White Associates Director - Justin Maritz

The Next Decade of Procurement

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Director Justin Maritz calls for efficient procurement strategies on his 10-year anniversary.

This month we celebrate Director Justin Maritz, our fifth employee to reach a decade of service.

 

Having initially joined White Associates as a Senior Cost Planner in 2013, Justin has been a Director for the last four years. A self-described generalist, he is currently involved in the leadership of three of our four divisions – Pre Contract, Post Contract and Advisory Services.

 

Justin has weathered his fair share of market ups and downs over the last ten years, and has seen firsthand the benefits of collaboration during the procurement process. Looking ahead to the next decade, he believes efficient procurement strategies will be key to navigating changing market conditions successfully.

 

“What I want to see in future is a well-considered competitive market. Well designed, well procured and well contracted.”

With New Zealand currently in a recession, we are seeing a shift from the previously perceived environment of minimal competition. Overall contractor and subcontractor capacity is coming back into the market as larger projects are completed and newer projects are slower to start.

 

This increased competition may cause some negative flow-on effects. Tough economic times mean tough decisions will be made, and the market may make commercial decisions in order to win work. But Justin remains cautious of this approach: “You want a value for money offer that gives certainty of successful project outcomes. We should always be dubious about abnormally low tenders, especially at this stage of the market cycle.”

 

Good procurement benefits all stakeholders of a construction contract, but this needs to be considered on a project-specific basis. Contract terms and conditions should be as realistic as possible, and not favour one party at the expense of the other. “To achieve a fair outcome, terms and conditions should reflect each project’s individual risk profile and specific requirements,” Justin says. “In order to achieve efficient management of risk, this should be allocated to the party best suited to manage it.”

 

Project stakeholders should also carefully consider advice for alternative or non-standard procurement strategies. Justin continues to favour traditional procurement approaches wherever possible: “Let’s challenge our thinking when asked to head down a pathway of hybrid procurement to ensure it delivers the best possible project outcomes.”

 

This article was contributed by Justin Maritz and Gemma Christall.

 

Procurement Advice

If you require procurement advice for your project, please feel free to contact our Advisory Division leads.

Jesse Conradie - Associate Director

Newly Promoted Associate Director Jesse-Paul Conradie, Advisory Division

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Jesse looks forward to continuing to promote a culture of dispute avoidance in his new role.

In 2019 we announced that Jesse-Paul Conradie had joined White Associates, bringing a powerful combination of risk management, dispute avoidance and dispute resolution expertise to our team.

 

Over the past four and a half years, Jesse has applied his unique skill set across White Associates’ wide spread of projects. “My passion has always been in dealing with contractual matters,” he says.

 

Jesse’s prior background in South Africa in various commercial management type roles has helped inform his current Advisory approach. “My responsibility was to protect the company’s contractual rights and interests. Dealing with a variety of challenges helped me gain an in-depth knowledge of EOT and prolongation claims, avoiding and resolving disputes, and negotiating with clients. My experience as arbitrator motivates me to approach contentious matters differently and seek amicable solutions to arrive at reasonable outcomes.”

 

In recognition of the value Jesse has added to the company and its clients, he has been promoted to Associate Director.

 

Director Justin Maritz describes Jesse’s promotion as a logical move, and common sense from a business point of view. “Jesse’s passion and ability to navigate complex contractual matters has an obvious synergy with the growth of our Advisory team. I look forward to continuing to grow the Advisory Division alongside him,” Justin says.

 

Excited for the future of the Advisory Division, Jesse says its primary focus will be to add value to the industry by promoting a culture of dispute avoidance. “This approach will be beneficial to all stakeholders by protecting relationships, spending less time and money on lengthy dispute resolution procedures, and shaping a better environment for the industry as a whole.

 

“We are confident that our contractual experience in both the construction and consulting arenas enables us to provide balanced advice and solutions. This approach reduces formal legal involvement.”

 

White Associates looks forward to our Advisory Division supporting your current and future projects.

 

From Cadet to Graduate and Beyond: Adam Harris

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Adam Harris joined White Associates in February last year as part of our cadet programme. Our fifth cadet in the four years that White Associates’ cadet programme has been running, Adam has been working three days a week in our Auckland office while he finishes off his final year of university studies at Unitec. The cadet programme is designed to equip future quantity surveyors with the skills and experience required to kickstart their careers.

