New BMA policy of fixed pricing

18/8/93

The price charged by the Building Management Authority for projects undertaken by its in-house workforce is in future to be charged for on the same basis as the private sector.

Works Minister Graham Kierath in a Ministerial statement to Parliament said the BMA was initiating a policy of fixed pricing, which effectively meant that the price quoted initially for a project would be the price charged.

"This is part of the Government's program to ensure that these projects are better managed and performance is improved," Mr Kierath said.

"The primary objective is for work being done by the construction operations of the BMA for client agencies to be charged at market price."

Mr Kierath said fixed pricing had advantages for client departments, the BMA and the taxpayers of Western Australia.

Clients would now have certainty of the outcome, as they would pay the agreed price and not the actual cost, as was the case in the past with BMA projects.

For the BMA, firm financial targets would improve cost controls and reduce cost overruns.

"It is unacceptable to the Government that under the old system it was perceived that if there were overruns, the client department would meet the bill," Mr Kierath said.

"In the past, client departments have had concerns that their building programs would be reduced by having to pay a premium for construction operations and this had an impact on the availability for work for the BMA's in-house workforce.

"Fixed pricing will remove these impediments for the BMA and provide certainty for clients."

Media contact: Brian Coulter 222 9595