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COST PLANNING AND REPORTING STANDARDS

Definitions & Standard Pro-forma

October 2012
Version 2.0 - FINAL

PREPARED FOR:
First published
th
Version 2.0 FINAL Issued 9 October 2012

Access
The Standards can be accessed electronically at the following web site address:
http://www.hinfra.health.nsw.gov.au/__documents/publications-and-resources/cost-planning-and-reporting-
standards_ver-2.0_final_20121009.pdf

Release notes
This release represents the public issue of the Cost Planning Standards and Reporting Standards.
Health Infrastructure endorsed the current release for industry use commencing 2nd October 2012.

What is new?
This is the first issue of this document in its current format. This Document supersedes any previous Cost
Planning or Cost Management documents issued by NSW Health.

Contacts
Anthony Manning
Health Infrastructure
02 9978 5402
Anthony.Manning@hinfra.health.nsw.gov.au

Acknowledgements
Health Infrastructure acknowledges the following contributors to the development of this Document:
 NSW Health;
 HI Expert Reference Group;
 Rider Levett Bucknall;
 All reviewers of the draft versions; and,
 All past authors, contributors and reviewers to previous releases.

Foreword
This document is intended for the use on healthcare facility projects valued at $10 million and above.
Cost Planning and Reporting Standards

CONTENTS

1. INTRODUCTION AND INSTRUCTIONS FOR USE................................................................ 1


1.1 Description ......................................................................................................................... 1
1.2 Objective of this Document ................................................................................................. 1
1.3 Document Structure ........................................................................................................... 1
1.4 Application ......................................................................................................................... 2
1.5 Relationship to other documents and guidelines ................................................................. 2
1.6 Review and revision ........................................................................................................... 3
1.7 Definitions .......................................................................................................................... 3
1.8 Acronyms ........................................................................................................................... 4
2.0 COST PLANS........................................................................................................................ 6
2.1 Introduction ........................................................................................................................ 6
2.2 Cost Plans Required .......................................................................................................... 6
2.3 Probability (P) Rating ......................................................................................................... 6
2.4 General .............................................................................................................................. 6
2.5 Cost Plan Layout ................................................................................................................ 7
2.6 Travel and Engineering Allowance...................................................................................... 7
2.7 On-Costs............................................................................................................................ 8
2.8 Contingencies .................................................................................................................... 9
2.9 Fees................................................................................................................................. 10
2.10 FF&E ............................................................................................................................... 11
2.11 ICT ................................................................................................................................... 13
2.12 Escalation ........................................................................................................................ 15
2.13 Cashflow .......................................................................................................................... 15
3.0 FINANCIAL REPORTS........................................................................................................ 17
3.1 HI Portal ........................................................................................................................... 17
3.2 Monthly Financial Report .................................................................................................. 17

APPENDICES
APPENDIX A FORMAT FOR STANDARD COST PLAN REPORT
APPENDIX B PRO-FORMA FOR STANDARD COST PLAN REPORT
APPENDIX C PRO-FORMA FOR STANDARD COST PLAN SUMMARIES
CP1 COST PLAN SUMMARY
CP4 ELEMENTAL SUMMARY
CP5 TRADE SUMMARY
CP6 PLANNING UNIT COST PLAN DETAILS
APPENDIX D PRO-FORMA FOR PRELIMINARIES (INDICATIVE)
APPENDIX E CONTINGENCIES
APPENDIX F PROFORMA FOR STANDARD CASHFLOW
APPENDIX G PROFORMA FOR VARIATION REGISTER
APPENDIX H FORMAT FOR (MONTHLY) FINANCIAL REPORTING
APPENDIX I PROFORMA FOR STANDARD (MONTHLY) FINANCIAL REPORTING
Cost Planning and Reporting Standards

1. INTRODUCTION AND INSTRUCTIONS FOR USE

1.1 Description
This document provides standard information for Cost Managers to prepare cost
information and documentation in the planning, design and implementation of new and
refurbished healthcare facilities in NSW over $10million in value (principally). Information in
this document is referred to throughout the text as: „Cost Planning and Reporting
Standards; „this Document‟; or „these Standards‟.
The purpose of these Standards is to ensure consistency in respect of the cost deliverables
of the Project and a framework for the uniform preparation and presentation of cost advice
by the Cost Manager to Health Infrastructure (HI).

1.2 Objective of this Document


The main objectives of these Standards are:
 To provide general guidance to Project team members in the design and
implementation of health care facilities in NSW for HI;
 To provide a single source reference document to define the requirements for cost
planning and cost reporting;
 To ensure consistency in the presentation of the cost deliverables of a Project;
 To facilitate cost comparison between projects;
 To facilitate cost benchmarking of projects;
 To convey HI policy;
 To identify inclusions within key cost components; and,
 To standardise reporting formats.

1.3 Document Structure


This Document is divided into numbered „Sections‟. The Sections are as follows:
1. Introduction and Instructions for Use;
2. Cost Plans;
3. Financial Reports; and,
4. Appendices.

Introduction and Instructions for Use


This Section (1).

Cost Plans
Section (2) provides Standards on the format, structure and definitions of items for
inclusion in Cost Plans deliverable during HI Projects.

Financial Reports
Section (3) provides Standards for Financial Reporting deliverable during HI Projects.

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Appendices
The Appendices to this Document include standard structures for reporting, pro-formas
and the like for Cost Plans and Financial Reporting.

1.4 Application
This Document is applicable to the entire Project Team to comprehend, support and apply
to all HI Projects.
Without limiting the professional processes of the Cost Manager, the User of this Document
is tasked with complying with the pro-forma documentation and structures for deliverables
and submissions to HI.
The application of these Standards is to ensure consistent information is presented to HI
during Projects and for later reference by others for benchmarking and general reference.
With the exception of Contingencies where allowances (percentages or otherwise) are
included within these Standards, the Cost Manager must undertake their own investigations
as well as any necessary benchmarking to validate the allowance as provided. In the
application of these Standards, where the allowances are significantly varied by the Cost
Manager, justification is required to be given in writing within the Project Reporting.
In all HI Projects, the Cost Manager must have a considered understanding of the intent of
these Standards together with advice and progressive thinking on how this intent can be
best presented to articulate the cost goals, and reporting of the Project.

1.5 Relationship to other documents and guidelines


This Document must be read in conjunction with other existing guidance and in accordance
with AIQS and RICS best practice.
All HI Projects must be delivered in accordance with the requirements of all relevant Codes
and Regulations.

1.5.1 Related Documents from HI


This Document forms part of a series of HI documents developed for use in design
and delivery of healthcare facilities in NSW.
To fully comprehend these Standards, Users must make themselves familiar with
the documents in this Section (1.5), as well as the relevant parts of any specific
reference documents noted in individual sections within these Standards.
The following HI documents (listed in order of relative importance) are associated
with this Document, including but not limited to:
a) „Part F‟ of the capital consultants‟ Request For Tender documents: this
forms the Consultants‟ scope of services and deliverables in the
administrative aspect of the consultants‟ engagement with HI;
b) TS 11: Engineering Services Design Guidelines;
c) Health Infrastructure Portal Project Director‟s Manual; and,
d) FF&E Strategy – HI Strategy and Documentation.

1.5.2 Other Related Documents


Other documents (listed in order of relative importance) relevant to this Document
and to be referred to by the User; include, but are not limited to:

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Cost Planning and Reporting Standards

a) Australian Health Facilities Guidelines (all parts);


b) Australian Health Facilities Guidelines, Part F - Project Implementation
680 Furniture, Fittings and Equipment; and,
c) Australian Cost Management Manual (ACMM).
The provisions or requirements of other documents and/ or guidelines will need to
be assessed against the deliverables required by this Document.

1.5.3 Reference to Other Documents


Where references are made in these Standards they are to the latest version of
referenced guides, codes and standards applicable. The user of this Document
must verify the latest guidance material available at the time work is to be carried
out.
The minimum requirements must be those listed in legislation, mandatory and
relevant standards and accepted good practice guides relevant to healthcare
facilities.

