Government as 'smart client' - Chapter 6 Glossary & references

6.0 Appendix

6.1 Glossary

ACCA: Association of Consulting Architects Australia.

AIA: Australian Institute of Architects.

Benefit Management Plan: A short document that defines the prerequisites for the delivery of each expected benefit, how the delivery of each benefit will be measured, and who will be responsible for measuring and realising each benefit.

Benefit Reports: A report for the investor that depicts the status of delivery of the benefits compared to the original expectations.

BOOT: Build, Own, Operate and Transfer.

Brief: The needs of the client, set out in a document. Buildability: The ease and efficiency of construction.

Building users’ guide: Complements the operation and maintenance manual, and explains to users, maintenance contractors and others how the building works.

Business Case: The document that articulates the rationale for undertaking an investment and whether to support a proposed project, before significant resources are committed to its development.

Capital budget: The money spent on one-off investment costs.

Capital costs: Costs incurred on the purchase of land, buildings, construction and equipment to be used in the production of goods or the delivery of services.

Client team: The in-house team responsible for delivering the project for the client, and liaising with project partners.

Consortium: Those private party persons who together intend to deliver a PPP.

Construction manager: A person, or company, that manages the construction and performs a purely management and co-ordination role (without delivery risk) and is generally paid a fee based on a percentage of the value of the works.

Construction management: The client engages a construction manager (contractor or consultant) to manage construction works on its behalf.

Consultant team: The group of professionals you need to produce a project – architects, structural engineers, quantity surveyors and potentially many other specialists.

Contingency: An amount of money kept aside for unforeseen costs.

Contract administrator: The person who ensures the activities and roles are carried out as per the contract. In smaller projects this is can be the architect or the quantity surveyor.

Contractor: The industry term for a builder. There can be a main contractor, and subcontractors, and specialist subcontractors, depending on your procurement route.

Cost Benefit Analysis (CBA): The comparison of payback by initial cost and lifecycle costing of options for elements of the project.

Cost Plan: Financial guidelines prepared prior to concept design, from project goals the project delivery can confidently be completed within. Final project definition and documentation occur after the cost plan preparation.

D&C: Design and Construct.

Design, Develop and Construct (DDC): The client prepares a Concept Design in addition to performance specifications, thereby giving a degree of control over the design output, while still transferring some of the design risk to the construction contractor.

Design, Construct and Maintain: In this procurement model, the contractor has on-going maintenance obligations in addition to design and construction. Lifecycle costs can be reduced if the contractor takes into account on-going maintenance obligations when designing and constructing the facility.

DBFM: Design, Build, Finance and Maintain. DBFO: Design, Build, Finance, Operate.

DBOM: Design, Build, Operate, Maintain. DCM: Design, Construct and Maintain.

Design Champion: A person at a senior level in an organisation who promotes the benefits of good design, and supports and challenges colleagues to maintain design quality in their activities.

Design development: is the phase in a construction project where the architect will develop the approved concept design and provide documentation to explain it to the client. They also coordinate the work of specialist consultants, provide a schedule of proposed finishes and review the developed design against the budget. Following this they coordinate and prepare an updated estimate of the cost of the works.

Design team: The group of professionals you need to produce a project, such as architects, structural engineers, quantity surveyors and potentially many other specialists.

Detailed brief: The document that gives all the detail for the client’s needs – down to the requirements in each room.

Detailed design: The documents that describe the design in detail, such as materials, services, structure and all the various products that they are made of.

ECI: Early Contractor Involvement.

ESD: Ecologically Sustainable Development.

Expression of Interest (EOI): a written request that outlines an intention to acquire goods or services. An EOI invites suppliers to indicate their interest in meeting the requirement. It allows for an exploration of the market and an opportunity to identify the level of interest in supplying the requirement. The process may also include a second stage. This may involve: the calling of competitive tenders from all registrants or tenders from a selected list of suitable registrants or direct negotiations with one or more registrants.

FEED: Front-End Engineering and Design. FEED is the basic, initial engineering and design undertaken for a project, usually following a conceptual exploration or a feasibility study. It defines the specific technical requirements for a project, identifies key issues including technical, contextual and environmental matters and resolves them where possible and enables the cost of the investment to be estimated.

Gateway review process: The Gateway Review Process examines projects and programs at key decision points. It aims to provide confidential timely advice to the Senior Responsible Owner (SRO) as the person responsible for a project or program. A review provides the SRO with an independent view on the current progress of the project or program and assurance that it can proceed successfully to the next stage. The SRO has ownership of the report and is accountable for the implementation of any recommended remedial action and the progress of the program or project.

