Forge Group Demise Spawns New Business Venture
Behind the cloud of the recent failure of Forge Group causing over 1,600 workers to lose there jobs is a silver lining for a new business venture emerging from the ashes.
Managing director of the newly incorporated Allied Projects and Project Management expert, Owen Henderson said that a number of former Forge employees have joined together to pool their combined skill sets into a new business venture.
“A large number of highly skilled people within Forge were suddenly without a job after the shock announcement earlier this year that company financiers had withdrawn support,” said Mr Henderson.
Shortly after laying off of the 1,600 strong workforce a group of former Forge employees began discussing the possibility of combining together to kick off a new business venture.
This ultimately culminated in the incorporation of Allied Projects just one month later.
Allied Projects is a Project Management consultancy which has taken lessons learnt from the failures that lead to the collapse of Forge to develop an improved project delivery model.
"There are many lessons to be learned from Forge Group who used a high risk Engineering Procurement and Construction (EPC) model on several major projects, which ultimately lead to the shock demise,” said Mr Henderson.
This high risk EPC model is characterised by a lump sum price based primarily on a concept design which elevates risk in estimating accurate quantities and making suitable allowances for detail design complexities.
At the other end of the spectrum the Engineering Procurement and Construction Management (EPCM) model uses an hourly rate fee which basically rewards inefficiency.
According to Mr Henderson the hourly rate fee removes the sense of urgency that working to a lump sum price creates and provides little incentive for EPCM contractors to expedite the design and construction process.
In comparison, the improved project delivery model introduced by Allied Projects is a hybrid that combines the best features from EPC and EPCM methods by merging the EP together and the CM together into two separate phases.
It is anticipated that Allied Projects use of their hybrid project execution model combined with key areas of expertise in managing design, project services, procurement and construction, will attract astute clients and provide a conduit that can assist to get many ex Forge employees back into the workforce.
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- Owen Henderson
- Managing Director
- Allied Projects Pty Ltd
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