2.1
The Department of Health (Health) seeks approval from the Committee to proceed with the proposed Fitout of New Leased Premises at Fairbairn Business Park, Canberra. The aim of the project is to relocate the Therapeutic Goods Administration’s laboratory from its current location in Symonston, ACT to Fairbairn Business Park, Canberra Airport. In addition, the project will create an additional 8,500 m² of office space that will serve as Health’s second campus in the Australian Capital Territory.
2.2
The estimated cost of the project is $60.7 million (excluding GST).
2.3
The project was referred to the Committee on 1 September 2020.
Conduct of the inquiry
2.4
Following referral, the inquiry was publicised on the Committee’s website and via media release.
2.5
The Committee received one submission and one confidential submission. A list of submissions can be found at Appendix A.
2.6
On 30 October 2020, the Committee conducted a project briefing, public and in-camera hearing via teleconference. A transcript of the public hearing is available on the Committee’s website.
2.7
On 20 November 2020, the Committee conducted a site inspection of the current Therapeutic Goods Association (TGA) accommodation in Symonston, ACT.
Need for the works
2.8
The TGA, a division of the Department of Health, ‘is responsible for regulating therapeutic goods, including over-the-counter medication, prescription medications, vaccines, sunscreen, vitamins and minerals, medical devices, blood and blood products. This work is undertaken by a specialist TGA workforce and requires some special-purpose accommodation.’
The existing facility at Symonston is no longer best supportive of the TGA in fulfilling this role. It has served the Commonwealth very well, but it is almost 30 years old. It does not have the flexibility within its design to meet modern standards, testing or scientific methods or modern workforce amenity. It is expensive to run and the site itself provides very limited amenities for our staff.
2.10
In their submission to the inquiry, Health note that the Symonston ‘fitout is not consistent with a modern workplace for ICT, amenity, design, or collaborative and flexible workspaces.’ ‘A full fitout refresh would likely be required and some significant structural remediation works to the aging building would likely be required’, if the TGA were to remain in Symonston.
2.11
In addition, Health told the Committee that the specialist plant and equipment servicing the laboratories will be close to thirty years old by the end of the current lease.
Advice received from engineering experts indicates that several of the building services require replacement or upgrading to meet modern standards, should TGA remain in the building beyond the existing lease expiry.
Under the existing (status quo) triple net lease arrangement, the TGA is responsible for all repairs and maintenance costs of the Symonston facility. The current annual lease costs are approximately $11.7m. This is comprised by rental costs of $6.5 million per annum and associated outgoings of approximately $5.2 million per annum.
2.13
Health told the Committee that due to the changing requirements of the TGA, the TGA require less laboratory space than previously, allowing for an opportunity to downsize in a new location.
…the proposal will provide the TGA with modern purpose-built laboratory facilities with more flexible designs and updated modern office accommodation as well, with greater staff amenity in the buildings and precinct, and it will provide these for the long term.
Options considered
2.15
In their submission Health stated that in 2019-20 they undertook a two-stage approach to market to identify the best value for money solution to meet its needs, from the expiry of the existing Symonston lease (30 June 2022). This resulted in nine competitive lease offers, which were shortlisted to three proposals for new buildings.
2.16
Health also considered an unsolicited offer by the existing landlord (Cromwell Group) to refurbish the current building in Symonston.
The type of work undertaken by the TGA in the laboratories does not allow for accommodation in CBD areas, due to land use permissions associated with the Crown Lease. Based on the TGA’s activities, it must be located in an industrial zoned area. In the ACT, these areas include Hume, Symonston, Fyshwick, and Majura (including the airport).
2.18
At the conclusion of the second procurement stage, Health selected the Canberra Airport Group’s proposal as preferred.
2.19
Health state that the ‘new proposed leases combined represent a reduction in NLA [Net Lettable Area] of around 4,800 square metres (or 26 per cent) compared with the current Symonston facility.’
2.20
As well as providing a new facility for the specialist TGA workforce, the proposed facility will serve as Health’s second ACT campus with a capacity for around 730 employees in total. Health stated that this ‘provides its broader workforce with flexibility of preferred work location and additional amenity, and the Department itself with a business continuity solution away from the main Woden Headquarters campus.’
Scope of the works
2.21
The proposal at Fairbairn Business Park is comprised of two separate buildings, an 8,500 m² office building, and a 5,200 m² laboratory with the two connected by a covered walkway. The office has the capacity to accommodate up to around 730 employees.
2.22
Health stated in their submission that the proposed office fitout works includes:
Integration of services into the base building works including electrical, air-conditioning, ventilation, lighting control, voice and data communications, audio visual equipment, security, fire, and hydraulic services.
Office accommodation including partitioning for individual office, meeting and conference rooms, reception areas, utility and storerooms, secure rooms, training rooms, break-out and staff amenities (including end of trip facilities) and communication and equipment rooms.
Workstations including desks, team storage units and personal lockers. Power cables will be reticulated in the workstation screens while data will be predominantly wireless.
2.23
Health told the Committee that:
the office fitout is aligned with the principles of the department's New Ways of Working Initiative, which focuses on improved information and communications technology, enhanced collaboration spaces and a variety of work settings.
the large floor plates in the office building will be connected through a central core that will include the base building lift, bathroom facilities and stairs allowing vertical connectivity between floors.
the current approach includes a ratio of premium ergonomic workstations of seven workstations for every 10 employees. In addition, staff will also have access to 3-4 informal collaborative settings, 3-4 formal collaboration settings (meeting and project rooms) and 2-3 networking/social settings.
2.24
The proposed scope of the laboratory fitout includes:
Delivery of services including electrical, air-conditioning, ventilation, lighting control, voice and data communications, audio visual equipment, security, fire and hydraulic services.