“I am studying a Bachelor of Construction majoring in Construction Economics, which is pretty much quantity surveying,” he says. “I took construction at school and took a liking to it. They taught us the basics of the construction industry, and I’ve always enjoyed maths. So, from there the two combined to lead me towards the world of quantity surveying.”

While in his first year at Unitec, Adam undertook what he describes as ‘a very extensive Google search through the construction companies’ to find QS firms that might be the place for him to start his career. “I looked up White Associates, and I was engaged by how client-driven they are, how it’s all about being fair in the construction industry. That really caught my eye. I didn’t even see the cadet programme opportunity, I just happened to apply at the right time.

Then I got the email saying that I was accepted. It was quite exciting.”

It is good news that although the world of work is undeniably different to life as a student, Adam’s early view marries up with his experience now he is established in the White Associates team. “School life is very different to work, but I am enjoying it. The main thing we talk about here is being fair. It’s about making sure that the contract is being administered in a way where everyone is following the contract correctly, and it’s a good team vibe.”

Over the last six months, Adam has taken on work on his own vertical built demolition project, doing site visits and making recommendations. “The main thing I have found about the construction industry is the importance of relationships. Being able to communicate with the contractor and client without feeling nervous about it, having open communication gets the desired outcome for everyone. The White Associates team and the contractor have been welcoming and supportive to me.”

One thing Adam has found helpful along the way is meeting a number of other previous cadets at White Associates. “When I first arrived, we had a session in the first week with previous cadets, Corize and Olivia. We discussed how the cadet programme works, what they’ve enjoyed about it, and any challenges. It was good to learn from them, and I am still enjoying learning every day. There are so many experienced people around our office that are willing to help you out. The learning opportunities have been great, and on top of that it’s been good while I was at uni because the cadetship gives you lots of flexibility. It’s not a set three days a week; it can be whatever suits your timetable, obviously through talking with the management team. That’s good when stress gets high if you’ve got some exams coming, and I do have exams coming up!

“I’m excited to see a project from the start to the end, which would be quite useful for my growth as well. I like the fact that White Associates has such a broad range of projects; it’s interesting to see a whole lot of different projects, especially early on in my career. I’ve really been exposed to pretty much everything.

“My first project in the construction industry, something to really look forward to.”

A cityscape from below

Updated Retentions Regime – What compliance requirements will project funders impose?

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In this brief, we discuss this question and how changes to the retention moneys regime provide increased insolvency security and enforced accountability.

A Pivotal Time to Increase Subcontractor Protection 

In today’s market, we see an increasing number of liquidations within the construction sector. It is therefore crucial to ensure that all contracting parties have sufficient security in place to mitigate risks, and are reciprocally releasing securities once the other party fulfils its contractual obligations. Mismanagement of security releases puts undue pressure on cash flow and risks a domino effect which in some instances culminate in liquidation.

The recent amendment of the Construction Contracts Act 2002 (“CCA”) brings a welcome and timely change to the retention money regime. It increases and enforces the accountability of the Head Contractor to hold and report retention money correctly, in a way that reduces Subcontractors’ exposure. 

A sizeable percentage of projects are funded by banks and/or other financial institutions. The question arises whether funders will impose additional compliance obligations upon borrowers. 

Key changes to the CCA are as follows: 

 

Issues with the Original Act 

Retention money, as between Head Contractors and Subcontractors, can be defined as a portion of payment that Head Contractors can choose to withhold from specialist tradespeople for up to 12 months. Retention money provides the Head Contractor with security if work is not completed to standard and incentivises Subcontractors to perform their defects remediation obligations. 

Under the current retentions provisions of the CCA, retention money can be intermingled with other company money or assets. However, the misappropriation of retention money as working capital has proven to be problematic. Subcontractors “are often the first to miss out in the event a construction company becomes insolvent,” says Hon Dr Megan Woods, Minister for Building and Construction. Subcontractors usually have no visibility of how their retention money is being held or used. 

The Construction Contracts (Retention Money) Amendment Act 2023 (“the Amendment”) addresses both issues.

 

Commencement Date and Applicable Contracts 

The Amendment will come into effect from 5 October 2023, and will apply to all new or renewed commercial construction contracts where retention money provisions are included. 

We note that the holding of retention moneys against Subcontractors remains a choice, not a legal requirement. 

 

Requirement to Hold Retention Money Safely 

Under the Amendment, Head Contractors will need to hold retentions on trust in a separate bank account or complying instrument. This trust is automatically created when an amount falls within section 18B’s definition of ‘retention money’. The bank account, or other instrument, must be ‘compliant’ as outlined in section 18E, and Head Contractors must inform their bank or account holder upon deposit that there is retention money being held on trust.

