOUGHT LEADERSHIP Consult Australia’s proactive advocacy continues with a strong pipeline of thought leadership scheduled for the second half of 2015. Look out for further landmark work on procurement, value capture, cities and urban development, stakeholder engagement, and workforce diversity. Increasingly our views are sought by policy makers on a wide range of subjects against which we have clear policy objectives. Our thought leadership is critical as we continue to strengthen these relationships, build our credibility and substantiate our voice on behalf of our members. Stay tuned!


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Consulting Matters What’s happening at Consult Australia

STATE DIVISION UPDATES QLD UPDATE In May we welcomed two new committee members to the Qld Division – Trevor Sullivan, SMEC and Matthew Uidam, Golder Associates. The committee now has representation from 13 of our member firms – AECOM, Arup, Aurecon, Beca, GHD, Golder Associates, Hyder Consulting, Jacobs, KBR, Lambert & Rehbein, Opus, SMEC and WSP Parsons Brinckerhoff. Following the launch of the ‘More for Less: The economic benefits of better procurement’ report in Queensland we held a range of meetings with relevant stakeholders. The Queensland Division will retain a focus on Procurement this year and have been contacted by government to provide input into an Interdepartmental Committee review of Queensland Government procurement. The most recent monthly meeting with the managers of the Queensland Government’s Engineering Consultant Scheme (ECS) focussed on reporting requirements under the scheme.

NT UPDATE The Division has continued to focus our advocacy work on procurement reform, with the recent NT launch in Darwin of the Economic Benefits of Better Procurement Practices report. The launch breakfast welcomed The Hon Peter Styles MLC, Minister for Business to keynote. Following the presentation of the report by Consult Australia Senior Policy Advisor, Robin Schuck, attendees were provided an update on Stage 2 of the Northern Territory Government procurement reforms by Department of Business Deputy Chief Executive Officer, Andrew Cowan. Meetings held to further discuss the report’s findings and recommendations were held and resulted in positive responses and we now have agreement for ongoing dialogue and collaboration to work towards practical outcomes for our NT members.

A new quarterly template should be released soon that will hopefully streamline the information required, reducing the burden to our members and the broader industry. In our last update we discussed collaboration. Consult Australia Qld will be collaborating with a range of key industry groups this year via ConstructionQ to progress initiatives raised at the industry forums held last year. Our particular focus will be on Construction Efficiencies and Profitability, and how technology and procurement affect this. We were pleased to see the commitment to establishing an independent statutory body to provide advice to government on Queensland’s infrastructure priorities (Building Queensland). The Division has received a briefing by the new CEO, David Quinn, and will be providing a submission to the Bill. It is essential that this new body remains independent and publishes a pipeline of projects to provide certainty for business and better value for money outcomes for the tax-payer. We will be advocating for investment in early feasibility and design studies, outsourced to support

Of particular note NT Division member representatives will join with the Department of Business in ongoing regular working group meetings to take forward the recommendations of the report. Upcoming Events Boardroom Breakfast – Member Only Event29 July Land Development Corporation General Manager, Andrew Kirkland Boardroom Breakfast – Member Only Event25 August

Queensland industry, to help ensure a continuous supply of a wide range of ‘shovel ready’ projects ready to proceed as soon as funds are made available.

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speech” and gain business contacts in the process. Next up will be a scavenger hunt racing around the CBD in a team, with a focus on improving participants team building and networking skill. Drinks and nibbles will be provided at a surprise nearby final location! FutureNet Darwin continues to welcome new members and we are always happy for event flyers to be shared with your business contacts to enable the group to grow and diversify. National Strategic Partner

Territory Generation General Manager Major Projects, Boyd White and Business Improvement Manager Ralph Hopwood. FutureNet FutureNet Darwin recently held a speed networking event at the Darwin Railway Club which offered young professionals an opportunity to test out their “elevator

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What’s happening at Consult Australia Consulting Matters

STATE DIVISION UPDATES VIC UPDATE With the More for Less report launched in Victoria, the Division has progressed productive discussions across government including with Jacinta Allan MP, Minister for Public Transport, the office of Treasurer Tim Pallas and the Department of Treasury and Finance, Major Projects Victoria, the office of Minister for Industry Energy and Resources, various members of the opposition, the Municipal Association of Victoria, and Regioanl Development Victoria. The Division Committee was delighted to host Chief Executive of VicRoads, John Merritt over a Boardroom lunch in May. John spoke at length about the infrastructure policy agenda in Victoria and opened the door to a strong collaborative dialogue with industry. FutureNet’s Professional Development series continues through 2015 with registrations open for the series into the second half of this year. Feedback has been

NSW UPDATE Following the NSW Election, the NSW Division has strongly sought the adoption of our recommendations from More for Less. The Division has met with individuals at Ministerial and Agency level, including but not limited to NSW Health, Sydney Water, NSW Trade and Investment, Urban Growth, the Shadow Treasurer, the Shadow Minister for Roads, the Shadow Minister for Infrastructure and Transport, Transport for NSW, the Office of the Small Business Commissioner and the Department of Finance. Overall feedback has been positive, and we look forward to continuing these conversations in the coming months. In addition, the NSW Division has been working on a new piece of thought leadership about Value Capture, due to be launched in July, we hope that this document will further the adoption of Value Capture. The Division is currently working with the Department of Finance to provide feedback on the Security

positive with participants considering the series a valuable opportunity to expand their skills and knowledge across a range of issues critical to consulting success. Taking a step outside of their project work, FutureNet Victoria considered the impact of increasing merger and acquisition activity across the Australian market for consulting firms. Reflections on the WSP | Parsons Brinckerhoff experience and an exploration of M&A activity more generally in the market supported a broad audience discussion. More recently FutureNet heard from Matthew Guy on the role of government in the built environment, his reflections in opposition and advice for young professionals. Look out for more great events as the Victorian Division considers the role of value capture to drive infrastructure investment, and supports a fresh debate between architects and engineers later in the year.

of Payment Act 1999, and with the Building Professionals Board, to review the Building Professionals Act 2005. We will keep members up to date with these reviews as they progress. Small to Medium sized firms should keep an eye out for our up and coming meeting with the Small Business Commissioner-to be advertised in the weekly e-news.

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Kindly hosted by ARUP, the NSW Division recently ran 2-hour complimentary training for our members on Project Finance and Contracting 101. Following this, Consult Australia will be hosting a small series of short low cost training seminars for our members. This year, FutureNet - Politics in the Pub will run in Newcastle and Sydney. The committees have a great line up of speakers, who will provide an analysis of the budget announcements, specifically how they relate to the pipeline of work, and the politics surrounding these projects- read more www.consultaustralia.com.au/nsw

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Consulting Matters What’s happening at Consult Australia

STATE DIVISION UPDATES WA UPDATE The WA branch had an extensive events calendar in the second quarter, including presentations from Peter Coleman, Woodside CEO; the annual Architects and Engineers Roundtable; and the WA public launch of the More for Less report. Woodside CEO Peter Coleman presented on the current economic winds and where the consulting industry is to focus its energies to maintain its important role in supporting the primary sectors whilst remaining sustainable and profitable. Robin Schuck presented on our More for Less report, and in collaboration with the WA committee, launched the report in private and public forums, with government agencies and members. The launch breakfast was well attended by key people within government, and follow-up meetings will continue in order to build momentum on the report outcomes. Several meetings with BMW (through BEDP), MRWA and WALGA were held during the quarter with traction building on key policy drivers, helped by the report release. At an early April morning FutureNet breakfast event, Jeff Hansen, Managing

2015

Director of Sea Shepherd Australia inspired the audience to follow their passion. Jeff recounted his story from childhood to today, and the many challenges and crossroads he has faced along the way. He opened up to the audience about his health challenges and personal relationships. It was a genuine and honest recount of the highs and lows of his life, and the meandering path it has followed.

FutureNet WA also hosted a presentation from the WA Minister for Mines and Petroleum, Bill Marmion. Minister Marmion is an engineer by profession, and shared with approximately 150 attendees, his career trajectory from Main Roads to Parliament House, which was entertaining and well-received.

