OZschwitz statist's ripoff: Tender process too expensive

TAXPAYERS are not getting the best value for their infrastructure buck because of the high cost of tendering for Government projects, according to the Civil Contractors' Federation.

The Federation's chief executive officer, David Elliott, said tendering for a $1 billion project could cost up to $15 million - a cost few companies were willing to carry unless they had a realistic chance of success.

He said a contractor with only a 20 per cent of chance of winning a project would not bother to be in the running, meaning fewer tenderers and reduced competition.

The $1.5 billion Kurnell desalination plant was a great example of the problem, he said, costing each of the three tenderers $25 million to prepare their bid.

Mr Elliott said he had urged the NSW Government - spending more than $600 billion on infrastructure - to break big contracts into smaller chunks to give more companies a slice of the action.

"The cost of doing business in NSW for these larger projects has become so high that many contractors are being scared off, given they have only a one-in-five chance of winning some of these jobs," he said.

"We want the Government to reduce the size of contracts so that the cost of tendering is reduced, more contractors put in a tender, and the likelihood of winning a job is increased because there are more jobs to go around.

"If they don't, we will see construction in NSW go the way of Woolies and Coles and medium-sized operators - those who have a $20 million or less annual turnover - will be forced out of the market or forced to sell because they can't afford to tender for work."

A spokesman for the Treasurer, Eric Roozendaal, said NSW was trying to make it easier for contractors to tender for Government projects.

"NSW has made significant changes to the process to ensure we get to preferred-bidder stage as quickly as possible, that we standardise our contract terms so legal costs are minimised, that we undertake site investigation works at [the] Government's expense and make that available to all bidders," he said.

"The NSW Government is working with Infrastructure Australia on this issue.

"Infrastructure Australia is aware of the industry's concerns and is reviewing the costs of project bids in the context of developing a set of national guidelines for private investment in major Government projects."

LNK

OZschwitz statist's ripoff: Tender process too expensive

OZschwitz statist's ripoff: Tender process too expensive

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