Day Two – Procurement Stream

Using Procurement as an Opportunity for Improving Social and Environmental Outcomes
Chris Bennett

Like doctors, engineers often approach their projects from the perspective of ‘first do no harm’. But investment projects also provide opportunities to have positive outcomes by contributing to the wider social and environmental agenda that society is increasingly embracing. Often, these outcomes can be achieved at little or no additional cost to the client. This presentation will touch on how the World Bank is using its procurement practices as a vehicle for positive change in areas as diverse as managing the influx of workers to road safety to environmental management.

Chris is a Lead Transport Specialist for the World Bank and the Advisor for the transport sector on addressing environmental, social, health and safety (ESHS) issues. As ‘Cluster Leader’ for the Pacific Islands, Chris oversees a portfolio of over 25 aviation, land and maritime projects in nine countries. Addressing the challenges of climate change is a key consideration, and Chris has led key initiatives on integrating climate change into asset management decisions, as well as how to address climate change risk in performance based contracting.  As ESHS Advisor, he is helping to minimize the negative social and environmental consequences from projects.

What does a successful procurement model look like?
Rowan Kyle, Opus International Consultants

Many Road Controlling Authorities (RCA’s), both here in New Zealand, and internationally, continue to seek improvement to their current procurement strategies. This desire is often a result of changing business environments, changes in demand, customer expectations, and/or disappointing outcomes from existing contract models. In some instances, it can be simply a perception that there must be a better way delivering the services required to maintain the assets within, and operation of, the road corridor in the future.
New Zealand is in the fortunate position of having trialled a variety of contract models over many years across a range of similar road networks. That this evolution is continuing suggests that a “one size fits all” solution does not actually exist. While the current version of Network Outcomes Contract (NOC) has been applied to nearly all the state highways, there is a much broader spectrum of contract model types in operation across local authority roads. Consequently, there is still considerable opportunity to learn from what has been generally accepted as successful, what has not worked so well previously, and how these lessons can be applied.
This presentation will briefly examine some of the reasons for this contract model variance, what common outcomes many RCA’s are seeking, the reasons why they remain disappointed by the outcomes being delivered, what they should aim to do differently next time, and ultimately how they might know if they have been successful.

Rowan graduated from Canterbury University with an Honours Degree in Civil Engineering in 1994. He is currently a Chartered Professional Engineer, and a Member of the Institution of Professional Engineers New Zealand. Rowan is presently a Principal Asset Manager based in the Napier Office of Opus International Consultants. Since 1995 he has held the positions of Engineer to Contract, Team Leader, Asset Manager, Engineers Representative, Project Manager, and Site Engineer across the full range of State Highway and local authority road maintenance contracts, as well as other asset management functions.
Over last 9 years Rowan has been involved with the development and implementation of Performance Based Contracts (PBC’s) for road maintenance in New Zealand, India, Mozambique, Sri Lanka, and Liberia. He has presented at an International Road Federation (IRF) PBC Workshops in Uganda in 2013, and 2016, at the Asian Development Bank Transport Forum in Manila in 2014, the First IRF Asian Congress in Bali in 2014, the second Asian Congress in Kuala Lumpur in 2016, and for the Ministry of Public Works in Sarawak in 2017.
Rowan is part of a combined Malaysian and New Zealand team that has prepared the pilot Performance Based Contract for the Federal Road Network for the Ministry of Public Works for Southern Region of peninsular Malaysia, and a PBC model for the North South Expressway.
Rowan won the Best Paper award at the 6th International Conference on Managing Pavements held in Brisbane in 2004 (represented at the Transport Research Board Annual Conference in Washington DC 2005), and jointly presented the winning Hynds paper at the 2006 Ingenium (now IPWEA) Conference in Auckland.

Road Efficiency Group (REG) – Procurement Work-Group 2018
Shawn McKinley, Central Hawkes Bay District Council

REG is the implementation authority responsible for delivering the recommendations of the Road Maintenance Task Force. There have been numerous successes in the various streams of work including the establishment of ONRC, the data quality project, performance measurement and the data quality reporting tools, and embedding the business case principles into all Activity Management plan development. Many of these products are both new to our industry, and also industry leading. It has taken a huge team effort between the wider transport sector to accomplish these and we should all be proud.
Over the coming period the focus will be maintained on developing those tools further in addition to a new focus for REG being on developing or thinking and pholosphy in the procurement arena. Taking a high level approach to procurement will assist us to achieve the strategic outcomes we are seeking on our transport need works and also meet the needs of our customers.
The focus of my presentation will be on the REG approach to planning and delivery of successful contracts for your community, what the REG procurement work-group will deliver over the upcoming year, along with how we are committed to assist local authorities in developing a common thorough understanding of procurement, delivery models and integrating ONRC into your procurement offerings.

