Академический Документы
Профессиональный Документы
Культура Документы
By:
F.F. Zaidan
BEng (Civil)
CO
ENTS
PREFACE
STATEMENT OF ORIGINALITY
ACKNOWLEDGMENTS
INTRODUCTION
1.0:
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5
LITERATURE REVIEW
2.0:
2.1:
2.2:
2.3:
2.4:
2.5:
3.0:
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FAST-TRACK CONSTRUCTION
3.1: What is Fast-Tracking.
3.1.1: Traditional and Fast-Track Construction.
3.2: Key factors for effective Fast-Track Construction:
3.2.1: Managing contractor appointed at the early stage:
3.2.2: Role of the architect has changed.
3.2.3: Selection of contractor is based on skills not price:
3.2.4: Capital intensive methods of construction:
3.2.5: Use of steel frames instead of concrete.
3.2.6: Overlapping work packages.
3.2.7: Components are standard and readily available:
3.2.8: Buildability and speed is the key issue.
3.2.9: Working at odd hours.
3.2.10: Client pays for preliminaries.
3.2.11: Variations at construction phase not entertained:
3.2.12: High Calibre staff are employed:
3.3: Effect of the economy on Fast-Track construction:
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5.1: Introduction.
5.2: Project Background:
5.3: Organisational Structure:
5.3.1: Project Management Structure:
5.4: Contract Arrangement:
5.4.1: Agreement with the architect
5.4.2: Agreement with the construction manager
5.4.3: Co-ordinated package contracting
5.5: Cost blowout:
5.6: Analysis of Case Study
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8.0: REFERENCES
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9.0: APPENDICES:
9.1:
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9.2:
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9.3:
101
9.4:
102
9.5:
103
The purpose of this thesis is to identify the key factors that account for the
success or failure of construction projects, that is, completion on time, to budget, at the
requires standard.
Chapter one explains the characteristics of construction projects and why today's
clients are adopting Fast-Track contracting.
Chapter two discusses the various articles that are most important to Fast-Track
construction.
The main body of this thesis is in chapter three with the key factors for effective
Fast-tracking are discussed in details. Process of Fast-Tracking and the roles and
Chapter four and five illustrates Fast-Tracking of projects with two case
studies:-
contract).
Finally both case studies are analysed and the important aspects to the success or
failures of each project are highlighted in details.
STATEMENT OF ORIGIN
11.
This to certify that this research project is entirely the work of the undersigned
unless otherwise acknowledged.
Frank
ACKNOWLEDGMENTS
I wish to acknowledge the assistance of the following people for the information
they provided and time given in interviews and discussions. Also I owe a debt of
gratitude to my supervisor Mr. Tim 0' Leary for his objective comments, guidance and
encouragement's during the preparation of this thesis:-
Mr. M. Fejar
( Telecom Australia).
(Fletcher construction).
Mr. T. Burke
RODUCTION
11# *
The construction industries are large and complex industries: they account for at
least 15 per cent of the gross domestic product, employ over two million people in a
great variety of roles (Hillebrandt, 1977).
.:C
The construction industry is subject to both market forces due to the state of the
economy and government strategies that use the industry to implement policy to direct
the economy. The nation's economy is subject to cyclic changes in demand levels that
oscillate about long term demand levels. Small fluctuations in the demand for the stock
of buildings and works will have very large repercussions on the demand for the
buildings and works created by the industry (B.I.S Shrapnel, 1986).
Each product of the industry may be subject to unique specifications to suit the
client's need and represent a high proportion of the purchaser's income. Furthermore,
the construction product typically has a life that extends over many years, which means
that the stock of products is large in relation to annual output.
The factors affecting the supply of the industry are the availability of inputs for
production, excess capacity and the confidence of the industry to reinvest and expand
or contract their business operations. The size of any one contract can represent a
significant level of output, thus having a greater bearing on the particular firm's
profitability during any given period.
These drawings would provide the basis for competitive tenders by builders for the
execution of the works.
cost of construction, which resulted in a search for new and innovative procedures to
ensure faster and more economical project completion (Fazio etc, 1988).
Today it has been established that the Traditional project delivery system has
failed in meeting the present challenges facing the client. The client is forced to be
involved in the administration and management of their projects in many instances to
shorten the duration of the project or meeting their requirements. New management
techniques have been developed such as; Design and Build, Fast-Track Construction,
Construction Management and Novation contracts to assist clients in their needs.
There are two types of clients that are involved in the construction process. The
experienced clients are those organisations that carry out construction of new projects
inexperienced clients who carry out construction of new projects once every five years
or more.
The architect or the engineer is the key player in direct link with the
inexperienced client, giving advice on the overall management of their projects. On the
other hand experienced clients as a result of the expertise gained in implementing their
own capital programmes over many years, tend to have more expertise in this area of
Construction Management and their opinions are based on past-experience and the
conservative decisions of their in-house experts (Mastennan, 1993).
that the inexperienced client is always at a disadvantage because the advice they get
from the industry usually is impracticable especially on different procurement methods.
Also clients have no means of judging which procurement method they should
adopt. As a result the large majority of clients were heavily dependent on consultants
and contractors.
The Centre for Construction Market Information's Report found that clients
involved in commercial buildings tend to still appoint the architect as their principal
advisers even if they decide to choose a non traditional method.
'3
Hence clearly the architect is still the key player in the eyes of the inexperienced
clients regardless of the method of procurement implemented.
On the other hand the experienced clients that regularly carry out construction
work should have little difficulty in obtaining information from, and dealing with the
construction industry because they have developed a working relationship between the
consultants and contractors that they are fully aware of the method of procurement
they should adopt to suit their needs.
However if a client is unable or does not wish to carry out the overall
management of the project then Hewitt, 1985 suggests:
Clients are very aware of the life cycle costs from inception to construction.
There is a tendency towards social leveling, as awareness of the need for cooperation
on the part of the traditional professions.
Recently a new method of project delivery has been added to the ranks, namely
Novation. This construction procurement system has already been used on a number
of major projects throughout Australia, and more recently here in Adelaide. Some of
these projects include the southern Grandstand of the Melbourne cricket ground and
the new Telecom building in Hinders Street Adelaide.
Explain the benefits and key factors for effective Fast-Track construction.
Roles and inter-relationship of the key players on a Fast-Track project.
Fully illustrate with two case studies Fast-Track construction:
Telecom Communication Building, Adelaide ( Novated Contract ).
Australian Parliament House, Canberra.
2.1:
Chapter one, defines what is Fast-Tracking and what are the strategic options for
implementing Fast-Track construction. The benefits and economic analysis are also
discussed briefly.
structures, client role, planning and programming, quality assurance and fmancial
planning for a Fast-Track project.
Chapter five, illustrates the future role of Fast-Tracking in relation to issues such
as; marketing effect, the level of client's awareness, acceptable and available
standardised form of contracts.
The final section of the report -gives general observations of the techniques and
suggests the type of organisations best Isuited for adopting Fast-Track construction.
2.2:
Chapter one, analyses the economic impact on projects as seen from the owner
point of view, suppliers and contractors.
Chapter two, talks about a standard form of project approach and the main
elements of this approach.
how to stop that from happening and how to meet project objectives without
sacrificing quality.
Chapter four, explain the special project partnership that exiSti between
suppliers, contractors and plant operators.
Finally, it examines what key steps are needed to complete a project _using Fast
Tracking on time and within budget.