His transition to accept past negative experiences and encouragement not to let them stop you, to find a career that lights your fire, and to be the manager you would like to have, were just some of the lessons the audience took from the talk. Jeff showed his passion for the environment and stressed the importance of the health of our planet “in a spaceship, we are the passengers and the environment is the crew, slowly but surely we are killing off the crew, if we continue we will be hurtling through space without anyone to steer us”. The audience left feeling empowered, and ready to effect change. All feedback received was positive, a great result reflecting the quality of the speaker. Jeff also provided us with his perspective of the event “I love what you are bringing to the table, presenting people with all the information so they can make their own decisions, while networking along the way. Keep up the great work.” It truly was a successful event all around.

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STATE DIVISION UPDATES SA UPDATE Building on the relationships established or strengthened following meetings to discuss More for Less: Economic Benefits of Better Procurement; and our advocacy strategies and program in support, the SA Division has now realised a strong platform on which to continue our campaign for better procurement. The report and its findings were well received and some early outcomes have been exceptional given the timeframes, and include: • The South Australian Industry Participation Advocate adopting our recommendations, and advocating strongly for our positions, including as part of detailed procurement proposals for consideration by the South Australian Cabinet. • South Australian Department of Treasury and Finance reviewing their Guidelines on the Limitation of Liability, and considering our report and recommendations in that context. The SA Division has made a submission in response to the revision of the South Australian Guidelines on Limiting Liability, which is currently taking place. We are now focussed on ongoing dialogue to work with stakeholders for practical outcomes for our members.

than keen to hear an update on the Adelaide Airport Master Plan, delivered by Adelaide Airport Ltd Managing Director, Mark Young and Executive General Manager Airport Operations, Vince Scanlon. The presentation included landside infrastructure projects being considered over the next five years as well as a detailed vision for the continued growth and development of the airport over the next 5 years, while also providing a strategic longer term view of potential changes over a 20-year planning horizon for both aeronautical and commercial activities.

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Mr Kevin Scarce AC, CSC, RANR - Royal Commission into the Nuclear Fuel Cycle Mr Michael Deegan, CEO, Department of Planning, Transport and Infrastructure Breakfast – Urban Infill: Delivering the Future Breakfast – Mr Raymond Spencer: Chair, Economic Development Board Architects and Engineers Roundtable

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ACT UPDATE The ACT Budget was welcomed by Consult Australia ACT with CEO Megan Motto welcoming ‘emphasis on infrastructure as part of a longer term plan for growth; innovation to establish a knowledge economy; improving urban inward investment through a marketable and attractive brand.’ Also in the ACT, Consult Australia met with representatives of the University of Canberra [UC] and Swinburne University of Technology, to work on the development of a BIM module as part of a future course being delivered by UC. The meeting was described as ‘very helpful’ they stated that they ‘are moving forward with providing education that will focus on meeting members' needs. At the last FutureNet event, young professionals

were given tips on innovation from The Chief Executive of CBR Innovation Network and member of the Department of Foreign Affairs International Reference Group on Innovation, Dr. Sarah Pearson. The Chief Operating Officer of SHL Development, Terry Shaw, and Ronan Moss of Cox Architecture – collectively known as the Stomping Ground Collective – also inspired on stage at Westside Acton Park. The next event brings together the Editor / Founder of Her Canberra, Amanda Whitley, and a Director from Molonglo Group, Johnathan Efkapidis, who are responsible for Canberra’s New Acton building which recently won the International Project of the Year at the 2015 Building Awards in London. At a Federal level, members described the meeting with Greg Divall as a ‘very useful and successful’ event; a ‘valuable forum to

share insights’; and, ‘a great opportunity to discuss ideas.’ Members were particularly pleased to hear his emphasis on quality, call for ideas on how to get relevant people into the costing process earlier to reduce costs further down the line, and his description of himself as an enabler keen to work in partnership. National Strategic Partner

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Consulting Matters Features

Champions of Change endorse Strategy for Diversity and Inclusiveness

Dr Marlene Kanga AM launches the report at the 2015 Consult Australia CEO Conference in Sydney

Diversity Panel at the 2015 Consult Australia CEO Conference from left: Consult Australia CEO Megan Motto, Former Engineers Australia President Dr Marlene Kanga AM, Sex Discrimination Commissioner Elizabeth Broderick, SMEC Chief Operating Officer, Australia and New Zealand Hari Poologasundram, and Opus Managing Director Australia Melvyn Maylin.

Dr Marlene Kanga AM believes that those concerned about the black hole in the Federal budget should start thinking outside the box for solutions, and consider the impact of increasing the participation of women in the workplace.

GDP could be expected to increase by a whopping $25 billion—that’s a contribution that could fill a lot of budget black holes!

Chair of the Consult Australia Champions of Change and Chief Executive of Hyder Consulting, Greg Steele, formally endorsed ‘A strategy for inclusiveness, well-being and diversity in engineering workplaces’ developed by Dr Marlene Kanga for increasing diversity and inclusiveness in the Australian engineering sector at Consult Australia’s ASPAC CEO Conference in Sydney in May. Australia currently leads the world and is ranked first out of 136 participating countries in the educational attainment of women. Yet, according to the World Economic Forum Global Gender Gap Report, Australia only ranked 52nd in the world in terms of the labour force participation of women in the workplace. On this basis alone there can be no doubt that an increase in this participation level would result in significant economic benefits. Based on the figures available we know that if Australian women did as much paid work as women in Canada, Australia's

Consult Australia has long recognised the importance of increasing the participation of women—and of having a more diverse workforce in the engineering and technology sectors— both of which have sadly lagged behind the rest of Australian industry in encouraging the participation of women. The Consult Australia Champions of Change (see update on page 6) is made up of the chief executives from the largest member companies in the sector who between them account for more than 50 per cent of

employment in engineering, science and related industries. "This strategy provides us with a real opportunity to change this paradigm. It is an innovation, developed specifically for our industry sector, the first of its kind in Australia and in the world", said Mr Steele. The strategy was launched as part of a panel discussion on diversity and inclusion at the Conference with a panel that included Greg Steele, Elizabeth Broderick - Sex Discrimination Commissioner, Andy Goodman - CEO, SMEC Consulting and Dr. Marlene Kanga - 2013 National President of Engineers Australia and author of the

Consult Australia has long recognised the importance of increasing the participation of women and of having a more diverse workforce in the engineering and technology sectors both of which have lagged behind the rest of Australian industry in encouraging the participation of women.


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Features Consulting Matters

STRATEGY FOR INCLUSIVENESS, WELL-BEING AND DIVERSITY IN ENGINEERING WORKPLACES

A STRATEGY FOR INCLUSIVENESS, WELL-BEING AND DIVERSITY IN ENGINEERING WORKPLACES

Measuring and reporting performance – the need for leading indicators �

TABLE 1: STRATEGY FOR INCLUSIVENESS, WELLBEING & DIVERSITY � COMMIT TO INCLUSIVESS, WELLBEING AND DIVERSITY

Measuring and reporting performance – the need for leading indicators �

A strategy for

It’s often said that what gets measured gets managed; and what gets rewarded gets repeated. A key element in changing the safety culture has been the monitoring of safety indicators by the Chief Executive and Board. In the same way, key metrics to track performance in achieving a more diverse culture and the embedding of incentives through key performance indicators are essential.

STEP 1

Develop a culture of inclusiveness, wellbeing and diversity

Establish inclusivness, wellbeing and diversity as a core value by leadership in the organisation

Develop performance and behaviour standards for inclusivness, wellbeing and diversity

Establish high performance and behaviour standards Policies available on company and zero tolerance for violations intranet

t’s often said that what gets measured gets managed; and what gets rewarded gets repeated. A key element in inclusiveness, well-being hanging the safety culture has been the monitoring of safety indicators by the Chief Executive and Board. In the same and performance diversity in in achieving a more diverse culture and the embedding of incentives through key way, key metrics to track erformance indicators are essential. engineering workplaces Key benchmarks need to be reported at appropriate levels of management to provide a highly visible message of the importance of the strategy. These metrics should report on the important elements of a diversity system and progress made in meeting each of them. Many listed and larger organisations in Australia already publish diversity policies and collect and publish data on gender representation to comply with ASX diversity recommendations and the Workplace Gender Equality Agency reporting guidelines.

As with safety, lagging indicators are a traditional reporting method and are a retrospective set of metrics that are based on events that have already occurred.

