Contractors call for collaborative relationships

Contractors call for collaborative relationships

A sea change in the relationship between contractors and local councils is essential for the economic future of New Zealand, says Jeremy Sole, chief executive of the New Zealand Contractors’ Federation.

Speaking at the Transport NZ Summit in Auckland, Mr Sole said that a healthy construction industry was vital to meet the massive infrastructure development that will feed New Zealand’s economic growth in the coming decades.

However, the increasing trend for many councils to bundle together a number of smaller contracts into one package favours only the bigger operators, stifles growth among smaller local contractors and could, ultimately, drive them out of business.

“The New Zealand Transport Agency, in contrast to some local councils, is blazing a positive trail in its relationships with contractors and approach to procurement,” said Mr Sole, following the summit.

“If local authorities and other infrastructure clients, such as the power industry and rail, can take a similar approach we can ensure a healthy civil construction industry where skilled and qualified clients, consultants and contractors collaboratively produce innovation and whole of life value for money at mutually acceptable prices.”

Mr Sole said problems fuelling the current “hostile environment” included councils modifying the standard NZS3910 Conditions of Contract for Building and Civil Engineering Construction.

“The whole point of 3910 was that it could be easily understood by everyone,” said Mr Sole “But in some areas now you need a lawyer and a Rubik’s Cube to figure it out.

“Risk management is another difficult area. While risk should be borne by the party best placed to manage it, that is really hard when parties modify the contract, through ignorance, to mislead or to deliberately obfuscate.

“This behaviour prevents tendering parties from understanding the allocation of risk and responsibilities embedded in the project, causes market distortions and litigation, and destroys what could otherwise be productive relationships.”

ENDS

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