Quality assurance in procurement, supply and construct

Over the last 6 months we have noted a significant difference in the contractual elements of our jobs.  These mostly have been in relation to insurance and quality assurance.  A number of the requirements seem to be very similar to what historically some of our larger miners would be expecting from their large scale head contractors.  This requirement seems to be being pushed down the line to smaller contractors like ourselves who do not have the resources for developing and attaining a full ISO certification.

We suspect that this is due to the full provisions of ISO 9001 2015 becoming active this year, as well as shareholders increasingly holding their boards accountable for quality assurance at ever smaller levels of capital investment. 

Rather than fighting it, we view this as an opportunity for our company in the smaller end of construction.  Having always "flavoured" our processes with a systematic methodology in line with experience gathered in a previous incarnation taking a small hospital through ISO certification, the ideas are not new, and the adjustment to what we do is not great.  Consequently, we have taken on an extra staff member to tidy up and add to procedures where required, as well as assist us to define our head office roles and requirements better in order to selectively recruit and increase our capacity for larger projects. 

We hope that this will help our regular clients to satisfy their contractual obligations upstream, and allow us to expand our scope into heavier steel fabrication where QA has historically been more demanded by clients.  Our perceived advantage here is that some of the cowboys who occasionally win work over us, only to present multiple problems to their clients on site will be screened out early.  Our challenge is to remain nimble and cost effective, allowing us to continue providing rapid building solutions at an economical price that allows our EPC clients to win jobs, and their clients to achieve feasible projects.

The most tangible changes for us so far:

  • Capability to supply, install and commission of overhead travelling cranes.
  • Routine supply and install of electrical scope.
  • A full formal pathway for fabricated steel where our lighter sheds are not quite enough.  This includes external shop drawing and detailing, as well as a fabrication pathway with full quality assurance able to be pre-arranged with clients to account for all required identification, traceability and NDT.
  • Much better post project documentation with comprehensive MDRs.

Mining Exploration in Western Australia

On occasions I am lucky enough to get a free pass from the office and wear a slightly different hat as a charter pilot.  I recently completed a 2 week contract for The Goldfields Nullarbor Rangelands Biosecurity Association aerial baiting for feral dogs and this involved covering a vast swathe of territory from Eucla to Cosmo Newberry to North West of Sandstone.  I was amazed at the number of small rigs and pilot diggings particularly through the North Eastern area.  For a supposedly quiet time, I don't think I was ever more than 10 minutes flying time from a representative of humanity.  For a small company involved with predominantly junior mining operations, this presented a very positive future outlook, and we look forward to working with some of our regular clients as some of these prospects come to fruition, as well as providing facilities for some of the smaller operators directly.

The remote area difference

I have recently been looking at pricing a large industrial building with high insulation requirements for a client, and been greatly struggling with this.  After several weeks of back and forward between the client, ourselves and the insulation supplier,  I was ready to throw my hands in the air and asked the rep "why is this so difficult, as surely we were not the only people in existence to have ever wanted to insulate a large building?  Is it something about us?"

His reply was very interesting.  "Jon, that is virtually the same scope that is written up Australia wide, but what normally happens is that is is technically not possible, and halfway through the project, the contractor finds it can't be done and the scope gets changed.  You are the only people we know of who try to work it out in advance"

Apart from muttering about why the rep didn't tell us (and others) this in advance, it caused me to reflect on what makes a successful remote area contractor.  Most of our sites are a long way from anywhere, and so issues have both a time and a cost factor to make anything happen.  We try to keep our projects as low cost as possible, and so we appear to have an inordinate amount of planning that happens BEFORE anything happens on site, and also before we even get to the stage of submitting a price estimate.  I have joked before that I only ever go to site for political reasons so the client thinks their job is being managed.  There is a large margin of truth in this as 90 percent of our head office work is complete before the first person arrives on site, and day 2 is generally an opportunity to sit back, take a deep breath and relax.  Execution is our anti-climax.  My observation of construction in Perth is that this is the time it gets really busy as the couriers and supervisors utes shift into gear picking up forgotten items.  Can't do that 1000 miles away, so we will stick with thorough planning in advance.....

2016 in memorium

Well, another financial year has been concluded, and it certainly has been surprising.  Amidst the doom and gloom, and the fears of both suppliers and clients going out of business mid contract, we have had a record turnover.  Some of the main things we saw this financial year in our industry were:

  • A huge management change in a key supplier along with promises of performance improvement,
  • A major new supplier entering into competition with that key supplier,
  • Very keen pricing from our steel sheeting and purlin suppliers,
  • A proportion of our competition dropping out of the market,
  • A change in the tendering and administrative requirements for some of the majors making it easier for some of the smaller engineering firms to bid and win on an even playing field,
  • A large and successful pushback on some of the majors who had tried to introduce significant payment delays to contractors, and of course
  • The Arrium group changes 

Our predictions for ourselves in the coming year are that with the turmoil and unpredictability, a number of closed gold mines will look at refurbishing and starting up, and a number of prospective gold mines who were not feasible at 1600 an ounce suddenly find themselves ready to build.