Project and Construction Management Guidelines

125. The Building Code sets out the Australian Government's expected standards for building contractors or building industry participants involved in Commonwealth funded construction projects. It is Commonwealth Government policy that Building Code 2016 will be applied to all construction projects indirectly funded by the Commonwealth Government where:

a) the value of Commonwealth Government contribution to a project is at least $5 million and represents at least 50 per cent of the total construction project value,

OR

b) the Commonwealth Government contribution to a project is $10 million or more, irrespective of the proportion of Commonwealth Government funding, see http://www.fwbc.gov.au/building-code/.

126. Schools must also comply with the Australian Government Building and Construction OHS Accreditation Scheme. Under the OHS Accreditation Scheme, schools must only contract with contractors who are accredited under the Scheme, subject to the financial thresholds outlined in a) or b)above. More information is available at:

http://www.fsc.gov.au/sites/fsc/needaccredited/accreditationscheme/pages/theaccreditationscheme

127. Project Management in this document is to be understood to mean the process of managing a building project through all of its stages i.e., from the initial request of a school for a building to the final completion of all accounts including, on the way through, the appointment of consultants, preparation of budgets and sometimes even arranging the finances. In most cases the school governing body undertakes this work.

128. Part of this process involves the actual construction work. This may be done in a variety of ways. Sometimes by calling tenders and entering into a contract with one of the tenderers - often referred to as a "Lump Sum Contract" which may include provision for cost increases. Another method is sometimes called Project Management. In this document it will be called Construction Management for reasons which will become clear.

129. The way a Lump Sum Contract operates is as follows. The school community agrees to pay an agreed sum for a building described in a set of contract documents. Once the contract is signed, the builder then proceeds with managing the construction and the savings he can make sometimes offset any unexpected additional costs. Provided the contract does not allow him to charge for those additional costs then he gains or loses depending upon the accuracy of his initial estimate.

Lump Sum Contract

Construction Management

130. It can be argued, in some circumstances where a school governing body has available to it the required expertise that Construction Management is a viable option with resultant benefits to that school. These benefits should be capable of being clearly defined.

131. Construction Management should only be considered if the school has such expertise and personnel already within its organisation or is able to supplement already existing skills with readily available consultants who will be available over the likely period of the project. If the school governing body does not already have some expertise in these matters, the traditional method of calling for tenders with its well known safeguards is to be preferred. One real danger of Construction Management is that if adequate skills are not available to properly contract and control a project, costs can escalate and the whole project (and possibly the school) is therefore placed in jeopardy.

132. Construction Management may provide more control on end cost and may also shorten construction time; however this can only be assured if effective means are used to monitor the project on a regular basis and this may mean week by week.

133. Another advantage of Construction Management is that design changes which often do occur can be made without penalty. Experience shows that such changes in the context of a lump sum contract often result in additional costs to the proprietor or schools. Construction Management can sometimes avoid these costs or at least allow the flexibility to offset them. This does not mean that a school should assume it can take short cuts in the planning process.

134. A successful project using Construction Management depends on the ability of the Construction Manager to estimate final prices accurately and to keep tight control on costs as the project proceeds. The estimate needs to take into account the tendering climate in the district and the monitoring needs to be done methodically and regularly.

135. NT BGA is prepared to consider requests from Schools for Construction Management provided the following conditions are met:

a) A detailed costing of the project is to be prepared and approved by NT BGA. Each proposed package or contract is to be costed.

b) The administrative aspects of the contractual process need also to be carefully analysed and allowed for e.g. insurances, approval of Council and other authorities. These costs need to be provided for in the overall costing by the school.

c) Regular monthly reports including a copy of the updated spreadsheet is to be given to the school governing body and made available on request to NT BGA. No work is to commence until the budget is agreed by NT BGA. A copy of the spreadsheet with any explanations will be required.

d) On completion NT BGA may require access to a copy of each of the signed contracts and a statement as to the variations that have led to the final contract amount shown in the spreadsheet. At any time NT BGA may require to view the current status of contract documents.

138. The Construction Manager will need to prepare suitable contract documents for the various packages of work. Proven ability in this area is essential. There are two basic documents. A copy of each of the proposed contract documents must be supplied to NT BGA before approval can be given.

a) The first of these will set out the responsibilities of the various suppliers and trades and describe in detail the extent of the work. In addition the relationship to the various contractors and the client and the role of the Construction Manager in these will need to be defined in another contract document.

b) The second will set out the relationship between the Construction Manager and the school governing body. His/her fees, responsibility for cost control the degree to which he/she can commit the school are all aspects that will need to be dealt with in such a document.

