Giorgio Marfella
Good afternoon everybody, my name is Giorgio Marfella.
I'm the chairperson of the Architects Registration Board, so welcome.
Welcome to all our attendees today and to this CPD webinar of the ARBV.
I would like to begin by acknowledging the traditional owners of the lands in which we are today. In particular, I'd like to acknowledge the Wurundjeri People of the Kulin Nation where I am now, and I wish to pay my respects to the Elders, past and present.
So today's presentation is part of the ARBV series of webinars, which are valid for formal Continuing Professional Development and in order to participate and obtain a certificate of attendance, you can scan the QR that you can see here on screen. You can scan it now or even later through the presentation there will be several opportunities to scan it.
We also will also provide a link on the chat where you can join in the appropriate form to respond to some questions along the way. Now also, I'd like to remind all present today that CPD is mandatory in Victoria for architects and the ARBV monitors the activities and audits as well.
So the ARBV is committed, as you know, to provide education that will support architects in refreshing and uplifting competencies. And as part of this we are committed, of course, to share knowledge that can help mitigate risks, facilitate discussion that can help architects to provide better architectural services. And so, in this line of thought we've had some webinars before they're presented on the findings of a research project we have completed earlier in the year. A Deep Dive research project, and we have covered already some aspects of the findings of that project and today we will focus in particular on procurement as a set of risks, and in particular we will look at risks that can arise in the context of design and construct or novated contracts.
So we have two speakers today who will be presenting. The first is Dariel De Sousa.
Dariel has been with us before. Dariel is a multidisciplinary professional with degrees in law, engineering and business and Dariel focuses on regulation, risk, compliance, governance and performance. She has more than 20 years of experience in giving strategic, legal and operational advice to several agencies at government level and also private. And she has given advice to different array of sectors of regulatory regimes. She also has recently authored a book, ‘Law, Policy and Climate Change’ which addresses the challenges of regulating systemic risk caused by climate change.
Dariel is currently director of Dart Legal and Consulting, and she was previously director of Compliance and Enforcement at the Australian Energy Regulator and a counsellor in the Legal Affairs division at the World Trade Organization in Geneva in Switzerland.
And our second speaker today is an architect, Mei Yang. Mei is an experienced architect who gives design and technical expertise across multiple sectors including seniors living and residential, and Mei is an architect committed to attention to detail and realising efficient design and design led built outcomes.
So Mei has considerable experience today, particularly in project leadership of the kind that we will discuss today that has been accrued by leading several projects at Plus Architecture. So, at this point, I can hand over to Dariel and I'll be back for the Q&A section if time allows.
Over to you, Dariel.
Dariel De Sousa
Thanks so much, Giorgio, and good afternoon everyone. Thanks for joining us.
As Giorgio mentioned, the focus of today's seminar is to share with you the Deep Dive findings in relation to D&C procurement. One of the core sources of systemic risk identified by the NSW ARB and the ARBV in some joint research that they have been undertaking since 2022.
I'm going to start with a brief background about the research. I realise that some of you have already heard it, so I'll keep it brief and apologise for the duplication.
So the research that's been undertaken by the ARBs focuses on addressing systemic risk facing the Australian architecture profession.
Now, risk is a concept that addresses or basically relates to uncertainty about adverse outcomes that could occur in the future and systemic risks are risks that can extend across the sector, they can compromise architects’ ability to comply with their professional standards obligations and they can cause widespread harm to clients, users, the public and architects themselves.
Now the ARBs are concerned about systemic risks because they may be latent, that is the harm may not yet have materialized, or the harm may not yet be obvious.
They can be difficult to identify in advance in the absence of good quality information and intelligence that can be used to enable trends to be detected.
And they may be too widespread for the regulators to tackle all at once.
So, the purpose of the joint research work that's being undertaken by the NSW and the Victorian ARBs is to identify key current emerging and future systemic risks facing the architectural profession in Australia and this will help the ARBs to better focus and target their proactive regulatory activity.
This is a type of regulatory activity that is designed to pre-empt and prevent non compliance with the regulatory framework which can then avoid harm from materialising, and the ARBs do that through education, engagement, thought leadership and CPD sessions like the one that we're having today. The proactive regulatory activity in turn helps to support architects to better navigate these systemic risks that have been identified. Now the work on systemic risks is captured in two distinct reports.
The first report was published by the ARBs in 2022 which was largely a desktop research and it was complemented in 2024, published in June of this year with insights from focus group participants that were consulted about four key systemic risks, including the one that we're talking about today, D&C procurement.
Now before I talk about the details of the finding on D&C procurement, just to explain, the systemic lens that the ARBs have adopted.
