Choosing a procurement strategy for BCM projects and programs
Determining the appropriate procurement strategy for projects and programs in the building construction and maintenance category requires consideration of a number of aspects, including the policy environment, project specific considerations and risks, and the overarching government objectives or needs.
This page steps through the fundamental aspects that should be considered when determining the procurement strategy for a project or program of works.
For clarity, the term project is used below to represent either a project or program of work.
Policy environment of building construction and maintenance
Building construction and maintenance in Queensland is governed by both legislative and policy requirements. Government has overarching policies and frameworks that set out requirements and processes for planning, maintaining and delivering government building assets.
These documents are interrelated and should be reviewed regularly throughout the project lifecycle (including, project planning, procurement, contract award and delivery) to ensure compliance with government requirements.
These are some of the main policies and frameworks.
The Financial Accountability Framework includes the Financial Accountability Act 2009 (Qld) and the Financial and Performance Management Standard 2019.
Together they provide a framework to achieve value for money by establishing and maintaining systems, practices and controls around asset management.
This includes acquiring, maintaining and/or improving significant assets in line with the Project Assessment Framework (below).
The Strategic Asset Management Plan (SAMP) framework and related guidance materials assist government departments in preparing a SAMP.
A SAMP provides a strategic and overarching basis for decisions about planning for investment and procurement, and the management and recycling of assets required, to meet a department’s service delivery objectives.
A SAMP should be developed as a dynamic framework and a living document that can be updated in response to changing needs, contexts and practices.
The Total Asset Management Plan framework is the whole-of-government policy for managing Queensland Government non-current assets.
It facilitates a coordinated approach to asset management, ensuring transparent and consistent asset planning across the Queensland Government.
The Queensland Procurement Policy 2023 is government’s overarching policy for the procurement of goods and services.
It sets out how to achieve the government procurement outcomes and strategic objectives detailed in the Queensland Procurement Strategy 2023.
The Queensland Procurement Policy is supported by the Buyer Companion Guide.
The Project Assessment Framework is used across government to ensure a common, rigorous approach to assessing projects at critical stages in their lifecycle – from initial assessment of a required service through to delivery. It is not limited to infrastructure projects or public private partnership projects.
Managed by Queensland Treasury, this framework provides tools and techniques for assessing projects. It also sets out dollar thresholds for its application to prevent unnecessary burden on less complex or costly projects.
The Gateway reviews (assurance) process is another tool endorsed by government for use on major infrastructure programs and projects. Gateway reviews are aligned to the Project Assessment Framework and provide an independent review at key decision points in the project lifecycle. This process helps to identify opportunities to improve project delivery, and ensures the best possible outcome. This is not an assessment tool.
The Business Case Development Framework ensures a consistent and rigorous approach to proposal development, enabling decision-makers to compare investment opportunities.
The framework integrates with other frameworks and infrastructure investment systems at both state and national levels. It is scalable and can be applied to all infrastructure proposals.
The Business Case Development Framework also provides fit-for-purpose guidance, recognising the different needs, assumptions and considerations for business case analysis.
The Building Policy Framework establishes a range of key principles for effective and efficient management of buildings owned by the Queensland Government.
It considers the planning, delivery, maintenance, performance and technical requirements for growth and renewal of government building assets.
The Building Policy Framework is supported by the Building Policy Guideline.
BCM procurement pathways
The procurement strategy for a particular project is a high-level plan that:
- identifies specific considerations and risks for the project; and
- sets out the strategies that are likely to facilitate successful procurement and delivery.
When funding decisions for a project are being considered, the procurement strategy is used to demonstrate that the investment can be procured in a way that maximises project outcomes and delivers value for money.
This provides decision makers with the confidence that risks and issues likely to impact the project throughout its lifecycle have been identified, analysed and can be appropriately managed. This increases the likelihood of successful project outcomes.
There are various procurement strategies you could use for a BCM project. To determine the appropriate procurement strategy for a project, you must:
- identify key issues that may impact the successful delivery of the project; and
- establish clear procurement objectives that address these issues.
This work will inform decisions about project structuring, bundling or packaging, and ensure procurement objectives align with project goals to increase the likelihood of success.
The following are BCM category procurement pathways:
Building construction
The extent of planning required for projects that involve constructing or improving government building assets should reflect the value, risk and complexity of the procurement.
When you are planning a procurement strategy to deliver or improve a government building asset, consider what services will be needed to support the:
- project planning and assurance stages
- business case development
- scope, design, cost and time aspects
- various procurement activities or processes needed to achieve the delivery outcome.
