Comparative procurement methodology analysis in Australia

A comparative review of procurement methods was undertaken for the purpose of objectively
determining the relative strengths and weaknesses of the principal methods for the state procurement
of economic and social infrastructures. The study concerned procurement alternatives commonly used
with large or complex projects and available to government, including:

o In-house provision using a state agency or works department
o Traditional procurement
o Outsourcing
o Build own operate and related forms of asset procurement
o Alliance contracting
o Public private partnerships.

Around 90% of state procurement in the late 1980s was traditional which employs a comprehensive
input specification, a lowest price tender selection process, separation of the design and construction
components of the project and an adversarial approach to contractual relationships. The main
measurement methods were delivery on time and within budget.

As traditional procurement is mainly concerned only with the delivery of assets, most performance
measures concern the timeliness and cost of delivery and these are mainly applied at commissioning.
Tender evaluation criteria may take into account the qualitative aspects of bids such as the bidder's
credit strength, expertise and track record. However, these values are generally subordinated to price
and few traditionally procured projects are evaluated again during their service life.

The development of a comparative procurement methodology involved a comparison of quantitative
and qualitative outcomes. The evidence was sourced from the procurement outcomes of 124
economic and social infrastructure projects commissioned by governments or state agencies in
Australia, Canada, New Zealand and the United Kingdom.