Frequently Asked Questions

State Schools Property Management Handbook - Frequently Asked Questions

Section 3 - Qualifying for Funding

Can 5YA funding be used to reconfigure teaching spaces and internal walls?
Yes, 5YA funding can be used to refurbish, reconfigure and/or realign internal walls in classrooms and blocks, as this is not creating new property.

Can 5YA funding be used to build new space?
An FAQ dealing with new sqms using 5YA funding was precluded from the Handbook. It was decided that outlining the possible scenarios where 5YA builds new property would only promote the fact that it can be done. The policy in 3.2 therefore accentuates that 5YA is for existing buildings and facilities, without precluding new property.

However, the ministry will consider using the 5YA to create new property where:

• a school's up-to-date 10YPP shows that all the projected capital and maintenance needs of existing facilities are not at risk by the proposed project
• the new square metres address no more than an existing SPG deficiency
• advice is included from the ministry's financial advisor about the school's financial position (work is often part of another project the school is funding itself).

Is there still a $500 minimum for Risk Management? This does not appear to be in the Handbook?
This remains a business rule, and is active in PMIS so that anything under $500 will not be accepted.

What is the difference between Board and Community Maintained funding?
Board of Trustees (BOT) funding is:

• `Discretionary funding' such as disposal of surplus property under SPDIS.
• Surplus operational funding. This is only available for projects when boards have met all their obligations for running their schools and maintaining school property.
• Funds from other funding sources including overseas students

Community Maintained (CM) funding is:

• Fundraising
• Trusts ie ASB trust, licensing trusts, charitable trusts, community groups
• Bequests

When does a five year agreement (5YA) need to be formally re-signed?
A 5YA needs to be re-signed when either of the following occurs:

• New projects coming in or out of the 5YA are over 10% of the 5YA budget
• A school property guide deficiency project is added

If there are other changes including re-ordering projects or marginally altering costs (less than 10% of 5YA budget), the 5YA summary sheet from the 10 Year Property Plan needs to be updated and sent to the Ministry (a formal re-signed agreement page is not required). This should be completed for the next project to proceed.

What happens if the actual cost of a project is less than what has been invoiced and paid to the school?
For 5YA, Roll Growth or SPG projects, a new project is set up in PMIS called "unspent balance project x" and a journal is completed by the Ministry to transfer the expenditure.

When funding is provided for a specific project such as unforeseen work or a special needs modification, unspent funds must be returned to the ministry.

Section 5 - Project Management Requirements

Why use a project manager?
See 5.1.7 and 5.1.8 in the Property Management Handbook or see the below article from The Herald.

What classifies as a conflict of interest?
More important than the seriousness of a conflict of interest, is the identification of it, as it can then be worked around in many cases. Any relationship or interest needs to be registered before it can become a problem.

What if I approached or rang 4 or 5 people to quote, and only got 2 responses?
The question is `how many more do I need to ring?' If in a small town there might only be 5 people in the yellow pages, and going further a field with high travel/transport costs won't attract a better price. In a bigger centre you should always be able to test the market by getting 3 actual prices.

The key is the evidence of the effort gone in to testing the market. You need to know the market and be aware of how many businesses could actually put an offer on the work. If it's a small market then you may not expect any more bids and accept this as an acceptable procurement.

What if there's a $1 million project, but there is only 1 bid received?
You need to ask yourself, have I fully tested the market? And is the price fair? If it's a small market then you may not expect any more bids, but may want to satisfy yourself that the price is fair by getting a QS estimate (only suitable for larger projects).

Are you able to renegotiate a sub-consultants price (as part of a larger bid)?
First, at the beginning of the process, everyone should understand what is required - this comes back to having a clear plan, project description, and assessment criteria. If you go back to renegotiate one bid, you should offer the same opportunity to all bids. If the second lowest bid is able to find savings to become the preferred option, then the first would have a legitimate grievance.

In an emergency (risk management) does the ministry's loss adjustor have to be used?

• Under $500 not a disaster
• From $501 to $9,999.99 Emergency Contractor or Loss Adjuster if the cost may be higher or need a professional opinion
• From $10,000 to $40,000 Loss Adjuster must be involved

Is "can we work with this person?" a fair assessment criteria?
No prior subjective information can be used in the assessment/evaluation stage. The process must be fair and transparent, which means that if there is an interview criterion then you can evaluate that information, but it must be applied to every bid. Some thought and planning must be put into the assessment criteria before you start the procurement process.

A school has a particular make of water fountain in the school and wishes to obtain more. Do the school need to go to a full tender?
The process for procurement must be fair and transparent. The board could advertise a registration of interest for suppliers of drinking fountains and short list a selection requesting quotes or full tender. The assessment criteria must specify the attributes of the desired product which could be based on the preferred make.

