Good afternoon, everybody. This is the Vermont State Senate Committee on Institutions and the House Committee on Corrections and Institutions. Today is Friday, April 1st, 2022. I'm Joe Benning, your host for this afternoon's festivities. Welcome to April Fool's Day. That is not to disparage our witnesses who are here for important business, but around the state house today, we've been finding various jokes and places. So you are as welcome today as we go through our conversation. We are meeting to talk with Associated General Contractors of Vermont and have a general conversation about building cost drivers with several different players.  Greetings so much, Ken. Thank you, Senator, for being on the podium. Sorry to interrupt. Thank you, Madam President. We're going to have some conversation now over Duncan Munchkins. Is that what is in there? Don't worry about it. All right. Well, sorry, for those of you in our House counterparts, you probably don't have as good stuff on your table out there. But the bottom line is today's conversation, I should say to all witnesses, as we proceed, the first thing I would like you to do is introduce yourself. Give us a brief biographical background to let our YouTube audience know who you are, and then we can dive into your conversation. Now, should you be rolling right along in your testimony and say something that we on the committees may know and understand, but it red flags for me the possibility that somebody in YouTube land may not understand what you're saying. I may interrupt you, not to be rude, but just to make sure we get those folks on the same page with our bus. Now, I understand Matt Musgrave is here from Associated General Contractors. He is the Government Affairs Director. Matt, I think you've been with us before, at least in Senate institutions. I'm going to welcome you to both committees this afternoon, and the floor is yours, sir. Well, thank you, Mr. Chair, and thank you, Madam Chair, for inviting us to come to your committee, as well as thank you, all the committee members here. For the record, my name is Matt Musgrave. I'm with the Associated General Contractors of Vermont, and I've met most of you, most of you in person, at least. And for the people on YouTube, the AGC is the Trade Association that represents general contractors in Vermont of many different types, including road and bridge contractors, commercial building contractors, capital state project contractors, as well as we have some residential home builders within our ranks. And we generally employ in a really good economy. We've had up to 20,000 employees within our ranks, and currently we're operating around 16,000 employees within our ranks. One of the things that the AGC does on a regular basis with its members is organizes committee discussions, not unlike what you do at the State House, where we get together and we talk about specific issues that are related to our industry. And one of those committees that we have is our buildings committee. And our buildings committee meets once every quarter, and we discuss the particularly capital building projects. And we've been lucky enough to have representatives from buildings and general services, specifically Commissioner Jennifer Fitch and Joe Asia have participated with some of these meetings. And the purpose of those meetings is to really look at how jobs are being laid out, how we can best respond, how we can best deliver those services to the state and also the Vermonters that use those services, buildings, you name it, parking rides, all the capital projects that you work on. The pandemic has given us an opportunity that we didn't take advantage of in the past. And we lament living in these Zoom format worlds a lot. But one of the opportunities that it did create for us was we were able to expand our committee. And so it went beyond working with just the buildings and general services. We actually got involved in conversations with the American Institute of Architects in Vermont, as well as the American Council of Engineering Companies of Vermont who all participate in these different projects. And we started meeting last summer and in various shapes, fashions and forms to talk about in where we interact within the capital building process. Well, we did decide during the summer last year, and this has been a six month process to get us here before you today, was that we wanted to share some of the challenges with you on the institutions committee. We will also be broadcasting the recording out to other members within the legislature to deal with the challenges that we're facing and planning, design and construction of state projects due to the increased costs of the supply chain, the workforce and some of the other building requirements that we have. I'm gonna be quick with my piece and I'll pass it off to some of my friends that I've brought with me today. But just to set the stage for the conversation today, as you know, home and purpose built commercial buildings have significant differences from start to finish. When the state decides that they wanna build a building that's gonna provide services to Vermonters is generally expected to last generations. And I think the state house is a great example of that with 160 year history, although it's been through a couple of rebuilds due to fire as I'm aware. The difference between the commercial build and a home build is that a homeowner in ISIL real estate for almost 20 years of my life, the average homeowner stays in their building for seven to 10 years. So they don't take some consideration into the same processes that you do and the buildings and general services does when they're purpose building these important estate projects. So it's important that we talk about those different cost drivers today. And I brought some experts with me that I'd like to introduce to you who can help describe this. I know next on the agenda, I think we had Commissioner Fitch. I don't see her on here. Is she in the room with you? She's here, he's here, he's with us. Okay, I'll pass it over to Commissioner Fitch and then we'll move on to our friends from the AIA. Thank you very much again for having us.  Sometimes I have to admit that, but yes. Well, in the 100th of April Fool's Day, would you tell him we offered you our condolences? Yes. This is becoming a tradition, happy to. Commissioner Fitch, welcome back to Senate and House, well, let's see, Senate institutions and House corrections and institutions. Well, thank you, Mr. Chairman and thank you, Madam Chair as well. And if you want to send over some of those donuts for us, we'll be happy to take them. Sir, so my name is Jennifer Fitch. I'm the commissioner of buildings and general services and Matt really said it all, which is when Chris Cole was the commissioner and I was the deputy commissioner of BGS in 2017, we really started reaching out to our industry partners both on the design side and on the construction side. And that created these quarterly meetings that we were basically having with each of the different groups. It wasn't until recently that we've had the opportunity to bring all three groups plus BGS together. And really that's where the power comes from, right? Because you have the planners, the designers and the contractors as well as the owner all in one room talking about our shared challenges, talking about innovations, talking about best practices and really working together to support successful outcomes, not only for BGS and in ourselves, but what are ways in which we can better support these different groups so that we get the best outcome. And that means quality projects, right? That are built basically at the lowest dollar possible, right? We'll still meeting all of the code requirements because we want to make sure that we are being very efficient in how we spend the money that we have. And so it's been a great collaboration and a couple of things have come out of that. One is we're here today for the first time you have all four, which is fantastic. And in a couple of weeks from now, we're actually gonna be putting on a buildings workshop, which is where we're inviting lots of different folks in the state. It's a four hour training and both architects and engineers will be able to get continuing education credits for participating in that workshop. But again, that's another opportunity where we brought all of us together to basically work together to create this training program. And we're sharing our lessons learned and we're sharing those best practices. So I really feel passionate about you're stronger when you're working together as a team. And at the end of the day, we all want to support each other because that's how we get the best outcome collectively. One of the things you'll hear about today in addition to cost drivers, and it is a big cost driver, is really gonna be workforce shortages. That's a big theme right now, not only just in general, but definitely in the trades industry. And we have been partnering with AGC on different ways in which we can try to encourage more people to go into the trades field. So for example, at BGS, we're gonna start a trade co-op program where next year we're gonna be hiring six students in their senior year. They will be working alongside some of our trades folks and that will allow them to get the hours that they need to get the certification when they go and graduate and then can go out into the tech field. So that's an example. And we're actually gonna have internships for the first time this summer as well on the engineering and architectural side, where we'll get students from architecture or engineering programs that will come and work for us for the summer. And by doing that, we're creating a pathway where we're encouraging people to go into the field and we're providing opportunity, but we're also creating a pathway to BGS as well because we've been struggling with recruitment and retention. So by working together collaboratively, we're really leveraging each other's strengths and we're leveraging these opportunities to basically fulfill mutual goals and figure out how we're going to tackle these shared challenges. Thank you. Thank you, commissioner. Alice, I cannot see your committee members. If anybody has a question, either room, please do just shout out. I see that you've properly banished representatives, Labor and Martel to separate quarters, but any of you who have questions, don't hesitate to let us know. The next person on the line is... We do have a question, Senator. Yeah, just quickly. Commissioner, so the architects and engineer interns are coming from Vermont colleges, is that right? We're gonna be targeting the three schools. We're just about to announce it. So it'll go to UVM, it'll go to Norwich and it'll go to VTC. Okay. And then hopefully we get applicants and we interview them and hopefully we'll hire three for this summer. True. Good. The next person that I have on my list is John Alden. I think I see you on the screen. John, I have an initial question. Do you trace your lineage? I'm here just waiting my turn. Well, Dave, John, can I just ask quickly? Do you trace your lineage back to John Alden on the Mayflower? Absolutely. Well, that's interesting because that means that you and I are related in some fashion. And we're apologized for that. No fooling. Okay. Welcome to the committees. Thank you. So I'm John Alden, I'm an owner at Scott and Partners Architects and I am a member of the AIA Vermont and co-chair of the AIA Vermont Public Policy Committee. So you may have seen some of our testimony around already in written form. I'm also on a planning commission in Essex Junction. So I've got a fair amount of background in this kind of thing and I've been practicing in Vermont for 25 years. And what I'm trying to tell you about today, I think is programming and the importance of learning as much as you can about the details of a project at the beginning, which is hard, so that you can know more about your costs and the forecasting of those costs in the project. So when you get surprised, hopefully you don't get surprised later during the process of going to construction. So architects in general are spending a lot of time at the beginning of the project before we hand that project off to the contractors for construction. So we and our team of engineers will go through and I'm gonna speak mostly about commercial projects. We consider residential projects to be quite easy and generally familiar for the contracting community. And so the real challenges in commercial projects, some of the ones that we've done for the state of Vermont include the forensics lab and the state health lab, along with other engineers and architects on those teams. But so the projects can be large. They generally are never the same as something else you've done before. They