Competitive Tendering Research Articles

Structural equation modelling of risk factors influencing the success of building projects

PurposeDespite several research efforts tackling construction project risks globally, tertiary education building projects are not devoid of experiencing risks with cascading effects on projects. In the past decades, there has been increasing application of linear assessments of risks in construction risk management practices. However, this study aims to assess the influence of risk factors on the success of tertiary education building projects using a structural equation modelling approach. This study will further reinforce the risk factors that require attention because risk factors are not linear but interdependent.Design/methodology/approachA quantitative research method was undertaken in this study, where data collection was achieved via a structured questionnaire survey. In total, 452 questionnaires were administered to client representatives, consultants and contractors involved in executing tertiary education building projects across five public tertiary education institutions in Ondo State, Nigeria. Of 452 questionnaires, 279 were found usable for the analysis, implying a response rate of 61.73%. The Cronbach α test, average variances extracted and composite reliabilities values show high reliability and internal consistency of the instrument used for data gathering. Furthermore, the study adopted percentile, mean, correlation, regression analysis and structural equation modelling for analyzing the data collected upon which the study’s inferences were based.FindingsThe study found that three out of six criteria for measuring the success of tertiary education building projects were significantly affected by risk factors while using the structural equation modelling technique. With this non-linear method of assessment, completion to time was significantly impacted by environmental risk factors. In addition, safety performance was also significantly influenced by logistic, environmental and legal risk factors; furthermore, logistics, design and environmental risks significantly affected profit. However, completion to cost, standard/quality and end-user satisfaction was not significantly affected by the risk factors in tertiary education building projects.Research limitations/implicationsThe quantitative data used for the analysis are limited to the tertiary education building projects from selected five tertiary education institutions in Ondo State; therefore, the results do not indicate all tertiary institutions in Nigeria. In addition, the findings are based on building projects that were procured through a competitive tendering arrangement only and thus considered a limitation for this study.Practical implicationsNot all the risks significantly influence the tertiary education building projects. Therefore, risk factors with a significant effect on the success indicators of tertiary education building projects should be prioritized for a successful project. While risk factors have not affected the completion to cost per se, the study implies that the resultant effect of risks on other success indicators could have a cascading effect on these projects in terms of cost and time overruns. These results may assist during the project risk management while also addressing complexity and uncertainty to avoid chaos in a tertiary education building projects.Originality/valueThe study found significant construction risk factors impacting the success of tertiary education building projects using a non-linear methodology, an extension beyond the usual linear method of assessment of risk impacts on the project performance.

Partnering with Agents: How the Covid-19 Pandemic changed Relations between the UK Government and Public Service Contractors.

The contracting out of public goods and services has become a central feature of the UK's state machinery, with more than £350 billion spent annually on services ranging from rubbish collection to building submarines. In response to the Covid‐19 pandemic, the UK government took the unprecedented step of incorporating private providers at a national scale to deliver emergency services which were previously the purview of the state. To achieve this, the government used emergency legislation temporarily to remove competitive tenders and reduced reporting processes. In doing so, it substantially re‐orientated its relationship with private providers, moving from a position of a principal granting its authority to deliver services to something more akin to a partner organisation leveraging private resources. This shift in power dynamics, coupled with an ongoing government ambition to expand the UK's public service markets, risks a permanent change in government‐provider relations, to the detriment of the UK's contracting out framework.

Transnational Machine Learning with Screens for Flagging Bid-Rigging Cartels

Abstract We investigate the transnational transferability of statistical screening methods originally developed using Swiss data for detecting bid-rigging cartels in Japan. We find that combining screens with machine learning (either a random forest or an ensemble method consisting of six different algorithms) to classify collusive versus competitive tenders entails (depending on the model) correct classification rates of 88%–97% when training and testing the method on the Okinawa bid-rigging cartel. As in Switzerland, bid rigging in Okinawa reduced the variance and increased the asymmetry in the distribution of bids. When training the models in data from one country to test their performance in the data from the other country, imbalance increases between the correct prediction of truly collusive and competitive tenders for all machine learners and classification rates go down substantially when using the random forest as machine learner, due to some screens for competitive Japanese tenders being similar to those for collusive Swiss tenders. Demeaning the screens reduces such distortions due to institutional differences across countries such that correct classification rates based on training in one and testing in the other country amount to 85% and to 90% when using the ensemble method as machine learner, which generally outperforms the random forest.

