The Value of SCIRT - Stronger Christchurch Infrastructure Rebuild

Transcription

The Value of SCIRT
(Interim Report – Third Edition)
Abridged Version
31 August 2014
The Value of SCIRT
Revision History for Third Edition
Revision
Issued for
Author
Approved by
Date
0
Board Comments
Duncan Gibb, General Manager /
Rod Cameron, Value Manager
Duncan Gibb
31/08/2014
1
Circulation
Duncan Gibb
24/10/2014
2
Abridged for
posting to web
site
Duncan Gibb
14/11/2014
File: 2014-08-31 Value of SCIRT – Third Edition Abridged
The Value of SCIRT
Outline Contents
1
EXECUTIVE SUMMARY .................................................................................. 1
2
BACKGROUND ................................................................................................ 5
3
ACHIEVEMENT OF CLIENTS’ OBJECTIVES .................................................. 8
4
ACHIEVING THE RIGHT PRICE .................................................................... 26
5
RISK MANAGEMENT .................................................................................... 32
6
NON-COST PERFORMANCE ........................................................................ 35
7
RISK/REWARD OUTCOMES ......................................................................... 37
8
GOVERNANCE AND ASSURANCE............................................................... 37
9
APPROVALS AND COMPLIANCE ................................................................. 39
10
KEY SUCCESS FACTORS ............................................................................ 40
11
LEARNING LEGACY...................................................................................... 46
Appendices
Appendix A
The Formation and Structure of SCIRT
Appendix B
Australian Value Reporting Guidance Note 4
Appendix C
Alliance Agreement Objectives
Appendix D
Client Governance Group – Value for Money Performance Metrics
Appendix E
International Post-Disaster Rebuild Mechanisms
Appendix F
CCC Report
Revision 0 August 2014
Confidential to SCIRT
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(blank page)
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Detail of Contents
1
EXECUTIVE SUMMARY .................................................................................. 1
1.1
1.2
1.3
1.4
1.5
1.6
2
BACKGROUND ................................................................................................ 5
2.1
2.2
2.3
2.4
3
Headline .................................................................................................. 1
Background ............................................................................................. 1
This Document ........................................................................................ 1
Achievements .......................................................................................... 2
Challenges .............................................................................................. 3
Outlook .................................................................................................... 4
Alliance Objectives .................................................................................. 5
Board Re-visit of Objectives .................................................................... 6
Value Framework .................................................................................... 6
This Report.............................................................................................. 8
ACHIEVEMENT OF CLIENTS’ OBJECTIVES .................................................. 8
3.1
3.2
3.3
Establishment – The Formation of SCIRT ............................................... 8
3.1.1
Key Elements Are Built In ........................................................................ 8
3.1.2
High Performance Culture ........................................................................ 9
3.1.3
Peak Performance Plan ........................................................................... 9
3.1.4
Production Ramp-Up .............................................................................. 10
3.1.5
Sharing ideas, experience and innovations ........................................... 10
3.1.6
Raising Standards + Standardisation ..................................................... 11
3.1.7
Independent Verification of Cost Estimation .......................................... 11
Economy – Doing the Right Work .......................................................... 12
3.2.1
Strategic Plan – Client Supplied ............................................................. 12
3.2.2
Strategic Review – Provided for the Clients ........................................... 12
3.2.3
Damage Rebuild Scope Definition ......................................................... 12
3.2.4
Additional Scope Reductions ................................................................. 13
3.2.5
2014 Re-visiting of Scope Definition ...................................................... 13
3.2.6
Rebuild Resilience .................................................................................. 14
Effectiveness – Doing the Right Work in the Right Sequence ................ 15
3.3.1
Rebuild Plan(s) – Client Supplied .......................................................... 15
3.3.2
Prioritised Schedule of Projects ............................................................. 15
3.3.3
Tactical and Timing Focus ..................................................................... 16
3.3.4
Strategic Decisions on Residential Red Zone ........................................ 16
3.3.5
Integrate SCIRT Plans with Others ........................................................ 16
3.3.6
Systems Integration................................................................................ 17
3.3.7
Deployment Flexibility ............................................................................ 17
3.3.8
Schedule Matching Funds ...................................................................... 17
3.3.9
Progress to Date .................................................................................... 18
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3.3.10 Maintain Delivery Capability ................................................................... 19
3.3.11 Program Delivery Resources ................................................................. 19
3.3.12 Award Projects on Performance ............................................................ 19
3.4
Efficiency – Progressively Getting Better ............................................... 19
3.4.1
Capability of Integrated Team ................................................................ 19
3.4.2
Asset Assessment Process .................................................................... 20
3.4.3
Asset Assessment Tools ........................................................................ 20
3.4.4
Design .................................................................................................... 20
3.4.5
Price Setting Data .................................................................................. 21
3.4.6
Monitor Delivery Costs ........................................................................... 21
3.4.7
Monitor Delivery Performance ................................................................ 22
3.4.8
Project Handover .................................................................................... 22
3.4.9
Capability Improvements ........................................................................ 22
3.4.10 Value Register ........................................................................................ 23
3.4.11 Improvements to Asset Systems ............................................................ 23
3.4.12 Lifting Standards .................................................................................... 23
3.4.13 Safety ..................................................................................................... 23
3.4.14 Environment and Heritage ..................................................................... 24
3.4.15 Dialogue with Residents ......................................................................... 25
3.4.16 Community Satisfaction.......................................................................... 25
4
ACHIEVING THE RIGHT PRICE .................................................................... 26
4.1
4.2
4.3
4.4
4.5
Programme Estimate Commentary........................................................ 26
Project Estimate Target Out-turn Cost (TOC) ........................................ 26
TOC Review .......................................................................................... 26
Actual Out-turn Costs ............................................................................ 27
Forecast Final Costs ............................................................................. 27
4.5.1
4.6
4.7
4.8
4.9
Programme Costs .................................................................................. 27
Independent Estimate Review ............................................................... 28
Independent Audit ................................................................................. 28
Earned Value ........................................................................................ 28
Monitoring Prices / Containing Escalation.............................................. 29
4.9.1
SCIRT Observations .............................................................................. 29
4.9.2
Independent Estimator Assumptions ..................................................... 30
4.10 Innovations ............................................................................................ 30
4.10.1 Innovation Management ......................................................................... 30
4.11 Standards and Standardisation ............................................................. 32
4.12 Early Contractor Involvement ................................................................ 32
5
RISK MANAGEMENT .................................................................................... 32
5.1
5.2
5.3
Programme Risks .................................................................................. 32
Project Risks ......................................................................................... 34
Central City Risks .................................................................................. 34
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5.4
6
NON-COST PERFORMANCE ........................................................................ 35
6.1
7
Safety ..................................................................................................... 35
6.1.2
Value ...................................................................................................... 36
6.1.3
Our Team ............................................................................................... 36
6.1.4
Customer Satisfaction ............................................................................ 36
6.1.5
Environmental ........................................................................................ 37
Work Allocation Status .......................................................................... 37
Status of Pain/Gain ............................................................................... 37
Strategic Plan ........................................................................................ 37
Client Governance................................................................................. 38
Client Framework .................................................................................. 38
Client Value Framework ........................................................................ 38
Programme Funding .............................................................................. 38
Audits .................................................................................................... 38
Informing Stakeholders.......................................................................... 39
APPROVALS AND COMPLIANCE ................................................................. 39
9.1
9.2
10
6.1.1
GOVERNANCE AND ASSURANCE............................................................... 37
8.1
8.2
8.3
8.4
8.5
8.6
8.7
9
KRAs and KPIs...................................................................................... 35
RISK/REWARD OUTCOMES ......................................................................... 37
7.1
7.2
8
Client Risk Management ....................................................................... 34
Approvals .............................................................................................. 39
Compliance ........................................................................................... 40
KEY SUCCESS FACTORS ............................................................................ 40
10.1 SCIRT Functionality .............................................................................. 40
10.1.1 Establishment Features.......................................................................... 40
10.1.2 Process Features ................................................................................... 40
10.1.3 Construction Features ............................................................................ 41
10.2 Transposition of the SCIRT model ......................................................... 41
10.3 Transposition to CCC ............................................................................ 41
10.4 Industry Engagement ............................................................................ 41
10.4.1 Procurement Forum ............................................................................... 41
10.4.2 Safety Forum .......................................................................................... 42
10.4.3 Training Initiatives and Programmes...................................................... 42
10.4.4 2014 Training Update ............................................................................. 42
10.4.5 New Zealand Society of Earthquake Engineers .................................... 43
10.4.6 New Zealand Lifelines Forum ................................................................ 43
10.5 Recognition – Awards............................................................................ 43
10.5.1 esri - Special Achievement in GIS .......................................................... 43
10.5.2 12d Model - Software ............................................................................. 44
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10.5.3 Environmental – NZ Planning Institute ................................................... 44
10.5.4 Champion Canterbury Business Awards ............................................... 44
10.5.5 Brunel Medal .......................................................................................... 44
10.5.6 Brunel International Lecture ................................................................... 45
10.5.7 NZ Engineering Excellence Awards ....................................................... 45
10.5.8 Public Relations Institute of NZ (PRINZ) Awards ................................... 45
10.6 Recognition – International Interest ....................................................... 45
10.6.1 Earthquake Engineering Research Institute .......................................... 45
10.6.2 NZ and International Lifelines and World Bank Visits ............................ 46
11
LEARNING LEGACY...................................................................................... 46
11.1 Material ................................................................................................. 46
11.2 Management ......................................................................................... 46
11.3 Dissemination ........................................................................................ 46
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Table of Figures
Figure 1 SCIRT Value Structure ................................................................................................ 6
Figure 2 SCIRT Value Structure – Establishment ...................................................................... 7
Figure 3 SCIRT Value Structure - The Three Value 'E's ............................................................ 7
Figure 4 Report Structure .......................................................................................................... 8
Figure 5 SCIRT Work Scope Definition ................................................................................... 13
Figure 6 Diagram of work definition over time ......................................................................... 14
Figure 7 Map of Project Schedule Overview ............................................................................ 16
Figure 8 SCIRT Monthly Spend and Prediction ....................................................................... 18
Figure 9 Construction Progress by Asset Type....................................................................... 18
Figure 10 Construction Progress Data ................................................................................... 19
Figure 11 Design Earned Value Analysis ............................................................................... 21
Figure 12 Monthly Injury Incidents .......................................................................................... 24
Figure 13 Table of Community Satisfaction Survey Data ......................................................... 25
Figure 14 Programme Earned Value Analysis ......................................................................... 28
Figure 15 Delivery Earned Value Analysis............................................................................... 29
Figure 16 SCIRT and Industry Prices ...................................................................................... 30
Figure 17 Innovations Received .............................................................................................. 31
Figure 18 Developed Innovations from Delivery Teams .......................................................... 31
Figure 19 Table of Programme High Risks .............................................................................. 33
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Appendices
Appendix A
The Formation and Structure of SCIRT
Appendix B
Australian Value Reporting Guidance Note 4
Appendix C
Alliance Agreement Objectives
Appendix D
Client Governance Group – Value for Money Performance Metrics
Appendix E
International Post-Disaster Rebuild Mechanisms
Appendix F
CCC Report
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1
Executive Summary
1.1 Headline
SCIRT continues to deliver value through:

Getting things done on a large scale in a short time frame

Working in a manner that achieved Clients’ expectations as identified in the commercial
agreement

Delivering strong community recovery outcomes by engaging positively and by evidencing
rebuild progress

Completing work at the right price with minimal cost escalation.
However the functions and output of SCIRT have been constrained in 2014 as the clients have
placed projects on hold in design and construction and commenced a review with the aim of
optimising the total spend for funds available from the Government – Christchurch City Council
2013 Cost Share Agreement.
1.2 Background
Stronger Christchurch Infrastructure Rebuild Team (SCIRT) is a purpose-built organisation
rebuilding publicly owned horizontal infrastructure, namely roads, walls and bridges, fresh water,
wastewater and stormwater networks damaged by the Canterbury earthquakes of 2010 and 2011.
It was created under a relationship agreement between government agencies: Canterbury
Earthquake Recovery Authority (CERA) and New Zealand Transport Agency (NZTA); the local
government territorial authority Christchurch City Council (Council) and five civil engineering
construction companies. An explanation of SCIRT’s formation and structure is set out in Appendix
A.
SCIRT was established in May 2011 to achieve rebuild objectives of speed and certainty, given
the large scale of damage up to this time and risk of continued seismic activity. It is funded by
taxpayers of New Zealand and ratepayers of Christchurch, through the government agencies and
the territorial authority.
In summary, SCIRT is an organisation that was created with a clearly defined purpose, in a form to
suit the circumstances and demands of post-disaster infrastructure rebuild.
1.3 This Document
This document is an interim report of the performance and achievements of SCIRT to 30 June
2014, as a work-in-progress explanation set against initial alliance objectives and the
establishment, economic, effectiveness and efficiency parameters that define its value framework.
It also includes comments on the likely future of SCIRT at the time of writing, arising from the 5
August 2014 client advice that resulted from the review of the scope and standard of rebuild to
match available funds.
Most of the following commentary is expressed in summary terms with little supporting
explanation, in the interests of brevity for an interim report.
This document:

follows the template of the Guidance Note 4, Value Reporting, of the Australian Government’s
National Alliance Contracting Guidelines, identified in Appendix B

will enable comparison against projects and programmes of a similar scale and commercial
arrangement
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
is an update from the February 2014 document of the same name

includes progress reporting shown at a level above individual teams and projects

will inform a final value report prepared by the appropriate Government Agency for the Minister
responsible for the rebuild, upon completion of the infrastructure rebuild programme.
1.4 Achievements
In the period from October 2013 to date the SCIRT organisation has been challenged in the
implementation of systems and procedures created to facilitate an efficient “Programme delivery
approach” as a number of external influences have either delayed or disrupted projects in design
and under construction.
The impacts of these influences have to a large degree been managed to mitigate the cost
impacts arising; this mitigation being a direct result of the flexibility afforded both client and
contractor organisations by the relationship style Alliance commercial arrangement.
Observations of other disaster response experiences confirm that it is to be expected that delays
and disruptions will occur in the third and fourth year after a causative event, as a transition from
Emergency Response to Recovery phase occurs. The resulting review of constraints such as
funding, resources and procurement methodologies necessitates a “pause” as government entities
consider the pathway forward.
At the time of drafting this report in August 2014, the SCIRT client organisations have undertaken
a review and instigated revised processes, including design guidelines and client approvals and a
number of projects have been delayed as local government reconsiders policy in response to
community consultation.
SCIRT is translating that advice in an intentional programme review, to re-set its processes,
structure and functions, to reform the organisation as appropriate to best deliver to the new
objectives. At the same time SCIRT has commenced a programme to re-focus and energise all
staff to ensure positive attitudes to and achievement of delivery goals.
Notwithstanding the preceding difficulties, substantial progress has been made through all phases
of activity as shown by programme throughput and other elements of the value framework:
Establishment:
The basics of SCIRT establishment can be regarded as completed. It is:

founded in conformity with the Alliance Agreement and is meeting those objectives

running effectively as evidenced by the rebuilt infrastructure ‘in the ground’ (completed works) and
the high daily throughput

achieving a good safety record

recognised in many arenas as the right tool for the job

attentive to community interaction

flexible to direction and deployment changes

able to be re-structured and managed as necessary to obtain best output results.
Economy – The Right Work

SCIRT rebuild objectives for remaining work are now subject to further definition as SCIRT
responds to the 5 August 2014 client advice
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
The Network Level of Service and asset life evaluation used to date will now be replaced by the
outcomes from the client advice

Similarly the rebuild cost prediction of September 2012 which was the Programme Target Estimate
will now be amended to reflect the client cost share agreement.
Effectiveness – Right Work in Right Sequence
SCIRT:

remains aligned with CERA Recovery Strategy general priorities and with planning and delivery of
all programmes within Christchurch Central

prioritises work (as last reported in March 2014), which may be reviewed by clients or refreshed by
SCIRT as the impact of current client review becomes clearer

continues to design and promote alternative solutions to achieve best-fit-for-purpose outcomes

has designed to target estimates in the early stages of the year but has progressively slowed or
halted design as projects are impacted by the client review

schedules projects to achieve a steady work stream matching budgeted cash-flow but this has
been increasingly difficult to achieve in the first half of 2014.
Efficiency – Progressively Improving

Throughout the SCIRT programme there is focus on on-going improvement of performance driven
by the vision and values of the organisation

SCIRT’s estimating processes have been independently reviewed in a comprehensive study at the
client’s request and found to be fit for purpose and not requiring any change

