whose problem is it anyway - projectmax.typepad.com · when i have a problem, i can see it if i can...

Whose Problem Is It Whose Problem Is It Anyway ?Anyway ?

Grant BinnsGrant BinnsGeneral ManagerGeneral Manager

Blackley Construction LtdBlackley Construction LtdBlackley Construction LtdBlackley Construction LtdPalmerston North, New ZealandPalmerston North, New Zealand

What ill I Talk Abo t ?What ill I Talk Abo t ?What will I Talk About ?What will I Talk About ?

A Bit About MeA Bit About MeBeat You Up A BitBeat You Up A BitBeat You Up A Bit.Beat You Up A Bit.Sob StorySob StoryB i R li tiB i R li tiBeing Realistic Being Realistic Putting It All TogetherPutting It All TogetherQ & C (You Can Beat Me Up)Q & C (You Can Beat Me Up)

Blackley Construction LtdBlackley Construction Ltd

G ant BinnsG ant BinnsGrant BinnsGrant BinnsNZCE (Civil), REANZCE (Civil), REA( )( )BCL for nearly 20 yearsBCL for nearly 20 years

Within the GroupWithin the GroupWithin the GroupWithin the GroupBlackley Equipment LtdBlackley Equipment LtdPathfinder Services LtdPathfinder Services LtdKMS Holdings LtdKMS Holdings LtdEast Coast Utilities LtdEast Coast Utilities LtdBlackley Equipment (HB) LtdBlackley Equipment (HB) Ltd

Past NZ Councillor on the ASTTPast NZ Councillor on the ASTTPast Past InfratrainInfratrain Civil TAG committee memberCivil TAG committee member


Overseas AttendanceOverseas Attendance1995 1995 -- Lines & Cables Conference Lines & Cables Conference -- Manchester, England.Manchester, England.1995 1995 -- Utility Equipment Exhibition Utility Equipment Exhibition -- Louisville, USA.Louisville, USA.1996 1996 -- Trenchless Technology Conference Trenchless Technology Conference -- Perth, Australia.Perth, Australia.1997 1997 -- Underground Construction Technology Underground Construction Technology -- Houston, USA.Houston, USA.1997 1997 -- Land Drainage Contractors Land Drainage Contractors FieldaysFieldays -- RockinhamRockinham, England., England.1998 1998 -- Construction Equipment Show Construction Equipment Show -- Bauma, GermanyBauma, Germany1998 1998 -- Land Drainage Conference Land Drainage Conference -- Melbourne, AustraliaMelbourne, Australia1998 1998 -- TractoTracto TechnikTechnik Factory Training Factory Training -- LennestadtLennestadt, Germany, Germany19981998 Trenchless Technology ConferenceTrenchless Technology Conference Brisbane AustraliaBrisbane Australia1998 1998 -- Trenchless Technology Conference Trenchless Technology Conference -- Brisbane, AustraliaBrisbane, Australia1999 1999 -- TractoTracto TechnikTechnik Asia Asia -- GrundomatGrundomat & Drilling seminar & Drilling seminar -- Brisbane, AustraliaBrisbane, Australia1999 1999 -- SaltexSaltex 99 Turf Industry Show 99 Turf Industry Show -- Windsor, EnglandWindsor, England1999 1999 -- Lines, Cables & Pipes Conference Lines, Cables & Pipes Conference -- Manchester, EnglandManchester, England1999 1999 -- Utility Equipment Exhibition Utility Equipment Exhibition -- Louisville, USALouisville, USA2000 2000 –– No Dig 2000 Conference & Exhibition No Dig 2000 Conference & Exhibition –– Perth, AustraliaPerth, Australia2002 2002 -- Underground Construction Technology Underground Construction Technology -- Houston, USAHouston, USA2002 2002 -- Trenchless Technology Conference Trenchless Technology Conference -- Sydney, AustraliaSydney, Australia2003 2003 -- North American No Dig Convention North American No Dig Convention –– Las Vegas, USALas Vegas, USA20042004 Trenchless Technology ConferenceTrenchless Technology Conference Melbourne AustraliaMelbourne Australia2004 2004 –– Trenchless Technology Conference Trenchless Technology Conference –– Melbourne, AustraliaMelbourne, Australia2005 2005 –– North American No Dig Convention North American No Dig Convention –– OrlandoOrlando, USA, USA2006 2006 –– International NoInternational No--Dig, Trenchless Conference Dig, Trenchless Conference –– Brisbane, AustraliaBrisbane, Australia2007 2007 –– Bauma Construction Equipment Exhibition Bauma Construction Equipment Exhibition –– Munich, GermanyMunich, Germany2008 2008 –– Tesmec Factory Training Tesmec Factory Training –– Houston, USAHouston, USA2008 2008 -- Trenchless Technology Conference Trenchless Technology Conference –– Sydney, AustraliaSydney, Australia2009 2009 –– American Wind Energy Conference American Wind Energy Conference –– Chicago, USAChicago, USA2009 2009 –– Wind Farm Site Visit Wind Farm Site Visit –– Texas, USATexas, USA

