7.1
There was strong support from inquiry participants for encouraging technology uptake by industry and government, and enhancing digitisation in infrastructure procurement, planning and delivery processes.
7.2
Improving the use of technology by both industry and governments is an important means of addressing infrastructure challenges, including lagging productivity in the construction sector. This was a recurring theme in evidence to the inquiry.
7.3
Infrastructure Australia’s Infrastructure Market Capacity research identified the rate of growth in expenditure as ‘set to outstrip the capacity of the sector to support growth over coming years’. Further, it noted that productivity in the construction industry is also falling relative to other sectors. Infrastructure Australia saw this combination of increasing demand from the bolstered infrastructure pipeline and lagging productivity as presenting a key risk for market capacity.
7.4
The Department of Infrastructure, Transport, Regional Development and Communications noted that multifactor productivity—reflecting the overall efficiency with which labour and capital inputs are used together in the production process—has remained relatively flat within the construction industry since 1999-2000, excluding a rise from 2010‑
11 to 2013‑
14.
7.5
The construction sector can be characterised by ‘low uptake of new technologies and digitisation with a high share of onsite manual labour’. The Department of Infrastructure, Transport, Regional Development and Communications explained that:
Recent years have provided further disruption with stringent sustainability requirements, rising costs, labour scarcity, new material and production approaches, providing an environment for innovation. COVID-19 has increased disruptions and is likely to continue to disrupt productivity, accelerating the requirement for digitisation and innovation.
7.6
In addressing the impact of the pandemic on construction projects, the Department of Infrastructure, Transport, Regional Development and Communications, at the time of its submission to this inquiry in July 2021, acknowledged that supply chain disruptions have delayed the progress of some construction projects. The department was not seeing, however, a major slowdown of the $110 billion transport infrastructure pipeline.
7.7
Research undertaken by the Felix Group suggested that the construction sector’s slow uptake of technology, which is hampering productivity improvements, can in part be attributed to a ‘risk-averse culture that roadblocks innovation’ and ‘low levels of digital awareness in leadership’.
7.8
However, North Projects was more optimistic, suggesting that Australia has the opportunity to make ‘an evolutionary future-focused leap in its project delivery framework…with an integrated approach with procurement, contracting and the regulatory framework—to unlock the full set of triple bottom line benefits’.
7.9
Roads Australia encouraged government leadership and collaboration with industry in supporting innovation in infrastructure delivery. It stressed that improvements needed to technology and innovation are broader than just procurement, and ‘have the potential to massively increase productivity in the design and construction of new infrastructure, as well as ongoing operations and maintenance’.
7.10
The following sections of this chapter explore digital opportunities for government-funded infrastructure projects.
Digital by default
7.11
‘Digital by default’ refers to providing digital services that are straightforward, convenient, and can be used reasonably easily by stakeholders. As well as improving the user experience, a digital by default approach typically provides administrative cost savings (after initial set‐up costs).
7.12
Infrastructure Australia highlighted the importance of the digital by default approach in planning, procuring and delivering public infrastructure, and maintained that Australian governments should no longer accept digital by exception and instead require ‘digital by default including valuing data, a federated approach to digital processes and systems alongside upfront incorporation of the enabling capacity for smart deployment’.
7.13
In its 2021 Australian Infrastructure Plan, Infrastructure Australia identified that adopting a digital by default mindset is one significant way that governments can lead a step change in productivity in the infrastructure industry. Naturally, this should parallel complementary reforms including industrialising the sector, adopting portfolio management, providing resources for front-end engagement, and rewarding innovation.
7.14
The Jacobs Group, a global engineering firm, observed that most infrastructure programs do not have a digital strategy or plan that covers all stages of a project, and recommended that all major infrastructure projects should ‘have a coherent digital plan for infrastructure design and delivery aligned with recognised industry standards’.
7.15
Ansarada, a private Australian company involved in data and technology platforms, claimed that improving procurement processes can deliver significant savings to taxpayers. It contended that in meeting minimum non‑negotiable requirements for procurement best practice, project teams and government may be using a blend of analogue methods and technology, and that in some cases there is even paper still in play. Ansarada explained that:
You may have email being used to communicate sensitive information, shared drives, generic e-procurement systems, USBs—there are a lot of different tools being used to achieve a complex set of events. While this meets the minimum requirements, there's a huge amount of risk and inefficiency between each of the steps that you navigate…
…A lot of organisations are still operating within Australia using these blended different systems, but, after talking with a lot of different partner agencies and departments, we know that by centralising, managing and automating a lot of the systems using technology you're able to reduce the cost of procurement by two-thirds and the inefficiencies by 60 to 80 per cent.
