Pimpama Coomera Waterfuture Master Plan Implementation Part 4

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

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) Pimpama Coomera Water Future 2007 ©

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. § § Pimpama Coomera Water Future 2007 ©

MA Evaluation Process § § 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: Pimpama Coomera Water Future 2007 ©

MA Evaluation Process § § 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. Pimpama Coomera Water Future 2007 ©

Package A Transaction Process (Reminder: This is the two treatment plants package – waste water and the downstream recycled water plants) Pimpama Coomera Water Future 2007 ©

Package A Infrastructure (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 Pimpama Coomera Water Future 2007 ©

Pimpama Coomera Water Future 2007 ©

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. Pimpama Coomera Water Future 2007 ©

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. Pimpama Coomera Water Future 2007 ©

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. Pimpama Coomera Water Future 2007 ©

The documents PROJECT LIFECYCLE Contractor Selection > CONTRACTS Engage two contractors > Concept design & TOC development > Design Development Agreement [DDA] SUPPORT DOCUMENTS Draft DDA Draft PAA Outline Design Brief TRANSACTION PROCESS Expression of Interest Request for proposal Pimpama Coomera Water Future 2007 © Engage Alliance Contractor > Delivery Project Alliance Agreement [PAA]

RFP PHASE Client DOCUMENTS Relationship Development Site Info Facts Concept Design [D&C bid standard] Technical Teams Reports, Specifications, Drawings Endorsement Design Brief New facility Technical Requirements Proposal and TOC Development Proposals RFP Documents Process Project Alliance Agreement Commercial Requirements Commercial Terms Project Alliance Agreement KPIs & Financial Data Commercial Team Pimpama Coomera Water Future 2007 © Evaluation Project Alliance

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 Pimpama Coomera Water Future 2007 ©

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 Pimpama Coomera Water Future 2007 ©

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 Pimpama Coomera Water Future 2007 ©

Package D Transaction Process (Reminder: This is the residual package of pipes, pump stations and reservoirs to complete the project) Pimpama Coomera Water Future 2007 ©

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$60 m of work is involved. The client did not have the resources to manage this scale of work in the detail required. Pimpama Coomera Water Future 2007 ©

Features of this “Managing Contractor” type contract The Managing Contractor 1. Undertakes survey and geotechnical investigations as required 2. Resolves alignment and detailed location issues 3. Designs and documentation 4. Procures construction resources 5. Manages community interface 6. Drafts submissions for GCW 7. Material procurement strategy 8. Coordinates construction activities with other packages and utilities 9. Commission and handover assets Pimpama Coomera Water Future 2007 ©

Features of this “Managing Contractor” type contract 10. All construction risk with the Managing Contractor 11. Tendered Management rate converted to Fixed Fee for each Package 12. Jointly manages the work with client involvement through a Joint Management Team 13. Construction Packages competitively tendered - self performing may be possible if competitive 14. Construction Contracts between Managing Contractor and Sub-contractor 15. Possible Quality Pool and KPIs 16. Contract concludes December 2009 Pimpama Coomera Water Future 2007 ©

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 Network Planning Proposals received Tranche 1 Planning Evaluation of proposals complete - Desk top review Tranche 2 Planning complete Tranche 3 Planning complete Tranche 4 Planning complete - Interview/Presentation - Evaluation Workshop - Commercial Schedules agreed - Schedule of Departures resolved & Commercial Terms agreed Contractor selected & Agreement signed Contractor Designs, Documents & Construction Manages Package D works ~3 years Hand over Construction Package 1 Construction Package 2 Construction Package 3 Construction Package 4 Pimpama Coomera Water Future 2007 © Hand over

Timing § § § § Advertise RFP Close RFP Interview / Presentation Assessment Workshop Commercial Meetings Appoint Contractor mobilises 2 September 2006 29 September 2006 mid October 2006 late November 2006 early December 2006 Pimpama Coomera Water Future 2007 ©

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. Pimpama Coomera Water Future 2007 ©

Assessment Criteria Continued Appreciation of the work Implementation methodology Capability: • Track record and experience • Resources • People • Key Personnel • Important Personnel • Other Personnel Culture: • Program team behaviours • Approach to team based contracting • Management Systems • Managing contractor’s fee - weighted at 40% of the scores Pimpama Coomera Water Future 2007 ©

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. Pimpama Coomera Water Future 2007 ©

End of this part ……………… Brett Lawrence will continue on the lessons learned Pimpama Coomera Water Future 2007 ©