Capital Insight Pty Ltd ABN SYDNEY MELBOURNE BRISBANE Staff Training 11 March 2009 Health Infrastructure’s Project Requirements

Agenda HI Team Changed scope of services Changed expectations Increased and changed procedures - HI accreditation

HI Team Additional staff – Project Delivery Managers Moved to North Sydney Formalised management structure Focus around their role: THEY ARE THE CLIENT –‘to deliver the facility to the CSP brief’ –become accredited as a delivery organisation (by NSW Treasury) – requires increased focus on process –risk minimisation –testing all current processes and procedures (POFP, forms of procurement, form of contract)

HI Team ROBERT RUST CHIEF EXECUTIVE xxx DIRECTOR PLANNING & TECHNICAL WAYNE BURGESS DIRECTOR PROJECT DELIVERY Stuart Bosel DIRECTOR MAJOR PROJECTS DAMIAN O’CONNER DIRECTOR COMMERCIAL LEGAL MICHAEL COLLINS DIRECTOR FINANCIAL

Changed Scope of Services PD Planning and PD Procurement interface: –PDPl role ends at PDP approval –PDPr role ends at occupation –No PDPr check on PDP – is part of current engagements –Post Occupancy Review – separate task 12 months post occupancy PD Planning: –Appointment of 2 economic advisors who will provide EA advice to PDPl’s – no longer part of our services –EA’s report to PDPL for delivery of analysis EA’s: –Cost effectiveness analysis rather than cost benefit analysis

Changed Scope of Services PD Planning and PD Procurement interface: –PDPl role ends at PDP approval –PDPr role ends at occupation –No PDPr check on PDP –Post Occupancy Review – separate task 12 months post occupancy PD Planning: –Appointment of 2 economic advisors who will provide EA advice to PDPl’s – no longer part of our services –EA’s report to PDPL for delivery of analysis EA’s: –Cost effectiveness analysis rather than cost benefit analysis

Changed Scope of Services PDPr: focus on core services vs managed services –core services: defined scope and deliverables of PDPr (eg cost management/reports, programs, monthly reports –managed services: management of others eg designers –appears to be value add is through how organisations do managed services –consideration of how ‘managed services’ are procured by PDPr – provisional sums/direct engagements

Changed Scope of Services PDPr: emphasis on key areas of risk, with expanded deliverables –design management plan – including how do we get the user sign off on design and certifications –overall risk management not just generic stuff costed risk schedules as part of cost plans –cost planning reviews/reports at key milestones –completion and commissioning plans

Changed Scope of Services PDPr: design management plan will: –include a comprehensive list of design inputs, design processes and design output deliverables for each of the design phases –address the scope of services of the PDC and the method of subsequent transfer of design responsibility to the D&C contractor including any responsibility/risk that remains with the Principal –address the contractual status of standards and guidelines and the fit between the D&C contract and the user sign-off process for incorporation in the PD&C and D&C tender documentation

Changed Scope of Services PDPr: design management – user group consultation: –user induction setting-out the roles and responsibilities of the various parties in the design process –details of the documentation to be presented for review at each user group meeting and the nature of the ‘sign off’ required –the various protocols of user group input and review, –a schedule of user group meetings and executive review/hold points –a procedure for escalation and resolution of issues from the user group level –a hierarchy of user group and executive sign-off –a program of consultation and sign-off that accords with the timeframe of the project –a method for dissemination of the plans to stakeholders beyond the user group consultation process

Changed Scope of Services PDPr: design management - –management of the developed design and pre-tender package process (refer to handout)

Changed Scope of Services PDPr: overall risk management – costed risks schedule

Changed Scope of Services PDPr: cost planning reviews/reports at key milestones –reviews to reflect procurement approach/structure –to incorporate costed risk issues

Changed Scope of Services PDPr: completion and commissioning plans –co-ordinate the commissioning and finalisation of the Project in accordance with the testing, commissioning and completion requirements of the design and construction contract”, ensuring that all necessary performance tests and demonstrations on and commissioning of plant and equipment are carried out in preparation for handover to the Principal at Completion –forward to the Principal, prior to occupation or handover of the Contract Works, and following review for accuracy and completeness, all as built drawings, operating and maintenance manuals, and relevant compliance certificates including BCA compliance and the health facility guidelines –provide certification that the Contract Works are in accordance with all relevant authorities’ requirements and the design documentation –list approved changes to the specification or design

Changed Scope of Services PDPr: completion and commissioning plans –inspect all Contract Works prior to Completion in conjunction with representatives nominated by the Principal, prepare a list of defects and incomplete Contract Works and issue to the relevant Service Provider for its action. –ensure that all contracts entered into by the Principal, including those managed by the PME, are complete and finalised. –ensure maintenance agreements are instituted in accordance with contractual requirements. –coordinate the Client in respect of all FFE required to be delivered and installed. –coordinate the Client and assist in respect of arrangements for the timing of the occupation of the new Works and ensure that the facility is operationally ready for its intended use. –prepare an Asset Maintenance Plan

Changed Expectations Project Reports: –must be submitted on time –must reconcile payments to HI general ledger –must updated projected cash flow every month –must identify key issues requiring any action –must be risk focussed in identifying issues (and costing them – costed risk schedule)

Changed Expectations Completion Plans –example from Auburn - includes operational readiness and fit for purpose issues

Changed Expectations OH&S Policy –see HI letter 2 March 2009 Commitment of Expenditure without HI’s approval –see HI letter 2 March 2009 AHS FFE commitments – PDPr to ‘spot the games’ of scope creep

Changed Procedures Procedures: –Security of Payments letter/Contractor Payments recommendations – see HI letter 2 March 2009 –PDC/consultants Tender Evaluation Procedures/Tender Report –Commitment schedule format –External audit of authorisations –Developing an ‘intranet’ Health policy reviews –POFP review –AHFG interpretation (+ version at PDP) –Retail strategy –Car parking strategy –Revision to HGC21 –Forms of procurement (lump sum)