For projects, the missing piece to this puzzle has always been that you cannot build the same project twice in order to quantify what the savings would be in direct comparison to having it built traditionally.

Technology vendors say that BIM tools are the enabler to improved production of a project through a return to best practice project management. They are tools for companies to create efficiencies within their workflows and business operations. They allow project teams to economise and leverage their resources through upskilling and have more immediate access to information in a way that has never been possible before on a project.

By way of example, the Dutch company, Vabi, has just released the Vabi Financial SimulatorÖ which is a plugin for Autodesk Revit«. It has been specifically designed to bring together and display financial performance data across BIM design teams to demonstrate P&L, Balance Sheet, Discounted Cash Flow and ROI impacts of design decisions. We are likely to see more of this type of technology as we focus as an industry on how to determine savings during early stages of design seek greater assurance on the longer term viability of a project.

The Stanford University Centre for Integrated Facility Engineering is well referenced in relation to its 2007 report on a study of 32 projects from across the US, Europe and Asia. The study is reported to have shown that when used on a project BIM could eliminate up to 40% of unbudgeted changes, increase cost estimation accuracy to within 3% and reduced the time taken to generate a cost estimate by 80%.

In 2010 Allen Consulting Group published the results of its industry sponsored study into the impacts of BIM on productivity. The study’s findings reported that the accelerated and widespread adoption of BIM on the Australian economy was likely to increase GDP by 0.2 basis points in 2011. Whilst this may not seem much, the study also noted the likelihood of a cumulative effect given the likely increase in the pace of adoption by 2025. This would mean an increase of 5 basis points in comparison to what they describe as a ôbusiness as usualö scenario.

Real Return on Investment û Is the Secret Already Out?

In this first article of a 3 part series on ROI and BIM, we have compiled a number of stories from owners and stakeholders who have accepted the early evidence and are forging ahead with BIM adoption to hold the construction industry and supply chain to account. These organisations are already establishing the metrics and benchmarking against the data to realise project savings and returns for the life of an asset.

Owners and Stakeholders:

The UK Government has published cost data since 2012 in relation to achieving its overarching target of a sustainable reduction in the cost of construction by 15-20% by 2016. Their July 2014 data report, ôUK Departmental Cost Benchmarks Cost Reduction Trajectories and Cost Reductionsö demonstrates a continued decline in costs and further evidences that the target ôremains practicableö. Trial procurement projects with set cost reduction targets and publicly documented are:

• ú212m New Prison, Wrexham, North Wales, where construction began in May 2015 and is expected to be completed in 2017, has a 26% cost reduction target.
• Cookham Wood Young Offenders New Build valued at ú20m hit its cost saving target of 20%. This is a good example of project specific ROI. The reported findings are quantified in relation to ôtaking into account value indicators of similar projects, cost savings achieved (as analysed by the client and cost consultant Sweett Group)ö in order for them to show a cost saving of 20% on the square metre rate anticipated for a comparable project at the time of establishing the agreed maximum price.
• ú119m Property Services Cluster of Primary Schools involving new buildings, extensions and refurbishments for 22 projects, has a 14% cost reduction target set and has already reported a 7% reduction.
• Project Horizon, ú100m highway repair and improvement program with a cost reduction target of 17.5% averaged over 5 years achieved 15% against spend in 2013.

The UK’s Crossrail is a whole of industry commitment led by the Transport for London and Department of Transport. The aim is for Crossrail to be the first major infrastructure project in Europe to fully realise the BIM lifecycle concept. The company is focused on achieving long-term savings through the application of BIM and its accuracy of information to handover to the rail operators, an opportunity to realise the longer term benefits of the asset. Crossrail’s current success measures focus on key information elements including:

• 1 centralised set of linked databases
• 25 design contracts
• 30 main works contracts
• 60 logistics main works contracts
• 1,000,000 (1 million) CAD files created, approved and integrated within centralised information model

Along with its sustainability strategy, Crossrail wants to create a skills legacy and sites the creation of over 2900 new jobs of which 94% have been filled by local people to April 2014. Crossrail #2 is now the focus of realising the savings from the Crossrail project and industry commentators are considering savings achievable in the region of 10-15% against an estimated construction budget ú25bn.

US General Services Administration’s (GSA) commitment for more than a decade to a National 3D-4D-BIM Program is realising consistent and measurable sustainability savings across a public sector building portfolio of more than 9000 assets. Its initial 10 pilot projects have reported cost savings that covered the cost of the first year’s pilot program. It’s now reporting regular savings in early detection of errors and omissions, reduced construction times, fast and accurate space measurements with less than 5% variance and better transparency and reliability of energy performance measures.

