Chapter 6 When things go wrong (published)

Not all the companies I worked for were great places to work, but the company I was representing on the project that I am about to narrate was one of the best places I've ever worked for.

We were a small team of seven professionals, all of different nationalities, different cultures, different walks of life, but despite our different backgrounds, we found a common ground in the projects we were working on.

We liked to celebrate and talk about our cultural differences around the table while eating cake. Chinese New Year, Ramadan, Carnival, Easter, everytime a well known cultural event was on going, it wouldn’t go unnoticed at our office. As time went by, only cakes baked by our favourite pâtissier would qualify for a celebration.

It is fair to say that the more cake we had the more addicted to sugar we became. It got to a point that one day when I entered the office someone said, ‘congratulations. You should be very happy about last night.’ Not quite sure about the context of my happiness, I replied, ‘it depends. Yes and no, what’s the story?’

‘Didn’t you watch the show last night?’ My colleagues asked in consternation.

Obviously not. I rarely watched TV, but it didn’t take long to realise where the conversation was going. I guess the grin on their faces quickly unmasked their intentions. Nevertheless, despite my best efforts to deviate from the conversation, I was soon informed that Portugal had won the Eurovision Song Contest; and although I was an Australian citizen and didn’t find the event the proudest moment of any nation, the consensus in the office was that ‘this was once in a lifetime event. I had to be proud of it. We needed to celebrate. Where was the cake?’

This is how tough the situation was back then. We were a great team on high sugar levels.

When we felt there weren't enough events to celebrate throughout the year we created a set of office rules. I can only assume that by then our cake addiction was out of control. My favourite rule was refilling the office water cooler. Everyone used it, but no one bothered to refill it when the water bottle was almost empty. So we decided it was time to do something about it. We agreed that the best solution was to draw a line on the wall, right next to the cooler, and anyone who got a glass of water and passed the line was then obliged to refill it. The result was that our boss got into the habit of buying us cake. He was always in a hurry.

Most of our work was in the residential sector. I lost count of the number of apartments we managed through planning and construction. We were not a property development consultancy, so by the time the projects came to us, the land had already been acquired. However, in many of these projects, one of my roles was to appease the bankers and secure the loan for the project.

At this point in my professional career I had heard about projects that had gone terribly wrong, but I had never been involved in one. Sometimes I would read on the news about a major project that was not going according to plan, let’s just think of the Berlin airport for a second; and yet, I could only speculate on the source of the problem, or problems. Until one day, when I was asked to fix a project that had stalled. Many things can go wrong in the construction industry, but this particular project was a real treat in that sense.

98 Mitchell Rd, in Cronulla, a little town just south of Sydney, was a 72 apartment beachfront development that had stopped under the management of a different company. It would take over 6 months to review and sign a new construction contract and another 6 months to get the project moving, resulting in a lot of wasted time and money.

It still baffles me how the client found himself in such a situation, what kind of decision making led the project team to hit the wall, literally, as they did. Unfortunately I didn’t have the opportunity to study in detail the beginnings of the project. Instead, what I am about to narrate is how we managed to get the project back on track.

The scope of works

I don’t remember exactly how the project started or how I was introduced to it. Only that my boss mentioned that ‘we were taking over an unusual project which had already started. We were replacing the management team.’

This was something entirely new to me. My boss didn’t know what went wrong. According to him, the client didn’t know it either. Exactly what happened I can't faint anymore. What I do remember was receiving a particular email with a few attachments and the following tasks:

1. Agree the wastewater connection;

2. Make an application for a substation;

3. File a Section 96; and

4. Get the contractor back on site as soon as possible.

After reviewing the email my initial feeling was that 98 Mitchell Rd was going to be a walk in the park. None of the tasks looked particularly challenging, but I obviously did not know much about jobs that had gone terribly wrong. Looking back at the task list I can say the following:

Item 1 was an interesting story. For some strange reason, the Sydney Water coordinator working on the project was struggling to organise the necessary approvals. We will return to this point later, as the wastewater connection turned out to be one of the key events in the development of this project.

Item 2 seemed odd to me. Why would we need to apply for a substation when the work had already started?

Item 3 would become a can of worms. An energy sucker that would take a long time to fix.

Item 4 seemed to be the client's main concern, which didn't surprise me. But with so many worms crawling out of the can it became a real challenge to make the job attractive to the contractor.

I scanned the available documentation, which was rather thin, and decided to book a meeting with the architects. Their head office was not far from ours and it was a pleasant walk to get there. Our first meeting was not as productive as I had expected. Instead of getting a good introduction to the project, I got a timid description of the design intent and little information about what needed to be done. After several meetings, with the whole design team, I was able to paint the following scenario:

98 Mitchell Rd had a rushed start, especially at the tender stage. Adjoining structures weren't protected. Neighbour relations were poorly managed. The owner of the adjoining building seemed to know the NSW legal system very well and was quick to sue for damage to his wall.

