Submission on the Draft Building and Construction Procurement Guide

<strong>Submission</strong> on the Draft Building and Construction
Procurement Guide – principles and options October 2012
Civil Contractors Federation
National Office
Contact:
Julie Abramson Deputy CEO
Telephone: 03 9851 9900

The Civil Contractors Federation (CCF)
The CCF is the member based representative body of civil engineering contractors in
Australia providing assistance and expertise in contractor development and industry issues.
Through our Federation we represent over 2000 small, medium and large sized contractors
who in turn work in an industry of more than 350,000 people.
Our members are involved in a variety of projects and activities including the development
and maintenance of civil or “horizontal” infrastructure such as roads, bridges, sewer, water
and drainage pipelines, dams, wharves, commercial and housing land development.
Members are also involved in the preparatory works for mining and other resource
developments.
We appreciate the opportunity to comment on the draft Building and Construction
Procurement Guide – principles and options (“the draft guide”).
We note that the draft guide “consolidates current jurisdiction-specific approaches to
procurement and contracting of civil (roads and bridges) and non-residential building works
and services into a single overarching framework”. It is not however intended to replace
existing jurisdictional practices but rather to supplement them.
Our response to this discussion paper concentrates on two main areas covered under
Chapter 6 – Procurement methods. We have however taken the opportunity to raise some
other matters.
1

1 An introduction
As noted the CCF submission in the main concentrates on Section 6 – Procurement
methods. We do however wish to make some general observations about procurement
strategies as outlined in section 2 of the draft guide.
At the outset whilst we welcome the work of ARRB, APCC and Austroads currently there are
a number of other projects with similar outcomes covering the same space especially in
relation to local government.
By way of example:
• the Federal Government has released the 2012 Ernst and Young Report into
infrastructure financing which in part deals with procurement models 1
• In August this year the Victorian Government has just released the Victorian Local
Government draft best practice procurement guidelines. 2
• In 2008 Ernst & Young also produced report known as the Local Government
Procurement Strategy. 3 (“Ernst & Young Report). They were commissioned by the
previous Victorian State Government to undertake a detailed assessment of existing
procurement practices employed by councils and to identify opportunities for councils to
work in partnership to improve these practices. Ernst & Young conducted a series of
workshops, interviews and detailed data analysis involving more than 40 Councils to
develop the Local Government Procurement Strategy. The research conclude that the
adoption of better procurement practices across the sector has the potential to yield
annual savings in the region of $180-350 million; and
• Additionally, there are also instances in state government where even between state
government agencies and departments there are different and competing procurement
practices. This adds to complexity and the cost of doing business.
In our view what is missing in a number of these projects (which we support) is a practical
emphasis on “the how to.” for example what are the practices in various authorities that
would make these principles “live and breathe”. 4
1 Ernst & Young Strong foundations for sustainable local government infrastructure available at
http://www.regional.gov.au/local/lgifr/files/20120622-strong-foundations.pdf
2 Victorian Local Government Draft Best Practice Procurement Guidelines August 2012 available at
www.dpcd.vic.gov.au
3 Ernst &Young Local Government Procurement Strategy at
http://www.dpcd.vic.gov.au/__data/assets/pdf_file/0016/52225/2008-Local-Government-Procurement-
Strategy.pdf
4 Particularly in relation to local government as the above reports indicate
2

We have made the point on a number of occasions that loss of and shortage of engineering
and like skills is negatively impacting infrastructure development.
For this reason the best practice guide for tendering and contract management developed in
by 2007 CCF (Victoria) in conjunction with the Institute of Public Works Engineering
Australia and the Municipal Association of Victoria is an important body of work and we are
looking further at updating and reviewing it in view of recent developments.
2 Procurement Methods
In this section we respond to the issues raised in Chapter 6 in particular in relation to form of
contract, the procurement process and other factors such as contract administration
requirements or bundling.
2.1 Forms of contract
As noted in the frequently asked questions document (FAQ) 5 variability in contract
documentation and management is a considerable and ongoing source of concern for our
members.
2.1.1 Variability in Contract documentation
Directly on this point in our recent submission to the Productivity Commission Inquiry into
local government as Regulator 6 we noted that one of the major concerns of the civil sector is
in relation to lack of standardisation.
This a broad ranging issue as it starts with the tender and procurement process, includes the
contract process, technical specifications and on site management. We deal with this later
point in 2.1.2 below.
In terms of the contractual process, previous research has highlighted that anecdotally in
one state alone there are over 60 different general conditions of contract. 7
This adds complexity and cost to contractors as they need to be able to understand and
interpret complex contracts which can differ between even neighbouring councils, shires and
authorities as well as consulting engineers sometimes in relation to similar projects.
5 See Draft Building and Construction Procurement Guide – principles and options at http://austroads.com.au
6 Our submission to the Draft Productivity Commission Report into Performance Benchmarking Role of Local
Government as regulator is available at www.pc.gov.au. The Commission has also now released its final
Report.
7 Our comments in this regard are picked up in the Final Report at page 105
3

