BUILDING ECONOMIST THE THE GREEN ISSUE FEATURING ON THE LEAN SIDE THAT COMMUNITY FEELING STAYING AHEAD WITH CPD KEN WALSH ON LEAN CONSTRUCTION – P10 ADAM BECK TALKS ABOUT WHAT DRIVES HIM – P16 WE HITCH A RIDE WITH THE CPD ROADSHOW– P24 JULY 2012 THE JOURNAL OF THE AUSTRALIAN INSTITUTE OF QUANTITY SURVEYORS
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Building Economist
The
THE GREEN ISSUE
FEATURINGON THE LEAN SIDE
THAT COMMUNITY FEELING
STAYING AHEAD WITH CPD
KEN WALSH ON LEAN CONSTRUCTION – P10
ADAM BECK TALKS ABOUT WHAT DRIVES HIM – P16
WE HITCH A RIDE WITH THE CPD ROADSHOW– P24 JULY 2012
THE JOURNAL OF THE AUSTRALIAN INSTITUTE OF QUANTITY SURVEYORS
2 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 32 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 3
JULY 2012C O N T E N T S
Building Economist
The
REGULARSContributions Articles relevant to construction economics and related subjects, pictorial material, letters etc are welcome. No responsibility is accepted for unsolicited material. All contributions should be addressed to the editor: Australian Institute of Quantity Surveyors, National Office, Level 6, 65 York Street, Sydney NSW 2000.
The Institute does not, as a body, hold itself responsible for statements made and opinions expressed in this Journal. All rights of translation and reproduction are reserved.
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General and Advertising Australian Institute of Quantity Surveyors, National Office, Level 6, 65 York Street,Sydney NSW 2000.
1826B.E. has a chat with Dr Ken Walsh, Chairman of
the Department of Civil, Construction Engineering
and Management at San Diego State University and
gets the ins-and-outs on Lean Construction, what it
is, how it works, and if it can actually
work at all. Ken came to Melbourne
recently for the first Australian
Institute of Quantity Surveyors
Continuous Professional Development
Roadshow, so we grabbed him and
picked his brain. What he provided
was a unique insight into where
construction is headed in the future,
and what we should know now to be
ready for it.
Lump sum contracts - guest writer
Adam Walker explores the problems
with fixed sum contracts, and solutions.
Adam Beck , the Executive
Director – Market Development and
Sustainable Communities for The
Green Building Council of Australia
talks to B.E. about his vision to leave
the world a better place.
A thirst for knowledge and a
need for innovation sees many
professionals going back to the
classroom. We chat with CPD
Roadshow Sponsor Exactal about
why innovation and CPD matters.
04 0910 24
SNAP SHOT
FROM THE CEO
NUTS & BOLTS SOCIAL
32 QS KIT
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snAPsHot
The Australian Construction
Industry Forum’s (ACIF) April
2012 forecast says while
the Australian economy
continues to enjoy continued
resource driven growth, some
moderation is likely. ACIF says
moderation will be caused by
pressure the high Australian
dollar places on export
intensive sectors and the
winding back of Government
fiscal stimulus measures.
Engineering construction is
forecast to peak at around $120
billion in 2013/14, according to
ACIF, based on heavy mining
activity in that year. Investment
in both private and public
sector engineering projects
is strong over the short-to-
medium term, ACIF says.
“In the private sector, we see
a number of large mining
projects, particularly in LNG.
In the public sector, we see
the impact of the NBN, along
with strong investment in rail
infrastructure in QLD and
NSW,” the forecast says.
Non-residential building
approvals have fallen for
13 consecutive months to
February 2012. ACIF says
this type of construction is
expected to remain weak for
the remainder of 2011/12. Its
outlook for non-residential
building activity is expected to
remain weak over the medium
term.
The moderation in residential
construction is set to continue
into 2012/13 but ACIF says,
in light of significant dwelling
shortfalls, strong underlying
demand and recent Reserve
Bank rate cut decisions a
recovery is forecast as access
to credit improves.
Broad Group Holdings Pty
Ltd, a fully owned subsidiary
of Leighton Contractors Pty
Ltd, has recently secured
more than $300 million of
major construction projects
throughout Western Australia,
Queensland and the Northern
Territory for clients including
Rio Tinto, Perth Airport
and the Northern Territory
Government.
The projects support the
strategic direction and growth
of Broad’s building and civil
divisions. The contract wins
also reflect the company’s
new focus and commitment
to further diversifying into
building infrastructure within
the resources sector.
Some projects are situated
in remote areas with a focus
on mining camps, associated
infrastructure and work within
Indigenous communities.
Chairman, Peter McMorrow
said Broad is continuing to
develop and diversify as a
market leader.
Broad’s infrastructure
capabilities and understanding
of Indigenous communities
have further strengthened
after successfully delivering
works as part of the New
Future Alliance (NFA –
Leighton Contractors, Broad,
Ngarda, Opus) in remote areas
of the Northern Territory for
the National Partnership
Agreement on Remote
Indigenous Housing. The
NFA has subsequently been
awarded further works and the
experience gained by the Broad
team has created new and
exciting opportunities across
the country.
