Holdfast Training Services Trial Blog

My first TMR focussed on what the project team assessed to be the greatest financial risk on the project – the rate of tunnelling.  The head contract stated we were to be granted access to site 18 August 2015.  The client gave us early access and so we began with surveying, fencing the alignment (7.8kms) and setting up the main office compound, and ting.

Early access to site = early finish and more profit?  Or do ‘fools rush in’?  The team is not yet fully staffed so every man and woman is doing everything.  Amidst the chaos of shoving the entire team into a single portacabin running off a generator, and a wireless network that spanks in every 15 minutes, we are painstakingly making progress in getting ‘things’ to happen.

This leads me onto the point of this blog.

I have spent the lions share (not Cecil who was killed by the trigger happy yank – Brad?) of my time compiling tender packages for subcontractors and materials suppliers.  This is followed by tender analysis and then recommendation prior to contract award.  Materials such as steel reinforcement can be procured through a PO (purchase order).  Having a contract in place saves us the hassle of shopping elsewhere at a later date as it prohibits the supplier from raising his prices midway through the project.  It also makes forecasting simpler.

If a ‘grubby subbie’ as the team refers to them is going to provide any labour on site, they are obliged to meet the building code of compliance.  This eliminates sham contractors (cowboys) who don’t have their own workforce and attempt to sell the job on for profit after having done absolutely squat.  To meet the code of compliance, these smaller companies are required to pay into their employees’ Supa (pension) amongst other things.  Proving they are compliant is a lengthy process, taking John Holland about a week to check.

The client (YVW – Yarra Valley Water) is obliged to provide us with a water supply for the project.  We have sneakily asked them to place it where they would bear the cost of getting it across a busy road.  YVW engaged a local sub-contractor called Select Solutions to carry out the works (directional drilling under the road from a launch pit to a receive pit).  My Traffic Management Plan was approved by VicRoads on condition that we would not cut the road to run a conduit for a return waste water pipe.  The output – we needed to bore under the road for a return pipe to a temporary sewer.

The risk?  Electricity, gas and fibre optics.  The plan?  Select Solutions, and hence YVW, owned the risk of finding a clear reach under the road.  So yesterday I engaged with Select Solutions directly to see if they could do another bore for us, parallel to the supply line i.e. proven route.  They were happy to, at a third of the cost of the next best quote I received.  His only concern was the timeframe to receive payment when dealing with Tier 1 companies.

The issue?  One day is not enough time to verify code of compliance.  And the job could not be done off a purchase order due to the labour element.  So this was a missed opportunity as a later date would see us incur mobilisation costs which YVW had absorbed for this particular window.

This morning I attended a lift planning course in head office.  While I was away, the team just got them to do the work with a ‘promise’ we’d pay them (!), and without proof of compliance and insurance.  One could argue that YVW wouldn’t employ a sham contractor, but that’s not the paperwork umbrella JHG requires.  In the end the job went ahead without incident and we have a return line, but the consequences of hitting the fibre optic, gas or electricity would have dwarfed the small victory. Cut a handful of fibre optic cables and all of a sudden the rate of tunnelling might not be the biggest money pit.

If that wasn’t enough, VicRoads specified the bore had to be 1.2m below the pavement surface as they will be doing roadworks there in the next few weeks.  See the photo, that’s not 1.2m!  So what do we do?  Backfill and pray VicRoads don’t come sniffing.

Now Select Solutions just need to monitor their bank statements…

Spec? What spec?

Learned about the ‘start calc’.  A walk through – talk through of a JHG system which identifies areas of risks and opportunities, and the monetary values attached to them.  The estimating team feeds data from the project tender to us which is effectively the cost code budget.  The forecast then informs the start card.  Not used by all sectors within JHG, it is favoured by the operations manager (Dave) who the PM reports to.  I liken him to John Moran – been around too long to entertain bullsh1t (pardon my Aussie).

The start card is a logical user friendly tool to turn qualitative opinions into quantitative estimates e.g.  ‘we reckon we’re going to make a big margin’ as opposed to ‘how much’  do we reckon we will make?  It takes the individual cost codes and churns out a plus or minus value from how we estimate we can do the ‘work’ for against what the estimators thought when we tendered for the project.  It’s the profit ‘P’ of the triple bottom line.

