Project Sponsor Group Handbook

Transcription

1 VERSION 6 UNIVERSITY OF OXFORD Project Sponsor Group Handbook May 2015

2 Project Sponsor Group Handbook, Version 6, 01/05/15

3 CONTENTS 1. INTRODUCTION CONTEXT PROJECT SPONSOR GROUP MEMBERSHIP PROJECT SPONSOR GROUP RESPONSIBILITIES PROJECT SPONSOR GROUP MEETINGS FINANCIAL MANAGEMENT OF BUILDING PROJECTS PERFORMANCE MEASUREMENT PROJECT QUALITY REVIEW PROCESS SUSTAINABLE BUILDINGS PHILOSOPHY Supplementary Documentation ANNEX A - Capital Projects Initiation Process Capital Projects Pre-Feasibility Process Map ANNEX B - RIBA Plan of Work 2013 ANNEX C - Strategic Guidance for Sustainable Buildings Philosophy ANNEX D - PSG Standard Agenda Template PSG Standard Minutes Template PSG Project Manager s Report ANNEX E - Donor Funded Governance ANNEX F - Benchmark Template ANNEX G - Project Expenditure Approval Form Project Proposal ANNEX H - Guide to Capital Building Projects ANNEX I - Standing Orders 2

4 1. INTRODUCTION This Handbook has been produced following a Buildings and Estates Subcommittee (BESC) working group report which reviewed the role and functioning of project sponsor groups (PSGs). See BESC(10)155 and BESC(10)175 for further details. Section of the Standing Orders issued by BESC states that BESC shall appoint a Project Sponsor Group to manage a major project and shall appoint the group s Chairmanˮ. Major projects have a total gross value of at least 100k (all funding sources, contingency and VAT are included in this figure). The purpose of the PSG Handbook is to provide a reference and guidance document for all Project Sponsor Group members. It contains sections on the membership of the group, including the responsibilities of each member plus the group as a whole. It also outlines the format of meetings and documentation that will be provided to PSG members. Other sections cover financial controls, use of contingency, tendering processes, governance structure for donor funded projects and environmental sustainability. The PSG Handbook should be read in conjunction with the Guide to Capital Building Projects produced by Estates Services, for use by University departments. Both of these documents are supplemental to the Standing Orders, issued by the Buildings and Estates Subcommittee which define the management requirements of capital projects. ( 3

5 2. CONTEXT A Project Sponsor Group is responsible for managing a project on behalf of the University. This includes responsibility for financial control of the project within the approved budget and for ensuring that the outcome satisfies the needs of those who will occupy and maintain the premises. A detailed schedule of responsibilities can be found in section 4 of this document. The diagram below indicates the reporting responsibilities of a Project Sponsor Group in relation to the Buildings and Estates Sub-committee (BESC) and the Planning and Resource Allocation Committee (PRAC). PRAC prepares and reviews annually the University s Capital Master Plan, as informed by the plans of Divisions and the services, advises Council on the use of capital funds, and considers advice from BESC on allocation of land and property in the functional estate. CSG reviews feasibility proposals and proposals for capital projects on behalf of PRAC. In particular it ensures that any proposed business case uses appropriate financial assumptions and space standards, has the approval of the relevant bodies, and is consistent both with the capital priorities of the division in question and with the Capital Master Plan 4

6 BESC is responsible to PRAC for management and maintenance of the functional estate, except for matters that are the responsibility of divisions, CSG, or other bodies. In particular, BESC: Advises PRAC on the allocation of land and property in the functional estate Oversees the repairs and maintenance programmes undertaken by Estates Services Makes recommendations to PRAC concerning the strategic development of the functional estate taking into account institutional plans and environmental, planning, and heritage issues Oversees the initiation and management of all major projects. 5

7 3. PROJECT SPONSOR GROUP MEMBERSHIP Section of the Standing Orders defines the usual Project Sponsor Group membership: a person nominated by the department on whose behalf the project is being undertaken a person nominated by the division to which the department belongs and a person nominated by the Director of Estates Larger projects might need more than one departmental representative, if this is the case, the department will carry only one vote on Project Sponsor Group meetings. Project Sponsor Group membership, including the Chairman, is always approved by BESC. The Project Sponsor Group shall include in attendance: the designated Project Manager (mandatory) an Estates Services Project Support Officer or Secretary appointed by the PSG to take meeting minutes if required any additional individuals required (for the entire meeting or part), e.g. consultants or the Client Representative, at the discretion of the group; formally agreed and invited by the Project Sponsor Group Chairman. In the event of not being able to attend a scheduled meeting a PSG member shall nominate a proxy who has delegated powers of representation and the authority to make decisions at the meeting. Where this is not possible, the Chairman will determine whether the PSG meeting should be rescheduled. The nomination of both the divisional representative and the departmental representative should have regard to the following: the nature of the project and therefore the experience required the time commitment involved the possible need to release the person concerned from other duties the requirement for the representative to be able to achieve consensus within the department or division and speak on behalf of the department or division in matters relating to the project ability to make decisions at the meeting on behalf of the department and users. It is proposed that, for large complex or high profile projects, the practice of appointing a Client Representative should be adopted. The Client Representative might also serve as the divisional or departmental representative on the PSG, or might delegate this representation to another person. Where a need for a Client Representative is identified, consideration should also be given to the 6

