Contractor

Changing the client mindset

Ex-contractor David Langford has shifted the way the New Plymouth District Council approaches temporary traffic management, with excellent results in safety, productivity and quality.

After graduating with an engineering degree from the University of Manchester, David spent nearly 10 years working on various civil contracting projects in the UK, before emigrating to New Zealand.

He then spent two years in Auckland with Downer, managing the Auckland Transport Central Road Corridor maintenance contract, before itchy feet saw him head south to New Plymouth in 2015.

There, he joined the council as its infrastructure manager, and was recently made group manager – planning and infrastructure.

“My move to the council was my first time on the client side, and I have come to it with the mindset of a contractor.

“I am always asking, what will make this difficult or easy for the contractors? Consequently, I have found collaboration for the mutual benefit of both the council and the contractor to be the ideal solution.

“Often, the client-focused approach is to make problems go away by throwing money at them. But, I believe, the actual client is not the council but the community.

“The council’s role is that of the supply chain leader – we’re simply the first link in the chain – and we need to work with the rest of the supply chain to deliver the best result for the community.

“As such, we look for opportunities that are perhaps beyond the usual. We want to enhance the value for our community – we’re not after the lowest price, but instead are looking to maximise the value of every dollar we spend.”

David says that one particular issue that comes with the ‘lowest price’ tender method, is that it puts contractors under pressure about where they can save money. Yet, at the same time, councils set health and safety guidelines that conflict with the cost-effective approach to contracting.

“As leaders, councils are a real driver in the health and safety area. However, the priority has always been to keep the roads open rather than keeping the contractors safe.”

Instead, David took inspiration from the World Bank, which reimburses contractors’ costs for key safety controls in an effort to remove commercial tension.

“We used to ask contractors to include the cost of temporary traffic management (TTM) in their tenders, but now we have separated this out and traffic management is paid on a separate, cost reimbursable basis.

“While it’s fairly easy to assess the TTM needs of contracts with a fixed scope, and the risks of getting this part of the tender price wrong are low, when it comes to maintenance contracts, their wider scope means it’s almost impossible to guess the fee for traffic management. This ‘guessing’ was affecting the tender prices and who got selected as the winning tender.

“My belief is that commercial priorities shouldn’t impact safety. We don’t want contractors compromising their workers’ safety in order to win the tender.

“Now, we pay the cost of temporary traffic control on a separate basis to the rest of the contract, and it is paid for regardless of whether the project is on time or not.

“This means the commercial incentive to perform is still there, but the safety controls are outside of this. And this eliminates any reason to jeopardise safety of the workers or the public.”

The New Plymouth District Council first tested this new approach on a roundabout project three years ago. It had put out a tender for the work and all the contracting firms came back saying they’d use stop/go signs for traffic management.

“That’s four people, for nine hours a day, for 10 weeks, and the people operating the stop/go signs aren’t actually adding value to the project, while the safety risk for the workers from moving vehicles is still there.

“So, we went to the leading bidders and said, ‘what if we close the road and you put those stop/go people to work on the project instead?’. They agreed.

“The result was that the project was completed nearly three weeks ahead of schedule and at 15 percent below the tender price – clearly the people working on the project were more productive without traffic constantly moving through their worksite.

“Most interestingly, we didn’t receive a single complaint from the community about the roundabout closure, and instead received compliments about the quality of the work and how quickly the job was completed.

“It was a win, win, win.”

That result gave the council the confidence to “go large”, as David puts it.

Last year, it tendered a 10-year road maintenance contract for a whopping $156,000,000 – 10 times bigger than any project New Plymouth District Council has ever let.

This contract prioritises road closures, and the traffic management costs incurred by the contractor are reimbursed by the council.

“Contrary to what you may think, the TTM costs haven’t run away, in fact, they are in line with what they have been in previous years.

“Not only that, the productivity is up, while the cost of TTM remains static.”

David also says that while the various maintenance works entail anything from one or two road closures up to 50 closures, there have been almost no complaints from the community and the contractors are enjoying the safer work environment.

“On top of all that, we are also getting better quality roading – the road closures give us a bigger working area and that means no cold joints in the road.”

David’s initiative has sparked interest amongst the roading community, with the NZ Transport Agency interested in incorporating it into its Code of Practice for Temporary Traffic Management.

“Thinking of the whole process as a supply chain is a good idea for improving social and economic outcomes.

“The supply chain model could also help change the mindset of the client-contractor relationship from that of master-servant to one where all parties are working together for the mutual benefit of everyone.

“It’s better for the industry, it’s better for the council, and it’s better for the community.”

As for David, he is really enjoying the satisfaction that comes from public service.

“Local government has its hooks in me. I’d much rather be serving the community than focusing on making a profit.”

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