Are we committed by the Stage 2 EOI?

Q. If we fill out the paperwork for Stage 2 to express an interest, are we
then obliged to be part of the alliance if the lead agency is successful? We
were unable to gather much information from the lead agency, and do not want to
commit to something which can not be followed through.

A. Your question raises a number of issues.

Firstly, it is important for members of a consortium or alliance to try
and get the arrangements sorted out before the EOI for Stage 2 is submitted to
DoCS so that your agency, as a potential partner in the alliance, can be clear
of what is expected of it – that is to clarify issues such as what services and
outputs your agency will be required to deliver and how much money your agency
will receive for providing this service. It is only when you are clear
about these types of questions, as well as the contractual arrangements around
the alliance, that you can make an effective decision about whether being part
of this EIP alliance is right for your agency. The details provided in the
Tool 2 - Checklist for small to medium sized NGOs in forming partnership under
Tools and Resources on this website should help your agency work out the types
of questions you may require answered by the lead agency.

Next, it is important for members of a consortium or alliance to try
and get the arrangements sorted out before the EOI for Stage 2 is submitted to
DoCS, as after that process, the next step will be for DoCS to enter into
contract arrangements with the successful tenderers to actually deliver the
service. So at that point you would be required to commit to what will become
part of a binding contract. The draft Service Specifications Early
Intervention Program (available on the DoCS website) state that:

‘Where the Lead Agency is part of a consortium, this organisation must be authorised to negotiate, act on behalf of, and bind each member of the consortiu. Written confirmation of this authority must be attached to the service specification. All consortiums should clearly set out the roles and responsibilities of each member organisation in an endorsed/approved agreement’ (draft Service Specifications Early Intervention Program from the DoCS website, Section 1.5.1, page 6).

Any changes to the Lead Agency, member agencies or the consortia agreement after that time will require the approval of DoCS – refer Section 2.9 Contract Management Requirements for Cosortia, pages 15-16 of the draft Service Specifications Early Intervention Program from the DoCS website.

It is therefore important that you try and get the information you need from the lead agency now in order to be able to make a decision that participation in the alliance to deliver the service is some thing that can be followed through once a decision on funding is made by DoCS.

Another matter is that that one of the criteria to assess Stage 2 EOIs that will be used by DoCS are the governance arrangements to support an integrated service model (including integration of service arrangements). Not only does each agency in the consortium or alliance have to complete Section 2 of the EOI form, but Section 3 requires details to be provided of the EIP service component to be provided by each member of the consortium and asks for some documentation about the arrangements for working together in the alliance or consortium. DoCS has indicated that this can take the form of an MOU, formal agreement or letter of intent). To have these arrangements in place, it is important for all agencies to have reached some agreement about how the partnership or alliance will work. And of course in the process of this being developed, it is important that you make sure the interests of your agency are protected.

Another potential problem if an agency joins a consortium or alliance and then does not proceed relates to the veracity of the bid. A question to consider is what if the EOI is successful because one organisation is seen as a desirable partner or consortium member and other tenderers lose out narrowly, then the organisation pulls out?

And remember, you do not have to sign or agree to something that you are not happy with. It is better not to proceed than to get into something that you cannot work with. A strategy at this time would be to work out the information your agency needs from the lead agency (the checklist in Tools 2 can be used to help you do this) and request that the lead agency provide this information prior to you agreeing to be part of the consortium or alliance.

Finally your agency also needs to look closely at anything it signs because it may be something binding them to the contract. If your agency is unsure or concerned about any of your rights or obligations under any agreement your agency may be entering into in relation to the Stage 2 of the EOI for EIP, your agency should seek independent legal advice (separate to the other parties in the consortium or alliance). While NCOSS cannot offer legal advice, all agencies are advised to seek professional legal advice on all contractual matters.

Responding to Question 12

Q. We are wondering how to respond to Question 12, which refers to contents of the Service specifications, when the Service Specifications have not yet been released?