1.6 Review and revision


A process of review and revision has been developed for these Standards. HI and industry
comment will be sought and responded to in future versions of these Standards.

1.6.1 Consultant/User Feedback


Users of this Document are invited to provide feedback on any aspect of the
Standards that may be considered of benefit to HI in order to facilitate continuous
improvement in the design and operation of NSW healthcare facilities.

1.7 Definitions
Definitions that are specific to words or phrases used in this Document are listed in the
following table.

Item Definition
Business Case A budget established as part of the Business Case process developed in
accordance with NSW Treasury Guidelines.
Net Construction Cost The cost of the building consisting of the substructure, superstructure,
external fabric and finishes, internal fabric, internal finishes, fixed fittings
and all services within and under the building, the external works and
services within the boundaries of the site and connection to Authorities
services at the perimeter of the site, Project specific costs within the
boundaries of the site; unless otherwise stated.
Gateway Review A series of structured reviews that are held at key decision points (gates)
in the procurement process. NSW Treasury retains the responsibility for
Gateway Review(s).
Greenstar A comprehensive, national, voluntary environmental rating system that
evaluates the environmental design and construction of buildings. The
system has been developed by the Green Building Council of Australia.
Gross Construction The Net Construction Cost plus preliminaries, overheads and profit,
Cost staging and locality allowance
Project risk register The document prepared by the Project Manager (with input from the
Project Team) and issued to HI on a monthly (or other agreed) basis.

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Project Team The consultant Project Team for the Project including; Project Manager.
Quantity Surveyor, Architect, Engineers and all Other Consultants.
HI Project Director The Health Infrastructure Project Director for the Project.
Access Layer Comprises the structured cabling system, hardware, WAP points and
supporting active equipment which enable access to the “Access Layer”.

1.8 Acronyms
Acronyms that may be used in this Document are listed in the following table.

Acronym Definition
ACMM Australian Cost Management Manual
AHFG[s] Australian Health Facility Guideline[s]
AS Australian Standard
AS/ NZS Australian and New Zealand Standard
BC Building Cost
CC Construction Cost
EA Economic Appraisal
ERG Expert Reference Group
ESC Executive Steering Committee
ESD Environmentally Sustainable Development
ETC End Total Cost
FF&E Furniture Fixtures & Equipment
FIS Financial Impact Statement
GCC Gross Construction Cost
HFBS Health Facility Briefing System
HFG Health Facility Guidelines
HI Health Infrastructure (also means the HI Project Director)
HPU Hospital Planning Unit
ICT Information & Communications Technology (ICT)
LHD Local Health District
NCC Net Construction Cost
NETC Net End Total Cost
PDC Project Development Committee
PDP Project Definition Plan
SOA Schedule of Accommodation
SPP Service Procurement Plan
TPC Total Project Cost
TS11 Technical Standards 11 – Engineering Services Design Guidelines
VM Value Management
VMS Value Management Study

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Cost Planning and Reporting Standards

2. COST PLANS

2.1 Introduction
The Cost Manager is to ensure that Cost Plans are:
 Holistic;
 Based upon all documentation available at the time the Cost Plan is produced;
 Incorporating all possible investigations;
 Inclusive of individual Project characteristics and site specific features; and,
 Established in conjunction with anticipated procurement methodologies and
programme; and,
 Compliant with the „Reporting Requirements‟ of the Consultant‟s contract.
 Inclusive of all applicable allowances and imposts including any applicable
allowance for the carbon pricing mechanism

2.2 Cost Plans Required


The Cost Manager is required to prepare Cost Plans as indicated in the following table.

Cost Plan HI Project Delivery Part HI Project Delivery Phase


Cost Plan A (P50) Part 1 – Master Planning Phase 1 - Planning
Cost Plan B (P60) Part 2 – Feasibility Development Phase 1 - Planning
Cost Plan C (P70) See below See below
Cost Plan C1 Part 3 - Schematic Development Phase 1 - Planning
Cost Plan C2 Part 4 - Design Development Phase 2 - Implementation
Cost Plan D (P80) Part 5 - Contract Documentation Phase 2 - Implementation

Cost Plans are generally to be prepared in accordance with the Australian Cost
Management Manual (ACMM).

2.3 Probability (P) Rating


Each Cost Plan has a Probability rating. This relates to the level of certainty that the Cost
Plan provides. For example, P70 represents a Cost Plan that has a 70% chance of being
delivered within Budget. As the Project Stages progress, the Probability level will increase.
The benefit of this rating is that the Cost Plan represents a realistic expectation of the level
of certainty based on the information available.
The P level P70, for example, does not represent that the Budget is likely to be exceeded
by 70%, but that there is a 30% chance of the Budget being exceeded. The Contingency
sums still need to accurately reflect the level of risk for the Project at each Stage. The
probability level includes the Project Contingency allocated to each design Stage.

2.4 General
It is intended that each Cost Plan establishes the „End Total Cost‟ (ETC) with allowances
assessed and modified on an individual Project basis.
Once the Business Case has been established, the allowances for ESD initiatives,
Contingencies, LHD Fees and HI Management must be maintained, as a maximum, at their

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Cost Planning and Reporting Standards

Business Case level in subsequent Cost Plans; notwithstanding that the GCC may
increase. The rationale for this is that the works are to be designed to the Business Case
Budget and therefore the Business Case Allowances for these items will not be exceeded.
Notwithstanding this position, the allowances will be subject to detailed reviews as cost
plans are developed and can only be amended upon agreement with the HI Project
Director.
Cost Plans and Cost Reports must report costs exclusive of GST.

2.5 Cost Plan Layout


The Cost Plan must include commentary on all of the items identified in the standard
Contents list as included in Appendix A. It must also be based on the Pro-forma as supplied
in Appendix B.
The Cost Plan must also include the appropriate Cost Plan Pro-Forma(s) provided for
reference in Appendix C.
The applicable pro-formas to be presented with each different type of Cost Plan are as
identified in the following table.

Pro-forma CP1 Pro-forma CP4 Pro-forma CP5 Pro-forma CP6


Cost Plan required required required required
Cost Plan A required ~ ~ required
Cost Plan B required required ~ required
Cost Plan C1 required required ~ required
Cost Plan C2 required required ~ required
Cost Plan D required required required required

2.6 Travel and Engineering Allowance


Generally the schedule(s) of accommodation (SOA) provided to the Cost Manager include
both the HPU areas together with an allowance for intra-departmental circulation. They
generally exclude inter-departmental travel and engineering allowances.
The SOA provided must be interrogated to identify if any travel and engineering allowances
have been included.
Allowances for travel and engineering must be measured from the drawings. Where no
drawn information is available, allowances for travel and engineering must generally be as
advised in the AHFG, Part C, Clause 705.25.00.
These allowances above must be verified by benchmarking against similar projects and by
reference to the Project Design Team.
Note that central energy buildings, „hospital streets‟, link corridors, bridges and the like must
be included as Project Specifics and not deemed part of travel and engineering.

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2.7 On-Costs

2.7.1 ESD Initiatives


The HPU cost/m2 rates must include best practice and minimum 4-Star Greenstar in
respect of the capital works that make up a HPU. ESD allowances are intended for
initiatives above 4-Star Greenstar and beyond best practice, to improve
sustainability, or meet Government policy initiatives such as energy efficiency and
water resource management.
For ESD Initiatives the following allowances must be made:
 4% of Construction Cost (CC) where Total Project Cost (TPC) is less than
$100m; or,
 2.5% of Construction Cost (CC) where Total Project Cost (TPC) is greater
than $100m.
Once design information is available it is anticipated that the ESD Initiatives costs
will be built up and replace the percentage allowance(s).