Laboratory accommodation including three main work zones being: office and workstations, main laboratories, and support laboratories.
The laboratory accommodation will be of a standard to support certification under section 90 of the Gene Technology Act 2000 and to the standards of the Gene Technology Regulator, as Physical Containment level 2 (PC2).
The support laboratory space will consist of general wet and dry laboratories, instrument, equipment and other support rooms.
Workstations including desks, team storage units and personal lockers. Power cables will be reticulated in the workstation screens while data will be predominantly wireless.
2.25
Health stated that the laboratory fitout is highly specialised and is being finalised in close consultation with staff, based on the TGA's requirements, the main users of the laboratory.
Staff consultation
2.26
At the public hearing Health told the Committee that:
Over the course of 2019, the engineers who did the functional design brief spent a lot of time with TGA staff across the organisation, talking to staff about the functions of the TGA and the needs of individual areas, and, in particular, the laboratory staff spent a huge amount of time with the engineers talking through our functions et cetera. Staff had the opportunity to talk through workflow issues, how the current building serves us or doesn't serve us and what we would need in the future to future-proof our functions. In addition to that, the TGA has run an accommodation committee throughout the course of 2019 with representatives from the areas across the Therapeutic Goods Administration, including health and safety representatives. The progress of the project was discussed at that accommodation committee. At this point in time, there are workshops being held with the TGA staff around the interior design of the office building. The laboratory staff have already been through that process.
2.27
Health further added that:
There's been a range of consultations with staff on the accommodation specifically and working through detailed designs. In terms of this particular presentation and this particular proposal, this has been discussed with our National Staff Participation Forum, which includes representatives from the Community and Public Sector Union, as well as particular staff networks, including the Pride Network, our Aboriginal and Torres Strait Islander and Indigenous Network, and also disability and carers networks. We've undertaken talking it through with staff to make sure that their views are heard and incorporated into the designs and the proposal to make sure that it works for both our workforce and the department.
2.28
In its submission, Health stated that to date, staff feedback ‘has indicated a strong preference for continued remote working, with staff preferring to undertake individual/focused activities remotely.’ As a result Health noted that ‘the design focuses the workplace towards collaborative and team activities, while still providing work settings for focused work when required.’
2.29
When questioned by the Committee about what issues or concerns had been raised by staff in response to the proposal, Health stated that it had received some questions about the availability of parking and public transport, and clarification about which staff would be relocating to Fairbairn.
2.30
Health told that Committee that with regards to staff relocations the ‘office accommodation is very much firming towards it being for TGA staff. The laboratory building, of course, will be exclusively for the TGA's access and use.’
2.31
In response to questions from the Committee about the availability of parking and public transport, Health noted ‘there are 2,000 car spots available nearby…which means more car spots are available than are available at the current Symonston site.’ Health further noted that under the terms of the current lease at Symonston, staff were not charged for parking, however, at the new site staff would be required to pay for parking at a rate of $900.00 per annum. The Airport Business Parks website indicates an annual cost of $1,550/ $42.50 per week.
2.32
Health stated that it will be actively consulting with the Community and Public Sector Union (CPSU) on the project and the broader New Ways of Working initiative, and ‘the CPSU will be invited to attend design workshops and project meetings as a key stakeholder representing a significant proportion of the Department’s workforce’.
2.33
With regards to the ongoing impacts of COVID-19 on workplaces, Health stated:
Fitout density will be managed in accordance with physical distancing advice in relation to current and future pandemic responses.
The facility will allow for occupancy of up to 730 while maintaining appropriate social distancing in line with current public health advice, both in the context of sitting at your desk and in the context of moving through the building and using shared facilities—kitchens, breakout facilities, meeting rooms et cetera.
Cost of the works
2.34
Department of Health’s proposed fitout of new leased premises at Fairbairn Business Park, Canberra Airport, has an estimated total cost of $60.7 million, exclusive of GST.
2.35
The estimate total capital out turned cost is comprised of $18.6 million for the office building and up to $42.1 million for the laboratory facility.
2.36
Health provided further details on project costings in its confidential submission and during an in-camera hearing.
2.37
In its submission, Health noted that:
The whole-of-life costs associated with the leases is $365 million (excluding GST), representing a $101 million saving on a whole-of-life basis, or $3.8 million a year (escalating annually), against the current building.
2.38
At the public hearing Heath told the Committee that the proposal ‘will deliver savings for the Commonwealth of over $100 million compared with existing arrangements.’
2.39
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.
Revenue
2.40
There will be no direct revenue generated by the project.
Committee comment
2.41
The Committee recognises the important role of the TGA in regulating therapeutic goods in Australia, particularly in light of the ongoing pandemic, and is understanding of the specific needs of the TGA in fulfilling its role.
2.42
The Committee notes the age of the current facility out at Symonston and is appreciative of the need for the laboratory to be located in an area zoned for industrial activity. The Committee recognises that this has placed limitations of the number of sites that could be considered as part of the proposal. More generally, the Committee believes that greater detail should have been provided on the option of the Commonwealth building, owning and operating a new laboratory.
2.43
The Committee was pleased to see that staff had been consulted as part of the design process, and staff feedback had influenced the design of the fitouts. The Committee encourages Health to continue engaging with staff throughout the process and work with representatives to resolve any issues that arise.
2.44
All entities relocating staff to new sites should consider the availability of parking and transport options, and the potential increased cost this may place on staff.
2.45
Having regard to its role and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.
2.46
The Committee recommends that the House of Representatives resolve, pursuant to section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: Department of Health’s Proposed Fitout of New Leased Premises at Fairbairn Business Park, Canberra.
2.47
Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.