Shawn attended Acadia University between 1970 and 1972 majoring in Business Administration and Contract Law. He spent 8 years working for the Ministry of Highways in Nova Scotia in road construction and surfacing. He subsequently re-located to British Columbia and was employed by the Ministry of Transportation for 22 years in various roles including road maintenance, avalanche control, communications, tender preparation and procurement. He was selected as one of 3 regional negotiators to evaluate and negotiate 28, ten year road maintenance contracts for the province valuing between 5 and 28 million each per year.
led a team of professionals to compile contracts used to construct the toll roads for the winter Olympics to be held in 2010 held in Whistler.
then immigrated to New Zealand to work for Opus where I managed their office in Taupo for 2 years before being enticed to work for Downer in Napier. Shawn currently works as the Land Transport Manager for the Central Hawke’s Bay District Council and is the chair of the REG Procurement sub-group

One for all, all for one – a common road maintenance contract for Northland’s Councils
Simon Gough, GHD

The Northland Transportation Alliance (NTA) was formed in July 2016 to deliver benefits for the management of Northland’s roads. With the three Council’s existing road contracts aligned to end in June 2018, the NTA decided to undertake a single procurement process (for 5 contracts) for the maintenance and renewal of its 5,800 km of combined road network.  This is therefore one of the largest road maintenance procurements undertaken in New Zealand.
This process has provided the NTA with an early opportunity to demonstrate the benefits of collaboration and sharing of knowledge.  This included a back to first-principles approach for the procurement and work specifications to allow the different organisations to seek alignment as well as mixing in a number of different best practice approaches into the new common form.
This presentation will walk through the NTA’s key objectives for the preparation of the contracts, the process used to collaborate in the development and procurement of the contracts as well as some of the work activity and management differences established in these contracts.

Simon has 24 years of experience in the roading industry including all aspects of asset management, maintenance and operations. With previous roles including Manager of the Auckland Traffic Operations Centre, Whangarei District Roading Asset Manager and Asset Systems team leader at Auckland Transport, Simon is currently an Executive Advisor for GHD Advisory.  Simon’s main focus these days is on business improvement and transformation using his wide industry knowledge and his experience in business process design and the use of systems and data to support business activities and outcomes.

Performance review and benchmarking achieving more with less
Babak Bigdeli, Ventia

Ventia is one of the largest infrastructure companies in Australia and NZ ($2.5b+) providing asset management services to infrastructure assets such as road networks, motorways and tunnels, hospitals, schools, city councils, utilities and telecommunication businesses.
This presentation describes a methodology developed based on 9 elements of best practices in asset management to provide quantitative and objective performance analysis on infrastructure projects. It also describes a proprietary tool, its functionality and its application on several imminent Australian infrastructure road network and motorways/tunnels projects.
The result of the performance review on individual projects have also been used to benchmark projects against each other as well as against the best practice, whilst predicting locked value in terms of dollar value on each project.
The presentation also, shows how the findings of such study have been used to compile tailored improvement roadmaps (in terms of action list with full resources and costings) to realise identified locked value on each project.

The learning outcomes include:
– What do we mean by “best practice in asset management” as practiced in one of the largest asset management service providers businesses in the region
– Hint and clues on how audiences could develop their very own performance review tool as it was achieved at Ventia
– The concept of “Locked Value”, and how to quantify that in terms of dollar value
– How to use this methodology (and the tool) to selectively target improvement opportunities and to achieve more with less

Dr Babak Bigdeli is a PhD educated Mechanical Engineer (UNSW) with over 20 years working experience in Infrastructure, utilities, mining and resources sectors as a consultant as well as in operational asset management roles. A select list of his clients or companies he worked for includes Australian brand names such as Covaris, Mincom, KPMG, BHP, BMA, Sydney Ferries, Downer and Ventia.
Babak has registered and owned an Innovation Patent in asset management (2016) on the application of ISO 55001 to services companies, following which he had secured two formal ISO 55001 certificates for two major infrastructure assets in Australia.
Babak is recently leads asset management function in Ventia, and has presented his findings in forums such as AMPEAK 2016 (Adelaide) and IAM/IET 2016 (London).

How to do Procurement Collaboration?
Dave MacDonald
The four Local Authorities and NZ Transport Agency formed the Northland Transportation Alliance, a Collaborative arrangement in 2016 for their internal professional transport related services.
To meet the Agency requirements a combined procurement strategy for the Councils was required to be developed and adopted during 2017.  This presentation covers the challenges, successes, pitfalls, problems and learnings of that journey.

