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Foreword
As Functional Leader for Government Procurement I am pleased to introduce this suite of Construction
Procurement Guidance. These guides represent the governments standards of good practice for the
development of a government agencys construction procurement strategy.
Over $7 billion is spent annually by government agencies on construction and infrastructure. While many
government agencies are experienced in delivering major construction projects, there has been a significant
increase in construction activity by agencies that do not routinely undertake this type of procurement. These
projects leave a lasting impact on the local communities that use the facilities and the New Zealand economy
as a whole; it is essential they are managed well and deliver value for money. Although there is no one size fits
all solution to the delivery of complex infrastructure in government, there are common good practices that
can be more consistently applied.
This guidance will support government agencies in their thinking when planning and delivering major capital
projects or programmes. The suite is not designed to replace professional advice but to support government
agencies to better understand some of the key issues to consider when developing their procurement
approach.
Included in this suite is specific guidance on how government agencies can take a lead role to improve
workplace safety when managing construction projects. Governments objective is to reduce the rate of
fatalities and serious injuries in the workplace by at least 25% by 2020. Government agencies have a collective
responsibility in ensuring we meet this target and this guidance supports us to do that. MBIE will build on this
work by developing a tool to help government agencies weight and evaluate health and safety considerations
in their wider procurement activity.
We are grateful to a number of construction industry organisations and government agencies that have helped
shape these guides with their feedback and advice. Since the Canterbury earthquakes many of these
organisations have been working in extraordinary situations. Valuable lessons have been learned and we are
grateful for the input of government agencies and industry members who found themselves managing massive
builds under difficult and urgent circumstances.
I am confident this guidance will help deliver value for money on our construction projects and significantly
contribute to a safe and secure built environment for New Zealanders.
David Smol
Chief Executive
Ministry of Business, Innovation and Employment
7. Manage
GUIDANCE FOR cont ract and
relationship
2. Ident ify needs and
analyse t he market
PLAN
THE CONSTRUCTION
PROCUREMENT LIFECYCLE 6. Negotiat e and
award contract
3. Specify requirement s
5. Approach 4. Plan
market and approach to
select suppliers market and
evaluat ion
1. Initiate Project 2. Ident ify needs 3. Specify 4. Plan approach 5. Approach 6. Negotiat e and 7. Manage 8. Review
and analyse t he requirements t o market and market and award contract cont ract and
market evaluat ion select suppliers relationship
TREASURY
Programme
BETTER
Strategic business case Implement at ion
BUSINESS CASE Det ailed business case
assessment or indicat ive business case
PROCESS
business case
MATCHING
COMPLEXITY
TO CAPABILITY
DEVELOPING
SUPPORTING GUIDANCE
YOUR
PROCUREMENT
STRATEGY
RISK
HEALTH AND
SAFETY
BUILDING
INFORMATION
MODELLING
Purpose
This guide is part of a suite of guidance documents developed by the New Zealand Ministry of Business,
Innovation and Employment (MBIE) for New Zealand public sector agencies (agencies). Each guide provides
standards of good practice on a specific aspect of the construction procurement process.
The purpose of providing the suite of guides is to:
modernise the Governments approach to construction procurement to align with good international
practice and provide better value for the New Zealand public
encourage agencies to take a strategic approach earlier in the planning of construction procurement
show how using these guides links to other government-directed requirements such as Treasurys Better
Business Case (BBC)
provide a plain English format that is easy for agencies and suppliers to use.
Components of suite
The set of Planning Construction Procurement guides to support the construction procurement process
comprises the following documents:
Title Primary users Description
An overview to the guides Agencies and industry This document; provides a high level overview of
organisations involved or the suite of guidance documents
interested in public sector
projects
A guide to matching capability to Agencies responsible for Provides a structured approach for matching the
complexity delivering major capital capabilities of key stakeholders to the complexity
projects or programmes of of the project environment
work
A guide to developing your Agencies or industry Provides guidance on:
procurement strategy organisations involved in assessing delivery options and identifying a
delivering public sector delivery model that accommodates a
projects projects characteristics, risks and
circumstances
good practices of tendering and contracting
Achieving construction productivity All agencies Provides a general overview of Building
gains by adopting BIM Information Modelling (BIM), its advantages, and
when it is appropriate to use
Definitions of some specific terms can vary between the guides, such as client or sponsor. Each guide
provides definitions that apply for the context covered in that specific guide.
To ensure that your project delivers value for money and is aligned with good practice, refer to the
Government Rules of Sourcing, Cabinet Office Circular 15/5 and the New Zealand Better Business Case
guidance notes. These frameworks set out Governments expectations for the management of procurement
and capital expenditure.
(Each guide in this suite may also list additional references that relate specifically to that guide.)
www.procurement.govt.nz
Advice: procurement@mbie.govt.nz
We are grateful to the following organisations for providing feedback to the first edition of the Construction Procurement
Guidance:
1
Refer to CO (15) 5 for a comprehensive list of public sector agencies to which the circular applies.
NEW ZEALAND GOVERNMENT PROCUREMENT 8 AN OVERVIEW TO THE GUIDES