IDM Toolkit DMG 1 Overview V9!1!2010!10!18

Delivery Management Guidelines
Overview
Version control
Version
Date
9-1
2010-10-18
Status
Approved
Overview
The IDMS
Prov Infr
Strat
DP1: Portfolio Management

DP1-1 Infrastructure Planning
Develop/review U-AMP (including
prioritised MTEF works list)
DP1-2 Programme Management

Develop
/review Constr
Proc Strat
Develop/review C-AMP (incl

portfolio level Work Plans)
U-AMP
PF1.2
Authorise
Implementation
PF1.3
PF1.4
Monitor &
Control
Close Out
Manage Implementation
C-AMP
G1(a)
PF1.1
Develop
/review
IPMP
G1(b)
PC
1
PF2.1
G2
PF2.2
PF5
PF2.3
PF3
PF4
DP2: Project Management

DP2-1 Implementation Planning
Prepare
Packages
Define
Packages
PEP1
PC
2
Develop/Review IPIPs
(Prgr & Proj level)
PEP2
G3
DP2-2 Design
IPIP
G4
PC PC
3 4a
DP2-3 Works
Design
devlpmt
Detailed Compile
design MFC Info
PEP3
PEP4
G5
PC
5
Construct /
Deliver works
Handover
works
PEP5
G6(a)
PC
4b
G6(b)
PF1.4
PF2.1
PF5
Contracts
Close Out
Adminstv
Close Out
PEP6
G7
T1
PF1.3
DP2-4 Close Out
PEP7
G8
T2
PF2.2
PF2.3
PF3
PF4
DP3: Operations & Maintenance

DP3-1 Recognise &
accept assets
G8
PF1.3
DP3-2 Mobilisation
for Facilities Mgt
PF1.4
Delivery Management Guidelines: Overview
DP3-3 Operations
PF2.1
PF5
PF2.2
DP3-4 Maintenance
PF2.3
DP3-5 Demobilisation
of Facilities Mgt
PF3
PF4
Overview
Structure of the Infrastructure Delivery Management Toolkit (IDMT)
Management Companion
PG1:
Prov Infr
Strategy
PG3:
Perform
Mgt
Practice
guides
PG2:
Constr
Proc
Strat
Infrastructure Delivery Management System

(IDMS)
Overview
Table of Contents
1.
Foreword and acknowledgements .................................................................................................................6

1.1
Foreword ................................................................................................................................................6
1.2
Acknowledgements ................................................................................................................................7
2.
Purpose of this module ..................................................................................................................................8
3.
Background to the Toolkit ..............................................................................................................................8
4.
Purpose of the Toolkit and how it will help users...........................................................................................9
5.
Whats new in the 2010 Edition....................................................................................................................11
6.
Structure of the Toolkit .................................................................................................................................11
7.
The Infrastructure Delivery Management System .......................................................................................15
8.
7.1
Overview ..............................................................................................................................................15
7.2
Linking budgets to infrastructure delivery management ......................................................................15
7.3
The IDMS .............................................................................................................................................16
An introduction to some key concepts .........................................................................................................30

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

8.1.2 How Portfolios, Programmes and Projects align with levels of management and their performance
indicators ......................................................................................................................................................32
8.1.3 Packages ..........................................................................................................................................33
8.2
Gateway Process .................................................................................................................................35
8.2.1 Synopsis ...........................................................................................................................................36

8.2.2 Control Gates ...................................................................................................................................36
8.2.3 Infrastructure gates and stages .......................................................................................................36
8.3
Construction Procurement Strategy .....................................................................................................38
8.3.1 Delivery Management Strategy ........................................................................................................38

8.3.2 Contracting Strategy.........................................................................................................................39
8.3.3 Procurement arrangements .............................................................................................................40
8.3.4 Documenting a Procurement Strategy .............................................................................................41
8.4
Infrastructure estimating, budgeting and prioritisation .........................................................................41
8.4.1 Estimating and budgeting.................................................................................................................41

8.4.2 Prioritisation ......................................................................................................................................42
8.5
Alignment between the Infrastructure Planning and Budget Cycles: The Alignment Model ............42
8.6
Principles of cooperative governance and joint Programme Management.........................................43
8.6.1 Overview...........................................................................................................................................43
8.6.2 Introduction to Joint Programmes ....................................................................................................44
8.6.3 Implementation Protocol for Joint Programmes...............................................................................45
8.7
9.
Risk Management ................................................................................................................................45
Summary of key legislation applicable to infrastructure management ........................................................46

9.1
Public Finance Management Act of 1999 ............................................................................................46
9.2
Government Immovable Asset Management Act ................................................................................46
Overview
9.2.1 Overview...........................................................................................................................................46
9.2.2 The implications of GIAMA and the Toolkit ......................................................................................47
9.3
Division of Revenue Act .......................................................................................................................50
9.4
Legislation applicable to municipalities ................................................................................................51
9.4.1 Local Government: Municipal Finance Management Act of 2003 ...................................................51

9.4.2 Municipal Systems Act of 2000 ........................................................................................................51
10.
King III Public Sector Guide An introduction ........................................................................................52
10.1
Introduction...........................................................................................................................................52
10.2
The benefits of self-regulation..............................................................................................................52
10.3
Key principles of King III ......................................................................................................................52
10.4
Governance framework ........................................................................................................................53
10.5
Application of the Code ........................................................................................................................53
10.6
New requirements ................................................................................................................................53
11.
Disclaimer ................................................................................................................................................54
12.
Annexure 1: Glossary - Definitions ..........................................................................................................55
13.
Annexure 2: Glossary Abbreviations ....................................................................................................66
14.
Annexure 3: Definitions of RASCI responsibility matrix ..........................................................................70
Table of Figures and Tables:

Figure 1: Structure of the Infrastructure Delivery Management Toolkit (IDM Toolkit) ........................................13
Figure 2: Schematic view of the Delivery Management Guidelines ...................................................................14
Figure 3: Navigating through modules ................................................................................................................14
Figure 4: The IDMS .............................................................................................................................................18
Figure 5: The DMS from the previous Toolkit .....................................................................................................19
Figure 6: Comparison of the linear DMS from the previous Toolkit to the current IDMS .................................20
Figure 7: Process diagram conventions ..............................................................................................................20
Figure 8: Detailed Delivery Process diagrams of the IDMS ...............................................................................21
Figure 9: The 6 DP1 process flow diagrams .......................................................................................................27
Figure 10: DP2 Process overview .......................................................................................................................28
Figure 11: DP3 Process overview .......................................................................................................................29
Figure 12: Portfolio, Programme and Project Management and other work interactions (PMI) ......................30
Figure 13: Packages versus Portfolios, Programmes and Projects ...................................................................34
Figure 14: Trends in the potential to add value or costs .....................................................................................38
Figure 15: Deciding upon a delivery management strategy ...............................................................................39
Figure 16: Deciding on contracting strategies.....................................................................................................40
Figure 17: Deciding upon procurement arrangements .......................................................................................41
Figure 18: Alignment of the Infrastructure Delivery Cycle with the MTEF Budget Cycle ...................................43
Table 1: Comparison of structure of 2006 Toolkit versus 2010 Toolkit ..............................................................14
Table 2: Comparative overview of Project, Programme and Portfolio management .........................................31
Table 3: Alignment of Portfolios, Programmes and Projects with levels of management ..................................32
Table 4: Examples of how Packages can overlap with Programmes and Projects ...........................................34
Table 5: Infrastructure Gateway Process information.........................................................................................37
Table 6: Summary of key roles and responsibilities per GIAMA ........................................................................49
Table 7: Table of Terminology ............................................................................................................................55
Table 8: Glossary of Abbreviations .....................................................................................................................66
Table 9: RASCI Responsibility Matrix .................................................................................................................70
Overview
1.
Foreword and acknowledgements
1.1 Foreword
The Construction Industry Development Board in conjunction with National Treasury, Department of Public
Works and the Development Bank of Southern Africa are delighted to issue the third edition of the
Infrastructure Delivery Management Toolkit.
The publication of the third edition and its improvements comes at an important time in South Africas history
where enormous resources are being harnessed to accelerate the delivery of infrastructure as part of
improving service delivery. Our Government has also recognised the link between the investment in
infrastructure and lifting our global competitiveness and is thus proactively using the investment to create
sustainable jobs and raise skills levels. As a result, the need has never been greater for our public and
private sectors to ensure that delivery is as efficient and effective as possible to ensure that these resources
are maximised. The Toolkit is therefore a significant resource to raise the benchmark in this regard.
This third edition introduces significant updates and amendments to the previous edition. It caters for new
legislation, a modernised approach to procurement, greater emphasis on Portfolio Management, readiness for
local government applications and dedicated additional modules to provide an expanded body of knowledge
in Strategy, Construction Procurement and Performance Management. It also provides for an updated and
easy to use web based navigation tool for users to navigate through the delivery processes, practice guides
and their associated supporting documents.
This third edition has been compiled by a panel of authors, some of whom were intimately involved in previous
editions, as well as new authors so as to create the balance of introducing new thought leadership while
building on the solid foundation of previous editions. The development of the third edition has also been
through a robust peer review process over a number of months in order to test the content and acceptability.
Ronnie Khoza
Chief Executive Officer
Construction Industry Development Board
Overview
1.2 Acknowledgements
Sincere appreciation is acknowledged to the following organisations:
National Treasury
Public Works
Department of Health
Department of Education
Development Bank of Southern Africa.
Sincere appreciation is also expressed to the team who developed this edition:
Inba Thumbiran, Sponsor
Kabelo Ntiisa, Project Manager
Edward Singo, Administrative Support
Arthur De Swardt, Technical Editing
David Lievaart, Portfolio Management
Sonny Schmidt, Project Management
Johan Coetzee, Operations and Maintenance
Sanet Koster, Provincial Infrastructure Strategy
Dr Ron Watermeyer, Construction Procurement Strategy
Georg Hofmeyr, Performance Management
Overview
2.
Purpose of this module
The purpose of this module is to:

Provide a background to the Toolkit
Indicate the purpose of the Toolkit and how it will help the user
Highlight what is new in the Toolkit
Provide an overview of the structure of the Toolkit
Provide an overview of the Infrastructure Delivery Management System (IDMS)
Provide an introduction to key concepts, including:
o The differences between Portfolios, Programmes, Projects and Packages
o A Construction Procurement Strategy and the Gateway Process
o The Alignment Model
o Principles of cooperative governance and joint programme management
o Risk Management
Overview of the legislative environment, including the implications of GIAMA
An introduction to the King III Public Sector Guide and its implications for users
Provide the definitions of terms and abbreviations used throughout the Toolkit
Provide definitions of a RASCI responsibilities matrix.
3.
Background to the Toolkit
The Infrastructure Delivery Improvement Programme (IDIP)

