WA contracting reforms and fast-tracked pipeline will pay long-term dividends

The McGowan Government’s transport construction contract reforms – coupled with the fast-tracking of $140 million in road and maritime projects – will not only help small to mid-sized contractors survive the COVID crisis, but is also an investment in the industry’s long-term future.

Roads Australia President Michael Bushby said today the decision would have far reaching benefits for WA because it encouraged smaller contractors to develop their skills and capacity on projects commensurate with their size and balance sheet.

“The big names in Australian construction, like John Holland and CPB Contractors, all started out as small players,” Mr Bushby said.

“The more opportunities we can provide to tier 2 and 3 contractors, the more we can foster a competitive and skilled construction sector to deliver the transport projects WA and Australia will need in the future.”

Mr Bushby said WA’s contracting sector would especially welcome the streamlining of procurement processes to reduce the cost of tendering.

“The establishment of a state-wide Construction Panel Contract for projects up to a value of $20 million is a great initiative,” he said.

“This will make a significant difference to the time and cost involved in bidding for these projects, and ultimately drive competition and more cost-efficient outcomes for WA taxpayers.”

Mr Bushby said governments rightly expected value for money from contractors, however the number of contractors (large and small) who were struggling across Australia at a time of record investment in infrastructure showed something was wrong.

“In the eastern states, medium and small contractors have increasingly been squeezed out from bidding because projects have become too large,” he said.

“Not only are the big contractors assuming a huge and disproportionate amount of financial risk, the smaller contractors with spare capacity aren’t able to take on that risk.

“Reforming the way we procure these projects is an urgent priority for all governments.

“More broadly, improved pipeline visibility is essential for industry to plan for capacity, particularly for mid-tier contractors who have the capacity to take on more work but are limited in their ability to take on larger projects.”

Mr Bushby also welcomed the announcement that Main Roads would be fast-tracking tendering for a number of large-scale road projects.

“Industry would welcome the opportunity to engage with government in a collaborative way to shape projects and to apply fit-for-purpose procurement,” he said.

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