New Zealand’s economic recovery from the hammer blows of the Covid-19 pandemic, and the employment prospects for many of those made jobless by it, will be closely tied to our construction sector – By James White
As the Government firms up on its ‘shovel-ready’ public works construction programme, jobs for many people will hinge on what construction projects are pencilled in for their region. But in the urgency to get projects rolling – and thus people in work – there is a risk, and a trap.
The public generally sees the beginning of a construction project signified by steel fences and orange cones, trucks, materials deliveries and workers in hard hats and fluoro vests. The scene is disrupted for many months, perhaps years. They assume a lot of planning has gone into what’s being built, but when the diggers start up and the hammers swing, that’s when the real work begins – right?
Truth is, the smooth running of a building project, if not its actual successful completion, depends a lot on how well the preparatory work goes leading into the construction phase. It’s not a simple case of ‘we have a plan, let’s build it’. If you work back from the proposed completed structure, there are hundreds, if not thousands, of individual pieces – design concepts, engineering calculations, feasibility studies, regulatory compliances, as well as materials and labour inputs – that go into the complex jigsaw that is your average large build.
Against that list of inputs, two other critical considerations loom over the project: the timeframe it must be completed within, and the budget – both extremely stern taskmasters.
WHERE THINGS GO WRONG
For a well-organised and planned construction project, once the designers and consultant engineers have put plans to paper, there is a highly important role played by the team that works out how, when, and at what acceptable set of costs the jigsaw will be assembled. If that function isn’t done properly and well, the implications for the project – and its backers and beneficiaries – can be severe, even disastrous.
Among the aspects at a macro level where things can go wrong:
- Failure to secure funding (or sufficient funding) for the project to proceed
- Not having access to key people during the planning phase
- Getting bogged down in compliance processes – or failing some key compliance requirement
- Overlooking local planning or environmental requirements.
At a micro level, materials specified in the plan may be unavailable or availability is delayed, and once delivered, the quality of the materials may be unacceptable or the quantities wrong. Potentially critical issues can also arise around effective scheduling of tradespeople – their unavailability at key times causing delays or disruptions.
Sadly, recent business history in New Zealand has seen a string of construction companies, including some large, long-standing and well-established businesses, go into administration as a result of many of the issues noted above.
The other sorry downside to project problems is litigation, seen most prominently in relation to leaky buildings and issues arising even from the actual remedial work done to address those first issues. But that’s another story.
REDUCING THE RISKS TO SUCCESS
The leadup time to an average construction project, when the real work is done to avert such problems, can be up to two years. During that time, there is a critical role to be played by the quantity surveying (QS) profession in collaboration with the project management team.
Key aspects the project manager (PM) – whose job may be to administer the contract – and the QS team need to nail down in that time include: ensuring the whole team (including the client) are on the same page regarding the goals of the project; identifying all the risks that might arise related to the specific project and its location; and agreeing the project budget and project programme.
The PM and/or the other key figure through the life of a project – the engineer to the contract – have a big responsibility, but they can significantly reduce the risks to the success of the build by being regularly visible onsite, and accessible on a day-to-day basis, to troubleshoot any issues that come up.
We put a high emphasis on having a robust initial discussion with the client, establishing a project plan that covers all the possible issues and eventualities, establishing a firm, agreed line of communication, and emphasising accuracy in all our deliberations and calculations.
We see ourselves as more than a simple QS firm, but rather as a consultancy that can manage projects and administer contracts in addition to the core QS skills we bring to a project.
Our approach is also slightly different in that we limit the number of projects our PM or engineer to the contract can engage on at any one time – so they can be visible and accessible when the project may urgently need a decision.
COMPLETING THE JIGSAW
Once the initial preparatory work is bedded down, the PM or engineer to the contract’s job isn’t over, of course. During the construction phase, they need to oversee the rollout of the plan to complete the jigsaw.
The issues they can face during that time, some of which may arise despite everyone’s best efforts and intentions, include the pitfalls mentioned earlier, as well as workplace accidents onsite and adverse weather events, such as flooding, landslips or, notably in recent times, earthquakes.
They can address these issues in a number of ways. Having effective relationships and robust communications channels to the key people to resolve issues speedily is hugely important. Equally, it’s essential to have ‘live’ data regarding funding and project budget status so when an issue does crop up, you can act decisively. And understanding your project programme, so you know what the nett effect of any issues will be, is vital.
The return on investment for a careful and meticulously planned leadup is a simple bottom-line equation. Coming in on time and on budget means avoiding potentially millions of dollars in cost overruns, not to mention potentially protracted and time-consuming legal issues.
James White is the founding director of Auckland-based project management and quantity surveying consultancy Kwanto. He has extensive contract administration and quantity surveying experience.