Leading indicators are forward looking, ensuring that targets for inclusiveness, wellbeing and diversity will be achieved in future and indicating weaknesses in procedures that may need additional attention. Leading indicators reduce the time lag in identifying and addressing issues and provide management with a clear picture of how an inclusive workplace culture is developing, how the strategy is being implemented, whether there are roadblocks and that shortcomings are identified and addressed. This is particularly important given the time lag to achieve change in the area of human resource management

Policy signed by CEO or Chairman of Board

Ensure competency for managing inclusivness, wellbeing and diversity

Ensure employees have the necessary knowledge - regular training appropriuate to at each level of management

Management training for a diverse workforce

Involve the workforce

Ensure employees take ownership and commit to inclusivness, wellbeing and diversity

Make it personal , e.g. “I want to be the best I can be”, this affects my daughter, my partner, my sister ...etc

UNDERSTAND INCLUSIVESS, WELLBEING AND DIVERSITY ISSUES

STEP 2

Review inclusivness, wellbeing and diversity issues across the organistaion

Undertake comprehensive analysis of all operations and all work sites

Training for managers in operations with particular problems, e.g. Bullying and harassment

ESTABLISH FRAMEWORKS FOR MANAGING INCLUSIVENESS, WELLBEING & DIVERSITY

A set of leading and lagging indicators that could be reported in an organisation’s diversity system is shown in Table 2. A powerful incentive is the alignment of the reporting framework with the strategic approach recommended by the Workplace Gender Equality Agency to achieve Employer of Choice (20). Such recognition would provide public endorsement of progress being made to achieve diversity within the organisation

Develop formal procedures

Documented procedures, regular training, recruitment, promotion, performance appraisal

Policies available on company intranet

Provide opportunities for flexibility

Develop policies for flexible working, job sharing etc.

Policies available on company intranet

Contractor management

Ensure contractors are aware of relevant procedures e.g. Recruitment and training, bullying and harassment etc.

Policies available on company intranet

Management of Change

Review impact of changes in operations, organisation structure, management personnel

Policies available on company intranet

Operational reviews

Conduct regular reviews of operations via interview, surveys etc.

Publish results for all employees

Key benchmarks needNovember to be 2014 reported at appropriate levels of management to provide a highly visible message of the mportance of the strategy. These metrics should report on the important elements of a diversity system and progress COMMIT made in meeting each of them. Many listed and larger organisations in Australia already publish diversity policies and TO A POLICY & STRATEGY ON IWD ollect and publish data on gender representation to comply with ASX diversity recommendations and the Workplace Gender Equality Agency reporting guidelines. STEP 3

MONITOR REPORT AND REVIEW

MONITOR, REPORT & REVIEW

UNDERSTAND IWD ISSUES IN YOUR ORGANISATION

Confidential reporting

Establish systems for confidential reporting of matters relating to breaches of the policieis for inclusiveness, wellbeing and diversity

Reports to management and board

Investigate incidents

Formal reviews of complaints and incidents and learning from these

Reports to management and board

Report key metrics

Develop key leading and lagging indicators of performance in inclusivesness, wellbeing and diversity

Reports to management and board

Conduct regular audits

Conduct regular audits to assess compliance with inclusiveness, wellbeing and diversity procedures

Reports to management and board

Review activities and performance

Report results of audits, metrics and other reviews to Reports to management and management board

STEP 4

As with safety, lagging indicators are a traditional reporting method and are a retrospective set of metrics that are based n events that have already occurred.

BOTTOM LINE IMPACT Employee turnover & satisfaction

Formal report to Board and management

Annual report

Safety performance

Formal report to Board and management

Annual report

Sustainability intiiatives

Formal report to Board and management

Annual report

Profitability

Formal report to Board and management

Annual report

Company profile and reputation

Formal report to Board and management

Annual report

eading indicators are forward looking, ensuring that targets for inclusiveness, wellbeing and diversity will be achieved in uture and indicating weaknesses in procedures that may need additional attention. Leading indicators reduce the time ag in identifying and addressing issues and provide management with a clear picture of how an inclusive workplace ulture is developing, how the strategy is being implemented, whether there are roadblocks and that shortcomings re identified and addressed. This is particularly important given the time lag to achieve change in the area of human esource management DOWNLOAD IT HERE: https://www.wgea.gov.au/sites/default/files/Inclusiveness_Wellbeing_Diversity_Strategy.pdf IMPLEMENT THROUGHOUT THE ORGANISATION

PLAN REQUIREMENTS FOR IWD

STEP 5

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A set of leading and lagging indicators that could be reported in an organisation’s diversity system is shown in Table 2. A powerful incentive is the alignment of the reporting framework with the strategic approach recommended by he Workplace Gender Equality Agency to achieve Employer of Choice (20). Such recognition would provide public ndorsement of progress being made to achieve diversity within the organisation strategy. The panel discussion was facilitated by Megan Motto, Chief Executive of Consult Australia.

COMMIT TO A POLICY & STRATEGY ON IWD

MONITOR, REPORT & REVIEW

IMPLEMENT THROUGHOUT THE ORGANISATION

"It's a myth that engineering and technology are male dominated industries. This sector needs clever people with an interest in building a better world, a requirement that is not gender specific. Australia and the world needs more engineers ", said Dr. Kanga.

UNDERSTAND IWD ISSUES IN YOUR ORGANISATION

PLAN REQUIREMENTS FOR IWD

"This Strategy for inclusiveness, well-being and diversity in engineering workplaces, is an innovation, developed specifically for our industry sector, and is the first of its kind in Australia and in the world", said Mr Greg Steele, Chair of the Consult Australia Champions of Change. "Implementing the strategy is an opportunity for leadership in this area. Our sector has achieved significant transformations in improving our safety performance, caring for the environment and in implementing sustainable outcomes on our projects. We know it won't be easy but it can be done", said Ms Megan Motto, Chief Executive of Consult Australia. In her forward for the Strategy, Ms Elizabeth Broderick, Sex Discrimination Commissioner observes: "This strategy provides a roadmap which I hope will be a game changer for the recruitment and retention of women in science, engineering and technology".


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Consulting Matters Features

Minimum design for maximum output - the psychology of project development “Common vision and alignment amongst all stakeholders is a must for any successful infrastructure project” according to Dr David Stevens, General Manager, Project Optimisation WSP | Parsons Brinckerhoff. “A project stands or falls because of its people; the work I do hinges on creating a framework that allows intelligent and experienced people to work in a structured environment to debate the complex issues surrounding large projects.” Stevens continues “Once that framework is in place, the goal is to focus on behaviours that facilitate the building of relationships and trust - across stakeholder groups.” Stevens, who has been working in the engineering environment for decades, has developed a suite of project development workshops that encourage a dynamic way of thinking about design; and about how stakeholders engage and interact on a project. These workshops span the entire life of a project, with the specific intent of ensuring on/under time and on/under budget outcomes. According to Stevens “achieving this level of project optimisation involves selecting the right methodology, or hybrid, at the right time, with the right stakeholders.”

A qualified psychologist and registered organisational and environmental psychologist, Stevens believes that securing time and budget gains on a project hinges on more than mere engineering. “There are critical points in the lifecycle of every project where intervention, particularly in the shape of value management or value engineering workshops, can yield significant project, people and financial dividends.” Value engineering workshops are key because they challenges people’s design assumptions and are the one intervention that can dramatically reduce capital expenditure. “On large projects, value engineering encourages participants to see what a project needs. This is vital at the detailed design stage where there can be a tendency to ‘gold-plate’ construction – such as designing an iconic building when a fit-for-purpose building would be more cost-effective and appropriate, or equipping a mine with infrastructure designed to last for 50 to 100 years when the mine is only set to last for 30 years.” Workshops can help to break down complex issues into an agreed functional framework that encourages effective, collaborative decision-making and reduces the danger of project derailment.

