STANDARD OPERATING PROCEDURES · Web viewThe Project Manager engages with relevant stakeholders advising of the new acquisition project. Note that planning for sustainment costs in

STANDARD OPERATING PROCEDURES

PROPERTY ACQUISITION

1 CONTEXT/SUMMARY

1.1 Defence is one of the largest land holders in the Commonwealth, and to best support Defence capability requirements, Defence regularly reviews its estate in line with the Defence Estate Strategy. Land acquisition is typically deemed necessary through an approved Defence Integrated Investment Plan project, an agreed property disposition plan or a separate approval, and Defence will ensure that the method of acquisition is supported by the Department of Finance (Finance).

1.2 Defence acquires property in accordance with the Lands Acquisition Act 1989 (LAA):

a. Section 40: Acquisition by agreement i.e. property is available on the open market;b. Section 40: Acquisition by agreement i.e. property is not available on the market;

andc. Section 41: Acquisition under the compulsory process.

1.3 The Commonwealth preference is to acquire land by agreement, where possible. For park land the LAA stipulates that compulsory acquisition with consent must be utilised.

1.4 This document works in parallel to GEMS Portfolio and Project Management module training.

2 CREATE/COMMENCE AN ACQUISITION PROCESS

2.1 The standard process is for the Assistant Secretary Property Management (ASPM) to receive an endorsed business case from Estate Planning Branch (EP) recommending the delivery of an acquisition project, including appropriate funding allocation and project approval (including Investment Committee approval). The Business Case is endorsed in accordance with FINMAN 2 Financial Delegations Manual.

1

2.2 The non-standard process is a direction e.g. DEPSEC, MINDEF or Prime Minister. Estate Planning remain the owner of such decision and secure appropriate funding, approval and handover of the delivery of the acquisition to ASPM.

2.3 ASPM tasks Director Directorate Property Acquisition Land Access (DPALA) to commence the acquisition project planning to develop the delivery strategy. DDPALA tasks the acquisition to the team (Project Manager) to commence all activities under the acquisition process.

2.4 The Project Manager reviews the property requirement and sends an email request to the Property Management Branch (PM Branch) Objective Coordinator to create a Virtual File for objective filing - [email protected]. The Project Manager creates the following file structure in Objective -

1. This symbol represents touch-points required in the GEMS system.

2 Acquisition services are not a standard service under the WoG contract, therefore, a quote must be sourced from JLL and a Schedule 12 completed

by SCM.

LAST UPDATED 8 OCTOBER 2019

mailto:[email protected]

2.5 The Business Case should identify and confirm funding in the Integrated Investment Plan (IIP). The Project Manager progresses a Project Creation Submission through ID Finance.

2.6 The Project Manager tasks ID Finance to create a project in ROMAN, allocate the relevant funding and Work Breakdown Structure (WBS), create the GEMS EST (property ID reference in GEMS), which enables the spending of allocated funding.

2.7 If there is no source of funding, the project will be delayed until a funding source is identified or the project will be cancelled.

This will be raised via an assigned task from a Project Officer to ID Finance;

ID Finance will advise when finance has been raised; Defence SAP provides functionality that allows the linking of

emails and/or other related documentation through Objective, as well as a field to capture notes/comments.

3 DEVELOP THE ACQUISITION STRATEGY

3.1 The Project Manager creates an Acquisition Management Plan. The Acquisition Management Plan assists the Project Manager to identify the relevant stakeholders, methodology and associated strategy, milestones, native title applicability and resultant handling strategy, risks and schedule.

3.2 The Project Manager engages with relevant stakeholders advising of the new acquisition project. Note that planning for sustainment costs in order to facilitate an effective Handover/Takeover process will have been considered by Estate Planning Branch during development of the acquisition business case, so this is an opportunity to reaffirm that engagement.



by SCM.


3.3 ENGAGE A PROPERTY SERVICES CONTRACTOR

Defence has the ability to secure external resourcing to assist with an acquisition project. There are two options (1) prepare a Schedule 12 to engage JLL, Defence’s outsourced Property Services Provider (PSP) or (2) engage a contractor under the Defence Infrastructure Panel (DIP). The additional resource will assist Defence in the acquisition process and undertake tasks such as: Arranging necessary meetings with land owners; Property Valuations; Property Surveys; Facilitating Environmental Site Assessments (ESA); Preparation of draft pre-acquisition declaration; Preparation of draft acquisition declaration; Preparation of LAA approval; Negotiating agreement with owners on the purchase price to be paid; and Oversight of the contract of sale process.

