Tendering

Securing Positive Project Outcomes using NEC3

The NEC3 suite of contracts is growing in use in New Zealand.  The contracts were used with apparent success for the development of the stadium and other facilities for the London Olympics in 2012, and it is the preferred form of contract by the Office of Government Commerce for all public private partnerships in the UK.

In NZ, the engineering and construction contract was used for the development of the Northland Events Centre for the Rugby World Cup in 2011.  At $16.5 million, the development was more modest that some others, but it was on time, within budget, and effective.

This paper was prepared for the NEC Users’ Group Australasia conference in Christchurch on 27 August 2013.

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Transparency & good governance in public sector procurement

Despite twenty years of public sector reforms and the corresponding reduction of the state sector, the purchasing power of central and local government, and their respective agencies, remains an important part of the New Zealand economy.

Core government expenditure[1] for the 2004 year is forecast to be $35,367 million, which represents 26.39% of GDP for the same period, of $134,034 million[2] (compared to 11% of European Community GDP in 1996, the most recent figures available[3]).  The most recent figures for local government expenditure[4],for the 2002 year, total $1,779 million[5].  Based on these figures, procurement procedures adopted at all levels of government, and the policies reflected in them, have real significance to a wide range of interest groups.

This research paper was submitted for my Master of Laws degree subject on Comparative Administrative Law in 2004

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Navigating the tender process

It is the very nature of a tender process that all parties are in competition with each other and, within certain bounds, each is fully entitled to act in their own interests.  The tenderers compete not only with each other, but also with the invitor to protect their profit.  The successful tenderer scoops the pot, leaving nothing for those whose bids were unsuccessful.  Increasingly, tenderers have shown an unwillingness to play the game, either by simply ignoring the rules or by challenging the process.  This is almost certainly as a result of the cost and uncertainty that is inherent in any competitive process.

This paper was originally published in the New Zealand Law Journal in 2000.

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