 

The only instances where retention money usage is permitted: 

  • To cover the value of defects requiring remediation, in which case the Head Contractor is required to provide written notice to the Subcontractor, minimum 10 days before use, outlining the details of such defects; 
  • As permitted by the contract, in which case the relevant contractual procedures need to be followed. 

 

A trust containing retention money will end when any of the following occur: 

  • The Subcontractor receives payment of the retention money; 
  • The Subcontractor releases the Head Contractor of such payment in writing; 
  • The retention money is used to remedy defects as above; 
  • The retention money otherwise ceases to become payable to the Subcontractor. 

 

Retention money may be held for multiple parties in the same trust account. If a deposit or withdrawal cannot be clearly attributed to a party, the amount deposited or withdrawn will be apportioned according to each party’s ledger record balances at the time it was made. 

Interest on retention money can be kept by the party holding it, providing the contract does not say otherwise. 

Notably, liquidators and receivers for all liquidations and receiverships commencing after 5 October 2023 will immediately become trustees of retention money, regardless of the contract commencement date.

 

Enforcement of Accountability 

One of the most significant changes in the Amendment is that it substantially increases the level of accountability. 

It is now a requirement for the Head Contractor to keep thorough accounting records of all retention money held and provide detailed information to the Subcontractor. This provision of information must be done as soon as possible after an amount is deemed ‘retention money,’ and at minimum every three (3) months thereafter until the retention money is released. The extent of reporting requirements can be found in Section 18FD, which includes:

  • The bank account holding the retention money; 
  • The applicable construction contract; 
  • Details of any account transactions. 

 

The Amendment also introduces several strict non-compliance penalties. These include:

Failing to Keep or Use Retention Money as Prescribed: 

  • Directors: Up to $50,000 NZD (New Zealand Dollars) for each offence; 
  • Companies: Up to $200,000 NZD for each offence; 
  • Intentionally providing false information about retentions held: Up to $50,000 NZD for each offence. 

 

Failing to Keep Accounting Records as Prescribed: 

  • Up to $50,000 NZD for each offence. 

 

Failing to Provide Regular Reports of Retentions Held: 

  • Up to $50,000 NZD for each offence.

 

In addition, the Ministry of Business, Innovation and Employment is now empowered to investigate and enforce retention money offence related penalties. Head Contractors that fail to provide information requested during an investigation could incur additional penalties. 

 

Third Party Funded Projects 

We provide project funding representation quantity surveying services on a range of projects, working with all the major funders in New Zealand. As part of monthly draw down certifications, funders traditionally expect quantity surveyors to advise:

  • the sum of retentions certified by that draw down;  
  • that it is appropriate for the facility to be drawn and the funds credited to the nominated stakeholder; and 
  • with verification, that borrowers are retaining the correct amount of retentions. 

 

Funders usually require that construction contracts contain appropriate retention provisions. 

We suspect that funders will bolster their compliance requirements to align with the additional requirements prescribed under the amended CCA. This will inevitably include a precondition that construction contracts must respond to the amended CCA. However, experience has shown that simply referencing an Act does not produce the desired outcomes. We recommend that the mechanisms prescribed under the amended CCA be summarized in contracts thereby patently drawing the user’s attention to the express requirements. This will furthermore assist quantity surveyors in verifying compliance. 

Borrowers and contracting parties will need to ensure they understand and are in a position to comply with the new legislation when it comes into force. 

We are liaising with the various funders to provide them further advice and recommendations in this regard and will accordingly share further updates as we become aware of any additional requirements set by them. 

 

Further Information 

You can find more detailed information about the Amendment below: 

MBIE will provide additional resources, including guidance information for businesses and Subcontractors, over the coming months. 

 

Further Guidance 

If you require further guidance, please feel free to contact our Advisory division leads. 

Justin Headshot

Justin Maritz

Director

Justin has over 24 years' international experience and a proven record in achieving successful outcomes on challenging projects.

Jesse Headshot

Jesse Conradie

Associate Director

Jesse has a powerful combination of Advisory expertise including contract law, engineer to contract, and dispute avoidance and resolution.

Rebecca Ward Senior Advisory Consultant White Associates

Rebecca Ward

Senior Advisory Consultant

A qualified lawyer with extensive construction experience, Rebecca provides practical, ethical advice informed by the project lifecycle.

This article was contributed by Jesse Conradie and Gemma Christall.