In 2001 the National Treasury commissioned a review of provincial service delivery systems with the view to
enhance infrastructure delivery. The review identified various deficiencies that impacted negatively on the
effective and efficient delivery of infrastructure in provincial departments. The review recommended, amongst
others, that a framework be developed to guide and structure the management of infrastructure delivery. It
also recommended that support be provided to provincial departments to develop their capacity to manage
infrastructure delivery. The IDIP was born out of these recommendations and was established in partnership
between the National Treasury (NT), Construction Industry Development Board (CIDB), the Development
Bank of Southern Africa (DBSA) and the National Department of Public Works (NDPW).
A Programme Management Unit (PMU) was established in National Treasury and a programme manager was
appointed to manage the IDIP. The IDIP was piloted in nine provincial departments of Education, two
departments of Health and two departments of Transport in 2004. Phase 2 of the IDIP was implemented in all
the provincial departments of Health, Education, and Public Works coordinated by the Provincial Treasuries.
Edition 1 of the Toolkit - 2004
The IDIP immediately set out to develop a number of improvement systems, including a model of best
practice infrastructure delivery, namely the Delivery Management System (DMS). This model and its
associated guidelines and supporting documents were consolidated as the first edition of the Toolkit and
launched in 2004 under a pilot phase. The Toolkit is regarded as a vehicle to implement the IDIP in provinces.
Technical Assistants were appointed in the selected departments to support rolling out the Toolkit to improve
delivery in Provinces. The Toolkit was designed to address the need to provide a practical guide for delivery
management processes.
Edition 2 of the Toolkit - 2006
One of the lessons learnt from the pilot was that there was limited understanding by departments of the
principles embodied in Portfolio and Programme Management. Most departments were relatively familiar with
Project Management practices of single projects, but lost efficiency in integrating resources under portfolios
and programmes of coordinated projects.
Overview
As a result, the Toolkit was updated in 2006 where, amongst others, some improved elements of Portfolio
Management were embedded, and enhanced Programme Management principles included into the DMS for
both client and implementing departments. The 2006 version was also published on the CIDBs web site.
Edition 3 of the Toolkit 2010 (current)
The current edition of the Toolkit is a significant update to the 2006 edition. It caters for new legislation, a
modernised approach to procurement, readiness for local government applications, greater emphasis on
Portfolio Management and dedicated additional modules to provide an expanded body of knowledge. Refer to
the paragraphs below for more details on what is new in the 2010 Toolkit. The name of the Toolkit was also
consolidated as the Infrastructure Delivery Management Toolkit (IDM Toolkit), or the Toolkit for sake of
expediency.
4.
Purpose of the Toolkit and how it will help users
The Toolkit provides a documented body of knowledge and set of processes that represent generally
recognised best practices in the delivery management of infrastructure. It is focussed on the delivery and life
cycle management of South African public sector infrastructure. The target users for this Toolkit include both
technical and non-technical managers. Typically these would include Head of Departments (HODs), Chief
Directors (CDs), Directors, Deputy Directors (DD), Chief Financial Officers (CFOs), Portfolio Managers,
Programme Managers and Project Managers, or the equivalent. The Toolkit provides guidance for User
Departments such as Education, Health, Finance, etc, as well as implementers of delivery and asset
Custodians such as Public Works or Implementing Agents.
The Constitution requires that Government effectively delivers services to its citizens. The Toolkit has
therefore been designed as a valuable resource to provide a National common knowledge base and set of
practices to assist in delivering these services in a manner that is effective, efficient and consistent across
provinces and departments. By adhering to the practices embodied in the Toolkit, users will be greatly
assisted in delivering on this mandate.
The Toolkit provides how to guidelines for infrastructure management which are intended to:
Provide guidelines on the actions and processes necessary to deliver, operate and maintain
infrastructure
Capacitate delivery managers
Facilitate a uniform approach to infrastructure delivery and procurement management
Facilitate the meeting of statutory requirements.
The Toolkit, when adhered to, will also assist departments in complying with applicable legislation. While the
Toolkit is in itself not legislation, parts of it are mandatory or legislated through, amongst others, the Division
of Revenue Act (DORA), the Construction Industry Development Board Act and the Government Immovable
Asset Management Act (GIAMA). It provides practical guidelines on how to comply with such legislation. It is
therefore clear that by following the Toolkit, users will be greatly assisted in complying with their mandates.
The Toolkit contains elements that are:
Mandatory: in so far as containing Guidelines and Templates that are required for compliance to
legislation e.g. DORA, GIAMA and CIDB Act
Recommended: with reference to generally accepted local and international best practice
Optional: with reference to the inclusion of proven practical templates, tools and techniques.
Benefits to Accounting Officers:
Understand the alignment of national and sector strategies with the provincial infrastructure strategies
as well as the departmental strategies
Understand delivery and procurement management processes
Overview
Understand delivery and procurement management within the framework of governments supply
chain management policy
Establish a construction procurement system that is compliant with the regulatory and legislative
framework
Institute control measures at appropriate points within the delivery and procurement management
processes
Account for the full life cycle costs of infrastructure, all the way through to asset disposal
Understand their governance obligations.
Benefits to delivery managers:
Understand delivery and procurement management processes and to identify the specific actions
associated with such processes
Identify appropriate delivery options
Design their programmes using simple templates and guides
Align the allocated budgets to their programmes
Identify and prioritise projects
Procure supplies, services and engineering and construction works, as necessary
Manage the planning and design of projects
Manage procurement and project delivery processes
Oversee the implementation of projects and perform contract administration functions
Manage project risks better
Manage performance better.
National benefits:
Delivery managers will be better empowered with good practice guidelines within a simple structured
system based upon well defined processes that are necessary to achieve effective infrastructure
delivery
A level of uniformity will be achieved with regard to how different organs of state implement
infrastructure projects
A level of certainty will be achieved within the construction industry of how programmes and projects
are rolled out by the public sector and knowledge of what is the next step in the process, by whom,
when, etc
The Toolkit will provide a structured environment for inexperienced delivery managers to thrive and
gain understanding well beyond their years by the use of templates formulated from years of
experience, i.e. they will receive distilled good practice
Senior management will have a tool to hold delivery managers accountable for performance
Reporting of progress, performance and impact will be uniformly documented
The quality and value for money of service delivery will improve.
Benefits beyond the public sector construction industry:
Although the Toolkit focuses on public sector delivery, many of the core processes, particularly those
associated with infrastructure planning, delivery and operations and maintenance and many of the
procurement functions are equally applicable in the private sector. It must be stressed that the construction
industry is a broad conglomeration of industries and sectors which add value in the creation, maintenance and
disposal of fixed assets within the built environment. Construction delivery therefore can include services,
manufacture, fabrication, engineering and construction works and the management thereof. This Toolkit can
therefore be of value to sectors outside of the confines of the construction industry as well.
10
Overview
5.
Whats new in the 2010 Edition
The 2010 version of the Toolkit includes alignment with new acts and best practice trends and an expansion
to include new thought leadership that has arisen since the previous version. These updates are summarised
as follows:
Modernised approach to procurement
Strategic construction procurement
Gateway approach
Institutionalise alternative delivery models
Introduce the concept of Packages
Alignment to the Government Immovable Asset Management Act (GIAMA) Act number 19 of 2007
An added emphasis on Portfolio Management
New modules to widen the body of knowledge:
o Provincial Infrastructure Strategy
o Construction Procurement Strategy
o Performance Management
Readiness for Local Government.
It is recognised that certain of the infrastructure delivery management processes in Local Government are
different to those in the Provincial and National sectors. For example programme management plans in
Provinces (IPMP, IPIP, U-AMP, C-AMP) are substantially different to those in the Local Government
environment such as the SDBIP, WSDP and the IDP. Consequently the Toolkit cannot attempt to cover all of
the infrastructure delivery processes in detail over the full spectrum of audiences. It would become too
generic and thus lose much of its practical value to the key Provincial users. However, following the updates
in the 2010 version it now allows many of the principles contained in the Toolkit to be generically applied
within the Local Government sector.
Some of the principles that can be applied in Local Government include:
Portfolio, Programme and Project Management
Strategy
Modernised approach to construction procurement
Performance Management.
The 2010 updates therefore provide the basis for a potential dedicated Local Government edition to be
developed in due course, i.e. it provides a degree of readiness for Local Government to apply the good
practices.
6.
Structure of the Toolkit
The Toolkit is structured into three Components as follows:

Management Companion:
A summary version of the subject matter content of the Toolkit, serving as a quick reference guide
It is printed in pocket book size (A5), also downloadable in electronic format off the Infrastructure
Delivery Management System (IDMS)
Provides senior managers with sufficient understanding so as to hold middle managers
accountable
Provides middle managers with a quick reference summary.
Content of the Management Companion:
o Overview
o Delivery Process (DP) Guides:
11
Overview
DP1 Portfolio Management

DP2 Project Management
DP3 Operations and Maintenance
Practice Guides (PG):
PG 1 Provincial Infrastructure Strategy
PG2 Construction Procurement Strategy
PG3 Performance Management.
Delivery Management Guidelines:

This is the main subject matter knowledge content of the Toolkit
Provides guidelines in using the IDMS
Provides context and subject matter knowledge as support to the IDMS
Printable on A4 format off the CIDBs website
Content of the Delivery Management Guidelines:
o Overview
o Delivery Process (DP) Guides:
DP1 Portfolio Management
DP2 Project Management
DP3 Operations and Maintenance
o Practice Guides (PG):
PG1 Provincial Infrastructure Strategy
PG2 Construction Procurement Strategy
PG3 Performance Management.
Infrastructure Delivery Management System (IDMS):
Encompasses all of the content
A web based tool for users to navigate through the management processes via roadmaps
The structure mirrors the processes of delivery
It provides the how to on process steps in day to day duties to manage delivery
It also includes, examples, templates and additional supporting documentation, knowledge
repository and downloadable forms of the Management Companion and Delivery Management
Guidelines
Available at www.cidb.org.za or in CD format.
It is important for users to understand that the Toolkit consists of all three of the components together, and
that only one or other individual component is not the Toolkit.
Since the Delivery Processes are key for the user to manage delivery, the IDMS and the Delivery
Management Guidelines itself are structured around these processes.
The structure of the Toolkit and its components is illustrated in the following diagram.
12
Overview
PG1:
Prov Infr
Strategy
PG3:
Perform
Mgt
Practice
guides
PG2:
Constr
Proc
Strat

(IDMS)
Figure 1: Structure of the Infrastructure Delivery Management Toolkit (IDM Toolkit)
It is assumed that users will diligently apply their minds in using the IDMS and Delivery Management
Guidelines to align their delivery management processes with those of the Toolkit. Users will find that in so
doing they will benefit from the distilled knowledge to assist them to more successfully fulfil their mandates as
well as conforming to required legislation.
The Delivery Management Guidelines and the three Delivery Processes that it supports have been
schematically depicted as a type of logo used consistently throughout the Toolkit as per Figure 2 below.
13
Overview
PG1:
Prov Infr
Strategy
PG3:
Perform
Mgt
Practice
guides
PG2:
Constr
Proc
Strat
Figure 2: Schematic view of the Delivery Management Guidelines
In addition, where it is appropriate, the colours for each of the Delivery Processes are used consistently
through the Toolkit in order to create a practical navigation reference, as follows:
DP3: Operations and maintenance
Green
Red
Blue
Furthermore, the above logo is used to orientate the user as to the current module that is being used by
highlighting only that module as per Figure 3 below.
Figure 3: Navigating through modules
The table below provides a comparison of the structure of the previous edition of the Toolkit versus the current
edition of the Toolkit:
Table 1: Comparison of structure of 2006 Toolkit versus 2010 Toolkit
Previous edition of Toolkit (2006)
Current edition of Toolkit (2010)
Infrastructure Delivery Guidelines
14
Overview
7.
Previous edition of Toolkit (2006)
Current edition of Toolkit (2010)
DMS (excel spreadsheets)
IDMS (web based)
The Infrastructure Delivery Management System
The Infrastructure Delivery Management System (IDMS) is the model that forms the backbone of the
management of the delivery of infrastructure.
7.1 Overview
Governments are required to deliver services to people that they serve. Organs of state are the instruments of
government and the means by which services are rendered to the public. These organs of state are provided
with the necessary mandate to provide a range of services and the means to do so through the annual
budgetary processes.
Public services are delivered in line with the policies, departmental programmes and objectives set out in the
annual budget. Each year the annual budget is finalised for the current financial year, whilst the Medium Term
Expenditure Framework (MTEF) is established for the next three years, on a continual rolling basis. Mediumterm budgeting is a continuous process that culminates each year in an annual budget and a MTEF that the
Minister of Finance tables in Parliament.
The National Treasury annually produces a set of complementary publications providing comprehensive
information on governments revenue raising and spending plans for the current and medium-term budgets.
These are published annually, and are available on the National Treasurys website, www.treasury.gov.za.
The budgetary process for municipalities is structured along similar lines.
The IDMS is therefore structured in such a way as to embed the Governments expenditure cycles into the
planning, delivery and operation and maintenance of infrastructure. These expenditure cycles are embedded
into the Toolkits three key Delivery Processes, namely:
Portfolio Management, including Programme Management
Project Management
Operations and Maintenance.
7.2 Linking budgets to infrastructure delivery management

All three levels of government are tasked with the appointment of an Accounting Officer to implement the
departmental programmes that are identified within their Budget Vote. The Accounting Officer is required to
put in place the required procedures, processes and controls that will allow the departmental infrastructure
programmes to be implemented, monitored and ensure that the objectives are achieved.
The obligations placed on National and Provincial Accounting Officers are through the Public Finance
Management Act number 1 of 1999 (PFMA), which furthermore requires the Accounting Officer to submit
certain information and reports to National Treasury on a regular basis. The intention behind the PFMA
reporting requirements is to ensure that the programmes and projects identified for each organ of state are
being implemented and their respective objectives are being achieved. This creates a link between the funds
for which the Accounting Officer is responsible and the proper delivery of infrastructure to which those funds
have been allocated.
The IDMS helps Accounting Officers to manage the delivery process in a systematic fashion according to the
PFMAs requirements and thus to create this vital link and therefore to be able to give proper account for the
15
Overview
funding under his/her control. The PFMA is applicable to both national and provincial departments, and state
owned enterprises.
The Municipal Finance Management Act (MFMA) extends the similar principles to municipalities.
Consequently the IDMS can be just as equally used by Local Government Accounting Officers to similarly
manage their infrastructure delivery in as an accountable fashion as their national or provincial counterparts.
7.3 The IDMS

The IDMS is a model depicted in the Toolkit that describes the processes that make up public sector delivery
and procurement management as it applies to the delivery of public infrastructure. It is illustrated in Figure 4
below. The model reflects the diverse needs of the construction industry, in responding to the demands
placed on it for the delivery of infrastructure and immovable public assets for South Africa. It outlines the core
processes associated for delivery and procurement management where the project delivery processes relate
to the provision of infrastructure works.
The model presents the distinctly different processes and sub-processes that are present in delivery
management, namely:
Portfolio Management - comprises the iterative processes of identifying objectives, planning and
intelligently grouping projects into infrastructure programmes and monitoring and controlling the roll
out of these programmes or projects
Project Management - comprises the undertaking of implementing the projects identified in the
planning processes
Operations and Maintenance - where assets are operated, maintained and ultimately disposed of.
The IDMS is structured by building up layers and integrates delivery elements as depicted by the following
icons:
Main delivery processes Level 1
Sub delivery processes Levels 2 and 3

Delivery Gates
G1(a)
Procurement milestones
PC
1
Performance Management processes
PF1.3
Triggers an action to trigger a forward pass action to a future process.
T1
It is to be emphasised that infrastructure delivery management does not necessarily have a single beginning
or end. Rather it is a cyclical process of continually assessing needs, planning for delivery, delivering
infrastructure, maintaining and operating infrastructure and disposing of assets that have reached their useful
life cycle, all the while continually planning for new needs and implementing new infrastructure that arise
during the delivery of current infrastructure.
The diagrams that follow provide a schematic view of the IDMS, as well as detailed process diagrams of the
delivery processes.
The following abbreviations are used to describe control points in the delivery processes:
Delivery Gates:
G1a Approved U-AMP (incl MTEF list)
G1b Approved C-AMP (incl Works list)
G2 Accepted Construction Procurement Strategy
16
Overview
G3 Accepted PEP1 v1 (Strategic Brief)

G4 Accepted PEP v2 (Concept Report)
G5 Accepted PEP v3 (Design Development Report)
G6a Accepted PEP v4 (Production Information)
G6b - Accepted Manufacture, Fabrication & Construction (MFC) information
G7 Accepted PEP v5 - works in accordance with requirements
G8 Works taken over by User, complete with record information.
Procurement milestones:
PC1 Procure PSP for Programme Management, incl strategic procurement services
PC2 Management Contractor / Framework Contract
PC3 Design and Construct
PC4a Design by Employer (Consultant procurement)
PC4b Design by Employer (Contractor procurement)
PC5 Develop and Construct.
Performance Management Processes:
PF1.1 Develop Indicators from Strategic Plan objectives
PF1.2 - Develop Indicators from Programme Implementation Plans and Budgets
PF1.3 Develop Indicators from Project / Operational & Maintenance Plans
PF1.4 Link Indicators and RACI to individual Performance Agreements
PF2.1 Monitor & Evaluate Inputs, Activities and Outputs against plan
PF2.2 Monitor & Evaluate Outcomes against plan
PF2.3 Monitor & Evaluate Impacts against plan
PF3 Publish Performance Information
PF4 Review / Appraise individual performance
PF5 Take management action.
Triggers:
T1 Trigger To O&M and other Departments on requirements for other services (staff, books
(Education), pharmaceuticals (Health), etc). on requirements for works that will be delivered
T2 Trigger To other Departments on impending handover.
PEP is a Project Execution Plan
17
Overview
The IDMS
Prov Infr
Strat

