UNIVERSITY OF OXFORD Project Sponsor Group Handbook · Project Sponsor Group Handbook, ... proxy who has delegated powers of representation and the ... The nomination of both the

VERSION 3

UNIVERSITY OF OXFORD

ProjectSponsor GroupHandbookApril 2013

Project Sponsor Group Handbook, Version 2, 06/12/12

Authorship

Friends and colleagues would like to remember with affection Bárbara Galanes-Álvarez who passed away

after a sudden and short illness following her preparation of this handbook. Her friendship, hard work and

ability to light up the lives of others will be remembered always.

Bárbara Galanes-Álvarez 1982 - 2012

PROJECT SPONSOR GROUP HANDBOOK

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CONTENTS

1. INTRODUCTION.....................................................................................................................3

2. CONTEXT...............................................................................................................................4

3. PROJECT SPONSOR GROUP MEMBERSHIP......................................................................6

4. PROJECT SPONSOR GROUP RESPONSIBILITIES.............................................................8

5. PROJECT SPONSOR GROUP MEETINGS .........................................................................12

6. FINANCIAL MANAGEMENT OF BUILDING PROJECTS ....................................................14

7. PERFORMANCE MEASUREMENT .....................................................................................23

8. PROJECT QUALITY REVIEW PROCESS ...........................................................................29

9. SUSTAINABLE BUILDINGS PHILOSOPHY ........................................................................32

Supplementary Documentation

ANNEX A - Capital Projects Initiation Process

ANNEX B - RIBA Schedule of Work

ANNEX C- Strategic Guidance for Sustainable Buildings Philosophy

ANNEX D - PSG Standard Agenda Template

PSG Standard Minutes Template

PSG Project Manager’s Report

ANNEX E - Donor Funded Governance

ANNEX F - Benchmark Template

ANNEX G - Project Expenditure Approval form

Project Initiation Document

Guide to Capital Projects

Estates Regulations


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1. INTRODUCTION

This Handbook has been produced following a Buildings and Estates Subcommittee (BESC)

working group report which reviewed the role and functioning of project sponsor groups (PSGs).

See BESC(10)155 and BESC(10)175 for further details.

Section 4.1.4 of the Estates Regulations issued by BESC states that “BESC shall appoint a Project

Sponsor Group to manage a major project and shall appoint the group’s chairman“. Major projects

have a total gross value of at least £100k (all funding sources and VAT are included in this figure).

The purpose of the PSG Handbook is to provide a reference and guidance document for all Project

Sponsor Group members. It contains sections on the membership of the group, including the

responsibilities of each member plus the group as a whole. It also outlines the format of meetings

and documentation that will be provided to PSG members. Other sections cover financial controls,

use of contingency, tendering processes, governance structure for donor funded projects and

environmental sustainability.

The PSG Handbook should be read in conjunction with the Guide to Capital Building Projects

(http://www.admin.ox.ac.uk/estates/regspols/) produced by Estates Services, for use by University

departments. Both of these documents are supplemental to the Estates Regulations, issued by the

Buildings and Estates Subcommittee (http://www.admin.ox.ac.uk/estates/regspols/) which define the

management requirements of capital projects.


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2. CONTEXT

A Project Sponsor Group is responsible for managing a project on behalf of the University. This

includes responsibility for financial control of the project within the approved budget and for ensuring

that the outcome satisfies the needs of those who will occupy and maintain the premises. A detailed

schedule of responsibilities can be found in section 3 of this document.

The diagram below indicates the reporting responsibilities of a Project Sponsor Group in relation to

the Buildings and Estates Sub-committee (BESC) and the Planning and Resource Allocation

Committee (PRAC).

PRAC – prepares and reviews annually the University’s five-year plan, as informed by the plans of

Divisions and the services, advises Council on the use of capital funds, and considers advice from

BESC on allocation of land and property in the functional estate.

CSG – reviews feasibility proposals and proposals for capital projects on behalf of PRAC. In

particular it ensures that any proposed business case uses appropriate financial assumptions and

space standards, have the approval of the relevant bodies, and is consistent both with the capital

priorities of the division in question and with the Capital Plan

BESC – is responsible to PRAC for management and maintenance of the functional estate, except

for matters that are the responsibility of divisions, CSG, or other bodies.

In particular, BESC:

Advises PRAC on the allocation of land and property in the functional estate


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Oversees the repairs and maintenance programmes undertaken by Estates Services

Makes recommendations to PRAC concerning the strategic development of the functional

estate taking into account institutional plans and environmental, planning, and heritage

issues

Oversees the initiation and management of all major projects.


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3. PROJECT SPONSOR GROUP MEMBERSHIP

Section 4.1.4 of the Estates Regulations defines the Project Sponsor Group membership:

a person nominated by the department on whose behalf the project is being undertaken

a person nominated by the division to which the department belongs and

a person nominated by the Director of Estates

Larger projects might need more than one departmental representative, if this is the case, the

department will carry only one vote on Project Sponsor Group meetings.

Project Sponsor Group membership, including the Chairman, is always approved by BESC.

The Project Sponsor Group shall include in attendance:

the designated Project Manager (mandatory)

an Estates Services Project Support Officer or Secretary appointed by the PSG to take

meeting minutes if required

any additional individuals required (for the entire meeting or part), e.g. consultants or the

Client Representative, at the discretion of the group; formally agreed and invited by the

Project Sponsor Group Chairman.

In the event of not being able to attend a scheduled meeting a PSG member shall nominate a

proxy who has delegated powers of representation and the authority to make decisions at

the meeting. Where this is not possible, the Chairman will determine whether the PSG

should be rescheduled.

The nomination of both the divisional representative and the departmental representative should

have regard to the following:

the nature of the project and therefore the experience required

the time commitment involved

the possible need to release the person concerned from other duties

the requirement for the representative to be able to achieve consensus within the

department or division and speak on behalf of the department or division in matters relating

to the project

make decisions at the meeting on behalf of the department and users.