all have their own particular details and requirements. The requirements will vary depending on the site. They'll vary depending on what's happening in the building. They'll vary depending on what they're being used for and what the construction type is or is required to be. And so our job is really to sort through all of those requirements that come from the building owner or the proposed owner and try and develop a building that matches all of those requirements for size and how does it look? It's like the last thing we're worried about, by the way. I mean, it's important, but the details of the technical compliance with all the rest of the codes and energy use and how you build the structural requirements. Those are the things that are really more important to our job than the actual appearance of the build. And you might find that odd to come from an architect. Yes, we care about the way they look, but I lose a lot more sleep on how well we've technically complied with all of those other requirements and frankly, what's out there that we don't know about. And so it's all those unknowns that are abundant at the beginning of a project that we're trying to pin down so that we can describe to the contractors and the owners, okay, if you wanna do this kind of building on that site, you're going to need to do all of the following things that's gonna cost you so much. And we don't always know the answers at the beginning. So this programming effort that we're talking about is where we try and put all of those things together. Give me the list, what do you need? Who's coming to the building? Where are they coming from? What are the soils like, where's the sun? What kind of utilities do we have available? How are we going to build it? What are the structural requirements? Oh, you're in a seismic zone that's different than normal, that has an impact. Oh, when we dig the basement hole, or just the foundations, the dirt's gotta go somewhere. We have urban soil on this project. Oh, great, well, where can the urban soil go? We don't need it on our site. Oh, it can only go to other places that like urban soil. I can't mix it around with everything else. So those are costs for us to figure out ahead of time so that when we develop a cost estimate for the project, we've identified not only the things that we know about, but we've put a stakeholder in for all the, a placeholder for all the things that might be costs. Like, okay, if you have to go dispose of all this urban soil somewhere, where's it gonna go and how much is that gonna cost? So I just wanted to say that it's always a good plan for us to put the work into that initial investigation at the beginning of a project so that you can identify as much of this kind of thing as possible because it all will come back and affect the final outcome of a project. So just having the great idea while we think it's gonna look like this and it's this big and that's a tip of the iceberg. So please try and give your advanced design team plenty of room to do that initial testing, whether it be subsurface testing or other types of investigation into what codes apply, how will they impact the final project and can you understand and contain as many of those costs up front as possible? And I think I'll turn it over now to ACEC, unless there are any questions. Anybody have any questions? I actually have Nick Haderis. Is that how you pronounce your last name, Nick? Very close, Haderis. Haderis, welcome. Thank you, thank you. My first time speaking to you all so I really appreciate your time today for the record. My name is Nick Haderis. I'm a member of ACEC, also chair of the ACEC and BGS subcommittee that has organized the workshop that the commissioner Fitch mentioned. I'm a senior project manager and also the federal department of defense program leader for VHB. So I work on projects both here in Vermont and elsewhere within our footprint for public agencies. So my area of expertise, I'm a civil engineer and my expertise is generally in large and complex public facility land development. So I'm gonna build a little bit, I think on what John just said and really kind of use an analogy to talk more about the planning and budgeting portion that happens both when you start thinking about a project and also once you start getting into design and planning and looking at how it's gonna go from there. So the analogy I like to use is that of a long road trip. So you've got a family member that is for some reason left Vermont and gone to Tennessee and you wanna go visit. That's a lot like a big project. You know you have a destination, you know you have something that you need to achieve and how are you gonna get there? You could take any road, go in any direction. So you start with that planning process. As John said, where are you going? What do you need to achieve? If we're talking about a building, you're talking to the users, to the stakeholders. What is their program? How many people are they gonna have? How much parking do they need? What do they need for utilities? How long is the building going to be there? And is it gonna be expanded later? So you think about that first. How much cost can you afford for that building? That could also get into back to the analogy. How far can you travel? How are you gonna get there? Can you afford to take the scenic route?  Same thing with a building project. What are your priorities? Having that all planned out upfront before you start talking about, okay, well, what's it actually gonna cost? Doing that planning upfront, have you checked the road ahead? If you get down the highway, somewhere on the way to Tennessee, and you find out there's highway construction and you're stuck, you have to back up, take another road. Same thing with a site that you're trying to develop. If you've got a site, you're already working on it, you find bad soils, shallow bedrock. There's an easement crossing the property you didn't know about. Now you've got to back up and try to take control of that easement or those other services. That all adds cost and design because it has to be redesigned. It adds costs in construction. Now you have to manage all of that bad soil or whatever else the challenge is, you're trying to overcome. And what happens then if, all right, you get past that, you get to your destination, and you find out your family members moved, they forgot to tell you, they're now in Colorado. What happens if the plan, if the need changes, if the users maybe weren't as involved in the upfront planning or during design, and you find out the parking lot needs to be twice as big as it already was. You've already got a site, it's now too small. So trying to overcome all of those challenges when you learn about those issues, when you're already in latent design or you're into construction, even worse, adds much larger costs. So it gets back to that old adage of an ounce of prevention is worth a pound of cure. What can you do upfront to mitigate those risks? Upfront plan and program before you set a construction budget. You do the planning and programming, you have the stakeholders involved. You know what your destination is and you establish your budget and schedule based on that. Then maybe you don't have a site already.  If you're waiting for somebody to offer you a site, it's a much more limited pool to choose from. It may not meet your requirements that may increase the cost for construction significantly. If you're finding those sites, you may pay a little more upfront because it's an owner that maybe didn't know they wanted to sell. But at the end, you may have a site that's easier to develop, less costly to develop, better meets the program needs. And then you update the budget and schedule. You've found your site. How difficult is it gonna be to develop? Is it already in a great location? And then, yeah, purchasing land, designing and constructing at that point, much more straightforward, a lot easier to predict and for a lower cost and a better product long-term. And I think that's what I wanted to convey and share as far as my perspective on how design and planning in particular can help to keep down costs for construction. And so I think I'll turn it over there to Sean Kelly for some of the other engineering considerations. I think Sean, just as a reminder, a little bit of a biographical background and then dive right in, but welcome. You're muted. You're muted. Star-six time, Ian. No, no, no, unfortunately not. You could call in. Can you do it from this side, anybody? No, no, no. No, it doesn't sound like we have to call in. You might have to call in. Can you tell me if you'd like or if you'd like? I'm sorry. Good. Okay, we can't hear you, Sean. I'm not sure if you're able to call in or not. I think it's a shame to remember. Mr. Chair, I'll send Alex, I'll send Alex McCracken, Sean's email address that hopefully he can forward along the call and information and get that. I'll send it right over. Thanks for that. I'm gonna skip down to Brendan Cosgrove, Executive Director of the American Council of Engineering Companies of Vermont. Brendan, welcome. Thank you, Mr. Chairman. And thank you very much, Madam Chair as well and the committee members for allowing us to give testimony today. And I really appreciate it. I'm gonna let my members do the expert analysis and give the information necessary, but I just wanted to make sure that I thank Commissioner Fitch for bringing together these organizations and also let you folks know a little bit about ACEC of Vermont. We represent the engineering firms in the state. We do a number of different collaborative efforts with state government, including VTRANS and VGS. We're really widespread, mainly civil engineers, but we represent a large community of engineering. And with that, I was hoping to have Sean come on. He's also the Chair of our Government Relations Committee. So, but I will pass it on to our next speaker as well. And thank you very much. Thanks for coming, Brendan. I have Peter Kelly, Vice President, Business Development, DEW Construction Corps. Welcome. Well, thank you. I appreciate the opportunity as background. I'm a media past president of AGC. I'm a Vermonter born and raised here at UVM, civil engineering degree. I'm a licensed professional engineer and the context of my discussion is going to be limited to the building trades. So I'm not going to be speaking about roads or bridges or what we call heavy civil. As a general rule of thumb, the cost of a building is approximately 50% labor and 50% material. So it's about split evenly. Competition reduces cost. So this goes for labor, material or subcontractors. Our Vermont marketplace, our little community of 620,000 people is sized for normal levels of economic activity. When you go outside of that normal range, we run into challenges with pricing. During boom times, pricing increases, during busts, pricing decreases. Our small scale and concentrated wealth has created pockets of limited competition. An example of that is gas pricing, gasoline pricing along the roof seven corridor. Rutland County has significantly lower gas prices than Chittenden County. And that's just a reflection of a lack of competition. So on labor, we have a shrinking construction workforce. It's been in gradual decline for years. It was not meaningfully impacted by the pandemic. If you recall, contractors went back to work within weeks of the shutdown, avoiding a huge draw on unemployment trust fund. Wage pressures, we have experienced pressures on wages as the labor pool has decreased. It's a classic example of supply and demand. Prices increase when there's more demand than supply. Right now we're seeing that in the housing market. We're seeing that in the construction market and conversely they decrease, prices decrease when there's more supply than demand. Wage pressure is also impacted by a healthy construction market. So there's more work than there are workers. So that puts pressure on the workers that are available. The federal stimulus funding will maintain or continue the upward pressure on wages in the short term. Prevailing wages are not impacted in our cost to deliver goods. Our market pays above livable wages. Meaningful advances in workforce development is needed to stabilize this trend. We need to return to a culture that fosters the trades from the early age. Material choices made during design will definitely impact costs. And when BGS and others make decisions about a design and the John Aldens of the world make decisions on designs, they have to make a decision early on about the initial cost versus life cycle costs. And so it's a classic of allocation of funds. Do you wanna spread it out over a time horizon or do you wanna incur those costs upfront or does the budget allow for those costs to be incurred on the upfront? Engaging contractors early to