A variety of non-cost performance measures show results that are commonly above minimum
conditions of satisfaction

the construction work allocation process is driving a cycle of continuous improvement by Delivery
Teams in the field

quality is acceptable as verified by audits and there is focus on improving quality standard
outcomes throughout the organisation

productivity monitoring has lapsed in the period due to work type changes and will be reinstated in
more comprehensive format in the second half of the year

innovations continue to emerge from all sectors, generating better processes, design and methods
of construction, saving tens of millions of dollars and presenting improvement ideas for other parts
of New Zealand

SCIRT’s learning legacy development is well under way and knowledge transfer to other sectors of
rebuild and wider New Zealand is just beginning.
1.5 Challenges
SCIRT remains challenged by some key aspects of its work:

it is a large organisation with a fundamental Alliance Agreement objective of lifting the standard of
the wider construction industry that it operates within. This creates a continual challenge for all, of
doing things better today than yesterday, necessitating change in short time frames. This
continuing response to change can be hard work at times

a five-year programme presents challenge to the construction industry in maintaining momentum
of effort and engagement of all players

the programme continues to be impacted by an on-going evolution of priorities and direction, as
other elements of the rebuild are more clearly defined, such as with:
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
the client engagement framework, protocols and communications – which have often
been challenged in dealing with multi-party issues defining best spend of money

the recent review / confirmation of funding and rebuild standards and the resulting redefinition of scope of work.
1.6 Outlook
SCIRT is entering a new phase of activity on receipt of the client advice of 5 August 2014. This
will require the creation by SCIRT of new design, cost estimating and client approvals processes
to enable restoration of a production-line programme of work.
It is expected that overall efficiency of the SCIRT machine will reduce somewhat from previous
levels due to the increase in design and administration costs arising from the revised process.
Separately, the objective of restoring levels of service and operating costs of infrastructure
networks to pre-earthquake levels has been revised by the new client guidelines. These changes
are natural consequences of the client amendments to definition of recovery and rebuild.
The client definition of an upper bound to costs for remaining work is expected to be developed
into a new target by SCIRT and its systems and procedures will ensure it is met.
The time and cost impact of the events from October 2013 to date, that are described above, will
not be clear until the completion of the SCIRT programme review.
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2
Background
The start point of the reporting structure in the Australian Government guidance note is to identify
the client objectives in establishing SCIRT, which are reproduced in Appendix C.
2.1 Alliance Objectives
The Alliance Agreement objectives were developed in response to the Government and Local
Government resolutions, from the Initial Alliance Agreement of 4 May 2010 and throughout the
SCIRT development phase ending less than five months later with the final agreement on 22
September 2014.
As the nature of the Horizontal Infrastructure Rebuild was one of Disaster Response with an
intentional requirement from the Central and Local Government for a rapid action, there was no
formal ‘business case’ developed. As such the Alliance Agreement objectives and the value
proposition developed by the Board provided the frame of reference for measurement of delivery
of Value by the SCIRT organisation.
The objectives were developed from inputs from Board members. They have only a notional
hierarchy and vary in importance, however they can be regarded as a collation of significant issues
of concern to the stakeholders.
They have been taken forward into the value framework and are dealt with from there, rather than
separately. The following table shows the objectives in summary and references the relevant
subject in this report that addresses them.
The Agreement Objectives
Report Cross Reference
a) Lift the zero harm performance ….to
industry best practice in NZ
Safety is reported within the Efficiency (3.4.13)
b) Demonstrate best…value… and…
environmental responsibility
Value: this document
Environment (6.1.5)
c) Maintain an open and honest
dialogue with residents
Dialogue with residents is addressed in Effectiveness (3.3.7)
d) Maintain high levels of customer
service
Efficiency (3.4.16) and KPIs (6.1.4)
e) Establish….interim level of
service…(all)….within six months
(This was led by Civil Defence and CCC as part of disaster
response)
f)
(This has largely been achieved by Civil Defence and CCC
as part of disaster response)
Quickly protect the environment and
reduce future health hazards
g) Do right thing…right time…right
standard…with minimal rework:
Effectiveness (3.3) Efficiency (3.4) & KPIs (6.1.2)
h) Return…assets to CCC….more
resilient
Economy (3.2.6)
i)
Incorporate ideas currently not
known
Several elements of Efficiency (3.3), Innovations(4.9)
j)
Co-ordinate the work with others
doing rebuild
Effectiveness (3.3.5)
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The Agreement Objectives
Report Cross Reference
k) ….maintain a sustainable market
condition
l)
…lift the capability of the sector
wide workforce
This is addressed in several areas including Economy
(resources, 3.3.11) Efficiency (3.4) and Achieving the Right
Price (4.8)
This is addressed in section Efficiency (3.4.9 & .12 Capability, Lifting Standards)
2.2 Board Re-visit of Objectives
Following receipt of the client advice of 5 August 2014 the SCIRT Board has resolved that the
objectives will require review and possible amendment once the impact of the advice on the
programme and on SCIRT has been assessed. It is anticipated that this will occur in the latter half
of this year (2014).
2.3 Value Framework
The value framework enhances the alliance objectives by transcribing them into a workable and
recognised structure that relates to the nature of the work of SCIRT. It is described in summary
terms in this section, to give a reporting sequence for this document. A more detailed explanation
is contained in Appendix A where the creation and structure of SCIRT are described.
The value of SCIRT arises from many areas which can be collated into four main groups:

the drivers and objectives at the time of initial creation of SCIRT (its establishment)
and the on-going functionality summarised by the ‘text book’ performance against

economy

effectiveness and

efficiency measures.
The following diagrams illustrate that approach as layers underlying the ‘production line’ primary
functions of SCIRT (also described in Appendix A) which extend from asset condition assessment,
through project identification and prioritisation, design, cost estimation, construction, completion
and handover. They list particular aspects of SCIRT work that will deliver value in each element.
This report presents advice and/or data against the lists to demonstrate value:
VALUE FOUNDATIONS
ESTABLISHMENT
ECONOMY
EFFECTIVENESS
EFFICIENCY
The SCIRT Production Line
Figure 1 SCIRT Value Structure
SCIRT delivers value from its initial establishment and resulting functionality which can be
described by the following list of items. This phase is not normal for conventional value
frameworks but is a result of the particular demands of post-disaster rebuild. A large and complex
team set up in a challenging set of circumstances in an environment of continuing aftershocks:
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THE BASE LAYER
ESTABLISHMENT
Central + Local government + private enterprise
Relationship contract - alliance
Prompt and expedient establishment
Delivery programme best fit
Full utilisation of resources
Open book accounting
Separate delivery teams with competitive tension
Cost reimbursement + fees adjustable on performance
High performance culture
Sharing ideas, experience and innovations
Raising standards + standardisation
Independent verification of cost estimation
Figure 2 SCIRT Value Structure – Establishment
Overlaying the base of initial establishment are the conventional subject definitions of value:

Economy (doing the right work)

Effectiveness (doing the right work in the right sequence)

Efficiency (progressively getting better).
Each of these is populated with items taken from the Value Management Plan and shown in the
following diagram. The items have been selected as appropriate for a post-disaster programme of
projects, starting from uncertain amounts of damage, able to be approached from many work
fronts and using competitive yet collaborative work processes.
THE THREE VALUE ‘Es’
ESTABLISHMENT
ECONOMY
Strategic Plan – client supplied
EFFECTIVENESS
EFFICIENCY
Capability of Integrated Team
Strategic Review – provided for clients
Rebuild Plan(s) – client supplied
Strategic decision conformance
Prioritised Schedule of Projects
Integrate SCIRT Plans with Others
Tactical and Timing Focus
Price Setting Data
Schedule Matching Funds
Monitor Delivery Prices
- coordination of effort
Design Cost
KPI Design Quality
KPI Delivery Performance **
Risk Management (Program) – a process
*Maintain Delivery Capability (as at left)
Focus on Owner Needs – a process
Award Projects on Performance
KPI Recognise Innovations
Program Delivery Resources * - a system to
Dialogue with Residents
Site Observations
monitor and control
Community Satisfaction - polled
**Capability Improvements (linked to above)
KPI Construction Quality
Lessons Learned
Value Engineering Register
Improvements to Asset Systems
Figure 3 SCIRT Value Structure - The Three Value 'E's
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2.4 This Report
The structure of this report reflects the preceding explanation and the items identified, which are
then presented to match the Australian value reporting template identified in section 1.3.
CERA Recovery
Strategy
Establishment
Economy
Effectiveness
Alliance
Objectives
-
Client Drivers
Efficiency
Value
Framework
Exec Summary
Background
Objectives
Price
Risk
etc
etc
Appendices
-
This
Report
Report Structure
Figure 4 Report Structure
3
Achievement of Clients’ Objectives
This section of the report demonstrates achievements that are emerging from the programme, reported
in sequence of the value framework.
3.1 Establishment – The Formation of SCIRT
3.1.1
Key Elements Are Built In
The following foundation elements can be regarded as fully effective and not warranting further
explanation or data to demonstrate achievements:

SCIRT is the envisaged mix of Central and Local government (the Clients) and private
enterprise (eight organisations in total)

The relationship contract (alliance agreement) is in place and working as intended

The prompt and expedient establishment was witnessed by set up being achieved in five
months creating a functioning organisation that began work immediately

The ‘delivery programme best fit’ requirement is effective because it facilitates parallel
work processes and construction on many fronts

‘Full utilisation of resources’ has progressively applied throughout all phases of operations
as the organisation has grown. The current level of construction is regarded by delivery
teams as still having capacity to grow to meet planned throughput

Open book accounting of incurred costs is in place and is independently reviewed and
audited by resources engaged by and acting for the Clients

Separate delivery teams which operate within an environment of competitive tension,
evidenced by the work allocation process that is based on performance scoring

The programme features construction management fees that are subject to pain/gain
based on actual construction cost against budget. This is very effective in maintaining
focus on costs and thereby containing cost escalation.
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The Value of SCIRT
3.1.2
High Performance Culture
Organisationally and hence culturally, SCIRT is complex. It is one team made up of many
smaller teams. Therefore to achieve its goals the many teams need to be aligned, and
members fully engaged within them. This demands a culture that delivers high performance
outcomes and therefore there is a deliberate, planned approach to achieve and maintain this.
SCIRT founds its culture on two fundamental building blocks:

the ‘What we are here for’ statement (or Noble Purpose):
‘Creating resilient
infrastructure that gives people security and confidence in the future of
Christchurch’

and the SCIRT ‘Mind-sets/Values and Behaviours’.
Mind Sets / Values
 Best for communities
 Open to new ways and other
perspectives
 Collectively we are stronger
 Generous with trust
 Zero Harm
 Developing our people
Behaviours
 Listening actively
 Having honest conversations
 Working together
 Having the courage to speak up
 Leading by example / walking the talk
 Striving for excellence
These continue to serve as reference points for the language that shapes the decision-making
and action and hence culture.
3.1.3
Peak Performance Plan
A “Peak Performance Plan” and framework was created in January 2012 to define activities for
building and sustaining outstanding performance, which allows for deliberate reviews of
effectiveness. The plan is reviewed on a 12 to 18 month cycle.
The ‘Our Team’ Key Result Area of the Agreement and the Key Performance Indicators within
it demonstrate the effectiveness of the plan through high levels of engagement and alignment
shown by independent staff surveys.
The December 2012 Review of the Peak Performance Plan by NZTA and University of
Canterbury affirmed the role of the plan in SCIRT, including:

‘In our view SCIRT has made extraordinary progress towards it goals over a very short
timeframe; undoubtedly the Board and leadership teams’ focus on both creating and
expecting a culture of high performance has been an integral part of SCIRT’s success.

(the plan) to be an intentional strategic framework which has enabled its workforce to
perform effectively and at pace…..highly commended for the clarity and effectiveness of
the plan…. a best practice example of intentionally designing key organisational structures
and processes to develop a high performance culture.’
That review has been supplemented with a further review in 2013.
Peak Performance planning has become an integrated part of SCIRT ensuring that the
organisation does not leave high performance to chance. The most recent Peak Performance
Plan and framework was update in June 2014 is the third intentional plan to be put in place.
High levels of engagement and alignment continue to be achieved through the 6 monthly
independently administered surveys which have now been conducted 6 times. The stability of
9
The Value of SCIRT
the results since the first survey are attributable to the concerted effort in maintaining a positive
and outcome focused environment for teams and individuals to perform at their best.
Two external reviews of the effectiveness and value of the Peak Performance Plans have now
been conducted, the most recent in April 2014 by “Resilient Organisations” at the University of
Canterbury. Positive affirmations about the role of the Peak Performance Plan in SCIRT
success continue, including:

“From the perspective of outcomes and external validation, there is little doubt that SCIRT
has been an outstanding success. Two factors particularly stand out as the basis for
SCIRT's success in delivering value – the quality of its people and its high performance
work culture.”

“SCIRT has performed effectively on all the above dimensions (of Organisational
Resilience) and, based on the reviewers’ broader consulting and research experience, can
be considered an exemplar of how organisations involved in recovery and rebuild after a
major disaster can deliver value.”
3.1.4
Production Ramp-Up
Another demonstration that the Peak Performance Plan as an effective tool was the speed of
ramp-up of the whole production line, each element of which was formed and quickly grown to
handle significant volumes of work:

asset assessment providing reliable information

project definition and prioritisation shaping the sequence of works (until first half 2014) to
reflect many external and internal factors

design delivered reliably at low cost (until 2014 client interventions)

planned transitions-out of asset assessment and designer staff as demand falls

cost estimating on a consistent basis (incorporating an independent review process)

construction growing to large daily throughput.
(All of which are supported by business systems, human resources and communications that
have grown and performed in parallel).
In summary, the outputs intended from the Peak Performance Plan are being achieved.
3.1.5
SCIRT has a focus of sharing ideas, experience and innovation. The aim is to keep raising the
performance bar, thereby getting smarter outcomes for the benefit of Clients and the end
clients of the people of Christchurch and New Zealand.
Sharing occurs across and between all disciplines of the organisation as a deliberate byproduct of its structure including:

formal technical and operational groupings and networks that are part of organisation

informally within the co-located ‘Integrated Services Team’

within the individual Delivery Team offices

technical groups (which include designer and contractor staff)

planned focus groups including best-practice construction groups

‘Early Contractor Involvement’ of delivery team representatives assigned one to each
project during design to inform on methodologies and risks

gatherings and social functions.
Interaction of people is recognised as an important element in SCIRT culture and is actively
encouraged, to the extent of a purpose-designed office floor plan.
10
The Value of SCIRT
Seven designer technical groups meet regularly to address conventional design issues and to
process ideas into innovations that are used in the programme. These groups include asset
assessment people to provide a link to site conditions and early contractor involvement
personnel, for construction knowledge transfer. Site training staff also informally link into the
groups. The outputs are transposed into design guidelines, standards and innovations.
The innovations management process is also an important cross-organisation facilitation of
ideas and experience sharing, as described within section 4 ‘Achieving the Right Price’, later in
this report.
3.1.6
Raising Standards + Standardisation
Standards and standardisation are primarily addressed within the designer work streams and
include new earthquake resistant designs, construction details, materials and testing.
The raising of standards is also facilitated by the large number of teams and crews involved in
work throughout SCIRT. For example the need to obtain consistent and accurate results
efficiently from such as site surveys or soil sampling or closed-circuit television observations,
has created many procedural learnings and improvements. These have transferred throughout
the organisation and externally across the industry, formally and informally, captured where
appropriate as ‘Innovations’ or ‘Lessons Learned’ within the Value Register (described in
section 3.4 ‘Efficiency’ following).
The competitive tension between project delivery teams, vying for work based on cost and noncost performance indicators, has also become a driver for increased construction standards.
Poor standards impact on quality scoring and risk re-work that might cost money and add to the
risk of out-turn costs exceeding budgets, both of which impact on future work allocation to a
delivery team.
The Key Performance Indicators also play an important part in raising standards within each
item and by the process of annual reviews when scoring levels are raised to give increasingly
challenging goals.
A formal process exists for bringing design and construction standards matters to the Clients
attention, through a Scope and Standards Committee, which reports to the Horizontal
Infrastructure Governance Group. More than 400 reports have been submitted to date.
3.1.7
Independent Verification of Cost Estimation
A specialist cost estimating and construction industry consultancy is engaged by the Clients to
provide on-site staff to review and independently verify every project cost estimate before it can
be passed into the project construction phase. Both the independent consultant and SCIRT
experts use a mix of estimator knowledge, market advice and project delivery feedback to
maintain a high level of awareness of construction process and input costs and thereby to
generate budgets that the delivery teams can confidently expect will be realistic.
This estimating process gives delivery teams confidence that the budget represents fair market
pricing which may still require challenge and innovation to achieve.
The programme estimating process has a secondary benefit of inhibiting cost escalation by
generating consistent price goals.
This feature is a vital element of SCIRT performance that has shown to be effective in the
subsequent section 4 ‘Achieving the Right Price’.
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The Value of SCIRT
3.2 Economy – Doing the Right Work
3.2.1
Strategic Plan – Client Supplied
At the most fundamental level, SCIRT objectives and time frames
demonstrate alignment with the CERA Recovery Strategy for Greater
Christchurch. The Built environment forms a primary element in the
Vision and Goals for the Recovery and ‘the development of resilient,
cost effective, accessible and integrated infrastructure’ is a key
objective within that element, which is the central focus for SCIRT.
SCIRT client objectives and value framework align with other parts of
that Strategy such as Priorities, Phases of Recovery, Pace of Recovery, Funding (which
includes SCIRT rebuild cost estimates), Leadership and Integration, Economic Recovery and
Built Environment Goals. In each of these SCIRT is planning or delivering work in a manner
consistent with the CERA intentions. The following description and map of project prioritisation
illustrates that point.
The client definition of strategy has been made clear from the outset by the Infrastructure
Recovery Technical Standards and Guidelines (the Guidelines).
That document was
prescriptive in nature and generally defines the scope of SCIRT as earthquake damage repair
or rebuild, with the extent of work for any particular asset location defined by measures of
damage.
3.2.2
Strategic Review – Provided for the Clients
In 2011 at the Board’s request, SCIRT commissioned and managed the preparation of a
rebuild strategy to:

‘Cause robust decision-making ahead of infrastructure reinstatement

Enable an economic well-targeted Stronger Christchurch Rebuild Plan.’
That work was completed and formally handed to the Clients in January 2012.
recommendations were processed by the client Strategy Committee as

resolutions to transpose into long term plans

items for review and adoption by SCIRT
The

(or were) not accepted.
None of the suggestions to extend rebuild into system review and improvements were adopted
and therefore SCIRT rebuild remains restrained to damage repair.
3.2.3
Damage Rebuild Scope Definition
The understanding of the scope of work for SCIRT has varied over time as the knowledge of
damage has grown and as SCIRT and clients have reconsidered the most appropriate basis for
work. The following diagram illustrates the principal review points which began with the IRMO
immediately post disaster.
12
The Value of SCIRT
Site
Observation
+
Network
Damage
Proportion
Assessment
Network
Segment
Damage
Calculations
March 2011
PostDisaster
Overview
August 2012
DamageBased
Evaluation
Network
Level of
Service
+
Remaining
Asset Life
+
Target
Estimate
December
2013
Calculation
Revised
Network
Guidelines
(including)
Remaining
Asset Life
+
Total
Spend
August
2014
HIGG
Advice
Infrastructure Networks
Work Scope Definition Over Time
Figure 5 SCIRT Work Scope Definition
The 2012 SCIRT programme cost estimate was based on the damage that had emerged from
investigations to that time. The cost advice included a suggestion that the definition of scope of
rebuild (based on levels of damage alone) could be replaced by a Target Estimate and Network
Level of Service combined process, which is explained in section 4 ‘Achieving the Right Price’.
If that approach was accepted, SCIRT predicted that a $300 million reduction in the total spend
might be achieved.
That suggestion was taken up by the clients and therefore SCIRT transitioned to a revised
approach to scope definition. The new process began with estimate allowances spread across
sewer catchment areas for all utilities, to be followed by concept design and cost estimation of
the anticipated work and ended with level of service evaluation for the whole network for each
utility.
The Level of Service parameters include assessment of remaining asset life and operations
and maintenance cost predictions.
The process was repeated iteratively if service levels or cost predictions did not match
parameter values or target cost respectively. The prediction at the end of 2013 was that the
levels of service and remaining asset life can be restored to pre-earthquake levels within the
Target Estimate.
3.2.4
Additional Scope Reductions
During the design process described above, it is common to identify measures or concepts that
would further reduce the amount of work or cost whilst having little net impact on Network Level
of Service or asset life. These ideas are commonly put forward to the Asset Owner Operations
meeting as a paper for consideration and forwarding to the Scope and Standards Committee.
Nearly four hundred papers have been put forward at time of writing.
3.2.5
2014 Re-visiting of Scope Definition
In the first six months of 2014 the clients have been working through the implications of the
Government-CCC cost sharing agreement and the many separate demands for rebuild funding.
In particular the client’s Horizontal Infrastructure Governance Group (HIGG) has revisited both
the basis of work scope definition (a set of guidelines for each asset type) and the definition of
total spending limit.
On 5 August 2014 the HIGG advised SCIRT of its conclusions and asked for information to
inform a better definition of its decisions so that future direction could be set for SCIRT. The
13
The Value of SCIRT
following diagram shows the work carried out under differing scope definition changes over
time.
Figure 6 Diagram of work definition over time
The work anticipated by the 2013 Target Estimate generated by SCIRT is the greater circle,
within which is the work completed under the various guidelines, beginning with the scope
constructed for CCC under the IRMO definition, followed by succeeding iterations of Rebuild
Guidelines, Level of Service definition and the remainder segment. The remainder was the
anticipation at June 2014, which is now expected to reduce to the order of that shown
‘Remainder under Client Advice 5 August 2014’.
This latest change will naturally have a significant impact on design and construction.
The remainder segment shown needs to be defined/deduced by the SCIRT design process and
the result will emerge over coming weeks. An added complication to that scope definition is
informal advice from CCC that it may decide to increase the rebuild standard for some assets,
funding this separately to the cost share agreement. If this is decided then the scope of work
may increase. The decision-making around that process is not yet visible to SCIRT.
3.2.6
Rebuild Resilience
The rebuild improves resilience of three water networks by the simple practice of using modern
materials and design details in place of existing, where practicable. Resilience is not created or
assisted by measures such as increased network connectivity or additional waste water
treatment plants as might be considered, because work scope is limited to the rebuild of
damage.
The modern materials policy means that the existing pressure pipe networks of asbestos or
concrete are replaced by upvc, polyethylene, or glass-fibre reinforced resin assemblies and the
gravity networks become upvc or polyethylene in lieu of the existing ceramic or concrete pipes.
The replacements are limited to damaged sequences and are not generally catchment-wide
and therefore resilience is incremental in rebuilt portions and less so across whole networks.
The client Design and Construction Standards initially included resilience concepts in pipe and
trenching by the addition of filter fabrics around embedment gravels and by more conservative
gravel grades and compaction specifications. However these provisions have been studied by
SCIRT research and field trials and are now regarded as un-necessarily conservative and not
adding effective protection, for the additional cost involved.
The specifications are continually in the process of evolution with client support, to be more
workable and affordable.
Some of the waste water gravity networks in the badly damaged and liquefaction-prone eastern
suburbs are being changed to pumped transfer (pressure waste water) or vacuum technology
14
The Value of SCIRT
networks to add system resilience within catchments. Both are known from international
experience to cope much better than conventional gravity systems when subjected to ground
liquefaction and other ground settlements from earthquakes and to provide the most effective
solutions based on whole of life value assessments.
However these changes have proven difficult for the clients to ‘sell’ to some landowners in the
affected areas and High-Court challenges have resulted in Christchurch City Council carrying
out additional community consultation before continuing with rebuild. This process has begun
and SCIRT provides documentation and consultation on behalf of Council.
As SCIRT has moved from the initial recovery phase to the reconstruction phase of disaster
recovery cycle, ‘best engineering’ solutions have continued to be challenged by social
considerations requiring flexibility of response with resulting trade-offs in terms of cost and
time.
SCIRT continues to inform the client organisation to enable robust decision-making processes,
which at time of writing remain unresolved.
3.3 Effectiveness – Doing the Right Work in the Right Sequence
3.3.1
Rebuild Plan(s) – Client Supplied
The SCIRT rebuild programme is aligned with CERA Recovery Strategy intentions and with
planning and delivery of all programmes within Christchurch Central – as commented in
previous sections.
The Clients have full engagement with the project prioritisation Multi-Criteria Analysis process
developed by SCIRT to plan the sequence of projects and their input includes any separate
rebuild plans, allowing them to be fully integrated. This tool assesses on-going operational
costs, damage states and strategic considerations such as relief to impacted areas (most, first)
and socio/economic factors (through client input)
Client organisations have added some projects into SCIRT scope where timing is
advantageous or integration with work areas is sensible.
3.3.2
The project identification and prioritisation process was developed and fully functioning within
the first few months of SCIRT, incorporating the Multi-Criteria Analysis tool summarily
described above. A typical output is shown graphically in the following map and individual
projects making up the coloured areas are automatically linked to the time schedule tool used
by SCIRT. The map has not been reviewed or confirmed by clients pending their 2014 reassessment of the basis of work definition and total spend.
This process is used to ensure that the right work is delivered at the right time.
15
The Value of SCIRT
Figure 7 Map of Project Schedule Overview
3.3.3
The schedule that emerges from prioritisation is also influenced in part by resource deployment
and partly by external factors. It is a conventional scheduling approach that takes in factors
that need priority because of timing constraints, such as servicing anchor projects of known
timing or for such as traffic congestion considerations, where SCIRT traffic modelling and
management is used to minimise impacts.
3.3.4
Strategic Decisions on Residential Red Zone
Throughout 2013 and 2014 SCIRT has engaged with the Clients to seek clarification of
strategies and policy for infrastructure rebuild that crosses through or borders the Residential
Red Zone near the Avon. Individual project submissions have been made using a CERA
template to facilitate client process. It is expected that the examples chosen will enable Client
agreement on differing needs and options to resolve land use issues and allow a strategy to be
defined.
SCIRT work continues within historic road and service corridors crossing the Zone and in some
cases with small areas of encroachment into the zone. No definitive advice on this issue has
been given at this time.
3.3.5
SCIRT planning and delivery in the central city is aligned and synchronised with the activities of
the Christchurch Central Development Unit (CCDU) of CERA and with key projects or
maintenance activities of Christchurch City Council, all being managed through a dedicated
SCIRT Central City Programme Manager. The construction schedule is integrated with other
16
The Value of SCIRT
rebuild needs and has been established with full traffic management modelling, planning and
deployment.
In the 6 months to June 2014 the peak intensity of work has been delivered within the central
city to facilitate the wider recovery programme including the roll out of the Central City
Recovery Plan and the progression of the Anchor Projects. At the peak delivery period, March
through to June 2014, 45 crews were working within the Central City area.
At the time of writing, SCIRT is 70% complete in the Central City, delivering the $136m of
identified work. Current programme is to complete all 3 waters repairs by December 2014 and
roading by March 2015. Only bridge repair works will continue beyond this period.
3.3.6
Systems Integration
SCIRT has been a leader in creating the focus and time frames of that integration by facilitating
joint platforms for communication and by providing programme integration tools for others to
use, such as the street-level forward works viewer of project planning and construction. SCIRT
developed the first version of this tool that shows the time sequence of rebuild and new build
below and above ground, based on information from Resource and Building Consent
applications, planned and constructed programmes. Late in 2013 this tool was handed to Land
Information New Zealand for further planned development and on-going operation.
SCIRT’s ‘Minimum Standards for Utilities in Design and Construction’ and best practice
approach has been endorsed by NZ Utilities Advisory Group and adopted by NZTA, CCC and
CERA, with the NSW Government and Auckland Transport actively considering its application.
SCIRT was active in the creation of the Utilities Review Panel which is a forum to foster on going working relationships within the utility industry, provide leadership and to identify
common issues in the rebuild process and recommend solutions.
3.3.7
Deployment Flexibility
SCIRT is contractually flexible and can respond to changing priorities or be re-deployed at sites
where required. For example, it is aligned with the CERA Recovery Strategy and planning and
development within the Christchurch Central area, yet can change from any of the priorities of
those schemes if needed, such as from a change in strategy from central or local governments.
Similarly the construction schedule is consistent with the project priorities developed by SCIRT
in conjunction with the Clients and is integrated with current plans of all interacting
programmes. However that schedule can be changed as required to meet altered stakeholder
need, without major cost implications.
As an example, the Pressure Waste Water projects described above that have been placed ‘on
hold’ have been accommodated by re-scheduling and back-filling work-load to the affected
teams to maintain the programme work schedule. This was achieved during 2013 with minimal
time and cost penalties that would arise from conventional commercial arrangements. The
delays have however incurred costs in 2014 as more work has been placed on hold
necessitating crew stand-downs.
3.3.8
Funding requirements and availability are balanced to set the annual cash flow of SCIRT,
including seasonal variances. This is an important factor in the SCIRT production line,
enabling prioritisation, design, cost estimation and construction schedules to be arranged to
deliver monthly through-puts and seasonal capabilities within the annual appropriation.
17
The Value of SCIRT
3.3.9
Progress to Date
With the preceding items substantially in place, the following data shows the status of work
achieved to date, demonstrating that the organisation was on track to meet the scheduled
programme delivery until the impacts of recent projects on hold impacted planning and
deployment:
Figure 8 SCIRT Monthly Spend and Prediction
Figure 9 Construction Progress by Asset Type
18
The Value of SCIRT
Figure 10 Construction Progress Data
3.3.10
Maintain Delivery Capability
In a similar manner to the funding focus, SCIRT plans, monitors and reviews all the segments
of the project production line to ensure they have demand matched to capacity, whilst having
output matched to the need of the next phase in the line and ultimately, to the needs of the
construction teams. The resource-capability processes are conventional, but the SCIRT multiproject production line creates added demands on optimisation of resources.
3.3.11
Program Delivery Resources
Resources are continuously evaluated by management, delivery teams and parent companies
to reflect current and forecast work allocation. Lack of resources has not proven to be a
significant obstacle to date, with construction close to peak throughput.
However, demands from the vertical rebuild are being closely monitored, especially for labour.
3.3.12
The allocation of projects available for construction to Delivery Teams is based on a fullyfunctional two part process defined within the Procurement Plan using cost and non-cost
performance measures. The process is used to track and report inputs and results monthly,
allowing the reward of good performance with a greater proportion of the work performed.
3.4 Efficiency – Progressively Getting Better
3.4.1
There is no single mechanism to review the integrated team. However the elements of the high
performance culture explained in ‘Establishment’ have created an integrated team delivering
consistent volumes in all phases of the programme of work. The ‘Our Team’ Key Result Area
confirms the alignment of the team by providing data showing an environment of integration
and collaboration.
19
The Value of SCIRT
3.4.2
Asset Assessment Process
The Asset Assessment task has been significant with a forecast final cost in the order of
$140million, representing a higher than normal proportion of programme costs. This activity is
the first step in defining and quantifying both the damage incurred by the earthquakes and the
appropriate method of repair. It defines the scope of work to be delivered.
Because of the high cost of this activity, the Asset Assessment team has kept efficiency gains
as a central plank of its operations since inception. The drivers being:

The urgency to provide information to specific areas to enable projects to be defined

