Selecting the best contractor to get performance: On time, on budget, meeting quality expectations

Kashiwagi, Dean; Byfield, Richard

doi:10.1108/14725960310807872

Cited by 50 publications

(40 citation statements)

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“…PiPS is a procurement method that aims to select the most suitable contractor and to spur this contractor towards achieving the highest possible performance while, at the same time, reducing the client's management and control tasks (Kashiwagi and Byfield, 2002;Kashiwagi et al, 2004).…”

Section: Performance Information Procurement Systemmentioning

confidence: 99%

Perceptions of success in performance-based procurement

Duren

Dorée

Voordijk

2015

Construction Innovation

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Purpose -The purpose of this study is to analyse, from the perspective of agency theory, differences between client and contractor in their perceptions of changes in uncertainty and in inclination to opportunistic behaviour while using a performance-based procurement procedure. In agency theory, dealing appropriately with the uncertainty and opportunism that results from information asymmetry is an essential precondition for successful procurement. Design/methodology/approach -The procurement procedure analysed is the Performance Information Procurement System (PiPS). PiPS is a performance-based procurement method that uses historic performance information to select the expected best performing contractor. In a theoretical model, a PiPS is interpreted as a set of contractual and organisational safeguards. Through a survey, based on this model, the perceived effects of the PiPS safeguards for both clients and contractors are investigated. Findings -Both clients and contractors believe that applying PiPS introduces safeguards that reduce transaction uncertainty. The perceived changes in the discouragement to use opportunistic behaviour when using PiPS differ between client and contractor. Clients do not know and contractors are sceptical as to whether applying PiPS discourages opportunistic behaviour. This difference in perceptions can be explained by the often-traditional background of the two parties' project teams and the existence of information asymmetry. Originality/value -This is one of the first studies to show that changes in the transaction environment in a performance-based procurement process are perceived differently by the client and the contractor. It is necessary to align the roles of both parties to avoid problems related to opportunistic behaviour.

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Section: Performance Information Procurement Systemmentioning

confidence: 99%

Perceptions of success in performance-based procurement

Duren

Dorée

Voordijk

2015

Construction Innovation

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“…A growing chorus of critics note that the low bid paradigm has not worked (Kashiwagi & Byfield 2002;Gransberg 1997;Gransberg & Ellicott 1996;Scott 1995;Latham 1994;Egan 1998;Wong et al 2000). It has produced low quality work, adversarial working conditions, a high incidence of contractor-generated change orders, claims, litigation and increased project management costs.…”

Section: 92mentioning

confidence: 99%

“…Scholars describe procurement approaches moving away from selecting contractors on the basis of lowest cost towards approaches considering multiple selection criteria (Gransberg 1997;Kashiwagi & Byfield 2002;Palaneeswaran et al 2003;Wong et al 2000). Gransberg (1997) describes quantifying non-price criteria (qualitative data) by ranking each category against the other proposals and assigning weighting criteria to each category.…”

Section: 92mentioning

confidence: 99%

“…There is a great deal of evidence in the literature that best value, or value-for-money in Construction Project Procurement is important (Kenley et al 2000;Jennings & Holt 1998;Tookey et al 2001;Holt et al 1995;Palaneesweran et al 2003;Wong et al 2000;Love et al 2008;Egan 1998;Latham 1994;Walraven & de Vries 2009;Kashiwagi & Byfield 2002;Gransberg;Scott 1995;Kelly et al 2004;Morledge et al 2006, pp.51-52). The way in which procurement is undertaken shapes any value that can be created.…”

Section: Procurement Of Infrastructurementioning

confidence: 99%

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Exploring infrastructure procurement by Australian state governments

Staples

Dalrymple

2011

International Journal of Managing Projects in Business

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PurposeThe purpose of this paper is to report on a research thesis that explores how Australian state government agencies procure infrastructure projects and the extent to which they view the procurement process as an opportunity to deliver more than just a physical facility. The primary purpose of this study was to understand the practice of construction project procurement by project managers on behalf of Australian state government agencies and to explore the creation of public value through procurement.Design/methodology/approachThis thesis presents results drawn from ten case studies of state government organisations that procure infrastructure; either roads or buildings. A total of 37 highly experienced project managers operationally responsible for the procurement of infrastructure within these organisations were interviewed.FindingsThe findings show that there is considerable scope for improving infrastructure procurement by Australian state governments and that broader public value creation approaches in the form of policy by‐products are either not considered or inconsistently pursued.Practical implicationsThe broader policy implications flowing from the research findings provide valuable commentary that inform the practice of infrastructure procurement and point to areas to which improvement efforts may be directed. These areas include the challenge of developing the next generation of infrastructure procurement managers, applying non‐price criteria in a rigorous way, using prequalification registers to engage in supplier development and delivering policy by‐products as part of standard procurement approaches.Originality/valueThis thesis presents qualitative data focused on the perspective of procurement professionals, a group who have, hitherto, been somewhat underrepresented in the literature.

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“…One of the most hotly contested debates in defense procurement has been the choice of contractor selection method and the procurement outcomes resulting from that choice (Kashiwagi and Byfield, 2002;Lohfeld, 2015). The low-price, technically acceptable (LPTA) method has been pitted against the full trade-off (TO) method, with the LPTA method taking the brunt of the criticism.…”

Section: Introductionmentioning

confidence: 99%

Examining the effects of source selection method on procurement outcomes

Landale

Rendon

Hawkins

2017

JDAL

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Purpose The purpose of this research is to explore the effects of supplier selection method on key procurement outcomes such as procurement lead time (PLT), supplier performance and buyer team size. Design/methodology/approach Data were collected from a sample of 124 archival contract records from the US Department of Defense. A multiple regression model and multivariate analysis of covariance/analysis of covariance models were used to test the effects of source selection method on pertinent procurement outcomes. Findings The trade-off (TO) source selection method increases PLT, as does the number of evaluation factors and the number of proposals received. Substantially larger sourcing teams are also associated with the TO source selection method. Nonetheless, the TO method results in better supplier performance. Practical implications TO source selections yield superior supplier performance than low-bidder methods. However, they are costly in terms of time and personnel. Any assessment of supplier value should consider not only the price premium for higher performance but also the transaction costs associated with the TO method. Originality/value Very little research addresses a buying team’s evaluation of supplier-offered value ex ante and whether that value assessment materializes into actual value-added supplier performance. Low bidder tactics are pervasive, but price (i.e. sacrifice) is only one component of value. Benefits from superior supplier performance may yield greater overall value. If value is critical to the buyer, a TO source selection method – versus a low-bidder approach – is the appropriate tool because of higher supplier performance ex post.

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Selecting the best contractor to get performance: On time, on budget, meeting quality expectations

Cited by 50 publications

References 0 publications

Perceptions of success in performance-based procurement

Perceptions of success in performance-based procurement

Exploring infrastructure procurement by Australian state governments

Examining the effects of source selection method on procurement outcomes

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