The Problem
The challenge around early contractor and supply chain engagement is not new and was recognised back in 2018 by the then Executive Director of the Australian Construction Association, Lindsay Le Compte, who said:
“The client has an obligation to ensure that they have undertaken all of the relevant background investigations to enable them to develop an appropriate tender specification."
“They must have thought through the key commercial, operational and related risks in their project and worked out how they are going to deal with them, and they need to select a tenderer with demonstrated capacity and commitment to work collaboratively with them to successfully
undertake the project” (Lindsay Le Compte the 2018 National Construction Equipment Convention, Sydney).
DCWC supports this initiative and, in line with state budgeting guidelines for high value, high risk projects, endorses the statement that the foundation for mega projects should be built on professional judgement where there is confidence that it can be achieved through good planning
of hard and smart work.
We believe that such statements should apply to early contractor and supply chain involvement as well as the traditional stakeholder, commercial, operational and their related risks pre-lodgement of tender.
Significant challenges facing Tier 1 Contractors in relation to supply chain risk have arisen due to two main factors:
1. The unprecedented spend on mega infrastructure projects - more than 2.5 times that of the previous spend during the mining boom period between 2007 and early 2013.
2. The global pandemic of COVID-19 where key manufacturing zones such as Wuhan and South Korea have been affected by widespread quarantines, factory closures, and logistics disruptions.
These two major factors will have both short and long term impacts on mega infrastructure projects, and if it is true that clients have the obligation to ensure that they have undertaken all of the relevant background investigations to develop project specifications, then these clients
should begin addressing these issues at the earliest opportunity.