Revenue Dependency For Public Works' Services Program - TB CIRCULAR 1987-39
CIRCULAR NO.: 1987-39
OUR FILE: TB 804983
DATE: August 31, 1987
TO : Deputy Heads of Departments and Heads of Agencies
SUBJECT: Revenue Dependency for Public Works' Services Program
Summary
EFFECTIVE APRIL 1, 1988, PUBLIC WORKS CANADA (PWC) WILL CHARGE MARKET-BASED RATES FOR ALL COMMON SERVICES.
- From April 1, 1988, PWC will be providing architectural, engineering, real estate, real property management and dredging services to its client departments in accordance with the Treasury Board-approved rate structure shown in the annexes to this circular.
- The rates are to be used as guides by PWC during its negotiations with client departments, focusing on level of service, to give PWC the flexibility of charging fees comparable to those of the private sector. The rates and negotiated fees will be set out in specific service agreements, which will be available for audit as required.
- To compensate for additional charges due to the implementation of the market-based rate structure, PWC will transfer resources from its 1988-89 and future year reference levels to client departments through the forthcoming Multi-Year Operational Plan (MYOP). Public Works has advised its clients of the amount of resources to be transferred. In special cases only, final adjustments may be made before the Fall MYOP with the concurrence of PWC, the client department and the Treasury Board Secretariat.
- Departments are not required to seek new approval for capital projects whose previously approved total estimated costs increased solely as a result of the application of PWC's new fee structure.
- Public Works, in consultation with the Bureau of Real Property Management and the Office of the Comptroller General, is preparing a discussion paper on the implementation options for the Revenue Dependency for Public Works Accommodation Program. It is expected that the discussion paper will be reviewed by the Treasury Board by the fall of 1987.
- Enquiries about this circular should be directed to the Bureau of Real Property Management.
L.J. O'Toole
Executive Director
Bureau of Real Property Management
Annex A -PWC Fee Rate Schedule, Architectural and Engineering Dervices
Service Fee Base Fee Rate
Buildings, Transportation, Marine and Technology
Produce Lines
. Project Management
services and
Professional and
Technical Services
- Time Base Staff Hours Hourly Payroll Cost x
- % Base Construction Value(3) 2.25(2)
As per approved A/E
Norms and Fees
. Special and Advisory Staff Hours Hourly Payroll Cost x
Services 2.25(2)
. Construction Direct Costs(4) 10 % of Fee Base
Management Services
. Fixed Asset Direct Costs(4) 15 % of Fee Base
Management Services
Remarks :
- PWC and client will negotiate an amount for services based on A/E norms and on a fee rate schedule, approved by the Treasury Board, and disbursements. A norm is a production factor for service found to exist in the private sector in providing a specific element of work.
- The "Mark-Up Factor" is reduced to 2.0 when an employee works on any one project for a period exceeding 20 consecutive working days. The factor is reduced to 1.8 for full time resident supervision staff while on site.
- Construction value means an agreed upon estimated cost of the project or the construction award price, and authorized extras which are additional to a contract, but excluding any costs attributable to errors and omissions on the part of PWC.
- Direct costs include the costs of all equipment, materials, labour and miscellaneous charges excluding taxes and/or grants in lieu of taxes directly associated with the construction of a project or the operations and maintenance of an asset. Direct costs will be charged to clients at cost.
- Disbursements for A/E services include payments to consultants, travel, overtime premium, isolated post allowance and the like, all in accordance with prevailing market practice and Treasury Board Policy. Disbursements will be charged to clients at cost.
Annex B -Public Works Canada, Realty, Realty Management Services, Fee Schedule
TYPE OF INVENTORY FEE
1) General Purpose Properties 3.5% of gross (guaranteed minimum fee
rent based on gross rent, +
escalations, at 95%
occupancy; year-end
adjustment if total
gross revenue exceeds
minimum)
2) Leased Accommodation 3% of gross rent (guaranteed minimum fee
same as #1 above)
3) General Purpose Properties 3.75% of gross (guaranteed minimum fee
- less than 1,000,000m2 rent same as #1 above)
(portfolio)
- Crown-owned
- generally small geographic
area
4) Special Purpose Properties 15% of O&M (fee based on agreed O&M
budget set for length of
agreement, or any other
agreed term; fee
increased annually based
on CPI, assuming no
change in program or
size of portfolio)
5) Parking Management 3% of gross rent (guaranteed minimum fee
same as #1 above)
6) Housing Managing 15% of O&M (fee based on agreed O&M
budget, same as #4
above)
5% of gross rent (for leased properties)
NOTE:
1) These fees are for a standard package of services. Deviations from the standard may require a different fee.
