As the spotlight of the Paris 2024 Olympic Games fades and global attention shifts to the Los Angeles 2028, and then Brisbane 2032, we stand at a critical point – one that demands a comprehensive and forward-thinking approach to planning. The Brisbane Olympics has already begun its recruitment of key hires, offering an unprecedented opportunity to redefine how this mega-event is managed, particularly in terms of procurement and financial oversight. With eight years to go, Brisbane 2032 can use this time and foresight, along with the advancement (and accessibility) of new technologies, to study host cities that succumbed to budget overruns and operational inefficiencies.

Drawing lessons from the legacy challenges faced by past Olympics, it is imperative to recognise the necessity of a robust knowledge transfer mechanism and the implementation of innovative, data-driven strategies. Historical data collected by Budzier (2024) reveals that Olympic Games budgets often multiply multifold from their initial estimates due to time lags and unforeseen external factors.

Recognising this, the Brisbane 2032 Organising Committee has a monumental task ahead: to meticulously plan and execute a financially viable and operationally successful Olympic Games.

The legacy of cost overruns

Historically, Olympic Games have been plagued by cost overruns. From the Sydney 2000 Olympics, which laid the foundation for formal knowledge transfer, to Tokyo 2020, the narrative has been consistent. The average cost overrun for the last three Summer Games has been an alarming 185%, excluding additional infrastructure costs such as roads, railways, airports, and hotels. This trend underscores a systemic issue in financial planning and procurement management, often exacerbated by the unique, temporary nature of Organizing Committees for the Olympic Games (OCOGs).

To mitigate these challenges, it is crucial to adopt a more strategic approach to procurement that leverages modern methodologies. As we research deeper into the complexities of Olympic planning, acknowledging the shortcomings of past games will serve as a vital learning experience.

Procurement lifecycle and the role of data

The procurement process for the Olympic Games is often fraught with complexity, involving multiple stakeholders and myriad technical and logistical challenges. One of the critical factors contributing to cost overruns is the extended time frame between the bid submission and the actual event, with budgets for the Olympic Games being submitted as part of the candidature files approximately eight years before the event. This significant duration introduces a higher degree of uncertainty due to several unforeseeable variables, including:

1. Extended planning horizon: The longer the planning horizon, the greater the uncertainty involved. Several years before the event, factors such as inflation, changes in economic conditions, technological advancements, and political shifts can drastically affect the initial budget estimates.

2. Optimistic budget estimations: During the bidding phase, there is often political and competitive pressure to present a budget that makes the bid appear financially feasible and attractive. This can lead to overly optimistic budget estimates that do not adequately account for potential risks and cost escalations.

3. Unforeseen exigencies: As the event draws nearer, unexpected issues such as delays in construction, changes in technical requirements, and other logistical complexities can arise. These exigencies can lead to increased costs that were not anticipated during the initial budgeting phase.

4. Changes in scope and requirements: As detailed plans evolve and more precise requirements are identified closer to the event, the scope of necessary infrastructure and services can expand. For instance, changes in sports disciplines, the need for additional or upgraded facilities, and heightened security measures can lead to significant cost overruns.

It is now widely recognised that cost overruns for Olympic Games will occur, as evidenced by the historical trends and these overruns occur in both the Organising Committee for the Olympic Games (OCOG) budget and non-OCOG infrastructure costs. The International Olympic Committee (IOC) has previously taken steps to address these issues, such as implementing the New Norm initiatives that promote dialogue and support for budget estimations, and disallowing significant changes in the master plan post-approval. Additionally, there has been an observable trend towards balancing these overruns with revenue increases from sponsorships and ticket sales, though this strategy might not always be reliable in the long-term.

The first significant stride towards knowledge transfer in the context of the Olympics was made by the Sydney Organising Committee of the Olympic Games (SOCOG) in 2000. This initiative led to the establishment of the Olympic Games Knowledge Management (OGKM) program, which later evolved into the Information, Knowledge, and Games Learning (IKL) team within the International Olympic Committee (IOC). Despite these efforts, barriers to effective knowledge transfer persist, including trust deficits, coordination challenges, and contextual differences between host cities.

The Sydney 2000 Games demonstrated the potential of a shared knowledge management system to streamline planning and execution. However, it is evident from subsequent games that more fundamental interventions are necessary to bridge the gaps. Brisbane 2032 has the opportunity to build on this legacy by incorporating advanced data analytics and real-time monitoring into its knowledge management framework.

The power of data in procurement: Open Contracting Standards

One of the most promising innovations for procurement in the context of mega-events like the Olympics is the Open Contracting Data Standard (OCDS) that uses open standards for machine-readable data. Machine-readable data refers to information that is in a format that can be easily processed by a computer without human intervention. This is particularly important in the context of infrastructure procurement where data from multiple systems can be standardised, mapped, and classified efficiently. By employing OCDS, the entire procurement process — from tendering to contract execution — can be monitored seamlessly, ensuring greater transparency and accountability. Implementing OCDS for Brisbane 2032 can mitigate risks associated with cost overruns and ensure that taxpayer money is used efficiently.

This access to real-time data offers several benefits over traditional methods. It negates the need for retrospective data cleaning and (expensive and timeconsuming) manual analysis, providing stakeholders with instantaneous insights into financial performance and procurement status. This transparency can highlight potential red flags early, allowing for timely interventions and adjustments. One of these red flags is the concept of the winner’s curse. This refers to the phenomenon where a winning bid is often overly optimistic, leading to significant underestimation of costs and overestimation of benefits. This strategic misrepresentation, driven by the intense competition to secure a contract, results in substantial cost overruns when the true financial realities become evident during the planning and execution phases.

The principal challenge for Brisbane 2032 lies in shifting the conservative and risk-averse mindset that has historically governed Olympic procurement. Adhering to the “principled principle” of maintaining the status quo offers no value; it is time to embrace change and strive for excellence. This is an opportunity to establish a new benchmark for future Olympic Games, drawing on the knowledge and lessons from others while leveraging modern data analytics and transparency standards.

By piloting the Open Contracting Data Standard and integrating advanced data-driven strategies into the procurement lifecycle, Brisbane 2032 can pave the way for a more efficient, transparent, and financially sound Olympics. Such an initiative will not only benefit the current games but serve as a model for future host cities, contributing to the broader body of knowledge and raising the standards of Olympic planning and execution globally.

An advanced bid management platform like Bidhive aligns seamlessly with the needs of Brisbane 2032. Not only does it adopt the OCDS, but provides bidirectional network data, offering the potential to deliver both procurement professional and suppliers with unparalleled insights into market and competitive intelligence. This has potential to include a detailed analysis of not just the number of bidders but also price and non-price criteria, win/loss outcomes, and project histories. Applying network theory-based approaches to data-driven procurement, bidding and assessment can uncover patterns and inform decision-making processes, thus ensuring optimal procurement outcomes for everyone.

Brisbane 2032 stands at the cusp of a transformative journey. The lessons from past games are clear: we must avoid the pitfalls of cost overruns and operational inefficiencies. By leveraging advanced data analytics, embracing open contracting standards, and fostering a culture of transparency, Brisbane has the potential to not only fulfill but surpass international expectations.

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