White Associates strengthens shareholder structure to support growth

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White Associates strengthens shareholder structure to support growth

This time last year we announced that at a time of growth we were adding a new director and three new associates.

One year on, it is with great pleasure that on our 18th birthday as a company we are coming of age and announce a new progressive company milestone that is all about further strengthening our leadership and shareholding structure, developing our people and supporting the continued growth of our business into the future.

We have added three new shareholders

Traditionally, White Associates has been owned by shareholding directors. For the first time, as part of our succession planning and our work to provide more opportunities for our team, we have added three minority shareholders who are staff but not directors.

In this first intake, Company Associates Richard Moore, Elliot Smith and Justin Bearne have bought into the business and have become shareholders. All three are well-recognised people within our business, and we are excited that they see a long-term future here.

Konrad says: “Adding new shareholders from within our own ranks is a hugely exciting step for White Associates. We have been talking consistently over the past year about how we set ourselves up for our next steps in our business growth, strengthening our structure and processes while providing a clearer pathway for our people to progress within our company. It is important to note that we will continue to look at our structure as we grow to provide further, future opportunities for people within our business to buy into it. This is not a one-time-only activity.”

“We want to build a strong, stable and rich working environment for our team as we grow, and enable our directors to work on the business as well as with our clients so we can develop and grow further still.”

The future looks green; budgeting in the construction industry

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The dollar has been unchallenged at the head of the budget table since its inception, but is that about to change?

As the voice of embodied carbon gets louder, one question starts to emerge into the foreground: could a carbon budget overthrow the monetary budget in our near future?

In our view, it could – for two reasons.

Firstly, our Government has passed legislation that makes climate-related disclosures mandatory for some large financial market participants from financial years beginning on or after 1 January 2023. Although this requirement is due to be phased in gradually – and currently only applies to large publicly listed companies, insurers, banks, non-bank deposit takers and investment managers – not only will it widen to other sectors over time, but it will also have an early trickle-down effect into the development and construction sectors that constitute substantial proportions of their lending and insurance books.

Source: https://www.xrb.govt.nz/dmsdocument/4773

Secondly, many large developers and constructors in New Zealand and overseas have responded to their government and other clients’ desire to improve environmental project performance – increasingly weighted in procurement processes – by creating strategies to move ahead in this area. Then they look to publicly disclose their intent and progress in annual sustainability reports. In turn, these reports are being increasingly scrutinised for vague or unfulfilled claims, in some instances leading to a rise in so-called ‘greenwashing’ lawsuits. In fact, the London School of Economics’ Grantham Research Institute on Climate Change and the Environment announced late last year that there are more than 2,000 climate change litigation cases underway around the world, more than double those taking place in 2015.

The effect of these two factors is clear

Unambiguous embodied carbon targets are rising in importance. So, although we have seen them enter the conversation on projects but not yet taking precedence over dollars, we ask: could we be approaching the tipping point?

Government clients are increasingly requiring the first steps along this path. A late-2022 Ministry of Education (MOE) release extract (below) shows how the Ministry is introducing carbon assessments for new builds, a natural first step that will no doubt be followed by additional steps. And the MOE is by no means alone in this area.

The Ministry of Education put out a news release late last year saying:

Carbon assessment for new build projects

As part of Te Mahere Taiao – The Environmental Action Plan for School Property – we are progressively implementing embodied carbon and operational carbon assessment requirements and targets for Ministry-led new builds.

Upcoming requirements:

Ministry-led new build projects contracted after 1 September 2022, with a capital value over $8m, will be required to conduct Life Cycle Assessments. It is optional and encouraged for all Ministry-led new build projects to opt-in and conduct Life Cycle Assessments.

Our intention is to progressively incorporate carbon assessment into business-as-usual processes and our design standards (within DSNZ) at a pace that the industry is capable of accommodating.

We are starting with high value projects, embodied carbon calculations, and simplified energy use calculations. Next year, we will progress to lower value projects and include whole-of-life operational carbon reporting. We will keep design teams updated with timelines and any changes to our requirements.

As public and private sector clients become more environmentally conscious and demand more sustainable building practices, becoming increasingly aware of the carbon footprint of building projects, they will prioritise low-carbon materials and construction methods. This will put pressure on the construction industry to prioritise carbon budgets over financial budgets in order to meet client demands.

Private companies and individuals are already taking steps to reach the targets that Government departments are striving for. This work applies not just to the big construction companies but also consultancies, subcontractors, suppliers and other smaller companies further down the supply chain, all of whom are being / going to be asked by their Tier 1 contractor clients to do more too as time progresses.

