Construction procurement guide: performance management

Introduction

Purpose

This guide applies to the performance management of:

• contractors carrying out construction contracts valued at $500,000 or more
• consultants carrying out consultant engagements valued at $30,000 or more
• contractors and consultants whenever a critical aspect of performance is unsatisfactory
• key stakeholders of construction contracts valued at $10 million or more.

Detailed guidance is provided for agencies, contractors, consultants and other stakeholders who participate in the reporting and management systems that include:

• contractor and consultant performance reporting system
• stakeholder performance review and reporting system
• performance data management
• contractor and consultant performance management review list
• panel of assessors.

The vision

The NSW Government’s vision is to bring about sustained improvement in productivity and quality across the construction industry to deliver best value for money outcomes. This vision is being realised by:

• the industry advancing in terms of its capability to deliver comprehensive solutions
• developing an efficient and profitable industry through improved business management and the associated lifting of skills
• an innovative culture with its associated contribution from information technology
• an environmentally responsible approach to changes in the built environment.

The actions in this NSW Government procurement framework for construction cover strategies across a broad field including business ethics, security of payment, workplace development, ecological sustainability, continuous improvement, and encouragement and recognition of good performance.

In support of this vision, a key procurement strategy is to facilitate ongoing improvement in industry performance and to encourage and reward better performance by service providers on government contracts. This is accomplished by offering more opportunities to do business together with the offer of longer-term relationships.

NSW Public Works (NSWPW) has developed and implemented an integrated systems approach to performance management within the context of the NSW Government Procurement Policy Framework.

A strong focus on comprehensive supplier performance and stakeholder feedback on performance is the centrepiece of the integrated approach to construction procurement.

The performance management system

This integrated approach to performance management encompasses the following key components:

Prequalification and Best Practice Accreditation Scheme

• Prequalification of contractors and consultants to be eligible for selection to tender for construction-related works.
• Best Practice Accreditation for construction contractors to encourage continuous improvement.

PWA prequalifies contractors for various categories of works valued more than $500,000. It also prequalifies various categories of technical consultants including project directors and project managers. Panels of contractors are prequalified based on their technical capability, financial capacity, relevant experience and performance.

Best Practice Accreditation further recognises construction contractors (prequalified for contracts valued more than $2.5 million) based on additional performance attributes.

The prequalified construction contractors who achieve best practice accreditation qualify for a greater number of business opportunities. This in turn assures superior and sustained performance outcomes for government.

Tendering and selection of tenderers

Prequalified panels expedite tenderer selection based on a range of criteria including:

• performance
• tenderer review.

Selection of tenderers for a given tender is based on a comprehensive multi-criteria decision-making process. A selection committee, comprising agency and PWA officers, ranks and selects from the prequalified contractors and consultants according to a number of established criteria.

The ranking process makes use of performance scores based on relevant contractor or consultant performance reports in combination with stakeholder performance reports.

Performance management

The performance management system for construction includes a range of procurement life cycle reporting processes such as:

The above system elements are further supplemented through information provided by:

• project audits
• OHS management system audits
• GC21 start-up workshops
• GC21 close-out workshops

Performance reporting systems

Role of performance reporting

The successful implementation of the following elements depend significantly on the preparation of timely and accurate performance reports:

• contractor and consultant prequalification (including evaluation of expressions of interest)
• best practice accreditation
• tenderer selection
• tender evaluation
• contractor and consultant performance management.

Objectives of performance reporting

The objectives of performance reporting are to:

• encourage contractors and consultants to implement a business culture of continuous improvement to benefit themselves and their clients
• provide performance data from past and current contracts to identify the best performing contractors and consultants
• ensure that the best performing prequalified contractors and consultants are offered more tendering opportunities than other contractors
• share information with other NSW Government agencies on contractor and consultant performance on current and past contracts
• facilitate the development of a more complete understanding of project procurement by identifying opportunities for improving future project stakeholder relationships and management practices.