The need to assess wide areas to inform wider views of scale of work

Thinking ahead to appropriate perspectives on the state of assets and life-spans.
The resulting initiatives and achievements have been:

a Land Survey Specification created and progressively improved

a methodology for As-Built CCTV inspection of laid pipes simplifying, standardising and
speeding-up of this task

a methodology to assess reduction in asset life caused due to earthquake events

updating of the Guidelines to allow greater discretion to maximise life against observed
pipe structural defects

a process of As-Built data transfer directly into 12d Model (civil engineering design
software) for GIS updates (together with the designer and survey teams)

completion of the water leak detection programme, including implementation of a method
to apply an irrigation offset for the summer period
3.4.3
Asset Assessment Tools
New tools have been created, resulting in reduction of Asset Assessment cost and definition of
most effective and efficient design solutions:

a statistical pipe data assessment tool to predict likely damage and reduce the need for
expensive CCTV inspection

an integration tool for data transfer onto GIS platform achieving in order of 93% accuracy
for assessments

up-dating of CCC pipe flow modelling section, along with flow monitoring programme

progressive creation of an asset search programme to better inform design teams

inclusion of Level of Service approach in the Guidelines to maximise asset life as well as
the defect intervention points.
These are very significant achievements for the rebuild, with excellent potential for wider New
Zealand infrastructure utilisation.
3.4.4
Design
The design portion of the earned value analysis shows that designer output is delivering
reliably ahead of time and cost parameters.
20
The Value of SCIRT
Figure 11 Design Earned Value Analysis
The design function has been delivered through a 180-strong pool of Christchurch-based
designers seconded from 16 consultancies. These resources were grouped into four
competing teams, tasked with both concept and detailed design and working to clearly defined
timeframes. A strong outcomes-focussed culture was maintained through openly monitored
and reported performance against these times. A consistent delivery of documentation for $30$40million of completed construction value was achieved each month until 2014.
This consistent high levels of output, to schedule, has given dependability to down-stream
activities.
Individual initiatives have created improvements to process, such as

the pipe lining pre-approval processes to assess capabilities of specialist sub-contractors
and assist delivery teams in selections

joint development of the as-built data transfer system with Asset Assessment and GIS
teams to significantly simplify the production of completion documentation

driving of technical groups, creating standardisation and innovations

driving the whole process of alternative sewer catchment solutions, to achieve best-forpurpose outcomes
3.4.5
Price Setting Data
SCIRT Cost Estimators maintain a comprehensive database of materials, plant and labour
costs and productivity rate data, to inform the pricing process (described in section 4,
following). The data is used as inputs to the estimate building and the final estimate ratified by
the Independent Estimator.
The results of a 2014 external review of the process are expected shortly.
3.4.6
Monitor Delivery Costs
The Delivery teams, the Estimating team and the Independent Verifier all separately monitor
actual project outcomes, including material, labour and sub-contractor input costs and rates
achieved in the field.
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The Value of SCIRT
3.4.7
Monitor Delivery Performance
The Key Result Areas of the Agreement and the Key Performance Indicators created by the
Board and Management Team set the framework for monitoring project delivery performance in
non-cost areas (described in Section 6 following).
3.4.8
Project Handover
At completion of individual projects a conventional set of information and data is handed over to
CCC for its records. This is a demanding process for a programme of projects of this nature,
because the as-built construction and cost information needs to be attributed to individual
assets, down to such detail as single access chambers for buried pipes, or lengths of pipe
between two chambers.
That need, coupled with the initial inexperience of delivery site teams, has meant that the
process has been subject to a planned development process-flow design and documentation,
information transfer and data management tools, training, monitoring and reporting. The
SCIRT IST has created a team member position to give focus plus support resources to ensure
that the process runs fast and smoothly.
Particular incentive has been added to delivery teams by project completion being added to the
performance monitoring that informs the work allocation process and this has had positive
results. However the rate of handover of project data to CCC has not achieved the desired
levels as at July 2014.
3.4.9
Capability Improvements
SCIRT is an organisation focussed on delivery of outputs from a repetitive programme of
projects (648 to date), which means that continual improvements become a focus of individuals
and teams. This applies to each segment of the production line where training, idea sharing
and competition create a learning environment that improves skills.
The people involved will emerge from SCIRT with awareness and attitudes focussed on
improvements in capability of individuals and teams that will benefit home organisations. This
awareness is engendered through a three-monthly performance review conversation focussed
on development and growth of the SCIRT team members.
The nature of SCIRT therefore gives rise to capability improvements which are evidenced by
new ways of doing things, such as:

Asset assessment has found quicker, more reliable processes to give results, leading to
the Pipe Data Assessment Tool

Designers standardise methods, solutions and construction details

During design, delivery teams inform designers of best construction methods

Cost estimators focus on first principles understandings of construction methods and input
prices

Schedulers continually balance project flow with field capacity and budgeted cash flow

Delivery Teams drive projects to beat budgets to achieve challenging target estimates

Communications teams refine information processes and content to improve the
understanding of others

Human Resources team promote the Peak Performance Plan and monitor results

Commercial processes continually evolve and enhance output such as with the refinement
of GIS deployment, financial reporting and Earned Value Analysis and reporting

Delivery teams refine skills for predicting cash flow and out-turn cost.
22
The Value of SCIRT
It must be acknowledged however that each project is different and the geotechnical conditions
vary considerably across the city, and hence the challenges in the construction phase are
expected and arise. The SCIRT programme of projects and the production line that feeds it are
not dealing with a succession of common projects or issues. One size (solution) does not fit all.
3.4.10
Value Register
The Value Register is a feature within the Project Centre database project management system
used by SCIRT. It allows the capture and management of a variety of information including:

innovations (value propositions, initiatives or value-added achievements)

value engineering gains (from particular studies)

lessons learned (positive or not)

asset system improvements

safety initiatives

donations to the rebuild.
Register entries are managed to promote, monitor and report innovations as they advance from
initial ideas to working results.
3.4.11
Improvements to asset systems arise through numerous initiatives of SCIRT, beginning with
changes to and development of standard specifications and design details for construction and
from construction innovations that feed back into design. Such innovations and changes are
recorded in the Value Register.
3.4.12
Lifting Standards
The previous section ‘Raising Standards and Standardisation’ identified the key mechanisms
by which standards are lifted as part of SCIRT operations. This works in practice as witnessed
by the number of amended documents described in ‘Innovations’ (section 4.9) following.
3.4.13
Safety
SCIRT has a strong emphasis on safety and has created the following initiatives now used by
other programmes in the rebuild and external organisations including NZTA:

Drug and Alcohol policy

Minimum Personal Protective Equipment standards

Safety in Design procedure

Utility protection strategy

Incident reporting definitions
SCIRT has developed and promoted a set of Safety Values and has identified critical safety
risks at programme level (common to all sites) for safety promotion to all workers. Safety
performance is continually improving through:

Focus on critical risks

Establishment of ‘minimum conditions’ of performance for critical risks

Use of Key Result Area & Delivery Performance Scoring system to drive appropriate
behaviours

Conducting regular site safety visits by the Board, providing active visible leadership
23
The Value of SCIRT

Recognising and celebrating good performance with the Bill Perry award.
SCIRT management is active in the Canterbury Rebuild Senior Leaders’ Steering group, which
developed the Canterbury Rebuild Safety Charter - establishing ‘minimum conditions’ to be
utilised by all organisations that sign up to the Charter. The aim is to engage organisations
working across all elements of the Canterbury Rebuild. This forum is working closely with
Worksafe NZ, MBIE, ACC and Rebuild Programmes across Canterbury to deliver a Zero Harm
Rebuild.
The following graphs show SCIRT programme reporting data achieved in a 12-month rolling
average:
Figure 12 Monthly Injury Incidents
Note:

MTIFR - Medical Treatment Injury Frequency Rate

LTIFR - Lost Time Injury Frequency Rate

TRIFR - Total Recordable Injury (MTI and LTI)
(All Frequency Rates based on 1 million hours worked)
3.4.14
Environment and Heritage
A number of field initiatives have been established across the SCIRT programme:

waste going to landfill has been reduced to approximately 5%. This is due to a variety of
initiatives including; reusing spoil and materials on SCIRT sites, and on non-SCIRT sites,
designs that minimise the creation of waste, desktop assessment and risk based approach
to contaminated land waste

the contribution to knowledge of Christchurch’s early history has been significant via
archaeological findings and records

we have developed new systems and procedures for working with and beside
environmental issues including wastewater over-pumping and coal tar

preservation of community assets such as trees and heritage, through creation of simple
procedures for delivery staff

heritage maintenance has occurred from such as retaining wall construction materials

creation of environmental awareness training material that is used by SCIRT teams and
teams outside of SCIRT

Recognition of stand-out performance via the Environmental Super-Stars award.
24
The Value of SCIRT
3.4.15
Since SCIRT formed, a great deal of printed communication has been produced and a heavy
emphasis placed on engagement with people face to face. SCIRT has:

produced 3,391 unique work notices and delivered 841,123 to residences/businesses

had more than 18,343 face to face interactions with people affected by our work.

produced 170 e-newsletters and 2,932 tweets

consulted with communities about 92 separate projects

been mentioned in 509 media articles

organised 118 visits to schools to engage with students about our work

engaged with residents to enable the installation of 1452 pressure wastewater tanks on
privately owned properties.
The SCIRT communication team works hard to minimise duplication of effort by sharing
resources, thereby also ensuring consistency across projects and delivery teams. It also
collaborates regularly at public displays and other community events.
3.4.16
Community Satisfaction
Community satisfaction with SCIRT is assessed six-monthly by independent market research
specialists and the following results are extracted from the May 2014 report by Opinions Market
Research Ltd, with very similar results to November 2013. In particular:
Subject area of survey questions
Support
Level
Recognition of funders
65%
Awareness of SCIRT
70%
Visibility of Progress
89%
Priorities believed appropriate
49%
Acknowledged impact on road travel
93%
Ease of navigation past works
55%
Belief that road works are a part of progress
92%
Tidiness of sites
72%
Residents with works in their neighbourhood
59%
Satisfaction with communications
86%
Clarity of information received
83%
Acceptable standards and time frames (approx. sum)
60%
Very satisfied or satisfied with local works
77%
Belief that SCIRT works are value for money
69%
Figure 13 Table of Community Satisfaction Survey Data
The results confirm a high level of satisfaction both from residents in the neighbourhoods of
projects and in the wider community. Given that a large proportion of the community are
affected by works to some degree, this represents very significant achievement.
These results are particularly important because SCIRT operations in the community reflect
upon both Central and Local Government. The level of infrastructure rebuild acceptance and
support reflects well on those organisations.
25
The Value of SCIRT
4
Achieving the Right Price
4.1 Programme Estimate Commentary
In October 2012 SCIRT created its first iteration of a cost estimate for the programme, based on
current status of understanding of damage assessment and the damage-based client rebuild
guidelines. The estimate report to the Clients included that an amount of about $300 million could
be saved through incorporation of a number of initiatives delivered through a Level of Service
evaluation of rebuild instead of damage-based calculation.
SCIRT was instructed to adopt that approach and the resulting value of $2,496 million became the
Target Estimate for the SCIRT programme. This caused the design team to amend processes to
focus on restoration of the pre-September 2010 Network Level of Service as the outcome of
rebuild. This result must be achieved within the Target Estimate. At the end of 2013 the design
was tracking well to achieve that target, but the target is being re-set in the second half of 2014 as
a result of the 5 August 2014 client advice and will be defined by SCIRT and reported against
subsequently.
4.2 Project Estimate Target Out-turn Cost (TOC)
Target Out-turn Costs for individual projects are developed by experienced estimators working
within the Integrated Services Team using a first-principles approach methodology utilising
productivity rates and material cost inputs from a central estimating data base.
The estimates created are independently verified by a parallel process of estimation and any
differences are reconciled and agreed before the estimate becomes the project Target Out-turn
Cost (budget).
In projects completed in the early part of the programme budgets have proven difficult to achieve,
due in part to the very challenging ground conditions exacerbated by the seismic liquefaction, but
the delivery is improving over time and the over-run is trending down as shown in the next section.

The estimation of target out-turn costs is regarded as rigorous

The estimates created are regarded as reliable.
SCIRT is therefore confident that rebuild is being achieved for the right price.
4.3 TOC Review
During the early part of 2014 the HIGG commissioned independent consultants MorrisonLow and
Evans and Peck to review the SCIRT procedures of both the Estimating (TOC) team and the
independent verifier team. It was intended to confirm whether generation of the cost estimate for
each project follows appropriate processes and delivers relevant TOC (Target Out-turn Costs),
including construction methodologies. It was to provide advice on areas where improvement could
be made. The brief contained more than twenty specific requests.
The review was completed in July 2014 and the comprehensive final report was issued in October
2014. The report repeatedly describes SCIRT systems and processes as sound, reliable, best
practice and completely appropriate. It recommended no changes.
The report conclusions included (paraphrased):

the process is appropriate for the nature of the projects being undertaken
26
The Value of SCIRT

the Estimating and Risk Management plans, Estimating Guidelines, ECI and TOC processes
provide procedural detail which is consistent with the requirements of the Alliance Agreement

there is multi-disciplined input into risk assessments

there is very good interaction between the designers and the ECI input

the ECI deliverables are emphasised as key inputs to inform the TOC setting process

assessment and pricing of risks is both efficient and consistent with the principles of an alliance

the ECI process and TOC creation is transparent and robust … business as usual

the Independent Estimator team participate throughout

the involvement (of all players) on behalf of the owners is proficiently and professionally executed

the TOC setting process is robust

it provides multi-disciplined input into identifying and mitigating risk and refinement of construction
methodology.

the transparent agreed risk contingency….is entirely consistent with best practice

no changes are recommended to the TOC setting process.
This report is a confirmation of an important element of SCIRT that can now be regarded as fit for
purpose.
4.4 Actual Out-turn Costs
The Actual Out-turn costs from active or completed projects over the last twelve months of
assessment show a trend to a lessening over-run of budget. At a project level delivery teams are
now consistently obtaining actual results better than target.
The target of the programme is to achieve an aggregated zero over-run on completion (or better).
4.5 Forecast Final Costs
4.5.1
Programme Costs
The programme target estimate and costs expended to date are monitored monthly, as is the
current forecast final cost including escalation and risk at project level within the target out-turn
cost, but not including any provision for residual risk for projects in concept or detailed design.
The programme cost prediction includes a current estimate of all projects in all phases, i.e.
from 100% price certainty (completed projects), to projects with large uncertainly (concept
design).
While currently predicting a final position slightly under target estimate, the unstated risk in
delivery (i.e. for projects still in concept design) is still significant, and has potential to impact
the final programme result.
Note that programme costs will be significantly modified by whatever emerges by the
programme review following the 5 August 2014 client advice. It is expected that design costs
will increase somewhat as a % of programme.
SCIRT has informally compared its cost structure with other larger-scale projects or
programmes in New Zealand and Australia and the proportion of spend in delivery is highest of
the sample. This is despite the high cost of asset assessment. This is another element
demonstrating that the SCIRT model is most appropriate for the rebuild task and that it is an
efficiently run organisation.
27
The Value of SCIRT
4.6 Independent Estimate Review
Bond Construction Management provides independent review of a variety of cost and site
performance information to inform the generation of independent estimates of project construction
cost for each of the 400+ projects processed to date, with monthly reports furnished to the Clients.
This process is described within the preceding section 3.1, ‘Establishment’.
4.7 Independent Audit
WT Partnership provides the Owner Participants with independent verification of actual costs
incurred each month across the programme, as detailed in the basis of compensation. It also
reconciles the monthly claim amount to the SCIRT Invoices and checks cost allocation to asset at
handover.
4.8 Earned Value
Earned Value Analysis is a process or discipline for assessment of the true time and cost
performance state of individual projects and the summed programme compared to ‘baseline’
forecasts. It has been in place in SCIRT since June 2013. The tool is mature in data gathering
and processing and delivering reliable information. If the reader is not familiar with the concept it
is summarily described in Appendix A and should be referred to before continuing with this section
to ensure that terms and graphs are understood.
The SCIRT monthly earned value report includes the four major components of: Asset
Assessment, Design, Delivery (calculated as an aggregation of individual projects) and
Overheads, amalgamated into a single SCIRT programme view.
Figure 14 Programme Earned Value Analysis
This figure shows a budgeted cost that was assessed in March 2012 as a notional pattern of
expenditure. The current earned value report line is showing that a lower spend might be
achieved, and that delivery appears behind time schedule. However this whole-of-programme
prediction is has two important provisos that the notional spend pattern may be over-estimating the
rate of spend and the prediction will now need to be reassessed in the light of the August client
advice on work scope and total spend.
All earned value base-lines will be reviewed in coming weeks as part of the programme review.
28
The Value of SCIRT
The delivery portion of the earned value analysis shows a steadily improving Cost Performance
Index (CPI) and Schedule Performance Index (SPI) position until late last year. At that time a
decline commenced that coincided with client placement of projects on hold.
Figure 15 Delivery Earned Value Analysis
There is a decline in delivery schedule over recent months, consistent with the impact of projects
being placed on hold in design and construction. The planned programme review will re-set the
predictions of outputs that will be needed to achieve the new targets.
In addition to the overview shown in these examples, the earned value tool is providing important
analysis and reporting information into the programme at a project level, where site observations
must be of a high standard to feed the tool (and outliers are readily discernible) and to keep site
administration to a high standard.
4.9 Monitoring Prices / Containing Escalation
SCIRT maintains a database of input prices both to inform cost estimation and as a flag against
shifts in the market. Separately, the independent estimator monitors SCIRT and market cost data
to track performance against forecast escalation. The following sections demonstrate clearly that
SCIRT is containing costs to well below market conditions as described in Department of Statistics
indices, (which in turn are below previous Treasury forecasts of Canterbury price premiums).
SCIRT is achieving results under the market inflation rate prediction of the Independent Estimator.
4.9.1
SCIRT Observations
The following diagram shows SCIRT analysis of construction-industry-related published price
indices together with a structured mix of monitored project input costs to date. The result
shows that the market index has increased by about 1.7%p.a. while SCIRT costs have
increased very little.
29
The Value of SCIRT
Figure 16 SCIRT and Industry Prices
4.9.2
Independent Estimator Assumptions
A prediction of market inflation that might be encountered by the programme is carried out by
Bond Construction Management to inform SCIRT of its view of appropriate provisions for
market cost escalation. It is reviewed together with the joint six-monthly TOC review process.
Its July 2014 report of six-monthly investigations covered:

construction labour

salaried staff (contractors plus the SCIRT IST)

designer consultants’ salaried staff

plant

equipment and vehicles

trucking

materials general

pipes (PVC, PE, GRP)

quarry products

fuel and bitumen products

concrete products (pipes, manholes, bridge beams)

steel products.
4.10 Innovations
From the outset SCIRT has recognised that innovations will be an important part of delivering best
value. As a result, the encouragement and use of Innovative ideas and solutions is an active
feature throughout SCIRT, from business systems and processes to the more conventional areas
of design and construction.
4.10.1
Innovation Management
A management process is applied to innovations beginning with lodgement of an idea in the
Value Register in the Project Centre. The ideas are then progressed through stages of review,
refinement, trial, formal recognition and cost/benefit assessment before ‘Release’ for common
use.
30
The Value of SCIRT
The following graph shows monthly lodgements for the previous year and cumulative total. The
table shows developed ideas and values and the pie chart is a summary of construction
innovation source areas.
Figure 17 Innovations Received
The following table shows numbers of innovations were submitted and their initial estimated
benefit as well as the “Released” innovations for sharing throughout SCIRT and elsewhere and
their estimated benefit over the programme. Estimated values are very low at this point
because they exclude large scale items such as the SCIRT-instigated change to Level of
Service basis for rebuild (which alone reduced the estimated rebuild cost by $300milliion) and
other large-scale process reforms, such as the pipe damage assessment tool (initial
assessment shows a reduction in pipe damage observations that could have cost $50million if
done conventionally).
The verification of value is significantly lagging the lodgement process due to resource
constraints and work priorities.
Innovations Raised
Released for sharing
Estimated Value
Verified Value
550
463
$37.4 million
$15.7 million
The following diagram shows the types of value initiatives that have been raised by delivery
teams that have been reviewed and released for sharing.
Figure 18 Developed Innovations from Delivery Teams
31
The Value of SCIRT
4.11 Standards and Standardisation
As SCIRT design has advanced, new and standardised specifications, procedures and
construction detailing continue to be developed, reviewed and accepted. They will also be
useful for future use by Christchurch City Council and other local government or supply
authorities nationally and are therefore a subject within the Lessons Learned section at the end
of this report.
Work to date includes:

6 engineering specifications particular to SCIRT

65 Standard design details (many shared widely)

58 Designer Guidelines

Best Practice Guide

Construction guides.
4.12 Early Contractor Involvement
As identified in earlier sections of this document, Early Contractor Involvement (ECI) is a feature of
SCIRT project evolution, beginning with initial concept design where contractor input is sought to
identify particular hazards such as traffic management, resourcing and site management issues.
As design progresses contractor methodologies are developed and applied into the design to
ensure that innovative construction methodologies and design solutions are incorporated. The
knowledge gained and benefits generated are captured into the design of the works and therefore
inform the cost estimate, which is the project delivery budget.
Specific risk items may also be identified at this stage, enabling risk to be designed out or allowed
for in the project estimate, reducing any general risk contingency allowance.
Two independent assessments of the ECI process have been conducted at Board request and
indicate that the process is appropriate.
In addition to those reviews, the TOC team manager has studied project outcomes and found a
positive correlation between ECI and better project cost performance against TOC, to the order of
6% of TOC on average. There is also a positive correlation between well executed ECI and
reduced design or work scope change requests during construction.
5
Risk Management
5.1 Programme Risks
Risk management at a programme level is the responsibility of the SCIRT Management Team and
a risk register has been established with Board input and is reviewed annually with the Board,
quarterly by the team and monthly by each manager. The residual high risks are given focus by
the responsible manager and are reported in the Operational Report, as shown by the following
table. Mitigation actions against cause are agreed by the team and are in place and strategies for
actions following consequence have been developed by the team.
The register was last reviewed with the Board in March 2014 and any fresh Board concerns were
incorporated.
32
The Value of SCIRT
Highest Programme Risks (by sector)
Risk
Level
Mitigation Against Cause
Mitigation Following Consequence
Result
Level
Owner
High
Weekly Asset Owner operation Interface
meeting enabling good discussion and
decision making
Focus with HIMT on getting decisions
made.
High
Duncan
Very
High
Active programme for working with Scope &
Standards Sub-committee to action
opportunities
Focus with HIMT and clients to
release projects
High
Duncan
Inadequate build at handover
creating a legacy of future work
and costs for clients
High
Maintain focus on Level of Service across
networks with each project design.
Optimisation will not focus on restoring preEQ level of service, but agree a programme
of work to allow an estimate of Opex and
replacement by CCC for each network
Development of a post-Scirt hydraulic
model for the WW network will allow
CCC to understand the level of
consent noncompliance that is likely.
This will inform discussion on whether
or not the consents need review.
High
Steve
Funding issues, delay
Low
HIGG to manage
Working with HIMT to mitigate
High
Graeme
Disruption, delay, related costs
High
Central City Manager working closely with
CCDU, CCC, private developers, CTOC,
DT's to coordinate. Central decision making
group required!!
CCC have placed 'Hold' on 10 PWW
projects and several others are on
Hold re: RRZ. Have raised at HIGG
for action.
High
Duncan
Delay, loss of reputation
High
Seek Client
obligations
HIGG direction
High
Annemarie
Very
High
Quality focus in management planning
including terms of reference, early detection
and mitigation planning.
High
Dennis
Consequence of risk
1. SCOPE / STRATEGY / PRIORITISATION
1.2
Decisions by asset owners on scope
and standards not aligning with
schedule demands
delay in programme
increased cost
1.15
Inability to achieve Target Estimate
opportunities - insufficient scope
available to challenge, Asset Owners
'block' efforts to convert opportunities
target estimate not achieved
1.16
Network Level of Service not achieved
on completion of programme and all
money spent
and
2. FUNDING / BUDGET
2.17
Competition
Rationing
for
funds
–
Capital
3. STAKEHOLDER / COMMUNITY / POLITICAL
3.3
Political intervention
causing road block
into
Projects
3.5
Consultation obligations rather than
simple informing
7. TEAM STRUCTURE / SYSTEMS
RELATIONSHIPS / COMMUNICATION
7.16
Quality inadequacies
(CCC)
confirmation
re:
/
Errors and
inefficiencies
omissions
with
Figure 19 Table of Programme High Risks
33
The Value of SCIRT
5.2 Project Risks
Risks at a project level are identified progressively through the evolution of the project production
line by designers, delivery team ‘Early Contractor Involvement’ personnel or estimators. Cost
allowances for risks that are not designed out are included as appropriate in the Target Out-turn
Cost (the project budget). The risks and allowances are then owned and managed by the
construction team as part of project delivery responsibility.
5.3 Central City Risks
SCIRT work within the central city (inside the perimeter avenues) involves interaction with a
number of other work programmes and projects for infrastructure rebuild and new buildings. This
shared design and construction space creates risks for SCIRT that are identified and managed by
a dedicated risk management plan and shared with stakeholder organisations.
Several risks were identified from the outset, including:

Anchor projects public realm or road alignment proposals causing delays to the SCIRT
programme.

Parking restrictions imposed due to sites impacting on businesses and residents

Traffic access constraints causing network delays impacting the travelling public, operating
businesses and residents
These risks were managed successfully through a collaborative approach between SCIRT, CCDU
and CCC with management plans and agreed procedures. The Transport Optimisation
Management Plan used tools including SCIRT developed traffic models, the LINZ Forward Works
Viewer and the communication strategy for the travelling public. The Central City Delivery
Management Plan outlined best practice procedures to ensure construction minimised disruption
and consistency in standards.
Remaining risks include:

Utility Services programmes, Anchor Projects and East Frame, all with roading conflicts
and especially if full road rebuild is involved

Finalisation of Anchor Project public realm proposals in areas requiring SCIRT roading
repairs

Timing and delivery of SCIRT work before Accessible City streetscapes are carried out,
including complex logistics for such as Hospital Corner, closure of Oxford Terrace, Bus
Interchange and the Cricket World Cup in 2015

Accessible City and Avon River Precinct, especially for timing and delivery

demolitions

bridge repair programme and access constraints arising.
5.4 Client Risk Management
The Clients created a risk management plan and register in the latter part of 2012 with SCIRT
client representatives and management input. Opportunities therefore exist to share client
perspectives on risk, to inform the SCIRT programme risk management process.
34
The Value of SCIRT
6
Non-Cost Performance
6.1 KRAs and KPIs
The following five Key Result Areas (KRAs) were established during the finalisation of the alliance
agreement to reflect client subject areas of key concern. Key Performance Indicators (KPIs) were
developed by the Board and Management Team to provide measures to evaluate the performance
of the organisation for each Key Result Area. They were created with the intention of driving
behaviours required to deliver the outcomes desired from the rebuild by the client organisations.
KPIs have been developed to be lead indicators to drive behaviours that will lead to improvements
in performance. For example the Safety KPIs will drive behaviours through a focus on leading
indicators such as risk identification, workforce engagement and active visible leadership, which
will ultimately be identified by traditional lag indicators (section 3.4) as behaviours change.
KPIs are reviewed regularly by the Management Team to ensure they are delivering continuous
improvement in the performance. Potential modifications to KPIs are submitted for Board approval
for new KPIs to be effective from the start of each financial year, with adjustments developed to
drive increasing performance delivery.
Each of the following graphs shows a summed (normalised) product of Key Performance
Indicators. The ‘bars’ for achievement are Minimum Condition of Satisfaction (MCOS), Stretch’
(better than minimum) and ‘Outstanding’, which is regarded as a level well above expected
performance. New KPI measures approved by the Board for July instigation each year are
reflected in notional reductions in performance, but these are actually just a result of the imposition
of higher levels of measurement.
6.1.1
Safety
The results have been increased with Reported Near Misses that have increased significantly
since introduced as a KPI in July 2013 and therefore identification, processing and reporting
will be subject to future review.
35
The Value of SCIRT
6.1.2
Value
Steady improvements are being seen in the quality of construction audit process and in
construction value initiatives. However both of these have had new measure levels introduced
to ‘raise the bar’ of achievement (lower the numerical value of results). Separately, productivity
measures and results have largely stalled during the early part of 2014 due to the changing
nature of work introducing asset types not previously measured. Therefore the process has
been comprehensively reviewed and changed from July 2014 to capture labour-based
productivity on all types of work of any volume within projects.
6.1.3
Our Team
Note that Well-being Initiatives have steadily increased contribution since March 2013 whilst
other measures remain stable, representing a healthy environment and team culture.
6.1.4
Customer Satisfaction
Customer satisfaction levels have remained very good and the graph shows the July 2014
raising of measurement thresholds.
36
The Value of SCIRT
6.1.5
Environmental
Note that the reporting bands of all environmental components are subject to review to respond
to the need to re-calibrate and maintain a consistent focus on continuous improvements.
7
Risk/Reward Outcomes
7.1 Work Allocation Status
The project allocation process described in section 3.3.8 ‘Effectiveness’, was developed as a tool
for creating competition between construction Delivery Teams and has been running effectively for
18 months. The relative performance of each team is reported monthly for review by the SCIRT
Board and currently shows a 6% maximum spread between the five delivery teams, with the low of
15.4%, high of 21.4% and median at 20% (equal fifth share). The process has demonstrated a
competitive environment between construction delivery teams, resulting in a ‘continuous
improvement’ loop of results driving share.
7.2 Status of Pain/Gain
An element of the Commercial Framework is the sharing of cost under or over-run against each
project Target Out-turn Cost. The model provides for an equal split between Owner and NonOwner Participants, which is then adjusted by a multiplier to reflect the outcome of the KRA KPIs.
The final adjustment of remuneration will not be made until completion of the Programme.
The current ‘pain’ position reflects challenging project environments that delivery teams have been
working in. All teams have a natural focus on delivering below the Target Out-turn Cost calculated
by the SCIRT and Independent Verifier teams, because of their competitive nature within the
construction industry.
8
Governance and Assurance
8.1 Strategic Plan
The fundamental strategy of the rebuild has been set by the Owner Participants (client
organisations) as described previously. At time of writing there have been no governance or
assurance issues arising from SCIRT processes or activity that have been in conflict with the
strategy.
37
The Value of SCIRT
8.2 Client Governance
In 2013 the Owner Participants created a new structure to align policy and to inform governance of
both SCIRT and non-SCIRT rebuild programmes. The resulting HIGG meets monthly and the
SCIRT Board Chairman and General Manager attend to present a summary report to the meeting
(beginning from December 2013) and raise key issues for action or resolution.
This interface has been particularly important during the first six months of 2014 as the clients
reassessed the basis of definition of work scope and the total available funding, both related to the
2013 Cost Share Agreement between NZ Government and CCC.
A significant effort has also been invested by the parties in aligning the relationships between the
HIGG and the SCIRT Board.
8.3 Client Framework
A group named the Horizontal Infrastructure Management Team (HIMT) serves the HIGG in the
roles of secretariat and link between the Owner Participants’ management teams and SCIRT.
8.4 Client Value Framework
Appendix B shows the value reporting framework developed by client organisations during 2012.
During 2014 HIGG has informally advised an intention to revisit that document in the near future.
8.5 Programme Funding
A number of client initiatives during 2013 and early 2014 has led to the client advice of August
2014, identifying the limit of funding to the SCIRT programme and other rebuild activities of CCC.
The practical implications of this advice in design and construction standards, sequencing and
deployments is being developed by SCIRT with the intention of re-shaping the structure and
function of the organisation to deliver optimum results for the available funding.
8.6 Audits
SCIRT continues to be subject to a number of financial audits and reviews (varies, about 20 each
year) that are aimed at providing key stakeholders with assurance that programme management
processes are working and providing accurate financial information:

the Office of the Auditor General conducted a full review of SCIRT and issued its report to
Parliament in November 2013

CERA engaged Ernst and Young in 2012 to perform an audit to gain understanding of the claim
process and provide assurance around the total amounts claimed to date, which has become part
of a cycle

CERA carried out a desk-top audit of the Safety Management systems and H&S protocols in May
2014 and resulting opportunities for enhancement are either under way or in plan in June 2014

the Client Governance Group approved the Christchurch Infrastructure Rebuild Investment Audit
Framework and engaged NZTA in conjunction with PwC to perform a programme of reviews
covering a broad spectrum of SCIRT processes and activities. To date the following have been
completed and reported to the clients:

the apportionment of actual cost and overhead to total project cost

the process of allocating cost to the three Clients

verification of the claims process and flow of money through SCIRT
38
The Value of SCIRT

pain/gain reporting financial summary

the project prioritisation process.
Separate audits include:

PwC for delivery team claims processes

PwC creating a fraud awareness report (imminent July 2014)

Deloitte are engaged by the Joint Venture financial transaction vehicle to conduct a year-end
audit and an audit opinion of year end accounts

Inland Revenue Department conducted a review for Goods and Services Tax compliance and
confirmation of subcontract processes being in place.
Other recent audits have been conducted for which close-out remains outstanding, including:

