Strategic Indigenous Housing and Infrastructure Program SIHIP

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Strategic Indigenous Housing and Infrastructure
Program (SIHIP)

• Industry Information Session
• Wednesday 30th April 2008

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Strategic Indigenous Housing and Infrastructure
Program (SIHIP)

• New era
• New approach
• Rick Harris
• SIHIP Program Director

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SIHIP ALLIANCEScope and TimingJim
DelkerSIHIP Program Manager
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SIHIP Alliance Scope and Timing

• 647 million program
• 420 million Major Works - 16 communities
• 124 million Refurbishments 57 communities
• 103 million Town Camps/Urban Living Areas/
• Existing Housing Programs

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SIHIP Alliance Scope and Timing

• Approximately 750 New Houses
• Approximately 230 New Replacement Houses
• Approximately 2500 Housing Upgrades
• Essential Infrastructure to Support New Houses
• Town Camp Living Conditions Improvements

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SIHIP Alliance Scope and Timing

• Incentives
• Key Result Areas (KRAs)
• Key Performance Indicators (KPIs)
• Community Engagement
• Employment Workforce Development

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SIHIP Alliance Scope and Timing

• Scope
• Alliance Partner Packages
• Approximately 30 - 50 million
• Geographically Grouped with
• New Houses
• House Replacements
• House Refurbishments

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SIHIP Alliance Scope and Timing

• Timing
• 30 Apr 08 - Industry Information Session
• 1 May 08 Issue Expression of Interest (EOI)
• 28 May 08 EOI Closes
• 18 Jun 08 Issue Request for Proposal (RFP)
• 24 - 26 Jun 08 Positive Guidance Workshops
• 23 Jul 08 RFP Closes
• 6 - 14 Aug 08 Proponents Interviews/Workshops
• Oct 08 Commercial Alignment Workshops
• Oct 08 Preferred Alliance Partners Approved

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SIHIP Governance
Joint Steering Committee (JSC)
Strategic Alliance Leadership Team (SALT)
Program Director Rick Harris
Program Manager Jim Delker
Alliance 3
Alliance 2
Alliance 1
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Strategic Indigenous Housing and Infrastructure
Program (SIHIP)Alliance

• Ray Whitehead
• Procurement Advisor, Coach Facilitator

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The Objectives of the SIHIP

• Housing Outcomes
• Housing that meets residents needs and
  effectively reduces overcrowding in selected
  communities
• Quality
• New and existing houses constructed and
  refurbished to a high standard
• Social and Economic Outcomes
• Employment supported by training of Indigenous
  people to achieve a sustainable workforce in each
  community for the ongoing construction,
  maintenance and management of housing
• Time
• The program is expected to be completed by 2013
• Cost
• The whole of life cost of delivering and managing
  houses is reduced, through innovation and
  economies of scale
• Management Best Practices
• Achieve a step change improvement in the delivery
  of major housing programs and use this as a basis
  for the delivery of a range of future housing
  programs and schemes
• Relationships
• Achieve benefits for all parties involved in the
  delivery of the program, including the
  communities, through the fostering of positive
  interrelationships

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SIHIP Alliance Delivery Model Selection Process

• Key Features
• Collective responsibility for all of the program
  risks
• Unanimous principle-based decision making on all
  key program issues
• No fault, no blame and no dispute between
  alliance participants
• Payment under a compensation model comprising
• Reimbursement of program costs on an open book
  basis
• A fee to cover corporate overheads and normal
  profit
• A gainshare/painshare regime where the rewards
  for good performance and penalties for poor
  performance are shared equitably among all
  alliance participants

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SIHIP Alliance Delivery Model Selection Process

• Key Features (continued)
• An integrated program team selected on the basis
  of best person for each position.
• encouraging innovation and innovative thinking to
  achieve Gamebreaking Performance.
• creating an environment of mutual support,
  appreciation and encouragement.
• equitably sharing the benefits of the rewards and
  the burdens of the risks.
• open, honest and efficient sharing of
  information.