The University of Colorado, Health Sciences Center is one of the few projects able to measure the success of BIM implementation against a similar project using conventional processes. R1 ($216m) was successfully completed on time and within budget using a traditional delivery approach. R2 ($201m) was built a few years later using an integrated virtual design and construction process (VDC) and resulted in ôoutstandingö results for the project with improved productivity, increased prefabrication, less rework, reduced RFIs and change orders and was completed 2 months ahead of schedule and under budget.

The award winning Collaborative Life Sciences Building (CLSB) a joint university project in Portland, Oregon, opened in 2014 and was awarded LEED Platinum certification status. In 2015 it was one of the winners of the COTE Top Ten Awards program recognized for its sustainable architecture and ecological design. The $295m project involved the collaboration of 28 different design teams and directly attributes BIM technologies to a $10m saving on construction costs.

Sutter Health Care over the last 10 years has invested more than $4.7 billion in the improvement of its facilities through construction, renovation and replacement for less than the conventional health construction costs and without public funding. Its $320m Eden Medical Centre, completed in 2012, was delivered on time and within budget and was a landmark in BIM collaboration bringing together an 11 party Integrated Project Delivery Contract.

In 2008, UNITEC, New Zealand’s largest institute of technology, undertook a 4 year whole of campus BIM integrated information system to dramatically change the management of its facilities for the whole of their life cycle. The development of the information is now being used to accurately plan and manage the facilities and operations of teams and contractors and the institution is reporting an annual return on investment from the project of approximately 23%.

So what’s in BIM for me?

For many projects the longer term ROI is yet to be realised for building owners as the buildings themselves are still in their infancy and many projects not yet out of the ground yet.

However, we are now seeing strong evidence of progressive governments, health care and educational institutions, particularly, those who are managing large asset portfolios and have embraced BIM to garner the efficiencies needed to manage these facilities better within tight budgets. This success is being attributed to the commitment to BIM upfront which is considered the determining factor on whether the ROI of the whole project in relation to budget, time and the building’s expected useful life is achieved.

As an industry we now need to move discussions on from ôwhat are the expected BIM returnsö and back to best practice for construction projects. The longer term ROI will become evident as the industry best practice establishes itself over the coming years and the discussions around whether to BIM or not to BIM will become obsolete.

Keep an eye out for my Part 2 of ROI on BIM where we look at the contractors and sub-contractors and how innovative technologies and upskilling of their teams is quantifying their return on investment in BIM.

For more information please email me direct atdmitchell@mitbrand.com

In Part 1 of our series on Return on Investment (ROI) and BIM, we reviewed the success of large scale institutional owners and stakeholders and how BIM is creating metrics that demonstrate savings achieved particularly for public projects. In Part 2 we look specifically at the Contractors and Sub-Contractors and how well BIM is returning on their investment.

At the heart of it, BIM improves communication in an industry that’s famous for dispute rather than effective communication.

For construction contractors and sub-contractors performance improvements can be measured in the form of a reduction in variations or change orders and contingency expenditure, but the question will remain in the case of:

• an improvement; was it due to BIM or simply a high performing team?
• a decline; was it due to a learning curve?

For individual businesses that are providing construction goods and services, efficiencies in applying a new internal process can be quantified by measuring changes in the cost it incurs over time in the form of reduced hours, resources, waste and difficulties.

Many now agree that the technology is a tool to create efficiencies within their workflows and business operation. It allows project teams to leverage their resources better and utilise the whole project information for their own benefits in delivering a project well.

Real Return on Investment û What’s in it for me?

Like any new process, product improvement or technology, there are early adopters (and innovators) that take the leap of faith at the beginning of an innovation cycle and have the greatest opportunity to gain (and to lose).

So what do the early adopters have to say and will they share their secrets on ROI?

The following is a collection of project examples and…

[TO READ THE FULL ARTICLE PLEASE CLICK HERE TO VISIT SOURCEABLE.NET]

For more information please email me direct at dmitchell@mitbrand.com

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Being a 5D Quantity Surveyor I have been actively following the discussions around Lean Construction for many years now. To me it just seems to sensible to reduce the amount of waste that takes place during the build of a construction project.

Even so, it can be difficult to identify precisely the amount of waste on a project, so it also makes good sense to physically measure waste to understand what is being wasted and how to mitigate it in the future. I recently came across the document “Recommended Practices for the Application of LEAN Construction Methods to Building New Australian LNG Capacity” by Engineers Australia (Western Australia Division) which is one of the clearest documents that I have read in regard to categorising construction waste.

They describe waste as; “… anything which does not add value to the customer“, further breaking down the term into 7 subsections, as follows;

ò Waiting û for materials or specifications 

ò Over Production û producing more than is required by the customer 

ò Rework û rectification of incorrect or defective work 

ò Motion û movement of people around site

 ò Processing (over) û doing too much to a job or producing too high a specification when it is not necessary 

ò Inventory û too much or too little inventory 

 ò Transportation û moving equipment, tools or materials around the site and double handling

BIM plays a pivotal role in holding all project data securely in order to deliver cost certainty across the designs, variations and final build. Through this BIM dramatically improves field performance by ensuring compatibilities between trades and areas, minimising clashes, and allowing fabrication issues to surface before construction commences, therefore eliminating multiple areas of the aforementioned wastes and improving construction efficiency.

