Administration and professional services

Introduction

The Land Transport Management Act 2003 (LTMA The Land Transport Management Act 2003, as amended from time to time. ) makes a distinction between:

• administration activities
• professional services
• other costs.

Output-based agreements with in-house professional services Technical inputs to an activity undertaken by persons skilled in fields relevant to that activity. business units and contracts for network and professional services must clearly identify the separation of these activities.

The information in this section applies to the 2012-15 NLTP A National Land Transport Programme Interrelated and complementary combination of activities that, when delivered in a coordinated manner, produce synergies – can span more than one work category and more than one activity class, e.g. a programme could include a road improvement and public transport improvement activities. adopted by the NZTA under section 19 of the LTMA, as from time to time amended or varied and before.

Definitions

The following definitions are intended to be used in relation to land transport activity in which the NZTA invests. They may not be relevant in any other context.

• Professional services are integral to an activity approved under section 20 of the LTMA The Land Transport Management Act 2003, as amended from time to time. . For NZTA funding purposes these are treated as an input and the cost is charged directly to the activity. They are services provided by a person (or persons) skilled in the particular field for which they are engaged.
• Administration is not integral to an individual project or activity that has been funded by the NZTA but nevertheless must be provided by an approved organisation to support the delivery of activities, such as management of a land transport programme. The cost of administration The components of activities that are reasonably provided in administering the delivery of land transport-related activities. is an overhead cost incurred in the delivery of activities.

Neither professional services Technical inputs to an activity undertaken by persons skilled in fields relevant to that activity. nor administration The components of activities that are reasonably provided in administering the delivery of land transport-related activities. (whether these are outsourced or obtained in-house) are activities in themselves (approved under s20 of the LTMA The Land Transport Management Act 2003, as amended from time to time. ). They are either inputs or overhead costs which make up part of the cost of approved activities.

Administration Funding Overview

Funding assistance for administration is provided separately for most activity types and it is calculated differently for different types of organisations, as follows:

• Territorial authorities/Unitary authorities are eligible for administration The components of activities that are reasonably provided in administering the delivery of land transport-related activities. at a fixed rate of 2.25% of the NZTA share for each eligible activity type, as detailed in the next section.
• NZTA (state highways) is eligible for administration The components of activities that are reasonably provided in administering the delivery of land transport-related activities. at a specified percentage for each activity class, which may be updated from time to time to reflect actual administration expenditure.
• Regional authorities are not eligible for an administration The components of activities that are reasonably provided in administering the delivery of land transport-related activities. percentage. Their administration costs are included as part of the direct cost for an activity.

Administration Funding per Activity Class A grouping of similar activities, as defined in the Government Policy Statement.

Professional Services Funding Overview

Professional services cost (whether provided in-house or contracted out) should be included as part of the direct cost for an activity.

For Maintenance an Operations, professional services Technical inputs to an activity undertaken by persons skilled in fields relevant to that activity. are funded under work category A type of activity – not confined to a particular activity class, e.g. new roads (work category 323) appears in:

* activity class 12 – local road improvements
* activity class 13 – state highways improvements 151: Network and Asset Management, rather than under the individual work categories, except for:

• 123: operational traffic management
• 141: emergency works

Procurement The purchase of works, goods or services. procedure requirements

Approved organisations that have NZTA approval under LTMA The Land Transport Management Act 2003, as amended from time to time. section 26 for professional services Technical inputs to an activity undertaken by persons skilled in fields relevant to that activity. and administration The components of activities that are reasonably provided in administering the delivery of land transport-related activities. need to be aware of the extent of that approval.

• Expenditure on professional services Technical inputs to an activity undertaken by persons skilled in fields relevant to that activity. is exempt from procurement procedure A procurement procedure approved under section 25 of the LTMA. requirements only when they are obtained in-house. When outsourced the expenditure is subject to procurement procedure requirements and the services must be purchased using an approved procurement procedure.
• Expenditure on administration The components of activities that are reasonably provided in administering the delivery of land transport-related activities. is exempt from all procurement procedure A procurement procedure approved under section 25 of the LTMA. requirements – regardless of whether the services are obtained in-house or outsourced.