Since inception, the Capacity Chapter has recognised the need for national policy reflecting both industry and government commitment to improving industry effectiveness and efficiency, specifically:
- Best use of existing capacity by reducing the complexity and cost of bidding and the risk in traditional forms of contracts;
- Providing confidence in future work flows (predictability) and contract conditions to promote investment in capability;
Building our industry capacity: the opportunity of a lifetime
In September 2017, over 100 CEOs, senior leaders and engineering and construction managers from over 60 organisations met in Sydney to discuss nine key areas impacting on the efficient delivery of infrastructure.
The outcomes from this workshop are detailed in The Opportunity of a Lifetime. This report captures the views of government and industry on the challenges and opportunities facing the nation, and at the same time provides practical options that we can work on together to deliver Australia’s record infrastructure program.
The report underlines the opportunity to create a more equitable, diverse workforce - and in so doing, capture the full productive potential of our nation and sow the seeds for a more enduring, flexible and sustainable workforce in the future.
The cost of tendering: what we learned from our 2017 survey
Launched at the 2017 National Roads Summit by Deputy Chapter Chair, Dan Reeve, the 2017 Cost of Tendering Survey compiled detailed information from 38 valid projects, with great variability in delivery model and value, and including international projects. The majority of projects assessed were delivered via the D&C model.
Key observations from the survey include:
- 87% of infrastructure projects examined reported bids costs below 2% of total tender price
- No international project reported bid costs higher than 2% of tender price
- 47% of projects ranked external costs over 40% of the total bid cost
- Victoria and NSW reported the least bid cost as a percentage of tender price
- 4 out of 38 projects reported being reimbursed for bid costs. Of those reimbursed, 50% of reimbursements covered external costs
- International projects reported design costs were less than the average
- Good performing projects report lower bid costs as a percentage of tender price
- Poor performing projects report high red percentage of tender price allocated to risk
- Where the risk allocation is fair, the majority of projects perform well
The Chapter continues to liaise with governments, industry and key stakeholders to find opportunities to work together to improve procurement efficiency.