It is proposed that, for large complex or high profile projects, the practice of appointing a Client

Representative might be adopted. The Client Representative might be also serve as the divisional

or departmental representative on the PSG, or might delegate this representation to another person.

Where a need for a Client Representative is identified, consideration should also be given to the


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extent to which (if any) a ‘buy –out’ of that person’s time is required to enable the project to be given

due attention. The need for a Client Representative should be agreed between the Chairman of the

PSG and the Chairman of BESC. Where a buyout is deemed necessary, the Chairman of PRAC

should be consulted, and appropriate costs built into the project budget.


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4. PROJECT SPONSOR GROUP RESPONSIBILITIES

4.1 RESPONSIBILITIES - PROJECT SPONSOR GROUP

The Project Sponsor Group shall be responsible for:

Managing the risks associated with the project

a) overseeing the selection process for the design team and making recommendations to

BESC if required under regulation 4.4.4 of the Estates Regulations

b) considering the procurement method and making a recommendation to BESC if required

under regulation 4.4.3 of the Estates Regulations

c) drawing up a list of contractors to be invited to tender and making a recommendation to

BESC if required under regulation 5.4.5 of the Estates Regulations

d) reviewing the tenders received and making a recommendation to BESC if required under

regulation 5.4.8 of the Estates Regulations

e) monitoring construction, approving any variations in design, and authorising any commitment

against contingency funds

f) approve the Project Initiation Document and Project Expenditure Approval form

g) ensuring every project complete the Project Quality Review Process (PQRP)

h) ensuring every project complete the Key Performance Indicator (KPI) and Benchmark

processes

i) sign off the project design at key gateways (including Feasibility, RIBA stage C, RIBA stage

D, approval of Employers requirements and Contractors proposals)

j) discussing and agreeing the need and nature of any internal and external consultations that

are required, and ensuring they are communicated to BESC

k) signing off the final space allocation drawings as soon as this is possible in order to confirm

that the information regarding occupation is correct

l) provide neutral challenge to the project delivery team.

4.2 RESPONSIBILITIES – PSG CHAIRMAN

The Project Sponsor Group Chairman shall be responsible for:

a) allocating and recording the individual responsibilities of PSG members where they

differ from those listed below

b) ensuring the agenda and associated papers are issued to all group members (in

collaboration with the Project Manager) no later than 4 working days prior to the meeting

c) ensuring the minutes of the last meeting are confirmed and accepted as a fair

representation of the discussion at the meeting

d) ensuring that any reports presented at the meetings are formally approved

e) ensuring that decisions made at meetings are clearly articulated and recorded

f) discouraging members from reopening discussions on point which have previously

received thorough consideration


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g) strictly curtailing discussions on matters left to project teams or working groups to

resolve

h) agreeing and formally inviting additional attendees to the meetings

i) arbitrating between Project Sponsor Group members’ conflicting opinions

j) reviewing any information that is additional to the Project Manager’s report and deciding

whether it should be tabled at the next meeting

k) ensuring changes to the PSG membership are endorsed and formally approved by

BESC

l) ensuring each PSG member receives a formal letter of appointment specifying their

responsibilities as a PSG member.

4.3 RESPONSIBILITIES - PSG DIVISIONAL REPRESENTATIVE

The Project Sponsor Group Divisional Representative shall be responsible for:

Exercising financial control of the project using the information provided in the Project

Manager’s reports, in particular the cost update

a) considering value for money when exercising financial control of the project

b) maintaining close scrutiny of, and justification for, the level of contingency

c) providing up to date fundraising information directly liaising with the development office

when applicable

d) ensuring the academic and finance control of the project ties in with divisional strategy.

4.4 RESPONSIBILITIES - PSG DEPARTMENTAL REPRESENTATIVE

The Project Sponsor Group Departmental Representative shall be responsible for:

Ensuring that the project meets the needs of those who will occupy and maintain the

building in question by taking an active role in developing and refining the brief, working

closely with the end users, Project Manager and lead designer as the detailed design

develops

a) serving as the primary point of contact between the department and the design team.

4.5 RESPONSIBILITIES - PSG ESTATES SERVICES REPRESENTATIVE

The Project Sponsor Group Estates Services Representative shall be responsible for:

Monitoring the project programme provided in the Project Manager’s report to ensure that

this remains on target

a) being the point of contact for BESC


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b) ensuring that the PSG carefully review the information presented by the project managers,

making sure that all relevant red flag issues are agreed by all PSG members and recorded

accordingly

c) ensuring that the Project Manager fulfils his responsibilities to the PSG by monitoring

performance and compliance with the Estates Regulations and the Guide to Capital

Building Projects, and referring any issues to the Head of Capital Projects

d) maximising the environmental performance of the building by monitoring the

implementation of the relevant Estates Regulations on environmental sustainability

e) overseeing the commissioning and acceptance of the building and handover to its

occupant

f) ensuring every project undertakes the Project Quality Review Process

g) ensuring every project completes the Key Performance Indicator and Benchmark

processes as required.

4.6 RESPONSIBILITIES - PROJECT MANAGER

The formal responsibilities of Project Manager are set out in detail in the Capital Projects Handbook.

A brief general outline follows:

a) Under the supervision of the Head of Capital Projects, the Project Manager is

responsible for selecting and procuring the services required for the project in

accordance with standing orders

b) The Project Manager works closely with the departmental representative to establish the

project brief and translate it into a preliminary specification that is refined as the project

progresses

c) At all stages the Project Manager, with the lead designer, ensures that the

specification is fully explained to the departmental representative

d) The Project Manager devises the programme for the project’s various stages so that

statutory approvals are achieved and construction work can proceed. The

programme must be approved by the PSG

e) The Project Manager guides the PSG in considering options for procuring the

construction work

f) The Project Manager may act as the Contract Administrator for the building contract

g) The Project Manager is responsible for implementing a change management process so that

the PSG can ensure that costs stay within budget

h) The Project Manager is responsible for managing and reporting the costs provided by the

cost consultant

i) The Project Manager places orders and authorises payments

j) The Project Manager makes regular reports to the PSG (at least four days before

each meeting), the headlines of which are incorporated in regular capital project reports to