SPECIAL SERVICES FEE
1) Occupancy Instruments $750.00 per O.I. (does not include
- including housing disbursements such as
establishment of rental
rates and measurements
when required)
2) Project Management 15% of (in-house plant
- tenant services construction or engineering or technical
- moving contract costs services, which are
- fit-up and re-fit charged at 2 x payroll,
- capital projects do not form part of fee
base on which 15% is
charged)
3) Advisory Services, 2 x Payroll (when charged to a
Additional Services, Costs non-O&M project)
Professional and Technical
Expert Services, Other Project
Time Changes
4) Management of Conference 15% fee on all (including payroll
Facilities, Ceremonial Events, costs costs)
Events, Other Similar Events
5) Plant Engineering Services 2 x Payroll (when charged to a
Trades Shops Services Costs non-O&M project)
NOTES:
- GROSS RENT includes base rent plus taxes plus O&M (including utilities) plus escalations.
- O&M includes utilities, repairs, maintenance, payroll costs, but excludes taxes.
- Staff charged to buildings are charged to enable recovery of all costs associated with each person, including benefits, etc. Staff training which increases employee productivity and is thus to the custodian's benefit is charged to building O&M or a project, as the case may be; staff development which is offered for the employee's benefit is absorbed in overhead.
- First-line white collar staff, which are always charged to buildings, refer to Property Managers and Property Officers.
- Decision concerning whether time-charging is appropriate is based on the activity, as overhead staff will be charged for if performing a billable activity.
- Measurement is always a billable activity.
- On-site accommodation provided for blue collar or first-level white collar staff is paid by the owner.
Annex C - Public Works Canada, Realty, Real Estate Services, Fee Schedule
1) Appraisal Services
Non-accredited (Up to AS-04) - $400/day Accredited (AS-05/06) - $475/day Manager Level (AS-07, SM, EX) and - $600/day advice/assistance Court Appearance/Arbitration - $700/day
Professional review of contracted work - appropriate per diem.
2) Acquisition/Disposals
Up to $75,000, per diem as appraisal service subject to SSA.
All transactions for which values are unknown or unattainable (e.g.: easements, interdepartmental transfers, quit claims, etc....), per diem as per appraisal service subject to SSA.
For all transactions above $75,000, a sliding scale from 5% to 1% of purchase price (not including appraisal and special work associated with government requirements). For disposals above $75,000, a sliding scale from 2.5% to 0.75% of disposal price (not including appraisal for special work associated with government requirements).
Acquisitions Disposals $75,001 - $250,000 @ 5% $75,001 - $250,000 @ 2.5% $250,001 - $500,000 @ 4% $250,001 - $500,000 @ 1.75% $500,001 - $5,000,000 @ 2.5% $500,001 - $5,000,000 @ 1.5% plus de $5,000,000 @ 1% plus de $5,000,000 @ 0.75%
For major land assembly projects, 3.5% of the purchase price (not including appraisals and special work associated with government requirements).
For special work/advice related to this service, per diem as appraisal service subject to SSA.
For lease purchase, 1% of net present value of rents.
3) Property Development
2.4 times salary of staff assigned to project subject to SSA.
4) Survey Services
Junior Instrument - $190/day Party Chief - $265/day Draftsman - $300/day Surveyor - $525/day Consulting - $525/day
Professional review of contracted work - appropriate per diem.
5) Central Real Property Inventory
2.0 times salary of staff assigned to project subject to SSA.
6) Municipal Grants
Researchers/Clerks - $190/day Junior Appraisers (up to PM-02) - $265/day Intermediate Appraisers (PM-03/04) - $415/day Senior Appraisers (PM-05/06) - $565/day Appeals/Court Appearances - $150/hour
7) Leasing/Letting
5% of first year's gross rent plus 2% of each additional year.
NOTE:
- All Real Estate Services, with the exception of acquisition by expropriation, and some survey projects can be offered on a Fixed Fee. Expropriation and some survey projects will be charged according to time actually spent.
- "Consultation/advice" fee rates are as per applicable service fee rates in each case.
- Disbursements are billed at cost.
- Staff time required for travel will be added to service and charged at the appropriate per diem rate.
Annex D - PWC Fee Rate Schedule, Dredging and Fleet Services
| Service | Fee Base | Fee Rate |
|---|---|---|
| Dredging | Full Costs(1) | 10% of the Fee Base |
| Marine Facility Repair and Channel Obstruction Clearance | Full Costs(1) | 10% of the Fee Base |
| Surveys | Full Costs(1) | 10% of the Fee Base |
REMARKS
- Full costs include the direct costs of all labour, plant, material and equipment necessary to operate and maintain the floating plant including the costs of on and off-shore support facilities plus the amortization of capital costs. These will be charged to the client at cost.
- PWC and the client will negotiate an estimated amount, on a project or annual basis, covering charges for management and full costs.
- Estimates for negotiation and subsequent charges will be made up of the management fee and full costs.
- Date modified: