Special guidelines works procurement
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SPECIAL GUIDELINES WORKS PROCUREMENT Draft for Public Consultation – v1
Transcript of Special guidelines works procurement
SPECIAL GUIDELINES
WORKS PROCUREMENT
Draft for Public Consultation – v1
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Contents 1. Introduction ............................................................................. 2
2. Project Definition Plan ................................................................. 4
3. Risk Management Plan ............................................................... 14
4. Procurement Plan ..................................................................... 24 Attachment 1: Short Form Procurement Plan ................................................................................... 32
Attachment 2: Contractor Solicitation and Evaluation Process ........................................................ 34
Attachment 3: Consultant Solicitation and Evaluation Process ........................................................ 42
5. Contract Management Plan .......................................................... 51
6. Project / Procurement Management Plan .......................................... 58
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1. Introduction The following Special Guidelines for Works Procurement are provided in draft form for customisation
by entities to assist them in undertaking works procurement consistent with the objects of the Public
Procurement and Disposal of Public Property Act 2015,as amended (hereafter referred to as ‘the Act’).1
THE ABOVE INTRODUCTORY PARAGRAPH MUST BE CUSTOMISED BY THE ENTITY.
The procurement of works, with the exception of that undertaken in categories assessed as low value
and low risk in the Annual Procurement Plan of the entity, will generally require the development of a
significant procurement strategy. The best practice guidance set out in the section of this Handbook on
Development of Procurement or Disposal Strategy should be followed. All procurement transactions
in categories of works that were assessed as high value and/or high risk in the Annual Procurement Plan
are significant procurements regardless of the value or risk associated with the particular works
procurement transaction. Likewise all procurement transactions in categories of works that were
assessed as low value and low risk in the Annual Procurement Plan are low value/low risk and treated
accordingly.
Works is interpreted in the Act at Section 4 as follows: “Works includes construction and
engineering works of all kinds”.
These Special Guidelines are consistent with but do not subsume the guidance provided in the
Handbook which should be read in conjunction with the Handbook.
Works Process
Schematic 1 below outlines a typical works process flow. This process flow covers a project or
programme of construction or works.
1 Where the term ‘entity’ is used herein, the name of the entity to which these special guidelines apply should be
inserted.
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Schematic 1 Typical works process flow
The various Plans outlined in the process flow are provided as Sections of the Special
Guidelines. In this format the Plans required are as follows:
o Project Definition Plan
o Risk Management Plan
o Procurement Plan
o Contract Management Plan
o Project Management Plan
Project Definition
Plan
•Objective
•Business Case
•Brief
Risk Management Plan
•Preliminary Risk Assessment
•Risk Identification
•Risk Assessment
•Risk Mitigation Strategies
•Risk Management Plan
•Review and Reporting
Procurement Plan
•Procurement Strategy
•Selection of Forms of Contract
•Market Research
•Consultant Solicitation and Evaluation Process
Contract Management Plan
•Management of the individual Contract or Contracts
•Time Management
•Financial Management
•Scope Management
•Governance
•Resourcing
Project/Procurement
Management Plan
•Overall Mangement of the entire Project /Procurement Activity
•Time
•Scope
•Budget
• Resourcing
•Governance
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2. Project Definition Plan Format
1.0 Introduction
Project development within the works process flow encompasses the development of:
business cases for individual projects in the project evaluation phase; and
capital works programmes, for which allocations have been made in the Budget, in the
programme formulation phase.
Business cases form the basis for which project proposals are further developed and seek to document
the justification for the undertaking of a project usually based on the estimated cost of development and
implementation against the risks and the anticipated business benefits and savings to be gained. This
may involve undertaking pre-design studies as may be required for the preparation of project briefs.
1.1 Project Objective(s)
This section of the Plan sets out the objective(s) to be achieved. The objectives must clearly reflect the
outcomes and deliverables that would define the success of the project.
1.2 Competencies and resources required
The competencies required to undertake the project definition phase of project delivery comprise a
range of skills, including those for:
facilitation and negotiation
needs analysis
project management
project development, and
value management.
The undertaking of pre-design studies and the preparation of project briefs requires a high level of
technical and professional expertise.
1.3 Scope
This element focuses on the project definition stage of the works management process and, in particular,
on the development of a project brief. It also provides an outline of pre-design studies or, where
applicable accommodation guidelines and their context in the project definition stage.
The scope of pre-design studies required in the project definition stage will depend on the size, nature
and complexity of the project and the extent of any studies undertaken earlier.
The project brief produced as a result of the project definition process provides project managers and
design teams with detailed information that may be translated into successful construction designs.
2.0 Project definition
Project definition is the first stage of the process for implementation of works projects that have
progressed through the project initiation and development phases.
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Resource and operational strategies should be further developed and documented in conjunction with
the development of the project brief in the project definition stage.
Activities involved in the project definition stage encompass: undertaking of pre-design studies; and,
preparation of the project brief.
There may be a need to commission pre-design studies to adequately define a project. The project brief
developed in the project definition stage details client needs and requirements and establishes the
appropriate standard for the design.
The project definition stage concludes with the completion of a project brief that provides project
managers and design teams with detailed information that may be translated into successful designs for
further development in the project delivery phase.
Business cases undertaken for works projects in the project evaluation phase of project development,
pre-design studies or, where relevant accommodation guidelines are key elements which form the basis
for development of project briefs. The context of these elements within the works process flow is
illustrated in Diagram 1. Please note that the following diagram references building construction but
may also be applicable to other forms of works.
Program
Formulation
Project
Evaluation
Project Proposals
Post-Budget Input
Pre-Budget Input
Accommodation
Guidelines
Business
Cases
Pre-Design
StudiesBuilding Projects Project
Briefs
Project
Definition
Diagram 1 - Context of business cases, pre-design studies or, where applicable accommodation
guidelines The objectives and scope of a project, as well as design and performance aspects
incorporated in a project brief, are endorsed at appropriate management levels prior to implementation
of the design and construction stage.
REQUIRES CUSTOMISATION
2.1 Pre-design studies
The scope of pre-design studies undertaken in the project definition stage will depend on the size, nature
and complexity of the project and the extent of any studies undertaken earlier at a strategic level in the
project evaluation phase. Where appropriate, some studies may be deferred to the design and
construction stage. Pre-design studies may include
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legislative and policy requirements including:
architectural aspects including, inter alia, investigations of:
o regulatory requirements - which may have significant implications, such as:
the Planning and Facilitation of Development Act, 2014 and all accompanying
regulations and guidelines; and
the Municipal Corporations Act
the Environmental Management Act 2000
o site and location considerations - such as further assessment of impacts or development
of disaster mitigation strategies including preventative measures to safeguard or
minimize the impact on or of all new works projects with respect to local requirements
as may have been identified in the project evaluation phase;
o master planning requirements - to establish a logical framework for future
development, particularly where there are a number of existing or proposed buildings
on a site, such as a school or hospital complex or where there are particular site
constraints or requirements for mitigation of environmental or social impacts;
o general design philosophies - such as interpretation of the entity’s aspirations for the
aesthetic and image characteristics, how it relates to the public and private domains of
the community and integration of art and design;
o accommodation guidelines or entity design policies, and specific needs for particular
types of works projects.
o other aspects - such as landscape considerations, vehicular and pedestrian movement,
climatic considerations, acoustics, materials and finishes, security, construction
feasibility and staging;
civil/structural engineering aspects including, inter alia, investigations of:
o contour and detail surveys, soils (including site contamination issues) and civil
engineering services - such as water supply and sewerage (including headworks and
water quality control aspects), drainage, earthworks, reclamation and roadworks; and
o structural/structural engineering aspects including, inter alia, investigations of:
water tables, coastal erosion, landslides, reactive soils, terrain categories,
supply and suitability of materials, aggressive environments, flooding,
geological faults/ earthquake considerations, subsidence, chemically
aggressive soils, unusual loadings, such as storm surges and serviceability;
electrical engineering aspects including, inter alia, investigations of:
o supply - including local supply source options, physical proximity, technical
requirements and life cycle costs;
o distribution - identifying any major issues such as economic aspects including
possibility of central energy plant and life cycle costs;
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o emergency and standby power - including consideration of mandatory provisions for
evacuation purposes and provisions for other installations such as computer rooms,
operating theatres, refrigeration, security and specialised communication systems; and
o general requirements - relating to lighting and power, such as application of solar
energy or other energy saving initiatives to achieve ecological sustainability,
communications, security systems, lifts and escalators and fire detection requirements;
and
mechanical engineering aspects including, inter alia, investigations of:
o internal air control - including requirements for air-conditioning, evaporative cooling
or mechanical ventilation and determination of required air conditions, air control
measures (including sound and vibration) and design and operational factors including
life cycle considerations;
o firefighting services - including requirements for fire control systems and consideration
of regulatory requirements;
o industrial services - such as steam, hot water, compressed air, vacuum systems, piped
gas, purified or treated water and special equipment; materials handling facilities -
including any pneumatic, mechanical or hydraulic systems; and
o other services - such as catering and laundry facilities.
Value Management
Value management studies may be undertaken at various points during the project. On some
projects, a value management study may have been undertaken prior to the business case being
finalised. The conduct of a value management study during pre-design studies and prior to the
preparation of a project brief may result in improved project management and implementation
outcomes by identifying innovative solutions, better options, time/cost savings and overall
enhancements.
3.0 Project brief
Development of a project brief should be based on the business case developed in the project
evaluation phase, pre-design studies undertaken in the project definition stage or earlier and,
where appropriate, accommodation guidelines. The scope of a project brief will depend on the
size, nature and complexity of the project. The following contents structure has been developed
to provide guidance on the content and requirements for project briefs.
ENTITIES ARE TO ENSURE THAT, AT A MINIMUM, THE FOLLOWING SECTIOINS ARE
INCLUDED IN A PROJECT BRIEF.
Table of contents
Introduction
Project identity
Objectives and scope of the project
Participants and related groups
Context, aims and resources
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Project management
Legislative and policy requirements
Financial and programming aspects
Background
Occupancy and use
Design and performance requirements
Location and site
Functional performance requirements
Technical and environmental performance requirements
Economic performance requirements
Symbolic performance requirements
Introduction
The introduction provides a general outline of the nature and purpose of the project, and the
people and organisations taking part. The introduction should include:
1.1 Project identity
the project name - including the title of the project, the location and where applicable
street address;
an introduction and a description of the project (including ownership of land or
buildings); and
identification of the management structure, client and project team;
1.2 Objectives and scope of the project
the project objectives - describing in general terms the entity’s aims and requirements
identified in the project evaluation phase and as documented in an approved business
case. These aims and requirements will be explained and analysed in further detail in
later sections of the project brief;
the scope of the project - with further information on its scale and any cultural,
historical, technical and environmental requirements; and
a statement of the purpose of the project brief - with further description of how it will
be used by relevant parties in subsequent stages of the project delivery;
1.3 Participants and related groups
the participants - providing a list of all parties taking part in the project delivery,
stakeholders and a brief description of the authority, responsibility and role of each
group;
related groups - identifying other groups such as local and national government, the
Regional or Municipal Corporations as well as other groups and persons with special
interest and their consultants; and
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a diagram - identifying each participant and stakeholder illustrating the relationships
between the parties and the lines of communication.