BESC

k) At the end of the project, the Project Manager ensures that documentation required for the

management of the building and its integration into the estate is delivered


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l) The Project Manager maintains the project’s electronic and paper records and ensures that

correct document templates are used as specified in the Capital Projects Handbook

produced by Estates Services

m) The Project Manager ensures that stage sign-offs and final project reviews are conducted

and that lessons learned from projects are recorded

n) The Project Manager will ensure that the project will be developed according to guidelines

set out in the Capital Projects Handbook

o) The Project Manager will agree with the PSG members the schedule of the Project

Sponsor Group meetings

p) The Project Manager will keep a schedule of decisions made by the PSG

q) To ensure continuous improvement, the Project Manager will ensure compliance with and

participation in the Project Quality Review Process in order that issues are resolved in a

timely manner and lessons learnt from projects are recorded and communicated

r) The Project Manager will ensure compliance with and participation in the Key

Performance Indicator (KPI) process ensuring relevant parties record KPIs in a timely

manner

s) The Project Manager will ensure the recording of benchmarks at the stages defined in the

benchmarking process.


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5. PROJECT SPONSOR GROUP MEETINGS

A meeting should take place each calendar month unless the Project Sponsor Group agrees to do

otherwise. As a minimum, meetings should be scheduled to cover the following critical project

events:

Agree project proposal

Agree feasibility scope

Agree architect selection

Feasibility Study sign-off

Agree procurement terms and funding for main project

Stage C sign-off

Stage D sign-off

Agree contractor tender list

Agree consultant tender lists

Accept building at handover

Approve final account

Review KPIs (quarterly)

Review benchmarks (each stage)

In each case a meeting timetable shall be agreed and recorded at the outset. The Project Manager

is responsible for organising all Project Sponsor Group meetings.

The generic agenda for all PSG meetings is as follows:

Matters arising and approval of minutes from previous meeting

Project Manager’s report to PSG

Client matters

Benchmarking

KPIs

Red flag issues

Funding

Any other business

Report sign-off

Date, time and venue for the next meeting

The Project Manager’s report shall contain the following:

Executive summary

Design update

Progress update

Programme and milestones

Procurement


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Cost update

Sustainability update

Benchmarking

KPIs

Risk and red flag issues

Client decisions

APPENDICES

A. Minutes of previous meeting

B. Programme

C. Cost Summary

D. Fee Schedule

E. Risk Register

F. Schedule of decisions

G. Report Sign-off Sheet

The report must be issued in its entirety ahead of the PSG meeting. Any subsequent information

that becomes available should be forwarded to the Chairman who will decide whether it should be

tabled at the meeting.

Project Managers will brief the PSG Chairman prior to any PSG meeting, highlighting any critical

decisions to be made by the PSG.

Only new or updated information should be presented to the PSG in order to avoid duplication and

repetition.

Project Managers will issue reports and associated papers a minimum of four working days

before a meeting, and will issue minutes to the PSG Chairman for approval no more than five

working days after each meeting. PSG Minutes must be approved by the PSG Chairman prior to

circulation to the PSG members. All reports, papers and minutes will be issued electronically unless

the PSG agrees otherwise.

The PSG members including the PSG Chairman will be asked, at the end of a PSG meeting, to

sign-off the information presented by the project manager and any deviations discussed at the

meeting. This sign off is formally recorded in the Project Manager’s report to the PSG.


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6. FINANCIAL MANAGEMENT OF BUILDING PROJECTS

The following is a brief process summary of the financial management of capital building projects.

More detail can be found in the Guide to Capital Building Projects. See also the RIBA Outline Plan

of Work.

Initiate project

New building projects must be discussed with the relevant Division & Estates Services to

ensure the work complies with divisional strategy and is technically viable.

Project Sponsor Group (PSG) formed.

Nominated Estates Services Project Manager completes a Project Initiation Document (PID)

with support from the PSG. Funding elements detailed on the Feasibility Expenditure

Approval (FEA) part of the document.

Feasibility Proposal (parts A & B of the PID) submitted to CSG/PRAC for approval.

Feasibility study

The Feasibility Expenditure Approval (FEA) is sent to Estates Services finance and Capital

Accounts for set-up of the project on Oracle Financials.

A Feasibility Team appointed by Estates Services carries out the feasibility study.

At the end of the study, a Feasibility Report is written detailing the possible options to be

considered by the PSG/Estates Services.

Project proposal

The departmental representative completes a Project Proposal, including the financial PEA

and VAT forms, with support from the PSG.

The completed Project Expenditure Approval form (PEA) must be authorised by the

department, division, Estates Services and any other parties contributing funding.

Complete Project Proposal submitted for Capital Steering Group consideration

The approved PEA is sent to Estates Services finance and Capital Accounts for set-up of the

project on Oracle Financials.

Pre-project initiation review held (stage 1 of PQRP).

Manage contracts, requisitions & invoices (Estates Services)

Tender process carried out resulting in formal contracts.

Pre-construction review held (stage 2 of PQRP).

Requisitions / Purchase Orders are raised as per the Purchase to Pay process.

Invoices are logged and reviewed against receipted works and appropriately authorised.


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OUFAL managed projects (if relevant)

Where the project is to be managed via Oxford University Fixed Asset Ltd (OUFAL) the

contract, requisition and invoice process (as above) is managed through the OUFAL

accounting system.

Reporting

On a monthly basis reports reviewing spend are generated by the Capital Accounts team for

review and discussion with the Project Manager.

Management reports are generated for BESC (Building & Estates Sub-Committee) and

PRAC.

Manage claims (Capital Accounts)

All claims are managed as required by the Capital Accounts team.

Complete project

At ‘Practical Completion’, subject to documentation being in order, contract retention

payments are released. At this point the building becomes a University asset.

Post project evaluation held (stage 3 of PQRP).

Defects-liability period starts, during which time phase one of the post-project evaluation

takes place.

