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Project Management and Quantity Surveying

A significant fire occurred to a major waste recycling facility causing extensive building damage which resulted in an estimated $3.5 million loss.

Overview
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Sergon was engaged by the Loss Adjusters to Project Manage all aspects of the reinstatement.

Due to a rapidly increasing Business Interruption loss following the incident, the claimant immediately engaged their preferred builder who provided reinstatement design documentation, arranged Council approvals and submitted their own Scope of Works for reinstatement.

The Builder also submitted a detailed Reinstatement Tender for consideration by the Insurers.

  • The Challenge

    While a quick reinstatement was a priority to mitigate consequential losses, Insurers and Loss Adjusters required control over the reinstatement process to ensure the scope was limited only to the insurable damages and to manage the costs. Also required was a separation of costs, i.e. two Insurers (for the Landlord and Tenant), and the issue of upgrades and requests for changes in design.

  • The Solution

    Sergon engaged a team of experts consisting of a Project Manager, an Engineer and Quantity Surveyors. From the outset, the team regularly met on site with the Insured representatives, engineers and builders, allowing all stakeholders to work collaboratively on a thorough review of damage, which ensured a scope of required reinstatement works was readily agreed. This was an important step to avoid confusion or disagreement.

    Regular onsite meetings also allowed the scope to be monitored and refined to the agreement of all stakeholders. This not only avoided delays but also ensured that the scope related to reinstatement of the fire damage only eliminating scope creep and unrelated building works.

    As part of the project management process a rigorous review of the Builders tender submission was carried out by Sergon Quantity Surveyors who completed a Tender Appraisal Report. It became evident that the Builders tender submission included numerous high value provisional sum allowances and contingency sums. Inconsistencies were rectified and a revised budget estimate was successfully negotiated with a demonstrated saving of approximately $164,000. As a result of agreeing for Sergon Quantity Surveyors to monitor all reinstatement costs, Insurers gained sufficient comfort to allow reinstatement to proceed. Builders monthly progress claims were reviewed in detail by Quantity Surveyors and corrected as required prior to recommendations for payment being released to Loss Adjusters.

    All costed variations were submitted in writing to Quantity Surveyors who approved reasonable costs only within the agreed Scope of Works. At the conclusion of reinstatement, Sergon Quantity Surveyors completed a detailed reconciliation of all Provisional Sum Allowances.

    Outcomes
    The involvement of Sergon Project Managers and Quantity Surveyors produced the following results:

    • Building reinstatement was completed in a compressed time frame.
    • Consequential losses for the Landlord and Tenant were significantly minimised.
    • Cost control by Quantity Surveyors resulted in direct savings of approximately $269,000.
    • Scope creep and unrelated building matters were eliminated and variations were tightly managed, producing unquantifiable additional savings.
    • Reinstatement went smoothly and the Tenant was able to return to normal operations in a shorter than expected time frame.
    • The matter has now progressed to the Supreme Court as the Insurer is pursuing recovery of their outlay. The Insurers are confident that the costs were tightly controlled and anticipate no disputes on quantum.
    • The Builder was required to submit all invoices to demonstrate costs and substantiate their spend resulting in a further saving of approximately $105,000.
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