In early October UTS professor Martin Loosemore and senior representatives of John Holland and CIMIC Group’s CPB Contractors met to discuss how they implemented Aboriginal social procurement on the Rozelle Interchange Project in Sydney.
Taking part in the meeting were Bradley Schapiro, senior commercial manager at John Holland; Stephen Antonopoulos, communications and stakeholder and engagement manager, CPB Contractors; and Stevie Cole, group manager – social impact, John Holland.
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The meeting formed the fourth case study in the UTS Social Procurement Community of Practice best practice series and provides insights into what the group members did, what they achieved and the lessons learnt in implementing social procurement.
Background
The ongoing $4.6 billion Rozelle Interchange and Western Harbour Tunnel – Southern Tunnel Works project in Sydney involved constructing one of largest and most complex underground motorway junctions in the world. Commenced in 2019 and constructed by a 50-50 John Holland and CPB Contractors Joint Venture (JHCPB), the project is a new underground motorway interchange with three storeys of cross-over tunnels (the deepest being 65 metres below ground).
The Rozelle Interchange provides connectivity to the M4-M5 Link Tunnels and the City West Link and an underground bypass of Victoria Road between Iron Cove Bridge and Anzac Bridge. It also provides a connection to the future Western Sydney Harbour Tunnel; new and upgraded pedestrian and cyclist infrastructure for Sydney residents; and up to 10 hectares of new public open space located at the former site of the Rozelle Rail Yards.
Rozelle Interchange Aboriginal Participation in Construction Program
The Rozelle Interchange Aboriginal Participation in Construction (APiC) Program was established in response to the New South Wales (NSW) Aboriginal Participation in Construction Policy, which is a whole-of-government procurement policy creating opportunities for Aboriginal-owned businesses and supporting Aboriginal employment and training throughout the NSW government construction supply chain. This required the Rozelle Interchange project to commit 1.5 per cent of qualifying project spend towards Aboriginal and Torres Strait Islander individuals and/or businesses.
In 2019, following a series of collaborative workshops between JHCPB and Transport for NSW, and a detailed analysis of the anticipated project spend, the value of the Project’s APiC commitment was initially set at $34 million and later increased to $44.7 million following the award of the Western Harbour Tunnel – Southern Tunnel Works package. This was the largest spending target on any project in NSW at the time.
While this seemed like an insurmountable feat at the start of the project, the project to date has committed over $150 million towards eligible APiC individuals and businesses, exceeding contractual APiC commitment spend by 300 per cent. This has resulted in 25 Aboriginal-owned businesses being engaged on the project and 566 Aboriginal or Torres Strait Islander people being employed (31 of whom were long-term unemployed). Overall, 4.32 per cent of project personnel and 5.03 per cent of direct JHCPB employees identify as Aboriginal or Torres Strait Islander peoples compared to 3.8 per cent of the Australian population.
As a result of these achievements, the Rozelle Interchange APiC Program was a shortlisted finalist for the Infrastructure Sustainability Council’s 2022 Annual Awards for NSW government APiC program achievements. Importantly, the project outcomes have had wider government policy implications, prompting discussions amongst government departments on whether APiC targets can now be utilised in other industries.
How did they do it and what did they learn along the way?
Leadership and education is critical
There was a large up-front education piece where everyone working on the project was made aware of the APiC program and their individual role in meeting the project targets. This started at their project induction and continued throughout the project at regular intervals to ensure that everyone was constantly mindful of what they had to achieve. For example, social procurement roadshows and subcontractor forums were held where project staff could meet Aboriginal business owners and local Indigenous community members. These were used to maintain focus and emphasise that the APiC initiatives were not just a compliance “tick box” exercise but about harnessing the project team’s power and responsibility to make a difference to people’s lives.