The school wish to purchase a specific make of playground equipment do they have to get quotes from other suppliers?
Same situation as water fountains above.

Can a school choose to have the same carpet installed as the rest of the school without going to different manufactures?
Same situation as playground equipment and water fountains above.

Can a Project Manager use a draughting technician to prepare design drawings for a school project?
 If a draughting technician has Public Indemnity insurance is it ok? Either the draughtperson must have professional indemnity insurance (not public indemnity insurance) or the project manager must have it to certify compliance on the draughtsperson's behalf.

Can a school advertise at the start of the 5YA that they have x number of projects at a total of y value and ask for registration of interest from appropriate contractors and once they select contractors from this list over the period of the 5YA for each of the projects to provide a price, or go out to tender for all the projects at the school to be completed by one contractor as per the project summary sheet?
Schools can do this as long as the correct procurement process is followed which would be a multi-staged tendering process. There are two alternatives with such a process. Either a range of contractors could be selected at the Registration of Interest (RoI) stage with these contractors then being invited to tender for each project according to the sequencing of the school's 5YA. The other alternative is a full tendering process to select one contractor for all projects. The latter option would be more suitable for a school with a small number of projects for the same type of work spread over relatively few years. For schools with a large 5YA budget and a number of projects over the full five years it may restrict price competitiveness, eg: the contractor may incorporate into their tender an inflated price premium for future building cost increases compared with the school paying the market cost at the time of tendering for each project. There is also the risk of dealing with one contractor over a long period if there are performance issues. The ministry would recommend it take the advice of a project manager first.

Can project managers specify the use of a certain product or equipment by supplier in the specification for the work?
An example of this may be that of carpet, paint or taps that the school has already determined that they wished to be installed.
There is nothing wrong in including a proprietary product(s) in the specification for the work. The process is fair and contestable because all tenderers have to include the cost of this product in their overall price. However, it is important that item is a product or equipment that is unique e.g.: has a patent, rather than a particular type of service or building that a supplier may be offering. Where, for example, a board is seeking a unique form of building design to suit the school's needs then it should invite a Request for Proposal (RFP) and establish assessment criteria to fairly evaluate the respective proposals.

For the 5% consultants' fee (5.3.6), how can the board know that the design will be within budget until they go to tender?
It is the project manager's responsibility to ensure the firm estimate of cost is within budget by, for example, getting a quantity surveyor's assessment. Proceeding to tender without a firm estimate is irresponsible as its wasting everyone's time in either post tender negotiations, or redesign and retendering. The project manager would also be creating school disappointment in terms of specifying a design that may prove unaffordable.

If it takes 9 months to get to the stage of being ready to call tenders through no fault of the designers, should the designers be entitled to an interim payment?
The policy can't cover every situation, so the board would have to carry the costs in that case. But it shouldn't take 9 months, and if the board takes this long they will have to carry the costs.
 
An electrical/heating project has not affected the asset in any way, is an asset update form still required to be completed?
Yes. As per the table in section 5.2.22 an asset update form is required documentation. If there has been no change, write this on the form and attach with all other documentation.

Having no asset update form on file could mean that the asset was not affected or it could mean that the asset was affected, but no documentation was received.

Are boards able to approve the payment of a board member who is able to manage a property project (when no building consent is required)? Is a board member able to claim 10% of the project cost as consultants fees?
No. If a parent/board member has volunteered to do a job then they are not to submit a fee. A parent/board member is able to act as project manager where his/her services are not charged (and if that person is appropriately qualified when the project requires a building consent).

If their services are charged then the normal procurement process must be followed, because there is a contractual or principal-client relationship involved with a consideration (fee). Evidence that no conflicts of interest exist should be recorded (section 5.1.3), as other consultants could contend that they could have done the same job for the same price or less, but were not given the opportunity to do so because the board member concerned has used his/her position for personal gain. The board member would have to stand aside or resign while the board procured the required services in a contestable and transparent manner. This would then allow the board member to enter the normal procurement process.

A board want to carry out a small project which consists of buying supplies for a job direct (after having sought competitive prices) and then carry out the work as part of a school working bee. Is this possible and how does the board cover both contract works and professional indemnity insurance issues?
That is acceptable. However, the board will need to first ascertain whether the scope of work requires a building consent. If it does, then a professional project manager will have to be engaged to confirm that the scope of work and the completed construction by the working bee meets all standards. A board cannot get its own professional indemnity insurance, as advised in 5.1.12 of the handbook. In terms of insurance, the board will have to cover all risks in terms of being responsible for remedial action in the event of loss. This is also advised in 5.1.12.

