Narrator: Risk management plans are not static documents to be prepared and left in a drawer. They are living documents that are a critical tool for the effective management of your project. They should be part of the agenda of project meetings and be revised and added to as new risks are identified. Meeting regularly to discuss risk management controls gives the project team an opportunity to reflect and evaluate the control strategies for effectiveness. Let's work through a line of the risk register and management plan using cost escalations as our example. Start by giving each risk an ID. This could be a number or code. For example, contractor risks C1, financial risks might be coded F1, health and safety risks might be coded HS1, environmental risks E1, and so on. Next, describe the risk. Be as descriptive as possible so that the risk is clearly identified. Rate the risks for likelihood. One, rare. A remote hazard is extremely rare. There is a less than 10% chance that it will happen. For example, a blizzard is unlikely to happen at your ECEC Service in Lismore. 2, unlikely. Unlikely risks hazards are those that happen about 10 to 40% of the time. For instance, you might determine financial escalations will have minimal disruption to your project because you have made adequate allowances in your financial plan. 3, moderate. A moderate risk hazard will happen between 41 and 60% of the time. For example, injuries to visitors could be possible if the site fencing and security is not adequate. 4, likely. These risk hazards will occur 61 to 90% of the time. You can be nearly certain it will manifest. For example, a flood will definitely happen at your ECEC Service in Lismore after 100-year rain events. 5, certain. These risks will occur more than 90% of the time. You can be certain that if you do not have a secured site prior to applying, or if your project does not align with objectives of the fund, then you will not be successful. For each risk, determine what the outcome might be if nothing were done to address the risk. This is a useful exercise as it lays out clearly the potential outcome of not engaging in effective risk management for everyone working on the project. It is a good way to keep those potential scenarios at front of mind. Working through our scenario, we can see that the cost escalations might have a cost impact that is not expected or delays importing materials will extend the timeline or impact on service operations.

Your risk controls and action plan will outline steps to respond to the risk if it occurs by addressing each hazard, reducing its likelihood, and reducing its impact. Depending on the severity of the hazard, you may wish to include notes about key team members, for example, project manager, PR or communications director, subject matter expert, and their responsibilities if the hazard occurs. Preventative measures. A response plan for media and stakeholders, for example, customers, vendors, clients, shareholders, board members. For each control, nominate who is primarily responsible for managing the risk. Then calculate the likelihood, consequences, and rating for the action that you are taking to manage the risk. The aim of this exercise is to reduce the risk rating to an acceptable level. When you have calculated a final rating for your controls, indicate whether this is acceptable. If the potential outcomes are not acceptable after controls have been applied, you will need to rethink how you manage this risk. In our example, the risk of escalation has been managed by having an adequate escalation allowance in the overall project budget. The preschool management committee have a role in this as they're effectively managing the project and are ultimately responsible for the deliverables. The project manager plays a key role in ensuring the project is delivered to specifications, on time, and within budget. The contractor has a role in estimating the cost of supplies and managing supply chain issues. After the controls have been implemented, the likelihood of the risk occurring remains likely as this is the current experience in construction. Having an appropriate allowance reduces the severity because you have planned for that risk to materialise and have the budget to address cost increases if they happen. The risk of the price escalation is still high because we cannot always predict what the market will do. However, we would accept the risk because we have adequate strategies in place to manage it. Other typical risks that exist and can crystallise are, development on the site is not permitted due to zoning and approval cannot be obtained or prepared DA documentation does not meet council requirements. The risk can be mitigated by engaging appropriately, adequately qualified building practitioners and legal counsel or other consultants to provide expert advice and reports. You should expect the project manager or other consultants that you have engaged to interrogate the local government development control plan and identify barriers or prohibitions on development. Does your service own the land and building from which you operate? Are you on a lease or right of use agreement with the owner of the land and buildings? Do you have their permission to undertake the work proposed? Do you have tenure over the site for at least 10 years? A professional qualified project manager should research all of these questions and proactively manage the relationship with the local government authority. In this risk, service approval might not be obtained for a number of reasons. Broadly, this might be because the planned project does not meet the requirements of the planning guidelines or the risks might be that the planned number of places cannot be achieved in the interior space planned. The risk is mitigated through the engagement of a licenced builder practitioner to prepare professional plans and unencumbered space calculations. The selection of licenced building practitioners who have the relevant experience of working on projects in the early childhood sector is critical, and you should research their background experience, gain referee reports, and if possible, physically inspect projects they have managed or completed.