23: Tore11, C.A "Fast-Track Construction Can Save Time and Money"
Hydrocarbon Processing, April 1989:
The idea behind Fast-Track contracting is that it does not require completed
design before letting bids for a portion of the work. This process has the advantage of
getting the construction work started sooner than in the traditional method of using
one contractor.
single general contractor. The benefits and risks of performing a Fast-Track project
and the key to the success of the project is the construction managers ability to manage
risks to get optimum benefits.
The construction manager plays a vital role in the process and he must be a part
of the project from day one, because he brings construction experience to the project
team. The importance of the construction manager in this early planning process is that
he knows what can be done in the field. He can thus make decisions that will benefit
the project as a whole, even though they may place an additional burden on the
engineer.
2.4:
attitude of client's. This paper talks about the role of engineers and project managers
on a Fast-Track project. If Fast-Track is properly done its great, but unfortunately lots
The
of time is spent dealing with problems encountered using Fast-Track construction.
attitude is `" we really do not know what we want but we'll dig a hole and design as we
build, trying to stay ahead of the contractor".
Robinson goes on to say that the engineer confronted by a client who says the
project must be Fast-Tracked: "Ask' what do you want ?' Get the criteria established
first. Fast track should be done with the production of drawings, not the design
concept." Fast track project cost the design more to produce than the ordinary. If the
client want's Fast-Track, the risks must be clearly understood by him. Also if Fast-
110
2.5:
the contract so that the engineer, architect and other parties are responsible to the
builder, hence the owner deals with one party.
Considered in this article, are some of the mechanisms that are being chosen by
the instrumentalities and might be encountered by the contractor which include things
such as:
Design control, i.e. shift the risk so that the design is controlled by the
contractor.
Design should be done in two stages to allow maximum early input
from the owner.
Tender for the building work when the building approval is being
contract.
Finally owners must decide on the type of project they will undertake, based on
consideration of the advantages and disadvantages to them of the type available. After
this is made they must adhere to the administrative procedures that apply to the type of
project.
2.6:
Fast tracking cuts down on lead time and allows the construction team to go to
work as soon as certain aspects of the design are completed. A non Fast-Track project
costing approximately $40 million takes two months to design, four months to do the
working drawings and ten months to build. With Fast-Track you still have your first
two months to design, but after the first month of your working drawings you will
begin construction picking up three months over the non fast-track"method.
Its important to contact the local utility companies early so gas and electrical
services will be available at the same time the HVAC units, electrical switch gear etc.
are delivered to the site.
The article discusses the pitfalls of Fast-Tracking i.e. if you over Fast-Track you
run into problems. Obviously, if you are Fast-Tracking to a point where you have
designed a structural system for a building, bid it out, and the steel is going up, you
cannot suddenly decide you want to drastically change an office layout.
going to be used so it can be taken into account during design phase. The owner must
provide the building professional with as much information as possible in terms of how
he intends to operate and manage his building. The professional responsibility is then
to interpret the owners needs and make sure they are incorporated into the job.
Finally the article discusses different methods of casting concrete; Jump Form
System, The Flying Form System, i.e. building a concrete table with a system of
aluminum beams and trusses tying the system together. In today's market, maintaining
the competitive edge means doing the job better, and faster than the competition.
'12
2.7:
The article explains the main concept behind a new form of Fast-Track contract,
contractor. The process has been used on a dozen of projects in Oregon (USA)
including schools, hospitals, office buildings and airport construction.
Finally the article discusses the importance of value engineering and issues such
as site layout, expandability, building configuration, schedule and construction ability
and illustrate the method with a model of the process and the roles of each party on a
particular job.
13
2.8:
Trouble areas requiring special attention have been recommended i.e. design
errors and omissions, design changes, coordination between design and construction,
coordination between work packages and lack of field work input.
that unless considerable attention is directed to problem areas especially those related
to design, such a popular technique could result in unexpected delays.
.14
2.9: Pott, F.K " An Alternative Payment System For Major Fast-Track
Construction projects"
Construction Management and Economics, 1988, Vol. 6,25 -33
This paper describes an alternative payment system for use on major Fast-Track
projects in which the contractor is financially motivated to achieve satisfactory progress
activities.
Some disadvantages of the system are also discussed which includes, variations
which are added from the cost centre value and are subject to the same percentage as
originally bid.
A contractor may bid higher percentages in the early stage of the project and may
cause over payment in the early months. Finally when construction progress is in
This payment system should thus be considered a real alternative by those clients
where completion on time on a Fast-Track is essential.
15
2.10:
which Quality Assurance should be taken. Assessment and monitoring techniques in the
design office have allowed the project manager to accept confidently the various
documents presented to him by the designers with little further checking.
programme which clearly puts the responsibility for quality assurance on the
contractor. Contractor's responsibilities are set out which includes; promptly detect and
correct non conformance, develop quantity verification manual, update and re-submit
the quality verification manual.
Finally the project managers responsibility are listed which includes; ensure
contractor carries out the work, sight and accept material samples and the contractor
must comply with the requirement of the quality verification manual. Also advantages
to the contractor and the client who are using Quality assurance are mentioned and
finally experience gained on the Arterial Gateway Project.
16
FAST-
CK CON MUM
the projects before all the working drawings are complete, you finish earthworks,
foundations, steel and concrete drawing's first.
Once they are ready you ship them out for bid and start construction without waiting for the architectural drawings to be completed (Hedberg, 1987).
project on time and within budget. Ruby (1978) and Sidwell (1983) pointed out two
major challenges in Fast-Track construction;
coordinating the construction work.
providing subcontractors with the information they need for
bidding, which must include a flexible design.
Figure 3.1 (Fazio etc, model) illustrate the difference between the Traditional
method and Fast-Track construction method. Time saving is immediately apparent if its
done properly.
TRADITIONAL
Construction
Design
ME:=8:35g8MVOMMOM
TIME
( Months )
Design
Saved
TIME
( Months )
From the above figure it is apparent how Fast-Tracking a project can save time if
its done properly with experienced staff.
Appointing the contractor at the design stage gives the design team expert
guidance on buildability. It also provides information on how to simplify the detailing
19
adoption of tower cranes and computer aided design, steel frame usage is on the rise
for reasons of speed of erection, reduced site labour requirements, prefabrication and
easy site modification if necessary.
The use of components that are manufactured on a regular basis and are not in
high demand is encouraged. If contemplating using non standard components, extra
time must be allowed for fabrication and delivery.
The project must be built in the fastest possible way, avoiding factors that
negatively affect the productivity process. The construction sequence is planned to
permit uninterrupted site labour wastage with fewer problems and be able to go on
from one trade to the next smoothly and efficiently ( Kwakye, 1991).
20
The removal of waste from the site and the distribution of materials to work
place is to take place at night and public holidays with the approval of the local
authority. This ensures the site is clean and safe for the next shift's work, also enables
operatives to start work promptly at each shift.
The client covers all preliminary costs resulting from the employment of
management and works contractor.
provision of site resources is similar to the normal level of preliminaries found with
lump sum contracts under traditional methods (Gardiner and Theobald, 1988).
Keep variations to a minimum as they consume not only money, but slow down
the
chlnge his
Although this can add extra costs to the client, in the long run it will be beneficial
because he achieves his objectives quicker.
21-
increased level of construction activity as buildings are in demand. Due to the lack of
spare capacity in buildings the only way to increase production is by further capital
spending.
schools and prisons are in demand. There is a need to build at a faster rate in order to
open up for special occasions or simply the beginning of semester in the case of
building a university.
there will be no need to build fast. Also the economy that is reviving from recession
will not need further capital investment in order to increase production because spare
capacity already exists in it (Kwakye, 1991).
When the economy overheats, government tries to slow it down by, reducing
public spending and hold off major construction projects.
