Will the Productivity Commission Inquiry accelerate a BIM mandate for Australia?

For more than six months, the Productivity Commission has been charged with reviewing how major public infrastructure can be financed and managed given significant and measurable issues of high costs and long lead times surrounding these types of Government projects. It is hoped that with the large number of stakeholders with a vested interest in the outcome, the final report, due to be presented to the Federal Government on 27th May, is likely to feature collaboration as the centrepiece for reform and technology as the catalyst.

Being productive is not just about being efficient

Doing something more efficiently is not as effective as innovating a process or technique that results in doing something in a completely different way. The invention of the blue banger hangers is a classic example of innovative thinking changing an entire process and creating increased productivity opportunities industry wide. The current onset of prefabrication across construction sites of a number of building elements, materials and wholesale mechanical and electrical sections of a build are also increasing evidence of the productivity gains available on a project.

Governments can be particularly successful in developing wide spread efficiencies in processes and workflows during times of cost cutting and calls for greater accountability of the public purse. This often manifests as a squeezing of labour costs where someone is willing to do something faster so that there are less people involved in the process. However the process itself may remain unchanged and may continue to be unproductive.

In its draft report released in March, the Productivity Commission clearly outlines the opportunity to improve public infrastructure tender processes, recognising that for large and complex projects bidding costs can be as much as 1% of the project’s value.

Making the procurement process more efficient (i.e. formal consultation, stringent tender guidelines, uniform documentation and policies designed to award the lowest price) does not necessarily equate to productivity gains. The process may be more efficient but the outcome may still translate to higher turn-out costs at the end of the project.

Often within a rigid and efficiently applied tendering process it is innovative concepts that are annexed or removed from the bidding process altogether under the policy of ônon-conforming tenderö. This also removes any opportunity to generate productivity which is often the outcome of innovation. The Commission points directly to the need for change in the bid process and for it to recognise and remunerate innovation even where the tenderer is not the preferred bidder. It also points to a need to distinguish between an initial tender process focussed on cost and working with preferred tenders at a much more developed level.

It is this level of innovation that the Productivity Commission report should focus on in developing bid processes that bring about a high level of innovative change from industry providers.

Official call for coordinated approach

The Commission’s draft report galvanises global calls for certainty in construction. Much of the discussion continues to focus on creating certainty of the information and the data through collaboration.

The March report cites evidence of poor project management that results in unacceptably high project variations. Poor scoping and initial cost estimates directly contribute to cost overruns and variations.

We, as informed and engaged BIM advocates, know this and preach to the unconverted one project at a time. Very recently Mitchell Brandtman was involved in a residential project where we applied the 5D process to reverse tender and obtain a builders price with just one builder that was within 2.0% of our initial estimate. This is the level of certainty that can now be attained with the application of the 5D technology and collaboration that is a foundation for successful BIM.

There is a clear understanding within the Commission’s draft report that certainty reduces risk and in turn reduces costs. Certainty is recognised as being created through model data validation and collaboration but the report only references the BIM benefits for projects of a ôsufficient complexityö. It needs to go much further in its assessment as it doesn’t seem to recognise the ability to achieve certainty for any size project at any stage in the design process. The public consultation process which included (3) public hearings and resulted in the receipt of 205 submissions from industry and interested parties, may see a better and more informed recognition of the process improvements BIM brings across an entire project life cycle for a $1M build or a $180M build and anywhere in between.

BIM mandate inevitable for productivity goals

BIM is an innovation that changes both the process and the technique of the way we do things. It means that we can reduce the steps in the process and make the model certain earlier through collaboration to bring about innovative opportunities for the construction which produces better buildings for a lower cost.

So, is the report to Government on 27th May going to tell us anything new? It is unlikely that the report will shine a light on anything surprising for those at a more developed stage of BIM implementation. However it may be that the report provides the official collection of all the research and the data analysis in order to make far reaching and progressive steps in Australia to bring about a change to project management to improve productivity through BIM and mandate this change for Government projects nationally.

The draft report makes it very clear that reforms can begin immediately and can realise economic benefits in the short term. This says that if we do anything rather than what we are doing now we are most likely to be better off. The call for a national approach will add an even greater weight to the opportunities for productivity gains across the supply chain for construction in Australia and for BIM to take the lead role.