Procurement of construction facilities: a case study of design management within a design and construct organisation

Presents a case study of design management within an Australian design-construct organization on a large residential apartment project, with the purpose of identifying and analysing issues associated with the organization, responsibilities and stages of development in a typical design-construct project. Discusses the nature of introspection in the Australian construction industry, the shift in procurement methods, the design and build approach, whole life issues, the need for a design manager, and the role of the facilities manager. Profiles the case study organization and its contracts and procurement methods, before focusing on weaknesses in the company, the role of the project design development manager in leading the design team, managing the design consultants, and interacting and advising the developer in relation to design decisions. Suggests from the exercise that: the project manager should remain the overall project leader, manager and interface between design, cost, programme, buildability, construction and user requirements; the design manager should be responsible for issuing all documentation; and the design cost manager should be responsible for verifying that the design developed accords with project budgets, project brief and quality requirements in conjunction with the design manager.

Capital works procurement policies in Australia : implications for understanding and meeting client needs

This paper undertakes a case study of procurement through a comparative analysis of the capital works procurement policies of the Commonwealth, State, and Territory Governments in Australia. Capital works procurement policies provide the mechanism by which governments manage procurement processes, and frame how individual government agencies, as clients, participate in those processes. The paper proposes a typology of capital works procurement approaches, together with implications of how these different policies play out for clients. A tentative proposition is advanced that policy approaches to capital works procurement either explicitly or implicitly, make assumptions about the organisational capability of clients to plan and deliver capital works projects, including their ability to understand and articulate their own building needs. Additionally, the paper concludes that innovation has occurred at a policy level in capital works procurement. Recommendations for further research are suggested.

Harmonised procurement policy environment - identifying key themes towards the development of a conceptual model

Capital works procurement and its regulatory policy environment within a country can be complex entities. For example, by virtue of Australia’s governmental division between the Commonwealth, states and local jurisdictions and the associated procurement networks and responsibilities at each level, the tendering process is often convoluted. There are four inter-related key themes identified in the literature in relation to procurement disharmony, including decentralisation, risk & risk mitigation, free trade & competition, and tendering costs. This paper defines and discusses these key areas of conflict that adversely impact upon the business environments of industry through a literature review, policy analysis and consultation with capital works procurement stakeholders. The aim of this national study is to identify policy differences between jurisdictions in Australia, and ascertain whether those differences are a barrier to productivity and innovation. This research forms an element of a broader investigation with an aim of developing efficient, effective and nationally harmonised procurement systems.

Towards the development of a construction supply chain transaction cost economic model for strategic infrastructure procurement evaluation

Australia has adopted public-private partnership (PPP) as a major strategy for procuring infrastructure for decades. However, even though considered to be a mature and sophisticated market, several major
failures have occurred resulting in increasing financial burdens on taxpayers. Failures have typically been traced back to economic evaluation and, in particular, value-for-money across the supply chain
in the original proposal. However, the literature review identified that there was no economic model that evaluated holistically the transaction costs of PPPs across the supply chain. In this paper, theories of transaction cost economics and construction supply chain economics are critiqued and analysed in order to develop a strategic infrastructure procurement evaluation model. The model will offer decision makers with an insight into project life cycle economic outcomes needed to successfully deliver PPPs.

Exploring potential success factors for procurement of privately financed infrastructure

Australia has joined many governments to adopt public-private partnership (PPP) as a major strategy for procuring infrastructure for decades. However, failures have occurred although the market has been considered to be a mature and sophisticated one. Failures have typically been traced back to inappropriate economic evaluation and a lack of value-for-money. In particular, a literature review has identified that there was no holistic consideration on the evaluation of procurement transactions of PPP projects. The transaction costs of PPPs were not handled properly. In this paper, theories of transaction cost economics are proposed for the purpose of such a holistic institutional economic evaluation. These theories are analysed in order to identify potential critical success factors for a strategic infrastructure procurement framework. The potential critical success factors are identified and grouped into a number of categories that match the theories of transaction cost economics. These categories include (1) Asset Specificity, (2) Organizational Capability, (3) Transaction Frequency, (4) Behavioural Uncertainty, and (5) Environmental Uncertainty. These potential critical success factors may be subject to an empirical test in the future. The proposed framework will offer decision makers with an insight into project life cycle economic outcomes needed to successfully deliver PPPs.

Relationship-based procurement methods for public infrastructure – the way forward

Public infrastructure is crucial to promote and sustain a sustainable economic growth and a health community. A large amount of capital investment is generally required in infrastructure projects that motivate the involvement of the private sector in the delivery process. Various relationship-based procurement methods have been attempted to maximize value-for-money. In this paper, the problems and challenges that relationship-based procurement methods have been facing are explored. A particular focus is placed on the challenges for the public-private partnership (PPP) model. Possible strategies for adapting the PPP models in the post-Global Financial Crisis era are proposed and discussed. In addition, the challenges facing alliancing, which is one of the other important relationship-based procurement methods, are also examined. Views on infrastructure procurement in the future were sought from industry professionals via interviews and are reported in this paper as well.