22'
Clients of the 1990's detect that Fast-Tracking acquire financial benefits but also
costs more, especially in fees, inefficiencies and extra claims.
construction.
23
suggests that there is an optimum time for completion related to the rate of return,
which is not necessarily the optimum time for minimising construction costs. Figure
3.2 illustrates what happens to costs when a works contractor operates at any level of
efficiency other than "A" at which he can optimise operating cost.
A = Optimum time/cost
B=
Cost
Crash programme
Uneconomical working
Resources
Extended programme
with possible delays
and disruptions plus
increased overheads.
Time
building as compared to the higher costs, risks and loss of financial control to be
incurred in Fast-Tracking (Kwakye,1991).
Kwakye goes on to say, that clients can save money if they adopt the following:
time-related preliminaries, early occupation and sale of the building. Other costs of
Fast-Tracking are:
Price of labour increases as the working days increases.
Additional fees incurred by the design team are paid by the client
Client pays for insurance cover for the contractors in the form of
higher tender price.
.25
Clearly the work packages approach, transfer most of the risk to the client. The
client awareness of these risks that make the process of selecting the project team very
important.
ICLIENT
PROJECT
MANAGER
ARCHITECT
DESIGN
CONSIiLTANT
CONSTRUCTION
MANAGER
Contractual Links
Mangerial Links
A major builder was appointed as construction manager and his duties were to
manage the whole construction, from purchasing to fitting out on site, provide all
common site facilities, input to tendering and documentation programme. All contracts
let were sub-contracted to the construction manager and usually let after competitive
tendering.
The advantage of this is that the construction manger did not carry a contractual
risk but acted as a member of the professional team. The construction manager was
also represented in the design team as a building consultant. In this role he influenced
design and programming to suit site procedures.
The client required for a Fast-Track project must be an experienced client who
has a good knowledge of construction and must understand the risks and benefits it has
to offer.
They must appreciate the risks, and understand how far reaching the risk can be.
They must pay up and look away if things go wrong because they are aware of
the implications that Fast-Tracking produces.
27
The direct commitment of the client is one of the crucial determinants of success.
The regular meetings meant all trade contracting firms felt involved and as though their
work was equal to any other. It provided an overview of the project to otherwise
blinkered trades, giving insight into other problems. The regular and prompt cash flow
enhanced this general positive attitude (Dodd, 1990).
construction contract.
Approval of outline and scheme design.
Development of project brief.
Also the client should study the expenditure schedule and make funds available as
required. The active client may demand that his professional's advisers determine an
optimum utilisation of his funds in order to minimise time.
The most important legal document is the design brief and it is the key to a
successful project. A good brief sets out; the functional requirement of the building,
how the building will look, the budget allocated and the programme.
In special
circumstances where the client needs a high quality of workmanship the brief must
contain a clause emphasising the importance.
It is crucial that the client defines in plain English his requirements, in terms of
time, cost and quality.
the project
Powerful
Down to earth
Practical
Knowledgeable
Selection of the project manager is one of the most important process. His
decision must have a non reversible impact on the outcome of the project's execution.
He should have absolute responsibility and authority over the project with unlimited
29
The project manager for Fast-Track contracting should have absolute and direct
control - over activities such as administration, engineering, procurement and
construction (Linden, 1991).
The various project disciplines must report directly to him and the project
-manager must set up close contact with the project's originator.
Linden suggests that the project should start without delay with the following
areas:
Purchase order to main supplier and secondary suppliers.
Engineering reviews.
The project manager with the assistance of his team must work around long
delivery items by borrowing, lending or purchasing from spare part's stock or simply
deciding to change the size and dimensions of the existing elements.
A genuine interest from the manufacturer's side is imperative. While from the
owner's side, this additional effort should result in an appreciation that does not
necessarily have to be financial or directly connected to concept under review.
30
The success of any project depends on many contributing factors. One of the
Information management
plays a major role in determining how successful project team are in meeting the client's
Significant benefits can be derived from applying cost and schedule control
techniques on a Fast-Tracked project. Tight controls with suitable monitoring reports
are required to spot deviations from the plan quickly and to forecast the probable
results of any deviations.
trend reporting and problem prevention rather than reacting to problems that have
occurred.
31
The system is used to provide control of the activities and their related resources,
cash flow requirements, etc. and can incorporate the following features:Multiple networks per project.
Networks may be analysed in sections.
Early and late start and finished dates are calculated together with float
Cost control.
Subcontractor control / change order management system.
CADD applications.
/
32
this importance the Walsh company developed the sub-contract management system
(SCS), a microcomputer database management system designed on dBASE 3+ that will
assist project management team to organise, process and track the numerous subcontracts and changes in the project
CADD Applications:
and add-on support. The programming features allows the user to customise his own
capability to act as a data-base for various labeled components of a drawing and use
the data-base to generate a bill of materials.
levels of management
,33
The consultant engineer must make sure that whatever he designs can be build.
Strong
The best place to produce drawings are at the construction site, with the big
advantage of having experienced construction personnel involved. It is also essential in
Fast-Tracking that both design and construction proceed at the same pace. The
difficulty is, that a complete set of drawings is not available at this stage.
Bishop (1985) explains the key factors in determining the productivity of operatives
that includes:
Tasks that call for exceptional care, i.e., large areas of plastering
unbroken by any feature and subject to grazing light
Tasks that fall outside the competence of the local labour force.
In order to simplify the design and produce a repetitive cycle Bishop 1985
recommends the following:
Simple forms.
Extensive and similar work places in lieu of many small work places
Designs defming tasks which may be tackled and completed
independently of other tasks.
In applying these principles (Macpherson, 1987) suggests simple ideas that cut
construction time used on the Broadgate project are:
Sub-contractors were brought in as early as possible so that their
contribution could be maximised.
loading steel on the building at upper levels on the back shift were
employed.
Columns were fabricated in three- storey heights and metal staircases are
delivered with concrete treads already filled.
Well marked steel from the works helped for quick and easy identification
at site.
Toilets were totally pre- fabricated with all fixtures and fittings down to
the last mirror and paper towel dispenser.
35
In today's economic climate most projects are proceeding along the Fast-Track
approach, but with the added clause in the contract fixed price and time. Hence it is
imperative that the contractor must proceed as fast as possible because delays cost's
money, which the contractor cannot afford to lose.
The management contractor produces and regularly updates a status schedule for
all the work packages. The contractor's responsibility is to pass on any changes that he
makes to the rest of the team as soon as possible.
Depending on the project, the client preferably would require the highest level of
control. The significance of the project, the costs of rectification of failures, and or the
risks to the public caused by failure during construction.
However the quality assurance programme should commence at the brief and
design phases and continue throughout the project.
project
inspection of all materials and components delivered to site.
testing of materials and of work done for quality levels.
Finally assessment and monitoring the quality assurance technique in the design
office, allows the project manager to accept confidently the various documents
presented to him by the designers with little further checking (Waldby, 1987).
37
Initially at the birth of the project, the quantity surveyor usually prepares an initial
project budget. The management contractor then assigns a specific budget for each of
the work packages in the cost plan.
The tender price is to match the initial budget of the work packages if the
contractor is to be successful in winning the bid. The client representative must infonn
the client at least monthly on the budget status taking into account the following:
Additional costs or savings during the design phase in the tender sum.
Total value of all authorised variations with a summary of the principal
items.
The quantity surveyor as part of his normal duties will be responsible for interim
Other cost management techniques suggested by the Business Council Of Australia are:
Overall design and construction budget controlled by the client
representative.