Owners will ultimately benefit from the efficiencies that come out of BIM but the value of these efficiencies won’t be realised until the market adjusts and we see reductions in allowances by subcontractors for various types of wastes (delay, disruption and rework) currently due to poor documentation and site management. While it will be some years, perhaps five to ten, before market prices show downward pressure there are still a number of savings strategies that can be put into action.

Historically, the way construction projects are priced is to allow high contingencies at the outset and to expect redesign, delays, disruption, rework and variation claims – all adding to project waste. BIM is about being able to reduce the need for contingencies as the gap between project development, modeling and the build narrows.

For those who implement standard methodologies to ensure project teams are involved in the BIM at the right stages of design and development, it will bring about leaner building design and construction that will ensure subcontractor costs are more predictable, negotiations are transparent and various wastes are reduced. Ultimately markets will adjust and we will realise reductions in contingencies, wastes and savings at the outset of projects and collectively achieve greater savings and cost certainty for the industry as whole.

There is no denying that the construction industry is rapidly advancing in the area of BIM. However for BIM to be truly effective in the field it must move away from being just a design tool and act on also reducing waste. Everyone within the industry faces the challenge of bringing technological best practice together to benchmark standards in project delivery for leaner, better buildings.

Taiichi Ohno explained that the market (or bid team!) sets the price

which can be charged; therefore the only sure way to make a profit is to reduce costs. However, you have to first understand real costs and how they change. Caitlin Shields, Associate & 5D Quantity Surveyor at
Mitchell Brandtman, explains how MB go about this through the use of 5D.
Watch below: https://youtu.be/vgkYbr904yI

The $1.8 billion Sunshine Coast Public University Hospital (SCPUH) project is a State Government initiative to address the growing health service needs of the Sunshine Coast community. The public hospital will open with approximately 450 beds in 2016, growing to a 738 bed facility by 2021. At construction peak it is expected to have created 1800 jobs created across all facets of the building and construction industry.

Out of a project of this magnitude, opportunity to innovate and instigate process improvements can resonate quickly within project teams and when taken a step further can have a significant impact not just industry wide but globally.

The project, like others of its scale and nature, contracts with more than one design team and often consultants to the project are required to be across the range of 3D authoring tools. Part of Mitchell Brandtman’s work on the project involved 5D quantities for the ceilings and partitions package authored by HDR Rice Daubney in joint venture with Architectus, known as Sunshine Coast Architects (SCA).

Reliability of IFC:

One of the key industry issues associated with BIM is the accurate data transfer relating to Industry Foundation Class (IFC) exports. This is a facility that allows information to transfer across software platforms so that designers, programmers, quantity surveyors, project managers and ultimately the sub-contractors can utilise the data for their part of the job.

A key focus of the collaborative work between Mitchell Brandtman’s 5D QS team and Lendlease’s cost planning team was to revision all of the quantities against the latest design. The reason for this was so that subcontract letting could be completed on the latest designs.

When CostX is the 5D platform this is a relatively simple task for Revit but it can be more difficult with ArchiCAD – simply because the interface between CostX and ArchiCAD is less common. The prototype workflow developed through the MB and Lendlease collaborative work was smooth for most objects with the exception of ceilings. Ceilings required special attention and a number of manual copy paste steps which were prone to errors if not manually checked and rechecked with every revision.

HDR Rice Daubney (part of the SCA joint venture) authored the ceilings and partitions package in ArchiCAD, Graphisoft’s globally utilised BIM software. Once exported to IFC, it became apparent that only a selection of the depth of information created in ArchiCAD was available within the exported IFC file and so was insufficient for transferring into CostX, the 5D authoring tool that facilitates estimating for the total trade package in its default form.

Scott Beazley, Mitchell Brandtman’s Digital Technologies Manager said that upon receiving the file the standard settings for the IFC export from ArchiCAD provided the right information but not the detail needed to support a fully measured, accurate estimate that could be revised quickly as the design models developed. ôThe information was visible within the IFC file and could be accessed for estimating use but was in a form that it could be retrieved only in a very manual and tedious way that would certainly also slow down revisioningö said Scott.

Due to the nature of the way this project in particular is managed and the collaborative culture across the project consultants, Mitchell Brandtman and HDR Rice Daubney (part of the SCA joint venture) teams met to discuss the data transfer issue and demonstrate the importance of having access to all the necessary data created within the native ArchiCAD file in the exported IFC file

Paul Brodala – Project BIM Model Manager, agreed that there was an immediate need to discuss enlarging the data export directly with the software developers, Graphisoft and ask their help to alter the way ArchiCAD exports data.

