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Thursday, 22 May 1980
Page: 3076

Mr KEVIN CAIRNS (Lilley) -On behalf of the House of Representatives Standing Committee on Expenditure I present the report of the Committee entitled: 'Alternative delivery systems for Commonwealth public works', together with a transcript of proceedings and certain documents authorised for publication.

Ordered that the report be printed.

Mr KEVINCAIRNS (Lilley)-by leave-This report results from the request from the Parliamentary Standing Committee on Public Works that the Standing Committee on Expenditure examine the use of project management as an alternative method of delivering major capital works of the Commonwealth. The Committee was guided by the terms of this request. This is the second request the Expenditure Committee has received from another parliamentary committee. The first request was from the House of Representatives Standing Committee on Environment and Conservation and related to the Northern Territory forestry program. When we add to these requests suggestions that fall within the Committee's terms of reference made in reports of other parliamentary committeesfor example, the report of the Senate Standing Committee on Social Welfare entitled 'Through a Glass, Darkly', and a report from the Senate Standing Committee on Finance and Government Operations on the Advance to the Minister for Finance- one can see a ray of hope of healthy co-operation that is emerging between the various committees of the Parliament. I thank all these committees, and, in particular, I thank the chairmen of these committees for this important innovation.

The subject matter of this report and inquiry has been very technical. This has meant an additional effort on the part of the sub-committee members- the deputy chairman the honourable member for Parramatta (Mr John Brown), the honourable member for Henty (Mr Aldred) and I as chairman- to understand the issues. It did appear, however, that most witnesses were challenging the efficacy of the traditional system to deliver public works in an economical and efficient way. Various alternatives were suggested by witnesses. Technical complexities were compounded by the lack of clarity in the information given to us, but after examining most of the evidence as to what are the appropriate matters for inquiry, we agreed that the questions that should be addressed are, firstly, whether a greater proportion of public works should be delivered by systems other than the traditional system; and if the answer is in the affirmative, secondly, the implications for the role of the Department of Housing and Construction. Once we stated our purpose in this way we realised we were on familiar ground. One of the major interests of the Committee is program evaluation in which we attempt to assess the success of a program in meeting its objectives and examining whether there are different ways- that is program alternatives- of meeting those objectives, particularly ones which lower costs.

Obviously, the starting point is the statement of the objectives of the Commonwealth works program. Initially, we constructed those objectives from the April 1979 submission of the Department of Housing and Construction. We further realised that only governments can set objectives for themselves. Accordingly, we corresponded with the Minister for Housing and Construction (Mr Groom) who gave us the objectives. We then proceeded to assess the extent to which the various delivery systems meet these objectives. The delivery systems chosen were the traditional system, design-construct, construction management, project management and selective tendering, which is a minor variation to the traditional system.

Four conclusions were reached on the issues. Firstly, the choice of a particular delivery system for a particular project has to be made in the context of the circumstances of that project and is, hence, a matter of judgment for the administrators. Secondly, the choice of a particular delivery system for a particular project should continue to reside with the organisation that has prime carriage for the co-ordination of the planning, design and construction of public works. Thirdly, it is not practical to formulate guidelines for the selection of a particular delivery system. Fourthly, since a government department or agency is responsible to government and the

Parliament for the efficient administration of public works, that department or agency should always have overriding authority over project management companies and others on those works.

Those conclusions can be said to be negative ones in that they do not make a contribution to increasing efficiency or improving accountability to the Parliament. To expect reports always to contain such contributions is to equate scrutiny with criticism. This is a view the Committee does not hold. However, the inquiry did throw up matters in relation to efficiency and to accountability. Concerning accountability, the Committee has recommended, firstly, that the Department of Housing and Construction either include in its annual reports or supply to the Parliament Standing Committee on Public Works for inclusion in that Committee's general reports the following information on each completed major capital work: The tender price, costs of rise and fall contract clauses, design alterations and other costs specified and the delivery system or systems used for each project. Secondly, it was recommended that the Department of Housing and Construction expedite the preparation of design and supervision costs for major public works and publish these costs in its annual reports.

This information should assist both departments and organisations located in the private sector to challenge the ways in which the Department of Housing and Construction is administering government programs. Without this information we feel that the questioning will continue to be based on assertions rather than wellthought out arguments. Finally, in an attempt to improve the efficient administration of construction programs, the Committee's third recommendation was that the Department of Housing and Construction assess the advantages and disadvantages of contractual project management and use this delivery system when circumstances permit its use. In a nutshell this is what the report represents.

I make it quite clear that a wide-ranging inquiry into the administrative efficiency of the Department of Housing and Construction was not contemplated at any stage. Some of the areas witnesses wanted examined are more appropriately dealt with in such an inquiry. We were guided always by the precise terms of the requests from the Public Works Committee. The information the Committee has asked for should enable it and other bodies to assess much better whether there is a case and a cause for such a wide-ranging inquiry.

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