Separate zones with definite budget.
38,
Traditional method:
The functional and contractual relationships between project participants for the
traditional procurement system are as shown in Fig. 3.4 and 3.5 below. In this system
the design and construction are distinctly separated with little or no overlap. The client
appoints the architect to undertake the design and as chief of the design team
coordinating other consultant's work. Only when full documentation is ready will the
tender be called and contractor selected. The following diagrams illustrate this method
CLIENT
ARCHITECT
QS
ENGINEER
DESIGN PHASE
CONTRACTOR
FIG. 3.4
CONSTRUCTION PHASE
ICLIENT
FIG. 3.5
participants in this arrangement are well defined and have been the traditional roles of
the respective professions.
The type of contract used is normally lump sum although other types such as cost
plus and target cost may be used as well. The mode of contractor selection is usually
open competitive, while selective and direct nomination (through negotiation) are other
variations of this type of procurement system.
3.6.2:
Construction Management
The functional and contractual relationships between project participants for the
Construction Management procurement system are as shown in Fig. 3.6 and 3.7 below.
ICLIENT
'ARCHITECT
CONSTRUCTION
MANAGER
'CONSULTANTS
DESIGN PHASE
TRADE
CONSTRUCTION
PHASE
CONTRACTOR
FIG. 3.6
CLIENT
CONSTRUCTION
MANAGER
CONSULTANTS
TRADE
CONTRACTORS
FIG. 3.7
41-
managing the construction works on his behalf. The success of this method will
depend largely on the professional skill of the management contractor. On the other
hand, the client has more flexibility but he must give prompt decisions at all times.
The usual mode of contractor selection adopted for this procurement system is
selective tendering though open competitive tendering and direct negotiation are
sometimes used. The type of contract used varies from client to client. For example,
SACON uses contracts with bills of quantities, whereas other clients prefer not too.
3.6.3:
1SUB -CONTRACTORS
This arrangement provides a single point of responsibility for the elements of the
design and construction. The client has only one contractual relationship i.e. with the
design and build of the project. However the client loses some control over design.
The designers on the other hand have no management responsibility and are now
answerable to the contractor. To a certain extent they have to accept the contractor's
terms and conditions.
The word" Novation "is currently being used across a wide range of contracts
and in a variety of industry sectors therefore, is difficult to determine an all-embracing
definition. Essentially, Novation refers to the process when a contract between two
parties is replaced with a new contract between one of the original parties and a third
party, thereby terminating the original contract. This process is carried out upon all
three parties reaching an agreement to the process and the conditions of the transfer.
"A novation contract is a form of Design and Construct agreement, in which the
proprietor initially employs the consultant team to carry out design and documentation
to the extent that the client's needs and intent are clearly identified and documented.
On the basis of these documents, tenders are called and a building contractor is
selected.
The proprietor then novates the consultant agreements to the contractor who
takes responsibility for the project to completion (Howden, etc 1991).
At the outset of the project, the client and the design consultants must enter into
a contract under which the original agreements between the client and design
consultants will be replaced by new contracts between the contractor and the design
consultants at the time of establishing the building contract between the client and the
contractor.
Initially, the functions of the design consultants are, firstly, to assist the client in
developing a project brief which describes the desired function of the project and the
quality performance that will be expected in relation to budget estimates and projected
time scheduling for completion of the building process. Once the brief has been
completed to the satisfaction of the client, the design consultants will proceed to the
second stage of the design development phase, i.e. preliminary design.
tenders are called on the basis of the partially completed documents. The primary
consideration regarding the extent to which documentation is completed is to ensure
that the client needs and intent are clearly, identified, i.e. to an extent of "legal clarity".
4'5
of the
the project brief and commence design work. The terms of the engagement
consultants are given by means of a contract established between the client and the
consultant. The role of the design consultants is to complete the designs to a stage
where all the requirements of the client are defined, drawn and specified to about 50
per cent of the overall design in order to ensure that the client's requirements are
adequately described to a level of legal clarity.
Once documentation is completed to a stage that legal clarity has been achieved,
the client is in a position to call for tenders from contractors operating in the building
establishing a building contract with a contractor to
undertake the building process. The contractual arrangements at this stage are shown
in Fig. 3.9 below.
Contract
Design
Consultant
IPrincipal
Contract
1Contractor
Contract
Sub-Contractor
Sub-Contractor
46
The contract between the client and the design consultants is novated to the
contractor upon awarding of the building contract as shown in Fig 3.10 below. Thus,
after Novation the consultants are paid by the contractor instead of the
Contract
Principal
Contract
Quantity
Surveyor
Project
Manager
Contractor
Contract
ISub-Contractor
Sub-Contractor
ConsulWit
IDesign
Hence, the contractor has become the designer and is now completely
responsible for all of the design work as well as the construction.
47
The involvement of the contractor in the detailed design phase allows the
contractor to implement changes to the design that suit his particular construction
practices and equipment or modify the design to suit the availability of material or
skilled workforce. The contractor is required to keep the Client infornied on design
matters while still maintaining prime responsibility of meeting the performance criteria
set down in the design brief.
After novation, restrictions apply on direct communication between the client and
the design consultants. The importance of this depends on the closeness of the
working relationships with the design consultants, and the importance of control over
the final stages of design.
By including the appropriate terms in a Novation contract, the client can retain
the right to monitor and comment on the design process. However, the client needs to
be careful not to do anything inconsistent with the contractors responsibility for the
design. This means that the client should not do anything that could be perceived as an
acceptance of responsibility for the design.
As the contractor
is contractually responsible
with all codes and regulation current at the time of Novation and must accept post-
Responsibility for
authority fees must be clearly noted by the client if he wishes to transfer these costs to
the contractor.
there is no single best procurement system that can satisfy the different needs of the
client in term of criteria such as time, cost, certainty, quality, flexibility, control and risk
avoidance. The fact is, some of these criteria are contradictory to each other. For
example to ensure certainty, it is likely that flexibility has to be sacrificed.
the client's view point. Design and Build and Novation are particularly well suited to
Thus, it is essential that the contract procurement system is selected to suit the
specific client needs, performance requirements and project characteristics.
Table 3.1:
Time
of Some saving
of Saving
project time of time due to
consuming
made
is
shortest
to
due
project time possible by partial
Most
time Capable
achieving
having
in
overlap
goes parallel design and
with design. construction.
phases and no Construction Time-saving
sequential
and
design
construction
because
t
consruction
construction
know-how
know-how
available
Quality
o
overlap
and
design
construction
phases.
is solutions are Contractors
by
input
themselves
Quality
Novation
Traditional
Quality
design stage.
modify design
to save time.
has
standard and
standard is set selection of control over some controlll
over design
design
by the client trade
and very much contractors is details and details an
the selection of selection of
his within
within
client's
subsubcontrol.
control.
contractors. contractors.
There
is subject to
many factors
such as no
design
changes and
errors.
absolute
is
.
of certainty o
and
time and cost time
(provided no cost if no
certainty
of tendered
time and cost
certainty
is There
as changes
project made)
the
as
and
design
progresses.
Control and construction
ns
management responsibility
single
is
is crucial.
point.
changes
made
betause
there is little
Provisions
for extension
and
variations.
Traditional
nt
Flexibility
Client
control
design
Novation
Design &
Build
Construction
tender
will
proceeds
little premium
for making
making
for
changes
during
construction.
construction.
Risk
Complexity
must
Some
Client
functional
contractual
relationship.
point
Single
be sure what
he wants at
the start. The
responsibility.