The Project Manager seeks relevant quotes under the Public Governance, Performance and Accountability Act 2013 (PGPA).

4 ENGAGE SPECIALIST ADVISORS

4.1 In most cases, the external resource engages valuers and/or surveyors on Defence’s behalf in accordance with Commonwealth Procurement Rules and the Indigenous Procurement Policy.

4.2 In some instances, the Project Manager may engage specialist advisors outside of the Property Services Provider.

4.3 The engagement of specialist advisors are predicated on: Value for money; Availability; and Security clearance appropriate to the project.

4.4 The following process should be followed for:

5.2.1 Property Valuation & Surveyor Depending on the estimated value of services, the Project Manager seeks

quotes directly from contractors (this may include the PSP itself, noting consideration should also be given to local contractors as well) or via Aus-tender as applicable. After obtaining quotes, the Project Manager engages a contractor based on value for money considerations.

5.2.2 Environmental Site Assessment (ESA)

The Project Manager engages a provider from the Defence Environment and Heritage Panel (DEHP) from the DIP to undertake an ESA.

The Project Manager prepares the ESA scoping document for the DEHP panel member to formulate a proposal for review.

The proposal is sent to the Regional Environment & Sustainability Manager (RESM) for approval of scope and cost before the Project Manager approves the proposal via an acceptance letter.



by SCM.


5.2.3 Legal Services Advisor The Project Manager emails Defence Legal with a Request for Legal

Services. The request should include, but not be limited to, the following –

o Conduct legal due diligence, native title, encumbrances, other third party interests etc.

o review the pre-acquisition declaration and lodge with the Land Titles Office (if applicable);

o arrange the exchange of contracts and conveyance of the transaction;

o assist Defence with transfer of funds for exchange and settlement

o the settlement process;o arrange for transfer documentation to be lodged, a

Certificate of Title to be issued in the name of the Commonwealth of Australia and a copy to be forwarded to Defence’s PSP;

o notify the relevant authorities of the transfer of ownership; o provide advice, as required, concerning the contract for sale

and the sale process more generally; and o Issue the title in name of the Commonwealth

5 SECTION 40 – ACQUISITION BY AGREEMENT

5.1 The Project Manager advises the Department of Finance (Finance) of possible acquisition via email, only where the property is not available in the market.

6.1.1 Where the property is not available on the market, the Project Manager seeks in-principle approval from Finance to approach the land owner on a no commitment basis.

5.2 Property Services Contractor sends a letter to the Land Owner (or Land Owner's Representative), informing them of the:

Acquisition approach (on a no commitment basis); LAA requirements; Requirement for valuation; and Requirement for an ESA.

Project Officer actions checklist box to indicate that the property owner and/or owner's representative has been notified.

5.3 The Project Manager identifies stakeholders and sends an email outlining the acquisition details.

5.4 The Project Manager reviews and approves or rejects quote(s) for additional services (valuation, surveying, ESA services). The Project Manager sets up the financial framework, including Section 23 Approval, vendor creation and Purchase Order creation for invoice payment through Vendor Invoice Management (VIM). The Project Manager ensures –

a separate purchase order is raised for each contractor;



by SCM.


all purchase order number is entered into the Acquisition Management Plan, and saved in Objective. The contractor must be advised of the purchase order number for inclusion on all invoices; and

a purchase order is not raised until the contractor’s quote for services has been accepted by the Project Manager.

5.5 Project Manager/ PSP arranges for the valuer to conduct a valuation of the property, in consultation with the property owner.

5.6 Project Manager/ PSP arranges for a surveyor to conduct a survey in consultation with the property owner, or representative, and a regional Defence representative (optional).

5.7 If an ESA is required, the Project Manager engages a DEHP panel member and requests a proposal.

5.8 The Project Manager forwards the DEHP panel member’s or Indigenous company’s proposal to the Directorate of Contamination Assessment, Remediation and Management (DCARM), and Assistant Director Environment & Sustainability (ADES) for review of work proposed and cost. If required, the Project Manager liaises with DCARM and ADES concerning any remediation requirements. If there is a requirement to remediate post-acquisition, DCARM will advise of the process.