It basically involves taking a step back from day-to-day cases involving particular instances of actual or possible non compliance with the regulatory framework and zooming out, taking a macro systemic or helicopter view of the sector and trying to work out what those systemic risks are that apply across the sector and there are four key systemic risks or sources of systemic risk covered in the Deep Dive Report.
The first, which was the subject of the first seminar that we ran a few months ago, client architect relationships and agreements. The second, D&C procurement.
The third, NCC compliance and the fourth, systemic disruptive change.
So let's turn now to the focus of this seminar, D&C procurement.
So the first main issue discussed in the D&C in the Deep Dive Report relates to the impact of D&C procurement on design. So, as you will all well know over the past 20 years, design and construct procurement has become the dominant procurement model, particularly for multi storey residential and non residential buildings.
The model offers clients cost and time certainty and the benefit of centralized responsibility for project delivery. Now, while the contractor assumes responsibility for both design and construction under its contract with the client, responsibility and risk are typically transferred down the contract chain to consultants and subcontractors, including architects. Now the centralisation of responsibility in the contractor and the incentives to complete the project on time and within budget may make this procurement model particularly attractive to banks that are financing some of these projects. And in fact, developers and builders shared with us during the focus groups, that were run that banks will not provide finance for some projects unless they are covered by a lump sum D&C contract.
Nonetheless, as explained in the Deep Dive Report, this procurement model is of concern to the ARBS because it can compromise the capacity of architects to comply with their professional standards obligations. Now, notably the regulatory framework administered by the ARBV does not include the power to limit or hinder in any way, choices that are made by architects about which contracts to enter into.
Nor does the regulatory framework dictate the procurement model that needs to be utilised for particular construction projects.
So, turning now to the specifics of the impact of D&C procurement on the design process.
A key finding in the report is that there are various features associated with this procurement model that can result in a shift in responsibility for and control of design away from architects, and this shift may have an impact on the level of detail in design documentation, the quality of the design and the translation of the design into the built outcome.
So let's unpack some of those particular features that I've referred to.
So time and cost pressures can result in a limited scope of services procured from the architect limited to an early schematic concept without commitment to detailed design documentation. The contractor may then be left to fill in the gaps created by the limited design documentation. And following novation, the architect may be replaced with a low cost, less qualified building designers which could undermine the integrity of the initial design. The time imperatives associated with D&C procurement may mean that the design process progresses at a faster pace than would otherwise occur and this can undermine architects’ ability to exercise due diligence and care that they would otherwise exercise.
When responsibility for design is transferred from the architect to the contractor, following novation, the consequent loss of direct contact between the architect and the initial client may mean that the architect doesn't have a clear sense of the client's position on key design issues as the project progresses and the architect may be unable to guide or direct project outcomes to ensure that the client's design objectives are achieved.
Following novation, siloing of design consultants may occur and this can limit their ability to collaborate in practice, and it can also consequently compromise the development of a complete design that comprehensively and effectively reflects the views of all the design consultants in totality.
Finally, design consultants who under the control of the contractor may have their site presence limited and this may mean that the design intent is not translated into the built outcome in practice.
And a key implication of these findings and insights is that mechanisms are needed to ensure that architects retain adequate control over the design process and they are they are able to manage design intent as the construction process unfolds.
I'm going to pass over to Mei now to share some of her practical insights.
Mei Yang
Thank you, Dariel. Good afternoon, everyone.
Thank you for the sort of the introductory to this session.
I do agree that in D&C procurement scenarios, the design process may be deprioritized whereby the contractor is, you know, managing time efficiency and costs, and the design might fall on the wayside. I believe as architects, particularly for us in Plus Architecture, we really hold on to the design integrity and the design intent of our projects.
We take a really proactive and architecture, take a really proactive approach in ensuring sort of alignment in the consultant team together with the contractor, understand what the main design pillars are, what are the non negotiables of your design, and hang on to it tightly. Keep this in the forefront and don't compromise while you bring the design forwards while you move towards documentation, completion of documentation or you head to its site. I think that's important.
So that it is always at the forefront.
The second point here is that, architects in current situation or climate face the challenge of maintaining the design intent while delivering what we would hope to be quality design that last over time timeless and at the same time meets you know more and more stringent regulatory compliance during the construction process.
That’s quite critical as well because when you head out to site builders or contractors might make changes.
At the forefront again, the quality of the design, the design intent has to be brought forwards and reminded time and time so that we do not, you know, the design doesn't fall into the wayside as well.
