Engagement of Capital Consultants 20120724 161022 0477

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1. Consultants

Consultant services may be required for any, or all, of the following:

q Project Manager (usually engaged for projects in excess of $5M)

q Architect

q Quantity Surveyor

q Engineers

r Building Services (mechanical, electrical, hydraulics, communications, etc.)

r Structural/Civil

r Fire Risk Assessment

q Building Surveyor

q Other Specialists

r Acoustics

r Asbestos

r Auditors

r Environmental/Energy

r Ergonomics

r Health Service Planning

r Interior Design

r Investment Evaluation

r Industrial Hygienists

r Kitchen Consultants

r Landscaping

r Post Occupancy Evaluation

r Probity Auditors

r Town Planning

r Transportation Planner

r Value Management Facilitating

r Water Management

The Health Service/Agency and the Department will jointly be involved in determining the requirements and theselection process of the consultant(s) to be appointed.

The type of consultant(s) required, composition of the consultancy team and scope of services will bedetermined by the Project Control Group (PCG) (refer to Table: Consultants generally required for projectscosting less than $5 million). This, together with the selection process, will be influenced by the following:

q Size and complexity of project

q Previous work undertaken

q Outcome(s) of previous studies

q Specialty of project or project components

q Procurement method

q Project timelineq Deliverables required.

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Consultants generally required for projects costing less than $5 million

Engagement of Capital Consultants

State Government of Victoria, Australia, Department of Health

For information relating to this content contact:Capital Projects and Service Planning, Department of HealthEmail: [email protected]

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Generally consultants will be engaged to carry out services that enable a project to be successfully managedthrough the project delivery process. This process will require professional duties to be carried out in thevarious phases of a project including some or all of the following services:

q Asset Assessment

q Asset Management Planning

q Business Planning and Gateway Reviews

q Commissioning

q Contract Administrationq Contract Documentation

q Cost Estimating and Control

q Decommissioning

q Design Development

q Energy and Water Audits

q Feasibility Study

q Functional Brief

q Master Plan Study

q Planning Brief

q Post Occupancy Evaluation

q Schematic Design

q Service Planning*q Site selection

q Tender and Evaluations

* Service planning may be carried out by the Health Service/Agency prior to the consultant engagement.

The Department or PCG may review the project at any stage, specifically engineering service design anddocumentation, prior to tendering, by engagement of an independent consultant.

Refer to further Capital Development Guidelines for details of process and expected outcomes of each stage ofthe project.

ActivityProjectManager

ArchitectandEngineers

QuantitySurveyor

ValueManagementConsultant

Planning Brief and MasterPlan

Optional Optional

Functional Brief andFeasibility Study

Optional

Schematic DesignComplexprojects

Optional

Design DevelopmentComplexprojects

Contract DocumentationComplexprojects

TenderComplexprojects

ConstructionComplexprojects

Post Occupancy EvaluationComplexprojects





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2. Scope of Services

This guideline provides information on the scope of services (refer to Sample Brief) and fees that may beoffered by Consultants. However, the Department should be consulted prior to commencing the Consultantselection process for major projects.

The following is a general description of the services usually provided by the Consultants throughout thevarious phases of the project.

* Phase 1 and 2 are often combined.

Dependent upon the nature of the project and the performance of a Consultant they may be engaged for allphases or part thereof.

When consultants are to be engaged, the following issues will need to be clarified prior to their appointment:

q The scope of service required for the project. A detailed description of the consultant(s) services to beprovided from the initial planning stages through to the finalisation of the contract.

q Time lines for execution of the services in accordance with the approval, funding and works program.q The consultants are expected to warrant that designs and documentation are fit-for-purpose as required

for the delivery of services and that the estimate is within the approved budget.

q The fee structure and any circumstances, which would require a fee adjustment together with the feesrequired at design milestones.

q The forms of procurement. If this is not determined prior to consultant engagement then theconsultants are to base their proposal on the use of the standard Government form of lump sumcontract AS 2124 - 1992 with special conditions.

q The consultants are expected to provide input and participate in the reviews and reports associated withGateway, Value Management and Post Occupancy Evaluation.

Details of the Project Manager scope are set out in the attached sample brief.

The Department also requires the provision of engineering services data in suitable hard copy and computerformat.