Head Contractor: The party responsible for the physical construction works on the project site, including the coordination of all subcontractors’ inputs for design, documentation and physical construction of the works on the project site. Post novation the head contractor becomes responsible to the principal for design and manages the consultants’ design services.

High Value High Risk (HVHR): Projects that have a total estimated investment (TEI) of more than $100 million, are classified ‘high-risk’ using the Gateway Project Profile Model, or are nominated by the Government as being part of the HVHR process.

Investment Logic Mapping (ILM): A single page depiction of the logic that underpins an investment. It represents an ‘agreed investment story’ that is created in an informed discussion. It is written in plain English in a way that will allow an ordinary person to understand the language and the concepts.

Investment Management Standard (IMS): Developed by Department of Treasury and Finance (DTF) the IMS aims to develop a best practice approach applied over the full project lifecycle to reduce the risk of investment failure.

Intellectual Property (IP): Inventions, original designs, and practical applications of good ideas protected by statute law through copyright, patents, registered designs, circuit layout rights and trademarks; also trade secrets, proprietary know- how and other confidential information protected against unlawful disclosure by common law and through additional contractual obligations, such as confidentiality agreements.

Key Performance Indicator (KPI): A measure that has been selected to demonstrate that a benefit expected from an investment has been delivered.

Lifecycle Cost: The total cost of an item or system over its full life. It includes the cost of development, production, ownership (operation, maintenance, support), and disposal, if applicable.

Novation: A term used in contract law describing the act of replacing a party to an agreement with a new party. A novation is valid only with the consent of all parties to the original agreement. An example would be when an architectural team developing the outline design is ‘passed’ from the client’s, to the contractor’s, responsibility.

Novation deed: The contract between the principal, head contractor and consultant which implements novation.

Outline brief: The document that describes the ‘problem’ that the design needs to ‘answer’ i.e. the client’s goals and requirements.

Post Occupancy Evaluation (POE): Post Occupancy Evaluation provides an assessment of the final built outcome against specified objectives or standards. It can be undertaken as a detailed study by specialist consultants, or as a series of surveys at regular intervals seeking feedback from operators and users. It may also be used to review the procurement process.

Principal: The party that formed the original contract with the consultants, which is subsequently novated to the head contractor. The principal may either own the site/project or represent the owner/s of the site project.

Principal’s Project Requirements (PPRs): The documents that form part of the design and construct contract that embody the principal’s brief up to the point of novation and against which the final built form will be assessed. The head

contractor must deliver what is documented in the PPRs, which can only be varied by agreement with the principal.

Private finance initiative (PFI): A procurement process where private sector consortia submit bids to provide and manage public buildings, usually on a 25-year contract.

Procurement: the management of and stewardship for the construction of a building or infrastructure. Procurement involves not just the contractual method but also the execution of a built project from idea to delivery and onto operation and audit.

Procurement Strategy: Method of project delivery detailing the participant’s methods and outcomes necessary to complete the project strategy.

Project Budget: An amount established by the client which represents the total available funds for the project including building costs, provisional sums, escalation, contingency sums, consultant’s fees, GST, furniture and equipment, approval costs and any other cost, allowance or item defined by the client.

Project program: The ‘timetable’ for when things happen in the project. Essential for all types of project, and usually drawn up by the project manager.

Project Steering Committee (PSC): provides strategic direction and monitors the project and is usually chaired by the Senior Responsible Officer (SRO).

Project vision: A simple statement of objectives for the particular project.

Public Private Partnership (PPP): A partnership between a public sector organisation, i.e. a local authority and the private sector to deliver a project (and sometimes manage it later as well).

Public realm: The spaces used freely on a day-to-day basis by the general public, such as streets, parks, squares, verges and other public infrastructure.

Public Sector Comparator (PSC): The PSC is an estimate of the hypothetical,

whole-of-life cost of a public sector project if delivered by government. The PSC is developed according to the output specification, the risk allocation and based on the most efficient form of government delivery, adjusted for the lifecycle risks of the project. This is also referred to as the Reference Design.

Quantity surveyor: A professional cost consultant who monitors, and advises on, costs.

Quality Based Selection (QBS): enables a transparent selection process for the selection of an architectural design team on the basis of the whole range of criteria without undue loading being given to any one criterion such as the current fashionable profile of a particular design firm, personal association of a member of the selection panel with a particular design firm, or price.