Who wins and who loses from renewable energy transition? Large-scale solar, land, and livelihood in Karnataka, India

ABSTRACT This article evaluates the winners and losers of the energy transition playing out around the Pavagada solar park in Karnataka, India. We analyse how the innovative land leasing and competitive tendering mechanisms of the ‘Pavagada model’ have shaped the socio-ecological relations and outcomes of the project. We show the solar park has provided investors with low-risk returns, state electricity distributers with low-cost power, and larger landowners with new income streams. However, we find that the model is entrenching colonial, gender, and caste-based inequalities and oppressions, particularly for landless agricultural labourers who have lost their sources of livelihood. We argue that when renewable energy policy is primarily concerned with reducing costs and managing risks for private investors and state actors, the potential benefits of energy transition will not be equitably shared. The case of Pavagada demonstrates the need for democratic ownership and control of renewable energy.

The liberalisation of the European Union passenger rail market: New challenges for future public service contracts

The process of European Union(EU) rail market liberalisation is now at a tipping point, with the fourth railway package approved by the European Parliament and Commission and the Member States that have to embed its mandates and provisions into their national legislation. To a large extent, this has already been achieved. The railway package is structured in two main pillars – market pillar and technical pillar – with specific objectives. My paper will focus on the market pillar, particularly on the new challenges that the liberalisation of the EU passenger rail market will generate on public service contracts in effect as of 2023. The establishment of the single European railway area requires common rules on the award of public service contracts in this sector, while taking into account the specific circumstances of each Member State. Public service contracts for public passenger transport services by rail should be awarded on the basis of a competitive tendering procedure. Procedures for competitive tendering of public service contracts should be open to all operators, should be fair and should respect the principles of transparency and non-discrimination. This paper will analyse the new legal challenges that public service contracts in railway transport will encounter and what their impact will be on the process of liberalisation or the EU passenger rail market.

Competitive tendering for rail track capacity: The liberalization of railway services in Spain

Congestion in infrastructure capacity is a barrier to entry to markets under liberalization. The Spanish rail infrastructure manager, ADIF AV, has implemented an innovative model to reduce such a barrier. ADIF AV optimized capacity by defining the schedule with the most efficient use of tracks, building packages with such track capacity and putting them for tender. Three railway undertakings, the incumbent and two newcomers, will compete in the high-speed market, increasing at least 55% the number of services. This model can be exported to other countries reforming the rail sector.

A period of contention? The politics of post-crisis activation reform and the creeping marketisation of public employment services

ABSTRACT Public employment services (PES) have undergone significant change since 2011, reshaping the roles of the market, state, and community sector within Ireland’s mixed economy of welfare. The post-crisis years saw the replacement of FÁS with a new network of one-stop-shop Intreo activation services, and the procurement of new employment services for the long-term unemployed through competitive tendering and Payment-by-Results. This process of marketisation is now being extended to other PES currently delivered by community organisations under block grants, such as Local Employment Services and Job Clubs. We position Ireland’s PES landscape as a strategic action field wherein various providers compete with one another for position, power and resources during episodes of contention. Applying this lens to the ongoing reform of activation policy and PES institutions, the paper considers how the recent trajectory of PES marketisation has remained politically contentious. It examines the strategies of various providers and policy actors in shaping the politics of reform, focusing especially on the position of community organisations within the field and the degree to which they have been able to strategically mobilise against marketisation. Lessons are drawn about the nature of Irish politics and policy reform.