Benefits of performance reporting

Benefits to contractors and consultants:

• contractors and consultants may secure more business opportunities by achieving favourable performance results. Past and current performance is a major consideration whenever tenderer panels are chosen and taken into account when tenders are evaluated
• concerns about performance are raised at the earliest opportunity, when there is the greatest scope for improvement
• participation in regular performance monitoring and formal performance reporting encourages a cooperative relationship through proactive and constructive discussion at the project level
• performance reporting helps contractors and consultants demonstrate their commitment to continuous improvement
• performance reporting will particularly benefit those contractors and consultants already committed to continuous improvement and client satisfaction as it assists them to identify those aspects of their performance requiring improvement
• maintaining records of performance will assist contractors and consultants to monitor their own performance trends over the longer term, to set targets for corporate performance improvement and to identify and correct adverse trends at the earliest opportunity
• performance ratings could be used when marketing services to clients (however, please note that staff and agents are not entitled to give commercial endorsements for contractors or consultants)
• performance reports provide the basis for contractors to periodically discuss their performance and business relationships at a senior management level.

Benefits to the NSW Government agencies:

• performance reports assist agencies in identifying the best performing contractors and consultants
• subject to availability of work, PWA is best able to support NSW Government Agencies under the NSW Government Procurement System for Construction by being able to offer better performing contractors and consultants for works and services
• performance reports are used to support the NSW Government’s approach to encourage continuous improvement in performance by contractors and consultants
• performance reports are available as reference documents for agencies when:
  • tenderer panels are selected
  • expressions of interest are evaluated
  • tenders are evaluated
  • due to unsatisfactory performance a decision needs to be made on the prequalification status of a contractor or consultant
  • when, due to a contractor or consultant’s unsatisfactory performance, default or insolvency, review list action may be required.

Types of reports

During a construction contract or consultant engagement

Contractor and consultant performance reports (CPRs) are required to be prepared during contracts and consultant engagements. These include the following:

• contractor performance report, prepared by the project manager
• consultant performance report, prepared by the project manager
• project manager performance report, prepared by the client agency representative responsible for the project
• project director performance report, prepared by the client agency representative responsible for the project.

Upon completion of construction works

The stakeholder performance review (SPR) reporting procedures supplement contractor performance management procedures for projects involving construction contracts valued at $1 million or more.

Following contractual Completion on a GC21 contract (or practical completion under other forms of contract), in addition to the CPRs the key contract stakeholders comprising the client, contractor and project manager may prepare the following performance reports to provide additional performance feedback:

• stakeholder performance report on the project manager by the contractor
• stakeholder performance report on the contractor by the client representative
• stakeholder performance report on the client by the project manager
• stakeholder performance report on the client by the contractor.

Contractor and consultant performance reporting (CPR) system

Contractor and consultant performance reporting behaviour

Contractor and consultant performance reporting should be based on the following:

• the mutual objective of the parties to a contract to achieve continuous performance improvement
• open, proactive and objective performance monitoring and periodic formal reporting by the representatives of both parties to a contract or consultant engagement
• performance reporting becoming the responsibility of both parties
• proactive approach to initiating and encouraging dialogue by either party to discuss performance and performance reporting matters including making arrangements for formal performance reporting consultation meetings
• performance being on the agenda at regular formal contract meetings (for example, weekly site meetings)
• performance issues being promptly addressed by the parties concerned
• no surprises – performance issues being discussed openly with the contractor or consultant to ensure that concerns (such as dissatisfaction with performance) do not come as a surprise when subsequently documented in the next contractor or consultant performance report
• the utilisation of performance reporting as a tool to facilitate the identification and resolution of project concerns,
• objective statements or documents consistent with and supporting the performance rating provide the foundation for the ratings recorded in a performance report
• assessment of the performance of the contracting organisation takes account of individual behaviour when necessary to highlight performance problems for resolution.

Contractor and consultant performance reporting process

The reporting officer, a representative of the principal (usually the project manager), prepares the contractor or consultant performance reports. Reports should be prepared during regular face-to-face meetings with the representative of the contractor or consultant.

When the report is prepared, the reporting officer:

• provides a copy of the performance report (completed and signed) to the contractor or consultant representative
• forwards the original performance report (completed and signed) to PWA (for entry of the report information into the contractor and consultant Management System (CCMS)).