evaluate material alternatives and availability is helpful. We suggest that the state use the construction management delivery model which engages contractors early in the process for material selection, suggestions and logistics input and sub trade interest. On the design side, the design definitely drives the cost. The state must prioritize the importance on the aesthetics. So for instance, a welcome center might have more of a priority on the aesthetics because it's part of the Vermont brand. Whereas an AOT building that's less important. Permits impact the cost of construction as well. They're high cost and the risk associated with the permit process limits competition. Feedback that we've received from national firms is that if they can make their way through the permit process in Vermont, they will get above market profits in Vermont because there's such a barrier to entry to our market. I'll give an example. The Cold Chester Costco does about a million dollars in revenue every day they're open which on a revenue per square foot basis is higher than the national average. A residential activity which I'm just gonna touch upon is limited to a few major developers in Chittenden County. The smaller players just can't take the risk to do a bigger larger scale project and the possibility that it will never happen. Lastly, the energy standards, that increases the cost upfront but the life cycle costs are decreased with Vermont's higher energy standards. And that's all I have. Well, Peter, I'm terribly curious you brought up the revenue stream for Costco and Cold Chester. Have you ever done a comparison between Costco and Mazda's general store, Cold Chester, to see what the receipts are like? I haven't but I really like to support the small guy and Mazda's is great. You know, they're often. Are you more in five minutes than I do at home? All right, Peter, thank you very much. I'm gonna come back to Sean to see if you're able to get in. Can you hear me now? Yes, we can. Yes! Oh, I gotta love the technology and the different formats when my computer was set for teams and not Zoom. So I apologize to everybody. Thank you very much for the opportunity to speak to you all. My name is Sean Kelly for the record. I work at Sanborn Head and Associates Incorporated we're a private engineering consulting firm. I'm representing here today the American Council of Engineering Companies, ACEC and I'm the legislative committee chairperson. For my background in terms of engineering, I'm a project director here at Sanborn Head I have a PhD in geotechnical engineering and I'd like to speak to you about some comments that Nick and John already presented. So in terms of construction costs, the stuff that I am involved with are the things that John had mentioned in terms of the beginning parts of a project. So we do evaluation of the subsurface prior to the construction of the building and prior to sort of designing what the building is. So our work is directly related to just the board of a structure and it involves sampling the soil. And once you determine what the building will be sitting on, that's not the end of the story. There's a whole bunch of other components that happen and the old adage, you don't know what you don't know really comes into play when we do our subservice evaluation program. So we present to the owner a certain program that would say, hey, your building is X square feet. You should do traditionally so many borings per square foot and then we go ahead and perform that program. But when we do our work, it's sort of like putting pins in a pin cushion and we don't know exactly what's gonna happen in between those pins. So that could create cost overages as the project progresses because you don't get to see everything that's on the site until you're in construction and excavators are digging that soil out. But we do as engineers, the best that we can, we try to engineer what those foundations will be and then predict what the soil conditions will be once we're in construction. John also mentioned about urban soils and obviously we have to follow rules and regulations. One of those big rules right now is the eye rule and that manages soils that are contaminated at different levels. And so that comes into play in terms of how to estimate what the cost will be ahead of time and then try to move forward and get the best solution as we can as we move forward. I guess the last thing I'll say is this sort of goes with a lot of geotechnical and foundation engineering stuff. All the good sites, at least in terms of support are already taken. All of the, we obviously live in a built environment and most of the good sites where we have firm soils, shallow rock, firm ground so we can build on, most of those are gone and so all of our projects that we have to use are ground field sites, sites that have already been used and potentially contaminated. So therefore it adds those costs that traditionally years ago we didn't have to worry about. And I guess, sorry I was gonna say that was the last thing. One last thing is in terms of our building code. So we have to follow the international building code for commercial construction and that code constantly changes. And the reason why it's changing is because life's safe, we wanna make sure that we design and build structures that meet today's requirements in today's code. And that as we go through time, really adds costs to the project. So I guess I'll end it there and I apologize again to the committee for my audio technical difficulties. We're glad you can make it, Sean. I'm gonna skip right over to Ann Minor. Welcome from PC Construction, the floor is yours. Great, thank you so much. It's such a pleasure to be here. This is my first time as well, very cool. A little bit about myself. Project manager at PC Construction have been at PC for about nine years. And my focus is on commercial construction in buildings. And I have been doing work around Maine, New Hampshire and Vermont for the last nine years. So what I'm gonna be talking to you today about is the supply chain issues and forecasting challenges that we're seeing, again, focused on the commercial and building side of our work. And I will get right into it, but when I'm gonna start a little bit high level and then kind of get into some granularity, one thing that we often look at to support, make sure things are what we're seeing for pricing is on trend with the market is the producer pricing index, also called PPI, which I'm sure some of you are familiar with. And there's a few different indexes that we look at to evaluate pricing and the trends that we're seeing.  We do a lot of our work subbed out. So sub being a guy that's working for us, of course. So our subcontractors that are buying the raw materials or buying the commodities, their index, we're seeing at their level some pretty exuberant increases over the last year. And just to name a few percentages that we've seen and Pete mentioned a few of these a little bit as well, but diesel fuel has gone up 55%, trucking costs have gone up 18%, plastics 34%, steel mill products 127%, gypsum products 21% and insulation 17% and lumber and plywood 18%. And this was a snapshot in time that was taken about a little over a month ago through an analysis we did to look at why we're seeing some crazy increases overall. So at the manufacturer level, they're seeing those increases in raw materials, which obviously filters all the way up through to the owner. When you roll that up to the owner side of things and from the state looking to do a new project or BGS, we're seeing that overall for non-residential construction just in the last year, a 12.5% increase in construction costs. As it's all rolled up, subs are trying to do their best to keep things down, but they have to keep on forcing it down the chain, I guess. And just for an awareness, but the escalation that we saw in 2020 was 1.3. So it was a huge jump and we're seeing that greatly going into 2022 that 12.5% continuing and pushing our numbers. So obviously there's a lot of factors that go into that, those crazy increases such as labor shortage, as Pete mentioned, that's a huge factor, limited materials due to high demand, shipping delays with clogged shipping ports, manufacturing shutdowns across the world for either needing to do to COVID or they're taking pauses on orders because they can't keep up. We've seen that quite a bit. So it's really forced us into needing to pre-purchase materials early. So we're often going into projects and coordinating with the owner early to buy most of the commodity materials. So for example, I worked on a project down in Benton recently and we went two months before the project even started. We bought all of the mechanical piping, all the plumbing piping, all the electrical conduit and all the commodity materials, just even before the project started, we had a pretty good idea of what that was and we got it come and got it stored and now we have it because we knew those things were gonna continue to increase. And then we had another wave where we bought all the mechanical equipment and electrical packages as well. So we could lock down that pricing and of course the steel. Steel's been a big one for them. So we're also seeing too, the thing that's really tough with bidding out projects these days, whether you're bidding out a lump sum project or you're bidding out a construction management project, the quotes that are coming from these guys because they're getting such a volatile pricing from their vendors, of course, that translates up as like quotes good for 10 to 15 days. And that is the timing for getting some of these projects started up is tricky. So we're having to pre-purchase early to lock in that volatile price and hopefully lock in their price overall. You know, for example, I have another project starting up in Stowe and we're already pre-purchasing all the raw material right now as we speak to make sure that we have it in time. And well, the biggest piece is actually the price increase, not so much lead time with steel right now, but they have given us a warning that as of Wednesday next week, if we don't buy the raw material, it's gonna go up another 30 grand. So we're trying to make that happen before the product is even started. You know, another example I have is on the Spannington project I worked on, we have an operable partition and we actually locked in with our subcontractor the purchase of the operable partition by the end of December to mitigate a 9% increase on the partition. And we just got noticed that normally, you know, the vendor would be able to say, yep, here's my PO to you. We're locking it in, good to go. But the manufacturer just came back to our subcontractor and said, yeah, I know you gave this PO, but I didn't get any money in hand and we're changing our structure and we need to come back with another, you know, it was like a little over 10% increase. And if you give us the money down, we can work with you on that, but they're asking for more money ultimately. And what we're seeing is that more and more we can't just lock in with a PO, we have to put money down. So more and more, some of these smaller commodity guys like overhead doors, operable partitions, miss specialty stuff, we're having to put down 50% deposit to actually lock in the price, which has also been a bit of a challenge for the owner side to make sure they have that cash flow ready, of course. I have just a couple more examples for you and then I'll take questions, but we also had a project that a year ago, they were told their generator would be 10 weeks. And here we are a year later, they are now just receiving their generator. We have another project where we just learned about the transformers. You know, transformers used to have anywhere from 15 to 20 weeks, there are now 30 to 52 week lead time for transformers. Typical wood aluminum clad windows like a pillow or Marvin window used to have an eight to 10 week lead time are now projected up to 30 to 35 weekly time. And the bottom line with all these examples is that these things are changing every day. We're staying as nimble as possible and working together with our owners and our subcontractors to make these projects successful still, but every week we find out of a new product challenge, a new volatile increase. And so it's something that makes it quite tricky these days to manage and get ahead of as much as we're all trying to do our best. So, yeah, I guess that's what I have for you. Any questions? Well, again, thank you very much for coming. First off, I hope you enjoyed your first experience testifying before a legislative committee. I'm gonna throw out the first question. We have about nine minutes left by the way before we promised our house counterparts they'd be on the road at two o'clock. But one of the cost drivers that you have all not mentioned, perhaps to be kind or perhaps because you didn't think it all the way through is the legislative process. I am curious, what things do you wish we could do or wouldn't do to help you get through your business day?  