Once the final valuation is received and the Making Good Defects certificate produced, the

final retention amount is released.

Where further works are required the Project Manager generates a report detailing the

requirements. This ongoing work is reviewed as required and funding documentation

appropriately amended.

Reconcile project

The Project Manager reconciles the award against Invoices and addresses open Purchase

Orders.

Project Closedown Form (PCF) completed.

As required finance must refund/fund relevant projects as per PRAC guidelines before

changing the status of project to ‘Closed’.

Post occupancy evaluation takes place (stage 4 of PQRP).


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6.1 FINANCIAL CONTROLS

The University’s Financial Regulations state that all non-research building projects must be

appraised, implemented, and monitored in accordance with the University's Financial Management

of Building Projects process.

The Project Manager has overall responsibility for ensuring that expenditure on a University capital

project is effectively managed within approved budgets and funding.

The key financial controls that must be complied with are:

All capital projects must be reviewed and authorised in line with the process; the project

funding must be established and agreed; and approval for the project to go ahead given by

the appropriate authorities in accordance with Financial Regulations

Project expenditure follows the University regulations and processes for purchasing and

expenses incurred, and is continually monitored against budget and funding.

6.2 VAT

The University is sometimes entitled to claim certain VAT reliefs on some capital building projects

(see table below). Most of the time the University has to pay VAT on capital building projects but

sometimes it can recover part (and very occasionally all) of this VAT from HM Revenue & Customs

(HMRC). Whether VAT is payable to suppliers and, if so, whether any of that VAT can be recovered

from HMRC, can have a considerable impact on the project’s budget. Therefore, it is vital to get

advice from the University’s Taxation Team in order to ensure that any appropriate VAT reliefs are

used correctly and, if VAT is payable, that it is costed into the project at an early stage.

The Taxation Team require detailed information about what the project entails and how the finished

building or refurbishment etc. will be used by the department(s) occupying it. The Project VAT

Review form (PVR) has been designed to capture as much of this information as possible. The

Project Manager should complete a PVR in conjunction with appropriate departmental user

contacts, including as much information requested as possible and send it to the Taxation Team.

The PVR should be completed and sent to the Taxation Team as early as possible to help

budgeting for VAT as necessary. The Taxation Team will make any further enquiries necessary


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(which may include contacting the departments involved, asking to review plans, and possibly

meeting to discuss complex projects) and then complete the advice section of the PVR.

Code Rate %

charged

by

supplier

% of VAT

recovered

VAT %

charged

to

project

Description

ZZZ 0 0 0UK zero-rated, exempt or outside the scope of

VAT

ZMD 0 0 0 Zero-rated medical items (special rules)

SVX 20 0 20 UK standard rated supply, non-recoverable

SVR 20 12 17.6 UK standard rated supply, partially recoverable

SVF 20 100 0 UK standard rated supply, fully recoverable

SCG 20 12 17.6UK standard rated supply, partially recoverable

under the Capital Goods Scheme

6.3 CONTINGENCY

Section 4.4.7 of the Estates Regulations states that:

“A level of contingency appropriate to the form of contract for a major project must be included in

the project budget. Normally, a contingency sum of 10% of the construction cost should be

available when the construction contract is awarded. The Project Sponsor Group must retain

control of the contingency and must not delegate that control to the design team.”

This has been further defined and approved by BESC (BESC(10)189):

The PSG’s obligation changes as a project evolves as follows:

15% at feasibility

10% from RIBA stage C onwards

5% at the point of agreeing a contract sum (assuming the usual design and build

procurement route)

From this point onwards, the PSG’s authority for any individual release of contingency is restricted

to the lesser of:

a) 10% of the contingency agreed at the point the contract was agreed, or

b) £100,000


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Any proposed individual approval above these levels requires the approval of the Chairman of

PRAC and the Chairman of the Sub-committee, subject to a minimum amount of £10,000. Any

proposed expenditure related to scope change requires similar approval.

These levels of contingency are recommended, however, they should reflect the levels of risk

identified in the project: the higher the level of risk, the higher the level of contingency required. On

complex projects or those with numerous risks there are various risk management tools available to

the PSG in order to assess and analyse risks.

6.4 PROJECT RISK MANAGEMENT

For each project it is important to:

Review existing risks identified to date

Identify new/emerging risks

Prioritise risks using a qualitative scoring mechanism

Identify and put in place risk response actions

Assign ownership of risk response actions

Before starting any complex and high-value project it is considered good practice to run an initial

‘risk workshop’ facilitated by a specialist external consultant.

Project Risk Areas

The following categories should all be considered (as a minimum) when identifying specific risks:

client issues

funding

planning / listed building requirements

statutory authorities

design

procurement

construction

commissioning and handover

other risks which may impact the project’s objectives


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Risk Identification and Evaluation

The probability of the risk occurring can be evaluated as follows:

Scale

Value of

Occurrence Likelihood Code Range (%)

1 Very Low Virtually impossible VL 0% -5%

2 Low Low but not impossible L 6% -20%

3 Medium Fairly likely to occur M 21% -50%

4 High More likely to occur than not H 51% -80%

5 Very High Probably will occur VH 81% -99%

The impact of the risk occurring can be evaluated in terms of cost and/or time delay:

Scale Impact on cost/time Code

1 Very Low VL

2 Low L

3 Medium M

4 High H

5 Very High VH

Risk Ranking

The risks identified are ranked in order of priority using a “Black, Red, Amber, Green traffic light”

system, providing a qualitative indication of the impact of the risk on cost and time. The

multiplication of a risk’s probability score with the highest of either its cost or time scores enables

the risk to be ranked, with the highest priority risks shown as “Red Risks” and the lowest priority

shown as “Green Risks” (as shown below). Probability x impact = risk rank

Probability Risk Rank

VH 5 10 15 20 25

H 4 8 12 16 20

M 3 6 9 12 15

L 2 4 6 8 10

VL 1 2 3 4 5

Impact VL L M H VH


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“High Priority” risks could have a significant consequence on the successful outcome of a project

and it is essential that PSGs ensure response actions are applied to these key risks. It is

recommended that an ongoing risk management process is implemented in order to track risks and

response actions and report findings to the PSG in order to track the management of risks and to

minimise the impact of the risks on the project.

