News tagged Contract-Administration
  • Common Construction Administration & Inspection Issues That SaaS Can Fix

    The construction contract administration phase for unit price contracts is often full of inefficiencies thanks to outdated, manual processes.

  • The Productivity Challenge

    The construction industry is a major contributor both directly and indirectly to the Australian economy. So no more reports, just get on with it! This is an industry that employs around 1 million Australians, and had turnover of $233 billion in 2013-14 equating to 14% of GDP. In addition, it creates the buildings, cities and infrastructure that makes Australia more productive, liveable and sustainable, adding substantially to our national wealth and well-being. Yet, the construction industry in Australia has not substantially improved its productivity in decades, and can waste up to 30% of its efforts. This is not a uniquely Australian issue. Rather, it is a product of the structure of the construction industry, the increasing complexity of its services, and the creation and operation of “silos” within that structure. If that wasted effort were to be reduced by only one third, it would lift Australian residential and non – residential construction output by more than $10 billion annually. If the changes required to achieve that reduction were to “ripple” through the industry, it is conceivable that within a few years the improved output would be substantially higher. The Solutions? This challenge has been the subject for numerous studies, reports, reviews and inquiries over at least three decades, most recently the Productivity Commission inquiry into Public Infrastructure Costs (2014). These landmark studies point to a diverse range of common denominators in reducing wasted effort. In particular, three key themes are evident; depth of procurement and project management skills, better supply chain integration and the use of technology to improve project outcomes. Yet despite these themes (and many particular recommendations) reappearing in study after study, there has been slow (if any) adoption of better practice. This is despite evidence from other jurisdictions (e.g. the UK) or industries (e.g. resources sector), that adopting these recommendations result in massive productivity uplifts, less waste, lower costs and happier industry participants. ACIF and its members believe that there is no need for more inquiries or reports. The imperative is to act on a handful of potential drivers of improvement that are developed collaboratively by governments, clients and service providers. The Role of Government The importance of governments is twofold.  As policy makers, governments have ultimate influence over the legislative and regulatory arrangements governing the industry. Even more important, however, is government in its role as client. As major and ongoing clients of the construction industry, and the ways in which governments and industry interact have a profound impact on both the health of the industry and the success of governments in delivering their capital programs. Industry is already doing a great deal of heavy lifting from the bottom up, but it is limited in achieving the pace of change required to remain competitive with major trading partners without top down political and government leadership. Leadership from government in both these roles is critical if we are to turn the dial on Australia's construction productivity. Recommendation 1 - Establish an Independent Procurement Centre of Excellence. With large amounts of public funds being spent on infrastructure, it is incumbent on governments to ensure they get maximum value for money through the procurement process. To buy wisely you need wise buyers: there are substantial opportunities for governments and business to share expertise, and identify and deliver solutions that improve productivity and value for money across the procurement process. To overcome persistent deficiencies in procurement skills and practices, we recommend a whole of government approach supporting the establishment of an Australian Procurement Centre of Excellence, building on the work of the Australasian Procurement and Construction Council (APCC). The Procurement Centre of Excellence will expand the APCC’s role and remit, broadening government engagement and building on work across jurisdictions considering efficiencies in procurement. The Centre would be tasked with building a stronger relationship between government and business and supporting best practice procurement in Australia at all levels of government. The Centre should: be established as independent of government; build stronger linkages between government and with industry sectors; provide transparent expert advice to all levels of government; develop guidelines, build capability and improve standards; and work with Infrastructure Australia and other government agencies to develop long term visionary thinking and planning for investment in economic and social infrastructure. The Board of the Procurement Centre of Excellence should include equal levels of representation from industry, and government. Recommendation 2 - Increase Standardisation in Procurement and Contracting Devolved responsibility for agencies has resulted in greater autonomy, but also significant re-inventing of wheels. Bespoke approaches to project definition, initiation and contracting have increased regulatory burden (or at least administrative burden), decreased trust and certainty and increased waste. ACIF believes that a ‘leading practice’ approach to can be reflected in a consistent public sector framework of capital works procurement policies and practices, used by all government agencies. ACIF recommends a suite of leading practice procurement policies, delivery strategies and contract conditions be developed by the Procurement Centre of Excellence, to be used by government agencies on an “if not why not” basis that would: provide best fit between end user and project requirements and delivery strategy; reduce the cost of contract administration and of providing appropriate procurement and commercial skills whether in house or by consultants; minimise wasted effort and disputes; and embody equitable risk allocations whilst ensuring best value for end users and owners. Recommendation 3 - Adopt BIM by 2020 Building Information Modelling (BIM) is being used around the world to complement better collaboration and coordination between the supply chain participants in construction.  Using technology as a facilitator to bring project teams together and design a virtual prototype of an asset are helping to enhance collaboration, test and re-test business case objectives, and plan for more efficient asset delivery. Moving an entire industry to a new way of doing things however, is not an easy task. There are up-front capital investments, significant industry up skilling, regulatory frameworks and standards to be developed and changes to culture to be considered. However the productivity dividend is undeniable. Numerous reports, experience from other countries and existing Australian examples provide a significant evidence base to substantiate making the change. Thus it is imperative that governments, through their significant purchasing power and whole of industry influence, lead the way.

  • New Partner helps you get paid

    Australian Construction Industry Forum (ACIF) is proud to announce a new partnership with an innovative company tackling one of the building and construction industry’s biggest issues: getting paid. Progressclaim.com bridges the gap between multiple organisations and stakeholders, by providing an easy-to-use, real-time, online collaboration platform. Developed specifically around construction needs, it works by allowing contract parties to collaborate on a neutral platform, eliminating the need for endless spreadsheet reconciliations, email trails and heated phone calls. “There is a big hidden cost for business in contract administration and chasing payment,’ said James Cameron, Executive Director for ACIF. “At a time when all sectors are facing a fall in the demand – the ACIF Forecasts show that there will be another 5% fall in activity this year and for the next three as historical booms pass – it’s the best time for businesses to have a way to reduce admin costs and improve cashflow. “We welcome Progressclaim.com as a partner that understands the payment challenges facing our industry, and, more importantly, has a solution to help.“ “Progressclaim.com is all about increasing productivity by connecting everyone in the construction supply chain and getting them communicating,” said Lincoln Easton, CEO of ProgressClaim.com. “We noted early that increasing industry productivity is at the top of ACIF’s activity agenda and the fact they are familiar with the software space, having their amazing Customised Forecasts Dashboard, made them an easy choice for us to partner with. “Everyone at Progressclaim.com is very excited about our relationship. ACIF are as driven by innovation, productivity and the positive use of data within the construction industry as we are - there’s exciting times ahead for us both.” Progressclaim.com joins a committed group of industry organisations supporting ACIF, as it works to improve the productivity, safety and profitability for businesses across architecture, building, engineering, and trades and professions in the built environment. ACIF’s Principal Partner Cbus Super Fund manages the financial future for over 700,000 people working in our industry; research organisation Cordell leading authority on project activity and building cost information in Australia, the industry’s lead trade event DesignBuild Expo and specialised construction software provider Viewpoint Construction Software. Find out more about ACIF’s partners at www.acif.com.au/partners.

Resources tagged Contract-Administration

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