“In the case of value engineering in particular, a project is broken down or ‘deconstructed’ into categories, elements and finally functions which are identified and analysed. The discipline adhered to in this case is a linguistic one. The project is then ‘reconstructed’ on a functional basis to identify which functions can be eliminated, minimised, reversed etc.” The guiding principle behind engaging clients in the workshop process is that participation in a collaborative environment generates a high level of ‘ownership’ between the parties in terms of decisions and outcomes. When experienced, senior personnel take on this level of project ownership it can quickly translate into a shared commitment to work together in the future to achieve specific project goals. Project Optimisation workshops typically centre on creating an environment that allows for fast-tracked, structured thinking as extending decision-making time doesn’t, according to Stevens, necessarily lead to a qualitatively better decision; ”In fact, there’s significant empirical evidence to suggest that the reverse is true.” Stevens believes his services are particularly important for large projects that have a rapid

SOME EXAMPLES OF THE POSITIVE FINANCIAL IMPACT OF VALUE ENGINEERING ARE HIGHLIGHTED IN THE FOLLOWING EXAMPLES: 

MTR Hong Kong

 ecision on rail route for MTRC, Hong Kong (two day workshop D duration) - approximately $HK1billion in savings  alue engineering Tsuen Kwan O for MTRC, (three x one day value V engineering workshops across civil engineering, station architecture and M&E/rolling stock) – savings of $HK1.4billion  alue management/risk management; Panama Canal Authority V $US850million savings in four days  alue engineering; Roy Hill Project ( three x one day value engineering V workshops rail, port and infrastructure) – potential savings of AUS$900million identified with AUS$450million subsequently realised  alue engineering (two x one day value engineering workshops) for a V US$1.5billion mining project in Mozambique - savings of US$0.5billion.


Features Consulting Matters

PROJECT OPTIMISATION IS APPLICABLE THROUGHOUT A PROJECT’S LIFE CYCLE. THE TABLE BELOW HIGHLIGHTS SOME OF THE KEY PROJECT OPTIMISERS THAT CAN BE USED AT VARIOUS STAGES IN A PROJECT’S LIFECYCLE. Project status

Optimising methodology

Rationale

Concept

Alignment/ start-up workshop

Is the project needed; does it contribute to the corporate mission? Are stakeholders’ objectives, cultures, etc. aligned?

Concept

Value management

Check the project meets all stakeholders’ needs; are there other options? Select a preferred option. Create a value ratio.

Concept

Initial risk assessment

Identify all risk areas associated with the selected project concept.

Detailed design

Value engineering

Check the preferred project concept is operating at the lowest overall cost and highest efficiency. Refine the design.

Detailed design

Risk assessment and risk management

Review risk areas on the basis of a value engineering study. Develop a management plan to avoid, ameliorate, accept or transfer risk.

Post-project completion

Post-completion review

Establish whether the right project option was undertaken efficiently, especially if there were ‘multiple designs’. What lessons have been learned?

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build-up of staff, such as the Roy Hill Project. In that particular case, he runs regular alignment workshops to ensure newlyformed relationships develop well to steer the project away from derailment through either cultural or values-based misalignment among the various stakeholders. According to Barry Fitzgerald, CEO of Roy Hill, “Steven’s methodology and workshop sessions at project execution stage contributed to project success and in particular to team alignment.” The workshop suite also allows for completed work to be assessed: “We even go so far as to do post-completion review workshops,” Stevens says, “where we can reflect on [the project] and identify what things we want to repeat in future projects and what we don’t want to repeat.” “As a psychologist I find working on highly complex projects an exciting adventure. Simple psychology and linguistics can save hundreds of millions of dollars in a short burst of highly-structured activity in a collaborative workshop environment.” WSP | Parsons Brinckerhoff


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Consulting Matters Features

More for less - or how to optimise business outcomes through a modern asset management approach As many economies across the globe find themselves constrained in their ability to fund new infrastructure there has been an increasing focus on unlocking greater value from existing public and private assets. A common theme across industry sectors where the CAPEX to OPEX balance has significantly shifted towards maintenance and operational optimisation is: how can our organisation do more for less? This can mean: how can we provide the same quality or level of services to our customers on a lower operational budget? But it can also be focused on how to grow / diversify / improve the quality of services without increasing costs. To achieve such business shift, asset management, as a business process and key function in any organisations, and associated change management are key enablers. The concept of asset management has evolved over time and through the last decade moved away from being considered a ‘technical discipline’ with a focus on asset maintenance to a broader business objective of sustaining the services that an organisation provides to its customers through the efficient use of its assets [1,2]. Infrastructure assets tend now to be evaluated and managed as key enablers of business delivery, for which their required performance must be balanced against cost and risk and not just assessed purely on the technical engineering issues that impact them. To achieve this, ISO 55000 [1] defines the following fundamentals for asset management: 1. V  alue: “assets exist to provide value to the organisation and its stakeholders” [1]

and this can be financial or not depending on the company’s objectives, 2. A  lignment: through the organisation that ensures that set objectives turn into decisions, strategies, plans and actions/ activities (i.e. a clear line of sight). 3. L  eadership: commitment from executive management to operational staff can foster a mature organisational culture that focuses on delivering value [3].

Infrastructure assets tend now to be evaluated and managed as key enablers of business delivery, for which their required performance must be balanced against cost and risk and not just assessed purely on the technical engineering issues that impact them.

4. A  ssurance: the development and implementation of a robust asset management system that instils confidence in the assets being able to deliver their required function / service. In that context, the knowledge of what assets can achieve in terms of service function (Level of Service) when they are being designed, built and operated is fundamental. A key concept is that of failure modes and pathways as this allows us to map out what can cause service interruptions and put in place tailored strategies and plans to manage the associated risks. Failure modes can include: • Asset deterioration (expected and predictable asset / material degradation over time). • Growth in demand to or past asset design capability (including unexpected catastrophic events, changed regulatory requirements, etc.).


Features Consulting Matters

• Change in use past design capability (changing market conditions that require a shift in focus for a business and the use of its’ assets). • Economic failure (through obsolescence, more cost effective solutions for delivery of the same service, new disruptive technologies, etc.). • Human error. As the interaction between an asset and its environment throughout its life can have a significant impact on its performance and thus the levels of service it can provide; the concept of durability management has received a growing focus across the world [4] . ISO 13823 [5] defines durability as “the capability of a structure or any component to satisfy, with planned maintenance, the design performance requirements over a specified period of time under the influence of the environmental actions, or as a result of a self-ageing process”. This is thus intrinsically linked to the value or return on asset that will be provided from a whole-of-life perspective, i.e. the lifecycle cost for an asset can often be closely related to its durability characteristics [6]. As ISO 13823 and 16586 relate performance to an engineering evaluation of the asset, a business asset management approach has been to link those technical parameters to levels of service and investment decisions.

In that context doing more for less could lead to better balancing of the budgets for pro-active, planned and reactive maintenance activities, by allocating funding towards critical assets and away from non-critical ones. This has also led to an increased focus on selectively monitoring the condition of assets, better understanding their modes of failure and developing tools and processes to better assess their current and predict future performance respectively. As such doing more for less also means: how to better manage asset information; how to identify what data is really needed to make decisions (in an age when obtaining and storing large amounts of data is relatively easy it is more important than ever to understand what data is critical and be able to focus collection efforts on that); and how to improve the collection of data, storage and presentation along with its transformation into valuable information for optimal decision making by an organisation. The challenge and opportunity of the current business climate is thus to evolve organisational governance, knowledge, processes, tools and resources synergistically to find more creative ways to best balance the performance of their services with their costs and risks. Succeeding in achieving this and being able to demonstrate it would set organisations and wider societies on a more sustainable course for the future.

The challenge and opportunity of the current business climate is thus to evolve organisational governance, knowledge, processes, tools and resources synergistically to find more creative ways to best balance the performance of their services with their costs and risks.

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Frédéric Blin, Miles Dacre, Brian Sharman, Mike Stoke, Craig Roberts and Peter Harris - AECOM References 1. ISO 55000, 55001 and 55002, Standard for Asset Management, 2014. 2. International Infrastructure Management Manual, Institute of Public Works Engineering Australasia, 2011 3. Lafraia J. and Hardwick J. Living asset management, Editor, M. Berenyi; Technical editor, D. Anderson, Crows Nest, NSW, Engineers Media, 2013 4. Blin, Furman and Mendes, Durability Design of Infrastructure Assets - Towards a Uniformed Approach, Proceedings of the Corrosion & Prevention conference, Australasian Corrosion Association, Perth, Australia, 2011 5.ISO 13823:2008, General principles on the design of structures for durability. 6. ISO 15686, 2001-2011, Buildings and constructed assets - Service life planning, parts 1–9.