Not all of this cost can be passed on which is another impediment to business growth.
We have noted with interest the comments in the FAQ that there is actually a debate about
whether standardisation is necessary or rather “...consistency of approach based on
common risk-sharing processes” would be a better outcome.”
We support in principle efforts to set forward some high level principles as a way at the very
least of working towards consistency of approach although we caution that any guidance in
this area has to be flexible enough to encompass and respond to local conditions.
We made this point in our recent submission on prequalification noting:
“There needs to be flexibility at a local or state level to deal with local issues to ensure that
smaller contractors in particular are competing on a level playing field. Flexibility is
particularly critical in relation to the harmonisation principles – what is appropriate in one
jurisdiction may be for local reasons not appropriate in another.
In other words our support for mutual recognition and harmonisation are not without
qualification.” 8
It would also be appropriate in the context of this draft guide to make some more general
remarks about the current use of standard form contracts and in particular AS 4000 which
was the subject of a recent submission to the Federal Attorney-General’s Review of
Australian Contract Law. 9
2.1.2 The role of standard form contracts
We note there is great variability in the standard from contracts used dependent on the
jurisdiction. We also note the comment in the draft guide that whilst:
“AS 4000-1997, which is the standard form that replaced AS 2124-1992 is also available for
use. However, it has not been widely taken up by member agencies, particularly in the civil
(road bridge sector).” 10
Top end or larger projects tend to be the subject of separate “be-spoke” contracts often
between parties with similar bargaining positions however the standard form contract still
plays a significant role for some of our medium and smaller sized members.
8 The CCF submission on prequalification lodged in October is available on request.
9 The CCF submission to the Federal Attorney –General’s review of contract law is available on request.
10 See page 39
4

Whilst there are regional variations dependent on the client/procuring authority a number of
members are parties to the 4000 series contracts and have raised issues with us in relation
to AS 4000 – 1997 General Conditions of contract
Whilst members in principle support the practicality and usefulness of standard form
contracts difficulties do arise in relation to the interpretation, construction and workability of
this series particularly given modern developments as noted in the draft guide.
In particular, in some cases members report to us of contracts which purport to be AS –
4000 based contracts and yet contain rafts of special conditions and exclusions which
change the whole basis of the contract.
We note that in developing the draft guide this point was also made to the Review group
“ Additionally, for contracts at all values the merits of appending voluminous supplementary
or “special conditions” to standard form contracts such as AS 2124 -1992 were questioned in
some of the submissions with a suggestion that these be minimised wherever possible.” 11
For smaller members without significant resources this practice can be problematic as they
may have little bargaining power or ability to influence the contract negotiation if they want
the work the subject of the contract.
We also strongly agree with the following comments in the draft guide:
“Standard form contracts are popular amongst project owners and industry because their
use helps reduce procurement and contract administration costs and they are generally well
understood by users, thereby resulting in fewer disputes or matters of interpretation. This
advantage may, however be reduced when amendments and supplementary or “special”
conditions are included that significantly alter the standard general conditions.” 12
Risk, indemnity, consequential loss, payments terms, latent conditions, accepted causes of
delay and subsequent extension of time, time bars and insurance provisions are commonly
altered in favour of the procuring party through this process.
Whilst we support efforts towards common principles we are concerned as to whether this
will result in better outcomes for members as in the end it will come down to the actual
contracting terms as well as the “mind set” of the procuring agencies.
11 See FAQ at page 6
12 See draft guide at page 38
5