5.9 Once approval for ESA is given by DCARM and ADES, the Project Manager/ PSP assists by arranging the ESA to be undertaken in consultation with the property owner, or representative, DEHP Member and nominated RESO. The DEHP Member then forwards a draft ESA report to the Project Manager.

5.10 The Project Manager emails the report to DCARM for review, comment and approval. Once approved, the Project Manager requests that the DEHP member sends a final version.

5.11 Once received, the ESA report is sent to key stakeholders i.e. RESO and regional Property Officer (OPO). The Project Manager saves the report in Objective.

Project Officer records the date of receipt of the valuation report, Survey report and ESA and any other due diligence requirement to be recorded within the Time Management Section of the Acquisition Management Plan. The documents are saved to GEMS.

5.12 The Project Manager considers the PSPs advice, valuation, survey and ESA Reports and determines the negotiation framework.

5.13 The Project Manager instructs the PSP to negotiate agreement with the property owner in accordance with this framework. The negotiation will reach an in-principle agreement of a purchase price and any special conditions of sale.

5.14 Following agreement and, on a no commitment basis, the PSP prepares a letter confirming the following with the property owner, or representative: acknowledgement and acceptance of Defence’s offer; the acquisition process; and



by SCM.


the requirement for a draft Contract for Sale. Typically this is provided by the vendor but Defence will consider drafting upon request.

5.15 The Project Manager, through Defence Legal, engages a Legal Services Provider (LSP) to provide legal assistance, as required. If the property is not on the market and not between two Government authorities (i.e. Commonwealth to State Government), a Pre-Acquisition Declaration (PAD) is required. The following steps provide the outline of additional documentation for these situations.

6.1.2 For the negotiation framework, the Project Manager prepares an Acquisition Strategy outlining all relevant details in relation to the acquisition.

6.1.3 The PSP prepares a draft PAD that is reviewed by the LSP and sent to DOF for approval and endorsement.

6.1.4 Once approved by the DOF, a letter and a signed PAD is sent to DDPALA. The Project Manager provides a copy of the PAD to the PSP.

6.1.5 The Project Manager instructs the PSP to send a letter to the property owner or representative to advise:

that the PAD has been endorsed DOF; that the vendors solicitor should use this time to prepare a draft Contract

of sale; and that all special conditions stipulated by Defence are to be included in the

Contract of Sale.

6.1.6 Under Section 22 (7) of the LAA, DOF sends a copy of the signed PAD, a statement of principal rights and a plan of the affected area to the affected parties.

Note: If there are no applications for reconsideration made in the first 28 days, the PAD will become absolute 28 days after the last date on which such an application could have been made.

6.1.7 The PSP is required to ensure the PAD is appropriately published, this includes:

in the Commonwealth Gazette; in a newspaper circulating in the area where the property is located; and provided to the lawyer for lodgement with the Land Titles Office.

5.16 The PSP liaises with the LSP and the Project Manager to ensure the terms and conditions of the Contract for Sale are suitable to Defence. Upon agreement, an exchange and settlement date is set.

5.17 After reaching agreement (and the PAD becoming absolute, if applicable), the PSP prepares the LAA Form A. The Project Manager obtains endorsement from the relevant delegates within Defence and the DOF.

5.18 At exchange, Defence pays 10% of the purchase price as deposit, unless otherwise agreed; with the balance due at settlement.

5.19 The Project Manager arranges for the 10% deposit to be transferred to the LSP trust account, as required for the exchange. The Project Manager informs the LSP and the PSP once funds have been transferred.



by SCM.


https://drms-deakin/id:AF9095875


5.20 Following exchange, the LSP provides a settlement statement to the Project Manager. The settlement statement outlines the remaining amount and date due for payment.

5.21 The Project Manager arranges for the remaining amount to be transferred to the LSP trust account, as required, for settlement. The Project Manager informs the LSP and the PSP after the funds have been transferred.6.1.8 If the LSP trust account is not to be used, Defence must set the seller up as a

vendor in Defence’s financial framework to pay the seller directly.

5.22 Prior to settlement, the PSP conducts a pre-settlement inspection of the property with the RPO to ensure all terms and conditions of the contract have been upheld and collect keys to the property. If the inspection is unsatisfactory, the PSP will request that settlement is re-scheduled and any out of pocket costs attributed to the land owner.