Some SituationsSome SituationsSome SituationsSome Situations


Changing Thei MindChanging Thei MindChanging Their MindChanging Their Mind

Original Contract did not require a change Original Contract did not require a change in our contract works insurance.in our contract works insurance.An NTC required a $2,000,000 cover.An NTC required a $2,000,000 cover.Insurance company would not give $2mInsurance company would not give $2mInsurance company would not give $2m Insurance company would not give $2m cover on $35K of cablecover on $35K of cableCli t id it t l fCli t id it t l fClient said it was to cover loss of Client said it was to cover loss of generation and delays to other contractorsgeneration and delays to other contractors


Changing Thei MindChanging Thei MindChanging Their MindChanging Their Mind

Insurance company provided cover at $5k Insurance company provided cover at $5k plus a $50k excess.plus a $50k excess.p $p $We offered it to the Client on this basis or We offered it to the Client on this basis or if we carry the risk $55k up frontif we carry the risk $55k up frontif we carry the risk, $55k up front.if we carry the risk, $55k up front.Client Response:Client Response:

Thi t h ld h b $200kThi t h ld h b $200kThis was a typo, should have been $200kThis was a typo, should have been $200kExcess was reduced by client providing Excess was reduced by client providing security guard for 4 nightssecurity guard for 4 nightssecurity guard for 4 nightssecurity guard for 4 nights


And Another OneAnd Another OneAnd Another OneAnd Another One


“The G een Line”“The G een Line”“The Green Line”“The Green Line”


G een Line P ocessG een Line P ocessGreen Line ProcessGreen Line Process

The client has probably been working on The client has probably been working on the project for 6 months or more, in some the project for 6 months or more, in some p j ,p j ,cases years.cases years.The document will state thatThe document will state thatThe document will state that The document will state that

Underground services are the responsibility of Underground services are the responsibility of the Contractor.the Contractor.the Contractor.the Contractor.The contractor will have 1 of if lucky 2 weeks The contractor will have 1 of if lucky 2 weeks to price the workto price the work


to price the workto price the work

There is nothing much in the There is nothing much in the ggway !way !

Y h Ri ht !!!!Y h Ri ht !!!!Yeah Right !!!!Yeah Right !!!!gg


The effectThe effectThe effectThe effect

Existing service position is a key factor in Existing service position is a key factor in being able to construct the new utilitybeing able to construct the new utilityg yg yExisting service location is the major risk Existing service location is the major risk in the construction processin the construction processin the construction process.in the construction process.It therefore has a major impact on priceIt therefore has a major impact on priceIt h t b k f t i th d i tIt h t b k f t i th d i tIt has to be a key factor in the design, not It has to be a key factor in the design, not just a green line on a piece of paper.just a green line on a piece of paper.


M Pe ceptionM Pe ceptionMy PerceptionMy Perception

It means that the Client / Consultant:It means that the Client / Consultant:Have not done their job properlyHave not done their job properlyHave not done their job properlyHave not done their job properlyThey are not prepared to stand behind They are not prepared to stand behind their worktheir worktheir work.their work.They are looking to get something for They are looking to get something for

thi ( hthi ( h h fth ft h t thh t thnothing (perhaps nothing (perhaps shaftshaft whoever gets the whoever gets the work)work)


The ResponseThe ResponseThe ResponseThe Response

Get Stuffed !Get Stuffed !It is time for a reality check for all; whyIt is time for a reality check for all; whyIt is time for a reality check for all; why It is time for a reality check for all; why should the contractor be expected to take should the contractor be expected to take the risk in the first place?the risk in the first place?the risk in the first place?the risk in the first place?


The ResponseThe ResponseThe ResponseThe Response

We have priced the green line & assume it We have priced the green line & assume it has been investigated, designed and is has been investigated, designed and is g , gg , gconstructableconstructable..If this isn’t theIf this isn’t the casecase we will carryout thewe will carryout theIf this isn t the If this isn t the case, case, we will carryout the we will carryout the above and provide a above and provide a constructableconstructable route route as a variation to the contract Firm pricingas a variation to the contract Firm pricingas a variation to the contract. Firm pricing as a variation to the contract. Firm pricing will follow the design.will follow the design.