7.16
Similarly, BuildingSMART, which describes itself as the global industry body driving the digital transformation of the built asset industry, outlined that many information management processes for projects are still heavily reliant on ‘analogue processes, replicating the paper-based processes that have been in use for hundreds of years’. It argued that running new and traditional processes in parallel are adding to the workload and diminishing the returns of adopting digital approaches.
Digital engineering
7.17
Digital engineering involves bringing together project information into a single digital location, thus enabling the seamless transfer of information and data over the project and asset life cycle.
7.18
The Australian Chamber of Commerce and Industry supported investing in technology and outlined that:
As projects become larger and more complex, digital engineering instruments and central digital information portals have become increasingly necessary. Restricting data access to a limited scope can stifle innovation and inhibit efficiency. Enhancing data access can lead to improved transparency and drive innovation for current and future projects. The collection of relevant data can also be used to inform future project planning. By documenting learnings from the project, industry can better anticipate the risks and issues for future projects.
7.19
Roads Australia also highlighted the value of digital engineering as a ‘new innovative tool that is transforming the way infrastructure is designed, constructed and managed’, and encouraged the Australian Government to take a strong leadership role in developing a nationally consistent approach.
Building Information Modelling and digital delivery
Definitions
Building Information Modelling
7.20
Building Information Modelling (BIM) is a form of digital engineering, which combines software and processes to model the build of an asset. It is increasingly used in the construction industry to deliver complex projects through their whole of life cycles. Digital information is key to BIM, which encompasses ‘3D to 7D, digital delivery, digital twin, Internet of Things, smart cities and the digitally connected world’.
7.21
The Australasian BIM Advisory Board (ABAB—see more on ABAB’s establishment and purpose in paragraph 7.30) suggested that the European Union BIM Task Group’s definition of BIM is the most comprehensive:
BIM is a digital form of construction and asset operation. It brings together the technology, process improvements and digital information, and this can radically change and improve the client and project outcomes.
BIM itself is a strategic enabler for improving decision-making, both in buildings and in public infrastructure.
7.22
The concept of openBIM extends the benefits of BIM. BuildingSMART described openBIM as a vendor-neutral (non-proprietary) collaborative process to share project information in support of seamless collaboration for all project participants, and to facilitate interoperability for projects and assets through their life cycles. ABAB agreed that:
What is important about BIM globally is, for it to be successful, it should follow the principles of openBIM. This allows interoperability, reliable data, flexibility, open and mutual standards, and collaboration while still achieving sustainability. Simply, that means that all the participants in the industry can use their software of choice, and it allows for future innovations.
7.23
BuildingSMART stressed that a significant advantage of governments specifying open digital formats for infrastructure projects is that in the future when a piece of information needs to be accessed for a given project, governments will not have to rely on a vendor specific piece of software, in cases where such proprietary software was used.
7.24
BuildingSMART also noted the collaborative work of its members to ensure that information can be moved between different software applications, and explained that:
It should make life easier for clients, customers, contractors and designers that we don't have to go and specify that they must use this or that piece of software. We can just say, 'This is how we want our information handed over, and we know we can use it for various purposes’.
Digital delivery
7.25
Broadly, the Australian Government, as part of its digital transformation agenda, has committed to the digital delivery of key government services by 2030. In the context of infrastructure projects, digital delivery essentially focuses on the effective use of digital data to design, construct, inspect and record as-built conditions during project delivery. In technical terms, ABAB describes digital delivery as:
…the outputs of the BIM process, which is the Project Information Model (PIM) at the end of the construction phase, and the Asset Information Model (AIM) that the asset operator combines the PIM with the operational readiness or soft landings data to operate and maintain the asset. If the operator wishes to connect this AIM to the devices and asset management systems and run that asset virtually, this is referred to as a Digital Twin.
The digital delivery of a PIM or an AIM is a digital representation of the physical and functional characteristics of a building, physical infrastructure, or environment. It serves as a shared knowledge resource for information about an asset throughout its life cycle supporting decision-making at each phase—from strategic appraisal and planning; through the design, construction and operation; and into maintenance, renewal and decommissioning.