8 extent to which (if any) a buy-out of that person s time is required to enable the project to be given due attention. The need for a Client Representative should be agreed between the Chairman of the PSG and the Chairman of BESC. Where a buy-out of the Client Representative s time is deemed necessary, the Chairman of PRAC should be consulted, and appropriate costs built into the project budget. 7

9 4. PROJECT SPONSOR GROUP RESPONSIBILITIES The following list is not exhaustive and individual responsibilities can be reallocated if appropriate for a project on agreement with BESC. 4.1 RESPONSIBILITIES - PROJECT SPONSOR GROUP The Project Sponsor Group shall be responsible for: Managing the risks associated with the project a) overseeing the selection process for the design team and making recommendations to BESC if required under regulation of the Standing Orders b) considering the procurement method and making a recommendation to BESC if required under regulation of the Standing Orders c) drawing up a list of contractors to be invited to tender and making a recommendation to BESC if required under regulation 5.4 of the Standing Orders d) reviewing the tenders received and making a recommendation to BESC if required under regulation 5.4 of the Standing Orders e) monitoring construction, approving any variations in design, and authorising any commitment against contingency funds f) approving the Project Proposal and Project Expenditure Approval forms g) ensuring every project completes the Project Quality Review Process (PQRP) as directed by the Head of Capital Projects h) ensuring every project completes the Key Performance Indicator (KPI) and Benchmark processes as directed by Head of capital Projects i) sign off the project design at key gateways (including Feasibility, RIBA stage 2, RIBA stage 3, approval of Employers requirements and Contractors proposals) j) discussing and agreeing the need and nature of any internal and external consultations that are required, and ensuring they are communicated to BESC k) signing off the final space allocation drawings as soon as this is possible in order to confirm that the information regarding occupation is correct l) provide neutral challenge to the project delivery team. 4.2 RESPONSIBILITIES - PSG CHAIRMAN The Project Sponsor Group Chairman shall be responsible for: a) allocating and recording the individual responsibilities of PSG members where they differ from those listed below b) ensuring the agenda and associated papers are issued to all group members (in collaboration with the Project Manager) no later than 4 working days prior to the meeting c) ensuring the minutes of the last meeting are confirmed and accepted as a fair representation of the discussion at the meeting d) ensuring that any reports presented at the meetings are formally approved 8

10 e) ensuring that decisions made at meetings are clearly articulated and recorded f) discouraging members from reopening discussions on points which have previously received thorough consideration g) strictly curtailing discussions on matters left to project teams or working groups to resolve h) agreeing and formally inviting additional attendees to the meetings i) arbitrating between Project Sponsor Group members conflicting opinions j) reviewing any information that is additional to the Project Manager s report and deciding whether it should be tabled at the next meeting k) ensuring changes to the PSG membership are endorsed and formally approved by BESC l) ensuring each PSG member receives a formal letter of appointment specifying their responsibilities as a PSG member. 4.3 RESPONSIBILITIES - PSG DIVISIONAL REPRESENTATIVE The Project Sponsor Group Divisional Representative shall be responsible for: Exercising financial control of the project using the information provided in the Project Manager s reports, in particular the cost update a) considering value for money when exercising financial control of the project b) maintaining close scrutiny of, and justification for, the level of contingency c) providing up to date fundraising information and directly liaising with the development office when applicable d) ensuring the academic and financial control of the project ties in with divisional strategy. 4.4 RESPONSIBILITIES - PSG DEPARTMENTAL REPRESENTATIVE The Project Sponsor Group Departmental Representative shall be responsible for: Ensuring that the project meets the needs of those who will occupy and maintain the building in question by taking an active role in developing and refining the brief, working closely with the end users, Project Manager and lead designer as the detailed design develops a) serving as the primary point of contact between the department and the design team. 4.5 RESPONSIBILITIES - PSG ESTATES SERVICES REPRESENTATIVE The Project Sponsor Group Estates Services Representative shall be responsible for: Monitoring the project programme provided in the Project Manager s report to ensure that this remains on target 9