139. It is sometimes a characteristic of such arrangements that the Construction Manager will be entering into contracts on behalf of the client. If this is the case then the client will want to be very sure that there are effective limits on what the Construction Manager can commit the client to. On the other hand it may be that the Construction Manager only recommends and the client enters into contracts directly with the various contractors.

Contract Document

140. NT BGA will regard the School/Approved Authority as the Project Manager responsible for the costs of the whole project including the construction costs as well as the costs for Consultants and the Construction Manager.

Project Manager:

Organisation Chart

141. It is recommended that an organisation chart be constructed to define clearly the relationships which exist between all parties. This chart is to be used to establish role definitions included in the various contract documents.

142. Public tendering for all contracts over $50,000 is required. This requirement can be met by calling for registration of firms interested in tendering and giving documents for pricing only to those considered to be capable of doing the work. Most contracts let under a Construction Management arrangement will be less than this in which case a call for 3 quotes will apply.

143. In all cases where quotes and public tenders or registrations of interested parties are called, proper documentation of the advertising and the actual quotes received needs to be maintained. Originals of all documents must be kept for review by the NT BGA representative at anytime up until the final grant monies are paid out.

Contract Limits

144. NT BGA minimum requirements for Construction Management:

a) A detailed description of the "exceptional" circumstances, which the school considers, warrants Construction Management rather than the Lump Sum tender:

 outline of the benefit/losses

 outline particular building circumstances in the district which lead to the request for approval of Construction Management.

b) Organisational Chart for the proposed Construction management.

c) A detailed description demonstrating the capacity of the school governing body to manage the project in the way being proposed.

d) Details of fees to be paid to the Construction Manager and of his responsibilities and duties (including the limits within which the Construction Management must operate - to what extent may he commit the school's governing body).

e) Assurance that public tenders will be called for all major elements of the project above $50,000 and three quotes obtained for all other aspects of the project.

f) A public invitation for the registration of interest to be called from project or construction managers.

g) Records of all assessments, tendering arrangements and results, payments and accountability processes to be available to NT BGA.

h) A detailed costing of the project to be prepared and approved by the school governing body. Each proposed "package" or contract is to be costed.

i) No work to commence until the budget is prepared.

j) Regular monthly financial reports in the above format to be provided to the school governing body and available to NT BGA on request.

k) On completion, copies of each of the signed contracts and a statement as to the variations which have occurred and which led to the final contract amount shown on the spreadsheet, to be available to NT BGA if requested.

At any time NT BGA may require to view the status of the contract documents.

l) Suitable contract documents will need to be prepared; one to set out the responsibilities of the Construction Manager to the school governing body and the other between the school governing body or the construction manager acting on its behalf and the various contractors, suppliers or trades.

m) The NT BGA will be regarding the school governing body as the Project Manager responsible for the costs of the whole project. A similar budget and cost control mechanism, probably best provided in some form of computer software should be prepared for those aspects of insurances, Council and other fees and approvals.

Construction Management

145. A school proposing a project that is to be partly or wholly undertaken by parents and friends must ensure that the people have the necessary formally recognised qualifications and capacity for the project. In effect this means having the relevant local government authority approve the parents as the builders of the project.

146. The proposed price for the project must be competitive. Because, in most cases, the parents' price will be lower than any commercial builder's price, it would not be ethical to ask commercial builders to submit tender/quotations as a check on the parents' price. An independent quantity surveyor (or architect for minor projects) must be used to price the work to be conducted by the parents.

147. The project must be supervised by an architect, or other appropriately qualified person, to ensure its quality and economy of construction. Both the buildings and all people who work on the site must be insured for the duration of the contributed works.

Projects undertaken by parents and friends

Construction Signs

148. Signs acknowledging Australian Government funding of projects must be erected on construction sites prior to the construction phase. Schools must at that time provide evidence to NT BGA that a construction sign has been erected.

149. Wording on signs acknowledging Australian Government funding must be of similar size and style to wording acknowledging other funding sources. Construction signs must provide the Australian Government and other funding details. The Australian Government details must include the sentence, ‘This project has been partly/principally/entirely (as appropriate) funded with a grant from the Australian Government of $X’.

150. Construction signs acknowledging Australian Government and other funding of a project are to be separate from any advertising sign erected by a building contractor on the site.