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Delivery Management Guidelines

Overview

Version control Version 9-1 Date 2010-10-18

Status Approved

Overview

Delivery Management Guidelines: Overview 2

The IDMS

Prov Infr Strat

G1(a) G2G1(b)U-AMP C-AMP

PC1

PF1.4PF1.3 PF2.1 PF2.2 PF2.3 PF3 PF4PF5

PF1.1 PF1.2

DP1: Portfolio Management

DP1-2 Programme ManagementDP1-1 Infrastructure Planning

Develop/review U-AMP (including prioritised MTEF works list)

Develop/review C-AMP (incl portfolio level Work Plans)

Develop /review Constr

Proc Strat

Develop /review

IPMPManage Implementation

Authorise Implementation

Monitor & Control

Close Out

G3 G4 G5 G6(a) G6(b) G7 G8PC2

PC3

PC4a

PC5

PC4b


T1 T2

PEP2PEP1 IPIP PEP3

DP2: Project Management

DP2-1 Implementation Planning

Prepare Packages

Define Packages

Develop/Review IPIPs (Prgr & Proj level)

DP2-2 Design

Design devlpmt

Detailed design

Compile MFC Info

DP2-3 Works

Construct / Deliver works

Handover works

DP2-4 Close Out

Contracts Close Out

Adminstv Close Out

PEP4 PEP5 PEP6 PEP7


G8

DP3: Operations & Maintenance

DP3-1 Recognise & accept assets

DP3-2 Mobilisation for Facilities Mgt

DP3-3 Operations DP3-4 MaintenanceDP3-5 Demobilisation

of Facilities Mgt

Overview


Structure of the Infrastructure Delivery Management Toolkit (IDMT)


Management Companion

Infrastructure Delivery Management System(IDMS)

Practice guides

PG1: Prov InfrStrategy

PG2: ConstrProc Strat

PG3: Perform

Mgt

Overview


Table of Contents 1. Foreword and acknowledgements .................................................................................................................6

1.1 Foreword ................................................................................................................................................6

1.2 Acknowledgements ................................................................................................................................7

2. Purpose of this module ..................................................................................................................................8

3. Background to the Toolkit ..............................................................................................................................8

4. Purpose of the Toolkit and how it will help users...........................................................................................9

5. What‟s new in the 2010 Edition....................................................................................................................11

6. Structure of the Toolkit .................................................................................................................................11

7. The Infrastructure Delivery Management System .......................................................................................15

7.1 Overview ..............................................................................................................................................15

7.2 Linking budgets to infrastructure delivery management ......................................................................15

7.3 The IDMS .............................................................................................................................................16

8. An introduction to some key concepts .........................................................................................................30

8.1 Portfolios, Programmes, Projects and Packages ................................................................................30

8.1.1 Portfolios, Programmes and Projects ..............................................................................................30

8.1.2 How Portfolios, Programmes and Projects align with levels of management and their performance indicators ......................................................................................................................................................32

8.1.3 Packages ..........................................................................................................................................33

8.2 Gateway Process .................................................................................................................................35

8.2.1 Synopsis ...........................................................................................................................................36

8.2.2 Control Gates ...................................................................................................................................36

8.2.3 Infrastructure gates and stages .......................................................................................................36

8.3 Construction Procurement Strategy .....................................................................................................38

8.3.1 Delivery Management Strategy ........................................................................................................38

8.3.2 Contracting Strategy.........................................................................................................................39

8.3.3 Procurement arrangements .............................................................................................................40

8.3.4 Documenting a Procurement Strategy .............................................................................................41

8.4 Infrastructure estimating, budgeting and prioritisation .........................................................................41

8.4.1 Estimating and budgeting .................................................................................................................41

8.4.2 Prioritisation ......................................................................................................................................42

8.5 Alignment between the Infrastructure Planning and Budget Cycles: The “Alignment Model” ............42

8.6 Principles of cooperative governance and joint Programme Management .........................................43

8.6.1 Overview ...........................................................................................................................................43

8.6.2 Introduction to Joint Programmes ....................................................................................................44

8.6.3 Implementation Protocol for Joint Programmes ...............................................................................45

8.7 Risk Management ................................................................................................................................45

9. Summary of key legislation applicable to infrastructure management ........................................................46

9.1 Public Finance Management Act of 1999 ............................................................................................46

9.2 Government Immovable Asset Management Act ................................................................................46

Overview


9.2.1 Overview ...........................................................................................................................................46

9.2.2 The implications of GIAMA and the Toolkit ......................................................................................47

9.3 Division of Revenue Act .......................................................................................................................50

9.4 Legislation applicable to municipalities ................................................................................................51

9.4.1 Local Government: Municipal Finance Management Act of 2003 ...................................................51

9.4.2 Municipal Systems Act of 2000 ........................................................................................................51

10. King III Public Sector Guide – An introduction ........................................................................................52

10.1 Introduction...........................................................................................................................................52

10.2 The benefits of self-regulation..............................................................................................................52

10.3 Key principles of King III ......................................................................................................................52

10.4 Governance framework ........................................................................................................................53

10.5 Application of the Code ........................................................................................................................53

10.6 New requirements ................................................................................................................................53

11. Disclaimer ................................................................................................................................................54

12. Annexure 1: Glossary - Definitions ..........................................................................................................55

13. Annexure 2: Glossary – Abbreviations ....................................................................................................66

14. Annexure 3: Definitions of RASCI responsibility matrix ..........................................................................70

Table of Figures and Tables: Figure 1: Structure of the Infrastructure Delivery Management Toolkit (IDM Toolkit) ........................................13 Figure 2: Schematic view of the Delivery Management Guidelines ...................................................................14 Figure 3: Navigating through modules ................................................................................................................14 Figure 4: The IDMS .............................................................................................................................................18 Figure 5: The DMS from the previous Toolkit .....................................................................................................19 Figure 6: Comparison of the “linear DMS” from the previous Toolkit to the current IDMS .................................20 Figure 7: Process diagram conventions ..............................................................................................................20 Figure 8: Detailed Delivery Process diagrams of the IDMS ...............................................................................21 Figure 9: The 6 DP1 process flow diagrams .......................................................................................................27 Figure 10: DP2 Process overview .......................................................................................................................28 Figure 11: DP3 Process overview .......................................................................................................................29 Figure 12: Portfolio, Programme and Project Management and “other work” interactions (PMI) ......................30 Figure 13: Packages versus Portfolios, Programmes and Projects ...................................................................34 Figure 14: Trends in the potential to add value or costs .....................................................................................38 Figure 15: Deciding upon a delivery management strategy ...............................................................................39 Figure 16: Deciding on contracting strategies.....................................................................................................40 Figure 17: Deciding upon procurement arrangements .......................................................................................41 Figure 18: Alignment of the Infrastructure Delivery Cycle with the MTEF Budget Cycle ...................................43 Table 1: Comparison of structure of 2006 Toolkit versus 2010 Toolkit ..............................................................14 Table 2: Comparative overview of Project, Programme and Portfolio management .........................................31 Table 3: Alignment of Portfolios, Programmes and Projects with levels of management ..................................32 Table 4: Examples of how Packages can overlap with Programmes and Projects ...........................................34 Table 5: Infrastructure Gateway Process information .........................................................................................37 Table 6: Summary of key roles and responsibilities per GIAMA ........................................................................49 Table 7: Table of Terminology ............................................................................................................................55 Table 8: Glossary of Abbreviations .....................................................................................................................66 Table 9: RASCI Responsibility Matrix .................................................................................................................70

Overview


1. Foreword and acknowledgements

1.1 Foreword The Construction Industry Development Board in conjunction with National Treasury, Department of Public Works and the Development Bank of Southern Africa are delighted to issue the third edition of the Infrastructure Delivery Management Toolkit. The publication of the third edition and its improvements comes at an important time in South Africa‟s history where enormous resources are being harnessed to accelerate the delivery of infrastructure as part of improving service delivery. Our Government has also recognised the link between the investment in infrastructure and lifting our global competitiveness and is thus proactively using the investment to create sustainable jobs and raise skills levels. As a result, the need has never been greater for our public and private sectors to ensure that delivery is as efficient and effective as possible to ensure that these resources are maximised. The Toolkit is therefore a significant resource to raise the benchmark in this regard. This third edition introduces significant updates and amendments to the previous edition. It caters for new legislation, a modernised approach to procurement, greater emphasis on Portfolio Management, readiness for local government applications and dedicated additional modules to provide an expanded body of knowledge in Strategy, Construction Procurement and Performance Management. It also provides for an updated and easy to use web based navigation tool for users to navigate through the delivery processes, practice guides and their associated supporting documents. This third edition has been compiled by a panel of authors, some of whom were intimately involved in previous editions, as well as new authors so as to create the balance of introducing new thought leadership while building on the solid foundation of previous editions. The development of the third edition has also been through a robust peer review process over a number of months in order to test the content and acceptability.

Ronnie Khoza Chief Executive Officer Construction Industry Development Board

Overview


1.2 Acknowledgements Sincere appreciation is acknowledged to the following organisations:

Construction Industry Development Board

National Treasury

Public Works

Department of Health

Department of Education

Development Bank of Southern Africa.

Sincere appreciation is also expressed to the team who developed this edition:

Inba Thumbiran, Sponsor

Kabelo Ntiisa, Project Manager

Edward Singo, Administrative Support

Arthur De Swardt, Technical Editing

David Lievaart, Portfolio Management

Sonny Schmidt, Project Management

Johan Coetzee, Operations and Maintenance

Sanet Koster, Provincial Infrastructure Strategy

Dr Ron Watermeyer, Construction Procurement Strategy

Georg Hofmeyr, Performance Management

Overview


2. Purpose of this module The purpose of this module is to:

Provide a background to the Toolkit

Indicate the purpose of the Toolkit and how it will help the user

Highlight what is new in the Toolkit

Provide an overview of the structure of the Toolkit

Provide an overview of the Infrastructure Delivery Management System (IDMS)

Provide an introduction to key concepts, including: o The differences between Portfolios, Programmes, Projects and Packages o A Construction Procurement Strategy and the Gateway Process o The Alignment Model o Principles of cooperative governance and joint programme management o Risk Management

Overview of the legislative environment, including the implications of GIAMA

An introduction to the King III Public Sector Guide and its implications for users

Provide the definitions of terms and abbreviations used throughout the Toolkit

Provide definitions of a RASCI responsibilities matrix.

3. Background to the Toolkit The Infrastructure Delivery Improvement Programme (IDIP) In 2001 the National Treasury commissioned a review of provincial service delivery systems with the view to enhance infrastructure delivery. The review identified various deficiencies that impacted negatively on the effective and efficient delivery of infrastructure in provincial departments. The review recommended, amongst others, that a framework be developed to guide and structure the management of infrastructure delivery. It also recommended that support be provided to provincial departments to develop their capacity to manage infrastructure delivery. The IDIP was born out of these recommendations and was established in partnership between the National Treasury (NT), Construction Industry Development Board (CIDB), the Development Bank of Southern Africa (DBSA) and the National Department of Public Works (NDPW). A Programme Management Unit (PMU) was established in National Treasury and a programme manager was appointed to manage the IDIP. The IDIP was piloted in nine provincial departments of Education, two departments of Health and two departments of Transport in 2004. Phase 2 of the IDIP was implemented in all the provincial departments of Health, Education, and Public Works coordinated by the Provincial Treasuries. Edition 1 of the Toolkit - 2004 The IDIP immediately set out to develop a number of improvement systems, including a model of best practice infrastructure delivery, namely the Delivery Management System (DMS). This model and its associated guidelines and supporting documents were consolidated as the first edition of the Toolkit and launched in 2004 under a pilot phase. The Toolkit is regarded as a vehicle to implement the IDIP in provinces. Technical Assistants were appointed in the selected departments to support rolling out the Toolkit to improve delivery in Provinces. The Toolkit was designed to address the need to provide a practical guide for delivery management processes. Edition 2 of the Toolkit - 2006 One of the lessons learnt from the pilot was that there was limited understanding by departments of the principles embodied in Portfolio and Programme Management. Most departments were relatively familiar with Project Management practices of single projects, but lost efficiency in integrating resources under portfolios and programmes of coordinated projects.

Overview


As a result, the Toolkit was updated in 2006 where, amongst others, some improved elements of Portfolio Management were embedded, and enhanced Programme Management principles included into the DMS for both client and implementing departments. The 2006 version was also published on the CIDB‟s web site. Edition 3 of the Toolkit – 2010 (current) The current edition of the Toolkit is a significant update to the 2006 edition. It caters for new legislation, a modernised approach to procurement, readiness for local government applications, greater emphasis on Portfolio Management and dedicated additional modules to provide an expanded body of knowledge. Refer to the paragraphs below for more details on what is new in the 2010 Toolkit. The name of the Toolkit was also consolidated as the Infrastructure Delivery Management Toolkit (IDM Toolkit), or the “Toolkit” for sake of expediency.

