Pimpama Coomera Water Future 2007 © Pimpama Coomera Waterfuture Master Plan Implementation Part 4: Transaction Processes Garry Law - SPAN

Pimpama Coomera Water Future 2007 ©

Pimpama Coomera Waterfuture Master Plan Implementation

Part 4: Transaction Processes

Garry Law - SPAN


Master Alliance Transaction Process

(Reminder – this is the consultant team to provide planning and project management service – public relations and business process development – standing in the place of the Council)


MA Evaluation Process

Was a public advertising of the opportunity

Initial Evaluation An initial review of all proposals received, followed by “long-listing” of

proponents based on Key Personnel for interview. ‘Key Personnel’ Interviews

Presentations from, and interviews with, selected “long-list” proponents, with the purpose of assisting identification of shortlisted proponents for the evaluation workshop step.

First Evaluation Workshop A first series of workshops with the proponents that have been

shortlisted based on their proposal, interview and Key Personnel, evaluating Key Personnel for: specific people capabilities; team capability; and credibility of deployment strategy.



Second Evaluation Workshop [Preferred ‘team gap analysis’ and evaluation workshop] A workshop based evaluation of the balance of that consortium/team that

included the preferred ‘Key Personnel’ will be conducted, with activities including: team gap analysis with preferred proponent ; evaluation of the potential of a ‘best-for-program’ team by completion

of the required resourcing with other staff nominated in the preferred proponent’s consortium/team;

a comparison of the nominal team, including remaining gaps, with best personnel selected from other proponents on a best for program basis;

evaluation activities with the identified personnel; and identification of a shortlist of other personnel/proponents that are

preferred as team partners. Following this identification of a preferred ‘Key, Important and

Other Personnel’ team, GCW will seek to complete the development of an integrated management team for the PCWMPI Program Alliance:



Third Evaluation Workshop [‘Team completion’ workshop(s)] A workshop based evaluation of the balance of the preferred ‘Key,

Important and Other Personnel’ team including: assessment of integrated team performance; and evaluation activities with the identified personnel;

At this stage a preferred complete Integrated Program Team was selected which will then be recommended to Council for approval.


Package A Transaction Process

(Reminder: This is the two treatment plants package – waste water and the downstream recycled water plants)


(All co-located)

•Pimpama WWTP (Stage 1)

•Pimpama RWTP

•Product water storages for excess inflow, between the processes and for product

•Associated Pumping Station/s – on site

The bid had to include a site master plan showing how the ultimate capacity could be achieved

Package A Infrastructure

Contractorselected &

PAAsigned

Handover

Expression of Interest invited- Criteria based on People, Culture, Systems,Track Record, Appreciation of project, Capabilityto Deliver, etc- Fixed fee proposed for development of Concept.- No payment for Estimating TOC or other RFPrequirements

Expression of Interestreceived

Evaluation of EOIs- Desk top review- Interview/Presentation- Workshop- Commercial Terms review- Schedule of alternatives review

Select two toRespond to a

Proposal[RFP]

Proponent 1develops Concept & TOC

Proponent 2develops Concept & TOC

Contractor Designs &Constructs

Treatment Plant/s

PimpamaTreatmentPlanning

completed

Features of competitive TOC Development Phase- Proponents sign up to a Design Development Agreement to deliver the Concept- Transaction Manager manages Probity process. Probity Adviser will be appointed- Issues Register & Dynamic Design Brief to ensure the same information is simultaneouslyavailable to both proponents- Combined Proponents workshops to agree Design criteria- Individual Proponent-GCW workshops for Relationship Development and Value Managementetc. to ensure the same people are available to both proponents- Project Alliance Agreement [PAA] negotiated at same time. Signed PAA submitted withproposal

Alliance Contractor Engagement Process(Competitive bid Target Outturn Cost [TOC])

Proving Period forTreatment Plant/s

Completion


The innovation of a competitive process places a particular pressure on timely completion of the bid.

The client has set a date for the submission. There is no longer the risk that arguments over technical specifications and costs can extend the time for arriving at a TOC, as is the case with the other alliance forms. Some award processes have failed on this point.

Secondly it eliminates the need for an independent estimate to ensure the value of the TOC is fair.

A common criticism of pure alliance is that the independent pricing mechanism gets the right rates for the work – but gives no assurance that the right work is being priced – in technology or size. The competitive process demands innovation and ‘right-sizing’ in the bid stage.


The assessment plan for the EOI stage was entirely weighted on non-price factors – technical capability, performance history, alliance experience and alliance readiness.

While the EOI assessment plan set a range within which the price to complete the DDA should fall, the actual level did not come into the assessment.


The assessment plan for the RFP bids concentrated mainly on the TOC for the non-price matters have been considered in the earlier EOI.

There are some non-price matters remaining around legacy issues.

The key measure on price is not simply the TOC – it is the present value (PV) of the capital (i.e. the TOC), the renewal and the operating costs.

The submitters were asked to nominate the plant items requiring renewal within 25 years and their present costs.

The client specified discount rates, biosolids disposal costs and inflation rates for energy chemical and materials, also provided future demand estimates for throughput different parameters combined into a PV by the client side, for each submission.

The contract is of course signed for the TOC – that is the capital cost.

There is a quality pool associated with the contract, linked to KPIs. One suite of KPIs is on the operating cost measured in a late contract period test period.