An architect or builder whose only experience is in residential housing is unlikely to be sufficiently familiar with all the regulatory and design requirements for building an early childhood education and care service. Risk. The builder makes a progress claim that is in excess of the cost to complete the work to date. Unfortunately, this is something that happens often and is more likely to crystallise when times are tough. Often, builders have to pay for materials prior to delivery in order to progress the project. When selecting a builder for your project, you should investigate their ability to cashflow the purchase of materials and pay subcontractors on time for work completed. Sometimes builders are still paying for the previous job using the income from the current job, and while you might not know this for certain, it is an indication that the builder is in trouble. Mitigation. The best insurance is to engage a quantity surveyor to certify the invoice and confirm that the invoice reflects the value of the work actually completed. It may be that the builder has to pay for materials upfront prior to them being used in the project, but in this instance, you should make clear in your contract the extent of allowance for materials that require prepayment. Where this has been agreed, your quantity surveyor will likely want to see those materials on site and ready for use. Most tradies are subcontractors to the main building contractor. These days, most builders do not employ tradies directly preferring to minimise their wages cost and insurance risk. The main contractor will likely employ a site foreman and perhaps some labourers. Where cashflow becomes tight and subcontractors have not been paid, there is a real risk that they will down tools and go onto another job. This can cause serious risk to your project timeline. The risk can be mitigated by ensuring that your main building contractor provides evidence or certifies to your QS that the subcontractors have been paid for work completed.

It is imperative a title block is included on every architectural drawing. A title block is defined as a template for a drawing sheet, generally including a page border and information about the project, design firm or licence building practitioner name, address, and logo. Title blocks must contain a north point, providing orientation on plan drawings, a scale bar, project name and address, date, revision number, and must contain the name of the licenced building practitioner that prepared the set of documents. The name of the entity should be noted if it is being provided by an entity. A site survey is crucial in an architectural proposal to ensure site levels, boundaries and tree locations are determined prior to planning. This will ensure greater accuracy of design. It must be prepared by a certified surveyor. A site survey must show property boundaries, physical features, trees, spot levels using Australian height datum or AHD, contours, easements, external pits, storm water and power poles and cables. An existing site plan is required when modifications are being made to the existing building structures on site. Existing structures must be shown in this plan, including their function and date of construction if relevant. Demolition plans graphically communicate what parts of an existing building are being demolished or retained. The demolished areas should be clearly indicated in red as shown in the example with relevant labels, a legend must be provided as shown. The outline of the surrounding buildings and property boundaries are also useful for providing context.

A quality site plan is essential for providing an overall scope of the project depicting the site's relationship to context and its building mass on site. The building's relationship to any landscaping should also be visible on a site plan. Property boundaries and site information to be taken from the survey plans must be prepared by a certified surveyor. Street names must be labelled with building entry points identified. Fences and their heights must also be identified. Parking must be clearly marked on plan and total site area in square metres must be labelled. Floor plans are one of the most essential components of a drawing set and should clearly show the interior layout of the proposed building to scale. The context should include the site boundaries and any direct neighbouring structures. Room names are essential and color-coding these zones is an effective method to clearly mark the different functions of these as well as their area in square metres. Door swings are also required to be shown. The proposed main entry should be clearly captured on plan, and this should be designed with consideration of clauses C15 and C16 of the childcare planning guideline that outline the importance of an accessible entry that faces a street frontage is limited to one secure point and easily monitored through surveillance. Roof plans are required to show the roof profile of the proposed development indicating roof falls and the roofing material. Verandas or pergolas adjoining to the roof should also be shown on the roof plan. Clause 3.3 of the childcare planning guideline includes considerations for the roof design, which should contribute to the streetscape, skyline and can reduce and refine overall building bulk. Elevations are required in an architectural drawing set to display building facade details and articulation, the overall appearance of the building from the street and to adjoining buildings. The location of windows and doors must be present on elevations as well as their openings clearly indicated. Clause 4.4 of the childcare planning guideline suggests the importance of window locations when considering access to natural lighting whilst also maintaining privacy. Clause 3.2 addresses that local character should be considered when designing. This may influence facades, architectural form and roof design, which are seen on elevations. Materials and finishes must be noted on elevations.