4. Purpose of the Toolkit and how it will help users The Toolkit provides a documented body of knowledge and set of processes that represent generally recognised best practices in the delivery management of infrastructure. It is focussed on the delivery and life cycle management of South African public sector infrastructure. The target users for this Toolkit include both technical and non-technical managers. Typically these would include Head of Departments (HOD‟s), Chief Directors (CD‟s), Directors, Deputy Directors (DD), Chief Financial Officers (CFO‟s), Portfolio Managers, Programme Managers and Project Managers, or the equivalent. The Toolkit provides guidance for User Departments such as Education, Health, Finance, etc, as well as implementers of delivery and asset Custodians such as Public Works or Implementing Agents. The Constitution requires that Government effectively delivers services to its citizens. The Toolkit has therefore been designed as a valuable resource to provide a National common knowledge base and set of practices to assist in delivering these services in a manner that is effective, efficient and consistent across provinces and departments. By adhering to the practices embodied in the Toolkit, users will be greatly assisted in delivering on this mandate. The Toolkit provides “how to” guidelines for infrastructure management which are intended to:

Provide guidelines on the actions and processes necessary to deliver, operate and maintain infrastructure

Capacitate delivery managers

Facilitate a uniform approach to infrastructure delivery and procurement management

Facilitate the meeting of statutory requirements. The Toolkit, when adhered to, will also assist departments in complying with applicable legislation. While the Toolkit is in itself not legislation, parts of it are mandatory or legislated through, amongst others, the Division of Revenue Act (DORA), the Construction Industry Development Board Act and the Government Immovable Asset Management Act (GIAMA). It provides practical guidelines on how to comply with such legislation. It is therefore clear that by following the Toolkit, users will be greatly assisted in complying with their mandates. The Toolkit contains elements that are:

Mandatory: in so far as containing Guidelines and Templates that are required for compliance to legislation e.g. DORA, GIAMA and CIDB Act

Recommended: with reference to generally accepted local and international best practice

Optional: with reference to the inclusion of proven practical templates, tools and techniques. Benefits to Accounting Officers:

Understand the alignment of national and sector strategies with the provincial infrastructure strategies as well as the departmental strategies

Understand delivery and procurement management processes

Overview


Understand delivery and procurement management within the framework of government‟s supply chain management policy

Establish a construction procurement system that is compliant with the regulatory and legislative framework

Institute control measures at appropriate points within the delivery and procurement management processes

Account for the full life cycle costs of infrastructure, all the way through to asset disposal

Understand their governance obligations. Benefits to delivery managers:

Understand delivery and procurement management processes and to identify the specific actions associated with such processes

Identify appropriate delivery options

Design their programmes using simple templates and guides

Align the allocated budgets to their programmes

Identify and prioritise projects

Procure supplies, services and engineering and construction works, as necessary

Manage the planning and design of projects

Manage procurement and project delivery processes

Oversee the implementation of projects and perform contract administration functions

Manage project risks better

Manage performance better. National benefits:

Delivery managers will be better empowered with good practice guidelines within a simple structured system based upon well defined processes that are necessary to achieve effective infrastructure delivery

A level of uniformity will be achieved with regard to how different organs of state implement infrastructure projects

A level of certainty will be achieved within the construction industry of how programmes and projects are rolled out by the public sector and knowledge of what is the next step in the process, by whom, when, etc

The Toolkit will provide a structured environment for inexperienced delivery managers to thrive and gain understanding well beyond their years by the use of templates formulated from years of experience, i.e. they will receive distilled good practice

Senior management will have a tool to hold delivery managers accountable for performance

Reporting of progress, performance and impact will be uniformly documented

The quality and value for money of service delivery will improve. Benefits beyond the public sector construction industry: Although the Toolkit focuses on public sector delivery, many of the core processes, particularly those associated with infrastructure planning, delivery and operations and maintenance and many of the procurement functions are equally applicable in the private sector. It must be stressed that the construction industry is a broad conglomeration of industries and sectors which add value in the creation, maintenance and disposal of fixed assets within the built environment. Construction delivery therefore can include services, manufacture, fabrication, engineering and construction works and the management thereof. This Toolkit can therefore be of value to sectors outside of the confines of the construction industry as well.

Overview


5. What‟s new in the 2010 Edition The 2010 version of the Toolkit includes alignment with new acts and best practice trends and an expansion to include new thought leadership that has arisen since the previous version. These updates are summarised as follows:

Modernised approach to procurement

Strategic construction procurement

Gateway approach

Institutionalise alternative delivery models

Introduce the concept of Packages

Alignment to the Government Immovable Asset Management Act (GIAMA) – Act number 19 of 2007

An added emphasis on Portfolio Management

New modules to widen the body of knowledge: o Provincial Infrastructure Strategy o Construction Procurement Strategy o Performance Management

Readiness for Local Government.

It is recognised that certain of the infrastructure delivery management processes in Local Government are different to those in the Provincial and National sectors. For example programme management plans in Provinces (IPMP, IPIP, U-AMP, C-AMP) are substantially different to those in the Local Government environment such as the SDBIP, WSDP and the IDP. Consequently the Toolkit cannot attempt to cover all of the infrastructure delivery processes in detail over the full spectrum of audiences. It would become too generic and thus lose much of its practical value to the key Provincial users. However, following the updates in the 2010 version it now allows many of the principles contained in the Toolkit to be generically applied within the Local Government sector. Some of the principles that can be applied in Local Government include:

Portfolio, Programme and Project Management

Strategy

Modernised approach to construction procurement

Performance Management.

The 2010 updates therefore provide the basis for a potential dedicated Local Government edition to be developed in due course, i.e. it provides a degree of readiness for Local Government to apply the good practices.

6. Structure of the Toolkit The Toolkit is structured into three Components as follows: Management Companion:

A summary version of the subject matter content of the Toolkit, serving as a quick reference guide

It is printed in pocket book size (A5), also downloadable in electronic format off the Infrastructure Delivery Management System (IDMS)

Provides senior managers with sufficient understanding so as to hold middle managers accountable

Provides middle managers with a quick reference summary.

Content of the Management Companion: o Overview o Delivery Process (DP) Guides:

Overview


DP1 Portfolio Management DP2 Project Management DP3 Operations and Maintenance

o Practice Guides (PG): PG 1 Provincial Infrastructure Strategy PG2 Construction Procurement Strategy PG3 Performance Management.

Delivery Management Guidelines:

This is the main subject matter knowledge content of the Toolkit

Provides guidelines in using the IDMS

Provides context and subject matter knowledge as support to the IDMS

Printable on A4 format off the CIDB‟s website

Content of the Delivery Management Guidelines: o Overview o Delivery Process (DP) Guides:

DP1 Portfolio Management DP2 Project Management DP3 Operations and Maintenance

o Practice Guides (PG): PG1 Provincial Infrastructure Strategy PG2 Construction Procurement Strategy PG3 Performance Management.

Infrastructure Delivery Management System (IDMS):

Encompasses all of the content

A web based tool for users to navigate through the management processes via “roadmaps”

The structure mirrors the processes of delivery

It provides the “how to” on process steps in day to day duties to manage delivery

It also includes, examples, templates and additional supporting documentation, knowledge repository and downloadable forms of the Management Companion and Delivery Management Guidelines

Available at www.cidb.org.za or in CD format.

It is important for users to understand that the Toolkit consists of all three of the components together, and that only one or other individual component is not the Toolkit. Since the Delivery Processes are key for the user to manage delivery, the IDMS and the Delivery Management Guidelines itself are structured around these processes. The structure of the Toolkit and its components is illustrated in the following diagram.

Overview


Figure 1: Structure of the Infrastructure Delivery Management Toolkit (IDM Toolkit)

It is assumed that users will diligently apply their minds in using the IDMS and Delivery Management Guidelines to align their delivery management processes with those of the Toolkit. Users will find that in so doing they will benefit from the distilled knowledge to assist them to more successfully fulfil their mandates as well as conforming to required legislation. The Delivery Management Guidelines and the three Delivery Processes that it supports have been schematically depicted as a type of “logo” used consistently throughout the Toolkit as per Figure 2 below.



Infrastructure Delivery Management System(IDMS)

Practice guides



PG3: Perform

Mgt

Overview


Figure 2: Schematic view of the Delivery Management Guidelines

In addition, where it is appropriate, the colours for each of the Delivery Processes are used consistently through the Toolkit in order to create a practical navigation reference, as follows:

DP1: Portfolio Management - Green

DP2: Project Management - Red

DP3: Operations and maintenance - Blue Furthermore, the above logo is used to orientate the user as to the current module that is being used by highlighting only that module as per Figure 3 below.

Figure 3: Navigating through modules

The table below provides a comparison of the structure of the previous edition of the Toolkit versus the current edition of the Toolkit: Table 1: Comparison of structure of 2006 Toolkit versus 2010 Toolkit

Previous edition of Toolkit (2006) Current edition of Toolkit (2010)


Infrastructure Delivery Guidelines Delivery Management Guidelines

Practice guides



PG3: Perform

Mgt

Overview


Previous edition of Toolkit (2006) Current edition of Toolkit (2010)

DMS (excel spreadsheets) IDMS (web based)

7. The Infrastructure Delivery Management System The Infrastructure Delivery Management System (IDMS) is the model that forms the backbone of the management of the delivery of infrastructure.

7.1 Overview Governments are required to deliver services to people that they serve. Organs of state are the instruments of government and the means by which services are rendered to the public. These organs of state are provided with the necessary mandate to provide a range of services and the means to do so through the annual budgetary processes. Public services are delivered in line with the policies, departmental programmes and objectives set out in the annual budget. Each year the annual budget is finalised for the current financial year, whilst the Medium Term Expenditure Framework (MTEF) is established for the next three years, on a continual rolling basis. Medium-term budgeting is a continuous process that culminates each year in an annual budget and a MTEF that the Minister of Finance tables in Parliament. The National Treasury annually produces a set of complementary publications providing comprehensive information on government‟s revenue raising and spending plans for the current and medium-term budgets. These are published annually, and are available on the National Treasury‟s website, www.treasury.gov.za. The budgetary process for municipalities is structured along similar lines. The IDMS is therefore structured in such a way as to embed the Government‟s expenditure cycles into the planning, delivery and operation and maintenance of infrastructure. These expenditure cycles are embedded into the Toolkit‟s three key Delivery Processes, namely:

Portfolio Management, including Programme Management

Project Management

Operations and Maintenance.

7.2 Linking budgets to infrastructure delivery management All three levels of government are tasked with the appointment of an Accounting Officer to implement the departmental programmes that are identified within their Budget Vote. The Accounting Officer is required to put in place the required procedures, processes and controls that will allow the departmental infrastructure programmes to be implemented, monitored and ensure that the objectives are achieved. The obligations placed on National and Provincial Accounting Officers are through the Public Finance Management Act number 1 of 1999 (PFMA), which furthermore requires the Accounting Officer to submit certain information and reports to National Treasury on a regular basis. The intention behind the PFMA reporting requirements is to ensure that the programmes and projects identified for each organ of state are being implemented and their respective objectives are being achieved. This creates a link between the funds for which the Accounting Officer is responsible and the proper delivery of infrastructure to which those funds have been allocated. The IDMS helps Accounting Officers to manage the delivery process in a systematic fashion according to the PFMA‟s requirements and thus to create this vital link and therefore to be able to give proper account for the

http://www.treasury.gov.za/

Overview


funding under his/her control. The PFMA is applicable to both national and provincial departments, and state owned enterprises. The Municipal Finance Management Act (MFMA) extends the similar principles to municipalities. Consequently the IDMS can be just as equally used by Local Government Accounting Officers to similarly manage their infrastructure delivery in as an accountable fashion as their national or provincial counterparts.

7.3 The IDMS The IDMS is a model depicted in the Toolkit that describes the processes that make up public sector delivery and procurement management as it applies to the delivery of public infrastructure. It is illustrated in Figure 4 below. The model reflects the diverse needs of the construction industry, in responding to the demands placed on it for the delivery of infrastructure and immovable public assets for South Africa. It outlines the core processes associated for delivery and procurement management where the project delivery processes relate to the provision of infrastructure works. The model presents the distinctly different processes and sub-processes that are present in delivery management, namely:

Portfolio Management - comprises the iterative processes of identifying objectives, planning and intelligently grouping projects into infrastructure programmes and monitoring and controlling the roll out of these programmes or projects

Project Management - comprises the undertaking of implementing the projects identified in the planning processes

Operations and Maintenance - where assets are operated, maintained and ultimately disposed of. The IDMS is structured by building up “layers” and integrates delivery elements as depicted by the following icons: Main delivery processes – Level 1 Sub delivery processes – Levels 2 and 3 Delivery Gates Procurement milestones Performance Management processes Triggers – an action to trigger a forward pass action to a future process. It is to be emphasised that infrastructure delivery management does not necessarily have a single beginning or end. Rather it is a cyclical process of continually assessing needs, planning for delivery, delivering infrastructure, maintaining and operating infrastructure and disposing of assets that have reached their useful life cycle, all the while continually planning for new needs and implementing new infrastructure that arise during the delivery of current infrastructure. The diagrams that follow provide a schematic view of the IDMS, as well as detailed process diagrams of the delivery processes. The following abbreviations are used to describe control points in the delivery processes: Delivery Gates:

G1a – Approved U-AMP (incl MTEF list)

G1b – Approved C-AMP (incl Works list)

G2 – Accepted Construction Procurement Strategy


DP1-1 Infrastructure Planning

PC1

G1(a)

PF1.3

T1

Overview


G3 – Accepted PEP1 v1 (Strategic Brief)

G4 – Accepted PEP v2 (Concept Report)

G5 – Accepted PEP v3 (Design Development Report)

G6a – Accepted PEP v4 (Production Information)

G6b - Accepted Manufacture, Fabrication & Construction (MFC) information

G7 – Accepted PEP v5 - works in accordance with requirements

G8 – Works taken over by User, complete with record information. Procurement milestones:

PC1 – Procure PSP for Programme Management, incl strategic procurement services

PC2 – Management Contractor / Framework Contract

PC3 – Design and Construct

PC4a – Design by Employer (Consultant procurement)

PC4b – Design by Employer (Contractor procurement)

PC5 – Develop and Construct. Performance Management Processes:

PF1.1 – Develop Indicators from Strategic Plan objectives

PF1.2 - Develop Indicators from Programme Implementation Plans and Budgets

PF1.3 – Develop Indicators from Project / Operational & Maintenance Plans

PF1.4 – Link Indicators and RACI to individual Performance Agreements

PF2.1 – Monitor & Evaluate Inputs, Activities and Outputs against plan

PF2.2 – Monitor & Evaluate Outcomes against plan

PF2.3 – Monitor & Evaluate Impacts against plan

PF3 – Publish Performance Information

PF4 – Review / Appraise individual performance

PF5 – Take management action. Triggers:

T1 – Trigger – To O&M and other Departments on requirements for other services (staff, books (Education), pharmaceuticals (Health), etc). on requirements for works that will be delivered

T2 – Trigger – To other Departments on impending handover.