Request for Proposal (RFP): This is between the tender development and tender evaluation stages in a procurement process and is the formal bid document issued by government.

Request for Tender (RFT): refers to a request for offer against a set of clearly defined and specified requirements. Tenderers are advised of all requirements involved, including the conditions of tendering and proposed contract conditions.

Risk allocation: The allocation of responsibility for dealing with the consequences of each risk to one of the parties to the contract; or alternatively, agreeing to deal with a particular risk through a specified mechanism which may involve sharing that risk.

Senior Responsible Owner (SRO): The SRO is the effective link between the organisation’s senior executive and the management of the project. The SRO is also a core member of the project steering committee, usually the Chair. The SRO has accountability and responsibility for the project.

Stakeholder: People and groups who are affected by, or have a financial or practical interest in, the outcome of your project.

Subcontractor: A firm or person (under contract to the main contractor) who performs work or who supplies and/or installs an item forming part of the works in the contract. The contractor is responsible for the selection, engagement, supervision, performance and payment of all subcontractors in accordance with the contract. Subcontractors do not include any firms or persons directly engaged and paid by the owner for work outside the contract. These are separate contracts.

Sustainable development: Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Tender: A proposal, with costs, to carry out a piece of work.

Target Outturn Cost (TOC): The TOC represents an agreement of the contractual cost to achieve the agreed project outcomes. It must show value for money and be reflective of key project assumptions and risks. Agreeing the TOC requires active participation by all participants in the alliance as there is a natural tension between the owner wanting to ensure they have lowest reasonable cost and the non-owner participants (NOP) wanting to minimise their risk exposure and provide opportunity for cost savings.

Value for Money (VFM): The best value procurement outcomes based on a balanced judgement of financial and non-financial factors, taking into account: the total benefits and costs over the life of the goods, services or works procured; environmental, social and economic factors and any risk related to the procurement.

Value Management: A disciplined method of identifying areas of potential cost saving, for considering design options and to assist in the selection of the best value solution. It helps identify where the conflicting criteria of minimum cost, maximum quality, best performance and minimum delivery time can be addressed and balanced.

Variation: In a construction context, a variation is a change to the project from what a contractor was obliged to deliver as part of the contracted documents. These changes could be for a number of reasons – unforeseen site conditions, the change in client brief.

Vision Statement: A simple statement of main objectives. Required for early consensus to start the feasibility and budget checks and as a constant reference point throughout the project.

Whole-of-life (or lifetime or lifecycle) costs: The costs over the 30 to 60 year lifetime of the building or project. This includes running and maintenance costs and the costs for people working there.

6.2 References

Acumen, Practice Advice for Architects’, Australian Institute of Architects, 2020.

‘A Guide to Competitive Quality Based Selection of Architects’ International Union of Architects and Australian Institute of Architects.

‘Better Public Buildings – A Proud Legacy’, Commission for Architecture and the Built Environment (CABE), October 2000.

‘Building and Construction Procurement Guide: Principles and Options’, Australasian Procurement and Construction Council and Austroads, 2014.

‘Client Policy Choices: Designing Project Delivery Strategies – August 2010’, Australian Procurement and Construction Council Australian Construction Industry Forum.

‘Draft Code of Novation – June 2020’, Australian Institute of Architects ‘Construction Industry Terminology’ Standen, D. RAIA Practice Services 1993.

‘Creating excellent buildings; A guide for clients,’ Commission for Architecture and the Built Environment, January 2011.

‘Creating Places for People: an urban design Protocol for Australian cities’ November 2011.

‘Department of Treasury and Finance, 2018-19 Budget Paper No. 1, Treasurer’s Speech’.

‘Design Champions’, Commission for Architecture and the Built Environment (CABE).

‘Economic benefits of better procurement practices’, Deloitte Access Economics, 2015.

‘Good Design & Transport,’ Office of the Victorian Government Architect, 2015.

‘Good Design Guide’, Government of Western Australia, Department of Finance, Office of the Government Architect., 2013.

‘Improving Standards of Design in the Procurement of Public Buildings’, Commission for Architecture and the Built Environment, September 2002.

Investment Lifecycle and High Value High Risk Guidelines, Business Case, Department of Treasury & Finance Victoria, 2019.

‘Investment Lifecycle and High Value/High Risk Guidelines Prove, Technical Guidance, Procurement Strategy Guideline’, Department of Treasury & Finance Victoria, 2013.

‘Living with Risk’: Promoting better public space design’, Commission for Architecture and the Built Environment, (CABE), May 2007.

‘Model Client Policy: Proposal for all government jurisdictions’, Consult Australia, June 2018.