Collaboration was key
Key to success was collaboration with Aboriginal and Torres Strait Islander recruitment and labour hire organisations including Aboriginal Employment Strategy (AES), Yalagan Group, Goanna Services and CareerTrackers. This promoted the project throughout broad networks of individuals who may otherwise not have had an opportunity to work on a state significant infrastructure project of this magnitude. Goanna Services, in particular, helped facilitate the successful Indigenous pre-employment program for the project, which resulted in 12 participants securing full-time employment with the project as civil construction apprentices.
Holding people accountable
Commercial managers and project managers were explicitly held accountable to achieve APiC outcomes. To do this, the project developed an Accountability Statement Matrix (ASM) which was a form of position description that outlined an individual’s role-specific objectives and deliverables. Individual ASMs required people to “actively seek out opportunities to meet APiC obligations” and “identify opportunities and work with the commercial team to contribute to Aboriginal Participation in Construction.”
Project and commercial managers were answerable directly to the project director to achieve their targets.
Innovation in procurement
To ensure that APiC businesses had equitable opportunities to participate in the project, the contracts team was required to include an Aboriginal or Torres Strait Islander subcontractor or supplier as one of the tenderers in every package issued to tender. If this was unable to be achieved, a justification was required to be submitted to the project director.
Packages were broken down by discipline and distributed across the contract teams. Each of the contracts leads was given sub-targets to drive accountability to engage with Indigenous businesses.
During the tender assessment process, Aboriginal and Torres Strait Islander participation was given a weighting in the assessment process and a range of cost and non-cost considerations were made when awarding a contract.
When Aboriginal and Torres Strait Islander businesses were selected as the successful tenderer, the commercial team notified the project’s APiC advisor. This kick-started the engagement process and a positive working relationship between the Aboriginal and Torres Strait Islander business and the project, with the advisor available to assist with onboarding processes and capacity-building, with a particular focus on smaller enterprises.
Apprentice and traineeship programs
One of the project’s most impactful youth engagement programs was its Apprentice and Traineeship Program, which included school and non-school-based streams. To date, 17 Aboriginal and Torres Strait Islander apprentices and trainees have been inducted on the project, offering sustainable employment opportunities in the project supply chain.
Enhancing cultural awareness
Numerous initiatives were introduced throughout the project’s life to foster understanding and appreciation of Aboriginal and Torres Strait Islander culture and connection with Aboriginal and Torres Strait Islander communities.
These initiatives included: education and training to staff and subcontractors to introduce the APiC program; cultural awareness training; unconscious bias training across a wide cross-section of teams and roles; training for commercial and administrative staff to familiarise attendees with APiC requirements, systems and governance structures; all site inductions (for over 19,000 people) emphasised the project’s commitment to Aboriginal participation; supplier diversity training for procurement staff; subcontractor forums to introduce subcontractors to the APiC program and help them understand how they could contribute to its goals; participation in cultural days of significance such as National Reconciliation Week and NAIDOC Week; opportunities for staff to learn from Elders in the Aboriginal community; and symbolic gestures such as artwork at the entrance to the site, on staff uniforms and PPE etc.
Don’t change your delivery expectations
Normal procurement processes were followed and there was no accommodation to lower standards of performance or higher prices.
As Bradley Schapiro said:
“It’s not about spending more money…. just spending our money more meaningfully”
Project leadership is critical
The steadfast commitment of the project director to social procurement was critical in overcoming resistance to change at the start of the project. In implementing social procurement, people can often be reluctant to change their very long-standing procurement practices and relationships with incumbent suppliers and subcontractors.
The project director’s leadership was critical in securing the emotional engagement of project staff by emphasising that social procurement was ultimately about making a difference to people’s lives – not just about meeting targets. The project director played a critical role in making this clear, having personally seen the potential power of social procurement to change lives in the mining sector. John Holland also ran “hearts and minds” roadshows where staff had the opportunity to meet the people whose lives had been changed on previous projects. Meeting Elders from local Aboriginal communities helped to reinforce the transformative social impact the project could make on the lives of those living in the local area.