1 PEP is a Project Execution Plan

Overview


Figure 4: The IDMS

The IDMS

Prov Infr Strat

G1(a) G2G1(b)U-AMP C-AMP

PC1


PF1.1 PF1.2


DP1-2 Programme ManagementDP1-1 Infrastructure Planning

Develop/review U-AMP (including prioritised MTEF works list)

Develop/review C-AMP (incl portfolio level Work Plans)

Develop /review Constr

Proc Strat

Develop /review

IPMPManage Implementation

Authorise Implementation

Monitor & Control

Close Out

G3 G4 G5 G6(a) G6(b) G7 G8PC2

PC3

PC4a

PC5

PC4b


T1 T2

PEP2PEP1 IPIP PEP3

DP2: Project Management

DP2-1 Implementation Planning

Prepare Packages

Define Packages

Develop/Review IPIPs (Prgr & Proj level)

DP2-2 Design

Design devlpmt

Detailed design

Compile MFC Info

DP2-3 Works

Construct / Deliver works

Handover works

DP2-4 Close Out

Contracts Close Out

Adminstv Close Out

PEP4 PEP5 PEP6 PEP7


G8

DP3: Operations & Maintenance

DP3-1 Recognise & accept assets

DP3-2 Mobilisation for Facilities Mgt

DP3-3 Operations DP3-4 MaintenanceDP3-5 Demobilisation

of Facilities Mgt

Overview


Users will note the following from the IDMS:

The Provincial Infrastructure Strategy is the key input into the delivery cycle

The delivery process is not strictly linear in nature. Rather it is an interactive cycle between the processes

The IDMS integrates key delivery components, namely: o Delivery Processes o Gates o Procurement o Performance Management o Triggers

The Procurement Strategy is determined early in the delivery process

A number of procurement regimes are catered for, not only the traditional design by employer

The triggers early in the delivery process to operational departments are crucial in order to give early warning of when infrastructure will be completed so that these departments can plan sufficiently early for the timeous and simultaneous delivery of other operational requirements such as staff, school books, pharmaceuticals, etc.

Comparison to the DMS from the previous edition of the Toolkit: The IDMS is equivalent to the DMS of the previous version Toolkit. For ease of reference of previous users, the DMS from the previous Toolkit is as per Figure 5 below:

Figure 5: The DMS from the previous Toolkit

3. Programme3. ProgrammeImplementationImplementation

1. Infrastructure1. InfrastructurePlanningPlanning

DepartmentalDepartmentalStrategicStrategicPlanningPlanning

2. Programme2. ProgrammeManagementManagement

4. Project4. ProjectDeliveryDelivery

Departmental Departmental Mandate andMandate and

PoliciesPolicies

Align

5. 5. ProcurementProcurement

3. ProgrammeImplementation

1. InfrastructurePlanning

DepartmentalStrategicPlanning

2. Client ProgrammeManagement

4. ProjectDelivery

Departmental Mandate and

Policies

Align

5. Procurement

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3. Programme3. ProgrammeImplementationImplementation

1. Infrastructure1. InfrastructurePlanningPlanning

DepartmentalDepartmentalStrategicStrategicPlanningPlanning

2. Programme2. ProgrammeManagementManagement

4. Project4. ProjectDeliveryDelivery

Departmental Departmental Mandate andMandate and

PoliciesPolicies

Align

5. 5. ProcurementProcurement

3. ProgrammeImplementation

1. InfrastructurePlanning

DepartmentalStrategicPlanning

2. Client ProgrammeManagement

4. ProjectDelivery

Departmental Mandate and

Policies

Align

5. Procurement

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Overview


This diagram was subsequently amended to the “linear DMS” which showed the delivery processes in a horizontal fashion. The new Toolkit IDMS is very similar in its overall delivery processes as can be seen in Figure 6 below comparing the “linear DMS” of the previous Toolkit to the current IDMS:

Figure 6: Comparison of the “linear DMS” from the previous Toolkit to the current IDMS

The following nine figures depict the summary and three Delivery Processes in a process diagram form. This provides users with the necessary details to show practical information on the “how to” elements of managing infrastructure delivery. The process diagrams follow the following basic conventions: Figure 7: Process diagram conventions

2006 edition DMS (linear version)

DP1: Portfolio ManagementDP2: Project

Management

DP3: Ops & Maint

PG1: Prov Infrastructure Strategy

PG2: Construction Procurement StrategyPG3: Performance Management

2010 edition IDMS

Process Name

Controls (typically legislation or

standards )

Inputs Outputs

Overview


Figure 8: Detailed Delivery Process diagrams of the IDMS

Overview


Overview


Overview


Overview


Overview


Overview


Figure 9: The 6 DP1 process flow diagrams

Overview


Figure 10: DP2 Process overview

Overview


Figure 11: DP3 Process overview

Overview


8. An introduction to some key concepts The following paragraphs provide an introduction to some selected concepts that are key for users to understand while using the Toolkit.

8.1 Portfolios, Programmes, Projects and Packages

8.1.1 Portfolios, Programmes and Projects The delivery and management of infrastructure is far more than just managing individual projects. There are a number of additional competencies required within the organisation to manage a collection of projects. These include those competencies that are contained within the Portfolio and Programme Management bodies of knowledge. Standard good practice shows that project management exists in a broader context governed by programme and portfolio management. As Figure 12 below illustrates, a collection of projects within the organisation are linked and have relationships between portfolios and programmes and between programmes and individual projects. Organisational planning impacts the projects by means of project prioritisation based on risk, funding and the organisation‟s strategic plan. Organisational planning can direct the funding and support for the component projects on the basis of organisational strategies, risk categories, specific departmental functions, or general types of projects, such as infrastructure or operational support services.

Figure 12: Portfolio, Programme and Project Management and “other work” interactions (PMI)

2

The following provides users with internationally accepted definitions (PMI):

Portfolio: A collection of projects, programmes or other work that are grouped together to

2 Project Management Institute – A guide to the PMBoK 2008

Highest level Portfolio

Lower level Portfolios

Projects

Higher level Programmes


Lower level Programmes

Projects


Lower level Programmes

Projects Other work

Overview


facilitate effective management of that work to meet strategic business objectives.

Programme: A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.

Project: A temporary endeavour undertaken to create a unique product, service or result The “Other Work” is equally as important as the projects themselves, since this is the body of day to day operational activities required to ensure that the functions required to enable project delivery are in place and efficient. It includes operational activities not scoped specifically under a project or programme but that are required to manage the portfolio. The intelligent grouping of projects under carefully selected programmes and portfolios provide for substantial improvement in efficiencies by being able to, amongst others, consolidate and share resources, shared governance and control processes, focussed benefits management and stakeholder management. It can be deduced from the above that managing a large group of projects in a Programme or Portfolio requires an additional set of management skills from just managing individual projects, hence the emphasis on Portfolio and Programme management in this edition of the Toolkit. Table 2 below provides some detail on what are the additional issues that need to be considered in managing Programmes and Portfolios as defined by the Project Management Institute. Table 2: Comparative overview of Project, Programme and Portfolio management

Project Element

Projects Programmes Portfolios

Scope Projects have defined objectives. Scope is progressively elaborated throughout the project life cycle.

Programmes have a larger scope and provide more significant benefits.

Portfolios have a business scope that changes with the strategic goals of the organisation.

Change Project managers expect change and implement processes to keep change managed and controlled.

The Programme Manager must expect change from both inside and outside the programme and be prepared to manage it.

Portfolio managers continually monitor changes in the broad environment.

Planning Project managers progressively elaborate high-level information into detailed plans throughout

Programme Managers develop the overall programme plan and create high-level plans to guide

Portfolio Managers create and maintain necessary processes and communication

Example: Let us assume a Provincial Department of Education were to embark on a classroom upgrading exercise in say 200 individual schools. If each of the 200 schools were to be managed as individual projects, it would require that 200 separate designs would have to be drawn up, 200 professional service providers engaged to do the design, 200 individual contractors employed to build the schools and 200 maintenance contractors employed to maintain the schools. The load on the Supply Chain Management of the Department would on its own render the roll out inordinately too long to make it practical when it is considered that the procurement of even one contractor on its own can take several months. Rather, by grouping the projects under a Programme, efficiencies can be made by sharing resources such as standard designs, one Professional Service Provider for a Region, one contractor to cover a group of schools in a District, etc.

Overview


Project Element

Projects Programmes Portfolios

the project life cycle. detailed planning at the component level.

relative to the aggregate portfolio.

Management Project managers manage the project team to meet the project objectives.

Programme Managers manage the programme staff and the project managers. They provide vision and overall leadership.

Portfolio managers may manage or coordinate portfolio management staff.

Success Success is measured by product and project quality, timelines, budget compliance and degree of customer satisfaction.

Success is measured by the degree to which the programme satisfies the needs and benefits for which it was undertaken.

Success is measured in terms of aggregate performance of portfolio components.

Monitoring Project managers monitor and control the work of producing the products, services, or results that the project was undertaken to produce.

Programme Managers monitor the progress of programme components to ensure the overall goals, schedules, budget and benefits of the programme will be met.

Portfolio Managers monitor aggregate performance and value indicators.

8.1.2 How Portfolios, Programmes and Projects align with levels of management and their performance indicators

Infrastructure Portfolios, Programmes and Projects have an alignment with levels of organisational management and their associated performance indicators as summarised in Table 3 below. Table 3: Alignment of Portfolios, Programmes and Projects with levels of management

General management level

Infrastructure management level

Typical Provincial Government Dep. Level

Typical National Government Dep. level

Performance Indicator Levels

Where indicators are captured

Strategic manager

Portfolio MEC / Sometimes a function within the Office of the Premier

Minister / Director General

Impact Departmental Strategy

Executive manager

Head Of Department

Deputy Director General

Senior manager Programme Chief Director Chief Director Outcome IPMP, IP, IPIP, C-AMP, U-AMP

Manager Project Director Director Output PEP

The following notes provide some explanatory details on the above table:

Portfolio Management: Infrastructure portfolios should be aligned with the strategic objectives of the organisation. Consequently the typical manager that would be responsible for Portfolio management would report to the strategic management level. As a result their performance indicators would be informed by and contained in the strategic plans of the organisation. In most public infrastructure organisations, such as Provinces, the strategic and executive levels are rolled

Overview


into one level. In some Provinces however, a function can exist within the Office of the Premier to provide strategic infrastructure management. The Portfolio performance indicators are of an “impact” nature. Typically these would be aimed at measuring the impact that infrastructure has in achieving strategic goals. Examples could include how the roll out of basic sanitation services impact infant mortality rates, labour intensive construction programmes impact poverty levels, classroom roll out impacts literacy rates, etc. These impact level indicators are normally developed in the Departmental Strategy, but can also be captured in the Annual Performance Plans of the relevant executive level manager. These would include “rolled up” versions of lower level indicators, i.e. “outcome” and “output” indicators. It is worth noting that no statutory Infrastructure Portfolio Management Plan has been legislated as yet within the South African public sector context. Consequently it is crucial that executive level managers either create some form of Infrastructure Portfolio Management Plan or capture these impact level indicators in Departmental Strategic Plans, Annual Performance Plans or an appropriate alternative Programme Management: The infrastructure programmes are scoped and managed within the greater infrastructure portfolio. Consequently the typical programme manager would report to the portfolio level manager. The programme management plans include the Infrastructure Plan (IP), Infrastructure Programme Management Plan (IPMP), Infrastructure Programme Implementation Plan (IPIP), etc. Performance indicators at the programme level are of an “outcome” nature. Typical examples would include reducing the classroom backlog by 50% over three years in a Province, serving 90% of the population with at least primary health care facilities within a 20km radius of place of residence within four years in a Province, etc. These performance indicators are usually captured within Annual Performance Plans, and would include “rolled up” versions of the “output” level (project level) indicators. Project Management: The infrastructure projects are scoped and managed within the greater programme. Consequently the typical project manager would report to the portfolio level manager as far as the project performance is concerned. This may or may not be an organisational line function reporting line. The project management plans include the Project Execution Plan (PEP). Performance indicators at the project level are of an “output” nature. A typical example would include the progress of a classroom construction project within the approved time, cost and quality parameters.

8.1.3 Packages Part of this concept is to introduce the concept of a “Package” to enhance efficiencies in the procurement process. It was partly motivated by the fact that the traditional approach has often been to procure a single contractor for a single project under a single contract. While this seems logical at a single project level, it does not exploit the potential efficiencies of grouping a number of works items together, i.e. a Package, under a single contract. By grouping these works items together a number of efficiencies will be obtained such as simplified Supply Chain Management, grouped controls, grouped supervision and grouped reporting.

Definition of a Package: Works which have been grouped together for delivery under a single contract or a package order.

However, to implement a Package solution requires a strategic approach to procurement since the Programme Managers need to apply their minds early in the planning process to ensure that the most appropriate grouping of projects is properly selected early enough in the process. For example, if the grouping of projects into a single procurement Package is only decided after the design is completed, it may be too late to select groups of works items if the design cannot allow for such. It is preferable that even before the design commences that a Procurement Strategy is agreed that will inform the design. If the procurement is strategically planned early in the planning process, the designs themselves will be influenced to group works items into logical “chunks” or Packages.

Overview


However, common sense still needs to be exercised in ensuring that while a number of works items might be grouped under one Package for reasons of procurement efficiencies, this grouping of works items would normally form the scope of a new and larger project. Consequently the normal project management activities to manage this larger project scope of work will still take place. This will include ensuring that there is now only one Project Manager accountable for the larger scope of work and one set of project management plans to manage the project. It can therefore be seen that there is great synergy between the concept of grouping projects under a single procurement regime or Package, while at the same continuing to apply the good practices of project, programme and portfolio Management. In some cases the Package could mirror the grouping of projects that form a programme, or in other cases they could intersect with one another as illustrated by Figure 13 below.

Figure 13: Packages versus Portfolios, Programmes and Projects

From the above it can be seen that Packages could intersect with Projects and Programmes in the following combinations: Table 4: Examples of how Packages can overlap with Programmes and Projects

Number Description of overlap Example

1 Package overlaps completely with the Programme.

One contractor to implement all works in the Programme. Example: Construct all four schools in the schools construction Programme.

2 Package overlaps with a portion of a Programme.

One contractor to only implement works in a portion of the Programme. Example: One contractor to construct two schools that are geographically close to one another.