Anybody wanna come? Anybody wanna come? And I can say my two pieces, I'm sure others have a piece. I mean, the piece that I think Pete hit on it too is doing, and forgive me, I don't know your process as well as obviously you do, but the thing that I see a lot of success with projects these days is going more of the construction management route and doing a lot of doing early design assist. So, the very early stages where maybe the contractors and subcontractors wouldn't be involved, more traditionally, they're involved more in the front end with the program planning and getting involved in helping price some of those scenarios out so you can learn head on what you're up against and mitigate some of those challenges that the boots on the ground are more aware of, obviously. So that we've seen a lot of success with and I think is a really positive approach to construction management. Thanks for that comment. John, I saw you had your hand up. I did, thank you. And I'll be also brief that I'll say that the industry in general is still struggling with the concept of all the energy code improvements and upgrades. And we're now already being asked to comment on the next round of ratcheting up the requirements. And I think that it will help all of us if the committees can really listen to some expertise from the field and not just the designers on the technical challenges we have to comply with all these things that are being, you know, they're great ideas, but when you actually try and fold them into the average construction project, it really is still causing, you know, quite a bit of disruption in the practice. So to the extent that we can all move forward together, that would be great. But, you know, let's, let's try and make it reasonable to achieve so that the best outcome can be obtained. Appreciate that. Senator Ingalls. How often does Act 250 get in the way of projects that are put a streamlined process of Act 250 help out your folks business? I'll weigh in on that one. Montpelier Hotel is a great example of an Act 250 challenge that DEW was involved in. We were hired to be the construction manager on that project. And that project got derailed through the Act 250 process and really it was kind of specifically about the appeal process, which I don't think was exactly what you asked, but anything that can be done to tighten up Act 250 would be a positive from a contractor's perspective. In that regard, Peter, am I safe in assuming it's not the content of Act 250, but rather the time it takes on the appeal process? Well, I think to get party status is fairly easy. And I think that that should be reviewed and from my personal perspective, more restrictive. And the amount of time is definitely money. And so the longer something drags out, the more at risk the project is in terms of being viable. Is that particular project, Senator Muzz and I were driving by the other day looking at the building, I wasn't able to tell whether it's actually occupied. Is it actually in operation? So the project that I was referring to never got built. You're talking about capital plaza. Correct. All right. All right. I cannot see any hands from house members, except for a couple of you who are sequestered for whatever reason. So if you just want to shout out any questions you may have and identify yourself when you do, it would be very helpful. Can I just make a comment? Commissioner Fitch has a comment she'd like to make. So the other thing is we have something called weekly reports, which really aren't any fun, but they're important for reporting up the chain and they eventually make it to the governor. One of the things that I've been watching is trends on projects that we've put out, either for architecture engineering services or for construction. And for the first time ever, we are actually having a high percentage of not receiving any bids at all. And what are the architects and engineers? Both architects and engineers, which kind of group into one category and construction, I continue to see and Joe's on the screen so he can validate this, but I continue to see more and more weekly reports with we put this out to bid and we didn't get a single bidder. And now they're starting to put in reasons why a lot of it is workforce shortages, supply chain, we're too busy. There's a variety of reasons and we're starting to document those, but I will tell you that I've never seen this before where we're not having people bid on our projects. And so that means we need to rebad them and we do. And the hope is eventually we're gonna find someone that bids on the project. But what that means is two things. One, it's getting more expensive, right? Because as they talked about, it's the supply and demand. So projects are now getting more expensive and we're gonna see project delays because if we have to take more time to hire someone, right? That's gonna add more time to the schedule to deliver it. I will tell you that the governor has recommended now that we start prioritizing projects, knowing that there's gonna be so much more construction out there with all the residential as well as commercial and the influx of federal funds for infrastructure projects, not only in buildings, but also in transportation. So we now are going to have to start prioritizing projects to make sure that we are getting contractors and designers for the ones that are the absolute highest priority. We would love to cover all of them. That's the goal, but we're gonna have to start being really strategic. Matt, I see your hand up. Yes, thank you, Chairman. I know it's a Friday afternoon and the House Committee would like to be out at two o'clock. Before we do so, I wanna take a moment and read line by line the 2020 commercial building energy standards manual. If you'll just give me a question. We're gonna have to get started now and done. We're gonna end. We're gonna let the tape roll back. Yes, we're breaking up. On a serious note, on a serious note, I wanted to thank everybody. We just talked about a lot of different things and there are some things that we don't have the ability to change. We don't have the ability to control the supply chain in Vermont. We don't have the ability to rapidly grow people any faster than nature will allow that to happen. But things that we can control in what we're doing right now at the AGC is trying to build that workforce. And that's one of the things that we can do on our end to try to help out with these projects. So we've built the first ever in Vermont industry specific trades, job board and information, including descriptions of different positions, opportunities and even outcomes. We're showing people what kind of outcome that they can have. We put together a great workforce program with retention training, a new director and a whole program here at AGC.  We actually are holding the Super Bowl of career fairs at the Champlain Valley Expo Center on April 26th. We currently have 150 different employers from all different business verticals around the state. We worked with the Department of Labor on this and we're anticipating about 1500 attendees to come out. So we're working hard to create careers with livable wages and advancement opportunities for people to hopefully on our end improve that workforce piece. On your end with the workforce, you're gonna be seeing H703 come through that's got a lot of great stuff for the CTE centers. I'd love to see you pass that through. It's a good step forward with what government can do to help us build the workforce. So thank you very much for having us out today. Well, Matt and commissioner, appreciate you guys putting all this together. Matt, don't forget to say we gave you our condolences on Bobby and house members, if you're hungry, we've got some Dunkin Donuts munchkins down here. If you don't come and take them, you're gonna end up at Maz's store, two bucks a piece. So feel free to come up. Everybody have a great afternoon and a great weekend. Thank you. Thank you so much. Thank you all. Thank you so much. Thank you. Bye house members.


Let's find out. I'm Chris, a product designer to an entrepreneur, but before that I wanted to be a cartoonist. Yes, I love sketching and still do it daily. In this video I'll be sharing some pro tips on how to level up your sketches that can save you hours on your next UX project. Stick around till the end to find out three sketching techniques every designers should know. Let's start with the problems. Do you find it difficult sometimes to share ideas of brainstorm with your clients? Are you having trouble aligning objective and expectations? You probably need to implement sketching into your workflow. UX sketching is a method that designers frequently use to explore, suggest, iterate and convey their proposed design solutions. Compared to moving immediately to a digital version of the solution where there is a higher fidelity and complexity, sketching takes less time and overall is less expensive. You might be wondering should you spend extra time sketching when you can just start working on the final solution? Just hold on. Sharing sketches enables collaboration and creativity across the whole team, resulting in a shared understanding and alignment from start to finish. Sketching makes complex ideas easier to understand. It encourages creative explorations. It takes less time and less effort. It keeps you focused on keeping the best idea without gaining attachment to discarded sketches. Sketches visually captures an archive of ideas that you can refer back to. Sketching prevents technological distractions and overall it helps you become a better visual storyteller. There's a lot of pros to sketching. So how do you get started with UX sketching? There are three main techniques that every designer should know. The first technique is scribbling. It's an excellent form for capturing your core ideas and it gives you a holistic view of the UI components. The second is layering, focusing on the importance of the hierarchy before progressively building layers, elements and details into your UI. The third one is interactions. It helps you define multiple interactions in one sketch. You can easily change the placement of each interactive element without having to redraw everything. When sketching, choose whichever tool you're most comfortable with. You can start with an A4 piece of paper and a pen. Some designers pick pens which are different line weights. Here are some of my favorite. The brand is Sakura Pigma Micron. Next, state the problem and goals you want to solve and define your audience. Ask the following questions. Why am I doing this sketch? Who is this sketch for?  The most important thing is to write clearly when sketching. So how did I use sketching to collaborate with my clients? Well, starting a new project is exciting and to help create momentum, I want to visualize the solution as fast as possible. So I used to dive in right into digital tools like Figma and the first version is never the final version, obviously. So what happened was endless rounds of feedback meant that the solution always was evolving and I ended up focusing on individual elements rather than the bigger picture. This is also true when I reviewed with clients. Clients were super distracted. Most often than not, they would miss details and we end up going back and forth with design revisions. I wasted hours and hours in the process of exploring different approaches and getting slammed back into the first idea that we approached. Then I tried sketching. It was a game changer. Not only did it help me produce more ideas quicker but showing and collaborating with clients actually became way more fun. We quickly put down what was in our heads and iterated together. Bringing them into the process through sketching made the process much more enjoyable and with fewer revisions. Finally, don't invest too much time in producing sketches. Sketches are not meant to be a detailed representation of the object. You want to use this method to quickly visualize a solution. Remember it's meant to be messy and that's kind of the whole point. In general, UX sketching is a good technique to help conceptualize and communicate ideas. Sketching can help you think differently and collaborate in a different way you are used to. There's no right or wrong way to do it, just do what's best for you. If you're interested in learning more about UX sketching with detailed guides and templates, check out the link in the description. Or for everything else, you can hit the big red button for another play-by-play breakdown of UX frameworks. Bye!