During the trial he did a great job of convincing the court that the contractor had completely ignored his calls and failed to address his concerns. He also appointed a good consultant that was able to produce an excellent report demonstrating the damage that had been done and how close the wall was from collapsing. After hearing the owner's compelling story, the judge quickly ruled in his favour and issued an order to immediately stop the works.

Clearly, there were signs of professional negligence. Which raised the question, how could a contractor have acted so poorly? There was no Dilapidation Report to prove them wrong, or a proper Construction Method Statement. Something was amiss. What kind of documentation had led to these decisions? Although I kept asking, it was difficult to find the right answers. It seemed to me that we were looking at a job which someone had tried to do on the run, and on the cheap.

I enquired about the previous project manager, which I felt would probably have a great deal of responsibility in this mess. I felt almost everyone refrained from speaking their mind, but my overall impression was that I was dealing with a bully.

To my surprise, the client was adamant about not taking any of the consultants or the contractor to the cleaners. He didn’t want to sue anyone. He was afraid they would walk away from the project, and it would take longer to get the project back on track. I understood his main concern and started babysitting everyone, which, as we shall see, was one of my mistakes.

Let's get back to item 3. After a few meetings the first worms started crawling out of the can. I had to lodge a Section 96, but no one could explain the design changes that had occurred at the start of construction. We had to apply for a substation and I was surprised that no one had checked how much electricity was needed in the building. Based on my experience, such a building was always going to need a substation.

The biggest design challenge to overcome was the Shoring Wall. The design called for a 400 millimetre thick sheet piling wall, but when the sheet piles were rammed in, the end result was a 650 millimetre thick wall. The 250 millimetre difference might not sound like much of a problem, yet it was enough to make the basement too narrow for the car parking. Suddenly we could no longer provide the number of parking spaces required by the council.

To solve the parking problem the contractor had suggested car stackers. The solution would increase the number of parking spaces, but we would still be short of the required amount. At the same time, most councils don't like car stackers. Car stackers can have mechanical problems, forcing residents to park their cars on the street and put pressure on the available parking spaces. The council we were dealing with was no different.

For a few weeks, the design team and I went around in circles. I turned up to meetings looking for solutions, but all I got was frustration. The design team always measured their answers, apart from the structural engineer who kept saying, 'the builder got away with murder. They f----- up the whole job.’ While I was concentrating on getting the permits and getting the job done, I could sense that I didn't have the design team with me.

Despite the inappropriate language, I understood the engineer. The contractor had a duty of care to protect adjoining structures. However, as we were also dealing with design issues, it was hard to believe that the contractor was the only party at fault.

Eventually I learnt a very important lesson: none of the consultants would tell me the truth. But what was the truth in this case if not different points of view? When things go wrong, with insurance claims at large, everyone involved in this mess would only tell me their version of the story, omitting the most important facts.

As I was not making progress with the design team I decided to talk to the contractor, which I had been avoiding until then. Since most of the issues I had been dealing with were design issues, I was under the opinion that there was no need to bring the contractor on board unless the main features of the design were sorted out first. I couldn't see the contractor coming back on site any time soon, as the client wanted, but talking to them wouldn't delay the project any further.

It was an hour's drive to their office on the outskirts of the city. I remember parking the car badly because I was late. Halfway through the meeting, the receptionist asked if a car, so-and-so, belonged to someone at the meeting. I apologised and left in a hurry. Outside was a big truck with a disgruntled driver. ‘Are you retarded?' he asked. I replied, 'Yes, I am,' and moved the car to a suitable parking space. To this day I think my answer was not quite what the truck driver expected to hear when I recall his facial expression.

Back at the meeting, I was surprised to find that they didn't think they had done anything wrong. They had been pressured into starting work without proper documentation. ‘We will sort it out later,' said the previous project manager. The contract didn't mention anything about a substation, sewer connections or design issues. They had little contact with the owner of the neighbouring property, who they said never raised any concerns about what they were doing. They also never felt that they had damaged the wall at all.

According to them, the 450 millimetre for the Shoring Wall suggested by the structural engineer was not feasible either. They were told to go with 650 millimetre and the design team would sort out the basement later; and suddenly I was looking at the structural engineer from a different angle.

Although my main focus was to move the job forward, I always assumed that understanding what had gone wrong would help me to fast track the process. However, like the design team, the contractor had a very frustrating approach to the job.

‘We're not going back until everything is well documented. The design doesn't work. Especially in the basement. This job is too risky for us,' and this was their position.

