Service Risk Assessment. Consultant PQC

Transcription

1 Service Risk Assessment Consultant PQC

2 For further information or additional copies of this document contact either: Principal Policy Manager Building Policy Unit Works Division Telephone Fax Or PQC Registrar PQC Infoline Telephone Fax Department of Public Works GPO Box 2457 Brisbane Qld 4001 December 2007 ISBN No

3 Contents 1.0 Introduction Purpose Definitions Who should read this guideline? Related documents Prequalification (PQC) System Service risk assessment and management strategies Identification of PQC service elements Using the Service Risk Assessment Tool 5 Attachment 1 Consultant PQC: Service Risk Assessment Tool 6 Consultant PQC: Service risk Assessment Page 1 of 7

4 1.0 Introduction 1.1 Purpose This guideline explains the process for determining the service risk rating for commissions associated with Queensland government building projects under the Queensland Government's Prequalification (PQC) System. Service risk rating is an important element in the invitation and selection process for building industry consultants and is used to assist in the selection of suitably qualified consultants registered in the PQC System. 1.2 Definitions Building industry consultant An organisation or individual contracted directly to the principal to provide particular services (defined in Attachment 1 of the Consultant PQC: Invitation and Selection Process guideline) in relation to a government building project. The terms building industry consultant and consultant are used interchangeably in this guideline. Principal The State of Queensland acting through a particular agency nominated in the consultant invitation documents. Agency A Queensland government department' as that expression is defined in the Financial Administration and Audit Act Government building project This term as defined in the Capital Works Management Framework. Service The scope of work to be undertaken by the consultant. Agent An individual or organisation contracted to manage the invitation and selection process on behalf of an agency. 1.3 Who should read this guideline? This guideline is specifically intended for government officers or their agents involved in the procurement and/or management and maintenance of government building projects. It will also be of interest to building industry consultants seeking to provide services associated with government building projects. Consultant PQC: Service risk Assessment Page 2 of 7

5 1.4 Related documents This guideline should be read in conjunction with the following policy and guideline documents and Australian/New Zealand Standard relevant to the procurement of government building projects and associated maintenance services (and as amended from time to time): Capital Works Management Framework (CWMF) and associated guidelines and policy advice notes, DPW; Maintenance Management Framework (MMF) and associated guidelines, DPW; Consultant PQC: Invitation and Selection Process guideline and other PQC System documents, DPW; Consultant PQC: Performance Reporting guideline, DPW; Queensland Government State Purchasing Policy (SPP) and in particular the Prequalifying Suppliers Better Purchasing Guide, DPW; Local Industry Policy (LIP), the Department of Tourism, Regional Development and Industry; and Australian/New Zealand Standard AS/NZS 4360:1999 Risk Management. 2.0 Prequalification (PQC) System The Queensland Government s process for selection of consultants is based on a system of prequalification, known as the PQC System. The PQC System contains records of registered consultant entity and office details, information on past performance on commissions, and the types of commissions each consultant is prequalified to undertake. It also provides a comprehensive assessment of each consultant s capabilities and commitment to continuous improvement against prescribed criteria. The application for prequalification incorporates a self-assessment component by which each consultant is assigned to one of four PQC levels from 1 to 4, where 1 indicates that the consultant has effective work practices and 4 indicates the consultant is at the leading edge of practice for the services provided, even when compared globally with other leaders across diverse industry sectors. The various services required for the procurement of government building projects in accordance with the PQC System are correspondingly rated according to their risk (refer section 3 for further details). The PQC Service Risk Rating is used together with other project specific factors to identify suitably prequalified consultants from the PQC System. Consultants must be appropriately registered on the PQC System and have a PQC Level that matches or exceeds the PQC Service Risk Rating to be eligible to be invited to submit proposals for government building project commissions. Performance evaluations must be carried out during and/or at the conclusion of each commission and the results are retained in the PQC System. Further information on performance evaluation and reporting is available in the Consultant PQC: Performance Reporting guideline. Consultant PQC: Service risk Assessment Page 3 of 7