ôThe SCPUH project is the largest ArchiCAD project underway in Australia at the moment. It was very clear to us the importance of exposing all of the data and the benefits this would have on time and cost not just for the ceilings and partitions but more widely across other project packages and potentially other ArchiCAD modelled projectsö said Paul.

Ahead of the curve:

The HDR Rice Daubney (part of the SCA joint venture) team met with Graphisoft in Hungary to demonstrate the requirements of the software change to better support the collaboration workflow with quantity surveyors (watch video here). Whilst often software developers are not immediately in touch with what the users require due to the lag from project issues to user group discussions and proposals to the software developers, the immediacy applied to this data shortfall was very apparent. Graphisoft readily agreed to change the way ArchiCAD exports data to help.

Graphisoft software development Vice President, Mr Laszlo Vertesi, quickly welcomed the opportunity to innovate the product in relation to real project requirements, especially of such scale. “It required a simple change to the mapping of the parameters in ArchiCAD to expose more of the data regardless of the object being exported. This now puts the interrogation of the data in the hands of consultants with the experience to utilise it at a very detailed level” he said.

The software change was tested and implemented within two weeks. The collaboration with HDR Rice Daubney (part of the SCA joint venture) and Graphisoft meant that the manual steps relating to the ceilings were removed because the MB and Lendlease team had access to more information within the .ifc export and could write maps directly from the .ifc model. The complete ceiling and partition BoQ could then be revisioned quickly and the quantities could be dissected by location into much greater detail ie zone, department or even room by room. For Lendlease this meant increased speed but also much more flexibility in the way the quantities are presented.

The change implemented within ArchiCAD has already proved beneficial to other projects and where the quantities can be delivered in a way that the 5D QS can control the data required for CostX. This process improvement has a significant impact on revisioning time, an area that relies on the detail and accuracy of the data and the skills of the 5D QS to build on the new information and update the cost estimate quickly. On a project such as SCPUH this can be necessary sometimes daily and often weekly.

An additional important outcome of this initiative is that the software change will go on to benefit all designers and estimators working with ArchiCAD globally. It will ensure that other projects aren’t stuck with the time consuming work of having to manually import data at each model stage through to construction. This is a significant but often unrecognised saving as a direct result of a project environment built around a culture of whole team collaboration.

For more information please email me direct at dmitchell@mitbrand.com

Scott Beazley (Digital Technologies Manager at Mitchell Brandtman) talks
through what true collaboration is to deliver successful 5D on a
construction project. Watch below:

Whilst Australia continues to debate the merits of whether we should have a whole of government or whole of industry taskforce and whether to mandate or not to mandate for BIM, the UK has quietly launched the Level 3 BIM Strategic Plan 12 months prior to the end date for the Level 2 Plan which has netted the UK government an estimated ú840m in savings. Where the bloody-hell are we Australia?

Leading the charge globally:

The Level 2 BIM program launched back in 2011 was considered very ambitious for its time but has allowed the UK to deliver major projects and infrastructure including the 2012 Olympics and Cookham Wood Prison with quantifiable savings. The innovative strategy has been touted as key to the development of their new rail projects, Cross Rail and HS2. Their recognition of the drive of the digital age provides the UK with the opportunity to lead globally in the value of its built assets and the data preserved to create a digital economy for all.

Digital Built Britain (DBB) brings together a number of key government initiatives driving the high performing UK digital economy û The Industrial Strategy û Construction 2025, the Business and Professional Services Strategy 22, the Smart Cities Strategy 23 and the Information Economy Strategy 24.

It will transform infrastructure development and construction and, according to the recent launch and accompanying DBB report, ôit will consolidate the UK’s position as a world leader in these sectors.ö Given the estimated share of the world market for construction is forecast to be in the region of $15 trillion globally by 2025, this strategy goes a long way to positioning the UK as an innovator of the digital age, something that Australia, given its decline in manufacturing, should be aggressively addressing to catch up.

The Digital Evolution Index (DEI)

In September 2014, the Institute for Business in the Global Context (IBGC) released a report ôDigital Planet: Readying for the Rise of the e-consumer.ö The report is a culmination of 6 years of research relating to 50 nations’ digital evolution trajectories.

The IBGC is the hub for international business at The Fletcher School, the oldest graduate school of international affairs in the United States. The purpose of the research undertaken is to create a Digital Evolution Index (DEI) that ranks these 50 nations in relation to their progress or decline in their own journey and evolution into the digital economy.

Australia, quite unsurprisingly sits within the category of ôStall Outö – a nation that has previously advanced rapidly only to recently stall or decline in its digital evolution.