Impact of various methods for choosing a railway undertaking: Case evidence from the Czech Republic

The liberalisation of passenger rail transport in the EU has brought a procedure (competitive tendering) for choosing a railway undertaking and observing the principles of transparency and non-discrimination. However, the latest experience has shown that this procedure has brought about many problems. Competitive tendering will be the obligatory method for choosing a railway undertaking under the EU regulation from 2023 (with some exceptions).This paper evaluates three methods (direct award, competitive tendering procedure, and direct award with competition) used for choosing a railway undertaking in different circumstances and assesses the EU regulation that specifies a rule for choosing the railway undertaking.Methodologically, the paper is based on four case studies of choosing railway undertaking in the Czech Republic and eight expert interviews with the representatives of railway undertakings and the representatives of public authorities.The results show that competitive tendering is suitable only for long-term simpler services where all necessary requirements are set in the tender documentation, no major changes can be expected during the contract period, and access to rolling stock is non-discriminatory. Direct award with competition is the best method of choosing a railway undertaking for more complex service delivery contracts because it enables PTAs to compare alternative bids, and thanks to cost-plus contracts it enables to respond flexibly to changes in the transport demand during the contract period with the control of costs and price due to the maximum amount of profit. Direct award is the best solution only if public authorities do not expect more bidders.

Procurement challenges analysis of Iraqi construction projects

Abstract Public procurement in Iraq plays an essential function in the development and recovery of the country's economy as well as providing the essential infrastructure for the growth of the private sector. The Coalition Provisional Authority's Government Procurement Legislation No. 87 (2004) is the final procurement law in effect in Iraq. Preparations are underway for new procurement legislation as of Oct. 2021. The objective of the paper is to determine the effectiveness of the public procurement process used in a construction project in Iraq, there is also a lack of procurement methods and policy consistency between government agencies. procurement techniques, tender documentation information, Advertising deadlines, and document management procedures, for example, vary amongst federal contracting agencies. Furthermore, there is no mandatory process for the definition and disclosure of tender evaluation criteria, providing room for subjectivity in the tender award process. This paper's major conclusion that is competitive tendering is open to everyone, tendering is not mandated as Iraq's general rule, despite the fact that it is considered best practice elsewhere. Direct invitation techniques are widely used in the construction project process tendering of Iraq and if not adequately managed, they can lead to bias, fraud, and corruption.

Competitive Tendering for Long-Distance Rail Transport Services as a Key to an Effective Rail Transport Market

Competitive Tendering for Long-Distance Rail Transport Services as a Key to an Effective Rail Transport Market

Spot market versus full charter fleet: Decision support for full truck load tenders

Given the dynamics of today’s markets, decision support based on advanced analytics is required to help market players keep their top position. This paper presents an approach to help business decision-makers gain market share by providing competitive tender offers for Full Truck Load (FTL) services. In particular, we compare operating a fleet of full charter trucks (FCT), using Spot-Market (SM) capacity and a mixture of both options against each other. A Pickup and Delivery Problem is modeled, and solved using an Adaptive Large Neighborhood Search heuristic. Computational results indicate strong service benefits combining FCT and SM usage. Numerical experiments are presented in detail to support the findings. Additionally, a real-life case study originating from DB Schenker is presented.

Increasing environmental outcomes with conservation tenders: The participation challenge

AbstractIncentive payments to landholders have become increasingly popular as mechanisms to achieve conservation goals. Within these mechanisms economists commonly recommend competitive tenders over fixed rate payment schemes because (a) specialist knowledge of landholders about their own enterprises and costs can be utilized, (b) auction prices are more likely to reflect the marginal value of the resources being used to produce the environmental outcome, and (c) the scope for rent seeking is reduced by competition between landholders. Yet there is very little uptake of conservation tenders as agrienvironmental schemes, potentially because of the difficulties in generating sufficient levels of landholder participation to make tenders effective. In this paper we summarize the efficiency benefits of using competitive tenders, analyze reasons why participation rates may be so low, and suggest potential mechanisms to address this.