‘National Alliance Contracting Guidelines – Guide to Alliance Contracting’. The Commonwealth of Australia 2015,

‘National Alliance Contracting Guidelines. Guidance Note 1 Language in Alliance Contracting: A Short Analysis of Common Terminology’. The Commonwealth of Australia 2015,

‘National Alliance Contracting Guidelines. Guidance Note 3 Key Risk Areas and Trade-Offs’. The Commonwealth of Australia 2015,

‘National Public Private Partnership Guidelines, Volume 2: Practitioners’ Guide’, Infrastructure Australia, 2015.

‘Perceptions of architectural design and project risk: understanding the architects’ role in a PPP project’, P. Raisbeck, Construction Management and Economics (November 2008) 26, 1145–1157.

‘Partnerships Victoria Requirements’, Department of Treasury and Finance, November 2016.

‘Procuring Architectural Services, An Industry Discussion Paper’, Association of Consulting Architects, www.aca.org.au, April 2017.

‘Procurement policy, building teams – achieving value’, Royal Institute of British Architects, November 2001.

‘Procuring innovative architecture’ van Schaik, L., London, G. George, B. 2010. ‘Projects as Wealth Creators’, Property Council of Australia, 2001.

Public Infrastructure, Inquiry Report No 71, Productivity Commission, Canberra, 2014.

‘Pursuing Design Quality for Public Infrastructure’, Office of the Western Australia Government Architect, September 2011.

‘Smart PFI: RIBA Position Paper’ Royal Institute of British Architects, December 2006.

‘The cost of bad design,’ Commission for Architecture and the Built Environment (CABE), June 2006.

‘The long-term cost of owning and engineering buildings’, Raymond Evans, Richard Haryott, Norman Haste, and Alan Jones, (1998) London, Royal Academy of Engineering.

‘The Value of Good Design’, Commission for Architecture and the Built Environment (CABE), November 2002.

6.3 Footnotes

1. The Victorian State Government 2019-20 budget provided $14.2 billion funding for infrastructure investment, p 3. 2019-20 Budget Paper No.1 Treasurer’s Speech.

2. Bryan Lawson, “Healing Architecture”, AR March 2002, pp72-75 Sheffield University School of Architecture research.

3. Office of Victorian Government Architect, ‘Case for Good Design – A Guide for Government’, 2019.

4. The Centre for Health Design, Implementing Healthcare Excellence: The Vital Role of the CEO in Evidence-Based Design, White Paper 3/5. 2008.

5. ‘Good Design Guide’, Government of Western Australia, Department of Finance, Office of the Government Architect.

6. p. 3. Victorian State Government Budget 2019-20, Treasurer’s Speech.

7. p. 6. Improving Standards of Design in the Procurement of Public Buildings, Office of Government Commerce and CABE, October 2002.

8. Ibid.

9. Overview - Investment Lifecycle and High Value High Risk Guidelines, Department of Treasury & Finance, Victoria, 2019. p. 23.

10. Consult Australia, Model Client Policy – Proposal for all government jurisdictions, 2018. p. 23.

11. Design Review Principles and Practice, CABE, p.2.

12. Financial Management Act 1993.

13. Probity in Procurement – Goods and Services Procurement Guide, Victorian Government Purchasing Board.

14. Model Client Policy, Consult Australia, p. 16, June 2018.

15. National Public Private Partnership Guidelines, Volume 2: Practitioners’ Guide 2015.

16. Department of Treasury & Finance, Victorian Government Purchasing Board Probity (Construction Guidance 4.1.2).

17. National Alliance Contracting Policy Principles July 2011, Australian Government, Department of Infrastructure and Transport.

6.4 Consultation

The following government departments and peak industry bodies offered valuable feedback in the development of these guidelines, commencing in 2013:

• ACT Government Architect
• Association of Consulting Architects Australia
• Australian Institute of Architects, Victorian Chapter
• City of Melbourne
• City of Port Phillip
• Creative Victoria
• Department of Education and Training
• Department of Health and Human Services
• Department of Justice and Community Safety
• Department of Environment, Land Water and Planning
• Department of Premier and Cabinet
• Department of Transport
• Department of Treasury and Finance
• Development Victoria
• Infrastructure Victoria
• New South Wales Government Architect’s Office
• Northern Territory Government Architect’s Office
• Office of Projects Victoria
• Parks Victoria
• Queensland Government Architect
• South Australian Government Architect
• Victorian Planning Authority
• Western Australian Government Architect