RESOURCE-DRIVEN GROWTH TO MODERATE SAYS ACIF
A BROAD 300 MILLION
in BRiEF
CITY OF SYDNEY RETRO-GREEN INITIATIVECity of Sydney has begun
an overhaul of 45 of its
properties to make them more
energy and water efficient,
potentially saving more than $1
million annually.
The two-year project, which will
cost $6.9 million, includes Town
Hall House, Customs House,
pools, community centres,
libraries and car parks.
It will involve fitting buildings
with energy efficient lighting,
air-conditioning and heating,
centralising power management
systems for computers, and
installing voltage reduction units
to reduce energy use by pumps,
fans and lights.
The initiative would almost triple
the reduction in the council’s
carbon emissions, from 6.8
percent to 19.9 percent, says Lord
Mayor Clover Moore.
Origin Energy won the tender
process to deliver the project, and
energy and water performance
guarantees will be independently
verified.
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Abigroup has been awarded a $40 million
project by the Hunter Water Corporation to
build a new water recycling plant as part of
the Hunter Treatment Alliance program of
works.
The Kooragang Industrial Water Scheme
(KIWS) involves constructing a new water
reuse plant that will use Micro-filtration
Reverse Osmosis processes with a 9 ML/
day output including provision for a future
expansion to 12 ML/day.
Abigroup’s Ian Hutchinson, who is the
Hunter Treatment Alliance Program
Manager, said that he is very excited that
Hunter Water Corporation Board has
decided to deliver the KIWS project using
the Hunter Treatment Alliance delivery
model.
“We believe that the KIWS team have
found the best technical and value for
money solution available to Hunter Water
Corporation for this type of project.”
The project includes an on-site education
centre building, discharge and return water
pipelines and the design, construction and
commissioning of all telemetry and control
systems for the scheme.
Site mobilisation is expected to commence
in December 2012 and the project is
expected to be completed by mid-2014.
The Hunter Treatment Alliance is carrying
out a $240 million five-year program of
works with the Hunter Water Corporation
designed to enable the region to cater for
increased population growth and ensure the
plants operate reliably and sustainably into
the future.
Pacnet has announced the appointment of
Nigel Stitt as Chief Executive Officer of its
Australia and New Zealand business.
With more than 21 years of IT and
telecommunications experience, Mr Stitt has
served in a number of senior positions with
Pacnet over the past 8 years, most recently
National Sales Director for Pacnet Australia.
Since the launch of Pacnet in 2008,
following the operational merger of Pacific
Internet and Asia Netcom, Mr Stitt has been
instrumental in delivering double-digit
growth for the company’s business across
Australia.
“We are pleased to appoint Nigel to the
helm of Pacnet’s Australia and New
Zealand operations where he can fully
utilize his industry expertise and business
savvy in moving our local business into its
next generation,” said Bill Barney, CEO of
Pacnet.
Prior to joining Pacnet Mr Stitt was General
Manager of Techcel/CNN Internet where
he became a top revenue contributor after
developing a business model integrating
ISP offerings with its IT integration
business. Mr Stitt has also held consultant
and management positions with Forsythes
Information Technology, Spear Technologies
and Osborne Computers.
The appointment of Mr Stitt to the
position follows former Pacnet Australia
and New Zealand CEO, Deborah
Homewood’s decision to pursue new
professional endeavors outside of the
telecommunications and technology sector.
Under Ms. Homewood’s leadership, Pacnet
Australia and New Zealand has been a
significant contributor to the company’s
overall achievements over the past 10
years.
ABIGROUP WINS WATER RECYCLING PLANT PROJECT IN THE HUNTER
PACNET APPOINTS NIGEL STITT ANZ CHIEF
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snAPsHot
One of the world’s leading engineering,
architecture and environmental
consulting companies, GHD, has added
new service offering Behavioural
Design, to its suite of capabilities that
will provide added-value to clients.
Led by Jonathan Daly, Behavioural
Design aims to bridge the gap between
design intent and human behaviour by
applying a human-centred approach to
the design of the built environment.
A human-centred approach puts
the user at the centre of the design
process, to enhance the functionality
and experiential value of a building or
urban space.
“Climate variability, population growth
and urbanisation are all issues that
currently challenge major cities. We’re
pleased to have such a strong and
experienced team to find innovative
ways to address these complex
challenges,” commented GHD Manager
- Victoria, Dean McIntyre.
“This new offering successfully
balances the broad range of services
we provide, to help our clients focus
on their core activities whilst we
concentrate on targeted solutions.”
Behavioural Design combines
behaviour change, design research,
architecture, urban design, spatial
analysis and visualisation, to provide a
stronger contextual fit between people
and place.
GHD LOOKS AT BEHAVIOUR IN DESIGN
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Conduit Recruitment - The Preferred Choice Conduit Recruitment are the preferred recruitment agency for the Australian Institute of Quantity Surveyors and the NSW Master Builders Association. In partnership with these organisations we provide:
Public Zone(s): Public space within the facility (lobby area, cafeterias, rest rooms, auditoriums, etc.)
Circulation Zone(s): Zones for the movement of people, processes and/or utilities throughout the facility, both horizontally and vertically.
