Once New Plymouth District Council ditched the “lowest-cost” approach to projects and procurement, the value and benefits became clear
New Plymouth District Council found that traditional and transactional procurement processes were not delivering high quality, cost-effective projects for its ratepayers. Suppliers were kept at arm’s length and relationships were only managed according to contract terms, which meant each party was bound to what was written down and there was little flexibility to achieve anything outside of the contract. The Council needed to develop longer-term relationships with partners across its supply chain – based on a better understanding of each supplier’s needs and goals.
The Council will always be held accountable by the public for the outcome of a project – no matter the reasons for successes or failures. Therefore, it needs to embrace its accountability by playing a more influential role and launching a supply chain leadership approach. To help achieve this, the Council removed itself from the role of ‘client’ and instead allocated this to the New Plymouth community. The team learned how to become the leader of its supply chain that’s made up of various separate, yet dependent, links.
David Langford, the Council’s Group Manager of Infrastructure and Planning, motivated his team to try a different approach while procuring infrastructure maintenance services that focused on understanding its suppliers’ needs, instead of forcing them to meet Council requirements.
For its supply chain leadership approach, New Plymouth District Council was presented the inaugural Beacons Award trophy by Hon Poto Williams, Building & Construction Minister, during a live awards ceremony at Infrastructure New Zealand’s 2021 Building Nations virtual event.
Williams says the judges recognised the courage and leadership required to move away from the Lowest Price Conforming tender approach, and to develop long term partnerships in an attempt to deliver better infrastructure for New Plymouth, while also delivering positive health and safety and training outcomes for their supply chain partners.
“The judges noted how transformative this approach would be if it were adopted widely across the industry. The judges were also blown away by your bravery and leadership.”
“You have thrown down the gauntlet to other clients across the industry to focus on value rather than cost.”
David Langford says “we achieved a lot but it’s only because of the collaboration and support and willingness of our supply chain partners to work with us so a big thank you to them for helping us get on with the mahi and try and make the sector better. We always set out to try and do something that could be applied across the sector and have an impact, so hopefully this award helps us achieve that. We’re always willing to share and learn.”
For the Accord, Beacons Director Andy Cochrane says “the judges really were hugely impressed at the way NPDC shifted the dial away from lowest cost tendering. The approach took bravery and leadership to sell to elected representatives and ratepayers, and we think this approach is a fantastic example of putting value ahead of cost. It really is a deserving first winner of the Beacons Award and a great example for the industry. We are so looking forward to seeing what could be the winner of next year’s award.”
The two other finalists for the award were:
- Canam Commercial and Whangarei District Council, for the procurement process on the Whangarei Civic Centre project which focussed on community objectives including an 80% minimum local contractor requirement.
- KiwiRail, for reducing construction risks and improving productivity by increasing digital capability on its new rail projects and upgrades, including the use of the digital construction technology known as BIM (Building Information Modelling).
They were selected from a field of seven Beacons case studies, all of which are exemplars of the Accord values showcasing good practice and innovation.
- Chris Bunny, Deputy Secretary MBIE
- Ross Copland, Chief Executive Te Waihanga NZ Infrastructure Commission
- Helen David, Chief Executive Associaton of Consulting & Engineering NZ
- Malcolm Fleming, Chief Executive NZ Institute of Building
- Marilyn Moffatt, Executive Director, NZ Institute of Quantity Surveyors
- Bharti Raniga, General Manager ConCOVE
- Peter Silcock, Chief Executive Civil Contractors NZ
- Maretha Smit, Chief Executive Diversity Works NZ