And bringing us to the third point as part of the D&C procurement. Architects, particularly us in the office, we need to be aware of forecasts. What are the risks? And be prepared for the demands of the D&C contract. The dot points listed here. Some of the activities that we know we will need to focus on when we are, when a builder is on board, when we are novated to a builder. There will be RFIs when a builder is on site. We need to do the right work. Do the work, research, coordinate.
Assess the RFIs and when the RFIs is got a question regarding some site conditions, we need to coordinate drawings with other consultants or even subcontractors.
In doing construction, you also have the shop drawing review process, making sure that the design intent is met and drawings, shop drawings procured are accurate.
Another example of an activity during construction stage in the D&C, sample and prototype reviews and sign off.
You know it's common for fixtures, finishes, materials to be substituted or presented as, change, it happens in the D&C contract. We have to accept that, but we need to be prepared and have the right processes in place to review samples, to understand what is being put forwards as a replacement. Another important factor that occurs during D&C, value management proposals and changes and contractor led design proposals. We need to be again mindful of the design intent in the forefront and then work towards, you know, collaboratively with the team to understand what are the design proposals that the contractor is proposing? How we can make it work or comments? And most importantly, the last point, material substitutions.
Be mindful when we are being shown substitutions. We need to allow ourselves ample time to research, ask for more information about what this material is, test data, check for suitability.
And allow ourselves just enough time to do our due diligence and not accepting, just as they are presented to us.
Dariel De Sousa
Thank you Mei.
So that brings us to the first question. And as Giorgio mentioned, you can use the QR code on your screen to access the question.
I'll give you a couple of seconds to respond, and then we'll quickly deal with a response.
Hopefully you've all had a chance to choose the appropriate response.
So, the question says which of the following statements is true in the D&C context?
The first, architects’ professional standards obligations don't apply if they are given a limited design role. Well, that's clearly not true.
The obligations under the regulatory framework apply to the provision of architectural services, notwithstanding the relative scope, whether it be limited or more expansive.
The second option, architects’ professional standards obligations don't vary regardless of the extent of their design role, and that is absolutely true.
And then finally, contractors are responsible for discharging architects’ professional standards obligations when they assume responsibility for design.
Now, contractors may bear their own obligations under whatever regime or under their contract, but under the regulatory framework administered by the ARBV, it’s architects that bear the professional standards obligations and these apply even though contractors assume responsibility for at least some aspects of design under the D&C contract. Now, in terms of recommendations on this first issue, the impact of D&C procurement on design, there are two key recommendations in the report. The first is recommending to industry bodies that they enquire into mechanisms that can be employed to enable architects to maintain design control, notwithstanding some of the challenges that we've just discussed. And also for government bodies to consider, whether there is a case for prescribing minimum levels of design documentation for critical aspects of the design.
So, let's move on to the second main issue addressed in the Deep Dive Report. Some of the contributing factors to these, for these adverse outcomes on the design process and on the capacity of architects to discharge their professional standards obligations.
So a key finding in the report is that there are various contributing factors, including limited budgets, unreasonable expectations and inadequate collaboration. Mei has already touched on some of these issues.
Many of the contributing factors are outside architects’ control, particularly the culture and approach amongst project participants.
So let's unpack some of these contributing factors. First of all, limited budget. After novation of a D&C contract, there may be inadequate budget for design finalisation and fees for architectural services may be reduced by limiting site presence, which will likely increase architects’ exposure to legal risk.
Developers may have unreasonable expectations for a project, notwithstanding the time and cost limitations, and they themselves may be ill prepared for the project. The extent to which the design intent is adequately reflected in the final build outcome is likely to be linked to the profile and the approach of the contractor, including how collaborative the contractor is, the extent of design oversight that the contractor exercises over the construction process, and the contractor's attitude towards quality.
The D&C procurement context can give rise to a lot of uncertainty, including design changes, as Mei has already alluded to, and adjustments to deadlines and budgets that can destabilise the project delivery process.
And finally, another contributing factor, the lack of adequate education and training for architects about contract administration, particularly in the D&C context.
Architects, particularly graduates and early career architects, may lack the competency to navigate D&C contracts, particularly in light of some of the challenges that we have just discussed.
So I'm going to pass over to Mei now to share some of her practical insights.
Mei Yang
Thank you, Dariel.
I've picked a couple of just two dot points here to discuss about factors that can contribute to, you know, negative outcomes to architect in a D&C scenario.
Often there is a mismatch between the procurement method selected to deliver the project.
We have to understand that sometimes it's common not to know who the contractor will be when we sign the D&C contract with the principal or the client prior to novation.
