By Peter Silcock, chief executive, Civil Contractors New Zealand.
Over the past few months I have travelled around the country attending the various CCNZ branch AGMs and Construction Excellence Award Dinners. The mood of the civil contractors is very positive.
The message is the same all over the country – there is plenty of work available and that’s putting pressure on the people and plant available to do the work. Increasingly, contractors are telling me they are picking and choosing the work that they bid for.
I have reminded contractors that this is not part of another short-term boom / bust cycle. The current level of investment will continue for at least the next five years. This increased level of work is driven by a renewed recognition of the importance of infrastructure (after decades of under investment), increased population, economic growth and renewal of our ageing three waters infrastructure.
The investment in infrastructure has been accompanied by improved asset management and a growing understanding that to get the best long-term value a strong partnership between the asset owner and the contractor is critical.
Whether it is construction or maintenance work, local authorities, like other clients and asset owners, need to adjust to the new market conditions and adopt best practice if they want to attract quality contractors to bid for their work.
As an organisation representing the interests of 400 civil and general contractors we see examples of both good and bad practice.
- Engagement with contractors – it is amazing how many clients still drop work into the market without any prior engagement with the contracting industry. Early notification of intentions, early engagement with contractors and positive relationships with contractors will ensure contractors are prepared to bid for and undertake work. Many of CCNZ’s 14 branches have regular meetings with council staff to discuss long-term plans, work due to come to market and the council’s procurement policies. If you would like to engage with your local CCNZ branch please contact us on 0800 692 376.
- Good forecasting – predicting future work can be a very difficult task with a range of factors in play including consents, land purchases, engineering and design. When engaging with contractors be clear about potential delays and when the construction phase is expected to come to the market and commence.
- Flexible completion deadlines – many clients establish inflexible deadlines which do not allow the work to be done productively or at a time which is most likely to get the best quality result. Many of the deadlines we create are arbitrary. We all want the job done, but building flexibility into the programme may allow the contractors to smooth overall work utilising plant and people more effectively and efficiently.
- Appropriate allocation of risk – we still see many instances where clients are trying to unload risk on to contractors. Good contractors will recognise this and add the costs of managing this risk into their bid or will not bid for the work at all.
- Minimise amendments to industry standard documents – the use of industry-standard documents such as NZS 3910 reduces procurement costs. Everyone knows what they’re dealing with. We have seen cases where there are over 50 pages of special conditions to a NZS 3910 contract. We can only imagine the legal bill faced by the council and the additional legal costs and work for each company bidding for the work. Only the lawyers are winning.
- The right paperwork – make sure that your documents are clear. As Caroline Boot of Clever Buying said in an article recently, “The right paperwork means RFTs that are based on clearly stated criteria… Clear, fact-based scoring systems… Up-front, well-thought-out definitions…” Poor documentation could put contractors off bidding for your work.
Getting the basics right will significantly improve your chances of engaging the right contractor who will deliver quality infrastructure that exceeds the expectations of your community. A great result for everyone involved.
This article was first published in the August 2017 issue of NZ Local Government Magazine.