2.0 Context, aims and resources
This section should provide information on the context, aims and resources of the entity and
user groups. This section should include:
2.1 Project management
the overall management of the project - defining the organisational structure and
process to achieve a comprehensive understanding of the needs and aims of the entity;
and
a preliminary project delivery strategy;
2.2 Legislative and policy requirements
laws, regulations, standards, codes and policies
2.3 Financial and programming aspects
financing - including funding sources that have been identified in the business case and
capital investment plan;
the project budget - including the projected cash flow; and
key programme dates and project timelines;
2.4 Background
earlier planning for service delivery - summarising relevant aspect of the entity’s
corporate plan as well as development of service delivery and resource strategies
previously undertaken, particularly referring to identified needs for elements
incorporated in asset strategies;
pre-design studies - outlining the conclusions of other studies such as master planning,
value management studies and engineering service reports;
earlier decisions - describing the impact of any earlier government or entity decisions
on the project objectives and purpose;
consultations - providing a summary of the outcomes of consultations with client and
user groups, stakeholders and the public; and
site selection - detailing earlier studies undertaken for the selection of a location and
site;
2.5 Occupancy and use (in case of building construction)
(This information will form a link between the service delivery strategies, as previously
defined, and the design and performance requirements in the subsequent section of the project
brief.)
functional requirements - providing detailed analysis and description of individual
activities and services that need to be performed to address project requirements, as
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defined previously in Objectives and scope of the project and in the Introduction, and
identifying the equipment required to perform these tasks;
special requirements - identifying particular aspects of activities that require special
consideration in the design; and
Priorities - identifying potential competing requirements and establishing a basis for
reconciling any issues.
3.0 Design and performance requirements
This section translates the information in the previous section into specific design and
performance requirements relating to physical aspects of the project site and, where applicable
works requirements. This information should include:
3.1 Location and site
other related works - detailing any project related work that may be required outside of
the project site boundaries and other projects that need coordination (e.g. road
upgrades, or development work on neighbouring sites); and
details of any need for emergency supply of utilities in the case of failure;
3.2 Functional performance and requirements
functional spaces required in and around the works;
minimum area requirements for each functional space;
desired groupings and their respective functional relationships;
quality objectives and standards to be incorporated in the design and works;
details of requirements relating to the site, such as physical characteristics, circulation
and access, safety, environmental, communications, security, appearance, art work and
operational aspects (including where applicable cleaning and maintenance);
the general planning and design principles - which may be established in applicable
policies such as defined in relevant accommodation guidelines; and
space data schedules - including descriptions of functions and relationships, and
planning and fit-out requirements in the case of building construction;
3.3 Technical and environmental performance requirements
health, safety and security requirements;
heating, cooling and ventilation requirements;
lighting and acoustic requirements;
plumbing and electrical requirements;
materials;
information technology requirements - detailing the assessment of strategies for IT
hardware, software, operations, networks and the impact these have on the building and
its design; and
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equipment requirements - providing a detailed assessment of new and existing
equipment to be accommodated and used in the building. All equipment should be
identified on space data sheets (previously referred to in Functional performance
requirements in Design and performance requirements);
3.4 Economic performance requirements
economic performance - relating to the performance of the asset as an investment of
resources in its operation in delivering the entity’s services. Capital and recurrent
investments as well as investments in, where applicable human resources, equipment,
furniture etc. should be considered in identifying applicable resources; and
whole-of-life issues - providing further assessment of requirements relating to all
recurrent costs associated with asset management and maintenance for the ongoing
provision of the entity’s services. For buildings these would include costs associated
with building occupancy and operations, leasing and lease management, workplace
health and safety, maintenance planning, disposal planning and ecological sustainable
development;
3.5 Symbolic performance requirements
symbolic performance - describing the aspirations for the aesthetic and image
characteristics and how the works relate to the public and private domains of the
community.
For Civil/Structural Engineering Projects
Inception Report -This is a statement of the basis for the project and a review of any historical
supporting documentation or reports
Schedule of Client Output Requirements -The Schedule of Client Output Requirements and
functional needs that establishes the scope of the project.
Design Standards Report -This report sets out the main parameters of the proposed scheme –
for example, proposed waste water treatment standards, capacity (m2/d), road cross section
(motorway, single carriageway), junction treatment, design speed etc. It is critical that design
standards be agreed in writing before the scheme design commences in order to avoid costly
and time consuming rework.
Preliminary Report / Design Brief
The approved Preliminary Report / Design Brief in the Definitive Project Brief.
Following best practice, the Preliminary Report should address all of the project parameters in
the project definition process in some manner.
Design Brief
(Design restrictions / requirements) in the project definition process.
Constraints
The Technical Experts’ report on any constraints (known at the time) that will apply in relation
to design. During the review it may become apparent that a more detailed constraints report is
required.
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Project Budget
The Design Team reviews and confirms the budget for all project costs.
Project Execution Plan
The approved Project Execution Plan included in the Definitive Project Brief that indicates the
overall timeframe within which the project should be delivered.
Project Programme
This document sets out the timeframe for design, procurement and construction activities. This
timeframe should be consistent with the overall timeframe as set out in the Project Execution
Plan.
Site Investigation Report
The information in this document should be based on borehole logs or trial holes that indicate
the nature of the sub-soil. It probably will not be possible (on a large site) to carry out a full
investigation for the whole site at this stage.
Preferred Route (Location) Report
This report will include a statement of the purpose and need for the project, a description of the
selected design, a discussion of the various alternative designs considered and a comparison of
all of the options which explains the benefits of the preferred solution.
Environmental Impact Statement (EIS) Screening & Scoping Report
This identifies the statutory approvals that will have to be obtained for the scheme prior to
progressing to procurement and construction.
Constraints
Where constraints require further review, it may be necessary to appoint specialist sub-
consultants in areas such as archaeology and ecology to assist the Lead Consultant in the
identification of potential constraints.
Minor Capital Works
Unless the category of works is assessed as high value and/or high risk and therefore as
involving significant procurement actions in the Annual Procurement Plan, minor works may
be managed as low value/low risk procurement activities. In this case, a short form of the brief
described in this section is used to underpin a definition of the project.
Maintenance
There are several approaches to the development of a maintenance programme for works
namely:
Emergent Repairs
The term refers to works that are not planned and emerge during the course of operation. They
are generally not predictable and require a response which is commensurate with the need to
maintain safe and secure operations.
A listing of the response times required for various circumstances is generally developed with
health, safety and security concerns requiring faster response times.
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Condition Based
This approach is based on establishing standards of serviceability and/or condition for the
individual asset or a portfolio of assets.
Condition assessments are undertaken on a pre-determined cycle. The scope of work for the
maintenance activity is the gap between the agreed standard and the current condition.
The work programme consequently developed is commonly described as a planned
maintenance programme.
Risk Based
As an alternative to a condition based approach the development and prioritisation of a planned
maintenance could be developed based on the scope of work required to minimise risk to the
service delivery requirements of the entity. This approach has been used where funds are
limited.
Statutory Maintenance
There are a number of elements of buildings in particular that are covered by statutes and
licensing requirements. Examples such as lifts, components of building services such electrical
switch boards, machinery and air conditioning plants to name a few.
These maintenance tasks must be done to comply with the law and ensure safe amenity.
An annual maintenance programme would normally be funded under the following sub
headings: emergent, statutory and planned.
Both planned and statutory maintenance tasks require that scope of work to be developed to the
level necessary to secure value for money.
In the case of the planned maintenance programme, the scope of work would come from the
condition audits together with a technical review plan which may be included in the
maintenance manuals supplied with any equipment.
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3. Risk Management Plan
1.0 Introduction
The Introduction outlines the process for establishing and maintaining a Risk Management Plan.
Each project categorized as significant would benefit from the development and maintenance of
a Risk Management Plan throughout the life of the Project. The reference used for the Risk
Management Plan is ISO 31000:2009, or equivalent.
For works procurement in categories defined as high value and/or high risk categories in the
Annual Procurement Plan, a Risk Management Plan should be developed and maintained
throughout the life of the project or programme cycle. In the case where categories of
consultancies have been assessed as high risk, in the Annual Procurement Plan and the
procurement of such a consultancy is part of a project life cycle, a Risk Management Plan
developed for the consultancy may be incorporated and managed within the overall Project Risk
Management Plan.
The Definition of Risk
• Risk is Defined as “ the effect of uncertainty on objectives”
• Project objectives and uncertainty in meeting those objectives give rise to risks
2.0 Uncertainty of Information
The concept of uncertainty may be listed as a number of elements or pieces of information that:
• is not available
• is available but not accessible
• is of unknown accuracy
• is invalid or unreliable
• involves factors whose relationship or interaction is not known
• is variable or subject to different interpretations
• exceeds the entity’s capacity to process
• is random or chaotic
• is conflicting or inconsistent
• involves a range of known possibilities, whether and when they could occur; or
• changes over time
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3.0 Project Risk Management Process
Schematic 1: Risk Management Process
Plan to
Address
Risk
Risk
Register
Risk
Variables
Risk
Level
Risk Management Plan
includes risk mitigation
action and assignment of
resources to manage the
risk
Identify Issues / Risks
Collect Data
Assess both consequence
and likelihood of risk
occurring
Measure performance
Risk assessment based
on consequence and
likelihood of risk
occurring
Review Performance
Learn Lessons
Continual Improvement
Continual ImprovementContinual Improvement
Continual Improvement
A Risk Management Plan should be continually reviewed throughout the life of the project in an
iterative fashion as shown in the cycle above.
Suggested minimum review stages are
1. At completion of the Project Definition Stage prior to selection of the Procurement
Method
2. Prior to the award of the contract
3. At regular meetings during the contract management stage
4. As part of the contract review process
4.0 Risk Identification
Risks may be listed under categories as detailed below when developing a Risk or Issues
Register. A productive method for developing a Risk Management Plan may be a facilitated
workshop encompassing the key stakeholders as participants.
Considerations for a Risk Register/ Issues Register include but are not limited to:
• Supply chain issues
• Time
• Budget
• Scope
• Quality
• Stakeholders
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• Security
• Environment
• Workplace health and safety
• Communication
5.0 Risk Analysis
Events may lead to either specific or a range of consequences (each linked to a particular
objective) of either different types or magnitudes each with its own likelihood)
The process of assessment of risk constitutes the consideration of the consequence and the
likelihood of issue or event occurring. A risk assessment is a means of making sure that the
serious project risks are managed by cost-effective control measures. The issues have been listed
in the Risk Register.
A risk analysis may be considered as outlined in the Schematic 2 below.
Assessed Risk
Consequence
Likelihood
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5.1 Risk Assessment - CONSEQUENCES
Table 1 Assessment of the consequence of risk occurring
Consequence
level
Financial
impact
People
effects
employees ,
clients
volunteers
Reputation Service
outputs
Legal and
compliance
Management
impact
Very High 5 >$3m One or more
fatalities
National media
coverage
Entity stability in
jeopardy
Total cessation of
multiple services
for many months
Major litigation
>$3m
Investigation by
regulatory body
Restructure of
entity with loss of
many senior
managers
High 5 $1m-3m Extensive injuries
to one or more
Media coverage Disruption of
services for many
months
Major regulation
breach significant
litigation
<$3m
Possible dismissal
of CEO.
Considerable loss
of time and
diversion of
productivity by
senior
management for
over a month or so
Medium 4 $300K-
$999K
Short term
disabilities to one
or more
Local media
coverage
Total cessation of
one service for a
few months
Breach of
regulation with
possible fine and
legal costs up to
$1m
Possible dismissal
of some senior
management.
Event or
disruption that
will require
several weeks
senior
management time
Low 2 $10k-
$299K
Significant
medical treatment
<2 weeks
Media coverage
Complaint to
manager
Some service
disruptions in one
area
Minor fine or
litigation
May be managed
with careful
attention
Negligible 1 <$10k First aid or minor
medical treatment
No media
coverage
Complaint to
employee
Minimal
disruption
Minor legal issues
or breach of
regulations
Will require
several days of
management
attention
There are various methods to assist in the determination of the consequences including through:
• Experimentation
• Research of past events
• Modelling to determine the way in which consequences develop
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• Considering both immediate consequences and those that might arise after a
certain time has elapsed
• Considering secondary consequences such as those affecting other objectives,
associated systems, activities, equipment or organisations.