C t t lC t t l P liti lP liti lContractualContractual, Political, Political

Design BuildDesign Build8 Week tender period8 Week tender periodpp200 properties to service200 properties to service6km of reticulation pipeline 6km of reticulation pipeline 6 o et cu at o p pe e6 o et cu at o p pe eAerial photo with some contours suppliedAerial photo with some contours suppliedBeen under consideration for more than twoBeen under consideration for more than twoBeen under consideration for more than two Been under consideration for more than two yearsyearsLump SumLump Sum


Lump SumLump Sum


The Principals Objectives in the same The Principals Objectives in the same document ask fordocument ask for

Minimisation of design and construction costMinimisation of design and construction costOptimal risk allocation for provision of bestOptimal risk allocation for provision of bestOptimal risk allocation for provision of best Optimal risk allocation for provision of best value for the project costvalue for the project costSound design and quality construction for Sound design and quality construction for Sou d des g a d qua ty co st uct o oSou d des g a d qua ty co st uct o olong term operational reliabilitylong term operational reliability



The IssuesThe IssuesLump Sum and optimal risk allocation don’t fit in the Lump Sum and optimal risk allocation don’t fit in the same documentsame documentsame document.same document.Health department subsidy issues will impact on the Health department subsidy issues will impact on the design and final operational costsdesign and final operational costsDoes the Council want to arrange easements to Does the Council want to arrange easements to reduce construction costsreduce construction costs

Why do I want to spend $70 000 plusWhy do I want to spend $70 000 plusWhy do I want to spend $70,000 plus Why do I want to spend $70,000 plus investigating & designing a project that I haven’t investigating & designing a project that I haven’t got. got.


The potential incomeThe potential incomeThe potential incomeThe potential income

EstablishmentEstablishment $ 5000.00$ 5000.00Foot path drilling rateFoot path drilling rate $ 12 000 00$ 12 000 00Foot path drilling rateFoot path drilling rate $ 12,000.00$ 12,000.00Additional costs for river Additional costs for river $ 12,000.00$ 12,000.00

TotalTotal $ 29,000.00$ 29,000.00

240m total length240m total length


240m total length240m total length

19545m 195m45m


Potential LossPotential LossPotential LossPotential Loss

Drill headDrill head $ 3,000.00$ 3,000.00Sonde HousingSonde Housing $ 6 000 00$ 6 000 00Sonde HousingSonde Housing $ 6,000.00$ 6,000.00SondeSonde $ 5,000.00$ 5,000.00150 d ill d150 d ill d $50 000 00$50 000 00150m drill rod150m drill rod $50,000.00$50,000.001 days work minimum1 days work minimum $ 3,500.00$ 3,500.00

TotalTotal $67 000 00$67 000 00


TotalTotal $67,000.00$67,000.00

$67 000 s $29 000$67 000 s $29 000$67,000 vs $29,000$67,000 vs $29,000

If there is no reward for trying, then why If there is no reward for trying, then why take the risk? take the risk? This is especially so if success will save This is especially so if success will save the client money or make the job possiblethe client money or make the job possiblethe client money or make the job possible the client money or make the job possible or keep the public or Local Authorities or keep the public or Local Authorities happyhappyhappy.happy.


So hat is the job o th?So hat is the job o th?So what is the job worth?So what is the job worth?


Who Bets on the Ho ses ?Who Bets on the Ho ses ?Who Bets on the Horses ?Who Bets on the Horses ?

Who would put a $67,000 bet on the red Who would put a $67,000 bet on the red hot favorite knowing his return would be hot favorite knowing his return would be gg$29,000 if he wins?$29,000 if he wins?

You ask me to do that everydayYou ask me to do that everyday


The Sob StoryThe Sob StoryThe Sob StoryThe Sob Story


M P oblemsM P oblemsMy ProblemsMy Problems

That Clients & Consultants understand That Clients & Consultants understand what they are asking for.what they are asking for.y gy gThe Quality of the homework.The Quality of the homework.That my staff can identify the risks andThat my staff can identify the risks andThat my staff can identify the risks and That my staff can identify the risks and price accordingly. price accordingly.


