Slide 1

Achieving Industry Best Practice in Contract Delivery

IPWEA Vic

Strategic Contract Management & Procurement Conference

6 October, MelbourneBy Lloyd Arnott

Business & Infrastructure Advisory Leader

Aurecon

Trends in the Industry

Slide 2

• Impact of GFC has reduced pool of contractors

• Local Government contract specialists in short supply

• Recognition that stronger focus required to rebuild contract skills on both sides

• Interest in Collaboration (Client / Contractor

• Standardisation of documents

• Councils developing Procurement units and Policies to create efficiencies and address

probity

• Strengthened focus on VfM

Drivers to achieve good contract outcomes

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1. Forward planning 2. Contract documentation

•Prior notice to contractor pool•A refined budget and estimating process

•Adequate bidding periods•Smarter use of prequalification panels

•Industry standardisation•Keep the lawyers out•Simple English

Drivers to achieve good Contract outcomes

Slide 4

3. Taking a Risk Management approach

4. Improving contract management skills

•Identify and assess risks up front (Risk Register)

•Allocate a cost to all risks in design / estimating phase

•Work up a Management Plan with the Contractor

•RMP becoming a Key Project Management Tool

•Exodus of experienced contract professionals

•Opportunity for new generation to fill the gap

•Structured training programs•Mentoring•Sharing experiences with the Local Government industry

Drivers to achieve good Contract outcomes

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5. Building in flexibility 6. Increased collaboration and communication

•Encourage innovation (build into selection criteria)

•Contractors often see innovation as a differentiator

•Take a “Value for Money” approach – avoid a bottom line $ focus

•Basis of all newer contracting forms (ECI, alliances)

•No master / servant relationships•No secrets or surprises•Requires a whole new approach & skill set

- Issue resolution procedures- Learn about mediation

Slide 6

Tools to assist

• Risk management approach• Prequalification panels• Standardised documentation wherever possible• Value for Money assessment• Two way collaboration• Training and mentoring programs