The case for negotiated contracts under the transition to a green bus fleet

Bus operators in the public and private sector are increasingly subject to competitive tendering in many countries and a requirement to operate under a gross cost contract. This contract sets out in detail the requirements of the operator, including the levels of service as well as infrastructure required to deliver the contracted services. Buses acquired by operators in many jurisdictions have until very recently been essentially diesel fuelled and often available from a panel approved set of buses compliant with Euro 6 standards. The predictability of the cost profiles of vehicles and associated costs of maintenance and repairs is well known and used in tendered offers. With the growing requirement of switching to a green fleet with varying timetabled transition rates, the future costs of providing bus services are going to be subject to significant unknowns. These unknowns are associated not only with the fast changing vehicle technology associated with a range of fuel sources (notably standard battery and fuel cell battery (i.e., hydrogen)), but also the impact this will have of the top-to-bottom change in the operations of bus fleets affecting operating and capital expenditure including depot infrastructure, timetabling, maintenance, labour skills and access to efficient electricity charging or hydrogen facilities. With such great uncertainty, the challenge of how to structure future contracts to allow for such volatility in cost commitments becomes of paramount importance to both the regulator and the bus operator. In this paper, we promote way forward to ensure that the transition to a totally green fleet is achieved without throwing the industry into chaotic uncertainty.

Success criteria-based impacts of risk factors on education building projects in southwestern Nigeria

PurposeDespite the huge capital outlay in tertiary education building projects (TEBP), these projects undoubtedly failed in meeting the set objectives of cost, time and quality, among others. Therefore, rather than the impacts of risks on the overall project performance, which is common in the construction management literature, the purpose of this study is to assess the impacts of risk factors on the criteria for measuring the success of public TEBP.Design/methodology/approachThe paper adopted a quantitative research method where the data collection was via a questionnaire survey. The researcher administered 452 questionnaires to the client representatives, consultants and contractors involved in building projects across five public tertiary education institutions in Ondo State, Nigeria. Of 452 questionnaires, 279 were retrieved and suitable for the analysis, translating to a 61.73% response rate. The reliability analysis of the research instrument showed 0.965 and 0.807, via Cronbach’s alpha test, indicating high reliability of the instrument used for data collection.FindingsThe study found different risk factors affecting the criteria for measuring the success of TEBP. For instance, the environmental risk factor significantly impacted completion to cost, while financial and political risk factors significantly impacted completion to time. In addition, while environmental, legal and management risks significantly impacted end-user satisfaction, safety performance was significantly impacted by logistic, legal, design, construction, political and management risks. Besides, the logistic, legal, design, construction, financial, political and management risk factors impacted profit. However, despite profit being one of the criteria for measuring the success of building projects, it recorded the highest risk impacts amounting to 41% variance.Research limitations/implicationsThe findings are limited to the public tertiary education building projects procured via competitive tendering; therefore, the results might differ when considering other procurement methods.Practical implicationsThe practical implication is that rather than focusing on all risk factors, the project stakeholders could give adequate attention to the significant risk factors impacting each of the parameters for measuring the success of education building projects.Originality/valueThe study revealed specific risk factors impacting the criteria for measuring the success of TEBP, which extend beyond the use of the overall project performance approach.

Entry barriers in the Brazilian bus market: A contractual prospect

Brazil has a long tradition of considering its urban bus systems as a public service. Almost a quarter of the Brazilian population rely only on them to perform daily activities. In 2015 urban transport was guaranteed as a fundamental social right in the Federal constitution, putting it in the same level of importance as public health and education. The Brazilian legislation establishes that the concession for private firms to provide public services is subject to competitive bidding criteria and must be regulated by a contract. This paper aims to identify entry barriers that are embedded in the concession contracts from the biggest cities in Brazil. Firstly, a literature review about the main entry barriers in the urban bus section was conducted. Subsequently, the eight most significant Brazilian contracts were compared and discussed vis-à-vis to the review findings. We concluded that all contracts considered in this study had aspects that gave local operators a substantial advantage in the bidding processes. Long term contracts, private depot ownership and tight deadlines to prepare the proposals contributed to driving out newcomers. Future competitive tendering procedures should seek to overcome these shortfalls as a way to reopen the market and promote fair competition among bidders.

Are market mechanisms associated with alcohol and other drug treatment outcomes?

