Construction’s conundrum

WILLIAM KERR’S VIEWS ON, BIG DATA, F1 & DRIVING PRODUCTION ON MEGA PROJECTS

Some contractors appear to be doing a good job using Big Data and digital dashboards to monitor construction projects, yet all too often they fail to collect and analyse the information to highlight the extent of overruns and support claims.

That’s the view of William Kerr, who recently joined HKA as Principal, following a career with a dual focus on project controls and claims analysis in complex infrastructure megaprojects.

Exposure to large and highly complex design and build projects came early in William’s career. Soon after completing his degree in construction management in the UK, he worked as a cost engineer on contracts ranging from High Speed 1 rail link to constructing the A1 motorway through Croatia’s mountainous interior.

From Russia to South Africa, and Middle East to Melbourne, his work for some of the world’s blue-chip contractors spanned planning and project controls on one hand, and on the other, recovery strategies and claims analysis on distressed projects.

This twin-track experience informs William’s view. He believes that construction’s Big Data conundrum is often compounded when Contractors fail to record data to prove productivity loss, as well recording data that encapsulates the reasons behind this.  “I often see the same mistakes over and over again – it’s almost like the definition of madness for our industry,” he said.

The problem with Big Data is not ‘paralysis by analysis’ so much as ‘distraction by data’. “IT systems in construction are changing quickly and Contractors are making use of BIM 4D planning, and the quantity of project data is increasing exponentially. New IT systems can extract data and produce quite sexy dashboards focusing on progress reporting,” William explained. “Despite such technology advances megaprojects still tend to suffer cost and schedule overruns. Then you find that the records needed to zoom into risk events and flag reasons why trends have occurred – are just not there. Too often projects are collecting the wrong data.

 The data analysis required by a project manager to spot and avert problems is constantly changing according to the project risk profile through a project lifecycle.

Formula 1 racing provides an analogy, inspired by his behind-the-scenes tour of the Red Bull garage at the 2019 Melbourne Grand Prix. While the car’s driver has a pretty basic dashboard, and his support crew has much more detailed information, back in the operations room on an industrial estate in Milton Keynes, every aspect from pit stop strategies to car performance are being analysed in real time. “So you have all this data, but it’s about identifying the right things at the right time, and being able to flag up the issues that matter to the driver, rather than being distracted by big data.”

In construction’s ‘good old days’, quantity unit rate reporting was people- and paper-heavy, and daily record-keeping of even low-value ‘widgets’ and hours’ output was probably excessive. “But it was effective. Now that data is pulled into a project control system or database. It looks great, it’s real-time, and you can access it from anywhere. But you’re not analysing it at source.”

The introduction of AI will certainly assist with the effort require to analyse and record data in real time, but with mega projects tending to end up with cost blow outs, William argues the need for “an experienced hand” with hard-won experience from multiple projects who to understand the contract and the risks that have been taken on, analyse the critical path and rates of production and assumptions, understand the interfaces between design and construction, and ensure that projects controls is set up and maintained to avert and protect against issues as and when they arise – do not wait and see.

 “Encapsulating all those in the beginning stages of a megaproject and communicating these to the project team is really important.”

In an overheated market, contractors’ expertise can be spread so thin that existing project teams are co-opted to prepare new bids. When won, there is then a push to get boots on the ground while a skeleton team strives to put together often onerous procedures defined in the Contract, everything from stakeholder engagement and systems engineering to project controls and delivery plans. Meanwhile, early works packages must be placed, and – in the case of rail schemes – critical track possessions carefully prepared. “So you’ve got this immense pressure from day one and because of that you’re often completely focussed on delivery”

As a result, there may be no appreciation of the actual risk taken on in terms of allowed rates and assumptions. Or, where these risks are understood by the bid team, they may not be properly communicated to the delivery team, who are unaware of these project-critical areas, or unprepared in how to protect the project from costly delay and disruption.

In my experience cost blowouts on distressed projects also reveal “a real lack of understanding of how to do production-based disruption analysis, and critical path delay analysis” he added.

That method for undertaking delay analysis and required record keeping to support events needs to be communicated to the delivery team, who should set basic production targets, spot trends and take corrective action, importantly record the data and loop back to the commercial team when and why things are not going to plan to analyse the reason why.

Such analysis also helps back up a delay and disruption claims and avoids mistaken assumptions about production on the next project. “This is what is lacking – techniques we use in a dispute scenario that should be employed in live projects. Sometimes they are, but most often they’re not, due to shortages of people, expertise and time, given the massive requirements and pressure at the beginning of the project.”

These lessons are invaluable, not least in the early stages of a construction boom such as that now developing in Victoria. “HKA is in a strong position to pass on the skills and knowledge we’ve honed on the Sydney Metro and other major projects in New South Wales and further afield,” William noted, citing Crossrail, Melbourne Metro, regional rail, airport rail link, the North East Link and the state’s other roadbuilding plans.

“What we call QED+, our specialist expertise in quantum, engineering, delay, disruption and damages, is relevant to claims avoidance and protection on live projects as well as analysing claims in disputes.

“We can add value in areas such as planning and controls, claims avoidance, protection and management; and interface management, which will be crucial on these projects in Victoria, and also in Brisbane.”

Now based in HKA’s Brisbane office, William has an important role to play in developing the consulting practice. After moving from project controls and planning onto distressed project recovery, he added a post-grad diploma in construction law. “I’ve worked both on live projects analysing extensions of time, and on disputes as the named expert and given testimony in the ICC,” he noted. As well as acting as expert witness, William will be training project teams to understand contract risk and ensure controls are set up to avoid and protect projects from disruptive events.