Abstract
The traditional contractor selection method, based on lowest price, has resulted in conflict, low quality products and a waste of resources. The need for an alternative supplier selection method has resulted in Best Value Procurement (BVP). BVP seeks to increase project value by utilizing the expertise of the contractor, while reducing the client’s management, direction and control. Currently, pilot projects in the Norwegian construction industry are testing the method. This paper addresses 1) how BVP is implemented in practice, 2) what the experiences with BVP are, and 3) how BVP should be performed in future projects. The research was carried out through a literature study and two Norwegian case studies. A building project and a medium-size infrastructure project in the Norwegian public sector were investigated through nine semi-structured, in-depth interviews and document studies. The findings show that the practical use of BVP is in accordance with the theoretical approach. Furthermore, the experiences with BVP are mainly positive. However, some challenges have been identified, such as the clients’ and contractors’ lack of knowledge and experience with the BVP method. This may reduce the potential project value. The conclusion is that BVP is an effective and promising method for contractor selection and project management. However, for the success of future projects using the method, clients and contractors may benefit from more knowledge and experience with BVP. This can be done by training and by being persistent in using BVP in future projects. This paper is a revised version of a paper that has been published in the proceedings of the Creative Construction Conference 2018.
Highlights
Projects in the construction industry often suffer from cost and time overruns (Sullivan, 2010)
This paper addresses 1) how Best Value Procurement (BVP) is implemented in practice, 2) what the experiences with BVP are, and 3) how BVP should be performed in future projects
4.3 How should BVP be performed in future projects? The interviewees were asked about success factors and pitfalls with the method to develop suggestions on how BVP should be performed in future projects
Summary
Projects in the construction industry often suffer from cost and time overruns (Sullivan, 2010) Various reasons for this have been suggested in the literature, but a recurring factor is traditional project procurement methods in which contractors are contracted sequentially. The vendors compete based on project capability, their ability to identify risk, the additional value they can provide, interviews, and price (van de Rijt et al, 2016). The competition within these factors should lead to the selection of the vendor who offers the best value. This paper addresses how BVP is applied to construction projects, and in the following the word ‘contractor’ is used instead of the more general term ‘vendor’
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