So, it's hard to sort of forecast as well what this relationship will be with the contractor when they come on board. You know, sometimes a contractor that is engaged or brought on, might not have the expertise, experience or project sector background to successfully deliver a project.
I think that also leads to a few difficulties when you head to site. And at the same time, once the novation occurs, most D&C contracts actually, do not, sort of allow or encourage communication or relationship with the client or the principal, so it makes like what was mentioned earlier hard for us to understand where the client stands or when things are moving in the project or design. How to understand where their position is.
And I think that can be difficult as well when you are navigating a D&C contract.
The other factor that I've put on here, the second dot point is architects are expected to have the responsibility of a lead consultant, but within a D&C contract they might have reduced influence to maintain the design and build outcomes.
For example, we might not have full authority in decision making as the contractor is the one that's managing information or bigger picture item such as the program or cost, which leads to the second dot point here, lack of access to critical information, such as a cost plan. We don't have visibility of that, that element. How much can be spent on a certain you know element or a certain façade, for example. Contractors brief as well, a contractor's brief might be different to what we know as the project brief.
Architects commonly might not be included in strategic design decision making processes, particularly during the PCG meetings. We might not have free access or regular attendance on site. And we might not have full knowledge of the scope of works by other project consultants as well, because that is being managed again by the contractor. And there is also, to be mindful, unfair, and less than satisfactory contractual terms that are placed on architects, placing much, much more responsibility than we actually understand and can compromise on our insurance indemnity, professional indemnity insurance coverage as well.
Dariel De Sousa
Thanks so much Mei, and we will touch on the contractual and insurance issues in the next segment as well.
So here's the next question. Again, you can use the QR code.
Which factors would excuse an architect from complying with their professional standards obligations in the D&C context?
So I'll just give you a second or two to respond.
And the correct answer is none of the above.
It doesn't matter that the fees may be too low.
Basically the professional standards obligations under the regulatory framework apply regardless of how much you're getting paid for them.
Secondly, limited time to complete design. Again, the professional standard obligations are not reduced or expanded dependent upon how much time you have to complete the design and it doesn't matter how much site presence you've been allowed under the contractual arrangements.
Your professional standards obligations apply, notwithstanding all of these practical issues that may have an impact on your capacity to discharge your professional standards obligations.
So hopefully everyone got that question, response to that question correct.
Now in terms of recommendations on this issue of contributing factors, one recommendation again was made to industry bodies to determine how a more collaborative approach can be wired into the D&C procurement context. Mei has already given some suggestions, but further thought that can be employed across the sector would be really worthwhile.
Now turning to some of the issues that Mei touched on in her last slide, risk liability and insurance. Now under the regulatory framework, architects are subjected to broad obligations to provide architectural services in a professional manner.
And there is a prohibition on carrying out architectural work unless covered by the required insurance.
Now the Deep Dive Report finds that, and this will be no surprise, as Mei has already mentioned, D&C contracts are typically bespoke, and they may include unfair contractual terms and unfair allocation of risk involving at times the imposition of significant responsibility on architects but despite the fact that they may have limited control over project delivery. The focus group discussion that led to the Deep Dive Report highlighted an important dilemma facing architects. In particular, developers suggested that they have limited capacity to negotiate allocation of risk liability and consequential insurance indemnity provisions because banks may insist upon certain standard terms in order to provide finance for particular construction projects. However, representatives from the insurance sector who participated in the focus groups indicated that unfair contractual terms, such as those that may be imposed upon architects, can compromise coverage under architects’ insurance policies. In particular, these insurance representatives said that any contractual terms that distort the normal common law standard of care, those standard common law obligations that architects subjected to, such as a disproportionate allocation of liability and attempts to contract out of liability by the contractor, may expose architects to risk under their insurance policy that may not be covered and this in turn can lead to negative outcomes for clients if a claim is made against the architect but coverage is not available.
The Deep Dive Report also notes that without support and advocacy, architects are unlikely to have sufficient leverage to negotiate more favourable terms in light of this asymmetry in bargaining power that can exist in the D&C context.
So I'm going to pass back to Mei for her practical insights.
Mei Yang
Thank you, Dariel.
So for us again like what was mentioned earlier by Dariel, there's various types of D&C contracts, and most commonly we have come across in our practice, bespoke or custom professional services agreements.
They, and I would like to remind all architects listening in today, that we should all carefully review and understand each of the clause that is being put into the contract, key terms and conditions, and also understand what the inclusions and exclusions are as part of our contract. As part of the contract review that you do in, in your practice and also don't forget there's the opportunity particularly with commercial clients I believe, negotiation with the client. We commonly review the clauses, we mark them up, we offer alternative wordings or suggestions on how it can mutually benefit both parties rather than being sort of strongly skewed or biased towards the drafting party which would likely be our client. The second dot point is to watch out for contract terminology such as fit for purpose, warrant or warranty, or guarantee and set off in any D&C contracts that you come across as they may be sort of unfair terms and impose risk that could compromise on our PI insurance coverage as well.
