Delivering Infrastructure Projects by Local Government Getting It Right

Transcription

1 Delivering Infrastructure Projects by Local Government Getting It Right Adam Wallwork Partner Goran Gelic Senior Associate 17 November 2016

2 Overview Statutory framework What effective procurement enables How is procurement effected? Trends Where the strategy might stumble Things to keep in mind

3 Strategic procurement for local government a working definition Local government strategic procurement is the process of determining the corporate procurement strategy, mapping and overseeing the high-level procurement portfolio, defining and challenging the desired procurement outcome, determining and managing specific procurement plans, identifying, evaluating and challenging procurement service delivery options, contract award, post-contract management and review. J Gordon Murray, Journal of Public Procurement, 2007

4 Statutory framework Local Government Act 1993 (NSW) and Local Government (General) Regulation 2005 (NSW) $150,000 requirement for tendering requirements for EOI and RFT and assessment Council must accept most economically advantageous or decline all Council can resolve to enter into direct negotiations once declined Tendering guidelines for NSW Local Government

5 Statutory framework Procedures and processes for local government PPP proposals Public-private partnership" means an arrangement: a) between a council and a private person to provide public infrastructure or facilities (being infrastructure or facilities in respect of which the council has an interest, liability or responsibility under the arrangement), and b) in which the public infrastructure or facilities are provided in part or in whole through private sector financing, ownership or control, but does not include any such arrangement if it is of a class that has been excluded from the operation of this Part by the regulations. Local Government Amendment (Public-Private Partnerships) Act 2004 (NSW) and mandatory PPP Guidelines tip: important to work with the Office of Local Government upfront OLG is there to help

6 PPP proposals - procedures and processes

7 What effective procurement enables Lower costs leverage of total spend standardisation optimal contestability improved supplier management Improved services from suppliers, resulting in better outcomes for the community and staff Increased transparency of expenditure and supplier performance Responsiveness to environmental and sustainability issues

8 How is procurement effected? Timetable Governance council approvals, steering committee, project director, evaluation committee need clear lines of responsibility and delegated authority Business Case identifying needs, assessing the level of demand and supply, undertaking an analysis of available procurement options and funding and selecting the best option based on cost, risk and benefit to the community Selecting delivery model: what is being built or delivered staging time constraints both procurement and delivery (schedule) budget constraints both procurement and delivery risks and appetite (including shifts in market appetite, mitigation strategies e.g. insurance) level of control required (e.g. over design or procuring trades) experience in using models (including key personnel)

9 How is procurement effected? Due diligence tenure and existing contracts Sourcing specifying requirements, identifying contractors, tendering and establishing terms and conditions, internal resources and advisers Contract Management once an agreement is in place, monitoring, measuring and managing the contractors to ensure that the infrastructure is delivered at the agreed price Stakeholder management

10 What are the trends? Focus on procurement strategy improved due diligence understand end-users needs and objectives Focus on improved procurement processes project strategy partner selection getting to know them more Payment by outcomes less focus on inputs or outputs use of output specification provides opportunity for innovative delivery

11 What are the trends? Building Information Modeling (BIM) collaborative approach to procurement better capture of project data can lead to project savings and reduction in project delivery times Principals do not need to own the asset just need the service Use of more efficient dispute resolution mechanisms early warning and escalation of issues issues facilitation DABs/DRBs expert determination and expedited arbitration

12 Where the strategy might stumble Lack of clear objectives and buy-in Governance gone astray Due diligence not adequate Over-reliance on existing thinking and resources within council Under investment in RFT and technical documentation Insufficient engagement with community and stakeholders Under investment in change management Circling back to review and update strategy and implementation

13 Things to keep in mind Disclosure obligations Probity Skills development Misleading and deceptive conduct: Fabcot v Port Macquarie-Hastings Council

14 Questions? Adam Wallwork Partner T E awallwork@mccullough.com.au Goran Gelic Senior Associate T E ggelic@mccullough.com.au Disclaimer: This presentation covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. This presentation is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this presentation.