NZ Report / Proposal Template - State Services Commission

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Section Six Section Seven ‣ assesses project governance and management. ‣ comments on reporting to Ministers. Introduction 8
3 Background 3.1 Before discussing the processes, systems and contracting practices associated with the new facilities, it is important to outline some of the environmental and contextual factors bearing upon the prisons project. To varying extents, these factors have had a significant impact on the approach to, and cost of, the new prison builds. Prison Population Growth 3.2 The Spring Hill and Otago projects are part of a wider programme of increasing prison capacity. The Department has been building 325 beds per year on average since 1996 into existing prisons. However, this is not sufficient to meet the expected growth in the prison population. New prisons have also been required and the Spring Hill and Otago projects are part of a wider programme referred to as the Regional Prisons Development Programme (RPDP). 3.3 The RPDP, which was announced in 1997, identified the need for four new regional corrections facilities, comprising two regional prisons in addition to Spring Hill and Otago. Both of the other prisons are operational; they are located at Ngawha in Northland and in Manukau (the recently opened Auckland Women’s facility). 3.4 In 1999, the prison population forecast for 2008 was 6,800. The current forecast for 2008 is 8,600; a 26% increase. These forecasts are prepared by the Ministry of Justice. The Ministry’s forecast underpins the Department’s modelling of future prisoner demand and the optimal build programme to provide additional capacity to meet that demand. The forecasts have a five year horizon which is significantly shorter than the lead time for completing a new prison. As a result of this, and reflecting the revised forecasts, the RPDP has required considerable flexibility to adapt to changing circumstances. In particular, there have been significant changes to the originally-planned bed numbers at three of the four regional prisons: Auckland Women’s ‣ 150 to 286 Spring Hill ‣ 350 to 650 Otago ‣ 220 to 335 3.5 Time pressure is a key issue affecting the RPDP because of the growth in the prison population. At the time decisions to proceed with the new prisons were taken, it was clear, and subsequently demonstrated, that new facilities had to be built in order to accommodate the increased numbers in the prison population. The timeline for completing the new prisons is tight and completion on time remains a high priority in order that the growing prison population can be appropriately housed. In recent years the Department has had to rely on police and court cells to manage the prison population overflow, a practice which is not desirable. Completing the construction of additional beds is therefore of utmost priority for the Department. 3.6 In this regard, and notwithstanding many of the points made later in this review, it needs to be acknowledged that the programme of new prison builds has delivered, and is delivering, the additional capacity that is needed to meet growth in the prison population. Moreover, the programme is adding the new capacity more or less within the very tight deadlines that had to be achieved in order to avoid a situation of demand for beds Background 9
Page 1: Report of the State Services Commis
Page 5 and 6: Disclaimer In preparing this report
Page 7 and 8: 1 Executive Summary 1.1 Constructio
Page 9 and 10: the development of the TOC until mu
Page 11 and 12: cost should be seen as indicative o
Page 13: 2.8 As indicated above, the scope o
Page 17 and 18: 3.12 While the merits of the new de
Page 19 and 20: 4 Key Drivers and Causes of Cost Es
Page 21 and 22: Otago Cost Contributors ($ million)
Page 23 and 24: • The types of building included
Page 25 and 26: • sub-contractors’ margins have
Page 27 and 28: • the impact of the projects on l
Page 29 and 30: Lessons Learned: • Notwithstandin
Page 31 and 32: Costing CWA methodology provided a
Page 33 and 34: • Auckland Women’s was a full C
Page 35 and 36: 5.20 Several points should be noted
Page 37 and 38: • The CWA methodology has been pu
Page 39 and 40: • • Department engaged CMS in r
Page 41 and 42: • Outsourcing arrangements - thes
Page 43 and 44: the hyb rid CWA subject to the cond
Page 45 and 46: • • where complexity gives rise
Page 47 and 48: 5.65 A probity audit of the selecti
Page 49 and 50: determination of TOC/QRA and the in
Page 51 and 52: 6 Governance and Project Management
Page 53 and 54: Public Sector Project Governance an
Page 55 and 56: 6.12 It is noted that these arrange
Page 57 and 58: Previous Arrangements 6.20 While th
Page 59 and 60: Department ‘Client’ Representat
Page 61 and 62: • While it is outside of the scop
Page 63 and 64: 7 Reporting to Ministers Key Findin
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• it is a core expectation that p
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• The report prepared by the Depa
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elationships and, as part of this,
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• the gain and pain is linked to
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Decision-making Effective decision-
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The decision-making for each projec
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NZ Report / Proposal Template - State Services Commission

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