President of the New Zealand Institute of Quantity Surveyors, Sam Lomax, “They’ll provide a much-needed and refreshed approach to procurement processes in the New Zealand construction industry.
Lomax says the industry had slipped into a pattern of unsustainable behaviour when it comes to risk transfer, largely driven by clients wanting the cheapest entry price possible, and too many companies had not fully considered risks they were taking on when signing contracts and have paid the ultimate price.
He says the goal of many clients was to shed as much risk as possible, often by obfuscating and a lack of transparency, and by focusing only on the contract cost.
However, he said it’s pleasing to see among the new rules that one of the key procurement values is to “deliver best value for money (which isn’t always the cheapest price).”
This should also help to enhance a sustainable future for the industry, together with a whole of life cost approach being adopted in assessing value for money solutions and not just upfront lowest capital costs. “Now we should have more transparency and a better information flow right at the outset which will mean contractors will be better placed to fully understand the risk, manage the risk and cost that into their work.
“And because Government agencies are a major construction sector client it’s good to see Government taking the lead to address this problem."
“We hope other clients and industry members will follow suit and adopt similar procurement principles.”
Lomax says if that happens, the industry will bed in a positive cultural change that will see the sector start to actively consider environmental impacts, social responsibility, health and safety and economic efficiency and resilience.