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Consulting Matters

How government policy on super can have downstream affects for infrastructure AT CONSULT AUSTRALIA’S RECENT ASPAC CEO CONFERENCE, EQUIP CEO, DANIELLE PRESS, SPOKE ABOUT WHY CURRENT INQUIRIES AND REVIEWS AND GOVERNMENT SUPERANNUATION POLICY CAN IMPACT THE INFRASTRUCTURE SECTOR. THIS ARTICLE IS BASED ON WHAT SHE TOLD DELEGATES.

Government policy on superannuation does affect the way funds think about investments and, therefore, is particularly relevant to the infrastructure sector. If you tie in the challenge of funding an ageing demographic, you can start to understand super fund investors’ views on infrastructure. Recently, the Murray Financial Services Inquiry handed down a number of ideas for the future of super. Central to the panel’s recommendations was the desire to cut fees across the industry. However, it acknowledged that decisions on any changes to the industry to achieve this should be deferred until beyond 2020 to allow the benefits of ‘Stronger Super’ implementation to flow through the system. Perhaps more important were discussions that compared the Australian superannuation system to those overseas, with specific references to Chile and Singapore. In Chile, pension funds tender for the right to administer the nation’s superannuation for three-year periods. The argument is that this creates price tension, keeping the cost of the system low. We consider this as totally inappropriate for Australia for a

Good infrastructure investments generally fit this profile very well, but to move the Australian superannuation industry into a competitive tender process would put at risk funds’ ability to invest to a long-term horizon. number of reasons but, from an infrastructure perspective, this would present a significant downside. Super funds focus on long-term returns and, importantly, on income-generated cashflows to fund the growing proportion of members who are now drawing an income from the super in retirement. Good infrastructure investments generally fit this profile very well, but to move the Australian superannuation industry into a competitive tender process would put at risk funds’ ability to invest to a long-term horizon. Put simply, the possibility of having to transition investments to new investment

teams every few years based on some form of cost-driven selection process would result in passive, index-based investing, which would likely preclude investment in unlisted infrastructure. The infrastructure industry would also do well to keep an eye on the impact of the Tax Review on government superannuation policy, as any change to the concessional tax arrangements for super could have a significant impact on Australian attitudes towards retirement savings. Already, we’re hearing stories from Canberra on tightening the rules around borrowing by self-managed super fund (SMSF) trustees for property investments. But for institutional funds like Equip, changes to tax concessions could impact the level of contributions flowing into funds and the structure and investment mix in financial plans put into place for people entering retirement. The tax review could also include considerations and recommendations in relation to the treatment of dividends to investors and imputation credits applied.

Equip Super CEO Danielle Press at the 2015 Consult Australia CEO Conference

While there is often a huge gap between the recommendations put to government from inquiries and reviews and the policies implemented by government, all of these discussions underscore the fact that those involved in infrastructure development and funding need to keep an eye on issues affecting the superannuation sector, which recently passed $2 trillion in funds under management.


Consulting Matters

For governments of any political persuasion, the temptation to access this pool of funds to support much-needed national infrastructure development and increasing health care and other welfare costs is substantial. While the purpose of super is clearly defined in legislation at the individual level i.e. to be used solely for the purpose of funding retirement, it is less clearly so at a policy or ‘national interest’ level. Super is a part of the broader financial services sector, is a critical and growing source of investment funds in Australia, and plays a central role in taxation policy. This means any adjustments to policy in any area of fiscal policy are likely to have flow-on

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While the purpose of super is clearly defined in legislation at the individual level i.e. to be used solely for the purpose of funding retirement, it is less clearly so at a policy or ‘national interest’ level. effects for the superannuation industry and, therefore on the investments it makes. As companies and individuals vitally interested in Australia’s infrastructure roadmap, it might pay to keep a close eye on future policy and its impact on superannuation investors.

How does your super fund measure up? Like you, we believe the future can only be built on vision, planning and skilled implementation. It is a philosophy that has enabled us to deliver consistently strong investment performance for over 80 years. Our goal is to better equip you to achieve an adequate income in retirement. As an Equip member, your ready access to information and professional advice can help you make the most of your super. If you’re an employer considering a switch to a high-performing fund for your employees, or you’re just looking for a fund that can take care of your future, we’re ready to take your call. National Sponsor

John Farrington Executive Officer, Corporate Relationships

For personal super inquiries:

(03) 9248 5911; Mob: 0438 302 746

1800 682 626

Email: jfarrington@equipsuper.com.au

www.equipsuper.com.au

Equipsuper Pty Ltd ABN 64 006 964 049 AFSL 246383 is the Trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017. This information is general information only. Before making a decision to invest in the fund, you should read the appropriate Equip Product Disclosure Statement (PDS). Past performance is not an indication of future performance.


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Consulting Matters Features

More for less: let’s look inside our firms too! Most firms have not yet fully raised the status and contribution of their procurement function to the level where it can maximise its contribution. Most partners and senior executives in all industries focus so much on the revenue stream and the order book, which is fair enough, that we often do not get around to managing costs and procurement opportunities as well and as hard as should be done. We know that in procurement, there are often cost gains to be made from sensibly centralising, standardising, and using ‘total cost of ownership’ decision criteria for choosing suppliers, materials and designs, although there are often trade-offs and exceptions to such policies that make sense or are forced onto us, for example by clients.

We know that in procurement, there are often cost gains to be made from sensibly centralising, standardising, and using ‘total cost of ownership’ decision criteria for choosing suppliers, materials and designs, although there are often trade-offs and exceptions to such policies that make sense or are forced onto us, for example by clients.

While one major aspect of potential improvement is the procurement function, which is only just maturing in most businesses, another key cost driver is the cost of running the businesses’ internal processes, which are often inefficient and sometimes ineffective too. In considering the firm’s internal processes, some key questions arise: how much waste exists in these, how often do we do unnecessary rework, chase our own tails, and just waste money because of the ‘noise’ in our internal and interfacing process steps? With a colleague, I have researched this thoroughly, and there is good news and bad news.

Now for the good news: great organisations know how to identify all the sources of organisational noise, separate the vital few from the trivial many (the Pareto Principle or 80:20 rule works here), then set about eliminating the noise drivers from their business processes. This leads to improving costs, throughput capacity and service to clients all at once!

The bad news is that on average, across a wide and large range of organisations, there is fully one third of people’s time, effort and monetary cost that is ‘noise’ meaning unproductive effort that is waste. It exists almost everywhere. For example in banks and insurance companies, loan and claim processing rarely goes according to the service blueprint. This is because information is often not where it should be when it is needed and unnecessary exceptions (caused by poor process design and management) drive people to engage in evermore workarounds just to get the job done, albeit inefficiently. So it is in consulting firms too, in design processes, project management, and indeed, very much on construction sites. Over the years that I have been running management courses for consulting, I have heard many stories of design errors slipping though, uncorrected, into fabrication and

delivery of wrong materials to sight with costly consequences.

Whereas excellent companies such as Toyota have honed their internal processes to a level of being maturely ‘lean’ over decades, most professional service organisations have not yet done so, but it can be done in services just as much as in a production environment.

BHP Billiton have done it brilliantly in their global shared services centre in Malaysia: it is lean, paperless and waste free, and extremely efficient, and indeed it’s the epitome of doing more with less! In my book (with Tom Bevington: Implementing Strategic Change) on this subject, we outlined how this process improvement work can be done in order to streamline, remove noise, improve responsiveness and service. First you need to identify where the noise creeps in, and the only way to effectively do that is to systematically ask all staff what they actually do with their time. The idea is to map what goes wrong, and how they cope with it, etc. Staff know what goes wrong—and often


Features Consulting Matters

how to fix it—and it is very instructive to code this, examine the accretive effect of noise, attribute noise and its costs to source or root cause and then set about fixing problems. The devil really is in the detail, but there are always a few big items that deliver significant benefits and your staff will be able to identify these with just the right questions being asked. This is not rocket science, but really just systematically applied common sense which is why it always delivers. Using the analogy of a petrol engine, it is as if our organisation is ‘out of tune’, and hence we are not getting even close to optimal power from it. When we try to press the pedal to the metal and ramp it up, the pistons slap and unburnt fuel smokes out of it! And yes, it makes a shocking noise. Once we tune our organisation’s processes up, fix sources of error, solve problems and eliminate the major sources of process noise, then power output goes up, capacity to process work goes up and speed of service goes up. Unit cost goes down. Client satisfaction increases. Profit increases. All of which combine to qualify brilliantly as getting more for less out of our organisations. One final comment worth considering for those who are motivated to do this: the best way to do so in order to produce permanent change is to do all this on a systematic basis, end-to-end, and not to just pick a few low hanging obvious fruit. An ad hoc approach gets ad hoc outcomes. A thorough approach can permanently allow your professional services to deliver more for less. Once the firm’s major processes are improved, it is indeed a time to take the opportunity to extend this approach to the supply chain, to client interfaces and to supply/ procurement processes. To begin with, a good question for senior executives to ask is “does my organisation generally work like a smooth, well tuned engine, or does it blow too much smoke out the exhaust?”