Portfolio of projects

ProgrammesPackages

1

2

34

5

Governance anomaly

Overview


Number Description of overlap Example

3 Package overlaps across a Programme and individual Project.

One contractor to implement works across two programmes and one independent project. Example: One contractor to construct five schools that are geographically close to one another, two of which are under one Programme, another two under another Programme, and one school independent of a Programme. In this case the Package will become a Programme, and will have multiple programme reporting lines. This is not recommended for general use, and should only be used in very special cases where there is sound reasoning for such. One example where this could be used is on constructing carports in a larger schools programme, where the carports have minimal scheduling conflicts with the larger schools programme. A fencing contract could be another example.

4 Package overlaps with a single Project.

One contractor to implement works on only one independent Project. Note that this will stay as a single project with normal project management principles applying.

5 Package overlaps with only certain portions of a group of single Projects.

One contractor to implement only portions of works of a number Projects. Example: One contractor employed under one contract to implement only the fencing elements of number schools. This can also create a governance anomaly as per number 3 above since each of the project managers of the individual projects lose some contractual control over the contractor employed under the Package. Again, in these cases only portions of work should be ring fenced under a package that will have minimal effect on the individual other projects scheduling, such as for example fencing projects

From the above table it is clear that selecting how and what work is grouped under a Package is very important. If it is not carefully grouped anomalies can be introduced in governance that can create confusion between contracts and leave the project or programme managers in a situation where they are hamstrung in controlling the work. Consequently the following are some guidelines in selecting Packages versus projects or programmes. Guidelines in selecting work under Packages versus projects or programmes:

Ideally, work that would ordinarily have been implemented via a number of separate projects but that is now re-grouped under a Package for contractual expediency, should be ring fenced as a newly scoped larger project or programme under a single contract or works order and Project or Programme Manager

If works that are grouped under a Package are part of a larger project or programme, the works under the Package should ideally be ring fenced out of the scope of the larger project or programme and be contracted under a separate contract or works order with a separate Project or Programme Manager

If the intention is to group works under a Package that also falls under a larger project or programme, then these works should be chosen in such a way that the Project or Programme Manager is not faced with a dilemma where he loses control over that portion of works or that any delays or overruns under the Package do not materially affect the remainder of the works under his control. Consequently works that fall under the Package should be isolated out of critical path activities, such as for example fencing and carports as in Table 4 above.

8.2 Gateway Process The CIDB has introduced the concept of the Gateway Process to further improve efficiencies in the delivery management of infrastructure. Please refer to the CIDB‟s Practice Note 22 of 2010 for more

Overview


details. See www.cidb.org.za. Some of these principles have been embedded into the IDMS. The following paragraphs provide some background understanding of the Gateway principles.

8.2.1 Synopsis The CIDB Infrastructure Gateway Process provides a number of control points (gates) in the infrastructure life cycle where a decision is required before proceeding from one stage to another. Such decisions need to be based on information that is provided during the infrastructure life cycle. If the Gateway Process is correctly followed it will provide assurance that a project involving the design, construction, refurbishment, alteration, rehabilitation or maintenance remains within agreed mandates and that it aligns with the purpose for which it was conceived and can thus progress successfully from one stage to the next.

8.2.2 Control Gates A gate is a control point in the infrastructure life cycle where a decision is required before proceeding from one stage to another. Such decisions need to be based on information that is provided that is pertinent to the project. If correctly done, a gate may provide assurance that a project:

Remains within agreed mandates

Aligns with the purpose for which it was conceived

Can progress successfully from one stage to the next. A gateway process designed around a set of gates that are strategically located within an infrastructure asset management cycle has the potential to:

Enable projects to be more accurately scoped and costed at an earlier stage in the asset life cycle

Reduce time and cost overruns

Improve alignment of service delivery with available funds

Improve procurement discipline

Manage risks more effectively

Reinforce responsibility and accountability for decisions

Enable projects to be better aligned with policies and objectives. Such control gates also enable project risk to be contained within the confines of an organ of state‟s risk appetite. The information upon which a decision is based at a control gate and the decisions made can be audited to ensure that projects remain within an organisation‟s mandate, are justifiable and realise value for money. The opportunity to audit the life cycle of projects also:

Improves transparency which, in turn, reduces the opportunity for mismanagement and corruption in planning and implementation

Enables the procurement strategy adopted for a portfolio, programme or project to be reviewed and improved upon when delivering similar projects in the future

Enables post implementation reviews to take place to examine whether planned benefits are achieved and risks are being effectively managed

Removes perverse incentives relating to the promotion of one project or solution over another.

8.2.3 Infrastructure gates and stages Infrastructure gateways should permit the undertaking of groups of activities in parallel or series and result at the end of each stage in:

A predetermined deliverable (a tangible, verifiable work product)

A structured decision point which enables decisions to be made to determine if the project should continue to its next stage with or without any adjustments between what was planned and what is to be delivered.

http://www.cidb.org.za/

Overview


The CIDB Infrastructure Gateway Process is based on the information flow as illustrated in Table 5 below: Table 5: Infrastructure Gateway Process information

Gate Stage

No. Information provided for a decision to be made as a gate

No. Infrastructure life cycle phase

1 Approved U-AMP and C-AMP 1 Infrastructure planning

2 Accepted Procurement Strategy 2 Procurement planning

3 Acceptance of Strategic Brief 3 Package planning

4 Acceptance of Concept Report 4 Package definition

5 Acceptance of Design Development Report 5 Design development

6a Acceptance of Production Information 6 Design documentation

6b Acceptance of Manufacture, Fabrication and Construction information

7 Acceptance of Works in accordance with requirements

7 Works

8 Handover of Works to User, complete with record information

8 Hand over

No procurement stages, apart from procurement planning at a portfolio level, are included in the infrastructure management cycle. Procurement gates governing procurement processes can occur whenever resources are procured. Professional service providers are generally required only after gate 4 to progress the works to gate 9. The specific services that are required at each stage vary depending upon the contracting strategy that is adopted. For example, a full service is required in stage 5 and 6 where the design by employer contracting strategy is adopted, whereas in a design and construct contracting strategy, the professional service provider will confirm that the design is proceeding in accordance with the concept report and the design and documentation prepared by the contractor. Gateway processes can be used to review projects. However, the application of the Gateway Process focuses on the putting in place of processes and procedures to ensure that the outputs of each stage in the delivery and maintenance of infrastructure are achieved and accepted before proceeding to the next stage. This enables works to be managed and controlled in a logical, methodical and auditable manner. The potential to add value or costs can be summarised as per Figure 14 below. By applying proper controls early on in the delivery process, managers have the ability to add value by ensuring negative project issues are identified and properly dealt with up front, before the costs are incurred. The earlier on in the process managers have the ability to influence the process through control gates, the more value can be added. Conversely, issues that are allowed to slip through control gates will potentially have an increasing effect on the cost add-ons.

Overview


Figure 14: Trends in the potential to add value or costs

8.3 Construction Procurement Strategy The following paragraphs provide users with an introduction to strategic construction procurement. Please refer to Practice Guide 2 (Construction Procurement Strategy) for more details. A construction procurement strategy is the combination of the delivery management strategy and contracting and procurement arrangements. A construction procurement strategy can be developed for a single project, a programme of projects or a portfolio of projects to identify the best way of achieving objectives and value for money, whilst taking into account risks and constraints. Once the necessary decisions relating to the delivery management strategy, contracting strategy and the procurement arrangements have been made, the procurement strategy may be documented and implemented in respect of each package. Thereafter, depending upon the choices that are made, the design team might need to be managed, and the contract managed or administered in accordance with the provisions of the contract. Additional Programme Management practices will also be required to be applied where projects are delivered under a programme. The following three paragraphs summarise the three main stages in developing a Construction Procurement Strategy.

8.3.1 Delivery Management Strategy The first stage in developing a procurement strategy is to decide on the delivery management strategy The development of a delivery management strategy can, however, only be embarked upon for a portfolio or programme of projects after the deliverable at the end of the infrastructure planning stage has been produced i.e. a medium term expenditure infrastructure plan which links prioritised needs to a forecasted budget. Figure 15 below graphically depicts how to develop a delivery management strategy.

Overview


Figure 15: Deciding upon a delivery management strategy

8.3.2 Contracting Strategy The second stage in developing a procurement strategy is to decide on the contracting strategy for each package and the professional services required to implement the contracting strategy associated therewith. The organisational and market analyses and primary and secondary procurement objectives provide the basis for the making of decisions regarding the choice of contracting options. Figure 16 below illustrates the process to decide on the contracting strategies.

Gather and analyse information

Step Description Output

1 Conduct a spend

analysis

Spatially located work items in the

infrastructure plan grouped into categories of spend with common attributes.

2 Conduct an organisational analysis

Descriptions of client organisational characteristics

3 Conduct a market

analysis

Descriptions of market characteristics

Formulate procurement objectives


1 Formulate primary procurement objectives

Identified primary procurement objectives

2 Formulate secondary procurement objectives

Documented and prioritised secondary procurement objectives

Make strategic delivery management decisions Description Output

Decide on how needs are to be met i.e. through: Proposition 1: a PPP Proposition 2: an IA Proposition 3: another organ of state‟s FA Proposition 4: leasing of property Proposition 5: outsourcing Proposition 6: own resources

A delivery management plan which indicates how each categories of spend or portions thereof are to be delivered.

Decide on delivery mode (project or programme)

Description Output

Decide on programme of projects or series of independent projects

Categories of spend or portions thereof delivered as a programme of projects or a series of independent projects

Follow National Treasury PPP

procedures if needs are met through a PPP Enter into service level agreement with an implementing agent if needs are to be met

through an implementing agent Approach organ of state to make use of framework agreement if needs are to be met through that organ of state‟s framework

agreement Procure a lease if needs are to be met through the leasing of property What about guidance for

outsourcing and own resources?

Package works Step Description Output

1 Identify opportunities for framework agreements

Categories of spend or portions thereof to be implemented through own framework agreements.

2 Identify packages A package plan for construction and maintenance projects or a combination

thereof which states the mode of delivery for and identifies each package

Overview


Figure 16: Deciding on contracting strategies

8.3.3 Procurement arrangements The final stage in developing a procurement strategy is to decide on the procurement arrangements. Figure 17 below describes how to decide upon the most appropriate procurement arrangements.

Allocate risks for packages


1 Decide service requirements and / or

contracting strategy

Service requirements and risk allocations for each package i.e. allocation of responsibilities, pricing strategy and standard form of

contract

2 Decide on pricing strategy

3 Decide on form of contract

Establish requirements for outsourced

professional services

Description Output

Identify services areas that are required

Identified professional services which need to be procured

Allocate risks for professional service contracts

Maintenance service options

Pricing strategy:

Priced contract with a priced list

Cost reimbursable

Target cost

Forms of contract:

CIDB General conditions of contract

NEC3 Term Service Contract

NEC3 Short Term Service Contract

Construction, maintenance and operation service options

Forms of contract:

FIDIC Conditions of Contract for Design, Build and Operate Projects

NEC3 Engineering and Construction Contract plus

NEC3 Term Service Contracts

Construction and maintenance service options

Pricing strategies

As for maintenance and construction services

Forms of contract:

NEC3 Engineering and Construction Contract with or without NEC3 Term Service Contracts

Construction service options

Contracting strategy

Design by employer

Develop and construct

Design and construct

Construction management

Management contractor

Pricing strategies

Activity based / lump sum

Bill of quantities

Cost reimbursable

Target Cost

Forms of contract

NEC3 Engineering and Construction Contract

NEC3 Engineering and Construction Short Contract.

FIDIC Conditions of Contract for Construction and

Building and Engineering Works Designed by the

Employer

FIDIC Conditions of Contract for Plant and Design

FIDIC Conditions of contract for EPC Turnkey

Projects

FIDIC Short Form of Contract General Conditions

(Short Form)

JBCC Principal Building Agreement

JBCC Minor Works Agreement

GCC 2010

Contracting strategy

Discipline specific or multidisciplinary service

Type of contract

Package specific, programme related or linked to a

framework agreement

Package professional service contracts


1 Decide on

contracting strategy

Requirements for outsourced professional services categorized as single discipline or

multidisciplinary

2 Decide on the type

of contract

Requirements for outsourced professional

services linked to a specific package or a

programme or a number of undefined

packages or programmes


1 Decide on pricing strategy

Identified pricing strategy for required professional services

2 Decide on form of contract

Identified standard form of contract for a professional service contract

Pricing strategy

Priced contract, fee based on percentage of cost of

construction, cost reimbursable or target cost contract

Form of contract

NEC Professional service contract or CIDB

Standard Professional Service Contract

Overview


Figure 17: Deciding upon procurement arrangements

8.3.4 Documenting a Procurement Strategy The construction procurement strategy arrived at by applying the aforementioned procedures then needs to be documented in such a manner that the logic behind the choices that are made at each step can be communicated to and reviewed by others. Accordingly, the specific inputs and outputs of the actions at each step in the stages of the development of a strategy need to be documented.

8.4 Infrastructure estimating, budgeting and prioritisation

8.4.1 Estimating and budgeting In order to implement an infrastructure plan and its related organisational support plan, resources will have to be made available to the responsible unit within an organisation. All these resources require financial resources at particular times in the planning and implementation cycle of infrastructure assets. These estimated financial projections are used to generate a long term estimate of the required cash flow for managing an organisation‟s infrastructure portfolio. The costs associated with the life cycle stages of infrastructure fall into two categories, namely:

Overview


Capital costs

Operating costs. Cost estimating for the long term infrastructure plan is conducted at high level. The costs for infrastructure work are related to the life cycle of each asset while the cost estimates for the organisational support work are based on the capacity required to manage this work effectively. The accuracy of estimates for work, initially included in the long term infrastructure asset plan, improves as the plan is reviewed each year and as scheduled work is included in the MTEF period (requiring a pre-feasibility study). This increasing accuracy of estimates is based on “progressive elaboration” of the scope of work. This process is repeated for all assets in an organisation‟s portfolio and is reviewed at least annually. Ideally the long term budget is updated as more accurate information becomes available (from completed work, new norms and standards, etc). As the MTEF cycle advances each year, work schedules need to be adjusted to match the available budget. The prioritisation process determines which work is implemented in an MTEF period and which work is delayed into the future.