A. This question is difficult for us to answer and perhaps is one you could send to the DoCS Q&A as well.

However, you will note from Appendix 2 of Part C of DoCS’s EIP Stage 2 EOI information that the Service Specification Guidelines are in draft form (being piloted in the EIP in the Blacktown and Bankstown areas). Section 2.6.3 of Part A of the package also includes reference to these guidelines.

Appendix 2 indicates that the draft of these guidelines have been provided to ‘short-listed applicants for reference’ and also they are ‘not meant to prescribe content for their response to the EOI’. So if your agency is a lead agency, then you should have a copy of the draft and if you are a partner agency, then perhaps you could ask your consortium’s lead agency for a copy to assist you to complete your input to Q 12 of the EOI. One possible strategy could be to develop your response to Q 12, taking into account the draft of these Service Specification Guidelines, but putting a proviso that you may need to make modifications to your strategies for ensuring your service model well meet the expectations/requirements of the EIP model, once the final of the EIP Service Specifications are released by DoCS.

Costing for a co-located worker?

Q: We have been asked by the lead agency in our consortium to provide them with a costing. In the proposed partnership, the lead agency will employ and pay workers and cover all associated costs. The idea is to "co-locate" the EIP worker at our service (and other like services in the region). On this basis the costing is quite minimal (eg rent/postage/phone etc). It does not seem to compensate in any way for the presence of a worker in our centre. What would you suggest?

A: In considering the situation you are referring to, with the EIP worker co-located in your service but employed by the lead agency, requires some careful thinking to ensure that all the costs to your service are in fact covered. The direct costs like rent, postage and phone may as you say be quite minimal, and should be relatively easy to calculate for the purposes of the EOI, based on your knowledge of your existing costs. However, there are a number of other costs that you may want to consider, including, but not limited to the following:

• Premises costs – remember these are not just rent; they may also include
  - cleaning, rubbish removal, recycling and/or cleaning supply costs
  - utilities (electricity and/or gas), other maintenance to your premises
  - meeting room hire costs or costs of use of space other than desk/office space for program activities
  - staff amenities and kitchen supplies
  - any other costs associated with your premises.
  
  These can be calculated on a percentage basis – the percentage of each of these costs that relate to the EIP project being located in your service.
  
  In relation to premises, you may also need to consider any capital costs associated with accommodating the new worker in your office e.g. building partitions, reconfiguration of space (and the EOI process does have some scope for capital costs to cover this)
  
• Office equipment, furniture etc – you will need to clarify whether your service is to provide office furniture (desk, chair, filing cabinet etc) and if you are expected to provide this, then you can include the cost of purchasing these items.
  
  You will also need to sort out in advance whether the lead agency will provide office equipment (e.g. computer, fax, phone, and photocopier) for use by the EIP worker. If not you will also need to cost in the purchase of these items (see details in the dot points below)
  
• Phone costs – again here, remember it is not just telephone costs – you may also need to consider other communication costs, including whether an additional line is needed on your phone system to cope with additional phone calls (and include set up and line rental costs), cost of facsimile, cost of broadband connection etc
  
• Office facilities costs – if the EIP worker is to use office equipment provided by your service then this needs to be costed in; this could include for example cost of photocopying (maybe a cost per page basis); cost of toner and other consumables for printer, fax etc
  
• Stationery and office supply costs – you will need to determine if your service is to provide these or if they are to be provided for the worker directly by the lead agency. If your service is to provide them then you would need to allow for the cost of additional stationery and office supplies to used by the EIP worker; you could then cost it as a percentage of your total costs for these types of items
  