The UK, again quite unsurprisingly, is trajecting itself towards the ôStandoutö category and ranks 4###sup/sup### after Singapore, Sweden and Hong Kong in relation to the 2013 Composite DEI score which accounts for four drivers: Demand, Supply, Institutional Environment and Innovation. Australia’s composite DEI score ranks us 12###sup/sup### out of the 50 countries. The report acknowledges that the UK is at risk due to the stalled performance of neighbouring Europe given its economic stagnation and austerity policies currently in place.

Where is Australia’s Construction Strategy at?

More concerning a question is ôWhere is Australia’s construction strategy let alone its digital and BIM strategies?ö

There are many active and progressive industry groups taking up the charge, but without significant government voices at the table to discuss how we can nation build through BIM, any strategy developed by industry is going to fall short.

The government funding for the UK’s Level 3 BIM Strategy will be used for a series of key measures identified as follows:

• ôThe creation of a set of new, international æOpen Data’ standards which would pave the way for easy sharing of data across the entire market.
• The establishment of a new contractual framework for projects which have been procured with BIM to ensure consistency, avoid confusion and encourage, open, collaborative working.
• The creation of a cultural environment which is co-operative, seeks to learn and share.
• Training the public sector client in the use of BIM techniques such as, data requirements, operational methods and contractual processes.
• Driving domestic and international growth and jobs in technology and construction.ö
  

Whilst none of this is necessarily ground breaking on the face of it, having it planned, funded and nationalised is imperative to its success. The whole industry benefits from the upskilling, technological advancements and productivities created through standards and protocols holding the entire industry to account. All parties buy in because it is in their direct interest to do so to be sustainable as a company. It has a wider flow on impact to educational sectors, wealth and wellbeing of citizens and direct contribution to the UK’s GDP.

The success of the strategy is underpinned by a ôskilled digitally enabled workforceö; ôdigital infrastructure û both physically and regulatoryö; ôa rich data set describing the existing user and asset baseö; ôsharing technology across sectorsö and ôan effective education and change management programmeö – a very compelling plan.

Australia’s BIM strategy by comparison is admirably led by passionate and visionary people who come together through groups like APCC, ACIF, Consult Australia, Collaborate, BrisBIM, MelBIM, WABIM, Lean Construction Institute and buildingSMART – a worldwide industry funded organisation for BIM.

Australia’s strategy, ôThe National Building Information Modelling Initiative (NBI)ö Report was set down in 2012. It was commissioned by BEIIC (the Built Environment Industry Innovation Council), authored by buildingSMART Australasia and co-funded by the Commonwealth Government. This report outlines the strategy to support ôthe focused adoption of BIM and related digital technologies and process for the Australian built environment sector.ö

The Australasian Chapter of buildingSMART advocates that ôThe Australian economy could be better off by as much as $7.6 billion over the next decade by adopting the NBI recommendationsö

In 2014 the Productivity Commission Infrastructure Inquiry called for submissions from industry and buildingSMART Australasia made its case to reiterate the benefits for all of industry and most obviously for Government.

The official Productivity Commission Infrastructure Inquiry Report released in July 2014 most controversially advocated that ôimpediments to adoptionö for BIM could be overcome by the market. buildingSMART and indeed many of the BIM advocates in Australia, strongly disagree. Australia is certainly being ôoutflanked by other nationsö as described by buildingSMART and seek to change the Commission’s recommendation regarding BIM and that the Commission should explicitly recommend that the Australian Government actively work with industry to accelerate BIM adoption in Australia to not only benefit industry but achieve significant savings for Government as well.

This is a far cry from the UK’s vision of ôbringing together expertise in design, planning, construction, operations, funding, technology and risk management will enable the UK to capitalise on the essential need to provide infrastructure and its services to our citizens and across the world.ö

Given the evidence and warnings coming out of the Digital Built Britain Report Level 3 Building Information Modelling – Strategic Plan û can Australia afford to as it were, ôfall back in the BIM arms raceö. This is the challenge stated in the British report.

For more information please email me direct at dmitchell@mitbrand.com

Build Only Contracts continue to be the construction industry’s biggest deterrent to delivery of better and leaner buildings with greater certainty.

Owners expect that construction will cost more and take longer than promised because of design discrepancies and latent conditions. If this is true, then there is an opportunity for builders to offer a higher price for a Warranted Lump Sum as an alternative to a hard dollar build only contract.

For builders this is a huge leap because they sit in a highly price competitive market and experience says – build only contracts are always decided on price.

Tradition dictates that resolution of design inconsistencies is not a reasonable risk for a builder to carry without novation of the designers, but the establishment of BIM as a robust virtual design and construction (VDC) process means under-pricing of risk should be a thing of the past.