The reporting officer may enclose the performance report with the following sample letter when issuing the performance report to the contractor or consultant:

• sample letter A - notice to contractor or consultant inviting comment on performance report.

If the contractor or consultant disagrees with the performance report, the representatives of the parties should attempt to resolve the disagreement in the first instance.

Following an unsuccessful attempt to resolve a disagreement, the disagreement is to be resolved by the contractor or consultant referring the report, with written reasons for the disagreement, to the executive officer.

The executive officer is required to:

• meet with the contractor or consultant and the reporting officer to consider the report and reasons
• decide on the disagreement
• if necessary, amend the report
• forward a copy of any amended performance report (completed and signed) to the contractor or consultant representative
• forward any amended performance report (completed and signed) PWA (for entry of the amended report information into the contractor and consultant Management System (CCMS) database).

The executive officer may enclose the response to the performance report with one of the following sample letters when responding to the contractor or consultant:

• sample letter B - notice to contractor or consultant when limited aspects of performance have been reported as unsatisfactory
• sample letter C - notice to contractor or consultant when several and/or critical aspects of performance have been reported as unsatisfactory.

At the commencement of the contract or engagement, the principal’s representative is required to notify the contractor or consultant of the name of the executive officer.

The executive officer should be suitably experienced and qualified in a discipline appropriate to the nature of the work being carried out under the contract or engagement.

The executive officer is a senior officer of the consultant or agency representative engaged as the principal’s project director or project manager responsible for the administration of the contract or engagement.

The following table identifies the persons involved in the preparation of performance reports, and resolution of disagreements about reported performance, for the respective general conditions of contract used:

Note: Attention is drawn to the important differences between preparing a contractor or consultant performance report and reporting on the outcomes of a GC21 construction contract evaluation and monitoring meeting. These differences are detailed in the GC21 meetings and workshops guide.

When to prepare contractor and consultant performance reports

Contractor performance reporting frequency

Contractor performance reports are prepared for all contracts valued at $500,000 or more:

• to be delivered by the first week in February, May, August and November (with reports covering the preceding 3 month period)
• at completion for Minor Works and GC21 contracts
• at the end of the defects liability period (Minor Works contracts)
• whenever a critical aspect of performance is unsatisfactory, for example if:
  • a management system (OH&S, environmental or quality) audit reports unsatisfactory performance
  • other contractor fails, within the time specified, to make good defects discovered after completion on GC21contracts
• at termination of a contract (if occurring).

For contracts valued less than $500,000, contractor performance reports are required whenever a critical aspect of performance is unsatisfactory.

Consultant and project manager performance reporting frequency

Consultant performance reports and project manager performance reports are required to be prepared for all engagements valued at $30,000 or more:

• to be delivered by the first week in February, May, August and November (with reports covering the preceding 3 month period)
• at the completion of the engagement
• whenever a critical aspect of performance is unsatisfactory
• during the course of construction or implementation stages, if it becomes apparent that the standard of documentation or services delivered by the consultant are found to be unsatisfactory
• at termination of the engagement (if occurring).

For engagements valued at less than $30,000, the reporting officer must complete and submit a performance report if the performance of the consultant, project director or project manager is unsatisfactory.

Irrespective of the contract or engagement value, a performance report must be prepared whenever a critical aspect of performance has been identified as unsatisfactory.

Contractor and consultant performance reports must include:

• detailed reasons for reporting the performance evaluation criteria rated as unsatisfactory
• when appropriate, copies of documents supporting the unsatisfactory rating (for example, audit report, WorkCover notice, photographs).

Content of performance reports

The standard performance report form is comprised of 5 parts:

• contractor, consultant or project manager performance report
• industry data (not used for monitoring performance)
• executive officer’s comments (if evaluation differs significantly in any aspect from the reporting officer’s evaluation)
• performance reporting system guidance
• performance evaluation criteria.

It is recommended that reporting officers:

• always refer to the performance evaluation criteria – detailed considerations and the contractor or consultant performance reporting system guidance whenever preparing a contractor or consultant performance report
• apply the principles set out in this guide to performance reporting on construction contractors and all categories of consultants
• provide the contractor or consultant with a copy of the fully completed and signed performance report as well as the portions of the report describing the performance reporting system guidelines, performance evaluation criteria and steps for completing a performance report
• submit the completed performance report to the address indicated on the form.