M P oblemsM P oblemsMy ProblemsMy Problems

Mechanical failureMechanical failurePerformance of my staff Performance of my staff –– We can just get it We can just get it wrong.wrong.WeatherWeatherG tti P idG tti P idGetting PaidGetting PaidKeep 40 plus staff gainfully and profitably Keep 40 plus staff gainfully and profitably employedemployedemployedemployedBalance workload with risk assessment (one can Balance workload with risk assessment (one can effect the other) effect the other)


))

Back To RealityBack To Reality


The FactsThe FactsThe FactsThe Facts

Not all contractors Not all contractors are rogues,are rogues,are rogues, are rogues, vagabonds or close vagabonds or close relations torelations torelations to relations to Blackbeard the Blackbeard the i ti tpiratepirate

The FactsThe FactsThe FactsThe Facts

Not Not all consultants know which way is all consultants know which way is upupupup..

The FactsThe FactsThe FactsThe FactsNotNot all principals know how to getall principals know how to getNot Not all principals know how to get all principals know how to get what they what they need or wantneed or want..

Benchma ksBenchma ksBenchmarksBenchmarks

Contractors need to make a fair profitContractors need to make a fair profitConsultants need to make a fair profitConsultants need to make a fair profitThe Principal wants Value for MoneyThe Principal wants Value for MoneyGenerally, contractors and consultants are good Generally, contractors and consultants are good t h t th d ( Skill )t h t th d ( Skill )at what they do (core Skills)at what they do (core Skills)

Problems occur when they move outside their Problems occur when they move outside their core skill level unless they are innovativecore skill level unless they are innovativecore skill level unless they are innovativecore skill level unless they are innovativeFlyFly--ByBy--Night operators create problems at any Night operators create problems at any levellevel

The Best DealThe Best DealThe Best DealThe Best Deal

The lowest price from the partner capable of The lowest price from the partner capable of doing the work is the best pricedoing the work is the best priceg pg p

If you have selected the right partners youIf you have selected the right partners youIf you have selected the right partners, you If you have selected the right partners, you will get the job that you expect, you may, will get the job that you expect, you may, because of their skill and experience get abecause of their skill and experience get abecause of their skill and experience, get a because of their skill and experience, get a better job better job

Risk Cost MoneRisk Cost MoneRisk Cost MoneyRisk Cost Money

There are no free lunchesThere are no free lunchesThere are no free lunches There are no free lunches

But we have a number of clients and consultantsBut we have a number of clients and consultantsBut we have a number of clients and consultants But we have a number of clients and consultants who expect the contractor to accept an ever who expect the contractor to accept an ever increasing amount of risk for no acknowledged increasing amount of risk for no acknowledged additional reward.additional reward.


Risk Cost MoneRisk Cost MoneRisk Cost MoneyRisk Cost Money

We have contractors who accept risk asWe have contractors who accept risk asWe have contractors who accept risk as We have contractors who accept risk as a price for getting the work. a price for getting the work. Thi i l d t ki i kThi i l d t ki i kThis can even include taking on risks This can even include taking on risks that are generally outside their control.that are generally outside their control.


basic risk impacts are still basic risk impacts are still i d di d dmisunderstood misunderstood

Open trenchingOpen trenchingOpen trenching Open trenching When I have a problem, I can see it When I have a problem, I can see it If I can see it I can deal with it.If I can see it I can deal with it.If I can see it I can deal with it. If I can see it I can deal with it. The risk is reduced substantially for this The risk is reduced substantially for this reason.reason.

Trenchless operations Trenchless operations You know you have a problem but you can’t You know you have a problem but you can’t see itsee itIt is very difficult to develop a solutionIt is very difficult to develop a solutionTh i kTh i k


The risks are greaterThe risks are greater

P tti It All T thP tti It All T thPutting It All TogetherPutting It All Together


Ho do o get the goods?Ho do o get the goods?How do you get the goods?How do you get the goods?

You need an effective teamYou need an effective teamThey need to be formed at the start if theyThey need to be formed at the start if theyThey need to be formed at the start if they They need to be formed at the start if they are to add maximum value to the projectare to add maximum value to the project

Early InvolvementEarly InvolvementyyMakes the “Hard Yards” easierMakes the “Hard Yards” easierGet the right partners on board earlyGet the right partners on board earlyUnderstand the specialist skills of theUnderstand the specialist skills of theUnderstand the specialist skills of the Understand the specialist skills of the people you are dealing withpeople you are dealing withKnow the limitations of the people you areKnow the limitations of the people you areKnow the limitations of the people you are Know the limitations of the people you are dealing withdealing withL k t diff t t f t t tL k t diff t t f t t tLook at different types of contracts to Look at different types of contracts to suite the outcome you requiresuite the outcome you requireBe prepared to pay for all servicesBe prepared to pay for all services

A C t t l R l ti hi R iA C t t l R l ti hi R iA Contractual Relationship RequiresA Contractual Relationship Requires

