So, the Nats finally work out what every project manager, and indeed most householders, already know. The “cheapest” tender is not necessarily the best tender (or the cheapest, in the long run). It is to weep:
Huge cost of rotten school alters Govt views on tenders
The horrendous cost of repairing a leaky Auckland school is changing the traditional Government view that the cheapest tender is the best tender.
The Ministry of Education has paid $19.5 million to repair Macleans College, which has had to remove 23 rotten buildings from its Bucklands Beach site. … More than 300 schools and 800 buildings nationwide have been affected at a total cost of at least $1.5 billion. …
The known cost of the entire leaky building saga is $11.2 billion, but the true cost is believed to be at least twice that figure
Lessons?
These costs had prompted the Government to review how it chooses tenders for taxpayer projects. “(Macleans) was the worst contract we’ve ever done and yet we got it for the cheapest price. ‘Cheapest price wins’ is a mentality that we’re changing,” he said.
Economic Development Minister Steven Joyce proposed new rules for Government procurement in April. He said the emphasis would shift from who can deliver the lowest costs to who can deliver the best value for money and other direct financial benefits over the life of a contract.
Imagine – just imagine – if the Nats had managed to work this out before trashing over 100 jobs at the Hillside Workshop when they went with a slightly cheaper Chinese rail tender.
Imagine – just imagine – if the Nats could consider the long terms cost and benefits over the whole range of policy portfolios. Most crucially the environment. Climate change is the leaky building fiasco on a global scale, and the Nats are still stuck with the cheapest tender.
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