Digital twins
7.26
A digital twin is a virtual model designed to accurately reflect a physical object. This interactive platform captures and displays real-time 3D and 4D spatial data to model the urban environment creating a digital real‑world model of cities and communities to facilitate better planning, design and modelling. A digital twin can be an output of a BIM, which can then evolve and transform using real-time data once the asset is operational.
7.27
The Department of Infrastructure, Transport, Regional Development and Communications described NSW’s development of a digital twin model to facilitate better planning, design and modelling for the state’s future needs. It outlined that:
Phase one – Digital Twin included digital visualisations of the local government areas that comprise the Western Sydney City Deal and Greater Parramatta to the Olympic Peninsula. This project has demonstrated the ability to upgrade NSW’s Spatial Data to 3D/4D and included the integration of live transport feeds as well as infrastructure building models.
7.28
ABAB also observed that the wider use of digital twins would drive opportunities for small and medium enterprises (SMEs), as the model enables reviewing of the impacts of large infrastructure projects and an understanding of how to break projects down into smaller contracts to encourage SME participation.
BIM and digital delivery: benefits and challenges
7.29
Infrastructure Australia, in its 2021 Australian Infrastructure Plan, acknowledged BIM and digital engineering as well-established digital tools and approaches that have ‘shown to deliver better project outcomes, increase productivity and improve infrastructure performance’.
7.30
ABAB, established in May 2017, comprises a team of experts from government construction policy agencies, peak construction associations, and standards bodies, to provide leadership on the adoption of BIM and Project Team Integration (PTI). The principle underlying PTI is that ‘wasted effort’ could be significantly reduced if clients, designers, head contractors, specialised trade contractors, cost planners and others, shared responsibility for the successful delivery of a project.
7.31
ABAB contended that new technologies and processes in BIM can lead to increased productivity and improved asset management. It submitted that:
When combining those robust requirements with the efficiencies digital delivery brings, the country can produce significant savings. The estimated construction activity in Australia is $205 billion in 2020 and a typical waste of effort, due to non-collaborative processes, is reported at 30 per cent. ABAB’s focus on promoting digital delivery as a conservative 5 per cent productivity improvement (in the 30 per cent waste) driven by BIM would result in a $3.1 billion savings each year.
7.32
ABAB described BIM as acting as a ‘single point of truth’ for a project, and that, in addition to time and efficiency savings, improved safety and asset management, and reduced project risk, there is also evidence of BIM producing cost savings. While conceding that information on exact savings is often commercial in confidence, ABAB cited examples from the United Kingdom (UK) where:
…government agencies have achieved construction cost savings of 12–20 per cent from the use of BIM and other complementary strategies to improve productivity.
7.33
Further, ABAB told the committee that the United States Transport Research Board had found that for every dollar spent on BIM there is an average $6.83 return on investment, with the minimum return being $3.26.
7.34
The committee heard that even where certain designers or contractors were using digital processes, such as digital engineering or BIM, this is not being applied throughout the whole process, with the data rich information instead ‘typically dumbed down to meet non-intelligent deliverables such as PDF drawings, specifications or reports’.
7.35
BuildingSMART explained that this has been its experience working with tier one contractors on large infrastructure projects, with often impressive technology being used in early stages such as design but not transferred to later stages of the project. It emphasised that:
…the largest productivity gains for the construction sector from digital transformation will be through the seamless transfer of information and ensuring reliable information can be shared and reused, not only through the life cycle of a project but across jurisdictions, departments and stakeholders.
7.36
Certain groups saw government procurement as an opportunity to leverage industry to adopt key technologies for government projects. ABAB stressed that BIM is a procurement decision that must be set as defined information requirements at the planning and procurement stage if beneficial outcomes are to be achieved.
7.37
Felix and Entwine called for mandating the use of key technologies for government projects. This is the approach taken by the UK Government, which requires the use of BIM on all publicly funded infrastructure projects. ABAB submitted that this approach has helped guide the UK construction industry in achieving better outcomes, which in turn drive productivity and economic growth.