Currently, as you know, architects are facing challenging PI insurance market overall, we've seen sharp rises in our PI insurance annually. Less and less insurers are providing cover as well in the industry or in the market, and be mindful of coverage exclusions as well when you enter into any D&C contracts. The last point is I would say, don't sign a contract that unfairly disadvantage an architect because the ramifications can be huge when there's a dispute or an issue on because of the contract that you've signed. We suggest to always seek advice and we do that as well from our insurer, our lawyers or other appropriate professional for matters regarding contracts, insurance coverage and some risk management practice. At the end of the day, I think the contract has to work for a practice in a commercial term, commerciality. We have to have that in our forefront that it works for us as an architecture practice before we sign the dotted line.
Dariel De Sousa
Thank you, Mei.
So let's move along to the next question again, access it via the QR code if you haven't got access already.
Which statement about D&C contracts is true?
The first, D&C contract indemnities override architects’ professional standards obligations.
The second, D&C contracts do not change architects’ professional standards obligations. And thirdly, architect’, insurance obligations don't apply if the design role under a D&C contract is limited.
Hopefully you're getting the flavour of the theme of these questions. The first one is incorrect.
The professional standards obligations are embedded in statute in the Architects Act and the Architects Regulation, which includes the Code of Professional Conduct and anything in the contracts that you sign, cannot override those professional standards obligations. So they apply, notwithstanding any contractual provisions that you may be subject to.
The last one, architects insurance obligations don't apply if the design role under a D&C contract is limited. That is not the case. That prohibition on providing architectural services without the required insurance cover applies despite the extent of the design role that you have signed up to under your particular contract. And so the second response is the correct one, D&C contracts do not change architects’ professional standards obligations.
Now in terms of recommendations that were made in the Deep Dive Report in this space of risk, liability and insurance, one recommendation was directed at research bodies, encouraging them to undertake legal and analysis of unfair contractual terms, particularly in D&C contracts. And another recommendation to industry bodies to identify legal action that could be taken in respect to unfair contractual terms, and I note in this regard, that the unfair contract terms legislation has been recently reformed and hopefully this improves access for architects when they are faced with some of the unfair contractual terms that we have just mentioned.
So moving along now to the issue of mechanisms to mitigate some of the adverse impacts of D&C procurement on architects, on design and on the delivery of design services.
So, the Deep Dive Report notes that the core mechanisms to mitigate adverse impacts in the D&C context relate to communication, engagement and collaboration among the key protagonists in a construction project, namely the client, the contractor and the designers.
So let's talk through some of the mechanisms that are identified in the Deep Dive Report.
The first relates to client engagement. The report suggests that clients need to remain involved throughout a project, not just at the beginning. They need to engage with all the parties to a project on an individual basis and make key decisions when required.
The second mechanism, and this is linked to a key insight, early engagement of the contractor. Early engagement of the contractor can help ensure the buildability by, of a project by ensuring that construction and trade issues are accounted for in the initial design.
Thirdly, more collaboration and open lines of communication, a more collaborative approach and open lines of communication amongst project participants, not just at the beginning, but during the entire construction process can help align interests and outcomes at the end of the day.
And finally, clarity about the design process and detailed documentation at the beginning of a project can help avoid poor built outcomes.
Now, architects clearly can't control the way in which contractors and other designers communicate and collaborate, and therefore one of the recommendations or implications from this aspect of the research is that sector wide cultural change is needed to focus on early engagement and collaboration, coupled with appropriate regulatory support through practitioner regulation to drive better outcomes from D&C procurement. So, I'll pass back to Mei for her practical insights.
Mei Yang
Yes. So I agree that in order to mitigate any negative impact to the D&C process, there needs to be clear and open communication between all, sort of stakeholders and all parties involved in a project.
I think there's nothing wrong with being in the same room with your client with your contractor, with all the other consultants and coming together and work shopping or you know, coming together to make to arrive at a decision. I think that can only benefit the project so that you are not sort of siloing certain parties away from, from putting in their critical contribution to the project. The other mechanism that can mitigate adverse impact I feel and it's getting quite popular in the D&C realm, is early engagement of contractor or the ECI process.
This allows contractor to be brought on board earlier on in the piece, not after tender but much earlier on in the project so that they can contribute to the project, to foster a closer sort of more collaborative and more sort of teamwork approach. And I've seen that the benefits of this, of this approach can bring into a project.