A landscape plan is required in the architectural drawing set to support the outdoor area calculations. Clause 4.10 of the childcare planning guideline states that outdoor space should be designed to facilitate the development of cognitive and physical skills, provide opportunities for social interaction and provide an overall stimulating outdoor environment. On plan, clear colour coding with a legend and labels is an effective way to communicate different ground finishes, show landscaping, and any different playing zones in the plan. Trees must also be shown in the plan. Clause 4.12 of the childcare planning guidelines states that any outdoor space used by children must be enclosed by a fence that is of heightened design that children preschool age or under cannot go through, over or under it. The minimum height decide rear and boundary fence is 1.8 metres. For an outdoor internal fence, the minimum height is 1.2 metres high. These figures may vary depending on council regulations, so verifying this with your local planning controls is critical. Please note that if the site is co-located with another service such as a church or community centre, regulatory requirements for service approval must be met with a clearly delineated fence boundary around the childcare centre and its own entrance. The importance of shading over outdoor play areas is outlined in clause 4.11 of the childcare planning guideline. It is recommended that as a minimum, indicative shading structures should be shown on landscape drawings. The shade structures should be evenly distributed using natural shade where possible. The retention of existing trees is favourable to providing the natural shade. All shade structures should be shown on landscape plans or floor plans. Area calculations are based upon the square metres of unencumbered space and must be included in floor plans. Room labels that identify their function must be clearly shown. It is fundamental that the methodology of area calculation for unencumbered space is consistent as defined in the childcare planning guideline. Clause 4.1 of the guidelines states that every child being educated and cared for within the facility must have a minimum of 3.25 meter-squared per child of unencumbered indoor space. The shading in the example plan helps clearly identify spaces that are included and excluded in unencumbered space. Clause 4.1 of the childcare planning guideline defines unencumbered space as, spaces that are usable, secure, and unobstructed and available for children's use. This includes spaces that are indoor play spaces or activity rooms and are always available to children, are enclosed and secure and always permit suitable supervision. Unencumbered space can also be understood by eliminating what is not included. These are spaces such as passageways and circulation, toilet and hygiene facilities, including nappy changing rooms, cot rooms, storage rooms, kitchen and staff rooms, laundry facilities, and any other space deemed unsuitable for children. Covered outdoor learning areas are not permissible to increase unencumbered space. Verandas are sometimes suitable if they meet with the regulations outlined in the childcare guideline. Clause 4.2 of the childcare planning guideline outlines the laundry requirements of the childcare centre. It is recommended that there is an internal laundry or at least some access, or arrangements to a laundry where soiled clothing, nappies and linen can be dealt with. Where an external laundry service is used, storage and collection points for soiled items should be in an area with separate external access.