7.38
ABAB added that BIM is increasingly used internationally and has also been mandated in Finland, Norway, the Netherlands, Singapore and South Korea. It also stressed the need to endorse and standardise digital delivery for infrastructure procurement, noting that Australia is lagging ‘many countries who have already developed the collaborative procurement models and uplifted their…competencies in digital delivery’.
7.39
Further, ABAB claimed that international experience has shown that ‘improving the weighting of relevant BIM and digital delivery experience on infrastructure procurement will drive equal treatment of suppliers’, and so assist with uplifting local competition and furthering Australian business capacity.
7.40
In addition to improving productivity, Felix and Entwine saw an opportunity for technology-based approaches to drive ethical behaviour in the construction industry, by assisting with ‘reducing discretionary decision making in this area by providing standardised evaluation methods and weightings that cannot be manipulated to allow price to be the ultimate decider’.
7.41
The then Council of Australian Governments Infrastructure Working Group formed the National Digital Engineering Working Group (NDEWG) in 2016, as a subgroup to address concerns from industry about divergent BIM approaches developing across jurisdictions, particularly relating to transport infrastructure.
7.42
The NDEWG was tasked with contributing to the development of a national approach to BIM, and later in 2016 released the National Digital Engineering Policy Principles (NDEPP). In the NDEPP, Australian governments recognised the importance of digital engineering and BIM to delivering and managing buildings and infrastructure assets and networks, and to consistency in digital approaches and data requirements.
7.43
ABAB stressed that while major companies have recognised the importance of, and are investing in, BIM capability, government leadership is needed to develop a consistent approach between sectors and jurisdictions. It stated that:
Most states and territories have begun adoption of BIM on a project-by-project basis, resulting in bespoke approaches which favour the provider rather than a consistent whole of government approach. New South Wales (NSW), Queensland (QLD), South Australia (SA), Victoria (VIC), and Western Australia (WA) have used BIM on significant infrastructure projects, particularly hospitals, but typically only in the design and construction phases. The use of BIM is now progressing to the asset management phases of some projects (such as the Perth Children’s Hospital and New Royal Adelaide Hospital) and also to linear transport infrastructure projects (such as roads and railways).
7.44
The Department of Infrastructure, Transport, Regional Development and Communications noted that work is underway in Australia on future opportunities around digitisation with some states, for instance, establishing digital tender and procurement processes. Digital procurement includes automating repeatable tasks to boost efficiency and reduce costs, providing stakeholders with real-time information and user friendly online tools, and smarter ways to infuse data models and enrich project operations.
7.45
As part of the Department of Defence’s approach to collaborative procurement models, it has created six BIM or digital delivery models based on integration requirements and risk profiles for each delivery or project type.
7.46
Sydney Water, as an adopter of collaborative contracting and Project 13, described the use of BIM systems as critical. BIM allows for simplicity and rapid data transfer, not just on technical aspects, but also for financial information and to enable timely project delivery. Sydney Water explained that:
…the digital systems and the asset knowledge we have, and the hyper‑connectedness of that into the customers, the growth and forecast in that area, the environmental requirements—all those things go into those models and allow us to collaborate right from the start and help us measure that system to serve customers well into the future.
7.47
Notwithstanding the need and scope for improvement in digital approaches to infrastructure projects in Australia, ABAB highlighted that there are positive cases in Australia, where Australian projects have been finalists for BuildingSMART international awards.
Digital upskilling
7.48
Evidence to the committee showed that better use of digital approaches can improve infrastructure sector efficiency and SME capacity.
7.49
BuildingSMART noted that attempts internationally to mandate the use of digital engineering or BIM for government infrastructure projects have been hindered by:
…a lack of leadership and a lack of resources to upskill both the supply chain and their [countries’] own government departments to ensure that they can not only enforce the requirements but also take advantage of new ways of communicating and collaborating.
7.50
Entwine highlighted the importance of having the right culture in place to support digital adoption, in particular the need for governments to show leadership, given that:
…the whole tone of the project is set by the instigator or the project sponsor or, like in this case, government agencies who are commissioning the works. There really is a huge onus to set a positive culture for learning.
7.51
When discussing leveraging procurement to support digital upskilling, particularly for SMEs, Entwine outlined that:
You leverage to a set of rules, where you say, even if the base at the start of the project is low, we want the base at the end of the project to be high. If it costs us more to deliver that project than it would have to deliver the project without doing that, then so be it, because that's how you get the broader benefits, such as social and environmental outcomes including an upskilled workforce.