Develop/review U-AMP (including
prioritised MTEF works list)
DP1-2 Programme Management

Develop
/review Constr
Proc Strat
Develop/review C-AMP (incl

portfolio level Work Plans)
U-AMP
PF1.2
Authorise
Implementation
PF1.3
PF1.4
Monitor &
Control
Close Out
Manage Implementation
C-AMP
G1(a)
PF1.1
Develop
/review
IPMP
G1(b)
PC
1
PF2.1
G2
PF2.2
PF5
PF2.3
PF3
PF4

DP2-1 Implementation Planning
Prepare
Packages
Define
Packages
PEP1
PC
2
Develop/Review IPIPs
(Prgr & Proj level)
PEP2
G3
DP2-2 Design
IPIP
G4
PC PC
3 4a
DP2-3 Works
Design
devlpmt
Detailed Compile
design MFC Info
PEP3
PEP4
G5
PC
5
Construct /
Deliver works
Handover
works
PEP5
G6(a)
PC
4b
G6(b)
PF1.4
PF2.1
PF5
Contracts
Close Out
PEP6
G7
T1
PF1.3
DP2-4 Close Out

Adminstv
Close Out
PEP7
G8
T2
PF2.2
PF2.3
PF3
PF4
DP3: Operations & Maintenance

DP3-1 Recognise &
accept assets
G8
PF1.3
DP3-2 Mobilisation
for Facilities Mgt
PF1.4
DP3-3 Operations
PF2.1
PF5
PF2.2
DP3-4 Maintenance
PF2.3
DP3-5 Demobilisation
of Facilities Mgt
PF3
PF4
Figure 4: The IDMS

18
Overview
Users will note the following from the IDMS:

The Provincial Infrastructure Strategy is the key input into the delivery cycle
The delivery process is not strictly linear in nature. Rather it is an interactive cycle between the
processes
The IDMS integrates key delivery components, namely:
o Delivery Processes
o Gates
o Procurement
o Performance Management
o Triggers
The Procurement Strategy is determined early in the delivery process
A number of procurement regimes are catered for, not only the traditional design by employer
The triggers early in the delivery process to operational departments are crucial in order to give
early warning of when infrastructure will be completed so that these departments can plan
sufficiently early for the timeous and simultaneous delivery of other operational requirements such
as staff, school books, pharmaceuticals, etc.
Comparison to the DMS from the previous edition of the Toolkit:
Management Demand
Align
1. Infrastructure
Planning
2. Programme
Client Programme
Management
3. Programme
Implementation
5.
Procurement
Acquisition Management
Departmental
Strategic
Planning
Implementing Department
Client Department Management
Departmental
Mandate and
Policies
Supply Chain Management Functions
The IDMS is equivalent to the DMS of the previous version Toolkit. For ease of reference of previous
users, the DMS from the previous Toolkit is as per
Figure 5 below:
4. Project
Delivery
Figure 5: The DMS from the previous Toolkit
19
Overview
This diagram was subsequently amended to the linear DMS which showed the delivery processes in a
horizontal fashion. The new Toolkit IDMS is very similar in its overall delivery processes as can be seen in
Figure 6 below comparing the linear DMS of the previous Toolkit to the current IDMS:
2006 edition DMS (linear version)
2010 edition IDMS

PG1: Prov Infrastructure
Strategy
DP2: Project
Management
DP3:
Ops &
Maint
PG2: Construction Procurement Strategy

PG3: Performance Management
Figure 6: Comparison of the linear DMS from the previous Toolkit to the current IDMS
The following nine figures depict the summary and three Delivery Processes in a process diagram form.
This provides users with the necessary details to show practical information on the how to elements of
managing infrastructure delivery.
The process diagrams follow the following basic conventions:
Controls
(typically legislation or
standards )
Inputs
Process Name
Outputs
Figure 7: Process diagram conventions
20
Overview
Figure 8: Detailed Delivery Process diagrams of the IDMS

21
Overview
22
Overview
23
Overview
24
Overview
25
Overview
26
Overview
Figure 9: The 6 DP1 process flow diagrams

27
Overview
Figure 10: DP2 Process overview

28
Overview
Figure 11: DP3 Process overview
29
Overview
8.
An introduction to some key concepts
The following paragraphs provide an introduction to some selected concepts that are key for users to
understand while using the Toolkit.
8.1 Portfolios, Programmes, Projects and Packages

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

Portfolio:
2
A collection of projects, programmes or other work that are grouped together to
Project Management Institute A guide to the PMBoK 2008
30
Overview
facilitate effective management of that work to meet strategic business objectives.
Programme:
Project:
A group of related projects managed in a coordinated way to obtain benefits and

control not available from managing them individually.
A temporary endeavour undertaken to create a unique product, service or result
The Other Work is equally as important as the projects themselves, since this is the body of day to day
operational activities required to ensure that the functions required to enable project delivery are in place
and efficient. It includes operational activities not scoped specifically under a project or programme but
that are required to manage the portfolio.
The intelligent grouping of projects under carefully selected programmes and portfolios provide for
substantial improvement in efficiencies by being able to, amongst others, consolidate and share
resources, shared governance and control processes, focussed benefits management and stakeholder
management.
Example:
Let us assume a Provincial Department of Education were to embark on a classroom
upgrading exercise in say 200 individual schools. If each of the 200 schools were to be
managed as individual projects, it would require that 200 separate designs would have
to be drawn up, 200 professional service providers engaged to do the design, 200
individual contractors employed to build the schools and 200 maintenance contractors
employed to maintain the schools. The load on the Supply Chain Management of the
Department would on its own render the roll out inordinately too long to make it practical
when it is considered that the procurement of even one contractor on its own can take
several months. Rather, by grouping the projects under a Programme, efficiencies can
be made by sharing resources such as standard designs, one Professional Service
Provider for a Region, one contractor to cover a group of schools in a District, etc.
It can be deduced from the above that managing a large group of projects in a Programme or Portfolio
requires an additional set of management skills from just managing individual projects, hence the
emphasis on Portfolio and Programme management in this edition of the Toolkit.
Table 2 below provides some detail on what are the additional issues that need to be considered in
managing Programmes and Portfolios as defined by the Project Management Institute.
Table 2: Comparative overview of Project, Programme and Portfolio management
Project
Element
Scope
Change
Planning
Projects
Programmes
Portfolios
Projects have defined

objectives. Scope is
progressively elaborated
throughout the project life
cycle.
Project managers expect
change and implement
processes to keep change
managed and controlled.
Programmes have a larger

scope and provide more
significant benefits.
Portfolios have a
business scope that
changes with the
strategic goals of the
organisation.
Portfolio managers
continually monitor
changes in the broad
environment.
Project managers
progressively elaborate
high-level information into
detailed plans throughout
The Programme Manager

must expect change from
both inside and outside the
programme and be prepared
to manage it.
Programme Managers
develop the overall
programme plan and create
high-level plans to guide
Portfolio Managers
create and maintain
necessary processes
and communication
31
Overview
Project
Element
Projects
Programmes
Portfolios
the project life cycle.
detailed planning at the

component level.
Programme Managers
manage the programme staff
and the project managers.
They provide vision and
overall leadership.
Success is measured by the
degree to which the
programme satisfies the
needs and benefits for which
it was undertaken.
Programme Managers
monitor the progress of
programme components to
ensure the overall goals,
schedules, budget and
benefits of the programme
will be met.
relative to the aggregate

portfolio.
Portfolio managers may
manage or coordinate
portfolio management
staff.
Management
Project managers manage

the project team to meet the
project objectives.
Success
Success is measured by
product and project quality,
timelines, budget
compliance and degree of
customer satisfaction.
Project managers monitor
and control the work of
producing the products,
services, or results that the
project was undertaken to
produce.
Monitoring
Success is measured in
terms of aggregate
performance of portfolio
components.
Portfolio Managers
monitor aggregate
performance and value
indicators.
8.1.2 How Portfolios, Programmes and Projects align with levels of

management and their performance indicators
Infrastructure Portfolios, Programmes and Projects have an alignment with levels of organisational
management and their associated performance indicators as summarised in Table 3 below.
Table 3: Alignment of Portfolios, Programmes and Projects with levels of management
General
management
level
Infrastructure Typical
management Provincial
level
Government
Dep. Level
Typical
National
Government
Dep. level
Strategic
manager
Portfolio
Minister /
Impact
Director General
Executive
manager
MEC /
Sometimes a
function within
the Office of the
Premier
Head Of
Department
Performance
Indicator
Levels
Where
indicators
captured
are
Departmental
Strategy
Deputy Director
General
Senior manager
Programme
Chief Director
Chief Director
Outcome
IPMP, IP, IPIP,

C-AMP, U-AMP
Manager
Project
Director
Director
Output
PEP
The following notes provide some explanatory details on the above table:
Portfolio Management: Infrastructure portfolios should be aligned with the strategic objectives of
the organisation. Consequently the typical manager that would be responsible for Portfolio
management would report to the strategic management level. As a result their performance
indicators would be informed by and contained in the strategic plans of the organisation. In most
public infrastructure organisations, such as Provinces, the strategic and executive levels are rolled
32
Overview
into one level. In some Provinces however, a function can exist within the Office of the Premier to
provide strategic infrastructure management. The Portfolio performance indicators are of an
impact nature. Typically these would be aimed at measuring the impact that infrastructure has in
achieving strategic goals. Examples could include how the roll out of basic sanitation services
impact infant mortality rates, labour intensive construction programmes impact poverty levels,
classroom roll out impacts literacy rates, etc. These impact level indicators are normally
developed in the Departmental Strategy, but can also be captured in the Annual Performance
Plans of the relevant executive level manager. These would include rolled up versions of lower
level indicators, i.e. outcome and output indicators. It is worth noting that no statutory
Infrastructure Portfolio Management Plan has been legislated as yet within the South African
public sector context. Consequently it is crucial that executive level managers either create some
form of Infrastructure Portfolio Management Plan or capture these impact level indicators in
Departmental Strategic Plans, Annual Performance Plans or an appropriate alternative
Programme Management: The infrastructure programmes are scoped and managed within the
greater infrastructure portfolio. Consequently the typical programme manager would report to the
portfolio level manager. The programme management plans include the Infrastructure Plan (IP),
Infrastructure Programme Management Plan (IPMP), Infrastructure Programme Implementation
Plan (IPIP), etc. Performance indicators at the programme level are of an outcome nature.
Typical examples would include reducing the classroom backlog by 50% over three years in a
Province, serving 90% of the population with at least primary health care facilities within a 20km
radius of place of residence within four years in a Province, etc. These performance indicators are
usually captured within Annual Performance Plans, and would include rolled up versions of the
output level (project level) indicators.
Project Management: The infrastructure projects are scoped and managed within the greater
programme. Consequently the typical project manager would report to the portfolio level manager
as far as the project performance is concerned. This may or may not be an organisational line
function reporting line. The project management plans include the Project Execution Plan (PEP).
Performance indicators at the project level are of an output nature. A typical example would
include the progress of a classroom construction project within the approved time, cost and quality
parameters.
8.1.3 Packages
Part of this concept is to introduce the concept of a Package to enhance efficiencies in the procurement
process. It was partly motivated by the fact that the traditional approach has often been to procure a
single contractor for a single project under a single contract.
While this seems logical at a single project level, it does not exploit the potential efficiencies of grouping a
number of works items together, i.e. a Package, under a single contract. By grouping these works items
together a number of efficiencies will be obtained such as simplified Supply Chain Management, grouped
controls, grouped supervision and grouped reporting.
Definition of a Package:
Works which have been grouped together for delivery under a single
contract or a package order.
However, to implement a Package solution requires a strategic approach to procurement since the
Programme Managers need to apply their minds early in the planning process to ensure that the most
appropriate grouping of projects is properly selected early enough in the process.
For example, if the grouping of projects into a single procurement Package is only decided after the design
is completed, it may be too late to select groups of works items if the design cannot allow for such. It is
preferable that even before the design commences that a Procurement Strategy is agreed that will inform
the design. If the procurement is strategically planned early in the planning process, the designs
themselves will be influenced to group works items into logical chunks or Packages.
33
Overview
However, common sense still needs to be exercised in ensuring that while a number of works items might
be grouped under one Package for reasons of procurement efficiencies, this grouping of works items
would normally form the scope of a new and larger project. Consequently the normal project management
activities to manage this larger project scope of work will still take place. This will include ensuring that
there is now only one Project Manager accountable for the larger scope of work and one set of project
management plans to manage the project.
It can therefore be seen that there is great synergy between the concept of grouping projects under a
single procurement regime or Package, while at the same continuing to apply the good practices of
project, programme and portfolio Management. In some cases the Package could mirror the grouping of
projects that form a programme, or in other cases they could intersect with one another as illustrated by
Figure 13 below.
Portfolio of projects
5
2
Governance
anomaly
Packages
Programmes
Figure 13: Packages versus Portfolios, Programmes and Projects
From the above it can be seen that Packages could intersect with Projects and Programmes in the
following combinations:
Table 4: Examples of how Packages can overlap with Programmes and Projects
Number
1
Description of overlap
Package overlaps
completely with the
Programme.
Package overlaps with a
portion of a Programme.
Example
One contractor to implement all works in the Programme. Example:
Construct all four schools in the schools construction Programme.
One contractor to only implement works in a portion of the
Programme. Example: One contractor to construct two schools that
are geographically close to one another.
34
Overview
Number
3
Description of overlap
Package overlaps
across a Programme
and individual Project.
Package overlaps with a