The documents

PROJECT LIFECYCLE

Contractor Selection

>

Engage two Engage two contractorscontractors

>>

Concept design &

TOC development

>

Engage Engage Alliance Alliance

ContractorContractor

>>

Delivery

CONTRACTS Design Development Agreement

[DDA]

Project Alliance

Agreement

[PAA]

SUPPORT DOCUMENTS

Draft DDA

Draft PAA

Outline Design Brief

Design Brief

TRANSACTION PROCESS

Expression of Interest

Request for proposal

Site Info

Facts

Design Brief

Technical Requirements

RFP Documents

Process

Concept Design[D&C bid standard]

Reports, Specifications, Drawings

Proposal and TOC Development

Commercial Terms

Project Alliance AgreementKPIs & Financial Data

CommercialTeam

Proposals EvaluationProjectAlliance

New facility

Client DOCUMENTS

RFP PHASE

TechnicalTeams

Endorsement

Relationship Development

Site

Project Alliance

Agreement

CommercialRequirements


Features of Competitive TOC Development Phase

Proponents sign up to a Design Development Agreement to deliver the Concept

The Transaction Manager manages Probity process

Issues Register & Dynamic Design Brief to ensure the same information is simultaneously available to both proponents

Combined Proponents workshops to agree Design criteria

Individual Proponent-Client team workshops for Relationship Development and Value Management etc. to ensure the same people are available to both proponents

Project Alliance Agreement [PAA] negotiated at same time. Signed PAA submitted with proposal


The proponent must submit an endorsed design – endorsed by the client technical team as meeting the design brief

Proponents completing the TOC submission are paid for their work at the agreed DDA price irrespective of success or otherwise.

The client has the right to take “good ideas” from the unsuccessful proponent to include in the winning proposal – subject to that being able to accommodated by the winning bidder


Package A Procurement Program

•Closing Date Tues 31 Jan 2006

•Presentation/Interviews 9 and 10 Feb 2006

•Final evaluation workshops 15-17 Feb 2006

•Applicants short listed 8 March 2006

•Issue RFP Documents to Proponents 15 March 2006

•Close of RFP 21 June 2006

•Award Project Alliance 31 July 2006

•Commissioning of Works, WWTP 30 November 2007

•Commissioning of Works, RWTP 30 March 2008


Package D Transaction Process

(Reminder: This is the residual package of pipes, pump stations and reservoirs to complete the project)


Part of the Pimpama Coomera project outlined above - package D in this case - involved three reservoirs, recycled water pumping stations and non-trunk reticulation for potable water, recycled water and sewers.

While the general technical requirements for these were known and the general location was determined, the finalisation of detailed locations and crucially of sizing would not be available until some further studies were complete.

The project however had strict constraints as it had to link to a committed programme of work on the treatment plants and commitments made to land developers as to the completion of service connections. Approximately A$60m of work is involved. The client did not have the resources to manage this scale of work in the detail required.


Features of this “Managing Contractor” type contract

The Managing Contractor 1. Undertakes survey and geotechnical investigations as

required2. Resolves alignment and detailed location issues3. Designs and documentation4. Procures construction resources5. Manages community interface6. Drafts submissions for GCW 7. Material procurement strategy8. Coordinates construction activities with other

packages and utilities9. Commission and handover assets


Features of this “Managing Contractor” type contract

10. All construction risk with the Managing Contractor11. Tendered Management rate converted to Fixed Fee for

each Package12. Jointly manages the work with client involvement

through a Joint Management Team 13. Construction Packages competitively tendered - self

performing may be possible if competitive14. Construction Contracts between Managing Contractor

and Sub-contractor15. Possible Quality Pool and KPIs16. Contract concludes December 2009

Request forproposals

Evaluationof

proposals

Proposalsreceived

Contractorselected &Agreement

signed

Construction Package 1

Tranche1

Planningcomplete

Contractor Designs, Documents & Construction Manages Package D works~3 years

Hand

over

Request for proposals

- Criteria based on People, Systems,

Track Record, Appreciation of project,

Capability to Deliver, etc

- Partnering relationship

- Fee proposition

Proposals received

Evaluation of proposals

- Desk top review

- Interview/Presentation

- Evaluation Workshop

- Commercial Schedules agreed

- Schedule of Departures resolved &

Commercial Terms agreed

Network Planning




Tranche

2Planning

complete

Tranche

3Planning

complete

Tranche 4Planning

complete

Hand

over

Hand

over

Hand

over


Advertise RFP 2 September 2006 Close RFP 29 September 2006 Interview / Presentation mid October 2006 Assessment Workshop late October 2006 Commercial Meetings late October 2006 Appoint Contractor late November 2006 Contractor mobilises early December 2006

Timing


The letting process was a single stage by public advertisement.

The process commenced before advertising with an industry briefing

The document was a request for tenders with an attached draft Managing Contract Agreement.

Assessment criteria:

Initial assessment was against the ‘hurdle’ criteria set by Council:

• Possession of AS NZS ISO 9001 certification

• Sufficient financial capacity, including a minimum turnover in like work

• A certified Occupational Health and Safety system.


Appreciation of the work Implementation methodology Capability: •Track record and experience•Resources•People •Key Personnel•Important Personnel•Other PersonnelCulture: •Program team behaviours•Approach to team based contracting•Management Systems•Managing contractor’s fee - weighted at 40% of the scores

Assessment Criteria Continued


Workshops were held with shortlisted tenderers to assist assessment.

The preferred tenderer was then invited to enter into a Managing Contract with the Council.

While there was a commitment to a dollar level for the quality pool the detailed KPIs were not set out in the draft Managing Contract. Proposals from tenderers were invited. The intention was to set the KPIs and pool linkages in the early stages of the operation of the contract, through the joint management process.

Only one tender was received which fortunately met the hurdle criteria. The fee level was higher than in previous work under managing contracts but this reflected its more diverse nature of the work packages and no-doubt the less competitive market.

The fee level was judged by client to be acceptable.


End of this part ……………………………

Brett Lawrence will continue on the lessons learned