Setting the vision for · 2019. 11. 14. · Setting the vision for Building Construction and Maintenance Category. Ms Liza Carroll, Director-General, Department of Housing and Public

Setting the vision for Building Construction and Maintenance Category

Ms Liza Carroll, Director-General, Department of Housing and Public Works

Opening key note speaker

What does a collaborative Building Construction and Maintenance category model look like for Qld Government?

• Ms Kimberley Dripps, Assistant-Director General, Queensland Government Procurement, Department of Housing and Public Works

• Mr Bill Lewis, Executive Director, Major Projects and Property, Department of State Development

• Mr Andrew Curthoys, Director, Infrastructure Policy, Engagement and Taskforce, Department of Infrastructure, Local Government and Planning

Government panel and Q&A

Group collaboration activity

Group collaboration activityHow important and urgent is it to:1. Have a common vision for BCM category in

Queensland Government?2. Have an embedded agency led, centrally

enabled operating model?3. Improve understanding of what value and

price is?4. Find an effective way to plan regionally

across agencies?

Group collaboration activity How important and urgent is it to:5. Improve the way we package work to create

local content and local jobs?6. Improve practice to make tendering more

efficient and use a standard application of contracts?

7. Improve our pre-planning to make more informed decisions using strategic asset management and Building Information Modelling?

Industry speakerDefining value from an industry perspective – How is industry impacted by collaboration?

Mr Bruce Wolfe, Managing Director, Conrad Gargett and QLD Chapter President, Australian Institute of Architects

Why engage?Expertise

• Available — preferably locally

• High quality, world standard

• Reasonable cost

• Fair engagement

What are the risks of not engaging?

• Knowledge gap

• Alienation

• Non-responsive industry

• Government unable to source expertise

Critical for Queensland’s economy

Professional consultancies• Purchase time of trained people (long tertiary studies,

registration, and CPD)

• Value is in the expertise, the knowledge

• 90% of a consultant’s cost is its people

• Accumulation of knowledge through project experience and their systems and methodology

ValueSkill x time x methodology

• Engagement between government and Industry is crucial

• Value delivered through a procurement policy that all agencies operate by

• Four separate workshops on procurement last year

• Significant investment by Industry

Investment in the dialogue

• $16B expenditure in Government purchases of goods and services each year

• Procurement Process right is seen as critical for both Government and consultants

• Directors-Generals and their representatives showed intent to make the new model work

Why

Key learningsCulture and behaviours are important elements in a successful implementation

• Innovation vs short term efficiency

• Cultural change and collaboration

• Importance of linking procurement to QLD Government’s overall objectives

A key enabler — strong and visible leadership by the executives across agencies

Procurement Industry Advisory Group Meetings

Engagement not limited to those workshops Building Construction and Maintenance Meetings

• Non-compliant building materials

• Contracts

• Cost of tendering

• Pipeline of projects

Agenda, issues, forums

The BCM Industry Reference Group Interactive poll results signalled

• Significant lead time for large projects

• Continuity of work in Government sector

• Need for consistent tendering practices

• Consistent regional program of projects

Pipeline and contracts

Value is not about getting the cheapest price

Procurement and value

Buying services

Skill x time x methodology

Success of your project?

Knowledge, skill, expertise, experience multiplied by the time spent by people to deliver it

• Essential ingredients of value

• When fees go down, resources go down

Value vs cost

• Consultants are professionals

• Government regulated

• Professionals have PI insurance

• Reputation is everything

What’s reasonable

“Good design and high quality documentation saves money by leading to fewer disputes, limited variations and a long term value product”

How do consultants establish their fees

Asset cost

Construction costs between 5% and 15% of 25 year life of building

Asset cost

Design and documentation 10% of construction cost

Asset cost

Architectural consultant cost 50% of consultant team

Asset cost

Schematic design 15% of architect fee

Asset cost

The cost area of most influence, yet this is often decided on price

100%

10%

1% 0.5% 0.075%

“Investing in this fee differential of 0.1% of the potential saving is a design dividend of significant proportion”

How the maths work

$18M

$240K $160K

1 staff x 6 wards over 20 years

Amenity reduces 2 sick days per year for 50% of staff

Energy consumption saving

Fee differential

$20K

A value exampleLady Cilento Children’s Hospital

• Fee range established by Project Services in conjunction with Queensland Health

