Agency Accreditation Framework
for
Delivery of Low Risk Construction
Projects under $1 million
2015
Agency Accreditation Framework
Table of Contents
1
Introduction
4
1.1
Definitions
4
1.2
Background
4
2
Agency Accreditation
5
2.1
Key factors to be considered
5
2.2
Process of accreditation
5
2.2.1
Accreditation for a programme of future works
5
2.2.2
Accreditation for individual projects
6
2.3
Key construction procurement risks
6
2.4
Review of agency construction program
8
2.5
System management
9
3
Skills Requirements
9
4
Legislative and Policy Requirements
10
4.1
Legislative compliance
10
4.1.1
Public Sector Act 2009 and Code of Ethics for the South Australian Public Sector
10
4.1.2
Public Finance and Audit Act 1987
10
4.1.3
Freedom of Information Act 1991
10
4.1.4
State Records Act 1997
11
4.1.5
Development Act 1993
12
4.1.6
Disability Discrimination Act 1992 (Cth) and Disability Services Act 1993
12
4.1.7
Occupational Health, Safety and Welfare Act 1986
12
4.1.8
Building and Construction Industry Security of Payment Act 2009
13
4.2
Policy compliance
13
4.2.1
Construction Procurement Policy: Project Implementation Process
13
4.2.2
Strategic asset management
13
4.2.3
Code of Practice for the South Australian Construction Industry
14
4.2.4
Prequalification of contractors
14
4.2.5
Construction Industry Training Board (CITB) levy
14
4.2.6
Contract disclosure
15
5
Construction Project Practices
15
5.1
Procurement management
15
5.1.1
Tendering systems
16
5.1.2
Conditions of contract
16
5.1.3
Contract roles
17
5.1.4
Insurance
17
5.1.5
Securities and retentions
18
5.1.6
Specifications and drawings
18
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Agency Accreditation Framework
5.2
Cost management
18
5.3
Time management
19
5.4
Scope management
19
5.5
Quality management
19
5.6
Risk management
19
5.7
HR management
19
5.8
Communications and reporting management
19
5.8.1
Australian Bureau of Statistics (ABS)
20
5.8.2
SAICORP
20
5.8.3
Premier and Cabinet Circular 114: Government Real Property Management
20
5.9
Integration management
20
6
Resources
20
6.1
Project roles
20
6.1.1
PSC contracts
20
6.1.2
GBC contracts
21
6.2
Accreditation and Project Procurement Assistance
21
6.3
Agency Accreditation Flowchart
22
6.4
Construction procurement roles
23
6.4.1
Project risk management
23
6.4.2
Budget risk management
23
6.4.3
Design risk management
24
6.4.4
Construction risk management
24
6.4.5
Procurement risk management
24
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Agency Accreditation Framework
1
Introduction
1.1
Definitions
Accredited Agency
An agency that has met all the requirements for accreditation and has been
granted by DPTI full or partial accreditation for a period of two years.
AGFMA
Across Government Facilities Management Arrangements
BPIMS
Building Project Information Management System, which consolidates building
construction procurement knowledge and documentation held and used by DPTI
DPC
Department of the Premier and Cabinet
DPTI
Department of Planning, Transport and Infrastructure
GBC
general building contractors
GST
The tax imposed on goods and services pursuant to A New Tax System (Goods
and Services Tax) Act 1999 (Cth). All amounts quotes herein are net and
exclusive of the GST
Lead PSC
Professional services contractor accountable for leading and coordinating its
own work and that of other professional disciplines
Medium Works
Lower value, lower risk construction projects between the value of $150,000 and
$2 million
Minor Works
Low value, low risk construction projects below the value of $150,000
PIP
Construction Procurement Policy: Project Implementation Process that governs
construction procurement in South Australia
Principal/Client
The Minister or Chief Executive for the agency contracting the construction
works and nominated in the respective contracts
Project
Building or engineering construction works being delivered by DPTI or an
accredited agency.
Project Manager
Project manager appointed by Project Delivery to lead and coordinate the
delivery of a project
Project Delivery
A directorate of Safety and Services division, DPTI established to centrally
manage across government delivery of building construction projects
PSC
PSC being architects, engineers, cost managers, planners, certifiers or other
building industry professionals contracted to provide services to the project
RSA
Urban Renewal Authority with the business name being Renewal SA
SAICORP
South Australian Government Financing Authority insurance group
1.2
Background
Cabinet approved the Construction Procurement Policy: Project Implementation Process (PIP) in
December 2005. The policy, updated in October 2011, affirms the role of the infrastructure
agencies, DPTI and the Urban Renewal Authority (Renewal SA) (RSA), for the procurement of
construction.
PIP mandates the role of an infrastructure agency in all projects over a $150,000 value threshold,
but provides flexibility to allow for delivery of building construction projects up to $1 million either
through the AGFMA, or by agencies that can demonstrate existing capability without duplicating
current resources in DPTI.
Depending upon the type of work and the particular risks associated with individual projects, an
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Agency Accreditation Framework
agency with accredited construction procurement practices and expertise may, by agreement with
Project Delivery, fully or partially manage low risk building construction projects up to $1 million in
value.
2
Agency Accreditation
Some non-infrastructure agencies have capabilities in construction procurement and are potentially
able to independently manage low risk building construction projects up to $1 million in value
without duplicating the resources in the infrastructure agencies.
Government has established infrastructure agencies with a centralised and core business role in
delivering construction projects in recognition that there are specific competencies required to
manage project risks, ensure that essential requirements are met and provide best value.
Irrespective of the building construction project procurement process, there are a number of
essential requirements which need to be met for effective and efficient building asset procurement
as detailed in sections 3, 4, 5 and 6.
2.1
Key factors to be considered
In considering the capabilities of a non-infrastructure agency to deliver low risk building
construction projects, the following factors will be considered.

The type and risk profile of projects or programmes of work likely to be undertaken by each
particular agency.