11 a) being the point of contact for BESC b) ensuring that the PSG carefully reviews the information presented by the project manager, making sure that all relevant red flag issues are agreed by all PSG members and recorded accordingly c) ensuring that the Project Manager fulfils his responsibilities to the PSG by monitoring performance and compliance with the Standing Orders and the Guide to Capital Building Projects, and referring any issues to the Head of Capital Projects d) maximising the environmental performance of the building by monitoring the implementation of the relevant Standing Orders on environmental sustainability e) overseeing the commissioning and acceptance of the building and handover to its occupant f) ensuring every project undertakes the Project Quality Review Process as directed by the Head of Capital Projects. g) ensuring every project completes the Key Performance Indicator and Benchmark processes as directed by the Head of Capital Projects 4.6 RESPONSIBILITIES - PROJECT MANAGER The formal responsibilities of the Project Manager are set out in detail in the Capital Projects Handbook. A brief general outline follows: a) Under the supervision of the Head of Capital Projects, the Project Manager is responsible for selecting and procuring the services required for the project in accordance with Standing Orders b) The Project Manager works closely with the departmental representative or client to establish the project brief and translate it into a preliminary specification that is refined as the project progresses c) At all stages the Project Manager, with the lead designer, ensures that the specification is fully explained to the departmental representative d) The Project Manager devises the programme for the project s various stages so that statutory approvals are achieved and construction work can proceed. The programme must be approved by the PSG e) The Project Manager guides the PSG in considering options for procuring the construction work f) The Project Manager may act as the Contract Administrator for the building contract g) The Project Manager is responsible for implementing a change management process so that the PSG can ensure that costs stay within budget h) The Project Manager is responsible for managing and reporting the costs provided by the cost consultant i) The Project Manager places orders and authorises payments j) The Project Manager makes regular reports to the PSG (at least four days before each meeting), the headlines of which are incorporated in regular capital project reports to BESC k) At the end of the project, the Project Manager ensures that documentation required for the management of the building and its integration into the estate is delivered 10

12 l) The Project Manager maintains the project s electronic and paper records and ensures that correct document templates are used as specified in the Capital Projects Handbook produced by Estates Services m) The Project Manager ensures that stage sign-offs and final project reviews are conducted and that lessons learned from projects are recorded n) The Project Manager will ensure that the project will be developed according to guidelines set out in the Capital Projects Handbook o) The Project Manager will agree with the PSG members the schedule of the Project Sponsor Group meetings p) The Project Manager will keep a schedule of decisions made by the PSG q) To ensure continuous improvement, the Project Manager will ensure compliance with and participation in the Project Quality Review Process in order that issues are resolved in a timely manner and lessons learnt from projects are recorded and communicated r) The Project Manager will ensure compliance with and participation in the Key Performance Indicator (KPI) process ensuring relevant parties record KPIs in a timely manner s) The Project Manager will ensure the recording of benchmarks at the stages defined in the benchmarking process. 11

13 5. PROJECT SPONSOR GROUP MEETINGS A meeting should take place each calendar month unless the Project Sponsor Group agrees to do otherwise. As a minimum, meetings should be scheduled to cover the following critical project events: Agree project proposal Agree feasibility scope Agree architect selection Feasibility Study sign-off Agree procurement terms and funding for main project Stage 2 sign-off Stage 3 sign-off Agree contractor tender list Agree consultant tender lists Accept building at handover Approve final account Review KPIs (quarterly) Review benchmarks (each stage) In each case a meeting timetable shall be agreed and recorded at the outset. The Project Manager is responsible for organising all Project Sponsor Group meetings. The generic agenda for all PSG meetings is as follows: Matters arising and approval of minutes from previous meeting Project Manager s report to PSG Client matters Benchmarking KPIs Red flag issues Funding Any other business Report sign-off Date, time and venue for the next meeting The Project Manager s report shall contain the following: Executive summary Design update Progress update Programme and milestones Procurement 12

14 Cost update Sustainability update Benchmarking Key Performance Indicators Risk and red flag issues Client decisions APPENDICES A. Minutes of previous meeting B. Programme C. Cost Summary D. Fee Schedule E. Risk Register F. Schedule of decisions G. Report Sign-off Sheet The report must be issued in its entirety ahead of the PSG meeting. Any subsequent information that becomes available should be forwarded to the Chairman who will decide whether it should be tabled at the meeting. Project Managers will brief the PSG Chairman prior to any PSG meeting, highlighting any critical decisions to be made by the PSG. Only new or updated information should be presented to the PSG in order to avoid duplication and repetition. Project Managers will issue reports and associated papers a minimum of four working days before a meeting, and will issue minutes to the PSG Chairman for approval no more than five working days after each meeting. PSG Minutes must be approved by the PSG Chairman prior to circulation to the PSG members. All reports, papers and minutes will be issued electronically unless the PSG agrees otherwise. The PSG members including the PSG Chairman will be asked, at the end of a PSG meeting, to sign-off the information presented by the Project Manager and any deviations discussed at the meeting. This sign off is formally recorded in the Project Manager s report to the PSG. 13