2.7.2 Preliminaries
Preliminaries allowance must take account of:
 The proposed programme;
 The manner (methodology) in which the works will be undertaken; and,
 The specifics of the site.
Where Preliminaries allowances are based on percentages, the percentages must
be benchmarked from similar projects executed under similar conditions and take
account of market forces.
A Preliminaries Cost Plan must be developed no later than Cost Plan C1 and
updated for later Cost Plans. An indicative format is provided in Appendix D,
Preliminaries Pro-Forma (Indicative).

2.7.3 Margin
Margin allowance must take account of the Contractors‟ profit and offsite overheads
as well as any contractual risk to be borne.

2.7.4. Staging Costs


Staging Costs include the cost of:
 Temporary/ staged decanting of the NSW Health‟s operations;
 Temporary works necessary as a consequence of the need to maintain an
existing healthcare facility during the works and maintain the NSW Health‟s
operations;
 Works and costs consequential on a programmed staging of the works; and,
 Costs associated with temporary services resulting from engineering
services shutdown to accommodate Project works (e.g. providing gas
bottles, temporary generators, bottled water etc.)

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2.7.5 Locality Allowances


The locality allowance is added to take account of factors affecting labour and
material costs and/or the loss of competition that can occur in remote areas. There
is published cost data and indices comparing different localities to a base. Whilst
these may be used as a reference it is incumbent on the Cost Manager to apply
Locality Allowances derived from their own investigations of the anticipated
marketplace, resources available in the locality and other factors that will have a
bearing on the cost of the work.
The Locality Allowance must be identified separately in Cost Plan‟s A and B. The
locality allowances may be built into the rates used or applied as a separate
allowance in Cost Plan‟s C and D.
The Locality Allowance must be either built into the rates or shown separately as
appropriate, but must not be in both.

2.8 Contingencies
HI has prepared guideline Contingency allowances for each Phase of a Project. Refer to
Appendix E.
Whilst guideline Contingencies have been prepared, it is imperative that the Cost Manager
develop Project-specific Contingencies based upon the risk registers developed by the
Consultant Team.
From and including Cost Plan C the adequacy of the contingency must be reviewed by
undertaking a costing and probability analysis of the Project Risk Register. The Cost
Manager, in conjunction with the Project Manager, is to continuously review and update the
Register to reflect the changing risk profile.

2.8.1 Project Contingency


This is intended for risks that can be owned and managed by the project, based on
the information available to them at the appropriate stages. The Cost Manager
must make sufficient provision for risks as identified within the three categories –
Design, Construction and Town planning:
 Design development contingency % of gross construction cost required
whilst developing design issues;
 Town planning contingency % of gross construction cost, required whilst
Town planning issues are resolved; and,
 Construction contingency % of gross construction cost, an allowance to fund
client risks during construction.

2.8.2 Client Contingency


This is intended to capture risks outside of the Project that the Project Team can
have little or no influence over. Items such as scope definition, changes in HPU
guidelines, changes in legislation, best practice and Government policy and the
impact of Government reprioritisation.
Risks must generally transfer from the Client Contingency to the Project
Contingency, during development of the Project and then either be realised or
mitigated.
The percentages indicated in the summary table are taken as „normal‟ percentages,
in all cases this percentage will be reviewed by the Project‟s Executive Steering

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Committee (ESC) in conjunction with the Project Team to establish the


appropriateness of the allowance compared to the known and unknown risks of the
Project. As such the allowance will be increased and decreased depending upon
the level of risk assessed in the Project.
At all stages the Cost Plan produced by the Cost Manager will include both the
Project Contingency and the Client Contingency. It is important that the two are
kept separate to allow the management of the contingency sums. Where
percentages are applied to both Project and Client contingencies are calculated on
the Gross Construction Cost (GCC) identified by the Cost Manager.

2.8.3 Allocation of Contingency


The allocation of project and client contingency is the sole domain of the Project‟s
Executive Steering Committee (ESC).
Any request for the ESC to allocate contingency must be based on a formal
submission from the HI Project Director and endorsed by the Project‟s Planning and
Development Committee (PDC) or Project Control Group (PCG).

2.9 Fees

2.9.1 Consultant Fees


Consultant Fees must include for:
 Professional design documentation and supervisory fees;
 Fees for consultants inputting advice into the Project; and,
 Costs associated with investigations of the site.
The Consultant Fees are also inclusive of fees associated with the Economic
Appraisal of the Project together with Gateway facilitation costs.
Consultant Fees must be benchmarked and based upon the Cost Manager‟s
experience but must be based on actual commissions as soon as available.

2.9.2 Authority Fees and Charges


The Cost Manager must make an assessment of the scheduled costs of external
agencies assessing and certifying building/construction approvals.
Authority Fees and Charges that may be applicable to a project include:

 Project Application Fee;


 Planning Reform Fee;
 Administration Fee
 Advertising Fee;
 Headworks Charges;
 Long Service Levy (may be included in building works contract at Cost Plan
D); and,
 Authorities contributions and charges.

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2.9.3 LHD Fee


For the LHD fee, Cost Plans A and B is to include an allowance of:
 1.5% of Gross Construction Cost (GCC) for all LHD costs inclusive of final
decanting or as otherwise advised by HI.
Cost Plans C and D must include allowances calculated by the LHD within the
1.5% allowance.
The LHD Fee is to cover the costs of project support by the LHD relating to the
capital work including, but not limited to:
 Input into the FIS;
 Change management;
 Communications strategy;
 FF&E procurement; and,
 Operational commissioning of the healthcare facility.

2.9.4 HI Management Fee


HI Management Fee is to be as follows:
 2% of Net End Total Cost (NETC) or as otherwise advised by HI.

2.10 FF&E
Furniture, Fixtures and Equipment (FF&E) includes the following:
 Furniture:
o Loose or movable, generally functional, items that equip a room (e.g. tables,
chairs and workstations);
 Fixtures:
o May also be referred to as „fittings‟;
o Fixed items that are attached to the building (walls, floors and/or ceiling);
and,
o May or may not require services (water, gas, electricity) connections;
 Equipment:
o Clinical equipment (e.g. defibrillator, ventilator, diathermy machine);
o Non-clinical equipment, which has a specific therapeutic or diagnostic
purpose (e.g. wheelchairs, IV poles, mechanical lifts); and,
o Major Medical Equipment, which is high-cost clinical diagnostic and
treatment electromedical items that may require specialist services (water,
electricity, gas, data networking and/or airconditioning) to be operational
before commissioning (e.g. linear accelerator, MRI, dental chair, x-ray
machine).
FF&E is separated into three (3) groups of items:
 Group 1, Supplied and installed by the Contractor:
o This includes everything that can be warranted and fully installed by the
Contractor.

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 Group 2, Supplied by the Client and installed by the Contractor:


o This may include items that the Client has on supplier contract or items for
transfer.
 Group 3, Supplied and installed by the Client:
o This will include items that are specific to the Project, but are under full
procurement and delivery control of the Client.

2.10.1 FF&E for Cost Plans A and B


For Cost Plan A and B, the FF&E estimate is to be established by reference to
AHFG rates/m2 for each HPU (or department rates), as well as benchmarking from
other Projects.
High cost transfer equipment should be identified at this stage (diathermy,
echocardiograph and the like).
Major medical equipment must be identified and costed separately.

2.10.2 FF&E for Cost Plans C and D


For Cost Plan C onwards, an FF&E Cost Report must be prepared as per the HI
template available on the HI Portal.
FF&E incurs two (2) separate costs:
 Cost for procurement; and,
 Cost for transfer;
The FF&E Cost Report template is designed to reflect this cost breakdown, so all
Cost Reporting is to be completed in the format specified in the Budget Template,
which has predefined formulas embedded into it.

2.10.3 Types of Equipment


The Budget Template is divided into the two types of equipment (new and
transfer). Each type is further defined to show costs for Major Medical (any item
that requires a final installation or shop drawing) and Minor Medical items. The Cost
Manager is to note the following:
 Costs for New Group 1 Major Medical items should be reflected line item by
line item;
 Costs for New Group 2, 3 items should be reflected line item by line item;
 Costs for Transfer Major Medical items should be reflected line item by line
item;
 Costs for Transfer Group 2, 3 items should be reflected line item by line item
and should include costs for Decontamination, Decommissioning, Tagging,
Wrapping and Packing, and actual Transfer / relocation costs.