Fast and reliable tools now exist for interrogation, validation and review of extensive design information. BIM provides the greatest level of certainty the industry has ever known and at all levels of design and construction. If adopted early and the entire supply chain is engaged, it becomes the critical tool in managing risk and cost overruns during construction.

Yet, builders continue to offer the same marginalised product. As if it were an excuse – a recent Australian Construction Industry Forum (ACIF) framework document stated ôIndustry is but a servant of those who commission new assets or decide to refurbish existing ones. It will adopt new technology and systems when its clients demand themàö.

Warranted Lump Sum û Head Contractor Risk and Return:

Just over a year ago, KPMG released its global survey on the construction industry and of the 165 senior executives personally interviewed for the survey, 77% reported under-performing projects due to delays, poor estimating processes and failed risk management as the key challenge for the sector.

We know that typically 83% of a contractor’s price is made up of the subcontracts. We also know that controlling time and cost will generate significant savings. Our goal as an industry must be to bring decisions forward and identify issues and clashes early in the process when the ability to change elements is high and the risk to the programme and to budgets is low.

BIM and the technology supporting every member in the supply chain have a direct impact on creating cost, design and time certainty. Poor risk estimation and management should be a thing of the past. Builders have a unique opportunity to take on known risk and push the project programme to ensure that visualisation technologies can create a virtual build and identify clashes and design changes much earlier and for much less than dealing with problems during construction where rework, delay and disruption explode costs.

From the development industry perspective this will generate significant project savings because a more certain industry means that the total funding required for any form of a development is reduced. Banks require a contingency for every development loan. A $100M apartment building typically requires an extra $8M in contingency and this translates into a need for an extra $1.6M û $2.4M in equity, depending on the risk profile, to make the project happen.

The Builder that masters VDC can turn this expectation into an opportunity by offering a higher alternative price (perhaps half or more of the expected contingency ie 5% to 8%) for a Warranted Lump Sum in lieu of a traditional lump sum. The alternative could be as simple as altering the standard clauses that appear in most hard dollar contracts and entitle the Builder to additional payments for:

• an inconsistency, ambiguity or discrepancy in a contract document; and
• a material difference in a physical condition to that which could be anticipated by a reasonably competent contractor.

What about Subcontractors and the Supply Chain:

In Australia, most of our construction contracts are hard dollar (either traditional or D&C). With traditional design + bid + build procurement there is no ability to engage with subcontractors during design other than some limited interactions driven by progressive designers.

To engage the supply chain one obvious approach is to go back to the old school nominated subcontractor (NSC) clauses which were common in the 1980’s in Australia. With the advent of BIM those NSC clauses are likely to have far more upside than downside.

With design + construct there is a far greater ability to engage with subcontractors during design but there is no contractual obligation to do this. The issue here is more about culture.

Often the behaviour is to avoid letting a subcontract early because there is a perception a better financial outcome will be achieved by maintaining competition for as long as possible. The cultural problem means that any head start and lead time is lost because subcontractors are unlikely to handover information and expertise without a guarantee that the subcontract will be won. For example, there is no incentive for a mechanical subcontractor to have racks designed prior to commencement of construction and where construction has started it is impossible to place blue banger hangers in a formwork deck where the concrete has already been poured.

Knowledge and understanding of the certainty offered through early collaboration is the missing ingredient here, not so much the contractual frameworks. There are plenty of design & construct (D&C), construction management (CM), early contractor involvement (ECI) and alliance contracts that can accommodate early involvement of subcontractors. The problem lies in the appropriate level of risk taken on by the head contractor. Traditionally, risk has been shifted down the chain of supply. This has always resulted in tight margins for head contractors and less incentive to become immersed in the virtual build.

The first builder to own the risk and become famous as Australia’s ôBIM Builderö stands to gain significantly, not only in the successful delivery of their projects but in the increase in profit margins in correctly identifying the level of risk and certainty available in the design information and prior to allocating any risk to sub-contractors.

For more information please email me direct at dmitchell@mitbrand.com

The construction industry in Australia is on the cusp of this great change. It’s time to collaborate and embrace the technologies of the 21^st century to create meaningful and lasting productive thinking in the way we build. It is critical that we prepare our businesses for a more connected, intelligent and demanding customer.

Becoming Fearless Digital Leaders

The UK Government in collaboration with industry has released a structured plan that paves the way for the UK construction industry to radically transform by 2025 û jointly aspiring to ôan industry that drives and sustains growth across the entire economy by designing, manufacturing, building and maintaining assets which deliver genuine whole life value for customersàö

Australia needs an integrated approach to collaboration of data collection and the knowledge that flows from this in order to innovate and compete effectively in the future.

The design table is about to get crowdedùlike really crowded. We’re talking hundreds, even thousands of voices, all providing input on your next project. For the first time, the masses can have a real say in how the built environment around them is formed.