There's the ability to maximize innovation as you have, I think we have the benefit of more time when a contractor is on board earlier. We can propose ideas, discuss alternatives approach and that can lead to innovation or looking at innovative methods of products. We also have a little bit more program flexibility as the contractor is brought on board much earlier where you know you have a bit more time in your program. Increase project transparency is another sort of good factor that comes out from ECI. The contractor can, with some drawings from us, early initial drawings reach out to subcontractors to get some pricing certainty or inform us on that you know the direction that we should take, and this also then leads to opportunity to identify cost savings within the project without sort of costly or time consuming redesign when it, the design has progressed too far. And the last dot point would be improved project quality as we can obtain a contractor's input regarding major design components much earlier on in the piece.
Dariel De Sousa
Thank you Mei. And that takes us to the fourth question.
Again, access it by the QR code if you haven't already, and the question is which mechanisms that could mitigate adverse outcomes in the D&C context are supported by the regulatory framework? Clear design process, effective communication between client and architect, detailed design documentation or all of the above.
Give you a moment to choose your response.
In fact, all of these mechanisms are supported by the regulatory framework. In relation to a clear design process under the regulatory framework, architects are required to have suitable skills to be in charge of a project and deliver the architectural services. In relation to the second option, effective communication
between the client and architect, architects have a range of different communication obligations to the client, including keeping the client informed at all times and responding promptly to enquiries made by the client. And in terms of detailed design documentation, architects are required to comply with the applicable laws, including the National Construction Code, which is linked to the issue of design documentation, they must act with reasonable care, and they have to basically discharge a duty to maintain professional standards when delivering professional architectural services. In terms of recommendations that were made in this space about mechanisms to mitigate, a recommendation was made to education and training bodies to build up collaboration skills engagement skills for architects and to also to help them mitigate risk in this D&C context.
To industry bodies, a recommendation to identify alternative procurement models that basically capture the benefits of D&C procurement while mitigating the risks. So build in more collaboration, more upfront engagement like the ECI model that Mei has just referred to and there are other examples referred to in the Deep Dive.
Report.
So finally, the topic of the education and training was discussed during the focus groups and a key observation from the focus groups is that good outcomes in the D&C context really need to be underpinned by appropriate education and training throughout the life, professional journey of an architect.
So a key finding in the Deep Dive Report is that there is a need for more education and training for architects about the spectrum of procurement models, which procurement model is suited to particular context, negotiating and navigating procurement models, particularly the D&C procurement model and risk management.
One of the insights from the Deep Dive exercise was that a stock take, an analysis is needed of current education and training available about D&C procurement, there appears to be lots of options out there, but a stock take and analysis would be helpful to ensure that future education and training is appropriately targeted and really is focused on gaps in education and training that currently exist. And a final implication is that there may be benefit in providing sectoral participants, not just architects, with case studies to illustrate good practice in the context of D&C procurement. So once again, I'll pass over to Mei for her practical perspectives on these issues.
Mei Yang
So I think it's important to have support education and training to architects, particularly the young graduates, to understand various procurement methods and, in particular within the D&C contract and how to navigate, because every contract would have its different contractual terms. We need to be aware of what they are and how we can operate within those sort of terms when delivering a project. And at the same time also in the forefront of our mind, we need to be mindful of risk and be able to mitigate risk.
So what we have in our practice is sort of a continuous improvement system. We have a robust QA or quality assurance or quality management system where we record learnings, feedback received, what went well, what did not go well. And we even have debriefing process that we record in our QA system that we can refer to as some form of database or resource internally to help us to navigate through a D&C contract.
And the last point would be knowledge exchange.
I think it's also important to have mutual support across different areas of expertise, and if there is a central resource that is particularly useful and available for any sort of architects’ reference when they are working within a D&C contract that will be helpful as well. Just so that they know what's available, how they can respond or what sort of other documents or elements that's available that they can refer to as well.
Dariel De Sousa
Thank you, Mei.
And we're actually running ahead of schedule, and I'll pass back to Giorgio to moderate the Q&A session.
Giorgio Marfella
Thank you very much Dariel and Mei, so I will give some time for the audience to put some questions on the Q&A box on the right. But in the meantime, I might start to ask some questions.
So, sort of go back to refresh a bit. Some of the key points.
I was quite taken by Mei's list of potential negative impacts that you can have in this form of procurement in the second section of the presentation.
And my question to you Mei, is that as an architect leading projects, how do you mitigate those scenarios?