single Project.
Package overlaps with

only certain portions of a
group of single Projects.
Example
One contractor to implement works across two programmes and
one independent project. Example: One contractor to construct five
schools that are geographically close to one another, two of which
are under one Programme, another two under another Programme,
and one school independent of a Programme. In this case the
Package will become a Programme, and will have multiple
programme reporting lines. This is not recommended for general
use, and should only be used in very special cases where there is
sound reasoning for such. One example where this could be used
is on constructing carports in a larger schools programme, where
the carports have minimal scheduling conflicts with the larger
schools programme. A fencing contract could be another example.
One contractor to implement works on only one independent
Project. Note that this will stay as a single project with normal
project management principles applying.
One contractor to implement only portions of works of a number
Projects. Example: One contractor employed under one contract to
implement only the fencing elements of number schools. This can
also create a governance anomaly as per number 3 above since
each of the project managers of the individual projects lose some
contractual control over the contractor employed under the
Package. Again, in these cases only portions of work should be
ring fenced under a package that will have minimal effect on the
individual other projects scheduling, such as for example fencing
projects
From the above table it is clear that selecting how and what work is grouped under a Package is very
important. If it is not carefully grouped anomalies can be introduced in governance that can create
confusion between contracts and leave the project or programme managers in a situation where they are
hamstrung in controlling the work. Consequently the following are some guidelines in selecting Packages
versus projects or programmes.
Guidelines in selecting work under Packages versus projects or programmes:
Ideally, work that would ordinarily have been implemented via a number of separate projects but
that is now re-grouped under a Package for contractual expediency, should be ring fenced as a
newly scoped larger project or programme under a single contract or works order and Project or
Programme Manager
If works that are grouped under a Package are part of a larger project or programme, the works
under the Package should ideally be ring fenced out of the scope of the larger project or
programme and be contracted under a separate contract or works order with a separate Project or
Programme Manager
If the intention is to group works under a Package that also falls under a larger project or
programme, then these works should be chosen in such a way that the Project or Programme
Manager is not faced with a dilemma where he loses control over that portion of works or that any
delays or overruns under the Package do not materially affect the remainder of the works under
his control. Consequently works that fall under the Package should be isolated out of critical path
activities, such as for example fencing and carports as in Table 4 above.
8.2 Gateway Process

The CIDB has introduced the concept of the Gateway Process to further improve efficiencies in the
delivery management of infrastructure. Please refer to the CIDBs Practice Note 22 of 2010 for more
35
Overview
details. See www.cidb.org.za. Some of these principles have been embedded into the IDMS.
following paragraphs provide some background understanding of the Gateway principles.
The
8.2.1 Synopsis
The CIDB Infrastructure Gateway Process provides a number of control points (gates) in the infrastructure
life cycle where a decision is required before proceeding from one stage to another. Such decisions need
to be based on information that is provided during the infrastructure life cycle. If the Gateway Process is
correctly followed it will provide assurance that a project involving the design, construction, refurbishment,
alteration, rehabilitation or maintenance remains within agreed mandates and that it aligns with the
purpose for which it was conceived and can thus progress successfully from one stage to the next.
8.2.2 Control Gates

A gate is a control point in the infrastructure life cycle where a decision is required before proceeding from
one stage to another. Such decisions need to be based on information that is provided that is pertinent to
the project. If correctly done, a gate may provide assurance that a project:
Remains within agreed mandates
Aligns with the purpose for which it was conceived
Can progress successfully from one stage to the next.
A gateway process designed around a set of gates that are strategically located within an infrastructure
asset management cycle has the potential to:
Enable projects to be more accurately scoped and costed at an earlier stage in the asset life cycle
Reduce time and cost overruns
Improve alignment of service delivery with available funds
Improve procurement discipline
Manage risks more effectively
Reinforce responsibility and accountability for decisions
Enable projects to be better aligned with policies and objectives.
Such control gates also enable project risk to be contained within the confines of an organ of states risk
appetite. The information upon which a decision is based at a control gate and the decisions made can be
audited to ensure that projects remain within an organisations mandate, are justifiable and realise value
for money. The opportunity to audit the life cycle of projects also:
Improves transparency which, in turn, reduces the opportunity for mismanagement and corruption
in planning and implementation
Enables the procurement strategy adopted for a portfolio, programme or project to be reviewed
and improved upon when delivering similar projects in the future
Enables post implementation reviews to take place to examine whether planned benefits are
achieved and risks are being effectively managed
Removes perverse incentives relating to the promotion of one project or solution over another.
8.2.3 Infrastructure gates and stages

Infrastructure gateways should permit the undertaking of groups of activities in parallel or series and result
at the end of each stage in:
A predetermined deliverable (a tangible, verifiable work product)
A structured decision point which enables decisions to be made to determine if the project should
continue to its next stage with or without any adjustments between what was planned and what is
to be delivered.
36
Overview
The CIDB Infrastructure Gateway Process is based on the information flow as illustrated in Table 5 below:
Table 5: Infrastructure Gateway Process information
Gate
No. Information provided for a decision to be made
as a gate
1
Approved U-AMP and C-AMP
2
Accepted Procurement Strategy
3
Acceptance of Strategic Brief
4
Acceptance of Concept Report
5
Acceptance of Design Development Report
6a
Acceptance of Production Information
6b
Acceptance of Manufacture, Fabrication and
Construction information
7
Acceptance of Works in accordance with
requirements
8
Handover of Works to User, complete with
record information
Stage
No. Infrastructure life cycle phase
1
2
3
4
5
6
Infrastructure planning
Procurement planning
Package planning
Package definition
Design development
Design documentation
Works
Hand over
No procurement stages, apart from procurement planning at a portfolio level, are included in the
infrastructure management cycle. Procurement gates governing procurement processes can occur
whenever resources are procured.
Professional service providers are generally required only after gate 4 to progress the works to gate 9. The
specific services that are required at each stage vary depending upon the contracting strategy that is
adopted. For example, a full service is required in stage 5 and 6 where the design by employer contracting
strategy is adopted, whereas in a design and construct contracting strategy, the professional service
provider will confirm that the design is proceeding in accordance with the concept report and the design
and documentation prepared by the contractor.
Gateway processes can be used to review projects. However, the application of the Gateway Process
focuses on the putting in place of processes and procedures to ensure that the outputs of each stage in
the delivery and maintenance of infrastructure are achieved and accepted before proceeding to the next
stage. This enables works to be managed and controlled in a logical, methodical and auditable manner.
The potential to add value or costs can be summarised as per Figure 14 below.
By applying proper controls early on in the delivery process, managers have the ability to add value by
ensuring negative project issues are identified and properly dealt with up front, before the costs are
incurred. The earlier on in the process managers have the ability to influence the process through control
gates, the more value can be added. Conversely, issues that are allowed to slip through control gates will
potentially have an increasing effect on the cost add-ons.
37
Overview
Figure 14: Trends in the potential to add value or costs
8.3 Construction Procurement Strategy

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

The first stage in developing a procurement strategy is to decide on the delivery management strategy
The development of a delivery management strategy can, however, only be embarked upon for a portfolio
or programme of projects after the deliverable at the end of the infrastructure planning stage has been
produced i.e. a medium term expenditure infrastructure plan which links prioritised needs to a forecasted
budget.
Figure 15 below graphically depicts how to develop a delivery management strategy.
38
Overview
Gather and analyse information

Step
Description
Conduct
analysis
Conduct
an
organisational analysis
Conduct
a market
analysis
Output
a
spend
Spatially located work items in the

infrastructure plan grouped into categories
of spend with common attributes.
Descriptions of client organisational
characteristics
Descriptions of market characteristics
Formulate procurement objectives

Step
1
2
Description
Formulate
primary
procurement objectives
Formulate
secondary
Output
Identified
primary
procurement
objectives
Documented and prioritised secondary
Make strategic delivery management decisions

Description
Decide on how needs are to be met i.e.
through:
Proposition 1: a PPP
Proposition 2: an IA
Proposition 3: another organ of states FA
Proposition 4: leasing of property
Proposition 5: outsourcing
Proposition 6: own resources
Output
A
delivery
management plan
which indicates how
each categories of
spend or portions
thereof are to be
delivered.
Decide on delivery mode (project or programme)

Description
Decide on programme of
projects or series of
independent projects
Output
Categories of spend or portions thereof
delivered as a programme of projects or
a series of independent projects
Follow National Treasury PPP

procedures if needs are met
through a PPP
Enter
into
service
level
agreement with an implementing
agent if needs are to be met
through an implementing agent
Approach organ of state to make
use of framework agreement if
needs are to be met through that
organ of states framework
agreement
Procure a lease if needs are to be
met through the leasing of
property
What about
guidance for
outsourcing and own resources?
Package works
Step
1
2
Description
Identify opportunities for
framework agreements
Identify packages
Output
Categories of spend or portions thereof to be implemented through own
framework agreements.
A package plan for construction and maintenance projects or a combination
thereof which states the mode of delivery for and identifies each package
Figure 15: Deciding upon a delivery management strategy
8.3.2 Contracting Strategy

The second stage in developing a procurement strategy is to decide on the contracting strategy for each
package and the professional services required to implement the contracting strategy associated
therewith. The organisational and market analyses and primary and secondary procurement objectives
provide the basis for the making of decisions regarding the choice of contracting options. Figure 16 below
illustrates the process to decide on the contracting strategies.
39
Overview
Maintenance service options

Pricing strategy:
Priced contract with a priced list
Cost reimbursable
Target cost
Construction and
maintenance service options
Construction, maintenance and operation service

options
Pricing strategies
As for maintenance and
construction services
Forms of contract:
FIDIC Conditions of Contract for Design, Build and
Operate Projects
NEC3 Engineering and Construction Contract plus
NEC3 Term Service Contracts
Forms of contract:
NEC3 Engineering and
Construction Contract with or
without NEC3 Term Service
Contracts
Forms of contract:
CIDB General conditions of
contract
NEC3 Term Service Contract
NEC3 Short Term Service
Contract
Construction service options
Allocate risks for packages

Step
Description
Output
Decide service
requirements and / or
contracting strategy
Service requirements and risk

allocations for each package
i.e. allocation of
responsibilities, pricing
strategy and standard form of
contract
Decide on pricing strategy
Decide on form of contract
Establish requirements for outsourced

professional services
Description
Output
Identify services areas that are

required
Identified professional services

which need to be procured
Package professional service contracts

Step
Description
Output
Decide on
contracting strategy
Requirements for outsourced professional

services categorized as single discipline or
multidisciplinary
Decide on the type

of contract
Requirements for outsourced professional

services linked to a specific package or a
programme or a number of undefined
packages or programmes
Contracting strategy
Design by employer
Develop and construct
Design and construct
Construction management
Management contractor
Pricing strategies
Activity based / lump sum
Bill of quantities
Cost reimbursable
Target Cost
Forms of contract
NEC3 Engineering and Construction Contract
NEC3 Engineering and Construction Short Contract.
FIDIC Conditions of Contract for Construction and
Building and Engineering Works Designed by the
Employer
FIDIC Conditions of Contract for Plant and Design
FIDIC Conditions of contract for EPC Turnkey
Projects
FIDIC Short Form of Contract General Conditions
(Short Form)
JBCC Principal Building Agreement
JBCC Minor Works Agreement
GCC 2010
Contracting strategy
Discipline specific or multidisciplinary service
Type of contract
Package specific, programme related or linked to a
framework agreement
Allocate risks for professional service contracts

Step
Description
Output
Decide on pricing
strategy
Identified pricing strategy for

required professional services
Decide on form of
contract
Identified standard form of contract

for a professional service contract
Pricing strategy
Priced contract, fee based on percentage of cost of
construction, cost reimbursable or target cost contract
Form of contract
NEC Professional service contract or CIDB
Standard Professional Service Contract
Figure 16: Deciding on contracting strategies
8.3.3 Procurement arrangements

The final stage in developing a procurement strategy is to decide on the procurement arrangements.
Figure 17 below describes how to decide upon the most appropriate procurement arrangements.
40
Overview
Figure 17: Deciding upon procurement arrangements
8.3.4 Documenting a Procurement Strategy

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

8.4.1 Estimating and budgeting
In order to implement an infrastructure plan and its related organisational support plan, resources will have
to be made available to the responsible unit within an organisation. All these resources require financial
resources at particular times in the planning and implementation cycle of infrastructure assets. These
estimated financial projections are used to generate a long term estimate of the required cash flow for
managing an organisations infrastructure portfolio. The costs associated with the life cycle stages of
infrastructure fall into two categories, namely:
41
Overview
Capital costs
Operating costs.
Cost estimating for the long term infrastructure plan is conducted at high level. The costs for infrastructure
work are related to the life cycle of each asset while the cost estimates for the organisational support work
are based on the capacity required to manage this work effectively. The accuracy of estimates for work,
initially included in the long term infrastructure asset plan, improves as the plan is reviewed each year and
as scheduled work is included in the MTEF period (requiring a pre-feasibility study). This increasing
accuracy of estimates is based on progressive elaboration of the scope of work.
This process is repeated for all assets in an organisations portfolio and is reviewed at least annually.
Ideally the long term budget is updated as more accurate information becomes available (from completed
work, new norms and standards, etc).
As the MTEF cycle advances each year, work schedules need to be adjusted to match the available
budget. The prioritisation process determines which work is implemented in an MTEF period and which
work is delayed into the future.
8.4.2 Prioritisation
Prioritisation is necessary when the demand for infrastructure work exceeds financial and/or organisational
resources to allow delivery of projects according to the desired or initially planned timeframes.
Prioritisation in the infrastructure environment is an interactive process broadly described as follows:
Initial schedule of work and first budget: The initial scheduling shown in the infrastructure plan
is based on technical and organisational considerations and constraints as well as relative needs
based on known strategic objectives contained in the organisations Strategic Plan.
Second scheduling of work: Once the outcome of the budgeting process and progress on
current work is known (typically in the 3rd financial quarter of the financial year), it may be
necessary to adjust the scheduling of work to match the available funds both in respect of
infrastructure expenditure (capital and current) as well as organisational and support expenditure.
8.5 Alignment between the Infrastructure Planning and