Dave commenced work with the MOW in 1971. He has held various technical and management roles within Government departments and Local Authorities including periods as a Borough and City Engineer.
He was the Northern Regional Manager for Transfund from 1996 to 2005. From 2005 he has run his own business serving both private and public sectors in strategy development, procurement and advisory services. Recently he has become associated with the Institute for Collaborative Working where collaboration is recognised as a professional discipline with a structured methodology that underpins successful business relationships.
His qualifications include BE, MBA and Diploma in Facilitation. He is a life member of IPWEA and an Associate Member of CCNZ

Tracking operational performance measures
Danny Fitzgerald, Fulton Hogan

The Operational Performance Measure auditing process for NOCs requires input from Maintenance Contract Managers (MCMs) from beginning to end, however providing transparency and ease of access to MCMs was a challenge for Fulton Hogan in the early days of the NOC maintenance model.
As a result, in 2016, we decided to invest in the development of a tool that would ease collaboration with our MCMs, in addition to strengthening our OPM data quality so we could improve our ability to analyse trends.  We also wanted to improve productivity within our contract teams by driving operational consistency over contract preference; use technology to reduce the time needed for auditors to prepare for and carry out audits; and ultimately free our teams to focus on improving operations, rather than being consumed by reporting on them.
In this presentation we will tell you about our journey, and the results, including these three points of learning:

  • Automating where possible
  • All Interpretation is misinterpretation
  • How to teach old dogs new tricks

Danny is a Senior Business Analyst in Fulton Hogan’s National Asset Management Team.  His responsibilities include identifying and implementing opportunity’s to improve operations using technology, and he is the Product Owner for the OPM Tracker, which you’ll be hearing about today.  Danny is Irish and moved to New Zealand from London in 2016, where he spent the previous 7 years working as a consulting Business Analyst and getting to know a persuasive kiwi, who is now his wife! Together they have been enjoying raising their young son in New Zealand’s Garden City.

Looking ahead: How the one network classification performance measure reporting tool is showing the way!
Simon Fendall, NZ Transport Agency
The Road Efficiency Group (REG) recognised the need to support the sector in assessing the One Network Road Classification (ONRC) performance measures and developed the ONRC Performance Measures Reporting Tool, a user-friendly information management system which road controlling  authorities can have confidence in.  The Tool was the recipient of the 2016 RIMS innovation award.  The tool is continuing to be developed and this presentation will highlight the tool’s current functionality, and how this can be used to support investment decision making, and also show the road map for development through to December 2018.

Key learning points covered –
1. The current functionality in the that has been developed by the sector, guided by the REG Data Work Group
2. How the tool is meeting the needs of the sector in evaluating their data, and enabling assessment of outcomes compared with peers
3. The development road map that is planned for the tool to continue this journey together
4. How the sector can provide feedback and input into the tool’s future development

Simon works for the Transport Agency as part of System Management and is also a member of the REG Data Working Group. Having cut his teeth working for Hamilton City Council, he is passionate about enabling local authorities to deliver best practice. He stays at the forefront of analytics and measures, with a particular focus on maintenance and asset management, and is managing the development programme for the ONRC Performance Measure Reporting Tool.

NZ Transport Agency Procurement manual Amendment 4c
Bernie Cuttance, NZ Transport Agency

The NZ Transport Agency’s Procurement Manual has been updated. The presentation will describe the changes, the reasons for making them and the implications for purchasers and their suppliers. Most of the changes have been made to ensure that the manual is equivalent to the Government Rules of Sourcing. A new rule has been introduced which with demand clearer communication with suppliers when ‘standard documents’ are used in contracts and the Transport Agency’s requirements in relation to procurement strategies have been clarified.

Bernie is now part of the new Procurement Centre of Excellence within the new NZ Transport Agency, with particular responsibility for improving procurement practice by the Transport Agency and its funding partners. He has worked for the Agency for many years and has been involved in developing its procurement policy for over 15 years. He led the recent work to update the Transport Agency’s Procurement Manual.

NPDC and sustainable supply chain contracting
David Langford, New Plymouth District Council
NPDC has adopted a new strategic approach to procurement and is aspiring to achieve enhanced value for money for its community by becoming a “Supply Chain Leader”. NPDC’s Infrastructure Manager, David Langford, will tell the story of how their new procurement strategy was developed, what it means to be a Supply Chain Leader, the results this new approach has delivered so far and what the next step on their journey will be.

is the Infrastructure Manager and part of the New Plymouth District Council senior leadership team and is responsible for the district’s municipal Infrastructure. David has transitioned into local government after 12 years working for Tier 1 contractors mainly in the roading sector. With his background he brings a wealth of knowledge regarding procurement and contract management best practice from both here in New Zealand and the UK.
As the Infrastructure Manager, David is responsible for providing strategic direction and leadership to the District Council’s teams for Transportation, water, wastewater & storm water, solid waste & Recycling, infrastructure projects and asset management. Development of the NPDC Infrastructure procurement strategy is part of David’s aspiration to move NPDC from being just a Client to a Supply Chain Leader.

Expert panel Q&A session – What is the best type of delivery model for Local Authorities
Panel:  Shawn McKinley, Bernie Cuttance, David MacDonald, Dave Proctor and David Langford