The existing capability (knowledge, skills and systems) to effectively manage the risks.

The resources available to Government, within the infrastructure agencies and the noninfrastructure agencies with consideration of the most effective and efficient use of those
resources.
2.2
Process of accreditation
Only low risk projects under $1 million can qualify for agency management.
The agency must have existing personnel with the necessary expertise and building construction
project management systems already in place to qualify for self-management. As a guide, the
roles provided by Project Delivery in managing the risks for government building construction
projects are included at Section 6.4.
An agency may seek accreditation for either a specific project or for a programme of proposed
future works which would expedite subsequent assessment of accreditation for individual projects.
The process for agency accreditation will follow a risk profile assessment. A description of the
steps involved follows for accreditation of a programme of proposed future works and for
accreditation of individual projects.
2.2.1
Accreditation for a programme of future works
Step 1: Identify profile of low risk projects likely to be undertaken by each agency in terms of
type, value, complexity and risk based on assessment of projects previously
managed.
Step 2: Identify typical risk profile for the type of projects or programme of works with each
agency and typical mitigation strategies for managing these risks. DPTI develops a
risk assessment framework to provide a risk profile for projects under $1 million. The
agency will self-assess risks within the framework and demonstrate capability in the
12 key risk areas.
Step 3: DPTI reviews the self-assessment and determines accreditation level and sets
required Gateway reviews or checks at key milestones. The assessment will
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Agency Accreditation Framework
consider historical performance, existing capabilities and construction procurement
practices within the agency, in particular:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
building asset knowledge and management
business case, scoping and value management
consultation and stakeholder management
construction procurement management and relationships with construction
industry liaison
process and systems knowledge and capability
governance, policy and approvals management
design/technical/construction knowledge management
statutory requirements knowledge and management
legal knowledge and contractor performance management
organisation, communication and collaboration management
cost and payment system management
risk management.
Step 4: Agree profile of projects for which the agency is assessed as having existing
(essential) practices and capabilities in building construction procurement together
with identification of likely risks and potential mitigation strategies in place.
Step 5: Re-Accreditation. Accreditation is for two years and agencies will be required to be
re-accredited on expiry. In addition, when circumstances change significantly (e.g.
loss of resource capability engaged in project delivery), the agency is required to
advise DPTI of the change and its proposed action in regard to its accreditation.
2.2.2
Accreditation for individual projects
Step 1: Agency undertakes self-assessment of management of construction procurement
risk for a particular project using the Agency Accreditation Checklist.
Step 2: Self-assessment checklist submitted to DPTI for review and assessment. Checklist
to be accompanied by a Project Brief, Project Risk Assessment and Procurement
Plan.
Step 3: DPTI reviews the self-assessment and determines accreditation level and sets
required Gateway reviews or checks at key milestones.
Step 4: Re-Accreditation. Accreditation is only for specific project(s) and re-accreditation is
required for additional project(s).
An agency may be fully accredited as having all the capabilities necessary to carry out the
procurement of building construction projects or ‘partially’ accredited with partial capability, which
will require the support of DPTI to mitigate particular risks.
Once an agency is accredited to deliver low risk projects under $1 million, for each project
proposed for delivery under accreditation, the agency will submit the project brief in the BPIMS
brief format to DPTI for authorisation.
2.3
Key construction procurement risks
The following risks have been identified as the key risks that must be addressed by the agency’s
construction procurement model.
Risk No.
1
Key Risk
Building construction projects must be developed in the context of the strategic whole-ofgovernment view on asset management (building asset knowledge and management).
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Agency Accreditation Framework
Risk No.
Key Risk
2
Construction projects are significant investments and require expert business case
development, costing, programming and a focus on lifecycle cost as well as initial capital
cost (business case, scoping and value management).
3
Buildings are lived and worked in by people and stakeholder consultation and ‘buy-in’ is
essential to success (consultation and stakeholder management).
4
Construction project tendering and contracting has special and complex requirements and
contractors must meet prequalification standards (construction procurement management
and construction industry liaison).
5
Major construction projects require extensive financial, payment, tender and contract,
project management, records and reporting processes and systems to be delivered
effectively (process and systems knowledge and capability).
6
Construction projects have unique government policy requirements, which must be met
(governance, policy and approvals knowledge).
7
Building design, documentation and on-site construction is complex and there is a
requirement for the purchasing agency to have the necessary skills to judge whether it is ‘fit
for purpose’ (design/technical/construction knowledge).
8
Building designs must comply with statutory requirements (statutory knowledge and
management – planning, OHS&W, Access to Premises, The Building Code of Australia etc).
9
Design and construction contractors and clients have extensive and detailed obligations
under contract and the purchasing agency must have knowledge of roles and obligations to
administer contracts effectively (legal knowledge and contractor performance
management).
10
Construction procurement is through teams working together over long periods and team
effectiveness is essential to successful delivery (organisation, communication and
collaboration management).
11
The control of construction project cost is complex and requires expert management of
estimating, cost planning, contingencies and escalation allowances and systems that
provide for the obligation to pay contractors to be effectively met (cost and payment system
management).
12
There are many general and specific risks in construction procurement and the purchasing
agency must have well-developed risk identification and mitigation processes and skills (risk
management).
These risks are grouped into broad areas with possible mitigation strategies identified for each
area.
Area of Risk
Risk No.
Mitigation Strategy
Communication
10
Agency demonstrates its capability in establishing team
communication and decision making systems.
Cost
2,11
Agency may access costing advice from DPTI or through
engagement of professional cost managers.
Agency may access the standard suite of DPTI guide notes and
templates.
Human Resources
7,9,10
Agency demonstrates its capability to assess required human
resources whether internal or external including identifying skills
for construction projects.
Agency demonstrates its existing workforce skills, knowledge and
experience in construction procurement.
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Area of Risk
Risk No.
Mitigation Strategy
Integration
All
Agency demonstrates understanding of the timing and impact on
construction projects of applicable legislation, policy and
Government approvals processes.
Agency has resources that able it to develop project plans to
ensure that the construction procurement process is lawful and
adheres to Government policy within the context of the particular
requirements of the project’s objectives and brief.
Procurement
4,5,6,9
Agency must follow PIP and demonstrate that there is system
support to the requirements of PIP.
Agency must use the DPTI Building and Construction Project
Prequalification System for selection of professional service and
general building contractors.
Agency must demonstrate that it has the necessary legal and
contract management skills, resources, procedures and systems
for construction procurement.
Internal Audit can perform reviews to ensure agency compliance
with the approved framework and standard documentation and
procedures.
Agency must use the standard contracts in use by DPTI.
Quality
1,3,7,8
Agency demonstrates access to SAMIS
Agency demonstrates capability in accordance with government’s
Strategic Asset Management policy.
Agency demonstrates that in-house resources have the
experience and skills to judge ‘fit-for purpose’ in design and
construction program services from contractors.
Risk
12
Agency demonstrates its governance and risk management
structures and processes.
Agency may access DPTI risk management system.
Scope
3,6
Agency confirms its resources for briefing/scoping projects and
demonstrates its value management capability.
Time
2,4,12
Agency demonstrates that in-house resources have the
experience and skills to program construction projects. The
Agency may access the standard suite of DPTI guide notes and
templates.
2.4
Review of agency construction program
Once an agency obtains full or partial accreditation, it will identify projects proposed for delivery
either on an individual project basis or as an annual program of works.
A risk assessment of projects or programs of projects proposed to be independently managed by
the agency will be required and provided in the form of:

a description of the project (using a standard project brief proforma);

a completed risk assessment (using a standard proforma); and

a procurement plan (using a standard proforma).
This information will be provided to DPTI for review, which will assess and determine whether:

a fully accredited agency will be authorised to procure assessed low risk building
construction projects up to $1 million with minimal or no support from Project Delivery. The
agency will be required to maintain an approved procurement delivery system and provide
summary project information to Building Management for database reporting, or
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Agency Accreditation Framework

a partially accredited agency will be authorised to procure assessed low risk building
construction projects up to $1 million with the involvement of Project Delivery at agreed
stages or for agreed services. The agency will be required to maintain an approved
procurement delivery system and provide summary project information to Project Delivery for
database reporting.
An accredited agency will have access to BPIMS including all standard proforma to assist it in its
project procurement and agency project managers will be trained in the use and administration of
DPTI standards and proforma to be implemented on all projects.
An agency that is not accredited must procure construction in partnership with Project Delivery in
accordance with PIP. Project Delivery will assess the most effective use of existing central
construction procurement resources and their availability for delivery of projects before providing
agreement to agency delivery.
2.5
System management
Project Delivery will:

accredit the agency, whether full or partial, for a two (2) year period and will review and
confirm its existing accreditation status on an annual basis

review and revise an agency’s accreditation on its procurement management performances
and or changes to its capability (the agency accreditation status may be adjusted on the loss
or gain of internal expert personnel)

review, verify and register all project risk profile assessments including a sample review of
projects delivered by the agency under the accreditation

provide support to the agency for agreed services or at agreed stages

maintain agency access to key documents, e.g. contracts and provide necessary training

co-ordinate with the agency to maintain ongoing accreditation or to re-accredit (if/as
applicable).
An accredited agency will:

be responsible for its procurement of building construction projects as agreed by DPTI and
implementation of all Government policies in construction procurement

undertake a risk profile assessment of all construction procurement and building construction
projects it manages/procures/delivers and provide the results/reports to Project Delivery

utilise services and support from Project Delivery at any stage or in accordance with any
conditions under partial accreditation

advise Project Delivery of any significant changes to procurement capabilities particularly
changes of key project management personnel

