ABSTRACT
This chapter aims to illustrate how innovative designs and construction approaches within affordability can be obtained from the industry stakeholders through innovative contract procurement, using so-called three-envelope tendering. It describes the Housing Authority's (HA) procurement system and the considerations guiding the development of its three-envelope tendering system for integrated contracts, and illustrates the benefits obtained from the implementation of the system in projects. Being a statutory body established for producing and managing the public housing programme in Hong Kong, the HA procures high volumes of building construction works every year. Each tenderer was required to provide a list of innovation proposals with his or her tender. The innovation proposals submitted by the tenderers were assessed, scored and selected through a three-step mechanism. The working group understood that the risks associated with the proposals must be fully considered and it was pivotal to successful procurement in having risk management incorporated holistically at the outset.