5.2 Risk Assessment - LIKELIHOOD
Likelihood or Probability may be defined as
Likelihood of
consequences
occurring
= The likelihood of an
event occurring that
may generate particular
consequences
x The likelihood of the event
Methods to estimate likelihood (probability)
• Using historical data on similar events
• Numerical data for systems e.g. plant and equipment
• Structured opinion of subject matter expert (s)
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Table 2 Assessment of the likelihood of an event occurring
Descriptor Description Indicative return
period
Indicative
probability
Almost certain V The consequence expected to
occur on annual basis
Every year or more
frequently
>0.9
Likely IV The event has occurred several
times during your career
Every three years >0.75,<0.9
Possible III The event might occur once in
your career
Every ten years >0.45,<0.75
Unlikely II The event does occur from time to
time
Every thirty years >0.25,<0.45
Very unlikely I Heard of something like that
occurring elsewhere
Every 100 years >0.05,>0.25
5.4 Risk Assessment - Risk Level
Table 3 below provides a matrix to determine the level of risk for each potential issue based on
the assessment that has been made of the associated consequence and likelihood.
Likelihood
Consequence
1
Negligible
2
Low
3
Medium
4
High
5
Very high
V Almost
Certain
Medium High Very High Very High Very High
IV Likely Medium High High Very High Very High
III Possible Low Medium Medium High Very High
II Unlikely Low Low Medium Medium High
I Very
unlikely
Low Low Low Medium High
6.0 Treatment of Risk
• May depend upon the risk attitude and risk appetite of the entity
– Risk versus reward according to the programme objectives and the external
environment
– Capacity of the entity to manage the risk
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• Risk treatment options
– Avoidance
– Acceptance
– Transfer
– Reduction
• of consequence and/or
• likelihood
The cost benefit of the treatment of the risk should always be taken into account. In some
cases the risk treatment option may out weight the actual cost to the entity if the event occurred.
A financial break even could be calculated as
Cost of risk
treatment
= Probability of occurrence X cost of the occurrence
Tools to manage or treat risk
• In house resources
• In house systems
• Additional funding
• Consultants
• Contractors
• Roles and responsibilities
• Forms of contract and their risk profiles
• Management resources
• Physical resources
• Management and reporting
• Programme management
7.0 Risk Management Plan
The Risk Management Plan should identify
• The reasons for selection of the treatment options
• Identify who are accountable for approving the plan and those responsible for
implementing the Plan
• Proposed actions
• Resource requirements including contingencies
• Performance measures and constraints
• Reporting and monitoring requirements
• Timing and schedule
The Risk Management Plan is a living document and a regular review of the Risk Management
Plan throughout the life of the programme or project is recommended. The Plan is particularly
valuable to inform decisions on procurement/contract management and project management and
governance. High risk projects would normally entail review of the Risk Management Plan at
each monthly project review meeting.
The review would include
• Ensuring controls are efficient and effective
• Obtaining further information to improve risk assessment
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• Analysing and learning lessons from events ( including near misses), changes, trends,
successes and failures
• Detecting changes in internal and external environments
• Identifying emerging risks
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Table 4 Risk Management Plan
Risk Consequence Likelihood Risk level
Risk
treatment
strategy
Risk treatment
action including
resources
required
Responsible
entity
Adjusted
consequence
Adjusted
likelihood
Adjusted
risk
Supply
Time
Budget
Scope
Quality
Stakeholders
Security
Environment
Safety
Communication
Others
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8. 0 Preliminary Risk Assessment
All procurement transactions in categories of works that were assessed as high value and/or high risk
in the Annual Procurement Plan are significant procurements regardless of the value or risk associated
with the particular works procurement transaction. However, a Preliminary Risk Assessment may be of
benefit to either confirm the category level risk assessment or to check that no low risk procurement
transactions in fact have a high risk associated with their procurement. Any anomalies between the
category level risk assessment as set out in the Annual Procurement Plan and the Preliminary Risk
Assessment must be drawn to the attention of the Chief Procurement Officer for their action if required.
The process of Preliminary Risk Assessment uses a short form version of Table 4 above and considers
only issues related to:
Supply
Time
Cost
Scope management
The format of a preliminary risk assessment is set out as follows.
Table 5: Preliminary Risk Assessment
Risk Consequence Likelihood Risk level
Supply
Time
Budget
Scope
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4. Procurement Plan
Contents
1. Introduction
1. Objective
2. Scope
3. Competencies for procurement/contract selection
4. Key Definitions
2. Achieving Value for Money
3. Procurement Method Selection
1. When to select a procurement method
2. Factors that influence procurement method selection
3. Selecting the procurement method
4. Confirming the procurement method
4. Market Analysis
5. Contract Selection
1. Minor Works and Maintenance
2. Significant Projects
6. Use of non-price criteria
Attachment 1 Short Form Procurement Plan
Attachment 2 Contractor Solicitation and Evaluation Process
Attachment 3 Consultant Solicitation and Evaluation Process
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1.0 Introduction
This Plan is developed based on the guidance provided in the Handbook on Procurement and Disposal
Strategy Development.
1.1 Objective
The objective of this guideline is to facilitate consistency in, and provide guidance to entities regarding,
selection of the most appropriate procurement methods and contracts for works projects.
1.2 Competencies for procurement method/contract selection
The selection of appropriate procurement methods and contracts requires knowledge of:
the key objectives of, and constraints on, the construction project
the risks (both typical and specific) that might impact upon or be encountered at each stage in the
delivery of the project, and how best to deal with those risks
the level of complexity of the project
the key processes and activities that must be performed in delivering the project
the nature and operation of the relevant supply market
the available procurement methods and contracts
1.3 Scope
This guideline provides an overview of the procurement methods and contracts that may be used on
works projects and guidance as to their application. It emphasises the need for early selection of the
procurement method and for flexibility after the selection has been made. The guideline also explains
why these aspects are critical to securing planned project outcomes.
1.4 Key definitions
Before selecting procurement methods and contracts for works projects, it is important to understand
the difference between these terms. In the context of this guideline:
‘procurement strategy' refers to the process used to take a project from its early planning
phases to completion – please see and follow the best practice guidance in the Handbook for
guidance on the Development of a Procurement or Disposal Strategy.
‘consultancy contract' means the written agreement between either the entity and a consultant
or the construction contractor and a consultant, for the delivery of consultancy services (such
as design, documentation, cost planning and project scheduling) related to a project
‘contract' means the written agreement between the entity and the contractor for the
construction of the project. The terms of the agreement may provide for the design and
documentation of the project by the contractor, and may also include ongoing maintenance
obligations.
2.0 Achieving value for money
The procurement method and contract selection for works projects is required, among other things, to
achieve value for money.
Achieving value for money typically involves comparing alternatives for the supply of goods and
services to get the best mix of quality and effectiveness for the lowest cost over the required term.
26
Importantly, it involves an appropriate allocation of risk, making the selection of a suitable procurement
method and contract a critical factor in determining whether value for money is achieved.
Assessing value for money involves more than a consideration of price alone. Other factors to be
considered include:
compliance with relevant policy requirements
achieving the objects of the Public Procurement and Disposal of Public Property Act, 2015 and
its associated amendments
cost-related factors such as whole-of-life and transaction costs
non-cost related factors such as fitness for purpose, and the quality, service and support offered
by the tenderers
Sustainability requirements and/or targets.
In terms of procurement, there are a number of factors that typically contribute to value-for-money
outcomes, including:
optimising risk allocation between the parties
using performance specifications, where appropriate, to encourage maximum innovation
ensuring flexibility to secure scope changes at a reasonable cost
using incentives to reward ‘better than business as usual' outcomes
setting an appropriate contract period
ensuring participants have the required skills and capabilities to deliver the planned project
outcomes
adopting a procurement method appropriate to the complexity of the project.
The impact of these factors on the achievement of value for money will depend upon the nature and
specific circumstances of each works project. Entities should pursue factors that may best achieve value
for money and ensure integrity and accountability.
3.0 Procurement method selection
3.1 When to select a procurement method
As a project moves through the phases, knowledge of the project increases. During the project
development phase (i.e. project evaluation and programme formulation), decisions should be made
about the type of asset that is required, when it is needed, and what funds might be available to undertake
the works. This is the ideal time to consider the procurement method or methods that might be best
suited to deliver the required project outcomes.
By the time the project reaches the project delivery phase, project knowledge will be at a level where a
preferred procurement method may be readily identified subject to analyzing the nature and operation
of the relevant supply market.
3.2 Factors that influence procurement method selection
Before selecting the procurement method for a works project, whether at a strategic or detailed level, it
is necessary to first identify the factors which will determine the most suitable procurement method for
the project. These factors are:
27
the key objectives and constraints of the project
the risks that may arise during the delivery of the project and how those risks might best be
dealt with
the level of complexity of the project.
the nature and operation of the relevant supply market.
These factors are considered in developing the procurement strategy and the guidance provided in the
Handbook is to be followed in analysing these factors as a basis for framing the procurement strategy.
The following subsections provide some further details on the factors influencing works procurement
method selection.
3.2.1 Key objectives and constraints
The key objectives of each project will be identified during the project definition stage of the works
management process, as a precursor to procurement method selection. The objectives generally relate
to:
scope (i.e. what is to be delivered) together with any required provision for flexibility in this
regard
cost, including whole-of-life and transaction costs
time, including an appropriate allowance for the contract period
quality, including fitness for purpose considerations
sustainability, including social, economic and environmental aspects
innovation, encouraged through the use of performance, rather than prescriptive, specifications
community or stakeholder needs and expectations
achieving the objects of the Public Procurement and Disposal of Public Property Act 2015 and its
associated amendments
‘better than business as usual' outcomes, encouraged through performance incentives.
Constraints are aspects of the project that limit, restrict or otherwise impact upon the project objectives
in some manner. Constraints are typically unique to each project and may include:
time constraints
budget constraints
physical constraints
availability of resources, including labour resources
skills, capability and capacity of the project participants to deliver the planned project outcomes
supply market conditions
policy requirements.
28
The objectives and constraints of each project are frequently interdependent, and will therefore need to
be considered concurrently. This approach will highlight the objectives and constraints that critically
impact upon the planned delivery of the project and facilitate the selection of the most suitable
procurement method. In some cases, however, it will be clear that one objective or constraint takes
precedence over all others due to its critical impact upon project outcomes. This critical objective or
constraint should then be used to determine the most suitable procurement method for the project.
3.2.2 Risks
The second factor that may influence selection of a procurement method is the risk associated with the
works project. In the context of this guideline, risks are events, both known and unforeseen, that might
occur during the delivery of a construction project and which will usually adversely affect the project
outcomes.
The nature of the risks to the project, and their impact on project outcomes if they occur, are often
determined by the key objectives and constraints of the project. For example, if a project has a
particularly tight timeframe for completion, delays to the works will be a risk to securing the timely
completion of the project. Once the key objectives and constraints of the project have been defined, the
risks may also be identified.
Responsibility for managing or mitigating particular risks is broadly determined by the procurement
method adopted for the project. (For example, where the procurement method is ‘design and construct',
the risk of design errors is, in general terms, passed to the contractor.) Therefore, managers should
consider and determine the most suitable method to deal with the identified risks prior to selecting a
procurement method for the particular project.
As a guiding principle, responsibility for managing a particular risk should be allocated to the party best
able to deal with that risk. Inappropriate risk allocation is likely to result in project budget overruns (as
contractors may reasonably be expected to make allowances in their tenders for the risks for which they
are responsible) and increase the likelihood of contractual disputes and litigation.
3.2.3 Level of complexity
The level of complexity of a project must be considered when selecting an appropriate procurement
method. The complexity of a project is determined by a combination of factors, including:
the size of the project
the duration of the project
the scope of the project
the number of stakeholders involved
the level of technology to be incorporated in the project
the degree of innovation required by the client
market conditions.
While contractually complex procurement methods may sometimes be required for complex projects,
the additional resources needed to administer a complex method are likely to be wasted if a simple
method may achieve the same outcomes. The inappropriate selection of a complex procurement method
may also lead to unsatisfactory project outcomes in terms of cost, as tenderers may make allowances in
their tenders for additional administration costs and the possibility of contractual disputes which might
otherwise not have arisen.