PwC for project gateway processes

Independent review of the TOC process

CERA-MWH project option decision process

NZTA Inspection test process.
Taken together, all audits confirm that robust processes are in place and functioning, appropriate
for the rebuild programme.
8.7 Informing Stakeholders
SCIRT data management features a central data repository that is accessed and managed by
separate software according to need. This includes project asset identification and Geographical
Information Systems, time scheduling, cost management and financial management. Clients have
access to data through these systems and in particular:

asset information (current network, damage, rebuild design and as-built) via GIS

project Concept and Detailed Design reports via Project Centre

a variety of project and programme cost and progress reports via SCIRT reporting system (named
Hi-Viz)
The Client Governance Group engaged Price Waterhouse Coopers to review and recommend on
reporting data and metrics and three staged reports have been created. These confirmed the
value framework, recommended then confirmed the earned value reporting and made general
principle suggestions for further engagement.
9
Approvals and Compliance
9.1 Approvals
The approach taken to regulatory approvals has been to obtain global approvals for infrastructure
rebuild activities where possible. This is of particular value to SCIRT and the rebuild because it is a
simplification of process that reduces workload significantly and reduces time frames around
consenting generally. It adds certainty to the complex process of identifying, designing and
delivering the large number of SCIRT projects.
Some project specific approvals have been obtained where a global approval cannot be applied to
certain situations.
39
The Value of SCIRT
SCIRT teams currently work under 21 global consent approvals, and 9 project specific approvals,
from Environment Canterbury, Christchurch City Council, and New Zealand Historic Places Trust.
There may be additional approvals required in future depending on design decisions.
9.2 Compliance
Overall the SCIRT teams’ compliance with the relevant approvals and rules has been good, and
the relationship between SCIRT team members and regulatory compliance officers is open and
collaborative.
The key compliance challenges are:

raising the bar on safety performance in particular around sub-contractor management and safety
attitudes

ensuring appropriate involvement of an Arborist for compliance with tree consent

ensuring dewatering discharges meet the standards for discharge into surface waterways

eliminating construction related wastewater overflows to the rivers.
The key compliance strengths of the SCIRT teams are:

construction activities in and near waterways are being carried out in an environmentally sensitive
manner

working on potentially contaminated land, ensuring appropriate disposal and reporting

raising the standard of practise with respect to minimising risks of wastewater overflows to rivers.
10 Key Success Factors
As SCIRT work builds in volume and progresses into a more ‘steady state’ function, it is obvious that
there are a number of success factors that are emerging. These are identified below, without supporting
comment, to bring them to client attention as being worthy of note as features that could be ‘boxed for
export’ for use post-disaster in other areas of New Zealand or in other countries. These factors form part
of the broad objective of lifting the capability of the sector-wide workforce, but extend beyond that into
disaster recovery learning legacy, able to be used by other agencies or in other situations.
In summary terms they are:
10.1 SCIRT Functionality
10.1.1
Establishment Features

public and private partnership - enlisting resources

fast establishment - vital for post-disaster infrastructure rebuild

suite of management plans – creating the operational environment

business systems purpose-built from ground up managing a single data set
10.1.2
Process Features

an integrated production-line delivery of projects

asset assessment tools and processes

design process streamlining

collaboration and sharing within all segments
40
The Value of SCIRT

continual improvement focus across the programme

integrated reporting systems from the single data set
10.1.3
Construction Features

maintaining focus on safety

competitive tension between teams

raising performance in time, cost and quality

creating a collaborative environment through feedback features

utilising early contractor involvement in design with clear expectations of outcomes

training and up-skilling the workforce including smaller contractors

modelling and managing traffic

integrated communications releases

capturing and sharing good ideas and lessons learned
10.2 Transposition of the SCIRT model

the ‘process’ or working model – structure and functions

production line but parallel processes, addressing many work fronts

design team structure and functions

many tools

business systems

asset assessment suite

GIS suite
10.3 Transposition to CCC
A wide range of SCIRT systems, functions, and procedures are appropriate to transpose into the
CCC environment to enhance or add to asset management functions. This activity has begun with
the protocols and procedures developed for the project handover process and will continue into a
plan of engagement and instigation that is intended to be put in place in the latter half of 2014.
10.4 Industry Engagement
SCIRT has been approached by and now actively contributes its experience or learnings to wider
organisations within the engineering or construction industry in Canterbury and New Zealand.
10.4.1
Procurement Forum
The Ministry of Business, Innovation and Employment ran a procurement forum until 2014 that
over-viewed resource demand planning and procurement time-lines for Canterbury rebuild.
From the outset of this initiative, SCIRT has contributed its knowledge and projections of
labour, worker accommodation, plant and machinery and materials demands for its programme
of work.
In May 2014 the forum transitioned into a CERA commercial support group to facilitate
coordination and performance monitoring of the public sector rebuild programme of work. The
main purpose of the group being to identify and remove barriers to delivery of projects, through
the sharing of ideas, experience and best practice. While SCIRT is excluded from any
41
The Value of SCIRT
reporting requirements, it is a participant in the monthly meetings to share data and
experiences with the public sector entities.
10.4.2
Safety Forum
SCIRT has played an active role in the formation of the ‘Canterbury Rebuild Senior Leaders
Steering Group’, which is a formal convening of construction industry organisations, with
Worksafe NZ, MBIE and ACC, to address safety issues across all programmes. The Forum
has generated a Vision statement, launched the ten commitments of the Safety Charter and
formed Leadership, Performance and communications working groups. SCIRT has created a
performance assessment tool to help industry benchmark their standards.
The SCIRT General Manager chairs the Performance working group.
10.4.3
Training Initiatives and Programmes
After identifying Human Resources as a critical need for the success of the programme, SCIRT
worked with the Infrastructure Industry Training Organisation (IITO) to:

establish a SCIRT Short-Course training programme (funded by the Tertiary Education
Commission) for Site Safe, Cable Location, Spotter Training, Slinging and Lifting, Reading
and interpreting plans, Concrete Saw and Loader operation.

develop industry competencies for Introductory Labourer, Excavator Operator, Loader
Operator, Roller Operator, which shape the training resources from IITO for wider industry
use

produce new Infrastructure Works Level 2 Training Resource

establish Terms of Reference with the Civil Infrastructure Trades Regime to support and
trial the civil trades training programme

trial new training resources and tools.
SCIRT provides one-to-one training, the majority of recipients carrying on to NZQA
qualifications.
SCIRT created a major initiative called “FOR REAL” to meet its objective of building capability
and to address the risk of resource scarcity. The scheme is designed to fast-track potential new
apprentices into the workforce and offered successful candidates free training, New Zealand
Qualifications Authority qualifications, off-job training in a polytech environment and then
continued on-the-job training with a SCIRT workplace tutors.
Over 2,500 expressions of interest were processed, over 600 candidates were referred to the
Canterbury Skills Hub and over 150 were introduced to Civil Infrastructure Training.
The initiative has been successful in having filled available SCIRT demand to December 2013.
10.4.4
2014 Training Update
SCIRT has been working to develop up-skilled resources for the programme across all levels.
This is in order to develop the workforce and also to mitigate the risk of skills gaps during the
programme. SCIRT has also worked with a range of stakeholders to leave a legacy of
improved training tools for the industry. Some key projects that have added value are:

Assisting the Civil Industry Training Organisation Connexis to develop training resources
that will form part of programme to achieve a newly established Civil trade certification. To
date that has resulted in the development of two revisions of the entry level labourer and
the skilled plant operator qualifications.

SCIRT has provided ongoing support and transitioning to new entrants to the industry
through the FOR REAL campaign and has promoted their ongoing training with their
42
The Value of SCIRT
employers. SCIRT has worked with Connexis to support the filming of a ‘Just the Job’ TV
episode to showcase work as a Civil Engineer.

As of July 2014 - 4,286 places on SCIRT short courses have been filled. These short
courses up-skill the workforce in specific technical areas and in safety. Short courses
include: Service Location, Reading Plans, Spotter, Slinging and Lifting, Concrete Saw and
Small Tools. These courses are provided at no cost for the training to participant
companies within the SCIRT programme. On Job Trainers have assessed over 800 NZQA
Unit Standards and have to date assisted 45 team members complete their national
qualification and are working with 93 others to that end.

SCIRT has fostered collaboration between the Non Owner participants to provide best
value training solutions such as the sharing of a Project Management Cost Control
Training Package between Delivery Teams circumventing the need for external training.

SCIRT has collated, developed and utilised material that allows for a shared industry view
of competence for field team members and has delivered training to this material on site if
loaders, excavators, other plant as well as for concrete saw. Some of this material is being
explored by owner participants such as the NZTA for wider usage.
10.4.5
New Zealand Society of Earthquake Engineers
NZSEE requested a keynote presentation by SCIRT to the Annual Conference in Wellington in
April 2013 and this was provided by the Value Manager and well received.
10.4.6
New Zealand Lifelines Forum
The Lifelines Committee requested a presentation to describe the formation and status of
SCIRT to the Annual conference in November 2013 and this was provided by the Value
Manager.
10.5 Recognition – Awards
SCIRT has been recognised with a number of industry awards since inception demonstrating that
the organisation is performing well in the eyes of the bodies involved. This success is raising
awareness of the programme in the wider community, nationally and overseas.
The recognition includes the following:
10.5.1
esri - Special Achievement in GIS
The esri Special Achievement in GIS Award is an annual international award given to
organisations that have used GIS ‘to improve our world and that set new precedents
throughout the GIS community’. The award is given to around 150 organisations a year out of
esri client pool of 350,000 and in 2012 SCIRT was the only New Zealand recipient.
The citation stated:
‘Business Problem Solved
The team has built a centralised spatial database system of all the project's horizontal
infrastructure data including utilities (power, gas, telco), planning, cadastral, topographic, and
environmental data. It is also reading web feature services from partner rebuild agencies such
as Christchurch City Council and the Canterbury Earthquake Recovery Authority (CERA) to
provide a powerful online tool for various activities across the city.
The system also delivers the following:

spatial connections to data workflows for asset conditional assessment work being carried
out across the city
43
The Value of SCIRT

data modelling to build a citywide complex Multi Criteria Analysis (MCA) tool to prioritise
assets against value and dependence

integrate asset valuation information

build a spatial-based project database to manage assets within project areas
Spatial project reporting.’
10.5.2
12d Model - Software
12D Model is a software database used in civil engineering design. The 2012 inaugural
International Innovations Award Gold Medal was won by SCIRT, against competition from over
60 countries, for its innovative use and adaptations in all design functions including surveying,
drainage and road design.
In 2014 the SCIRT users won gold awards in each of the customisation and the drainage
categories (of four awards in total).
10.5.3
Environmental – NZ Planning Institute
SCIRT was a recipient with Environment Canterbury of the New Zealand Planning Institute
2013 Best Practice Award for a Collaborative Approach to a Global Consent Framework. The
citation explains:
“…….With up to 150 work sites open ….(and)…..the additional complexity of extensive and ongoing investigations ...presented a unique opportunity to develop a consistent consenting
framework for a suite of global consents for typical construction-related activities…..(which)
….provided a unique environment for the five SCIRT delivery teams to work together to ‘raise
the bar’ in complying with these global consents, developing a risk-based management plan
approach and developing innovative tools and techniques to address the challenges.
These solutions enabled the physical works to be carried out in an environmentally sound
manner, while not slowing down the recovery with undue regulatory barriers, meaning the
planning solutions have provided value for money for the people of Christchurch. These
innovations are likely to leave a lasting legacy in the environmental and construction space.”
10.5.4
Champion Canterbury Business Awards
SCIRT’s contributions to the Canterbury rebuild received official recognition at the Champion
Canterbury Business Awards in early October 2013 when it won not only the Infrastructure
Award but also the Press Supreme Award for medium to large businesses.
Leeann Watson, general manager, Canterbury Employers’ Chamber of Commerce,
congratulated everyone working for SCIRT on the double achievement. “This is a huge honour
for an organisation that has only been in the market place for a short time,” she said. “The
Champion Canterbury Awards are all about recognising and rewarding business success. This
was our eleventh year in running what is now known and regarded as the largest business
awards in New Zealand. SCIRT was one entry from more than 120 entrants and 46 finalists.
“SCIRT was recognised for taking a well-planned, strategic, collaborative approach to their part
in the rebuild. You have built a big organisation, going new places in a short time frame –
exactly what our city needs.“
10.5.5
Brunel Medal
In October 2013 SCIRT was awarded the prestigious Brunel Medal from the Institution of Civil
Engineers (ICE - United Kingdom). The Institution cites: “The purpose of this award is to
recognise valuable service or achievement, which has been rendered to or within the civil
44
The Value of SCIRT
engineering industry.
Eligibility includes all grades of membership, local authorities,
contractors, firms of consulting engineers, educationalists and any person or organisation
connected with the civil engineering profession, with particular consideration being given to
teams which include chartered / incorporated engineers and engineering technicians.”
In awarding the Brunel Medal to SCIRT, the Institution noted: “This project highlights the scale
of the task and the number of people involved, showing outstanding teamwork and
collaboration. This was a natural disaster of great magnitude and shows the dedication to a
project of immense scale. It has placed civil engineering in the forefront of people's minds.”
ICE President Barry Clarke presented the medal while visiting New Zealand. He noted that
SCIRT provided an excellent foundation for collaboration in all areas. “SCIRT’s work is
outstanding and I am delighted the team has been awarded the Brunel Medal,” he said.
10.5.6
Brunel International Lecture
Early in 2014 SCIRT General Manager Duncan Gibb was awarded the prestigious Brunel
International Lecture by the Institute of Civil Engineers. He created and gave the inaugural
delivery in London in June 2014 and will follow that by an international programme extending to
the end of 2015. His chosen theme is ‘Collectively we are stronger – Engineers delivering
collaborative solutions to strengthen community resilience post-disaster’.
The messages involved have been well received and will undoubtedly lead to wider recognition
of the features of SCIRT that can be transposed into other arenas in New Zealand and
internationally.
10.5.7
NZ Engineering Excellence Awards
In November 2013 SCIRT was finalist in all categories applied for in the New Zealand
Engineering Excellence Awards, run by the Institute of Professional Engineers New Zealand.
These were: Community Engagement (Communications and Stakeholder Management
Team), ‘ICEET’ (Geographical Information Systems team), Water and Waste (the whole of
SCIRT) and two of three ‘Young Engineer of the Year’ finalists.
SCIRT won the Excellence in Community Engagement award in recognition of the extensive
community engagement that is keeping it informed and involved.
10.5.8
Public Relations Institute of NZ (PRINZ) Awards
SCIRT was highly commended in the category of Sustained Public Relations, ‘Setting a new
benchmark for post-disaster recovery communication’.
10.6 Recognition – International Interest
10.6.1
Earthquake Engineering Research Institute
The Earthquake Engineering Research Institute is a United Nations, World Bank and European
Union funded body that has sent a team to visit Christchurch in 2013 and 2014. They have
spent time at SCIRT hearing presentations from several members of the management team
and visiting pipe-laying and retaining wall sites. Their interest is strong their on-going intention
is to learn more of the SCIRT agreement, data management and GIS system design and
functionality.
45
The Value of SCIRT
10.6.2
NZ and International Lifelines and World Bank Visits
Following the Lifelines Committee Forum in November 2013, SCIRT continues to contribute to
the International Lifelines forum headed by the American Society of Civil Engineers’ Technical
Council on Lifeline Earthquake Engineering (TCLEE). This involvement is expected to continue
into the 2015 conference planned in Rome, Italy, and beyond. The interrogation to date has
been centred on the overall function of SCIRT and the use of Levels of Service to be used in
asset management and definition of scope of rebuild. The Rome conference expectation is
centred on the latter.
11 Learning Legacy
11.1 Material
Lessons learned from SCIRT arise across all areas of its activity and may be generated from
organisational overview or from business systems, methods, specifications or construction. The
identification and reporting of these learnings is coming from within SCIRT in many forms, and
from a variety of external studies or observations, predominantly from academia, in New Zealand
and internationally.
11.2 Management
The University of Canterbury Quake Centre project-manages the processes from overall strategy
created jointly with SCIRT management, through the creation of a structured collection, storage
and dissemination plan, facility and process. The items are initially being identified from the Value
Register, or external sources, transferred to a legacy register and finalised using standard forms,
suitable for transfer to the archive. A dedicated SCIRT resource has been in place since early
2014 to drive item retrieval, documentation and recording. Delivery Teams also have dedicated
resources to capture ‘value initiatives’, measured for them under the Value Key Result Area,
Innovations Key Performance Indicator.
The University of Canterbury CEISMIC digital library has defined the structure and function of
archive and retrieval process and is set up to host information. The archive is expected to become
active from early 2015 and continue into the future as a source of information backed up by
National Archives of NZ. A web interface is planned for creation later in 2014 and will incorporate
features to satisfy needs identified by an audience analysis created through Quake Centre.
11.3 Dissemination
It is expected that the legacy material will be accessed on-line but that the presence or content will
also be publicised to a variety of industry and governmental agencies through papers presented at
seminars and conferences. Inquiries for contributions to these avenues are coming to SCIRT
during 2014 for events later that year and through 2015.
11.4 Other Earthquake Rebuild Learning Legacy
The whole process and systems created by SCIRT has been offered to other rebuild principals
through initial discussion, which will be followed up with more formal dissemination as SCIRT
material becomes stored and accessible. It is anticipated that the SCIRT process and facility will
be simply replicated, with appropriate common or separate branding, for the other agencies. Initial
interest was shown by the other organisations.
46
The Value of SCIRT
(blank page)
47
A
Appendix A The Formation and Structure of SCIRT
Contents
1
THE CASE FOR A SPECIAL DELIVERY VEHICLE ....................................... 49
1.1
1.2
Introduction ........................................................................................... 49
Post-Disaster Infrastructure Rebuild ...................................................... 49
1.2.1
Alliance Advantages ............................................................................... 50
1.2.2
International Experience ........................................................................ 50
2
SCIRT ESTABLISHMENT .............................................................................. 51
3
CONVENTIONAL ALLIANCE VALUE FRAMEWORKS .................................. 51
3.1
Report Structure .................................................................................... 52
4
SCIRT SITUATION BY COMPARISON .......................................................... 53
5
SCIRT FORMATION ...................................................................................... 54
5.1
5.2
5.3
5.4
5.5
5.6
6
5.1.1
The Nature of Damage and Rebuild ...................................................... 54
5.1.2
SCIRT Role ............................................................................................ 54
5.1.3
Value Framework ................................................................................... 54
SCIRT Fundamentals ............................................................................ 55
5.2.1
The Delivery Model ................................................................................ 55
5.2.2
The Production Line ............................................................................... 55
5.2.3
The Structure of SCIRT .......................................................................... 56
The Benefits Arising .............................................................................. 57
Alternative Delivery Models ................................................................... 58
Commercial Arrangement ...................................................................... 58
5.5.1
Costs and Fees ...................................................................................... 58
5.5.2
Project Allocation .................................................................................... 60
Benefits of the Commercial Arrangement .............................................. 60
VALUE STRUCTURE ..................................................................................... 61
6.1
6.2
7
Damage and Rebuild ............................................................................. 54
Specific Value Measures ....................................................................... 62
Earned Value Analysis .......................................................................... 62
SUMMARY ..................................................................................................... 64
48
1
The Case for a Special Delivery Vehicle
1.1 Introduction
This appendix sets out a summary explanation of the Stronger Christchurch Infrastructure Rebuild
Team (SCIRT) from inception to date. It describes the factors leading up to its establishment, its
purpose, structure, functions and achievements, with particular emphasis on the value that SCIRT
brings to the rebuild of Christchurch.
The process of formation and the resulting structure of SCIRT differ from conventional alliance
contracts in key ways and these are highlighted. The value proposition of SCIRT therefore also
differs from conventional project delivery and this is explained. This document therefore is
intended to inform stakeholders and interested parties on the value framework under SCIRT’s
control and to provide data for client reporting.
It is intended that achievements will continue to be reported to the SCIRT Board and stakeholders
regularly in future. It is also intended that this document will be developed into a summary in
electronic format on SCIRT’s data observation system so that the reader can follow links between
descriptions and current data reports in subjects of interest. This feature is expected to be
available later this year.
The set-out of data reports in later sections of this document relate to a conventional alliance value
framework, as modified to reflect the SCIRT situation. The achievements are also shown against
reporting measures that have been requested by the Client Governance Group, which is the body
that coordinates the focus of the three owner participants in the rebuild activities of Christchurch
including for SCIRT. The reporting content will be extended with additional data as appropriate in
the future.
1.2 Post-Disaster Infrastructure Rebuild
Following the September 2010 earthquake an initial response to the repair and rebuild of the
damaged infrastructure was begun by the Christchurch City Council (CCC) using collaborative
working relationships with five contractors. Those agreements were designed to achieve quick
response, using local resources, coordinated with other authorities in the region, utilising contract
and relationship management practices to achieve quality, cost and performance to deliver value
for money. At the time of the February 2011 earthquake the organisations were variously
advanced in design and had commenced construction on some sites.
After the February 2011 event the amount of damage increased significantly in intensity and scale
across the city and both Central and Local government bodies reflected on the challenges posed
by large scale delivery using the existing contracts and determined that a different approach was
required for the rebuild. Government sought advice from New Zealand Transport Agency (NZTA)
and accordingly NZTA with CCC staff recommended that a city-wide alliance be developed jointly
by the Clients, using those contractors already engaged under the head contractor model.
The Report to Council is reproduced in Appendix D. It and the Minister of Transport’s cabinet
paper are important foundations to the evolution of SCIRT and begin the definition of the value
framework.
49
1.2.1
Alliance Advantages
An alliance delivery model was considered to give significant advantages to the Christchurch
rebuild that can be summarised as follows:

post-disaster speed of establishment and output

shared responsibilities with alignment of objectives ensuring focus on delivery of outcomes
rather than protection of contractual rights and obligations

availability of resources and control over them

resource management commitment whilst retaining flexibility of deployment and scale of
undertaking

simplicity of decision-making framework from a single client/delivery team entity working to
achieve common goals and objectives

clarity of reporting structure

programme of projects approach, creating adaptability throughout all phases of work

flexibility of commercial framework suiting
o work scope uncertainty
o ability to adapt scale to variable needs
o ability to change focus and direction
o delivery on many available work fronts
o collaboration with other rebuild programmes
o uncertainty of environment (especially with regard to earthquake risk)

resource focus and management – project and programme-wide

management of risk within uncertain scope

delivery on both cost and non-cost objectives

quality control process implicit in operations including business systems, design,
documentation, cost management, construction and handover

innovation encouragement and capture

sharing of learning and up-skilling of industry

value focus.
Any of these factors might be available to some extent in alternative project delivery models
such as early contractor involvement, managing contractor, or design and construct delivery,
but many are absent to the same degree and therefore the chosen alliance delivery model was
argued to give the most appropriate range of benefits.
1.2.2
International Experience
Joint research by University of Auckland and University of Canterbury of international
experience of post disaster response and rebuild delivery methods gives strong pointers for the
appropriate rebuild of Christchurch infrastructure. The local disaster has many similarities with
international experience and the key elements identified from the research closely align with
the above set of advantages of alliance delivery.
The research findings are summarised in the document in Appendix C ‘International PostDisaster Rebuild Mechanisms’. It should be noted that SCIRT meets every one of ‘the ten
characteristics that are favoured in large-scale post-disaster reconstruction’ as listed in that
document.
50
2
SCIRT Establishment
In the context of an urgent response to a crisis situation, the relationship contracting format was selected,
driven by an alliance commercial arrangement. Once the alliance model was accepted by Cabinet and
Council, a process of engagement was commenced, with invitation, offer and selection process, leading
to a team of public and private organisations, formed under an initial agreement.
The parties to the alliance became the client organisations Canterbury Earthquake Recovery Authority
(CERA), Christchurch City Council (CCC), and New Zealand Transport Authority (NZTA), joined with civil
engineering construction companies City Care, Downer, Fletcher Construction, Fulton Hogan and
McConnell Dowell under an alliance commercial framework to form the delivery vehicle for the rebuild.
The resulting organisation is known as the Stronger Christchurch Infrastructure Rebuild Team - SCIRT.
The initial agreement set a four month time frame for finalising the agreement. It charged the
participants with creating an integrated and collaborative team to deliver prescribed services, within high
performance teamwork, innovative thinking, transformational leadership and high performance culture.
The initial agreement set the foundations of structure, working relations and outputs that were to continue
into the final agreement and therefore into SCIRT operations.
There is a value framework implicit in the agreements that relates to the advantages identified above,
and more factors that have been established since. These arose from the initial submissions to Cabinet
and Council, the Alliance Agreement through the commercial framework and the “Objectives” (Appendix
B) defining the required programme outcomes. There are other conventional elements to the framework
that might be expected in other alliance contracts. The framework is explained in following sections,
beginning with a reflection on a conventional alliance establishment and structure.
3
Conventional Alliance Value Frameworks
When government agencies engage in alliance contracts there is a relatively consistent hierarchical
process involved that can be summarised as follows, drawn from the Australian Federal Government
Department of Infrastructure and Transport publication ‘National Alliance Contracting Guidelines –
Guidance Note 4 – Reporting Value for Money Outcomes’ (identified in Appendix C).
Each of the steps in the process involves value considerations that are carried forward into the project in
a variety of ways:
Government At the highest level, government choses between competing proposals to set budgets
for project funding. It receives proposals from various agency sources that are in effect competing for
funds based on merit. When choosing between the proposals Government uses value considerations to
identify service benefits from the project, as defined in the business case for each, against the various
funding requirements.
51
Agencies
The project proposals are created by government agencies to address government
priorities with an implied value framework, based on value comparisons between differing schemes and
differing methods of delivery for any scheme, normally expressed within a business case for the project.
Project delivery using alliance agreements is an option that typically has added benefits if particular
difficulties exist with conventional delivery, such as with uncertainty of scope and risk, where there is
limited industry capacity to provide services (limited competition), or with unusual technical challenges.
The agency presents a business case having used value considerations to assess and compare differing
projects that will meet value criteria and to select from options for delivery of the best project.
Approved Projects
If the government approved project is to be delivered utilising an alliance
relationship delivery model then it is subject to a structured range of value considerations for its creation
and in its operation. Creating the value framework begins with establishing the best form of the alliance
and selection of proponents continues into project delivery decisions (concept then detail design options)
and ends in specifications and standards for quality and cost.
The following diagram illustrates the structure outlined above and the value areas underlying:
Government
(Budget)
Agency
(Proposal)
POLICIES
(SERVICE LEVELS)
BUSINESS CASE
Govt
Values
SELECTION PROCESS
Vehicle
(Alliance)
ECONOMY
Delivery Model
EFFECTIVENESS
EFFICIENCY
Project
Values
Project Inputs
Conventional Project Value Foundations
The on-going delivery by the alliance identifies value measures accumulated from each phase in the
project establishment and applies these to process and methods to ensure that appropriate outcomes
are achieved for the agencies and the government.
3.1 Report Structure
The above process is explained in more detail in the Australian Federal Government publication. This
report is structured to reflect that process as closely as possible, tailored to the post-disaster rebuild
particulars of the SCIRT situation.
52
4
SCIRT Situation by Comparison
The SCIRT situation is significantly different to the conventional sequence of events described
above, as the services to be delivered are of a disaster response nature rather than a long-term
planning process.
Government faced the need to support a region that had been severely impacted by earthquakes
and which needed prompt response and action at a large scale. Primary considerations were
centred on community support and reinstatement of services with added resilience. These
influences are described within a broader explanation of recovery in the CERA document
‘Recovery Strategy for Greater Christchurch’
Additionally, the three Agencies involved in SCIRT represent both central and local government.
They joined in a determination to act quickly to establish an appropriate rebuild vehicle. An
alliance had obvious advantages of quick capture of available resources and of bringing collective
and relevant experience to the task at hand. The agency efforts were centred on a form of
agreement that incorporated natural strengths for value delivery.
As described above, the value framework definition began from the outset of SCIRT
establishment, through generation of the Agreement. It continued through the subsequent actions
of board members providing client representation and advice together with interaction with
management team efforts, leading to the current framework described herein and within the
SCIRT Value Management Plan. The resulting framework is the basis of the reporting that follows.
The following diagram illustrates the value foundations of SCIRT in a form similar to the preceding
diagram for conventional projects so that the inherent client relationship is highlighted.
Government
NZTA
POLICIES
(SERVICE LEVELS)
CERA
CCC
Client Values
Agencies &
Council
Client
Governance
Group
Committees
Strategy
Funding
Scope & Standards
Communications
Board
ESTABLISHMENT
Programme
Values
ECONOMY
Management
EFFECTIVENESS
EFFICIENCY
Delivery Teams
SCIRT Programme Value Foundations
The Client Governance Group during 2012 has created a list of value reporting metrics as a
framework to inform the agency bodies. This is reproduced in Appendix C as ‘Value for Money
Performance Metrics Report’. The data from this report is intended to inform applicable
components of those metrics. It should also be noted that the 2012 PwC reports ‘Horizontal
53
Infrastructure Rebuild Value Reporting Metrics Review – Stage 1 & 2’ has presented a number of
recommendations and these have been taken into account in preparing this report.
5
SCIRT Formation
5.1 Damage and Rebuild
5.1.1
The Nature of Damage and Rebuild
The earthquakes of September 2010 & February, June and December 2011 in Christchurch,
New Zealand, resulted in significant damage to the built infrastructure and in particular to the
horizontal infrastructure of water supply, waste water, stormwater and roading systems,
including bridges and associated structures. The cost attributable to that damage is significant
in human and material terms and the impacts will be felt throughout New Zealand for many
years.
The rebuild of the horizontal infrastructure following such damage is a vital component in the
recovery of the region, for several reasons. The most fundamental of these is that
infrastructure is essential to the functioning of a city and therefore the situation of continued risk
of seismic activity dictates that rebuild must be completed as soon as practicable and using
resilient systems to resist future earthquakes. That resilient infrastructure will then provide a
lead to re-development of the city and help drive recovery through generation of security and
confidence across the community.
5.1.2
SCIRT Role
SCIRT was established as the delivery vehicle for the client organisations to achieve the
infrastructure rebuild objectives, given the large but poorly-defined scale of damage and
uncertain seismic risk.
The founding agreement that binds the parties of SCIRT charges the organisation with
addressing or achieving a range of tasks in its work including demonstration of long-run value.
This is equal to safety, which is expressed as Zero Harm. Value is therefore a subject of
specific focus in SCIRT throughout its life, building on the value creation of its establishment,
together with value from the chosen delivery and commercial models.
5.1.3
Value Framework
The case for SCIRT value processes and outcomes can be structured into a framework of four
tiers. The first of which being the formation and function of SCIRT, the remaining three being
the classical measures of value delivery:
Establishment – this is the inherent value arising from creating an organisation specifically to
promptly deliver post-disaster rebuild
Economy – which in the context of SCIRT, translates into doing the right work as identified by
high-level strategic thinking
Effectiveness – being a tactical focus of delivery of the right work in the right order and the
right time-frames. That is a prioritised sequence of work, to best serve the community,
recognising earthquake hazards. This has included

a transition phase, reacting to immediate demand (to first quarter 2012)

the long run, time-line prioritised, schedule of works.
54
Efficiency – which is a focus on continual improvement, including procurement, capital and
operating cost optimisation and productivity gains.
5.2 SCIRT Fundamentals
5.2.1
The Delivery Model
A major challenge in responding to a natural disaster is ensuring the interests of those
immediately impacted are balanced with social, economic and environmental considerations, to
name a few. Whilst the immediate emergency response phase would typically place a higher
priority on the return of essential services over economic value, the following phase of recovery
needs to address the delivery of economic value as a priority.
SCIRT is structured to deliver value for the people of Christchurch and New Zealand from its
speed of establishment and response, its delivery capacity, commercial model and numerous
lower-level attributes as described following.
The SCIRT disaster response is reasonably conventional in that systems and services need
prompt repair and replacement, however there are a number of complications that elevate the
demands of infrastructure rebuild to a higher level. These include that the scope of the rebuild
cannot be precisely defined because the assets are below ground, in a damaged state and not
easily observed. An additional consideration is that the rebuilt infrastructure needs to be made
more resilient so that subsequent earthquakes do not repeat the damage. This involves design
input and option evaluations. These factors mean that the business case financial definitions
and value monetary measures of conventional rebuild project/programme are not applicable or
cannot be achieved.
The form of delivery adopted is through a programme of projects to allow a progressive
advance of repair across the city on many fronts. This suits both the spread-out nature of the
assets and the variable intensity of rebuild which changes over areas of differing ground
conditions, shaking intensities and fragility of assets.
5.2.2
The Production Line
SCIRT therefore identifies damage as the initial part of its work, defines and prioritises projects,
carries out concept then detailed design (project by project), estimates cost (with independent
review), constructs the projects and hands them over to the asset owners. The rebuild is
therefore a programme of projects, defined, designed and constructed. This is illustrated in the
following diagram as a production line.
55
Client
Inputs
Asset
Assessment
Project
Definition
Project
Prioritisation
Concept
Design
Detailed
Design
Cost
Estimation
Construction
Hand Over
COMMUNICATIONS - Informing stakeholders
SCIRT Programme of Works Process
5.2.3
The Structure of SCIRT
The structure of SCIRT has three distinct components

a Board for strategic and operational direction, comprising one member from each client
and contractor organisation

an Integrated Service Team of managers and staff creating a high performance team
culture

delivery teams from each of the construction organisations, competing for work on the
basis of performance and delivering by a variety of engagements with market suppliers or
subcontractors and own resources.
The overall structure is shown in the following diagram:
56
The People of Christchurch and New Zealand
Local Government
CCC
Central Government
CERA
City Care
Downer
Fletcher
Fulton Hogan
MacDow
NZTA
Client Governance Group
(Owner Participants)
Non-Owner
Participants
Board
Management Team
Independent
Verifiers and
Auditors
City Care
Integrated Services Team
Downer
Fletcher
Fulton
Hogan
CCC
Staff
Board
&&
Consultants
Management
MacDow
Sub-Contractors and Suppliers
Delivery Teams
in the Field
SCIRT
SCIRT Organisational Structure
5.3 The Benefits Arising
SCIRT Integrated Service Team under one roof combined with a best practice programme
management approach brings several benefits

