A View on the Australian Building Industry 2012 – Part 1

A View on the Australian Building Industry 2012 – Part 1

A View on the Australian Building Industry 2012 – Part 1

After 37 years in the building industry, I suggest building standards have now fallen to a standard below that existing prior to my graduation. In the interest of reducing bureaucracy and facilitating development, we have eliminated well established safeguards on the quality of the end product as well as the quality of the workplace. I believe it is time for an urgent review. Part one is the first of four reports presenting my view of different aspects of the building industry.

When I started my own consultancy business in 1984, clients still generally used the traditional consultancy agreement with a full tender process involving full architectural and engineering design plus a bill of quantities, prepared by a quantity surveyor. That system was often criticised because the clients considered that too often they were paying for variations generated due to error or dispute between the builder and the various consultants. In consequence, the market moved towards ‘Design and Construct’ contracts. I suggest that we have substantially eliminated that problem. However after 20 years since its introduction, I suggest urgent readjustments are now required. The industry may have solved one problem but in my view have created other far more serious ones in the process. I consider some of those problems [Part 1] to be as follows:

1. The process of Certification I have no reason to question the moral standards of the Private Certifier. However I cannot understand how the industry could have evolved a system where the “poacher” is in charge of the “game keeper”. It is fundamentally important that those responsible for maintaining the quality of the end product do so independent of the party responsible for their remuneration. In my opinion there is no doubt that the certifier must be totally independent of the developer and the builder. Their fees should be paid through council if the certifier is not the council itself.

Further, if a job is to be organised as ‘Design and Construct’, a set of consultants should be appointed by the certifier to ensure that design documentation is maintained at a satisfactory standard. This will obviously affect the cost of construction. However I suggest that the cost will be considerably less than the current overall long term cost. In the past 25 years, either I [or my staff in times past]have assisted both government and private organisations to diagnose and rectify building problems. Too often the problems become the burden of the eventual owner or insurer. This was highlighted by the recent article in the Sydney Morning Herald on the 21 May 2012. That article reflected what many of us in the building industry already knew. The natural competitiveness of the building industry means that companies will always look to save cost where they can as permitted by the system of eventual approval. The reality has meant that design documentation, contractor site supervision, consultant site supervision are all inadequate and the final letters of certification are often meaningless. Too often the subcontractors are left to design their work on site themselves. Standards in the recent BER and the low cost housing were simply a continuation of the problems which existed in the period 1995-2002. Builders got out of residential construction because their costs rectifying problems post contact were exorbitant. Clearly nothing changed between 2002-2008. The GFC forced all the builders back into that work because they had no alternative. Self regulation does not work at present. Safeguards are often circum navigated and consequentially, either the local council, the insurance company or the owner become responsible to cover the costs to rectify the problems. Everything has become a question of the lowest common denominator. Builders know that if they price the job to do it properly, they will not win the project. There is nothing to maintain standards. In my opinion we have virtually destroyed the architectural profession. In my own experience I know of senior people in every professional building service who are advising their children to choose a different career from their parent. Clearly matters need to be urgently addressed.

2. ‘As Built’ Documentation One would think that one of the great benefits of the computer age is that complete ‘as built’ documentation was automatically available for every project. But in practise retained records have never been worse. Even on government projects this is the case. I do a lot of work for the Department of Public Works. At McKell House near central station in Sydney they have a comprehensive collection of construction details relating to past projects. However if you ask the librarian the question, he will tell you that the percentage submission of documentation for new projects for storage on record is probably less than 25% (including the recent BER).

Apparently submission of documentation depends on the choice of the particular project manager. So much so that when I am acting for the department to look at a problem on a particular building the standard phrase of the client and myself is “the building is pre 2000 so there is a good chance we will find the records at Mckell House” in other words for buildings post 2000 we don’t expect to find anything useful. In this day and age it should be mandatory for every building, private or government to have to submit ‘as built’ documentation for all disciplines prior to the release of an occupancy certificate. To remove the responsibility from councils this should be set up as a central registry for every state. As part of the lodgement process, copies of all warranties and certificates would have to be signed off and submitted as a complete set on a disc. In the past 25 years, I have done and still do considerable diagnostic work for a whole range of clients. In all that time, only one building had the appropriate documentation carefully stored and available for future reference. The absence of such documentation is unacceptable and out of line with standards in other areas of society. A major consequence of the absence of these records is the cost associated with building repair and renovation. The cost of rectification of these errors is increased enormously because of the time required to actually establish how the building was constructed and then diagnose the problem. In my own experiences, perhaps the worst case was a block of units in Enfield. The repair cost was over $5.0M and could have been much more without significant pragmatism. A three storey complex with a basement, a ground floor podium slab which supports 2 storey townhouses had been built founded on a 150mm thick ground bearing slab, itself seated in soft clay. As a result the whole complex had major defects due to differential settlement. The original design engineer had specified support on shale but there was no one to ensure the building was actually built to the design. Yet final certificates had been issued.

3. Site Supervision Today, the standard of supervision of work onsite is unacceptable if we are to maintain quality and compliance in construction. I suggest that this statement applies to the builder, the consultants who should be supervising the work and indeed the certifier, be they the council or a private company. In consequence I further suggest that the certifier should have a formally appointed permanent Clerk of Works on all substantial residential work, with a formal visiting role on all small projects. An advantage of the aging population is that there is an abundance of retired experienced trades persons and consultants who would be able to fulfil this role. Certainly this would be an additional cost to the project but totally justified.

In 1980, I was the associate in charge of the engineering design team for a $200m (2012 value) large shopping centre. I had a site team of 5 engineers, full time on site. By comparison, in 2003-2006, on a $180M shopping centre, the builder was able to cut costs to cover only a limited number of periodic visits as specified by him. This clearly demonstrates how supervision standards have fallen over the past 30 years and the urgent need to return to a more stringent level of control. The current system particularly with ‘Design and Construct’ contracts has led to totally inadequate staffing levels across the board. For instance, most engineering consultants provide a unit rate per site visit to inspect works. The number of visits is dependent on how many times the builder asks him to visit the site. Builders save money by avoiding consultant visits. Yet they still get the certificates they require.

4. Construction Certificates I do not consider that current engineering or architects certificates to be adequate documentation since they are always limited to those works which were actually inspected. Clearly this is to limit the liability of the particular consultant. I suggest that often the works inspected may only account for 10% of the total project. They are what I call ‘Clayton’ certificates. In the 1980’s the architects and the consultants certified the works without qualification. It is time the principal certifiers demand such a certificate again. In this way it would force developers and builder to implement appropriate site supervision.

Please do not hesitate to contact me if you wish to discuss these matters.

Yours sincerely.

Charles Rickard

FIEAust, FIStructE, MICE, CEng, MIPENZ, NPR-3

RH Consulting Engineers

Specialist Structural, Civil, Façade and Diagnostic Engineer

Suite 5, 121 Military Road, Neutral Bay NSW 2089

Ph: +61 2 9904 5610

Fax: +61 2 9904 5642

Mobile: +61 418 238 247

Email: charles@charlesrickard.com.au

Website: charlesrickard.com.au

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