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3.3 Selecting the procurement method
Having defined the key objectives and constraints of the construction project, identified the risks,
broadly determined the preferred risk allocation and identified the level of complexity of the project,
the procurement method may be selected.
The procurement method best suited to the project will be the one that best aligns with the key objectives
and constraints of the project, that deals most appropriately with the identified risks, and that suits the
level of complexity of the project.
4.0 Minor Works and Planned Maintenance
Minor works or maintenance may be categorised as low value/low risk in the Annual Procurement Plan.
However, opportunities to improve value for money by aggregating the procurement of these items to
achieve value for money. This is sometimes called bundling. Such aggregation would change the
product category to low risk/high value procurement activity requiring development and
implementation of a significant procurement strategy.
Where the category level strategy set out in the Annual Procurement Plan involves bundling or
aggregation, the procurement method may be to seek tenders to deliver geographically based on a firm
Priced Schedule of Rates Contract or a Contract based on the hourly rates of key trades and mark ups
for materials. These may be solicited competitively on price alone or include a component of non-price
to encompass an evaluation of service quality being offered.
Rather than have only one contractor or supplier, a panel of suitable contractors could be used. This
would be of particular advantage where one contractor is not available. A case in point is where a timely
response is required in an emergent situation.
Statutory Maintenance in most cases are procured through long term contracts usually engaging the
services of the original suppliers who are familiar with their product. They may also be specialist
maintenance contractors with the necessary skills and licenses to perform the work. These procurement
actions may be categorised as high risk in the Annual Procurement Plan and therefore constitute
significant procurements. The use of good scope setting and risk management supports such
procurement together with a proper analysis of the relevant supply market. There are some instances
where the manufacturer or supplier has sole knowledge and expertise to perform the work. The use of
a sole supplier may be the preferred option. In this case, the procurement strategy needs to be clearly
documented to support such action.
5.0 Significant Projects
The following procurement and contracting methods are commonly used for significant projects:
Traditional fully documented – lump sum
The entity engages consultants to design the construction project and prepare documentation which
fully describes the work to be undertaken. The contractor then constructs the project in accordance with
the project documentation prepared by the entity’s consultants, for the agreed lump sum price. This
procurement method is best suited to projects where there is a high degree of certainty regarding the
specific project requirements.
Design and construct – lump sum
The entity engages consultants to prepare a detailed project brief which defines the scope, quality and
functionality requirements of the project. The contractor then completes the design of the project,
prepares construction documentation, and constructs the project for the agreed lump sum price. This is
30
an effective procurement method where the need to achieve defined time and cost outcomes outweighs
the need for quality.
Managing contractor – design and construction management
Typically, this is a two-stage procurement method that provides for early contractor involvement. Prior
to stage 1, the entity engages consultants to prepare a project brief, which includes a budget estimate
and estimated time for completion of the project.
During stage 1, the managing contractor works collaboratively with the design consultants and the entity
to revise the project brief and refine the design to meet budget and time constraints. Prior to stage 2, the
managing contractor makes an offer to the entity based on the revised project brief. If the offer is
accepted, stage 2 commences and the managing contractor completes the design and manages the
construction of the project. This procurement method is best suited to major or significant projects
where there is some uncertainty regarding the specific project requirements.
Alliance
This procurement method also provides for early contractor involvement. An alliance is formed between
key project participants, including the entity and contractor. All members of the alliance are collectively
responsible for all aspects of the delivery of the project. The alliance is generally structured so that
commercial risks and rewards are shared by the alliance members. It is best suited to complex, high risk
projects where alternative strategies for risk allocation will be ineffective.
Bundling
Bundling is a programme management method that involves the delivery of a number of projects (in
some cases, for a number of entities) under a single contract. Bundling may be particularly effective at
times when the market is under strain, or for the delivery of multiple projects in particular locations.
6.0 Confirming the procurement method
For some projects, certain objectives and constraints may be difficult to identify, or may be subject to
change over time. As a consequence, the identified risk management strategy (and hence the
procurement method), while previously well aligned with the key objectives and constraints, may
become unsuitable for the project. In such cases, an alternative procurement method should be selected
and implemented.
Where there is a degree of uncertainty surrounding the key objectives and constraints of the project, the
project team must remain flexible in order to rapidly address any misalignment between these objectives
and constraints and the selected procurement method. To facilitate such flexibility, it is necessary to
monitor the key objectives and constraints as the project progresses and be prepared to adjust the
procurement method accordingly.
7.0 Market Analysis
The supply market analysis undertaken in developing a procurement strategy informs the basis upon
which tenders/offers may be solicited from the market. Where there is repeated requirement for
particular categories of works, the supply market may be segmented as local, national and/or
international. In each segment there may will be companies with various levels of financial and
technical capability to undertake particular categories of works contracts and consultancies
successfully. The data associated with the local and national contractors and consultancies may be set
out in a contractor/consultant pre-qualification system. Such information is useful for analyzing the
operation of the relevant supply market for specific project or programme procurements. A centrally
held data base available to all public procuring entities would be efficient and effective as long as it is
contemporary and continually updated. The Office of Procurement Regulation will manage such a
database.
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Where initial market analysis has indicated a low probability of securing competitive and value for
money tenders using contractors/consultant identified through a pre-qualification system, it may be
necessary to seek bid/offers internationally.
The Handbook provides more detail on analysis of supply markets applicable to procurement strategy
development.
8.0 Contract selection
Having determined an appropriate procurement method for the project, the relevant entity may select
the contractual form that is optimal in the circumstances. The optimum contract for a particular project
will:
be suitable for use with the chosen procurement method
be in alignment with the key objectives and constraints of the project
deal most appropriately with the identified risks
be suited to the level of complexity of the project.
9.0 Use of non-price criteria
Where both price and non-price criteria are to be used as the basis for a tender evaluation, the non-price
evaluation criteria and the weightings given to those criteria need to be set out in the appropriate
schedule in the conditions of tender. Offerors/tenderers will then be required to respond specifically to
the matters put to them in the non-price criteria when preparing their offers/tenders.
While the contract will allocate responsibility for certain risks and requirements to the consultant or
contractor, it is useful to understand the means by which each offeror/tenderer proposes to manage those
risks and/or meet those requirements before a consultant/contractor is selected.
Effectively drafted and appropriately weighted non-price criteria will elicit responses directly
addressing the risks that are to be managed by the consultant/contractor. In responding to the non-price
criteria, each offeror/tenderer details the commitments they will fulfil once the contract has been
awarded.
A set of effectively drafted and appropriately weighted non-price criteria may be a powerful tool that
provides the offer/tender evaluation team with the opportunity to identify which offeror/tenderer will
best deliver the planned value-for-money and project outcomes. Among other things, non-price criteria
may assist the evaluation team to identify: the particular competencies of each offeror/tenderer that are
relevant to the project; and the way in which each offeror/tenderer intends to address any nominated
entity policy requirements
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Attachment 1: Short Form Procurement Plan
The Short Form Procurement Plan may be considered for use in works procurement transactions in the
low value/low risk category as set out in the Annual Procurement Plan. This Plan is developed based
on the guidance provided in the Handbook on Procurement and Disposal Strategy Development.
1.0 Brief and issues
Provide a brief description of the project and any information that will assist in determining the most
appropriate procurement method. Only issues considered relevant should be addressed. Information
may include detail such as:
project objectives
stakeholders
scope, including:
o the project’s various elements (e.g. new construction, refurbishment, additions,
demolition, site infrastructure, early works packages)
o a breakdown of the construction budget relative to its elements
o the proposed staging or sequencing of work
o any sketch plans/documentation
o critical activities
time considerations, including:
o key milestones or critical activities
o planning and approval timeframes
o a fixed end date versus flexible timeframes
o any time dependencies or influences from other projects
budget (and possible funding issues) including:
o most recent estimate
o allowance for escalation
o confidence level of estimate
o any cash flow forecasts
tender and evaluation process, including:
o whether open or select tenders are being used
o proposed evaluation criteria and weightings, including whether there are any non-price
criteria
constraints, including:
o supply issues (e.g. market conditions)
33
o site issues (e.g. site access)
environmental issues (e.g. vegetation protection, contamination)
cultural/heritage issues (e.g. all or part of site/building registered as culturally or historically
significant)
assumptions and givens
policy considerations
current position, including:
o the current stage of the project
o any consultancy contracts that have been let
other relevant information, including:
o the likelihood of an adequate pool of eligible tenderers
o any approved deviations from entity policy
o expectations of the entity sponsoring the project (e.g. with respect to sustainability
outcomes)
o external factors/stakeholder issues
o public sensitivities
o security
2.0 Options and analysis
Identify the procurement strategy options and analyse each of them, noting advantages and
disadvantages.
3.0 Recommendation
Recommend an option.
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Attachment 2: Contractor Solicitation and Evaluation Process
Note: The terms ‘solicitation’ and ‘tendering’ are interchangeable in this document as are the terms
‘evaluation’ and ‘selection’.
1. Introduction
The process of contractor solicitation and evaluation is determined in the procurement strategy, the
development of which is based on the guidance provided in the Handbook on Procurement and Disposal
Strategy Development.
1.1 Objective
This guideline explains the process of selecting suitably qualified contractors to undertake works
projects.
1.2 Achieving value for money
The selection process for works contractors is required, among other things, to achieve value for money
in the expenditure of public funds. In addition to the initial cost of a service, consideration needs to be
given to the total transaction costs and to whole-of-life costs associated with the project.
However, assessing value for money involves more than a consideration of price alone. Non-cost-
related factors such as fitness for purpose, and the quality, service and support offered by the tenderers
should also be considered. Other factors to be considered in a value-for-money assessment include:
achieving the objects of the Public Procurement and Disposal of Public Property Act 2015 and
its associated amendments;
compliance with relevant entity agreements and policies; and,
sustainability requirements and/or targets.
2.0 Selection of the procurement method
The procurement method facilitates the delivery of a project outcome and generally incorporates a
contractual relationship that allocates risk between the entity and the contractor. The procurement
method determines the type of contract to be used and how that contract will be adapted and used for
the project. The risk allocation among all parties along the contractual chain must be clear, with risks
preferably allocated to the party best able to manage them.
Procurement methods available for works procurement include:
Traditional procurement methods Non-traditional procurement methods
Traditional fully documented – lump sum
Bundling (where the process involves two or
more portions being procured using only
traditional procurement methods
Design and construct – lump sum
Managing contractor – design and
construction management
Alliance
Bundling (where the process involves two
or more portions, at least one of which is
being procured using a non-traditional
procurement method)
Construction management
35
3.0. Methods of tendering
Generally the open or select methods of tendering for construction projects are used depending upon
the project requirements and the assessed service risk rating. Whichever process is used, it is important
to ensure that effective competition is achieved and that the total costs of tendering are minimised.
With either method of tendering, where applicable, a quantity surveyor’s project check estimate of the
tender documentation issued to tenderers (including any addenda) should be obtained to provide a
reasonable benchmark to assess the value for money of tenders received.
4.0 Open tendering
Open tendering involves a call for tender submissions from all eligible contractors
Open tendering is used where: there is competition among contractors, project requirements are well
defined, there is no significant construction time constraint, and where the project risks and total cost
of tendering are anticipated to be relatively low. Generally, low-risk lump sum traditional projects
should be procured under open tendering arrangements.
5.0 Select tendering
Select tendering involves the selection of a limited number of pre-qualified contractors who are invited
(in writing) to tender on a project based on the following factors:
financial capacity
management systems’ requirements
location of contractor’s office(s) relative to the location of the project
location of the project
capability for the type of work
cost, size and complexity of the project
current commitments and recent select tender opportunities on public entity projects
past performance regarding time and quality of work and, in particular, any evidence of
superior performance
Select tendering provides a balance between the total cost to the industry participants of tendering and
the advantages of having adequate competition among suppliers. However, entities need to be mindful
of the risk of supplier collusion when using a select tender process and take appropriate steps to reduce
this risk. These steps should include, among other things:
making officers involved in the tendering and evaluation process aware of the risk of collusion;
periodically reviewing the outcomes of tender processes at a project and programme level in an
effort to identify any abnormal patterns, for example, relating to the clustering of tender prices,
withdrawal of tenders or inclusion of unacceptable qualifications by tenderers;
periodically including the maximum number of tenderers rather than the minimum number on
select lists (refer to Table 1 for the recommended maximum numbers);
periodically varying the tender process by using an open tender process where a select tender
process may have been routinely used; and,
ensuring that eligible tenderers are not pressured into tendering and not penalised for failing to
tender.
