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REVISED PROCUREMENT POLICY HURTS MORE THAN IT HELPS

QMCA is disappointed that the Queensland Government has decided to publish an important guidance note, detailing how the recently amended Queensland Procurement Policy will operate, mid-way through a belated industry engagement process during which serious concerns about policy operation were raised.

QMCA CEO, Jon Davies, expressed surprise at the timing of publication give Government’s
commitment to engage with industry and review extremely valid concerns. ‘Following an
initial reluctance to engage with industry on the operation of the expanded policy, we had a number of meetings with the Department of Housing and Public Works where we were able to discuss our serious concerns and suggest ways in which they could be addressed.’

‘It would now appear that those meetings were more about the perception of consultation
rather than any meaningful engagement. This is particularly disappointing as the Palaszczuk Government has prided itself of being a consultative government that takes into account the needs of stakeholders when formulating policy.’

The expanded policy applies to major government projects valued over $100M thus
accounting for the majority of projects undertaken by QMCA members and has significant
negative impacts and unintended consequences including:

  1. Potential conflict with Federal Legislation such as the Fair Work Act 2009 (Cth)
  2. Lack of Transparency in application – There is no requirement for an awarding
    Department to publish assessment criteria weightings (that can be up to 40%) prior to
    contractors bidding nor to provide contractors with details post bid as to how they
    have been scored against the criteria.
  3. Application to the Supply Chain – The successful contractor is required to apply the
    policy when subcontracting any work on the project – directly impacting the
    thousands of small and medium businesses who support major construction projects.
  4. Retrospectivity – The amended policy applies to any project that has not yet
    commenced awarding subcontract packages. Significantly this includes the Cross River Rail Project where international consortia are currently mid-way through a bid process costing millions of dollars.
  5. Sanctions for Non-Compliance – A contractor could potentially be barred from
    tendering for further Government work due to the failure of one of its subcontractors
    to adhere to the policy.

The new policy could not have come at a worse time for the construction sector.

‘The expanded Buy Queensland policy will have a significant detrimental impact on our
members, unintended consequences for our supply chain and will result in increased market uncertainty and the addition of onerous and unnecessary red tape and compliance costs.

‘This is at a time when southern states are working collaboratively with the contracting
industry to reduce costs and improve project value – an example being the NSW 10 Point
Commitment to the Construction Industry,’ said Mr Davies.

‘The market for major infrastructure projects is a national market not a state-based market.
Contractors take decisions on which projects to bid based on factors such as cost of bidding, risks of construction and certainty of financial outcome. On all these measures Queensland currently lags well behind the major markets of NSW and Victoria’.

‘QMCA appeals to Government to collaborate and learn from industry on how the Buy
Queensland Policy can be amended to yield superior safety and societal benefits for all
industry participants.’

In the meantime, QMCA will be keeping a close watch on how Government implements the expanded Procurement policy and its impacts upon our members, partners and the small businesses who are the backbone of the sector in Queensland.

-ENDS-
For further information or to arrange an interview or additional commentary, please contact James Flaherty on 0449 979 629.

Our members.

Acciona Infrastructure Australia
Bielby Holdings
BMD Constructions
Civil Mining and Construction Pty Ltd
Clough
CPB Contractors
Decmil Group Limited
Fulton Hogan
Georgiou Group
Ghella
John Holland
Martinus Rail Pty Ltd
McConnell Dowell
Seymour Whyte Constructions