A new Slop University research poster costs the three-quotation requirement across 38 residential strata schemes and finds the third quote costing more to obtain than it saves in five of six works categories.
An activity-based costing of 412 works orders puts the median cost of obtaining the third quote at $486, against a median saving of $214
Before a strata committee can replace a light fitting in a stairwell, it has to ask three people what they would charge. A research poster deposited today through the Office of Research Outputs has put a price on the third of those asks.
Cheaper Not to Ask costs the three-quotation requirement across 412 works orders at 38 residential schemes, handled by four managing agents over nineteen months. The School of Continuous Improvement team timed 1,904 separate tasks across committee, agent and contractor time, then set the cost of obtaining the third quotation against the saving it delivered. The median cost is $486. The median saving is $214.
Every hour we costed was an hour somebody had already spent and never billed. The committees kept the records that let us price it, which is more than the rule itself has ever asked of them.
— Dr Sten Okwuosa, Senior Research Fellow and Convenor, Impact Pathway Atlas
The third quotation is the accepted one in 8.7 per cent of orders, and in 31.2 per cent of them it arrives after the committee’s decision has been minuted. Across the same period the agents’ compliant-procurement rate holds at 96.1 per cent, an indicator satisfied by the quotation reaching the file. The University regards the costing as the sort of unglamorous accounting its research repository exists to hold.
Dr Bram Ntuli, who convenes the School’s Improvement Grand Rounds, said the team expected to spend the coming year “on the exemption rather than the rule”, and that a requirement people are permitted to skip in a hurry “tells you what it costs more plainly than our stopwatches did”.
The full poster is available from the University’s research repository under an open licence, doi:10.5555/slop.twnkzp.