THE BENEFITS OF COLLABORATING WITH KEY SUBCONTRACTORS (GOOD STORY)

Answer this question honestly…..

Do you regularly take the cheapest tender/subcontract price, and hope that you can manage your way through the risk?

The temptation is always to take the cheapest price – then roll the dice and back yourself.  Is this a good idea when dealing with foundations and ground risk? Where there are so many variables at play, and most of them out of your control?  Once you’ve mobilised to site change becomes very slow and very very costly!

This is can be an even bigger risk in a tender scenario.  Each tenderer is trying to lower their price to win by tagging out of more and more risk items – effectively passing them on to the Client.

So why not involve a trusted and reliable specialist at an Early Contractor Involvement stage?  You may actually find it’s a “hedged bet” – where they can help you identify opportunities to save you money and identify the actual risks and putting mechanisms in place to prevent costs spiralling out skyward.

Good Story – The Opportunity

Piletech recently helped a prominent NZ Main Contractor who was engaged in an ECI project of their own. This Main Contractor advised their Client – “We want to bring Piletech on board now – to work with your designers”.

The results were huge, and here is a glimpse of the key Value Adds (or Customer Value Propositions) that Piletech have delivered through our early involvement:

• Local Experience: It counts for something when you’ve done jobs next door, and worked with the local designers and councils!
• Efficient Design WITH an Efficient Price:
  • Piletech’s inhouse designers understand the relationship between the geotechnical and the structural components to optimise design, and minimise the risk.
  • Our designers work closely with our estimators to check what gives the best price, and revise if necessary.
  • Knowing when to load test, and when it’s a waste of your clients’ money!
  • Advising what site investigations should be done to ensure the right design is chosen.
• Prompt PS1’s & PS2’s to quickly and easily navigate the consenting phase the first time.
• Stock and Procurement: Piletech can draw upon large pipe stocks, and manufacture off the critical path.  This means less delays, and protection from FOREX and steel fluctuation risks.
• The Right Piling Solution: screw piles were not only cost effective in this scenario, but there were an array of other factors that made us the silver bullet.  Speed of installation, noise and vibration, minimal deliveries, no dust, no spoil (asbestos was identified), amongst others.

The result:  We saved their client over $100k (~20%) on their original piling design, not to mention programme benefits and an array of headaches removed before we’d even set foot onsite.

It really begs the question why you’d go and get 3 prices for “competitive tension” right before the project is about to kick off, when you can engage the right partners in your ECI team and end up with a cheaper price, installed more quickly with less risk.


[See also THE BENEFITS OF COLLABORATING WITH KEY SUBCONTRACTORS (BAD STORY)]

Pulling in the same direction

James Wood - Piletech Manager

Over the years we have worked for many clients with a variety of strategies and cultures for procuring their trades; from the hard money, nail the sub-contractor through to collaboration and early specialist involvement or nominated sub-contracts.

However, all 1000 plus of these screw pile specific projects have been lump sums - they provide only so much room to drive collaboration and best-for-project outcomes.

2015 is seeing a new opportunity for Piletech with us being part of an Alliance Contract.
An Alliance Contract can be defined as an agreement between two or more parties to achieve agreed outcomes on the basis of sharing risk and reward.

In this model we are open book on cost and work towards an agreed target outturn costs (TOC), where all parties take a pain gain share in the final outcome. In essence, you sink or swim together, which ensures that all parties do what is best for the success of the project.

The transparency of the contract and the trust and collaboration that this affords, has allowed our specialist knowledge to be leveraged to best effect. The key benefits are:

• Coordinated Design - achieved through early involvement, which has reduced the geotechnical risk and ensures all design drivers are identified and managed upfront;
• Optimised Budget – early testing on site gained early, detailed understanding of the ground. The TOC was then developed which was assessed by an independent Engineer;
• Efficient Procurement - materials are procured specifically for project, saving significant $ through optimising the supply chain. Steel will arrive just in time (JIT);
• Early detailed Methodology – planned as part of the TOC, and optimised in parallel with the supply chain.

The project requires significant screw piling, certainly the largest scope in New Zealand and approaching some of the largest we have seen globally. This model may not be practical for smaller projects with clearer initial scope and risks, it will certainly provide us with experiences and lessons that we can leverage into the traditional business.

It’s an interesting journey we are embarking on that already has already seen many positives - We look forward to the lessons we will learn.