Technical Interview

Culture change needed if contracting is to take on a new form

23rd October 2019


Based in Perth, the head of HKA in Western Australia fervently believes BIM (building information modelling) and the NEC standard contract can unlock significant benefits for the major projects planned and underway in infrastructure, mining and the state’s energy sector.

Digital technology and new forms of contract alone cannot deliver more successful projects without a culture change on the part of clients and contractors, according to Jonathan Brown, HKA’s new Principal.

However, there is a real danger that old mistakes will be repeated under the new contracts, and BIM remains prey to widespread misconceptions. On both counts, the significant advantages construction and engineering projects stand to gain risk being negated, he warned. Delays and disputes could even be exacerbated.

“The NEC form of contract has been used on major projects elsewhere in the world with success. More sophisticated clients and advisors in Australia see this as an opportunity. But it comes with the familiar danger that standard terms will be amended to suit particular circumstances, or procedures in the NEC form will be ignored, so that parties then revert to their old ways of operating,” Jonathan said.

This concern is compounded by the historical reluctance of industries in Western Australia to move away from outdated forms, such as AS2124, and the cyclical switch between EPC and EPCM, in the mining and oil & gas sector. “Rather than avoid disputes, clauses heavily weighted in favour of clients have led to more disputes. And vogues for alternative contracts have had no real impact. There are still lots of projects that are overrunning on cost and time,” he explained.

A more holistic analysis is required. “If you really want better allocation of risk to those that can best manage it and a less adversarial approach, then we should look at the whole organisation. Processes may need to be redesigned for that form of contracting to flourish. The culture of the organisation has to change, and that doesn’t happen overnight. It takes a lot of effort to achieve.”

Main Roads Western Australia’s contract for the Pithara section of the Great Northern Highway was only the second major project in the country to adopt the NEC form. As a consultant for his former employer, Jacobs, Jonathan developed and ran workshops for shortlisted bidders. “Everybody was effectively re-learning how to price a tender. Otherwise contractors would be at a disadvantage and might revert to claims-conscious, adversarial ways,” he said.

HKA can draw on extensive first-hand involvement in this family of contracts as well as its recently signed memorandum of understanding with NEC Contracts. “We have many professionals within HKA with extensive experience of the NEC Suite of Contracts in the UK, Hong Kong and other jurisdictions – and that can be harnessed immediately”.

Likewise with digitalisation and BIM, the potential gains for projects – not least in collaborative working – can be squandered by a piecemeal approach, as shown by challenges experienced on some of the projects which have utilised a BIM process in Australian so far.

“A lot of clients and consultants think BIM is going to be the saviour of projects, resolving disputes and enabling completion on time and budget. But there’s a widespread misapprehension that BIM is just a matter of replacing 2D drawings with a 3D model,” he warned.

On some projects where BIM was mandated, it has contributed to disputes. Problems have occurred partially as a result of clients’ lack of knowledge of what they want to achieve from BIM, failure to accurately articulate this to designers and varying skill levels of consultants who are party to the process.

“What’s needed is a proper understanding at the outset – not partway through design – of the client’s needs and deciding how, or whether, BIM can be introduced to get maximum benefit. We have to ensure the advantages of greater levels of collaboration are understood and get all parties connected at an earlier stage to take full advantage of the BIM process”

Again, Australia can learn from past experience and mistakes in the UK, where use of BIM is more advanced. “HKA has really taken time to consider the full implications of BIM, advised the UK and Mexico governments, and carried out an assurance assessment of the BIM services from consultants,” he explained. “This puts HKA in a unique position to provide advice on BIM and digitalisation.”

Having invested the last 22 years of his career in the state, Jonathan is relishing his new position: “It’s satisfying to have a leading role in steering HKA’s growth in Western Australia.”

After gaining a quantity surveying degree and working in the UK, Jonathan was exposed to major projects in the Middle East, before relocating to Perth. His CV spans the region’s major industries and senior roles in project procurement, delivery and disputes, including as expert witness.

The ability to feed HKA’s profound knowledge of disputes and their causes across sectors and the world into strategic planning and procurement should prove invaluable on upcoming projects. Recovery in the price of iron ore and global demands for lithium has spurred development of new mines and value adding such as development of lithium refineries.

The HKA strategy in Western Australia is straightforward. “I’ve always believed in frank and fearless advice. It’s our job to listen to what our clients’ want to achieve  and deliver – not just a standard report but the successful outcomes they desire.”

This publication presents the views, thoughts or opinions of the author and not necessarily those of HKA. Whilst we take every care to ensure the accuracy of this information at the time of publication, the content is not intended to deal with all aspects of the subject referred to, should not be relied upon and does not constitute advice of any kind. This publication is protected by copyright © 2019 HKA Global Ltd.

HKA combines this advisory expertise, as well as technical engineering and financial forensics, with our disputes side – quantum, engineering, delay, disruption and damages – QED+. The benefits of having all those offerings in one organisation are significant for clients. You remove one layer of management and are able to collaborate more effectively as one team.”
Jonathan Brown, Principle, HKA

Follow HKA on WeChat


HKA WeChat