PROCUREMENT FRAMEWORK

Procurement Framework

Procurement Framework

Abstract

In this paper, we develop a testable holistic procurement framework that examines how a broad range of procurement related factors affects project performance criteria. Based on a comprehensive literature review, we put forward propositions suggesting that cooperative procurement procedures (joint specification, selected tendering, soft parameters in bid evaluation, joint subcontractor selection, incentive-based payment, collaborative tools, and contractor self-control) generally have a positive influence on project performance (cost, time, quality, environmental impact, work environment, and innovation). We additionally propose that these relationships are moderated or mediated by the collaborative climate (i.e. the trust and commitment among partners) in the project and moderated by the overall project characteristics (i.e. how challenging the project is in terms of complexity, customization, uncertainty, value/size, and time pressure). Based on our contribution, future research can test the framework empirically to further increase the knowledge about how procurement factors may influence project performance.

Introduction

Since construction projects and/or their outcomes heavily affect our modern society, the importance of a well-functioning construction industry is beyond doubt (Cheung et al., 2001 S.-O. Cheung, T.-I. Lam, M.-Y. Leung and Y.-W. Wan, An analytical hierarchy process based procurement selection method, Construction Management and Economics 19 (4) (2001), pp. 427-437.Cheung et al., 2001). In many countries the construction industry has, however, attracted criticism for inefficiencies in outcomes such as time and cost overruns, low productivity, poor quality, and inadequate customer satisfaction ([Egan, 1998], [SOU, 2000], [Yasamis et al., 2002] and [Chan et al., 2003]). Practitioners, researchers, and society at large have, therefore, called for a change in attitudes, behaviour, and procedures in order to increase the chances for project success and improved end products (Dubois and Gadde, 2002). The client is proposed to act as a change agent in such a change ([Egan, 1998] and [SOU, 2000]). The way the client deals with procurement determines responsibilities and authorities in the entire construction process, affecting the degree of integration and cooperation among project participants ([Love et al., 1998] and [Briscoe et al., 2004]). Since traditional procurement procedures cause adversarial relationships and many problems in all stages of the buying process, this is a vital improvement area that can contribute substantially to project success ([Cheung et al., 2003] and [Eriksson and Laan, 2007]). Although procurement procedures need to be tailored to enhance the fulfillment of different project performance objectives ([Cox and Thompson, 1997] and [Wardani et al., 2006]), clients tend to choose those procurement procedures that they have a good knowledge of and a habit of using, regardless of any differences between projects ([Love et al., 1998] and [Eriksson, 2008b]). For a new procurement procedure to be implemented, clients need to feel confident of how to use it and have positive attitudes towards its effect on outcomes (Tysseland, 2008). Hence, the key to a change of practice lies in an increased understanding of how different novel procurement procedures actually work and affect project performance.

Discussion

Even though issues relating to procurement procedures seem highly important for accomplishing project success, earlier research on this topic ...