Systems innovation at a project level
The project was large enough to be able to invest in its own innovations. This included a new integrated reporting system which allowed every project leadership team member to continuously monitor and report against their individual role targets. This was a project level investment which is now being introduced across other projects.
As Stephen Antonopoulos stated:
“It’s not very exciting but we put a lot of work into integrating our induction systems with our reporting system.. getting everyone on-board so that you could see what your Indigenous spend was along with other metrics in your area.”
The project held numerous internal training sessions for the commercial teams and project managers to ensure education on the policies guiding the APiC spend were understood and agreed to across the board.
Building and supporting supply chain capacity
A lot of up-front work went into building and supporting Indigenous businesses and understanding their capability to ensure they had full, fair and reasonable access to subcontracting opportunities on the project. This was done through a comprehensive pre-qualification process and appointment of suitable tenderers to supply panels.
As Stephen Antonopoulos stated:
“It’s critical to get them into our system. Once all the hard work is done and the subcontractor and/or supplier is set up in our system, then it’s easier to keep using them.”
De-risking social procurement and making it an opportunity
Developing resources to help existing staff and subcontractors to engage with social procurement was one of the keys to success. One of the key initiatives on the project which helped to de-risk social procurement for existing staff was CPB Contractors’ project specific ‘Aboriginal Business Suppliers Pocket Guide’ which provided those procuring goods and services to understand the scope, capability and reliability of existing Indigenous businesses. Although existing intermediaries like Supply Nation provide lists of suppliers, it’s very difficult to understand the capabilities of different suppliers and how and where they can reliably contribute to a project.
Build a supportive project culture
The project culture was key to exceeding the basic APiC targets.
As Stevie Cole stated:
“You should not under-estimate the critical importance of the strong culture which was built on this project.”
A strongly supportive project culture was built in numerous ways, starting with the strong leadership and emotional commitment of the project director, and by the high levels of relational trust formed between the project team on a previous project (the M4). This trust underpinned the willingness to experiment with new ways of working to achieve the high targets being set.
The project director was also very strong on forensic reporting against ambitious goals at an individual level. This was not only important for external reporting reasons, but to enable the project leadership team and individuals to constantly be aware of and reflect on their individual progress against targets set.
Progress was constantly communicated against the targets being set
Human resources support in the form of cultural awarenesses training built a high level of understanding, respect, tolerance and support within the workforce to accommodate Indigenous cultural expectations and flexibilities around their community and cultural commitments.
Finally, having a supportive corporate leadership role at business strategy level was essential in creating an over-arching support structure with initiatives such as defined “social procurement champions” who could support individual projects to meet the complex array of APiC and other requirements imposed on projects.
Capturing lessons learned for future projects
Even though the project spent more than three times their contracted APiC commitment with Indigenous businesses the project team realised they could have done more and were keen to have this captured in their end of project lessons learned report to share with future projects.
As Bradley Schapiro stated:
“We could have done a lot better. We could have actively sought contractors to do temporary works, electrical testing and tagging, site plumbing services; kind of the low hanging fruit with limited risk. However, the most important thing is that you have to target every package from the very start of the project and not just assume that you’re going to achieve every target at the back end.”
In conclusion
Why did this project overdeliver so much when it didn’t have to?
The secrets to success in this project are numerous. However, it essentially comes down to strong and emotionally engaged project leadership backed up by strategic support at business level, a willingness to challenge existing ways of working and relationships, and to commit the necessary resources to support success.
Once success starts to become apparent and trust is built in these businesses being able to deliver to the same standards as any other contractor, momentum starts to accumulate, and it becomes business as usual. In this context, external targets being set become irrelevant which is the ultimate goals of any government policy maker.
As Bradley Schapiro stated:
“Why did we overspend so much? We went from fear of incurring a penalty to finding it was a good thing. They were delivering and doing a great job. So we just stuck with it…why would you pull back?”