Professor Danny Samson conducts the Consult Australia residential management program, Service Excellence and Innovation: Driving Business Value. Comments to d.samson@unimelb.edu.au

SERVICE EXCELLENCE AND INNOVATION 2015: DRIVING BUSINESS VALUE 31 August - 2 September 2015 at Melbourne University Business School This three-day residential management course focuses on business excellence for technical professionals with key topics including: • Leadership of the Service Focused Organisation • Best Business Practices • The Principles of Service Excellence • Advanced Service Company Practices • Marketing and Differentiated Pricing • Attracting and Retaining the Right Clients • Teamwork and Service Operations • Strategic Business Improvement • Firm Measurement and Reporting Performance • Financial Management • Business Strategy and Development

Cost: $3,950 (including full residential costs) Registration: For more information and to register, contact Professor Daniel Samson on (03) 8344 5344 or d.samson@unimelb.edu.au

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Consulting Matters Protecting your business

LIABILITY for SUBCONSULTANTS A SUB-CONSULTANT IS A CONSULTANT ENGAGED BY YOU AND FOR WHOSE CONDUCT YOU ARE LIABLE TO THE CLIENT. THE SUB-CONSULTANT MAY BE IN THE SAME DISCIPLINE AS YOU, OR A DIFFERENT DISCIPLINE.

CLAIMS INVOLVING SUB-CONSULTANTS If you engage a sub-consultant, you become liable to the client for the work of that subconsultant (and any other sub-consultants engaged by your sub-consultant). Claims are frequently made against head consultants where the only basis of liability is by reason of the fact that the head consultant engaged and is therefore responsible for the acts and omissions of the sub-consultant. Usually the client brings a legal claim against the head consultant, and the head consultant joins the sub-consultant as a third party. This brings both the sub-consultant and its professional indemnity insurer into the dispute. Ultimately, the sub-consultant may be found liable for all or some of the claim. However, the head consultant and its insurer can still incur considerable defence costs, and often the head consultant also has to contribute money to the settlement payment for the privilege of being released from the claim. Even worse, the sub-consultant may have disappeared or passed away, may be insolvent, or may not have any, or adequate, professional indemnity insurance cover. In this unhappy event, the head consultant (and its professional indemnity insurer) can end up wearing the whole liability. Despite no “fault” or negligence, the head consultant will then have an adverse claims record.

All this is avoided by having the client engage the consultant team directly. In that case, the head consultant would only be liable where the head consultant’s own negligence or other fault contributed to the matter in dispute.

UNINSURED RISK IN SUB-CONSULTANCIES Consultancy agreements put forward by subconsultants (which may take the form of a one-page document in fine print attached to a fee proposal) may contain provisions that not only increase your risk but also leave you with risk that professional indemnity insurance will not cover. Any clauses which limit the sub-consultant’s liability in terms of money, time, or type of loss would raise this risk and should be approached with care.

Ultimately, the sub-consultant may be found liable for all or some of the claim. However, the head consultant and its insurer can still incur considerable defence costs, and often the head consultant also has to contribute money to the settlement payment for the privilege of being released from the claim.

How can you reduce your exposure to a claim arising out of a sub-consultant’s work? If you engage sub-consultants, steps you can take to reduce your exposure to a claim are: • First, check the cover provided by your professional indemnity insurance. Some policies do not provide any cover at all for claims arising from sub-consultants’ work. Others only provide cover when the sub-consultant is working in the same discipline as you, and will not, for instance, cover an engineer for the risks of engaging another construction professional that is not in the same profession or even the same discipline of engineering. A few policies only provide cover for sub-consultants with a certain length of industry experience. • Have a signed, written sub-consultancy agreement. • Only engage sub-consultants from related disciplines. You may have little expertise to supervise or evaluate the work of accountants, solicitors, valuers and other commercial consultants and their errors can cause very large claims. Have the client appoint them directly. • Never engage asbestos consultants as your sub-consultants because claims arising out of asbestos are typically excluded from professional indemnity cover. • Choose the sub-consultants yourself. If you engage a consultant as your sub-


Protecting your business Consulting Matters

consultant you remain liable for their work, even if the client chooses them. Clients who wish to select other consultants should engage them directly. • Only engage sub-consultants who are reputable and solvent and who carry sufficient professional indemnity insurance. • If your consultancy agreement requires you to obtain the client’s consent before engaging a sub-consultant, seek that consent and keep a written record of obtaining it. Failing to do so creates a needless excuse for the client to refuse to pay your claim for that sub-consultant’s fees. • The insurance requirements under the sub-consultancy agreement should also be, at the least, “back to back” with the requirements of your own consultancy agreement. • Remember that a claim against the sub-consultant may not occur for several years, so it is important that the sub-consultancy agreement requires the sub-consultant to renew its professional indemnity policy annually for a reasonable period after completion of the subconsultancy services (common periods include six or ten years). • Insist on sighting a copy of the sub-consultant’s policy wording and review it for any relevant exclusions that may relate to the sub-consultant’s services. • Also request a copy of the sub-consultant’s certificate of currency, and diarise to request a current certificate of currency annually. • Inform your client of the sub-consultant’s professional indemnity insurance arrangements, and of any relevant changes to them. This is particularly important if a term in your own consultancy agreement requires you to see that sub-consultants have effected, and maintained, professional indemnity insurance.

Professional Indemnity question? Consult Australia believes that it is important to support members in all aspects of their business. We also recognise the impact that the insurance market has on Consult Australia member firms in terms of availability, affordability and quality of Professional Indemnity insurance. Post your latest Professional Indemnity insurance cases on the Consult Australia Linkedin group and our PI Insurance Pathway will advise you on the best steps to tackle these issues.

WHAT FORM OF CONTRACT SHOULD YOU USE TO ENGAGE SUB-CONSULTANTS? Always engage sub-consultants with a signed, written sub-consultancy agreement which accurately reflects the sub-consultant’s scope of services, and most importantly, mirrors your obligations to the client under your own consultancy agreement so that it removes any ‘gap’ in the sub-consultant’s scope of services. These are some options for creating ‘back to back’ terms, in order from the ideal alternative to the riskiest: • Bespoke sub-consultancy agreement - The most thorough solution, especially for high value subconsultants on large projects, is for solicitors to draft an individual contract for each sub-consultant. Its terms would be back to back with your head consultancy agreement with the client. 

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Consulting Matters Protecting your business

• Pro forma ‘framework’ agreement - Have your solicitors draft a single pro forma sub-consultancy agreement which is adaptable for you to use on all projects. It would set out fundamental details like the parties’ names, project details and the sub-consultant’s duty to have and maintain insurance. It would then state that the sub-consultant must comply with your obligations under your head consultancy agreement with the client, and provide a place for that agreement to be attached. • Copy and paste your head agreement - If you copy the entire of your head consultancy agreement into a new document and amend it so that the client’s name is replaced with your name, and your name is replaced with the sub-consultant’s name, you can be confident the agreement is back to back. However, you should then check the new agreement for any obligations that are not appropriate for the sub-consultant. • General agreement to engage ‘back to back’ - Merely sending a copy of your head consultancy agreement to the sub-consultant and stating that they are engaged back to back with it creates uncertainty. Was the sub-consultant supposed to comply with every clause in it? What about the ones that were not relevant to their services? Worse still, if you do not actually provide a copy of the head consultancy agreement, it is hard to argue that the sub-consultant agreed to go back to back with a contract they had never seen. • Standard sub-consultancy agreement Standard sub-consultancy agreements usually provide a balanced risk allocation but are rarely back to back. • The sub-consultant’s own standard terms - These commonly contain clauses which restrict the sub-consultant’s liability and place your insurance cover at risk, and they are not back to back. We do not suggest accepting them. Get clear, written agreement on one of these options before commencing. Be vigilant about reiterating firmly that the agreed contract applies, and not the sub-consultant’s standard terms which they may continue to send to you.

If you effectively engage consultants ‘for and on behalf of’ the client, you are acting as the client’s agent to form a binding legal contract directly between that other consultant and the client. In this case, the other consultant would not be your sub-consultant, and so you would not automatically be held liable to the client for their work and errors. CAN YOU ENGAGE OTHER CONSULTANTS ‘FOR AND ON BEHALF OF’ THE CLIENT? If you effectively engage consultants ‘for and on behalf of’ the client, you are acting as the client’s agent to form a binding legal contract directly between that other consultant and the client. In this case, the other consultant would not be your sub-consultant, and so you would not automatically be held liable to the client for their work and errors. However, engaging ‘for and on behalf of’ is not as simple as writing those words in a letter. If the other consultant has made a mistake, the client may well deny that the other consultant was engaged on their behalf, and seek to prove that they were your sub-consultant after all. In this situation, the only clear legal answer is if there is a consultancy agreement signed by both the client and the other consultant. In the absence of that, it will be a matter for legal argument.

WHAT IF YOUR CLIENT REQUIRES ADVICE ON ENGAGING OTHER CONSULTANTS? You may be held liable for another consultant’s defaults if your recommendation of that consultant was negligent or misleading, and this could include a failure to warn the client that the client’s preferred (or nominated) consultants are not appropriately qualified or suitable for the project. If you

suggest other consultants to be engaged by the client: • Identify a range of specialist consultants necessary for the project and avoid making ‘blanket’ recommendations regarding their services; • Do not overstate their qualifications or reputation, or make any statements that go beyond what you know to be true; and • Disclose any adverse considerations, though of course tactfully. Cos Cirocco National Business Manager Planned Cover


Corporate social responsibility Consulting Matters

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AECOM partners with the Red Cross to improve disaster resilience Global professional, technical and management services provider AECOM has partnered with the Red Cross International Emergency and Shelter Team to provide pro-bono professional services to assist Red Cross Australia with its crisis shelter design and construction. AECOM’s Building Information Modelling (BIM) teams will assess existing twodimensional disaster relief shelter documentation and transform the designs to data rich three-dimensional models. Applying a BIM workflow holds the potential to set new standards in the modelling, coordination, information management and visualisation of disaster relief projects by using techniques with embedded construction data typically only used on projects of significant capital value and complexity. Initial efforts will focus on supporting recovery in the Philippines, following the devastation caused by Typhoon Haiyan in late 2013. To date, the Red Cross has built approximately 400 out of the planned 9000 shelters in the Philippines, and this proposed approach has the capacity to influence other disaster relief responses across the globe. Ben May, AECOM Principal Technical Officer and Project Manager, said the opportunity to apply AECOM’s technical skills to improve the resilience of communities was in keeping with AECOM’s purpose to positively impact lives, transform communities and make the world a better place. “The project is a unique opportunity to apply leading BIM processes and workflows generally reserved for large complex projects to a critical humanitarian service,” he said. “The team jumped at the opportunity to be involved, and to get back to basics in terms of applying our experience in a real life situation.” The final model, construction drawings and 3D animation will be used by the Red Cross for training and awareness raising purposes, but also to highlight the benefits of using BIM technology. Tim McNamara AECOM


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Consulting Matters Project case studies

Creativity combines with know-how to provide more for less Northrop Consulting Engineers recently completed a project that challenged its engineers to deliver more for less. Their thorough understanding of the client’s needs along with a creative, collaborative approach between builder and engineer helped reduced construction timeframes and cost.

in modelling and analysing the construction process to ensure that crane use was optimised, and to eliminate the potential for costly delays.” The team exhaustingly refined the design of the precast slabs for size and weight—as their weight brought the crane equipment to its limit, an addition of even 100mm to the width of the beams would have made the lift impossible. The result of Northrop's careful and focused design, coupled with the thorough planning of the multiple crane lift, was the safe and successful installation of the lower precast floor.

Hansen Yuncken, as the design and construct builder, appointed Northrop to design several structures as part of a $348 million redevelopment transforming Patrick's Botany shipping and logistics facility. The project included an administration block, workshop and support buildings, but by far the most challenging component was the control tower for Patrick's automated container terminal.

Dr Habibi continued, “Lifting the structure's upper floor slab in one piece was not possible—the 33m high lift of a 160 Tonne slab was too great for the available lifting equipment. To overcome this challenge, Northrop broke the slab into six smaller sections and temporary elements were introduced to provide support of the six slabs until each section was stitched together with dowels.”

The engineering challenges were considerable: design a mushroom-shaped concrete tower with a height of more than 42m incorporating an upper floor slab of more than 311sqm, and build it quickly and safely, while being able to withstand the strong winds of the exposed site. As Northrop Principal and Structural Engineer Todd Halliday explains, the team's creative solution to achieve more for less involved the clever use of pre-fabrication integrated into the logistics of heavy lift cranes. The steel fire staircase within the tower's core was designed with enough lateral capacity to resist the temporary wind loading applied to the pre-cast panel walls during the panel erection. The braced staircase was erected first to provide a supporting framework and the perpendicular core panels were then erected and fixed into the staircase. The floor

slabs of the two level control tower were at 28m and 33m, supported by the tower's core. Construction of each floor level posed unique problems. Dr Ali Habib, Senior Structural Engineer at Northrop explains, “the engineering challenge of the lower floor was to design two 125 tonne slabs that could be lifted 28m into their final position. Northrop worked closely with the construction team to understand the lifting limitations of the massive mobile cranes. They invested time

This was always going to be a very diffcult project and we needed to build it differently: we wanted to do as much of the construction work on the ground as possible for safety, access and program concerns. The collective ideas we developed between Northrop and Hansen Yuncken enabled us to think through in detail how we would achieve and execute the desired construction method.

In designing the precast slabs and their connections, Northrop had to consider a complexity of factors such as durability, flexibly shrinkage cracking, lifting design, construction sequencing, robustness and primarily safety. As Halliday explained that similar shipping or aviation towers had previously been constructed by pouring concrete at height —a costly, time-consuming and dangerous process which requires extensive formwork, with workers operating at unsafe heights. “For the Patrick tower, the bulk of the structure was pre-fabricated on the ground and then craned into place. By pre-casting components and then lifting them—like Lego bricks in space—we were able to construct the tower faster and safer, as the number of workers at height was dramatically reduced," Mr Halliday says. Through the clever use of pre-fabrication, Northrop was able to avoid formwork, reducing construction time and cost and delivering more for less for its clients Hansen Yuncken and Patrick. Kate Lainson Northrop


Project case studies Consulting Matters

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Consulting Matters Project case studies

Australia Post puts an environmental stamp on headquarters

In 2009, Australia Post celebrated 200 years as Australia’s oldest and continually operating organisation. Over this double century Australia Post has established a diverse – and one of the largest – property portfolios in Australia. These properties include Post Offices, mail processing sites, warehouses, offices, call centres and a plethora of heritage-listed buildings. With such a large and diverse building portfolio, and given that energy used by these facilities makes up about 68 per cent of the company’s greenhouse gas emissions, Australia Post is committed to initiatives that reduce the environmental footprint of its operations. The extensive refurbishment of its NSW headquarters building in Surry Hills was an opportunity for Australia Post to make a clear statement about its commitment to reducing energy usage and CO2 emissions. In order to fulfil a NABERS Commitment Agreement to achieve a 5 Star Base Building Energy rating, Australia Post has installed one of the largest commercial rooftop PV (solar) installations in NSW. The project is also looking to achieve a Green Star Office v3 Design and As-Built ratings, and a Green Star Interiors v1.1 rating for the Australia Post fitout. NDY’s reputation for sustainability advice led to its appointment in spearheading the ESD ambitions of the project. NDY was

also appointed to provide mechanical, electrical, hydraulic and fire protection design services but it was the sustainability advice, in particular the energy modelling, which identified options to improve the Australia Post building’s NABERS rating from 2.5 Stars to 5 Stars. “Getting to 4.5 Stars was achieved through building services upgrades and fabric improvements including new double glazing,” says NDY director Campbell Williams. “But it was the PV system that was crucial in reaching the 5 Star NABERS target.” Australia Post recently completed the installation of the 283 kWp photovoltaic array. “To put this in context, an average Australian house might install a 2.5 to 3 kWp photovoltaic array, so the Australia Post system is about 100 times the size,” says Williams. The 1048 solar panels at Australia Post will produce 371.5 MWh of electricity per annum;

enough electricity to reduce the base building electrical load by 25% at peak times. Australia Post has long recognised the need to make their buildings more energy efficient and have a national energy management plan in place to achieve long-term results. According to Australia Post’s environmental policy: “As a business that is an integral part of the Australian community, all of our daily decision-making gives genuine consideration to balancing commercial returns, customer service and community and environmental interests.” According to Williams, PV installations are an increasingly common feature of new buildings and major refurbishments, due in large part to increasing efficiency, reliability, and most importantly declining costs. “Prices for photovoltaic systems have come down dramatically in recent years. The current cost of large (10kWp) solar PV systems is around $1.64/W (Ref: Link).