I mean, do you have an opportunity to leverage, say, with your initial client to prevent some of those negative conditions may arise? For example, you know you mentioned the fact that you might have absolutely no control of cost, value management that could be taking, you know, that is to somehow diminish quality and so forth.
What can you do as an architect at the beginning of the process to prevent those things from, to somehow be outside of your control?
Mei Yang
Hmm, as I mentioned in the first slide as well, it's about understanding what the design integrity or the main design intent of the project is and holding firm to that because that will be sort of, the main guiding point in any other decisions that the contractor will put upon us.
There's also other documents or factors that can impact on it. For example, just to give you a specific example would be the town planning permit or the endorse drawings.
We have certain design elements which were important which enable us to obtain a permit to, to progress the development.
So those sort of elements, because we have been involved in the project right from the start, we know that they are non negotiables that they will part of the process that you know enable us to obtain the permit to move forwards.
So we hold on tight to those elements and say that you cannot change these elements because it's, you know, the front of your facade is it does XY and Z to your design or how it's appreciated from street level or in the broader you know, urban context.
And we use those elements and understand them and use them as leverage tools to sort of progress our design and hold on to it.
Giorgio Marfella
Very good.
Thank you.
Yeah. So, I mean you can you can hold tight is the part of your presentation was like you know, be aware of what you still have some element of control. So, make sure you set yourself those pillars as you said very, very clearly up front.
Mei Yang
And I think it's also a negotiation process with sometimes with the contractor, they might say how about you do A and then we can say, okay.
We've done the sketch or research a bit, do a bit more sort of background. You know, thinking. And could we do option B instead ,where you know the outcome or the cost might be neutral, but you know, don't forget any change that you do to a building externally you might need to go back to council again for rendorsement. So, we have that in mind to make the process smoother as we move forwards in construction, but we are also mindful about things that need to happen in the background to make the project work as well.
Giorgio Marfella
Yeah. And that's a very good point because one of the key expectations for an architect is to provide service to client that sometimes also imply telling things that they might not like to hear. And so the architect’s role in providing still advice to the client to, inform and also bring clients’ awareness of potential risk is a key component of the services that architects have to provide and this brings into Dariel because I think one of the late motives of today is the fact that, notwithstanding the procurement process, novated contracts is not an alibi or an opportunity to lower your professional standards. Of course there are different services to be provided, but Dariel, I mean, the responsibilities of the Code of Conduct by and large, apart from codes that talk about contract administration still apply.
Am I right?
Dariel De Sousa
Absolutely. And it sort of goes back to that concept that Mei talked about holding firm.
I mean, you can hold firm on design intent, but you can also, you should also be holding firm on your professional standards obligations because they are non negotiable. They apply notwithstanding the procurement model.
It doesn't matter what the scope of the services that you've been engaged to provide are, they apply despite all of those factors and considerations.
And a point that is made in the Deep Dive Report is that holding true or holding firm to your professional standards obligations actually helps you navigate some of these risks and to mitigate risk in practice because it provides a guide guard rails to say actually this is the benchmark that we have to meet in order to properly provide our professional services, our architectural services even if we're being subjected to pressure from the contractor, there are limits on fees etc., these are the baseline obligations that we need to meet in order to discharge our professional standards obligations. So that may sound like a negative, something that you have another thing that you have to do, but in fact you can see them as a positive to help you navigate this very challenging context and mitigate risk through compliance with your professional standards obligations.
Giorgio Marfella
Thank you Dariel.
Another thing that emerged today in the presentation is obviously the idea of collaboration I suppose. It’ll be like embedded. It could be also a positive risk mitigation strategy.
So obviously a lot of the success of this project depends on the quality of the bigger project team. Of course, the expertise and the skills of the architects, but also the contractor involved. Are they adequate for the type of project? And the consultants,
I imagine you know, engineers and so forth. You know that provide consulting services that are more specific rather than the generalist design advice of the architect. And Mei you mention the ECI approach, which is an interesting model.
It's been around for a while. In your experience do you see this picking up more?
And in the context of that, how can you also establish positive collaboration with subcontractors? And I'm referring particularly some critical subcontractors that mechanical services or façade contractors that sometimes hold expertise that rarely is actually known or owned by the general contractor.
So in this contest of ECI, how do you also set up a strategy to be on the table to collaborate also with the subcontractors?
Mei Yang
I think, the fact that the contractor is on board quite early on in the project. Normally as in the capacity of like some form of advisor because they have not signed a building contract yet.
Yeah. So that they might be putting put on a monthly retainer, but the carrot is at the end where you know if they can show the cost plan or meet the construction cost budget, then they will get the project.