The type of laundry facilities must be appropriate to the age of children accommodated and does not count as unencumbered space included in clause 4.1 of the childcare guideline is storage area requirements. This states that storage areas, including joinery units are not to be included in the calculation of unencumbered indoor space. The storage requirements state that there must be a minimum of 0.3 cubic metres per child of external storage space and a minimum of 0.2 cubic metres per child of internal storage space. Clause 4.1 of the guideline outlines instances where verandas can be counted as indoor space. For veranda to be included as unencumbered indoor space, any opening must be able to be fully closed during inclement weather. It must have written approval by the Department of Education to be included as unencumbered indoor space, and the veranda can only be counted once in space calculations. Clause 4.9 of the guideline refers to instances where verandas may be included in outdoor space calculations. Verandas are eligible to be included when it is open at least 1/3 of its perimeter. It has a clear height of 2.1 metres and a wall height of less than 1.4 metres where a wall with an opening forms its perimeter, it must have adequate flooring and roofing and designed to provide shading and protection from the weather. Covered outdoor learning areas or COLAs are not suitable to increase unencumbered space as they're not suitable for all weathers. Clause 4.9 of the guideline discusses outdoor space requirements ensuring a minimum of 7 square metres of outdoor space is to be provided for every child being educated and cared for in the facility. Dense hedges or landscape planting areas do not count towards outdoor area calculations. The exclusions to the minimum of 7 square metre outdoor space also include any pathways or thoroughfares, car parking areas, storage sheds or other storage areas, laundry rooms, and other space that is not suitable for children. It is imperative that area calculations are done correctly. To do so, please avoid these common mistakes highlighted on the example of an area plan that is calculated incorrectly. Common mistakes are including door swings, corridors, joinery, and poorly supervised space in the total number of unencumbered space. Supervised space will be explained in detail in the following slides. When designing a childcare centre, the facilitation of supervision should be a key aspect to consider. Clause 4.7 of the guideline states that the rooms and facilities within a premises, including toilets, nappy change facilities, indoor and outdoor activity rooms and play spaces are to be designed to facilitate adequate supervision of children at all times. This space must be visible from all points and when designing childcare space, closed-in alcoves of poor supervision should be avoided. The importance of staff supervision of the outdoor space is also elaborated in clause 4.7. This can be done with glazing on both sides of activity rooms, maintaining visibility of the outdoor space from the inside as shown in the example image and minimising closed in spaces that create areas of poor surveillance. Clause 4.11 recommends dense shrubs to be planted around the perimeter of site so that they do not obstruct supervision. Clause 3.8 of the guidelines suggest some considerations for the parking arrangements on site. Safety and risk management of staff and children should be considered, and vehicle access from the street should be situated in a safe environment that does not disrupt traffic flows with a clear and direct pedestrian entry to site. For parking requirements, refer to your local development control plans or DCPs. Disabled parking spaces should be indicated on plan. The number of parking spaces specifically allocated to the childcare centre should also be identified on plan. Please note that if a site is co-located with another service such as a church or community centre, there must be parking specifically designated for the childcare centre, which should be within close proximity to the entrance of the centre to ensure child safety. Clause 3.1 of the guidelines specifies that local councils may identify areas of significant hazard in their planning instruments and policies and throughout the process, please refer to your local planning controls outlined in the DCP of your council area. Additionally, childcare facilities must be designed and built in accordance with the standards outlined in the National Construction Code or NCC. Depending on the proposals characteristics, cost and scale, some additional documents may be required to provide further information. These can include, but may not be limited to a bushfire report, biodiversity development assessment report, floor report, mine subsidence, acid sulphate soils, geotechnical report including contamination, acoustics, air quality, remediation action plan, waste management plan, essential service augmentation, and a pre-DA consultation with Council.

• Architectural plans and regulatory compliance
• Building Early Learning Places Program – Architectural Checklist (PDF 67.9 KB)

Narrator: In this slide, we have prepared a simple flowchart to guide you through the risk assessment and management process. Firstly, identify hazards, who or what may be harmed. Evaluate the risk arising from the hazard and determine the control measure required. Then evaluate the remaining risk after control measures have been put in place. Record the findings of the risk assessment and make a contingency plan for the residual risks. Importantly, review and revise your risk management plan regularly, as needed. A meaningful risk assessment should include identification of risks by category, physical security, data security, expense reduction, health and safety, product safety and quality, et cetera. Scoring of risks by expected frequency and severity of the impact. Historical data plays a huge role in the ability to score risks accurately. Proposed mitigation strategy. Begin by brainstorming the options. Guided by the severity and frequency score, you'll find it easier to determine where to allocate your risk reduction resources.

What is a risk matrix? A risk matrix helps to calculate risk across various outcomes to give you clear guidelines on whether the risk is acceptable or unacceptable. Let's take a look at the process. How a risk matrix works. In simple terms, risk assessment is defined as the probability of an event intersecting with its impact. The risk matrix then plots these variables in a colour coded chart to show overall risk for different situations. The matrix is aligned with the risk assessment that you must include in your application. First, determine the likelihood of the risk occurring. Likelihood is defined as certain, more than 90% chance of an event occurring over the life of the project. Likely, 61% to 90% chance of an event occurring over the life of the project. Moderate, 41% to 60% chance of an event occurring over the life of the project. Unlikely, 10% to 40% chance of an event occurring over life of the project. Rare, less than 10% chance of an event occurring over the life of the project. After determining the likelihood, then rate the risk for severity. Minimal. The consequences are minimal and may cause a near negligible or only minor damage. This hazard poses no real threat. Examples, no media coverage and/or no bodily harm to employees or customers. Moderate. The consequences are moderate and may cause a sizable amount of damage. This hazard cannot be overlooked. Examples, loss of $100,000, regional media coverage and/or minor bodily harm. High. The consequences are critical and may cause a great deal of damage. This hazard must be addressed quickly. Examples, loss of $1 million, national media coverage, major bodily harm and/or police involvement. Major. These consequences are catastrophic and may cause an unbearable amount of damage. This hazard is a top priority. Example, loss of $10 million, extreme bodily harm and/or police involvement. The intersection of these elements determines the risk rating. A risk rating of high or very high means these risks could have significant impact if they crystallise and effective controls are needed. You need to mitigate the risk. We can define risk mitigation as a process in which we take steps to reduce adverse effects.