Function Zone(s): Comprise the primary function of the facility, such as administration (offices), manufacturing, hospital, laboratories, warehouse, etc.
A facility can have more than one or combination of these zones.
FUNCTION ZONES
SITEWORK ZONEUsing the same concept of zone
breakdown in ship building, facilities
breakdown would be:
10 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 11
ON THE LEAN SIDE
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FOR ITS FIRST CPD ROAD SHOW, THE AUSTRALIAN INSTITUTE OF QUANTITY SURVEYORS INVITED DR KEN WALSH, PROFESSOR AND CHAIRMAN OF THE DEPARTMENT OF CIVIL, CONSTRUCTION ENGINEERING AND MANAGEMENT AT SAN DIEGO STATE UNIVERSITY, TO DISCUSS THE “INS AND OUTS” OF LEAN CONSTRUCTION. B.E. SAT DOWN WITH DR KEN WALSH TO DISCUSS ALL THINGS LEAN AND IF IT CAN REALLY WORK.
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THE PRINCIPLE OF LEAN CONSTRUCTION SEEMS SIMPLE. REDUCE COSTS BY CUTTING WASTE, INNOVATE BY ENGAGING PEOPLE AND ORGANISE THE WORK-PLACE TO BE MORE EFFICIENT. YET MANY STRUGGLE TO DEFINE WHAT LEAN CONSTRUCTION REALLY IS. ACCORDING TO DR KEN WALSH, IT CAN BE THIS DIFFICULTY TO “LABEL” THE PROCESS THAT IS LEADING TO A WIDER CONFUSION.
insigHt
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Australia is one of the last developed
countries to look how lean can be applied
to the construction sector, with the
Lean Construction Institute Australia
forming just under a year ago and its
second conference to be held at the end
of August. Lean Construction Institute
Australia Chair, Marton Marosszeky
believes that the complexity of the
process of translating the client’s brief
into a product hinders the drive for
efficiency and hence also affects the
uptake of business improvement ideas
such as lean production.
“When you consider the car industry,
there is a lot of repetition and you
can just point at one and say ‘I’ll have
that one in red’. However, when you
look at commissioning the design and
construction of a building, you are
committing to a product purchase even
before it can be described on paper.
There are so many ways the process can
go wrong it is hard for people to see ways
of improving it, this makes it hard for
people to look past the way we do things
now.”
According to Marton, Australia has not
needed to change as it has been in an
extraordinarily lucky position with the
minerals boom and Government both
investing heavily in construction, building
and infrastructure, and keeping the GFC
away from our doors. However, now
Australia’s time has come.
“The interest in lean has rocketed
overseas due to the GFC, when things get
really tight you need to look at becoming
more efficient – its common sense. Now
with construction in our cities and towns
becoming stressed, the interest in lean is
rising.”
If you want to understand how lean
construction can really make a difference,
Dr Ken Walsh says to look no further than
the ship building industry (See Nuts and
Bolts, page 8). Considered to be one of
the oldest professions in the world, ship
building and its processes has undergone
major transformations over the years.
“...DEFINING LEAN IS ACTUALLY EASY TO DO – DOING CONSTRUCTION WITH LESS.” KEN WALSH
14 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 15
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Ken Walsh presents at the CPD road show.
“QUANTITY SURVEYORS ARE CRITICAL TO THE UPTAKE OF LEAN. THEY ARE ABSOLUTELY ESSENTIAL TO THE PROCESS OF QUANTIFYING VALUE AND SUGGESTING ALTERNATE APPROACHES TO HELP THE OWNER OBTAIN MORE VALUE FOR THEIR ExPENDITURE.”
insigHt
This product-orientated approach has seen the U.S lagging far
behind Korea and Japan. Commanding up to $150million and
a production time of 36 months has caused the U.S to go from
leading innovators to sorry losers to the 7-10 month turnaround
for only $33million of Korea and Japan. All this without
compromising quality and safety has seen a dramatic shift in
customer base.
When Dr Ken Walsh pulls up these figures in his presentation
an audible gasp can be heard around the room and everyone
immediately points to the difference in labour wages and costs
for the inflated price of the Americans. In fact, when money and
wage costs are mentioned one of the most common questions
he receives is based on the different labour climate between
shipbuilding and the construction industry.
“And my answer to that question is that obviously there are
differences. Nonetheless the big changes that we have seen in
productivity drive the cost differentials in shipbuilding, not the
labour rates themselves.”
It is the questions that Ken has answered and the people he
has spoken to throughout his whirlwind tour of Australia that
has shown him that the concerns they face in the US are clearly
occurring on Australian shores too. Impressed with the responses
he has seen from his Australian audiences to his presentation, it
has supported him in his belief that lean construction is something
this industry needs.
“I think the response [to the presentation] was very thoughtful.
It was quite clear to me that there is a common recognition that
a change in productivity is probably needed in the construction
industry, and furthermore, that such a chance is unlikely to
occur without a dramatic change in our approach to construction
processes.”
