Resource Management Guide No. 500
Overview of the Commonwealth Property Management Framework
SEPTEMBER 2015
© Commonwealth of Australia 2015
ISBN: 978-1-922096-63-0 (Online)
With the exception of the Commonwealth Coat of Arms and where otherwise noted, all material presented in this document is provided under a Creative Commons Attribution 3.0 Australia (http://creativecommons.org/licenses/by/3.0/au) licence.
The details of the relevant licence conditions are available on the Creative Commons website (accessible using the links provided) as is the full legal code for the CC BY 3 AU licence.
Use of the Coat of Arms
The terms under which the Coat of Arms can be used are detailed on the following website: www.itsanhonour.gov.au/coat-arms.
Contact us
Questions or comments about this guide should be directed to:
Policy and Advice Branch
Property and Construction Division
Department of Finance
John Gorton Building
King Edward Terrace
Parkes ACT 2600
Email:
Internet: www.finance.gov.au
This guide contains material that has been prepared to assist Commonwealth entities and companies to apply the principles and requirements of the Public Governance, Performance and Accountability Act 2013 and associated rules, and any applicable policies. In this guide the: mandatory principles or requirements are set out as things entities and officials ‘must’ do; and actions, or practices, that entities and officials are expected to take into account to give effect to those and principles and/or requirements are set out as things entities and officials ‘should consider’doing.
Effective from <date of effect of the Guide> / Topic heading – RMG<XX> | 2Contents
Audience 2
Resources 2
Summary 2
Introduction 3
Commonwealth Property Management 3
Policy Principles 3
Key legislation that interacts with property management 3
Commonwealth Property Management Framework 4
Planning and Reporting 5
Property management planning 5
Risk management 5
Information Sharing and Collaboration 6
Commonwealth Property SES Band 1 Steering Committee 6
Senior Property Officers Forum 6
Govdex 6
Co-location 7
Machinery of Government (MoG) assistance 7
Budgeting and Funding 7
The case for investment 7
Capital budgeting requirements 8
The Budget Process Operational Rules 8
Alternative funding models for Commonwealth property 8
Special Purpose Properties 8
Decision Making 9
Property decision making in the Commonwealth 9
Cost-benefit analysis using whole-of-life costs 9
The threshold for preparing a cost-benefit analysis 10
Whole-of-life costing 10
Final decision 11
Contracts and leases 11
Decision tracking and recording 12
Acquisition and disposal of property 12
Acquiring and disposing of property 12
Delegations 12
The Commonwealth Property Disposal Policy 13
Cost-benefit analysis of disposal options 13
Due diligence 13
Approvals 14
The lease endorsement process 14
Two Stage Capital Works Approval Process 14
Thresholds 14
First stage 14
The Parliamentary Standing Committee on Public Works 15
The Commonwealth Property Disposal Policy approval process 15
Design 16
Office accommodation and fit-out design 16
Flexible and Efficient Workplace Design Guidance 16
Other Property Management Considerations 17
Better practice approaches 17
Contamination and hazardous building materials 17
Glossary of Terms 19
Audience
The Commonwealth Property Management Framework (Property Framework) establishes the broad policy environment within which Non-corporate Commonwealth entities (non-corporate entities) subject to the Public Governance, Performance and Accountability Act 2013 (PGPA Act) must govern and undertake their own property management activities in a transparent and informed manner.
Resources
This guide is available on the Department of Finance website at www.finance.gov.au.