Additionally, if there is reasonable cause to suspect that a contractor, or contractors may have colluded
on a specific contract, the matter must be referred immediately to the Chief Procurement Officer who
shall report the matter to the Office of Procurement Regulation.
36
6.0 Circumstances where a sole contractor may be invited to tender
The invitation of a sole contractor to tender for (and subsequently undertake) a project without a
competitive tendering process should generally be avoided owing to the perception (if not the reality)
that:
value for money may not be achieved;
the objects of the Public Procurement and Disposal of Public Property Act 2015 and its
associated amendments may be compromised; and that,
access to tendering opportunities by eligible contractors will be diminished
Clear justification for inviting a sole contractor may be set out in the procurement strategy. Such
justification for which there must be supporting evidence may include:
the contract is of a specialist or confidential nature and it is reasonable in all the
circumstances for it not to be tendered more widely;
there is only one contractor able to meet the project requirements;
there is an existing contract underway to which the new procurement is related;
a genuine urgency unrelated to poor planning exists; and/or
a structured process involving market analysis, industry consultation, and a registration and
assessment of interest process has been used to identify only one suitable tenderer.
The reasons for taking such a course of action, including specific identification of how value for money
will be achieved, should be clearly documented in the procurement strategy which must be approved in
the manner set out in the Handbook before any procurement action may be taken.
7.0 Tender framework
Table 1 provides a guide to the preferred number of tenderers and tender period (i.e. the tender
framework) for projects of varying values. The actual number of tenderers/tender period may be
individually assessed, taking into account the procurement method to be used, project time constraints
and the required level of input from tenderers.
Table 1: Preferred number of tenderers/tender period for construction projects
Procurement
method(s) Preferred number of tenderers Tender period2
Works in low risk
categories
Generally, open to all eligible contractors on the pre-
qualified list for that category of works 3 – 4 weeks
Traditional lump sum
without bill of quantities
Generally, select list of 4–6 eligible contractors on
the pre-qualified list for that category of works
4 – 6 weeks
Traditional lump sum with
bill of quantities
Generally, select list of 4–6 eligible contractors pre-
qualified list for that category of works 3 – 4 weeks
2 The tender periods shown are a guide only. If inadequate time for the calling of tenders has been allowed, this
may result in unsatisfactory project outcomes.
37
Procurement
method(s) Preferred number of tenderers Tender period2
Design and construct lump
sum
Generally, a select list of 3–5 eligible contractors on
the pre-qualified list for that category of works
4 – 10 weeks
(depending on
complexity)
Non-traditional, fee-only
managing contractor
Generally, a select list of 4-6 eligible contractors on
the pre-qualified list for that category of works 2 – 4 weeks
A bill of quantities (excluding specialist services such as mechanical services, electrical services,
security, data and communications) may be prepared for all simple construction projects (e.g. housing
units, school buildings and office buildings) over $5 million in value and for all other projects exceeding
$3 million. The provision of a bill of quantities (BOQ) may reduce the risk for tenderers associated with
incorrectly assessing the materials and quantities required for a project.
8.0 Tender documentation
The tender documents for a project underpin the contract that will be established between the entity and
the successful tenderer. The quality of these documents is a major factor in the success of the tendering
and selection process, and ultimately the project outcome. Further, poor documentation is likely to result
in increased project costs. Entities should therefore allow adequate time for the preparation of tender
documents.
All reasonable steps should be taken to ensure the tender documents are prepared by appropriately
qualified staff. Project requirements should be clearly and accurately identified to limit the need for
subsequent amendments. It is also necessary to ensure that the same information is given to all
contractors who collect tender documents.
Tender documents should include as a minimum:
the invitation to tender, stating the closing date, time and place of lodgement for
submissions;
a tender form (provided by the relevant entity) for completion by a tenderer;
conditions of tender;
any general information that will assist the tenderer to prepare the tender, including details
of a nominated contact for further information or queries;
all non-price evaluation criteria (where applicable);
details of any supporting information required from the tenderers;
full details of the work to be covered by the tender (e.g. for major traditional works projects,
this would include drawings and a specification, as a minimum, and a Bill of Quantities
where applicable); and,
general and special conditions of contract.
9.0 Invitation to tender
Whether calling for tenders by advertisement in the public domain (open tenders) or by written
invitation (select tenders), an invitation to tender must clearly state the closing date, time and a place of
lodgement for submissions. This information must also appear on the tender form. The closing date
should not fall on a Monday, an industry-recognised holiday, public holiday, or day following a public
holiday. Receipt of tender submissions should only occur as provided for in the conditions of tender
(e.g. if tender conditions require hard copy submissions, entities should not take receipt of a submission
in electronic form).
10.0 Enquiries during the tender period
38
A nominated representative of the entity should promptly handle and record any enquiries and responses
relating to tender documents for a particular project. Where it is considered necessary to provide
information to tenderers as a result of an enquiry, the information must be issued to all tenderers as soon
as possible. The nominated representative should also request that tenderers confirm receipt of this
additional information. If the information issued is expected to result in tenderers having to significantly
amend their tenders, then an extension to the tender period should be considered.
11.0 Amending tender documents during the tender period
The amendment of tender documents during the tender period should be avoided if possible. This is
best achieved by ensuring that systematic and thorough processes are used to develop and check the
documents before tenders are called.
If amendments to tender documents are required, they must be provided promptly, in the form of an
addendum, to all contractors who were issued with tender documents. The responsible
officer/nominated representative of the entity should request that all contractors:
confirm receipt of any addenda
note in their tender responses that allowance has been made in the tendered amount to cover
such addenda.
If the amendments are significant (i.e. require extensive consideration) or are issued late in the tender
period (i.e. within 5 days of tender close), extension of the tender period should be considered. An
extension to the tender period should also be handled as an addendum.
12.0 Receiving and closing of tenders
Entities should have an auditable system in place to ensure the security and confidentiality of all tenders
received prior to the closing time.
Local tender boxes should be used, where appropriate, to ensure that local industry participants are not
disadvantaged, particularly when using an open tendering process and advertising locally.
All tenders should be opened as soon as practicable following the closing time. Each tender shall be:
checked to ensure that it is complete (i.e. that all parts of the submission have been received)
marked with the date and time of receipt
Initialled and recorded as being received.
This task should be undertaken by at least three people, who should sign and date the summary of
tenders received. Although tender openings may or may not be conducted as public sessions,
information specified in the tender documents as suitable/available for public release should be
disclosed as soon as possible.
13.0 Evaluating tenders and awarding the contract
The aim of the tender evaluation process is to identify the tender that is most advantageous to the entity
and offers the best value for money which may not necessarily be the tender offering the lowest price.
In situations where a high level of accountability must be demonstrated (e.g. cases of complex tender
evaluations), the commissioning of a probity auditor may be warranted.
14.0 Tender evaluation criteria
For projects delivered using the traditional procurement method, where requirements are well defined
and documented, the ‘tender sum’ or ‘tender price’ will be the major factor taken into account when
evaluating tenders. However, non-price evaluation criteria may also be used for these projects, where
39
appropriate. In general, projects delivered using a non-traditional procurement method would include
non-price evaluation criteria.
Non-price evaluation criteria are included in the tender and selection process to support entity policy
and provide a greater level of certainty of project outcomes. For example, on a project with a non-
negotiable completion date (i.e. where time is a critical project constraint), tenderers would be required
to submit details on how they intend to resource the project and coordinate activities in order to ensure
that this critical objective is achieved.
15.0 Evaluation criteria weightings
For projects where non-price evaluation criteria form part of the conditions of tender, tender
documentation should clearly state the weighting given to each evaluation criterion (i.e. an indication
of the relative importance of each criterion, usually expressed as a percentage).
16.0 Tender evaluation panel
A tender evaluation panel is required to evaluate tenders for all projects where non-price evaluation
criteria form part of the conditions of tender. The panel should comprise at least three people, including
the following:
an officer who was involved in preparing the tender documents for the project;
an officer with a sound and current technical knowledge of the construction process capable
of fully understanding and interpreting the tenders;
an officer with sound knowledge of procurement and related policies;
Tender panellists should be aware that information received from tenderers must be treated as
commercial-in-confidence. Panellists also need to be aware of the risk of contractor collusion, be
vigilant in seeking to identify any aspects in the tenders that could be reflective of collusion
All tender evaluation panel members must act ethically and maintain high standards of integrity and
accountability, among other things, this requires that they provide a written declaration noting any
actual, perceived or potential conflicts of interest they may have in relation to their role on a tender
evaluation panel. The Chief Procurement Officer determines how such conflicts may be managed.
17.0 Evaluation of tenders
The tender evaluation process should be transparent and equitable. It is good practice to document and
randomly audit the process to verify its effectiveness. Any discrepancies between submitted tenders and
the tender documentation must be noted and resolved before a final recommendation is made regarding
tender acceptance/award.
If there is reasonable suspicion of collusion associated with the tenders, panel members should refer the
matter to the Chief Procurement Officer for action. Depending on the circumstances, this could require
the release of tenders, and (if it remains the most appropriate procurement method) the recall of tenders.
The tender evaluation process involves a:
‘technical review’ of all tenders
‘capability validation’ of all contractors submitting tenders
‘financial capacity assessment’ of the preferred tenderer.
The technical review also involves an assessment of any conditions or qualifications attached by the
tenderers to their submissions, as well as an assessment of the project’s estimated value and the value
of each tender received. Capability validation includes an assessment of the contractor’s work load over
the period of the proposed contract.
40
Notwithstanding that tenders should be called only when there is an intention to proceed with a project,
the entity may reject all of the tenders and recall tenders in accordance with the conditions of tender.
18.0 Evaluation by a panel
The evaluation process generally involves:
obtaining a written declaration from each panel member regarding any conflicts of interest they
may have in relation to their role on the tender panel so that such conflicts may be effectively
managed;
an initial meeting of the tender panel, prior to tender close, to confirm the members’
understanding of the project time-frame, evaluation criteria, criteria weightings and required
project outcomes;
a subsequent meeting of the panel to evaluate the completeness of tender information received
(i.e. that all parts of each tenderer’s submission have been received);
a meeting of the panel to finalise scoring; and,
the recommendation of a preferred tenderer (pending the outcome of the technical review and
financial capacity assessment).
If non-price criteria represent a significant proportion of the total weightings, tenderers may be invited
to make a presentation to the evaluation panel. In such cases, the purpose of these presentations should
be limited to clarifying aspects of the tenders.
19.0 Approach when a tender price is very low
Where a tender price (or a key element of a tender price) is considered well below the median price
and/or the project's estimated value, further investigations should be undertaken before selecting this
tender as the winning bid. In accordance with Section 34(1) of the Act, a request is made to the tenderer
to review their bid and/or respond to questions regarding particular aspects of the tender. The tenderer
should also be asked to provide written confirmation that the scope of work and contractual obligations
are fully understood3.
20.0 Post-tender negotiations
Post-tender negotiations may be conducted with a tenderer or tenderers in certain circumstances,
although care must be taken to ensure that integrity and accountability requirements are met. Guidance
on best practices in negotiation is provided in the Handbook.
21.0 Tender approval
Subject to a satisfactory financial assessment report on the preferred contractor, the entity will follow
the process of tender approval as set out in the Handbook including:
nominating the preferred tenderer to the relevant approving authority; and
seeking financial approval and approval to accept the tender.
Following the receipt of these approvals, the awarding of the contract may proceed subject to the
observance of any standstill period under Section 35(2) of the Act and in accordance with the process
set out in the Handbook.