It's a good sort of method to enable or to make sure that everyone is sort of working towards the same direction of same outcome which is you know to meet the obviously the client’s budget but also have good design or the design outcome that's met. And in this instance I think with contractor coming on board early, the ECI, they might have access to sub consultants which they can or subcontractors that they can bring on board in meetings you know, we can discuss about how we can be more efficient in the façade, for example early on, so that decisions are made that have got quite a big impact on cost, is understood quite early on. And then I think that builds up the project or builds up towards a sort of more, built up towards to a situation where the project stack up much earlier on, rather than heading out to the market at tender and you still need to wait four weeks, six weeks for contractors to price them.
Giorgio Marfella
Hmm.
Mei Yang
Yeah, and go out to their subcontractors as well, yeah.
Giorgio Marfella
Yeah.
There are, yes, there.
Please go ahead. Yes.
Dariel De Sousa
No, I was just going add that a point that was made during the focus groups is that despite all the negative features that we've been talking about during this session about D&C procurement, the insurance representatives in particular pointed out that they have seen examples where D&C procurement can work very well.
And in essence it comes down to this concept that you just referred to Giorgio of collaboration, how well the parties work together from the outset. So, we may be looking for other procurement models, but it may well be that it comes down to the particular parties, who's, whether they're collaborative or not.
And so I think that needs to be accounted for when you're deciding which procurement model should be used for a particular project.
Giorgio Marfella
Yeah, very good point.
And I mean there's, many will say it's very difficult to stay out of this particular model of procurement at least here in Australia. And so certainly some good projects have come out of it, you know. But of course the ones that often hit the news are the ones that didn't go quite right.
So that that's probably a tendency to obviously focus more on the problems for good reasons.
Now we got just two minutes to conclude.
And very good point towards the end about education.
Mei and Dariel very quickly.
What can you do to provide opportunities for graduates to be exposed to construction management processes of the architectural services? I don't want to say a contract admin because that's a very specific role, but novated D&C contract get built and so there is still opportunities potentially also for having younger architects or future architects to be involved.
What, what can you do?
And Dariel then quickly, what can we do more I suppose moving forward to provide more education in this regard?
So Mei first.
Mei Yang
What we do in our practice is for young graduate architects, we bring them to site with us.
So when I attend a site meeting or a site walk, I'll bring one or two colleagues along with me.
And of course, with the contractors sort of permission, we bring them around the site to look at, you know, if a slab is being poured or precast columns are being, you know, poured on site, how does it actually look like, what's happening?
Contractors are more than happy, I think. When you have a collaborative relationship, contractors are more than happy to show you around and explain to you what's happening on site.
And you know, there's often very interesting, you know, things that can come up from those sort of communication or those site walks as well. And I think young architects, they need to be exposed. They need to see what's happening to get a bigger picture, to get a clearer picture of, you know, what you draw on the paper and how it translates to on site. So, we do that. We bring our fellow architects or graduates to site during the construction phase and also when the building is completed so that they can see before and after I guess. And I think that's a good sort of opportunity for architects.
Giorgio Marfella
Very good. Dariel on the helicopter view in the education.
Dariel De Sousa
Yeah, yeah, sure.
Just two quick points.
One point that was made during the focus groups was that with a limited design role under the D&C procurement model, this may limit the ability of graduates to understand what is actually involved in D&C procurement. So as the scope of the role is sort of confined or limited. That therefore exposes graduates who may be tagging along to less of the scope of services that may otherwise be on show. The other point that was made is that apart from getting exposed to practical issues, the actual design and the translation of design into the built form, was contract administration.
So graduates really need to have solid foundation in contracts. What they say, what they mean, how they're applied, what these indemnities and you know, liability clauses mean in practice, how to negotiate and navigate contracts in practice.
So there's the design aspect, and then there's the contract aspect, which both need to be addressed in tandem.
Giorgio Marfella
Very good. Absolutely. And let's not forget, of course, there's the process of registration that is an educative process in itself, where of course it begins with university knowledge, but then there's the years of professional practice in which, as we heard from Mei, there's opportunities for graduates to consolidate this experience, and then by the time you reach registration hopefully you, you'll have sufficient experience to lead projects.
Right, we’re right on time.
So, thank you very much Mei and Dariel for what was hopefully a very, certainly was for me, but I imagine for the audience as well, it was a very instructive session. We will have more.
We have probably at least another two coming up on the Deep Dive so, but we'll endeavour to provide more activities throughout the year, so thanks everybody for attending us and we'll be in touch and see you next time.
Mei Yang
Thank you.
Dariel De Sousa
Bye everyone.
Updated