2.1.3 Contract administration issues
Clearly whilst there are issues in relation to form and content of contracts one of the main
areas of concern is also in relation to contract administration.
We note that the frequently asked questions (FAQ) docment provides a very good snapshot
of issues in the existing variability in contract documentation and management
administration where it is stated:
“Specific issues cited were:
• An apparent lack of informed choice of procurement methods and contract
instruments
• Poor attention to detail in contract documentation
• Project owner personnel lacking appropriate contract management experience.” 13
Whilst we fully support these points in our view the issues are actually broader and include
inappropriate regulatory controls, inconsistent applications of standards, over-engineering,
unnecessary processes and poor tendering and contract management practices all of which
impact negatively upon civil construction activities such as the construction of subdivisions
and road infrastructure.
This has a real cost to the community as the Ernst & Young Report found the adoption of
better procurement practices across the sector has the potential to yield annual savings in
the region of $180-350 million. Our own research has also indicated that:
“CCF Victorian members in 2009 believed that in some instances, subdivision construction
costs could be reduced by upwards of 10% through the removal of the impediments to the
efficient delivery of infrastructure. This equates to approximately $8,000 per house allotment.
That cost anecdotally is now likely to be between $9000 and $10,000 an allotment.” 14
The issues raised in the draft guide were also highlighted in relation to the AS 4000 General
Conditions of Contract where problems for members included in relation to payment
schedules, the role of superintendents, retention of payments and bank guarantees, practical
completion and lack of engineering skills particularly in local government.
Where appropriate we comment on this in relation to the contracting principles outlined in the
next section.
13 FAQ at page 6
14 This submission is available on request or pc.gov.au
6

2.2 Contracting Principles
In general terms we support the contracting principles as we have noted previously the issue
we see is more in providing support on the “How to” by way of some good practices already
in procuring agencies.
We would however like to make some more detailed commentary on several of the
principles.
2.2.1 General principles
(a)
Procurement method
See our comments in relation to standard form contracts above in 2.1.
(b)
Innovation
Whilst we support any provision to encourage innovation contractors actually need to be
rewarded for innovation. There are at least three factors to consider.
Firstly, one of the consistent complaints of CCF members is that tenders are often only
awarded on a “lowest price basis” and other relevant factors such as sustainable
construction methods, training and development commitments, third party endorsements or
innovative practices are not taken into account.
Such an approach particularly disadvantages small to medium contractors who because of
their size might have unique expertise or innovative approaches which are not recognized in
a “price alone” model.
Secondly, the loss of engineering skills particularly in local government works against
supporting innovative methods of construction.
Our members commonly refer to the over engineering and over specification issues as
requiring a Rolls Royce solution when other more practical and efficient solutions are at
hand. Contractors tended to be very pragmatic about this putting this down to the current
“risk averse” approach of authorities or their consultants.
One of our members related to us an example where his company was required to construct
and install drainage pits to what was regarded as the most expensive option notwithstanding
that from an engineering point of view in our member’s judgement this was totally
unnecessary.
7

This also raises a connection with tendering. If contractors are asked to tender to particular
technical specifications they will do so as failure to do so will result in a non-conforming
tender.
Lastly, the ability to innovate is directly related to the flexibility in the design elements, the
time available to tender and the willingness to explore alternatives that meet the
performance requirements.
It is a common scenario that the design is finalised and the procurer is unwilling or even
unable to consider alternatives, the tender time is very short and / or the performance
specifications are not provided and so alternatives are difficult to provide.
So whilst we strongly support this goal in principle much work will need to be undertaken for
there to be practical outcomes.
(c)
Risk Allocation
Some comments on the general principles
Whilst the risk allocation principle is sound there has been a continuing tendency to shift
“risk” towards contractors and it is difficult to see how the principle will in our view
“rebalance” the pendulum.
Whilst we support the principle – “place the risk where the risk is best managed”. In our view
that has also been applied out of context.
As noted in relation to standard form contracts in practice these are rarely standard and the
substantial amendments are often to do with changing risk allocation, indemnity provisions
and insurance from the procuring party/client to the contractor.
Risk by its very definition is a ‘possibility’ and not a ‘probability’. Managing a risk (or
managing a possible event) in a contract sense is about being adaptable and resilient as
well as being capable of dealing with the inevitable uncertainty.
As an industry our best project managers are probably the best at dealing with this
uncertainty and being able to react to a possible event actually occurring in a manner that is
safe and cost effective. It is however the experience of the industry that managing risk is
often not about the project manager’s ability to deal with uncertainty but rather it is about
cost.
8

