Work Package Procedure

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1. Work Package Procedure:

1. Definition: A work-package is a group of related tasks within a project and may be considered as a sub-project. Work-package is the smallest unit of work that a project can be broken down to when creating a Work Breakdown Structure (WBS). A work-package is assigned to a person or a team with a (1) price, (2) duration and (3) quality targets. Every work-package has a measurable and manageable outcome (or deliverable).

2. A Work Breakdown Structure is a project plan or method statement that identifies work-packages that make up a project. For cost estimation and quotation purposes, every project needs to be broken down into a set of work-packages where each work-package is priced.

3. ISO 9001 Quality Management Standard defines the need for a project structure plan or work breakdown structure as a set of work-packages. Client sign-off and invoicing should be based on work packages as units of work that can be understood by the client.

Glossary:

WP means Work-Package as the smallest unit of work that can be measured and managed. A work-package may have many tasks.

WBS means Work Breakdown Structure as a kind of project plan of sub-projects, each with their own cost.

Job means Work-Package to be presented to the client as an invoiced line item with an optional price.

2. Client Sign-Off Sheet (CSS):

1. A construction team undertakes one or more work packages in accordance to a schedule of agreed deliverables where each deliverable has an agreed price.

2. When the team document evidence that a work-package is complete and correct, then evidence is presented on the Client Sign-Off Sheet (CSS) for signature by the client on-site represenative.

3. The work-package is then invoiced to the client with the CSS attached as evidence.

4. Each CSS is a work-package with a stated outcome that can be checked by the client - each completed CSS is emailed to the client for reference. Where the work-package includes certificates, permits and OHS information, then such documentation is part of the work package that the client pays for.

5. Each CSS may be emailed to the client representative as evidence - this is the online document that could be signed and saved without needing to sign-in.

TO DO

* Easy online phone application page for the client representative to sign, name and date - email with link to CSS page with name and date complete waiting for signature block to be signed and press "save".

3. Work Package:

1. Every quotation to a client is a set of work-packages that have been individually priced so each work-package may be sub-contracted to a construction team.

2. The quotation will have a total price, but where each work-package is priced, then each work-package may be invoiced when complete and correct.

3. When each work-package has a documented outcome that can be measured by the client, then the Client Sign-Off Sheet is a means to demonstrate complience with ISO 9001 and get paid without delay.

4. A work-package is a set of tasks that will cause the documented outcome to happen in the documented time scale to the documented quality. Each task can be said to be a step in the method statement when used in the context of a Risk Assessment and Method Statement (RAMS).

5. A work-package will include an asset list of tools and equipment needed to complete each task - this may include contract hire costs and schedule.

6. A work-package will include a supplies list of materials to be purchased and delivered to the site to complete the work.

7. A work-package will include a risk assessment of hazard control measures that must be deployed and permits that must be managed.

8. While most work-packages are jobs with a price, not every job has a price, so an invoiced line item may have a zero price.

4. Quotation Management:

1. Each request-for-quotation (RFQ) is responded with a quotation that aspires to become a contract and the contract aspires to become an invoice that is paid.

2. The quotation must identify work packages with outcomes that the client can measure and sign-off so those work packages can be invoiced and paid without delay.

3. The client terminology used in the request-for-quotation should be reused in the quotation (contract) and associated invoices.

4. A question that may be asked of each quotation before it is approved by an executive is:

(1) Does the quotation specify work packages with outcomes that the client can measure as complete and correct?

(2) Are work packages defined for sub-contractors to deliver with photographic evidence?

(3) Which work packages are to be invoiced and what work is done free of charge?

5. State Transition:

(1). Request for Quotation (RFQ) by client as ad-hoc document to be uploaded.

(2). Quotation list document to client with price, duration and quality of each work package.

(3). Contract as amended quotation to the client with amended price, duration and quality.

(4). Work Package as part of contract to be sub-contracted with a price, duration and quality.

(5). Client Sign-off Sheet as a work package outcome that can be seen to be complete and correct.

(6). Invoice as one or more work packages as invoiced lines.

(5). Payment to match invoice and contract without delay.

6. The primary reason for a payment delay and a cash flow crisis is because this state transition was not managed as a set of work packages. Every payment is a reflection of the quotation and its work package outcomes.

7. Every quotation should consist of at least two documents as:

(1). Quotation list of one or more work package outcomes, each with a (1) price, (2) duration and (3) quality.

(2). Standard Terms and Conditions as list of clauses that are published and stable for any Time And Materials (TAM) contract.

8. "Time and Materials" means that the price includes labour time and materials as contract hire, supplies and expenses. It is recommended that expenses such as the congestion charge are never charged in addition to the quotation price because the cost of administration work needed to provide adequate legal proof of such additional charges are totally out of proportion to the benefit. It is reasonable and measurable to charge for "waiting time" when the on-site client representative is able to sign-off the waiting time as "approved". Waiting time is applicable to a team with vehicle and contract hired equipment where an hourly rate does not disclose the labour rate for a person - hourly labour rates must never be disclosed.

5. Quality Management:

1. Every work-package must be managed in accordance with ISO 9001 Quality Management Standard and ISO 45001 Occupational Health and Safety Standard.

2. Daily Activity Briefing (DAB) is mandated by the Site Manager (or supervisor) for each day people are on-site.

3. Daily On-Site Register (DOR) is mandated by the Site Manager (or supervisor) for each day people are on-site.

4. Daily Time Sheets (DTS) are mandated by each person for each day they are on-site. Daily time sheets must include HAV time durations when people are working with vibrating ewquipment.

