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Develop a procurement strategy

Selecting the right procurement strategy for your building construction and maintenance (BCM) activity will help you to deliver on planned outcomes, manage risks and reduce the likelihood of contractual disputes and litigation.

Your procurement strategy takes your procurement activity from early planning through to completion.

Plan your procurement

Make sure you plan your procurement first, so you have the necessary details to develop your strategy.

Demonstrate value for money

The Queensland Procurement Policy requires all government building projects to demonstrate value for money, fairness and probity.

Assessing value for money involves more than just considering price.

To choose a strategy that contributes to value for money, be sure to:

  • optimise risk allocation between parties by selecting the right contracts and annexure
  • use performance specifications, where appropriate, to encourage maximum innovation
  • maintain flexibility to secure scope changes at a reasonable cost
  • use incentives to reward 'better than business as usual' outcomes
  • set an appropriate contract period
  • ensure participants have the required skills and capabilities to deliver planned project outcomes
  • adopt a procurement strategy appropriate to the complexity of the project
  • time procurement activity with other agencies to maximise regional participation
  • apply a 'local benefits test' to all high-expenditure or high-risk procurement and plan to use local suppliers

Learn more about how to achieve value for money.

Read the Probity and integrity in procurement guide.

Select a building construction procurement strategy

During the project development phase, you should consider the best procurement strategy(ies) based on:

  • the scope of work
  • when it is needed
  • estimated contract value.

A new Building Policy, replacing the Capital Works Management Framework is also due to commence on 1 July 2023 which will continue to provide guidance for agencies in policy requirement 3 – Procurement strategy and contract selection and through the associated guideline document accompanying the policy.

Comparison of strategies for building construction procurement

Traditionally fully documented – lump sum

Best suited to: projects where there is high degree of certainty regarding specific project requirements

Process summary

  • Principal engages consultants to design the building project and prepare documentation fully describing the work to be undertaken
  • Contractor constructs the building project in accordance with the project documentation, for a lump sum price

Design and construct – lump sum

Best suited to: projects where the need to achieve defined time and cost outcomes outweighs the need for the highest or most defined quality

Process summary

  • Principal engages consultants to prepare a detailed project brief defining the scope, quality and functionality requirements
  • Contractor completes the design of the project, prepares construction documentation, and constructs the project for an agreed lump sum price

Managing contractor – design and construction management

Best suited to: major, significant or complex projects where there is some uncertainty regarding specific project requirements

Process summary

  • The principal engages consultants to prepare a project brief including a budget estimate and estimated time for project completion

Stage 1

  • The managing contractor works collaboratively with its design consultants and the principal to revise the project brief and refine the design to meet budget and time constraints
  • The managing contractor provides a guaranteed construction sum offer to the principal based on the revised project brief

Stage 2

  • If the offer is accepted, the managing contractor completes the design and manages construction of the project

Alliance

Best suited to: complex, high risk projects where alternative strategies for risk allocation will be ineffective

Process summary

  • An alliance is formed between the key project participants, including the principal and contractor
  • All partners in the alliance are collectively responsible for all aspects of project delivery
  • The alliance is structured so commercial risks and rewards are shared by the alliance partners

Select a consultancy services procurement strategy

You must use the prequalification (PQC) system to source building, construction and maintenance related consultancy services:

  • worth more than $60,000

or

Email PQCRegistrar@epw.qld.gov.au or phone 1800 072 621 for more information.

Consultancy services worth less and $60,000 and considered low risk*

You can use your standard agency process for these services.

Standard forms and guidance for the Building Policy will still apply.

Speak to your agency contact to find out about the standard process.

Monitor your procurement strategy

You should monitor key objectives and constraints as the project progresses and be prepared to change your strategy at appropriate stages or to manage for alternative outcomes.

If objectives or constraints change, then you should consider an alternative procurement strategy to respond to a changed risk profile.

More information

Last updated:
1 August 2023
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