liaise with DPTI to review existing processes, upgrading where necessary, to secure ongoing
accreditation or re-apply for accreditation (as applicable).
Accredited agencies are to note that should accreditation lapse the accreditation process must be
commenced again as a new accreditation.
3
Skills Requirements
Project Delivery has professional and technical employees from the building industry – project
managers, architects, engineers, technical officers, cost managers and building inspectors to
manage all aspects of building construction procurement and the associated risks. This group of
employees is essential to the effective delivery of construction procurement in accordance with
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Agency Accreditation Framework
government policy and best practice.
Professional cost managers review projects at key milestones, advise on management of risks to
the approved budget, planned cash flow, expenditure and manage the contract payment
processes.
Architects, engineers and building inspectors review the designs and contract documents to check
that relevant industry, government and project specific design standards have been met, and that
the design solution meets the brief.
There is a group of specialist tradespeople who go on-site during construction with the PSC teams
and advise on technical matters, building materials, good trade practices, quality assurance
standards and contractual obligations.
The agency will demonstrate that it has the required skills to manage the complexity and risk in
major building construction procurement.
4
Legislative and Policy Requirements
4.1
Legislative compliance
Knowledge of the key legislation for building and construction projects and an understanding of
how the Acts and Regulations under the Acts are applied in the public sector context.
The agency will have a training program to ensure project management personnel with direct
responsibility for managing construction projects are aware of their responsibilities and obligations
especially in relation to honesty, accountability, probity and fairness.
4.1.1
Public Sector Act 2009 and Code of Ethics for the South Australian Public
Sector
The Public Sector Act 2009 and the Code of Ethics for the South Australian Public Sector
provide the foundation for responsible and appropriate conduct by public servants. It has
particular relevance when linked to the expenditure of large sums of public monies and to
contracting for services from the building construction industry.
4.1.2
Public Finance and Audit Act 1987
The Public Finance and Audit Act 1987 regulates the expenditure of public monies and
project management personnel require knowledge of its constraints and obligations. Project
financial management must be in accordance with the Act. Specific details are included in
Treasurer’s Instructions, particularly in Treasurer’s Instruction 8 FINANCIAL
AUTHORISATIONS.
The agency will have a management system in place to ensure there are clear delegations of
authority to enter into contracts and to expend public monies, and to monitor and report on
expenditure and its authorisation.
Delegations under the Public Finance and Audit Act 1987 include:
- financial – there must be set delegations for authority to expend public monies on projects
- contract – there must be set delegations for the acceptance of tenders
- project limits – in PIP, Cabinet has determined certain thresholds for approval for projects
to proceed and these must apply.
4.1.3
Freedom of Information Act 1991
The Freedom of Information Act 1991 provides for public access to official records.
Retention of and access to public records has to be managed, and there needs to be clear
lines of responsibility to ensure the appropriate records are kept and are accessible.
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Agency Accreditation Framework
Project management personnel must be aware of their responsibilities and obligations
especially in relation to keeping accurate and auditable public records of all transactions and
decisions in relation to building projects.
The agency will have processes that support responses to freedom of information requests.
4.1.4
State Records Act 1997
The State Records Act 1997 requires preservation and management of official records. This
is especially important where buildings and land are involved as each has a long history and
accurate and detailed records need to be maintained for public information and asset
management. Detailed records are essential in the event of legal challenge or liability
claims.
Typical information sought on projects includes:
-
name
site address
scope description
project stakeholders and governance
approvals records, e.g. expenditure approvals, contract approvals
cost details, e.g. initial budget, final approved budget, final cost, initial estimate, estimate
at end concept, end of documentation, pre-tender estimate
- program details, e.g. commencement date, completion date, commencement of
construction, handover; approvals milestones
- risk analysis
- general project correspondence.
Typical information sought on contracts includes:
- name
- tender documents
- tender details
- contract documents
- contractor details
- date of contract and approving authority
- initial contract sum
- final contract sum
- cost of contract variations and approving authority
- initial completion period
- actual completion period
- dispute records
- general contract correspondence
Effective long-term management of building assets requires the maintenance of information
on the design and construction of the building. Data is used by SAICORP for risk
management including public sector building insurance negotiations.
Typical information retained on assets includes:
- original drawings and specifications
- as-built drawings and specifications
- maintenance and minor works logs
The agency will maintain detailed records of projects.
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The agency will maintain detailed records of tendering and contracting activities.
The agency will maintain detailed asset management records.
4.1.5
Development Act 1993
All projects must meet requirements under the Development Act 1993 and the delivery of
projects requires processes to ensure projects gain development approval through the
Development Assessment Commission. There must be application of the Building Rules and
The Building Code of Australia to the design, interpretation of Act requirements and
monitoring of legislative change.
The agency will:
- access the DPTI register of private certifiers for major Government projects and appoint
certifiers independent of the design team
- maintain records of certification and ensure these are related to Development Approval
- ensure there is professional service and construction contractor sign off to confirm that the
completed project conforms with contract documents and certified documents
- ensure that Schedule 16 – Essential safety provisions (Regulation 76 of Development
Regulations 2008) is provided to the facilities management service provider as part of
project handover.
4.1.6
Disability Discrimination Act 1992 (Cth) and Disability Services Act 1993
Asset owning agencies are bound by the Disability Discrimination Act 1992 (Cth). They are
also required to provide funding and services in accordance with the Disability Services Act
1993 but have some capacity to interpret these Acts in ways that ensure the spirit and intent
of the Acts are implemented. Agencies must conform to the Australian Human Rights
Commission guidelines, the policy ‘Promoting Independence: Disability Action Plans for SA’
and Premier and Cabinet Circular PC020 Upgrading of Safety and Access in Crown
Buildings.
Agencies may access the DPTI register of accredited access discipline contractors and DPTI
guide notes where appropriate
The agency will establish standards for its projects to meet access requirements in The
Building Code of Australia, the Disability Discrimination Act 1992 (Cth) and Government
policy.
4.1.7
Occupational Health, Safety and Welfare Act 1986
Government requires careful observance and application of the Occupational Health, Safety
and Welfare Act 1986 as it applies to the design and operation of its built assets and with
regard to the work conditions employed in the construction of these assets.
DPTI has in place systems and processes for management of OHS&W responsibilities
associated with contracting and construction activities, which the agency may access. These
include:
- procedures and responsibilities when operating on a shared or occupied site to ensure the