15 6. FINANCIAL MANAGEMENT OF BUILDING PROJECTS The following is a brief process summary of the financial management of capital building projects. More detail can be found in the Guide to Capital Building Projects. See also the RIBA Plan of Work Initiate project New building projects must be discussed with the relevant Division & Estates Services to ensure the work complies with divisional strategy and is technically viable. Project Sponsor Group (PSG) formed. Nominated Estates Services Project Manager completes the feasibility section of the Project Proposal with support from the PSG. The Project Proposal is submitted to CSG/PRAC for approval. Feasibility study The Project Expenditure Approval (PEA) is sent to Estates Services finance and Capital Accounts for set-up of the project on Oracle Financials. A Feasibility Team appointed by Estates Services carries out the feasibility study. At the end of the study, a Feasibility Report is written detailing the possible options to be considered by the PSG/Estates Services. Project proposal The departmental representative completes the main project section of the Project Proposal, and the financial PEA and VAT forms, with support from the PSG and Project Manager. The completed Project Expenditure Approval form (PEA) must be authorised by the department, division, Estates Services and any other parties contributing funding. Completed Project Proposal submitted for Capital Steering Group consideration The approved PEA is sent to Estates Services finance and Capital Accounts for set-up of the project on Oracle Financials. Pre-project initiation review held (stage 1 of PQRP). Manage contracts, requisitions & invoices (Estates Services) Tender process carried out resulting in formal contracts. Pre-construction review held (stage 2 of PQRP). Requisitions / Purchase Orders are raised as per the Purchase to Pay process. Invoices are logged and reviewed against receipted works and appropriately authorised. 14

16 OUFAL managed projects (if relevant) Where the project is to be managed via Oxford University Fixed Assets Ltd (OUFAL), the contract, requisition and invoice process (as above) is managed through the OUFAL accounting system. Reporting On a monthly basis, reports summarising spend are generated by the Capital Accounts team for review and discussion with the Project Manager. Management reports are generated for BESC (Building & Estates Sub-Committee) and PRAC. Manage claims (Capital Accounts) All claims are managed as required by the Capital Accounts team. Complete project At Practical Completion, subject to documentation being in order, contract retention payments are released. At this point the building becomes a University asset. Post project evaluation held (stage 3 of PQRP). Defects-liability period starts. Once the final valuation is received and the Making Good Defects certificate produced, the final retention amount is released. Where further works are required, the Project Manager generates a report detailing the requirements. This ongoing work is reviewed as required and funding documentation appropriately amended. Reconcile project The Project Manager reconciles the award against invoices and addresses open Purchase Orders. Project Closedown Form (PCF) completed. As required, finance must refund/fund relevant projects as per PRAC guidelines before changing the status of project to Closed. Post occupancy evaluation takes place (stage 4 of PQRP). 15

17 6.1 FINANCIAL CONTROLS The University s Financial Regulations state that all non-research building projects must be appraised, implemented, and monitored in accordance with the University's Financial Management of Building Projects process. The Project Manager has overall responsibility for ensuring that expenditure on a University capital project is effectively managed within approved budgets and funding. The key financial controls that must be complied with are: All capital projects must be reviewed and authorised in line with the process; the project funding must be established and agreed; and approval for the project to go ahead given by the appropriate authorities in accordance with Financial Regulations Project expenditure follows the University regulations and processes for purchasing and expenses incurred, and is continually monitored against budget and funding. 6.2 VAT The University is sometimes entitled to claim certain VAT reliefs on some capital building projects (see table below). Most of the time the University has to pay VAT on capital building projects but sometimes it can recover part (and very occasionally all) of this VAT from HM Revenue & Customs (HMRC). Whether VAT is payable to suppliers and, if so, whether any of that VAT can be recovered from HMRC, can have a considerable impact on the project s budget. Therefore, it is vital to get advice from the University s Taxation Team in order to ensure that any appropriate VAT reliefs are used correctly and, if VAT is payable, that it is costed into the project at an early stage. The Taxation Team require detailed information about what the project entails and how the finished building or refurbishment etc. will be used by the department(s) occupying it. The Project VAT 16

18 Review form (PVR) has been designed to capture as much of this information as possible. The Project Manager should complete a PVR in conjunction with appropriate departmental user contacts, including as much information requested as possible and send it to the Taxation Team. The PVR should be completed and sent to the Taxation Team as early as possible to help budgeting for VAT as necessary. The Taxation Team will make any further enquiries necessary (which may include contacting the departments involved, asking to review plans, and possibly meeting to discuss complex projects) and then complete the advice section of the PVR. Code Rate % charged by supplier % of VAT recovered ZZZ ZMD SVX VAT % charged to project SVR SVF SCG Description UK zero-rated, exempt or outside the scope of VAT Zero-rated medical items (special rules) UK standard rated supply, non-recoverable UK standard rated supply, partially recoverable UK standard rated supply, fully recoverable UK standard rated supply, partially recoverable under the Capital Goods Scheme 6.3 CONTINGENCY Section of the Standing Orders states that: A level of contingency appropriate to the form of contract and level of remaining risk for a major project or an intermediate project must be included in the project budget. Normally, a project will commence RIBA Stage 2 with a contingency sum of 15%, a contingency sum of 10% of the construction cost should be available when the construction contract is awarded. The Project Sponsor Group must retain control of the contingency and must not delegate that control to the design team. This has been further defined and approved by BESC (BESC(10)189): The PSG s obligation changes as a project evolves as follows: 15% at feasibility 10% from RIBA stage 2 onwards 17