NOTE: ‘Red Flag’ is defined as any issue that requires immediate action, whereas red risks

might not require immediate action but need to be flagged so that the relevant individual or

University body is made aware. Any item which remains as a red risk is likely to become a

red flag issue.

Red flag issues vary extensively between projects. Example of red flag issue: project main

contractor filing for administration.

Mitigation

It is essential that all mitigation measures are developed, implemented and monitored throughout

the project life-cycle to ensure that risk mitigation actions are effective and the exposure to risk is

understood as the project progresses. It is important to:

Ensure all mitigation actions are developed and implemented by the project team

Undertake regular risk reviews/updates as part of project progress/team meetings

Review migration/operational risks to identify any additional project risks which require

management under the project

Identify and record additional risks identified through the procurement process by sub

contractors

Identify and implement Mitigation Action Plans for major risks

Implement a formal risk procedure for the on-going management of risks throughout the

project life-cycle to identify, mitigate and monitor risks to the project

Focus on mitigating the key Red risks

Risk Register

Each risk identified should be included in the project Risk Register which is reported to the PSG by

means of the Project Manager’s report. The register contains a description of the risk together with

the current assumptions on the probability of the risk occurring, its consequential impact on the

project, and any measures taken to mitigate its impact.


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6.5 TENDERS

Section 5.4 of the Estates Regulations lists the instructions that apply to the placing of all orders,

contracts or commissions. The approvals procedure for tendering is summarised in ‘Standing orders

for tenders’ (document 32.0 of the Capital Projects Handbook) – see table below. Distinction is

made between contracts estimated to be valued £10k-£500k and those over £500k.

Amount of contract, sub-

contract or order

£500,000 and over £10,000 - £500,000

Number of tenders Agreed by the Director of Estates

List of tenderers approved by BESC Director of Estates

Tenders opened byThree members of the Tender

Panel* appointed by BESC

Two members of the Tender

Panel

Approval of tender other than

the lowest byBESC Director of Estates

Award of contract by Director of Estates

Amount of contract,sub-contract or order

£100,000 andover

£10,000 - £100,000 £10,000 - £25,000

Approval of singletender action

BESC Director of EstatesDirector of Capital

Projects

*The Tender Panel comprises: the Chairman of BESC, the Vice-Chairman of BESC, the Secretary

of BESC, an officer nominated by the Director of Finance, the Director of Estates, the Head of

Capital Projects, the Head of Conservation and Buildings, the Head of Building Services, the

Estates Strategy Manager, and the Capital Projects Administrator.

6.6 DONOR FUNDED PROJECTS

The following is an extract from a BESC report to PRAC (PRAC(10)158aR) proposing a new

committee structure for donor-funded capital projects:

It is … proposed to create a new group, the Design Review Forum (DRF), for projects where there

is a substantial donation from a single benefactor, and where the benefactor wishes to take a role in

the development of the project. The DRF would have a significant role in establishing design

aspirations; assisting in the selection of design teams and architects, and reviewing the design as it

develops throughout the project … In all instances the DRF would be responsible for making

recommendations to the PSG … It is anticipated that the DRF would meet regularly with the design

teams, cost and planning consultants etc., and act as advisors on design matters to the PSG … The


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Sub-committee recommends that, as part of the new structure, it be stipulated that neither donors

nor their representatives should be appointed as members of a PSG.

The table Committee structure for donor-funded capital projects (Annex E) illustrates this.


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7. PERFORMANCE MEASUREMENT

Estates Services is committed to developing a performance management culture to drive

continuous improvement throughout the estate. In delivery of projects, this will be through two key

areas:

Performance Benchmarking

Key Performance Indicators (KPIs)

7.1 Performance Benchmarking

Estates Services has established a set of benchmarks in conjunction with other leading university

establishments. It is intended that the PSG to monitor performance against a pre-established

baseline and a project target figure. At the end of each project these benchmark indicators will be

incorporated into the performance matrix for the whole of Estates Services.

The PSG may decide to define, measure, and monitor additional, project-specific benchmarks which

can be added to the register although it is not envisaged that this will be appropriate for all projects.

The benefit of this is to provide a structured approach across the whole estate and to allow specific

areas to be monitored, for example, on unusual or complex projects.

The benchmarks against which targets will be set at project initiation are:

Benchmark Description Source of Data

Capital cost per m2

Cost of construction, including net building costs, maincontractor costs, contractor overheads and profit andinflation divided by the gross internal area in m

2 note 1.

Cost consultant

Net project cost per m2

Cost of construction, includes net building costs, maincontractor costs, overhead and profit, fees, other projectcosts and inflation but excludes contingency and VAT,divided by the gross internal area in m

2

Cost consultant

% Total consultant fee spend Expressed as a percentage of construction costsnote 2.

Cost consultant

% Architect fee spend Expressed as a percentage of construction costs Cost consultant

Space efficiency Net to gross, this being the net usable area divided by thegross internal area in m

2and expressed as a %

Architect

Space usageTeaching sub-category

Space usage by teaching expressed as % of net internalarea following omission of services and circulation

Architect

Space usageResearch sub-category

Space usage by research expressed as % of net internalarea following omission of services and circulation

Architect

Space usageSupport sub-category

Space usage by support expressed as % of net internalarea following omission of services and circulation

Architect

Design occupancy Net usable area in m2

of gross internal area per staff andstudent FTE, visitors omitted

Architect

Water consumption (m3) per

student and staff FTETotal m

3of water used annually per student and staff FTE Mechanical & Electrical

design consultant

Total water consumption(m

3) per year

Total m3

of water used annually Mechanical & Electricaldesign consultant


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Benchmark Description Source of Data

Building CO2 output kg CO2 produced per m2

of gross internal area per year,CO2 output calculated from electricity, heat and gasconsumption only

Mechanical & Electricaldesign consultant

Total CO2 output kg CO2 produced per m2

of gross internal area per year Mechanical & Electricaldesign consultant

Energy consumption kWh of energy consumption per m2

of gross internal areaper year, energy consumption calculated from electricity,heat and gas consumption only


Total energy consumption kWh of energy consumption per m2

of gross internal areaper year


Note 1. Contingency % allowance may reduce with successive stagesNote 2. Includes cost of surveys and architect fee spend

At the end of the project feasibility stage the PSG will set the core benchmarks targets from the list

above along with any additional specific improvement metrics if necessary. These will be

communicated to the design team upon appointment. The PSG will own the development of the

benchmarks, using data provided by Estates Services and will be responsible for assessment

during the gateway stages. Quantitative data will be provided be the Project Manager during the

gateway stages.

