6.09.2021

Centrality of Price in New Zealand Procurement: Time for Change

The focus on centrality of price in New Zealand procurement (or securing the lowest price) continues to be a key concern for the construction industry. 

This essay analyses the issue of lowest price-based procurement and some of the recent overseas procurement processes which seek to address this issue (including that of Sweden, Scotland, and Australia).  Finally, the essay examines the Construction Sector Accord as an example of a New Zealand Government initiative which seeks to promote fair risk allocation and collaborative procurement models that are not centred on price.

Overall, the essay makes the following recommendations:

  • Consideration needs to be given to the economic, technological, commercial, social and legal factors alongside price (including client and contractor experience);
  • A good faith clause should be made mandatory in tender documents in accordance with the Accord’s principles of collaboration and transparency; and
  • To use a schedule of quantities in tender documents for lump sum contracts for principal-provided items in order to give the principal a solid basis for comparison of tender prices and to filter unusually low prices.

Victoria’s essay received a commendation and was recommended for publication by the New Zealand Society of Construction Law.  To read Victoria’s essay, please click here.

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

Force Majeure – Not A Get Out Of Jail Free Card
Woolworths Group Ltd v Twentieth Super Pace Nominees Pty Ltd [2021] NSWSC 344
17.06.2022 Posted in Trade and Transport
Payment Claims: Incorrect Due Date From Delayed Delivery
Nicholls Group Projects Ltd v Plan Design Build Homes Ltd
20.05.2022 Posted in Construction
Employment Court Deems Gloriavale Residents Employees
The definition of “employee” in the Employment Relations Act 2000 (ERA) can at times be tricky to navigate; recent cases involving builders, couriers, and uber drivers can attest to the issues tha...
18.05.2022 Posted in Employment
New proposals on modern slavery place higher responsibilities on NZ organisations
Over recent years, modern slavery has become a more prominent issue in New Zealand.
13.05.2022 Posted in Business Advice
Insurance Contracts Bill – submissions on exposure draft closing soon
As we reported in late February, the Ministry of Business, Innovation and Employment (MBIE) is seeking submissions on the exposure draft Insurance Contracts Bill.  Submissions close on 4 May 2022. MB...
20.04.2022 Posted in Insurance
Matariki and Fair Pay Agreements
Matariki Te Pire mō te Hararei Tūmatanui o te Kāhui o Matariki (Te Kāhui o Matariki Public Holiday Bill) received Royal Assent yesterday, and the new Act comes into force today – 12 April 20...
12.04.2022 Posted in Employment
A Landmark Change? – Proposed reform of the occupational regulation of engineers
Engineers engage in building work that is critical to public safety. Despite this, few restrictions are placed on who can carry out and supervise complex and specialised projects that require high levels of professional judgement, skill and technical competence.
07.04.2022 Posted in Construction
Send us an enquiry
For expert legal advice, please complete the form below or call us on (09) 375 8700.
  • This field is for validation purposes and should be left unchanged.
-->