Story: $4.4B Trains that didn’t meet specification
The Queensland Rail New Generation Rollingstock (NGR) debacle is a $4.4 billion lesson in the cost of poor procurement. Intended to deliver compliant, modern trains, the project took five years—four years longer than necessary—and still resulted in trains that failed to meet disability requirements, a key reason for their purchase.
Poor governance and procurement processes led to decisions based on incomplete information that wasn’t escalated to senior decision-makers.
This highlights the dangers of mismanaged procurement: delays, overspending, and failed outcomes. Strong procurement skills ensure specifications are clear, risks are managed, and projects deliver as promised—avoiding costly mistakes like this.
The Critical Role of Procurement
Procurement is the critical link between a project’s vision and its successful delivery. Like the first domino in a long chain, a single poor procurement decision can trigger delays, cost overruns, and inefficiencies that are difficult to undo. Treating procurement strategically prevents these pitfalls and ensures project success.
7 Hallmarks of Inexperienced Procurement
- Poor Communication: Failing to escalate critical issues early, leading to rushed, suboptimal decisions.
- Inability to Manage Uncertainty: Struggling to adapt to project risks and unexpected challenges.
- One-and-Done Mentality: Prioritizing quick closure over iterative, strategic refinement.
- Narrow Cost Focus: Fixating on individual costs instead of broader project optimization.
- Passive Procurement: Blindly executing orders without challenging assumptions or strategies.
- Lack of Operational Insight (“Clean Shoes”): Never visiting the site, missing real-world impacts of decisions.
- Over-Reliance on Newbie Consultants: Inexperienced consultants lacking practical procurement expertise.
Read Article: The 7 Hallmarks of Inexperienced Procurement in Infrastructure Projects
The Risks of Underinvestment
Underinvesting in procurement for infrastructure projects can have severe consequences, impacting timelines, costs, and overall project success. Key risks include:
- Poor Supplier Selection: Misaligned contracts cause delays and disputes.
- Inefficient Processes: Disrupted timelines inflate costs.
- Missed Cost Savings: Lost opportunities for strategic value.
- Increased Risk: Supplier failures and supply chain disruptions.
- Stakeholder Confidence: Delays and overruns damage trust and reputations.
Read article: The 5 Risks of Underinvestment in Procurement for Infrastructure Projects
The Skills That Make the Difference
There are three key skills that make the biggest difference in project success:
- Operational Understanding: Align procurement decisions with real-world operational needs to avoid inefficiencies and delays.
- Commercial Acumen: Optimize value, manage risks, and ensure decisions support long-term project goals.
- Behavioral Economics: Navigate stakeholder motivations to drive alignment, reduce conflict, and keep projects moving forward.
Read article: The 3 Key Skills That Drive Project Success When Engaging The Market
Procurement Readiness Checklist for Projects
Essential for aligning procurement with operations, it streamlines workflows, mitigates risks, and ensures projects stay on track and deliver value.