The Commonwealth Property Management series of guidance materials supports the Property Framework which facilitates informed decision-making processes and establishes the foundation for the efficient, effective, economical and ethical use of Commonwealth property resources. Accordingly, this document forms part of the guidance to non-corporate entities under the Property Framework. The published suite of documents form part of the Resource Management Guidance series issued by Finance including:
RMG No. 500 Overview of the Commonwealth Property Management Framework
RMG No. 501 Property Management Planning Guidance
RMG No. 502 Guidance for the Two Stage Capital Works Approval Process for Australian Government Construction Projects
RMG No. 503 Whole-of-Life Costing for Australian Government Property Management
RMG No. 504 Commonwealth Property Management Framework Lease Endorsement
Process
RMG No. 505 Funding arrangements for Commonwealth Property
RMG No. 506 Flexible and Efficient Workplace Design Guidance
Additional guidance is available from the Commonwealth Property Management Framework webpage at http://www.finance.gov.au/property/property/property-management-framework.html or by contacting
Summary
1. The Property Framework incorporates a range of policy, guidance and cooperative activities to support non-corporate entities to achieve efficient, effective, economical and ethical property outcomes in line with the requirements of the PGPA Act. In relation to the management of Commonwealth property, the Accountable Authority (or an official authorised by the Accountable Authority) mainly discharges this responsibility by ensuring that their entity has appropriate strategic planning, policies and procedures in place to achieve value for money in property management.[1]
2. The purpose of the Property Framework is to establish an evidence base for property decision making across Government based on the Commonwealth Property Management Principles. The Property Framework evidence base is applied consistently during entity cost-benefit analysis, the lease endorsement process, review by the Expenditure Review Committee of Cabinet and scrutiny from the Public Works Committee (PWC). This allows for robust, equitable and informed decisions to be made on a repeatable basis.
Introduction
3. The Property Framework applies to property leased or owned within the Australian Government’s property portfolio. Where a project falls outside the scope of the Property Framework, the principles contained in the Property Framework can be applied as a matter of best practice in managing Commonwealth property resources.
4. Corporate Commonwealth Entities (corporate entities) subject to the PGPA Act are not subject to the Property Framework. However, corporate entities may be directed by the Minister for Finance to apply policies of the Property Framework, and should have regard to other relevant policies such as the Financial Framework. Corporate entities should note that while the Property Framework does not apply to them in general, some aspects of the Property Framework such as the Commonwealth Property Disposal Policy do apply (unless specifically exempt).
5. The Department of Defence (Defence) is subject to the Property Framework but maintains a separate two stage approval process for Defence estate capital works. This process is similar to, and consistent with, the two stage capital works approval process, incorporating cost-benefit analysis and whole-of-life costing processes that are undertaken in consultation with Finance.
6. Property leased and owned by the Commonwealth that is located overseas is subject to the Property Framework. The Commonwealth’s overseas owned property estate is managed by the Overseas Property Office (OPO) within the Department of Foreign Affairs and Trade. OPO, in consultation with Finance, is responsible for guidance in relation to the management of overseas property.
Commonwealth Property Management
Policy Principles
7. The Property Framework is based on the five Commonwealth Property Management Principles (Property Framework Principles) for efficient, effective, economical and ethical property management:
- Value for money: ensure the best outcome of property decisions
- Property management planning: support property planning and management
- Efficient and effective design: encourage the best design solutions for organisational needs
- Appropriate accountability measures: document property decision making
- Cooperative Commonwealth property management measures: ensure property decisions consider whole-of-Government outcomes.
8. Adherence to these principles is supported through the policies and guidance of the Property Framework.
Key legislation that interacts with property management
9. There are many policies and legislative provisions outside the Property Framework that have implications for property management decisions that non-corporate entities should be aware of. Some key legislation includes:
· Australian Capital Territory Planning and Land Management Act 1988;
· Environment Protection and Biodiversity Conservation Act 1999;
· Lands Acquisition Act 1989; and
· Public Works Committee Act 1969.
Resource Management Guide 500 / Overview of the Commonwealth Property Management Framework | 1Commonwealth Property Management Framework
Resource Management Guide 500 / Overview of the Commonwealth Property Management Framework | 4Planning and Reporting
Property management planning
10. Consistent with the Property Framework Principles, the Property Framework requires all non-corporate entities to have a property management plan in place to support the achievement of short, medium and long term property objectives. The property management plan must be approved by the entity’s Accountable Authority (or an official authorised by the Accountable Authority).
11. A property management plan is an internal planning document which should be directly linked to an entity’s broader strategic plans, including business and corporate plans. As a matter of best practice, this plan should be reviewed and updated on an annual basis or more regularly if circumstances require, so that the plan remains aligned with the objectives of the entity.