There are five types of risk mitigation strategies that hold unique to business continuity and disaster recovery. When mitigating risk, it's important to develop a mitigation strategy that is based on the cost benefit analysis of possible mitigations and which closely relates to and matches your organization's profile. Accept risk strategy. With some risks the expenses involved in mitigating the risk is more than the cost of tolerating the risk. In this situation, the risks should be accepted and carefully monitored. Avoid risk strategy. In general, risks should be avoided that involve a high probability impact for both financial loss and damage. Transfer risk strategy. Risks that may have a low probability of taking place but would have a large financial impact should be mitigated by being shared or transferred, e.g. by purchasing insurance, forming a partnership, or outsourcing. Reduce risk strategy. The most common mitigation strategy is risk limitation, e.g. businesses take some type of action to address a perceived risk and regulate their exposure. Risk limitation usually employs some risk acceptance and some risk avoidance. Hedging risk strategy. Hedging assumes the additional risk that works in the opposite direction as the mitigated risk. While natural hedging organises the business in a way that internal risks offset each other, external hedging uses the instruments that create offsetting risks, e.g. by locking the price, secures us against the price fluctuations.

Narrator: Risk management plans are not static documents to be prepared and left in a drawer. They are living documents that are a critical tool for the effective management of your project. They should be part of the agenda of project meetings and be revised and added to as new risks are identified. Meeting regularly to discuss risk management controls gives the project team an opportunity to reflect and evaluate the control strategies for effectiveness. Let's work through a line of the risk register and management plan using cost escalations as our example. Start by giving each risk an ID. This could be a number or code. For example, contractor risks C1, financial risks might be coded F1, health and safety risks might be coded HS1, environmental risks E1, and so on. Next, describe the risk. Be as descriptive as possible so that the risk is clearly identified. Rate the risks for likelihood. One, rare. A remote hazard is extremely rare. There is a less than 10% chance that it will happen. For example, a blizzard is unlikely to happen at your ECEC Service in Lismore. 2, unlikely. Unlikely risks hazards are those that happen about 10 to 40% of the time. For instance, you might determine financial escalations will have minimal disruption to your project because you have made adequate allowances in your financial plan. 3, moderate. A moderate risk hazard will happen between 41 and 60% of the time. For example, injuries to visitors could be possible if the site fencing and security is not adequate. 4, likely. These risk hazards will occur 61 to 90% of the time. You can be nearly certain it will manifest. For example, a flood will definitely happen at your ECEC Service in Lismore after 100-year rain events. 5, certain. These risks will occur more than 90% of the time. You can be certain that if you do not have a secured site prior to applying, or if your project does not align with objectives of the fund, then you will not be successful. For each risk, determine what the outcome might be if nothing were done to address the risk. This is a useful exercise as it lays out clearly the potential outcome of not engaging in effective risk management for everyone working on the project. It is a good way to keep those potential scenarios at front of mind. Working through our scenario, we can see that the cost escalations might have a cost impact that is not expected or delays importing materials will extend the timeline or impact on service operations.