Budget Cycles: The Alignment Model
In order to improve planning and efficiency in the delivery of infrastructure, the Alignment Model was
developed which called for the amendment of the timeframes of the Infrastructure Delivery Cycle to
include appropriate due processes in the cycle as well as to create the critical linkages that are necessary
between the Infrastructure Delivery Cycle and the MTEF Budget Cycle. The Alignment Model shows the
process and indicative time frames of the infrastructure cycle and how it links with the Budget Cycle.
Figure 18 below shows the alignment of the Infrastructure Delivery Cycle with the MTEF Budget Cycle.
Please refer to Delivery Process 1 (Portfolio Management) in the Delivery Management Guidelines for
more details on the model.
42
Overview
Figure 18: Alignment of the Infrastructure Delivery Cycle with the MTEF Budget Cycle
8.6 Principles of cooperative

Programme Management
governance
and
joint
8.6.1 Overview
The Constitution of South Africa (Act 108 of 1996) assumes devolution of powers to cascading levels of
responsibility down and across the governance chain. Chapter 3 of the Constitution makes specific
provision for such cooperation. In other words, one of the foundations of our Constitution assumes that
individual Departments will proactively cooperate with other Departments to deliver an integrated service,
even if some of their duties are not strictly their own responsibility. This requires a mature degree of
cooperation so as to avoid complex and tedious legislation to force cooperation.
This cooperation has not always been as successful as is desired, partly due to the complexity of
integration. Consequently it has necessitated additional legislation to provide mandatory actions and
guidelines.
Chief of these is the Intergovernmental Relations Framework Act, 2005 (Act 13 of 2005 the IGR Act). It
establishes a framework for the national, provincial and local governments to promote and facilitate
intergovernmental relations, and to provide for mechanisms and procedures to facilitate the settlement of
intergovernmental disputes.
Chapter 3 of the IGR Act provides for organs of state to enter into an implementation protocol as an
Agreement where the implementation of a policy, the exercise of a statutory power, the performance of a
statutory function or the provision of a service depends on the participation of organs of state in different
spheres of government.
43
Overview
A Service Delivery Agreement (SDA), based on an implementation protocol as proposed in the IGR Act
will be presented as mechanism to document the roles and responsibilities of each role player in the
management of such a joint programme.
Programme Management will be defined and the separation of programme management functions, roles
and responsibilities between User Department, Custodian and Implementing Agent in respect of
immovable asset project delivery will be discussed.
8.6.2 Introduction to Joint Programmes

The concept of managing immovable asset delivery as a joint programme is founded on the GIAMA
Clause 14 (1) (b) which prescribes that: The accounting officer of a user or custodian in its capacity as a
user must, for all the immovable assets that it uses or intends to use - jointly conduct the immovable
asset strategic planning process with the relevant custodian.
GIAMA Clause 4 (4) further prescribes that: A custodian and user must settle any dispute between them
in the manner contemplated in the IGR Act This GIAMA reference to the IGR Act creates the opportunity
to introduce the principles of inter-governmental and inter-departmental relations - as contained in the
Framework - into these management guidelines for immovable asset delivery.
The IGR Act establishes a framework for the national, provincial and local governments to promote and
facilitate intergovernmental relations, and to provide for mechanisms and procedures to facilitate the
settlement of intergovernmental disputes. The Framework further extends the principles of participation
and co-ordination between organs of state in the different spheres of government, to also include
integration, participation and co-ordination of joint programmes within a particular sphere of government.
In November 2005, the Cabinet approved the Framework for Managing Joint Programmes in the Public
Service (the Framework). The Framework defines joint programmes as Those programmes that
transcend the conventional organisational boundaries in planning, budgeting and implementation resulting
in a number of departments/agencies/ministries responsible for one aspect of the programme, although
none is responsible for it in its entirety.
The Framework describes joint programmes as having the following characteristics:
Programmes that require a cross-departmental involvement in the planning, budgeting and
delivery of services
A number of departments are often responsible for a specific aspect of the programme, but none is
responsible for it in its entirety
Programmes that require integration rather than mere co-ordination.
Given the definition and characteristics as described above, it can be concluded that the management of
immovable assets - as described in GIAMA falls within the ambit of a joint programme as defined in the
Framework.
This conclusion is further strengthened by the proposed institutional arrangements for Joint Programmes
which are clearly aligned with the IDIP prescripts as documented in the Toolkit. The Guidelines for the
Management of Joint Programmes make provision for the establishment of:
Joint scoping of programmes
The appointment of a Joint Programme Manager responsible for overseeing the planning and
implementation of the Joint Programme
The establishment of a Joint Programme Steering Committee consisting of representatives from all
departments involved in the Joint Programme, representatives from key stakeholders and the coopting of external consultants as necessary
A Joint Panel of Executive Authorities consisting of the executive authorities of departments
involved in the implementation of the relevant joint programmes.
44
Overview
8.6.3 Implementation Protocol for Joint Programmes

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

All projects are exposed to risks that could potentially negatively, or positively, impact on delivering the
required outcomes of the project. Therefore it is good practice in the management of any Portfolio,
Programme or Project to ensure that a concerted Risk Management Plan is developed and implemented.
The paragraphs that follow provide the mere basic outlines of Risk Management. Each of the modules
contains implications of risk to the aspects detailed in that particular module. Consequently the
paragraphs below provide a basic context to the details contained in the other modules. The definitions
that follow are per PMIs Guide to the PMBOK.
Definition of Project Risk: An uncertain event or condition that, if it occurs, has a positive or negative effect
on a projects objectives.
Severity of Risk: Is determined by multiplying the Probability of the risk occurring by the Impact on
achieving the projects objectives, i.e.
Risk Severity = Probability X Impact.
The objective of Project Risk Management is therefore to increase the probability and impact of positive
events, and decrease the probability and impact of negative events.
The following are good practice processes to follow in Risk Management:
Plan for Risk Management how to conduct risk management activities
Identify risks determining which risks may affect the project
Perform risk qualitative analysis prioritising risks for further analysis or action by assessing and
combining their probability of occurrence and impact
Quantitative risk analysis Numerically analysing the effect of identified risks on overall project
objectives
Monitor and control risks Implementing risk response plans, tracking identified risks, monitoring
residual risks, identifying new risks and evaluating risk process effectiveness throughout the
project
45
Overview
9.
Summary of key legislation applicable to

infrastructure management
It is noted that users are faced with a daunting range of legislative requirements in planning for
infrastructure delivery. The following paragraphs provide a summary for ease of reference of some of the
key pieces of legislation. There are a number of other pieces of legislation that have relevance, including
legislation that relates to specific sectors such as water, transport, finance, etc. However for the sake of
expediency only key elements of some of the applicable Acts are summarised below.
9.1 Public Finance Management Act of 1999

Chapter 5 (Strategic planning) of the Regulations issued in terms of the Public Finance Management Act
(PFMA) of 1999 requires the accounting officer of an institution to prepare a Strategic Plan consistent with
the MTEF, and a Medium Term Strategic Plan in line with their Annual Performance Plans:
The regulations require strategic plans to, inter alia:
Cover at least three years and be consistent with the institutions published medium term
expenditure estimates
Include specific constitutional and other legislative, functional and policy mandates that indicate
the output deliverables for which the institution is responsible
Include policy developments and legislative changes that influence programme plans over the
MTEF framework
Include the measurable objectives, expected outcomes, programme outputs, indicators
(measures) and targets of the institutions programmes
Include details of proposed acquisitions of fixed or movable capital assets, planned capital
investments and rehabilitation and maintenance of physical assets
Include details of proposed acquisitions of financial assets or capital transfers and plans for the
management of financial assets and liabilities
Include multi-year projections of income and projected receipts from the sale of assets
Include details of the Service Delivery Improvement Programme.
9.2 Government Immovable Asset Management Act

9.2.1 Overview
The Government Immovable Asset Management Act 19 of 2007 (GIAMA) provides for:
A uniform framework for the management of an immoveable asset that is held by a national or
provincial department to ensure the co-ordination of the use of an immoveable asset with the
service delivery objectives of a national or provincial department
The issuing of guidelines and minimum standards for immoveable asset management by a
national or provincial department.
The principal objective of this Act is for a custodian to provide immovable assets to users to meet their
service delivery objectives.
The guidelines issued in terms of the GIAMA define an immoveable asset as any immovable asset
acquired or owned by government. Immovable assets are further described as land and any immovable
improvement on that land, and which have enduring value and consist of assets of residential, nonresidential or infrastructure nature and include machinery and equipment that have been installed and are
an integral part of immovable assets and include all assets both state-owned and leased. The application
of the definition means that the types of assets listed below, will be construed to be immovable assets for
the purposes of this guideline.
46
Overview
Land including but not limited to developed, undeveloped, vacant, cultivated, non-useable or
inaccessible land
Buildings including but not limited to office accommodation, prison buildings, police stations,
courts, schools, hospitals, and houses
Rights in land including servitudes, right to use, leases
Infrastructure including but not limited to roads, harbours, railway lines, airports, transmission
lines, dams and pipe lines
Machinery, plant and equipment including but not limited to pump stations, machinery and
irrigation systems for as far as such machinery, plant and equipment are construed to be
immovable in terms of the common law applicable to property
Conservation, cultural and heritage assets including but not limited to monuments, historical sites,
heritage sites, conservation areas and sites of scientific significance.
The guidelines also define the following terms:
Custodian - a national or provincial department designated in terms of GIAMA that must plan,
acquire, manage and dispose immovable assets
User - a national or provincial department that uses or intends to use an immovable asset in
support of its service delivery objectives (and includes a custodian for an immovable asset that it
uses or intends to use in support of its own service delivery objectives).
GIAMA distinguishes between the roles of users and custodians of immovable assets. Users utilise
immovable assets to give best effect to their functions and therefore must produce a User Immovable
Asset Management Plan (U-AMP) to ensure:
Accountable, fair and transparent management of immovable assets
Effective, efficient and economic use of immovable assets
Reduced overall cost of service delivery
Reduced demand for immovable assets.
Custodians are responsible for all activities that are associated with common law ownership and therefore
must produce a Custodian Immovable Asset Management Plan (C-AMP) to ensure that immovable assets
are:
Efficiently and effectively managed throughout their lifecycle
Provided in a transparent and cost effective (best value) manner to meet the service delivery
requirements of users
Maintained in the state in which it would provide the most effective service
Assessed in relation to their performance, suitability, condition, as well as the effect thereof on
service delivery
Disposed of, if the assessments so indicate, at best value for money to the state, in respect of
financial and/or social returns.
9.2.2 The implications of GIAMA and the Toolkit

The earlier versions of the Toolkit were originally focussed on improving infrastructure delivery
management during the infrastructure delivery capital project life cycle, especially new infrastructure and
the renovation and refurbishment of existing infrastructure components.
GIAMA, in line with the requirements of the Public Finance Management Act (PFMA, 1999) and the
Construction Industry Development Board Act (CIDB Act, 1999), introduces the management of
infrastructure throughout the full asset life cycle, i.e. placing additional emphasis on phases beyond the
delivery of the capital asset itself.
47
Overview
In addition to this, it also introduces the concepts of asset portfolio management, as a means to evaluate
priorities for the delivery of new infrastructure against that of the maintenance of existing infrastructure,
within the context of a limited capital and operational budget, while at the same time meeting national and
provincial priorities, and maintaining the service delivery objectives of the relevant user of such
infrastructure.
It also introduces the concept of project portfolio management as a means to prioritise expenditure within
the framework of a limited capital or operational budget while meeting national and provincial priorities.
In line with the objectives of the Toolkit, the CIDB Act and the PFMA, GIAMA aims to introduce uniform
asset management practices to all organs of state. Such practices include the use of:
User Asset Management Plans (U-AMPs) as a means for a user to state its needs in a uniform and
structured fashion within the context of its service delivery objectives and the asset portfolio that
supports its on-going operations. GIAMA requires the user to unpack its user asset management plan
into management plans for:
o New asset requirements
o Repair requirements
o Disposal requirements
Custodian Asset Management Plans (C-AMPs) as a means for a custodian to coordinate delivery
on the needs of a user within the context of a common portfolio strategy and analysis framework that
takes cognisance of individual user needs, the requirements of maintaining a sustainable asset
portfolio and structured work plans (management plans) to ensure on-going delivery in line with the
operational priorities of users. GIAMA requires the custodian to unpack the portfolio strategy and
management plan (beyond the initial requirements for a capital work plan) into management plans that
address:
o Capital works
o Maintenance
o Leases
o Disposals.
The C-AMP is presented in two parts:
o
o
The first part (Portfolio Strategy, Asset Performance-, Life Cycle- and Portfolio Analyses) forms
the Portfolio Management Plan
The second part (Capital Works-, Maintenance-, Leasing-, Disposal Plans and Budget) forms
the Implementation Plan.
Functional performance assessments by the user to ensure that assets meet the operational
requirements of users. The functional performance includes measures such as a user assessment of
condition, suitability, locality, accessibility, utilisation, level of service and security in relation to the
national priorities for facilities.
Condition assessments, at least every five years, by suitable technical personnel, to ensure that
maintenance requirements are determined in a uniform and structured fashion.
Life cycle costing techniques for the evaluation of asset and procurement alternatives, thereby
ensuring that all asset alternatives have been considered on an equal basis, and an appropriate asset
management- and procurement strategy are selected for the relevant assets.
Feasibility analysis techniques to ensure that the individual infrastructure requirements are properly
documented and agreed upon by both the user and the custodian, while the economic value of the
asset and procurement alternatives are compared based on the life cycle cost, delivery capacity and
risk of the custodian and implementing agent and the long term sustainability of the specific user
requirement.
Valuation techniques to ensure that the valuation of assets is done in an economical, viable and
technical appropriate manner for the process requirement at that point
Minimum requirements for asset registers to ensure that both the user and custodian can interact
with the asset register in relation with their views on the asset management data.
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Overview
Asset performance measures which allow the user and custodian to measure the on-going
sustainability and operational efficiency of infrastructure components and the value for money derived
from capital investment during the project life cycle.
Current reporting requirements to National Treasury on project implementation has not been replaced and
are left intact as per the requirements of the relevant National and Provincial Treasury.
GIAMA also separates the accountability for asset management between the user and custodian, without
interfering with the constitutional responsibility of the relevant ministers, premiers and members of
executive councils. It tacitly, as for all legislation, places the obligation on the relevant minister and
premier to delegate responsibility and accountability for user and custodianship to the department which
can deliver against such responsibility in an optimal fashion.
Table 6 below describes the general responsibilities as envisaged by the Act of User versus Custodian
departments.
Table 6: Summary of key roles and responsibilities per GIAMA
Role
Responsibility
Description
Portfolio
Management
Key Account
Management
Understanding the requirements of the

