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3. Alternative procurement methods

The procurement method identified at the schematic design stage shall be selected by the project control group (PCG) subject to the approval of the Department of Health and Human Services. It is expected to:

  • comply with regulatory provisions including the ministerial directions pursuant to the Project Development and Construction Management Act, the Code of Practice for the Building and Construction Industry and guides set out by the Construction Contracts Advisory Panel (CCAP), and in departmental procurement procedures
  • address gateway and the Partnerships Victoria requirements, which can be located here
  • follow an assessment of options taking into consideration risks and opportunities. The assessment is generally prepared by consultants with recommendations.

Part of the design development activity involves selection of the procurement method if this matter has not already been considered and resolved, as this will influence the activities to be undertaken in the tender and contract documentation phase.

A range of factors require consideration with regard to alternative procurement options including:

  • complexity and size of project
  • undertaking of works on existing / functioning facility or greenfield site
  • stage of completion of design, documentation and performance requirements when works are expected to commence
  • environment within which local contractors operate
  • requirements for early works, decontamination or other preparatory works
  • availability of appropriate construction, trade and managerial experience within the region
  • skills available within agency to manage contracts and sub-contracting arrangements
  • inflationary trends in the industry (actual or projected) and their bearing on possible alternative management methods
  • size and experience of local and regional contractors and subcontractors
  • implementation program
  • implications of the Australian and United States Fair Trade Agreement (AUSFTA)
  • risk analysis such as implications to the principal (health service / agency), contractor and other site users
  • opportunities for outsourcing, skills transfer or other benefits.

In general the following four main methods of procurement are available for delivery of capital projects. Under any procurement method a contract must be executed, i.e. signed, insurances and bank guarantees provided and a superintendent appointed to administer the contract on behalf of the principal (i.e. health service / agency) prior to commencing any construction works.

For a more comprehensive assessment of procurement strategies and requirements refer to the Department of Treasury & Finance (DTF) gateway website.