North Eastern Maintenance Alliance (NEMA) The Story Steve Brown Exec Director Regional Operations
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1 North Eastern Maintenance Alliance (NEMA) The Story Steve Brown Exec Director Regional Operations
2 NEMA The Story The background The framework Objectives Scope KRA s KPI s The selection process Achievements Challenges
3 Alliance What is it? Partnership contract Common goals, common interests Shared risks and rewards Commercial interests achieved by meeting or exceeding agreed objectives Selection of partners based on non-cost criteria
4 Maintenance Alliance model Why? Pressures on funding and other resources Non-fulfillment by contractors of requirements of the Road Management Act Price pressure on Industry Industry signalled willingness to change delivery method Victorian Auditor-General s recommendation to improve routine maintenance delivery Deterioration of road network Quest for innovation
5 Maintenance Alliance model Options Joint VicRoads - Industry discussion regarding the future of maintenance Investigation of different models: Schedule of Rates Partnering model Routine Maintenance Only Alliance (financially not viable for proponent) Road Network Maintenance Alliance (Co-operative all-in alliance)
6 Maintenance Alliance Area
7 Alliance The three phases in an Alliance Contract Establishment of Alliance preparation of framework, selection of partners Development of the Maintenance Alliance Agreement in conjunction with non-owner participant Implementation integration of teams, change management process
8 Alliance Objectives Improve the efficiency of delivering road maintenance activities. Implement a needs based asset management planning and decision-making process. Provide an outcome-focused best for network approach to maintenance. Enhance VicRoads reputation with the community and stakeholders. Ensure that the maintenance industry in Victoria is viable and provides VicRoads and contract staff with an environment of learning and continuous improvement.
9 Key Result Areas Safety Asset Management Delivery Road Users and Stakeholders People and team development Innovation and Improvement Sustainability Value for Money
10 Minimum Condition of Satisfaction Minimum Performance Requirements Commitment to exceeding MCoS Focus on exceptional outcomes KRAs were developed during the Alignment Workshops Selected KRAs were linked to the Gainshare Regime and specific KPIs developed
11 Alliance Model Framework Five year contract with five one year extension options All routine and periodic maintenance activities (road, roadside and bridge) Surfacing treatments to be tendered All minor improvement projects under $500k All rehabilitation works under $500k Development of periodic and rehabilitation programs Emergency response Estimated budget $25 30M pa
12 VicRoads Supplied Resources Office Staff 45% will be provided by VicRoads Field Staff 20 field staff NEMA located with in VicRoads Regional Office 5 Maintenance depots 3 Snow depots Minor plant and equipment
13 Alliance Delivery Strategy Alliance Structure VicRoads Chief Executive NON-OWNER PARTICIPANT/S (NOP) 2 Members VicRoads Executive Director-Regional Services Regional Director NER Alliance Leadership Team (ALT) Community and Stakeholders Alliance Management Team (AMT) (At least one position from VicRoads sourced personnel) Director NER Agree AWP Receive monthly operations report from Alliance Delivery Team (Comprising VicRoads and Non-Owner Participant sourced personnel)
14 Alliance - Selection Process Seven proposals received Four proponents shortlisted based on desktop assessment of proposal Two day Foundation workshop to assess proponents Real life scenarios workshopped Scored based on KRA s and soft criteria such as behavior and relationship building Commercial alignment workshop with two preferred proponents negotiated margins and commercial framework
15 Alliance Benefits Introduction of Zero Harm Asset Management Purchasing process End-to-end project management Shared risk Open book policy Emergency response Reinvestment of savings
16 Benefits Zero Harm Introduction of Zero Harm Change in culture regarding safety Regular tool box topic Introduction of changes to equipment, processes etc within VicRoads and across most subcontractors Results: Exceptional safety record to date Analysis of Near miss incidents to drive improvements Introduction of Contractor Zero Harm Forums Improved safety outcomes for VicRoads employees Sharing learnings and behavioural changes to other parts of VicRoads
17 Benefits Asset Management System Asset Management: Planned approach to routine maintenance activities efficiencies in programming work Development of Asset Management system Funding scenario and outcome analysis Asset Inventory & Condition
18 Benefits - Purchasing Ease of purchasing process Ability to deliver emergency works promptly to provide recovery from natural disasters Efficiencies gained in changes to contract management Access to broader range of resources and expertise from partner
19 Benefits Project Management End-to-end project management Omeo Hwy sealing and Darbyshire Hill overtaking lane Dedicated team from conception, design to construction Enables flexibility in scoping and delivery without contractual issues Obtaining required permits part of the project Minimising the pre-construction period, by removing the need for a formal tender process Joint preliminary site inspections which enable early and accurate scoping and costing
20 Benefits Omeo Hwy sealing
21 Benefits Shared Risk Shared risk Reduction in costs Equal share of costs, accountability
22 Benefits Open book policy The Alliance providing for an open book policy with agreed margins and overheads established Reduction of costs Independence of market trends/costs
23 Benefits Emergency response Improved emergency response Ability to deliver promptly emergency works to provide recovery from natural disasters Reduced set up time Crews ready to be deployed Ease of purchasing enables quick acquisition of materials and equipment as needed improved buying power
24 Emergency response Slip on Great Alpine Road
25 Emergency response Slip on GAR
26 Benefits - Reinvestment Reinvestment of program savings into un-programmed work Reinvestment of $590,000 in year 2 and $ 1 million in year 3 from savings in pain/gain share and performance gain share Projects can be stage delivery and not dependant on full design or clearance prior to start
27 Alliance Challenges Difficulty in the integration of financial systems Accountability of tasks (Alliance or Region) Development of Asset management system Taken longer than anticipated Hard to determine effective KPI s to Drive innovation in the Alliance Compare against other forms of contract Reporting Assessment of KPI s Measuring success Culture
28 Conclusion Overall excellent outcomes to date Looking to extend similar arrangements in other parts of the State We get what we pay for and we pay for what we get
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