19 5% at the point of agreeing a contract sum (assuming the usual design and build procurement route) From this point onwards, the PSG s authority for any individual release of contingency is restricted to the lesser of: a) 10% of the contingency agreed at the point the contract was agreed, or b) 100,000 Any proposed individual approval above these levels requires the approval of the Chairman of PRAC and the Chairman of the Sub-committee, subject to a minimum amount of 10,000. Any proposed expenditure related to scope change requires similar approval. These levels of contingency are recommended, however, they should reflect the levels of risk identified in the project: the higher the level of risk, the higher the level of contingency required. On complex projects or those with numerous risks there are various risk management tools available to the PSG in order to assess and analyse risks. 6.4 PROJECT RISK MANAGEMENT For each project it is important to: Review existing risks identified to date Identify new/emerging risks Prioritise risks using a qualitative scoring mechanism Identify and put in place risk response actions Assign ownership of risk response actions Before starting any complex and high-value project it is considered good practice to run an initial risk workshop facilitated by a specialist external consultant. Project Risk Areas The following categories should all be considered (as a minimum) when identifying specific risks: client issues funding planning / listed building requirements statutory authorities design procurement construction commissioning and handover other risks which may impact the project s objectives 18

20 Risk Identification and Evaluation The probability of the risk occurring can be evaluated as follows: Scale Value of Occurrence Likelihood Code Range (%) 1 Very Low Virtually impossible VL 0% -5% 2 Low Low but not impossible L 6% -20% 3 Medium Fairly likely to occur M 21% -50% 4 High More likely to occur than not H 51% -80% 5 Very High Probably will occur VH 81% -99% The impact of the risk occurring can be evaluated in terms of cost and/or time delay: Scale Impact on cost/time Code 1 Very Low VL 2 Low L 3 Medium M 4 High H 5 Very High VH Risk Ranking The risks identified are ranked in order of priority using a Black, Red, Amber, Green traffic light system, providing a qualitative indication of the impact of the risk on cost and time. The multiplication of a risk s probability score with the highest of either its cost or time scores enables the risk to be ranked, with the highest priority risks shown as Red Risks and the lowest priority shown as Green Risks (as shown below). Probability x impact = risk rank Probability Risk Rank VH H M L VL Impact VL L M H VH 19

21 High Priority risks could have a significant consequence on the successful outcome of a project and it is essential that PSGs ensure response actions are applied to these key risks. It is recommended that an ongoing risk management process is implemented in order to track risks and response actions and report findings to the PSG in order to track the management of risks and to minimise the impact of the risks on the project. NOTE: Red Flag is defined as any significant risk that could prevent the project from proceeding (BESC should be made aware), whereas red risks might not require immediate action but need to be flagged so that the relevant individual or University body is made aware. Any item which remains as a red risk is likely to become a red flag issue. Red flag issues vary extensively between projects. Example of red flag issue: project main contractor filing for administration. Mitigation It is essential that all mitigation measures are developed, implemented and monitored throughout the project life-cycle to ensure that risk mitigation actions are effective and the exposure to risk is understood as the project progresses. It is important to: Ensure all mitigation actions are developed and implemented by the project team Undertake regular risk reviews/updates as part of project progress/team meetings Review migration/operational risks to identify any additional project risks which require management under the project Identify and record additional risks identified through the procurement process by subcontractors Identify and implement Mitigation Action Plans for major risks Implement a formal risk procedure for the on-going management of risks throughout the project life-cycle to identify, mitigate and monitor risks to the project Focus on mitigating the key Red risks Risk Register Each risk identified should be included in the project Risk Register which is reported to the PSG by means of the Project Manager s report. The register contains a description of the risk together with the current assumptions on the probability of the risk occurring, its consequential impact on the project, and any measures taken to mitigate its impact. 20

22 6.5 TENDERS Section 5.4 of the Standing Orders lists the instructions that apply to the placing of all orders, contracts or commissions. The approvals procedure for tendering is summarised in the tender approval templates (documents 32.1 and 32.4 of the Capital Projects Handbook) see table below. Distinction is made between contracts estimated to be valued 10k- 500k and those over 500k. Amount of contract, subcontract or order Number of tenderers to be invited Names of tenderers to be settled by Tenders to be opened by Approval of tender other than the lowest by Award of contract by 500,000 and over 10, ,000 BESC To be agreed by the Director of Estates Three members of the Tender Panel* BESC Director of Estates Director of Estates Two members of the Tender Panel Director of Estates (*) If the anticipated value of the tender exceeds 500k, tenders shall be opened by three members of the tender panel including at least one who is not an officer of Estates Services. If the anticipated value of the tender does not exceed 500k tenders may be opened by any two members of the tender panel. Amount of contract, sub-contract or order Approval of single tender action 100,000 and over BESC 10, ,000 10,000-25,000 Director of Estates Director of Capital Projects Director of Asset and Space Management The tender panel is comprised of the following members: the Chairman of BESC, the Vice- Chairman of BESC, the Secretary of BESC, an officer nominated by the Director of Finance, the Director of Estates, the Director of Capital Projects and Property Management, the Head of Capital Projects, the Head of Conservation and Buildings, the Head of Building Services, the Capital Projects Administrator, and the Head of Finance, Estates Services. ( ) refer to Planning Procedures document (27/01/2015) 21