7.52
ABAB also explicitly highlighted digitisation as an ‘enabler for small and medium enterprises to get into the game’, with the smaller project packages providing the opportunities for SME staff to ‘learn these skills on the job’ and then take this experience to the next projects.
7.53
In addition to using government procurement and a digital by default method, a direct approach to upskilling SMEs may also be an option. Felix and Entwine noted New Zealand’s ‘Digital Boost’ program, for example, and indicated they would support similar direct investment in Australian businesses. The New Zealand Government allocated $10 million to this program, which provides free training for local small businesses to improve their digital skills in areas such as ecommerce, digital marketing, business analytics and cloud-based accounting. The content is delivered through videos, case studies, question and answer sessions, podcasts, learning summaries and other resources.
Committee comments
7.54
Improving the use of technology by both industry and governments is an important means of addressing infrastructure challenges. Evidence to this inquiry highlighted the importance of integrating digital technology throughout the infrastructure procurement, planning and project delivery cycle to optimise efficiency and productivity.
7.55
The committee agrees that embracing digital technology in procurement and the delivery of infrastructure projects will help the construction sector make serious inroads towards boosting productivity. Clearly, this will need to work in consort with improving risk sharing arrangements and enhancing collaborative practices, as covered in previous chapters, and in addressing other sector challenges explored in Chapter 8.
7.56
The committee shares Infrastructure Australia’s view, outlined in its 2021 Australian Infrastructure Plan, about the importance of moving to expecting a digital by default approach in the planning, procurement and delivery of public infrastructure, rather than accepting digital by exception.
7.57
While some government agencies and companies have made significant progress in technology uptake and digitisation, this is by no means consistent across parties, different infrastructure projects, or even the whole of life cycle of a given project. The committee heard that in some cases project teams and government clients are using a blend of analogue methods and technology, which may meet minimum requirements for best practice procurement and project delivery, but in practice are not delivering the efficiencies and wider benefits that embracing this technology can provide.
7.58
The committee, however, is cognisant that there is inherent risk in governments being too prescriptive on the use of specific software or platforms when setting procurement requirements. It recognises that investing in technology and the associated upskilling of staff can be costly in terms of time and money, and so should not be set up in such a way as to act as a further barrier, in particular for small and medium enterprises which, by nature, have less resources to draw on for this kind of investment.
7.59
There are clear benefits in being able to utilise the data in digital delivery for an asset’s life cycle, and, where appropriate, to apply to future government procurement and project management. As discussed in Chapter 5, a collaborative approach to procurement and projects will likely facilitate the transferability of certain information for future application, where it is not restricted by commercial considerations.
7.60
The committee recognises that digital delivery and alliance contracting are complementary approaches and notes the Australian Constructors Association’s observation that alliance contracts facilitate the open and transparent sharing of information that is required for the adoption of digital engineering tools and processes such as Building Information Modelling (BIM).
7.61
In considering the benefits that can be derived from BIM, it is also important to keep the ability to share this information between key parties at the forefront of strategic planning and recognise the need for vendor-neutral (non-proprietary) methods of information exchange. Niche or boutique products will not effectively support the wider objective of information sharing to facilitate better project outcomes and long-term asset management.
7.62
The Australian Government must show leadership in highlighting the importance of digitisation to government-funded infrastructure projects; driving the adoption of suitable technologies; and facilitating collaboration to help ensure consistency and information sharing between government clients and the various parties in the project delivery chain.
7.63
The committee recognises the potential benefits for increased efficiencies and productivity through the adoption of a digital by default approach in infrastructure projects, in which governments take the lead in providing accessible digital options that can be utilised by government officials and businesses, from planning to post‐delivery assessment and, where applicable, for future application to like projects.
The committee recommends that the Australian Government in consultation with state, territory and local governments, support a digital by default approach in infrastructure projects, with consideration for:
the digital by default recommendations in the 2021 Australian Infrastructure Plan
tender requirements that utilise Building Information Modelling (BIM) or similar technologies
supporting openBIM or similarly interoperable methods for digital delivery that allow for exchanging project information
fostering contractor upskilling for small and medium enterprises in digital approaches when undertaking government‐funded infrastructure projects
facilitating whole of life digital strategies in project plans.