Supply Officer is the head of the Supply Department. You'll be responsible for the supervision, training and evaluation of personnel and the planning, coordination and organization of supply operations. The Supply Officer duties include the oversight of food service and logistics. This position is primarily promoted from within the ranks of Junior Supply Officer. The Junior Supply Officer is responsible for the day-to-day management of the Supply Department, working under the Supply Officer depending on class of ship. The Supply Officer is the head of the Supply Department.


Good afternoon ladies and gentlemen. Welcome to today's event. I'm Hervé Lemayu, the director of research here at the Institute. And I'm very pleased to welcome you all to this event and conversation with Dr. Bobo Loh, non-resident fellow at the Lohy Institute and author of a new analysis paper out just yesterday, fresh off the press, Putin, G and the Russian invasion of Ukraine, which you can download for free, of course from the Institute's website and I think we also have copies available for you. Bobo is one of the world's finest observers of Russia and the Sino-Russian relationship. He has served as an Australian official, as a diplomat in Moscow, as a think-tanker at Chatham House in London, Ifri in Paris and at the Carnegie Moscow Centre. Importantly for us, he's a long-standing non-resident fellow here at the Institute since 2016, I believe. And in that capacity, he's published a series of fantastic papers, including in 2017, Bobo's Lohy Institute paper with Penguin Random House Aware Embrace, which was about the emerging Sino-Russian partnership. In 2019, he wrote an analysis paper, Once More with Feeling, Russia and the Asia-Pacific, and in 2020, Global Order in the Shadow of the Coronavirus. And these are just a number of highlights because he's written many more. But they're really a fantastic series of discussions, and much like the catchy title of his papers, Bobo has acquired a bit of a cult-like status within the building for his lucid, provocative and elegant writing. So I knew who to turn to when presented with the most serious conflict in Europe since the end of the Second World War, Russia's invasion of Ukraine in early February. I did a podcast with Bobo, I think, just on the day itself. And apart from anything else, it was clear to us then, and it is now as well, that the invasion is really a stress test of the partnership between Moscow and Beijing, between two strongmen, Presidents Vladimir Putin and Xi Jinping, and the evolution of their relationship in the aftermath of Russia's invasion of Ukraine will be important not just for the outcome of the war in Europe, but indeed for the future of the global order. So I came to Bobo with one question when commissioning this paper. The Sino-Russian relationship has arrived at a turning point, but to where? And Bobo certainly didn't disappoint us. The Institute is very proud to publish this paper. I will invite Bobo to make some brief opening remarks on the driving thesis of his argument, of his paper, and after which we'll sit down for a conversation between ourselves. So ladies and gentlemen, please join me in welcoming Bobo back to our beautiful offices at 31 Blyth Street. Thank you very much, Alveir, for that warm welcome. It's a delight to be here again. So I should just briefly outline some basic arguments that I've put in the paper. My first argument really is that Putin's war in Ukraine has highlighted the resilience but also the limitations of Sino-Russian partnership. You hear a lot of talk about Russia and China having being an alliance or an axis of authoritarians or erstwhile Prime Minister Scott Morrison's phrase, arc of autocracy. But really this is an interest-based relationship between strategically autonomous powers and geopolitical calculus matters far more in this relationship than a so-called convergence over authoritarian values. Now foreign policy coordination between China and Russia is limited by their very different views of global order. Now people think, well that's strange because surely they both oppose a rules-based international order. They oppose US global leadership and that is indeed true. But Beijing, I would argue and I argue in this paper, is invested in a global order, albeit one where its influence is much greater than a present and where US and Western dominance is much reduced. But it still believes in the principle of a stable global order, a stable international system. It's a revisionist power but not a revolutionary one. But Moscow, on the other hand, is an anarchist of the international system. It thrives on disorder and instability because it figures correctly as it happens that the more chaos and anarchy there is in the world, the more influence it has, the more play it has, the more chaos it can create. And I think these very different views of global order and disorder have been highlighted in the course of the war in Ukraine. Now a lot of people argue that China has been the big winner of this war in Ukraine. Well I would disagree. I think China has suffered on a number of fronts. Number one, it has suffered considerable reputational damage because essentially it's close association with, frankly speaking, an international delinquent. But perhaps even more telling is that the war has served to unify the West. Transatlantic unity is stronger than in years. The United States has recovered its leadership mojo. The Europeans are increasingly inclined to view China in adversarial terms. And liberalism and the very idea of a US-led rules-based international order has acquired some credibility which frankly didn't much have before the Russian invasion of Ukraine. And conversely, Putin's struggles in Ukraine have highlighted the weaknesses of authoritarianism. They've undermined the authoritarian brand, authoritarianism's reputation, the efficiency. Putin has been shown not only to be brutal but also acutely fallible. And from Beijing's perspective, Russian actions or mistakes over Ukraine have actually served to limit China's room for maneuver over Taiwan. I think that a forcible reunification of Taiwan with the mainland is now less likely than it has been for years. Now, the uncertain course of the war in Ukraine presents China with a really difficult conundrum because on the one hand it wants to preserve the Sino-Russian partnership. Russia is the closest country that China has to a friend. But on the other hand, China is part of that international system. China has been the single greatest beneficiary of the rules-based post-Cold War international order over the last three decades. So it's trying to sort of thread the eye of the needle. And how does it do that? How does it keep Russia satisfied without alienating the West completely, running the risk of sanctions? And so what Xi Jinping has done is he's pursued a sort of balancing act. He's offered full-sum moral and political support to Putin but just about zero material assistance. And so he basically hopes that Russia will be happy with moral and political support. On the West won't be so angry but they'll impose sanctions. The trouble is, the longer this war continues, the harder it will be to sustain this balancing act. Because you've got to ask, what happens if a frustrated Putin exhausts his conventional weapons playbook? He escalates to chemical and biological weapons, maybe even to a tactical nuclear strike. What happens if the war extends beyond Ukraine and becomes a more generalized conflict between Russia and NATO? And the problem is, if the war continues to go badly for Russia, then Putin might think, well, yes, words are all very well, but come on, you've got to deliver something more as our valued strategic partner. Now, I think however the war unfolds, now Putin could lose, he could win, there could be an accommodation or stalemate, we could have an uncontrolled major escalation. But I think whatever happens, in whatever scenario, the balance of power within the relationship will tilt heavily towards China. Really, Moscow's escalating confrontation with the West means that Russia, geopolitically and economically, is now more dependent on China than at any time in the two countries' history. Now, I think the Sino-Russian partnership will continue to exist in some form. But I think the long-term outlook for this relationship is, frankly speaking, unpromising. Simply put, Russia and China will soon be playing in very different leagues. They will have different interests, different priorities, and that makes it hard to develop any kind of really long-term, deep convergence. So the question I end up with really in the paper is, what should the West do? How should the West respond to this Sino-Russian partnership of, frankly, considerable limits? Well, I think the Western decision-makers should recognize several realities. The first is, China and Russia are not a conjoined entity. Their worldviews are different, their approaches to international relations are different, and as we've seen in Ukraine, their interests are not the same. Second, I would argue, and it's perhaps difficult to make this point to an Australian audience, but I would argue that Russia represents a considerably greater threat than China to international order, and this will remain the case while Putin sits in the Kremlin. Paradoxically, it is Russia's weakness that makes it dangerous, because unlike China, it doesn't have a variety of means to project power and influence. It really, fundamentally, only has military means. And so for Russia, the exercise of military force is a comparative advantage. They have it, and they, just as important, they have the will to use it. So, all this means that it'll become more, not less, disposed to use military power in the future. Ukraine is just one stage in a succession of stages that we will see in coming years. Third, the West's capacity to directly influence the Sino-Russian partnership is negligible. No amount of threats, incentives, flattery will persuade either Beijing or Moscow to distance themselves from each other. On the contrary, such efforts merely encourage them to leverage, to use this as leverage and to play Western decision makers for seconds. And finally, the West needs to understand that the importance of the Ukrainian moment, the heroic resistance of the Ukrainians has shown us really what is at stake, how precious, how fragile it is. But it's also bought the West time, time in which to revitalize liberal norms, values and institutions. And what does that mean in reality? Well, that means improving standards of governance, accountability, transparency in our own societies. It means addressing fundamental problems like global poverty and injustice. It means demonstrating that international order, a rules-based international order, is not just a Western construct made by the West for the benefit of the West. But it actually has broader application and broader value to a wider audience. And most of all, we need to be able to address 21st century threats and challenges, because these are the critical challenges, whether it's climate change, global poverty and inequality, the technological transformation, pandemic disease, or the information revolution. So I'll leave it there out there and we can develop some of these themes if you like. Thank you, Bobo. There's a lot to take in and to digest in this paper, and not enough time really to delve into every angle. But I thought I'd start with going back to the basics. Why did Vladimir Putin invade Ukraine? Okay, to sort of adapt a Cartesian logic, he was, I can, therefore I will. He had the opportunity and therefore saw that this was the right moment. But really there were deeper reasons. So one thing is that we tend to think