Computational methods which balance the reciprocities of form, material, structural and environment, and integrate technological advancement in manufacturing are delivering brand new performative material and construction systems, which could change the design and construction world imminently.

The ôInternet of Thingsö – the linking of physical objects with embedded sensors – is being developed at a breakneck speed. Companies and consumers are now using technology daily to track movements, improve collaboration and customer service to increase productivity at an organisational and personal level. This simultaneously creates massive network effects and opportunities for global industries to shape our lives.

The age of the quantified self is here, shifting the boundary between humans and technology. Currently, this data management and æsocial analytics’ mostly benefits organisations, but soon people will demand a share of their ôdata valueö.

æBig Data’ Will Drive Wisdom in Construction

There is a direct correlation between the input (data) and output (knowledge and wisdom). The more data that is created, the more knowledge and wisdom people can obtain from it. Individual data by itself is not very useful, but volumes of it can identify trends and patterns to make informed decisions.

Knowledge is also evolving. Knowledge stocks are no longer valuable because knowledge is so easy to come by. There is a movement toward ôknowledge flowsö resulting from collaboration to replenish knowledge and leverage the collective knowledge to gain greater productivity through the process.

Building teams will benefit from Big Data for data-driven design by:

• Enhancing iterative design through capture and analysis of building performance metrics.
• Using project data on future work to eliminate rework and apply best practices on future projects.
• Understanding how people interact with spaces.
• Automating the planning process by applying algorithm-based approaches to improve the traditional project planning process.

As the Big Data movement takes hold clients will be looking to us for more than just well-informed opinions and industry benchmarks. Analytics will soon drive many planning and design strategies, and detailed occupancy evaluationsùboth pre- and post-occupancy evaluations (POE)ùwill play a larger role on projects.

Building-occupant research has long played a critical role in planning for some projects. What’s changing is the immediacy and sheer amount of data, and the ease by which it can be collected and analysed. The Retail Supermarket sector is emblematic of living, breathing and using data to track customer behavior and applying these metrics to benefit the future design and fit out of stores.

Additionally, the rise of mobile devices and social media, coupled with the use of advanced survey tools and interactive mapping apps, has created a powerful conduit through which building teams can capture real-time data on the publicùwhat spaces they like most and least in a given building, where they prefer to hang out on campus, whether they take public transportation or drive to work.

With advanced traffic flow simulation programs that allow users to program thousands of avatars with unique behavioral characteristics, building teams can predictùwith a much higher degree of certaintyùhow people will interact with a space layout. Arup, Perkins+Will, and Sasaki Associates are among the firms now developing custom digital tools for polling building occupants and end users and using analytics that apply advanced data-driven design techniques.

The Next Big Shift

Once data has been collected it is obsolete by the time that it is put in practice. So anything based on this in the future is out of date. We obtain knowledge from our experiences of doing something and then apply this knowledge the next time we do something that requires it û but what if in the future it didn’t have to be like this?

æDeep Learning’ is the concept of computers continuously learning and improving their algorithms, and therefore functionality, so that their output in current time is up to date û turning a concept of reactive user input into proactive and personalised output for the user.

Deep Learning for construction is something that is yet to be explored and it is hard to imagine how it fits into the scope of construction since buildings are very hard to change once built. But that’s as we know them right now. Perhaps this is the first step towards a building that can change its shape, form and structure based on data it mines from its users in current time over its whole life cycle û connecting its internal infrastructure to the ôInternet of Thingsö, users’ Smart Devices that ætalk’ to the building and infrared scanners.

The most notable commercial example of an advanced, automated faþade is PNC Tower in Pittsburgh, designed by Gensler, slated for completion in 2015. Focused on delivering a ôbreathable building,ö according to the design team, the enclosure features sensor-controlled air gates in the outer skin. Integrated with a solar chimney and heat sink, the gates bring cool air in as warm air is drawn out above. Stakeholders anticipate the gates will be open up to 42% of the time, achieving a 50% reduction in power loads.

We have reached 2015 û the age of the ôInternet of Thingsö and the target date for the UN Millennium Goals. By 2020 there will be 75B devices connected to the internet creating a powerful intelligence grid and millennials will comprise 75% of the global workforce by 2025. There is a new wave of positive change at hand, with new technologies and a connected world we did not have at the turn of the century. What we achieve in the next 10 years will depend on our level of collective consciousness and willingness to collaborate, change and adapt to the new world and at the heart of this is how we capture, mine, analyse, apply and preserve our data.

For more information please email me direct at dmitchell@mitbrand.com

With the recent release of the Australian Construction Industry Forum (ACIF) and Australian Procurement and Construction Council’s (APCC) ôFramework for the Adoption of PTI and BIMö are we still dancing around the inevitability of a BIM mandate?

Australia and New Zealand (ANZ) construction industry bodies and government must welcome the release of a focused framework for Project Team Integration and BIM which ôraises the flagö and progresses the debate on collaborative and productive design, construction and building life cycle management.

