For owners corporations, this has meant needing to have buildings assessed and (where necessary) to arrange for rectification.
To help with this, the NSW Government in February confirmed a three-year program to remediate flammable cladding on 214 apartment complexes which are considered by the state’s Cladding Taskforce to be at risk.
Known as Project Remediate, the program is being delivered through the Office of Project Remediate, which has been established within the Office of the Building Commissioner.
It has two components.
First, an interest-free loan scheme will help owners to fund remediation work (refer above link for details).
Second, an assurance and project management service will assist owners corporations to navigate the process and will help to ensure a safe and durable solution.
During a recent Sourceable interview which he conducted in conjunction with Matt Beattie
Executive Officer – Project Remediate, NSW Building Commissioner David Chandler provided Sourceable with an in-depth view of the program and key roles involved.
First, it is important to put the program into context.
After the Grenfell fire in 2017, the NSW Government established the NSW Cladding Taskforce which has audited 185,000 building records and inspected 4,127 buildings for combustible cladding.
Of these, 3,755 buildings have been cleared whilst 372 remain under review, assessment or in remediation. Of these 372 buildings, 214 are multi-storey residential buildings (Class 2 buildings). Of these, 79 buildings are high-rise (nine storeys or greater) whilst 129 are mid-rise (four to eight storeys) and six are low rise (up to three storeys). On average, there are about 76 apartments per building.
Chandler says the assurance service component of the program is needed for several reasons:
- Unlike commercial property funds who own commercial real-estate, typical owners corporations of residential apartment buildings tend to be less sophisticated regarding construction and less able to make sophisticated decisions about their buildings or to adopt a nuanced approach toward risk management. It is critical therefore, to ensure that remediation solutions do not require owners to undertake unusual activity in order to maintain the building’s fire safety systems.
- Amongst owners corporations who have undertaken remediation thus far, there have been tendencies to spend insufficient money up-front and to seek the cheapest possible solutions to identify the scope of the works. Speaking of the issue, Chandler says this can lead to the scope increasing as work progresses and owners being exposed to nasty surprises regarding the final cost. Indeed, whereas owners corporations thus far have generally spent around half of one percent of the remediation value in upfront scoping, the Office of Project Remediate intends to allow around two and a half percent for projects which are remediated under the program.
- The standard of remediation must be acceptable not only to owners but also to the Insurance Council of Australia and to first responders such as emergency service personnel. In terms of the former party, the Office has worked closely with the ICA on the program’s design to ensure that remediation once complete enables buildings to be insured for their replacement value without carve outs in respect of cladding. Regarding the latter, remediation must be undertaken to a level which minimises the risk faced by first responders when attending a scene.
- Buildings which fall under the scheme span 32 local government jurisdictions. Of these, not all councils have the expertise needed to assess proposed solutions. Several have asked for help.
As shown in the chart, the program has several key roles.
First, there is an eight-member expert panel known as the Cladding Product Safety Panel (CPSP). Established last year, this provides advice to the Cladding Taskforce on the suitability of cladding replacement products and external wall assembly methods.
Whilst the panel was established prior to the program’s announcement, its work will inform rectification which is undertaken during the program.
Next, a managing contractor will be appointed to coordinate activities which are necessary to ensure a safe and durable solution for each building.
The managing contractor will provide technical program leadership to ensure that scoping is done properly, the technical framework in which the work is being performed is being adhered to and that work is properly executed.
They will also establish five pre-qualified panels of service providers for the program. These will cover investigation and scoping, design, remediation work and installation, assurance and independent project superintendents (see below).
Finally, the managing contractor will guide owners corporations through the remediation process and ensure that owners are informed of work or decisions which impact the building and are consulted on matters such as design, scheduling, safety and building access.
Four tenderers have been shortlisted for the managing contractor role (their identities are not public at this stage). A final decision on the successful tenderer will likely be made in June.
Speaking about the managing contractor role, Chandler says two aspects of the program’s design should be noted.
First, the program has been designed to ensure that work is awarded to small and medium designers and contractors. This is part of NSW Government COVID stimulus and stands in contrast to many large infrastructure projects which have been awarded to ‘apex’ players.
Given variability within this cohort, the managing contractor will need experience in working with designers and trade contractors and will need to drive consistency across remediation efforts. This will go beyond managing processes and will encompass working with both parties and applying active management where needed.
Second, the program has been designed so that owners corporations retain ownership of the process.
Toward this end, owners corporations themselves will directly engage designers, contractors, assurers, superintendents and building investigators from prequalified panels as outlined above, with the managing contractor performing a coordination role.
This stands in contrast to the Building Education Revolution (BER) program which followed the global financial crisis. In many cases throughout that program, Chandler says principals, parents and friends of schools were relegated in terms of input amid a centralised push to roll the program out.