2.10.4 Groups (1, 2 or 3)


Regarding Groups, the Budget Template is designed for the HI Project Director‟s to
monitor costs incurred by the LHD (Group 2 procurement and Group 3 procurement
and installation). The Budget Template does not show costs for Group 1 items, as
these will be reflected in the construction costs.

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2.10.5 Resource Costs


The FF&E Cost Report template is specifically designed to ensure any costs
associated with resources are both accounted for and transparent. If the costs are
accounted for under Professional Fees or in other parts of the Budget, it must be
specifically stated where each Resource Cost is being taken into account.

2.11 ICT
Information and Communications Technology (ICT) includes the following:
 ICT Infrastructure, which may include:
o Structured Cabling Systems;
o Wide Area (WAN) and Local Area Networks (LAN);
o Wireless Networks (WLAN), including support for Automatic Guided Vehicles
(AGV);
o Networking devices which facilitate the LANs and WLANs, including
switches, routers, racks and servers to enable the access layer;
o Communications, including Public Address and Messaging Systems, two
way radio and paging systems, voice over WLAN, Digitally Enhanced
Cordless Telecommunication (DECT), Unified Communications (including
legacy PABX and fixed voice);
o ICT accommodation, for example, Communications Rooms, Ducts and
Risers.
 ICT Functional Systems, which may include:
o Clinical Information and Services, Point of Care Systems, and Patient
Records Systems;
o Building Management Control Systems (BMCS), Programmable Logic
Controllers (PLC) and Supervisory Control And Data Acquisition (SCADA);
o Logistics, Supply Chain Management, Stock and Instrument Control;
o Patient Entertainment, Comfort, Audio Visual, TV systems;
o Education, Research and Training; Hospital Administration, Asset
Management and Human Resources; and,
o Security, Staff Assist, Nurse Call, Porter, Duress and Orderly Systems, Real
Time Location and Way Finding Services.
Most of the ICT functional systems are included in the building contract except for the
software of:
 Patient Entertainment systems;
 Administration systems; and,
 Asset management systems.
ICT is to be a separate line item in all cost plans and cost reports.
ICT is separated into three (3) Groups of items:
 Group 1, Supplied and installed by the Contractor:
o This includes everything that can be warranted and fully installed by the
Contractor.
 Group 2, Supplied by the Client and installed by the Contractor:

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o This may include items that the Client has on supplier contract or items for
transfer.
 Group 3, Supplied and installed by the Client:
o This will include items that are specific to the Project, but are under full
procurement and delivery control of the Client.
The Project will fund ICT infrastructure associated with the “Access Layer”, as well
as ICT equipment which directly supports clinical functions (including Nurse Call,
Security, Duress, Major Medical ICT, clinical video conferencing, master clocks,
master aerial systems and imaging.

2.11.1 ICT for Cost Plans A and B


For Cost Plan A and B, the ICT estimate is to be established by reference to AHFG
rates/m2 for each HPU (or department rates), as well as benchmarking from other
Projects.
High cost transfer equipment should be identified at this stage.

2.11.2 ICT for Cost Plans C and D


For Cost Plan C onwards, an ICT Cost Report must be prepared as per the HI
template available on the HI Portal.
ICT incurs two (2) separate costs:
 Cost for procurement; and,
 Cost for transfer;
The ICT Cost Report template is designed to reflect this cost breakdown, so all Cost
Reporting is to be completed in the format specified in the Budget Template, which
has predefined formulas embedded into it.

2.11.3 Types of Equipment


The Budget Template is divided into the two types of equipment (new and
transfer). The Cost Manager is to note the following:
 Costs for New Group 1 ICT should be reflected line item by line item;
 Costs for New Group 2, 3 items should be reflected line item by line item;
 Costs for Transfer Major ICT should be reflected line item by line item;
 Costs for Transfer Group 2, 3 items should be reflected line item by line item
and should include costs for Decontamination, Decommissioning, Tagging,
Wrapping and Packing, and actual Transfer / relocation costs.

2.11.4 Groups (1, 2 or 3)


Regarding Groups, the Budget Template is designed for the HI Project Director‟s to
monitor costs incurred by the LHD (Group 2 procurement and Group 3 procurement
and installation). The Budget Template does not show costs for Group 1 items, as
these will be reflected in the construction costs.

Version 1.0, June 2012 Page 14


Cost Planning and Reporting Standards

2.11.5 Resource Costs


The ICT Cost Report template is specifically designed to ensure any costs
associated with resources are both accounted for and transparent. If the costs are
accounted for under Professional Fees or in other parts of the Budget, it must be
specifically stated where each Resource Cost is being taken into account.

2.12 Escalation
The Base Date(s) prevailing for the rates included in the Cost Plan must be clearly
identified. It is important that Escalation from the Base Date to Construction
Commencement and Escalation during the construction period are separately identified.
Whilst published cost data and indices may be used as a reference, it is incumbent on the
Cost Manager to apply escalation factors derived from their own investigation of the
anticipated marketplace and Project specifics. Escalation must be accounted for on the sum
total of the estimated Total Project Cost (TPC) prevailing at the Base Date.
Following completion of the Cost Plan (C2), Escalation is to be distributed within the
elemental and/or trade analysis.

2.13 Cashflow

2.13.1 Generally
Cashflows must reflect when expenditure is anticipated to be accrued and not when
paid, e.g. for the value of work done (vowd) during June, the cost is recorded
against June, not July, which is when the payment certification and payment is likely
to occur.
It is anticipated that the Cashflow is a compilation of the cash flowing of individual
cost centres and individual Construction contracts.
In the Cashflow, Project and Client Contingencies must be shown separately and
consideration must be given to when they are likely to be expended rather than
being cash flowed over the life of the project..
Cashflows must reflect NSW Government financial years that commence on 1 July
annually.
In the Cashflow, FF&E must reflect anticipated expenditure in accordance with the
programme and any deposits and early payments. Generally it is expended 30% in
the period 6-3 months prior to Project Completion and 70% in the final 3 months
prior to Project Completion. The Cashflow for professional fees shall reflect the
different rate of expenditure during the planning and delivery phases as well as pre-
and post-construction.
The Cashflows are to be updated monthly to reflect Actual Expenditure as incurred.

2.13.2
During the Business case phase, prior to Cost Plan C, the Cashflow must be
presented as included in Appendix F.
The Cashflow Pro-forma has been developed to serve competing interests. During
the Business Case the financial modellers require the Cashflow exclusive of
Escalation. HI for their purposes requires Annual Cashflows prepared that are both
inclusive and exclusive of Contingency.

Version 1.0, June 2012 Page 15


Cost Planning and Reporting Standards

2.13.3
For Cost Plan C and onwards the Cashflow must reflect the project programme
prepared by the Project Manager as updated from time to time and not based upon
standard Cashflow formulae. The programme must identify anticipated delivery
dates of major items of plant and equipment as well as cost significant items. The
Cashflow must reflect the expenditure of these items as lump sums rather than
being cash flowed over the life of the project.
Cashflow‟s for LHD fees should be obtained from the LHD and for HI fees from HI.
The Cash flow is to reflect the anticipated ETC exclusive of contingency allowances
where it is deemed, by the Project Director in consultation with the Project team, that
the contingency allowance will not be required.

2.13.4
During construction the construction Cashflow is to be based upon the Contractor‟s
cash flow. Prior to adoption, the Cashflow is to be vetted by the Cost Manager and
adjusted by the Contractor, if required, and agreed. An activity based Cashflow shall
be obtained from the Contractor prior to the first progress payment claim, and
preferably at tender time, to assist the vetting. The Contractor is to update the cash
flow at the time of each progress claim.