• Information technology (IT) costs – if your service is to provide a computer and/or IT support, this could include the following costs:
  - the cost of providing a computer for the worker (hardware and software purchase costs), or if you have an existing computer, some contribution towards replacement costs in the future.
  - the costs of IT support (e.g. if you need to bring in someone for technical support, computer setup)
  - the costs of software upgrades (e.g. if you are upgrading the software on your systems, the costs for the computer used by the EIP worker)
  - if you operate on a network, the network administration and support costs (e.g. your admin time in backing up, network admin etc – again, the share for the computer used by the EIP worker)
  
• Administration staff time – you will need to clarify if your admin worker(s)’ time is to be used in any way to support the EIP project worker; if so, this would need to be costed in e.g.
  - if your admin worker is to answer the phone for the EIP worker and take messages
  - if your admin worker at reception is to greet visitors or clients of the EIP and/or provide information on EIP from the front desk
  - if your admin worker is to provide any admin support like doing copying, typing, data entry, etc
  
  If your admin worker is to provide any of the above, or any other admin support, then this time needs to be costed and included. It could be done as a percentage of the total admin staff costs.
  
• Project management and coordination time – the time for your service’s coordinator or manger in liaison with the lead agency re the establishment and ongoing management of the EIP service, participation in any project steering committees, consortium meetings or working parties, preparing accounts, or other involvement in the EIP.
  
  In addition, you would need to clarify if there is any expectation on the part of the lead agency that your service’s manager or coordinator will provide any support or supervision for the EIP worker that will be co-located in your service. If that is the case, then it will also need to be costed in.
  
  These project management and coordination tasks could be grouped together and costed as a percentage management fee.
  

You may also need to look at insurance costs and discuss with your insurance company whether accommodating this additional worker (and any activities that are associated with the EIP operating in your service) may have any impact on your insurance costs, so that they can be included if necessary.

In looking at each of the above areas, you may choose to either work out the actual costs associated with the additional co-located worker or include some or all of them in an overall management fee that is a percentage of your service’s total costs.

You might also like to refer to Tool 2 Checklist for small to medium sized NGOs in forming partnership under Tools and Resources on this website for further information not only on costing, but also on looking at the impact and benefits for your organisation of being part of a consortium.

What to include in ‘letters of intent’?

Q: We are a small NGO and will be partnering with locally based children’s services for our EOI in Stage 2. We are talking about a MOU and letters of intent. Can you advise what should be covered in 'letters of intent'. At this stage we have only a rough idea what the MOU might look like and feel more confident about proceeding with such letters of intent.

A: The information package from DoCS allows agencies submitting an EOI as a consortium to provide written authority for the Lead Agency to act for consortium members, and to support and document the consortium or partnering arrangements, to take one of a number of forms: as a Memorandum of Understanding (often referred to as an MOU), as a letter of intent, as a partnership agreement, or a letter of authority. So it is up to you to determine the form that will work best for your organisation and your partners in the process of developing your Stage 2 EOI.

In preparing letters of intent, there are a number of issues that you might like to consider including:

• Acknowledge and specify which agency will be the lead agency, and include a nominated contact person in that lead agency
• Specify who will be the partner agencies
• Set out what the lead agency and what the partners will do in relation to the planning, management and delivery of the service ie who will do what
• Set out how decisions will be made about how the money will be allocated between partners for the delivery and management of the EIP services
• Specify the proposed management arrangements for the new service
• Any other terms and conditions that you have agreed to.

You might also like to refer to Tool 2 Checklist for small to medium sized NGOs in forming partnership under Tools and Resources on the NCOSS website for other issues you need to consider in developing your partnership, and that you may wish to document in your letter of intent. You also need to remember that all partner agencies in the consortium need to complete Section 2 of the EOI form.

NCOSS is also currently getting legal advice on the form of a model MOU and we hope to post it on this website in the near future.

And, if your EOI successful, you may need to develop more formal contractual arrangements between the Lead Agency and partner agencies for the delivery of the service.

Is it OK to say No?

Q: We are a small family day care service and have been approached by two different lead agencies to sign up with them and feel very pressured by them.

