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Avoiding lowest price chaos

Contract bid management

Failed government buildings, collapsed stop banks, collapsed water supply tunnels, and now we read that, in one district, flood-warning devices on three rivers all failed to work when floods came. In every case, contract bid management proved to be flawed.

Compared to Singapore over the past three decades, we’ve become more like a weird Hobbiton and much less like a successful modern country. And Singapore is little more than half the size of Banks Peninsula.

Despite all the recent fuss, red tape and expense aimed at fixing the chaos surrounding building industry contracts, today I see reported that the industry still faces “poor workmanship, build error(s), material faults and failures….poor design and procedural errors” . I do Hobbiton a disservice: it was never bad like this.

More red tape and cost
A group of highly paid public servants is now calling for more red tape and cost to the public in the form of a Local Government Risk Agency to save us from an unprecedented threat. I argue that the biggest unprecedented threat is the well-paid government managers who award contracts to incompetents.

It’s not that we lack skills in New Zealand. The problem is that firms with the right skills are failing over and over to win contracts against incompetents. It’s a communication issue. Of course, incompetent contractors are likely to offer a lower price. But cheapness guarantees excellence in neither quality nor value.

I challenge every honest competent contractor who misses good contracts to check very carefully whether their failed bid/proposal documents really displayed a high degree of excellence, perception and enthusiasm.

Bottom line: The competence of authorities is shown to be dismal over and over again. Before we sink further into the make-believe land of Little People, let’s work harder to halt the rise of failed contracts where chaos follows lowest price incompetence.

(c) This Opinion by Tom Evison was first published by Tecads in October 2017

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