8.4.2 Prioritisation Prioritisation is necessary when the demand for infrastructure work exceeds financial and/or organisational resources to allow delivery of projects according to the desired or initially planned timeframes. Prioritisation in the infrastructure environment is an interactive process broadly described as follows:

Initial schedule of work and first budget: The initial scheduling shown in the infrastructure plan is based on technical and organisational considerations and constraints as well as relative needs based on known strategic objectives contained in the organisation‟s Strategic Plan.

Second scheduling of work: Once the outcome of the budgeting process and progress on current work is known (typically in the 3

rd financial quarter of the financial year), it may be

necessary to adjust the scheduling of work to match the available funds both in respect of infrastructure expenditure (capital and current) as well as organisational and support expenditure.

8.5 Alignment between the Infrastructure Planning and Budget Cycles: The “Alignment Model”

In order to improve planning and efficiency in the delivery of infrastructure, the Alignment Model was developed which called for the amendment of the timeframes of the Infrastructure Delivery Cycle to include appropriate due processes in the cycle as well as to create the critical linkages that are necessary between the Infrastructure Delivery Cycle and the MTEF Budget Cycle. The Alignment Model shows the process and indicative time frames of the infrastructure cycle and how it links with the Budget Cycle. Figure 18 below shows the alignment of the Infrastructure Delivery Cycle with the MTEF Budget Cycle. Please refer to Delivery Process 1 (Portfolio Management) in the Delivery Management Guidelines for more details on the model.

Overview


Figure 18: Alignment of the Infrastructure Delivery Cycle with the MTEF Budget Cycle

8.6 Principles of cooperative governance and joint Programme Management

8.6.1 Overview The Constitution of South Africa (Act 108 of 1996) assumes devolution of powers to cascading levels of responsibility down and across the governance chain. Chapter 3 of the Constitution makes specific provision for such cooperation. In other words, one of the foundations of our Constitution assumes that individual Departments will proactively cooperate with other Departments to deliver an integrated service, even if some of their duties are not strictly their own responsibility. This requires a mature degree of cooperation so as to avoid complex and tedious legislation to force cooperation. This cooperation has not always been as successful as is desired, partly due to the complexity of integration. Consequently it has necessitated additional legislation to provide mandatory actions and guidelines. Chief of these is the Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005 – the IGR Act). It establishes a framework for the national, provincial and local governments to promote and facilitate intergovernmental relations, and to provide for mechanisms and procedures to facilitate the settlement of intergovernmental disputes. Chapter 3 of the IGR Act provides for organs of state to enter into an implementation protocol as an Agreement where the implementation of a policy, the exercise of a statutory power, the performance of a statutory function or the provision of a service depends on the participation of organs of state in different spheres of government.

Overview


A Service Delivery Agreement (SDA), based on an implementation protocol as proposed in the IGR Act will be presented as mechanism to document the roles and responsibilities of each role player in the management of such a joint programme. Programme Management will be defined and the separation of programme management functions, roles and responsibilities between User Department, Custodian and Implementing Agent in respect of immovable asset project delivery will be discussed.

8.6.2 Introduction to Joint Programmes The concept of managing immovable asset delivery as a joint programme is founded on the GIAMA Clause 14 (1) (b) which prescribes that: “The accounting officer of a user or custodian in its capacity as a user must, for all the immovable assets that it uses or intends to use - jointly conduct the immovable asset strategic planning process with the relevant custodian”. GIAMA Clause 4 (4) further prescribes that: “A custodian and user must settle any dispute between them in the manner contemplated in the IGR Act” This GIAMA reference to the IGR Act creates the opportunity to introduce the principles of inter-governmental and inter-departmental relations - as contained in the Framework - into these management guidelines for immovable asset delivery. The IGR Act establishes a framework for the national, provincial and local governments to promote and facilitate intergovernmental relations, and to provide for mechanisms and procedures to facilitate the settlement of intergovernmental disputes. The Framework further extends the principles of participation and co-ordination between organs of state in the different spheres of government, to also include integration, participation and co-ordination of joint programmes within a particular sphere of government. In November 2005, the Cabinet approved the Framework for Managing Joint Programmes in the Public Service („the Framework‟). The Framework defines joint programmes as „Those programmes that transcend the conventional organisational boundaries in planning, budgeting and implementation resulting in a number of departments/agencies/ministries responsible for one aspect of the programme, although none is responsible for it in its entirety.” The Framework describes joint programmes as having the following characteristics:

Programmes that require a cross-departmental involvement in the planning, budgeting and delivery of services

A number of departments are often responsible for a specific aspect of the programme, but none is responsible for it in its entirety

Programmes that require integration rather than mere co-ordination. Given the definition and characteristics as described above, it can be concluded that the management of immovable assets - as described in GIAMA – falls within the ambit of a joint programme as defined in the Framework. This conclusion is further strengthened by the proposed institutional arrangements for Joint Programmes which are clearly aligned with the IDIP prescripts as documented in the Toolkit. The Guidelines for the Management of Joint Programmes make provision for the establishment of:

Joint scoping of programmes

The appointment of a Joint Programme Manager responsible for overseeing the planning and implementation of the Joint Programme

The establishment of a Joint Programme Steering Committee consisting of representatives from all departments involved in the Joint Programme, representatives from key stakeholders and the co-opting of external consultants as necessary

A Joint Panel of Executive Authorities consisting of the executive authorities of departments involved in the implementation of the relevant joint programmes.

Overview


8.6.3 Implementation Protocol for Joint Programmes Chapter 3 of the IGR Act provides for organs of state to enter into an implementation protocol as an Agreement (a memorandum of understanding) for the implementation of joint programmes. Use of the Implementation Protocol Guidelines is therefore recommended when consideration is given to the implementation of a Service Delivery Agreement between a User Department and Custodian. At the January 2006 Cabinet Lekgotla, the Cabinet approved the development of templates for inter-departmental protocols to further strengthen the frameworks for intergovernmental relations. It is therefore recommended that the Implementation Protocol Template (provided as Annexure A to the IGR Act) be used when drafting a Service Delivery Agreement. Clause 5 of the Implementation Protocol Template allows for the inclusion of a Workplan, i.e. an agreement between the parties on the implementation of the Protocol. The Implementation Protocol Guidelines state that the Workplan should also serve as an instrument to measure the effective implementation of the Protocol. The Implementation Protocol Guidelines contain minimum requirements for a Workplan. It is however recommended that these minimum requirements be adjusted to incorporate the programme management plans as described in the Toolkit.

8.7 Risk Management All projects are exposed to risks that could potentially negatively, or positively, impact on delivering the required outcomes of the project. Therefore it is good practice in the management of any Portfolio, Programme or Project to ensure that a concerted Risk Management Plan is developed and implemented. The paragraphs that follow provide the mere basic outlines of Risk Management. Each of the modules contains implications of risk to the aspects detailed in that particular module. Consequently the paragraphs below provide a basic context to the details contained in the other modules. The definitions that follow are per PMI‟s Guide to the PMBOK. Definition of Project Risk: An uncertain event or condition that, if it occurs, has a positive or negative effect on a project‟s objectives. Severity of Risk: Is determined by multiplying the Probability of the risk occurring by the Impact on achieving the project‟s objectives, i.e. Risk Severity = Probability X Impact. The objective of Project Risk Management is therefore to increase the probability and impact of positive events, and decrease the probability and impact of negative events. The following are good practice processes to follow in Risk Management:

Plan for Risk Management – how to conduct risk management activities

Identify risks – determining which risks may affect the project

Perform risk qualitative analysis – prioritising risks for further analysis or action by assessing and combining their probability of occurrence and impact

Quantitative risk analysis – Numerically analysing the effect of identified risks on overall project objectives

Monitor and control risks – Implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks and evaluating risk process effectiveness throughout the project

Overview


9. Summary of key legislation applicable to infrastructure management

It is noted that users are faced with a daunting range of legislative requirements in planning for infrastructure delivery. The following paragraphs provide a summary for ease of reference of some of the key pieces of legislation. There are a number of other pieces of legislation that have relevance, including legislation that relates to specific sectors such as water, transport, finance, etc. However for the sake of expediency only key elements of some of the applicable Acts are summarised below.

9.1 Public Finance Management Act of 1999 Chapter 5 (Strategic planning) of the Regulations issued in terms of the Public Finance Management Act (PFMA) of 1999 requires the accounting officer of an institution to prepare a Strategic Plan consistent with the MTEF, and a Medium Term Strategic Plan in line with their Annual Performance Plans: The regulations require strategic plans to, inter alia:

Cover at least three years and be consistent with the institution‟s published medium term expenditure estimates

Include specific constitutional and other legislative, functional and policy mandates that indicate the output deliverables for which the institution is responsible

Include policy developments and legislative changes that influence programme plans over the MTEF framework

Include the measurable objectives, expected outcomes, programme outputs, indicators (measures) and targets of the institution‟s programmes

Include details of proposed acquisitions of fixed or movable capital assets, planned capital investments and rehabilitation and maintenance of physical assets

Include details of proposed acquisitions of financial assets or capital transfers and plans for the management of financial assets and liabilities

Include multi-year projections of income and projected receipts from the sale of assets

Include details of the Service Delivery Improvement Programme.

9.2 Government Immovable Asset Management Act

9.2.1 Overview The Government Immovable Asset Management Act 19 of 2007 (GIAMA) provides for:

A uniform framework for the management of an immoveable asset that is held by a national or provincial department to ensure the co-ordination of the use of an immoveable asset with the service delivery objectives of a national or provincial department

The issuing of guidelines and minimum standards for immoveable asset management by a national or provincial department.

The principal objective of this Act is for a custodian to provide immovable assets to users to meet their service delivery objectives. The guidelines issued in terms of the GIAMA define an immoveable asset as any immovable asset acquired or owned by government. Immovable assets are further described as land and any immovable improvement on that land, and which have enduring value and consist of assets of residential, non-residential or infrastructure nature and include machinery and equipment that have been installed and are an integral part of immovable assets and include all assets both state-owned and leased. The application of the definition means that the types of assets listed below, will be construed to be immovable assets for the purposes of this guideline.

Overview


Land including but not limited to developed, undeveloped, vacant, cultivated, non-useable or inaccessible land

Buildings including but not limited to office accommodation, prison buildings, police stations, courts, schools, hospitals, and houses

Rights in land including servitudes, “right to use”, leases

Infrastructure including but not limited to roads, harbours, railway lines, airports, transmission lines, dams and pipe lines

Machinery, plant and equipment including but not limited to pump stations, machinery and irrigation systems for as far as such machinery, plant and equipment are construed to be immovable in terms of the common law applicable to property

Conservation, cultural and heritage assets including but not limited to monuments, historical sites, heritage sites, conservation areas and sites of scientific significance.

The guidelines also define the following terms:

Custodian - a national or provincial department designated in terms of GIAMA that must plan, acquire, manage and dispose immovable assets

User - a national or provincial department that uses or intends to use an immovable asset in support of its service delivery objectives (and includes a custodian for an immovable asset that it uses or intends to use in support of its own service delivery objectives).

GIAMA distinguishes between the roles of users and custodians of immovable assets. Users utilise immovable assets to give best effect to their functions and therefore must produce a User Immovable Asset Management Plan (U-AMP) to ensure:

Accountable, fair and transparent management of immovable assets

Effective, efficient and economic use of immovable assets

Reduced overall cost of service delivery

Reduced demand for immovable assets. Custodians are responsible for all activities that are associated with common law ownership and therefore must produce a Custodian Immovable Asset Management Plan (C-AMP) to ensure that immovable assets are:

Efficiently and effectively managed throughout their lifecycle

Provided in a transparent and cost effective (best value) manner to meet the service delivery requirements of users

Maintained in the state in which it would provide the most effective service

Assessed in relation to their performance, suitability, condition, as well as the effect thereof on service delivery

Disposed of, if the assessments so indicate, at best value for money to the state, in respect of financial and/or social returns.

9.2.2 The implications of GIAMA and the Toolkit The earlier versions of the Toolkit were originally focussed on improving infrastructure delivery management during the infrastructure delivery capital project life cycle, especially new infrastructure and the renovation and refurbishment of existing infrastructure components. GIAMA, in line with the requirements of the Public Finance Management Act (PFMA, 1999) and the Construction Industry Development Board Act (CIDB Act, 1999), introduces the management of infrastructure throughout the full asset life cycle, i.e. placing additional emphasis on phases beyond the delivery of the capital asset itself.

Overview


In addition to this, it also introduces the concepts of asset portfolio management, as a means to evaluate priorities for the delivery of new infrastructure against that of the maintenance of existing infrastructure, within the context of a limited capital and operational budget, while at the same time meeting national and provincial priorities, and maintaining the service delivery objectives of the relevant user of such infrastructure. It also introduces the concept of project portfolio management as a means to prioritise expenditure within the framework of a limited capital or operational budget while meeting national and provincial priorities. In line with the objectives of the Toolkit, the CIDB Act and the PFMA, GIAMA aims to introduce uniform asset management practices to all organs of state. Such practices include the use of:

User Asset Management Plans (U-AMPs) as a means for a user to state its needs in a uniform and structured fashion within the context of its service delivery objectives and the asset portfolio that supports its on-going operations. GIAMA requires the user to unpack its user asset management plan into management plans for:

o New asset requirements o Repair requirements o Disposal requirements

Custodian Asset Management Plans (C-AMPs) as a means for a custodian to coordinate delivery on the needs of a user within the context of a common portfolio strategy and analysis framework that takes cognisance of individual user needs, the requirements of maintaining a sustainable asset portfolio and structured work plans (management plans) to ensure on-going delivery in line with the operational priorities of users. GIAMA requires the custodian to unpack the portfolio strategy and management plan (beyond the initial requirements for a capital work plan) into management plans that address:

o Capital works o Maintenance o Leases o Disposals.

The C-AMP is presented in two parts:

o The first part (Portfolio Strategy, Asset Performance-, Life Cycle- and Portfolio Analyses) forms the Portfolio Management Plan

o The second part (Capital Works-, Maintenance-, Leasing-, Disposal Plans and Budget) forms the Implementation Plan.

Functional performance assessments by the user to ensure that assets meet the operational requirements of users. The functional performance includes measures such as a user assessment of condition, suitability, locality, accessibility, utilisation, level of service and security in relation to the national priorities for facilities.

Condition assessments, at least every five years, by suitable technical personnel, to ensure that maintenance requirements are determined in a uniform and structured fashion.