6 3.0 Service risk assessment and management strategies In the context of the PQC System, risk assessment refers to the systematic process of identifying and analysing the risks associated with a government building project commission and then managing the identified risks. As part of the risk assessment process, a PQC Service Risk Rating is determined. This numerical risk rating equates with the commission s identified level of risk. A PQC Service Risk Rating of one (1) indicates a low risk commission, whereas a risk rating of four (4) indicates a very high risk commission. Only in extraordinary circumstances will a commission s risk profile warrant a PQC risk rating of 4. The PQC service risk assessment process aims to appropriately manage the Queensland Government s exposure to risks associated with government building project commissions by: ensuring all commissions undergo a service risk assessment early in the planning process; providing a transparent and auditable service risk assessment framework; providing a system that identifies those consultants that are best placed to manage risks associated with the commission; and identifying strategies to minimise risks. Where a service is assessed as high or very high risk, that is, a PQC Service Risk Rating 3 or 4, consideration should be given to how the proposed commission s high risk elements should be managed. In this regard, approaches could include: incorporating the high risk elements in the commission s non-price criteria, thereby requiring consultants to specifically address these elements in their proposal and weighting these criteria accordingly (for details regarding non-price evaluation criteria refer to the guideline Consultant PQC: Invitation and Selection Process); or reviewing and if necessary modifying the proposed procurement strategy to ensure that high risk elements are appropriately managed. 4.0 Identification of PQC service elements Government building projects generally require a number of separate consultant services for which there may be different risk ratings. Each of these services must be assessed separately for their risk rating and the assessment process needs to be documented, transparent and auditable. The PQC System facilitates this by providing a service risk rating table and associated documentation to users of the System. When the service risk rating for a particular service is being assessed, it is important that the agency officer who administers the commission documents the decision process and records the rating in the PQC System to provide sufficient information to enable audit and/or an independent review. Consultant PQC: Service risk Assessment Page 4 of 7

7 5.0 Using the Service Risk Assessment Tool The approach to service risk assessment for consultants has its basis in the risk management processes advocated in the Australian/New Zealand Standard AS/NZS 4360:1999 Risk Management. The assessment focuses on three key areas of risk, namely: time overruns; cost overruns; and the potential for functionality or commission requirements not being met. The Consultant PQC: Service Risk Assessment Tool at Attachment 1 is used to determine the service risk rating for particular commissions based on a consideration of each of these areas of risk in terms of the consequences and the likelihood of the risk event. Tables 1 and 2 within the attachment provide information to assist agency officers assessing the PQC Service Risk Rating to differentiate the levels of consequence and likelihood. Each consultancy service must be assessed separately for its risk rating taking into account the considerations when determining consequences and considerations when determining likelihood as outlined in columns C and E of the assessment tool. The scores of columns B and D are then multiplied and recorded in column F for each of the areas of risk. An average of the results is then used at Table 3 of the attachment to determine the PQC Service Risk Rating for the commission, i.e. between one (1) and four (4). Most services are expected to have a PQC Service Risk Rating of 1, 2 or 3. After the PQC Service Risk Rating has been determined, the agency officer administering the commission uses the information to develop a long list of consultants. Only those who are appropriately registered on the PQC System and have a PQC Level that matches or exceeds this PQC Service Risk Rating are eligible to be invited to submit proposals for government building project commissions. If there is uncertainty as to the most appropriate PQC Service Risk Rating for a particular service, advice should be sought from the Building Division, DPW. Consultant PQC: Service risk Assessment Page 5 of 7

