Yarra Valley Water (YVW) engaged PCI to re-design and renew its maintenance contracting arrangements.

YVW's former contract model had been in place for some time, and needed to be reassessed against changing performance expectations, cost pressures and market conditions — requiring a clear-eyed look at what was working, what wasn't, and what a better model could look like, before any new arrangement was put to market.

The scope covered three parallel packages of work — Mechanical and Electrical (M&E) services, Civil Maintenance North, and Civil Maintenance South — with proponents able to tender for any individual package, any combination of two packages, or all three. This was a price-competitive process, with two bidders competing for each package.

Bid pricing was based on a binding tendered target cost rate, submitted on an open-book basis, covering all services expected to be delivered in the first year of the contract. Rates for subsequent years were set using CPI-X factors — a forecast year-on-year change in real terms relative to the first-year target cost rates. Scope of work across all packages included emergency and unplanned maintenance and scheduled maintenance. 

PCI's role:

• Reviewed the former contract model to understand its strengths and weaknesses, along with cost and performance trends over time

• Engaged with relevant stakeholders across YVW to develop a new contract model suited to its future needs

• Designed and facilitated a price-competitive market engagement and selection process across the three parallel packages (M&E, Civil North and Civil South), allowing proponents to bid for single, combined or all three packages

• Structured the pricing framework, including binding open-book target cost rates for year one and CPI-X escalation factors for subsequent years

• Helped establish an appropriate contract management support function to ensure desired outcomes are achieved and incentive payments are well-founded

• Supported YVW's internal team to develop a comprehensive plan for contract transition and mobilisation across all three arrangements

• Continued to support YVW post-award, helping to resolve early implementation issues and refine contract management arrangements as the new models bed in

Outcomes:

• Three new maintenance contracting arrangements were successfully developed and taken to market in parallel — M&E, Civil North and Civil South — through a price-competitive process, replacing a legacy arrangement that no longer matched YVW's needs

• A flexible tendering structure allowed proponents to bid across single or multiple packages, encouraging competitive tension while giving YVW flexibility in how the market responded

• A contract management function was established to ensure ongoing performance is properly tracked and incentives remain well-founded across all three packages

• PCI's continued post-award to help YVW work through early teething issues, positioning the new arrangements for long-term success

• All procurement timelines were achieved and all three packages were awarded.