safety of workers and the public, minimise the possibility of accidents, and protect the
Government from liability claims
- guide notes and instructions for processes such as asbestos removal
- Government policy and established practice notes.
The Agency will have particular regard for compliance with the Act as there is financial
impact through a cost premium for breach of this Act, and the risk that the agency Chief
Executive will be held personally liable for breach of the Act.
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Agency Accreditation Framework
The agency will:
- develop design standards and details of specific design requirements to meet agency
OHS&W requirements and ensure they are readily available to professional service and
construction contractors
- ensure that agency corporate and local site specific OHS&W policies and guidelines are
provided to professional service and construction contractors
- regularly review standards to ensure ongoing compliance with the Act and any
amendments and to incorporate feedback from users
- attend to unrealistic demands being made on building construction workers to complete
work in short time spans and to undertake dangerous work without the necessary
protections being in place
- ensure ongoing monitoring and reporting of industrial accidents and analysis of the base
causes contributing to worksite accidents. The Australian Bureau of Statistics requires
statistics on workplace accidents and SAICORP insurance rates are affected by the
number of accidents recorded.
4.1.8
Building and Construction Industry Security of Payment Act 2009
The Building and Construction Industry Security of Payment Act 2009 introduces a system of
rapid adjudication to ensure that payment claims in the construction industry are resolved
quickly. It applies to all contracts (or other arrangements) for construction work or the supply
of goods and services related to construction work including the provision of services by
PSC.
The process requires the Client/Principal in a contract for construction works and/or services
to meet certain statutory requirements for responding to a claim for payment from a building
contractor or PSC. These requirements include:
- to assess the validity of a contractor’s claim in a timely manner
- to issue to the claimant a payment statement either concurring with or disputing the
amount claimed and providing reasons why it is disputed within 15 business days of the
claim being made.
The failure to meet these requirements can result in a court enforced obligation to pay the
claim in full whether the claimant is entitled under the respective contract or not.
The agency will develop a systematic and timely approach to:
- assess the validity of any progress claims for payment received
- issue payment statements with respect to progress claims made in a timely manner.
4.2
Policy compliance
4.2.1
Construction Procurement Policy: Project Implementation Process
Government policy for building construction procurement (PIP) applies.
The agency will demonstrate:
- knowledge of the PIP processes and the roles and responsibilities to be fulfilled
- attention to the sign off and acquittals requirements at Gateways in PIP.
4.2.2
Strategic asset management
Government policy for strategic asset management must be applied.
The agency will keep specific asset registers which detail the location of dangerous and
hazardous materials such as asbestos.
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DPTI currently maintains detailed records that can be aggregated and located
geographically.
The agency will have a compatible information system in place.
4.2.3
Code of Practice for the South Australian Construction Industry
Compliance with the Code of Practice for the South Australian Construction Industry is
Government policy. The agency must have knowledge of the Code of Practice and
understanding of how the principles outlined in the Code are applied in the public sector
context.
A system for managing complaints is required including processes for investigation that are
transparent to ensure fair and equitable treatment. DPTI will investigate complaints from the
building industry about the agency and its practices.
The agency will comply with specific requirements in the fields of:
-
ethics
tendering code of practice management and understanding
security of payment
industry relationships
skill development and training
best practice
sanctions for breaches of the Code.
4.2.4
Prequalification of contractors
Government seeks to work with PSC and GBC that have industry credibility are reputable
and have demonstrated their capacity and capability to deliver public sector projects
successfully – on time, on budget and to the standard specified.
To ensure consistency in performance Project Delivery requires that only prequalified
professional service and construction contractors are eligible to tender for construction
projects over $150,000 in value.
Maintaining the DPTI Building and Construction Project Prequalification System requires a
computer based records management system to identify, assess, record and confirm details
of those professional service and construction contractors who pre-qualify to undertake
Government work in building design and construction.
DPTI provides the process and procedures for the assessment, registration and ongoing
performance measurement and management of professional service and construction
contractors to ensure that Government only engages those businesses with sufficient
financial, technical and management capacity, consistent with established benchmarks.
The agency will utilise the DPTI Building and Construction Project Prequalification System.
DPTI requires contractor performance reports from the agency as a means of gathering data
for the prequalification system.
4.2.5
Construction Industry Training Board (CITB) levy
As a requirement under the Code of Practice, all State agencies managing construction
industry activity must provide a regular report to the CITB of all contracts let and the
appropriate specific details including the name and nature of the asset, the name of the
successful contractor and the approximate value of the contract/project. Currently DPTI
collects the levy for the projects it manages and pays CITB.
The agency will ensure the appropriate levy amount is included in any tender submitted.
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The agency will ensure the levy is collected and paid to CITB.
4.2.6
Contract disclosure
Premier and Cabinet Circular PC027 Disclosure of Government Contracts requires public
authorities to publicly disclose certain contracts involving Government expenditure in
particular eligible contracts for expenditure over $500,000.
The Government requires contract disclosure to demonstrate probity and transparency. This
requirement applies to all contracts between public authorities and the private sector with the
exclusion of all contracts under the Public Sector Management Act 1995, involving the
expenditure of public funds and with a value of $500,000 or more (inclusive of GST).
The systems need to be able to aggregate data and maintain long-term records. The
requirements of the State Records Act 1997 need to be observed.
The agency will have processes and systems in place to record details of the contracts
entered into, the contractors, the amounts and dates.
5
Construction Project Practices
The procurement of building assets is complex and takes place over an extended period.
Government requires certain processes to be observed because it has a direct interest in the longterm viability of the building and construction industry, the fifth largest business in the State.
Construction for Government makes up a large percentage of all building construction work in the
State. Consequently Government requires fair and open competition for Government work. It
seeks value for money (not necessarily the lowest price) and to use those professional service and
construction contractors who have demonstrated to Government that they are financially viable and
capable of doing the work.
In response to agency and industry concerns, DPTI has developed and implemented procedures
and practices which provide clear guidelines and processes which ensure Government receives
the products and services it wants at the right price which is a fair price representing value for
money (not necessarily the lowest price). Ongoing development of procedures and practices is a
risk management strategy aimed at ensuring that work processes are reviewed and refined
regularly so work can be done efficiently and effectively.
Examples of procedures and practices include:

evaluation of construction contract tenders

dispute resolution guidelines

procedures for variations to contracts.
The agency will regularly refer to Project Delivery to ensure it shares the benefit of ongoing
practice development.
5.1
Procurement management
Government requires transparent tendering processes that demonstrate that the processes have
been fair, equitable, and non-discriminatory and that Government work has been offered to all
appropriate suppliers to maintain a competitive marketplace.
Tendering on behalf of Government needs to take into account current Government policy as
detailed in the AS 4120―1994 Code of tendering AS 4121―1994 Code of ethics and procedures
for the selection of consultants.
DPTI uses its prequalification system with a public or select tender process that includes
advertising the tender electronically on the SA Tenders & Contracts website and in appropriate
newspapers as applicable.
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DPTI has systems and procedures in place for receipt of tenders, opening, scheduling and
notification of the success of the tender. This is done in accordance with the AS 4120―1994 Code
of tendering, and audit requirements. Once the preferred tender is selected, DPTI does not
negotiate the price or attempt to drive down the price by referring to competing bidders.
DPTI conducts the evaluation of tenders, assessment of alternatives and makes a
recommendation to the agency that has to be approved by an appropriately authorised delegate
within that agency. There are timelines to be met to comply with the conditions of tendering, and
DPTI works with agencies to ensure those timelines are met, or re-negotiated.
DPTI has systems and processes in place to let the contract, administer the contract, manage any
variations to work arising from agency requests or from construction issues, manage disputes
arising from the contract and finalise the contract so that all aspects including financial payments
and outstanding disputes are finalised appropriately. All of this has to be done in a consistent way,
with consistent interpretation of contracts and issues arising in accordance with Government
standards and legal advice from the Crown Solicitor.
The agency will have a tendering and contracting system which has similar principles, practices
and systems and which honours the Code of Tendering, or
the agency will tender through Project Delivery Contracts Services section.
5.1.1
Tendering systems
Systems are required to:
- detail all tenders
- record queries and responses
- check compliance with the AS 4120―1994 Code of tendering
- list instances of non-compliance
- highlight consistent non-compliance and take action.
The agency will have systems in place to ensure the tendering process is clear to tenderers,
their queries are effectively and fairly answered, tenders are evaluated appropriately and
tenderers notified.
5.1.2
Conditions of contract
There are some seven forms of standardised contract conditions in use by Project Delivery
for engagement of professional service and construction contractors. The contracts have
standard special conditions and contract information items.
Contract conditions in general use are:
- AS 2124―1992 General conditions of contract (major construction)
- AS 4300―1995 General conditions of contract for design and construct (design and
construct)
- GC21 General Conditions of Contract (major construction)
- MW 396―12 Conditions of Contract for Minor Works (minor construction – DPTI
developed)
- MDW―12 Conditions of Contract for Medium works (medium value construction – DPTI
developed)
- AS 4122―2000 General conditions of contract for engagement of consultants (PSC)
- MPS―12 Contract for Provision of Minor Professional Services (for Medium Works)
(minor PSC – DPTI developed)
The agency will demonstrate that it has appropriate standard conditions of tendering and
contract for professional service and construction contractors.
DPTI continually reviews, updates and manages contract conditions to ensure proper risk
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Agency Accreditation Framework
management and risk allocation is maintained. DPTI also understands the need to ensure
appropriate conditions are in place for alternate forms of procurement, e.g. design and
construct contracts, schedule of rates contracts.
The agency will demonstrate that it has capability in this area.
5.1.3
Contract roles
On Project Delivery managed projects, the Minister for Transport and Infrastructure is the
Principal or Client (for professional services) in all contracts. Having a single government
Minister responsible for government professional service and construction contracts ensures
consistency in decision-making. There are specific contract roles for the Principal/Client that
require some formal understanding of contracts and contract law.
There are essential contract responsibilities for the Principal/Client including that they must:
- be a Body Corporate
- make payments when due under contract
- ensure appropriate certificates are issued as and when due
- ensure appropriate insurances are in place
- provide possession of or access to the site to contractors.
The agency will determine a single Principal/Client as either the Lead Minister or the Chief
Executive.
The agency will have a system in place that effectively supports the role of the
Principal/Client.
In DPTI contracts, the Principal/Client appoints as its representative, the Executive Director
Project Delivery who has specialist knowledge and expertise in contracts.
As the Principal/Client and Representative are not ordinarily involved in the day-to-day
matters of the contracts, the project risk manager and the lead PSC (usually the architect for
the project) take contract roles and provide the management and advice required.
The agency will appoint a Principal/Client’s Representative.
If Australian Standard (AS) construction contracts or the DPTI developed medium works
contract are utilised, it is necessary to appoint a Superintendent. The Superintendent has
responsibility for making fair and just decisions in accordance with the contract. The
Superintendent may appoint a representative.
In DPTI managed projects, the role is undertaken by the Director Project Services who is
able to maintain an objective and fair approach to the administration of contracts,
representing neither the Principal nor the Contractor. The Superintendent appoints the
Project Risk Manager as its Superintendent’s Representative, who must similarly act in an
objective manner in administering the contract.
DPTI practice is to recognise the lead PSC (architect or engineer and subcontractors) as
representing the Principal’s interests and for this reason PCS’s are not appointed into the
Superintendent’s Representative role. A clear understanding of the different contract roles is
paramount to the proper operation of contracts.
The agency will appoint a Superintendent to administer contracts as required.
5.1.4
Insurance
Organisations contracting with Project Delivery are required to indemnify the Government
from any wrongdoing and/or liability as a direct consequence of that contract. Project
Delivery does not accept ‘capping’ of liabilities (refer Treasurer’s Instructions).
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To ensure consistency in insurance cover on construction contracts, Project Delivery has
taken steps to ensure it has Principal controlled insurance in place for works and public
liability, and is therefore not reliant on individual contractors that may forgo or under provide
insurance. DPTI works with SAICORP to define and arrange appropriate insurance for all its
building construction projects. This is cost effective and good risk management practice.
DPTI has the understanding and expertise in managing insurance conditions (at renewal)
and matters that arise from losses and events under insurance limitations.
The agency will work with SAICORP to develop its own works and public liability insurance
arrangements, whether by Principal or Contractor.
5.1.5
Securities and retentions
DPTI requires PSC and general construction contractors to demonstrate their financial
viability to ensure that work contracted will be completed in accordance with contract
agreements. Construction contracts have the added requirement for contractors to provide a
security (major works) or retention (minor works) for the performance of the contract.
Securities may be in a number of forms including cash, unconditional undertakings (bank
guarantee) and insurance bonds.
Holding cash securities requires adherence to specific accounting and audit requirements.
Unconditional undertakings require specific wording in place, or providers of insurance bonds
need to be approved. Other matters include:
- negotiating the bank guarantee which requires an understanding of the type of contract
being used as the contract will determine the specific security and type of bank guarantee
acceptable
- ensuring there are processes for the return of guarantees and for enforcing of guarantees.
The agency will demonstrate that it has an appropriate system for the administration of
securities and retentions.
5.1.6
Specifications and drawings
NATSPEC is a specification developed nationally. Its standardised use by Project Delivery is
a risk management tool to ensure that GBC are familiar with the layout and content leading
to efficient identification of the on-site requirements and the detail of the proposed building
work.
Project Delivery has over time developed a customised form of NATSPEC that meets the
requirements of the lead agencies. Its policy requires that lead PSC use the standard DPTI
modified specification.
The agency will demonstrate that its special requirements are advised to PSC to be
incorporated into contract documents, and will require the use of NATSPEC unless otherwise
agreed with DPTI.
5.2
Cost management
DPTI operates cost management systems for the management of project estimates and budgets
and a financial system that meets accounting and audit standards for construction project contract
payments.
The cost management systems allows the project budget and progressive estimate of cost to be
recorded and tracked, cash flow to be monitored, contract progress and variation payments to be
made and expenditure approvals to be recorded.
Once the project is initiated and contracts are entered into, the financial commitment is recorded
and tracked and regular payments are made to PSC and construction contractors in accordance
with contract obligations and the Code of Practice for the South Australian Construction Industry.
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Agency Accreditation Framework
The agency will have a financial management system in place to ensure PSC and construction
contractors are paid appropriately and in a timely manner consistent with the contract.
5.3
Time management
DPTI project management personnel have skills in the development of design and construction
programs, utilising programming tools, to include key activities and milestones and to set realistic
timeframes for design and construction services delivery by the private sector.
The agency will demonstrate capacity to effectively manage construction project time.
5.4
Scope management
DPTI project management personnel apply their experience and skills to manage that the briefed
requirements are clear for the PSC, that construction contract documents are in accordance with
the brief and the approved budget and that ‘scope creep’ is tightly managed to avoid project time
and cost overruns.
The agency will demonstrate capacity to effectively manage construction project scope.
5.5
Quality management
DPTI architects, engineers and building inspectors apply their experience and skills to identify
design features that do not meet briefed or standards requirements and/or constructability,
OHS&W and Development Act 1993 issues. These reviews ensure the quality of the project meets
briefed requirements for functionality at handover and during the building’s life cycle.
DPTI cost managers review estimates of cost and budgets to ensure alignment and to identify cost
risks in relation to cost plan elements particularly contingency and escalation provisions.
The agency will demonstrate capacity to effectively manage construction project quality.
5.6
Risk management
DPTI project management personnel apply their experience and skills to identify construction
project risks and to develop a risk management and mitigation plan utilising risk tools which meets
the requirements of AS/NZS ISO 31000:2009 Risk management - Principles and guidelines.
The agency will demonstrate capacity to effectively manage construction project risks.
5.7
HR management
DPTI applies its knowledge of the services and skills available in the building and construction
industry to determine the appropriate human resources for construction project delivery,
complementing in-house skills with private sector skills.
To ensure consistency in performance, DPTI requires that only prequalified PSC and GBC are
eligible to tender for construction projects over $150,000 in value. Refer to Section 4.2.4.
The agency will demonstrate capacity to effectively identify required human resources from the
building and construction industry and an understanding of the DPTI Building and Construction
Project Prequalification System and its application.
5.8
Communications and reporting management
DPTI establishes communications processes within project teams to ensure that there is an
integrated approach to design, documentation and construction and to ensure that information is
provided in a timely way. There are standard approaches to meetings management and records
and contract communication including variation orders, site instructions, site visits, document
transmittal etc.
The agency will demonstrate effective project communications systems.
Government agencies are required to contribute to State and Commonwealth statistical records.
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Agency Accreditation Framework
There is an obligation on all building asset owning agencies to collect and record data regarding all
owned building assets.
5.8.1
Australian Bureau of Statistics (ABS)
Details of the building projects, their value and completion date must be collected so the ABS
can provide detailed economic analysis of business transacted and buildings constructed.
This information is used widely for business planning, workforce planning and as an indicator
of the state of the economy.
5.8.2
SAICORP
Details of assets held by Government, including area, condition, location, age, materials,
photos etc are required for use by SAICORP when negotiating insurance premiums.
5.8.3
Premier and Cabinet Circular 114: Government Real Property Management
For effective ongoing asset management, Project Delivery requires building plans and
drawings to be developed and submitted in a consistent format that is compatible with
government systems.
DPTI is working with the building and construction industry to develop a consistent format for
electronic records of plans.
The Agency will maintain compatible systems to ensure ongoing asset and records
management and access to essential data for asset maintenance, refurbishment,
replacement and demolition.
The agency must record a base set of data regarding all owned building assets under
Premier and Cabinet Circular 114: Government Real Property Management.
Government has a number of asset data management systems into which data should be
entered so it can be aggregated and used for ongoing planning and forecasting.
DPTI has an existing system, the Strategic Asset Management Information System (SAMIS)
to capture historical data, record new building asset data and provide a forward planning tool.
The agency may use the system for management of its asset data.
The agency will have systems to collect and aggregate statistics and data to various bodies.
5.9
Integration management
DPTI project managers have specialist understanding of the timing and impact on construction
projects of applicable legislation, policy and government approvals processes. Project plans
ensure that the construction procurement process is lawful and adheres to policy within the context
of the particular requirements of the project’s objectives and brief.
The agency will demonstrate knowledge of the relevant legislation, policy and approvals.
6
Resources
6.1
Project roles
The agency will be required to nominate personnel/positions for a number of formal roles in
procurement contracts. In the case of the Client/Principal there is a formal delegation of
responsibilities to the Client‘s/ Principal’s Representative while the role of the
Superintendent/Contract Administrator is defined in the contract form itself.
6.1.1
PSC contracts
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Agency Accreditation Framework
Formal Contract Roles
DPTI
Client
Minister for Transport and
Infrastructure
Client’s Representative
Manager Project Delivery
6.1.2
6.2
Agency
(Agency to nominate)
GBC contracts
Formal Contract Roles
DPTI
Principal
(All construction contracts)
Minister for Transport and
Infrastructure
Principal’s Representative
(All construction contracts)
General Manager Project
Delivery
Superintendent
(For AS contracts and MDW-12
medium works contracts)
Manager Construction
Contracts
Agency
(Agency to nominate)
Accreditation and Project Procurement Assistance
The following DPTI resources are available to assist agencies.

Accreditation assistance

- Manager Project Delivery, Jon Whelan
- Registrar Prequalification, Sally Katianos
Project Management

- Manager Project Delivery, Jon Whelan
- Principal Project Manager, Amanda Thomas
- Manager Medium Works Procurement Program, Sam Miceli
Contracts

- Manager Project Delivery, Jon Whelan
- Principal Project Manager, Amanda Thomas
Professional Services

- Principal Architect, Andrew Brown
Construction Advice
- Manager Construction Advice, John Callea
Accredited agencies or agencies seeking accreditation are to nominate representative(s) for the
implementation, management and maintenance of their accreditation.
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Agency Accreditation Framework
6.3
Agency Accreditation Flowchart
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Agency Accreditation Framework
6.4
Construction procurement roles
As the Government’s risk manager in the building industry, DPTI works with the lead agency to
establish a framework within which the project will be delivered and the project team will operate.
DPTI ensures that its expertise and experience in the building industry is applied to the project with
the objective of managing risks and achieving the project objectives for value, time, budget,
program and quality.
DPTI ensures that the policy and program objectives of Government concerning the building
industry are honoured and implemented as part of the project delivery.
The key elements of DPTI roles are outlined below to provide the agency with a reference for the
types of specialist management activities which should be part of its construction procurement
model.
6.4.1
Project risk management
Review brief for clarity of scope, stated purpose and technical content.
Advise on the implementation of Government building standards as applicable.
Attend and participate in strategic value management and value management workshops.
Advise on building industry professional service and construction contractors required.
Select contract form for professional service and construction contractors and prepare
contract documents.
Select professional service and construction contractor short lists, call tenders, coordinate
tender appraisal and tender recommendation and execute contracts.
Administer contracts as Principal/Client, Principal’s/Client’s Representative, Superintendent
and Superintendent’s Representative.
Make contract payments to professional service and construction contractors.
Maintain and update professional service and construction contractor registers.
Advise on on-site inspection plans.
Advise on furniture and equipment procurement plans.
Manage dispute resolution, liquidations and bankruptcies if applicable.
Review and manage the project budget.
Manage and make payments for project disbursements including principal controlled
insurance and contract printing.
Plan, establish and manage a project program for key activities and milestones.
Advise on quality standards for PSC, contractors and building design.
Identify project risks and classify projects into high, medium and low risk categories.
Advise on, implement and manage a project plan for risk minimisation and management.
Assist with the preparation of statutory and Government approval documents.
Coordinate project reporting and keep project records.
Implement governance and project organisation arrangements.
6.4.2
Budget risk management
Establish and audit project budget and cost plan.
Overview the PSC cost planning and estimating advice.
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Agency Accreditation Framework
Overview and supplement financial reporting.
Attend and participate in strategic value management and value management workshops.
Attend project control group meetings, liaise with design PSC and provide cost advice on
materials alternative methods and construction systems during the design process to ensure
that all cost implications are considered in design team decision making.
Process progress payments and contract variations.
Oversee financial finalisation of contract.
6.4.3
Design risk management
Liaise with the appointed PSC at all project phases to ensure the PSC has access to all the
available design knowledge in Project Services relevant to the project.
Advise the PSC on relevant agency and Government design standards.
Ensure the design meets the client’s brief.
Expertly review the architectural, engineering and technical solutions on behalf of the client
at key stages during the project process including end of concept design, project definition
and at 100% through contract documentation.
Review the project brief, if required by the client agency.
6.4.4
Construction risk management
Meet with PSC in early design stages and advise on appropriate design.
Review PSC drawings and specifications for design details and methodology.
Provide advice/assistance to architects, engineers, PSC and contractors on technical
matters, materials, good trade practices, standards and contractual obligations.
Monitor the performance of PSC and contractors.
Develop construction detailing and methodology standards and practices on site inspection.
Liaise with appropriate departmental officers on construction matters.
Provide advice and support on Government construction site occupational health and safety.
Advise Government, the industry and DPTI on construction inspection matters.
Provide advice and support on Government construction sites OHS&W issues.
Manage the on-site control and co-ordination of all construction projects by monitoring works
in progress.
6.4.5
Procurement risk management
Manage the process of identifying which project needs can be best met by procuring
products or services outside the project team.
Provide consistent and legal conditions of tender for process and probity risks arising from
contracting with the private sector.
Manage probity of tender and contract acceptance.
Ensure tender documents are accurate and satisfy government procurement procedures.
Manage the processes of tendering and the execution of contracts.
Understand implications of delegations/approvals and contract acceptance.
Identify and advise on potential claims prior to acceptance of contract.
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Agency Accreditation Framework
Prepare special conditions to accompany standard contract conditions for particular projects
where appropriate.
Match conditions of contract to project outcomes, seek strategic response to project
procurement.
Ensure proper execution of contract documents.
Provide advice on contractual matters and support the Superintendent and the Principal.
Manage security responsibilities to be provided by contractors.
Protect the Principal from breach of contract during contract administration.
Apply and manage government risk management through insurance compliance.
Minimise default bankruptcies and liquidations of contractors.
Provide consistent contract advice with regard to potential matters of dispute.
Assist in contract dispute resolution and manage the resolution of contractor disputes.
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Agency Accreditation Framework
Document Control
agency accreditation framework g120 v1-3.doc
Document Endorsement and Approval
This document is approved for transmission:
Name
Title
Date of Issue
Version
Peter Swift
Director Project Services
Feb 2008
V1-1
John Domino
Director Project Services
Oct 2012
V1-3
Confidentiality
The information contained in this document is confidential to the Government of South Australia. It
may not be disclosed, duplicated or used for any purpose in whole or in part, without the prior
written consent of the South Australian Government.
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