2.13.5
From PDP onwards the Cashflow shall be monitored in monthly reports by reference
to the PDP approved Cashflow, or other milestone Cashflow s instructed by HI, and
is to be presented as included in Appendix F. Any significant deviations must be
brought to the attention of the Project Director and Project Manager so that
corrective action can be investigated.
Additionally, the Cashflow is to be prepared in the HI Portal Format as included in
Appendix F.

Version 1.0, June 2012 Page 16


Cost Planning and Reporting Standards

3. FINANCIAL REPORTS

The process of Financial Reporting to HI is via the HI internet Portal as well as by way of a
Monthly Financial Report.

3.1 HI Portal
The Cost Manager is to refer to the HI Portal Manual.
Responsibility for inputting data in the HI Portal Financial Reporting is as indicated in the
following table.

Input Responsibility
Budget HI Project Director
Commitments Project Manager (approved by HI Project Director)
Forecast commitments Cost Manager
Payments Project Manager (approved by HI Project Director)
Cashflow Cost Manager
Commentary HI Project Director and Project Manager

3.2 Monthly Financial Report


The Cost Manager is to prepare a Monthly Financial Report and in addition is required to
upload information into the HI Portal as a Financial Report.

3.2.1 Purpose
The purpose of the Monthly Financial Report is to convey the financial status of the
Project by providing information on Project budget status, funding sources,
cashflow, financial risks and be a base data source for PDC, PCG and ESC
governance groups.
The HI Portal Financial Report must form an appendix to the Monthly Financial
Report.

3.2.2 Layout
The Monthly Financial Report must include commentary on all of the items identified
in Appendix H. It must be presented in the format as supplied in Appendix I.

Version 1.0, June 2012 Page 17


Cost Planning and Reporting Standards

APPENDICES

Version 1.0, June 2012 Appendices – Cover Page


Cost Planning and Reporting Standards

APPENDIX A

STANDARD COST PLAN REPORT


FORMAT
Cost Planning and Reporting Standards

FORMAT FOR STANDARD COST PLAN REPORT

Each Cost Plan Report must include the following standard headings (as indicated by
numbered, bold text) and content as described in dot-points below:

1.0 Executive Summary


 Inclusive of an estimate budget comparison

2.0 Basis of Cost Plan


 Summary of the information used as the basis for the specific Cost Plan.

2.1 Introduction
 A concise note on the status of the project.

2.2 Scope of Project


 A concise description of the project including location, building type,
number of storeys, service level and service objectives, major
departments, bed numbers, theatre numbers, etc.

2.3 Outline of Cost Plan


 An outline of the level of cost plan, design stage, method of preparation,
methodology of pricing, etc.

2.4 Specific Inclusions


 A schedule of items and allowances included in the Cost Plan. E.g. Mining
subsidence allowance, radiation shielding to imaging theatres, Contractor‟s
design fees, shell space etc.

2.5 Specific Exclusions


 Exclusions other than GST must be avoided. Items such as “fit outs by
tenants” are to be recorded as “work by others outside the Project Scope”.

2.6 Drawings & Information Used


 A schedule of all drawings, specifications, reports and the like used in the
preparation of the cost plan.

2.7 Area Measurement


 A schedule of gross floor areas (GFA) on a departmental basis;
 A schedule of Travel and Engineering areas;
 A schedule of unenclosed covered areas (UCA);
 A summary of all building areas; and,
 Where areas can be measured there must be a reconciliation of measured
areas to the SOA.

2.8 Procurement and Market Assumptions


 An outline of the proposed procurement method, anticipated market
conditions and any other factors likely to affect the pricing of the Project.
Cost Planning and Reporting Standards

2.9 Escalation
 Confirmation of the base date of the cost plan and the assumption used for
calculating escalation.

2.10 Locality Index


 Confirmation of the locality factor used and basis of applying factor.

2.11 Exchange Rate


 Exchange rate applicable for overseas procured items including FF&E.

2.12 Asset Acquisition & Asset Realisation


 Details of land purchases included in estimate and any asset realisations
relied upon.

2.13 Risks and Contingencies


 Details of specific risks having a bearing on the estimate;
 Contingency allowances included in estimate; and,
 Value Management workshops undertaken.

2.14 ESD and Sustainability Initiatives


 A schedule of items and allowances

2.15 Staging Costs


 A schedule of assumptions and allowances.

2.16 Benchmarking
 Details of other projects upon which benchmarking has been undertaken
and details of major inputs; e.g. Building cost/HPU/bed, Building cost/unit
(e.g. theatre/bunker), FF&E cost/m2 FF&E cost/unit (e.g. theatre/bunker),
Fees etc..

2.17 Fees
 Details of fee allowances.

2.18 FF&E
 Details of FF&E allowances; and,
 Summary of FF&E cost report.

2.19 ICT
 Details of ICT allowances; and,
 Summary of ICT cost report.

2.20 Budget Reconciliation


 Full reconciliation of cost plan against budget and previous cost plan.
Reconciliation of each cost plan to be maintained progressively so that all
cost plan adjustments are progressively visible.

2.21 Life Cycle Cost


Cost Planning and Reporting Standards

 Refer to separate HI document „Life Cycle Costing Guidelines‟.


3.0 Cost Plans
Cost Plans are to be included as applicable and to the pro-forma as supplied in Appendix C
of this Document (Cost Planning and Reporting Standards).

3.1 Cost Plan Summaries


 Include for Cost Plan summaries as required for the particular Cost Plan
stage.

3.2 Cost Plan


 Include the detailed cost plan.
Cost Planning and Reporting Standards

APPENDIX B

PRO-FORMA FOR STANDARD


COST PLAN
Cost Planning and Reporting Standards

COVER PAGE:

COST PLAN REPORT


NUMBER [Ref]

for

[PROJECT PHASE/ PART]

[PROJECT NAME]

[PROJECT LOCATION]

[Date]

Prepared by
[insert logo or name of company]

Prepared for:
Cost Planning and Reporting Standards

INSIDE COVER PAGE:

Header

CONTENTS
1. Executive Summary
2. Outline of Cost Plan
2.01 Introduction
2.02 Scope of Project
2.03 Basis of Cost Plan
2.04 Specific Inclusions
2.05 Specific Exclusions
2.06 Drawings & Information Used
2.07 Area Measurement
2.08 Procurement & Market Assumptions
2.09 Escalation
2.10 Locality Index
2.11 Exchange Rate
2.12 Asset Acquisition & Asset Realisation
2.13 Risks & Contingencies
2.14 ESD & Sustainability Initiatives
2.15 Staging Costs
2.16 Benchmarking
2.17 Fees
2.18 FF&E
2.19 ICT
2.20 Budget Reconciliation
2.21 Life Cycle Costs
3. Cost Plans
3.01 Cost Plan Summaries
3.02 Cost Plan
Appendices
[List Appendices]

PROJECT CONSULTANTS
HI Project Director: [insert name]
Project Manager: [insert name and company]
Cost Manager: [insert name and company]
Architect: [insert name and company]
Structural & Civil Engineer: [insert name and company]
MEP Services Engineer: [insert name and company]
Landscape Architect: [insert name and company]
[Insert others or delete as appropriate]

QUALITY SYSTEM STATUS

Revision No: ____ [insert] Issue Date: _________[insert]


Controlled Doc No: ______[insert] Checked By: _________[insert]

Distribution: _______________________________________________[insert]

Footer
Cost Planning and Reporting Standards

PAGES:

Header

1 INTRODUCTION

This Report has been prepared by _____________________________ [insert company name].

The Report is based on information provided by _________________________________ [insert]


and includes all works completed up to the end of _________ [date] and forecast final cost of the
Project to completion.

[INSERT OTHER TEXT AS APPROPRIATE]

[INSERT REMAINDER HEADINGS AND BODY TEXT AS PER CONTENTS LIST]

Footer
Cost Planning and Reporting Standards

APPENDICES SECTION COVER PAGE:

Header

APPENDICES

Footer
Cost Planning and Reporting Standards

OTHER APPENDIX COVER PAGE:

Header

APPENDIX [letter]
[NAME OF APPENDIX]

[INSERT DOCUMENTS ON FOLLOWING PAGES]

Footer
Cost Planning and Reporting Standards

APPENDIX C

PRO-FORMA FOR STANDARD COST PLAN


SUMMARIES
Cost Planning and Reporting Standards

CP1 – COST PLAN SUMMARY Job Ref.