The Building Policy Framework provides guidance about the factors that influence procurement strategy selection. However, the most suitable procurement strategy for the project will be the one that best:
- aligns with the project’s key objectives and constraints
- deals most appropriately with the project’s identified risks
- suits the level of complexity of the project.
The following information provides an overview of:
- relevant frameworks and considerations applicable during the assessment and development of a service requirement
- procurement strategy options available for building constructions projects
- the standard contracts suitable for each building construction procurement strategy.
This information is alternatively available in downloadable PDF documents for use in procurement workshops or the development of business cases.
Procurement pathways alignment to government policies and frameworks
The following downloadable table, Table 1: Procurement pathways alignment to government policies and frameworks , relates mainly to government building construction or maintenance projects where the Project Assessment Framework, Building Policy Framework and/or Business Case Development Framework apply, or where a departmental approval process could benefit from the structure and considerations of these frameworks.
It sets out the stages and relevant guidance available to support each step during project conceptualisation, procurement strategy development and form of contract determination.
For less complex or costly projects, some of the information may be helpful when determining the project lifecycle and delivery pathway.
Building construction procurement strategies
Below you can see the procurement strategy options available for building constructions projects. You can also download a table with this information: Table 2: Building construction procurement strategies overview .
Design, documentation and construction are carried out in sequence, and design, documentation and approvals must be completed and obtained prior to commencement of construction.
Initially, the principal completes the design and documentation (in full) for the project either by engaging design consultants (e.g. an architect, engineers and other technical specialists) – directly or as subconsultants to a principal consultant – or having the work performed in house.
Then, following tendering of the project on the basis of the principal's design and documentation, the principal engages a contractor, who may in turn engage subcontractors and suppliers, to construct the project in accordance with the documentation prepared by the principal.
The principal's consultants generally retain responsibility for design and documentation, with the contractor generally responsible for construction only. The contractor should not ordinarily be required to retain its own design consultants under this delivery method.
Features:
- Suitable for projects where government seeks to retain design and quality control, and has the capability to ensure consultants produce good quality documentation.
- Not suitable where the project would benefit from a contractor’s input into the design.
- Success is dependent on completeness, accuracy and adequacy of design and documentation.
- Can deliver great price certainty when the design and documentation are complete, accurate and adequate.
- Well known and understood method of delivery.
Design and construction stages overlap.
Initially, the principal may document the principal’s requirements for the project (also referred to as a project brief) and preliminary design, if applicable, either by engaging design consultants (e.g. an architect, engineers and other technical specialists) – directly or as subconsultants to a principal consultant – or having the work performed in house.
Then, following tendering of the project on the basis of the principal's project requirements/project brief, the principal engages a contractor, who in turn engages design consultants, subcontractors and suppliers, to design, document and construct the project in accordance with the principal’s requirements for the project.
There are options in relation to the extent of the design carried out by the Principal.
Features:
- Suitable where the project would benefit from a contractor's input into the design.
- May be suitable where a more fast-tracked delivery of the whole project is required, as this delivery method allows construction to progress ahead of full design documentation.
- Not suitable where government seeks to retain design and quality control.
- Success is dependent on completeness, accuracy and adequacy of the principal's project requirements/ project brief.
- Can deliver great price certainty where the principal's project requirements/ project brief is complete, accurate and adequate.
- Well known and understood method of delivery.
Design and construction stages overlap.
Initially, the principal may document the principal’s requirements for the project (also referred to as a project brief), and preliminary design, if applicable, either by engaging design consultants (e.g. an architect, engineers and other technical specialists) – directly or as subconsultants to a principal consultant – or having the work performed in house.
Then, following tendering of the project on the basis of the project brief prepared by the principal, the principal engages a contractor who, during Stage 1, works collaboratively with the contractor's design consultants and the principal to revise the project brief and refine the design to meet budget and time constraints and provides a Stage 2 offer to the principal based on the revised project brief.
If the offer is accepted, Stage 2 proceeds and the contractor completes and/or manages the design, documentation and construction of the project.
Features:
- Provides a potential opportunity for early works to be carried out during Stage 1 (while design is being finalised).
- Best suited to complex, high-risk or significant projects.
- Suitable where early contractor involvement is beneficial.
- Success is dependent on completeness, accuracy and adequacy of the project brief and cost estimates.