This view is supported by Marton Marosszeky, who believes that
people won’t be able to afford not to adopt lean practices in ten
years time, with the three principles of lean already considered to
be the cornerstones of every business: focus on what the customer
wants and add value, build productive relationships at the supplier
and sub-contractor level to ensure smooth flow, and eliminate
waste.
“Clients like the idea of lean, and the concept is already appearing
in many contracts, but they do not currently really know what they
are asking for. Early adopters of lean will see the positive benefits,
and the rest of the industry will have follow.”
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It seems strange that an industry that has pushed the envelope
with sustainability and a focus on “going green” is so reluctant
to change its processes. Although many within the construction
industry have jumped on to environmental rating tools, with design
heavily influenced by these guidelines, these can be seen as more
value propositions rather than the solution.
In a world where sustainability sits high on the agenda, lean
construction can also offer environmental benefits too. If it is lean,
it can be more sustainable too. The lean techniques can assist
construction companies to improve resource efficiency, and in turn
improve their bottom line. As Dr Ken Walsh states when the two
disciplines are merged, “...the owner can more easily incorporate
green if the overall cost balance becomes more favourable due to
lean concepts.”
And Quantity Surveyors have a role to play in lean construction.
“Quantity Surveyors are critical to the uptake of lean. They are
absolutely essential to the process of quantifying value and
suggesting alternate approaches to help the owner obtain more
value for their expenditure.”
They are also important to drive the lean construction ideas
on every project. “This means that they could play a key role in
facilitating the advance of the philosophy into the minds of the
owner,” he continues.
So with the obvious reluctance to embrace the lean construction
philosophies despite the benefits, where does that leave us? What
does the future hold for lean construction?
If Dr Ken Walsh is to be believed, there will be a point in the future
where lean construction will become essentially the standard
approach to construction. “Manufacturing has largely progressed
to a point where any line you walk into will have been influenced
by lean manufacturing ideas. Maybe to greater or lesser degrees,
but everyone is now using those ideas. Sooner or later we will see
something similar in our industry,” he concludes.
From our waistline to the construction site, there is always room
to trim some ‘fat’. With hundreds of Quantity Surveyors attending
the first AIQS Road Show and ready to spread the word on lean
construction, it is only a matter of time before the construction
industry cuts a slimmer figure on the Australian landscape.
16 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 17
As AustrAliA seArches for its sense of community, one mAn is using his pAssion to leAve the world A better plAce to inspire the industry to creAte A more sustAinAble plAce to live.
the green building council of AustrAliA is
celebrAting the releAse of the new green stAr –
communities pilot rAting tool, And At the helm
sits executive director – mArket development
And sustAinAble communities, AdAm beck.
b.e. chAts to AdAm beck About whAt drives
his enthusiAsm to creAte better communities.
THAT COMMUNITY FEELING
PIXEL PErfEctPixel, a new building in Carlton, Victoria has received the highest ever Green Star Rating.
18 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 19
To Adam Beck, it is a single desire that drives his work: “I want to
leave the world a better place than it was when I got here.”
It’s a big goal, and not an easy one. As the Executive Director – Market
Development and Sustainable Communities for the Green Building
Council of Australia (GBCA), he has seen the world change. Since the
launch of the Green Building Council ten years ago, our landscape
is looking a little more sustainable. There are now 455 Green Star
certified projects across Australia, amounting to 7.1 million square
metres of space. According to Adam, this shift to sustainability within
the sector has been nothing short of extraordinary.
“When the Green Building Council of Australia was established
[in 2002], the industry had no metrics or agreed methodology to
measure green building practices, no assessment tools and no
benchmarks for best practice. There was no organised approach
to knowledge sharing or collaboration. Nor was there any way for
the industry to promote or profit from green building leadership.”
Fast forward ten years and offices, apartments, schools, shopping
centres and hospitals have all embraced sustainability. “And, of
course, we’ve moved from looking at how we green our buildings,
to how we green our entire communities and cities,”
Ask Adam how he sees Australia, and in particular its major cities,
in the future and he immediately pictures something that sounds
idyllic as it all works together in harmony. A country designed to
take a holistic approach to environmental, economic and social
sustainability that results in places that will stand the test of time,
whilst remaining vibrant and liveable.
“We want to see communities that promote active living and
local employment and education opportunities. We want to see
more communities engaged in local food production and using
active modes of transport. And we want to see communities
with a diverse mix of people, affordable housing and good access
to amenities.”
Mixing those ingredients together has enabled Adam, with a little
help from all three tiers of government, public and private sector
developers, professional services providers, academia, product
manufacturers and suppliers and other industry groups, to create
and release the Green Star – Communities PILOT rating tool.
18 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 19
The AIQS is delighted to announce the inaugural Infinite Value Awards.
This event celebrates the People and Projects of our members and the affiliated professionals in the Property and Construction Industries.
This annual vibrant awards program will discover, reward, and promote a wide variety of National and International initiatives culminating in a glittering gala dinner at the end of the year.
With 13 categories that aim to showcase the breadth and depth of our industry, all firms and industry members have the opportunity to enter in a variety of categories.
We know our people are something to be proud of; they work hard and are often behind the scenes in some of the world’s largest projects. Now is the time to recognise the unsung heroes of the construction industry and the many faces that are responsible for the built environment in which we live.
