PROPERTY AND CONTRACT MANAGEMENT

Property Management
Property Group manages the Commonwealth's non-Defence property portfolio. The portfolio comprises approximately 400 properties in 50 countries valued at $2.4 billion. It includes Australian embassies and residences overseas, and commercial office buildings, law courts and laboratories within Australia.

Commercial Leasing Arrangements
During 1999-2000, DOFA extended commercial leasing arrangements across some 60 special purpose facilities within its portfolio. DOFA also transferred management responsibility for overseas leased accommodation to user agencies, which allows DOFA to focus on its core function of managing Commonwealth owned property.

Rents were reset at prevailing market levels to ensure the cost of occupying Commonwealth owned property is transparent and that a commercial return is generated on the value of the Commonwealth's real estate assets.

DOFA recorded a return on net assets of 9 per cent including realised capital gains on sold properties, which surpassed the target of 6 per cent. DOFA paid dividends of $72 million and made an equity repayment of $138 million to the Commonwealth from the Property Group. A survey of tenants found that in general, they considered property management and maintenance functions were satisfactory, although the survey identified some areas to improve responsiveness and consultation with tenants. DOFA will address these findings in 2000-01.

Divestment of Under-performing Assets
DOFA continued to sell, transfer or divest under-performing properties where no public interest reasons existed for retaining them. Ninety nine properties were divested in 1999-2000, achieving sales revenue of approximately $285 million which exceeded the 1999-2000 Budget target. Since 1997, the divestment programme has returned equity of more than $1.3 billion to the Commonwealth. Property sales valued at $257 million are scheduled for 2000-01.

Strategic Alliance Project
The Government announced in April 1999 that it would seek to establish a strategic alliance with the private sector to manage the non-Defence property portfolio. In July 2000, DOFA selected PricewaterhouseCoopers Process Solutions Pty Ltd, and expects to hand over the property management in early 2001. The alliance gives access to international best practice and improved rates of return, whilst maintaining the portfolio's value. DOFA anticipates savings of around $74 million in the first five year term of the alliance.

Construction Development
In 1999-2000, DOFA completed a number of major construction projects in Australia and overseas. In line with the target of providing cost effective, value added, quality property services, DOFA completed all projects to high standards, within budget and on time, often in very difficult circumstances.

A highlight was managing the refurbishment of an existing property in Dili, to be used as the Australian Consulate. The aftermath of East Timor's vote for independence added significantly to the complexity of the task. Work was completed over two months, in the face of limited local resources, logistical problems, cultural and language differences, and the sensitive environment. The Department of Foreign Affairs and Trade and the Australian Consul in Dili commended DOFA for the quality of the service provided by DOFA staff on the project.

Contract Management
Removals Australia Sale
The sale of Removals Australia was foreshadowed in the 1999-2000 Budget. Toll Transport Pty LTD was the successful bidder for Removals Australia in December 1999, with the handover taking place on 31 January 2000. The sale price of $10.4 million reflected the sound state of the business and exceeded expectations.

The excellent outcome was a result of Removals Australia's efforts to establish Memorandums of Understanding with clients, introduce enhanced purchasing arrangements, and establish good business relations with providers. Of the 113 removals firms who dealt with Removals Australia before the sale, only three chose not to renegotiate existing contracts with the new owner. Removals Australia's retention of staff was critical to the business functioning through its busiest time while the transfer of ownership took place.

Comcover
During 1999-2000, 535 claims totalling $16.0 million (net of member policy excesses) were reported to Comcover. This compared with 285 claims reported in 1998-99, totalling $7.8 million. This increase can be attributed to a greater participation rate by members in the Comcover Fund, increased familiarisation with their new insurance cover and a concerted programme by Comcover to raise awareness of the need to report claims and incidents to Comcover. Premium revenue increased significantly during 1999-2000, compared to 1998-99.

In September 1999, the Special Minister of State, Senator the Hon Chris Ellison, launched Comcover's risk management awareness and education programme. The first stage of the programme's delivery was to promote greater understanding and awareness of risk management in the Commonwealth, using awareness seminars and training sessions for members. Some 495 representatives from Comcover members attended these sessions. Comcover also established a Customer Advisory Group in February 2000 as a consultative forum in which members are encouraged to raise matters of interest.

Access to Government Information
Two main areas of improving access to government information have been targeted with the first being to improve quality, consistency, ease of access and cost of information products. The second was to increase awareness about this information. DOFA achieved both targets, with a 97 per cent increase in the number of hits on the Federal Government Entry Point, and international recognition of its quality, consistency and ease of access. During 1999-2000, the sites DOFA managed had nearly 54 million hits, indicating DOFA's success in improving access to government information. Sites managed by DOFA include www.fed.gov.au, www.scaleplus.gov.au, www.ausinfo.gov.au, www.lawsearch.gov.au and www.gold.gov.au.

Online with e-business
DOFA made considerable progress in e-commerce by improving access to information through online delivery. For example, it has more than 713 suppliers together with details on 4,600 dealer outlets registered on the Internet based pre-qualification system, the Endorsed Supplier Arrangement. The site had more than 15,000 hits during 1999-2000. In addition, two complementary purchasing access and accountability systems went live on the Internet in November 1999. The Gazette Publishing System www.contracts.gov.au was developed in conjunction with the Office for Government Online. This Internet site provides agencies and the public with the ability to review government procurement transactions of $2,000 or more. The Commonwealth Government advertising web site www.ads.gov.au, jointly developed by the Department of the Prime Minister and Cabinet with DOFA, allows business opportunities to be registered and reviewed online, 24 hours per day.

The popularity of the Internet portal www.fed.gov.au as a one stop shop increased dramatically in 1999-2000. This Federal Government entry point offers a comprehensive search capability covering 1,000 different subject areas, 300 agencies and over 450,000 Commonwealth documents. In 1999-2000, the site had 12 million hits, compared to six million last year, with around 40 per cent international usage. The site also was internationally recognised by the UK National Audit Office which acknowledged Australia as leading the field in developing a government entry point.

On 8 June 2000, the Special Minister of State, Senator the Hon Chris Ellison, launched the new Internet gateway site for the Australian Public Service, www.fedinfo.gov.au. This new gateway was developed in partnership with central agencies, and is a direct route to governance, policy and operational information for those working in or with the public sector.

The Government Online Strategy introduced in April 2000, requires agency compliance with the Guidelines for the Dissemination of Commonwealth Documents in Electronic Formats, developed by AusInfo in 1998-99 and updated in January 2000. The guidelines were highly commended in the 1999-2000 Public Service and Merit Protection Commission Workplace Diversity awards, for incorporating best practice in providing access to government information for diverse audiences.