Life cycle costing techniques for the evaluation of asset and procurement alternatives, thereby ensuring that all asset alternatives have been considered on an equal basis, and an appropriate asset management- and procurement strategy are selected for the relevant assets.

Feasibility analysis techniques to ensure that the individual infrastructure requirements are properly documented and agreed upon by both the user and the custodian, while the economic value of the asset and procurement alternatives are compared based on the life cycle cost, delivery capacity and risk of the custodian and implementing agent and the long term sustainability of the specific user requirement.

Valuation techniques to ensure that the valuation of assets is done in an economical, viable and technical appropriate manner for the process requirement at that point

Minimum requirements for asset registers to ensure that both the user and custodian can interact with the asset register in relation with their views on the asset management data.

Overview


Asset performance measures which allow the user and custodian to measure the on-going sustainability and operational efficiency of infrastructure components and the value for money derived from capital investment during the project life cycle.

Current reporting requirements to National Treasury on project implementation has not been replaced and are left intact as per the requirements of the relevant National and Provincial Treasury. GIAMA also separates the accountability for asset management between the user and custodian, without interfering with the constitutional responsibility of the relevant ministers, premiers and members of executive councils. It tacitly, as for all legislation, places the obligation on the relevant minister and premier to delegate responsibility and accountability for user and custodianship to the department which can deliver against such responsibility in an optimal fashion. Table 6 below describes the general responsibilities as envisaged by the Act of User versus Custodian departments. Table 6: Summary of key roles and responsibilities per GIAMA

Role Responsibility Description Accountability and delegation

Portfolio Management

Key Account Management

Understanding the requirements of the user, reporting to the user and joint preparation of the U-AMP.

Custodian

Portfolio Analyses Preparing portfolio management plan. Custodian

Cost Engineering Life cycle costing, feasibility and economic value appraisal.

Custodian

Works Planning Preparing works plans. Custodian

Property Management

Property Management

Management of all rights that the state holds over property.

Custodian

Contracts Management

Management of acquisition, lease and disposal contracts.

Custodian

Property Valuation Determining the value of property before acquisition, renovation, upgrading or disposal.

Custodian

Property Account Administration

Recognising the asset on the asset register. Responsible for the payment of all rates and taxes related to the property held by the state.

Custodian

Procurement Management

Programme Management

Plan and monitor, with the custodian and implementing agent, the implementation of new as well as refurbishment and renovation projects.

User

Project Manager Manage and coordinate all activities over the project life cycle for one or more capital works projects.

Custodian

Specification Develop the specification for the procurement of capital works projects.

Custodian

Estimating Estimating the cost of implementing a capital works project.

Custodian

Construction Contracts Management

Managing the implementation of capital works contracts.

Custodian

Facility Management

Operations Management

Manage the building operations while in use. It includes the soft services

User

Overview


Role Responsibility Description Accountability and delegation

normally provided by facilities management. Prepare the User Asset Management Plan. Conduct space planning.

Maintenance Management

Manage all hard services normally associated with facilities and infrastructure.

Custodian

From the above table, Toolkit users are to note the following important issues in deciding who fulfils the role of User or Custodian:

The Act does allow that in certain cases a department that would ordinarily be regarded as a “User” department, such as for example the Department of Education, may elect to take on the responsibility of the Custodian as well for particular reasons.

A User department may also elect to use the services of an “Implementer” or Implementing Agent, to implement works on their behalf, as opposed to utilising the Custodian department itself as the implementer. In such cases the User department is to exercise caution as to where the ultimate responsibility and accountability rests.

The Toolkit has embedded the implications of GIAMA by aligning phases and functions of the infrastructure management cycle with the requirements of the Act. Where terminology introduced by GIAMA differs from that of other generally accepted terms it is indicated as such.

9.3 Division of Revenue Act The Division of Revenue Act (DORA) is published annually. It provides for the equitable division of revenue raised nationally among the national, provincial and local spheres of government for each financial year and the related responsibilities. It allows for the allocation of funds according to a number of schedules, each with their own requirements. These schedules are summarised as follows:

Schedule 1: Equitable division of revenue raised nationally among the three spheres of government

Schedule 2: Determination of each province‟s equitable share of the provincial sphere‟s share of revenue raised nationally (as a direct charge against the National Revenue Fund)

Schedule 3: Determination of each municipality‟s equitable share of the local government sphere‟s share of revenue raised nationally

Schedule 4: Allocations to provinces and municipalities to supplement the funding of programmes or functions funded from provincial or municipal budgets

Schedule 5: Specific purpose allocations to provinces

Schedule 6: Specific purpose allocations to municipalities

Schedule 7: Allocations-in-kind to municipalities for designated special programmes

Schedule 8: Incentives to provinces and municipalities to meet targets with regards to priority government programmes.

Overview


9.4 Legislation applicable to municipalities

9.4.1 Local Government: Municipal Finance Management Act of 2003 Section 63 of the Local Government: Municipal Finance Management Act of 2003 makes the accounting officer responsible for the management of the assets of the municipality and requires that the accounting officer takes all reasonable steps to ensure that the municipality has and maintains a management, accounting and information system that accounts for the assets and liabilities of the municipality. This Act requires, amongst others:

That the mayor approve a service delivery and budget implementation plan for implementing the municipality‟s delivery of municipal services and its annual budget within 28 days of the approval of the annual budget.

The accounting officer is responsible in terms of the Act for implementing the municipality's approved budget and is required to explain any material variances from the service delivery and budget implementation plan.

The Act also requires that the mayor takes into account in the development of the annual budget the integrated development plan which must be developed in terms of the Municipal Systems Act of 2000 and realistic revenue and expenditure projections for future years.

9.4.2 Municipal Systems Act of 2000 The Integrated Development Planning (IDP) process provided for in the Municipal Systems Act of 2000 originates in the Constitution of the Republic of South Africa (Act 108 of 1996), which enjoins local government to:

Provide democratic and accountable government to all communities

Ensure the provision of services to communities in a sustainable manner

Promote social and economic development

Promote a safe and healthy environment

Encourage the involvement of communities and community organisations in matters of local government

Municipalities must draw up an IDP as a single, inclusive and strategic development plan that must be aligned with other municipalities and other spheres of government

Establishes the IDP of a municipality as the principal strategic planning instrument that guides and informs all planning and development, and all decisions with regard to the planning, management and development in the municipality. It links, integrates, and coordinates all municipal plans into a single strategic plan for the development of the municipality. It provides a basis for determining the level and extent of municipal resources and capacity required, and for formulating budgets.

Municipal council to review its integrated development plan annually in accordance with an assessment of its performance measurements and to the extent that changing circumstances so demand.

Sections 78 and 79 of this Act address aspects of infrastructure investment planning. These sections require that the cost of ownership must be known and the appropriate delivery mechanism identified ahead of implementation. The Department of Co-operative Governance and Traditional Affairs (CoGTA), who are the custodians of the Municipal Systems Act, consider the preparation of a Comprehensive Municipal Infrastructure Plan (CMIP) as a key mechanism to achieve this end. Their Guidelines for Infrastructure Asset Management in Local Government define a comprehensive Municipal Infrastructure Plan as a plan that provides a holistic overview of existing service performance, a vision of future performance scenarios, the risks, priorities, funding and tariff implications, as a strategic input to the Integrated Development Planning process.

Overview


10. King III Public Sector Guide – An introduction

10.1 Introduction The third King Report on Governance for South Africa 2009 “the Report” was released on 1 September 2009. It provides for a good governance Code of practices for both public as well as private institutions. Consequently Departments are required to comply to the Code as well. The King Code of Corporate Practices and Conduct 2002 (King II) saw only limited adoption in government and the public services. This was largely due to the pre-emptive legal requirement of compliance with the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and the Municipal Finance Management Act, 2003 (Act No. 56 of 2003) (MFMA), as minimum requirements in the public sector. In contrast, the provisions of King III are specifically intended to be „applied or explained‟ within all economic sectors, including the public sector. The paragraphs that follow provide a brief overview of the requirements of the code to assist Departments in fulfilling their obligations of good governance as detailed in the King III Report. The information will not be sufficient for Departments as a “how to” guide, but will provide sufficient background to understand the basics of the requirements of good governance as contained in the Report.

10.2 The benefits of self-regulation In addressing the link between governance principles and law, the introduction to the Report observes: “The ultimate compliance officer is the company‟s stakeholders who will let the board know by their continued support of the company if they accept the departure from a recommended practice and the reasons furnished for doing so.” In the case of the public sector, Parliament, on behalf of the public at large, acts as a key stakeholder and it will determine the level of compliance that each public institution should strive to achieve in addition to its statutory compliance required in terms of the PFMA, MFMA and other applicable acts. National and provincial institutions will have similar compliance obligations and these will reside with the executive authority, who delegates these responsibilities to the accounting officer or equivalent. South Africa‟s public sector is governed by a vast number of acts and regulations and the extent of self-regulation, in which an institution voluntarily monitors its own adherence to legal and ethical standards, needs to be balanced against these statutory and regulatory requirements. The extent of the success of self-regulation can militate against the need for further statutory and regulatory requirements.

10.3 Key principles of King III King III has broadened the scope of corporate governance in South Africa with its core philosophy revolving around leadership, sustainability and corporate citizenship. These key principles are given prominence:

Good governance is essentially about effective leadership. Leaders need to define strategy, provide direction and establish the ethics and values that will influence and guide practices and behaviour with regard to sustainability performance.

Sustainability is now the primary moral and economic imperative and it is one of the most important sources of both opportunities and risks for businesses. Nature, society, and business are interconnected in complex ways that need to be understood by decision makers. Incremental changes towards sustainability are not sufficient – there is a need for a fundamental shift in the way companies and directors act and organise themselves.

Innovation, fairness, and collaboration are key aspects of any transition to sustainability – innovation provides new ways of doing things, including profitable responses to sustainability

Overview


challenges. Fairness is vital because social injustice is unsustainable and collaboration is often a prerequisite for large-scale change.

Social transformation and redress is important and needs to be integrated within the broader transition to sustainability. Integrating sustainability and social transformation in a strategic and coherent manner will give rise to greater opportunities, efficiencies, and benefits, for both the institution and society.

King II required companies to implement sustainability reporting as a core aspect of corporate governance. Since 2002, sustainability reporting has become a widely accepted practice and South Africa is an emerging market leader in the field. However, sustainability reporting is in need of renewal in order to respond to:

o The lingering trust deficit among civil society of the intentions and practices of big business;

o Concerns among business decision makers that sustainability reporting is not fulfilling their expectations in a cost-effective manner.

10.4 Governance framework King III has opted for an „apply or explain‟ governance framework. Where the executive authority believes it to be in the best interests of the institution, it can adopt a practice different from that recommended in King III, but must explain it. Explaining the different practices adopted and an acceptable reason for it ensures consistency with King III principles. The framework recommended by King III is principles-based and there is no „one size fits all‟ solution. Entities are encouraged to tailor the principles of the Code as appropriate to the size, nature and complexity of their institution. Public sector institutions should similarly tailor the principles in accordance with public sector legislation and regulations.

10.5 Application of the Code In contrast to King I and King II, King III applies to all entities regardless of the manner and form of their incorporation or establishment. Principles are drafted on the basis that, if they are adhered to, any entity would have practiced good governance. The compliance with the PFMA and MFMA has established many of the governance practices within the public sector and the challenge is now to assess what changes, if any, are needed to achieve King III compliance. All institutions should disclose which principles and/or practices they have decided not to apply or explain. This level of disclosure will allow stakeholders to comment on and challenge the leadership to improve the level of governance within an institution. For public sector institutions, this may be incorporated in the framework of reports made during the year and in annual reports to the executive authority and Parliament.

10.6 New requirements Some of the requirements introduced by King III include:

The need for an annual integrated report that focuses on the impact of the institution in the economic, environmental and social spheres

A statement by the audit committee to the board and shareholders on the effectiveness of internal financial controls to be included in the integrated report

The consideration of the strategic role of IT and its importance from a governance perspective

The positioning of internal audit as a strategic function that conducts a risk-based internal audit and provides a written assessment of the institution‟s system of internal control, including internal financial controls

The governance of risk through formal risk management processes.

Overview


11. Disclaimer This toolkit is intended as a resource information document to be used by public sector client for purposes of accelerating the delivery of infrastructure in government. The CIDB together with its partners do not accept any liability either direct or indirect for any action arising out of the use of the toolkit. The copyright and ownership of the toolkit reside with CIDB and it reserves the right not to allow any person to use the toolkit without any prior written permission.

Overview


12. Annexure 1: Glossary - Definitions Table 7: Table of Terminology

Term Definition Source Activity The work undertaken on an asset or group of

assets to achieve a desired outcome. International Infrastructure Management Manual – Ver.3.0 2006

Advanced Asset Management

Asset management which employ predictive modelling, risk management and optimised decision making techniques to establish asset life cycle treatment options and related long term cash flow predictions.

International Infrastructure Management Manual – Ver.3.0 2006

Asset A physical component of a facility which has value, enables services to be provided and has an economic life of greater than 12 months.


Asset A resource controlled by a municipality as a result of past events and from which future economic benefits or service potential is expected to flow to the Municipality. GAMAP/GRAP requires a minimum level of detail that separates items that have a difference in Expected Useful Life and are financially material. As a general guide, the scope of asset can be determined by considering the extent that would be associated with any periodic renewal.

DPLG Guidelines for Infrastructure Asset Management in Local Government – 2006-2009

Asset (Immovable) Any immovable asset acquired or owned by Government, excluding any right contemplated in the Mineral and Petroleum Resources Development Act 2002 (Act No. 28 of 2002).

GIAMA (Act No. 19, 2007)

Asset Management The combination of management, financial, economic, engineering and other practices applied to physical assets with the objective of providing the required level of service in the most cost effective manner.


Asset Management Information System

A combination of processes, data and software applied to provide the essential outputs for effective asset management such as reduced risk and optimum infrastructure investment.


Asset Management Plan A plan developed for the management of one of more infrastructure asset that combines multi-disciplinary management techniques (including technical and financial) over the life cycle of the asset in the most cost effective manner to provide a specified level of service. A significant component of the plan is a long term cash flow projection for the activities.