8 Attachment 1 - Consultant PQC: Service Risk Assessment Tool Instructions 1. Determine consequence rating for each key area of risk (Column A), rate the consequences should the risk event occur (Column B). Refer to Table 1 for descriptions of typical consequences and associated levels. Considerations (Columns C & E) are provided as prompts to assist decision-making and are not rated. 2. Determine likelihood rating for each key area of risk, rate the likelihood of the risk event occurring (Column D). Refer to Table 2 for descriptions of the likelihood ratings. 3. Calculate When each risk event has been rated, multiply the numerical ratings from Columns B and D and insert the total in Column F. Calculate the average of the figures recorded in Column F by adding Boxes 1,2 & 3 and dividing this figure by 3. Record the average at the top of Table Determine PQC Service Risk Rating locate the average within the ranges given in Table 3. Record the PQC Service Risk Rating at the bottom of Table 3. Column A Key area of risk Column B Consequence rating (refer Table 1) Column C Considerations when determining consequence Column D Likelihood rating (refer Table 2) Column E Considerations when determining likelihood Column F Risk rating B x D Time overrun 1 Insignificant 2 Minor 3 Moderate 4 Major 5 Catastrophic Consultancy is on the critical path Implications if program or project completion is delayed Time overrun has implications for service delivery Public statements (e.g. media releases) have been made advising of a particular completion date 1 Rare 2 Unlikely 3 Possible 4 Likely 5 Almost certain Consultancy timeframe is compressed Approvals required and may cause delays Approvals involve various levels of government (i.e. Local, State, Federal) Consultation with stakeholders required and may cause delays Requirement for coordination of consultants/number of consultants requiring coordination Box 1 Cost overrun 1 Insignificant 2 Minor 3 Moderate 4 Major 5 Catastrophic Implications if the project budget is exceeded Implications if life cycle cost requirements are not met or recurrent costs exceeded Availability of additional funds Capacity to reduce project scope Capacity to stage project 1 Rare 2 Unlikely 3 Possible 4 Likely 5 Almost certain Whether project budget is based on historical data for projects of similar size, scope, location and currency Firmness and clarity of Terms of Reference/brief for commission Anticipated level of innovation required Degree of rigour required with respect to life cycle cost performance Budgeted contingency amounts considered adequate Box 2 Reduced Functionality /Commission requirements not met 1 Insignificant 2 Minor 3 Moderate 4 Major 5 Catastrophic Implications if commission requirements are not met or functionality is not fully achieved Level of public awareness of, and interest in, the project to which the consultancy relates Effect of functionality on service delivery Level of quality specified in the Terms of Reference/brief for commission 1 Rare 2 Unlikely 3 Possible 4 Likely 5 Almost certain Firmness and clarity of Terms of Reference/brief for commission Anticipated level of innovation Adequacy of project budget to cover brief requirements Requirement for coordination of consultants/number of consultants requiring coordination Box 3 Consultant PQC: Service risk Assessment Page 6 of 7

9 Table 1: Measures of consequence Level Descriptor Example detail description 1 Insignificant Errors/omissions/defects/design flaws are inconsequential or non-existent; intended functionality delivered; service delivery as planned. 2 Minor Errors/omissions/defects/design flaws requiring limited rework/redesign, slightly reduced functionality; service delivery generally unaffected 3 Moderate Errors/omissions/defects/design flaws requiring significant rework/redesign; reduced functionality; delayed/reduced/interrupted service delivery 4 Major Errors/omissions/defects/design flaws making the building unfit for occupancy without extensive rework/redesign, significantly reduced functionality; significantly delayed/reduced/interrupted service delivery 5 Catastrophic Errors/ omissions/defects/design flaws resulting in partial or total building collapse requiring demolition, redesign and rebuilding, serious injuries or loss of life; loss of functionality/service delivery Table 2: Measures of likelihood Level Descriptor Description 1 Rare May occur only in exceptional circumstances 2 Unlikely Could occur at some time 3 Possible Might occur at some time 4 Likely Will probably occur in most circumstances 5 Almost Certain Is expected to occur in most circumstances Table 3: PQC Service Risk Rating Ranges Average of Boxes 1, 2 & Low Moderate High Very High PQC Service Risk Rating (1 4) Consultant PQC: Service risk Assessment Page 7 of 7