One thing is for sure: carbon budgets are emerging into importance, and it is possible that overall carbon budgets for a project might even overtake financial budgets in the construction industry of New Zealand – as the financial budget might end up by being just a component of the carbon budget, rather than the other way around.

The construction industry will need to play its part in reducing emissions, and carbon budgets will be an essential tool in achieving this goal.

How might this process work in practice?

Historically, clients come to us with a question of either, ‘here’s what we want to do. How much will it cost?’ or ‘I have a budget of $x, what can I do with it?’

This conversation is evolving into to, ‘here’s what we want to do. What is a reasonable embodied carbon target?’ Or ‘I have an embodied carbon limit of x. What can I do with it?’.

We are already helping clients by analysing embodied carbon on different options for designs to see which is the most efficient/lowest carbon option. This type of option engineering is just one way we can work alongside your design team to determine the most efficient embodied carbon option.

Companies looking to make the most of this process should come and talk to us. The construction industry has operated for a long time with dollars defining budgets. We’re entering a fast-paced period of change over the next decade, and the winners will be those who respond well.

This article was contributed by White Associates' Richard Moore-Savage

Richard Moore-Savage, Associate
Richard Moore-Savage, Associate

From marketing and retail management to quantity surveying

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Last month Olivia, our most recently graduated cadet, was featured in Open Polytechnic’s Student Stories.

Looking for a change from retail management and marketing, Olivia de Rooy found the “numbers side” of studying quantity surveying through Open Polytechnic | Te Pūkenga the perfect fit.

Olivia, who is based in Queenstown, recently completed the New Zealand Diploma in Construction (Level 6) (Quantity Surveying)  through Open Polytechnic | Te Pūkenga.

The 26-year-old is pleased she decided to switch from marketing and retail management to quantity surveying in November 2020.

“With a marketing degree and a 10-year background in retail management I found the financial and numbers side of business the most interesting,” Olivia said.

“When COVID-19 hit, the fast-paced environment of retail diminished so I began looking for something else. As I loved the numbers side of retail management, and have always had a love for buildings, I decided to go down the route of Quantity Surveying.”

Olivia’s career switch from marketing and retail management to quantity surveying

Olivia completed a Bachelor of Business, Marketing and International Business degree from Griffith University in Queensland, Australia in 2018.

But while she enjoyed studying marketing, it was tough to find her dream job.

Olivia had thought that getting a degree in marketing would lead her straight into a corporate marketing role with standard business hours.

Instead, with plenty of competition for marketing jobs, she found opportunities in retail management, with varied work hours and days. And while she loved her career in retail, this was not what she had envisioned.

But a conversation with a friend in late 2020, nine months after she moved to Queenstown, changed things.

Her friend suggested that she should consider studying quantity surveying.

“I looked into it and thought, this is the perfect fit for me – the construction industry is fast-paced and exciting. And that’s how I decided to go back and study,” she said.

Another benefit of moving into quantity surveying was the opportunity to get practical experience, by combining on the job training with her study.

Olivia managed to get work while she was studying, as a cadet in the Queenstown-based office of White Associates, who are property and construction consultants and quantity surveyors.

“Having experienced multiple career changes, from marketing to retail management, I was really committed to finding experience as a quantity surveyor before finishing my studies, to ensure that this is exactly what I wanted to do,” she said.

Throughout her studies, Olivia worked part-time and studied full-time, and upon graduating, she moved into a full-time Junior Quantity Surveying role. While she is still relatively new to the industry, having the New Zealand Diploma in Construction (Level 6) (Quantity Surveying)  through Open Polytechnic | Te Pūkenga has helped.

“Because of the foundations set by Open Polytechnic, I wasn’t a nuisance the first day in my job. I had somewhat of an idea of what I was doing,” she said.

“Construction is so complicated, there is so much more to quantity surveying than you realise. I think having the foundations through studying has definitely helped.”

According to Olivia, the company she is with now (White Associates), likes to promote from within their ranks and they are really supportive of current employees, so she knows there will definitely be future opportunities to come.

“They were very good throughout my studies. If I had any questions I would go straight to them,” Olivia said.

“There are four other cadets at the moment, so they do support students going through their study stages and then going full-time at the end of it.”

Studying with Open Polytechnic | Te Pūkenga

For Olivia, who has been living in Queenstown for three years, the decision to study through Open Polytechnic | Te Pūkenga was easy.