They have not provided information that relates to the checklist on your website, nor actually provided any information as to who pays for the childcare places, what our scheme will actually benefit from by entering into a partnership. Can we say no if we are uncomfortable with the procedure?

A: You should never sign up to any agreement that makes you feel uncomfortable.

If the lead agencies are unwilling to spell out the details of what they want you to do, where you fit into their overall service model and how much funding would be available, you should not feel pressured to do anything that may potentially disadvantage your service.

Some lead agencies are finding it difficult to share information because of the competitive nature of this process. However, this puts smaller, potential partner organisations into an impossible position.

This is not a compulsory process and your service should not be disadvantaged if you decide to say No.

As a service you need to think about what you want to do, what the service goals and objectives are, and whether or not you think participating in the partnership would offer benefits to vulnerable families in your area.

If on that basis you decide not to participate, that is a legitimate decision.

If you decide it would be beneficial and you would like to participate, then the lead agency must be prepared to negotiate with you, to share information, to discuss terms and conditions, and to allocate an appropriate share of the funding based on your assessment of the costs to your service.

Working out costs

Q: I am from a locally based Family Support Service. We have just been approached by one of the lead agencies in our area requesting that we partner with them. They have said they would like us to provide home visiting and other support services for vulnerable families in our area. They have asked me to tell them how much our costs would be. How do I work out the costs for our service?

A: First of all you will need to sort out the amount of service delivery the Lead Agency will want you to provide. It’s important to be clear about that right up front – and it could be expressed in terms of number of hours of visiting, number of families to be visited (in which case you will need to estimate the length of visits and how often – and don’t forget to include travel time as well).

From this you can work out the worker hours you will need (and don’t forget to include time for staff meetings, supervision, travel between clients, time for collating data and any reporting required, or any meetings that will need to be attended).

Once you have the number of worker hours you can calculate the cost of direct service wages, plus on costs like super, leave loading etc and allowance for penalty rates if any work is outside normal hours. Again, don’t forget to take into account not only direct service time, but also time for staff and consortium meetings and planning as well as expected award increases and the need for penalty rates if required.

Then its time to consider all costs, so that they can be factored into the figure you give the Lead Agency. This means looking at the full range of costs which may include but not be limited to:

• Direct service costs – as discussed above
• Costs of setting up and managing the partnership (time, staff involvement)
• Additional administrative and coordination / management costs e.g. to cover the costs of advertising and employment, payroll, supervision and support for EIP direct service staff
• Costs to provide admin support to the new service, if needed
• Rent to provide space for service staff and for service delivery if any of the activities are centre based
• Premises – cost of reorganisation or refurbishment to accommodate new staff and services
• Additional office furniture and equipment required for new staff
• Equipment and resources to set up space(s) for programs
• Computers and other information technology upgrades required
• Travel costs, especially for the home visiting service. You will need to consider vehicle purchase vs. mileage reimbursement costs
• Costs of data collection and reporting

See also Tool 2: Checklist for small and medium sized NGOs in forming partnerships under Tools and Resources on the NCOSS website, which provides more detail and will also help you look at how the proposed new services will impact on the financial operations of your organisation, to make sure there are no detrimental effects on what you are doing now.

Named in another agency's EOI

Q: We are a small migrant resource centre and the lead agency for EIP in our area has mentioned us in their Stage 1 EOI. We knew nothing about this. Do we have to go in with that organisation in Stage 2?

A: No, there is nothing that means you have to go in with the Lead Agency. Before you make a decision about whether or not it is a good idea, you might want to look at Tool 2: Checklist for small and medium sized NGOs in forming partnerships under Tools and Resources on the NCOSS website. Clicking on the link will take you there. Working through some of the questions might help you understand some of the factors involved and help you make a decision about whether it’s the right way to go for you organisation. If you do decide to go ahead, then the checklist will help you know the questions to ask when you are negotiating and planning with the Lead Agency.