The extensive refurbishment of its NSW headquarters building in Surry Hills was an opportunity for Australia Post to make a clear statement about its commitment to reducing energy usage and CO2 emissions.


Project case studies Consulting Matters

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Consulting Matters Project case studies

As a result of falling prices, rooftop solar is proving an attractive investment which outperforms conventional investment options. Compare this to prices in 2010 which were about $6 per Watt. Just 4 years ago large photovoltaic systems were more than 3 times as expensive as they are now.”

their total scope 1 & 2 emissions. That's a combined saving of nearly 40,000 tonnes of CO2 emissions—this puts Australia Post on track to meet their performance target.”

As a result of falling prices, rooftop solar is proving an attractive investment which outperforms conventional investment options. A recent article by RenewEconomy Magazine (Link) citing data from PV supplier Energy Matters shows that investing in a solar photovoltaic system in NSW delivers a return on investment of about 19% (i.e. a payback of about 5 years), which is twice as good as the average return on Australian Shares (9.8%), and far better than investing in residential property (9.5%), fixed interest savings (7.5%) and gold (4.3%).

Australia Post walks the talk when it comes to sustainability. They have been a proud partner of the Banksia Sustainability Awards for the past five years and recently re-signed as the sponsor of the Leading in Sustainability Small to Medium Business Award which recognises the great work that is being done by Small to Medium Businesses in developing and implementing industry leading environmental and sustainability measures.

In Australia, paybacks for commercial PV systems are typically between 5 to 7 years. They are guaranteed by the manufacturer to last for at least 25 years and many will still be producing power 40 years after being installed, meaning that after they’ve paid for themselves, the owner gets free electricity for more than 20 years. This supports Australia Post’s ‘Carbon Reduction Strategy’ which aims to achieve a 25 per cent reduction in their 2000 level emissions by 2020. “They have been extremely successful throughout this period” says Williams “and in the last 3 years they have achieved a 12 per cent reduction in

For Williams, the decision by Australia Post to install such a large PV array will have flow-on benefits. “When a major organisation like Australia Post commits to improving their energy efficiency and makes such a big investment in renewable energy generation, it sends a strong signal to the broader business community that implementing the right sustainability initiatives makes good business sense.” NDY took out the award for Best Sustainable Development (Existing Buildings) at the 2015 Property Council of Australia Awards in May where this project was acknowledged by the judges as a leading example of energy efficiency and resource utilisation. Ric Navarro Norman Disney & Young


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Consulting Matters Industry comment

Getting more for more As state and local governments across Australia tighten their belts to deliver more services for less, there’s a natural inclination to focus on cost, as opposed to the value that can be generated by an infrastructure investment. This tendency for a “race to the bottom” can be seen at every stage in the procurement process and at every scale of project. In its 2013-14 budget statement, for example, the NSW Treasury notes that it is important to build infrastructure at the “lowest possible cost”. But a blind focus on the lowest possible costs can miss important direct and indirect benefits that can be captured to help fund the investment. According to Infrastructure NSW, better value in infrastructure investment and delivery is achieved by “getting the right infrastructure built at the right time for the right cost. The emphasis on achieving better value is not simply about achieving lower cost or short term efficiency gains. Achieving better value from infrastructure spend will in turn improve productivity, drive economic growth and provide better public amenity”1. The purpose of this report is to raise awareness and stimulate discussion of value capture as both an alternative infrastructure funding method and a decision-making tool to help fill the infrastructure funding gap in Australian cities.

The NSW Government’s $20 billion asset recycling program, underpinned by the narrowest of margins by the NSW Parliament, provides a once in a generation opportunity to invest in the “right” infrastructure, not the cheapest. Let’s hope our political leaders have learned this lesson.

JUNE 2015

Joe Langley AECOM Joe Langley is a Technical Director – Infrastructure Advisory, with AECOM in Sydney. His Value Capture Roadmap - which raises awareness and stimulates discussion of value capture as both an alternative infrastructure funding method and a decision-making tool to help fill the infrastructure funding gap in Australian cities - was recently released by Consult Australia. Download your copy. Arup 2012, Better Value Infrastructure Plan, Infrastructure NSW, Sydney

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Value capture funding model

What do you think is the most pressing issue our industry is facing? Submit an industry comment to Consulting Matters today. Send your comment to our Editor (max 200 words) at kisanne@consultaustralia.com.au.


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Consulting Matters

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CONSULT AUSTRALIA IS ON YOUR SIDE

Consult Australia believes that it is important to support members in all aspects of their business. We also recognise the impact that the insurance market has on Consult Australia member firms in terms of availability, affordability and quality of Professional Indemnity insurance.

Protecting Professionals

BRIC

Bovill Risk & Insurance Consultants

Consult Australia’s PI Insurance Pathway gives Consult Australia members access to the PI market through a Panel of Brokers selected by Consult Australia. Consult Australia is providing a referral service only and is not providing any form of financial advice or offering a financial product. Consult Australia does not guarantee the value, price and terms of cover that may be received from any member of the Panel of Brokers. Any agreement entered into through use of the PI Insurance Pathway will be expressly between the Panel Broker and the Consult Australia member firm.

March 2015

To get a quote please visit: www.consultaustralia.com.au/pipathway.aspx


Open courses and in-house training available!

Thinking about professional development? Consult Australia offers a number of intensive training programs to provide consultants with invaluable skills, knowledge and advice. This powerful training puts you in control and allows you to better protect your business. Please see the website for dates and further information.

Learn vital information about: • Designer duties under current legislation • Hazard identification tools

2015 dates: NSW: 10-11 Sept VIC: 13-14 Aug QLD: 19-20 Nov WA: 19-20 Oct

Contracts for Consultants Learn vital information about: • Contract formulation & terms • Contractual relationships

• Risk assessment, control, and management

• Liability & Insurance

• Safety in design procedures and documentation

• Professional indemnity insurance

• Onerous contract terms • Dispute resolution

• Best practice examples

Facilitated by Tony Horan - one of the most knowledgeable and experienced barristers working in the construction industry in Australia.

• Includes the Safety in Design Tool Kit

Member Price: $1,800 Non-Member Price: $2,680

The Role of the Superintendent Topics include: • Scope of duties • The dual roles of the Superintendent • Decision making and conveying information

Member Price: $2,900 Non-Member Price: $3,200

2015 dates: NSW: 30 Sept VIC: 14 Oct SA: 28 Oct QLD: 11 Nov WA: 25 Nov

• Liability of the Superintendent • Insurance issues Facilitated by Tony Horan - one of the most knowledgeable and experienced barristers working in the construction industry in Australia.

Member Price: $1,300 Non-Member Price: $1,550

2015 dates: NSW: 1-3 Oct VIC: 15-17 Oct SA: 29-31 Oct QLD: 12-14 Nov WA: 26-28 Nov

ALL courses are now available in-house! All courses are also available in-house. For more information, visit www.consultaustralia.com.au or contact Consult Australia on 02 9922 4711 or education@consultaustralia.com.au http://bit.ly/caeducation Jun 2015

Safety in Design

Profile for Consult Australia

2015 June Consulting Matters  

Consult Australia's official quarterly print publication focuses on the issues which are prevalent in the consulting industry through articl...

2015 June Consulting Matters  

Consult Australia's official quarterly print publication focuses on the issues which are prevalent in the consulting industry through articl...

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