of Vladimir Putin in the West as some sort of chess player, calculating genius, evil, sort of a kind of almost evil genius. But this is, he's actually quite emotional. And he feels viscerally about certain issues. And Ukraine is one of those. So he honestly believes that, I think Russia and Ukraine are one society, one civilization, one country, and that it's the perfidious West that has prevented this rightful destiny from being achieved. Then there is the element of unfinished business. In 2014, Russia annexed Crimea. But paradoxically, it lost Ukraine. It lost control of Kyiv. So what that meant was that whereas he'd been successful militarily in foreign policy in lots of other areas, that this was the great failure of his presidency. So therefore time to correct this historical anomaly, this historical mistake. But I think, you know, one of the questions people ask is, well, why now? Well, why now? Because circumstances could hardly have seemed more favorable to him. You had a US president that was obsessed with China, but also unable to get his domestic agenda through. So besieged at home and abroad, you had the debacle of the political withdrawal, military withdrawal from Afghanistan. You had Angela Merkel finishing up her 16 years as a Chancellor of Germany and sort of a nascent German coalition government. You had Macron getting ready for the French presidential elections. You had post Brexit and an utterly discredited Boris Johnson. So the question is not why, but why not? If not now, then when were you going to actually get a better opportunity? And he honestly, I think thought that, you know, yes, we'll invade. The Ukrainians will fold after a few days. The West will slap us on the wrist like they did in 2014. They'll chuck a few meaningless sanctions at us, sanction a few more oligarchs. Who cares? Basically, the West, Ukraine, the world will have to confront a new reality, whether they like it or not. So he liked his chances very much. And how was he disappointed? It's incredibly interesting that in the lead up to the war in Ukraine, there was, it seems, very good intelligence by the US that Putin was planning something concrete. No one necessarily, well, not everybody, including the Ukrainians, until the week before the invasion believed that. And the West, it seemed, was rather powerless to do much about it. I mean, they pursued every possible diplomatic avenue, I think. There was still in the Elysee and in DC, perhaps a view that Russia could be prized away from China, or that there was some sort of entente cordial that could be set up between Russia and the Europeans. You're very critical of that sort of powerlessness and passivity of the West. But you can also read it differently, which is to say, you have to exhaust every possible diplomatic avenue before confronting the inevitable, which was Putin's military intentions in Ukraine. The biggest problem with that reasoning, in my view, is that Western leaders have been trying to suck up to Putin for the best part of 15 years. Let's not provoke him. Let's not risk an escalation. Let's try and understand Russia's so-called legitimate interests. And where has that got us? Exactly. So far, we've got 2008 Russian war in Georgia. We've got 2014 invasion of annexation of Crimea and invasion of the Donbas. 2015 Russian military intervention in Syria, including encouraging and using chemical weapons against civilian populations. So how has this Western policy of conciliation of not wishing to provoke or escalate the situation? How has that gone? The problem with that is what, from our perspective, looks like a perfectly reasonable search for compromise falls down because we assume that Putin is a Western-style rational actor like us. Now, he is a rational actor, but in a very different tradition. And so, from his perspective, every time the West tries to reach out and try to be reasonable, what he sees is weakness. He sees a lack of resolve. And he thinks, well, you know what? I'll just keep pushing because it's worked so far, so why fix it if it ain't broke? And that's, I think, the biggest problem. Now, when Biden came into office on January the 20th, one of the first things he did was to ratify or to organize the five-year extension of the Strategic Arms Reduction Talks Treaty. Now, that was an important step. He needed to do that. There was nothing wrong with him reaching out to Putin, except he didn't really do that. He kind of ignored Russia for the first few months. It wasn't until the military build-up, Putin's military build-up in the spring of last year that Biden thought, oh, my gosh, this could be dangerous. Let's organize a summit. And then again, this happened in the autumn. Russian military build-up, Biden thinks, oh, no, let's organize a telephone summit. And so every time, my criticism is not that you have dialogue with Russia. That's perfectly reasonable. But you need to do it on its own merits and not just a reaction as a reaction to a Russian escalation, because that gives Putin a kind of escalation dominance in diplomacy as well as military. And it means that he's always taking the initiative and you're always on the back foot trying to mitigate the consequences. And so you're basically allowing him to frame the debate, set the terms of engagement, and you just lose if you play that game. And that's what he's counting on. And so at some stage, you have to say, no, we can't do that. We actually have to take the initiative ourselves. And I think there's a real sort of, it's almost like if I'm nice to you, it's like how you react to a playground bully. If I'm nice to you, maybe you won't hit me again. That's just no way to conduct international diplomacy. And one way that I mean, in retrospect, we might sort of view more critically the the ruling out preemptively of any military response to an act of aggression against Ukraine. I mean, it might have been a platform of strategic ambiguity that could have been applied. Look, I'm not saying that Biden or anyone else should have said we will react militarily. I think that would have been foolish. But to rule it out straight away, automatically gave Putin greater room for maneuver than he deserved, or maybe even expected. There was no question that it was going to be used. So if there was no question, why provide an answer? Just really, I mean, talk about blowing your strategic ambiguity is not just an intrinsic good.  And so when you have that tactical blunder allied to the strategic blunder of an over emphasis on China as a threat relative to Russia, then I think that that just hands over the initiative to the outside. And now turning to China, take us back to the Winter Olympics. The infamous Xi Putin summit which has acquired an almost totemic status to use your words in the paper.  Why is that? Well, what does a friendship without limits mean? It's it's actually fairly meaningless phrase, because it just says our friend another way to read that a phrase like that is our friendship can grow. Well, yeah, of course it can. When you say there are no forbidden areas of cooperation, which the joint statement said, well, of course, there are no forbidden areas of cooperation, because in recent years, military cooperation is expanded 2021 was a record year in terms of bilateral trade. Yeah, I think these are these are perfectly fair things to say. I would also say that the no limits phrase has been around since 2016. So it's not exactly a stunning novelty in and of itself. But the problem is we've tried to over interpret those phrases in the light of the Russian invasion of Ukraine. We have assumed that Putin sought Xi Jinping's blessing. And Xi Jinping said, yeah, you go right ahead, mate. Now, this is what I think happened. I mean, I wasn't there. But I think it's highly likely that Putin would have told she that there was going to be a Russian invasion, because not to have done so would have been a betrayal of their so called special friendship. So he would have told him we're going in. But he would not have surely sought Xi Jinping's permission, much as Xi Jinping would not seek Putin's permission about how to deal with Taiwan or South China Sea. This is a this is like a classic core interest of Russian foreign policy. You don't mess. So Putin would tell Xi Jinping as a matter of courtesy, but he's not going to ask his permission. You know, foreign policy for both Russia and China is a full holy sovereign affair. You make your own decisions. And if you're nice, you'll tell your partner partially and selectively about certain things. And that goes to the crux of your argument, which is you believe there's still two strategically autonomous great powers. There is an agenda between them, but it's not an alliance because the alliance in some ways would compromise the core proposition, which is that both want to enhance their independence, their freedom of maneuver. Because then you would actually have to ask permission. That's the problem with an alliance. It ties you. It's much more binding than the current format of the relationship, which is a flexible strategic partnership. Now, China has, I think, asserted a form of pro-Kremlin neutrality described in different ways. Rhetorically, it stands firmly behind Russia. In terms of its actions, you've seen major Chinese companies like Huawei, Lenovo and others divest from Russia. The ADIB has stopped its loans into Russia or with Russia and Belarus. So the actions in the rhetoric don't exactly line up. And you argue that sort of exposes certain dilemmas for China. What are those dilemmas? The dilemma is this. It needs to keep everyone on site. And it's hard to do. So China and Russia share a 4,300 kilometer long border. So this is not the kind of enemy that China would want to have. Especially in the West, we tend to underestimate Russia. We tend to assume, well, you know, it's politically and economically stagnant. It's a bit of a joke country in many ways. But Russia remains, for all its many weaknesses, a formidable, disruptive and preventative power. And the Chinese understand this. They look at the experience of the West and they say, well, Russia may not be able to achieve much on its own, but it can sure as hell prevent other people from realizing their objectives. It can cause an immense amount of trouble. It can be a right royal pain in the arts. And the Chinese look at this Western experience and say we don't need the aggravation. So if we want to pursue our goals, say the Belt and Road through Eurasia, if we want to penetrate into the Arctic, it's not so much that we need Russia's active cooperation, but we need them not to be an obstacle. And I think this is the great lesson. That's why the Chinese big up Putin and Russia. They say Russia's a great power. Putin's a great man. Because they need them not to obstruct their goals. And so there's always the appreciation that in fact a weak Russia is an ordinary, awkward partner as well. So you've got to always tippy toe around and possibly a tail that works at all if it's too problematic. Yes, because what they don't want to have, they don't want a clientelist relationship, like say with North Korea. If Russia became a kind of outsized North Korea, what a nightmare for China would become then more a burden than an asset. But not a burden that you could just get rid of. So the danger from the Chinese perspective is Russia might be able to leverage its weakness, saying basically to the Chinese, you can't afford to let us fail. Fascinating. Now turning to the question of Taiwan briefly, actually. I mean, this is, we've had some good discussions about this yesterday. You assert that the Chinese are less inclined now than they would have been prior to the invasion of Ukraine to consider making a move on Taiwan through