Procurement Under Pressure: Why “Business as Usual” No Longer Works

Procurement Under Pressure: Why “Business as Usual” No Longer Works

Queensland’s infrastructure pipeline is accelerating at a pace not previously experienced. In the lead-up to 2032, councils, council-owned corporations (COCs) and delivery agencies are being asked to deliver more, faster, and with greater complexity and scrutiny. The pressure is not just on what gets delivered — but how it is procured. The issue is not that procurement frameworks are fundamentally flawed. It is that they were built for a different market. Today’s market demands agility, commercial awareness and strategic decision-making, while still maintaining probity, transparency and defensibility. That tension is where many projects begin to falter. Today’s environment is defined by constrained contractor capacity, pricing volatility and heightened risk sensitivity.

The Growing Mismatch: Time vs Process

At the core of the challenge is time, and the growing disconnect between procurement processes and delivery urgency. Project timelines are tightening, funding windows are fixed, and political and community expectations are high. Yet procurement processes remain heavily structured, sequential and compliance-driven.

Typical procurement pathways, including lengthy tender periods, rigid evaluation methodologies, and multiple layers of approval, were designed to ensure fairness and accountability. Those objectives remain critical. However, when applied without flexibility, they can slow down delivery to the point where opportunities are lost or costs escalate.

We are now seeing this play out in real time:

• procurement timeframes exceed delivery timeframes;
• market interest declines due to overly burdensome processes; and
• contractors price in risk premiums to account for uncertainty and delay.

In short, doing things properly is being conflated with doing things slowly, and the market is responding accordingly.

Template-Driven Procurement vs Strategic Procurement

Another key issue is over-reliance on standard templates and legacy procurement models.

Templates serve an important purpose. But over-reliance on templates is increasingly becoming a failure point in major projects. They provide consistency, reduce drafting time and embed baseline protections. However, they are not a substitute for strategy. When procurement becomes a fill-in-the-blanks exercise, it often fails to respond to the specific risks and dynamics of a project.

This is particularly evident in:

• inappropriate use of standard D&C or lump sum models in constrained markets;
• risk allocation that does not reflect current contractor appetite or capacity; and
• evaluation criteria that prioritise compliance over capability and delivery outcomes.

The result is a growing disconnect between what procurement processes demand and what the market is willing, or able, to deliver.

Strategic procurement requires stepping back and asking:

• What is the best delivery model for this project?
• Where is the market currently positioned?
• What risks can realistically be transferred, and at what cost?

Without that front-end thinking, even well-run procurement processes can produce suboptimal outcomes.

Procurement is not a documentation exercise. It is a strategic decision-making process.

Risk Transfer Models Are Reaching Their Limits

Traditional procurement has relied heavily on transferring risk to contractors. In the current market, that approach is under strain.

Contractors are increasingly unwilling to absorb unquantifiable risks, particularly in relation to design development, escalation and complex interfaces. Where they do accept it, risk is priced at a premium — or avoided altogether.

The result is higher pricing, reduced competition, or both.

Fixed Price Contracting in a Volatile Market

Fixed price contracting remains common, but in a volatile market it is creating tension.

Contractors are being asked to hold risks they cannot control, while principals face inflated bids or increased claims post-award.

Increasingly, disputes are not arising from performance failure — but from misaligned commercial assumptions at the outset.

Capability Constraints and the Adviser Paradox

Many councils and agencies are operating with constrained internal capability. Procurement teams are often under-resourced, managing multiple projects within tight governance settings. This can lead to an over-reliance on process rather than judgement, limited flexibility in tailoring procurement approaches, and challenges in navigating complex commercial negotiations. At the same time, institutional knowledge is not always captured or embedded, resulting in recurring issues around scope, risk allocation and evaluation.

In a constrained environment, process often becomes a substitute for judgement.

To bridge these gaps, organisations frequently turn to external advisers. While necessary, this  introduces its own risks if not well managed. We are seeing unclear role delineation, overly cautious decision-making driven by probity concerns, and fragmented advice delivered in silos. In some cases, procurement becomes adviser-led rather than outcome-focused.

External advisers should support and inform decision-making, not displace it. Clear governance structures and defined roles are essential to ensure advice remains practical, aligned and commercially grounded.

Without clear ownership, procurement risks becoming fragmented, slower and less commercially effective.

Moving to Outcome-Driven Procurement

Traditional “business-as-usual” procurement is no longer fit for purpose in a constrained and volatile market. The shift required is not incremental, it is structural, toward outcome-driven frameworks that remain compliant but are more agile and commercially focused. This includes:

• earlier market engagement;
• two-stages or ECI models;
• more flexible commercial structures; and
• streamlined governance pathways for time-critical projects.

This means designing procurement processes that are fit for purpose, market-informed, proportionate, and integrated across legal, commercial, technical and probity considerations. In practice, this may involve earlier market engagement, streamlined pathways for lower-risk or time-critical projects, more flexible evaluation approaches, and clearer governance to support timely decision-making.

The challenge is not choosing between speed and probity, but achieving both. Poorly structured procurement can create as much risk as poor governance, leading to delays, cost overruns and disputes. By contrast, well-designed frameworks strengthen both integrity and delivery, providing clarity to the market, improving pricing outcomes, and reducing downstream risk.

The Role of Front-End Structuring

One consistent theme across successful projects is the quality of front-end structuring.

Investing time upfront to:

• define scope clearly;
• select the right delivery and contracting model; and
• establish a tailored procurement strategy

is one of the most effective ways to de-risk delivery.

This is where legal and commercial input can add the most value, not at contract drafting stage, but at the earliest point of procurement design.

Looking ahead

As Queensland’s infrastructure pipeline accelerates toward 2032, procurement will remain a defining pressure point.

Those who continue to rely on business-as-usual approaches will face reduced market engagement, higher costs and increased delivery risk. Those that adapt by embedding strategic, outcome-focused procurement frameworks will be better positioned to deliver projects efficiently, defensibly and with confidence.

The next article in this series explores one of the most critical tools in addressing these challenges: early market engagement, and how to unlock capacity without compromising probity.

How Muscat Tanzer Can Help

At Muscat Tanzer, we work at the intersection of procurement, probity and project delivery.

We support government and delivery agencies to:

• Design procurement strategies aligned to market conditions
• Structure collaborative and hybrid delivery models
• Manage probity without slowing procurement
• Align contracts with realistic risk allocation

In a market under pressure, the right procurement approach is not just beneficial, it is critical.

The critical issue is not funding. It is whether the system is capable of delivering what is being asked of it.