Report

Towards agreed expectations: Tender strategies to improve design and construct infrastructure delivery outcomes

30 Jun 2012
Description

An investigation was undertaken in the second half of 2011, on behalf of the Council of Australian Governments Infrastructure Working Group, into the Design & Construct (D&C) model in contracting for public infrastructure. This investigation was conducted through a qualitative research method using semi-structured interviews to gather experiences and insights from many practitioners in the public and private sectors (covering both client and supplier groups).

The investigation witnessed an impressive commitment from all practitioners to “get things right” for both the client and for the infrastructure industry more generally.

Practitioners reported many good outcomes using the traditional contracting model (D&C, Construct Only and others) and expressed confidence in its continued relevancy and importance in the delivery of both infrastructure and building assets. Whilst historically traditional contracting has been associated with stories of an adversarial and litigious environment, this was not confirmed as the current experience. The practitioners interviewed (including public officials) were generally satisfied with the outcome of their traditional contracts, although there were strong views that improvements could (and should) be made.

All practitioners recognised that the standard of tendering for D&C contracts was not uniform across agencies, both in the client’s engagement of the market and in the tenderers’ ability to respond, leading to some sub-optimal practices and dissatisfaction. The investigation found that a good characterisation of the root cause of dissatisfaction was the expectation gap1 that results at contract execution.
Three key challenges were identified that could be satisfactorily addressed to close this expectation gap and to meet the challenge of delivering an optimal project outcome for both the client and the tenderer. These were:

  • people capability: always necessary to achieve optimal outcomes;
  • foundation success factors: these are matters that we should aim to get right every time, including such matters as quality tender documentation supporting the client’s requirements, project definition, the tender selection criteria and its application during evaluations, adequate timelines, enabling probity etc (see Table 3, Chapter 4); and
  • effective collaboration: to enable a full and mature understanding of the client’s “request for tender” and the contractor’s “tender response”. There was a common view that the most effective solution for closing this expectation gap was the presence of a collaborative spirit in the tendering process, supported in particular by capable project leadership from all parties.

This report provides two options, which can be used together or separately, for the structured application of collaboration in D&C tender strategies. These options are presented in the report with enabling probity principles and the potential (positive) legal implications of using such collaborative processes. The following figure illustrates those two options.

This report presents issues and opportunities for improvement that the practitioners interviewed, and the authors, believe are achievable (and should be done); leading to improved productivity outcomes for all parties.

Finally, this investigation confirmed what many have already observed; that infrastructure and non residential building are two different sectors, each meriting its own specific focus. This report focuses on infrastructure, although many of its principles can be adapted for the building sector.

Publication Details
Published year only: 
2012
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