In forecasting, I have produced product breakdown structures which have created work breakdown structures.  From that I have built up cost breakdown structures (thank-you Steve Payne), and coughed up a dollar value for the ‘cost code’.  If this is higher than the estimators envisioned, the code is in the red and vice versa equals in the black.  Follow suit for all of the cost codes by the team members and we land up with a total bottom line red or black figure for the project.  (It should be mentioned that my team does not use the APMP method and the feedback has been positive).

Too much in the black and JHG senior management will take money off our project to offset projects which are heading south.  The trick seems to be to lie through your teeth with a smile on your face.  Find places to ‘hide the fat’ e.g. $30k on ‘small tools’.  The point being that if you show your cost breakdown to match (or darn near equal) the estimate from the tender estimate, the JHG powers that be will leave you alone.  Dave wasn’t born yesterday and he knows the score, he just can’t prove anything – yet.

Another angle is that from a quantitative direct cost risk analysis process (as used on my project), both opportunities and risks are assigned monetary values.  Take the value of the cost code and multiply it by the likelihood of an event occurring and voila – you have a red or black number (risk or opportunity).  Any ‘fat’ i.e. black you accumulate is then used to offset the red figures from incompetent estimating or ‘Jonahs’.  Essentially nothing more than a contingency fund.  Like anything, too much of it (visible) is bad as the senior management will transfer it to another suffering project, not enough and the project is costing JHG money.

So this morning taught me to keep your friends close and your enemies closer.  Hide the money up your sleeve.  Also, bad news is best delivered early.  Make your superiors aware of the curve early so that they can fleece other projects to help you, rather than waiting until the project is a hopeless flop and then begging for handouts.

In other news; supersize your kangaroo leather hat with a genuine kangaroo scrotum bottle opener for just $30 AUD extra.

Roo sack – gen.

Our surveyor has started on the northern end of the alignment as it was the first land given to us by the client.  He is marking out the construction boundary and the CL of the tunnel alignment.  There are some discrepancies – the title lines do not lie exactly with the fence lines.  So what?  There is a fibre optic cable that runs the length of the fence which makes up the western construction boundary and runs parallel to the railway.  Effectively, the construction boundary has been reduced by approximately 1.0m due to this fence.  We are not considering removing the fence and placing a new one for the sake of this meter.  So what are the risks?  They are two-fold.  Firstly, the risk of cutting something increases (slightly), but it is not a show stopper, the show will go on.

The second risk has more severe consequences.  The works zone is in an area of significance to the Wurundjeri Tribe Land Compensation and Cultural Heritage Council (WTLCCHC) as it connects present day Aboriginal people with their ancestors who have lived in the region for thousands of years.  As you may have read in my first blog, I attended a CHMP (Cultural Heritage Management Plan).  This involved an Aboriginal ‘laying down the law’ with regards to excavating in our project corridor.  Artefacts of cultural heritage were displayed which included glass ‘knives’ and stone ‘spear heads’ and ‘axe heads’.  The Aboriginal Heritage Act 2006 makes it a legal requirement for contractors working in sensitive areas to produce a CHMP.  It is a legally binding document which must be followed by everyone working on site.

Aboriginal artefacts.

Our corridor has up to 80 areas deemed to be of CH value.  We are permitted to remove topsoil inside a 20m corridor centred directly above the sewer tunnel, and outside a 100m corridor of either of the 2 creeks (Merri and Malcolm) without the need to call an Aboriginal ‘advisor’ to monitor our works.  However, should we uncover a broken grogg bottle or spear head, or human remains(!), works must halt and the advisor is to be called in.  Reaction times can be anything up to 48 hours.  Historical dealings include the advisor arriving on site, picking up the ‘valuable spearhead’, and throwing it in a bush.  All this for a handsome $2500 per day (or 5 minutes), and we have 8 kilometres of this to look forward to.

