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Is Collaboration the new Black?

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On Tuesday I attended a launch event for the latest edition of the Queensland State Infrastructure Plan (Part B), co-hosted by Infrastructure Association Queensland (IAQ), Construction Australia (CA) and Engineers Australia (EA).

During the opening speeches by Cameron Dick, (Minister for the Department of State Development, Manufacturing, Infrastructure and Planning) and Damian Gould (CEO Building Queensland) I was struck by how many times they both talked about the need for either increased industry collaboration or the benefits that flow from it. Evidently, I was not the only person in the room to notice this as the emcee for the event (Megan Motto CEO of Consult Australia) questioned whether collaboration was the new black i.e. the latest fashion.

So is collaboration the new black or a short lived re-emergence of the flared trousers trend that only ever looked good on someone else?

There is no doubting that the subject of collaboration in the civil infrastructure industry has received a lot of attention in recent weeks, especially following the launch of the NSW Ten Point Commitment to the Construction Industry (which is primarily aimed at improving industry collaboration) but it is equally true that for all the talk there has still been little meaningful action (however laudable the intent, the Ten Point Plan is short on detail as to how the commitments will actually be achieved).

Why the focus on collaboration?

Increased collaboration in the construction industry has been proven to provide many benefits, including:

  • Greater certainty of project outcome
  • Reduced disputes
  • Increased Innovation
  • Increased productivity
  • Reduced construction and whole of life cost.
  • Reduced accidents

So why, given all these benefits, isn’t the industry collectively sat around a camp fire singing Kom Bah Ya every night?

The main reason centres on the opaque concept of value for money.

Clients have historically been led to believe that value for money in a construction sense equals locking in a lump sum price for a project with full risk transfer to the contractor / designer. The associated contracts leave little room for collaboration as this potentially introduces uncertainty as to liability when things go wrong and in recent times Clients (particularly Government Clients) have sought 100% certainty that if anything goes wrong it is not their fault.

Changing Times.

A number of factors are however starting to result in key Clients reconsidering their approach to risk transfer which in turn is opening the door for improved collaboration.

Firstly, a number of high profile projects have shown that no matter how tight you think your contract is you can never avoid being dragged through the courts by a desperate contractor or be immune from the wrath of angry stakeholders when a major project is delayed.

Secondly, the familiar law of supply and demand has swung, at least in the Southern States, in favour of contractors and they have been able to be more selective in the projects that they bid, favouring more collaborative contracts that provide a greater certainty of outcome (return) over traditional high-risk lump sum design and construct contracts. Even though the number of available major projects here in Queensland is comparatively limited, the same law applies given that market for major projects is a national if not international one where major projects are delivered by companies that operate throughout Australia and make decisions on allocation of resources on a national basis.

BuY Three Hospitals and Get One Free

Here in fiscally constrained Queensland there is also another imperative to consider increased collaboration and that is the demonstrated cost savings than can accrue when parties work together to develop innovative solutions for complex projects, reduce waste, improve productivity and agree that rather than sue each other at the end of a project they will agree how things could be done better next time

It has been estimated (UK Office of Government Commerce – The Integrated Project Team – Achieving Excellence in Construction Procurement, 2007) that such cost savings can be up to 30% compared to more traditional delivery methods effectively enabling Governments to but three hospitals and get one free!

This is why the QMCA is taking a lead in championing increased industry collaboration. Through initiatives such as the Collaborate to Innovate summit we hope to work with other industry stakeholders to identify opportunities for improved collaboration and agree strategies for achieving it in areas such as:

  • Project pipeline
  • Project Procurement
  • Project Delivery
  • Asset operation and maintenance.

At QMCA we hope that collaboration is the new black – as black never goes out of fashion and neither should collaboration!

Our members.

Acciona Infrastructure Australia
Bielby Holdings
BMD Constructions
Civil Mining and Construction Pty Ltd
Clough
CPB Contractors
Decmil Group Limited
Fulton Hogan
Georgiou Group
Ghella
John Holland
Martinus Rail Pty Ltd
McConnell Dowell
Seymour Whyte Constructions