Capabilities, institutions and markets : a cross jurisdictional analysis of embedded public values in public works procurement in Australia

Over time the provision of public works has changed from the construction and delivery of public infrastructure by internal public sector processes and labour market; to the commissioning and procurement of public works by the public sector with construction and delivery by external third parties. The main reason for this change was the adoption of a new underpinning value system. This value orientation focused on increased efficiency in the public sector as a primary policy goal, and this objective was typically achieved by the ‘contracting out’ of government services (Majone 1996) Contestability and greater marketisation of public services (Niskanen 1998) has increasingly driven a public policy focus on private provision of public infrastructure. The public demanded efficiency in the public services and efficiency became a driving principle under these new arrangements as governments sought to provide public works, but in a more cost effective fashion. However, the implementation of contracting-out did not resolve the issues related to achieving efficiency in public works provision. Instead new sets of problems and issues resulted. These related chiefly to the attempts of government agencies, with little experience in competitive tendering, attempting to manage the design, bid and build elements of a typical capital works project; although the tendering of large volumes of public works projects in specific markets also had an effect. This paper describes and explores the array of procurement policy regimes which provide public works. It undertakes a comparative analysis of the operationalisation of capital works procurement in order to examine and understand the role of public values (Stewart and Walsh 1992; Peters and Wright 1996; Jogensen & Bozeman 2002), together with institutional and market arrangements (Brown, Potoski & van Slyke 2006) in these differing approaches. The paper seeks to determine the public policy issues arising from changes to public works policy frameworks and public infrastructure delivery through a study of the differing approaches by the various jurisdictions in the Australian context. Broader implications for public infrastructure procurement and delivery are examined. Policies and principles for undertaking public works are demonstrated as being contentious as there is no agreed and consistent method of infrastructure delivery. The study found that policy responses were contextualised as similar issues were resolved in different ways, due to the extant constraints and opportunities within each jurisdiction. Most jurisdictions adapted their approach in response to unforseen problems and unfolding dilemmas in the procurement of public works. Contextual factors encountered by each jurisdiction in the operationalisation of contracting-out are thus important sources of differences. The study found that jurisdictions moved through a series of iterations as governments responded to changes in markets, institutions, and organisational capability in public works procurement. A typology of procurement approaches is developed, together with the rationales for why these approaches have been implemented within each jurisdiction. The paper concludes with advancing a framework for developing contextually-appropriate public works infrastructure policies.