1. TasWater 2014/15 TasWater Works Program Presented by: Stuart McFadzean Date: April 2014

2. Presentation outline Intro & TasWater structure Procurement strategy / objectives Contract types (standard documentation) Contract roles (Super, Sup Rep, Principals Rep) Tender assessments Performance feedback Safety expectations Probity and integrity expectations Taswater’s Works Program for 2014/15 Questions

3. What is TasWater? Brand new statewide water & sewerage utility Established under the Corporations Act with Council owners Services 200,000 residential & business customer connections Employs 800+ people statewide Revenue $264m (FY13). Expenditure $232m (FY13).

4. Vital statistics Service area – 68,000 sq km Population serviced – 470,000 Water connections – 201,800 Sewer connections – 179,100 Water supplied – 77,400 million litres pa Sewage volume – 50,000 million litres pa Total asset value - $1.7B

5. Vital statistics Water mains – 6,380km Water Treatment Plants & Dosing Stations - 60 Pump stations – 716 Dams – 121 Water catchments – 75 Length of sewer mains – 4,774km Sewage Treatment Plants - 110

6. Key priorities Key priorities in FY 2014 are: Improving our safety performance Price & Services Plan 2015-18 development Capital program, $80 million Completing our restructure and moving to the new operating model Consolidating statewide services, systems & processes Enhancing & improving our stakeholder relationships Delivery on efficiency gains from merger ($2.5 m FY 14, $5m FY15)

7. Structure

9. Procurement objectives & strategy Open, honest, ethical Maximise value for TasWater –Encourage competition –Leveraging purchasing power –Effective ‘bundling’ of work Tasmanian contractors are valued

10. Procurement (cont.) Threshold for mandatory tendering is $150,000 All tenders run through Tenderlink which is accessible via the TasWater website.

11. Contract types Currently in use: AS 4000, 4902, 4300, 4906, 2124 and various purchase order T&Cs We will standardise general conditions We aim to minimise the number of ‘mark- ups’ or departures from the AS documents but some changes will be necessary

12. Contract roles Superintendent – always a TasWater Department Manager (Stuart McFadzean or Nigel Vivian) Supers Reps – consultants likely to be used on larger contracts only. TasWater Project Managers may be used on smaller contracts Principals Rep – Project Managers under delegation

13. Tender assessments Traditional Procurement Plan EOI & shortlist (optional) RFT – Weighted qualitative criteria assessed – Shortlist (optional) – Price assessed D&C Procurement Plan EOI & shortlist (optional) RFT – Weighted qualitative & quantitative criteria assessed – Best value assessed

14. Tender assessments (cont…) Value for money includes assessment of: –Capital costs Tender price Likely variations Timely completion of the works Management overheads –Through life costs –Asset performance –It may also include intangibles like potential reputational damage.

15. Tender assessments (cont…) Bid prices –It is important that you complete the pricing schedule as these are used for both qualitative and quantitative assessment criteria –We may adjust your bid price for the purpose of making a comparative assessment Conformance –We generally include a schedule of departures so that the contractor is to identify all non-conformances –Non-conforming tenders may be rejected by TasWater –Usually, alternative tenders will only be accepted from contractors also submitting a conforming tender

16. Tender assessments (cont…) Past performance & references –We may discuss your performance with other utilities Confidentiality –If you win a tender, your tender price and the final contract price may be made public –Unsuccessful tender prices will not be disclosed –On request, we will provide you relevant information from our tender assessment report that relates to your bid

17. Performance feedback We value an open dialogue on each others performance during the course of the contract You will be asked to participate in a project review at the end of most contracts We will provide you with a written performance evaluation at the end of large contracts or if your performance was exceptional. You will have an opportunity to submit a response to this evaluation These evaluations will form a database that will be used as a reference for future tender assessment panels

18. Safety expectations Safety is our number 1 priority – it should be yours too Generally, contractors will be appointed as a ‘Principal Contractor’ under the Workplace Health & Safety Act if the TasWater site can be handed over to the contractor Contractors are responsible for their worksite as a PCBU under the Act. We are responsible for informing the contractor of all known safety hazards associated with the project We have a due diligence responsibility to ensure that the Principal Contractor is managing safety appropriately. We will: –review the WHS Management Plan and Safe Work Method Statement prepared by the contractor before granting possession of the site. –undertake surveillance of the site to ensure these plans are effective. If we believe that the WHS is not being managed effectively, then we have a duty of care obligation to step in to take control of the activity. This may include stopping the work.

19. Safety concerns Safety Issues (my hot issues): –Consultation, coordination & communication between parties –Treating likelihood and also consequences, eg response plans –Discipline on site –Confined spaces –Trenching

20. Other policies You should be aware of the following policies at TasWater: –Fitness for Work (Alcohol & Other Drugs, fatigue) –Environmental Policy –Equity & Diversity –Code of Conduct –Media Communications Policy

21. Probity & integrity expectations Understand TasWater delegations (if in doubt, ask) All correspondence during tender is through Tenderlink All pre-award and post-award correspondence is via email or letter Avoid and report anti-competitive behaviour Tender in good faith No-surprises approach to variations –early formal notification and claims

22. 2014/15 works program $80 million planned for 2014/15 Highlights include: –Over $40 million of new water projects –Over $20 million of new sewerage projects –Dams program (Ridgeway, Tolosa & Swansea)

23. 2014/15 works program Projects may be subject to approval of business cases Awarded and ongoing projects are included in the $80 million The project timing and detail are indicative only Project cost are indicative only and represent the project in its entirety

24. Questions?