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By Willow Aliento
May 6, 2018
Green construction is the hottest game in town, but how does the nuts and bolts process of procurement change when a developer is committed to a specific green rating tool?
Jobsite asked Defence Housing Australia, a government-owned business that is also one of the nation’s largest property managers and developers, how procurement for rated projects differs from the everyday least-cost approach.
DHA has delivered projects under three different green rating systems—the Green Building Council of Australia’s Green Star, the Urban Development Institute of Australia’s EnviroDevelopment, and Bioregional’s One Planet Living.
According to Jan Mason, Managing Director, DHA’s business model is unique. “We transform the land into vibrant and sustainable communities that bring together Defence families and residents in an integrated and harmonious way.”
DHA builds homes for Defence families. It also builds homes that are available for sale on the private market; owner-occupiers or investors can then rent them to either private tenants or Defence families.
“Ultimately, DHA’s procurement strategy reflects our core commitment to sustainable and innovative development,” Mason says.
The organisation has been a leader in the green certification stakes, with the first two 6 Star Green Star by Design certified residential projects in Australia to its credit. Nine of its projects have earned 6 Leaf EnviroDevelopment accreditation from the UDIA.
Mason says each DHA development is unique depending on the location, local environment, and the specific needs of the residents.
“The rating we utilise, therefore, is largely determined by the type of project, its key features, and the tool that will be the most informative for investors and residents alike,” Mason explains.
“For example, EnviroDeveloper is more focussed towards subdivision projects, such as Bluewattle in Townsville or Breezes Muirhead in Darwin, whereas Green Star and One Planet Living have more applicability to apartment developments, like Liv Apartments in Fremantle.”
Liv Apartments is a multi-storey development consisting of two towers. It comprises a total of 166 apartments, along with a landscaped courtyard, public open space, rooftop communal space, as well as ground floor retail and commercial facilities.
The project used the OPL rating because it is located within Fremantle City Council, which is a certified One Planet Living Council. In order to address OPL requirements, the project incorporated such sustainability initiatives as solar PV panels, a high specification glazing system, edible gardens, landscape irrigation, a waste reduction strategy, energy saving ceiling fans, and public plaza space with lawn and gardens.
In January this year, Bioregional Australia Foundation formally accredited the project as an OPL Community.
“This ground-breaking development received this prestigious recognition for its commitment to environmental and financial sustainability,” Mason says. “Liv is the single largest development and third community in WA to receive accreditation as a One Planet Community.”
Mason says OPL is about reducing your waste footprint, energy footprint, and the use of scarce resources, such as water.
In this it is similar to Green Star, she says. The additional items for an OPL project concern community engagement, integration, and providing for the mental health and wellbeing of the residents of the development.
“To that end, we have engaged additional consultants to advise us on these issues and to assist us in creating relevant programs to address these OPL requirements,” Mason says.
The OPL framework does not preclude any specific types of common products, but it can open up a project to different suppliers of services, such as specialist engineering consultants. Mason says, however, that traditional trades do not need any additional knowledge or skills sets to work on OPL projects.
The organisation’s two 6 Star Green Star projects to date are The Prince’s Terraces in Adelaide, which in 2015, became Australia’s first residential project to achieve 6 Star Green Star by Design. The other is Shout Ridge at its Crimson Hill precinct-scale development in Sydney, which gained a 6 Star Green Star Multi Unit Residential Design V1 certified rating.
Mason says that the way Green Star changes procurement compared to business as usual is having it as a guide. It encourages the project team to prioritise building products that ensure high levels of energy efficiency. It also means procuring products that are either low carbon or certified to have a sustainable supply chain or manufacturing process. Of course, itis not without its challenges.
“The greatest challenge with procurement for Green Star projects is getting the industry to understand the thinking and processes involved with being environmentally responsible in our industry,” Mason says. “Product sourcing, resource management, and accurate process management/recording are essential. Obviously, they all take more effort than business as usual.”
Overall, Green Star projects require more rigour in the materials selection process.
“This may involve more time and costs in screening products to meet Green Star criteria,” she explains. “It also requires more accountability with trades on site, Nevertheless, with a good management system employed by the project management team, this can be administered efficiently and well.”
Procurement and management to meet Green Star criteria also come at a cost.
“DHA’s Prince’s Terrace Adelaide saw a six percent cost premium, however, that helped us create a sustainable project utilising non-toxic materials. It is built to operate as efficiently as possible,” Mason says. “These homes will ultimately save occupants thousands of dollars per annum.”
She says that for DHA the business case for the Green Star procurement strategy is a “no brainer.” “We are providing cost-efficient homes for our Defence members and their families, while caring for the environment.”
The UDIA EnviroDevelopment rating tool assesses projects across a number of criteria including ecosystems, waste, energy, water, materials, and community.
Mason says that even though when using this tool the procurement strategy is not markedly different to a non-rated project, the scopes and briefs will include the requirements for record keeping and documentation to support seeking accreditation.
“Suppliers or trades can be required to provide additional documentation around the demonstration of compliance with the tool,” she says.
A major benefit of using the tool for DHA has been providing it with a demonstrated point of difference in the marketplace compared to other developers. In general, the procurement process for all of its rated projects has had a flow-on effect in terms of procurement choices and strategies for non-rated projects.
“Innovation and sustainability are core to DHA’s overall development philosophy,” Mason says. “Learnings from our sustainable accredited projects are disseminated throughout our organisation. Where financially viable, these learnings are taken into consideration during the design and construct process of all our developments nationally.
“It is envisaged as the understanding of ‘environmentally sustainable’ and ‘carbon footprint’ gains more momentum and becomes standard practice, it will remove ‘financially viable’ out of the equation.”
Being strategic with procurement is generally positive for everyone.
“As the provider of housing solutions for serving Defence members and their families, DHA is committed to offering residents environmentally-friendly dwellings that offer maximum lifestyle satisfaction whilst providing cost-effective energy solutions,” Mason says.
“To that end, we believe that strategic procurement and DHA’s commitment to sustainable design and development benefits all our major stakeholders. This includes investors, Defence members, and members of the general public who choose to call our innovative residential developments home.”
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