Design, documentation and construction are carried out in sequence. Design, documentation and approvals for the respective trade works must be completed and obtained prior to commencement of construction.
Initially, the principal completes the design and documentation (in full, in trade packages) for the project either by engaging design consultants (e.g. an architect, engineers and other technical specialists) – directly or as subconsultants to a principal consultant – or having the work performed in house.
Separately, the principal engages a construction manager (or performs this role in house) to package, procure, manage and coordinate the construction work.
Then, following tendering of the project on the basis of the trade package documentation prepared by the principal, the principal engages contractors and suppliers under individual trade specific contracts to undertake the construction of the project.
Features:
- Involves numerous contracts and related procurement activities.
- The majority of the risk, including overall time and cost, remains with the Principal.
- Suitable for projects where the principal needs to maintain control of the scheduling and performance of the trade works.
Government forms an alliance with key project participants, including the principal and contractor, and works collaboratively with alliance partners/project participants (e.g. designers, contractors, and suppliers) to collectively make unanimous, best-for-project decisions on all aspects of the delivery of the project, including agreeing performance targets and target costs.
There are various alliance model options, but alliances are generally structured so that alliance partners share all commercial risks and rewards.
Seek expert advice before committing to this strategy due to its considerable risk and complexity.
Refer to Queensland Treasury Project Assessment Framework – Alliance establishment and management.
A PPP is a procurement and financing solution for public sector infrastructure, where private sector investors contract with government to design, build, finance and maintain the social infrastructure necessary for government to deliver its services.
Regular payments are then made to the private sector consortium for the availability and use of the asset.
Standard contracts aligned to building construction procurement strategies
Once the procurement strategy has been determined, the next step is to determine the appropriate form of contract to support the delivery of the project.
The following downloadable table sets out the standard contracts that are aligned to each building construction procurement strategy, available on the government BCM standard contracts page:
Maintenance
The Building Policy Guideline provides guidance in relation to developing procurement strategies to assist departments in achieving value for money on maintenance projects.
Maintenance projects include capital replacement works, as well as proactive and reactive maintenance works.
For any building construction related works that include capital replacement scope, follow the guidance in the building construction section on this page.
When developing the procurement strategy for proactive or reactive maintenance, consider using any accessible whole-of-government standing offer arrangements (including common-use supply arrangements).
If a suitable arrangement does not exist, procurement can be managed in accordance with the relevant policies and frameworks. Note that, in some instances, the procurement size and duration may require compliance with the Project Assessment Framework and Business Case Development Framework.
Refer to the Table 1: Procurement pathways alignment to government policies and frameworks for more information on the project planning stages and considerations required under both frameworks.
Procurement pathway options for maintenance work include:
- using or establishing a whole-of-government standing offer arrangement where the scope of the works is suitable and the need is ongoing(see the Standing Offer Arrangements section below for more guidance)
- conducting procurement on an ‘as needs’ basis, noting the relevant policies and frameworks in place and the requirement to procure accordingly, and using a standard BCM contract suitable for the maintenance work being procured
- bundling when an agency has similar service needs across multiple assets, which can be bundled from a logistic and program perspective, so value-for-money outcomes may be improved with a bundled procurement approach (see the Bundling section below for more guidance)
- using QBuild to carry out the work.
The following downloadable table sets out the standard contracts that are aligned to each maintenance procurement strategy, available on the government BCM standard contracts page:
Standing offer arrangement
The establishment of a standing offer arrangement (SOA), including a common-use supply arrangement, can result in effective whole-of-government outcomes when there is a high volume of repetitive purchases of works or services that can be scoped and priced with sufficient certainty for a set time period.
When you establish an SOA, consider the Queensland Procurement Policy principles and whether there are enough suitable suppliers to support establishing the SOA.
The standing offer arrangement is the standard contract suitable for this procurement strategy. See the relevant SOA documents on the government BCM standard contracts page.
Bundling
Bundling is a term used when multiple smaller government building construction projects (with similar scopes of work and delivery times) across several different sites are grouped (bundled) together and collectively procured under one procurement activity.
When the right projects are bundled, bundling can deliver operational efficiencies and provide better value-for-money outcomes.
Bundling may occur with multiple projects in a single department or opportunities may be identified across departments, through forward pipelines, business cases or reporting and forward planning in line with the:
Under the overarching policy framework, when forward planning opportunities are identified, agencies could be asked to consider a bundled approach with other agencies.
Read the Building Policy Guideline for more guidance on bundling and scheduling medium-value and lower-value government building construction projects.