Stakeholder performance review and reporting (SPR) system

System scope

The stakeholder performance reviews are a part of the performance management system linking and integrating all performance management processes into an 'end of construction cycle' performance monitoring and management system. The reviews may also be initiated during the life of the project by a key stakeholder.

Contractors, consultants and project managers prequalified under any prequalification schemes are key participants in this integrated process.

The review process applies to the nominated stakeholders involved with construction contracts when the contract price is valued at $1 million or more.

Stakeholder performance reports represent a component of the performance management system.

SPR – A distinct reporting system

The SPR is not to be confused with or replaced by the performance measurement systems of other organisations and is not to be confused with the GC21 performance evaluation form (which is a team-based system of self-measurement and self-improvement). Refer to GC21 meetings and workshops guide for clarification.

Objectives

The objectives of the stakeholder performance review and reporting system are:

• to obtain a measure of the performance of each key stakeholder on a project from the perspective of the other key stakeholders. Stakeholders include the contractor, project manager, client and consultants. In some instances, additional stakeholders may be invited to participate
• to obtain a broad, balanced and equitable review of the entire project, including project relationship issues
• enable performance trend monitoring and feedback to be provided to stakeholders for problem-solving and continuous improvement
• to contribute to the measurement of the overall performance of prequalified firms for the purposes of prequalification review and tenderer selection.

SPR system

The SPR system includes the following elements:

• A criteria and rating system that are standardised, well defined, applicable across stakeholders, quick and easy to understand, and relevant and accessible over the passage of time. The criteria enable comparison between different stakeholders and permits comparative historical review and future trend assessment.
• Generally 3 stakeholders comprising the client, contractor, project manager may participate in the SPR process.
• The system may extend to other stakeholders if considered desirable by either the stakeholders or PWA.
• The stakeholders conduct their reviews following the completion of a project and following a period of normal business operation utilising the completed project usually within 3 months of completion.
• The system attributes include robustness, fairness and transparency in business processes.

SPR process

The stakeholder performance review process may be carried out following contract completion. The reviews may also be initiated during the life of the project by a key stakeholder.

This process makes use of the 4 standard performance reports that are prepared through the course of contracts:

• contractor performance report
• consultant performance report
• project manager performance report
• project director performance report

and 4, generally one-off stakeholder performance reports including:

• stakeholder performance report on the project manager by the contractor
• stakeholder performance report on the contractor by the client representative
• stakeholder performance report on the client by the project manager
• stakeholder performance report on the client by the contractor.

Report frequency

Quarterly and upon completion:

• consultant performance report
• contractor performance report
• project manager performance report
• project director performance report

Within 3 months of completion of the contract:

• stakeholder performance report on the project manager by the contractor
• stakeholder performance report on the contractor by the client representative
• stakeholder performance report on the client by the project manager
• stakeholder performance report on the client by the contractor

SPR report elements

The stakeholder performance report forms are comprised of 2 parts:

• stakeholder performance report
• performance reporting system guidelines

Stakeholder performance reports should be prepared in the following manner:

• Each stakeholder, reflects upon and considers the performance of another stakeholder, prior to the preparation of individual reports.
• The stakeholder that is to prepare the report arranges to meet face-to-face with the other stakeholder who is the subject of the report to discuss performance and to prepare the report.
• Stakeholders preparing a report may attach to the report additional clarification or supporting information, where available. This may include copies of correspondence, newspaper clippings, newsletter extracts, photos, articles.
• The completed and signed stakeholder performance report, including all attachments, should be promptly forwarded to:
  • the stakeholder who is the subject of the report
  • PWA.

Consultation during SPR process

Preparation of stakeholder performance reports should be a matter for discussion at the first site meeting and at regular intervals thereafter. The purpose and function of the SPR process report should be discussed and clearly differentiated from the periodic CPR reports and the GC21 team performance evaluation.

As with the contractor or consultant performance reports, a stakeholder completing an SPR report is to consult during preparation with a stakeholder that is the subject of the report. This is to include face to face consultation. A copy of the SPR report is to be provided to both PWA as well as the subject of the report.

SPR preparation

Stakeholders preparing SPR reports are to provide honest and fair commentary that is constructive and balanced. This includes clearly stating performance issues, concerns and problems experienced as well as acknowledging significant positive outcomes. Stakeholders are to carefully consider the guidance given in these guidelines when preparing SPR reports.

Preparation and submission of these SPR reports is encouraged from:

• project managers prequalified under the consultant prequalification scheme
• contractors prequalified under the contractor Prequalification and Best Practice Accreditation Scheme.

SPR information utilisation

Upon completion of analysis of the SPR reports for a project, a summary of stakeholder performance outcomes may be communicated to key project stakeholders.

SPR outcome reports will provide insight for stakeholders into areas of success and opportunities for improvement. Stakeholders should review the summary reports and seek to address any issues raised so as to promote improved project and relationship outcomes on current and future projects.

SPR management

The performance of contractors and consultants will be monitored and managed in accordance with the systems, processes and procedures described in sections 3, 7 and 8 of the performance management systems Guidelines.

For other stakeholders when, as a result of a stakeholder performance outcome review, a significant performance trend of concern on a project or across multiple projects is identified:

• the stakeholder involved will be provided with the performance outcome review
• clarification of the issues involved will be sought from the stakeholder
• *a response invited from the stakeholder regarding any corrective action that has been taken or is planned to be taken to overcome the issue reported.

Where further resolution is required, there may be individual meetings with the stakeholders. Meetings with project stakeholders may be extended to include a broader forum of stakeholders where a systemic problem is identified for resolution.

Confidentiality

The information provided in Stakeholder performance reports is treated as confidential and will not be disclosed outside of NSW Government agencies except in the following circumstances:

• with the agreement of the agency responsible for the project, to resolve project, systems and relationship management issues, a summary of key issues and concerns of an SPR report may be discussed with other project stakeholders. The report itself will not be made available to other stakeholders.
• discussions with the subject of the report.
• when required by law.

Data management

Access to CCMS reports and data

The contractor and consultant Management System (CCMS) contains confidential information regarding the performance of contractors and consultants.

Access to contractor and consultant performance reports and associated CCMS performance analysis reports is restricted to:

• CCMS officers
• NSW Government agency staff responsible for projects
• prequalified private sector project managers and project directors when engaged by a NSW Government agency to procure a construction-related project for the agency.

A read-only section of the contractor and consultant performance reporting system allows staff and authorised agents from offices administering contracts to review the performance of contractors and consultants. Data is regularly downloaded.

Authorised CCMS officers, NSW Government agency staff and private sector project directors and project managers, when engaged on projects by NSW Government agencies, must:

• not release information to any external organisation
• not disclose the password to any other person
• only check the performance of contractors and consultants relevant to their duties
• not generate reports not relevant to their duties
• ensure the secure storage of any reports generated in hard copy form
• ensure the destruction of hard copy reports which have been generated in error or which are no longer required

All users must respect the confidentiality of the data maintained within CCMS.

CCMS restriction codes

If, following the implementation of the contractor and consultant performance management system procedures, a restriction is placed on a contractor or consultant’s future business opportunities, the type of restriction will be recorded under the following CCMS reference codes:

• A – Administrator appointed
• B – Unsatisfactory business relationship
• C – Referred by NSW Construction Consultative Committee (CCC)
• E – Licensee externally appointed
• F – Unsatisfactory financial situation
• I – Under investigation by investigatory or law enforcement agency
• L – Liquidator appointed
• P – Unsatisfactory performance
• R – Receiver manager appointed
• S – Suspension under contractor Prequalification and Best Practice Accreditation Schemes
• X – Non-compliance with the NSW Government Code of Practice for Procurement.

Release of contractor and consultant performance reporting information to outside organisations

The standard tendering conditions warn contractors and consultants that performance information may be released to external organisations such as other NSW Government departments and agencies and to local government authorities.

As a part of the tender probity process, Agency staff, and private sector project managers and project directors involved in tenderer selection, tender evaluation or contractor performance management must sign the Code of Conduct for a Tender Process, prior to gaining access to contractor performance information relevant to the contracts they are engaged on.

