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Link to thesis. - Concept - NTNU

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ARTICLE IN PRESS6 T. Williams et al. / International Journal of Project Management xxx (2009) xxx–xxxthe existing building at 2 Marsham Street (or 2MS) as temporaryaccommodation during the refurbishment. Anne’sGate Property plc (AGP), however, made a developedand costed variant bid for a new building at 2MS, and thisplan was adopted. Two bidders submitted further best andfinal offers. AGP’s bid turned out <strong>to</strong> be the winner. Extensiveprobing of the bid by the Project Team was undertaken,investigating the his<strong>to</strong>ry of the company andprevious similar projects, risk, the detailed resourced programme,and a Quantity Survey-type analysis of the price.The first Gateway Review of the contract was a Gateway 3,in January 2001, during the lead-up <strong>to</strong> placement of contract.This was only about eight months after the foundation of theOGC. The aims of the Review were, briefly, <strong>to</strong> confirm thebusiness case and benefits plan in the light of the final tender,<strong>to</strong> ascertain that the plan should deliver the specified outcomesand value-for-money, and <strong>to</strong> ensure controls were inplace. Outstanding issues were looked at in a SupplementaryGateway 3, with further issues arising later, and leading <strong>to</strong> aFurther Supplementary Gateway 3 in August 2001. At thispoint the Home Office was embarking on a relationship witha bidder who was very experienced and sophisticated. Havingexpert support was beneficial <strong>to</strong> the project.Analysis following advice taken from consultants andcorrespondence with the National Audit Office indicatedthat using the UK Private Finance Initiative would givethe best value. In March 2002, the Home Office signed a29 year contract with AGP for funding demolition, designand construction of the new accommodation on the site,<strong>to</strong>gether with provision of associated services. Because thisis a PFI project, the authors of this paper do not haveaccess <strong>to</strong> detailed time and cost estimates, although noincrease in price has been reported <strong>to</strong> date. However, it isinteresting that a Parliamentary enquiry later identified evidenceof optimism bias, in over-estimating reductions instaff numbers due <strong>to</strong> outsourcing, efficiency gains andchanges in working practices.During the contract, internal governance was managedthrough an ongoing Project Board, which decided whenGateways were <strong>to</strong> be held, and tracked the external governanceprocesses. Key risk areas or issues could be trackedhere, such as uncertainties in the numbers of staff actuallygoing in<strong>to</strong> the building. A Gateway 4 review was held inJanuary 2002, at the request of the Treasury – implyingthat they held a watching brief. This had fifteen specifiedpurposes, including <strong>to</strong> check that the current phase of thecontract was properly completed, that the business casewas still valid and unaffected by events – reflecting someof what a Gateway 0 might be expected <strong>to</strong> investigate –and looking at risks in particular. There was, in fact, morethan one Gateway 4, <strong>to</strong>gether with a separate PFI contractfor information technology provision in the building. However,the governance mechanism appears <strong>to</strong> have been singleproject-based, and the governance of this linked projectwas not clear.External governance operated through the Home OfficeAudit and Assurance Unit, and beyond this, <strong>to</strong> theNational Audit Office (NAO). The NAO came on the scenebetween contract signature and start of construction, andissued a favourable report in July 2003, particularly onthe nature of the PFI contract. The role of the NAO is<strong>to</strong> scrutinise public spending on behalf of Parliament, independentlyof Government, and their report was taken upby the key Parliamentary Accounts Committee (PAC).This Committee met in November 2003 <strong>to</strong> look in<strong>to</strong>value-for-money, including running costs, financing, numbersof staff and refinancing charges. The most senior membersof the Home Office and contrac<strong>to</strong>rs were called <strong>to</strong> giveevidence. The hard-hitting report made recommendationson under-forecasting of staff numbers, identification ofwider business benefits from the move <strong>to</strong> the new building,questioned a specific financing issue, and also posed a questionabout disposal of the existing estate. PAC reports aretaken extremely seriously by the Civil Service. This being avery visible public project, there was also considerableinterest generally within Parliament, and a succession ofParliamentary Questions were asked, some covering fundamentalissues about the project, but many concerningother, more detailed issues, only tangential <strong>to</strong> its success.The building handover was completed on time inJanuary 2005, amid considerable publicity. The HomeOffice then began paying AGP a monthly charge for thebuilding and services amounting <strong>to</strong> £311 million (net presentcost) over the life of the project.3.3. Norway civil case (IFI2)Information about this case came from semi-structuredinterviews, supported by a pre-supplied questionnaire, withsenior personnel involved in the project, and extensivestudy of the project and QA documentation. One publicallyavailable reference is a Statsbygg report [22].The IFI2 project includes the construction of a newbuilding for teaching, research and ICT operations in theDepartment of Informatics at the University of Oslo(UiO). The building’s planned gross area is approximately28,250 m 2 . The current base estimate for the building isNOK 1040 million, and the current <strong>to</strong>tal budget is NOK1080 million, based on 2006 price levels. The need fornew facilities for the UiO Department of Informatics wasexplicitly mentioned in a Government proposition <strong>to</strong> theNorwegian Parliament in 1998. The driving forces werethe Department for Informatics’ expressed needs for morespace, closely aligned with government strategies <strong>to</strong>strengthen research and higher education in ICT. In 1999the Research Council of Norway (NRC) ordered a designproposition for a new building, which was presented in2000. The initial plans included a 10,000 m 2 extension ofan existing building, financed by the Research Council ofNorway. The new facilities were <strong>to</strong> be rented by the Universityof Oslo. In 2001, following discussions on the levelof rent, Parliament decided <strong>to</strong> put the new building on thelist of prioritised state building projects. This meant 100%state funding of the new building and execution by Stats-Please cite this article in press as: Williams T et al.An investigation of governance frameworks for public projects in Norway and the UK. Int J Project Manage (2009),doi:10.1016/j.ijproman.2009.04.001

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