By way of illustration Clients often transfer uncertainty of scope and / or thus cost to the
Contractor but do this on the premise that ‘the Contractor can manage the uncertainty’.
Whilst this is often the case the difficulty is that if the risk can’t be quantified than how can
the cost be managed. So what happens in practice is that risk is priced on a set of unknown
variables which may or may not be appropriate. This of course adds to cost in a project and
if the contractors judgment is wrong this can have a devastating impact on their business.
A good example of how this works in practice is utility relocation costs. Many times the
works that civil contractors undertake cannot be started until the utilities have relocated their
water, gas or power lines. The utilities have a ‘no risk’ policy – that is if the contractor needs
the pipes moved then an estimate will be provided but the ultimate costs will passed on in
full. However, the client invariably requires that the civil contractor fix their cost at tender
time, often citing that this risk is best managed by the Contractor.
The bottom line is Contractors can deal with uncertainty and respond with cost effective
solutions. But they should not be put in the position of having to quantify a cost which at that
stage is unquantifiable and hence to price in a risk that cannot be costed.
Contracts like AS2124 and AS4000 have legitimate principles that apply to the management
of items where the scope isn’t known for example provisional sums but these are routinely
altered in favor of the client or procuring agency.
Additionally our members also report instances to us of “having to wear” what they regard as
a greater risk in circumstances where they cannot mitigate it. For example being provided
with specifications which they can’t change and which carry significant design risk and then
when a design fault causes loss being held liable.
Risk allocation, PPP and Alliance contracting
The way risk is allocated is of course a particular feature of a PPP which parties are aware
of when they undertake the project however it remains essential that there are clearly
defined roles and responsibilities for the parties which identifies the management for each
key risk.
We would also like to make some comments about alliance contracting. World-wide
experience underscores that effective alliances involve the “share the gain share the pain”
across the entire supply chain of alliances.
However, unfortunately a number of our members have had experiences of alliance
contracts which do not deliver the benefits to all parties equally.
9

It is our view that Government and Government agencies can and should structure their
alliance contracts in such a way that all entities in the supply chain are encouraged to pursue
collectively the benefits implicit in such contracts. We note with some interest the
development of the “Project Alliance Agreement” template.
(d)
Limitation of liability, warranties, indemnities and Insurances
These principles appear sound but once again the proof will be in contracting outcomes.
Some of the practical issues for contractors are outlined below.
Warranties (and defect liability)
Contractors are experiencing an increasing timeframe for expiry of the defects liability
period. This has shifted over time from 6 months, to 12 months and now in some cases 24
months.
This comes at a cost to the contractor because in practical terms some security will remain
in place whether through retention of payments or a conditional bank guarantee. In some
cases the contractor can price for this and pass the cost on impacting the overall cost of
projects in others it reduces already slim margins.
Additionally, contractors report being reviewed in relation to financial capacity by procuring
agencies because they have had to hold financial surety in relation to a number of
completed projects for extensive periods of time. This acts as a brake on business
productivity and growth particularly in the mid-sector as well as limiting the functioning of a
truly competitive market (i.e. by removing some participants).
Insurances and unlimited liability
Once again the principle is sound. The practical experience of contractors is that over time
the amount of insurance for example in public liability has expanded from $5 million, to $10
million and now routinely $20 million.
In some cases this results in projects being over insured as each contractor takes out
insurance. It also flows through the contracting chain. By way of example if there is state
funding in a project the state government will require certain levels of insurance, the local
government will also require insurances and finally the head contractor. This also then
becomes the industry norm.
10

(e)
Key Personnel
We are very strongly supportive of the principle “contract personnel are to have skills and
experience appropriate to their roles”.
This is a key issue identified by members.
In 2009 the CT Management Group was engaged by CCF to undertake a research project
aimed at assessing the impediments to the efficient delivery of subdivisions and road
infrastructure. 15
The research project involved face-to-face interviews with 20 CCF members actively
involved in the provision of subdivisions and road infrastructure.
In that Report one of the findings of that research was that:
“Authorities were losing the older more experienced supervisors and replacing these with
younger less experienced personnel. Many contractors felt that authorities needed to
improve succession planning and programs to pass on the experience to younger
personnel.” 16
We have previously indicated that in our view much of the over-engineering and over
specification is directly referrable to the loss of engineering skills particularly in local
government.
In an environment of acute skills shortages especially in engineering this is not easily
resolved. However, there are solutions to this which include involving the contractor in the
early stages of a project and in the design and construction.
(f)
Subcontracting
As the Guide proponents would be aware CCF as a matter of principle supports unbundling
and de-aggregation of works so that all levels of the contracting market have the ability to
grow. Therefore a prohibition on sub-contracting the whole of the works should in theory
assist our smaller to medium sized members to tender for work in that own right although in
some procuring agencies this would also require a shift in the “procuring culture”.
Unbundling of contracts is not the only issue as small and medium sized contractors can
also be severely disadvantaged by the way contracts are structured, tendering processes,
15 This Report is available on request
16 2009 Report at page 3
11