23 6.6 DONOR FUNDED PROJECTS The following is an extract from a BESC report to PRAC (PRAC(10)158aR) proposing a new committee structure for donor-funded capital projects: It is proposed to create a new group, the Design Review Forum (DRF), for projects where there is a substantial donation from a single benefactor, and where the benefactor wishes to take a role in the development of the project. The DRF would have a significant role in establishing design aspirations; assisting in the selection of design teams and architects, and reviewing the design as it develops throughout the project In all instances the DRF would be responsible for making recommendations to the PSG It is anticipated that the DRF would meet regularly with the design teams, cost and planning consultants etc., and act as advisors on design matters to the PSG The Sub-committee recommends that, as part of the new structure, it be stipulated that neither donors nor their representatives should be appointed as members of a PSG. The table Committee structure for donor-funded capital projects (Annex E) illustrates this. 22

24 7. PERFORMANCE MEASUREMENT Estates Services is committed to developing a performance management culture to drive continuous improvement throughout the estate. In delivery of projects, this will be through two key areas: Performance Benchmarking Key Performance Indicators (KPIs) 7.1 Performance Benchmarking Estates Services has established a set of benchmarks in conjunction with other leading university establishments. It is intended that the PSG monitor performance against a pre-established baseline and a project target figure. At the end of each project these benchmark indicators will be incorporated into the performance matrix for the whole of Estates Services. The PSG may decide to define, measure, and monitor additional, project-specific benchmarks which can be added to the register although it is not envisaged that this will be appropriate for all projects. The benefit of this is to provide a structured approach across the whole estate and to allow specific areas to be monitored, for example, on unusual or complex projects. The benchmarks against which targets will be set at project initiation are: Benchmark Description Source of Data Gross Internal Area (GIA) (m 2 ) Occupancy (FTE) Capital cost per m 2 ( ) Cost of construction, including net building costs, main Cost consultant contractor costs, contractor overheads and profit and 2 note 1. inflation divided by the gross internal area in m Net project cost per m 2 ( ) Cost of construction, includes net building costs, main Cost consultant contractor costs, overhead and profit, fees, other project costs and inflation but excludes contingency and VAT, divided by the gross internal area in m 2 % Total consultant fee spend Expressed as a percentage of construction costs note 2. Cost consultant % Architect fee spend Expressed as a percentage of construction costs Cost consultant Space efficiency Net to gross, this being the net usable area divided by the Architect gross internal area in m 2 and expressed as a % Space usage Expressed as % Architect Teaching sub-category Space usage Expressed as % Architect Research sub-category Space usage Expressed as % Architect Support sub-category Design occupancy Net usable area in m 2 per staff and student FTE Architect Water consumption (m 3 ) per student and staff FTE Total m 3 of water used annually per student and staff FTE Mechanical & Electrical design consultant Total water consumption (m 3 ) per year Total m 3 of water used annually Mechanical & Electrical design consultant 23

25 Benchmark Description Source of Data Building CO 2 output kg CO 2 produced per m 2 of gross internal area per year, CO 2 output calculated from electricity, heat and gas consumption only (As calculated to determine Building Regulations Part L compliance) Mechanical & Electrical design consultant Total CO 2 output kg CO 2 produced per m 2 of gross internal area per year Mechanical & Electrical design consultant Energy consumption kwh of energy consumption per m 2 of gross internal area per year, energy consumption calculated from electricity, Mechanical & Electrical design consultant heat and gas consumption only (regulated load - as calculated to determine Building Regulations Part L compliance) Total energy consumption kwh of energy consumption per m 2 of gross internal area per year (includes regulated and unregulated) Mechanical & Electrical design consultant Note 1. Contingency % allowance may reduce with successive stages Note 2. Includes cost of surveys and architect fee spend At the end of the project feasibility stage the PSG will set the core benchmarks targets from the list above along with any additional specific improvement metrics if necessary. These will be communicated to the design team upon appointment. The PSG will own the development of the benchmarks, using data provided by Estates Services and will be responsible for assessment during the gateway stages. Quantitative data will be provided by the Project Manager during the gateway stages. 7.2 Key Performance Indicator Evaluation Process (KPI Process) Aims Continuous improvement Quantitative and qualitative consultant, contractor and supply chain evaluation Identification and commendation of exceptional performance Timely identification of issues and resolution during the project process Compliance with adopted 2010 audit recommendations Introduction The University and particularly Estates Services is committed to continuous improvement across its capital projects, project teams and supply chains. The present paper describes a formal Key Performance Indicator evaluation process which will further facilitate continuous improvement. The KPI process is a whole life project process of evaluating project and team key performance indicators throughout, and following, the design and construction of new buildings or facilities, as well as the refurbishment of existing buildings and facilities. The objective of the KPI evaluation process is to inform Project Sponsor Groups (PSGs) and Estates Services of project delivery team performance against agreed KPIs. On the basis of the indicators reported, the PSG or Estates Services may then take action to correct failings in the project delivery or note exceptional performance. The KPI process will also assist the University in the process of contractor or consultant selection and general supply chain management. Further, 24

