How-To Guide: Canam Case Study
This informative how-to guide was created to help others learn how to adopt Whangarei District Council's procurement process that promotes community objectives.
Who this is for
Canam Commercial Ltd are a mid-sized construction company but the fundamental elements of their approach can be applied to organisations of any size.
The key principles of using local suppliers, promoting trainee and apprentice positions and engaging with the local community can be scaled appropriately to any organisation or project. For example, using builder's apprentices has been an historic part of developing skilled builders within small building contracts.
The approach adopted by Whangarei District Council and Canam is a Broader Outcomes approach (sometimes referred to as Sustainable Outcomes, Progressive Procurement or Social Procurement).
Rule 16 of the Government Procurement Rules [PDF](external link) provides more detail, which can be applicable to both public sector and private sector organisations.
Auckland Council also partnered with the construction sector to develop a Sustainable Outcomes Toolkit(external link) – a practical guide to help deliver broader social, cultural, environmental and economic outcomes.
Further information from MBIE and Waka Kotahi(external link) - procurement.govt.nz
Early Contractor Involvement (ECI) and collaborative working
To achieve a positive impact on the local community, contractors and construction clients need to work in partnership to develop a local approach.
This can be achieved through a collaborative working model that can be initiated through Early Contractor Involvement (ECI). The Construction Procurement Guidelines [PDF](external link) offer some insight into the ECI approach.
The Construction Sector Accord's Contract Partnering Agreement [PDF, 118 KB] also offers a way to document a collaborative approach between clients and construction companies.
To embed a local approach, you need to first understand the local community and its needs:
- What is important to the local community?
- What are the strengths of the local market and the community that can be utilised in the construction project?
- What areas in the local market and community need to be supported and developed?
This information is normally established through research and by engaging with the community directly or through workshops. You can identify a set of potential impact areas that can be analysed and presented in an opportunity map.
An example opportunity map is provided in Auckland Council's Sustainable Outcomes toolkit(external link). This information can be translated into a procurement strategy that will help determine the requirements for tenderers.
Weighted attributes approach
A key factor in Canam's local approach is considering non-price attributes when procuring subcontractors and suppliers. This was achieved through a weighted attributes procurement approach.
Implementing a weighted attributes approach requires two key points:
- Establishing the weightings for each attribute by putting a percentage against each element according to their importance. Canam and the Council project team determined that non-price attributes should comprise 60% of the weighting and price should comprise 40%*.
Then determine how non-price elements should be configured between aspects like a company’s track record, project team experience, quality and, in this case, geographical location. The project team collaboratively developed a Request for Subcontract Tender, which included the following weighted attributes:
Non-price attributes Percentage weightings Relevant experience and track record (successful projects delivery) 10% Capacity / proposed team (resources & availability) 10% Geographic location 15% Quality 10% Sustainability (social and environmental) 15% Price attributes Percentage weightings Price 40%
- The second part of the process involves establishing a scoring mechanism for each attribute. Typically this will be a scoring mechanism out of 10 or 100.
Scoring should be clearly defined, either setting out what is required to achieve each score, known as an anchored scale, or a generic scale that can be used across all trades. An anchored scale normally provides the most clarity for tender evaluators but requires more work to agree on the scales. A generic scale requires less initial input but sometimes provides a disparity in scoring across evaluators – meaning the tender evaluation process needs to be very clear to avoid disparate scoring.
Given the number of trades that needed to be tendered, the project team established a generic scale as shown below.
|Scoring category||Description||Score range|
|Excellent||Exceeds the criterion to provide substantial additional benefit and/or reduction of risk||9 - 10|
|Good||Exceeds the criterion to provide some additional benefit and/or reduction of risk||6 - 8|
|Acceptable||Meets the criterion||5|
|Minor deficiency||Does not meet the criterion due to minor deficiency or risk||3 - 4|
|Major deficiency||Does not meet the criterion due to major deficiency or risk||1 - 2|
|Unacceptable||Does not comply, insufficient information provided or unacceptable deficiency or risk||0|
Canam invested in a relatively simple reporting infrastructure. Sign-in sheds built by Canam's apprentices were put up at each entrance, with each housing a sign-in tablet and a sim card to provide data/internet capability remotely.
They researched existing electronic sign-in systems and selected SwipedOn, a visitor management software. All information exported from SwipedOn is collated in an excel spreadsheet and uses simple Microsoft Office tools to present data in a dashboard report.