These are the key dates to mark in your diary:
6th August Entries Open
10th September Entries Close
17th September First round of judging
2nd October Finalists Announced
15th November Gala Award Dinner
infinitevalueawards.com
PRINCIPAL PARTNER
SPONSORS
We always knew you were valuable, but now we want to tell the world.
infinitevalueawards.com
Responding to the industry’s call for a
rating tool to help transform and better
plan Australia’s communities, Green Star
- Communities assesses the sustainability
performance of projects’ planning, design
and construction outcomes against the
categories of governance, design, livability,
economic prosperity, environment, and
innovation.
So with over 500 projects on the GBCA books
hoping to achieve a Green Star rating, and
with a proven track record of changing the
approach to building design, why is Adam so
passionate about Green Star – Communities
PILOT rating tool? Why communities and
why now?
“Buildings are just one part of the
sustainability equation. Broader
sustainability issues around our
communities and cities are just as
significant, such as the design of our
public spaces, the affordability of
housing, engagement processes with
our stakeholders, climate adaptation
and community resilience. Improving
the sustainability of our communities
is our next challenge – and Green Star
– Communities is a response to that
challenge.”
Supported by some of Australia’s largest
industry and government organisations,
and off the back of over two years of
extensive collaboration, Adam has had to
approach this project with much ardour
in order for it to be a success. It has not
been without challenges. Engaging with
economists, planners, social scientists,
project managers, academics, government
representatives, product manufacturers,
to name a few, was never going to be an
easy ride – but also presented him with
something to be proud of.
“My greatest achievement has been holding
together - virtually with sticky tape - the
energy of the Green Star - Communities
Technical Working Committee, which was
one of the most diverse stakeholder groups
across the built environment I have ever
worked with. In fifteen years of facilitating
stakeholder engagement processes, I
have never had to engage with so many
disciplines,” declares Adam.
Whilst he looks with pride at the new Green
Star tool ready to influence an industry,
waits for the expressions of interest for
PILOT projects to come flooding in, and gets
ready to analyse the feedback from what is
sure to be a vocal sector, Adam can take the
time to reflect.
“It is hard not to try and be all things to all
people, when everyone is so passionate
about making a difference to Australia’s –
and the world’s – built environment. The
best piece of advice I’ve ever received is to
make others around you successful. Then
you’ll be successful in your endeavours.”
After spending years trying to change an
industry and improve the buildings, and
now the communities we live in, what
advice does he have for the next generation
of building and construction professionals?
“Don’t try to do it on your own! There are
always others who will be willing to come
on the journey. You will get there quicker,
achieve more and have more fun along the
way. Also, don’t underestimate the future.
As Einstein once said: “If at first the idea is
not absurd, then there is no hope for it.” ”
Working in an evolving industry and
surrounded by a workforce ready to make a
difference drives Adam forward. He takes his
own advice and surrounds himself with some
of the best from across the building and
construction industry. You just have to take a
look at who he has worked with to bring the
Green Star – Communities PILOT rating tool
to fruition.
“Australia has some of the world’s best
brains, skills and experience when it
comes to planning, designing and building
“my greAtest Achievement hAs been holding together - virtuAlly with sticky tApe - the energy of the green stAr - communities technicAl working committee...”
22 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 23
About thE GrEEn buILdInG councIL of AustrALIA (GbcA) The Green Building Council of Australia was launched in 2002 with a mission to develop a sustainable property industry for Australia by encouraging the adoption of green building practices. Uniquely supported by both industry and governments across the country, this national, not-for-profit organisation created the Green Star rating tool to provide a national benchmark and reward innovation.
WhAt Is GrEEn stAr?Green Star is a comprehensive, national, voluntary environmental rating system that evaluates the environmental design and construction of buildings and communities. The Green Star rating tools assess building or community projects against a number of categories including management, indoor environment quality, materials, energy, water, emissions, land use & ecology, transport, and innovation.
sustainable cities. The richness
of the industry – both in terms
of its depth and breadth of
knowledge – is world class.
I’m passionate about taking
advantage of this depth. We
have a strong economy, a clear
urban agenda – and the time is
now! Being able to play at the
centre of the ‘built environment
sandpit’ is exciting,” he
concludes.
It is clear to see that greening
the Australian building
landscape is Adam Beck’s
passion. His, and the GBCA’s,
vision of Australia’s cities and
communities to be “liveable,
productive and sustainable
places” is evident and it is the
passionate people like Adam
that will drive the changes, and
just maybe, be the generation
that can leave the world a
better place.
A GrEEnEr housEThere are now 455 Green Star certified projects across Australia – an extraordinary shift in our culture.
22 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 23
MELBOURNE WELCOMES KEN WALSHcPd RoAd sHoW 14 mAY, mElBouRnE
THE AIQS welcomes Ken Walsh to the Melbourne CPD Roadshow
KEN WALSH rubs shoulders with our best and brightest.
sociAl
24 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 25
AIQS BADMINTON 2012
Last month some Victorian AIQS
Members got together at Albert Park to
enjoy a smashing round of Badminton.