5. Evidence of each and every task, delivery, collection as it happens.

6. Job as a work package as agreed deliverable with an optional price.

7. Client sign-Off Sheet (CSS) is a job or work package summary with a place for the client representative to sign, print their name and date when the job is complete and correct. The client sales invoice shall attach one or more CSS pages as evidence of the work completed.

6. Structure:

1. Site is a work place for one or more projects.

2. Project is a contract to deliver an agreed outcome with an agreed (1) price, (2) duration and (3) quality.

3. Quotation is a project contract that has not yet been agreed.

4. Project is a work breakdown structure with one or more work packages.

5. Work Package or Job is the smallest unit of work with a price, duration and quality.

6. Job is a work package with (1) asset list, (2) supplies list, (3) method statement, (4) risk assessment.

7. Each project has a project RAMS. Each work package has a job RAMS. Each Daily Activity Briefing has a daily RAMS.

8. DAB triggers any required Permits and Clearances such as:

(1). DEP Daily Excavation Permit and Daily Excavation Checklist (DEC).

(2). WHP Working at Height Permit.

(3). HWP Hot Works Permit.

9. DOR Daily On-Site Register triggers Site Initiation Training (SIT) for each person on-site on the first day.

7. Services:

1. What is generally contracted to a client is a service, but people tend to think in terms of goods.

2. A service is complete and correct when the contracted outcome can be signed-off by the client representative.

3. Where the service is for a duration such as a months Internet service, then the service is complete when the duration is complete.

4. Every contracted work package should specify:

(1). Price to deliver the outcome of the work package.

(2). Duration to delivery the outcome.

(3). Quality of the outcome.

5. Most people understand the price is net of taxes and the price of a work package may be called the cost.

6. Most people understand the duration is an estimated of how many days the team may be on-site - an over estimate is generally better than an under estimation.

7. Most people overlook quality because it does not have any units of measurement - "good" is not something that can be measured. Quality is a comparative term used to specify how the client will measure that the work package outcome is complete and correct. Photographic before and after evidence may be needed to demonstrate quality. In accoradance with good building practice may be a quality term used for a work package. Within one centimeter of where marked by the client may be a quality term used.

8. To avoid specifing quality for a work package is to invite the client to imply unrealistic quality standards to cause payment delays and to justify non-payment. The supplier is at fault when they cannot achieve the specified quality target and the supplier pays the snagging cost of correction. How flat is a concrete slab? Say plus or minus 15 mm. How flat is a plastered wall? Say plus or minus 20 mm. How big is a 2500 mm by 1500 mm excavation? Say plus or minus 50 mm (5%).

7. Standard Terms and Conditions:

1. Payment terms are the single most critical aspect of any quotation because all the risk is with the supplier, until the client pays.

2. Ownership of all supplies provided by the supplier must remain the legal property of the supplier until paid for by the client.

3. When a work package is complete and correct, then that is the legal tax point date and the date when the client must be invoiced.

4. The client may be restrained from using the outcome of the work package that remains the property of the supplier until the client pays for the work package.

5. If the client cannot or will not pay the supplier, then the supplier has a legal right to gain possession of the materials provided where ownership has been retained.

6. In the case of a concrete slab, the supplier would have the legal right to remove their concrete slab, however it may be a legal battle to gain access to the site.

7. The supplier is wholly responsible for funding all sub-contractors costs and that is like the supplier paying for the clients project in advance.

8. The supplier must have adequate insurance against such unsecured losses and the cost of such insurance must be passed on to the client.

9. The client has the right to minimise their costs by paying the supplier in stages so the cost of loss insurance is minimised.

Work Package Management:

1. With the benefit of hindsight, work package management has been simplified and consolidated into project task diaries. NOTE: Use of the Asset DD Quote (B63) list and form has been replaced with normal work package tasks.

2. A work package is a unit of work with a price that is used:

(1) in a quotation as a priced work package.

(2) in a sign off sheet as a completed work package.

(3) in an invoice as a billed work package.

3. A work package may have a price calculated from diamond drilling, labour or supplies with the following parts:

(1) client net amount for labour that is subject to CIS deductions.

(2) client net amount for materials that is NOT subject to CIS deductions.

(3) supplier net cost of labour as subcontracted.

(4) supplier net cost of materials and supplies.

4. The calculation of VAT and CIS are dependent on project factors for the invoice that are not relevant to each work package. Main client discount and similar factors may impact the total price, but are not impacted at the work package level.

Invoice Management:

1. Based on both the client and the supplier (subcontractor) VAT and CIS registrations.

2. A client or subcontractor invoice may show:

(1) Net Labour (not shown when zero).

(2) Net Materials (not shown when zero).

(3) Net Total (mandated).

(4) VAT on net total (mandated with rate see below).

(5) Gross as Net Total plus VAT (mandated).

(6) CIS on Net Labour (optional see below).

(7) Paid as Gross minus CIS (optional).

3. VAT is applied when the supplier is VAT registered. VAT zero rate is applied when the client project is a new dwelling. VAT reduced 5% rate is applied when the client project is conversion to a dwelling. VAT standard 20% rate is applied when any other project. VAT amount is always shown when zero as a positive statement that no VAT has been billed.

4. CIS is deducted when the client is CIS registered and the supplier is CIS registered. Not all clients have the capacity to make a CIS deduction. CIS amount is not shown when zero. Paid amount is not shown when the same as the gross amount.

Document Control.

1. Document Title: Work Package Procedure.

2. Description: Work Package Procedure, policies and guidelines.

3. Keywords: Work Package Procedure, policies and guidelines.

4. Privacy: Shared with approved people for the benefit of humanity.

5. Edition: 1.1.

6. Issued: 20 Dec 2018.