NPWC / Single / Multiple
Cost Plan Building Project
Building Type Code Project / Building Job Ref.

Location Date BPI


Current
Client Tender
Locality Index
Physical Cost / Other Factors
Full Area Area Cost Current $ $
2 2
m % Weight Building Cost Cost/m Cost
%
FECA
Fully Enclosed Cov. Area 100
Rate/Cost
UCA
Unenclosed Cov. Area
Rate/Cost
Gross Floor Area (GFA) Building Rate / Cost
Departmental Area Total Current $ Tenders $
Travel & Eng Area Total Net Construction Cost
Area Efficiency Gross Construction Cost
No. of Storeys * Total Project Cost
Building Height * End Total Cost
Floor / Floor Height * Type of Contract:
Wall / Floor Area Ratio * Time for Completion
POP Ratio * Special Factors:
FF&E (% of Construction Facility Scope
Cost) - Bed numbers
- Bed numbers/m2
Level of facility
Locational factors
Shape / Description: Proportion of new build/refurbishment
Extent of refurbishment
Allowances for significant abnormals

Drawing References:

No. GCC/No. TEC/No


* Not included in Multiple Building Project Summary
Internal Car Spaces

12518 6.0 rlbrpts 6.9 nswhealthcpguidelines


Cost Planning and Reporting Standards

CP4 – ELEMENTAL SUMMARY Job Ref.

PROJECT:
G.F.A. : m2 BUILDING:
% Cost / m2 Cost
Code Element
BC $ $
1 SB Substructure
2 CL Columns
3 UF Upper Floors
4 SC Staircases
5 RF Roof
6 EW External Walls
7 WW Windows
8 ED External Doors
9 NW Internal Walls
10 NS Internal Screens and Borrowed Lights
11 ND Internal Doors
12 WF Wall Finishes
13 FF Floor Finishes
14 CF Ceiling Finishes
15 FT Fitment
16 SE Special Equipment
17 SF Sanitary Fixtures
18 PD Sanitary Plumbing
19 WS Water Supply
20 GS Gas Service
21 SH Space Heating
22 VE Ventilation
23 EC Evaporative Cooling
24 AC Air-conditioning
25 FP Fire Protections
26 LP Electric Light and Power
27 CM Communications
28 TS Transportation Systems
29 SS Special Services
00 PR Proportion of Preliminaries

BUILDING COST (BC) 100


30 CE Centralised Energy Systems
31 AR Alterations and Renovations
32 XP Site Preparation
33 XR Roads, Footpaths and Paved Areas
34 XN Boundary Walls, Fencing and Gates
35 XB Outbuildings and Covered Ways
36 XL Landscaping and Improvements
37 XK External Stormwater Drainage
38 XD External Sewer Drainage
39 XW External Water Supply
40 XG External Gas
41 XF External Fire Protections
42 XE External Electric Light and Power
43 XC External Communications
44 XS External Special Services
45 XX External Alterations and Renovations
00 PR Proportion of Preliminaries
46 YY

CONSTRUCTION COST - CURRENT / TENDER DATE


Cost Planning and Reporting Standards

CP5 – TRADE SUMMARY Job Ref.

PROJECT:
G.F.A. : m2 BUILDING:
% Cost / m2 Cost
No Trade
BC $ $
1 General Items
2 Preliminaries
3 Demolition
4 Groundworks
4.1 Excavation
4.2 Filing and hardcore
4.3 Paper and plastic membranes
4.4 Underpinning
4.5 Rock stabilisation
5 Piling
5.1 Driven piling
5.2 Cast in-situ piling
6 Concrete
6.1 In-situ concrete
6.2 Formwork
6.3 Permanent metal formwork system
6.4 Reinforcement
6.5 Prestressing
6.6 Slip formed construction
6.7 Precast concrete
6.8 Tanking
7 Masonry
8 Stonework
8.1 Natural stonework
8.2 Artificial stone, terracotta and similar work
9 Structural steel
10 Metalwork
11 Woodwork
12 Glazing
13 Hardware
14 Access floors
15 Partitions
16 Roofing
17 Suspended ceilings
18 Windows
19 Doors
20 Finishes
20.1 In-situ applied finishes
20.2 Metal lathing
20.3 Plasterboard, fibrous plaster, plaster acoustic tiles and similar
20.4 Tile, slab, block or sheet finishes, pavings and carpets
20.5 Division strips and inserts
21 Painting
22 Fitments
23 Hydraulics
24 Drainage
25 Electrical Installations
26 Mechanical Installations
27 Exterior Elements
27.1 Landscaping
27.2 Roadworks

CONSTRUCTION COST – CURRENT / TENDER DATE


Cost Planning and Reporting Standards

CP6 – PLANNING UNIT COST PLAN DETAILS Job Ref.


Date of
COST PLAN SUMMARY PROJECT: Estimate :
BUILDING: Base Date of
Estimate for
OPTION: escalation :

PLANNING UNIT Briefed Measured


H.P.U. Area H.P.U. Area Cost Cost
m2 m2 $ $/m2

1.00 General Acute


1.01 Medical m2
1.02 Surgical m2
1.03 Paediatrics m2
1.04 Mental Health m2

Sub total - - $ -

2.00 Sub Acute


2.01 Mental Health m2
2.02 Drug & Alcohol/Detox Unit m2
2.03 Assessment and Rehabilitation m2
2.04 Rehabilitation and Day Hospital m2
2.05 Palliative Care m2
2.06 Abulatory Care m2

Sub total - - $ -

3.00 Obstetrics
3.01 Birthing/Delivery Unit m2
3.02 Maternity m2
3.03 Gynaecology m2
3.04 Neonatal m2

Sub total - - $ -

4.00 Procedures
4.01 Emergency m2
4.02 Medical Imaging m2
4.03 Day Procedures m2
4.04 Intensive Care m2
4.05 Operating Suite m2
4.06 Mortuary/Post Mortem m2

Sub total - - $ -

5.00 Non Inpatient


5.01 Outpatients and Allied Health m2
5.02 Dental m2
5.03 Blood Bank m2
5.04 Pathology m2
5.05 Sexual Assault m2
5.06 Pharmacy m2
5.07 Imaging m2
5.08 Oncology m2
5.09 MRI / PET / Cyclotron ect. m2

Sub total - - $ -

6.00 Corporate Services


6.01 Linen m2
6.02 CSSD m2
6.03 Engineering Services m2
6.04 Stores m2
6.05 Domestic Services m2
6.05 Security m2
6.07 Biomedical m2
6.08 Food Services m2
6.09 Cafeteria (Staff/Pubic) m2
6.10 IT Services m2
6.11 Medical Records m2

Sub total - - $ -
Cost Planning and Reporting Standards

COST PLAN SUMMARY

PLANNING UNIT
Briefed Measured
H.P.U. H.P.U.
Area Area Cost Cost
m2 m2 $ $/m2

7.00 Administration
7.01 Child Care m2
7.02 Main Entry/Reception m2
7.03 Admissions and Discharge m2
7.04 Nursing Admin m2
7.05 Conference, Education and Library m2
7.06 Research m2
7.07 Staff Accommodation m2
7.08 Tenants m2
7.09 Area Executive m2

Sub total - - $ -

8.00 Community Health


8.01 Mental Health m2
8.02 Child Health m2
8.03 Dental m2
8.04 Community Health m2

Sub total - - $ -

9.00 Alterations to existing Structures


(Sub divide alterations)

10.00 Travel and Engineering


10.01 Inter Unit Space m2
10.02 Plant Rooms and Ducts m2
(sub divide T&E for alterations) m2

Sub total - - $ -

BUILDING COST (BC) - - $ -

11.00 Site Specifics e.g.


External Works item
External Services item
Stormwater Detention item
Temporary Works item
Earthquake Provisions item
Heritage Provisions item