First: Kong King Yap & Prashanth Nair
from Charter Keck Cramer
1st Runner-up: Joseph Lin & Vincent
Liew from Aquenta
2nd Runner-up: Edmund D’Cruz & Aldo
Assirvaden from Charter Keck Cramer
tHuRsdAY, 28 JunE 2012m.s.A.c, AlBERt PARk, Vic
AIQS MEMBERS enjoying the CPD Roadshow post event.
sociAl
If you have held or attended an AIQS event in your area and want to feature it in the Social Pages please send the event details and photographs with the names of who is in the picture to [email protected]
24 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 25
A rApidly chAnging work environment, A thirst for knowledge And A need for innovAtion Are sending mAny professionAls bAck into the clAssroom. As AiQs hits the roAd with its new continuous professionAl development nAtionAl roAd show, the building economist explores the increAsing interest in cpd And chAts with sponsors exActAl on why innovAtion And cpd mAtters.
STAYING AHEAD WITH CPD
26 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 27
The idea of Continuous Professional
Development, or CPD as most of us
know it, is nothing new. New government
policies, changing market conditions,
differing client demands, and a worldwide
economic recession have sent the workforce
clamouring to learn more and stay ahead of
the game.
To keep a competitive edge in a constantly
evolving and demanding industry,
organisations have always invested heavily
in product research and development.
Much time and money is often spent in
developing innovative technology to meet
market requirements. Leading software
developers, and AIQS Road Show sponsors,
Exactal, knows how important innovation is
to position itself as a leader.
For Mark Kefford, CEO and Founder of
Exactal, using technical brilliance guided
by its internal Quantity Surveyor team
to solve commercial industry problems
makes innovation possible. To Mark, it is
about fusing “industry requirements with
technical delivery capabilities to produce
the best result. Without both parties
working seamlessly together, innovation
would not be possible.”
Now organisations are plunging dollars
into developing their staff and encouraging
a more structured approach to learning.
Demand for distance learning, seminars
and presentations is high and the building
and construction industry sector is calling
for more.
And it’s not just organisations keen to jump
on board with CPD. Individuals keen to keep
on top of their profession and add value to
themselves as an employee are choosing
STRUCTURED LEARNINGMore and more organisations are plunging dollars into developing staff and encouraging learning.
26 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 27
to focus on CPD. Sharon Beenie, CEO and
founder of property specialist recruitment
and headhunting agency sharonbeenie,
states that although the focus is on the
experience candidates have gained and the
longevity that they have been in roles, the
added value of CPD cannot be ignored.
“A candidate’s desire to improve
themselves independently provides a
strong sense of their commitment to
the industry and an insight in to their
dedication to further themselves. CPD is
a positive part of the industry. It allows
employees who are not in progressive
organisations a chance to still remain up to
date with changes,” concludes Sharon.
When it is just as competitive to secure
roles within the property and construction
industry as it is for an organisation to win a
project, CPD offers a double incentive.
Australian Institute of Quantity Surveyors
CEO, Michael Manikas, believes it is even
more important for the property and
construction sector, and in particular
Quantity Surveyors, to focus on CPD.
“We as a sector are one of the most rapidly
evolving, and investing in our minds is just
as important as investing in our materials,”
says Michael. “It is the building industry
itself that has initiated the uptake of CPD
GOING SOLOMany individuals take it in to their own hands to improve themselves.
28 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 29
GEttInG EXAct WIth EXActAL As AIQS Road Show sponsors, Exactal recognises the importance of CPD for innovation and embracing new technologies. With a new product - CostX Live - released onto the market, Exactal CEO and Founder Mark Kefford knows the challenges the industry faces and how people need to recognise and embrace the changing face of technology to be truly successful.
In a fasT movIng IndusTry, whaT are The mosT ImporTanT Issues facIng exacTal?The biggest issue we face is that the industry and technology are both advancing rapidly at the moment and we need to continue our large
investment into R&D to ensure we continue to produce products ahead of the market needs. Now the entire industry is focused on BIM we are continuing to push the integration envelope whilst still focusing on the estimating or Quantity Surveying side, rather than the traditional architecture side of BIM.
exacTal consIder Themselves (and posITIon Themselves) as leaders – how?
When Exactal produced the first version of CostX the industry was very much using scale rulers and paper drawings. CostX introduced a new way to measure and has continued to evolve ahead of industry requirements. With the architects designing everything in 3D and BIM now, CostX is still able to take the quantities
out and make sense of the information for the estimator or Quantity Surveyor. Everything in CostX is still focused around the Quantity Surveyors but the information flow is much smarter and the Quantity Surveyor is now an integral part of the BIM design team.
whaT Is cosTx lIve?CostX Live is the newest innovation in estimating, allowing you to view CostX plans and projects in real time using the cloud. When on site you can be up-to-date with live plan data anywhere you go using laptops, tablets or smart phones. CostX Live is next step in the distribution of estimation data to the field.