Asset Management Strategy

A strategy for asset management covering the development and implementation of plans and programmes for asset creation, operation, maintenance, rehabilitation, replacement, disposal and performance monitoring to ensure that the desired levels of service and other operations objectives are achieved at optimum cost.


Asset Manager The asset manager is responsible for major maintenance, repair and renewal decisions, as well as the long-term strategic plans for a corporate asset portfolio.

Vanier D.J., (September 2001), “Asset Management: “A” to “Z””, APWA International Public Works Congress, Philadelphia

Asset Managers and Property Managers

Asset managers and property managers are those responsible for managing the maintenance, repair and renewal work. It is their collective responsibility to maximize the effect of expenditures as well as to maximize the value of their assets over the asset‟s service life.

(Source – Vanier D.J., (September 2001), “Asset Management: “A” to “Z””, APWA International Public Works Congress, Philadelphia)

Overview


Term Definition Source

Asset Register A record of asset information including inventory, historical, financial, condition, technical and financial information.


Authorisation The process of approving, funding and communicating the permission for initiating work.

The Standard for Portfolio Management 2006; Project Management Institute, Inc.

Basic (Core) Asset Management

Asset management which relies primarily on the use of an asset register, maintenance management systems, job & resource management, inventory control, condition assessment, simple risk assessment and defined levels of service, in order to establish alternative treatment options and long term cash flow predictions. Priorities are usually established on the basis of financial return gained by carrying out the work (rather than detailed risk analysis and optimised decision making).


Batch order The instruction to supply items of goods in a batch in terms of a framework agreement.

IDM Toolkit

Brief A working document for an identified package which specifies at any point in time the relevant needs, aims and resources of the client, the context of the project and any appropriate design or maintenance requirements within which all subsequent briefing (when needed) and designing can take place.

IDM Toolkit

Capacity The resources (human resources, financial, physical assets, systems, procedures, etc) which an organisation puts at the disposal of portfolio management to select, fund and execute its work.


Capital Expenditure (CAPEX)

Expenditure used to create new assets or to increase the capacity of existing assets beyond their original design capacity or service potential. Capital expenditure increases the value of asset stock.


Cash flow The stream of cost and/or benefits over time resulting from a project investment of ownership of an asset.


Category A description used to group potential authorised components, assets or work to facilitate decision making. Categories usually link their components, assets or work with a common set of strategic goals.


Client Organ of state that provides the strategic brief, commissions the work and pays for it.

IDM Toolkit

Completion State of readiness for use or occupation of the whole works although some minor work may be outstanding.

Adapted from ISO 6707-2 Building and civil engineering – Vocabulary - Part 2: Contract terms

Components Specific parts of an asset having independent physical or functional identity attributes such as different life expectancy, maintenance regimes, risk or criticality.


Condition Based Preventative Maintenance

Preventative maintenance initiated as a result of knowledge of an asset/component‟s condition from routine continuous monitoring.

International Infrastructure Management Manual – Ver. 3.0 2006

Construction Industry The broad conglomeration of industries and sectors which add value in the creation and maintenance of fixed assets within the built environment;

Construction Industry Development Board act of 2000 (Act No 38 of 2000)

Construction Procurement Procurement in the construction industry, including the invitation, award and management of contracts

CIDB Standard for Uniformity in construction Procurement

Overview



Contracting Strategy Strategy that governs the nature of the relationship which the employer wishes to foster with the contractor, which in turn determines the risks and responsibilities between the parties to the contract and the methodology by which the contractor is to be paid

DIS / ISO 10845-1: Construction procurement- processes, methods and procedures procurement- processes, methods and procedures

Corrective Maintenance The remedial actions to restore an asset/component to a specified condition. The actions are usually required as a result of failure of a component.


Corrupt Practices The offering, giving, receiving or soliciting of anything of value to influence the action of the employer or his staff or agents in the procurement process or the administration of the contract.

ISO 10845-1: Construction procurement- Part 1: processes, methods and procedures

Cost plan The document progressively developed by estimating the total cost of the project including any construction, refurbishment, extension and professional service costs, service and planning charges and applicable taxes

IDM Toolkit

Current Replacement Cost The cost of replacing the service potential of an existing asset, by reference to some measure of capacity, with an appropriate modern equivalent asset.


Custodian Custodians are responsible for the efficient and effective management of immovable assets throughout their lifecycle and therefore must produce a custodian asset management plan (C-AMP) to ensure implementation.

Government Immovable Asset Management Act

Defect A part of the works which is not in accordance with the scope of work or a part of the works designed by the contractor which is not in accordance with the applicable law or the accepted contractor‟s design.

Adapted from NEC3 Engineering

Deferred Maintenance The shortfall in rehabilitation work required to maintain the service potential of an asset.


Delivery Management The management of the process of public service delivery as applied to infrastructure and maintenance projects

IDM Toolkit

Demand Management The active intervention in the market to influence demand for services and assets with forecast consequences, usually to avoid or defer capital expenditure. Demand management is based on the idea that as needs are satisfied expectations rise automatically and almost every action taken to satisfy demand will stimulate further demand.


Design and construct contract

Contract in which a contractor designs a project based on a brief provided by the client and constructs it.

ISO 10845-1: Construction procurement- processes, methods and procedures

Design by employer contract

Contract under which a contractor undertakes only construction on the basis of full designs issued by the employer.

DIS / ISO 10845-1: Construction procurement- processes, methods and procedures

Develop and construct contract

Contract based on a scheme design prepared by the client under which a contractor produces drawings and constructs it.


Disposal Activities necessary to dispose of decommissioned assets.


Economic Life The period from the acquisition of the asset to the time when the asset, while physically able to provide a service, ceases to be the lowest cost alternative to satisfy a particular level of service. Obsolescence will often ensure that the economic life is less than the physical life.


Overview



Eligibility Criteria Criteria which have to be satisfied in order for the employer to evaluate a submission made in response to a call for an expression of interest or an invitation to submit a tender

IDM Toolkit

Employer The person or organization intending to or entering into a contract with the contractor for the provision of goods, services, or engineering and construction works


Engineering and construction works contract

A contract for the provision of a combination of goods and services, arranged for the development, extension, installation, repair, maintenance, renewal, removal, renovation, alteration, dismantling or demolition of structures, including building and engineering infrastructure

CIDB Standard for Uniformity in construction Procurement

Estimate An assessment of the likely result. Usually applied to costs and duration and should always include some indication of accuracy, e.g. ± x per cent. Usually used with a modifier, e.g. preliminary, conceptual, feasibility, etc.

A guide to the Project Management Body Knowledge; Project Management Institute Inc.

Facilities / facility Facilities are a functional group of assets, which may consist of property, plant, equipment and engineering infrastructure to deliver a service or services (or products) to a specific target audience (or target market). A facility may be situated on one or more property


Facilities / facility A complex comprising many assets (e.g. a hospital, water treatment plant, recreation complex, etc) which represents a single management unit for management ( financial, operational, maintenance, etc) or other purposes.


Facilities Management Is an interdisciplinary field primarily devoted to the day to day operations, maintenance and care of buildings, such as hospitals, schools, universities, office complexes resorts, sport complexes, convention centers etc.. Duties may include the care of air conditioning, electric power, plumbing and lighting systems; cleaning; decoration; grounds keeping and security. Some or all of these duties can be assisted by computer programs. These duties can be thought of as non-core or support services, because they are not the primary business (taken in the broadest sense of the word) of the owner organization.

IDM Toolkit

Framework agreement Agreement between an employer and one or more contractors, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.

Agreement between an employer and one or more contractors, the purpose of which is to establish the terms governing contracts to be awarded during a given period, in particular with regard to price and, where appropriate, the quantity envisaged.

Fraudulent practice Misrepresentation of the facts in order to influence the tender process or the award of a contract arising from a tender offer to the detriment of the employer, including collusive practices intended to establish prices at artificial levels, or the administration of the contract including compensation procedures.


Fruitless and wasteful expenditure

Expenditure which was made in vain and would have been avoided had reasonable care been exercised.

Public Finance Management Act of1999 and Local Government: Municipal Finance Management Act of 2003

Geographic Information Systems (GIS)

Software which provides a means of spatially viewing, searching, manipulating and analysing an electronic database.


Overview



Governance The process by which an organisation directs and controls its operational and strategic activities and by which the organisation responds to the legitimate rights, expectations and desires of its stakeholders.


Immovable Asset Management

Immovable Asset Management comprises the strategic management activities required to ensure that the immovable asset requirements for service delivery of an entity (or enterprise) are met. It includes setting a strategy, the assessment of immovable asset needs, planning a portfolio of assets optimally located to meet such needs, budgeting for the lifecycle cost to pay for such assets and monitoring (& regularly evaluating) the level to which such needs are met.

IDM Toolkit

Infrastructure In the context of the toolkit means any building, construction or engineering works constructed fior the betterment of the build environment and includes maintenance works when referring to an infrastructure programme.

IDM Toolkit

Infrastructure The stock of basic facilities and capital equipment needed for the functioning of a country.

www.princeton.edu

Infrastructure The system of public works of a country. Meriam Webster

Infrastructure (or engineering infrastructure)

Infrastructure (or engineering infrastructure) includes all assets provided to ensure that the optimal functioning of a facility. It includes bulk assets, municipal assets, on-site assets such as roads, storm water drainage, sewerage, water, electricity, gas, steam, incineration, heating, ventilation etc. Provided at a level of service relevant to the requirements of the current and future needs of the assets.

IDM Toolkit

Infrastructure Assets Stationary systems forming a network and serving whole communities, where the system as a whole is intended to be maintained indefinitely at a particular level of service potential by the continuing replacement and refurbishment of its components. The network may include normally recognised ordinary assets as components.


Infrastructure Plan An infrastructure plan depicts an estimated 10 years view ahead in terms of infrastructure development within a province.

National Treasury MTEF

Irregular expenditure Expenditure, other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation.

Adapted from the Finance Management Act of 1999

Joint programmes Those programmes that transcend the conventional organisational boundaries in planning, budgeting and implementation resulting in a number of departments/agencies/ministries responsible for one aspect of the programme, although none is responsible for it in its entirety.

Framework for managing joint programmes in the public service („the framework‟) – cabinet lekgotla 2005

Key Performance Indicators

Key Performance Indicators (KPI) are quantifiable measurements, agreed to beforehand, that reflect the critical success factors (of the company, department, project.) A qualitative or quantitative measure of a service or activity used to compare actual performance against a standard or target. Performance indicators commonly relate to statutory limits, safety, responsiveness, cost, comfort, asset performance, reliability, efficiency, environmental protection and customer satisfaction:


http://www.princeton.edu/

Overview



Level of Service The defined service quality for a particular activity or service area against which service performance may be measured. Service levels usually relate to quality, quantity, reliability, responsiveness, environmental acceptability and cost.


Life A measure of the anticipated period an asset or component will be able to provide the required service e.g. time, number of cycles, distance intervals, etc.


Life Cycle The cycle of activities that an asset (or facility) goes through while it retains an identity as a particular asset i.e. from planning and design to decommissioning or disposal.


Life-cycle costing /life cycle cost

Life-cycle costing (or total cost of ownership) is estimation at the planning stage of an asset of all cost involved in the acquisition, operation, maintenance and disposal of an asset and forms the basis to monitor the performance of the asset against the planned cost over the lifecycle of the asset. Depending on the policy of the organisation, lifecycle costing may include the services cost. The total cost of an asset throughout its life including planning, design, construction, acquisition, operation, maintenance, rehabilitation, disposal and financing costs


Maintenance Maintenance is the execution of activities required to ensure that an asset operates at its intended service level. It includes preventative (& statutory) maintenance (servicing of plant and equipment), minor repairs and renovation to ensure effective functioning of the asset at its required level of service. It excludes the renovation, refurbishment, upgrading or extension of an asset. All actions necessary for retaining an asset as near as practicable to its original condition, but excluding renewal. Fixed interval maintenance is used to express the maximum interval between maintenance tasks. On condition maintenance is the maintenance action depend upon the asset/component reaching some predetermined condition.


Maintenance Plan Collated information, policies and procedures for the optimum maintenance of an asset, component or group of assets.


Management contract Contract under which a contractor provides consultation during the design stage and is responsible for planning and managing all post contract activities and for the performance of the whole of the contract.


Monitoring & Evaluation Monitoring is the systematic, regular collection and occasional analysis of information to identify and possibly measure changes over a period of time. Evaluation is the analysis of the effectiveness and direction of an activity and involves making a judgment about progress and impact.

IDM Toolkit

Overview



Non-Asset Solution Methods of providing delivery needs other than adding asset capacity. See “Demand Management”.

Asset Management – Learners Guide: National Treasury

Operation The active process of utilising an asset which will consume resources such as human, utilities and materials. Operation costs are part of the life cycle costs of an asset.


Optimised Decision Making (ODM)

A formal process to identify and prioritise all potential solutions with consideration of financial viability, social and environment responsibility and cultural outcomes.


Overspending Expenditure in excess of a voted (sanctioned) amount or a main division of a vote.

Adapted from the Finance Management Act of 1999

Package Construction works which have been grouped together for delivery under a single contract or a package order

IDM Toolkit

Package information The brief, design, programme and cost of the project as it develops from time to time

IDM Toolkit

Package Order The instruction to carry out construction works under a framework agreement

Adapted from NEC3 Framework Contract

Packaging strategy The organisation of work packages into contracts DIS / ISO 10845-1: Construction procurement- processes, methods and procedures

Performance Monitoring Continuous or periodic quantitative and qualitative assessments of the actual performance compared with specific objectives, targets or standards.


Planned Maintenance Planned maintenance activities fall into 3 categories: 1. Periodic – necessary to ensure the reliability or to sustain the design life of an asset or component. 2. Predictive – condition monitoring activities used to predict failure. 3. Preventative – maintenance that can be initiated without routine or continuous checking (e.g. using information contained in maintenance manuals or manufacturers‟ recommendations) and is not condition based.


Portfolio Collection of projects or programmes and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives. The projects or programmes may not necessarily be interdependent or directly related.


Portfolio Balancing The process of organising the prioritised work into a co-ordinated mix that has the best potential to collectively best support and achieve strategic goals.


