Comment

Poor procurement holding us back

By Peter Silcock, Chief Executive, Civil Contractors New Zealand. 

ONE OF THE CENTREPIECES of Finance Minister Steven Joyce’s Budget was the $11 billion per year investment in new infrastructure over the next four years.

Naturally the civil construction industry and Civil Contractors New Zealand has welcomed the government’s additional infrastructure spending commitments.

This work added to the local government three waters work and the continued commercial and residential building demand means we are now undertaking the country’s largest ever infrastructure construction programme.

It is very good news that the additional investments are being made because New Zealand has a lot of catching up to do after a few decades of under investment in infrastructure. We can now see at least five years of solid work ahead of us which means that contractors can confidently invest in plant, equipment and developing their people.

Our major challenges we face are developing the industry’s capability and capacity and using the resources we have in an effective and efficient way.

Developing capability and capacity

Developing our capability and capacity can only be achieved if contractors invest in people, plant and innovation. The confidence to make that investment is not just related to one job it is about having consistency of work without the peaks and troughs of the past.

Clients need to lead this process by making training, people development and innovation a core part of the non-price attributes in all procurement. As long term asset owners, central and local government have a vested interest in ensuring that there are people to maintain and build their assets in the future.

We need more people. CCNZ has launched the industry’s civil trades programme which for the first time creates a strong career path for the people working on civil sites.

Central Government can also help us to recruit more Kiwis by encouraging people to take up trades and technical jobs. Our industry offers fantastic career paths with exciting work on high profile projects. We all need to promote that more.

The demand for more people is already exceeding supply. So, the industry also needs to continue to have access to people from off-shore with the right skills, expertise and attitude. This is a critical area of debate as we lead into the election later this year and it can’t be decoupled with the governments bold plans for investment in infrastructure.

Efficient and effective use of resources

The second major challenge is around how we can more effectively and efficiently use the resources we have. We need to urgently eliminate poor procurement practices that waste the resources of clients and contractors.

Having contractors bid for work they don’t have a chance of getting, having eight contractors bid on a design and construct contract or having copious amendments to industry standard documents like NZS 3910 wastes everyone’s time and money.

Having clearer documents, choosing the right contract form for the job, using standard contracts with the minimum of amendments, reducing the duplication of information required to be submitted and using industry standard health and safety systems could save millions of dollars for both clients and contractors. This is all about using the resources we have in a smarter and more efficient way.

We need to eliminate project delays and allow contractors more flexibility around start and completion dates so we can optimise the use of resources. Clients need to understand the benefits of doing work at the most appropriate time of year when it minimises rework and maximises quality rather than being driven by arbitrary dates and the financial year end.

Central and local government especially need to engage more with the contracting industry so they better understand the market we are working in and the best times to undertake the work they require.

With record level of work on the smart use of resources is more important than ever before.

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