Project Manager

The Project Manager is the team leader and is usually a separate appointment for projects in excess of $5million, sensitive or complex projects. Appointment of a Project Manager preferably occurs prior to any designwork having been undertaken. The Project Manager is expected to manage and coordinate all aspects of theproject during planning, design, documentation, construction, equipping and commissioning stages.

Phase 1 Master Plan*

Phase 2 Feasibility Study*

Phase 3 Schematic Design

Phase 4 Design Development

Phase 5 Contract Documentation

Phase 6 Contract Administration

Phase 7 Post Occupancy Evaluation





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Generally the project managers services will entail the following activities:

q Establish procedures and reporting requirements for liaison with client and consultant team

q If required assist in the selection of site, procurement model and client representation.

q Assist in the selection and engagement of the consultant team

q Manage and co-ordinate all consultants

q Develop and manage the approved program and budget

q Review and where appropriate, amend the project brief

q Provide regular reports to and make recommendations to the PCG

q Conduct business planning studies including Gateway review of participation of Private Sectorassessment

q Prepare, manage, co-ordinate and ensure contract documents

q Tender, evaluate and recommend construction works

q Ensure appropriate quality assurance process including meeting sustainability and risk managementobjectives

q Oversee construction works and represent the principal as Superintendent

q Manage the commissioning process

q Review and report on outcomes

q Undertake the post occupancy evaluation (12 months after handover).

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Architect

The extent of services provided will depend on the nature of the project and the project delivery method.

For projects less than $5M, the architect/principal consultant is generally responsible for the engagement ofsub-consultants other than the quantity surveyor. The submission of tenders is to include a description offees and services for the preferred sub-consultants. For major projects (in excess of $5-10M), the buildingservices engineers will generally be appointed separately.

The agreed scope will determine the works and activities the architect will carry out.

For projects where there is no Project Manager, the architect will undertake the responsibilities as stated underthe previous section. Services provided by the architect include the following:

q Prepare plans and designs appropriate to the brief(s) and client requests including meeting buildingrequirements such as passive design initiatives associated with energy efficiency and low maintenanceassess

q Co-ordinate sub consultants work which will have impact on plans/designs

q Carry out services within approved program and budget

q Undertake existing conditions audit

q Ensure the works comply with regulatory requirements

q Liaise with user groups and attend meetings of the design team and where appropriate, the PCG andsupport preparation of key documentation such as Business Plans

q Liaise with and provide progress reports to the Project Manager

q Administer the construction contract and perform functions of Superintendent or the Superintendents

Representative where appropriateq Manage or support the commissioning process and defects liability period activities

q Participate in reviews and the post occupancy evaluation (12 months after handover)

q Consultants are to prepare designs and documentation in accordance with Environmental SustainableDevelopment principles that embody objectives of energy efficiency, greenhouse emission reduction andwaste minimisation.

Engineering Services

The sco e of services for en ineerin should be a ro riate at each sta e to ensure all en ineerin and





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building systems options are considered in the planning and design processes.

Where the projects are in excess of $5-10M, the Department will independently appoint the building servicesengineers.

Engineering services normally include communications, environmental, fire safety, mechanical, electrical, civil,

structural and hydraulics. As a project progresses, it is normal for the engineering requirements to becomemore detailed and it is possible that additional specialist consultants may be required.

Engineering services usually entail the following:

q In response to the brief and approved plans, prepare designs that result in the most resource and costefficient and effective outcomes

q Undertake existing building services and structural conditions audit (including fire safety requirements)and identify key infrastructure issues affecting the site

q Provide life cycle cost analysis recurrent and capital cost estimates

r The facilities should make effective and efficient use of scarce resources such as fossil fuels andwater

r Engineering systems selected should promote use of renewable energy such as solar with particularapplication to relevant locations such as north of the divide

q Undertake designs and documentation of building systems, materials and engineering infrastructure thatare robust and low maintenance and reflect sound engineering design principles

q Attend design team meetings

q Commission and administer contracts

q Participate in the post occupancy evaluation (12 months after handover).

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Quantity Surveyor

The Department will directly engage the quantity surveyor as an independent consultant, except for minorwork projects.

The Department expects the procedures of the Australian Institute of Quantity Surveyors (AIQS) Cost ControlManual to be followed and the project development stages are related to NPWC Cost Plans. In relation to costcontrol, the Department has developed for use Capital Management Guideline 2.3, Cost Plans and Reports.