user, reporting to the user and joint
preparation of the U-AMP.
Preparing portfolio management plan.
Life cycle costing, feasibility and
economic value appraisal.
Preparing works plans.
Management of all rights that the state
holds over property.
Management of acquisition, lease and
disposal contracts.
Determining the value of property
before acquisition, renovation,
upgrading or disposal.
Recognising the asset on the asset
register.
Responsible for the payment of all
rates and taxes related to the property
held by the state.
Plan and monitor, with the custodian
and implementing agent, the
implementation of new as well as
refurbishment and renovation projects.
Manage and coordinate all activities
over the project life cycle for one or
more capital works projects.
Develop the specification for the
procurement of capital works projects.
Estimating the cost of implementing a
capital works project.
Managing the implementation of
capital works contracts.
Portfolio Analyses
Cost Engineering
Property
Management
Works Planning
Property
Management
Contracts
Management
Property Valuation
Property Account
Administration
Procurement
Management
Programme
Management
Project Manager
Specification
Estimating
Facility
Management
Construction
Contracts
Management
Operations
Management
Manage the building operations while

in use. It includes the soft services
Accountability
and
delegation
Custodian
Custodian
Custodian
Custodian
Custodian
Custodian
Custodian
Custodian
User
Custodian
Custodian
Custodian
Custodian
User
49
Overview
Role
Responsibility
Maintenance
Management
Description
normally provided by facilities

management.
Prepare the User Asset Management
Plan.
Conduct space planning.
Manage all hard services normally
associated with facilities and
infrastructure.
Accountability
and
delegation
Custodian
From the above table, Toolkit users are to note the following important issues in deciding who fulfils the
role of User or Custodian:
The Act does allow that in certain cases a department that would ordinarily be regarded as a
User department, such as for example the Department of Education, may elect to take on the
responsibility of the Custodian as well for particular reasons.
A User department may also elect to use the services of an Implementer or Implementing
Agent, to implement works on their behalf, as opposed to utilising the Custodian department
itself as the implementer. In such cases the User department is to exercise caution as to
where the ultimate responsibility and accountability rests.
The Toolkit has embedded the implications of GIAMA by aligning phases and functions of the
infrastructure management cycle with the requirements of the Act. Where terminology introduced by
GIAMA differs from that of other generally accepted terms it is indicated as such.
9.3 Division of Revenue Act

The Division of Revenue Act (DORA) is published annually.
It provides for the equitable division of revenue raised nationally among the national, provincial and local
spheres of government for each financial year and the related responsibilities.
It allows for the allocation of funds according to a number of schedules, each with their own requirements.
These schedules are summarised as follows:
Schedule 1: Equitable division of revenue raised nationally among the three spheres of
government
Schedule 2: Determination of each provinces equitable share of the provincial spheres share of
revenue raised nationally (as a direct charge against the National Revenue Fund)
Schedule 3: Determination of each municipalitys equitable share of the local government
spheres share of revenue raised nationally
Schedule 4: Allocations to provinces and municipalities to supplement the funding of programmes
or functions funded from provincial or municipal budgets
Schedule 5: Specific purpose allocations to provinces
Schedule 6: Specific purpose allocations to municipalities
Schedule 7: Allocations-in-kind to municipalities for designated special programmes
Schedule 8: Incentives to provinces and municipalities to meet targets with regards to priority
government programmes.
50
Overview
9.4 Legislation applicable to municipalities

9.4.1 Local Government: Municipal Finance Management Act of 2003
Section 63 of the Local Government: Municipal Finance Management Act of 2003 makes the accounting
officer responsible for the management of the assets of the municipality and requires that the accounting
officer takes all reasonable steps to ensure that the municipality has and maintains a management,
accounting and information system that accounts for the assets and liabilities of the municipality.
This Act requires, amongst others:
That the mayor approve a service delivery and budget implementation plan for implementing the
municipalitys delivery of municipal services and its annual budget within 28 days of the approval
of the annual budget.
The accounting officer is responsible in terms of the Act for implementing the municipality's
approved budget and is required to explain any material variances from the service delivery and
budget implementation plan.
The Act also requires that the mayor takes into account in the development of the annual budget
the integrated development plan which must be developed in terms of the Municipal Systems Act
of 2000 and realistic revenue and expenditure projections for future years.
9.4.2 Municipal Systems Act of 2000

The Integrated Development Planning (IDP) process provided for in the Municipal Systems Act of 2000
originates in the Constitution of the Republic of South Africa (Act 108 of 1996), which enjoins local
government to:
Provide democratic and accountable government to all communities
Ensure the provision of services to communities in a sustainable manner
Promote social and economic development
Promote a safe and healthy environment
Encourage the involvement of communities and community organisations in matters of local
government
Municipalities must draw up an IDP as a single, inclusive and strategic development plan that must
be aligned with other municipalities and other spheres of government
Establishes the IDP of a municipality as the principal strategic planning instrument that guides and
informs all planning and development, and all decisions with regard to the planning, management
and development in the municipality. It links, integrates, and coordinates all municipal plans into a
single strategic plan for the development of the municipality. It provides a basis for determining the
level and extent of municipal resources and capacity required, and for formulating budgets.
Municipal council to review its integrated development plan annually in accordance with an
assessment of its performance measurements and to the extent that changing circumstances so
demand.
Sections 78 and 79 of this Act address aspects of infrastructure investment planning. These
sections require that the cost of ownership must be known and the appropriate delivery
mechanism identified ahead of implementation. The Department of Co-operative Governance and
Traditional Affairs (CoGTA), who are the custodians of the Municipal Systems Act, consider the
preparation of a Comprehensive Municipal Infrastructure Plan (CMIP) as a key mechanism to
achieve this end. Their Guidelines for Infrastructure Asset Management in Local Government
define a comprehensive Municipal Infrastructure Plan as a plan that provides a holistic overview of
existing service performance, a vision of future performance scenarios, the risks, priorities, funding
and tariff implications, as a strategic input to the Integrated Development Planning process.
51
Overview
10. King III Public Sector Guide An introduction

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

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

King III has broadened the scope of corporate governance in South Africa with its core philosophy
revolving around leadership, sustainability and corporate citizenship. These key principles are given
prominence:
Good governance is essentially about effective leadership. Leaders need to define strategy,
provide direction and establish the ethics and values that will influence and guide practices
and behaviour with regard to sustainability performance.
Sustainability is now the primary moral and economic imperative and it is one of the most
important sources of both opportunities and risks for businesses. Nature, society, and
business are interconnected in complex ways that need to be understood by decision makers.
Incremental changes towards sustainability are not sufficient there is a need for a
fundamental shift in the way companies and directors act and organise themselves.
Innovation, fairness, and collaboration are key aspects of any transition to sustainability
innovation provides new ways of doing things, including profitable responses to sustainability
52
Overview
challenges. Fairness is vital because social injustice is unsustainable and collaboration is often
a prerequisite for large-scale change.
Social transformation and redress is important and needs to be integrated within the broader
transition to sustainability. Integrating sustainability and social transformation in a strategic and
coherent manner will give rise to greater opportunities, efficiencies, and benefits, for both the
institution and society.
King II required companies to implement sustainability reporting as a core aspect of corporate
governance. Since 2002, sustainability reporting has become a widely accepted practice and
South Africa is an emerging market leader in the field. However, sustainability reporting is in
need of renewal in order to respond to:
o The lingering trust deficit among civil society of the intentions and practices of big
business;
o Concerns among business decision makers that sustainability reporting is not fulfilling
their expectations in a cost-effective manner.
10.4 Governance framework

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

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

Some of the requirements introduced by King III include:
The need for an annual integrated report that focuses on the impact of the institution in the
economic, environmental and social spheres
A statement by the audit committee to the board and shareholders on the effectiveness of internal
financial controls to be included in the integrated report
The consideration of the strategic role of IT and its importance from a governance perspective
The positioning of internal audit as a strategic function that conducts a risk-based internal audit
and provides a written assessment of the institutions system of internal control, including internal
financial controls
The governance of risk through formal risk management processes.
53
Overview
11. Disclaimer
This toolkit is intended as a resource information document to be used by public sector client for purposes
of accelerating the delivery of infrastructure in government. The CIDB together with its partners do not
accept any liability either direct or indirect for any action arising out of the use of the toolkit.
The copyright and ownership of the toolkit reside with CIDB and it reserves the right not to allow any
person to use the toolkit without any prior written permission.
54
Overview
12. Annexure 1: Glossary - Definitions

Table 7: Table of Terminology
Term
Activity
Advanced Asset
Management
Asset
Asset
Asset (Immovable)
Asset Management
Asset Management
Information System
Asset Management Plan
Asset Management
Strategy
Asset Manager
Asset Managers and

Property Managers
Definition
Source
The work undertaken on an asset or group of

assets to achieve a desired outcome.
Asset management which employ predictive
modelling, risk management and optimised
decision making techniques to establish asset life
cycle treatment options and related long term
cash flow predictions.
A physical component of a facility which has
value, enables services to be provided and has an
economic life of greater than 12 months.
A resource controlled by a municipality as a result
of past events and from which future economic
benefits or service potential is expected to flow to
the Municipality. GAMAP/GRAP requires a
minimum level of detail that separates items that
have a difference in Expected Useful Life and are
financially material. As a general guide, the scope
of asset can be determined by considering the
extent that would be associated with any periodic
renewal.
Any immovable asset acquired or owned by
Government, excluding any right contemplated in
the Mineral and Petroleum Resources
Development Act 2002 (Act No. 28 of 2002).
The combination of management, financial,
economic, engineering and other practices
applied to physical assets with the objective of
providing the required level of service in the most
cost effective manner.
International Infrastructure Management

Manual Ver.3.0 2006
Manual Ver.3.0 2006
A combination of processes, data and software

applied to provide the essential outputs for
effective asset management such as reduced risk
and optimum infrastructure investment.
A plan developed for the management of one of
more infrastructure asset that combines multidisciplinary management techniques (including
technical and financial) over the life cycle of the
asset in the most cost effective manner to provide
a specified level of service. A significant
component of the plan is a long term cash flow
projection for the activities.
A strategy for asset management covering the
development and implementation of plans and
programmes for asset creation, operation,
maintenance, rehabilitation, replacement, disposal
and performance monitoring to ensure that the
desired levels of service and other operations
objectives are achieved at optimum cost.
The asset manager is responsible for major
maintenance, repair and renewal decisions, as
well as the long-term strategic plans for a
corporate asset portfolio.
Asset managers and property managers are
those responsible for managing the maintenance,
repair and renewal work. It is their collective
responsibility to maximize the effect of
expenditures as well as to maximize the value of
their assets over the assets service life.

Manual Ver.3.0 2006

Manual Ver.3.0 2006
DPLG Guidelines for Infrastructure
Asset Management in Local
Government 2006-2009
GIAMA (Act No. 19, 2007)

Manual Ver.3.0 2006

Manual Ver.3.0 2006

Manual Ver.3.0 2006
Vanier D.J., (September 2001), Asset

Management: A to Z, APWA
International Public Works Congress,
Philadelphia
(Source Vanier D.J., (September
2001), Asset Management: A to Z,
APWA International Public Works
Congress, Philadelphia)
55
Overview
Term
Asset Register
Authorisation
Basic (Core) Asset
Management
Batch order
Brief
Capacity
Capital Expenditure
(CAPEX)
Cash flow
Category
Client
Completion
Components
Condition Based
Preventative Maintenance
Construction Industry
Construction Procurement
Definition
Source
A record of asset information including inventory,

historical, financial, condition, technical and
financial information.
The process of approving, funding and
communicating the permission for initiating work.
Asset management which relies primarily on the
use of an asset register, maintenance
management systems, job & resource
management, inventory control, condition
assessment, simple risk assessment and defined
levels of service, in order to establish alternative
treatment options and long term cash flow
predictions. Priorities are usually established on
the basis of financial return gained by carrying out
the work (rather than detailed risk analysis and
optimised decision making).
The instruction to supply items of goods in a batch
in terms of a framework agreement.
A working document for an identified package
which specifies at any point in time the relevant
needs, aims and resources of the client, the
context of the project and any appropriate design
or maintenance requirements within which all
subsequent briefing (when needed) and designing
can take place.
The resources (human resources, financial,
physical assets, systems, procedures, etc) which
an organisation puts at the disposal of portfolio
management to select, fund and execute its work.
Expenditure used to create new assets or to
increase the capacity of existing assets beyond
their original design capacity or service potential.
Capital expenditure increases the value of asset
stock.
The stream of cost and/or benefits over time
resulting from a project investment of ownership
of an asset.
A description used to group potential authorised
components, assets or work to facilitate decision
making. Categories usually link their components,
assets or work with a common set of strategic
goals.
Organ of state that provides the strategic brief,
commissions the work and pays for it.
State of readiness for use or occupation of the
whole works although some minor work may be
outstanding.
Specific parts of an asset having independent
physical or functional identity attributes such as
different life expectancy, maintenance regimes,
risk or criticality.
Preventative maintenance initiated as a result of
knowledge of an asset/components condition
from routine continuous monitoring.
The broad conglomeration of industries and
sectors which add value in the creation and
maintenance of fixed assets within the built
environment;
Procurement in the construction industry,
including the invitation, award and management
of contracts

Manual Ver.3.0 2006
The Standard for Portfolio Management

2006; Project Management Institute, Inc.
Manual Ver.3.0 2006
IDM Toolkit
IDM Toolkit