22.0 Awarding the contract
3 34. (1) Where a procuring entity is of the opinion that a submission is abnormally low, it shall request, in writing
from the supplier or contractor, details of the submission that gives rise to concerns as to the ability of the supplier
or contractor to perform the procurement contract.
41
Once approval has been received from the relevant approving authority, a ‘letter of acceptance’ is issued
to the successful tenderer (a ‘purchase order’ may also be issued). At this point, the contract has been
awarded.
A number of documents typically constitute the agreement between the parties (i.e. the contract),
including:
a copy of the tender documents, including drawings and specifications and any
correspondence or addenda issued during the tender period;
the original submitted tender;
any post-tender correspondence and clarifications;
the letter of acceptance; and
where applicable, a formal Instrument of Agreement (i.e. a deed attached to
the Special Conditions of Contract that identifies the documents forming the
contract.
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Attachment 3: Consultant Solicitation and Evaluation Process
Note: The terms ‘solicitation’ and ‘tendering’ are interchangeable in this document as are the terms
‘evaluation’ and ‘selection’.
1.0 Pre-invitation activities
The process of consultant solicitation and evaluation is determined in the procurement strategy, the
development of which is based on the guidance provided in the Handbook on Procurement and Disposal
Strategy Development.
The quality of the initial planning and documentation is critical to the selection of suitable consultants
and ensuring successful project outcomes. Prior to inviting and selecting consultants, the entity needs to
undertake specific tasks including:
preparation of comprehensive and well defined Terms of Reference, (refer to the Project
Definition Plan);
completion and approval of a procurement strategy based on the guidance and process set out
in the Handbook including:
o preparation of a commission fee estimate;
o selection of an appropriate procurement method; and,
o identification of consultants with capabilities specific to the commission requirements.
2.0 Consultant invitation
2.1 Invitation methods
Two methods are available to identify consultants who will be invited to submit proposals – select
invitations to pre-qualified consultants and expressions of interest. Both methods ultimately involve the
preparation of a shortlist of consultants but the initial approach differs.
An analysis of the detailed commission requirements provides the basis for reducing the long list of
appropriately qualified and eligible consultants to the shortlist of consultants who will be invited to
submit proposals. Factors taken into account in preparing the select list from the long list include:
the consultant’s demonstrated performance, particularly on previous; and,
the consultant’s current commitments and capacity to serve any new commitments;
The number of consultants on the select list is determined by factors such as type and value of the
commission, the risk and urgency; however it should generally not be less than three or more than five.
Notwithstanding, there are circumstances, e.g. emergent commissions or where the service is highly
specialised or unique, that an exception to this provision may be warranted, resulting in a select list of
one or two consultants. In such cases, the reason for any departure from the general provision should be
recorded.
A selection panel should determine the select invitation list of consultants. The panel should comprise at
least three people; namely, the entity officer administering the commission (i.e. a professionally qualified
person - preferably from the same or related discipline as the required consultant) and a person with a
sound knowledge of procurement.
In determining the final list, it is advisable to have identified additional consultants beyond the select list
in the event that one or more consultants is not in a position to submit a proposal. The proposed select
invitation list, and the documented method used to determine it, should then be reviewed and approved
43
by the assigned Senior Procurement Officer in the case of a low risk/low value consultancy and by the
Chief Procurement Officer in the case of a significant procurement.
Prior to finalising the list, it is good practice to contact the short-listed consultants and determine their
availability and/or interest in being invited to submit a proposal. Any decline by a consultant at that stage
will not reduce that consultant’s opportunities to be invited to submit future proposals.
2.2 Expressions of interest
Expressions of interest should only be used as an invitation method where:
special skills or a high level of innovation are required (e.g. associated with a design
competition); or
it is desirable to facilitate opportunities for consultants to work together (in particular to meet
the policy objectives associated with local industry participation).
In relation to the second bullet point, the expressions of interest process may not be necessary if there is
an adequate pool of prequalified consultants in the area where the project is located.
To achieve optimum local industry participation, advertising for expressions of interest should be limited
to the relevant local area and may include provision for consultant - sub consultant and consortia
arrangements.
The expressions of interest process involves an invitation to consultants to make submissions:
to state their ability to meet specific project requirements, either individually or by combining their
abilities; and
to be assessed as the basis for determining their inclusion or otherwise in a shortlist for invitation to
submit a consultancy proposal.
Specific activities should be undertaken in the early planning stages of the expression of interest, to
manage risk associated with the procurement of consultant services. They include:
assessment of supply market for the consultant services;
alignment of project requirements and the supply market capability; and
preparation of the expression of interest Terms of Reference.
After a decision has been made to seek expressions of interest, a Terms of Reference should be prepared.
Care needs to be taken to ensure that the effort and documentation required from consultants is
minimised. The Terms of Reference should limit the requested information to that which is essential to
assess the consultant’s capability and interest. It should not require duplication of information that has
already been provided and is available in any pre-qualification system, nor should it require information
more appropriately addressed in the subsequent stages of selection.
Whether invited by letter or public advertisement, the invitation for expressions of interest should always
explicitly state the intention of the expression of interest process, which is to identify a shortlist of
consultants for invitation to submit a proposal for ultimate selection as the consultant.
The invitation activities need to be managed to enable invited consultants to develop proposals
appropriate to the Terms of Reference and within the nominated timeframe. These activities include
preparation and distribution of documents, responding to consultant inquiries during the proposal
preparation period, and receiving and closing of proposals. For some commissions, it may also be
appropriate to schedule pre-invitation briefings with consultants on the select list.
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2.3 Invitation documents
The invitation documents for a commission underpin the agreement between the entity and the
consultant. All reasonable steps should therefore be taken to ensure that adequate time is allowed for the
preparation of these documents and that they are clear and accurate to reduce the likelihood of subsequent
amendments.
The entity should provide an invitation package to each of the consultants on the select list. The package
should contain all information necessary to enable the consultants to prepare a concise and conforming
proposal. The same package should be given to all consultants.
As a minimum, the package should include:
• a Letter of Invitation including evaluation criteria and any applicable weightings;
• conditions of offer;
• the Terms of Reference detailing the specific service requirements and scope of the
commission;
• a copy of the General Conditions of Engagement of Consultants;
• a copy of any Special Conditions of Engagement; and
• instructions regarding the required structure and/or format of proposals.
The invitation should not require consultants to provide information that has already been provided.
Consultant responses to price and non-price criteria should always be sought in separate parts (envelopes
or electronic files depending on whether the process is paper-based or involves electronic tendering) to
allow the relative merits of each consultant’s non-price proposal to be assessed separately and before the
fee proposal is sighted. This should be made clear to consultants in the instructions relating to the format
of proposals.
2.4 Enquiries/amendments during the invitation period
The entity officer nominated to manage the commission should promptly attend to and record any
enquires and responses relating to invitation documents for a particular commission. Where it is
considered necessary to provide information to consultants as a result of an enquiry, the information
should be issued to all invited consultants as an addendum as soon as possible. Each consultant should
be requested to confirm receipt of all addenda at the time of submitting their proposal.
Amendment to invitation documents during the invitation period should be avoided. However, if
required, amendments should be provided as addenda to all invited consultants and the consultants
requested to confirm receipt of such addenda.
If the amendments are significant and require extensive consideration or are issued late in the invitation
period, an assessment should be made of the likely impact on the adequacy of the proposals sought and
whether the invitation period should be extended. If it is subsequently determined to extend the invitation
period, the extension should also be handled as an addendum.
3.0 Receiving and closing of proposals
A closing date, time, and place of lodgement should be nominated in the invitation documents. The
closing date should allow a reasonable time for the preparation of proposals and take account of addenda
that may have been issued and public holidays that fall within the proposal period.
Entities should have a documented and auditable system in place to ensure the security and
confidentiality of all proposals received prior to the closing time. When receiving paper-based proposals,
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the use of a locked box provides assurance that proposals are appropriately secured. Where electronic
lodgement of proposals is used, processes need to be in place to ensure that the electronic files are stored
securely.
Unless an entity has an electronic tendering system, proposals should be opened as soon as practicable
following the closing time, checked, dated and signed by at least three people, their receipt recorded in
a register and acknowledged in writing. Alternatively, where an electronic tendering system is used, the
receipt of proposals will be electronically recorded and acknowledged.
4.0 Consultant Fees
While fees are an important aspect of any proposal, it is important that they are not over-emphasised
relative to the non-price evaluation criteria.
Consultants should receive a fee commensurate with the level of required service. A number of key
industry bodies produce fee guides for varying types and levels of service. These may be helpful as a
reference.
Fees should be determined in accordance with requirements specified in the invitation documents and
will usually be described in the form of a lump sum or percentage of the estimated works project cost.
It is expected that the fee will take into account such factors as specified quality requirements, required
documentation levels, known risks and contractual obligations (e.g. ownership of copyright) together
with any value-adding to be delivered by the consultant through activities such as research, option
studies, design innovations and coordination of sub consultants.
Where there is a particular need to achieve a required level of service, agencies may find it beneficial to
fix a minimum fee for commissions.
Generally, consultants cannot claim fees for the preparation of proposals. However, where the
commission is complex and is likely to involve considerable cost to the consultants in preparing their
proposals, the entity should give consideration to allowing invited consultants to claim some portion of
their costs. In such cases, these arrangements should be identified in the invitation documents.
5.0 Consultant Selection
5.1 Evaluation methods
There are two main methods for the evaluation of consultant proposals:
Value selection; and
Qualification Based Selection.
5.1.1 Value Selection
Value Selection should be the evaluation method used where the commission service requirements are
either well defined and/or of a routine nature (i.e. in the majority of cases). This evaluation method will
identify proposals that represent the best value for money, with value for money being determined using
an evaluation of consultant responses to both price and non-price criteria. This method rewards the
consultant who has the highest overall weight adjusted score for both price and non-price criteria.
Price scoring
The highest score for the price criterion should be awarded to the proposal offering the fee closest to the
average and the lowest score(s) should be awarded to the fee(s) furthest from the average, whether above
or below. This approach requires a minimum of three fee proposals and will result in a negative score if
a fee is less than half the average.
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The score should then be weight-adjusted using whatever pre-established weighting has been determined
for the price criterion. The price score should then be added to the scores for the non-price criteria to
arrive at an overall score for each proposal.
Subject to value for money considerations, where three proposals have been sought by an entity but only
two proposals are received, the highest score for the price criteria will generally be awarded to the
proposal offering the lowest price. However, where three proposals have been sought and only one
proposal is received, the officer responsible for the invitation process should carefully consider whether
invitations for proposals should be re-called.
5.1.2 Qualification Based Selection
Qualification Based Selection should be the evaluation method used when the commission service
requirements lack definition and/or require significant innovation.
The Qualification Based Selection method identifies consultants who are best qualified to address the
commission's non-price selection criteria. Selection is based on an evaluation of consultant responses to
non-price criteria only (i.e. the fee proposal is not considered in the initial evaluation).
The fee proposal should be opened only after a preferred consultant is identified and then only for that
preferred consultant. The fee proposal is used as the starting point for negotiations with the preferred
consultant regarding the scope of work and associated fees. If agreement cannot be reached with the
preferred consultant, negotiations may then begin with the second ranked consultant and so on through
the rankings until agreement is reached. All unopened fee proposals should be returned to unsuccessful
consultants.
The Qualification Based Selection method and the associated negotiations require professional and
technical expertise.
5.2 Evaluation criteria and weightings
5.2.1 Evaluation criteria
The evaluation of consultants should be undertaken using price and non-price evaluation criteria.
The approach to evaluation of consultant responses to the price criterion through their fee proposals is
covered in section 5.1.1.
The non-price criteria may include:
understanding project objectives;
method;
resource strategy;
value adding; and
support for local industry.
Information sought from consultants in response to these criteria should be limited to the critical aspects
of the service to be provided. The level of detail sought in the proposals should be commensurate with
the value and service risk associated with the commission.