Your risk controls and action plan will outline steps to respond to the risk if it occurs by addressing each hazard, reducing its likelihood, and reducing its impact. Depending on the severity of the hazard, you may wish to include notes about key team members, for example, project manager, PR or communications director, subject matter expert, and their responsibilities if the hazard occurs. Preventative measures. A response plan for media and stakeholders, for example, customers, vendors, clients, shareholders, board members. For each control, nominate who is primarily responsible for managing the risk. Then calculate the likelihood, consequences, and rating for the action that you are taking to manage the risk. The aim of this exercise is to reduce the risk rating to an acceptable level. When you have calculated a final rating for your controls, indicate whether this is acceptable. If the potential outcomes are not acceptable after controls have been applied, you will need to rethink how you manage this risk. In our example, the risk of escalation has been managed by having an adequate escalation allowance in the overall project budget. The preschool management committee have a role in this as they're effectively managing the project and are ultimately responsible for the deliverables. The project manager plays a key role in ensuring the project is delivered to specifications, on time, and within budget. The contractor has a role in estimating the cost of supplies and managing supply chain issues. After the controls have been implemented, the likelihood of the risk occurring remains likely as this is the current experience in construction. Having an appropriate allowance reduces the severity because you have planned for that risk to materialise and have the budget to address cost increases if they happen. The risk of the price escalation is still high because we cannot always predict what the market will do. However, we would accept the risk because we have adequate strategies in place to manage it. Other typical risks that exist and can crystallise are, development on the site is not permitted due to zoning and approval cannot be obtained or prepared DA documentation does not meet council requirements. The risk can be mitigated by engaging appropriately, adequately qualified building practitioners and legal counsel or other consultants to provide expert advice and reports. You should expect the project manager or other consultants that you have engaged to interrogate the local government development control plan and identify barriers or prohibitions on development. Does your service own the land and building from which you operate? Are you on a lease or right of use agreement with the owner of the land and buildings? Do you have their permission to undertake the work proposed? Do you have tenure over the site for at least 10 years? A professional qualified project manager should research all of these questions and proactively manage the relationship with the local government authority. In this risk, service approval might not be obtained for a number of reasons. Broadly, this might be because the planned project does not meet the requirements of the planning guidelines or the risks might be that the planned number of places cannot be achieved in the interior space planned. The risk is mitigated through the engagement of a licenced builder practitioner to prepare professional plans and unencumbered space calculations. The selection of licenced building practitioners who have the relevant experience of working on projects in the early childhood sector is critical, and you should research their background experience, gain referee reports, and if possible, physically inspect projects they have managed or completed.

An architect or builder whose only experience is in residential housing is unlikely to be sufficiently familiar with all the regulatory and design requirements for building an early childhood education and care service. Risk. The builder makes a progress claim that is in excess of the cost to complete the work to date. Unfortunately, this is something that happens often and is more likely to crystallise when times are tough. Often, builders have to pay for materials prior to delivery in order to progress the project. When selecting a builder for your project, you should investigate their ability to cashflow the purchase of materials and pay subcontractors on time for work completed. Sometimes builders are still paying for the previous job using the income from the current job, and while you might not know this for certain, it is an indication that the builder is in trouble. Mitigation. The best insurance is to engage a quantity surveyor to certify the invoice and confirm that the invoice reflects the value of the work actually completed. It may be that the builder has to pay for materials upfront prior to them being used in the project, but in this instance, you should make clear in your contract the extent of allowance for materials that require prepayment. Where this has been agreed, your quantity surveyor will likely want to see those materials on site and ready for use. Most tradies are subcontractors to the main building contractor. These days, most builders do not employ tradies directly preferring to minimise their wages cost and insurance risk. The main contractor will likely employ a site foreman and perhaps some labourers. Where cashflow becomes tight and subcontractors have not been paid, there is a real risk that they will down tools and go onto another job. This can cause serious risk to your project timeline. The risk can be mitigated by ensuring that your main building contractor provides evidence or certifies to your QS that the subcontractors have been paid for work completed.

• Risk management and construction projects
• Building Early Learning Places Program – Risk Register Template (XLSX 41.4 KB)

Narrator: Cost plans, quotes and budgets. As you are working with your construction professionals, you will hear these terms. While each refers to a financial aspect of the project, each has a different focus and different inclusions. A cost plan is a document prepared by a quantity surveyor, and we'll talk more about quantity surveyors in the next slide. Quotes are prepared by your building contractors and trades. A budget is prepared by you, the approved provider, based on costings and quotes received, including all other project expenses and all project income. As we have said, a cost plan is prepared by a quantity surveyor. So, what is a quantity surveyor? A quantity surveyor is a construction specialist who is skilled in estimating and monitoring the costs of construction and maintenance of buildings and infrastructure. They're usually involved from the feasibility stage through to completion of a construction project. An efficient quantity surveyor will make sure that the project's costs remain within the stipulated budget across the life of the project. To find a qualified quantity surveyor refer to the Institute of Quantity Surveyors website. What is a cost plan? Cost plans are generally undertaken by an Australian Institute of Quantity Surveyors, accredited quantity surveyor, or quantity surveying firm. The cost plan includes all costs required to complete the project. The plan details the project budget for each stage and is used as a guide of estimated cost to complete the project. Cost planning is essential to ensure you stay close to budget during the development project.