Generally the quantity surveyor will be responsible for:

q Cost management and control

q Cost estimating including preparation of Bill of Quantities when required

q Assess, review and verify independently the building engineering services estimates

q Cost planning and warrant the pre-tender estimate is within the approved budget allocation

q Monitoring and reporting of financial progress including variations and contingencies

q Identifying contingent liabilities (at completion of tender documentation)

q Participate in the post occupancy evaluation (12 months after handover).

The Department also requires the provision of cost/plan data in suitable computer format to allow data,lodgement, transfers and access for analysis.

Building Surveyor

The services of a building surveyor are engaged to arrange certification of documentation and issuance of anoccupancy permit/certificate as required by the Building Act 1993.

Under the Act, the building surveyor is required to certify all tender documents prior to construction





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3. Consultant Selection Process

commencing and issue a certificate of occupancy at the completion of the project. In those instances whereexemption from compliance with the regulations is required, the building surveyor is to arrange for seeking amodification.

Following initial certification any subsequent amendments to the documents are to be certified prior to changesbeing implemented.

Other Specialist Consultants

In some projects it may be necessary to appoint specialist consultants to provide advice and input onparticular aspects. These consultants may cover areas such as town planning, environmental design,landscaping, security, asbestos, ergonomics, telecommunication, hazardous materials such as asbestos andinterior design. The scope of service required would usually be defined by the specific problem encountered.

Commencement of Services

No contract is to commence without the approval of the Minister or the appropriate delegated Director,Secretary or Executive Director. The Consultants recommended for appointment are not to commence workwithout documentation on file of one of the following:

q A signed contract, or

q An approval to enter into a contract from an authorised delegate, or

q A letter of engagement following an "approval in principle" from the delegate.

Appointment of consultants is normally carried out by the Capital Projects and Service Planning Branch (CPSP)following recommendation by a selection panel including Health Service/Agency and Regional/Divisionalrepresentatives. It is undertaken in accordance with the Project Development and Construction ManagementAct 1994, Ministerial Directives 1 and 2, the Code of Practice for the Building and Construction Industry and

regulatory requirements.

The consultancy may be novated to the Health Service/Agency following the schematic design and Cost Plan Cstages 1 and 2. In those instances where the Health Service/Agency are selecting consultant(s), they will needto obtain the latest information from CPSP regarding the tendering process and associated responsibilities.

Generally, the appointment of the Project Manager (if required), Architect and Quantity Surveyor will be priorto the commencement of the Master Plan or Feasibility Study. Consultant(s) may be appointed for the whole ofthe project components. The engagements are for services identified as phases and the consultant is tocomplete each phase satisfactorily before proceeding to subsequent phases.

Consultancies Financial Criteria

The Project Development and Construction Management Act 1994 and Ministerial Direction No. 1, 1995:Tendering Provisions for Public Construction, and Ministerial Direction No. 2, 1996: Contractual Provisions forPublic Construction, provides for consultant engagements undertaken by the Department of Human Servicesand public bodies. These documents can be viewed on the Internet athttp://www.buildingcommission.com.au/.

Written Quotation Requirements

Project ValueNumber of QuotesRequired

Additional Information





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$0 - $25,000 1 written tender

Due diligence is required.Proposal must beconsistent with currentmarket prices.

$25,000 - $150,000 3 written tenders minimum

$150,000 and over3 Tenderers from a list ofpre-qualified consultants orinviting public tenders

The process shouldincorporate activities setout in Table: ConsultancyAppointment Flowchart





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4. Consultant Fees and Other Issues

The Consultant Selection Process

The following is a general guide to appropriate fee structures for services, which may be provided by thevarious consultants.

As a result of changing priorities or funding availability, project development may not be continuous. HealthServices/Agencies are to obtain professional services in a manner that will provide for consulting services to beinterrupted or terminated recognising thestop startnature of project development.

As a consequence, the fee structure and consultants contract should reflect the various distinct stages of aproject.

It is the PCGs responsibility to confirm that the fees incorporate all services required by each Consultant.Such fees should reflect their actual responsibilities (eg management, reporting, design, documentation,contract administration superintendent, co-ordination, commissioning etc).