12. Documentation of the property management plan is a critical element of accountability and should be considered in accordance with the Property Framework Principles. A well planned and executed property management planning process that is supported by appropriate documentation is more likely to be executed and to withstand external scrutiny.
13. Finance has released Property Management Planning Guidance which is a better practice tool to support a structured approach to property planning. While the specific content of property management plans is largely determined by each entity to reflect their own property management practices, the Property Management Planning Guidance provides advice on the possible coverage and structure of property management plans.
14. For assistance with drafting property management plans, contact Finance at .
Risk management
15. Appropriate strategies to manage and mitigate risks should be at the heart of a structured property management plan. The Property Management Planning Guidance provides general guidance on typical risk analysis considerations. Non-corporate entities should have regard to the principles and guidance outlined in Comcover’s Risk Management Better Practice Guide as well as the Risk Management Standard: Risk management – Principles and Guidelines AS/NZS ISO 31000:2009. Comcover is also responsible for the whole-of-Government risk management policy.
The Australian Government Property Data Collection
16. The Australian Government Property Data Collection (PRODAC) has been established as an evidence base for the office space leased and owned by the Australian Government. This information helps non-corporate entities to identify opportunities for better practices, and progressively improve the management and use of office space while also informing whole-of-Government property decision making.
17. Non-corporate entities are required to collect specific data relating to their properties in accordance with the data specifications issued by Finance, and report this information to Finance. PRODAC collects two files of data information:
· the PRODAC Property File contains information about the office space leased and owned by the Australian Government as of 30 September each year. The Property File includes area, workpoint and descriptive data; and
· the PRODAC Cost File contains information on expenses and revenue related to office space leased and owned by the Australian Government on a full financial year basis. The Cost File includes rent expense, revenue and administration expense data.
18. The PRODAC Specifications provide guidance for non-corporate entities to use when collecting and reporting PRODAC data. For further assistance on PRODAC contact .
The Commonwealth Real Property Audit
19. Non-corporate entities are required to report annually to Finance on land holdings including the size, location and brief description of each property, value and characteristics such as contamination and heritage. The Commonwealth Real Property Audit informs development of property policy and provides information to assist in Commonwealth decision making.
Information Sharing and Collaboration
Whole-of- Government approaches to property management
20. In accordance with the Property Framework Principles non-corporate entities should have regard to whole-of-Government outcomes in their property decision making and property management processes. Achieving these outcomes requires a high level of cooperation within an entity, with Finance and with other non-corporate entities.
21. Information sharing across non-corporate entities facilitates the identification of opportunities for the best use of Commonwealth property resources. It avoids unnecessary competition occurring when non-corporate entities attempt to locate property at the same time in the same market, and may also strengthen the Commonwealth’s negotiating position.
Commonwealth Property SES Band 1 Steering Committee
22. The Commonwealth Property SES Band 1 Steering Committee includes self-nominated representatives from non-corporate entities. The Committee and designated working groups aim to facilitate collaboration and innovation when solving contemporary issues.
Senior Property Officers Forum
23. The Senior Property Officers Forum (SPOF) promotes the sharing of good practice property management and enable non-corporate entities to contribute to the development of the Property Framework’s policies and guidance materials. The SPOF also fosters the development of productive working relationships and information sharing across non-corporate entities.
Govdex
24. Govdex (https://www.govdex.gov.au) supports collaboration across government. It is a secure, private, web-based space that helps non-corporate entities to manage projects, and share documents and information.
25. The Commonwealth Accommodation Register and further information on government property management is available on govdex.
26. To enquire about becoming registered as a member of the Commonwealth Property Management Community on govdex please contact .
Co-location
27. To streamline the process of setting up shared arrangements and transferring leased space between non-corporate entities, a suite of guidance documents has been developed by Finance. This guidance includes:[2]
· the Commonwealth National Lease – which can reduce the time and costs associated with lease negotiations and improve the commercial office market’s understanding of the Commonwealth’s position in leasing transactions;
· guidance and Memoranda of Understanding for the assignment and subleasing of property between non-corporate entities – which provides voluntary Memoranda of Understanding templates and guidance developed to support non-corporate entities when assigning and subleasing property to other non-corporate entities;