To find out more about Exactal and what CostX Live can offer your next project, visit www.exactal.com
options, so now it is up to professional and
industry associations like the AIQS to create
effective, accessible and affordable options
for the Australian workforce.”The CPD Road
Shows kicked off in May with Dr Ken Walsh,
from San Diego University offering insights
into lean construction (see page 10 for more
on lean construction and Dr Ken Walsh) and
will continue throughout 2012 with more
topics and speakers ready to expand the
minds of all AIQS members.
“It is up to all of our members to keep
abreast of what is happening within our
industry and the AIQS will continue to
strive to keep our members constantly
learning, sharing and networking. It is only
by opening the mind and working together
as an industry that true innovation can
happen,” concludes Michael Manikas.
For a member organisation like the
Australian Institute of Quantity Surveyors,
delivering regular and informative events
would not be possible without sponsors,
and Exactal stepped up to support the first
CPD Road Show.
With industry qualified Quantity Surveyors
providing the first line of customer
contact – whether presenting, training or
supporting the use of the products – Mark
Kefford understands the importance of
CPD in enabling the industry to keep
pace with changes in technology, which
in turn supports Exactal’s commitment to
continuing the development of its products.
“It is not enough to simply buy a new
piece of software. Practitioners need to
understand the context in which industry
workflows are changing and how they can
actively participate. We find that there is
a lot of misunderstanding and unrealised
expectations arising from a lack of
knowledge in these areas and CPD can
address that.”
Continuous Professional Development
does exactly what it says on the tin. In an
industry where nothing stays the same, the
next project is different, the next team filled
with new faces, and new challenges laid
out, organisations and their staff cannot
afford to stay still either. Whether adding
value to your staff, or your own CV, if you
want to lead from the front then it is time to
embrace CPD ASAP.
The Lean Construction CPD seminar with
Dr Ken Walsh can be purchased as a
webinar for $25 via the AIQS website. Visit
www.aiqs.com.au for more information.
The next AIQS CPD National Road Show
will take place in early 2013 with a brand
new industry topic and guest speaker. Keep
an eye on the AIQS website for further
information towards the end of the year.
28 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 29
in AustrAliA we hAve two mAin procurement methods
for constructing buildings which Are lump sum
price And design And build. both involve the builder
providing A lump sum contrAct price bAsed on A set of
tender documents which Are supposed to be complete,
coordinAted And reflective of the intended risk
Apportionment of the vArious pArties. we hAve been
using these contrAct methods for yeArs And obviously
clients And bAnks love the promise of A fixed price.
lump sum contrActs
ADDICTED TO FALSE CERTAINTY
But is this method conducive to
producing quality buildings via an
efficient process. Is it a methodology that
is sustainable in the future? Or are we just
addicted to the false sense of certainty that
it eludes to?
The main problems with these fixed sum
contract methods are:
No fixed price - no building contract ever
has a fixed price. There are always changes
and when the builder is on board the room
for negotiation is virtually gone. In fact the
builders will be counting on changes to
increase their profits on the project. They
will be looking for them. The more changes
the better to extend the contract period and
make claims.
Are the tender documents worthy of a fixed
price? - probably not. Design fees are the
first place a client looks to save money. But
if the documents are not complete, well
coordinated and of good quality then the
fixed price will be even more of a myth and
the builders will be wringing their hands
and firing up their ‘variation spotting’ team.
Also, if there are any ambiguities in the
documents then the items are excluded
or a large cost is placed against them to
cover the risk. The ambiguities inflate costs
and shift the risk away from the party that
should be embracing it.
Us and Them - the fixed price contract
is not really conducive to a cooperative
arrangement between the client and the
builder. Due to the very low margins, the
builders’ prerogatives of increasing his
profits by pushing down subcontractor
prices and exaggerating variations are not
the same prerogatives as the client - which
are keeping down costs and making sure
30 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 31
subcontractors are producing a quality
product. The contract parties are usually
pulling in opposite directions. It often ends
in dispute.
Tender Wastage - there are instances
where a lump sum tender is issued to
anywhere between 10 to 15 different
builders to price. This means that there
could be 15 different tender teams
measuring and pricing the works, 15
different highly paid Estimating Managers
pulling all the prices together, 15 different
executive teams spending time refining the
price, multitudes of subcontractors pricing
the works and so on and so on. There is
often a shared Bill of Quantities that can
save on the measurement wastage but
ultimately the lump sum tender process
squanders the industry’s resources. Plus a
tender list with 15 names on it would scare
off most astute builders and so the client
may not have access to the best companies.
All this reduces efficiencies and reduces the
chances of a quality product.
It is interesting that when we recently
asked two very prominent NSW Estimating
Managers whether they thought that
the recent cases of builders going into
administration in NSW was due to the lump
sum form of contract – they said that it
had a great deal to do with it. Obviously
this factor is heightened by the current
economic climate but they both agreed
that the lump sum contract puts inordinate
pressure on the builders’ margins and that
any errors made in the pricing of these
contracts can spell disaster for the builder.
The pressure is high. This is obviously why
Estimators are paid very large salaries –
and so they should be, if you understand
the pressure they are under to win projects
from suspect tender documents.