It provided her with the flexibility to complete a qualification online, from home, without having to travel to other cities regularly.

“As long as I met my deadlines for my assignments, it really suited my lifestyle, rather than sitting in a lecture and having to be there, it was great to be able to set time aside whenever I could fit it in.”

“I was quite efficient with studying and doing assignments at the same time. I could go through the modules as fast as I wanted to and do the assignments on the days that suited me and my work schedule, rather than waiting each week for what the lecturer puts out, like traditional face-to-face study.”

There are 16 courses in the diploma, and Olivia says she particularly enjoyed the ones that covered measurement and estimates as well as construction.

“The quantity surveying courses give you a really good foundation for measurement and rate build ups,” Olivia said.

“The general construction courses were also really helpful for someone like me, who doesn’t have a construction background. They gave me a good foundation about what goes into a building, from residential to commercial builds.”

Open Polytechnic | Te Pūkenga support

Studying online can have its challenges says Olivia, particularly if a student isn’t sure about what they are learning and has questions. In this situation, she found it could sometimes be hard to explain a question through the forums provided in the online learning platform. Olivia found in this situation it was important to make the most of the support provided by lecturers.

“My lecturer, Marius, was golden,” Olivia said.

“He was so supportive, always quick to reply to students, he was quite good at explaining if you weren’t sure what was going on with an assignment or a certain topic in the course.”

“I really appreciated him throughout the whole diploma.”

Advice for anyone thinking of getting into study

Olivia suggests doing some research into what you want to study beforehand and making sure it’s what you want to do before you commit.

“Obviously there is the financial aspect to it, but you are committing time out of your life,” she says.

“But if you are to study, I would say time management is the biggest thing you need, especially with the diploma being solely assignment based which can take up a lot of time. You need to be able to manage and juggle the workload.”

For Olivia, work and study needs to be balanced with leisure activities.

She keeps active and makes the most of the sports on offer around Queenstown, including skiing, mountain biking, Pilates and hiking, as well as catching up with friends and family.

“I live in Queenstown for the lifestyle, so it was really important to be able to maintain that throughout the two-year course. I think all students should keep a healthy study, work, and lifestyle balance in mind and luckily, studying through Open Polytechnic allows that,” she said.

Future plans

Now that she has completed her diploma, Olivia says she may eventually do a degree, but for now, is enjoying focusing on her job.  Enjoying her work at White Associates, she hopes to progress into an intermediate role, and then a senior role.

“I love White Associates, and there’s a lot happening in Queenstown – it’s definitely growing.  It’s a great place for me to stay career-wise.”

Precision the key to Woolworths’ Distribution Centre opening on time

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Few topics have dominated the headlines of the past few years more than the impacts of COVID-19 on global and local supply chains. In early 2020, having steady access to food and essentials became one of the world’s most pressing concerns for manufacturers, producers, distributors, retailers and consumers alike.  

New Zealand has not been immune to the acute supply and demand pressures felt around the globe. Despite repeated pandemic shocks and the new demands of a re-opening world, one sector of the New Zealand economy has remained robustly reliable when it comes to keeping its doors open and, to a significant extent, products on shelves: supermarkets. 

You can therefore imagine the importance of programme when developing and constructing a new $50 million Green Star-rated North Island distribution centre in Palmerston North for Woolworths NZ Ltd, which would deliver roughly 450,000 cartons of groceries to 55 North Island Countdown supermarkets every week.  

Design began in 2019 to create a 37,000m² distribution warehouse and a 1,200m² office and amenities building on a 100,000m² site. This was followed by a planned two-stage construction process – with civil and earthworks taking place from March to June 2020, followed by a year-long vertical build completing in June 2021.  

On this intensive project, White Associates provided full quantity surveying services covering pre-contract, procurement and post-contract cost management. Associate Weng Tan was the post-contract lead QS of the White Associates Team on this project, which also included Konrad Trankels, Justin Maritz, Brett Zeiler and Richard Moore-Savage.  

No room for slippage 

Weng says that timing was always the critical aspect.

“You might think that the sheer physical size and scale of this development would dominate our team’s thinking. However, while it was undoubtedly a major factor for us, timing really was the most important thing on this project, as the tenant’s setup team – IT, security, and racking – was working on an extremely tight, back-to-back schedule.”  