7.2 Key Performance Indicator Evaluation Process (KPI Process)

Aims

Continuous improvement Quantitative and qualitative consultant, contractor and supply chain evaluation Identification and commendation of exceptional performance Timely identification of issues and resolution during the project process Compliance with adopted 2010 audit recommendations

Introduction

The University and particularly Estates Services is committed to continuous improvement across itscapital projects, project teams and supply chains. The present paper describes a formal KeyPerformance Indicator evaluation process which will further facilitate continuous improvement.

The KPI process is a whole life project process of evaluating project key performance indicators andteam key performance indicators throughout, and following, the design and construction of newbuildings or facilities, as well as the refurbishment of existing buildings and facilities.

There are a wide selection of project, contractor and consultant KPIs with the potential formeasurement, however, any KPI used routinely within Estates Services capital project processneeds to be consistent, unequivocal, realistically measureable, auditable, and of value. In particularthe KPI should inform the reviewer, enabling action to be taken or decisions to be made.The objective of the KPI evaluation process is to inform Project Sponsor Groups (PSGs) andEstates Services with regards to the achievement of agreed KPIs and project delivery teamperformance. On the basis of the indicators reported, the PSG or Estates Services may then takeaction to correct failings in the project delivery or note exceptional performance. The KPI processwill also assist the University in the process of contractor or consultant selection and general supply


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chain management. Further, implementation of performance monitoring is an audit requirementstemming from the 2010 audit of the Estates Services.

Estates Services will routinely evaluate the performance of the following team members against theKPIs: Architect, Building Services (M&E) Engineer, Client Representative, Contractor, PlanningConsultant, Project Manager, Quantity Surveyor/Cost Consultant, Structural/Civil Engineer andSustainability Engineer.

Methodology

The KPI evaluation process has four key elements:

Agreement of project Key Performance Indicator targets at project outset by the PSG In project Key Performance Indicator evaluation at project gateways Post project evaluation of Key Performance Indicators against agreed targets Quarterly Key Performance Indicator 360 degree evaluation of project team members

The Estates Services has selected a concise set of KPIs, referencing previous stakeholderconsultation, and agreed a balanced scorecard approach with the following categories: Process,Finance, Environmental, Personnel and Client Satisfaction. The scorecard is weighted towardsProcess and Client Satisfaction in order for project teams to demonstrate consistent high quality andcorrect project delivery. The KPIs against which targets will be set at project initiation (end of RIBAStage B) are:

Category Key Performance Indicator

Client satisfaction Average time taken to close out defects *Average Post Project Evaluation scoreAverage Post Occupancy Evaluation score

Environmental Energy consumption (MWh/m2/year) (gas, electricity and heat)

%, by weight, of construction waste sent for recyclingFinance % of contingency utilized

% variation between budget and predicted or actual final accountPersonnel Accident/incident rate per number of man hours worked

Considerate Contractors scoreProcess Progress against programme (days behind or ahead of schedule expressed as a %)

% of required reports delivered on timeNumber of defects at 1 month post practical completion *

* Not adjusted for relevant scale of individual defects, caution required during interpretation

The KPI process commences at the completion of RIBA stage B with the setting of targets againstthe KPIs detailed above by the PSG, it is the Estates Services PSG representative who retainsresponsibility for ensuring that this action is undertaken.

Estates Services recognizes that while some of the KPIs are contractor - or consultant - specific (forexample, % of required reports delivered on time) others are a measure of project teamperformance attributable to all team members whose role influences the indicator (for example, theprogress against programme indicator). The balanced scorecard indicates whether scores are teamscores and therefore recorded against those team members with the ability to influence themeasured parameter, or are individual scores.


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Post Project KPI evaluation

The post project recording element of the KPI process is the recording of the final, as delivered,

post project KPIs. The Project Manager will have responsibility for collating the data and entering it

onto the online project specific balanced scorecard. The balanced scorecard will be presented to

the PSG against a narrative provided by the Project Manager which will set out additional comment

or explanation, including details of mitigating circumstances where required. The data will be

reviewed by the PSG which will, taking into account all factors, agree a traffic light indicator of

performance using the following scale: red – performed poorly; amber – performed below standard;

green – performed well; blue – performed exceptionally well. Such information will be used to

inform ongoing contractor or consultant selection and encourage project team, contractor or

consultant improvement for future projects.

In Project KPI evaluation

To add value to the KPI evaluation process a second element is the on-going evaluation of KPIs

during the project process. Performance against the initial targets will be evaluated throughout the

project at project gateways (plus one additional stage at the end of RIBA stage J). The process

works as above, with the project manager compiling the Key Performance Indicators via the online

project specific balanced score card for presentation to the PSG, who in turn will apply the colour

coded system. This will allow rapid identification when a performance score falls below the

acceptable level and the implementation of corrective measures is necessary. The process would

also identify exceptional performance, enabling the recognition of success in a timely manner. The

traffic light definition system for this process is defined as follows: red – urgent action required;

amber – warning; green – on target; blue – exceptional performance to be commended. It is the

Estates Services representative’s responsibility to ensure this is undertaken. Again, such

information will be used to inform ongoing contractor or consultant selection and encourage project

team, contractor or consultant improvement.