ACIF and APCC’s Framework document provides an in depth analysis of the landscape of BIM adoption in ANZ, including reaffirming the 7 work programs that buildingSMART Australasia recommended in 2012. What it lacks however are tangible solutions, clear ownership of commitments to change and a timeline.

Industry needs leadership on BIM. It is heartening to see a clear understanding of the benefits for both government and industry but stronger recommendations on BIM adoption and jurisdictional responsibilities are required. In the framework, there is a hint of powerlessness on the part of industry by saying ôàindustry is but a servant of those who commission new assets…ö It seems service providers are still in a reactive space waiting for their customers to demand the change that is available through new technologies and approaches.

UK Mandate 2016:

When Mark Bew, Chair of the UK Government BIM Working Group, Chairman of the UK Government BIM Task Group and buildingSMART UK, delivered the keynote speech at the buildingSMART Australasia conference in Sydney last year, three critical themes stood out for me:

1. A sense of urgency and a compelling reason for change was created via a deadline.
2. UK implementation would not have even started without the appointment of a Chief Constructor, currently Paul Morrell.
3. The concept that it’s okay for Government to tell industry what it wants as long as it stays away from telling industry how to do it.

What is interesting is that the latter point contrasts to how the Government here in Australia is approaching BIM û generally abstaining from the conversation for fear of interfering with the marketplace and creating red tape. What has been clear for some time and what the UK strategy demonstrates is a definitive need for leadership in order to achieve greater advancements and returns.

In Australia the latest statistics from the ABS tell us that the value of construction work within the Building and Engineering Construction Industry is $215 billion dollars[1], that construction (excluding its service industries) is 8.0% of GDP[2] and employs 1.1M workers or 9.1% of the labour force[3]. Given the comparative statistics that the UK knew at the time of creating the Government Construction Strategy[4] in 2011 û the UK construction sector was 7.0% of GDP, it expended ú110B and it employed 2.0M workers[5] û shouldn’t we be placing a larger emphasis on improving our industry considering it is as large a contributor to our economy and our workforce as the UK’s is to theirs?

Should Australia Make a Date or Continue Organically?

In late 2014 Mitchell Brandtman 5D Quantity Surveyors conducted a straw poll of 137 industry stakeholders with varying degrees of BIM, posing the simple question, ôShould the Australian Government mandate BIM?ö The results showed that over 66% of all respondents said ôYesö to a Government mandate.

Designers generally agree with a mandate (68%) and Contractors agree even more so (83%). Owners unsurprisingly are more reluctant (only 36% agreeing). A breakdown of the results can be viewed here.

Clients will always expect better design within a well-coordinated project that is on time and within budget. BIM simply assists in delivering these outcomes and facilitates the improvement in best practice. The project team should apply BIM because it makes business sense to do so.

The reality however seems to be that customers don’t want to dictate to the supply chain as it might create limited choice and less competition, ôbreakingö the circle of innovation. The supply chain is looking for a guarantee for their investment before they push an innovation that isn’t fully in demand. Australian and New Zealand’s skills and innovations in the field are well documented and respected internationally but if all the stakeholders in the ANZ construction industry are waiting for someone else to act on BIM – is ANZ going to miss one of the greatest opportunities for exporting design and construction services to Asia and the UK as the mandates in those countries take hold.

Missed opportunities are one thing but without a sense urgency will ANZ be exposing itself to more international competition from Denmark, Finland, Hong Kong, Korea, Malaysia, Netherlands, Norway, Singapore, UK and US as those countries innovate in response to their decisions to mandate?

Fixing the Broken Circle: Industry or Government?

Coupled with the recent release of the Framework, we are also anticipating the imminent release of the ôGuide to Procurement using BIM and PTIö. This document may prove more valuable to assisting industry stakeholders in their adoption and implementation investments and strategies. It will also add further rigour to the Framework’s promise of ôa step by step guideö to address the issues and challenges of BIM adoption and Project Team Integration.

Without clear leadership and ownership however, it is difficult to see how quickly and how extensively a guide will be adopted.

Given that we know that owners are reluctant, why not change the decision stream û say ôYesö to BIM for the benefit of public asset management and in turn the innovations derived from this Government decision will see private sector owners choose BIM and industry stakeholders innovate and evolve or disappear. After all, public sector construction work is only 9.8% of our industry as a whole û just $21B. The chance to improve productivity and output by influencing the other 90.2% of our industry is too big of a chance to pass up.

Only after there is a ôYesö can industry turn its mind to the ôhowö, like engaging with educational institutions to pave the way for our future technology disruptors to emerge and improve the processes and lead Australia in the advancement of BIM and PTI.

For more information please email me direct at dmitchell@mitbrand.com