Cost and Time Overruns in Western Australian Government Projects: Procurement Decision-Making Antecedents

Tom Lees; Dane Segar; Andrew Whyte; Stephen Urquhart.

Cost and time overruns in public-sector construction projects are a noteworthy issue in Western Australia, often stemming from pre-contract client decisions’ antecedents compounded by a lack of guidance for (lay) stakeholders. This research develops models to assist stakeholders towards identifying/selecting a procurement method that allocates risk appropriately, alongside objective guidance for suitable prequalification criteria. A qualitative research methodology using two developed sets of semi-structured interviews targeted a sample of 21 respected WA industry-practitioners. Response transcripts revealed common themes; findings then informed models for selecting a procurement method that most appropriately allocates risks, leading to the development of additional models to structure prequalification processes in construct-only procurement, by aligning prequalification criteria with respective project circumstances. The developed guidance flowchart models have been validated and enhanced through follow-up validatory industrial appraisal. This research provides a contribution to the existing body of knowledge related to procurement methods, contractor selection, and optimisation of pre-contract decisions for use by inexperienced stakeholders, towards the mitigation of cost/time overruns in public sector jobs.

KEYWORDS: Construction; time/cost-overruns; procurement; decision-making



Download this PDF file

REFERENCES

1. Abdullah, N. M. Q. B., Lee, Y.Y., Lee, Y.H., Gui, H. C. & Whyte, A. 2021. Perception analysis of industrialized building system implementation for G7 contractors in Kuching, Sarawak. ASM Science Journal, 14, 1-7.
2. Awad, H., Thomas, G. & Swanson, J. 2013. Construction risk identification and allocation: cooperative approach. Journal of Construction Engineering and Management, 139 (9), 1098-1107.
3. Caffieri, J., Love, P., Whyte, A. & Ahiaga-Dagbui, D. 2018. Planning for production in construction: controlling costs in major capital projects. Production Planning & Control, 29(1), 41-50.
4. CEIID (Centre for Excellence and Innovation in Infrastructure Delivery). 2010. Infrastructure procurement options guide. Government of Western Australia. (https://studylib.net/doc/18731400/infrastructure-procurement-options-guide). Last accessed on 15 February 2022.
5. Creswell, J. 2014. Research design: Qualitative, quantitative, and mixed methods approach (4th ed). SAGE Publications. Inc.
6. Eadie, R., McKeown, C. & Anderson, K. 2012. The impact of recession on construction procurement routes. International Journal of Procurement Management, 6(1), 24-38.
7. Flyvbjerg, B., Skamris hoem, M. K. & Buhl, S. L. 2003. How common and how large are cost overruns in transport infrastructure projects? Transport Reviews, 23(1), 71-88.
8. Hampton, G., Baldwin, A. & Holt, G. 2012. Project delays and cost: stakeholder perceptions of traditional V PPP procurement. Journal of Financial Management of Property & Construction, 17(1), 73-91.
9. Hatush, Z. & Skitmore, M. 1997. Criteria for contractor selection. Construction Management and Economics, 15(1), 19-38.
10. Liu, J., Love, P., Smith, J., Matthews, J. & Sing, C. 2016. Praxis of performance measurement in public-private partnerships: beyond the iron triangle. Journal of Management in Engineering 32 (4).
11. Love, P., Davis, P. & Edwards, D. 2008. Uncertainty Avoidance: Public Sector Clients and Procurement Selection. The International Journal of Public Sector Management, 21(7), 753-776.
12. Murphy, C. 2012. Major Capital Projects. Office of the Auditor General Western Australia. ISBN: 9781922015129.
13. Rao, M.V.K., Kuma, V.S.S. & Kumar, P.R. 2016. Prequalification of contractor in the construction industry using multi-attribute utility theory multiplicative approach. Malaysian Journal of Civil Engineering, 28(3), 467 - 480.
14. Uher, T. & Davenport, P. 2009. Fundamentals of Building Contract Management. Sydney: University of NSW Press.
15. Urquhart, S. & Whyte, A. 2018. Contractor tendering research: Going beyond bid/no-bid and mark-up models. Proceedings of the Institution of Civil Engineers - Management, Procurement and Law, 170(6), 255-262.
16. Urquhart, S. & Whyte, A. 2020. Implications of governance obligations being within construction contractors' tendering procedures. Australian Journal of Civil Engineering, 18(1), 93-105.
17. Whyte, A. 2015, Integrated Design and Cost Management for Civil Engineers. CRC Press/Taylor & Francis Group, USA ISBN: 13:978-0-415-80921-4
18. Xiao, J., Zhang, G. & Yang, R. 2012. Factor Analysis of Partners' Commitment to risk management in public-private partnership projects. Construction Innovation, 12(3), 297-316.