The evaluation criteria and associated sub criteria are addressed in further detail at Appendix 1 -
Evaluation criteria and sub-criteria for consultancy proposals.
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5.2.2 Weightings
The weightings for particular criteria should be aligned to the achievement of an appropriate balance of
project and other outcomes consistent with the objects of the Act, while at the same time being responsive
to factors such as project size, complexity, profile, budget, timeframe, specialist nature, site conditions
and location.
5.3 Evaluation of proposals
The aim of the proposal evaluation process is to identify the most advantageous proposal for the entity,
that is, the proposal that offers the best value for money.
The review and evaluation process must be transparent, fair and equitable. It is good practice to document
and randomly audit the process to verify that it is working effectively. Any discrepancies should be noted
and addressed before a final recommendation is made.
Any proposal that is not lodged by the closing date (unless a consultant may provide a reasonable written
explanation of causes beyond their control which caused this) or that does not comply with the
requirements of the conditions of offer included in the invitation package may be deemed non-
conforming and be rejected without evaluation.
The entity also has the option to reject all proposals and recall invitations in accordance with the
conditions of offer. However, it is important that this step be undertaken with good reason.
5.3.1 The evaluation panel
The evaluation of submissions is to be undertaken by an evaluation panel of at least three people
comprising:
one professionally qualified officer involved in preparing the invitation documents;
one officer (preferably from the same discipline as the consultant required) with sound technical
knowledge and capable of understanding and interpreting the proposals; and
one officer with a sound knowledge of procurement procedural requirements.
One of the panel members should assume the role of evaluation panel chairperson. The panel chairperson
is responsible for ensuring that the proposal evaluation process is conducted in a timely, competent and
accountable manner.
5.3.2 Proposal evaluation plan
On high value, high risk and/or sensitive commissions it is appropriate to prepare a proposal evaluation
plan to assist evaluators in their task and help ensure that the process is conducted in a timely, competent
and accountable manner. The plan should comprise:
a description of the evaluation criteria and associated weightings. It may also be useful to provide a
list of sub-criteria presented in the form of a checklist to assist evaluation of the proposals;
a description of the scoring method to be used; and
a brief explanation of the evaluation method being used (that is, Value Selection or Qualification
Based Selection – refer section) and an overview of the steps in the process.
5.3.3 Approach when the proposal fee is very low
Care should always be exercised in selecting proposals where the whole or a key element of the proposal
is at a fee level considered well below the average proposal fee, and/or the fee estimate for the
commission.
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While the price scoring approach used in the Value Selection method significantly reduces the likelihood
of a proposal with a very low fee emerging as the preferred proposal, this could occur if the consultant
scored highly in response to the non-price criteria. Low fee proposals may also be encountered where
there is a sole invitee or two invitees.
In this situation, in accordance with Section 34(1) of the Act, it is necessary to request the consultant
offering the very low fee to review their proposal and/or respond to questions regarding particular aspects
of the proposal and confirm in writing that the Terms of Reference and contractual obligations are fully
understood before proceeding. If the consultant has made a mistake in preparing their proposal, there is
an opportunity for the consultant to withdraw the proposal.
5.3.4 Evaluation criteria and sub-criteria for consultancy proposals
The following criteria may be used to evaluate consultant proposals:
understanding project objectives
method
resource strategy
value adding
support for local industry
price
These criteria are discussed as follows:
5.3.5 Understanding project objectives
The consultant’s understanding of project objectives is important, particularly for design commissions
associated with larger projects. Consultant responses to this criterion should convey the consultant’s
analytical understanding of the objectives and not simply repeat those stated in the Terms of Reference.
The consultant’s understanding of project objectives should also be evident in their response to other
criteria.
Relevant sub-criteria that consultants may be requested to address in their proposals include:
the scope of work identified in the Terms of Reference
project objectives and deliverables in terms of time, cost, quality and function
design intent
operational efficiency requirements / intended service delivery
flexibility requirements
asset life-cycle factors such as maintenance, operating costs, etc.
5.3.6 Method
This criterion is concerned with the consultant’s processes for delivery of the required service.
Consultant responses may include diagrammatic representation of the proposed processes, reporting
relationships, systems, procedures, etc. Items the consultant may be requested to address in their
proposals to include:
process management
overall design (or trade package) documentation process
programming issues
cost planning and cost management
built asset life-cycle cost issues
training, handover and commissioning processes
buildability issues
quality management, safety and environment policies
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management systems
key support equipment and systems
built asset whole-of-life cost issues
alternative forms of procurement
strategy for maximising value for money
community consultation strategy
environmental management/sustainability
5.3.7 Resource Strategy
The criterion seeks to clarify how the consultant will resource the project in line with the project
objectives. The required resources should be outlined, including back-up resources and any special
expertise considerations.
Relevant sub-criteria that consultants could be requested to address in their proposals include:
capability of the project team (both managerial and supervisory personnel and key team
members)
personnel backup strategies
referees
resource management strategies
management structures and reporting relationships (including identification of key activities and
the proportion of time that identified personnel will be allocated to these activities)
past and current time related performance
impact on entity resources
use of special information technology packages
5.3.8 Value adding
This criterion provides consultants with an opportunity to state benefits that they may offer over and
above those sought in the Terms of Reference. The information provided should demonstrate how the
consultants propose to add value to the delivery process or the project outcome.
Relevant sub-criteria that consultants could be requested to address in their proposals include:
innovative approaches to design issues described in the Terms of Reference
incorporation of research and development findings into project deliverables
prior knowledge of the particular site
understanding of local issues
special skills of personnel (may also be reflected in resources section)
contribution to the built environment
5.3.9 Support for local industry
This criterion is concerned with local industry participation issues and requires consultants to explain
how full, fair and reasonable access will be provided. Relevant sub-criteria that consultants could be
requested to address in their proposals include:
strategy for use of local sub consultants and/or service providers and suppliers
strategy for providing training and/or skills/technology transfer to local consultants and/or local
service providers or suppliers
opportunities for local product specification / import replacement
5.3.10 Price (fees)
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This criterion is relevant to both Value Selection and Qualification-based Selection as it provides the
basis for assessment of value for money of consultant proposals. Under Value Selection, price scores
are calculated using a price scoring formula; whereas under Qualification-based Selection, price scoring
is relevant only to the extent of providing a starting point for negotiations with the preferred consultant
after that consultant has been initially identified based on responses to the non-price criteria.
Consultant fees need to be stated in accordance with the invitation documents. Generally, this will be in
the form of a lump sum or percentage of the estimated construction cost or based on an hourly rate with
an agreed maximum limit.
6.0 Pre-approval activities
Prior to recommending a preferred consultant, the identified consultant’s current workload should be
clarified to confirm that the consultant is still eligible to undertake the commission in terms of currency
of registration/licensing, management systems, insurances or any other issues that may preclude the
awarding of the commission to that consultant.
7.0 Awarding the commission
Subject to satisfactory pre-approval checks, the evaluation panel should nominate the preferred
consultant to the relevant approving authority.
After approval, a Letter of Commission should be issued to the successful consultant commissioning the
consultant under the General Conditions of Engagement.
Each unsuccessful consultant should be advised in writing of the outcome of the evaluation process and
of the name of the successful consultant.
8.0 Standard consultant agreements
Requires customization and further development by each enterprise
9.0 Debriefing
Debriefing meetings to discuss evaluation results should be available to consultants upon request. The
debriefings should be held on an individual basis and be conducted by at least two members of the
evaluation panel.
The purpose of the debriefing is to provide constructive feedback on areas where the consultant could
improve for future proposals. In this regard, the panel should advise the consultant on:
the adequacy of the consultant’s proposal in relation to the evaluation criteria; and
the relativity of the consultant’s response to each of the criteria in comparison to the successful
consultant, taking care not to disclose actual scores.
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5. Contract Management Plan
The following template for contract management of works contracts has been adapted from the Procurement
and Disposal Handbook to suit the process normally associated with Management of Construction Contracts.
A draft Contract Management Plan using this template is to be developed and included in the procurement
strategy in accordance with the guidance and processes set out in the Handbook.
Focus Element Detail to be completed
Contract
Management
Plan:
Title and Purpose Insert title of plan and summarise its
purpose.
Identify the significant procurement action
to which this plan related
Identify the significant procurement
strategy of which this plan forms a part.
.
Contract
Structure:
Contract summary Summarise key contract details, for
example:
contract number,
commencement date,
contract term/duration
approved users of the contract
contract value
Background Provide a brief summary of the
procurement objectives and actions that
give rise to the contract
Contract purpose, objectives, scope, and
key deliverables of the contract.
Documentation List all documentation relating to the
contract that is held by the Contract
Manager e.g.,
Project Definition Plans
Procurement Plans
Tender evaluation reports,
Risk management plans etc.
Contract term and
extension options Contract start and end dates
Contract extension options
Pricing Total contract value,
Payment arrangements including any
payment schedule
Variations
Fluctuation formulae if applicable
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Focus Element Detail to be completed
Group roles and
responsibilities:
Contact details Contract management contacts: Entity
Contract/relationship management
contacts: Contractor
Other key entity and supplier entity
contacts
Employer under the Contract
Employers Representative
Key stakeholders List key stakeholders and their major
responsibilities in relation to the contract
Stakeholder
management and
communications
strategies
Project governance
Methods to be used for liaison,
Reporting arrangements,
Strategies for building relationships with
key stakeholders
Project governance arrangements
including
o Project Manager
o Project Steering Committee
o Project Control Group
Delegations for approval of variations
incurring cost and time.
Delegations for issuing instructions
without a financial implication
Delegations for granting extensions of
time
Delegations for approval of progress
payments
Delegations to issue the final certificate
Document
Management
Managing Requests for
Information from the
Contractor
Managing Transmittal
and Receipt of
Amendments to
Drawings and Technical
data
Instructions to
Contractor
Process to be developed jointly with the
Contractor defining such elements as
o Communication Media
o Roles and Responsibilities
o Response Timeframes
Conditions of
the Contract:
General conditions Identify the form of contract used
Special conditions Special conditions:
Warranties
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Focus Element Detail to be completed
Intellectual property ownership etc.
Government policy requirements
Contract variations
(price, product/services
or other)
Contract variations
Requirements that need to be met to allow
a variation as per contract provisions.
Process of evaluation of variations for
particularly time and cost
Insurance Details of insurances held
Details of currency and adequacy of
insurance certificates
Procedures for obtaining evidence from
the supplier/contractor of future currency
Financial
Considerations:
Payment conditions Contract conditions relating to payment
Details of payment schedule and basis for
payment
Documentation of payments made with
reference to ensuring that through Budget
Management there are funds available to
discharge the Contract Payment
conditions/obligations
Incentives or rebates Describe any incentive arrangements
included in the contract and how they are
to be calculated.
Penalties or
disincentives
Describe any penalties that may be
included in the contract and how they are
to be calculated and applied e.g. liquidated
damages, performance guarantees
Budget management Maintain a record of the overall project
budget including
Total project budget
Contingency
Actual budget allocated to this
contract
Variations approved
Variations committed but not
approved
Balance of funds available ( i.e. not
committed )
Invoicing
Detail the invoicing requirements for the
contract as well as
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Focus Element Detail to be completed
format for progress claims and the
process for lodgement of progress
claims
assessment and certification of
progress claims
process to ensure payments are
made within the provisions of the
contract
Performance
Measurement:
Key performance
measures Key performance measures/indicators to
be used for measuring the performance of
contract.
Performance measures are identified in the
approved procurement strategy, in the
solicitation documentation and in the
contract.
Performance
incentives/disincentives
List any non-financial performance
incentives or disincentives that are
applicable to the contract and the key
performance indicators that trigger them.
Performance monitoring May not apply for all Contracts
Describe the data collection and analysis
methods to be used for monitoring and
assessing performance (e.g. user surveys,
third party certification, benchmarking
etc.)