Manual Ver.3.0 2006

Manual Ver.3.0 2006
IDM Toolkit
Adapted from ISO 6707-2 Building
and civil engineering Vocabulary
- Part 2: Contract terms
Manual Ver.3.0 2006

Manual Ver. 3.0 2006
Construction Industry Development
Board act of 2000 (Act No 38 of 2000)
CIDB Standard for Uniformity in

construction Procurement
56
Overview
Term
Contracting Strategy
Corrective Maintenance
Corrupt Practices
Cost plan
Current Replacement Cost
Custodian
Defect
Deferred Maintenance
Delivery Management
Demand Management
Design and construct

contract
Design by employer
contract
Develop and construct
contract
Disposal
Economic Life
Definition
Source
Strategy that governs the nature of the

relationship which the employer wishes to foster
with the contractor, which in turn determines the
risks and responsibilities between the parties to
the contract and the methodology by which the
contractor is to be paid
The remedial actions to restore an
asset/component to a specified condition. The
actions are usually required as a result of failure
of a component.
The offering, giving, receiving or soliciting of
anything of value to influence the action of the
employer or his staff or agents in the procurement
process or the administration of the contract.
The document progressively developed by
estimating the total cost of the project including
any construction, refurbishment, extension and
professional service costs, service and planning
charges and applicable taxes
The cost of replacing the service potential of an
existing asset, by reference to some measure of
capacity, with an appropriate modern equivalent
asset.
Custodians are responsible for the efficient and
effective management of immovable assets
throughout their lifecycle and therefore must
produce a custodian asset management plan (CAMP) to ensure implementation.
A part of the works which is not in accordance
with the scope of work or a part of the works
designed by the contractor which is not in
accordance with the applicable law or the
accepted contractors design.
The shortfall in rehabilitation work required to
maintain the service potential of an asset.
The management of the process of public service
delivery as applied to infrastructure and
maintenance projects
The active intervention in the market to influence
demand for services and assets with forecast
consequences, usually to avoid or defer capital
expenditure. Demand management is based on
the idea that as needs are satisfied expectations
rise automatically and almost every action taken
to satisfy demand will stimulate further demand.
Contract in which a contractor designs a project
based on a brief provided by the client and
constructs it.
DIS / ISO 10845-1: Construction

procurementprocesses, methods
and procedures
and procedures
Contract under which a contractor undertakes

only construction on the basis of full designs
issued by the employer.
Contract based on a scheme design prepared by
the client under which a contractor produces
drawings and constructs it.
Activities necessary to dispose of
decommissioned assets.
The period from the acquisition of the asset to the
time when the asset, while physically able to
provide a service, ceases to be the lowest cost
alternative to satisfy a particular level of service.
Obsolescence will often ensure that the economic
life is less than the physical life.

and procedures
and procedures

ISO 10845-1: Construction procurementPart 1: processes, methods and

procedures
IDM Toolkit

Government Immovable Asset

Management Act
Adapted from NEC3 Engineering

IDM Toolkit

ISO 10845-1: Construction

and procedures
57
Overview
Term
Eligibility Criteria
Employer
Engineering and
construction works contract
Estimate
Facilities / facility
Facilities / facility
Facilities Management
Framework agreement
Fraudulent practice
Fruitless and wasteful

expenditure
Geographic Information
Systems (GIS)
Definition
Source
Criteria which have to be satisfied in order for the

employer to evaluate a submission made in
response to a call for an expression of interest or
an invitation to submit a tender
The person or organization intending to or
entering into a contract with the contractor for the
provision of goods, services, or engineering and
construction works
A contract for the provision of a combination of
goods and services, arranged for the
development, extension, installation, repair,
maintenance, renewal, removal, renovation,
alteration, dismantling or demolition of structures,
including building and engineering infrastructure
An assessment of the likely result. Usually applied
to costs and duration and should always include
some indication of accuracy, e.g. x per cent.
Usually used with a modifier, e.g. preliminary,
conceptual, feasibility, etc.
Facilities are a functional group of assets, which
may consist of property, plant, equipment and
engineering infrastructure to deliver a service or
services (or products) to a specific target
audience (or target market). A facility may be
situated on one or more property
A complex comprising many assets (e.g. a
hospital, water treatment plant, recreation
complex, etc) which represents a single
management unit for management ( financial,
operational, maintenance, etc) or other purposes.
Is an interdisciplinary field primarily devoted to the
day to day operations, maintenance and care of
buildings, such as hospitals, schools, universities,
office complexes resorts, sport complexes,
convention centers etc.. Duties may include the
care of air conditioning, electric power, plumbing
and lighting systems; cleaning; decoration;
grounds keeping and security. Some or all of
these duties can be assisted by computer
programs. These duties can be thought of as noncore or support services, because they are not the
primary business (taken in the broadest sense of
the word) of the owner organization.
Agreement between an employer and one or
more contractors, the purpose of which is to
establish the terms governing contracts to be
awarded during a given period, in particular with
regard to price and, where appropriate, the
quantity envisaged.
IDM Toolkit
Misrepresentation of the facts in order to influence

the tender process or the award of a contract
arising from a tender offer to the detriment of the
employer, including collusive practices intended to
establish prices at artificial levels, or the
administration of the contract including
compensation procedures.
Expenditure which was made in vain and would
have been avoided had reasonable care been
exercised.
Software which provides a means of spatially
viewing, searching, manipulating and analysing
an electronic database.
ISO 10845-1: Construction procurementPart 1: processes, methods and

procedures

procurementprocesses, methods and
procedures
construction Procurement
A guide to the Project Management

Body Knowledge; Project Management
Institute Inc.


IDM Toolkit
Agreement between an employer and

one or more contractors, the purpose of
which is to establish the terms governing
contracts to be awarded during a given
period, in particular with regard to price
and, where appropriate, the quantity
envisaged.
Public Finance Management Act of1999

and Local Government: Municipal
Finance Management Act of 2003
58
Overview
Term
Governance
Immovable Asset
Management
Infrastructure
Infrastructure
Infrastructure
Infrastructure (or
engineering infrastructure)
Infrastructure Assets
Infrastructure Plan
Irregular expenditure
Joint programmes
Key Performance
Indicators
Definition
Source
The process by which an organisation directs and

controls its operational and strategic activities and
by which the organisation responds to the
legitimate rights, expectations and desires of its
stakeholders.
Immovable Asset Management comprises the
strategic management activities required to
ensure that the immovable asset requirements for
service delivery of an entity (or enterprise) are
met. It includes setting a strategy, the assessment
of immovable asset needs, planning a portfolio of
assets optimally located to meet such needs,
budgeting for the lifecycle cost to pay for such
assets and monitoring (& regularly evaluating) the
level to which such needs are met.
In the context of the toolkit means any building,
construction or engineering works constructed fior
the betterment of the build environment and
includes maintenance works when referring to an
infrastructure programme.
The stock of basic facilities and capital equipment
needed for the functioning of a country.
The system of public works of a country.
Infrastructure (or engineering infrastructure)
includes all assets provided to ensure that the
optimal functioning of a facility. It includes bulk
assets, municipal assets, on-site assets such as
roads, storm water drainage, sewerage, water,
electricity, gas, steam, incineration, heating,
ventilation etc. Provided at a level of service
relevant to the requirements of the current and
future needs of the assets.
Stationary systems forming a network and serving
whole communities, where the system as a whole
is intended to be maintained indefinitely at a
particular level of service potential by the
continuing replacement and refurbishment of its
components. The network may include normally
recognised ordinary assets as components.
An infrastructure plan depicts an estimated 10
years view ahead in terms of infrastructure
development within a province.
Expenditure, other than unauthorised expenditure,
incurred in contravention of or that is not in
accordance with a requirement of any applicable
legislation.
Those programmes that transcend the
conventional organisational boundaries in
planning, budgeting and implementation resulting
in a number of departments/agencies/ministries
responsible for one aspect of the programme,
although none is responsible for it in its entirety.
Key Performance Indicators (KPI) are quantifiable
measurements, agreed to beforehand, that reflect
the critical success factors (of the company,
department, project.)

IDM Toolkit
IDM Toolkit
www.princeton.edu
Meriam Webster
IDM Toolkit

National Treasury MTEF
Adapted from the Finance Management

Act of 1999
Framework for managing joint

programmes in the public service (the
framework) cabinet lekgotla 2005

A qualitative or quantitative measure of a service

or activity used to compare actual performance
against a standard or target. Performance
indicators commonly relate to statutory limits,
safety, responsiveness, cost, comfort, asset
performance, reliability, efficiency, environmental
protection and customer satisfaction:
59
Overview
Term
Level of Service
Life
Life Cycle
Life-cycle costing /life cycle

cost
Maintenance
Definition
Source
The defined service quality for a particular activity

or service area against which service
performance may be measured. Service levels
usually relate to quality, quantity, reliability,
responsiveness, environmental acceptability and
cost.
A measure of the anticipated period an asset or
component will be able to provide the required
service e.g. time, number of cycles, distance
intervals, etc.
The cycle of activities that an asset (or facility)
goes through while it retains an identity as a
particular asset i.e. from planning and design to
decommissioning or disposal.
Life-cycle costing (or total cost of ownership) is
estimation at the planning stage of an asset of all
cost involved in the acquisition, operation,
maintenance and disposal of an asset and forms
the basis to monitor the performance of the asset
against the planned cost over the lifecycle of the
asset. Depending on the policy of the
organisation, lifecycle costing may include the
services cost.

The total cost of an asset throughout its life

including planning, design, construction,
acquisition, operation, maintenance, rehabilitation,
disposal and financing costs
Maintenance is the execution of activities required
to ensure that an asset operates at its intended
service level. It includes preventative (& statutory)
maintenance (servicing of plant and equipment),
minor repairs and renovation to ensure effective
functioning of the asset at its required level of
service. It excludes the renovation, refurbishment,
upgrading or extension of an asset.




All actions necessary for retaining an asset as

near as practicable to its original condition, but
excluding renewal.
Fixed interval maintenance is used to express the
maximum interval between maintenance tasks.
Maintenance Plan
Management contract
Monitoring & Evaluation
On condition maintenance is the maintenance

action depend upon the asset/component
reaching some predetermined condition.
Collated information, policies and procedures for
the optimum maintenance of an asset, component
or group of assets.
Contract under which a contractor provides
consultation during the design stage and is
responsible for planning and managing all post
contract activities and for the performance of the
whole of the contract.
Monitoring is the systematic, regular collection
and occasional analysis of information to identify
and possibly measure changes over a period of
time.
Evaluation is the analysis of the effectiveness and
direction of an activity and involves making a
judgment about progress and impact.

ISO 10845-1: Construction
procurement- Part 1: processes,
methods
and procedures
IDM Toolkit
60
Overview
Definition
Source
Non-Asset Solution
Term
Methods of providing delivery needs other than

adding asset capacity. See Demand
Management.
Asset Management Learners Guide:

National Treasury
Operation
The active process of utilising an asset which will

consume resources such as human, utilities and
materials. Operation costs are part of the life cycle
costs of an asset.
A formal process to identify and prioritise all
potential solutions with consideration of financial
viability, social and environment responsibility and
cultural outcomes.
Expenditure in excess of a voted (sanctioned)
amount or a main division of a vote.
Construction works which have been grouped
together for delivery under a single contract or a
package order
The brief, design, programme and cost of the
project as it develops from time to time
The instruction to carry out construction works
under a framework agreement

Packaging strategy
The organisation of work packages into contracts
Performance Monitoring
Continuous or periodic quantitative and qualitative

assessments of the actual performance compared
with specific objectives, targets or standards.
Planned maintenance activities fall into 3
categories:

and procedures
Optimised Decision Making

(ODM)
Overspending
Package
Package information
Package Order
Planned Maintenance
Portfolio
Portfolio Balancing
Pricing strategy
Prioritisation
Procurement procedure
1.
Periodic necessary to ensure the reliability
or to sustain the design life of an asset or
component.
2.
Predictive condition monitoring activities
used to predict failure.
3.
Preventative maintenance that can be
initiated without routine or continuous checking
(e.g. using information contained in maintenance
manuals or manufacturers recommendations)
and is not condition based.
Collection of projects or programmes and other
work that are grouped together to facilitate
effective management of that work to meet
strategic business objectives. The projects or
programmes may not necessarily be
interdependent or directly related.
The process of organising the prioritised work into
a co-ordinated mix that has the best potential to
collectively best support and achieve strategic
goals.
Strategy which is adopted to secure financial
offers and to remunerate contractors in terms of
the contract procurement strategy: selected
packaging, contracting, pricing and targeting
strategy and procurement procedure for a
particular procurement.
The process of ranking the selected work based
on their evaluation scores and other defined
management considerations.
Selected procedure for a specific procurement

Adapted from the Finance Management

Act of 1999
IDM Toolkit
IDM Toolkit
Adapted from NEC3 Framework
Contract




and procedures

and procedures
61
Overview
Term
Procurement strategy
Programme
Programme Management
Project Definition
Project Management
Project Risk
Project: Active project

Project: Potential project
Project: Proposed project
Property
Property Management
Property Manager or
Facility Manager
Property ownership
Definition
Source
Selected packaging, contracting, pricing and

targeting strategy and procurement procedure for
a particular procurement.
The grouping of a set of related projects in order
to deliver outcomes and benefits related to the
organisations strategic objectives which would
not have been achieved had the projects been
managed independently.
A value adding business function that interfaces
strategic management and project management
with the aim of realising the potential outcomes
and benefits of a programme.
The brief, design, programme and cost of the
project as it develops
from time to time.
Project Management is the management activities
in a finite process (defined scope and result as
well as start and end time) which integrates all
services required to acquire (procurement or
purchasing), renovate, refurbish, upgrade, extend
or dispose of an asset.
An uncertain event or condition that, if it occurs,
has a positive or negative effect on a projects
objectives.
An immovable asset project listed on the MTEF
Works list and approved for implementation.
An immovable asset project listed in the U-AMP
but not listed on MTEF Works list.
An immovable asset project on the MTEF Works
list but not approved for implementation because
budget not approved.
Property is a collective name for immovable
assets and the single land parcel on which they
are situated (erf as defined by the surveyor
general). Property ownership assigns certain
rights pertaining to the property to an owner
including use and disposal rights, but may also be
encumbered by assigning specific rights to other
entities such as servitudes, right of way, usufruct,
etc. Mineral rights are separated from property
ownership. Use rights may further be defined by
type of use in the town planning scheme.
Property Management entails the management
and execution of all activities required to own a
property and includes the acquisition (by lease,
purchase, expropriation, etc), letting or subletting
of the property, acquisition of service contracts
and the payment of property rates and municipal
services.
The property manager or facility manager
primarily deals with day-to-day accommodation
issues and the implementation of the strategic
plan.
Is established by a deed (which describes the
owners rights) and surveyor general diagram
(which defines the extent of the property). The
Deeds Office and the Surveyor General
administers property rights in South Africa. A
lease is a finite form of property ownership and is
governed by a contract on short term leases.
Leaseholds (49 or 99 years) over a property must
be registered as a leasehold deed at the Deeds
office.