A college has employed a full time builder to carry out the property work required at the school. Recently, the college was approved roll growth classrooms where they brought two relocatables on site.  They have used the on site builder to carry out the building work required to bring them up to ministry standards. They have received quotes from different firms for the materials the builder has used. Can boards use their own then seek re-imbursement via the capital programme?
First in terms of the builder, if he is now an employee of the school then the relevant part (section 5) of the new handbook applies (quote):

3. Employment issues

If a board employee (such as the caretaker) is used to manage the project, the scope of work must be:

• fully covered in their employment agreement
• in line with their collective/individual agreement

The cost of their labour will be a cost to the school's operational funding (as a board employee), not chargeable to the project.  

If the builder is not an employee but a contractor, then the full project management requirements apply in terms of procurement, qualifications, insurance, certification of the design, etc.

The other issue is the procurement of the materials, where the usual rules about procurement apply in terms of contestability and transparency.

In the past there have always been recognised cost savings by maintaining a singular service from specialist trades. Provided the board was prepared to accept their price and continue with the same service of the past, these sub-trades have been accepted within the process as nominated sub-contractors. Is this no longer appropriate?
See section 5.1.8 - Depending on the complexity and scope of the project some of the different types of consultants could be engaged as sub-consultants, either under the project manager (as a 'consultancy team') or individually through direct contracts with the board.

The types of project management models in 5.1.13 show that the ministry is indifferent to the sub-consultants unless they are procured by the multiple line of accountability. So no procurement process and no procurement report form is required, therefore using a singular service is acceptable.

The same logic applies to construction contractors and sub-contractors/sub-trades. The board could indicate a preference for specialist trades in the tender assessment criteria which means all head contractors have the ability to include these sub-trades in their tenders. The important consideration is that the main contractor's procurement is contestable.

If a school has a current contract with a property manager will they be required to terminate this contract from 1 July 2007 and use a fair and contestable process?
The school should have used a fair and contestable process to select the current project manager. The existing contract is in place until the termination date or by other mutual arrangement. The appointment process for the next project manager must follow the procurement rules as in the Property Management Handbook.

If a school has entered into a long-service (consultancy) contract for 5 years, but did not follow the procurement process, must they now rip it up?
Any contracts entered into before the 1st of July 2007 are acceptable. Any contracts entered into after the 1st of July 2007 must adhere to the Property Management Handbook.

If there is not a formal contract in place but an informal "relationship" then that relationship must be terminated at the next logical pause, such as the next project on the school's 5YA.

Under the single line of accountability project management model, can a project manager also be the architect?
The handbook makes it clear that the project manager can also be the architect (see 5.1.17).

Further to this, if a long-service contract is in place, does the project manager have to receive three tenders every time to procure for projects/drawings/services etc?
If there is only one contract with the board, then there is only one procurement process that needs to be undertaken. The benefit of a long term contract is that the project manager can perform smaller projects without having to go through the full procurement process every time.

In section 5.2.9 Quotation, it says "RFQ is an economic and efficient approach for items of low value, small quantities, and trade standard items which can easily be specified." But how easy is easy?
The 'easily specified' means that the product or service offered will always be the same and that price will be the main selection factor. Quotes are for easily specified/comparable products or services like clearing a drain, replacing a pipe etc. Easily specified also means that technically detailed specifications are not required.

Section 5 - Project Management Forms

If completing the Project Reimbursement Form (Form 10), does the Procurement Report Form (Form 12) still need to be completed (this appears to be a duplication)?

If seeking reimbursement, cash flows are not required, and the Project Reimbursement Form (Form 10) can replace Form 9 and Form 12.

The Ministry does not require the duplicate information. When the under $50k/over $50k process was created the Memorandum of Agreement (Form 9) was split to create the Project Reimbursement Form (Form 10). When the procurement information was added to Form 10, the documentation required mentioned in section 5 of the Handbook was unfortunately not adjusted accordingly.

Can a delegate of the board sign the project forms?
Some of the new forms allow for the board to assign a designated signatory to the forms and these are shown by a note on the form. The designation must be properly recorded by the board.

Are all members of the Project Control Group supposed to sign a Conflict of Interest Declaration (Form 1)? Note the form requires that it be signed if there is no conflict of interest.
Any declarations of potential conflicts must be made as soon as they arise to ensure a fair tendering process. Form 1 can be used for this purpose. Whether a project control member wishes to declare that they have "no conflict of interest" is at their discretion.