So what is the solution? When we asked
a number of prominent members of
the NSW building community including
Estimators, Consultants and Clients they
agreed that the answer is a move towards
less adversarial forms of contract such as
Management Contracting and Construction
Management. Also, Two Stage Tendering
and Guaranteed Maximum Price forms of
contract are proving popular. With these
contracts the builder is engaged earlier
without the need for full documentation
(thereby making use of their buildability
knowledge), there is more effort placed in
pre selection of the builders so that a very
relevant and select tender list is compiled,
and a partnering atmosphere is promoted
rather than an ‘us and them’ regime. The
efforts of the builder and all the talents
of the parties involved are concentrated
in achieving the project goals rather than
ensuring survival commercially. This
is not to say that competitive tendering
is eliminated as the competition is still
experienced when sourcing subcontractor
prices.
The move to these contract forms will
benefit the health and efficiency of the
Australian construction market. They are
used all over the world with continued
success. When stakeholders and banks
break there addiction to the false certainty
of the lump sum contract, then the builders
and project teams will be freed up to
concentrate project success.
By Adam Walker
AAIQS MRICS
Director at Conduit Recruitment
tHE EFFoRts oF tHE BuildER And All tHE tAlEnts oF tHE PARtiEs inVolVEd ARE concEntRAtEd in AcHiEVing tHE PRoJEct goAls
RAtHER tHAn EnsuRing suRViVAl commERciAllY.
30 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 31
Qs kit
SAMSUNG GALAxY S IIIThe highly anticipated Galaxy S III Smartphone
available now - Intuitive technology ready in
stores around the country.
The effortlessly smart and intuitively simple
Samsung GALAXY S III is now available in
Australian stores in an effort to revolutionise the
smartphone experience. This next generation
Samsung smartphone boasts sleek design and
effortless functionality with features such as
voice recognition, a 4.7 inch HD Super AMOLED
display powered by the Android 4.0 (Ice Cream
Sandwich) and an 8MP camera.
The introduction of ‘Natural Interaction’ within
the device enhances the experience between
the device and the user as it includes not only
facial and motion recognition but also the new ‘S
Voice’1 which uses an advanced language user
interface designed to listen and respond to the
voice and words of the user.
The new ‘S Beam’ technology also allows easy
sharing between devices by simply placing two
devices back to back and pressing a button.
Music, movies and photos can be easily swapped
between friends providing seamless interaction.
Access to top Australian content means that
Samsung users can also access the best Apps
available as well as GPS functions and an ever-
growing range of movies and television.
With its great new design, leading technology
and improved functionality, the Samsung
GALAXY S III is set to become the leading
smartphone in the Australian Market.
The Samsung GALAXY S III is available now from
various retail outlets at $899 RRP outright for
the 16GB device from all operators and is also
available on plans.
32 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 3332 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 33
Qs kit
KORK 2 BRAUN WATCH THE SPACE BAR LOGITECH SOLAR KEYBOARD
ECOCHIC.COM.AU
The Kork 2 for iPad 2 protects
your iPad while giving you
access to all the buttons and
inputs, and even integrates
with the Apple Smart Cover
for complete protection of
your fruity device. It works
as a natural sound amplifier
too, and has a shade mode for
using outdoors. Free shipping
worldwide from Europe.
Current retail price $49.95
www.shop.aprodukt.com/
products/kork-2
This stainless steel
chronograph watch features
second, minute and hour
chronograph dials in a sleek
water-resistant design that
exudes Braun’s company
values and style. Ideal for
everyday wear for the stylish
QS gentleman. Available from
Mr. Porter. Price: £150 (approx
$232AUD)
www.mrporter.com/
product/325873
A favourite of us here at
B.E., it is also notoriously hard
to buy while in stock online. If
you can get a hold of one, you
will find an elegantly designed
riser for your computer that
includes 6 USB ports and
sturdy construction of brushed
aluminium and plastic accents.
Price: $79.99(USD)
www.quirky.com/products/22-
The-Space-Bar-Desk-
Organizer
It may seems strange to use
a solar powered keyboard
indoors, but this sleek, low
profile keyboard uses any light
source – natural or otherwise
– to charge itself. It stays
charged in total darkness
for up to three months, and
has a fluid and whisper quiet
keystrokes. Price: $98.97 (on
special - be quick!)
www.logitech.com/en-au/
keyboards/keyboards/k750-
keyboard
This is your one-stop-shop for eco friendly, stylish, Aussie
homewares products. Our fave at the moment are the “City Slicker”
throw cushions shown here. Depicting city scenes in a stylish pop art
style, these will brighten up the dullest of sofas with just the right
splash of colour and life. Head to the site to check out the other items
available, as all their furniture and homewares are Australian Made
too! Price: $65.00 AUD
www.ecochic.com.au
32 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 3332 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 33
CONTACT AIQS NOW TO ENQUIRE ABOUT JOINING THE A-LIST WWW.AIQS.COM.AU
Previously named the Members’ Business Register, the A-list is a new look for the AIQS’ member register. Available exclusively online as a shareable e-book, we are making the go-to guide for Quantity Surveyors easier for you and better for the environment.
In the past the A-list has been responsible for generating over 1,000 leads per annum. The new A-list is instantly global and available from anywhere. Your audience is now worldwide and live.