 

“Everything had to happen within a precise timetable to enable Countdown to move in and begin it’s vital work to supply fridges and pantries across the North Island. All sub-trades are lined up at the start of the year, working to a highly precise programme throughout the year. If our team were to miss any project milestones along the way, the tenant would have to reschedule their team, and the facility might not open on time. To highlight how tight the programme was, when the construction team finished the ground slab, the racking contractor immediately moved in – the next day – to start installing racking. Once their electrical subcontractors finish on one project they move on immediately to the next project, with hotels booked in advance, so there is absolutely no room for slippage. They only had a certain window for the Palmerston North project to come here, set up, then head off to the next site. If we missed the window they’d be lost. This is a challenging enough dimension on it’s own, but when you consider the challenges provided by lockdowns, it was significantly amplified.” 

The pressures of time, which also included a short timeframe to award the contract, meant that it was necessary to bring a contractor on board quickly.  

“We managed the tendering process to ensure the client obtained accurate, reasonable and comparable prices from tenderers,” says Weng. “Our quick response and rigorous tender analysis process provided the client and project design teams with a clear view of the best available contractor for this project.   

 

“Then, to ensure that the carefully designed racking system could be installed we needed to guarantee that the first half of the warehouse would be completed by March 2021 and the second half by May 2021. This required milestone-based incentives to be put in place to encourage the contractor to achieve these goals, and to ensure we hit the milestones we had to ensure provisions for acceleration costs were included in our estimate. 

 

“To prevent any confusion regarding the scope of works required we ensured to keep in close communication with the client and the contractor. To provide clarity for all parties involved we had to tightly manage client and contractor expectations, which required early planning and constant planning ahead; working to do so every day.” 

Splitting costs 

Maintaining budget was also a critical and evolving dimension to the project, says Weng.

“Careful construction cost control was required to meet budget, as you’d expect. However, although the project started with a usual cost reporting format, it changed when we were requested to split the costs out between the project and tenant forecasts, fitout payments and expenditures.”

 

“As we were also required to provide cash flow and expenditure forecasts for the project, we sat down with the contractor to identify costs and split payments between the project and tenant costs so we could provide a realistic cash flow programme. Communication was the key to achieving this; talking to the Engineer to the Contract, the project manager and the contractor’s QS all led to higher accuracy for cashflow planning and variation of work budget costing.”

Delivered on programme and budget 

Just under a year ago, amid media fanfare on 31 August 2021, the new Palmerston North Distribution Centre for Woolworths opened. Not only was the practical completion achieved on schedule in June, the project was also delivered within the approved budget.  This project has recently received a Merit in the CBRE Industrial Property Award at the 2022 PCNZ Industry Awards.

These achievements were the source of some pride for Weng and the White Associates Team.

“I’m really proud of the fact that all cost reports and payment recommendations were issued on time throughout the project, despite the many COVID disruptions. To finish on time and budget, and for the client to be able to use their facilities as planned, was not easy, particularly with COVID doing its best to get in the way. It is great to think that Woolworths is now using its facility to supply Countdown Supermarkets all over the North Island, helping to ensure that people get the goods they need for their everyday lives.” 

New World Supermarket, Te Kauwhata

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Earlier this year in March 2022, the all new New World Supermarket in Te Kauwhata opened to the public. A state of the art building and a great addition to the local community, check out the video footage below!

 

Congratulations to our client and our funding team led by Darin Bayer and Melissa Foong!

Taking the test: relationships drive A-grade outcomes at Macleans College

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When looking to do well in an exam and the clock is ticking, one of the keys to success is to budget your time so you complete your work fully in the time allowed. For this and many other reasons White Associates is exceptionally proud to be part of the team that has delivered the new science and technology buildings at Macleans College for the Ministry of Education on time, and to budget.  

A finalist in the Education Property category of the 2022 Property Industry Awards run by the Property Council New Zealand, this exceptional $7.4 million project is the first stage of a bigger multi-phase project at the college. 

Involving Justin Maritz and Richard Moore-Savage from White Associates as part of a wider project team that included C3 Construction, Pacific Environments, MEPS Engineers and BECA, the project came about because the the science and technology block at Macleans College in Auckland was in poor condition and required replacement. It required the design and building of new, modern teaching spaces tailored to the school’s pedagogy that also meet the Ministry of Education’s design standards, including requirements for natural ventilation. 

Inevitably, the school needed to remain fully operational during works that would include the demolition of ten existing buildings and the construction of 16 new classroom teaching spaces. As the brief called for all accommodation in the development to be provided under one roof, enabling high quality education for over 2,500 local and international students, the need to provide specialist teaching programmes without building temporary accommodation drove a decision to split the scheme into multiple buildings, which also aided access around the site during the construction period.  