‘Yes, we are struggling to get the basement in order, but you have to finish what you have started,' I said.

‘We will look into it, but it depends on the conditions,' the contractor replied. It is fair to say that this was a buoyant time in Sydney. The contractor was not desperate for work as there was plenty in the city.

I went back to my office. I sat at my desk. I asked my colleagues if there was any cake left in the fridge. There wasn't, so we had to find out who had broken the office rules.

I remember talking to my colleagues about the project. I felt I had to start thinking outside the box. Obviously, no one was telling me the whole truth. I had been led to believe that the contractor was the one at fault, but they had defended themselves quite well. I could start a forensic analysis of the project, but as the client kept reminding me, reviewing the past did little to move the job in the right direction.

Fortunately, during one of the weekly design meetings, one of the consultants mentioned a subcontractor with expertise in Shoring Walls. I had dealt with many subcontractors in the past, but this was not the type of engagement we were used to in our office. Still, in an effort to start thinking outside the box, I gave the Shoring Wall experts a call. I was not very optimistic at first, but I was glad I did.

The Shoring Wall experts

The Shoring Wall experts were based in Melbourne. They had a small office in Sydney, but most of their work was in the mining industry, which sounded exactly like the kind of expertise we needed, since our plans were to excavate two basements.

They sounded interested in the job when I called them. On the other end of the line was an individual called Pat. Apparently he tendered the excavation works for this project previously. According to him he had prepared a programme and a detailed breakdown of costs, but they came in 50% higher than the competition.

According to Pat, no one could do the job for 50% less. Not in that location. One of his suggestions was to protect the adjacent wall before doing anything. They included a $33,000 cost in the tender to underpin the adjacent structures. If the contractor had done this, they would have prevented the wall from cracking and avoided a court order. As we shall see, the court order was only one of the problems, but for a job that was going to cost millions, $33,000 was a bargain for what the client was going to get out of it. Why the builder hadn't protected the existing structures was anyone's guess; and this situation, despite what the builder thought, could be blamed on them.

Pat called me back a few days later with a solution to our design problem. They were able to ram their sheets 25mm off the existing wall, giving a total wall thickness of around 350mm, which would allow our basement car park layout to comply with the approved Development Application. This was good news, I could finally see the first ray of light shining through the project, but Pat and his Team were reluctant to finish a job that someone else had started. It was not a question of what they could do, but how to correct the sheet metal that had been installed by others.

The court ordered the removal of the existing sheet pilling, which according to Pat, was going to cause three times more vibration than driving sheets into the ground. There could be further damage to the neighbouring property. At the same time Subsidence was still a major concern. The site was close to the beach. Much of the sand had been removed. There was still more to be removed, which meant that sand was still moving around the site. It would take months to settle.

‘Touching the Shoring Wall can backfire, we can't take the risk.’

‘Surely there is something we can do,' I said.

'Probably, but we don't know yet. We need to fly people in to look at it. Rest assured, we are the best at what we do,' Pat said.

I had to admit that Pat and his Team seemed to know more about groundworks than the average subcontractor. They flew people in to look at the job to advise on the next steps, which often meant gathering more information or carrying out more survey work.

Weeks went by and their lack of commitment to the project started to give me a headache. They just wouldn't execute the work and I was under pressure from the client and the court to remove the sheet piling and get on with the job as soon as possible.

Weeks went by and Pat finally suggested his solution to the problem. The plan was to ram their sheets through the 350-millimetre gap between the existing sheet piling and the perimeter of the plot. After ramming their sheets they could proceed and remove the existing ones. Leaving their sheet piles in the ground would reduce vibrations and ensure that the ground didn't collapse.

When I asked Pat why it had taken so long to come up with what looked like a straightforward solution, he replied, ‘We weren't sure we could do it. Not that many subcontractors can do it, but we can,’ and just when I thought we had a solution for the Shoring Wall, we had to digest a sparkly looking annoying worm that had come out of the can and put our design solution on hold.

The distribution station

While I was dealing with Pat and his Team, I was also organising the sewerage connection so that the contractor could return to the site, which as you might remember, was related to item 1 from my initial list of things to do.

98 Mitchell Rd was a site between three existing buildings. One was rather old, which led to a court order being issued for damages to the wall. On the opposite side there was a new residential block and at the back an old distribution station.

The wastewater connection was supposed to be installed at the back. Rob, our Sydney Water coordinator, was working on it. Rob was an expat living in Sydney. He was from Ireland and was always checking the amount of water kept in the Sydney water reservoirs. He always gave me the impression that we were going to run out of drinking water sooner than later.