With the current program, owners corporations will be the customer and will receive a full customer experience in terms of a project assurance and support service.
“We’ve got out a tender for someone whose key jobs will be assurance, technical leadership, logistics leadership and making sure that the customer journey for the owners corporations is as good as it can be,” Chandler said.
“We need a relatively sophisticated managing contractor who we feel can take on the responsibility to deliver the consistent customer experience that we want to deliver and manage the key attributes of what needs to be done. That is making sure the scoping has been done professionally, making sure that the technical framework in which the work is done will be performed properly and then making sure that the execution of the work is done properly.”
Beneath the managing contractor will sit be the global façade consultant, who will be the principal design engineer for the program.
This entity will provide program-wide design guidelines and act as a central repository of information, technical guidance, knowledge and learnings for the program which will inform product and design decisions.
Appointed by the managing contractor, they will use advice from the CPSP to develop and maintain a repository of suitable remediation designs and will provide designers with a palette of materials which are considered suitable for remediation.
As the project progresses, the global façade consultant will also take input from investigators as patterns emerge of buildings which require similar design solutions. This will be used to produce maybe fifteen or twenty standardised design solutions which can be rolled out across the program and which will provide designers with guidance about what to consider when applying individual designs for each project.
This, Chandler says, will help to promote continual learning and avoid the need for new individual designers to perform ‘greenfield’ designs from scratch.
Chandler stresses that the global façade consultant will be an engineering entity which specialises in facades. Often in design and construct contracts, he says façade engineers are appointed toward the end of the line and are left to compete for limited project funds.
Instead, the expertise of the façade engineer will be brought to the forefront of the project.
Next, there are the five types of prequalified panels from which providers will be recommended to owners corporations.
The first are building investigators, who will perform investigations and undertake project scoping. As noted above, there will be considerable emphasis on adequate project scoping throughout the program.
Next, will be designers.
After receiving investigation reports, design teams will walk owners corporations through design options, work with OCs to select the best solution for their building and prepare design documentation. These teams will include a designer, engineer and quantity surveyor.
Design teams will also work with local councils to ensure designs satisfy requirements about the look and feel of the building within its urban setting Remediation, Chandler says, must deliver not only a solution which is technically sound but also a built form which is suitable given the character and context of its surrounds.
Next, remediation contractors will carry out the work and deliver upon designs.
Here, Chandler stresses that small and medium sized players will be sought but adds that contractors should have at least five years’ remediation experience. This is to avoid similar quality and safety problems to those which occurred on the Commonwealth home insulation scheme.
Lump sum contracts will be used when engaging contractors. Meanwhile, design documentation will be 100 percent complete for each project before contracts go to tender. This will enable contractors to fully understand the design upon which they will be expected to deliver and to price their bids accordingly. It will help to avoid situations where contractors are forced to ‘guess’ important design details and subsequently face imperatives to cut corners where bid prices turn out to be insufficient.
Measures will also be adopted to help mitigate risks which would materialise in the event of contractor insolvency.
During tendering, contractors will be asked to nominate all trade contractors and suppliers whom they intend to engage for contracts worth $50,000 or more. When submitting payment claims, they will need to identify amounts which are attributable to each contractor whose contract meets this threshold. Money will then be paid directly to this second line of trade contractors. This will ensure that major trade contractor/supplier payments will be up-to-date even if the contractor falls into financial difficulty and will help to avoid suppliers/trade contractors being out of pocket and needing to cut corners.
Next, independent assurers will certify that the work has been done correctly according to the designs.
As part of their work, assurers will make sure that there is a clear chain of custody and line of sight to verify that all products used have been demonstrated through testing to be fit for purposes for their intended use. This includes nuts, bolts, metal pieces, insulation pieces and all other materials.
Toward this end, any test certificates used will be scrutinised to ensure that the tests have been robust and suitable given the product’s intended use. This means where fire testing is required it is performed by a NATA accredited testing body and the system tested matches the proposed configuration of the façade.
Where the Office of Project Remediate is not satisfied with testing which has been done, it will, through the managing contractor, conduct its own tests and publish outcomes.
Assurers will also observe the installation process to ensure that products are correctly installed.
The end result will be that owners corporations will have an assurance line of sight for all products from source and testing through to installation.
Finally, independent superintendents will ensure that the contract is properly administered and that design documentation is correct. These people will need to understand both design and installation.
Chandler says the importance of delivering the project effectively should not be underestimated.
“We’ve just got to get the job done,” Chandler said.
“We’ve got to win public confidence. We’ve got to make sure that the value of the project gets down into the small and medium sized enterprises and we’ve got to make sure that there are 214 happy customers (the owners corporations involved in the program).”