With design getting underway in 2018 and a construction period for this first phase lasting from 2019-December 2020, White Associates provided full quantity surveying services including pre-contract, procurement and post contract cost management.  

Responding to emerging challenges 

Inevitably, challenges emerged on the project as fast as unexpectedly nasty questions in an NCEA mathematics exam. 

Richard Moore-Savage, the leading Associate on White Associates’ work on the project, says that the costs for this first stage of the project were skewed by it being the first of a complex, multi-stage construction project in an active school environment.

“The first stage required the project to absorb some of the whole-project fixed costs on site, such as infrastructure. The majority of ground works for the development, including drainage, stormwater management and works to the existing transformer were incorporated into the costs for this stage.  

“We also needed to ensure that sufficient allowances were made in the estimate for costs associated with isolating the live school environment from risks associated with demolition such as dust, noise and contamination. The programme also needed to respond to specific staging in order to accommodate out of hours demo as this would have a financial impact as well.” 

Then unknown site conditions, which included un-engineered fill and asbestos pipework, caused delays early on in the programme. However, when these previously undocumented in-ground services were discovered, the Ministry of Education invested in the civil infrastructure to bring installations up to current standards and reduce future maintenance costs, says Richard. 

“As we are well versed in working on existing sites, we worked with the contractor to identify unforeseen underground services on the risk register and allocate suitable risk contingency to the project budget. So, when a water mains pipe, school bell cable and fibre-optics cable were discovered on site, our contingency allowed the team to focused on mitigate the risk and associated cost.” 

This ability to flex he says was all due to the quality of the relationships built on the project. “The best thing we have done is to build – and keep – strong relationships with the client, contractor and the project team throughout this project. This involved finessing negotiations with the contractor to avoid an adversarial stance; always kept friendly, resulting in us assessing and agreeing variations quickly in a fair and reasonable manner, quickly without resistance.” 

This was exceptionally useful says Richard when the costs for the technology block internal wall framing system came in above budget expectations.

“Recommending that different design options be explored, we initiated a change in specification of internal light steel wall framing to reduce costs. The substitution from an Australian supplier to product manufactured in Auckland was proposed by the contractor, and It saved $120,000 and 18 weeks of programme. This required collaboration between contractor and design team on structure and bracing.”  

Working in a live school environment also created tests of the programme that needed to be met, he adds.

“Challenges involved working around school-imposed conditions such as acoustics during the examination seasons, asbestos removals over weekends and holidays, and the school requesting design changes. By planning thoroughly and facilitating open communication channels with the school, Ministry and all stakeholders, we helped to ensure a smooth project delivery while minimising disruption for students, teachers and visitors. In doing so, we applied our experience in working on fully operational sites such as Mt Eden Correctional Facility Building C, the Rimutaka Rapid Build, and at Marist School amongst a number of other projects.” 

Macleans College

The key to the real value provided by White Associates though revolved around the ability to maintain strong relationships even while applying strict financial management of payment claims and variations, says Richard.

“Maintaining a healthy and collaborative relationship with the contractor meant that variation values were negotiated on a fair and reasonable basis, and by working together to identify alternative products the team achieved cost savings to client without any loss of quality. Further, working closely with Macleans College has produced an extremely flexible building with a floor plate tailored to the school’s needs.” 

Achieving practical completion just before Christmas in 2020, in one of the most disrupted years in the New Zealand construction sector’s history, was the cause of some celebration, Richard says.

“It tracked against programme extremely well given the challenges of the global pandemic and unknown site conditions, due to a focus on forward planning from a committed and enthusiastic team. And, personally speaking, my proudest moment is that our work on the project received an extremely high score from the Ministry for our service.” 

Always looking for a good mark from any test, Richard was particularly pleased that the Ministry of Education’s appraiser Farman Iqbal scored White Associates 96 out of 100 across a range of criteria, one of the highest scores given, saying in his comments: “With a difficult changing project the team has been very good with working with the Ministry. Always aware of any changes are work really well with the school and MoE to facilitate and work through them. (White Associates) also work extremely well with the consultant team and the main contracting team with a collaborative approach to variations and costs associated.  

“Whites have been really good in helping with items out of scope to help with the MoE’s internal project funding allocations. With a project that has been split into multiple projects Whites have helped immensely to tidy this up. With a project that has so many variations Whites are always up to date with variations and getting out instructions to the contractor in a timely manner.” 

Excellence.