Australian, State and Territory Governments are committed to improving the infrastructure that is critical to efficient, productive and equitable operations of our economy. Achieving this objective requires efficient procurement processes and careful examination of costs to ensure value for money in infrastructure investments. Governments have cooperated to conclude the first national pilot benchmarking of infrastructure procurement processes and construction costs (as recommended by the 2014 Productivity Commission Inquiry into Public Infrastructure and agreed by the Council on 28 August 2014). This report covers the findings of the initial benchmarking and outlines plans for continued and improved future monitoring of infrastructure procurement performance and construction costs. The analysis was undertaken by the Bureau of Infrastructure, Transport and Regional Economics (BITRE) for the Infrastructure Working Group of the Transport and Infrastructure Council. In 2012 Infrastructure Australia recommended timeliness, quantitative and qualitative performance measures based on industry consultation. These measures and targets were used to benchmark a sample of 29 infrastructure projects spread across seven jurisdictions, all undertaken since 2010. Analysis of the procurement processes found the majority of the projects in the pilot study sample met most timeliness targets and most qualitative and quantitative performance measures specified by Infrastructure Australia. Project phases involving extensive client—contractor interaction (Interaction, Evaluation and Finalisation) were found to be most time-intensive, exhibited most time variation and had poorest compliance with targets (Table 1). The majority of projects also complied with planned quantitative (Table 2) and qualitative performance benchmarks, however, with two exceptions: • Almost 80 per cent of sampled projects reported at least one addenda for project changes or missing information; and • Approximately 57 per cent of sample projects reported at least one material change to terms or scope at the Request for Proposal phase. These results also highlight areas for potential process improvement; in particular, the data collected through this initial study provides no information about the quality of agency procurement processes (including procurement team skills and agency systems) or the quality of procurement outcomes. For example, extended contractor interaction may contribute to better project outcomes or improve project delivery efficiency, but this is not captured in the pilot study data. Further work is recommended in 2016 to better measure improvement in procurement processes and outcomes. The experience working with Infrastructure Australia’s performance measures highlighted the value of thorough evaluation of infrastructure procurement processes but also highlighted areas where the measures could be improved to capture outcomes and potentially be simplified. (Author/publisher)
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