TrustTrustTrustTrustCommunicationCommunicationF i D lF i D lFair DealsFair DealsAgreed ExpectationsAgreed Expectations

AA T aditionalT aditional RelationshipRelationshipA A Traditional Traditional RelationshipRelationship

Principal

er

Consultant als

Supp

lie

Consultant

Mat

eria

Contractor

The Best RelationshipThe Best RelationshipThe Best RelationshipThe Best Relationship

PrincipalPrincipal

M i l S liMaterials Supplier

Consultant Contractor


The Cont act Doc mentThe Cont act Doc mentThe Contract DocumentThe Contract Document

Is a document of distrustIs a document of distrust

The more you distrust the bastard, the The more you distrust the bastard, the bigger the documentbigger the documentbigger the documentbigger the document


Doc mentsDoc mentsDocumentsDocuments

Should be written for competent partnersShould be written for competent partnersShould not be an excuse for poor planning Should not be an excuse for poor planning p p gp p gand designand designNeed to say what is expected and what is Need to say what is expected and what is y py prequiredrequiredNeed to contain all of the information Need to contain all of the information necessary for pricing and building the necessary for pricing and building the workwork

Anal se Yo Cont actsAnal se Yo Cont actsAnalyse Your ContractsAnalyse Your Contracts

Does it say what you Does it say what you needneedDoes it allow for innovationDoes it allow for innovationIs it practicalIs it practicalAre you being honest and fair with theAre you being honest and fair with theAre you being honest and fair with the Are you being honest and fair with the information being suppliedinformation being suppliedInterview the preferred partnersInterview the preferred partnersInterview the preferred partnersInterview the preferred partnersCould you enter this contract with a Could you enter this contract with a handshakehandshakehandshakehandshake

Doc mentsDoc mentsDocumentsDocuments

Must Say What you Need !Must Say What you Need !That’s Val e fo moneThat’s Val e fo moneThat’s Value for moneyThat’s Value for money

Not what you Want!Not what you Want!That Costs You MoneyThat Costs You MoneyThat Costs You MoneyThat Costs You Money

Don’t Make It Harder Than It Don’t Make It Harder Than It H T B !H T B !Has To Be !Has To Be !

Early Contractor Involvement, Early Contractor Involvement, y ,y ,When ?When ?

When you are not sure of the RIGHT When you are not sure of the RIGHT Solution.Solution.When it is difficult to design.When it is difficult to design.When it is difficult to specifyWhen it is difficult to specifyWhen it is difficult to specify.When it is difficult to specify.

The Key ingredient The Key ingredient TRUSTTRUST


To ed ce RiskTo ed ce RiskTo reduce RiskTo reduce Risk

Do the homeworkDo the homeworkCommunicateCommunicateCommunicateCommunicateDo the homeworkDo the homeworkC i tC i tCommunicateCommunicateDo the homeworkDo the homeworkCommunicateCommunicate


P oc ementP oc ementProcurementProcurement

There Are Ways To Achieve Early InvolvementThere Are Ways To Achieve Early InvolvementIt Can Be Quite Simple.It Can Be Quite Simple.Q pQ pIt Is All About The RelationshipIt Is All About The Relationship

f ’ h df ’ h dIf You Don’t Trust The Bastards, If You Don’t Trust The Bastards, Don’t Employ Them!Don’t Employ Them!Don t Employ Them!Don t Employ Them!

Pea ls of WisdomPea ls of WisdomPearls of WisdomPearls of Wisdom

We are in the same industryWe are in the same industryThat’s why we are hereThat’s why we are here

We all have common GoalsWe all have common GoalsSuccessful ProjectsSuccessful ProjectsValue for effortValue for effort

Client value for moneyClient value for moneyProfit for effortProfit for effortProfit for effortProfit for effort

If we get it right, we all get a bonusIf we get it right, we all get a bonusThe opportunity to do it all againThe opportunity to do it all again


The opportunity to do it all againThe opportunity to do it all again

If yourIf your Partners, Consultants orPartners, Consultants orIf your If your Partners, Consultants or Partners, Consultants or Contractors Contractors

D ’ fD ’ fDon’t performDon’t perform

You Got It WrongYou Got It WrongYou Got It WrongYou Got It WrongBecause you picked themBecause you picked themBecause you picked themBecause you picked them

Whose Problem Is It Anyway ?Whose Problem Is It Anyway ?

Grant BinnsGrant BinnsBlackley Construction LtdBlackley Construction Ltd

Questions & CommentsQuestions & Comments