and procedures
IDM Toolkit
IDM Toolkit
IDM Toolkit
IDM Toolkit
PMI Guide to the PMBOK
IDM Toolkit
IDM Toolkit
IDM Toolkit
IDM Toolkit
IDM Toolkit
(Source Vanier D.J., (September

2001), Asset Management: A to Z,
APWA International Public Works
Congress, Philadelphia)
IDM Toolkit
62
Overview
Definition
Source
Public Private Partnership

(PPP)
Term
A contract between a public sector and a private

sector party, in which the private party assumes
substantial financial, technical and operational risk
in the design, financing, building and operation of
a project over time.
Regulations issued in terms of the Public

Finance Management Act of 1999
Record of information
Drawings that record construction works as

completed and any maintenance or operating
manuals.
Major maintenance works carried out on an asset
to restore it to an acceptable condition.
Refurbishment work does not extend the life of
the asset, but is necessary for the useful life to be
achieved.
Works to rebuild or replace parts or components
of an asset, to restore it to a required functional
condition, which may incorporate some
modification. Generally involves repairing the
asset to deliver its original level of service without
resorting to significant upgrading or renewal,
using available techniques and standards.
IDM Toolkit
Works to upgrade, refurbish or replace existing

facilities with facilities of equivalent capacity or
performance capability.
Action to restore an asset or component to its
previous condition after failure of damage.
The complete substitution of asset that has
reached the end of its life so at to provide a
similar level of service.
A person or organization that submits an
expression of interest in response to an invitation
to do so.
Roles and responsibility matrix to highlight
specific accountabilities and responsibilities
between various stakeholders.
Effect of uncertainty on objectives

Risk Management
Coordinated activities to direct and control an

organization with regard to risk
ARP 070:2009 ISO Guide 73:2009
Scope of work
Means the document that specifies and describes

the goods, services, or engineering and
construction works which are to be provided and
any other requirements and constraints relating to
the manner in which the contract work is to be
performed.

Secondary procurement
policy
Procurement policy that promotes objectives

additional to those associated with the immediate
objective of the procurement itself.
A contract for the provision of labour or work,
including knowledge-based expertise, carried out
by hand, or with the assistance of equipment and
plant;
Document depicting the agreed levels of service
agreement between relevant stakeholders
Service undertaken at scheduled times e.g.
seasonally or annually to enable the required level
of service to be delivered.

procedures
Refurbishment
Rehabilitation
Renewal
Repair
Replacement
Respondent
Responsible, accountable,
support, consult with,
interact with matrix
Risk
Service contract
Service Delivery
Agreement
Service Maintenance

National Treasury


ISO 10845-1: Construction procurementprocesses, methods and procedures
Infrastructure Delivery Improvement
program (2009)
ARP 070:2009 ISO Guide 73:2009
Infrastructure Delivery Improvement

program (2009)
63
Overview
Definition
Source
Services
Term
Services are defined as those activities required

throughout the lifecycle of an asset to ensure
optimal lifecycle performance. It may include built
environment professionals, building & engineering
contractors, estate agents, valuers, cleaners,
gardeners etc.
IDM Toolkit
Statutory permissions
Any relevant approval, consent or permission

under any legislation required for the development
or construction of the project (or both).
IDM Toolkit
Strategic Goals
The definition of an organisations intended

achievements in terms of business and cultural
results within a specified time frame and usually
associated with specific metrics.
A high level document that explains the
organisations vision and mission plus the
approach that will be adopted to achieve this
mission and vision including the specific goals
and objectives to be achieved during the period
covered by the document.

A plan containing the long term goals and

strategies of an organisation. Strategic plans have
a strong external focus, cover major portions of
the organisation and identify major targets,
actions and resource allocations relating to the
long term survival, value and growth of the
organisation.
Plan of action with a particular goal.

Supply contract
A contract for the provision of materials or

commodities made available for purchase.

Targeting strategy
Strategy which is adopted to promote secondary

procurement policy objectives
IDM Toolkit
Task order
An instruction to carry work within the services in

terms of a framework agreement
Adapted from the NEC3 Professional

service Contract
Tenderer
A person or organization that submits a tender

offer.
Unauthorised expenditure
Overspending of a vote or a main division within a

vote or expenditure not in accordance with the
purpose of a vote or a main division within a vote.
Corrective work required in the short term to
restore an asset to working condition so it can
continue to deliver the required service or to
maintain its level of security and integrity.
The period over which it is expected that an asset
will be used by the organisation before it becomes
uneconomical to do so.

procedures
Adapted from Public Finance
Management Act of 1999
Strategic Plan
Strategic Plan
Strategy
Unplanned Maintenance
Useful Life
User
See "Economic Life"

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

IDM Toolkit

National Treasury
Government Immovable Asset

Management Act (GIAMA)
64
Overview
Term
Value Management
Whole of Life Cycle

Approach
Definition
Source
A management process that minimises the life

cycle cost and maximises service delivery
efficiency by addressing the technical and
functional dimensions at the early stages of a
project (establishment of project objectives,
preparation of project brief and consideration of
concept & design options) to ensure that:

a fully integrated approach has been

adopted
the project is consistent with strategic

goals, and
non-build solutions, including demand

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

National Treasury
65
Overview
13. Annexure 2: Glossary Abbreviations

Table 8: Glossary of Abbreviations
Abbreviation
Description / Name in Full
AC
Actual Costs
APP
Annual Performance Plan
ASGISA
Accelerated and Shared Growth Initiative South Africa
AV
Actual Value
BAC
Budget at Completion
BBBEE
Broad Based Black Economic Empowerment
C-AMP
Custodian Asset Management Plan
CAPEX
Capital Expenditure Programme
CAS
Condition Assessment Surveys
CCTV
Closed Circuit Television
CD
Chief Director
CD
Compact Disk
CFO
Chief Financial Officer
CIDB
CMIP
Comprehensive Municipal Infrastructure Plan
CoGTA
The Department of Co-operative Governance and Traditional Affairs
CPI
Consumer Price Index
CPI
Cost Performace Index
DBSA
Development Bank of Southern Africa
DCC
Departmental Co-ordination Committee
DD
Deputy Director
DMS
Delivery Management System
DOE
Department of Education
DOH
Department of Health
DORA
Division of Revenue Act
DP
Delivery Process
DPLG
Department of provincial and Local Governement
DPSA
Department of Public Service and Administration
DPW
Department of Public Works
DRIP
Data rich, information poor
EAC
Estimated cost at completion
ECC
Engineering and Construction Contract
ECS
Engineering and Construction Sub Contract
ECSC
Engineering and Construction Short Contract
ECSS
Engineering and Construction Short Sub Contract
EPWP
Extended Public Works Programme
EV
Earned Value
EVM
Earned Value Management
EXCO
Executive Council
66
Overview
Abbreviation
FIDIC
International Federation of Consulting Engineers (Federation Internationale des

Ingenieurs Conseils (French))
FM
Facilities Management
Gate, as in the Gateway System
GCC
General Conditions of Contract
GDP
Gross Domestic Product
GIAMA
Government Immovable Asset Management Act
GIS
Geographical Information System
GWM&E
Government wide monitoring and evaluation system
HOD
Head of Department
HR
Human Resources
HSE
Health, Safety and Environment
HVAC
Heating, Ventilation, Air Condition
IA
Immovable Asset
IA
Implementing Agent
ICE-SA
Institute of Civil Engineers South Africa
ICOMS
International Conference of Maintenance Societies
IDIP
Infrastructure Delivery Improvement Program
IDM
Infrastructure Delivery Management
IDMS
IDMT
Infrastructure Delivery Management Toolkit (The Toolkit)
IDP
Integrated Development Plan
IGP
Infrastructure grant to provinces
IGR
Intergovernmental Relation Framework
IGR Act
Intergovernmental Relation Framework Act
IIMM
International Infrastructure Management Manual
IMESA
Institute of Municipal Engineers of South Africa
IP
Infrastructure Plan
IPIP
Infrastructure Programme Implementation Plan
IPMP
Infrastructure Programme Management Plan
IRM
Infrastructure Reporting Module
IRR
Internal Rate of Return
JBCC
Joint Building Contract Committee
JIPSA
Joint Initiative on Priority Skills Acquisition
KPI
Key Performance Indicators
LCC
Life-cycle costing
LG
Local Government
M&E
Monitoring & Evaluation
MDG
Millennium Development Goals
MEC
Member of Executive Council
MEP
Mechanical, Electrical, Plumbing
MF&C
Manufacture, Fabrication and Construction
MFMA
Municipal Finance Management Act
67
Overview
Abbreviation
MinMec
Minister & Members of the Executive Committee
MIOS
Minimum inter operability standards
MS
Microsoft
MTEC
Medium Term Expenditure Committee
MTEE
Medium Term Expenditure Estimates
MTEF
Medium Term Expenditure Framework
MTSF
Medium Term Strategic Framework
NDPW
National Department of Public Works
NEC
New Engineering Contract
NEC3
New Engineering Contract 3
NEIMS
National Education Infrastructure Management System
NGO
Non Government Organisation
NIMS
National Infrastructure maintenance Strategies
NIPP
National Industrial Participation Program
NPV
Net Present Value
NSDP
National Spatial Development Perspective
NT
National Treasury
O&M
Operations and Maintenance
OOP
Office of the Premier
OSP
Organisation Support Plan
P&B
Planning & Budgeting
PABX
Private Automated Branch Exchange
PC
Procurement Milestone
PCAS
Policy Coordination and Advisory Services
PCC
Presidents Co-ordinating Council
PEP
Project Execution Plan
PFMA
Public Finance Management Act
PG
Practice Guide
PGDS
Provincial Growth and Development Strategy
PIA
Programme Implementing Agent
PIDC
Provincial Infrastructure Delivery Committee
PM&D
Performance Management and Development
PMBOK
Programme Management Body of Knowledge
PMI
Project Management Institute
PMO
Project Management Office
PMU
Programme Management Unit
PPP
Public Private Partnership
PPPFA
Preferential Procurement Policy Framework Act
PSP
Professional Service Providers
PV
Planned Value
R&R
Renovation and Repair
RASCI
Responsible, Accountable, Support, Consult with, Inform responsibilities

matrix
68
Overview
Abbreviation
SANS
South African National Standards
SCM
Supply Chain Management
SDA
Service Delivery Agreement
SDBIP
Service Delivery Budget Implementation Plan
SFU
Standard for Uniformity
SLA
Service Level Agreement
SMME
Small, Medium and Micro Enterprise
SOE
State Owned Enterprise
SPAID
Support Programme for Accelerated Infrastructure Development
SPI
Schedule Performace Indicator
SV
Schedule Variances
ToR
Terms of Reference
U-AMP
User Asset Management Plan
VO
Variation Order
WBS
Work Breakdown Structure
WSDP
Water Services Development Plan
69
Overview
14. Annexure 3: Definitions of RASCI responsibility

matrix
Table 9: RASCI Responsibility Matrix
RESPONSIBLE
The Doer
ACCOUNTABLE
Owner
SUPPORT
Facilitator
CONSULT
In the Loop
INFORM
The doer is the department(s) that actually completes the task.

The doer is responsible for action/implementation. Responsibility
can be shared. The degree of responsibility is determined by the
department with the A.
The accountable department is the department who is ultimately
answerable for the activity or decision. This includes yes or no
authority and veto power. Only one A can be assigned to an
action.
The support role refers to a department or stakeholder who has
the capability / authority to facilitate and/or support an activity to
commence or be finalised. E.g. Department of Treasury could
assist the Office of the Premier with the commencing of the PGDS
workshops, realising that the outcome will benefit (is required for)
the finalisation of the Infrastructure strategy.
The consultation role applies to departments (typically subject
matter experts) which need to be consulted prior to a final
decision or action. This is a predetermined need for two-way
communication. Input from the designated position is required.
Provide reports and data for information purposes
70

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Delivery Management Guidelines

DP1: Portfolio Management

DP1-2 Programme Management

Develop/review C-AMP (incl

DP2: Project Management

DP2-4 Close Out

DP3: Operations & Maintenance

Delivery Management Guidelines: Overview

Structure of the Infrastructure Delivery Management Toolkit (IDMT)

Infrastructure Delivery Management System

Delivery Management Guidelines: Overview

Foreword and acknowledgements .................................................................................................................6

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

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

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

Whats new in the 2010 Edition....................................................................................................................11

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Delivery Management Guidelines: Overview

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

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

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

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

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

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

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

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

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

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

Annexure 2: Glossary Abbreviations ....................................................................................................66

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

Table of Figures and Tables:

Delivery Management Guidelines: Overview

Foreword and acknowledgements

Delivery Management Guidelines: Overview

Delivery Management Guidelines: Overview

Purpose of this module

The purpose of this module is to:

Background to the Toolkit

The Infrastructure Delivery Improvement Programme (IDIP)

Delivery Management Guidelines: Overview

Purpose of the Toolkit and how it will help users

Delivery Management Guidelines: Overview

Delivery Management Guidelines: Overview

Whats new in the 2010 Edition

Structure of the Toolkit

The Toolkit is structured into three Components as follows:

Delivery Management Guidelines: Overview