Pricing strategy Strategy which is adopted to secure financial offers and to remunerate contractors in terms of the contract procurement strategy: selected packaging, contracting, pricing and targeting strategy and procurement procedure for a particular procurement.


Prioritisation The process of ranking the selected work based on their evaluation scores and other defined management considerations.


Procurement procedure Selected procedure for a specific procurement DIS / ISO 10845-1: Construction procurement- processes, methods and procedures

Overview



Procurement strategy Selected packaging, contracting, pricing and targeting strategy and procurement procedure for a particular procurement.


Programme The grouping of a set of related projects in order to deliver outcomes and benefits related to the organisation‟s strategic objectives which would not have been achieved had the projects been managed independently.

IDM Toolkit

Programme Management A value adding business function that interfaces strategic management and project management with the aim of realising the potential outcomes and benefits of a programme.

IDM Toolkit

Project Definition The brief, design, programme and cost of the project as it develops from time to time.

IDM Toolkit

Project Management Project Management is the management activities in a finite process (defined scope and result as well as start and end time) which integrates all services required to acquire (procurement or purchasing), renovate, refurbish, upgrade, extend or dispose of an asset.

IDM Toolkit

Project Risk An uncertain event or condition that, if it occurs, has a positive or negative effect on a project‟s objectives.

PMI Guide to the PMBOK

Project: Active project An immovable asset project listed on the MTEF Works list and approved for implementation.

IDM Toolkit

Project: Potential project An immovable asset project listed in the U-AMP but not listed on MTEF Works list.

IDM Toolkit

Project: Proposed project An immovable asset project on the MTEF Works list but not approved for implementation because budget not approved.

IDM Toolkit

Property Property is a collective name for immovable assets and the single land parcel on which they are situated (erf as defined by the surveyor general). Property ownership assigns certain rights pertaining to the property to an owner including use and disposal rights, but may also be encumbered by assigning specific rights to other entities such as servitudes, right of way, usufruct, etc. Mineral rights are separated from property ownership. Use rights may further be defined by type of use in the town planning scheme.

IDM Toolkit

Property Management Property Management entails the management and execution of all activities required to own a property and includes the acquisition (by lease, purchase, expropriation, etc), letting or subletting of the property, acquisition of service contracts and the payment of property rates and municipal services.

IDM Toolkit

Property Manager or Facility Manager

The property manager or facility manager primarily deals with day-to-day accommodation issues and the implementation of the strategic plan.

(Source – Vanier D.J., (September 2001), “Asset Management: “A” to “Z””, APWA International Public Works Congress, Philadelphia)

Property ownership Is established by a deed (which describes the owners rights) and surveyor general diagram (which defines the extent of the property). The Deeds Office and the Surveyor General administers property rights in South Africa. A lease is a finite form of property ownership and is governed by a contract on short term leases. Leaseholds (49 or 99 years) over a property must be registered as a leasehold deed at the Deeds office.

IDM Toolkit

Overview



Public Private Partnership (PPP)

A contract between a public sector and a private sector party, in which the private party assumes substantial financial, technical and operational risk in the design, financing, building and operation of a project over time.

Regulations issued in terms of the Public Finance Management Act of 1999

Record of information Drawings that record construction works as completed and any maintenance or operating manuals.

IDM Toolkit

Refurbishment Major maintenance works carried out on an asset to restore it to an acceptable condition. Refurbishment work does not extend the life of the asset, but is necessary for the useful life to be achieved.


Rehabilitation Works to rebuild or replace parts or components of an asset, to restore it to a required functional condition, which may incorporate some modification. Generally involves repairing the asset to deliver its original level of service without resorting to significant upgrading or renewal, using available techniques and standards.


Renewal Works to upgrade, refurbish or replace existing facilities with facilities of equivalent capacity or performance capability.


Repair Action to restore an asset or component to its previous condition after failure of damage.


Replacement The complete substitution of asset that has reached the end of its life so at to provide a similar level of service.


Respondent A person or organization that submits an expression of interest in response to an invitation to do so.

ISO 10845-1: Construction procurement- processes, methods and procedures

Responsible, accountable, support, consult with, interact with matrix

Roles and responsibility matrix to highlight specific accountabilities and responsibilities between various stakeholders.

Infrastructure Delivery Improvement program (2009)

Risk Effect of uncertainty on objectives ARP 070:2009 ISO Guide 73:2009

Risk Management Coordinated activities to direct and control an organization with regard to risk

ARP 070:2009 ISO Guide 73:2009

Scope of work Means the document that specifies and describes the goods, services, or engineering and construction works which are to be provided and any other requirements and constraints relating to the manner in which the contract work is to be performed.

CIDB Standard for Uniformity in Construction Procurement

Secondary procurement policy

Procurement policy that promotes objectives additional to those associated with the immediate objective of the procurement itself.


Service contract A contract for the provision of labour or work, including knowledge-based expertise, carried out by hand, or with the assistance of equipment and plant;


Service Delivery Agreement

Document depicting the agreed levels of service agreement between relevant stakeholders

Infrastructure Delivery Improvement program (2009)

Service Maintenance Service undertaken at scheduled times e.g. seasonally or annually to enable the required level of service to be delivered.


Overview



Services Services are defined as those activities required throughout the lifecycle of an asset to ensure optimal lifecycle performance. It may include built environment professionals, building & engineering contractors, estate agents, valuers, cleaners, gardeners etc.

IDM Toolkit

Statutory permissions Any relevant approval, consent or permission under any legislation required for the development or construction of the project (or both).

IDM Toolkit

Strategic Goals The definition of an organisation‟s intended achievements in terms of business and cultural results within a specified time frame and usually associated with specific metrics.


Strategic Plan A high level document that explains the organisation‟s vision and mission plus the approach that will be adopted to achieve this mission and vision including the specific goals and objectives to be achieved during the period covered by the document.


Strategic Plan A plan containing the long term goals and strategies of an organisation. Strategic plans have a strong external focus, cover major portions of the organisation and identify major targets, actions and resource allocations relating to the long term survival, value and growth of the organisation.


Strategy Plan of action with a particular goal. IDM Toolkit

Supply contract A contract for the provision of materials or commodities made available for purchase.


Targeting strategy Strategy which is adopted to promote secondary procurement policy objectives

IDM Toolkit

Task order An instruction to carry work within the services in terms of a framework agreement

Adapted from the NEC3 Professional service Contract

Tenderer A person or organization that submits a tender offer.


Unauthorised expenditure Overspending of a vote or a main division within a vote or expenditure not in accordance with the purpose of a vote or a main division within a vote.

Adapted from Public Finance Management Act of 1999

Unplanned Maintenance Corrective work required in the short term to restore an asset to working condition so it can continue to deliver the required service or to maintain its level of security and integrity.


Useful Life The period over which it is expected that an asset will be used by the organisation before it becomes uneconomical to do so. See "Economic Life"


User User means a national or provincial department that uses or intends to use an (immovable) asset in support of its service delivery objectives {and includes a custodian in relation to an immovable asset that it uses or intends to use in support of its own service delivery objectives).

Government Immovable Asset Management Act (GIAMA)

Overview



Value Management A management process that minimises the life cycle cost and maximises service delivery efficiency by addressing the technical and functional dimensions at the early stages of a project (establishment of project objectives, preparation of project brief and consideration of concept & design options) to ensure that: · a fully integrated approach has been adopted · the project is consistent with strategic goals, and · non-build solutions, including demand management, have been properly assessed.

International Infrastructure Management Manual – Ver. 3.0 2006 and Asset Management – Learners Guide: National Treasury

Whole of Life Cycle Approach

The approach that assesses every phase in the life cycle of an asset before acquisition and that advocates the management of every phase in the ownership of an asset from the planning and acquisition through the operation and maintenance to the eventual disposal of the asset.


Overview


13. Annexure 2: Glossary – Abbreviations Table 8: Glossary of Abbreviations

Abbreviation Description / Name in Full AC Actual Costs

APP Annual Performance Plan

ASGISA Accelerated and Shared Growth Initiative – South Africa

AV Actual Value

BAC Budget at Completion

BBBEE Broad Based Black Economic Empowerment

C-AMP Custodian Asset Management Plan

CAPEX Capital Expenditure Programme

CAS Condition Assessment Surveys

CCTV Closed Circuit Television

CD Chief Director

CD Compact Disk

CFO Chief Financial Officer

CIDB Construction Industry Development Board

CMIP Comprehensive Municipal Infrastructure Plan

CoGTA The Department of Co-operative Governance and Traditional Affairs

CPI Consumer Price Index

CPI Cost Performace Index

DBSA Development Bank of Southern Africa

DCC Departmental Co-ordination Committee

DD Deputy Director

DMS Delivery Management System

DOE Department of Education

DOH Department of Health

DORA Division of Revenue Act

DP Delivery Process

DPLG Department of provincial and Local Governement

DPSA Department of Public Service and Administration

DPW Department of Public Works

DRIP Data rich, information poor

EAC Estimated cost at completion

ECC Engineering and Construction Contract

ECS Engineering and Construction Sub Contract

ECSC Engineering and Construction Short Contract

ECSS Engineering and Construction Short Sub Contract

EPWP Extended Public Works Programme

EV Earned Value

EVM Earned Value Management

EXCO Executive Council

Overview


Abbreviation Description / Name in Full FIDIC International Federation of Consulting Engineers (Federation Internationale des

Ingenieurs Conseils (French))

FM Facilities Management

G Gate, as in the Gateway System

GCC General Conditions of Contract

GDP Gross Domestic Product

GIAMA Government Immovable Asset Management Act

GIS Geographical Information System

GWM&E Government wide monitoring and evaluation system

HOD Head of Department

HR Human Resources

HSE Health, Safety and Environment

HVAC Heating, Ventilation, Air Condition

IA Immovable Asset

IA Implementing Agent

ICE-SA Institute of Civil Engineers – South Africa

ICOMS International Conference of Maintenance Societies

IDIP Infrastructure Delivery Improvement Program

IDM Infrastructure Delivery Management

IDMS Infrastructure Delivery Management System

IDMT Infrastructure Delivery Management Toolkit (The “Toolkit)

IDP Integrated Development Plan

IGP Infrastructure grant to provinces

IGR Intergovernmental Relation Framework

IGR Act Intergovernmental Relation Framework Act

IIMM International Infrastructure Management Manual

IMESA Institute of Municipal Engineers of South Africa

IP Infrastructure Plan

IPIP Infrastructure Programme Implementation Plan

IPMP Infrastructure Programme Management Plan

IRM Infrastructure Reporting Module

IRR Internal Rate of Return

JBCC Joint Building Contract Committee

JIPSA Joint Initiative on Priority Skills Acquisition

KPI Key Performance Indicators

LCC Life-cycle costing

LG Local Government

M&E Monitoring & Evaluation

MDG Millennium Development Goals

MEC Member of Executive Council

MEP Mechanical, Electrical, Plumbing

MF&C Manufacture, Fabrication and Construction

MFMA Municipal Finance Management Act

Overview


Abbreviation Description / Name in Full MinMec Minister & Members of the Executive Committee

MIOS Minimum inter operability standards

MS Microsoft

MTEC Medium Term Expenditure Committee

MTEE Medium Term Expenditure Estimates

MTEF Medium Term Expenditure Framework

MTSF Medium Term Strategic Framework

NDPW National Department of Public Works

NEC New Engineering Contract

NEC3 New Engineering Contract 3

NEIMS National Education Infrastructure Management System

NGO Non Government Organisation

NIMS National Infrastructure maintenance Strategies

NIPP National Industrial Participation Program

NPV Net Present Value

NSDP National Spatial Development Perspective

NT National Treasury

O&M Operations and Maintenance

OOP Office of the Premier

OSP Organisation Support Plan

P&B Planning & Budgeting

PABX Private Automated Branch Exchange

PC Procurement Milestone

PCAS Policy Coordination and Advisory Services

PCC President‟s Co-ordinating Council

PEP Project Execution Plan

PFMA Public Finance Management Act

PG Practice Guide

PGDS Provincial Growth and Development Strategy

PIA Programme Implementing Agent

PIDC Provincial Infrastructure Delivery Committee

PM&D Performance Management and Development

PMBOK Programme Management Body of Knowledge

PMI Project Management Institute

PMO Project Management Office

PMU Programme Management Unit

PPP Public Private Partnership

PPPFA Preferential Procurement Policy Framework Act

PSP Professional Service Providers

PV Planned Value

R&R Renovation and Repair

RASCI “Responsible, Accountable, Support, Consult with, Inform” responsibilities matrix

Overview


Abbreviation Description / Name in Full SANS South African National Standards

SCM Supply Chain Management

SDA Service Delivery Agreement

SDBIP Service Delivery Budget Implementation Plan

SFU Standard for Uniformity

SLA Service Level Agreement

SMME Small, Medium and Micro Enterprise

SOE State Owned Enterprise

SPAID Support Programme for Accelerated Infrastructure Development

SPI Schedule Performace Indicator

SV Schedule Variances

ToR Terms of Reference

U-AMP User Asset Management Plan

VO Variation Order

WBS Work Breakdown Structure

WSDP Water Services Development Plan

Overview


14. Annexure 3: Definitions of RASCI responsibility

matrix Table 9: RASCI Responsibility Matrix

R RESPONSIBLE “The Doer”

The “doer” is the department(s) that actually completes the task. The “doer” is responsible for action/implementation. Responsibility can be shared. The degree of responsibility is determined by the department with the “A”.

A ACCOUNTABLE “Owner”

The accountable department is the department who is ultimately answerable for the activity or decision. This includes “yes” or “no” authority and veto power. Only one “A” can be assigned to an action.

S SUPPORT “Facilitator”

The support role refers to a department or stakeholder who has the capability / authority to facilitate and/or support an activity to commence or be finalised. E.g. Department of Treasury could assist the Office of the Premier with the commencing of the PGDS workshops, realising that the outcome will benefit (is required for) the finalisation of the Infrastructure strategy.

C CONSULT “In the Loop”

The consultation role applies to departments (typically subject matter experts) which need to be consulted prior to a final decision or action. This is a predetermined need for two-way communication. Input from the designated position is required.

I INFORM Provide reports and data for information purposes

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