According to Rob, we needed approval from two agencies: Sydney Water and Ausgrid. Sydney Water owned the wastewater infrastructure and they had the final say regarding the connection between our building and their asset. Only consultants approved by Sydney Water were allowed to interact with them. Rob was one of them. But because the connection was close to the distribution station, Ausgrid, the owner of the network, also had to be consulted.

Rob had tried and tried to engage Ausgrid, but was struggling to get a response from them. Nothing. All quiet on their end. I had seen in the past how difficult it could be to get two government agencies to agree on something. This was obviously a risky situation that needed to be handled quickly. I decided to call Ausgrid directly. I wanted to know what was going on. Rob was on good terms with Sydney Water, which was the bulk of his work. So it was up to me to figure out what Ausgrid needed to get the job done.

I asked Rob for the contact details I needed and made the call as soon as I got them. On the phone I explained the reasons for my call, expecting someone on the other end to say 'hmmm, yes, we need to work something out', but something else happened, 'we are so happy that someone is talking to us about this site', said a guy called Dan.

‘What do you mean?’ I asked.

‘We are about to send you a letter asking for more information.’

'More information? About the wastewater connection? What do you need exactly?’ I asked.

'Which connection? No, we need more information to lift the Section 49A!’

‘Section 49A, what the heck is that,’ I thought, but instead I asked politely, 'Excuse me, but what are you referring to?’

I must have looked like a rather misinformed project manager on that call. When I felt that we were finally about to lift the court order, Dan told me that he had written a similar letter to the contractor; and none of the consultants seemed to know about it. The client was playing dumb, and I could only assume that the previous management team would have known about it, which didn't help much in this situation.

So, during my phone call, I was informed that the contractor had twice tripped the adjacent distribution station when ramming the metal sheets into the ground. The contractor had also been working within 10 metres of high-voltage cables without any supervision. As a result, Ausgrid had issued a Stop Notice to stop further construction work, also known as Section 49A.

Lifting Section 49A was not an easy task. Ausgrid was entitled to protect its assets and had the law on its side. In order to understand how to move the project forward, Dan and I had a couple of meetings. It was clear that due to what happened on site Ausgrid was not going to make it easy for us and produced a long list of requirements to allow any works near their station. It soon became clear that I needed a contractor with a good Working Method Statement to appease them.

The baseline meeting

Pat and his Team wanted to do the job. Although they were a subcontractor and I was desperate for a contractor, there was nothing stopping us from going with Pat, as long as they could meet all of Ausgrid's requirements. I could prepare an Early Works Package to get the job started, but Pat was not prepared to take any risks. He wanted the job risk-free.

‘You can't blame us if the work goes wrong,' he said, which was unacceptable because they had to be responsible for their work. But since negotiations were underway, I felt that we would eventually come to some sort of agreement. Unfortunately, as you shall see, my strategy couldn’t have been more wrong.

As requested by Pat, I had spent a lot of time commissioning reports to identify the location of existing services, ground Anchors, groundwater and so on. The building on the other side of the site was a 7 storey block of apartments that had been built a few years earlier with a 2 storey basement. The walls were probably anchored. Pat wanted to know the exact location and length of the Anchors. We managed to find the documentation, but it took several phone calls and persistence to track down the building company that had done the work.

We developed a strategy for monitoring the execution of the works. Dilapidation Reports were commissioned for the adjoining walls and footpaths around the building. As the documentation was piling up, I felt it was about time to organise a meeting to discuss the status of the project. I called it the baseline meeting.

My plan was to review the documentation to appease Pat and his Team. Pat liked the idea and suggested bringing his CEO with him. I had heard so much about this man that I was really looking forward to meeting him in person. He had a reputation for knowing earthworks like the back of his hand. In our office we used to refer to him as the expert of the experts.

At the baseline meeting, my initial impression was that he looked like a frail pensioner, but things changed very quickly once we started reviewing the documentation. The CEO quickly took control of the discussions. He was a very opinionated person, but rather than agreeing that we had reduced the project risk to the bare minimum, he felt that even more reports were needed.

According to him, Subsidence was still an issue. The distribution station could still be affected as the risk of the Shoring Wall collapsing was still a possibility. It was better to assess the risk of further damage. He was right, but it was quite annoying to find out about these things so late in the process. I could have been told about it weeks before. I felt the usual frustration creeping in, but I was getting used to it in this job.

However, as the meeting progressed, something unexpected happened. Just when I thought the baseline meeting was heading towards another few weeks of compiling more documentation, the CEO touched on a topic that would get this job on the right track; with what initially sounded like a rather trivial question to me. 'Has the insurance company been notified?' he asked. I didn't think much of the question at first, but it would be the cataclysm of a great lesson for me.