Who is supposed to sign for "Provider Name"? I assume this is the board person that is heading the Project Control Group for the project?
This could be anyone in the project control group.

The Registration of Interest (Form 2) seems to indicate that the contractor/supplier needs to fill in and supply information based on this form. Generally we will request Registrations of Interest through the Government Electronic Tender Service (GETS). Are we supposed to attach this form to our Registrations of Interest requests?
The ministry ROI can be used, but is merely a sample, and is therefore not a requirement as long as the correct procurement process is still followed.

Are these forms used both for the employment of the project manager and other consultants as required i.e. the board is to submit Form 3 when determining the project manager and then this same form is used if the project manager needs to employee an architect? Is it compulsory to use these forms? How will you be checking that these forms are being used?
The ministry ROI/RFQ/RFP/RFT can be used, but are samples. They are not compulsory; therefore alternatives can be used if compliant in terms of the project management requirements.

Part 1.4 of Form 8 says "board prepares project manager's procurement documentation" Handbook reference 5.2.10. I cannot determine from section 5.2.10 what documentation they need to fill out?
The checklist under 5.2.10 includes mandatory and non-mandatory requirements that make up the tender package, which is otherwise known as the procurement documentation. Most of this information is also contained in the ROI/RFQ/RFP/RFT.

What is the "Designation"? Is this to confirm that the person signing is the Chair of the Project Control Group?
In Form 12 part D for example, the designation of the person making the recommendation is requested, and the designation of the person peer reviewing the recommendation. This information is required to enable differentiation between the roles people are fulfilling in the procurement process. Names would not provide this level of information.

Under sections 5.2.22 and 5.4.19 it identifies the forms which are to be submitted for approval and completion of projects. It does not identify when Forms 1-5 are to be submitted. Does that mean that it is not compulsory to use these forms?
Forms 1-5 are for board use. The ministry does not require these forms to be submitted because the ministry is not managing the projects. (The ministry ROI/RFQ/RFP/RFT can be used, but are samples. They are not compulsory; therefore alternatives can be used if compliant.)

How will you be checking that boards have undertaken the necessary steps required, as identified on Form 8?
The key checks for the ministry are based on all the required documentation, as in 5.2.22. For example, Form 12 will be used to ensure that all correct procurement processes have been followed. Form 8 is a checklist for board use, but is only a guide to ensure that the correct project management processes are being followed. The ministry does not require this form to be submitted.

Does Form 2: ROI - 3.5.b. "invite additional registrant's to register" mean that a consultant down the road could be tapped on the shoulder to make up the numbers?
If less than the required number of registrants is received (e.g. only 1) then the board may advertise again. Anyone already registered will already be considered, and therefore do not have to register again. The board may shoulder tap someone, but any additional registrant's must still go through the normal procurement process.

Is the Procurement Report Form (Form12) required to be completed by boards of trustees in respect of the consultants who are engaged? It appears from the Handbook that this is the case. However the form itself does not appear to be designed for this purpose for example there are sections which are required to be completed by the project manager.
Section 5 makes it clear that the procurement processes must be followed and that documentation must be completed for the contracting of both project managers and other consultants (See 5.1.14). Form 12 must be completed when procuring a project manager, and also when the project manager manages construction contracts. As an example, in PART D of Form 12, it directs the "project manager to complete", so when a project manager is employed, they will obviously complete this section. When a board is procuring the services of a project manager, the "project manager" filling in PART D would be the property expert on the project control group.

But Form 12 is required for anyone the board is directly contracting (this will depend on the type of project management model used - see 5.1.13).

For an emergency procurement for electrical/heating work, an electrical engineer drew up a scope of works. Are they required to complete the design certificate (Form 15)?
Yes, "scope of works" should be written next to `Nature of design work completed' and the design certificate signed.

Section 6 - Design Requirements

Our school plans to extend a building, taking it above the 1,000 square metres threshold requiring fire sprinklers to be installed. Do we need to retrofit the building with sprinklers?

The sprinkler policy is based on the need to protect sizeable buildings, relative to their potential loss, at a reasonable cost. Cost does justify installing sprinklers in any new building over 1,000 square metres in size but retrofitting sprinklers in an existing building that increases in size beyond the 1,000 square threshold due to an extension may not be justified. Therefore, in these situations the extended areas must be the subject of a separate fire cell.

(NB: this is a policy change and differs from that advised in Section 6.18.3 of the Property Management Handbook)

1 available for easily specified items under $50,000

2 If the procurement process is a tender, the board must have determined prior assessment criteria for applying to either an open tender process, or to the ROIs that will subsequently result in a closed tender process. This closed tender may involve more or less than three tenderers depending on the number that qualifies under the criteria