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How much safety can the lowest bidder provide?

By johnboy - 11 July 2012 15

The Greens’ Amanda Bresnan is expressing concern that the cheapest companies win the tenders for ACT construction projects.

“Answers to questions we put to the Government show a startling pattern of rewarding the company that provides the cheapest service,” said ACT Greens Industrial Relations spokesperson, Amanda Bresnan MLA.

“Of 26 recent construction projects, the ACT Government awarded the contract to the cheapest tenderer 23 times – almost 90%.

“The concern is that price is being prioritised above worksite safety and above fair wages and conditions.

“The Government should be focused on contracting safe and fair companies, especially in light of recent construction site accidents and deaths in the ACT, and the fact that construction is an industry where sham contracting is a problem.

“I am extremely concerned the Government is creating an environment that encourages short cuts, and safety and employee conditions are suffering.

What’s Your opinion?


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15 Responses to
How much safety can the lowest bidder provide?
Pork Hunt 7:09 pm 13 Jul 12

An old military joke. When you are in a foxhole and the enemy is throwing everything at you it is of little comfort to know that your rifle was manufactured by the lowest bidder…

Pork Hunt 7:06 pm 13 Jul 12

KB1971 said :

I dotn think she ahs to wory about workers getting paid, most government tenders are over inflated anyway.

Dyslexia rules KO.

rosscoact 3:50 pm 13 Jul 12

unbelievable, imagine going with the cheapest quote. tsk tsk, those gubbimt people

I would presume that unless you wanted to get hauled over the coals by everyone from the Auditor General to the opposition to the chattering classes then ceteris paribus you do accept the lowest quote

JC 7:03 pm 12 Jul 12

Zeital said :

taking the GDE into account who in there right mind would make it 1 lane both ways only to turn around and make it 2 lanes both way just after the 1st part of it was done?

I assume they went with the cheeper option but then it got out of proportion anyways cuz they basicly had to redo it anyways

They went with a design that they could afford in the first instance and one they thought would last a bit longer than it did. This discussion is about going for the cheapest price which is something entirly different.

In the GDE case who knows if the companies that did the work were the cheapest, the most expensive or somewhere in-between. Unless any of us know the answer than not one of us can really comment on the value for money for the road. All we can carry on about is the stupidity of the design and the ultimate cost to us the taxpayer.

pirate_taco 12:31 pm 12 Jul 12

Crazy thought, why is everything put out to tender?
Does TAMS even have it’s own road crew to build/maintain roads instead of putting everything out to tender?
Sure, some tasks may require specialist outside contractors, but outsourcing everything comes at a cost, be it financial or not.
The tender process alone can be a waste of time and money for many involved.

Holden Caulfield 11:25 am 12 Jul 12

Awesome way to artificially inflate pricing.

enrique 10:45 am 12 Jul 12

Amanda Bresnan is right.

Any government of the day should really consider fostering an environment where local companies can grow and prosper in order to ensure Canberra a consistent and reliable supply that can incrementally improve over time.

That means paying enough so that successful contractors can make a decent enough (note, not exorbitant) profit to stay afloat, to pay their staff and sub-contractors and to put some money back into improving their own businesses.

If you just keep focusing on lowest cost then you will inevitably see a pattern where fly-by-night operators come along, undercut the more serious players, quote on work with very little margin, and doing bodgy jobs. These operators will ultimately end up failing and closing their business down because they can’t sustain operations or grow with such tight margins.

In the meantime the serious players start folding also because they’re not winning any jobs due to others undercutting them (or they themselves start cannibalising their own margins)… The end result is an environment with continuous churn of businesses coming and going, bodgy work being delivered, and a reduced level of capability and productivity in the local market.

Sometimes, if you want to do what’s best for Canberra in the long run, you’ve got to think beyond the short term perceived cost savings. Acknowledged, the expenditure on contracts will need to be sustainable – we can’t just ignore costs when awarding tenders – but costs shouldn’t be the most heavily weighted element.

p1 10:00 am 12 Jul 12

Governments should not be going for the cheapest, but rather the best value for money (just like every other business). This should factor in every single consideration they can possibly, um, consider – quality, time, support for local businesses, professionalism, past experience, etc, etc – including the way the company treats its workers.

However, this weighing up will always be heavily related to the dollar amount, so you would expect the cheapest quotes to most often get the gig. And the way the contractor treats their staff (safety, pay, etc) should be a pretty minor one, since governments already have extensive systems in place to ensure those things, like minimum wage and OHS laws.

If the Greens genuinely think that private companies are not doing right by their employees they should be suggesting that the government do the job themselves rather then contracting out. Which I imagine would suit them fine, in a new age communism kinda way.

KB1971 9:48 am 12 Jul 12

I dotn think she ahs to wory about workers getting paid, most government tenders are over inflated anyway.

Sandman 9:40 am 12 Jul 12

Who’s to say the price of the tender has anything at all to do with the quality of the work? Rather than putting up with sensationalist claims from psychic politicians with a keen sense of hindsight they need to get a few people with actual knowledge of construction to make these decisions. Most public works are simply a good way to create good employment figures, and the more guys you have standing around doing bupkis or repeat work, then the better the economy must be when judged by employment figures.
Unfortunately they usually forget to mention the number of interstate workers on these projects. It looks good on paper for the people of Canberra but much of the money is heading out of town.

Zeital 8:52 am 12 Jul 12

taking the GDE into account who in there right mind would make it 1 lane both ways only to turn around and make it 2 lanes both way just after the 1st part of it was done?

I assume they went with the cheeper option but then it got out of proportion anyways cuz they basicly had to redo it anyways

JC 11:25 pm 11 Jul 12

Did the GDE go to the cheapest bid or are you guys just assuming so? If so you have blown your own arguments out of the water. Cheapest doesn’t always mean the worst and more expensive doesn’t guarantee quality either.

gooterz 8:18 pm 11 Jul 12

The cheapest quote isnt always the cheapest in the long run..

Just look at what they did with the roads! GDE for an example!

joingler 8:18 pm 11 Jul 12

Felix the Cat said :

The Govt can’t win. They accept the lowest tender and all of a sudden it’s a safety issue. If they accept a higher price they will be accused of wasting taxpayer’s money.

Although that is true, the government should not be governing to gain popularity. They should be governing to do the best thing by the people. If the cheapest option is the best option then go for it. But I seem to get the impression that cheap is not always best. Whoever did GDE did not do it properly. Everytime it rains, huge potholes appear. Had to negotiate them on my way to Tuggers this morning. Someone was there fixing it up when I came back at lunchtime though so at least it was fixed. But it shouldn’t need fixing. If it was done properly the first time, it wouldn’t need fixing.

Surely it would be cheaper to pay a bit extra the first time and get it done properly rather than save a little bit of money then spend thousands getting it fixed??

Felix the Cat 4:54 pm 11 Jul 12

The Govt can’t win. They accept the lowest tender and all of a sudden it’s a safety issue. If they accept a higher price they will be accused of wasting taxpayer’s money.

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