So how is this related to the surveyor?  We aren’t scraping for BREEAM points by including trees in our construction boundary, but we are going to lose Brownie points, time and money if our works mistakenly step outside our corridor. If everybody is singing off different song-sheets, we are exposing ourselves to future potential disputes, particularly with the cultural heritage side of life.  It all seems to come back to communication and version control; two things I feel JHG could improve upon.

In other news, I am the proud owner of a genuine Kangaroo leather hat.  Taking orders now for my return to the UK. $60AUD.

I have been in Melbourne for almost 4 weeks now and have spent 3 of them finding my feet in the JHG head office and 1 of them trying to work out how to post on the blog.  The project I find myself on has not yet hit site and will not do so for another few weeks. Not great considering time on site will be shortened, but it has given me the opportunity to interrogate my captive audience in the office for project information to put AER1 together.

The best way to describe my initial few weeks would be akin to being the new dog in a well established pack.  We are most definitely still at the backside sniffing stage.  Picture Daz in the middle of the room being circled by dingoes all having a whiff.

Week one was great; I dented my work vehicle reversing into a concrete column – first impressions and all that.  Today I got a double combo traffic fine for following Mr Satnav onto a toll road, not paying and trying to play the tourist card (epic fail).  The first incident report for the project belongs to yours truly.  Explaining that to my project manager was interesting (he is a mountain of a man from Glasgow with hands like baseball mitts – not one you want to annoy).

Anyway, no-one died and the project must go on, or start at least.

I have done this a bit back-to-front in order to submit AER1 in time. So instead of a blog feeding an AER, my AER will write this blog…

My role is as Project Engineer for the Amaroo Main Sewer Project, located roughly 30km north of the Melbourne CBD (central business district).  Yarra Valley Water (YVW) is the largest of Melbourne’s three water corporations and services the Northern growth corridor which includes the Amaroo Main Sewer Project. The Victoria State government’s Metropolitan Planning Authority predicts that this corridor will grow to accommodate a population of 260,000 people. There are currently no existing major sewers (or wag bags) in the regions where this growth is expected to occur and the delivery of the Amaroo Main Sewer will ensure sustainability for the development.

YVW intends to construct a new 7.8km long main sewer from North of Donnybrook Road to the existing Kalkallo Recycled Water Treatment Plant in Craigieburn. The main sewer is proposed to have an internal diameter of 1,575mm and be founded at depths ranging between 6m and 14m. YVW has requested that the John Holland Group Pty Ltd (JHG) tender for the Amaroo Main Sewer Project. In turn, JHG has requested that GHD Pty Ltd (GHD) provide a proposal for the temporary works design services for the project.

The Project comprises a trunk sewer, provision for 12 future sewers and 1 connection to an existing YVW branch sewer. This is to accommodate development of the land between Craigieburn and Donnybrook in the future.  All sewers are required to have a 100 year life, a smooth internal surface and be installed as per the drawings to ensure gravity fed hydraulic performance requirements are met.  The proximity of entry chambers will vary between 284m and 695m, with an average of 502m.  They will have internal diameters ranging between 3.2m and 6.0m, with depths from 5.1m to 19.2m.  All manholes are required to allow sufficient space to meet operational and maintenance access requirements for the sewer.  The delivered article will have no staged access.  To reduce the risk of incidents caused by human fatigue, maintenance personnel wearing sewer gear will be lowered into and lifted out of the manholes by means of a Davit Arm.  Checking the sewers (up to 695m in length) will continue to be done conventionally.

The head contract is an AS4000-1997 Construction Contract (Modified) between The Client (Yarra Valley Water Corporation) and the Contractor (John Holland Pty Ltd).  It is a traditional lump sum contract of $84,179,360.58 AUD – construct only.  The lump sum was derived by JHG using a combination of first principles and experience.  They benchmarked this project against their previous recent tunnelling project in Woolloongabba. With similar ground conditions and TBMs (tunnel boring machines); JHG used 8m per day tunnelling per TBM as their benchmark when creating their lump sum amount.  In order to be able to provide a lump sum, JHG had to know what their pipe suppliers would price at.  JHG conducted early negotiations with two prominent competitors – I-Plex and Hobas.  After establishing the scope of works with zero (or as close to as possible) unknowns, JHG asked both suppliers for their BAFO (best and final offer). This single contract with I-Plex accounts for $60m of the head contract $85m.  From this BAFO, JHG submitted their lump sum to YVW.  Schedule of rates contracts under variations would include extra tunnelling e.g. if the client was to request JHG to tunnel further, this would be priced per meter tunnelled.