26 implementation of performance monitoring is an audit requirement stemming from the 2010 audit of the Estates Services. Methodology The KPI evaluation process has two key elements: Recording of post project KPIs against PSG set targets Quarterly KPI 360 evaluation of project team members throughout project Post Project KPI Evaluation Estates Services has selected a concise set of KPIs, referencing previous stakeholder consultation, and agreed a balanced scorecard approach with the following categories: Process, Finance, Environmental, Personnel and Client Satisfaction. The scorecard is weighted towards Process and Client Satisfaction in order for project teams to demonstrate consistent high quality and correct project delivery. The KPIs are as follows: Category Client satisfaction Environmental Finance Personnel Process Key Performance Indicator Average time taken to close out defects * Average Post Project Evaluation score Average Post Occupancy Evaluation score Energy consumption (MWh/m 2 /year) (gas, electricity and heat) %, by weight, of construction waste sent for recycling % of contingency utilized % variation between budget and predicted or actual final account Accident/incident rate per number of man hours worked Considerate Contractors score Progress against programme (days behind or ahead of schedule expressed as a %) % of required reports delivered on time Number of defects at 1 month post practical completion * * Not adjusted for relevant scale of individual defects, caution required during interpretation The KPI process commences at the completion of RIBA stage 1 with the setting of targets by the PSG. It is the Estates Services PSG representative who retains responsibility for ensuring that this action is undertaken. Estates Services recognizes that while some of the KPIs are contractor or consultant specific (e.g. % of required reports delivered on time) others are a measure of project team performance attributable to all team members whose role influences the indicator (e.g. the progress against programme indicator). The Project Manager will have responsibility for collating the data and entering it into the project scorecard. It will be presented to the PSG against a narrative provided by the Project Manager which will set out additional comment or explanation, including details of mitigating circumstances, where required. The data will be reviewed by the PSG which will, taking into account all factors, agree a traffic light indicator of performance using the following scale: red performed poorly; 25

27 amber performed below standard; green performed well; blue performed exceptionally well. Such information will be used to inform ongoing contractor or consultant selection and encourage project team, contractor or consultant improvement for future projects. In-Project 360 Feedback Model The second element of the KPI evaluation process is the performance evaluation of the project team. The process described above is heavily weighted towards indicators of team performance, while audit requirements have significant interest in the evaluation of the performance of the Estates Services supply chain in the form of individual contractors and consultants. This will enable individual performance appraisal, timely resolution of problems, provide further opportunities for improvement and identify exceptional performance. This element is a qualitative analysis of team performance via analysis of peer group project team opinions and experiences, utilizing a 360 feedback model. The 360 evaluation is a common tool for evaluating performance, based on feedback from other team members. Estates Services will routinely evaluate the performance of the following team members against the KPIs: Architect, Building Services (M&E) Engineer, Client Representative, Contractor, Planning Consultant, Project Manager, Quantity Surveyor/Cost Consultant, Structural/Civil Engineer and Sustainability Engineer. The process involves each team member being required to rate the performance of the other team members via an online survey tool on a quarterly basis, beginning at the start of RIBA stage 2, using the following criteria: 1. Overall service provided to date 2. Overall timely delivery of information provided to date 3. Overall accuracy of information provided to date 4. Overall completeness of information provided to date 5. Overall quality of information provided to date 6. Meeting of milestones on time 7. Availability and responsiveness of personnel 8. Commitment to team working 9. Commitment to project goals and aspirations 10. Competency of the team member(s) provided 11. Ability to apply ingenuity and solve problems 12. Flexibility 13. Compliance with University procedures 14. Compliance with health and safety legislation Data collected is summarised in a composite report which generates an automatic traffic light colour coding which quickly identifies a team member s performance ranging from red, indicating very poor, to blue, indicating excellent. The data is reviewed by the Project Manager prior to submission to the PSG in order that details of mitigating circumstances or other comment or explanation may be added. The data will be reviewed by the PSG who may take action or request the Project Manager take action as necessary. The Estates Services representative on the PSG will be responsible for conveying concerns and/or commendations to the Director of Capital Projects & 26