5.23 The Project Manager informs the Net Personnel Operating Costs (NPOC) team of a settlement date and provides the settlement statement.

5.24 Once settlement has occurred, the PSP tasks the LSP to obtain the Certificate of Title (CT).6.1.9 The PSP ensures that the Certificate of Title is recorded on Defence's Certificate

of Title register.

6.1.10When the CT is received, the PSP stores it on behalf of Defence.

6 SECTION 41 – ACQUISITION BY COMPULSORY PROCESS

6.1 The Project Manager meets with the DOF to provide a background to the acquisition and discuss the approach to be adopted. DOF takes into consideration Defence’s reasons for acquiring the property.

6.2 Defence seeks in-principle agreement from DOF to: the acquisition approach, including a section 78 pre-acquisition agreement; undertake a valuation; and conduct an ESA.

6.3 The Project Manager facilitates a meeting with the land owner. This meeting will provide the land owner advice on: the acquisition approach (on a no commitment basis); the LAA requirements; the requirement for a valuation; the requirement for an ESA; statutory rights under section 47 of the LAA concerning leaseback; and a section 78 pre-acquisition agreement to resolve compensation.

Note: Where appropriate, a representative from DOF may be present. The Project Manager will determine whether the Property Services Provider will be involved in the meeting.

6.4 The Project Manager identifies and sends an email engaging stakeholders.

6.5 The compulsory acquisition process then follows items 5.3 to item 5.11.



by SCM.


6.6 The Project Manager reviews and approves or rejects quote(s) for additional services (valuation, surveying, ESA services): If the Property Services Provider is managing these services, it will submit quotes for

review and approval; and If services are being sourced via the DIP, the process must be followed.

6.7 The compulsory acquisition process follows item 6.1.5 to item 5.15.

6.8 The Project Manager, through Defence Legal, engages a LSP to provide legal assistance as required.

6.9 The PSP prepares a draft Pre-Acquisition Declaration (PAD).

6.10 The Project Manager updates the Acquisition Strategy, including the draft PAD and valuation report, and submits it to ASPM for endorsement. The Project Manager seeks approval from DOF for the ASPM endorsed Acquisition Strategy. The Project Manager includes the draft Pre-Acquisition Declaration and valuation report when seeking approval. Approval is achieved through one of two paths, determined on a case-by-case basis: A letter from A S P M to the appropriate delegate in DOF; or a Ministerial Submission.

6.11 Once the PAD is signed by DOF, the Project Manager provides a copy to the PSP.

6.12 Under Section 22 (7) of the LAA DOF, sends a copy of the signed PAD, a statement of principal rights and a plan of the affected area to the affected parties.

6.13 DOF publishes the PAD in the Commonwealth Gazette.

6.14 The PSP is required to ensure the PAD is appropriately published.Note: If there are no applications for reconsideration made in the first 28 days, the PAD will become absolute 28 days after the last date on which such an application could have been made.

6.15 If a lease-back is requested by the landowner, the following additional steps apply:

6.1.11during the PAD period and prior to Acquisition Declaration, The Project Manager must consult with Defence stakeholders concerning the possibility of a leaseback, the length of a leaseback term and the terms and conditions of the licence agreement, if any.

6.1.12The Project Manager provides a standard draft template of the leaseback licence to the LlS.

6.1.13The Project Manager forwards the standard draft template to DOF for its minister’s review and agreement.

6.1.14The Project Manager seeks assistance, under section 47 (4) of the LAA, to facilitate the approval of the draft leaseback licence for the continued occupation of the property post-Acquisition Declaration, if required.

Note: Defence aims to have all necessary actions concerning the licence agreements finalised prior to Acquisition Declaration.

6.16 When the PAD is absolute, the PSP, in consultation with the LSP, prepares the draft Acquisition Declaration (PAD).



by SCM.


6.17 The Project Manager, in consultation with DOF, instructs the PSP to commission an updated valuation, as at the date the AD.

6.18 The Project Manager sends a letter to DOF with the draft AD attached for endorsement by the appropriate.

6.19 Once the AD is signed, the PSP ensures that copies of the signed AD are: Published in a newspaper circulating in the area where the property is located; and Provided to a legal panel member for lodgement with the Land Titles Office.

