Part 4: Monitoring and evaluating maintenance work
4.1
In this Part, we discuss the Corporation's systems and processes for:
- monitoring maintenance work;
- comparing the quality of its housing with the quality of properties in the private sector; and
- improving its maintenance performance and processes.
4.2
There are no recommendations in this Part. Overall, we are satisfied with the Corporation's systems and processes for monitoring and evaluating its maintenance work.
Monitoring maintenance work
The Corporation monitors the maintenance work that contractors carry out through a quality audit process and through contract management staff.
4.3
The Corporation monitors how maintenance work is carried out through:
- formal quality audits;
- measuring job response times; and
- day-to-day contract management.
4.4
The Property Improvement Team's quality auditors assess whether maintenance contractors and the Corporation's staff comply with contract requirements and related procedures. This quality audit process is intended to continuously improve the condition of state housing properties, and to ensure that the Corporation delivers excellent customer service to tenants and receives value for the money it spends on maintenance.
4.5
Each quality audit covers a sample of the contractor's work, including at least 70 urgent jobs, 15 exterior paint jobs, and five estimates of the work required on a vacant property (job scoping). Each quality audit also covers selected currently critical job lines, such as the quality of job scoping, hot-water cylinder safety fittings, glazing, or invoicing. The Property Improvement Team reports the results to contractors promptly, to remedy unsatisfactory work and to improve future performance. The team also reports the results to the local Maintenance Contract Manager, for calculating at-risk performance payments. The audit team checks on remedial work in follow-up "mini-audits".
4.6
Contractors we interviewed told us that they found the quality audit processes to be rigorous. While variations in auditing style resulted in some perceptions of excessive fault-finding and "by the book" rulings lacking reasonable regard for operational or commercial realities, contractors also viewed audits in constructive terms, as aids to their own performance improvement.
4.7
The Corporation has routinely monitored contractors' job response and completion times since 2005/06 for performance management purposes. KPIs require responses to urgent health and safety jobs within four hours, to urgent responsive jobs within an average of 1.02 working days, and to general responsive jobs within 10 working days. Average response times for urgent health and safety and general responsive jobs have been well within the target times, while non-health and safety urgent responsive jobs are marginally outside (see Figure 1).
Figure 1
Average response times for urgent health and safety and general responsive maintenance
| Target | 2005/06 | 2006/07 | 2007/08 | |
|---|---|---|---|---|
| Urgent health and safety jobs | Less than 4 hours | 2.10 hrs | 1.79 hrs | 2.00 hrs |
| Urgent responsive jobs | Less than 1.02 days | 1.06 days | 1.07 days | 1.10 days |
| General responsive jobs | Less than 10 days | 4.13 days | 4.75 days | 4.81 days |
Source: Housing New Zealand Corporation
4.8
The Corporation's regional Maintenance Contract Managers and Maintenance Account Managers provide effective day-to-day monitoring of contractors. This includes:
- monitoring the progress of current jobs;
- negotiating and resolving differences about priorities, components, standards, and costs;
- managing work flows; and
- delivering constructive feedback.
Comparisons with the private sector
The Corporation monitors its maintenance standards and performance through regular comparisons with the private sector.
4.9
The Corporation commissioned Opus International Consultants Limited to conduct independent annual reviews in 2006 to 2008 of the standard of maintenance and level of amenities in state housing properties compared to the private sector. These reviews, which give the Corporation an external perspective on the relevance and appropriateness of its standards, involve surveys of samples (different each year) of about 300 Corporation properties and 100 private sector properties in Auckland, Hamilton, Wellington, and Christchurch.
4.10
The 2006 report concluded that the Corporation's properties were generally maintained better than rental properties in the private sector market. However, the 2007 report found the private sector rental properties were maintained better, except for the quality of appliances, structure, and exterior painting. The Corporation's Property Improvement Team uses this information to adjust and set its maintenance standards.
Improving maintenance performance and processes
The Corporation works to continuously improve its maintenance performance and processes.
4.11
The Corporation uses information obtained in its monitoring to improve performance. The quality audit system is the main instrument for this. It enforces standards, and identifies and exemplifies good practices. It motivates contractors, through feedback and ultimately through rewards and sanctions, to meet the performance standards. Surveys of response times (see paragraph 4.7) and surveys of tenants (see paragraph 3.26) also inform how the Corporation manages the performance of contractors. The Corporation feeds information it acquires through its Maintenance Management Model (see paragraph 2.16), and about other future maintenance commitments it is able to identify (such as local authority services upgrades), into its planning processes.
4.12
The Corporation's Property Improvement Team reviews its processes and practices to improve effectiveness and efficiency. Recent results include introducing new technologies to improve efficiency in quality audits, and to streamline communications with contractors about job letting, job management and completion, and invoicing and payment. The team communicates and consults internally as a matter of practice, using scheduled formal meetings (of the Maintenance Contract Managers, and of the Quality Auditors, for example), and informal systems to share advice and information and to solve practical problems.
4.13
The Corporation has implemented changes in the maintenance of state housing with the move to a performance-based contract system in 2005. The changes involved a suite of new contract documents, a schedule of rates, a tendering system, and a quality audit regime. As stated in paragraph 3.11, we consider that the KPIs, quality audit, and significant financial penalties form an effective performance-based contract system.
4.14
The Corporation is now putting in place its next set of changes through the Asset Management Framework project referred to in paragraph 2.11. We emphasise our expectation that this project will meet its stated objectives and put in place by 2010/11 a new framework incorporating the elements covered in our recommendations.