A builder's quotation is also a measured set of quantities based on a set of documents at a point in time that outlines or schedules the cost of construction-only activities required to complete the project. For your application, be sure to gather quotes for all aspects of the project. The builder's quotation may be an estimate only, and also is unlikely to include all costs required to complete the project. A builder's quotation is not normally a fixed quote and will be subject to the finalising of all documents and project scope. A fixed price quote may be prepared when you have selected your preferred building contractor. It is the department's preference that you provide full quotes for fixed price contract and includes all details specific to your project with your application. Remember that while you are not required to present quotes based on the final scope of works, you should not enter into any contracts before getting a successful outcome for your application and executing the funding agreement with the department. What is the difference between a cost plan and a builder's quotation? A cost plan, by nature, sets the initial budget for the entire project, and generally includes all activities required to complete the project, including construction costs, design fees, contingencies, cost escalation, council, and statutory fees. In contrast, a builder's quotation will only include items relating to construction. Comparing the minimum structure of a cost plan to a quotation. Expect these elements in your cost plan. Executive summary, including key analytics. Things such as total gross floor area, or GFA, number of children, cost per metre square of GFA, cost per child of GFA, area per child of GFA. Outline of key risks, such as latent conditions, for example, hazardous materials, geotechnical ground conditions, bushfire requirements, et cetera. Cost escalation allowances. The cost increase of cost between the date of quotation and site commencement. Assumptions. Any notes made by the builder that may have a price impact on the submitted quotation. Exclusions. Any notes made by the builder that may have a price impact on the submitted quotation. Information used. List of drawings and/or documents used to produce the quotation.

Cost plan summary. Project costs as summarised in slide 14. Detail cost plan measurement, project costs. Detail summary of items that make up the trade costs and summary. Area schedule. Calculation of the gross floor area. In a quotation expect these elements. Executive summary, construction costs only. Assumptions. Any notes made by the builder that may have a price impact on the submitted quotation. Exclusions. Any notes made by the builder that may have a price impact on the submitted quotation. Information used. List of drawings and/or documents used to produce the quotation. It's necessary to have both. As previously stated, a builder's quotation will only include items relating to construction and may not include all costs required to complete the project. Whereas a cost plan, by nature, generally includes all activities required to complete the project, including construction costs, design fees, contingencies, cost escalation, council, and statutory fees. This fundamental difference may have an adverse effect on your application as the shortfall may place your submission at risk if you have not considered all costs at a realistic level in your budget. You must ensure you have quotes for all elements of your project. The size and complexity of the project will determine if an application will benefit from a quantity surveyor or quantity surveying firm undertaking a cost plan for your project. You can expect to pay from 3,000 to $5,000 for a cost plan prepared by a qualified quantity surveyor. In the case of minor alterations and additions, say up to $500,000, then it would be considered unfeasible to engage the services of a quantity surveyor. For these smaller projects, it's acceptable to rely on a detailed builder quotation, with the level of detail in the quote being key to accuracy and dependability.

The building contractor should provide you with a detailed breakdown price by category, including consultants, preliminary, substructure, superstructure, finishes, fittings, services, external services, contingency, and escalations. If the quote notes any exclusions, you must obtain additional quotes for each of these, if they apply to your project, or include a note saying that you are not costing them because they do not apply to your project. This is critical to the completeness of your project budget and provides reassurance to all parties that all costs involved in the project have been considered. Risks to avoid when considering a builder's quote. Check for the date or period of time that the quotation is valid for. For the purpose of your capital grant application, quotes must be provided within the last four months. Check for any exclusions, assumptions, clarifications. Check for contingency and check that escalation has been included. Make sure you fully understand the allowances made. Cost escalation is critical to discuss with your building professionals as they must understand the likely timing of the project, beginning and end. Check what documents the quote has been based on, such as scope of works. Note that any design additions not included in the quote and applications budget cannot be funded by the grant, so it is vital the quote is based on the final scope of works. Final plans, not a concept. Schedule of fixtures and fittings. Check that your builder is licenced with Services New South Wales via the website Builder's Licence Check and has no claims history. The risk review will provide insights and highlight gaps within the formulation of your project budget and is designed to give future pathways to avoid unnecessary funding shortfalls that may affect the completion of your project. Please ensure you also watch Managing Project Risk in this webinar series. There is also a resource accompanying this webinar, which includes the checklist shown here. Eligible applications receiving application support will be assisted to develop a risk management plan with a particular focus on these areas.