6.20 DOF publishes the AD in the Commonwealth Gazette.

On gazettal of the Declaration, ownership of the land vests in the name of the Commonwealth, and the affected parties are entitled to lodge a claim for compensation with DOF in respect of the interest compulsorily acquired, if not agreed under section 78 of the LAA.

6.21 Prior to Acquisition Declaration and/or the expiry of the leaseback licence, the PSP conducts a hand over inspection of the property with the rPO. Keys to the property are collected, if any.

6.22 Under Section 48 of the LAADOF sends a copy of the signed AD, a statement of principal rights, a plan of the affected area and a compensation claim form to the affected parties. A compensation claim form is not provided if there is a Pre-Acquisition Agreement made under Section 78 of the LAA.

6.23 The Project Manager informs the Net Personnel Operating Costs (NPOC) team of of the AD date and provides a copy of the AD.

6.24 Once AD has occurred, the PSP tasks the L S P to obtain the Certificate of Title (CT) –

6.1.15 The PSP ensures that the Certificate of Title is recorded on Defence's Certificate of Title register and

6.1.16 When the CT is received, it is stored on Defence’s behalf, DDPALA arranges the financial requirements for making a compensation payment (refer to compensation guide). If funds are not sufficient, discussion with CFO is required and, if needed, additional funding via a ministerial is requested.

6.25 DOF determines the compensation and negotiates on Defence’s behalf, having regard to all relevant matters, including whether any payment under Section 85, an advance payment of compensation, should be paid to the landowner.

6.26 When a compensation amount is agreed upon and advised by DOF, DPALA pays the affected party within 28 days.

7 PROJECT CLOSURE

7.1 The Project Manager will notify relevant stakeholders of the acquisition project settlement, via a minute/email.

7.2 The Project Manager conducts a review of the Acquisition Management Plan to ensure all details are updated and accurate and confirms procurements are complete. The invoices are also verified to have been paid against Purchase Orders raised for the project.



by SCM.


Note: All invoices should be sent by the contractor to the PSP and DPALA for uploading to VIM.

Release the Close Phase in Defence SAP

7.3 The Project Manager sends a request to PM Finance to close purchase orders and WBS for the project and to return any remaining funds to the MCF.

7.4 The Project Manager prepares project closure minute with the following attachments: Notification of Asset Completion or Enhancement ; Capital project completion submission ; Location map; Valuation report; and Documentation as evidence of the completion date – e.g. gazette notice or settlement

statement, admittance notice or valuations.

7.5 The Project Manager requests ID Finance complete, review and clear the Notification of Asset Completion Form and the capital project completion submission

7.6 The Project Manager sends a project closure minute, with attachments, to asset notification addressees list.

7.7 The Project Manager reviews and completes the following project registers: Lessons Learnt; Finance Recommendation and Advice; and Legal Recommendation and Advice

7.8 DPALA closes the project on SAP

Note: All project closure actions must be conducted whether the acquisitions proceeds to completion or not.

8 DEFENCE INSURANCE (COMCOVER)Regardless of the acquisition approach, the property is covered by Comcover at Acquisition Declaration or settlement. Should an incident occur, Defence has a 'General Legal Liability' policy with Comcover that will cover Defence's legal liabilities in the event that a third party becomes injured or killed and/or third party's property is damaged, when it is deemed that Defence is legally liable for a third party injury/property damage, subject to policy terms and conditions.

Should the value of an acquisition be in excess of one billion dollars, the Defence Insurance Office (DIO) requires notification. All others will be captured in asset registers at the appropriate time in the process.



by SCM.





9 ASBESTOSIf potential asbestos contamination is discovered, the relevant EMOS contractor must be notified in order to record the property on the asbestos register. Please see the list of EMOS contacts for further information. Additional information regarding asbestos management is available on the Defence intranet.

10 GLOSSARYEIR: The Estate Investment Requirement (EIR) is a document that informs the structured process of prioritised decision-making within the Estate & Infrastructure Group (E&IG). It is used for planning the future delivery of the full range of E&IG products and services and is known as the Strategic Screening process. The EIR used to be known as a Corporate Services and Infrastructure Requirement (CSIR).



by SCM.


Documents

STANDARD OPERATING PROCEDURES · Web viewThe Project Manager engages with relevant stakeholders advising of the new acquisition project. Note that planning for sustainment costs in