Novation
design
of
buildability.
buildability.
buildability
likely.
is
Buildability is
achieved
by
making
the
contractor
responsible for
the design.
51
Novation
Design &
Construction
Build
Mana ement
Usually single Either single Usually multiNormally
multiple stage and not
stage. stage selective, or
single
Traditional
Tendering
Can be open
competitive,
or
selective
nomination,
designs.
SUITABILITY:
Important but
Client's
Experience
Essential.
Not essential.
Important.
not essentiaL
Performance Fixed
Requirement price.
tender Speed
minimum risk
quality,
in Large
Normal
Project
complex.
Characteristics complexity
and size.
and
Simple,
size.
and
no risk
to
Any Medium
large, simple to
complex.
MMUNICATIONS BUILDING
4.0: TELECOM
ADELAIDE, FLINDERS STREET.
CASE STUDY 1:
4.1: Introduction:
The Telecom Major Communication Building (MCB) was conceived about two
years ago to provide additional floor space to accommodate Telecom switching and
transmission equipment's. The proposed site that is strategically located within the
central business district was selected because of its proximity to most of the
commercial customers. The gross site area is approximately 6260 square metres and
the MCB covers about 2730 square metres with 42 metres frontage at Hinders Street.
study are the project objectives, site constraints, design issues, delivery arrangements,
contractual and legal issues, project programme and risk management.
'53
Project
Management
Committee
Policy
Project Managemen
Team
Project
Management
Telecom
Project Director
Project Staff
Quantity
Surveyor
Project
Consultant
Service
Engineer
Structural
Engineer
Other
Consultants
Design
Le
The MCB must also be able to accommodate the Network Management Centre
(NMC) and the Customer Network Service Centre (CNSC). The NMC and CNSC
provide traffic control and performance monitoring of the Telecom network.
Flexible and able to cater for current and future telecommunication switching and
transmission equipment needs
Robust and reliable; all dynamic plant and equipment serving network dependent
functions must not have any single point of failure
Designed for optimum energy efficiency and low operating and maintenance costs
Capable of sustaining a post disaster function
55
in cabinets which are grouped into suites. The existing design solution proposes that
telecommunication switching and transmission equipment initially be located on the
second, the third and the fourth floors.
All Telecom UPS and DC power equipment (batteries and rectifiers) used to drive
telecommunication switching and transmission equipment
Telephone and telecommunication cabling
Unlike most central business district projects where buildings areas cover the
total site, the MCB under construction for this site does not cover the entire area.
Hence, there was no special constraints to be taken care of.
The site had sufficient access from both sides of Roper Street and Flinders Street.
Despite the generous site availability -- with total gross area approximately 6260
square metres -- the Contractor chose to accommodate its management staff off site.
When the basement was constructed, it was used for site accommodation. This was a
calculated move by the contractor.
Due to the availability of space along side the boundary, the city council insisted
that the crane stay inside the boundary.
Initially, Telecom owned the corner piece of land in 1940s. From 1950s to 1980s,
these attempts were unsuccessful. This resulted in the site having an odd shape.
Perhaps it is the only site constraint because it imposed some restriction on the layout
of the building.
December 1994. Currently, the construction work is about 90 per cent completed.
The Contractor has anticipated completion of all major building work (excluding
installation of switching and other telecommunication equipment) by the end of
September 1993, so they are ahead of schedule. However, there will be a substantial
time required to commission the equipment
The building requires substantial electrical supply, mainly to cater for the
requirement of maintaining temperature in equipment rooms.
The arrangement of the building is also important to minimise the cost of cables.
All mechanical and electrical facilities were designed with spare capacities for
contingent reasons.
58
He is required under the contract to have quality plans and full time Quality
Assurance Manager, besides Design Manager and Building Services Manager. The sub-
contractors are required to fill out inspection test plans. At each witness and inspection
point, the relevant parties need to sign documents that signify there is approval of the
quality before work can proceed to the next stage.
The approval process adopted ensures that the Client (through his Project
Manager) is part of the approval process although he is not responsible for such
approval. However, the Client holds the right of objection or rejection as well as the
right to be informed.
_59
Telecom has chosen the project delivery arrangement. The important features of
this arrangement are:
Certainty of time and cost.
to deliver a quality facility which meets the end user requirements, on time and
at a fixed price
to set up a delivery system which gives Telecom total control over the process
pre-Novation and which gives total responsibility to the contractor postNovation but with Telecom retaining a continuing overview and control with
respect to the contractor meeting the design intent
to set-up a delivery system and project culture whereby all participants adopt
an outcome oriented, non-adversative approach
60
Basically, the delivery arrangement is divided into two stages: pre-Novation and
post-Novation. Details of the project delivery structure is shown in figure 4.1
& ENG.
ESIGN CONSULT
IDARCH
POST NOVATION
TPT
LEGEND
MANAGERIAL LINK
P/A
-
- - CONTRACTUAL LINK
Administrator
BLD: Builder
DESIGN CONSULT
61
Telecom with the assistance of it's Project Consultant, has selected a team of
Design Consultant to clearly der= Telecom's design brief for the project.
It is envisaged that at this point the Design Consultant will have developed and
completed the design through concept, schematic and design development stages.
Telecom will then invite competitive lump sum tenders from pre-qualified contractors.
The tender will clearly establish that the successful contractor accepts
responsibility for the design work prior to and beyond the point of tender selection as
well as the requirement to deliver the project on time, at fixed cost and to an agreed
standard of quality.
These were evaluated and reduced into four, based on their capability and past
performance record. Then these selected contractors were invited to tender for the
project and finally, the subsequent selection of the successful contractor was based on
price.
62
During the period prior to finalising the tender i.e., pre-contract phase, the
Design Consultant will be engaged by Telecom and directed by Telecom with the
assistance of its Project Consultant.
After the tender is finalised i.e., post-contract phase, the successful tenderer will
take over responsibility for the work of the Design Consultant and manage the postcontract documentation as defmed in their terms of engagement.
This, coupled with the fact that the contractor takes responsibility for all previous
and future design work, achieves Telecom's objective of a single line responsibility for
design and construction.
The Contractor's tender price will include the Design Consultant's fees for
construction documentation on the basis originally agreed with Telecom.
Any services required by the Contractor of the Design Consultant's beyond the
services listed in the agreement must be separately negotiated. After the appointment of
the Contractor, Telecom's role (with the assistance of the Project Consultant and
Quantity Surveyor) will be to overview the Contractor's activities for compliance with
the design brief and to monitor the project performance with regard to cost, time and
quality.
63
The contract was prepared in a very simple format and using plain English. The
condition of contract was designed specifically for this project.
Since the nature of the contract was fixed time and fixed cost, it is essential to
protect the project from any substantial changes. In the conditions of contract it was
stipulated that any change which the Contractor proposes to any design documentation
created before the date of the contract during (pre-Novation) stage, must be submitted
to the Project Manager with details of:
proposed change.
reason for proposed change.
effect on other elements of works.
cost and time effects and
(i)
In the course of the project, major contractual issues highlighted by Telecom was
the request made by the consultant to reduce their risk and responsibility in the
contract. Telecom acceded to this request where it could.
65
In the Traditional system, the client is left outside the big picture as shown above.
However once a client project management system is implemented the following is
achieved:
mean for all originators of actions to control and record the actual
performance of those actions.
The project brief and other contract documents are held on the
system and can be amended and updated as required whilst
maintaining an archival record of the changes made.
