Guidelines signal new hope for construction industry


Guidelines signal new hope for construction industry Guidelines signal new hope for construction industry
Peter Silcock Peter Silcock Peter Silcock

The new guidelines require agencies to limit or justify any use of special conditions—a move away from lengthy additions to ‘standard’ construction contracts

The contracting relationship between government and the construction industry is set to be redefined, with new construction-specific guidelines created to accompany new government procurement rules that have come into force.

Civil Contractors New Zealand chief executive Peter Silcock said if the new Construction Procurement Guidelines and the new Government Procurement Rules 4th Edition were properly implemented with agencies held accountable, it could signal a new era.

"For a long time now, the focus has been on lowest cost. Agencies will now be required to change their procurement to focus on outcomes rather than cost, placing more emphasis on fair allocation of project risk to those best-placed to manage it."

The new guidelines require agencies to limit or justify any use of special conditions—a move away from lengthy additions to ‘standard’ construction contracts, which sometimes added hundreds of pages of special terms, requiring complex legal interpretation.

"Clients think they are managing risk by deviating from standard contracts. In some cases, they create it. Moving away from this should bring the costs down as clients, contractors, and lawyers won’t have to spend time poring over hundreds of pages of special conditions," says Peter.

Peter says that while the threshold requiring a specific skills and training development plan was too high at $50 million dollars, its inclusion placed greater emphasis on skills and could be adopted in smaller projects, too. Factors such as involving contractors early in project planning to ensure a sound business case would also make a positive difference.

He said shifting the focus from cost-cutting would provide more value for money in the long run. For instance, greater emphasis on skills development planning would improve project quality, potentially also reducing cost by making it easier to find skilled people.

"Many of the new rules are optional for local government, but I would like to see increasing uptake among councils," Peter says.

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