• Depth of research, investigation of options

• Application of evidence based design

• Referenced world standards

• Delivered on time and on budget

• Most awarded Hospital by International Academy of Design and Health

• Budget pressures

• Demonstrating savings

• Reporting success

What drives short term thinkingPOLICY AUTHORITY

AND TOOLS

Price and non-price• Value of the intended asset

• Skill and expertise of the provider

• Environmental outcomes

• Employment outcomes

• Amount of effort that the consultant will apply to see the best solution

Or just the price

• Value conceptual planning

• Importance of dialogue between Industry and Government

• Delivering value

How value is delivered

Evaluating tenders

• Good Design is good business

• Maximize value

• Investment in good design

• Good design equals good value when measured across lifetime of a building or place

• Good design flows from engaging skill at the right time through the right process

Design dividends

0

20

40

60

80

100

120

140

0 20 40 60 80 100

Back to the valueIN

CEPT

ION

CON

CEPT

DESIGN DELIVERY

The 80/20 Principle

“The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.”

Examples:• 20% of the input creates 80% of the result• 20% of the workers produce 80% of the result• 20% of the customers create 80% of the revenue• 20% of the features cause 80% of the usage• In this case, 80% of impact at 20% into design

Continued engagement“Industry sees continued value for Queensland, for Queensland buildings and infrastructure in the continued dialog between Government and Industry”

“A more sustainable and viable industry and a more value conscious government client”

“The realisation of the value of good design will deliver a legacy of civic places, buildings and public infrastructure that will provide rich rewards for our community, now and in the future.”

Doing anything less will be a burden of future generations

Queensland Government is a leader, it sets the position for others to follow

Industry is a willing partner

Group collaboration activity

Group collaboration activity

Themes and questions:• Value: How often do we define value and

make a decision based on value?• Planning: How often do you provide industry

with forward notification of upcoming projects and tenders?

• Local jobs: How often do you package work to match market capabilities?

Group collaboration activity

Themes and questions:• Collaboration: How often do you collaborate

with others within and outside of your agency to maximise market’s capacity and capability?

• Time to tender: How often do you consider how much is time and cost is involved for industry when tendering for government?

Industry speaker

Driving value through procurement

Mr Iain Ward, President, Queensland Major Contractors Association and Operations Manager, CPB Contractors (formerly Leighton Contractors)

Driving value through procurement• Defining value • What are the procurement objectives for

industry?• How to get industry interested?• Engagement methods• Collaboration• Strategies for success• Challenges

Defining valueWhat is value for money? • Driving value for money is the primary principle of the

Queensland Procurement Policy. • Procurement must achieve the best return and

performance for the money being spent. Price is not the sole indicator of value.

• The Queensland Procurement Policy includes three factors to be considered when assessing value for money: – Overall objective of the procurement, and outcome being

sought. – Cost-related factors including up-front price, whole-of-life costs

and transaction costs associated with acquisition, use, holding, maintenance and disposal.

– Non-cost factors such as fitness for purpose, quality, delivery, service, support and sustainability impacts.

What are the procurement objectives?

What industry considers when procuring:• Time • Cost • Quality• Safety approach• Environmental approach• Stakeholder engagement

Steve Draper, Department of Psychology, University of Glasgow

How to get industry interested?• Provide visible pipeline of work:

– Forward looking– Eliminate the boom bust cycles– Eliminate one offs

• Procurement efficiency:– Setout the timeline– Minimise cost of bidding

• Creating the environment to succeed:– Consistent contract conditions– Alternative contract models

Engagement Methods• Briefing sessions

– Industry– Stakeholders– Intra Government

• Expressions of Interest– Online registrations– Capability statements– Shortlisting processes

Participatory Research - WordPress.com

Collaboration• Cooperative arrangement in which two or

more parties work jointly towards a common goal

• Procurement collaboration– Inside and outside government– Industry

Participatory Research - WordPress.com

Strategies for success• What are the drivers

– Jobs – Local industry participation– Accelerated works– Building industry capability

• Strategy Implementation– Stakeholders– Across government– Industry

What is possible?Coal Seam Gas Industry• Massive capital spend • Shorten time frames• Overcoming resource

shortages • Building industry capability• Local industry participation• Stakeholder engagement

Challenges

Group collaboration activity

Group collaboration activity

Themes:• Value• Planning• Local jobs• Collaboration• Time to tender• Other

What can we do? What do we require?

Desired state of working with BCM Category

Management

Where to from here?

Email: [email protected]

Mail: GPO Box 2457, Brisbane Qld 4001

Website: www.hpw.qld.gov.au

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