66
Cost Control/Monitoring
I
PROJECT DATABASE
Payment types
Budgets
Contract sums
Trade packages
Variation Register
Extension of time claims
Contingency sums
Commitments statements
O'
ADMINISTRATION
Payment certificate
Action list
Status codes
Amendments codes
Documents Proformas
Documents milestones
Check list
Project brief
Project diary
DOCUMENTATION
QUALITDY
Drawing register
Shop drawing register
Document register
Production paths
Correspondence register
Transtnittal forms
ELECTRONIC MAIL
Project Memorandum
instrucdons
Request for information
Other forms as required
Terminal messages
,
AUDIT TRAILS
Performance requirements
Accountability
Non-Conformance register
68
contractors have access to study the design and drawings during the pre-Novation
period
implementing a single line of control to the project executor
initial design activities and business case studies are done concurrently
In implementing the 'Novation' contract, the contractor carried full risks of:
Time: It was a fixed time contract, so there is little provision for extension
Cost: The contractor must finish the project within the contract cost as it is
a fixed priced contract. His room for maneuver is the cost saving that he
would get, if he can come out with cost saving suggestions.
69
(d) Latent Conditions: The contractor is responsible for, and assumes the risk
of, all increase costs and any losses and expenses in respect to physical
conditions and characteristics of the site and surroundings encountered in
the execution of the works.
However, the contractor will not be responsible for the risks of time extension
and price increase caused by:
70
rapid construction of the building and an overall time-saving in erection and these
included:
There was a restriction to start work in the first four weeks because building
approval was needed. Fletcher Construction arranged with the Adelaide City
Council to start construction of the cable chamber sub-structure, ground floor
and fmalising of documents for construction. While this was taking place, the
design of the super-structure was completed. This saved approximately 4 weeks
of the total scheduled construction time.
Connell Wagner initially designed the floors of the building using a Flat Slab with
a drop panel and a conventional form work arrangement. The introduction of the
"Transfloor System" by the builder had saved approximately 6 weeks off the
scheduled completion date plus a considerable cost saving.
be up to 12 metres long which is the maximum for normal road transport. Panels
are transported in stacks on semi-trailers, approximately 160 metres squared per
The original schedule was programmed 12 weeks ahead of completion date. This
allowed for inclement weather and industrial strikes not caused by the site staff.
#71
Extra staff were hired during construction to complete the work on schedule, but
the majority of staff worked 40 hours a week to eliminate over time payment.
Having a tight schedule with practically no float meant that sub-contractors had
to be brought in early so that their contribution could be maximised.
All vertical elements are continuous from roof through to foundation. This
enabled the building to be constructed in a fast and efficient manner.
The success of the project was that design documentation's were approximately
60 per cent complete by Telecom prior to construction and this saved
considerable time to the builder.
Careful selection of a contractor who had the resources to fulfill his contract
commitment and confidence in the managing contractor ability to appreciate their
problems and react accordingly.
72
(13) Care in ensuring that a satisfactory industrial relations system was set for the
project before construction began, and the collective will to see that it was
properly administered to prevent anomalies occurring during the life of the
project.
The correct use of Novation contract can combine the benefits of both the
traditional as well as design and build delivery arrangements.
A close relationship between the Client and the Design Consultant during the
pre- Novation stage provides the Client the opportunity to monitor and provide
some direct input to the design process.
At the post-Novation stage, the involvement of the Contractor in the design can
result in cost and time savings. In this project, a total of 117 proposals for change
that will save money and time, have been submitted by the Contractor, so far.
Good quality can still be achieved for delivery arrangements that place the
responsibilities of quality approval on the Contractor (and Consultant under his
charge) if a proper approval procedure is adopted the Client can be part of the
process.
Good foresight and planning can prevent the development of potential risks.
A clear understanding by Client, Consultants and Contractor of their respective
roles and responsibilities is a key to project success.
5.0:
5.1: Introduction:
In November 1978 the then Prime Minister Mr. Malcom Fraser announced the
government intention to proceed with the design of a new Parliament House. The
The Ministers of Parliament sensed that if they did not force the issue, by using
the convenient political peg of a bicentenary project, a new Parliament House would
never be built and that's how the Australian Prime Minister Malcom Fraser got stuck
with it (Ramsey, 1986).
A week later Fraser announced Australia was to get a new Parliament house in
time for the 1988 bicentenary. The new building originally was to be 58,000 square
metres approximately three times the size of existing Parliament House and total cost
was estimated at 151 million.
Due to those associated with the project, politicians and technicians would have
known that this cost is unrealistic if they are to achieve their objectives, especially due
to the time period to complete the project in ten years.
To ensure the target date, January 1988 for completion was achieved in an
efficient manner, the government established a new statutory authority; The Parliament
House Construction Authority. The role of this authority was to manage and control
phases of design and construction. On top of that they stacked it with establishment
figures from private enterprise to give mom expert opinions if required.
decided to use what is known as "Fast-Track Construction" and that's where the
problems became to emerge.
Cost of the new Parliament house had accelerated since January 1984 and could
not be contained anywhere near the original budget. Cabinet learnt the full extent of the
blow out in a confidential report from the PHCA.
The new Hawke government in 1985 replaced all the members of the PHCA with
new members comprising a former chairman and managing director of Theiss Holding,
the giant construction and mining company (Ramsey, 1986).
Cabinet was asking why the original cost estimate was so low and apparently it
was due to the fact that they had no design concept to work off and based the
estimates of construction costs on three other major projects; The Opera house, The
extension and renovation of the NSW Parliament and the Westmead Hospital in NSW.
In mid 1979, a two-stage, world-wide design competition was held and this
attracted 329 entries. Over the next seven months this was to be pruned to five
finalists, each of who was paid $100,000. By that stage the gross floor area had
increased from 58,000 square metres to 60,294 square metres (National times, 1986).
architect Richard Thorp, were selected unanimously by the competition jury as the
winner. The proposal was based on 69,000 square meters of space and costing $156
million.
The assessors stressed that many of the elements in the winners cost estimates
an early stage with the PHCA placed at the top of the organisation as "Project
Management Centre," with a project manager appointed as a specialist consultant.
3T-
PARLIAMENT
Cabinet
Committee
National
Capital
Development
Commission
PHCA
User
Joint
Requiremeni
Standing
Conmdttee
Architects
Consultants
Construction
Manager
Cost
Planner
Project
Planner
Contractor
Sub-Contractor
78
the consortium has a contracted consultancy fee based on 4 per cent of the total cost of
the building.
Concrete and Holland joint venture is only one of many firms, including a number
of overseas firms, they range across technical expertise such as cost planners, project
planners, engineers etc. (Ramsey, 1986).
what's happened over the years. Since the original design was chosen in 1980 the
Parliament house had grown by an additional 11,000 square metres (Monaghan, 1987).
The principal firm engaged in building the Westmead hospital was appointed by
the Authority as one of the two firms that comprise the Construction Manager for the
new Parliament house. There were few firms in Australia at the time with experience in
'79
The Audit also found that the agreement was deficient in that:
Did not recognise fully the role and responsibilities of the architect during
the construction phase of the project.
Provided little incentive for the architect to submit design and
documentation work on time or to design within the cost allowance.
Did not provide for equitable risk sharing with the architect, and
Provided few options for action against inadequate performance by the
architect.
The
selection was a joint venture comprising a construction firm and an engineering firm.
80
they did not allow for changing circumstances over the life of the project.
Ineffective penalty / protection provisions.
Most of the construction work on the project had been let in the form of trade or
works contracts. Under this approach individual contractors are engaged separately to
undertake specific work in a nominated area. The dual role of the CM under such
contracts is that of head contractor and superintendent of works.