General Fee Arrangements

Planning/Functional Briefs

Fees for the development of planning and functional briefs are usually a fixed lump sum related to services tobe provided. There need be no commitment to the project proceeding beyond this stage.

Master Plan/Feasibility Studies

Fees for this stage are anticipated to be on a fixed fee basis related to the services provided. There would beno commitment to the project proceeding to the next stage.

Design Stage

The fee for the design stage is generally 25 per cent of the total percentage fee.

q Schematic DesignFees of approximately 12 per cent of the total percentage are based on the approved cost estimate ofconstruction. This will be the net project cost (excluding fees, land acquisition and prolongation factors)

in accordance with Cost Plan C (limit of cost estimate).q Design Development

Fees of approximately 13 per cent of the total percentage are based on the cost estimate ofconstruction. This will be the net project building cost (excluding fees, land acquisition and prolongationfactors) in accordance with the approved Cost Plan C, (limit of cost estimate).The Department or PCG may review the project, specifically engineering service design anddocumentation, prior to tendering by engagement of an independent consultant.

Contract Documentation





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The fee for the contract documentation stage is generally 40 per cent of the total percentage fee.

Fees are maintained on a percentage of the construction cost in accordance with the approved Cost Plan C(limit of cost estimate). This will be the net project cost (excluding fees, land acquisition and prolongationfactors).

Contract Administration

The fee for the contract administration stage is generally 35 per cent of the total percentage fee.

Fees are maintained on a percentage of the construction cost in accordance with the approved Cost Plan C(limit of cost estimate).

This will be the net project cost (excluding contingencies, fees, land acquisitions and escalation factors).

Although fees for design, contract documentation and contract administration are usually on a percentagebasis, upon completion of schematic design in which the scope of works and budget will be determined thefees can be converted to a fixed fee basis.

Fees for each stage may then be converted into a fixed fee if an overall discount is provided. Fees foradditional works such as client initiated changes should be negotiated at project commencement stage. Whenpresenting fee proposals consultants are to nominate the hourly rates of key personnel.

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Disbursements

In the course of providing services, consultants will incur expenses, which are reimbursable. When presentingfee proposals consultants are to identify disbursements. Generally travel, printing, photocopying,communication, provision of contracts and photographic records costs are to be included in the consultantpercentage fees. Expenses, which may be additional to normal fees, include:

q Fees paid to Statutory Authorities/Government Levies

q Advertisements and published noticesq Provision of more than the agreed number of copies of documents and/or drawings

q Special services such as development of general prototypes, major models or manuals

q Use of specialised equipment where required and agreed by client

q Costs associated with a Clerk of Works

q Travel associated with inspections/study of facilities not directly associated with the project.

Novation

Consultants can be novated from the Department to Health Services/Agencies. This action transfers theresponsibility to act as the Principal in the contract, from the Department to Health Services/Agencies forthose consultants who are novated. Health Services/Agencies need to be aware of their responsibilities andobligations under these circumstances.

Professional Indemnity and Public Liability Insurance

Any consultant signing a contract with the Department or Health Service/Agency (known as the Principal) shallprovide and maintain Professional Indemnity and Public Liability Insurance to the minimum value set out inattachment to the consultants brief unless otherwise agreed.

The purpose of the insurance is to indemnify the Principal and/or the State of Victoria from and against anyclaim, demand, action, suit or proceeding by any person in respect of personal injury to or the death of anyperson or loss of or damage to any property arising out of or as a consequence of an act of negligence by the





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5. Selection Criteria

The broad criteria used in consultant selection will take into account the following:

Services Planning Expertise

This criterion is to be used where required.

Project Experience

The relevant experience of the consulting organisation / group in working with or on a project of this type,scale and environment eg design, documentation, administration etc.

Government Procedures

Knowledge of Government / Department of Health projects and procedures.

Team / Management

The assigned people on the project their experience, expertise and nominated tasks how they will bemanaged and coordinated. Consideration has to be given to the consultants recognition of their responsibilityto the project process.

Methodology / Approach

Having a sound understanding of the issues surrounding the particular project and tailoring the sequence ofactivities to ensure that the desired project outcome is achieved. The ability to challenge and promote lateralthought amongst all parties is an important consideration.

