NZ Report / Proposal Template - State Services Commission

5 Methodology and Processes: Design, Costing,
Procurement and Scheduling
Key Findings:
• A key feature of the Spring Hill and Otago projects is that they have involved the use of the
Collaborative Working Approach (CWA) methodology. This methodology is relatively new
to New Zealand, although it is used by Transit for some road projects.
• A hybrid form of CWA was used for the Northland project and it was key to overcoming
some issues that were threatening to disrupt progress with that project.
• The collaborative approach implied by the CWA methodology, the advantages offered by
CWA and the positive experience with CWA in the context of Northland led the Department
to use CWA for the other regional prisons, including Spring Hill and Otago.
• The way in which the Department has applied the CWA methodology has enabled it to
benefit from many of the advantages inherent in the CWA approach. In particular:
– there has been close integration of design, construction and commissioning teams
which assists in achieving an optimal balance between design, construction and
operational requirements;
– several value management reviews have been undertaken to further optimise designs
and take out unnecessary costs;
– at a site level, resources have been mobilised to deal with day-to-day issues, thereby
increasing the efficiency of on-site resource utilisation;
– the collaborative approach to dealing with issues has helped to maintain momentum
with the projects, thereby enabling the timing of projects to be completed on, or near
to, expectations;
– high levels of transparency in relation to costs have been achieved at the project level
consistent with the “open-book” philosophy that underpins CWA (with some opportunity
for more transparency over margins – see below); and
– costs have been exposed to extensive third party scrutiny and review.
• Overlaying all of these benefits, the methodology chosen by the Department means that it
is on track to deliver Spring Hill and Otago in time to meet expected prison population
requirements. There were sufficient indications to suggest that, had the Department
elected to follow a traditional procurement method, timeframes for completing the projects
would probably not have been met.
• Notwithstanding these benefits, there are aspects of the way in which methodology and
supporting processes have been applied that can be improved. In particular:
– analysis of the reasons for preferring CWA ahead of other procurement options was
not sufficiently documented;
– the timing for completing the TOC has not conformed with good practice. However, key
reasons behind this were delays in completing designs caused by changes in the
scope of facilities, lack of design resource and shortage of experienced costing
resources. To avoid delays to the projects (and the problems this would cause in
terms of accommodating the increasing prison population), the Department decided to
proceed with the projects; and
– while there is good transparency over costs at the project level, the Department does
not have visibility over margins. As a result, it is dependent on the advice of third
parties.
Methodology and Processes: Design, Costing, Procurement and Scheduling 22