The dual role enabled the CM a fee of 4 per cent of the construction costs,
comprising 2.5 per cent for head contractor duties and 1.5 per cent for superintendent
duties.
81
Once announcing the winning entry, it carried with it a price tag of $220 million.
The new cost estimates had jumped by more than 46 per cent on what the government
two years earlier had said.
The base cost plan of $220 million produced in June 1980 was the estimated
building cost of the project excluding allowances and non-building items such as
furnishings, sound and vision equipment's.
The biggest professional fee of about 11 per cent was going to the Architect
Mitchell Giurgola Thorp. The cost explosion began to show up in January 1984. At
that time, after allowances for inflation, they surged ahead of budget during the month
by $5 million, by September the overrun had crept up to $7 million.
In October 1984 it rocketed to $30 million and by late 1985 it had reached a
staggering $60 million above budget forecast. Clearly the cost was now out of control
and no one took it seriously because cabinet was distracted by the budget of 1984 and
in early planning for the election (PHCA, 1987).
According to Peaty, in real term the original building budget of $220 million
(May 1987) prices had increased by 23 per cent, a further 6 per cent of the increase
was due to matters beyond the Authority's control, such as cost of industrial
disputation, insolvencies and exchange rate variations.
82
Inflation over eight years alone accounted for the remaining increase to the
building budget in August 1986 prices of $811.1 million. In addition in 1982 the
Authority had been given additional responsibilities not included in the original building
budget, for providing furniture, sound and vision communication equipment's.
As the budget for the non-building items was $171 million (August 1986) these
prices brought up the total project budget to $982 million (PHCA, 1987).
So in the end it became a political exercise in blaming your opponent and hoping
nobody would probe too deeply about what went wrong. Finally Bob Hawke's ACT
Minister Gordon Scholes placed the responsibility on Fraser, especially in establishing
the $220 million budgets back in August 1980 (Ramsey, 1986).
,83
1. Planning for the new parliament house began in 1965, but construction did not start
until 1980. Parliament then decided to have the new Parliament house completed
for the bicentenary in late 1988. To achieve this date it has adopted the "FastTrack" approach.
4. Appointing a construction manager had avoided conflicts that would arise when a
head contractor is appointed on a firm price basis and generally generated a good
team relationship.
5. Having two construction managers Holland and Concrete could create conflicts
especially the two construction managers are in competition previously with one
another and both are independent in decision making issues on the project. It
would have been better if appointed only one construction manager.
84
Another important issue is that, the selection panel must be chosen from a list of
possible Engineers, Quantity Surveyors, Construction Managers, i.e. some one who
clearly understand the concepts, rather than have politicians who do not know
anything about construction of Parliament houses.
it failed to exert adequate control over the architect whose performance were
lacking at various times. These arose partly from the agreement with the architect
which did not contain specific incentive to submit design work on time, and within
budget and without errors.
The Authority should also have taken firm approach with the Construction
Manager. Like the Architect, the agreement with the Construction Manager did
not ensure that work is organised efficiently and economically. The Authority
Cost control systems were inefficiently maintained, the cost planner's service was
not fully utilised and variations were improperly managed.
A consultant
estimated that in 1985, direct and indirect cost arising from delay in concrete
deliveries were $3.7 million. The authority appeared to have put too much reliance
.85
The authority says the design competition for the Federal Parliament House was
well managed and had produced an outstanding piece of public architecture.
It found the failure to finalize terms of agreement for the Architect in time
include them in design competition. Conditions had compromised the Authority
bargaining position as the architect knew it was assured of the job
(Weekend Australian, May 1990).
works in the United States. In the 1970's , it hoped that these methods would save
1.5 to 2 years on large projects. But problems arose, including:
The government owner could not delegate the same amount of authority
The construction manager firms lack of authority meant that it could not be
held financially responsible for the project and its outcome , and
The harmony among the team members, that had been hoped for died upon
the signing of the contracts.
On balance, it appears that the new Parliament House project, given its shear size
and lack of expertise at the time, proved to be relatively well managed with a price. In
comparison with other projects it had achieved the quality criteria and opened on time
for the 1988 bicentenary and did not stray significantly from the agreed budget.
,87
RAL CONCLUSION
In recent years, participants in the construction industry
have become
example, the underlying demand for new dwellings depends on household formation,
demolition's and demand for second homes.
Similarly, the underlying demand for office space depends on office employment
and on the space required by the introduction of new office technology. Essentially,
the warranted level of construction activity in a specific sector derives from the
underlying demand for the services provided by that type of building in the light of
economic and demographic trends.
The goal of an owner is to have a project that incorporates the latest technology
with the capacity to meet project cost and scheduling objectives. This goal has resulted
in Fast-Track construction of projects.
to provide a structure which is a 'bare bone skeleton' onto which the remaining building
fabric is placed. It must be readily able to accommodate changes during design, during
buildability of the various alternatives, regular consultation is needed with subcontractors regarding alternatives, particularly in regards to form work.
At the birth of the project, the brief should be short, to the point, and setting out
the client's basic space and performance requirements. The skilled adviser to the client
will set out the performance specification and little else, thereby allowing the
contractors scope to come up with the most cost effective and innovative solutions.
Contractors need to have direct access to the client and understand how his business
works.
Contractors are much closer to the market rate products than consultants and are
able to compare, say a curtain wall with a brick work and window facade and arrive at
the most appropriate solution.
Clients are demanding more and more say in the design stage. Instead of giving a
contractor a brief on an A4 slip of paper, as they have done in the past, clients are
employing their own consultants to come up with the concept design.
Clients consultants are now designing building to roughly the layout and look of
the building. When the contract is let the contractor then has the responsibility of
thrashing out the details which makes tenders more easily comparable.
The client must appoint a project manager who has the following expertise:
Negotiation skills to produce win win situations rather than traditional win
lose outcomes.
Communicate effectively , including developing a good listening skills.
Understand their client's business needs from building project, and tailor
The project manager should be the guardian of the client's interest. Equipped
costs, project managers help firm up the brief, appoint the professionals team, choose
the best form of contract, hone the design process and deliver the building to their
paymasters on time and to budget without conflicts.
Steel frame construction is the key to speed. With services being 40 per
cent of the building's value, it is essential to weatherproof the building as
fast as possible.
The use of lighter steel structures reduces loads on the existing walls and
needs less foundations and less piling.
sub-assemblies consistent with the shop size and means of transport to site.
Painting of the sub-assemblies should also be undertaken off-site where a
controlled environment leads to a satisfactory standard of furnish.
Avoid repeating mistakes all over again in each project.
Do not hesitate in decisions.
Take calculated risks.
90
at a certain stage of the project life cycle. It takes account of the unique feature of
construction production which has distinct phases in its life cycle.
The most significant factor that limits the application of Fast-Track contracting is
in regard to the risk of change to project scope once the building contract has been
initiated. For projects where there exists a high chance of client initiated change during
the building process, other project delivery systems are more likely to be the most
appropriate, e.g. Construction Management. In this regard, Fast-Track projects cannot
be adequately handled by Design and Build or Novation, even though these processes
does have potential to save some time compared with the traditional 'hard-money'
contract which separates entirely the process of design and construction.
Other factors which may need to be taken into account when deciding on the
method of contract to be used is the availability of competent contractors within the
local market that could provide competitive tenders.
If the client relies on contractors that do not normally operate in the local market,
,
then problems may arise due to the contractor's lack of local knowledge. On the other
hand, local contractors lacking direct design experience, may not have the managerial
skills to cope with the responsibility of the design phase, or even miscalculate their risk
associated with warranting the design. Should such a contractor fail to deliver a
satisfactory product will ultimately lead to much greater inconvenience to the client.
