In June 2022, the Construction Sector Accord (Accord) released new guidance to support government agencies to embed broader outcomes into their construction procurement activity. The guidance explains what is meant by broader outcomes and outlines four key steps for implementing them into construction projects.
A summary of the guidance is set out below, and the full guidance can be found here.
What are broader outcomes?
Broader outcomes are the additional cultural, social, economic, and environmental benefits that can be achieved through procurement activities. Rule 16 of the Government Procurement Rules requires each agency to consider and incorporate, where appropriate, broader outcomes when purchasing goods, services or works.
The Government Procurement Rules identifies four priority broader outcomes, namely:
- To increase New Zealand businesses’ access to government procurement.
- To increase the size and skill level of the domestic construction sector workforce.
- To improve conditions for New Zealand workers.
- To reduce emissions and waste.
The importance of broader outcomes is reflected in the Accord’s Construction Sector Transformation Plan 2022-2025, where ‘procurement and contracting’ is noted as one the Accord’s 11 priorities. The Transformation Plan sets out the Accord’s aim of continuing to support the implementation of broader outcomes and to further understand the barriers preventing private clients from embedding broader outcomes in construction projects.
Our summary of the Transformation Plan can be found here.
Key steps to implement broader outcomes
The Accord highlights the importance of considering broader outcomes as early as the business case planning phase to ensure they are appropriately considered and implemented into construction projects. The guidance sets out the following four key steps to implement broader outcomes.
1) Opportunity Map: Exploring and identifying broader outcomes for the project
A project should focus on three to five broader outcomes. It is important to consider the wider communities your project will impact and its potential avenues of procurement. Is there room for improvement when considering the various project development stages, or the long-term repercussions once completed?
2) Question Guide: Selecting RFx questions in relation to broader outcomes
RFx (i.e Request for Tender and Request for Interest) documents should be written so it is obvious to tenderers the basis on which they will be evaluated. Questions may be “open” or more “specific”.
Example RFx questions include:
- What training opportunities can you make available to new workers?
- Are all your employees being paid correctly for annual leave, and receiving the bereavement leave, alternate holidays, public holidays, sick leave, and domestic violence leave they are entitled to?
3) Response and Evaluation Guide: How to evaluate and select a tenderer based on the RFx responses
Broader outcomes weightings can be between 10% and 30% (or more or less), and will depend on the project’s size, scope, and purpose. Evaluators should include a panel with diverse perspectives and the skills to adequately evaluate broader outcomes.
4) KPIs measurement Guide: How to measure and report on broader outcomes using Key Performance Indicators (KPIs)
KPIs can be used to measure the progress of broader outcomes.
Example KPIs include:
- Number of employees on living wage involved with the project.
- Total waste (per thousand tonnes) throughout the project.
- Number of female, Māori, or Pasifika employees in senior leadership positions.
It is also necessary to consider how broader outcomes and KPIs can be reported on and incentivised. For example, consider how KPI data will be collected, and how broader outcomes can be reported on through mechanisms such as monthly reports or payment claims. Broader outcomes may also be more successful if a contract includes incentives or consequences for meeting or failing to meet KPIs.
This article was co-authored by Rebecca Neil, a Solicitor in our Construction and Infrastructure team.
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