Multi Outcome Construction Policy (final report)

A contracting agency: the Department of Main RoadsThe policy officer we interviewed in the Department of Main Roads estimated theadministration costs associated with the Building Skills Policy to be insignificant. Onthe other hand, he asserted that the policy had resulted in higher tender prices on theDepartment’s projects subject to the policy. No information on the magnitude of thesecost increases was provided.A contracting agency: The Department of Housing and WorksThe costs associated with the implementation of the Building Skills Policy for theDepartment of Housing and Work (DHW) included costs associated with developingprovisions for the agency’s tender and contract documents. Costs were also associatedwith the processing the policy’s provisions. However, as was the case for PriorityAccess, these costs were considered to be fairly small.As was also the case for the Department of Main Roads, concern was expressed bythe DHW policy officer about the effect of Building Skills on tender bids. However,this view was not supported by the head contractors and subcontractors, who assertedthat the policy had not affected their tender pricing. The contractors did, however,take training and other labour costs into account when setting their tender prices.More evidence was available in the interview transcripts on the effects of BuildingSkills on competition for government contracts. One of the other head contractors thatwe interviewed stated that the Building Skills Policy had affected the company’swillingness to tender on construction projects subject to the policy. He considered thatthe Building Skills’ requirements placed an unnecessary administrative load on thecompany, and involved many administrative tasks that the company preferred not todo. In sum, for this firm, the Building Skills Policy acted as a disincentive to bid ongovernment construction contracts. However, it is important to note that the othercontractors we interviewed (including those who had stopped tendering ongovernment contracts) asserted that that the Building Skills Policy had not affectedtheir willingness to tender on government construction contracts.68