The type of contract used was lump sum, fixed price, fixed time with no rise and
fall clauses. The brief was detailed and complete, the contractor thoroughly briefed
mechanisms where the contractor has to submit design documentation to the project
manager for review as soon as they are prepared. Any request for change subsequently
needs the support of the design team concerned and the approval of the project
manager as provided under clause 2.2(e).
Unlike most Novated or Design and Build contract, this project has a well
established quality control mechanisms that ensures the client is involved in the process
through the project manager. The contractor is required to employ a full time quality
assurance manager for the project. At each stage of the construction work, there is a
hold and witness point test where all parties concerned with the element being
constructed must sign a document endorsing their approval before the main contractor
can approve the work.
This process ensures that the work is proceeding according to specifications and
if something goes wrong in the future it can be traced back to find out who was at
fault.
Unlike the Telecom project, the Australian Parliament house, Canberra proved to
be one of the most difficult and expensive project in Australia.
92
Many of the problems arose from the use of Fast-Track system of project /
Construction Management.
The lack of attention to cost control on the project has caused major difficulties
which resulted in a late pursuit of savings. The agreement with the architect which did
not contain specific incentives to submit design work on time, within budget and
without errors.
Also the agreement with the construction manager did not contain specific
incentives to ensure that the construction manager organised work on the project
efficiently and economically, and was slow to respond when poor performance came to
notice.
The handling of contractors by the Authority was poor and this was due to the
provides benefits to both the client and the contractor, however, a number of
disadvantages are associated with the process.
The client should carefully consider the advantages and disadvantages, weighing
the relative benefits with alternative contract types when making his selection of a
project delivery systems. The most important aspect to keep in mind is that any one
contract system does not suit every conceivable type of project; the selection of a
system appropriate to the unique facets of a particular project is a critical determinant
of the ultimate success of the project.
.93
Design and build contractors are the main beneficiaries of this type of contract.
For a set price, the contractor will arrange the fmance, design and construct the
accommodation and hand it over furnished with everything except the posters on the
walls.
The most common means of financing the deal, for the education establishment
to supply the land and a developer to stump up the money for the construction. The
developer then leases the building to the college for 25 years.
Hornibrook, not only are tenders high for BOOT schemes, there is also the extra cost
of contractual and legal fees to add to the cost of a detailed design. BOOT providers
also pay a high interest on capital than government authorities and they attract land
taxes and rates which government are not required to pay.
This type of contract is used widely in the Eastern States especially in Australia's
current economic climate where government are attracted to these schemes because
they allow them to allocate scarce funds to other projects.
BOOT contracts are beyond the scope of this thesis, and this type of contract
need to be studied carefully considering the advantages and disadvantages it has to
offer to the client and the developer.
8.0zR
CRS:
BURK, T (1993) Blake Dawson Waldron. Design and Construct Through Novation,
April. (Unpublished).
BRENSEN, M.J; HASLAM, C.D; KEIL, E.T (1989) Performance on Site and the
Building Client. CIOB Occasional paper No 42.
Building Economic Development Committee (1983) Faster Building For Industry.
NEDO, London, May.
BURGMANN, J.B (1982) Fast-Track and Structural Design of Westmead Hospital.
The Institution of Engineers, Australia. Civil Engineering Transaction, June
Business Council of Australia (1993) Case Study of Project Implementation in the
Building and Construction Industry.
95
GRIFFITH, F (1989) Project Contract Strategy for 1992 and beyond. Project
Management, 7, 2, pp. 69-83.
HEDBERG, A.N (1987) Building on the Fast-Track. Building, June.
HEWITT, R.A (1985) The procurement of building, proposals to improve the
performance of the industry, project reports submitted to the college of Estate
Management for RICS diploma in Project Management.
HIGGIN, G (1965) Communications in the Building Industry - the report of a pilot
study: Tavistock Publications.
HILKER, 1(1988) Quality Control , US Style. Building Technology and
Management, August/September.
HILLERBRANDT, P.M.(1977) Economic theory and the construction industry.
Macmillan.
96
WALDBY, D.W; LOIUS, L.J (1987) Quality Assurance of Design and Construction
of the Gateway Arterial Project. Queensland Division Technical Paper, March
Weekend Australian, May 26-27 1990.
97
9.1: Appendix A:
119/012/02
sERVIcmg.e, FINISHES
STRUOTURE.
'V
e-5:11211EMOI
TOTA!..FCOAT..',
.0;FINISHES:
'',y
.....
IVA
,-,.
:S.'COMPLETE
,fr:":";,;CRI-T.ICAL
CRITICAL:.
LEGEND
SUxLcoms CONTINGENCY:
sAmc's CARPARK.CONSTRUCTION
5TH
,;TH:FLOOR
FINISHES
FLOOR'SERvICSS.0 FINISHES
4TH FLOOR'
3RD
.2NO FLOOR
NO FLOOR STRUCTURE
BASEMENT SUSSTRuCTURE.
SROuNS FLOOR. CONSTRUCTION
ORO FLOOR SERVICES C FINISHES,
Namii
CURRENT DATE:
1002
FEB MAR 'APR :HAT, JUN
JUL AUG
sEp
1002
.1504
OCT NOV Dec JAN FEB MAR APR MAY JUN JUL AUG BED OCT NOV DEC 'JAN
9.3: Appendix C:
Conditions of Contract
Contents
DEFINITIONS AND INTERPRETATION
1.1.
1.2
1.3
Definitions
Interpretation
Ambiguous and inconsistent terms
DESIGN DOCUMENTATION
2.1
2.2
2.3
2.4
2.5
THE SITE
3.1
3.2
3.3
3.4
3.5
3.6
10
NOVATION
4.1
4.2
4.3
5.2
5.3
\ 5.4
\ 5.5
\-,5.6
5.7
5.8-
5.9
5.10
5.11
5.12
Design development
Site meetings
Composition of the Project Control Gioup
Project Control Group functions
Project Control Group meetings
Contractor's reporting and related obligations
Removal of persons
The Project Manager
Contractor's Representative
Contractor's personnel
Production of documentation
Use of "CLIENT" information system
TERMINATION
11.1
11.2
11.3
11.4
11.5
11.6
35
RESOLUTION OF DISPUTES
12.1
12.2
123
12.4
4
41
GENERAL
13.1
Counting of days
13.2
Notices
Deemed receipt of notices
Governing law
Notices and fees
.133
13.4
135
13.6
13.7
13.8
13.9
Imported materials
13.10 Publicity
13.11 Subcontracting
13.12 Confidentiality
13.13 No assignment
13.14 Entire agreement
13.15 Disdaimer
13.16 Variation of the terms of the Contract
Schedule 1:
Schedl 2:
Schedule \3:
Annexure A:
Unconditional- undertaking
Annexure 13::
Annexdre 'C:
27/2/92.
1110372A580/91
43
43
43
43
43
43
9.4: Appendix D:
'Revision
Date
April 1991,
9.5: Appendix E:
MAY
$220M
1978
1979:. JUN
JUN
1981
SEP
kaf
DEC
$392M
$408M
$436M
$463M
MAR
1982
$512M
SEP
$526M
MAR
1983
SEP
air
$548M
$588M
FEB
1984
$644M
AUG
kga $684M
FEB
1985
$894M
AUG
$928M,
MAY
1981,, AUG
\NOV
$1673M
.5:
.'""MIFY
Building Budgets
Non-Building Item
:Approved Additions
-Escalation
InsolVencies, exchange rate, variations, govemement fees etc.
A' $1076