military action. The other way you could read the fact that these are two strategically autonomous actors is that it has no bearing in Beijing whatsoever on whether they make a move on Taiwan or not. Essentially it's not that they incentivize them one way or the other, they will do what they've always wanted to do. But you think there's actually growing disincentive and it's not just, or it's not because Russia exerts political influence, so these two countries are allies, but for military reasons, I think. Well, both military and political. So let's deal with a political side of things. It's striking how involved America has become in the Ukraine conflict and crisis. And yet Ukraine is, frankly, a peripheral priority of U.S. foreign policy. It's only Russian actions that have forced it to the forefront of American foreign policy. Now, if I were in Beijing and I would be thinking, well, if Joe Biden can get that exercised about a peripheral priority of U.S. foreign policy like Ukraine, how much more actively involved is America going to be when it affects a primary priority, not just Taiwan, but the whole U.S. system of alliances in the Indo-Pacific? So number one, the U.S. political will to actually do something to prevent the forcible reunification of Taiwan will be much greater, I think. And the second issue is the military side. Russia had just about every possible military advantage in Ukraine. Flat terrain. It occupied Crimea. It occupied Transnistria to the west of of Western Ukraine. It had a client state in Belarus to the north of Ukraine, and it had overwhelming, so we thought, preponderance of military might. And yet it struggled tremendously. So how much more difficult militarily is it going to be for the PLA, People's Liberation Army, to cross 100 miles of Taiwan Strait, to execute amphibious landings, conquer a well-developed, also mountainous country, by the way? That, I think, is just the military challenges are vastly greater, and that's even before you get to the relative military capabilities of Russia and China. The Russians have fought a lot of wars in recent times. They're battle-hardened. It's not just Ukraine, Georgia, Syria. It's also Mali, Central African Republic, Libya. They've had a lot of practice, and this is not even counting the two Chechen wars, by the way. What's China done in all this time? The last conflict, the last major conflict it fought, was in 1979, sort of a month, six-week-long incursion into northern Vietnam, which did not go well. So if the Russians, with their vastly greater experience and know-how, can't conquer a relatively simple target like Ukraine, what price the PLA being able to do Taiwan? I think those are questions that I think would give policymakers in Beijing plenty of food for thought. There's often a tendency to view Russia and China as interchangeable? Yeah. And one of the big points you make in the paper is that you really think there's a big gulf in terms of how they approach the world, but not only tactically, but also how they view the world and what their ultimate intentions are. And that leads you to conclude that Russia presents the bigger menace of the two. But can you just explain briefly the clash of world views? Because to many it seems as if there's a great overlap in world views. Okay. So the overlap is, as I mentioned in my opening remarks, is they both want to see U.S. dominance weakened. Neither of them believe in, or more than that, they seek to counter a liberal vision of a rules-based international order. So there are similarities. They also agree on many issues. So like a sovereign internet, for example, human rights. But the biggest difference between China and Russia is that China believes in a global order and Russia doesn't. Now, it seems to me that that is more than just the means by which you seek to achieve a goal. That is about a fundamentally different vision of the world. So China believes in a global order. It's, of course, it wants to change that global order. I would say the Chinese approach to the existing international system is almost, what I call parasitic and incremental. So it works from within the system to reform it, to change it in ways that advantage its interests. But it doesn't want to trash the order. Now, the Russian approach is different. It doesn't have the patience. It doesn't have the capacity to change the order from within. So therefore, its goal is not to reform it. It's to overturn it. It also realizes more generally that under any stable international order, whether it's a U.S.-led order, a multilateral rules-based order, some kind of U.S.-China condominium, that Russia will be a much diminished player. It will be a player who basically gets marginalized. So the reason that it's not that Russians intrinsically like chaos, it's that they realize that a situation of global disorder gives them more room for play, more room to prosecute their interests. So it's just a more favorable context. Their position is actually entirely logical. But that is a very, very fundamental difference between one side's vision, which is about achieving some kind of global order, some kind of stable international system, and the other partner which thrives on instability, disorder, uncertainty. Now, if Russia thrives on uncertainty and instability, because largely it's a declining power, its comparative advantages in terms of its military power, and there isn't much it can do to replace the rules-based order of the liberal international system, but there is a lot it can still do to disrupt it. Exactly. And if China is in the business of global order building, let's call it that way, because it's an ascendant power, what would then happen if and when China ceases to be on the ascendancy? When China realizes, and this may come soon, and we've published research on this revising down the rise of China, that its economic growth rate is slowing, that it's incapable of really sustaining or replacing the US as a global hegemon, that even in its near abroad, it is up against robust counterbalancing. Do you think that would change that worldview, that risk aversion that we've seen today? I still think the Chinese approach would be essentially conservative in the literal sense. I think they recognize that the international, let's put it this way, China has been the prime beneficiary of the US-led order over the last three decades, whereas Russians see themselves as the principal casualty, the victim. So, while the Chinese want to change the way global order works, they still have a vested interest in some kind of stable order, and that will continue even if their economic growth slows. They're still dependent on the US-led international system, on global trade and financial structures. The renminbi is in no position to replace the dollar, and they're practical people. They understand these realities. So, while they might look to change things, they don't want to wreck things, and I think this is almost an inertial force. This will remain, this will transcend even falling growth rates. Now, what if China goes into real crisis, sort of maybe another warlords period where the regime implodes? Then, of course, you could get an anarchic power like Russia. But I don't see it yet. You never say never, of course. But I think that's sometimes, I get the sense that's wishful thinking by Western commentators. They're busting for China to reap the rewards of its bad behavior over decades, and so they predict, they keep predicting its demise, but China keeps defying these predictions. So, I'm personally very skeptical about the China collapseists or declineists.  The debate in Australia is overwhelmingly focused on China. And it was interesting to see how the war in Ukraine, I think, challenged different schools of thought on foreign policy in Australia. On the one hand, you had those like former Prime Minister, Scott Morrison, who embraced the concept of a let's call it a 360-degree new Cold War that was global in its remits that encompasses both Russia and China as an axis of autocracy. On the other hand, you had, let's call them Asianists, and these were both multilateralists who wanted us to do more with ASEAN, as well as alliance managers who wanted us to do more with the US in terms of the Quad. But irrespective, these Asianists were arguing, no, Russia is a total distraction. Europe is a sideshow. China is the main game. We have nothing, no business really to get substantively involved in that crisis, and it has no real bearing on any of the things that we are grappling with. Now, as I read your paper, I was thinking actually you are directly challenging both schools of thought. Yeah. And I wonder how you square that circle. Sure. Okay. Well, you said it. I think they're both wrong, and I think they're as wrong as wrong can be. So let's start off with your, well, let's start off with the arc of autocracy, the division of the world in this binarism that's very, that's popularized by the White House, and obviously is spread to other parts. Look, we live in an infinitely more complex world that can't be divided into neat sort of authoritarians on the one hand, democracies on the other. I think that's frankly a childish, primitive way of looking at the world. You know, it's almost like satisfying our craving for simplicity. But the world is infinitely more complicated. What do you, what does a country like Singapore fit in? What about Saudi Arabia? What about India or Poland or Hungary? Where are you going to put them? But we consider them Western allies. They are on our side. And yet many people would regard them as increasingly illiberal, not to say anti-democratic. So I have a major problem with that. I think we need to, we're better than that. We can be more sophisticated in our analysis of issues. And I think it's extremely unhelpful when we encounter a crisis like Russia's invasion of Ukraine to think, to adopt that kind of model or paradigm. Now, addressing the second school, the Asianists. There is a school of thought that, you know, rather like Chamberlain said about Czechoslovakia in 1938.  I'm adding that last bit. But I think that's a really, again, an immature, parochial way of looking at things. Because the crisis in Ukraine, the Russian invasion in Ukraine is not just about the fate of a single democratic sovereign democracy. It is about the post-Cold War settlement in Europe. But more importantly still, it is about the very principle of international order or a rules-based international order. So consider the consequences. If we say, oh, look, it doesn't matter. Let the Russians do their thing in Ukraine. Let's just get over it and focus back on China or whatever on some other issue. If Putin wins in Ukraine, the US leadership, global leadership, claims to global leadership, will be crippled. The idea of a unitary West will be seen as a joke. The notion of a rules-based international order and that other sort of bromide being on the right side of history, all that will seem nonsensical. Because what people see is if the West cannot even defend rules in the rules-based international order in the Western heartland of Europe, then what price is it going to be able to do anywhere else? So this is the thing. If we ignore what happens in Ukraine, it has global implications because it says disorder is the way of the world. So we move into a kind of Hobbesian dystopian vision of the world and all this stuff about order and rules and norms. That's just so much guff. It's just chat. It's not reality. So if we actually want to invest substance into principles like rules-based international order, then we can't just deliver bromides and self-congratulatory homilies. We actually have to show that Western liberalism, that rules-based international order, is not only virtuous, it's actually more effective at problem-solving than any of the alternatives. And that's our big challenge. That's Western democracy's big challenge in coming years and decades. Fascinating. Now, we have just over 12 minutes to go, so I'll go to questions in just a moment. So have your questions ready. One more question on my behalf. The other thing is, Bobo, you've been obviously reading about the Pacific and China's overtures there and there are a lot of Australian observers who will be looking at China's muscular diplomacy in our near and broad southwest Pacific and think that perhaps you understate China's ambitions. So what would be your response to them? Then I'll go to questions. Let's be clear. I mean, China is not a benign actor in the Indo-Pacific. It has clear strategic ambitions in the Indo-Pacific. In no way am I saying that we should be soft on China. In no way am I saying that we should ignore what China is doing in the Indo-Pacific. Of course, we should pay attention, but it's not enough to whine about it. We actually have to out-compete them. So that's one thing. But the other thing is China, you may not like what China is doing and we don't, but it's really at a certain level, it's between it and the Pacific Island countries. They're making a decision that maybe they want some more Chinese involvement. Now, that happens not to be in Australia's best interests, fine, but then it's, but the fact that China should at least try to do that is, well, frankly, a fairly rational behaviour on its part. But what Russia is doing is literally killing tens of thousands of people in Ukraine.  