the building economist - july 2012

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.

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General and Advertising Australian Institute of Quantity Surveyors, National Office, Level 6, 65 York Street,Sydney NSW 2000.

Tel: (02) 9262 1822 Fax (02) 9279 1400 Email: [email protected]

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ISSN 0007-3431

Designed and printed for the Australian Institute of Quantity Surveyors (ACN 008 485 809) by Nose to Tail Pty Ltd

Managing Editor Jenna Harfield

Executive Editor Emma Marshall

Art Director Julian Brown - Nose to Tail

Chief Executive Officer Michael Manikas

Contributor Ian T Blyth P.h.D

Cover Image: Pixel. Grocon/John Gollings. Architect: Studio505, Engineers: Umow Lai, QS: Slattery

INSIGHT ON THE LEAN SIDE

ADDICTED TO FALSE CERTAINTY



12

30

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


http://issuu.com/action/page?page=12









snAPsHot

A prosecution brought by the Building

Commission against an unregistered

builder has resulted in one of the largest

fines ever recorded by the Victorian building

regulatory body.

Unregistered builder, Kadri Saydar, who did

not appear in court, was ordered to pay an

aggregate fine of $100,000 and legal costs

of approximately $20,000 on 12 June 2012.

Broadmeadow’s Magistrates Court found

Mr Saydar guilty of 31 charges relating

to breaches of the Building Act 1993 and

the Domestic Building Contracts 1995

Act, including entering into a domestic

contract when not registered and carrying

out building work before a building permit

was issued. The charges were in relation

to illegal building work at five properties in

Hume and Whittlesea.

Building Commissioner, Michael Kefford

said that the case should send a strong

message to the building industry that the

Building Commission will hold unregistered

builders accountable.

“This is a warning to all individuals

operating without the appropriate building

registration with the Building Practitioners

Board (BPB). If you operate illegally, you

will be prosecuted,” Mr Kefford said.

As part of the Building Commission’s role

in overseeing the building control system

in Victoria, it prosecutes companies and

individuals operating without a registration

with the BPB in the Magistrates Court.

Mr Kefford said that he believes the case

was not indicative of the quality of Victoria’s

domestic building industry.

When consumers are embarking on building

projects they are advised to check whether

their proposed builder is registered with the

BPB by going to the Building Commission’s

website at www.buildingcommission.com.au

and searching the ‘Find a RBP’ section.

Consumers should also ask to see the

builder’s warranty insurance for the work.

RECORD FINE HITS VICTORIAN BUILDER

4 – tHE Building Economist – JulY 2012 tHE Building Economist – JulY 2012 – 5

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.


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

snAPsHot


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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May 2012 Ad_FINAL.indd 1 16/05/12 3:32 PM

It is with great pleasure that I welcome

you to the highly anticipated new look

Building Economist.

This is a project that has taken much

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Whether you are reading this now as our

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On the topic of Green this leads me

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Until next time, all the very best for the new

Financial Year and beyond.

Regards,

Michael Manikas

Chef Executive Officer

THE NEW LOOK BUILDING ECONOMIST

FRom tHE cEo


nuts And Bolts

DIVISION OF ZONESCARGO SHIP

ZONES ARE MODULATED AND CREATED SEPARATELY

CARGO • LIVING QUARTERS • ENGINE ROOM • BOW • CONTROL DECK

To tie in with our feature on Lean Construction, a useful

example of how Lean Construction can be advantageous

is the similarity between Lean Construction methods

for the built environment and the construction methods

used by modern ship building. This is but one aspect of

Lean Construction, and is an example used in Ken Walsh’s

presentation at the CPD Roadshow.

BUILDING FACILITIES WITH LEAN CONSTRUCTIONTHE SHIP-BUILDING CONCEPT


DIVISION OF ZONESFACILITY

PLANT ZONES

PUBLIC ZONES

ZONES ARE MODULATED BUT NOT NECESSARILY CREATED SEPARATELY

Plant Zone(s): Mechanical areas providing heating, cooling and other utilities supporting the buildings function.

Sitework Zone(s): Structure/infrastructure beyond the facility envelope (parking lots, utility tie-ins, substations, emergency power, etc.)

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:


ON THE LEAN SIDE

insigHt


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.


“I think the issue is that defining lean is

actually easy to do - doing construction

with less,” says Ken. “But the method for doing

that is very complex, and involves a lot of tools

and approaches. Too many definitions try to

capture ALL of that, and in my opinion it ends

up making the idea look very complicated.”

For many people, the easiest way to

understand the “lean” side of the process

is to relate it to the manufacturing sector. A

Japanese approach that focuses on cutting

the waste whilst not sacrificing on quality, and

in turn cut costs to make the business more

efficient and able to respond to market needs.

Car manufacturers, from Ford to Jaguar,

have applied these principles with well known

success, yet the building, construction and

engineering sectors are some of the last to

adopt these lean practices. So why are many

reluctant to implement Lean Construction

principles to their building projects?

“I think there is a resistance to change in

our industry. Because there is so much

competition and margins are so low, there

is an understandable reluctance to find new

ways to do things that seem to be working

now - however inefficiently. This inertia makes

it hard to find time to figure out a way to

change,” states Ken.

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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


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

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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.


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.


PIXEL PErfEctPixel, a new building in Carlton, Victoria has received the highest ever Green Star Rating.


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.


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.

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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...”


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.


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


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]


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.



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.


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.


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.


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


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.


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.


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


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THE NEW LOOK MEMBERS’ BUSINESS REGISTER 2012

REGISTRATIONS OPEN SOON

A NEW LOOK AND NOW AN eBOOK

GENERATE LEADS HERE AND OVERSEAS

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.

AIQS QUANTITY SURVEYORSADDING VALUE

the building economist - july 2012

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