Narrator: As we have already stated, when you are developing your project budget, you must consider costs beyond the price your builder quotes. The cost of a building project is more than just the builder's construction cost. Some of these additional expenses may be included in the builder's quote, but should be confirmed. Subcontractor costs for electrical and plumbing, for example. Consultant fees, such as project manager, surveyor, architect, landscape architect designer, engineer, structural, civil and storm water, environmental sustainability, accessibility, if not included or only estimated by the builder, fire engineering, mechanical, heating, ventilation, air conditioning. Administrative costs, council DA application cost and developer levy, New South Wales long service leave levy, building permit, plumbing permit, electrical supply upgrade, legal fees, certification fees. Contingency sum. This is in addition to the builder's contingency included in their quote.

For Capital Works projects, it is highly recommended that you include contingency costs in your budget. Contingency costs are any unexpected expenses, inflation or project overruns. Approved funded providers are responsible for these costs in accordance with the funding agreement terms and conditions. Unforeseen costs might arise because of wet weather delays, for example, or what is known in construction language as latent conditions. Older buildings often contain asbestos that is not readily seen. It might be buried in landfill or hidden behind plasterboard walls or in insulating material around old plumbing pipes. Discovering asbestos as a latent condition will draw on the contingency as the cost of specialist removal is not known until the asbestos is found. Also, include fixed furniture and equipment. How will you fit out your building or extension? also need to be considered in your budget, such as Internet connectivity to the site. may be included in the builder's quote, but should be confirmed, for example, temporary fencing, temporary toilet, temporary silt fencing, site signage, removal of waste skip bins. In your application, you are required to complete a table, which includes the proposed project expenditure. It is critical to your application that you populate this table accurately, including site readiness and management, site clearing and waste, extension Capital Works, main build extension cost, plumbing, electrical, fit out, landscaping and roadworks, other Capital Works build costs, project management fees.

For projects with a total cost over $500,000 XGST, the project manager must be professional and have adequate credentials and experience delivering construction projects. For projects with a total cost under $500,000, a project manager is still required, but the credentials won't be required. However, it is still highly encouraged that you appoint a professional project manager in all cases, as this will ensure the project is delivered within time and budget and thus, avoid budget overruns. Project manager costs can be included in the grant request as long as they are on the budget table and a quote is provided for the services of the professional. Do not enter into any contracts before receiving an outcome on your application. That is, get a quote for your project manager, but do not sign a contract until you get confirmation that you were successful. Admin expenses, professional fees, engineer. Depending on the extent of works, professional fees and various professional reports will impact on total professional fees. Provide a list of consultant fees that support the amount included. Professional fees, architect. Other professional fees number one, other professional fees number 2. Contingency, depending on the level of documentation and the status of the drawings through the approval process, a minimum of 5% of the above cost is required. Other expenses. Total project expenses should be equal to the total project income, including the grant amount, provider contribution, and any other sources of funding. Your balance should be zero. If it's not, you need to go back and make corrections to reach a zero balance. Again, remember that the total expenditure is the total cost of the project and considers all expenses, not just the building works. All expenses must be supported by a quote. This graphic is for illustration purposes only. Your budget will have more line items than this one.

To recap, your project expenses must be equal to your project income. If your expenditure is more than your income, your project will fail before it even begins, and if your income is more than your expenditure, you will need to reduce the amount you are requesting. An important part of managing risk is budgeting for contingencies. It is recommended applicants include a contingency allowance within the project budget to allow for unforeseen increases in project expenditure during delivery of the capital works project that are outside the applicant's control. There are 2 forms of contingency that may be covered in the capital works project. Builder construction contingency. This refers to the sum set aside to cover any cost escalations and overruns related to the build, such as increased material costs and labour costs or associated costs with unforeseen construction delays. It is expected that construction contingency will be included within the builder's quote provided in support of an application. Provide a contingency. This is contingency funding set aside by the applicant or other risks associated with delivery of the capital works project outside of any construction or builder expenses. These costs may be incurred at any time of the project lifecycle, such as during the planning and design phase of the capital works project. Examples may include unforeseen increases, project management and/or statutory fees. Provider contingency does not include project scope changes and an applicant must ensure that its project is fully scoped and the scope is final as at the date the application is submitted. A reasonable allowance for contingency can be included in the project expenditure budget within the application for grant funding.

• Building Early Learning Places Program – Budget Review Checklist (PDF 36.7 KB)
• Building Early Learning Places Program – Financial Resources Expenses Checklist (PDF 150 KB)

• Addressing cultural safety in your capital works project.

• Access and inclusion and your capital works project

• Strategic workforce planning

• Safeguarding considerations in the physical environment of your capital works project