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There is ample evidence that construction standards in Australia and New Zealand are highly variable. There is no way to measure the level of non-compliant work installed, paid for and accepted. There is evidence of these shortcomings owing into modern construc- tion projects where traditional construction procurement practices have yet to adapt. There are few single-point owners of in-full construction delivery.
This is a challenging time for the industry’s regulators, perhaps less so for New Zealand than Australia. There, a federation of states makes up the regulatory canvas, each with di erent approaches to professional standards, licensing and compliance enforcement.
Home owner warranty insurance has vexed the housing industry’s customers for ever with many unhappy cases of customers having been the industry’s guinea pigs.
Authentic, global and far sighted
We now enter a global construction market place where more on-site fabrication passes to o site as each year goes by. Australian and New Zealand construction turnover makes up about 3% of global construction activity. Construction inputs these days are just as likely to come from o shore as from at home. Is this a time to be raising domestic barriers to the realities of an industry rapidly transforming its enterprise and project practices to embrace a digital, industrialised, globalised and more sustainable future?
The modern construction era heralds a profound transformation to the way traditional construction has been scoped, procured, delivered and used. Leveraging this potential will require an authenticity that is seen in other successfully transformed industries that have reimagined their value propositions and become truly customer facing.
Time for high standards
This is a time for modern constructors committed to assuring tomorrow’s customers that in-full, responsible delivery means just that. Setting higher standards will be impor- tant in di erentiating those committed to the
The key point of
modernising the industry ... Better buildings for less and combining smart construction to deliver smarter buildings.
long term from those who may exploit a more short-sighted approach.
This is not a time to treat construction’s customers as guinea pigs in a period that will involve innovative new materials, composi- tions and assemblies. This is not a time to let uncertain compliance regimes and payment for construction goods and services impede assurances to policy makers, financiers and insurers that industry transformation momentum is anything but in the public good.
Rewriting the rule book
Modern construction will be defined by measurably better construction for less as the industry’s wasteful and discontinuous processes realign. As construction’s engage- ment with the digital economy deepens, new enterprise opportunities will open for constructors who embrace the potential for tomorrow’s buildings to be measurably more resilient and functional.
Big data and the digital economy will rewrite the industry’s approach as construction clients demand secure chains of custody, traceability and production compliances that redefine traditional construction transactions and cash ows. Today’s test for practical comple- tion under traditional contract forms will look odd in an industry where construction nance becomes dependent on a total package assur- ance risk wrap?
Assurance risk wrap emerges
UK’s Buildoffsite organisation is the first mover on assurance risk wrap. It has organ- ised Lloyd’s insurers to provide a construction compliance and performance risk wrap called the Buildo site Property Assurance Scheme (BOPAS).
This product o ers clients a single under- write, covering all their project’s inputs whether they come from China, Turkey, Lithuania, Spain or from home in the UK. The entire supply chain, including designers, is picked up in this assurance scheme that can extend to 60 years of assurance.
The UK’s mortgage underwriters are now preferring projects with BOPAS cover, and builders who have been rated are modifying their former less-assured practices. Those on this journey are reporting smarter process management, less waste, higher quality, lower costs and higher margins. So much for the race to the bottom of the traditional design, bid and build model.
Risk rating for individual buildings
The writing is on the wall. Individual build- ings may soon be able to have their own risk rating, just like the builder of record who built them. Big data and the Internet of Things (IoT) will come into play to reward buildings with low impairment risk and high performance and resilience ratings.
It’s happening in every industry as insurers move to price individual risks and moderate future exposures. Just imagine the insurance industry helping to rewrite the construction rule book. This will relieve industry regulators who have been impotent to in uence raising industry standards and compliance.
Note David Chandler, OAM FAIB, advises enterprises and mentors young constructors on preparing for and embracing the opportunities that smart modern construction will o er.
For information on the Australian Senate’s inquiry into non-conforming building products, see https://tinyurl.com/yaahppw8, and information on the Buildo site Property Assurance Scheme (BOPAS) is available at www. bopas.org/about.
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