INFRASTRUCTURE ADVISORY STANDARD COMMERCIAL FRAMEWORK
The NSW Treasury is currently seeking to cap daily rates for architectural services for all NSW government contracts using a benchmark rate which we believe is not representative of the current market, and which we do not believe is based on fair and robust data. The capped rates being proposed are, we understand, below the cost rates of many practices. This would leave these practices unable to continue government work, a sector which, for some practices, is a core revenue source.
There is concern regulating pricing, particularly with below-market rates will manipulate the market and lead to unintended outcomes. We maintain the streamlining sought by government could be readily achieved through competitive tendering and the standardisation of contractual terms rather than the capping of rates.
A considerable proportion of the rates data from practices was collected at a time when unprecedented market conditions were at play, such as Covid-19. Additionally, we are aware some of the rates data was from contracts dating back to as early as five or more years ago (given the length of some of the contracts in place). We are therefore concerned that the proposed capped rates are unrepresentative of current market rates.
Architecturally designed government projects deliver some of the most important public spaces in NSW. These spaces rely on the competitive market to deliver quality architectural outcomes. Should the rates for government projects be far lower than in the private sector, outcomes risk being compromised.
What are we doing?
The NSW Chapter is advocating strongly to have these capped rates removed. We have raised this issue with Minister Petinos, Treasurer Kean and the Small Business Commissioner Chris Lamont. We are working closely with allied organisations such as Engineers Australia and the Australian Institute of Quantity Surveyors.
What can you do to assist?
Speak to your Member of Parliament and impress upon them the importance and value of the contribution experienced architects make to infrastructure projects.
Speak to the government agencies you may work with and help them to understand the risk to NSW should experienced architects not be available to carry out this work.
Image: Wagga Wagga Base Hospital – Stage 3 Redevelopment | Jacobs Group (Australia) Pty Ltd | Photographer: Brett Boardman