It is recognised that some of the twelve KPIs are not obtainable until practical completion, or indeed

sometime after and the availability of data evolves with the project as the project progresses and

contractors are appointed and the appropriate stages undertaken. It is possible at Gateway 2 to

formally record just two KPIs, those of milestone achievement against program and % of required

reports delivered on time, while by Post Occupancy all twelve KPIs will be measurable. Accordingly

a revised balanced score card is provided for the in-project process.

360 degree feedback model

The third element of the KPI evaluation process is the performance evaluation of the project team.

It is recognized that many of the KPIs are dependent on the performance of the team, delivered as

a result of the team effort and therefore a measure of the team. The processes described above

are heavily weighted towards indicators of team performance, while audit requirements have

significant interest in the evaluation of the performance of the Estates Services supply chain in the

form of individual contractors and consultants. This will enable individual performance appraisal,

enable timely resolution of problems, provide further opportunities for improvement and identify

exceptional performance.


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The third element is a qualitative analysis of team performance via analysis of peer group project

team opinions and experiences, utilizing a 360 degree feedback model. The 360 degree evaluation

is a common tool for evaluating performance, based on feedback from other team members. Each

project team consists of the nine principal team members identified above. The proposed process

involves each team member being required to rate the performance of the other team members

using the criteria detailed in the online reporting tool on a quarterly basis, beginning at the start of

RIBA stage C.

Data collected is summarised in a composite report (Appendix D with explanatory text shown in

Appendix E) which generates an automatic traffic light colour coding which quickly identifies a team

member’s performance ranging from red, indicating very poor, to blue, indicating excellent. The

data is reviewed by the Project Manager prior to submission to the PSG in order that details of

mitigating circumstances or other comment or explanation may be added. The data will be

reviewed by the PSG which may take action or request the Project Manager to take action as

necessary. The Estates Services representative on the PSG will be responsible for conveying

concerns and/or commendations to the Director of Capital Projects & Property Management or the

Head of Capital Projects to enable exceptional performance to be noted, or team performance

issues addressed in a timely manner.

Output

Each evaluation will produce a data set, either in the form of the balanced score card or the 360

degree composite report, and will be entered on a database held within Estates Services. In

addition the results will be deconstructed and the data entered into a supply chain database in order

that contractors and consultants may be evaluated for performance across all projects in which they

have participated. The database will be able to be interrogated to determine trends. Consistent

throughout the process is a continual review and improvement cycle, whereby the supply chain is

continually reviewed against original aspirations and the team reviewed for performance in order

that any unjustifiable deviations or problems may be addressed in a timely manner ensuring quality

is maintained and improved.

Anonymity

It is intended that the 360 degree feedback composite report will be anonymous although the

University will recognise any legal requests for release of data. Information will be stored securely

and held in accordance with the University’s Data Protection policy:

http://www.admin.ox.ac.uk/dataprotection/policy/

Ownership

The Project Manager has responsibility for ensuring that data is gathered and the balanced score

cards are completed on schedule and presented to the PSG. The Estates Services representative

on the PSG has responsibility for ensuring that the results of the evaluations are reviewed by the

PSG and grade where required. In addition the Estates Services representative has responsibility

for conveying both performance concerns and commendations to the Head of Capital projects as

appropriate.


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Stages in summary

End of RIBA stage B – setting of KPI targets by PSG

Project Gateways 2 to 6 plus additional stage at end of RIBA Stage J – In project KPI

evaluation

Quarterly following project initiation – 360 degree feedback model evaluation of project team

End of RIBA Stage L – Post project KPI evaluation


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8. PROJECT QUALITY REVIEW PROCESS

Aims

Continuous improvement

Learning for the next project

Timely identification of issues and resolution during the project process

Affirmation of initial aspirations, continual review and redirection

Improved communication

Project ownership

Introduction

The University and particularly Estates Services is encouraging continuous learning from capital

projects whereby issues identified during the project process are addressed in a timely manner

before project completion, and the benefits of lessons learned are passed on to other projects. The

aim is to foster a culture of continued review and problem resolution, and constructive feedback

within the project teams and amongst the client representatives, consultants and contractors who

work within it, with the intention of improving the efficiency and effectiveness of the delivery process,

therefore ensuring the high quality of the resulting project.

The PQRP is a whole life project process of evaluating the design and construction of new

buildings, and the refurbishment of existing buildings whilst actively involving a wide group of people

who have responsibility for delivering the project, who will occupy the resulting construction or have

some form of responsibility for the building. The process involves four key stages, Pre-Project

Initiation (PPI), Pre-Construction Review (PCR), Post Project Evaluation (PPE) and Post Occupancy

Evaluation (POE). Each stage is equally valuable and to be afforded equal focus and effort.

The Project Quality Review Process is primarily concerned with reviewing and improving delivery by

undertaking continual:

Process Evaluations

Operational and Functional Reviews

Technical and Performance Reviews

The emphasis at each stage evolves throughout the project. At the start of a project the PQRP is

primarily concerned with reviewing, and if applicable adopting, lessons learnt from previous projects

including both problems encountered (and their mitigation) and project successes. Additionally, at

the start of a project, the focus is one of developing and agreeing the brief and aspirations and

conveying this to the team. As the project evolves the emphasis evolves to one of recording

lessons learnt for the benefit of others and to one of checking the brief and aspirations are being

met, to finally verifying the functional and technical performance against the original brief. The start

of the project sees the building of a team and adoption of best practice from lessons learnt with


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regards to process. This then evolves through stage review of team performance to a final review of

team performance and onward communication of any lessons learnt.

Consistent throughout the process is a continual review and improvement cycle, whereby the

project is continually reviewed against original aspirations and the team reviewed for performance in

order that any unjustifiable deviations or problems may be addressed in a timely manner ensuring

quality is maintained or improved.

Methodology

The PQRP provides a tool to assess the design quality of buildings and the project process,

adopting lessons learnt, identifying problems and resolving them and passing lessons on to

subsequent projects. The process follows a clear structure that is linked to RIBA stages of a building

project, as well as OCG gateways and other processes including the KPI and benchmarking

exercises. At each stage there is a questionnaire gathering of data and a workshop where issues

are discussed and actions agreed.