the prequalification system and the failure of procurement agencies to properly plan through
rolling and forward capital programs.
We deal with this in more detail in our response to 6.6 of the draft guide.
(g)
Dispute resolution
We strongly support the principles in relation to dispute resolution.
There is research available which seeks to quantify the cost of disputes. For example the
CRC Construction Innovation Study on”Dispute Avoidance and Resolution” 17 . That study
found that on an analysis of available industry data regarding the direct cost of resolving
disputes, and feedback from clients, contractors and legal practitioners:
“…that an industry-wide general magnitude estimate of the direct cost
of resolving disputes of between about $560 million and $840 million per year.
When the direct cost of resolving disputes is added to the avoidable costs, the total waste
exceeds $7 billion per year, given construction industry turnover of $120 billion in 2008-09. 18
The Aurecon 2009 Report Achieving Civil Infrastructure Procurement Best Practice - a study
by Civil Contractor’s Federation in conjunction with VicRoads (the Aurecon Report) 19 also
noted:
“The time, effort and energy spent on resolving claims and disputes represents an
opportunity cost to the civil infrastructure industry. If these costs can be avoided by
appropriate attitudes and practices the same resource pool is capable of producing
more public and private infrastructure for the benefit of the community as a whole.
Traditional methods of dispute resolution are adversarial in nature and do not start until the
parties have developed contrary positions and a difference or dispute has
crystallised.
Today’s best practice requires proactive issue resolution processes to be employed that
attempt to resolve issues as they arise and before a dispute forms. That is proactive issue
resolution seeks to resolve claims as well as disputes.” 20
17 CRC Construction Innovation Study on ”Dispute Avoidance and Resolution” available at www.constructioninnovation.info
18 Ibid Page 3
19 The Aurecon report is available on request
20 See Page ix of the Report
12

2.3 Structuring the procurement process
In this section we make some general comments about the tendering principles but do not
respond to each and every principle.
Whilst we mainly add and amplify the draft guide principles we would like to draw to your
attention the fact that we do not support the comment made in 6.6 without qualification.
Other Factors:
“ Opportunities for bundling of multiple projects into a single contract should also be
considered, where this is likely to deliver efficiencies at a program level.”
The reason for our opposition is outlined at 2.3.2 below.
2.3.1 Tendering Principles
As noted in section 1 in 2007 CCF (Victoria) in conjunction with the Institute of Public Works
Engineering Australia and the Municipal Association of Victoria published a best practice
guide for tendering and contract management.
The principles of good practice in tendering in that Guide remain a sound benchmark and
are generally reflected in both the tendering and contracting principles in this draft guide.
13

The general principles we consider important in tendering are as set out in the CCF
Guide as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Value for money – procuring goods and services at optimal cost, having regard to
issues such as policy, performance standards, risk management and life-cycle
costs.
Open and fair competition – maximising the opportunity for firms and individuals to
compete in business
Accountability – allocating responsibility for compliance with policy and adoption of
best practice
Risk Management – adopting management strategies to minimise risk in tendering
and contract management. Generally, risk should be managed by the party best
able to manage the risk.
Probity and transparency – ensuring fairness, impartiality, consistency and
transparency in all stages of the tendering phase.
Local industry participation – using local suppliers wherever they offer best value
for money.
Minimisation of tendering costs – ensuring that consideration is given to the costs
of tendering on the part of both Principals and contractors alike 21 .
With these general principles in mind we comment as follows.
(a)
Prequalification
CCF has long been a supporter of both the need for prequalification and for a pursuit of
consistency of prequalification systems across jurisdictions. We support the goals of mutual
recognition and harmonisation in principle.
At the outset we believe that any prequalification system must be based on three core
principles of consistency, transparency and flexibility.
21 See the principles in the Guide available on request
14

