Australian Procurement and Construction Review

Australian Procurement and Construction Review
Name	Australian Procurement and Construction Review
Date	2018
Jurisdiction	Australia
Author	Australian Government
Published	2018
Subject	Procurement, Construction

Contents

Australian Procurement and Construction Review The Australian Procurement and Construction Review is a 2018 Australian government-commissioned report examining procurement and delivery practices across Australian Commonwealth of Australia agencies, statutory authorities and major infrastructure programs. It was led by a panel chaired by senior public servants and involved consultations with industry groups including Australian Industry Group, Master Builders Australia, and unions such as the Construction, Forestry, Maritime, Mining and Energy Union. The review intersected with major projects and entities including the National Broadband Network, Sydney Metro, Inland Rail, and the Department of Defence acquisition programs.

Overview

The review analyzed procurement frameworks used by bodies such as the Australian Public Service Commission, Department of Finance (Australia), and the Australian National Audit Office to identify failures common to projects like WestConnex, Snowy Hydro 2.0, and metropolitan rail programs. It drew on precedent from inquiries including the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the Hope Report-style reviews in states like New South Wales, and international practice from the United Kingdom Infrastructure and Projects Authority and the U.S. Government Accountability Office. The panel engaged stakeholders such as Infrastructure Australia, Business Council of Australia, Australian National University, and peak construction unions.

Commissioned in response to high-profile cost overruns and schedule slippage on projects including Adelaide Desalination Plant, Melbourne Metro Tunnel, and Defence procurement such as the SEA 1000 program, the review built on prior Australian inquiries into procurement such as the Victorian Bushfires Royal Commission and state-level audits by the Victorian Auditor-General's Office. The review synthesized lessons from reports on public-private partnership projects like the Victorian EastLink and Queensland's Gateway Upgrade Project, and considered regulatory frameworks shaped by the Competition and Consumer Act 2010 and procurement reforms promoted by the Productivity Commission. International comparative material included the Infrastructure UK green book, the Project Management Institute standards, and Australian adaptations used by organisations like Transurban and CPB Contractors.

The review's scope covered procurement lifecycle stages affecting bodies such as the Australian Rail Track Corporation, Ausgrid, Queensland Rail, and major contractors including Lendlease, John Holland Group, and Multiplex. Objectives included strengthening assurance mechanisms used by the Department of Finance (Australia), improving capability in the Australian Public Service Commission, reducing disputes involving arbitral bodies like the Australian Centre for International Commercial Arbitration, and promoting best practice drawn from authorities such as Infrastructure Australia and industry associations including the Civil Contractors Federation.

The panel found recurring issues across projects managed by entities including Snowy Hydro, NBN Co, and the Department of Defence: insufficient early-stage strategic planning, weak cost estimation, and misaligned incentive structures in contracts awarded to firms like Acciona and Downer Group. Recommendations included establishing a central capability hub modelled on the UK Cabinet Office and the Infrastructure and Projects Authority, mandating independent cost verification akin to practices at the New South Wales Treasury, requiring consistent use of whole-of-life analysis used by Infrastructure Australia, and improving procurement training through institutions such as the University of Melbourne and Monash University. It advocated stronger oversight by the Australian National Audit Office and clearer ministerial accountabilities similar to provisions found in state procurement reforms in Western Australia and Queensland.

Following publication, agencies including the Department of Defence, Infrastructure Australia, and the Department of Finance (Australia) adjusted guidance on capability frameworks, contract forms, and assurance processes, influencing procurement on projects such as Inland Rail and the Sydney Metro City & Southwest. Industry bodies like Master Builders Australia, Australian Constructors Association, and Engineers Australia incorporated recommendations into codes of practice, while contractors such as CPB Contractors and Laing O'Rourke revised commercial approaches. The review also informed parliamentary scrutiny by committees including the Joint Committee of Public Accounts and Audit and provided material used by state treasuries in reforming procurement rules.

Responses varied across stakeholders: major construction firms and industry groups including the Australian Industry Group welcomed emphasis on capability, while unions like the Construction, Forestry, Maritime, Mining and Energy Union and advocacy groups such as the Australian Council of Trade Unions urged stronger protections for workers and supply chain transparency. Critics referenced projects such as WestConnex and the Melbourne Metro Tunnel to argue the report underestimated systemic political drivers highlighted by state inquiries like the Independent Commission Against Corruption (New South Wales), and commentators from outlets associated with The Australian Financial Review and The Sydney Morning Herald questioned implementation timelines. Academic commentators from Australian National University and the University of Sydney suggested that the review underemphasised procurement law reform interactions with statutes like the Competition and Consumer Act 2010.

Category:Australian government reports