Rethinking tendering in the Pacific: Why the current model isn’t working

The Pacific has a well-documented infrastructure deficit, a gap that is only widening as climate pressures increase on already-stressed nations. What is less often talked about is how difficult it is to get this work to site in the first place. And even when projects do reach that point, they are rarely straightforward to deliver. Construction companies working in the region are often operating on razor-thin margins, while carrying a disproportionate share of the commercial, logistical, and delivery risks – delivering projects that ultimately have benefits well beyond the region.  Nowhere is this tension more visible than in energy infrastructure.

Across the Pacific, many island nations still rely heavily on imported diesel for electricity generation. There is now a clear push toward 100% renewable energy systems, largely driven by solar and storage. Achieving this will require a significant amount of new generation capacity – estimated at around 1.8 GW across the region. While this transition is critical locally, its implications are much broader, both in reducing emissions and in showing how decentralised, solar-driven infrastructure can reshape energy systems more widely.

Yet despite the urgency, the availability of funding, and the technology y being ready, progress is slower than it should be. A large part of the issues is that we are still relying on a tendering model that prioritises maximum competition over efficiency, consumes significant industry resources before a project even begins, and too often fails to get projects to site at all.

Put simply, we are asking the market to solve one of the Pacific’s biggest challenges using one of its least efficient processes. That message came through clearly at the Pacific Infrastructure Business Opportunities Seminar, in conversations with contractors, clients, and development partners: the problem isn’t a lack of opportunities, it’s how we are procuring them.

Across conversations at the conference, the same issues came up repeatedly – regardless of geography, project type, or funding model.

– Poor scoping leading to inefficiency during delivery.

–  Incomplete or poor-quality design documentation, forcing contractors to either price in uncertainty or push back to the client through variations and tags.

– Unrealistic timeframes for preparing tender submissions, compromising quality before the project even startsExtended decision-making periods, leaving contractors in limbo without pipeline certainty and carrying costs before mobilisation.

– Projects that never progress beyond the tender stage – creating industry-wide cost with no outcome, inevitably requiring absorption elsewhere.

– Too many bidders in the process, driving resource wastage with diminished value for the client.

– The high cost of bid preparation requires contractors to absorb high upfront costs with no guarantee of return.

Each of these issues is manageable on its own. Taken together, however, they point to something more fundamental: a procurement system that is inefficient by design. The current model encourages competition – but not necessarily value. It tends to transfer risk rather than resolving it, and it consumes a significant amount of industry capacity without delivering proportional outcomes.

In a Pacific context, where contractor pools are smaller, mobilisation costs are higher, and procurement is often shaped by strict development funding frameworks, these inefficiencies are amplified. At a time when infrastructure delivery is critical – whether for climate resilience, energy transition, or economic development – the process is increasingly becoming a bottleneck rather than an enabler.

The discussions in Fiji made it clear that this is not just a problem – it is also an opportunity to reset. There is a noticeable shift toward earlier contractor involvement to improve scope and design maturity, more selective tendering approaches to reduce wasted effort, and a stronger focus on value rather than simply price. But if that shift is going to translate into better outcomes, it will require more than procurement reform on paper. It will require a more deliberate effort across the industry to engage earlier, communicate more openly about risk, and create processes that are designed to get projects delivered – not just tendered.

Procurement approaches need to better reflect the complexity of these projects and provide greater certainty that work will proceed before being taken to market. Encouragingly, this aligns with a broader shift toward design-and-build procurement models and value-led delivery. Ultimately, tendering is not a neutral process – it is one of the most influential drivers of project outcomes. If inefficiency is embedded at the front end, it will almost always show up during delivery as cost overruns, delays, disputes, and reduced industry capacity.

That said, contractors are not passive participants in this system. The way we engage – early, constructively, and with a focus on improving outcomes rather than simply responding to what is put in front of us -can materially influence how projects are shaped. There is a role for the industry to be clearer about what good looks like, to push for better scoping and more realistic timeframes, and to be willing to engage in ways that lift capability across the market, rather than just competing within its constraints.

Improving infrastructure outcomes in the Pacific doesn’t start on site – it starts with how the work is procured. And if we want better outcomes across the region, that responsibility sits with all of us – clients, funders, governments, and contractors alike – to create a system that is more realistic, more efficient, and more focused on successful delivery.

Ben Marsh
McKay Auckland and South Pacific Regional Manager