Prospect Reserve Critical Watermain Renewal – Base-Estimate Evaluation Clarifications

General Pricing-Schedule & Programme Clarifications (G-Series)

• G1.1 – Activity Schedule vs P6 Programme Alignment

  • Issue: Several activities showing time in Primavera P6 had no dollar values in the Activity Schedule.
  • CW Response (R1): Submitted mapping doc “20038913 _Pricing Schedule and Activity Mapping” showing:
  • Milestone & Project-Management (PM) tasks intentionally carry $0$ cost in the schedule because their costs are rolled into monthly PM line-items.
  • Claimed this is a logical, efficient way to track PM progress.
  • Status: Closed after SWC noted receipt of mapping on 17 Apr 25.

• G1.2.1 – Missing DABC Milestone

  • Definition: DABC = Detailed Analysis & Business Case; SWC internal step releasing project funds.
  • Issue: DABC date absent in schedule.
  • CW R1: Hidden inside Activity RFQ-PRM-120 – SW Review & Approval; argued lack of visibility because it is SWC-controlled.
  • SWC R2: Management Specification §3.4.1 demands an explicit DABC milestone; gave target $29/08/25$.
  • CW R3: Re-issued P6 programme with DABC on the specified date.
  • Status: Closed.

• G1.2.2 – Distribution of PM Costs

  • Issue: PM costs spread evenly each month → SWC feared difficulty verifying earned value.
  • SWC requirement: Costs must correspond to observable deliverables, map to Activity Schedule, and allow monthly payment certification.
  • CW R3: Re-aligned programme, activity schedule, and pricing schedule; provided resource breakdown analogous to Group 8 template.
  • Status: Closed.

• G1.2.3 – Absence of a Risk Activity

  • Principle: Management Spec §3.5.2 expects explicit risk activities or allowances traceable to Risk Register.
  • CW R1: Cost of risk distributed across affected tasks (lump-sum contract logic).
  • SWC R2: Requested clarified allowances + full risk register.
  • CW R3: Submitted risk register (Group 8 format) and agreed to include escalation line.
  • Status: Open pending escalation update.

• G1.2.4 – NOA/NTP Lag

  • Definitions:
  • NOA = Notice of Award
  • NTP = Notice to Proceed
  • Issue: Only 3 weeks allowed between DABC and NTP.
  • SWC requested 6 weeks → fixed NTP milestone $10/10/25$.
  • CW: Programme amended.
  • Status: Closed.

• G1.2.5 – Orphan Activities & Critical Path

  • Activities without successors:
  1. Environmental Sediment Controls
  2. Site Mobilisation & Compound Setup
  3. Traffic Management (CH 900 → 935)
  • Risk: Breaks Critical-Path integrity.
  • CW: Added relationships; critical path unaffected; updated P6 file submitted.
  • Status: Closed.

• G1.2.6 – CESMM4 & WBS Depth

  • Requirement (since 1 Jul 24): Estimates using ECC Option A must reach WBS Level 7 (Cost Estimating & Cost Control) to align with CESMM4 coding.
  • CW defence: RFQ predates 01 Jul 24; compliant with WBS Rev-12 approved in Implementation Plan.
  • SWC accepted.
  • Status: Closed.

• G1.3 – First-Principles & Sub-contract Quotations

  • SWC needs granular data to build SWC Bill-of-Quantities (BoQ).
  • CW supplied “Basis of Estimate” with sub-contractor comparison.
  • Example given during 06 Apr 25 meeting: Discrepancy between DGB20 back-fill quantities in quotes vs CW baseline.
  • Status: Closed after submission.

Indirect Cost Clarifications (I-Series)

• I1.1 – PM & Supervision Breakdown

  • Deliverable: Resource-loaded WBS to Level 7 matching Group 8 template (shows PM labour, margin, Workers-Welfare, risk, Long-Service-Levy).
  • CW initially non-compliant; later provided activity schedule; SWC confirmed sufficiency.
  • Status: Closed.

• I1.2 – Quantum of PM Costs (\$4.28 M)

  • SWC view: High given heavy subcontracting; especially $\$9.6k$ daily burn during site investigations.
  • CW justification:
  • Option A contract shifts more contractual/quality risk to head contractor.
  • Contamination management (waste classification) needs dedicated resources.
  • Compared to Jasper Rd CWM (4 yrs ago) costs are actually lower.
  • CW supplied detailed cost file; SWC accepted explanation with minor reservations.
  • Status: Closed.

Direct Cost Clarifications (DC-Series)

• Procurement Governance Reminder

  • SWC Procurement Guidelines: ≥3 quotes for each supplier package >\$50k, plus tender analysis whenever lowest quote not chosen.

• DC1.1 – Sub-contract & Supplier Quotes

  • CW initially cited Option A confidentiality; SWC insisted.
  • Quotes delivered; SWC satisfied.
  • Status: Closed.

• DC1.2 – Civil Sub-contract Selection (RA Smith vs Jonishan)

  • Delta: Jonishan $≈\$3 M$ cheaper.
  • Non-conformances cited by CW:
  1. No traffic-management provision.
  2. No haulage / tipping of spoil.
  3. Temporary restoration limited to 50 m.
  4. One crew only → longer duration ⇒ higher indirect cost.
  • Revised procurement strategy & tender evaluation matrix submitted; SWC closed.

