ACA QLD/NT submits response to Productivity Commission Inquiry
ACA QLD/NT has submitted a detailed supplementary response to the Queensland Productivity Commission’s Construction Productivity Inquiry. Building on our May 2025 submission, this response addresses key issues raised in the Commission’s Interim Report and presents solutions-oriented recommendations to modernise Queensland’s construction sector.
Our submission emphasises that productivity improvements must align with public interest outcomes. By focusing on the often-under-recognised pre-construction phase – planning, scoping, design and documentation – we can address many downstream challenges before they reach the construction site.
OUR KEY RECOMMENDATIONS
Queensland Government Procurement Policies
Core Issue: Current procurement practices often prioritise lowest price over value for money, undermining the Queensland Procurement Policy’s six principles.
Our Recommendations:
- Develop “Model Client” procurement guidelines with fair contract conditions and appropriate risk allocation
- Establish an ongoing Industry Reference Group for government-industry dialogue
- Focus on value-based selection rather than cost-only decisions
- Address gaps in understanding specialised professional services roles
Expected Benefits: Fewer disputes, reduced project delays, better-designed projects, and improved public value through a collaborative procurement approach.
Pre-Qualification System Reform
Core Issue: Excessive duplication of information between PQC registration and individual tender submissions creates an administrative burden, particularly for SMEs and regional firms.
Our Recommendations:
- Streamline PQC process by leveraging the existing database rather than requiring resubmission
- Review and right-size PQC thresholds with regional considerations
- Implement more flexible criteria, allowing alternative demonstrations of capability
- Provide targeted support and training for SMEs in PQC processes
Impact: Broader participation, increased competition, stronger local industries, and reduced procedural costs.
Improving Tendering and Contracting
Digital Technologies
Barriers: Cultural resistance, lack of client mandates, skills gaps, and risk aversion to innovation.
Recommendations:
- Mandate digital deliverables (BIM) for major projects by 2027
- Weight tender evaluation to favour digital capability
- Provide grants and training for digital skills development
- Establish “Construction AI Challenge” for productivity solutions
Collaborative Contracting
Benefits: Innovation through early engagement, improved risk sharing, time savings, and better-quality outcomes.
Recommendations:
- Expand the use of alliances and early contractor involvement for complex projects
- Invest in building agency capability to manage collaborative contracts
- Start with pilot projects to demonstrate effectiveness
Risk Management and Standard Contracts
Core Issue: Proliferation of bespoke contracts with onerous clauses undermines Professional Indemnity insurance market and increases costs.
Recommendations:
- Mandate the use of standard form contracts (e.g., AS 4122-2010) without amendments
- Implement proportionate liability principles
- Cap consultant liability appropriately
- Ensure visibility of subcontract terms to prevent unfair risk transfer
Project Bundling
Position: Selective use only, with careful consideration of market impact.
Guidelines:
- Assess whether bundling reduces competition below acceptable levels
- Consider regional impacts and SME participation
- Allow joint ventures, but avoid mandating them
- Monitor outcomes and adjust approach based on evidence
Agency Capacity
Core Issue: Erosion of public sector project management expertise leads to inconsistent practices.
Recommendations:
- Develop central procurement guidance and Model Client principles
- Invest in public sector skills development
- Create an Industry Reference Group for ongoing support
- Consider formal capability reviews of major procuring agencies
Performance vs Prescriptive Specifications
Position: Support shift towards performance-based specifications to encourage innovation.
Implementation:
- Ensure performance criteria are clear and measurable
- Build agency capability in verification and testing
- Start with selective implementation (energy, acoustics, structural)
- Explicitly invite alternative proposals that meet performance intent
Modern Methods of Construction
Expanded Focus: Beyond traditional MMC, emphasise the transformative potential of AI and digital technologies in design and project delivery.
Future Skills Roadmap (2025–2035+):
- 2025–2028: AI literacy, prompt engineering, ethical oversight
- 2028–2032: Strategic leadership, multi-scenario simulation management
- 2032–2035+: AGI orchestration, cultural mediation, moral risk leadership
Key Actions:
- Establish Queensland Architectural Future Skills Fund
- Fund 200 architectural cadetships focused on AI-enabled practice
- Require human sign-off on AI-generated designs for public projects
- Create Built Environment Ethics Council for AI governance
IMPLEMENTATION STRATEGY
Immediate Actions (2025–2026)
- Adopt Model Client procurement guidelines
- Streamline PQC system
- Pilot collaborative contracts on select projects
- Launch digital skills training programs
Medium-term Goals (2026–2028)
- Mandate standard contracts across government
- Implement BIM requirements for major projects
- Establish Industry Reference Group
- Roll out AI integration support for SMEs
Long-term Vision (2028–2035+)
- Position Queensland as national leader in construction innovation
- Develop comprehensive AI governance framework
- Achieve productivity gains while maintaining safety and quality standards
EXPECTED OUTCOMES
- For Government: Better project outcomes at lower cost, reduced disputes and delays, enhanced reputation as preferred client
- For Industry: Fairer risk allocation and contract terms, increased opportunities for SMEs and regional firms, investment in innovation and skills development
- For Public: Higher quality infrastructure delivered more efficiently, stronger local construction industry, better value for taxpayer investment
The ACA QLD/NT stands ready to collaborate with the Commission and State Government to implement these reforms, supporting a more efficient, innovative and resilient construction industry for all Queenslanders.