Detail who will undertake performance
monitoring including: responsibility for
collecting and analysing data; how
frequently monitoring will take place; the
reporting arrangements; and any processes
to review the arrangements.
Contract
Administration:
Supplier/contractor
obligations
Detail all obligations the contractor has
under the contract including:
contract construction deliverables (May be
defined by reference to the Contract
Schedule e.g. Conditions of Contract,
Technical Specification and Drawings)
any other deliverables covered by the
contract
timeframes to be met
specified personnel nominated in the
contract
reporting requirements
provision of equipment
back-up arrangements.
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Focus Element Detail to be completed
Entity’s obligations Detail all obligations the entity has under
the contract including:
access to site
provision of utilities e.g. power ,
water
security arrangements
information to be made available to
the contractor
equipment to be provided
accommodation
feedback and satisfaction reporting
scheduling of meetings
Product or service
standards expected Product or service standards included in
the contract (Generally defined in the
Technical Specification)
How they are to be administered
(commissioning processes, quality
assurance, site inspections)
Compliance
management Detail relevant procurement related
polices and obligations that the entity and
the suppliers/ contractor are required to
comply with and how these will be
managed.
The contract manager is responsible for
the management of these obligations.
Transition Arrangements for managing any transition
and attach transition strategies or plans.
Reporting requirements Refer also to section on governance
List the reporting requirements:
reports to whom
what is to be reported
format of reporting
frequency of reporting
schedule of reports
Audit requirements Requirements for internal and independent
audits
Elements of the contract to be audited
The timeframe for the audit
Resources required (in-house or external)
Contractor meetings Schedule of meetings specific to the
contract
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Focus Element Detail to be completed
Process for inviting and reminding
relevant parties
Risk assessment
and
management
strategy:
Procurement Risk Plan Risk management plan included in the
Significant Procurement Strategy
Identify risks that carry through to the
contract management phase.
Update Risk Management Plan as a
regular monitoring item normally an
agenda item for Project Meetings
identified in the Governance Section
Contract Risk Plan Refer to Risk Management Plan
Details of contract risk planning
Risks and mitigation strategies.
Contract risk plan to Risk Management
Plan.
Issue Register Refer to Risk Management Plan
Issues (realised risks) that may arise and
how they are to be managed
Identify locus of responsibility for
managing each issue/risk.
Contract Review Refer to the Sections on Governance and
Reporting Requirements
Outline regular reviews and their timing
Detail how they will be conducted
including data collection responsibilities
Identify trigger point(s) at which contract
review becomes necessary due to
underperformance.
Dispute Resolution
Process Dispute resolution clauses in solicitation
documents and in the contract
Procedures for addressing the dispute.
Termination Termination clauses in contract
Conditions for termination
Termination process to be followed
Contract
Review:
Renewal or extension Process to be followed in assessing
whether to renew or extend the contract
Steps to be followed as the contract nears
expiry.
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Focus Element Detail to be completed
Contract closure List the tasks that are required to
successfully complete and close the
contract including but not limited to:
commissioning plan
recovery of entity material and
equipment
handover procedures
security and access closure
contract evaluation
resources required (in-house or
external)
documentation of lessons learned
notification to stakeholders
Attachments: All documents relevant to contract
management to be attached including:
General Conditions of Contract
Special Conditions of Contract
Schedule of Technical Data
Technical Specification
Bill of Quantities
Schedule of Rates
Provisional Quantities
Contract Programme
Schedule of Drawings
Letter of Acceptance
Documents exchanged Pre
Contract Award
Instructions to Contractor Post
Award
Project Correspondence
Variations Issued
Budget Management
Time Management
Approvals
Project Governance Meetings
Risk Management Plan
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6. Project / Procurement Management Plan
1.0 Introduction
1.1 Purpose of this document
A project management plan as described in the Project Management Body of Knowledge -
PMBOK Guide Sixth Edition is a formal approved document that defines how the project is
executed, monitored and controlled. It may be in summary form or detailed and may be
composed of one or more subsidiary management plans (appendices) and other planning
documents. The objective of a project management plan is to define the approach to be used
by the project team to deliver the intended project management scope of the project. The attached
appendices capture live project information.
2.0 Project Details
Project Name
Project Short Description
Physical Location
3.0 Scope
3.1 In Scope
The scope inclusions are those specifically included in the Bill of Quantities and cost
estimate.
3.2 Out of Scope
Any items not included in the Bill of Quantities and cost estimate have not been
allowed in the project.
3.3 Related Projects
Any related projects?
3.4 Constraints
The issues constraining this project are as follows:
3.5 Urgency
If any
3.6 Assumptions
An example
The following assumptions are part of this project management plan:
Funding will be identified, confirmed and approved prior to formal project
commencement.
Timing constraints from both political and funding obligations will be
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confirmed prior to formal project commencement.
The preliminary design proposed in the current master plan forms a substantial
basis of the final design.
A design and construct delivery model for a guaranteed maximum price
Political support for the project will continue.
4.0 Impacts
Areas within the entity
e.g. Maintenance and Operations
Nature of Impact e.g. costs
Areas external to the entity
e.g. Public Safety
5.0 HR Management Plan
This is normally contained in a HR Management Plan including contract
administration summary; staff roles and responsibilities; responsibility assignment
matrix and consultancy list.
5.1 Project Customer
5.2 Project Sponsor
5.3 Project Manager
5.4 Governance Structure
An example
The project will be governed by a Project Control Group. This will consist of
delegated representatives of both the Project Customer and the Project Sponsor, as
well as the Project Manager and representatives from the contractor. An independent,
third - party superintendent will be appointed to manage the contract administration
and perform a role in the assessment, valuation and certification of contractual
claims. A detailed organisational structure for the project is attached at Appendix D
Detailed Human Resource
60
6.0 Scope Management
6.1 Risks and Issues
For additional information refer to Risk Management Plan
6.2 Time Management
An Example
During the pre-contract phase of the project the Project Manager will be
responsible to ensure that the project programme remains on target. This
occurs through regular review of project progress in relation to programme
milestones. During the contract phase project the management of time and
resources will be obligations of the contractor overseen by the Project
Manager. There will be contractual mechanisms in place to ensure that
these are appropriately managed. Regular meetings of the Project Control
Group and reporting of progress are the responsibility of the Project
Manager. The Project Manager remains responsible to ensure that
satisfactory project progress is maintained.
A detailed Project Schedule is contained Appendix B: Project Schedule
6.3 Cost Management
An example
The design and construction contract will be structured to guarantee the maximum
price of the works. Value for money is ensured by the supply of a bill of quantities
and rates at tender. The competitive nature of this phase ensures keen pricing.
Variations are managed through scope manipulation but the contractor is bound
by the quantities and rates submitted at tender. Change to costs are managed then
through a change in scope, but only where there is a clearly demonstrated case
arising from circumstances or facts that could not reasonably be known at tender.
Independent, third-party oversight of rates and quantities throughout the
construction phase is a contractual requirement.
A detailed Project Schedule is contained in Appendix C: Project Budget and Estimate
6.4 Human Resources Management
An example
Internal human resources required to manage the project are identified in the Project
Team organisation structure at Appendix D.
6.5 Communication
An example
Appendix E
Communication Management Plan identifies, analyses and classifies stakeholders,
61
includes communication methods, tools and techniques, and reporting systems.
6.6 Project Control
An example
Project control is managed through the Project Control Group. This group
meets regularly throughout the project to identify, discuss and determine issues
that confront the project. Minutes from these meetings form instructions to the
contractor and others. The Project Manager is responsible for taking and
distributing minutes and ensuring that follow up action occurs. Issues that are
beyond the authority of the Project Control Group are escalated to the Project
Sponsor for determination. It is the responsibility of the Project Manager to
ensure that this occurs where necessary and is managed in a timely fashion in
order to maintain the progress of the project.
Design documentation is prepared as part of the contract works. This is
progressively approved or amended by the Project Control Group during the
contract phase of the project and this documentation then forms part of the
contract.
6.7 Contract Management
This is outlined in sufficient detail to inform the Project Management Plan
particularly as it relates to Project Management Resourcing Strategies
6.8 Quality Management
An example
Quality through the design phase of the project is managed in the first instance by
the detail included in the specification at tender.
Quality through the construction phase of the project is managed by regular
inspection of the works; hold points at key milestones in the contract; and third
party certification of prescribed portions.
6.9 Integration
Note areas where there could be integration with other projects.
7. Safety
An example
Occupational Health and Safety (OH&S) throughout the design and
construction contract will be the responsibility of the contractor. He will be
nominated as the person in charge of the workplace and will need to
demonstrate at the EOI stage of the selection process that there are appropriate
systems in place to meet these obligations.
A detailed OH&S Construction Checklist will be required to be prepared and
submitted as part of the tender process.
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8. Operational Issues
Any general operational issues such as site access, site security, safety
requirements, etc.
9. Project Performance Measurement
An example
Success
Criteria Responsibility
Measurement
Method KPI Target
On-time Delivery Project Manager
Assessment of
planned progress
against actual
progress
On budget delivery Project Manager
Assessment of
outturn cost against
Budget
Ongoing
Operational Costs
Operations
and
Maintenance
Manager
Assessment of
planned
expenditure
against actual
expenditure.
Stimulus to
commercial
environment
Number of full
time equivalent
(FTE) positions
employed in
commercial
environment
10. Project Management Plan Acceptance
In signing this approval:
• I agree that the document meets the standard required for the project
management plan deliverable (requirements above).
• I understand the financial and other impacts associated with approving this project
plan
• I authorise progression to the implementation stage.
The following officers have approved this document.
Project Manager (accountable for ensuring the project is clearly defined to all
stakeholders, with strategies to deliver the project efficiently and effectively)
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Name:
Position: ------------
Signature: Date: I
Name: _
Position: _
Signature: Date: I
Appendix A - Business Plan
Appendix B - Project Estimate
Appendix C- Risk Management Plan
For the purposes of establishing the Project Management Plan and for handover to a project or
contract manager the following checklist has been provided. The checklist covers the entire
project life-cycle and may be cut down to suit the individual project or contract management
role.
Project Management Plan Approval Checklist
What the project is expected to achieve has been determined. (For example
potential costs and benefits based upon current knowledge and understanding).
There are clear justifications for the project
The real underlying problem to be addressed has been identified
Project governance is documented. Project customer, sponsor and manager have
been identified and accept their responsibility
The products or services to be delivered, and how they specifically address
requirements have been clearly determined.
Background details include (in summary format if possible):
Who initiated the project and how current situation
(problems, needs or opportunities) will affect the
project
The products or services that will be delivered
Potential costs and benefits based upon the current
knowledge and understanding the history of the project
Any other initiatives carried out previously to address related issues.
The scope outlined in the business case is confirmed or updated.
Any scope creep is noted
Internal and external impacts, and possible mitigation
strategies, are identified
The business case investigations, research method and
engagement are clear.
The risk management plan is attached. The issues management
plan is included where appropriate.
The broad strategy to deliver the project is clear.
Adequate project controls are included (including integration, scope, time, cost,
64
quality, HR, communication, risk and procurement management.
Environmental management, cultural heritage management and safety are addressed.
Operational issues asset transfer or ownership, commissioning, handover
support, maintenance, warranty and management strategies identified.
Project performance measurement and product benefits realisation are clear.
The costs incurred to date are identified. (preparation of options analysis, and
project proposal).
Financial impact analysis) attached, including cash flows, estimated costs for
each phase, contingencies, financial indicators and expected year for
programming of fund.
Funding Source is clear
The recommendation is clear, e.g. reason why the project should proceed to
the next stage and identify the impacts of not proceeding.
Deliverables
Appendix A- Project Scope
Appendix B- Project Schedule
Appendix C- Project Budget& Estimate
Appendix D - Human Resource Management Plan
Appendix E - Communication Management Plans - Internal and External
Appendix F - Risk Management Plan
Appendix G - Procurement Requirements Plan
Appendix H - Project Controls
Appendix I - Quality Plan
OH&S Construction Checklist
Environmental Management Checklist
