Government as an informed buyer: recognising technical expertise as a crucial factor in the success of engineering contracts

Yates, Athol

Government as an informed buyer: recognising technical expertise as a crucial factor in the success of engineering contracts

Date

1999

Authors

Yates, Athol

Abstract

To be an informed buyer in government, two distinct skill sets are required: contracting skills and subject matter expertise. For goods and services which have complex engineering inputs, the subject matter knowledge required is engineering expertise. While government procurement and contracting guidelines recognise the importance of both skill sets, their emphasis is on contracting skills with only passing reference to subject matter expertise Access to technical expertise is becoming a more critical issue for governments due to changes in the administration and type of contracts, and the skills available in the public sector. Devolution and decentralisation of government procurement powers are increasing the decision making power of individual agencies and contract staff, mega-contracts and the increasing technological complexity of contracts are increasing the penalties for making uninformed decisions, and a 20% reduction in the number of engineers in the public sector over the last decade has reduced significantly government's in-house engineering expertise. There is no universal amount of engineering expertise required for a contract which has complex engineering inputs. The appropriate type and level of engineering expertise varies with the type of contract and at different stages of the contract. Based on research, including interviews with both engineers and non-engineers involved in both sides of government contracting, factors for determining the appropriate level of engineering expertise for the various stages of a contract were identified. This, plus an examination of whether the expertise should be in-house or contracted in, resulted in the development of a method for selecting the most cost effective approach to determining and obtaining the necessary levels of technical expertise for a contract. The method involves the following steps: * Determine the level of technical expertise required to be an informed buyer in the relevant contract areas * Evaluate the relevant existing level of in-house and external technical expertise available * Undertake a cost benefit analysis of in-house and/or contracted expertise at each stage of the contracting process * Obtain the expertise and start the contracting process To improve government contracts which contain complex engineering inputs, agencies should employ the above method of selecting the most cost effective way to determine and obtain the necessary levels of in-house and contracting in technical expertise, and include it in government contracting guidelines.