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Business View Australia - June 2015 27
CONSTRUCTION
contracts. Even though the works
were in two separate geograph-
ic locations about 40 km apart,
the projects were combined to en-
sure a commonality of equipment
between the two sites. The value
of this project was $77 million.
In the normal course a contrac-
tor who was large enough would
have taken on this project and in
turn, awarded sub-contracts. How-
ever, the Council decided to take
this role upon itself and conse-
quently split the project into “pack-
ages” and awarded the contracts
for similar work at the two sites.
Greg Mashiah describes how the
Council utilized this technique to en-
sure the successful implementation of
the project, “We have been very for-
tunate here that all our projects have
been successful, but we have also tak-
en lessons from each of the projects.
For example, one of the things that
we did on the first project was that we
split it up into five separate contracts.
The value of the project was such
that if we had let the whole augmen-
tation as a single contract it would
have been within the financial capa-
bility of only the largest contractors,
because it was about $77 million in
total. So by splitting it up into sev-
eral contracts, the largest award-
ed was just about $40 million. On
the Iluka project we, as a result of
lessons learnt, reduced that from
four contract packages to three.”
Another technique used by the Coun-
cil was the Early Tendering Involve-
ment which was initially developed
by New South Wales Public Works for
Council’s Shannon Creek Dam proj-
ect in 2005. This technique involves
short-listing potential construction
contractors through an Expression
of Interest process. A meeting is
then held with these potential con-
tractors to reply to any questions
that they may have and describe
the details of the contract to them.
Explaining the benefits of Early Ten-
dering Involvement, Greg Mashiah
says, “Another thing that we have used
quite extensively is that all the tenders
have been awarded using a process
where potential contractors who have
been short-listed at the beginning of a
project are given an initial risk alloca-
tion and each is requested to provide
feedback on both design and risk al-
location to ensure that risk is placed
with the party best able to manage it.
We found the process extreme-
ly successful because we believe it
has mitigated the cost of unknown
risks and risks are placed with the
party best able to manage them.”