It's a challenge and we need to pay very, very close attention and we need to out-compete it. But come on, let's keep a sense of proportion here. What's happening in Ukraine is the worst, the most devastating conflict since the Second World War and the worst breach of international order since North Korea across the 38th parallel in 1950. That's how serious Ukraine is. I mean, so compared to that, what China is doing with Solomon Islands and other Pacific countries, come on, that small beer, frankly. All right, I see a lot of hands up in the air. Why don't we begin from that middle row there? The gentleman on the far left or my far left. Yes, that's right. And if you can identify yourself, that's the question. Hello, I'm a retired Commodore from Bangladesh Navy, Kazi. So I'm just an independent researcher. I just want to add a few points. The first question asked to Mr. Babulo. Why Russia attacked Ukraine? Okay, if I say, USA had two options. Russia was warning USA that do not extend the NATO, but they are kept on extending NATO. So that is the opportunity for the USA. Either we extend, we go for the extension, or you impose war on Russia that in both the cases, USA is winner. So am I right or wrong? Okay, I'll address that. But this is the most conventional explanation of why Putin invaded Ukraine, that it was because NATO enlargement posed an existential threat to Russia. But this is not, this is an excuse, not an explanation. And it's important to make that distinction. Now, it's funny, I remember when I was in Moscow, and the Baltic states and others joined NATO. Putin actually reacted in a very relaxed fashion. He didn't care because he knew that it's not like NATO is going to be seriously strengthened by the addition of three Baltic states with populations of under two million. I mean, really. The other thing is it's not the United States that pushed the enlargement of NATO. It was these states begging to join NATO. And you have to say, thank God they did join NATO, because can you imagine a situation today if the three Baltic republics of Estonia, Latvia, Lithuania, Romania, yeah, moving from the Baltics, Romania, Bulgaria, Slovakia, Czech Republic, Hungary, Poland, if they were not members of NATO, then the kind of instability that we see today in Ukraine and in the Western Balkans would also be in Central and Eastern Europe. That is the reality. So I'm saying, thank God they are members of NATO. But I would point out this was not a Washington-driven initiative. This was countries begging to join NATO. And Washington, in some cases, really agreeing quite reluctantly, actually having to be pushed, not only by the applicant countries, but also by European countries like Jim. Next question is for Jim Spiegelman, the Low Institute board member. And there's a microphone coming, sorry. Thank you. One area in which China is not conservative is in the unequal treaties. And the three unequal treaties signed in May and King, as it was then known in 1860, includes one in which the Chinese empire allowed certain land to become part of Russia. And that's a significant slice of Siberia, as I understand it. How does that work for a long-term relationship between China and Russia? Okay. So it's quite striking. When I first started going to the Russian Far East in the 1990s, working in the Australian embassy, there was a lot of fear that the Chinese would try and regain the so-called lost one and a half square million kilometers, essentially the southern half of the Russian Far East. You know, enormous territory. But in fact, that's been one of the great successes of the relationship, that they come to a territorial settlement. And the Chinese haven't pushed it. Now, you might ask, well, why? Well, because they recognize that the gain of the trying to regain those territories, even in a relationship where they've increasingly dominant, is just fraught with risk. And they don't need it anyway. They already sense control that the economy of the Russian Far East, the Chinese side of the border with I think now 160 million versus 6.3 million on the other side, is so much more developed. So who needs the aggravation? Why would you take the risk? Where's the benefit? And so that really has been sort of kicked into the long grass, really. I mean, now maybe one day someone might look to regain it, but that's not really on the cards. And I think what I've noticed is that in the last, gosh, 2022, so I guess last quarter of a century, how Russian attitudes have changed, they become much more relaxed. They don't think the Chinese have any particular designs. Yes, they're occasional exhibitions that the Chinese stop the Russians from looking at, just because it might sort of set hairs running. But they don't, you know, this is not an issue. There are other issues that are more important. And the stability of each other's backyards. Absolutely.  Exactly. Don't break it. Sorry, let's go to gentlemen just there in second row. Is there is there an off ramp for Putin to say face it and get himself out of Putin, out of Ukraine that would be acceptable to Ukraine and the West? Short answer, no, because we belong to various sort of discussion groups. And I think one, one, one areas of consensus is that for Putin and off ramp is the other guy's unconditional surrender. So the only off road, I'm only going to stop when you give up. The thing is, what Putin might do just tactically is he might go for a ceasefire at some stage. But the problem is he won't give up. So the methods might change. He might compromise on his methods. In fact, we've already seen that in the three months of the war. But the goals will remain the same. What are the goals? The destruction of Ukraine as a sovereign independent democracy, sovereign independent nation. Now, that doesn't mean being part of the Russian Federation. I think Putin's vision for Ukraine is similar to the Eastern Bloc countries during the Cold War. So Ukraine would be like Czech Slovakia or Hungary. So in other words, they'd have a certain degree of political and economic autonomy, but foreign and security policy would be dictated out of Moscow. That I think is Putin's aim and he will not stop until he achieves it. Well, it isn't doomed if we can summon up and sustain the resolve to present it. Sorry. Well, yeah. I mean, it's not just Ukraine losing the war. If it loses the war, it's us losing the war.  We have time for one more very brief question and I'll go to the very far end of the room there. The last, yep, that's right. Military force in an economy the size and with less complexity than Australia and New Zealand. And that seems to me the overwhelming lesson that's now emerged. If you look at China, you're totally different situation. It's a highly sophisticated, highly complex society, very well coordinated and with a strikingly effective and sophisticated economy. So I really don't never see how those two will emerge one and two. I don't really see how Russia is going to be able to project useful power in the future. The problem is that Russia's idea of projecting power is different from ours. So we tend to think of China as a multi-dimensional power. Traditional powers throughout history have been multi-dimensional. Russia doesn't care whether it is multi-dimensional. I mean, it'd like to be because it's nice to have a few options. But if it can be a formidable military power enough to beat up on most people and intimidate its neighbors, then that is going to be its comparative advantage. And that will be enough. I mean, it's like Machiavelli's dictum. If you can't be feared and loved at the same time, then at least be feared. And that's good enough because there's a sense that, for example, the Europeans, the Europeans don't understand hard power. Maybe they're starting to acknowledge it now. But that is Russia's great comparative advantage. It's not just having hard power. It's actually having the will to exercise it. And we might think that that's very 19th century, very 20th century. That's not very modern. They don't care because they think it gives them an advantage over countries and governments who are a bit squeamish and who are easily intimidated, as the Europeans, indeed, have been over the last two decades. So while ordinary logic would suggest that what you're saying is absolutely right, they view it through a different prism, yes, but they could still end up winning this war. It's been untidy at massive human cost, including their own. I mean, in the first two months, in fact, indeed, in the first six weeks of this war, they lost as many troops as in the 10-year invasion and occupation of Afghanistan, which was, by the way, one of the reasons for the fall of the USSR. But they don't care because they think that ultimately they will win out. Putin thinks he's meaner, tougher, smarter than any of his Western counterparts. He thinks that Russians have this some kind of not only messianic zeal, but also tremendous result. They can take defeat. They can take hardship so much more than their soft Western counterparts. And as long as he believes that, then he is going to, even at huge human cost, he is going to continue, and he will back his chances to win. And one of the things that worries me in Western coverage of the war in Ukraine is this, you know, we talk up Ukrainian successes and Russian failures, rightly so. But it worries me that we slip into, therefore Ukraine will win and Russia will lose. I think that Russia is a long, long way from being beaten in this war. So you'll have to read the paper to uncover all four scenarios, and one of which, I'm sorry, Bobo says of Putin, that whilst the win seems improbable, there are variables that would make it less so. One of which, of course, would be a victory by Donald Trump or a Trumpian candidate in 2024, which would certainly weaken Western resolve. And in bold in Russia, this is a long game. But thank you, Bobo, for your time, for your insights, for your knowledge, for your perspective, above all, the paper is turning point Putin G in the Russian invasion of Ukraine. Ladies and gentlemen, thank you for coming, and please join me in thanking Dr. Bobolo.