Best Value Procurement – Experiences From the Execution Phase

Abstract

Best value procurement (BVP) is one of the approaches for early contractor involvement (ECI) in public construction projects. Despite an increased number of projects using the approach, there is a lack of knowledge regarding use of BVP in the Norwegian construction industry. Little research has been done on the consequences due to BVP, and the approach is often misinterpreted as only a procurement model. However, BVP provides an important mind-set for all parties involved, also during the execution phase. This paper study how BVP is practiced in two public kindergarten projects, what consequences that followed in the execution phase, and how BVP should be practiced in future projects. In addition to a literature study, the two projects were studied through a longitudinal study consisting of 8 in-depth semi-structured interviews and a document study. The findings show that how elements of BVP are practiced in the early phases influences both the execution phase and the final product. This study has developed important measures and improvements for how to practice BVP, and is among the first to document experiences from the execution phase. The identified measures can lead to a better execution phase, and thus a better product for the client.

Public administration accountability on the social pillar of sustainable procurement: a documentary analysis

“…Furthermore, the cross-sectional exploration (considering all stages of the procurement process referred to in the procurement file) of the social pillar of public procurement carried out in this study complements previous literature focusing on the study of particular stages, especially the second stage (supplier selection) (e.g., Akenroye, 2013;Bergman & Lundberg, 2013;Falagario et al, 2012;Lindholm et al, 2019;Watt et al, 2009); the third stage (contract execution) remains understudied (Nygård et al, 2019) despite the importance of this final stage in the public procurement process, as it is here where the indicators that have been designed in earlier stages of the public procurement process should be implemented (Nygård et al, 2019). Moreover, the literature that has explored the social pillar of public procurement mainly relies on the use of questionnaires (Akenroye, 2013;Brammer and Walker, 2011;Chiarini et al, 2017;Prier et al, 2016), and to a lesser extent, interviews (Holma et al, 2020;Selviaridis et al, 2011).…”

“…Stage 3 is the actual execution of the contract by the supplier selected in the previous stage (Nygård et al, 2019;Racca et al, 2011). Public entities must always make sure that, notwithstanding any unforeseen events that may arise by chance, the contract is fulfilled as stipulated (Fox & Morris, 2015;Racca et al, 2011).…”

Collaborative Dialogue During the Pre-Tendering Phase to Maximize Project Value Generation

“…This procurement method attempts to choose the best AEC team based on what the client considers to add value to the project rather than the low price of the proposals (Ying et al, 2021). Moreover, BV procurement allows for the early involvement of the contractor in a public construction project (Nygård et al, 2019). The procurement method has commonly been used to minimize the involvement of the client during the design and execution phases of the project since the contractor is considered the expert and the only member capable of making decisions related to the development of the construction project (Wondimu et al, 2018).…”

“…The procurement method has commonly been used to minimize the involvement of the client during the design and execution phases of the project since the contractor is considered the expert and the only member capable of making decisions related to the development of the construction project (Wondimu et al, 2018). Multiple studies have reported (Lesjø et al, 2019;Nygård et al, 2019;Tillmann et al, 2017;Whelton et al, 2004;Wondimu et al, 2018) that, even though BV focuses on ensuring both value and lower costs before construction starts, there is still conflict and misalignment between the owner and the contractor about these aspects during the execution phase of the project. Furthermore, misalignments of commercial incentives in AEC projects can be avoided if participants select trusted and competent members; business models and key performance metrics is communicated well; stick around to adapt towards the principles of IPD and TVD; ensure that participants are adequately trained in lean construction; and adequate resources to implement IPD and TVD systems (Do et al, 2015).…”

“…The several contractors would be compensated just for passing to the dialogue phase, and in case they offer ideas that add value to the project, they would be compensated for them or even hired as consultants for the project, working collaboratively with the awarded contractor. The early contractor involvement (ECI) and flow of ideas between different professionals would open a space for innovation that could lead to cost and time-efficient projects (Nygård et al, 2019;Tillmann et al, 2017). Moreover, advantages and disadvantages of collaborative dialogue are explored through expert interview that is discussed in the results and discussion section.…”