Procurement Method Misselection Cost Impact
Definition
Procurement method selection directly correlates to cost outcome variance. Traditional Lump Sum contracts achieve only 12.83% mean overrun but range to 96.73% maximum. Alliance contracts require AU$50M+ capital threshold justification.
Key Findings
- Financial Impact: AUD 50-80 million estimated annual loss across Australian rail sector due to suboptimal procurement method selection
- Frequency: Quarterly (major contract awards)
- Root Cause: Lack of data-driven procurement decision framework; manual risk assessment by project managers
Why This Matters
The Pitch: Australian rail equipment suppliers lose AUD 50-80M annually by selecting inappropriate procurement models. Data-driven procurement method selection reduces overrun variance by 40%.
Affected Stakeholders
Project Managers, Commercial Directors, Risk Officers, Contract Administrators
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Cost Overrun in Retrofit and Rebuild Estimation
Possession-Driven Estimation Delays in Rail Projects
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