Program / Response

A demonstration that the consultants have an awareness of the time constraints placed on the project, and,having considered the particular issues relevant to the project, have established the sequence of tasks andassociated schedules necessary to achieve any predetermined timelines.

Client Response

Enthusiasm and professionalism of presentation the ability of the consultant to elicit a co operative andvaluable contribution form the client and familiarity with local conditions.

Quality Assurance

The process that the consultants put in place to ensure the correctness of planning, design anddocumentation, and co-ordination of the physical aspects of the project.

Availability

Firms history and resource capability to perform services and availability of key personnel.

Fee Inclusions





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6. Consultant Professional Indemnity Insurance

Scope of services included in the fee proposal and the appropriateness of the quoted amount to enableoptimum service provision for the client.

References

Normally three referees should be provided to support the submission in relation to the type of work/role

envisaged.

CMB Guidelines For Engagement

Contract Phase Type of Activity

Professional Indemnity Insurance

Sum - Insured Limits

Pre-design

Planning Brief & Master Plan

Functional Brief & FeasibilityStudy

Minimum $2M any one claim unless project valueexceeds $10M.

If project value exceeds $10M minimum sum insuredto be negotiated with the Department.

Design andDocumentation

Schematic Design

Design Development

Contract Documentation

Allied Services not associatedwith Statutory or Contractual

Obligation (eg. acoustic,ergonomic, interior design,kitchen, landscape, townplanning, value management


If project value exceeds $10M minimum sum insuredlimit to be negotiated with the Department.


ContractAdministration

Tender

Construction/ContractAdministration

Allied Services not associatedwith Statutory or ContractualObligation (eg. acoustic,ergonomic, interior design,

kitchen, landscape, townplanning, value management

Minimum $5M any one claim for project value up to$10M.

Minimum $10M any one claim for project valueexceeding $10M but less than $25M. If project valueis $25M or more minimum sum insured limit to benegotiated with the Department.

Minimum $2M any one claim unless project value

exceeds $10M.

The PI limits setout above are aguide. The levelscan be adjusted inconsultation withDHS FinanceBranch.

If there is a request to addressthe levels other than the levelsset out in the Standard Brief,the approach should be to:

Consultant to provide a clearproposal of what is

In support of the request to address the PI levels,theconsultant(s) is to set out risk profile andassessment of the services sought in accordancewith the project descriptors, specific risks associatedwith the project such as innovation requirements,site or access constraints, restricted time frames,etc.





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Checklist

Pro Formas

recommended

Support request with anaccompanying rationale

Provide information for

consideration.

The information that would be considered assupportive of establishing specific PI cover levels

would include:

Type of consultancy and demonstrated experience bystaff assigned to the project, the back uparrangements and relevant structure of the firm.

Role of consultant in terms of project development(e.g. superintendent of contract) and during whichphase does the risk exist i.e. design, documentation,tender / award, construction, commissioning andbuilders' defects.

Other responsibilities e.g. PM also has responsibilityfor coordination programming, Industrial Relations,strategic issues Project and contract management ofscope, cost, quality and cash flow as well asmonitoring / reporting to PCG

Risk Assessment (refer to AS 4360) related to theconsultancy setting out the magnitude and frequencyof risks (in a summary spreadsheet would be useful).Risk exposure should set out the impact overall e.g.consequences of error such as involves variationnegotiations which occur frequently and can havesubstantial impact on TEC thus impact is significant.

Risk mitigation measures and evidence of use onsimilar projects successfully completed by consultant(if known) and what is done to contain this risk (e.g.following Departmental procedures, CPSPsupervision, good documentation, checking, QA

system,

Audit and risk reduction measures such as 3rd partyindependent review & input, training and re-education of staff etc).

This is the checklist that relates to the content of this guideline.

Checklists

Engagement of Consultants (pdf, 54.1 KB)

The Engagement of Consultants checklist is to be completed and signed with each project and sent to theappropriate DHS Project Manager.





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These are the pro formas that relate to the content of this guideline.

Pro Formas

Engagement of Consultants - Major Project Brief (MS Word, 795.5 KB)

The Major Project Brief proforma is to be used as a template.

Contract - DHS Standard Contract (MS Word, 337.5 KB)

The DHS Standard Contract proforma is to be used as a template.





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Documents

Engagement of Capital Consultants 20120724 161022 0477