ACA QLD/NT submits response to Productivity Commission Inquiry
ACA QLD/NT has submitted a detailed supplementary response to the . 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.