Output

Each stage will produce a formal report detailing the findings of the review and the agreed action

plan to ensure problems are addressed or project successes implemented. In addition the

information gathered at each stage will form part of the output, including copies of presentations

given and the findings of the surveys. The output of each stage also evolves throughout the

project. At the start of a project the output will focus on the aspirations and brief as well as the

lessons to be adopted from other projects both good and bad. As the project evolves the output will

record progress against the original aspirations and brief and detail problems highlighted by the

surveys and workshops and the plans for resolution. The output of the final stage will formally

record achievements against the original brief and lessons learnt on the project, both good and bad

for subsequent projects. The final output takes the form of a case study detailing the project,

benchmarking and lessons learnt.

The Teams

The PQRP requires a team who will see the project and process through from the initial stages to

post occupation. A PQRP team takes ownership of the project, and as well as professional

membership requirements, certain members have other key roles such as the end user

representatives who have key role in communicating aspects of the project through to their

departments and encouraging participation in the Post Occupancy Review. The following teams

have been designated for PQRP purposes:

The Client Team represents those that are responsible for determining requirements and

aspirations and those that will use the building or be affected by it and will have

responsibilities for the building function, operation, maintenance or safety. This will also

involve Stakeholders who have an active interest in the project as a result of their

requirements to discharge their own responsibilities.


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The Project Team represents those who are responsible for the design, construction and

delivery of the building.

The teams are made up of the following team members:

Client Team Membership Project Team Membership

Project ManagerChairman, Senior Academic or Principal InvestigatorDepartment Facilities ManagerEnd User RepresentativesArea Safety OfficerDisability Advisory ServiceEquality & Diversity UnitInsurance OfficeEstates Services Asset and Space ManagementEstates Services Direct Labour OrganisationEstates Services Director of Capital Projects and PropertyMaintenanceEstates Services Electrical Maintenance ManagerEstates Services Estates Strategy ManagerEstates Services Facilities ManagerEstates Services Head of Capital ProjectsEstates Services Head of ConservationEstates Services Mechanical Maintenance ManagerEstates Services Project Support OfficerEstates Services Sustainability ManagerSafety OfficeTelecommunications & DataVAT OfficePSG Membership

Further Participants and ContributorsEnd Users and Occupants (at POE stage)

Project ManagerArchitectCost ConsultantStructural EngineerMechanical EngineerElectrical EngineerCivil EngineerSustainability EngineerFire EngineerLandscape ArchitectEcologistSecurity AdvisorBREEAM AdvisorPlanning ConsultantCDM CoordinatorAcoustic Consultant

Client Team Members as appropriate

Further Participants and ContributorsMain Contractor (at PCR, PPE & POE stages)Principal Subcontractors (at PCR, PPE & POE stages)

Ownership and Facilitation

Each stage is owned by the Project Manager or the Head of Capital Projects. The workshop is

facilitated by the Project Manager for the first two stages (PPI and PCR), as these are primarily

learning stages. The Head of Capital Projects, or his Deputy will facilitate for the final two stages

(PPE and POE), as these are primarily review stages and must remain objective and independent

although an external facilitator may be appropriate in some cases.

The information gathered will primarily be available to the University and participants in the project.

Stages in Summary

There are the following four stages to the PQRP:

Pre-Project Initiation

Pre-Construction Review

Post Project Evaluation

Post Occupancy Evaluation


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9. SUSTAINABLE BUILDINGS PHILOSOPHY

A new Sustainable Buildings Philosophy Document (SBPD, please see Annex C) ) was approved by

the Sustainability Steering Group, BESC and PRAC in December 2011. The purpose of the SBPD

is to help the University meet the aspirations of the sustainable buildings section of its

Environmental Sustainability Policy 2008 (see extract below). In addition, all energy and carbon

reduction work in the University is guided by the Carbon Management Strategy approved by Council

in January 2011. This document was written to meet HEFCE requirements and it defines the steps

that the University has taken and will take in future to achieve a reduction in its CO2 emissions.

SUSTAINABLE BUILDINGS – The University of Oxford Sustainable Buildings Policy is to

build environmentally sustainable buildings, and embed sustainable building best practice into

the management of the Estate. The University will ensure that any new building or

refurbishment is planned, built and occupied to ensure the greatest energy and water

efficiency and lowest carbon emissions that are reasonable in the circumstances. The

University is committed to making full use of its existing buildings and, wherever possible when

expansion is necessary, to the development of sites within walking or cycling distance of the

remainder of the University.

The SBPD is a suite of four documents which as a whole is intended to provide information to a

number of participants, including Project Managers and Project Sponsor Groups around new build

or major refurbishment projects being undertaken by the University such that sustainable

development issues are considered appropriately and are outcome focused. The document suite

comprises:

Guidance for Project Managers

Strategic Guidance for PSGs

Scoping Questions

Sustainable Aspirations Map (SAM)

The core purpose of the SBPD is to ensure that, as far as is possible, University capital projects

result in the delivery of low CO2 buildings in-use. This important focus on operational energy

consumption and CO2 emissions represents a shift in focus from compliance (i.e. Part L Building

Regulations) to outcomes (i.e. actual in-use efficiency) and should result in better performing

buildings in terms of CO2 emissions.

In addition to this focus on CO2, the SBPD addresses a range of broader sustainable development

issues across the following topic areas:

Passive design techniques:

Building orientation

Building depth


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Natural ventilation

Daylighting

Construction methods and materials Green building elements (roof, walls)

Construction waste

Local ecology (protection, enhancement etc)

The overall intention is that future building projects will assist in the realisation of the various

sustainable development objectives set by the University and, in particular, play their part in

reducing CO2 emissions.

Documents

UNIVERSITY OF OXFORD Project Sponsor Group Handbook · Project Sponsor Group Handbook, ... proxy who has delegated powers of representation and the ... The nomination of both the