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Project Manager : Project Manager Dec Jan 2014
KIERAN FORDHAM Kieran Fordham is Procurement Advice and Transaction Support Lead at Thinc. www.aipm.com.au Project Manager 13 THOUGHT LEADERS Against procurement fashion Moving away from a retrograde procurement trend in the construction sector may be a sensible thing. WITH A MIXED OUTLOOK FOR THE Australian construction sector and relatively sluggish recent activity, it's no surprise that we have seen clients return to ' lump sum' contracting for projects that are getting o the ground. is shift re ects the dramatic change in the UK from 2009 at the start of the global nancial crisis and despite 10 years of 'collaborative' rhetoric after Egan's Rethinking Construction report on the UK industry commissioned by the British Government. e reaction, which moves design responsibility back to clients, is yet to impact Australia. e capacity of clients, management teams and design teams to handle this change will be tested and there may be a lack of experience in the client teams, possibly resulting in a rise in disputes. More wor ryingly, perhaps this almost wholesale shift highlights the industry's di culty in adopting a strategic approach to procurement, where the method suits the project case by case. However, the e cient procurement of a constr uction project through the choice of the most appropriate procurement strategy has long been recognised as a major determinant of project success. Conversely, failure to select an appropriate procurement approach is often a primary cause of project dissatisfaction or failure. e question is why do we continually struggle to adopt a strategic and innovative approach to procurement? The three sins of project procurement A report by the Built Environment Industry Innovation Council (BEIIC), Built Environment Procurement Practice: Impediments to Innovation and Opportunities for Changes, looked into Australian procurement practices and highlighted the factors that lead to the inappropriate selection of methods. e three biggest 'sins' are considered to be: • Poor scope management -- a survey found that 52 per cent of senior project professionals had been involved in a project that had not been adequately scoped by the time the project was submitted to market. Scoping failures lead to ine ective procurement decisions and have a signi cant impact on project outcomes, with more than 60 per cent of respondents stating that inadequate scope documents had resulted in a cost overrun, with more than half of those over runs costing more than 10 per cent of the value of the project, and a third more than 20 per cent. • Bad habits -- project professionals rely too heavily on previous experience, typically picking procurement methods from habit, rather than considering the particular characteristics of the project and evaluating all the relevant options. is approach sti es innovation, encourages traditional adversarial practices and leads to poor procurement decisions, with the BEIIC's report stating that around 20 per cent of projects do not use the most appropriate procurement option. ( FAILURE TO SELECT AN APPROPRIATE PROCUREMENT APPROACH IS OFTEN A PRIMARY CAUSE OF PROJECT DISSATISFACTION OR FAILURE
Project Manager Oct Nov 2013
Project Manager Feb Mar 2014