The following section includes guidance on appropriately managing and limiting access to performance information.

Contractors and consultants are entitled to a copy of documents and reports on their performance. If a contractor or consultant requests information on past or current performance, the request should be forwarded to the NSW Procurement Service Centre.

All requests from external organisations for information regarding a contractor’s or consultant’s past or current performance must be referred to the NSW Procurement Service Centre.

Legal aspects of performance reporting

In the course of their duties, project staff, agency staff and private sector project managers and project directors involved in the administration of NSW Government agency contracts will be required to report on the performance of contractors, consultants and other stakeholders.

The following sections outline the legal position of those persons in regard to action taken by a contractor, consultant or other entity over statements made in performance reports:

The performance – prequalification relationship

Contractor and consultant prequalification schemes

The NSW Government procurement system for construction supports the following contractor and consultant prequalification and accreditation schemes:

• Contractor Prequalification and Best Practice Accreditation Scheme for Construction Related Works for contracts valued greater than $500,000 (prequalified contractors), Greater than $2.5 million (Best Practice Accredited contractors)
• Regionally based contractor Prequalification Schemes for Minor Works or Trade Works (for contracts valued up to $500,000)
• Consultant Prequalification Scheme (includes technical consultants and project directors and project managers).

Performance management provisions

The respective prequalification and accreditation schemes uniformly provide the following steps for managing ongoing compliance of prequalified and accredited contractors and consultants with the performance requirements specified under each scheme:

• monitoring of performance on tendering, financial capability, NSW Government Code of Practice for Procurement compliance, contract performance and project outputs and outcomes
• surveillance and audit of the implementation of a contractor’s or consultant’s management systems, where relevant, including for quality, occupational health and safety, the environment, industrial relations and other management systems
• providing increased tender opportunities to contractors and consultants in return for demonstrated good consistent performance
• applying sanctions such as temporarily suspending a prequalified or accredited contractor or consultant from receiving the benefits of prequalification or accreditation as a consequence of non-compliance with the respective scheme performance requirements
• removing the prequalification or accreditation status when the  panel of assessors determines that a contractor or consultant has not complied with the scheme requirements
• providing the opportunity for a contractor or consultant, whose prequalification or accreditation status has been downgraded or removed, to request a review of the decision
• applying the review list procedures when applicable.

Performance management procedures

The table in performance management actions summarises the aspects of some actions to be taken with contractors and consultants under the respective prequalification and accreditation schemes.

Complete details of the scheme conditions and management procedures are available in the respective Scheme documents.

Contractor and consultant performance management – review list

The procedures for reviewing contractor and consultant performance are implemented in accordance with the principles of procedural fairness to ensure that:

• timely and effective action is taken in response to reports of unsatisfactory performance or the development of an unsatisfactory business relationship with a contractor or consultant
• contractors and consultants are given the opportunity to comment, prior to any action PWA may choose to take to restrict the contractor or consultant’s future business opportunities under the NSW Government Procurement System for Construction
• contractors and consultants that are subject to a restriction on future business opportunities are informed of the reasons for the restriction and have the opportunity to request a review.

The procedure for the review of performance depends on the completion of performance reports and may be initiated whenever the contractor or consultant’s performance is considered to be generally unsatisfactory and one or more of the performance evaluation criteria are rated as unsatisfactory in a contractor or consultant performance report.

PWA is responsible for the monitoring of contractor and consultant performance, benchmarking, trends analysis and strategic performance management including the application of sanctions when necessary.

In this role, PWA reviews the performance of a contractor or consultant on:

• the contract for which the performance report was prepared indicating critical aspects of performance as unsatisfactory
• all other current and recently completed contracts
• tenders arranged in recent years
• if relevant, on current and recently completed contracts being undertaken by the contractor or consultant for other NSW Government agencies accredited by NSW Treasury for the construction project planning or delivery phase.

Additionally, when unsatisfactory performance is reported, PWA will check and assess whether the contractor’s performance reflects adversely on the contractor’s status as a prequalified contractor or consultant or best practice scheme accredited contractor.

