The costs of applying Transit New Zealand competitive pricing procedures (CPP) (brought into operation in 1991) to the letting of contracts for the engagement of professional services for Transit New Zealand-funded roading work are evaluated, based on a study of the financial year 1991–92, and carried out in 1992–93.
Conclusions from the study include:
- Selection of consultants should be made using quality-based procedures for most Transit New Zealand-funded roading work.
- Quality-based procedures, based on Brook's law, should be used for fully funded works. However, other procedures may need to be developed to meet the special needs of the local authority tendering requirements.
- Professional services contracts should be parcelled into larger packages, and should be for defined periods to reduce administration costs, both before acceptance and during progress of the work.
- Training programmes should be implemented in the preparation of requests for tender briefs, tender evaluation procedures, and negotiation skills for staff of Transit New Zealand and of local authorities.
Recommendations have been made for changes to CPP procedures so that quality service will be provided, competition will be encouraged, and unproductive costs related to the present bidding system will be reduced.
Keywords: Competition, engineering, evaluation, procedures, professional services, roading, selection