12.00 Project Specifics e.g.


Central Energy and Plant item
Lifts No
PABX etc item
Car Park m2
Courtyard m2

NET CONSTRUCTION COST (NCC) - - $ -

13.00 Allowances, overheads and Margins


Main Contractor's Preliminaries item
Main Contractor's Overheads and Profit item
Staging Costs item
Locality Allowance item

GROSS CONSTRUCTION COST (GCC) - - $ -


Cost Planning and Reporting Standards

COST PLAN SUMMARY

PLANNING UNIT
Briefed Measured
H.P.U. H.P.U.
Area Area Cost Cost
m2 m2 $ $/m2

14.00 Fees
Consultant Fees % of GCC item
Authority Fees and Charges % of GCC item
Area Health Division Costs % of GCC item

15.00 FF&E
Furniture, Equipment, Artworks
(Sub divide FF&E into categories) % of GCC item

16.00 ICT
Infrastructure and Systems
(Sub divide ICT into categories) % of GCC item

17.00 Land Acquisition & Property Settlement


Land Purchase item
Property Settlements item

TOTAL PROJECT COST (BASE COST) - - $ -

18.00 Special Provisions


Escalation item
Prolongation and Delay Costs item
Contributions item
Other item

19.00 Contingencies
Design Contingency % of GCC item
Planning Contingency % of GCC item
Construction Contingency % of GCC Item
Client Contingency % of GCC item

NET END TOTAL COST (NETC) Sub total - - $ -

% of Project
HI MANAGEMENT COSTS End Cost

END TOTAL COST (ETC)


Notes :
All costs must exclude GST
Cost Planning and Reporting Standards

APPENDIX D

PRELIMINARIES PRO FORMA


(INDICATIVE)
Cost Planning and Reporting Standards

APPENDIX E

CONTINGENCIES
Contingency Requirements

1 2 3 4 5 6 7 8

Nr HI Contract Stage (Completion) Cost Stage Procurement Project Contingency Client Contingency Total Contingency Treasury
responsibility (% costs) (% costs) (% costs) Guidance (%)

C Only Design 5
HI Benchmarking Tool
0 CSP DD&C Const 5 25% 40% 33 – 100%
Includes Project Cont
D&C Planning* 5

C Only Design 5
Health Facility Briefing System
Master Planning
1 Cost Plan A DD&C Const 5 15% 30% 33 – 100%
Includes Project Cont
D&C Planning* 5

All HI
C Only Design 5
Feasibility - Concept Design (Business Cost Estimate ‘P50’*
2 Case) Cost Plan B DD&C Const 5 10% 25% 18 - 33%
Includes Project Cont
D&C Planning* 5

Cost Plan ‘P70’* C Only Design 2.5


Cost Plan C1
3 Schematic Design (PDP) DD&C Const 5 10% 20% 11 - 18%
Includes Project Cont
D&C Pre Tender Estimate D&C Planning* 2.5

D & C Procurement Point

Updated Cost Plan ‘P80* C Only HI Design 2.5


Cost Plan C2’
5 Design Development DD&C HI Const 5 7.5% 15% 11 – 18%
Includes Project Cont
DD&C Pre Tender Estimate D&C Con Planning* 0

DD & C Procurement Point

Revised Cost Plan ‘P90’* C Only HI Design 2.5


Cost Plan D
6 Construction Documentation DD&C Con Const 5 5% 12.5% 5 - 11%
Includes Project Cont Construct Only Pre Tender
Estimate D&C Con Planning* 0

Construct Only Procurement Point

C Only HI Design 2.5

7 Start of Construction Contract DD&C Con Const 5 2.5% 10% n/a

D&C Con Planning* 0

C Only HI Design 0

8 Project Commissioning Final Account DD&C Con Const 2.5 0% 2.5% n/a

D&C Con Planning* 0


Contingency Requirements

Accompanying Notes completed, the difference is in the party that is responsible for the design activity. The summary table
considers the following procurement criteria’;
Column 1 – provides a stage number for each design stage during the process
 Construct Only (full design)
Column 2 – Identifies the HI Contract Stage Terminology  Design & Construct (D&C)
 Design Development & Construct (DD&C)
Column 3 – Identifies the Cost stages aligned to the design stages
The key difference between D&C and DD&C relates to the extent to the design that the contractor
HI Benchmarking Tool is expected to undertake. D&C requires a greater extent of contractor design than a DD&C.

The HI Benchmarking tool is being designed to provide a high level budget, the tool utilises historic data and At this stage PPP and Construction Management have not been fully considered.
considers a limited number of parameters;
 Facility scope (‘bed’ numbers / m2) Column 5 & 6 - Contingency
 Level of facility
 Locational factors Contingency has been divided into two separate elements, with two separate owners to recognise the
 Proportion of New Build / Refurbishment ownership of risk in a project. No adjustment or allocation of contingency shall occur without HI Director
 Extent of Refurbishment (if any) approval.
 Allowances for significant abnormals
Project Contingency
At present this is not undertaken in a formally recorded process, the intention is to develop a tool to allow
AHS’s to provide high level budget information in line with HI. This is intended for risks that can be owned and managed by the project, based on the information available
to them at the appropriate stages. The QS should make sufficient provision for risks as identified within the
Health Facility Briefing System three categories – Design, Construction and Town Planning.

The HFBS system (subject to some development) will have the ability to generate a budget estimate which Client Contingency
is more sophisticated than the benchmarking tool. One of the issues raised in the initial consultation stage
related to the QS’s continuity of involvement in the overall process, and that the limited extent of the This is intended to capture risks outside of the project that the project team can have little or no influence
historic data that they hold on which they base their budgets. The HFBS system holds a significant amount over. Items such as scope definition, changes in legislation, best practice and government policy, and the
of historic information, both in terms of actual achieved costs and on Australia wide projects, it therefore impact of government reprioritisation.
provides a much more extensive basis for budgeting.
Risk should generally transfer from the Client contingency to the project contingency, during development
Cost Plan A – D have already been defined within Health of the project, and then either be realised or mitigated, for example the summary table shows project
contingency static at 15% for the initial phases, as SPP and PDP relate more to scope definition which is
Probability (P) – Each cost plan has a probability rating this relates to the level of certainty that cost plan provided for within the client contingency that falls during these stages from 20% to 5%, as the project is
provides – P 70 represents a cost plan that has a 70% chance of being delivered within budget, as the stages developed and defined.
progress the Probability level increases. The benefit of this is that the cost plan represents a realistic
expectation of the level of certainty based on the information available. The P level P50 for example does The percentages indicated in the summary table are taken as ‘normal’ percentages, in all cases this
not represent that the budget is likely to be exceeded by 50%, but that there is a 50% chance of the budget percentage will be reviewed by the PDPL or PDPR in conjunction with the project team to establish the
being exceeded, the contingency sums still need to accurately reflect the level of risk for the project at each appropriateness of the allowance compared to the known and unknown risks of the project. As such the
stage. The probability level includes the project contingency allocated to each design stage. allowance will be increased and decreased depending upon the level of risk assessed in the project.

Escalation – Escalation should be accounted for on the sum total of the base cost, project contingency and At all stages the cost plan produced by the QS will include the project contingency, but exclude the client
client contingency. Costs should be expressed at a base point in time (we have currently standardised contingency, it is important that the two are kept separate to allow the management of the contingency
projects currently to 30/07/08) and as a total escalated in accordance with the proposed delivery program. sums. Both contingencies are based on the base costs identified by the QS rather than a client contingency
This allows for delivery timescales to be flexed and a revised escalation calculation assessed from the base on base cost and project contingency.
point, it also allows us to raise awareness of the impact of time on the costs of the project.
Column 7 – Total Allocated Contingency
Column 4 - Procurement related Responsibility
This column identifies the total ‘normal’ risk allocation for the project – a combination of the project and
The Framework as detailed needs to be applied to a number of different procurement options, the broad client contingencies.
philosophy is that regardless of the chosen procurement route the total design work needs to be
Contingency Requirements

Column 8 - Treasury Guidance on Contingency

Treasury have provided guidance (within the Draft Capital Project Estimating (for construction) version no.1
dated 20th December 2006 – Budget estimating & contingencies, pages 13 - 19), which has been considered
as part of developing this analysis. This guidance identifies what Treasury considers to be appropriate risk
allocations during a projects development. It is noted that any risk allocation that is significantly above or
below the range identified would have to be substantiated.