Our position in summation is:
• Different pre-qualifications in different agencies and state governments, is inefficient
and time consuming especially with contractors operating between jurisdictions. Such
impediments to doing business do not support an open, efficient and competitive
market;
• There must be transparency in relation to how to become qualified, how to move
between qualification grades and how the criteria for qualification are applied in a
consistent, open and fair manner;
• There needs to be flexibility at a local or state level to deal with local issues to ensure
that smaller contractors in particular are competing on a level playing field. Flexibility
is particularly critical in relation to the harmonisation principles – what is appropriate
in one jurisdiction may be for local reasons not appropriate in another.
In other words our support for mutual recognition and harmonisation are not without
qualification.
Additionally, we believe that the words “prequalification is to be used where appropriate”
provide an important qualifier.
One of the important points we have made previously is the criticality of maintaining capacity
in the small to mid-sector. Prequalification schemes can act as a disincentive to growth due
to the fact that they invariably require the maintenance of systems and processes which are
time, labour and cost intensive.
A small contractor simply cannot afford to invest in such developments unless they can see
with some certainty a future work stream. Additionally, it can lead to a concentration or
reduction of competition and we have been advised of situations where a prequalified
contractor has won the work and sub-contracted to non prequalified contractors which raises
the question as to why the prequalification was required in the first place.
(b)
Cost of tendering
We are pleased to see this recognised in the draft principles however much will need to be
done to improve the situation for contractors. This is a complex issue as it also involves the
15

way in which procurement takes place and the lack of forward and rolling capital works
programs making it difficult for contractors to plan and tenders coming in “lumps”.
A particular example of this is when tenders are invited in clusters particularly when capital
works are tailored to an agencies’ annual budget cycle.
(c)
Tender documents
We have previously made a number of key points about tender documents and these are
reflected in the principles.
One of the most critical factors in tender documents is the attention that is paid to the brief or
scope of work and specification. Members report to us a number of instances when briefs
and / or scopes of work are ambiguous, lacking in detail or not clear and rely on generic
scopes of work rather than specifically what is required.
Importantly in our view procuring agencies and clients need to spend more time getting the
project brief right rather than relying on contractual legal rights contained in the terms and
conditions of the contract when conflict arises in the project because of these issues.
Importantly the CCF/IPWEA/MAAV guide puts some practical “how tos” to support the
principles and outlines what information should be provided in an invitation to tender.
(d)
Innovation
See our comments on innovation in relation to contracting principles.
Additionally a very important point is made in the principles about “non-conforming tenders”
Whilst contractors are critical of overdesign and over-specifying in contracts in most cases
they accept the Principal’s right to specify what they want.
Contractors tend to be very pragmatic about this putting this down to the current “risk
averse” approach of authorities or their consultants. In a practical sense if a particular
authority wants a drainage pit constructed a certain way then to be successful in a tender the
contractor would construct on that basis even though it may not be the most efficient
solution.
16

Additionally, if contractors are asked to tender to particular technical specifications they will
do so, as failure to do so will result in a non-conforming tender.
This approach stifles innovation and does not lead to the best outcomes and as noted
previously there can be real issues in relation to risk allocation.
(e)
Other principles
We do not wish to add any further commentary as these principles are sound and are
reflected in the CCF Best Practice Guide.
2.3.2 Other factors
In other factors we note the following statement in the draft guide:
“ Opportunities for bundling of multiple projects into a single contract should also be
considered, where this is likely to deliver efficiencies at a program level.” 22
We are not supportive of this comment without qualification.
It is our strong view that too often contracts are let to market as one large project when it is
possible to consider breaking such projects into smaller component parts. Governments and
Government Agencies should be required to give consideration to unbundling of major
projects.
For example a project could provide for the use of larger and smaller contracts - an
illustration might be like the a road authority using prequalified contractors under the
Austroads NPS – requiring R5 contractors to team with one or more R2/3/4 contractors.
CCF believes that a level playing field which allows contractors to truly compete will lead to
better outcomes for the community providing strong value for money.
By truly supporting competition small to medium sized operators will have the opportunity to
compete and in turn grow and develop capacity. It will also support skills development with
small to medium sized businesses being key trainers of civil skills as well as regional
employers.
22 See 6.6 of the draft guide
17

3 Conclusion
CCF is generally supportive of the Guide however we are concerned that there are now a
number of such documents available and yet contractors continue to experience the
problems of variability in contract documentation and management, inappropriate risk
allocation, variable and inefficient procurement practices which the Guide seeks to address.
What is really needed is further work on best practice models and more in depth “how to”
support particularly in local government.
Whilst we support harmonisation in principle we are always concerned about what this
means in practice on the ground as a “one size fits all” approach does not in our view lead to
outcomes which support particularly our small to medium sized members.
We are also of the view that a number of difficult structural issues such as risk allocation
practices and contract administration will need to be addressed if real progress is to be both
made and maintained.
As always we would welcome discussing our submission as appropriate.
18