Independent Review

You may have heard the word Kaizen before.

It is a Japanese term meaning ‘change for the better’ or, put another way, continuous improvement. And it is something that is critical to success in the construction industry.

Projects that fail or encounter disruptions to the programme require lots of reflection on the problems that occurred, the source of the issues, and how to keep them from happening again in the future.

But even successful projects offer opportunity for learning and reflection.

Debriefing to understand what made projects successful so that these practices can be continued and enhanced, identifying unproductive areas that can be improved or discarded, and identifying the pitfalls that inevitably occur are all key elements of continually improving your delivery of projects.

When you reflect back on your projects, what pitfalls come to mind? Here are four of the most common ones, and some tactics as to how they can be overcome.

1. Under managing the programme

Late finishing projects are the result of a complex mixture of reasons, from procurement issues and labour challenges to unforeseen conditions. These issues and their impacts on the programme are often exasperated by reactive programme management by the Project Manager (PM). Reactive programme management refers to addressing issues after they have impacted the programme. For example; when a monthly status update reveals that the concrete contractor is two weeks behind, a problem that must now be solved after the delay has already occurred.

There are a number of ways to overcome this problem. Having a solid programme from the start is foundational. While it is normally the responsibility of the contractor to produce the construction program, working collaboratively on it from the start will assist in developing a programme that is robust, and one that the PM fully understands.

It is also important that the programme be actively managed and consistently updated and statused. Construction projects move at a rapid pace, and small incidents such as the late delivery of key materials or subcontractors missing daily or weekly productivity marks have a way of slowly building up and causing an issue that would not be picked up unless the programme is being managed.

2. Budget mismanagement

While many project budgets are set prior to PMs becoming involved, the PM can still influence project budget outcomes. One way is through value management (VM). PMs need to act as the lynchpin amongst the architect, quantity surveyors, and other members of the design team, to ensure there is a strategy for achieving VM outcomes, a plan and most importantly making sure that the plan is followed.

The PM can also work closely with the project Quantity Surveyor and Contractor to develop a number of key budget metrics that can be updated regularly and monitored over time, so that trends or issues like contingency erosion or buyout losses are spotted early and can be addressed.

3. Workflow not focused on the client

One measure of a successful project is client satisfaction, which is an important factor in earning a nod on that next project. Lack of communication and failing to involve the client are surefire ways to not be invited back.

It is understood that PMs and the rest of the project team are hired for their expertise in building, but this often results in a tendency to want to keep the client in the background while the experts do what they were hired to do. This is shortsighted. The client has the vision for the project and is deeply invested in the end product. Thus, the PM should incorporate client involvement into the project workflow from the start and maintain continual involvement throughout the project. Communications should be ongoing and transparent.

These elements combined help to ensure that even as project issues occur, they can be solved as a team and any project adjustments like contingency spend or program adjustments, are made together.

4. Communication breakdown

Construction projects are all about meeting the needs of local people and broader communities, and wherever the needs of people are involved, communication is key. Amongst all the common project issues, poor communication is often the most prevalent and sometimes plays a role in the other project pitfalls related to programme, budget, and the like.

Poor communication leads to problems being raised too late, information not being shared to those who need it, and faltering relationships.

Good communication is where plans are hatched, problems solved, negotiations hashed out.

The PM is the key link between all members of the project team and needs to act as the facilitator at the top of a well oiled communication machine. Understanding the importance of good communication to a project and being diligent about it in practice is a good start. However, a PM can go further. Face-to-face or phone contact should be prioritised over electronic interactions. Meetings should be efficient, well managed, and outcomes based. Written communications should be practiced, sharp, and always on point.

2021 Property Council of Australia/Rider Levett Bucknall Innovation & Excellence Awards Finalists have been announced! DCWC is pleased to see some of our clients and project partners receive finalist nominations for their outstanding projects.

DCWC is delighted to have provided project management services for Project 100 at Trinity College, the University of Melbourne, which is shortlisted for the 2021 Victorian Architecture Awards; in the Residential Architecture – Multiple Housing category.

The Construction Students Association (CSA) helps advocate and support Construction students at the University of Melbourne, by providing career and networking events such as their annual Industry Night, which was recently held on May 4th.

Our Sydney team is delighted to now call Symantec House, Home.

The Donald Cant Watts Corke Infrastructure team sponsored the Road Australia Industry Luncheon in Melbourne last Friday. Inviting valued guests alongside the team, the event brought together key voices around Infrastructure and Transports systems in the state.

For many years now, Donald Cant Watts Corke (DCWC) has been an advocator of certainty in high risk and high value projects, particularly in the infrastructure sector. Recently we have found some concerning trends in cost planning and overruns for major infrastructure projects nationally.

The impacts these cost overruns have run deep with consequences. Affecting not only key project stakeholders, but also placing a strain on the relationship between communities and the Government, in its ability to effectively deliver on the future needs of local populations. These trending errors can be easily overcome by abiding by three simple principles in getting project right from the start.

Department of Treasury and Finance Guidelines

Guidelines for preparing business case budgets for major infrastructure projects in states across Australia have been articulately prepared for use by consulting firms, and yet for various reasons, this advice continually gets ignored by construction service consultants. For example, the Victorian Department of Treasury and Finance (DTF) budget estimating guidelines specifically state that there should be a process of design review by appropriately experienced personnel in order to determine that the cost estimate captures all relevant scope, reflects good practice design solutions, construction methodology, constraints and program scheduling etc. Budgets should be reasonably based on professional judgement and experience, and that each project can be achieved through good planning of hard and smart work.

Despite the above we continue to see audited examples of projects where relevant scope has not been captured and where budgets are inadequate. A baseless application of professional judgment through overlooking Government guidelines, that in turn stimulates cost overruns in client projects.

Inappropriate Use of Contingency Allowances

This leads to the second most common error that we see in the preparation of budget estimates; the use of contingency allowances for relevant scope that was missed. Contingency allowances should be derived through the management of both inherent and contingent risk and therefore by definition, are not to be used for missing scope items. 

Contingency allowances are not to be used for missing scope items, but for uncertainty in the cost estimate for quantities rates and construction methodology, and for site specific (contingent) risks bespoke to each individual project.

Inappropriate Use of Historic Data

Another common error that often comes up when reviewing budget estimates for major infrastructure projects is the inappropriate application of historic cost data. Applying outdated unit rates is a mistake in itself. But the problem is compounded when these same rates are incorrectly applied to the wrong construction activity. This error can be easily avoided by following a standard set of Plain Language Questions (PLQs).

Experienced consultants with the appropriate knowledge and understanding of such matters will then be able to answer these questions correctly and apply the historic data to the applicable activities.

There are of course, many factors that contribute to cost certainty but as an organisation, DCWC will continue to advocate that our clients focus heavily on the scope, constructability and operational requirements prior to projects going to the market.

DCWC has eight services dedicated to providing project certainty in all areas of a project's development, including project management (delivery), health advisory, engineering services and infrastructure. Our diverse talent pool that continues to grow with Australia’s leading industry professionals is critical to providing certainty at an integrated level, providing the clearest assurance and confidence with director involvement through every step of project planning and delivery.

International Women’s Day provides us as individuals and as collective organisations and communities, an opportunity to support the ever important efforts towards creating a gender equal world.

DCWC has been announced as a finalist in the Client Choice Awards 2021 for Best CX Firm: Built & Natural Environment Consulting!

Executive Summary  

In May 2019, DCWC Infrastructure and Agonis presented a whitepaper entitled ‘Project Assurance through Integrated Quantity Surveying Teams’.