• DC1.3 – MSCL Pipe Supply (Pipe Lining & Coating vs Steel Mains)

  • PLC quote $\$4.75 M$ vs Steel Mains $\$3.74 M$.
  • Only 2 suppliers on SWC SP panel for this pipe calibre; 3rd quote impossible.
  • CW rationale for higher-priced supplier: “conservative approach”; willingness to revisit at NTP.
  • Documentation provided; Closed.

• DC1.4 – Installation Rate $\$7000/Lm$

  • SWC flagged as excessive (sub-contract lump sum $\$12.39 M$ vs CW install price $\$16.77 M$).
  • CW detailed production-rate model:
  • Typical productivity: 3 × 6 m lengths/crew/day ⇒ $18\,\text{m/day}$ market rate.
  • Prospect Reserve constrained:
    • CW allowed $10\,\text{m/day/crew}$ (two crews) = $20\,\text{m/day}$ overall.
    • Concrete-encased sections (>2.5 m deep) drop to 1 length ≈6 m/day.
  • Option A risk premium & contingency added.
  • SWC to evaluate in final estimator’s report.
  • Status: Pending SWC final cost assessment.

• DC1.5 – Overall Rate $\$14,116/Lm$ for 2.4 km

  • SWC couldn’t reconcile with past projects.
  • CW delivered full first-principles workbook (Direct + Indirect + Provisional).
  • SWC to comment in final report.
  • Status: Pending SWC final report.

Environmental & Heritage (DE-Series)

• DE1.1 – REF & s60 Controls
  • REF = Review of Environmental Factors; s60 = Heritage Act approval.
  • CW confirmed proposal must change due to:
  1. Experienced archaeologist to monitor all excavations.
  2. Soil-amendment works around pine trees on William Lawson Dr, 6 months pre-construction.
  3. Full-time arborist monitoring those excavations.
  • Implication: Additional time & cost risk to be loaded into programme and risk register.
  • Status: Closed after acknowledgement.

Risk Register Clarifications (R-Series)

• R1.1 – Time & Cost-Loaded R&O Register
  • Spec §3.5.2 requires:
  • Clear distinction between inherent vs contingent risks.
  • Quantified $P50$ and $P90$ cost/float provisions.
  • Transparent basis of estimate (BoE) per risk scenario.
  • CW provided Group-8-style register; still needs:
  • SWC risk overlays.
  • Re-calibrated Groundwater-Sensitive Waste (GSW) & rock excavation allowances.
  • Status: Open – awaiting resubmission.

Key Technical & Contractual Concepts Explained

• Option A (NEC-ECC)

  • Lump-sum with activity schedule; payment upon completion of listed activities. Shifts quantity risk to Contractor but still requires transparent cost build-up for SWC funding governance.

• CESMM4 Coding & WBS Level 7

  • Ensures estimates are measurable, comparable, and traceable; Level 7 captures specific resources (labour, plant, material) enabling $Earned\ Value$ & cost-control reporting.

• Productivity Assumptions

  • Market norm: 3 × 6 m = 18 m/day/crew.
  • CW conservative: 10 m/day/crew due to environmental constraints.
  • Concrete-encased (>2.5 m depth) sections: 6 m/day/crew.

• Risk Quantification Metrics

  • $P50$: Probability distribution median ⇒ expected cost/time.
  • $P90$: High-confidence allowance; only 10 % chance of exceedance.
  • Registers record $\Delta\text{Cost}$ & $\Delta\text{Time}$ in $days$ per risk.

• Scheduling Milestones

  • DABC Approval: $29/08/25$
  • NOA: Immediately after DABC.
  • NTP: $10/10/25$ (6 week administrative lead time).

Practical & Governance Implications

• Accurate alignment between Programme, Activity Schedule and Pricing Schedule is vital for:

  • Monthly payment certification (Option A).
  • Cash-flow forecasting for both SWC and Contractor.
  • SWC DABC funding release.

• Non-conforming sub-contract bids can’t be chosen merely on price; missing scope items can inflate SWC’s risk if later added by variation. Ethical procurement demands transparent tender evaluation.

• Environmental & heritage obligations (archaeologist, arborist, soil amendment) not only add cost but can trigger schedule float consumption; must be mirrored in risk & programme to avoid latent claims.

• High PM cost scrutiny reflects public-sector accountability; Contractor must demonstrate value-for-money while acknowledging increased Option A risk profile.

Numerical / Statistical References & Formulae

• Pipe-installation cost flagged: $C_{install} = \frac{16.77\,\text{M\$}}{2396\,\text{m}} \approx 7000\,\$/\text{m}$.
• Overall project rate questioned: $C_{total} = \frac{33.4\,\text{M\$}}{2396\,\text{m}} \approx 14,116\,\$/\text{m}$.
• Productivity allowances:
  • Normal: $18\,\text{m/day/crew}$
  • Allowed: $10\,\text{m/day/crew}$
  • Concrete-encased: $6\,\text{m/day/crew}$.
• Administrative lag: $\text{Lag}_{NTP} = 6\,\text{weeks} = 42\,\text{days}$ post-DABC.

Outstanding Actions Summary

• CW to update Risk Register (SW risks, GSW & rock).
• SWC to issue final estimator’s report covering DC1.4 & DC1.5 cost reasonableness.
• CW to upload revised escalation figures (noted in G1.2.3).
• Confirmation that amended P6 file (with all G-series fixes) is accepted by SWC planning.