Contractor and consultant review list

PWA maintains a contractor and consultant review list to record the names of contractors and consultants that require special consideration and/or further investigation before being considered eligible for any of the following:

• shortlisting as a tenderer following the calling of expressions of interest for a contract
• prequalification as potential tenderer for a program of works
• inclusion as a selective tenderer on a tender panel
• invitation to tender as a single or one of a number of invited tenderers for a contract
• recommended as a tenderer in contention for contract award.

Contractors and consultants included on the review list should not be shortlisted, prequalified, selected, invited or recommended as a tenderer or for a contract or engagement without prior consultation.

Placement of a contractor or consultant on the review list

The table in performance management actions summarises the aspects of contractor and consultant corporate status, business relationship and performance that may lead to the application of the contractor and consultant performance management review list procedures.

The table refers to the following sample letters:

• sample letter D – Contractor's or consultant’s performance may warrant the application of a sanction
• sample letter E – Contractor’s or consultant’s business relationship with PWA may warrant the application of a sanction
• sample letter F – Decision by panel of assessors to apply a sanction to restrict future tendering opportunities to a contractor or consultant
• sample letter g – Informing liquidator, receiver manager or administrator of the placement of the contractor or consultant on the review list.

As a general guide, contractors or consultants in the following situations are not likely to be included on the review list because of the remoteness of their relationship to PWA:

• never tendered for a contract
• failed to gain prequalification
• failed to become shortlisted as a tenderer following a call for expressions for interest for a particular contract
• related via a common parent company to a subsidiary company included on the review list.

Management of the review list

The names of contractors and consultants which have not met the requirements for corporate status, business relationship, financial capacity or performance will be included on the review list. Refer to the table in performance management actions.

Generally, the decision to place or remove a contractor or consultant on the review list is made by a panel of assessors.

However, when a contractor or consultant is placed under external administration, the Manager, Supplier Management Systems, Policy Support Services may, at his discretion, decide to place such a contractor or consultant on the review list without reference to a panel of assessors.

Every 6 months, all entries on the review list are checked to determine whether contractors and consultants included on the review list should remain or be placed under another more appropriate CCMS reference code.

Contractors and consultants that have remained on the review list for more than 2 years will be reminded by letter of:

• their continued inclusion on the review list
• the action to be taken by the contractor for removal from the review list.

Following receipt of a contractor or consultant’s response to a reminder letter, a recommendation to the panel of assessors will be prepared to determine whether the contractor or consultant should continue to be included on the review list.

The table in performance management actions summarises the actions to be taken when it is necessary to:

• remove the name of a contractor included on the review list
• amend the CCMS reference code for a contractor on the review list.

Whenever the review list is amended, it is re-issued electronically on a confidential basis to senior managers and executives directly involved in the procurement of construction and facilities maintenance contracts.

Panel of assessors

PWA is responsible for developing, maintaining and improving the procurement system for construction and for providing related support services in the use of the system to NSW Government agencies to support planning and delivery phases of construction procurement. It also provides and administers the panel of assessors.

Functions

The panel has 3 main functions:

• It assesses applications from contractors and consultants for prequalification or best practice accreditation. The panel determines the acceptability of the contractor or consultant for each category of work and financial range applied for, accepts the application (with or without limitation) or rejects it.
• It reviews adverse contractor and consultant performance reports and decides on further action. This may include written and oral assessments (for example, consideration of a written response from the contractor followed by an interview with the contractor) and may result in a decision by the panel of assessors that a sanction should be applied.
• It may also refer to and seek advice from specialists for technical, financial or quality assessments of applicants, prequalified contractors or consultants or other suppliers under performance review.

Composition

A quorum consists of the chairperson and 2 members:

• Chairperson: the Manager, Procurement Systems, Policy Support Services or nominated representative.
• Secretary: an officer of Supplier Management Systems Section, Policy Support Services.
• Members: a senior officer with experience or qualifications in the type of construction or service being procured; and
  *another senior officer from the agency responsible for the  procurement o the related construction project or service being procured.

The panel of assessors meets as demand requires.

Improvement and feedback

This guide and its processes are under continual review to ensure ongoing effectiveness in achieving the desired outcomes. Feedback is requested from project stakeholders and key interest groups.

Related resources

Find more resources on the construction category page.