28 Property Management or the Head of Capital Projects to enable exceptional performance to be noted, or team performance issues addressed in a timely manner. Output Each evaluation will produce a data set, either in the form of the balanced score card or the 360 composite report, and will be entered on a database held within Estates Services. In addition, the results will be deconstructed and the data entered into a supply chain database in order that contractors and consultants may be evaluated for performance across all projects in which they have participated. The database will be able to be interrogated to determine trends. Consistent throughout the process is a continual review and improvement cycle, whereby the supply chain is continually reviewed against original aspirations and the team reviewed for performance in order that any unjustifiable deviations or problems may be addressed in a timely manner, ensuring quality is maintained and improved. Anonymity It is intended that the 360 feedback composite report will be anonymous although the University will recognise any legal requests for release of data. Information will be stored securely and held in accordance with the University s Data Protection policy: Ownership The Project Manager has responsibility for ensuring that data is gathered and the balanced score cards are completed on schedule and presented to the PSG. The Estates Services representative on the PSG has responsibility for ensuring that the results of the evaluations are reviewed by the PSG and graded where required. In addition, the Estates Services representative has responsibility for conveying both performance concerns and commendations to the Director of Capital Projects & Property Management or the Head of Capital projects as appropriate. Stages in summary End of RIBA stage 1 setting of KPI targets by PSG Quarterly from the start of RIBA stage feedback evaluation of project team End of RIBA stage 6 Post project KPI evaluation 27

29 8. PROJECT QUALITY REVIEW PROCESS Aims Continuous improvement Learning for the next project Timely identification of issues and resolution during the project process Affirmation of initial aspirations, continual review and redirection Improved communication Project ownership Introduction The University and particularly Estates Services is encouraging continuous learning from capital projects whereby issues identified during the project process are addressed in a timely manner before project completion, and the benefits of lessons learned are passed on to other projects. The aim is to foster a culture of continued review and problem resolution, and constructive feedback within the project teams and amongst the client representatives, consultants and contractors, with the intention of improving the efficiency and effectiveness of the delivery process. The PQRP is a whole life project process of evaluating the design and construction of new buildings, and the refurbishment of existing buildings whilst actively involving a wide group of people who have responsibility for delivering the project, who will occupy the resulting construction, or have some form of responsibility for the building. The process involves four key stages: Pre-Project Initiation (PPI) Pre-Construction Review (PCR) Post Project Evaluation (PPE) Post Occupancy Evaluation (POE) Each stage is equally valuable and to be afforded equal focus and effort. The Project Quality Review Process is primarily concerned with reviewing and improving delivery by undertaking continual: Process Evaluations Operational and Functional Reviews Technical and Performance Reviews The emphasis at each stage evolves throughout the project. At the start of a project the PQRP is primarily concerned with reviewing, and if applicable adopting, lessons learnt from previous projects including both problems encountered (and their mitigation) and project successes. Additionally, at the start of a project, the focus is one of developing and agreeing the brief and aspirations and conveying this to the team. As the project evolves the emphasis evolves to one of recording lessons learnt for the benefit of others and to one of checking the brief and aspirations are being met, to finally verifying the functional and technical performance against the original brief. The start 28

30 of the project sees the building of a team and adoption of best practice from lessons learnt with regards to process, this then evolves through stage review of team performance to a final review of team performance and onward communication of any lessons learnt. Consistent throughout the process is a continual review and improvement cycle, whereby the project is continually reviewed against original aspirations and the team reviewed for performance in order that any unjustifiable deviations or problems may be addressed in a timely manner ensuring quality is maintained or improved. Methodology Each stage consists of a questionnaire gathering of data and a workshop where issues are discussed and actions agreed. A formal report results from the workshop detailing the findings of the review and the agreed action plan to ensure problems are addressed or project successes implemented. The output of the final stage will formally record achievements against the original brief and lessons learnt on the project, both good and bad, for subsequent projects. On larger projects the final output takes the form of a case study detailing the project, benchmarking and lessons learnt. The information gathered will be distributed as widely as possible in order to engender learning. The Teams The PQRP requires a team who will see the project and process through from the initial stages to post occupation. A PQRP team takes ownership of the project and consists of professional members as well as those with key roles such as the end user representatives who have key role in communicating aspects of the project through to their departments, and encouraging participation in the Post Occupancy Evaluation. The following teams have been designated for PQRP purposes: The Client Team represents those that are responsible for determining requirements and aspirations of those that will use the building, be affected by it, or will have responsibilities for the building function, operation, maintenance or safety. This will also involve Stakeholders who have an active interest in the project as a result of their requirements to discharge their own responsibilities. The Project Team represents those who are responsible for the design, construction and delivery of the building. Ownership and Facilitation Each stage is owned by the Project Manager or the Head of Capital Projects. The workshop is facilitated by the Project Manager for the first two stages (PPI and PCR), as these are primarily learning stages. The Director of Capital Projects and Property Maintenance or the Head of Capital Projects will facilitate for the final two stages (PPE and POE) as these are primarily review stages and must remain objective and independent, although an external facilitator may be appropriate in some cases. 29