The risk percentages noted by Treasury represent a proportion of the total project costs, so an allocation of
50% for risk, actually represents 100% of base cost. Percentages in column 10 have been amended from the
report to reflect risk as a % of base costs.
Cost Planning and Reporting Standards

APPENDIX F

PRO-FORMA FOR STANDARD


CASHFLOW
Cost Planning and Reporting Standards

APPENDIX G

PRO-FORMA FOR VARIATION


REGISTER
Cost Planning and Reporting Standards

APPENDIX H

FORMAT FOR FINANCIAL (MONTHLY)


REPORTING
Cost Planning and Reporting Standards

FORMAT FOR FINANCIAL (MONTHLY) REPORTING

Each Cost Plan Report must include the following standard headings (as indicated by
numbered, bold text) and content as described in dot-points below:
Refer to Appendix I for Pro-forma for Financial (Monthly) Report.

1.0 Financial Report Structure


Each Financial Report must include the following:
 Introduction;
 Project Summary;
 Variation Report;
 Cashflow Report; and,
 Appendices, incorporating detailed:
 Cost Report;
 Cashflow Report; and,
 Sundry Reports as appropriate.

Introduction
The introduction of the Financial Report is to include fundamental information on:
 Company responsible for preparing the Financial Report;
 Period for which the Report is valid; and,
 Information provided and on which the Report is based.

Project Summary
The Project Summary of the Financial Report is to include the following cost data abstracted
from the HI Portal Financial Report:
 Forecast Final Cost.
The Project Summary must also include the following supplementary sections:
 Risk Position, detailing
 Original contingency amount;
 Variations;
 Remaining contingency;
 Statement of adequacy of contingency to complete the project; and,
 Statement of committed and uncommitted costs.
 Budget Position, detailing:
 Initial Budget;
 Budget Transfers;
Cost Planning and Reporting Standards

 Funded Scope Changes;


 Current Budget; and,
 Variance of Current Budget against Forecast Final Cost.
 Explanatory Notes, detailing any:
 Specific exclusions;
 Specific inclusions;
 Threats to the project; and,
 Monthly movements in cost or contract status.

Variation Report
The Variation Report is to be linked to the detailed variation register included in the Appendices
and to include the following:
 Value/number of approved variations;
 Value/number of unapproved submitted variations;
 Value/number of un-submitted variation; and,
 Value of proposed variations.

Cashflow Report
The Cashflow Report is to be linked to the detailed cashflow included in the Appendices and to
include the following:
 Approved project cashflow;
 Indicative cashflow for current financial year;
 Monthly update of “forecast” to “actual”; and,
 Monthly movements/changes.

Appendices
The Appendices are to include detailed Monthly Reports in accordance with the Standard Pro-
forma for:
 Cost Plan information;
 Variations Register (refer to Appendix G of this Document, „Cost Planning and Reporting
Standards‟ for pro-forma);
 Cashflow Report (refer to Appendix F of this Document, „Cost Planning and Reporting
Standards‟ for pro-forma); and
 Other Reports, Correspondence, information etc., as appropriate.
Cost Planning and Reporting Standards

APPENDIX I

PRO-FORMA FOR STANDARD


FINANCIAL (MONTHLY) REPORT
Cost Planning and Reporting Standards

COVER PAGE:

FINANCIAL REPORT
NUMBER [Ref]

for

[PROJECT NAME]

[PROJECT LOCATION]

[Date]

Prepared by
[insert logo or name of company]

Prepared for:
Cost Planning and Reporting Standards

INSIDE COVER PAGE:

Header

CONTENTS

1. Introduction
2. Project Summary
2.1 Forecast Final Cost
2.2 Risk Position
2.3 Budget Position
3. Variation Report
4. Cashflow Report

Appendices
[List Appendices]
APPENDIX A - COST PLAN INFORMATION
APPENDIX B - VARIATION REGISTER
APPENDIX C - CASHFLOW REPORT
[INSERT OTHERS AS REQUIRED]

PROJECT CONSULTANTS
HI Project Director: [insert name]
Project Manager: [insert name and company]
Cost Manager: [insert name and company]
Architect: [insert name and company]
Structural & Civil Engineer: [insert name and company]
MEP Services Engineer: [insert name and company]
Landscape Architect: [insert name and company]
[Insert others or delete as appropriate]

QUALITY SYSTEM STATUS

Revision No: ____ [insert] Issue Date: _________[insert]


Controlled Doc No: ______[insert] Checked By: _________[insert]

Distribution: _______________________________________________[insert]

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Cost Planning and Reporting Standards

PAGE 1:

Header

1 INTRODUCTION

This Report has been prepared by _____________________________ [insert company name].

The Report is based on information provided by _________________________________ [insert]


and includes all works completed up to the end of _________ [date] and forecast final cost of the
Project to completion.

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Cost Planning and Reporting Standards

PAGE 2:

Header

2 PROJECT SUMMARY
2.1 Forecast Final Cost
1. Authority Fees $ XX
2. Network and NSW HI costs $ XX
3. Professional fees $ XX
4. Land $ XX
5. Early works and decanting $ XX
6. Construction $ XX
7. Major equipment and FF&E $ XX
8. ICT $ XX
9. Escalation $ XX
10. Commissioning and relocation $ XX
11. Other $ XX
12. Contingency $ XX
Forecast Total Project End Cost $ XX

2.2 Risk Position


1. Budget design contingency $ XX
2. Budget planning contingency $ XX
3. Budget construction contingency $ XX
4. Budget executive contingency $ XX
Total budget contingency $ XX

5. Approved variations (X no) $ XX


6. Unapproved submitted variation (X no) $ XX
7. Unapproved variations (X no) $ XX
8. Proposed variations $ XX
Total proposed and actual variations $ XX
9. Remaining contingency $ XX
10. Committed costs $ XX
11. Uncommitted cost $ XX
12. Percent committed % XX

2.3 Budget Position


1. Initial Budget $ XX
2. Budget Transfers $ XX
3. Funded Scope Changes $ XX
4. Current Budget $ XX
Variance Current Budget vs. Forecast Final Cost $ XX

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Cost Planning and Reporting Standards

PAGE 3:

Header

2.4 Explanatory Notes


[Insert text]

3 VARIATION REPORT
[Insert text]

4 CASHFLOW
[Insert text]

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Cost Planning and Reporting Standards

APPENDICES SECTION COVER PAGE:

Header

APPENDICES

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Cost Planning and Reporting Standards

APPENDIX A COVER PAGE:

Header

APPENDIX A
COST PLAN INFORMATION
[USING PRO-FORMA AS APPLICABLE]

[INSERT DOCUMENTS ON FOLLOWING PAGES]

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Cost Planning and Reporting Standards

APPENDIX B COVER PAGE:

Header

APPENDIX B
VARIATION REGISTER

[INSERT DOCUMENTS ON FOLLOWING PAGES]

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Cost Planning and Reporting Standards

APPENDIX C COVER PAGE:

Header

APPENDIX C
CASH FLOW REPORT
[USING PRO-FORMA AS APPLICABLE]

[INSERT DOCUMENTS ON FOLLOWING PAGES]

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Cost Planning and Reporting Standards

OTHER APPENDIX COVER PAGE:

Header

APPENDIX [letter]
[NAME OF APPENDIX]

[INSERT DOCUMENTS ON FOLLOWING PAGES]

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