The client has employed a designer (JACOBS) and a Clients Representative (Aurecon).   The client is utilising a third party representative to provide technical and commercial expertise i.e. the client is passing the risk to Aurecon.  Jacobs have compiled a Geotechnical Data Report (GDR) which has been analysed to produce a Geotechnical Baseline Report (GBR). The purpose of the GBR is to clearly and succinctly communicate the risks associated with the ground (relevant to the project) to the client (a GDR as we know it).

The method of shaft excavation varies along the project corridor. The three southernmost shafts will be constructed conventionally by excavator and hydraulic hammer (without the use of explosives).  The remainder will be either drill and blast or open trenching (depth dependant).  Varying thicknesses of steel fibre-reinforced shotcrete (with a compressive strength of 40MPa) will be sprayed onto the shaft walls to mitigate the threat of block slip planes and fretting.  JHG will employ a geotechnical engineer to map the rock shaft walls to identify possible slip planes.  There is an option to use anchor bolts in resin anchors and steel mesh if the shaft walls are assessed to be unstable.

JHG is not following the usual sub-contracting route.  Instead, they will use direct works which is unusual for a Main Contractor these days.  JHG will carry out WUC using its specialist tunnelling sector. This demonstrates an appetite for risk; showing a willingness to accept the risk for financial gain. When considering their vast experience in tunnelling, it would appear they are suitably placed to make educated decisions on identifying opportunities in the risks.

A selection of sub-contractors are in the process of tendering for work on the project.  In evaluating payment, JHG will receive claims for work done by engaged sub-contractors. These claims will be evaluated by comparing the actual work done against the specified task, and then payment made if JHG is satisfied that the sub-contractor has met its contractual obligations.  We are not contractually due to start on site until August 2015, however the client is hoping to grant us access to site on 18 June 2015.

So what have I done? The first few days were spent reading the contract, the specification, the GDR and the GBR.  Once my insomnia was cured I was responsible for the DBYD (Dial Before You Dig).  This organisation operates 24/7 and acts as a single point of contact between us and service providers. I give a location and proposal of works to be carried out in the area, and receive information from all companies with water, electrical, gas or communications assets in the vicinity. It is streamlined process with a rapid turnaround (all companies provided their information within 2 hours). From this data, I have been compiling a risk assessment on the likelihood of damaging any of the abovementioned assets, putting all data on a one-pager for easy access.

Following on from that, I have been putting together tender packages to be sent out to potential sub-contractors.  These include the scope of works, the sub-contract or purchase order, the specification and the drawings relevant to their package.  I am specifying by outcome, not method, so as to pass the risk to the suppliers.  We have accepted enough risk in the tunnelling.

Notably, I have been tasked with securing a package for the drugs and alcohol testing.  It goes without saying that I am eyeing out a ‘buckshee’ breathaliser to see what reading (beer-not-drugs) I can score over one of my loose BBQs.

This week will see us wrapping up the tender packages and hopefully get the surveyors on site to start marking up.

Tomorrow morning I will be attending a CHMP meeting, affectionately referred to as a ‘chimp’. Led by the environmental officer, it is a meeting with the local Aboriginal tribe to discuss the proposed works and identify any artefacts of cultural importance.  Identified items will be removed and then restored in place once the execution phase is complete.  A huge amount of attention is given to environmental issues, and I am preparing myself for some gobsmacking stuff.  On the plus side, Merri Creek (which we will be tunnelling through) is a renowned hotspot for Brown Snakes and Tiger Snakes – both of which are pretty much one way tickets to the crematorium.  As John said – God picked up everything that could kill you by looking at you, and threw it in Australia.  I am currently on the lookout for a fishtank off gumtree to start my collection of these non-friendly drunken beasts.