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Principles

• Be energetic and passionate
• Be a team player
• Show respect
• Be key focussed
• Be trustworthy
• Be accountable
• Give acknowledgement
• Be inclusive
• Create a positive learning environment

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Performance Framework - Gamebreaking Performance
SIHIP Alliance Delivery Model Selection Process
Alliance Principles
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Selection ProcessBuilding a High Performance Team
EOI
Proposal
RFP
Evaluation Shortlist
Industry Information Session
Positive Guidance
Selection Interviews / Workshops
Commercial Alignment
Selection Approved
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SIHIP Alliance Delivery Model Selection Process

• Key intentions of the Selection Process
• Build the team as part of the process increase
  momentum
• Progressive resolution of issues
• Meet the real team
• Force targeted thinking avoid motherhood
  statements
• Subjective and objective assessment
• Look for a team most likely to meet or exceed
  Gamebreaking objectives
• Meet highest standard of probity

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Selecting the Team
SIHIP Alliance Delivery Model Selection Process

• Fundamentally evaluating three aspects
• 1. History (track record and experience)
• 2. Potential
• 3. Fit (with Territory Housing within their own
  team)

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SIHIP Alliance Delivery Model Selection Process
Expression of Interest (EOI)
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SIHIP Alliance Delivery Model Selection Process
Request for Proposals (RFP)
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Selecting Participants Integrating subjective and
objective assessments
SIHIP Alliance Delivery Model Selection Process
FINAL SELECTION
100
INTERVIEWS/WORKSHOPS
SUBJECTIVE ASSESSMENT
PROPOSALS
0
OBJECTIVE ASSESSMENT
0
100
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Key Features of the Participation Alliances
Alliance Team Structure
Territory Housing as Client
Chief Executive Territory Housing
Policy / Governance Owner Non-Owner Participant
Departments, Key Stakeholders
Independent Financial Auditor Independent
Estimator
Accountability
Territory Housing as Alliance Participant
Accountability
Alliance Leadership Team (ALT)
Coordination Communication
Coordination Communication
Alliance Manager (AM)
Participation Alliance Management Team (PAMT)
Roles and functions of the ALT, PAMT and
Alliance Manager defined in Participation
Alliance Agreement
Wider Program Team (WPT)
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SIHIP Alliance Delivery Model Selection Process

• Potential Key Result Areas (KRAs)
• Housing
• Quality
• Social Economic
• Time
• Cost
• Management Best Practice
• Relationships

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Commercial Framework Cost Structure
Gainshare for gamebreaking performance in
project/program objectives linked to gainshare
regimes (uncapped for cost savings)
Gainshare
Result for meeting Target Outturn Cost (TOC) in
cost gainshare and Minimum Conditions of
Satisfaction (MCOS) in performance gainshare
Limb 3
MCOS Profit
Painshare
Limb 2
Painshare for poor performance in project/program
objectives linked to gainshare regimes (capped at
Corporate Overhead and MCOS Profit)
Corp O/head
Direct Costs
Limb 1
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SIHIP Alliance Delivery Model Selection Process

• Ensuring Value for Money
• Promise of future work (12 packages anticipated)
• Opportunity for gain share everyone benefits
• Potential for pain share everyone loses
• Comparison across packages of building costs
• Pre-agreed corporate overhead and profit
  percentages
• Open-book accounting / auditing
• Key Result Areas (KRAs) Key Performance
  Indicators (KPIs)
• Risk and opportunity sharing

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National Code of Practice for the Construction
Industry

• National Code of Practice For the Construction
  Industry
• Commonwealth procurement guidelines require
  agencies to comply with this code
• The Code applies to all construction activity
  undertaken for, or on behalf of the Australian
  Government
• Tenderers must be informed of the Code and
  Guidelines at EOI stage
• Tenderers must ensure that any of their related
  entities also comply
• The code will be applied to this program

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Federal Safety Commission

• Federal Safety Commission
• Administers the Australian Government Building
  and OHS Accreditation Scheme
• Scheme established to improve occupational health
  and safety outcomes in building and construction
  industry
• Since March 2006, only persons who are accredited
  under the Scheme have been able to contract for
  building work directly funded by the Australian
  Government
• Since October 2007, applies to contracts valued
  at 3 million or more
• This Scheme will be applied to this program

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Legal and Commercial Framework

• Lachlan Drew
• Partner, Minter Ellison

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Key Features of Alliance Agreements

• Two main agreements
• Alliance Participation Agreement
• Package Alliance Agreement

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Key Features of Alliance Agreements

• Key features of Alliance Participation Agreement
• Treatment of risk
• Win/win or lose/lose
• No blame
• Carve outs
• Collaborative and by agreement
• Insurance
• Governance (SALT, ALT, PAMT)
• Intellectual property

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Compensation Model

• Setting TOC
• Open book audit
• Non-owner participant recovers
• Direct costs
• Agreed margin
• Pain/gain incentive
• Can be positive or negative
• Based on performance against KPIs
• Pain capped at amount of margin

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Thank You