A collaborative exercise between the Government and industry to improve construction tendering and contracting processes should lead to multi-million dollar improvements for both parties in future years, says the Chair of the Construction Strategy Group (CSG), Geoff Hunt.
The CEO of Hawkins Group, Hunt says new guidelines produced for state agencies to use in major construction projects should result in cost savings and value enhancements of at least 5% of the annual $7 billion spend.
Geoff Hunt says the new guidelines are intended to bring about better and earlier communication between the tenderer and contracting parties, greater effort to allocate project risk to the parties best suited to manage them, more regular use of standard contracting procedures and an emphasis on total cost of ownership and “best value” rather than lowest cost.
Need to embrace the new guidelines
The CSG would like to see these new guidelines adopted for use by all local governments and all state agencies.
Says Geoff Hunt: "The approach should be that these are automatically followed unless a good reason or reasons can be provided why an alternative process is to be used. The potential savings to taxpayers and ratepayers as well as industry are too great to allow wide-spread non-observance of them. Already both the public sector and industry have contributed a great deal of time and money to produce this best-practice material."
The CSG is keen that the new processes are adopted as widely as possible among Government agencies and departments.
“Introduction of the Global Procurement Agreement (GPA) makes it all the more important that state agencies observe these guidelines and follow the rules and principles established for Government procurement. A strong Government procurement platform and consistent adherence to it will give confidence to local and international businesses that there is a fair and stable base on which they can rely.
“There should, in our view, be an obligation on heads of Ministries and Departments to ensure there is such adherence. Confidence within the construction and building materials supply market in the commitment of state agencies to the platform now established will greatly enhance the ability of government to obtain best value from its suppliers.”