a repeatable project delivery process (identified in the previous section)

integrated services team co-location optimising management efficiency and enabling sharing of
best practice and supporting innovation

early contractor involvement to inform designers and estimators of best constructability options,
beginning at concept design and continuing until Target Out-turn Cost estimation

independent verification of cost estimation for each project before being released as a project
budget

independent audit of commercial transactions in an ‘open book’ environment

staff for all these functions being drawn as a mix from all the participant organisations together
with designers hired from local consulting practices co-located into a single office environment
enabling rapid formation of the organisation.
Separation of the delivery component allows

delivery teams to manage construction using their own resources and systems, but with
competitive tension between the teams vying for project allocation based on project performance
cost and non-cost measures
57

delivery team self-performance of safety, quality, cost management, completion and hand-over of
construction

price competition to achieve an Actual Out-turn Cost for each project at or better than the Target
Out-turn Costs that have been set by SCIRT and subject to independent verification to ensure
market competitive pricing

specific requirements for priority to utilise local resources

delivery of quality outcomes assured through ‘ISO’ accredited quality systems.
The practical outcome of these arrangements sees immediate benefits for the programme of

fast establishment of SCIRT into a completely functional organisation

the sharing of ideas, experience and innovations across the whole organisation

inherent drive for the raising of standards (continuous improvement)

constructability advice provided to designers for all projects

design and documentation standardisation

construction optimisation and on-going productivity improvement

optimised utilisation of local resources.
5.4 Alternative Delivery Models
SCIRT creates key advantages in addition to those of standard alliance arrangements over
conventional delivery of construction work that were described in Clause 2.2.1 Alliance
Advantages
the delivery of the whole scope of work is carried out by parallel process for investigations, design,
costing and construction, greatly shortening time frames
The high performance culture creates consistency in approach to work, whilst colocation facilitates
sharing of ideas, experience and innovation. This in turn leads to raising of standards and
conscious standardisation to minimise design and documentation effort
resource management is a progressive process shared across the organisation in parallel with
design, construction and cost estimation
project cost estimation is separate from the delivery process and is independently verified to give
delivery teams and the Clients confidence of the budgets created.
the competitive focus on achievements and performance by the delivery teams is rewarded by
work allocation and therefore the benefits from better results flow immediately to the overall work
programme.
5.5 Commercial Arrangement
5.5.1
Costs and Fees
The commercial arrangement of SCIRT is described as a cost reimbursement with
performance-incentivised fee and includes the following components

all participants are reimbursed costs for staff and expenses contributed to the IST and for
agreed overheads

the Non-Owner Participants (NOPs) are paid for actual construction and site administration
costs
58

the Non-Owner Participants (NOPs) are paid a corporate overhead and profit fee as a
percentage mark-up on work delivered. This was negotiated during the establishment
phase and represents a lower return than similar business-as-usual fees

the fee is aggregated across all NOPs

the fee amount is modified by the amount of pain/gain difference between targeted and
actual cost of delivery, with the balance of pain or gain shared 50/50 with the Owner
Participants

the share of pain/gain is further modified to a limit of ±10% by a score outcome from noncost key performance indicator measures

the fee is allocated to NOPs on the basis of the percentage of work delivered by each
team, measured by cumulative Target Out-turn Cost (not the actual out-turn cost).
The following diagram illustrates the fee structure (identified as ‘Limbs’):
SCIRT Fee Structure
59
5.5.2
Project Allocation
Project allocation is a foundation element in the commercial model driving value outcomes.
The amount of work allocated to a team is based on a set of performance measures of
completed work and therefore teams need to perform well to gain more work and maximise fee
income to their organisation. The performance review is carried out quarterly. This process
creates added delivery performance tension.
SCIRT Project Allocation Process
5.6 Benefits of the Commercial Arrangement
The commercial arrangement creates a number of drivers to behaviours

competition between delivery teams to increase the share of work for any team (and therefore
the fee income to be received), which gives focus on performance

the work-share allocation mechanism in turn drives improvement through performance measures
in areas of time, cost, quality etc

the pain/gain share drives best cost outcomes on each project

the pain/gain share spread across all delivery teams also drives support for each other with
ideas and advice to minimise the likelihood of loss-making jobs because losses are shared by
all, creating delivery collaboration

the performance factor modifier on the pain/gain share encourages delivery teams to provide
outstanding outcomes in areas identified by the owner participants as important (environment,
human relations/team-work, customer satisfaction and value)

these measures combine to ensure that all teams perform to their best to secure a larger share
of the work, to deliver it for best cost and to perform well on each project.
These benefits are a combination of those from conventional alliance models with the added
benefit from the competitive tension elements. SCIRT is a unique development of the ‘pure’
alliance commercial model in that it aligns commercial drivers with high performance objectives to
deliver mutually agreed outcomes. SCIRT has overlain convention with competitive tension without
upsetting the fundamental outcome-focus drivers.
The overall effect is a positive impact of continually giving incentive to raise performance of
delivery teams, both as separate entities and in shared support with the resulting benefit to client
organisations.
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6
Value Structure
It has been described in the previous sections that value from the SCIRT organisation arises from
its initial establishment and its on-going functionality. The value can also be explained against the
conventional value measures of performance against economy, effectiveness and efficiency. The
following diagrams show those under-lying subjects and lists particular aspects of SCIRT work that
will deliver value in each subject. The illustration presents the structure as foundation layers of
value from the initial establishment and the on-going focus on system and output economy,
effectiveness and efficiencies:
VALUE FOUNDATIONS
ESTABLISHMENT
ECONOMY
EFFECTIVENESS
EFFICIENCY
SCIRT Value Structure
The initial establishment and on-going functionality from which SCIRT delivers value can be
described by the following list of items:
THE BASE LAYER
ESTABLISHMENT
Central + Local government + private enterprise
Relationship contract - alliance
Prompt and expedient establishment
Delivery programme best fit
Full utilisation of resources
Open book accounting
Separate delivery teams with competitive tension
Cost reimbursement + fees adjustable on performance
High performance culture
Raising standards + standardisation
Independent verification of cost estimation
SCIRT Value Structure – Establishment
The conventional value elements then overlay this base as described by the many following items:
61
THE THREE VALUE ‘Es’
ESTABLISHMENT
ECONOMY
EFFECTIVENESS
Strategic Plan – client supplied
EFFICIENCY
Strategic Review – provided for clients
Rebuild Plan(s) – client supplied
Strategic decision conformance
Price Setting Data
Monitor Delivery Prices
- coordination of effort
Design Cost
KPI Design Quality
KPI Delivery Performance **
Risk Management (Program) – a process
*Maintain Delivery Capability (as at left)
Focus on Owner Needs – a process
KPI Recognise Innovations
Program Delivery Resources * - a system to
Site Observations
monitor and control
Community Satisfaction - polled
**Capability Improvements (linked to above)
KPI Construction Quality
Lessons Learned
Value Engineering Register
SCIRT Value Structure - The Three Value 'E's
6.1 Specific Value Measures
The preceding diagrams presented a number of components of value, many of which can be
measured to define the value that SCIRT will deliver. Added to these are specific measures that
have been generated by the Board and management

the value Key Result Area of the SCIRT agreement, that has Key Performance Indicators of
o
productivity gains, measured on key site performance elements identified in each Target
Out-turn Cost
o
quality observations on project designs and construction
o
innovations from design and construction
o
traffic impact monitoring

(Note that the achievements against these measures impact the work allocated to delivery
teams)

the programme cash flow for a 12 month horizon must be achieved to ±1.5% (reviewed quarterly
and at the completion of each financial year period).
6.2 Earned Value Analysis
Earned Value Analysis is a process or discipline for assessment of the true state of a project
against its time and cost delivery objectives. It is a valuable tool to identify whether a project is
ahead or behind objectives and to predict the likely time frame to complete the work and the likely
cost over or under-run.
SCIRT has not included Earned Value Analysis in business systems at this stage for the primary
reason that work in the field has only now reached the end of the transition from the ‘emergency
response reactive’ projects that are non-typical work and begun the ‘long-run value’ phase of the
programme.
62
However SCIRT has commenced development of detailed Earned Value Analysis with the initial
emphasis focused on project delivery. The first data collection will occur with March 2013 monthly
returns from delivery teams and will encompass some one-hundred projects. The process will be
extended in May 2013 to incorporate asset assessment, design and overheads, ultimately
enabling SCIRT to report an aggregate position for the entire programme.
The time frame of three months of lead-in is anticipated to be needed to complete training of
delivery teams, to prove analytical process and to establish consistent outputs across all sectors.
It is intended that the reporting will be used to confirm forecasts, will show aggregation of activities
across the programme and will show trends over time. The following sample graphs show two
intended presentation formats of earned value trend analysis that SCIRT will commence to report
against from 1 July 2013.
Earned Value Trend Analysis
63
Earned Value Trend Analysis – Variances
7
Summary
The formation and structure of SCIRT and its commercial model has created an organisation with
a strong focus and capacity to deliver value. In addition to this, a range of processes are in place
built on that foundation, to keep a focus on behaviours that will create on-going improvement.
These processes generate a large variety of data that is reported monthly and quarterly together
with written advice for more subjective overview. The progressive review and feedback from this
information will maintain an organisation that remains focussed on delivering value through its
work and on ‘lifting the game’ of the industry.
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65
B
Appendix B Australian Value Reporting Guidance Note 4
The link below is direct to the Australian Federal Government Department of Infrastructure and Transport
publication ‘National Alliance Contracting Guidelines – Guidance Note 4 – Reporting Value for Money
Outcomes’, illustrated below.
That document sets out the basic structure followed by this report and is regarded as best practice for
value reporting available in Australia and New Zealand.
Go to: http://www.infrastructure.gov.au/infrastructure/nacg/files/NACG_GN4.pdf
66
(blank page)
67
C
Appendix C Alliance Agreement Objectives
The following is an extract from the final Alliance Agreement of September 2011:
1.3
1.3.1
Objectives
The Alliance objectives are to:
a)
Lift the zero harm performance of all Alliance Participants on the project to industry best practice in
NZ:
i)
Total Reportable Injury Frequency Rate (TRIFR) 10 per 1,000,000 man hours worked, 12
months rolling average.
ii)
Zero Department of Labour infringement, prohibition or improvement notices issued;
iii)
Zero environmental infringement notices issued.
b) Demonstrate best long run value for money and demonstrate environmental responsibility:
i)
Maintain a cost database in relation to Work under the Alliance which demonstrates
increasing productivity and resource utilization as the work progresses;
ii)
Undertake work by matching capability to the scale and complexity of the work;
iii)
Provide a key reference for construction costs for the total rebuild effort across
Christchurch;
iv)
Reduce and recycle to eliminate waste.
c)
Maintain an open and honest dialogue with all residents over the rebuild effort:
i)
Work to ensure messages to communities are co-ordinated with other rebuild efforts (e.g.
housing);
ii)
Be proactive with communication and make it face to face where possible;
iii)
Do what we say we will do;
iv)
Communicate in simple language.
d) Maintain high levels of customer service in the rebuild effort;
i)
Plan he work so when we go in we do it once, do it quickly and do it well;
ii)
Build rapport with affected residents and go the extra mile where required;
iii)
Present ourselves as tidy and professional and be conscious of the impact our work has on
residents going about their normal day to day lives;
iv)
Coordinate all works to minimise disruption to the customer.
e)
Establish for all residents, an interim level of service for water, wastewater, stormwater and roading
within six months;
i)
Make urgent and temporary reconnection of services a priority as this will improve quality
of life and increase confidence in the rebuild effort;
ii)
Keep people in their houses where practically possible to increase wellbeing and take
pressure off other infrastructure;
iii)
Acknowledge that this means there will be some additional cost if subsequently houses are
retired or rebuilt
f)
Quickly protect the environment and reduce future health hazards:
i)
Stop pumping raw sewerage into the Avon and Heathcote Rivers within four months;
ii)
Rehabilitate the environment and clean up all residual waste within 12 months;
iii)
Minimise further health hazards due to a winter lift in the water table.
68
g)
Do the right thing, at the right time to the right standard every time. Complete the rebuild effort to
prescribed standards with minimal rework:
I)
Complete the rebuild work in accordance with the network and facilities rebuild strategy;
ii)
Undertake the work in the correct priority order to achieve best value for money whilst
minimising the impact on the community
iii)
Incorporate innovations and greater resistance to withstand subsequent seismic events;
iv)
Ensure whole life performance of new assets meets industry asset management standards.
h) Return the built assets to the Christchurch City Council (CCC) with proof they will be more resilient
than they were before;
I)
Clearly articulate long term asset performance;
ii)
Comply with appropriate infrastructure design standards;
iii)
Hand over asset information and operations manuals in relation to the Alliance Works
which set a benchmark for New Zealand;
iv)
Accept a defects period of one ear minimum for each Project.
i)
Incorporate ideas currently not known;
I)
Work hard on innovations at all levels;
ii)
Break down unsustainable cost structures on assets or services to ensure CCC has the
lowest whole of life cost structures moving into the future;
iii)
Disseminate all new ideas to all infrastructure providers throughout New Zealand.
j)
Co-ordinate the work with others doing rebuild work:
i)
Establish a forum to share planning efforts;
ii)
Co-ordinate work within areas to avoid excessive disruption;
iii)
Adjust priorities to ensure co-ordinated work is undertaken;
iv)
Maximise use of underground trenches and/or trenchless technology to accommodate all
services.
k)
Rebuild Christchurch ensuring the infrastructure sector maintain a sustainable market condition;
i)
Establish the lowest cost structures to the rebuild effort;
ii)
Maximise the use of local resources to deliver the work provided those resources can be
obtained at prices and on terms that are competitive with similar resources available from
elsewhere;
iii)
Maintain appropriate systems to ensure and prove the market is sustainable.
l)
Purposefully lift the capability of the sector wide workforce:
i)
Return CCC embedded resources back to the CCC as more capable than when they went in;
ii)
Lift the capacity of all sub-contractors;
iii)
Establish greater capability for current specialist infrastructure activities;
iv)
Do something meaningful to reduce the level of unemployment in Christchurch;
v)
Target delivering a new wave of skilled resources into the market.
69
Appendix D Client Governance Group – Value for Money
Performance Metrics
D
The following table has been created at the request of the client management team leader to show the
Client Governance Group list of value items and expectation of reporting, with commentary to identify
SCIRT provision of report or otherwise.
CLIENT EXPECTATIONS
REPORT ORIGIN
SCIRT REPORT LINK
Economy
Whole of life cost (NPV) for each asset type
CCC
Not applicable
Materials, plant and labour index
Bond CM
Resource management plan
SCIRT Board report
(SCIRT also collecting)
Value Report
Clause 5.2.1
Effectiveness
Operating costs (maintaining services)
CCC(quarterly)
Delivering core Level of Service (LoS) for recovery
CCC (quarterly)
CERA (quarterly)
LoS returned (back to ‘as at 30 June 2010’)
CCC (quarterly)
Improve community and business resilience
CERA (quarterly)
Economic Recovery Index
CERA (quarterly)
Efficiency
Earned Value
(actual outputs) on time and to budget (actual spend)
SCIRT Board report
% of completion of the overall programme
SCIRT Board report
% of overheads as a proportion of total costs
SCIRT Board report
Average unit cost by km of pipe or
square meters of tarmac
SCIRT Board report
Quality based on measure of rework
SCIRT Board report
Compliance with Infrastructure Rebuild Technical
Guidelines
Spot peer reviews by
CERA (weekly)
Level of programme safety
SCIRT Board report
Pain/Gain outcomes for SCIRT contractors
SCIRT Board report
Value Report Clause
4.2.6 (to commence in
July 2013)
Operational Report
Appendix 1 Item 1.5
Operational Report
Appendix 9 Item 9.1
Asset
based
cost
reporting will be available
in
project
handover
documentation
Value Report
Clause 5.3.1
Operational Report
Appendix 2
Value Report
Clause 4.5.1
It should be noted that the PwC report ‘Horizontal Infrastructure Rebuild Value Reporting Metrics
Review – Stage 1’ makes a number of recommendations to the Client Governance Group
concerning these metrics and SCIRT data required to inform them.
70
(blank page)
71
E
Appendix E International Post-Disaster Rebuild Mechanisms
72
73
74
(blank page)
75
F
Appendix F CCC Report
Refer overleaf for a reproduction of the CCC report ‘Reinstating Infrastructure in Christchurch’
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The Value of SCIRT - Stronger Christchurch Infrastructure Rebuild

Transcription

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