Building Projects – Management Fees and Project Costs

The Government of South Australia has determined that the services provided to its agencies and authorities by the Building Projects directorate of the Department of Planning, Transport and Infrastructure’s (DPTI) division of Infrastructure Delivery will be provided on a commercial ‘user pays’ basis, benchmarked wherever possible against similar government jurisdictions and/or the private sector.

Fees charged by Building Projects are approved by Cabinet and are set to recover the full cost of service provision. They are reviewed on a periodic basis.

The fee model covers the full spectrum of professional and administrative activities related to the management and procurement of infrastructure facilities for Government Agencies.

This fact sheet summarises the fee arrangements for the Building Projects directorate.

Project Management Services

When a lead agency undertakes a construction project (defined under Regulations to the State Procurement Act 2004 as over $150,000 in value), DPTI provides a project management delivery framework to the project. The framework has been developed to target the key risks to Government in the procurement of new and refurbished assets and addresses the risk areas of project management, budget, design, construction and procurement. Cabinet has directed that the costs for the DPTI package of project management services will be funded on a sliding scale of costs as a percentage of the approved project budget.

Construction projects are generally categorised as either ‘Major works’ or ‘Medium works’ with the latter defined as low risk projects up to $2 million in value. The two categories of projects have separate fee schedules outlined below.

Costs for a project of particular value are adjusted for project complexity (simple, average or complex). Initially project costs are fixed for the Concept phase and are indicative for subsequent phases. The DPTI price is progressively fixed for Design, Documentation and Tender phase, and finally the Construction and Review phase.

The DPTI price includes fees set out below, plus allowances for Project Costs, such as insurance, certification, tendering expenses, legal costs, Development Assistance Commission fees, SAMIS updating, etc.

Regional projects will generally have additional costs due to the requirements for travel and accommodation expenses, which will be site specific rather than a set standard.

Major Works Fees

Original Project Value ($) / DPTI Fees (% of Value)
$150,000 - $500,000 / $22,500 fixed fee
$500,000 - $1 million / 5.0%
$1 - 4 million / 4.5%
$4 - 10 million / 4.0%
$10 - 20 million / 3.0%
$20 - 50 million / 2.0%
over $50 million / project specific

Medium Works Fees

Original Project Value ($) / DPTI Fees (% of Value)
$150,000 - $500,000 / $17,500 fixed fee
$500,000 - $2 million / 3.5%

Additional Professional Services

Fees for specialist professional services provided by in-house architects, engineers and cost managers to projects are determined on a DPTI fee scale derived from guideline fees published by the various professional bodies, and through benchmarking against private sector professional service contractor tendered costs.

Additional Fees

In the scenario where a Client Agency approves additional funding for a significant increase in the scope and cost of a project, DPTI policy is that an extra fee, over and above the original approval, will generally apply. This additional fee will be based on the percentage indicated for the original project value in the Major (or Medium) Works fee tables. Where the fixed fee for the original project value is applicable, the fixed fee shall remain, and any additional value over $500,000 will be charged at the rate applicable to the revised contract value.

Contact

For further information contact:

Principal Cost Manager

Phone: 8343 2518