The configuration of alcohol and other drug treatment service systems has been influenced by the uptake of market mechanisms for treatment funding and purchasing. This study measured the impact of market mechanisms for funding and purchasing alcohol and drug treatment services on client outcomes. An observational cross-sectional study, employing multi-level analysis: episodes of care data, nested within person-level data, nested within treatment site and nested within organization. One hundred and seventy-eight alcohol and other drug treatment service sites in Australia. Client outcome variables were length of stay and successful treatment completion. Predictor variables were competitive tendering, number of funding contracts, recurrent funding, the ratio of episodes to staff, type of professions, years of clinical experience, staff turnover and type of provider (government; non-government). Analyses controlled for drug type, type of treatment received and client characteristics. There were no significant associations between the procurement and contracting variables and length of stay [incidence rate ratios (IRRs) ranged between 1.01 and 1.07, all P > 0.05; Bayes factors (BF) < 0.03], and inconclusive results for treatment completion [odds ratios (ORs) ranged between 1.04 and 1.15, all P > 0.05, BF = 0.51-0.63]. Having an alcohol and other drug (AOD) work-force relative to an 'other' work-force (IRR = 0.79, P = 0.021) and lower case-loads (IRR = 0.99, P = 0.047) may be associated with longer stay in treatment. Receiving services from a government compared to non-government provider may also be associated with less treatment completion (OR = 0.34, P = 0.023, BF = 2.14). There appears to be no association between client outcomes and procurement and funding contract arrangements for alcohol and drug treatment services.

Global access to affordable direct oral anticoagulants.

Poor control of cardiovascular disease accounts for a substantial proportion of the disease burden in developing countries, but often essential anticoagulant medicines for preventing strokes and embolisms are not widely available. In 2019, direct oral anticoagulants were added to the World Health Organization’s WHO Model list of essential medicines. The aims of this paper are to summarize the benefits of direct oral anticoagulants for patients with cardiovascular disease and to discuss ways of increasing their usage internationally. Although the cost of direct oral anticoagulants has provoked debate, the affordability of introducing these drugs into clinical practice could be increased by: price negotiation; pooled procurement; competitive tendering; the use of patent pools; and expanded use of generics. In 2017, only 14 of 137 countries that had adopted national essential medicines lists included a direct oral anticoagulant on their lists. This number could increase rapidly if problems with availability and affordability can be tackled. Once the types of patient likely to benefit from direct oral anticoagulants have been clearly defined in clinical practice guidelines, coverage can be more accurately determined and associated costs can be better managed. Government action is required to ensure that direct oral anticoagulants are covered by national budgets because the absence of reimbursement remains an impediment to achieving universal coverage. Tackling cardiovascular disease with the aid of direct oral anticoagulants is an essential component of efforts to achieve the World Health Organization’s target of reducing premature deaths due to noncommunicable disease by 25% by 2025.

Are the public tertiary education building projects devoid of risks in the Nigerian construction context?

PurposeThe non-performance of construction projects in meeting the set objectives has continued to draw researchers worldwide. Despite this, little attention is accorded to public tertiary education building projects in Nigeria. Therefore, on this background, this study aims to assess the perceptions of stakeholders on the level of occurrence of risk factors in the public tertiary education building projects (TEBP) to enhance the performance of these projects.Design/methodology/approachThe study adopted a quantitative method of data collection via a questionnaire survey. In total, 452 questionnaires were administered to the respondents comprising client representatives, consultants (quantity surveyors, architects, services and structural engineers and builders) and the contractor. The respondents were involved in the conception and execution of TEBP across five public tertiary education institutions in Ondo State, Nigeria. Of 452 questionnaires, 279 were retrieved and found suitable for analysis, indicating a 61.73% response rate. The reliability analysis for the research instrument was 0.965 via the Cronbach α test, indicating the high reliability of the instrument used for the data collection. Moreover, the clusters of risk factors also had reliability values that ranged between 0.719 and 0.875.FindingsThe study found inflation, delayed payments in contracts, high competition bids, delay in work progress and occurrence of variations are the most frequently occurring risk factors in public TEBP. By contrast, difficulty to access the site, environmental factors and pollution were found to be low-weighted risks with the least likelihood of occurrence. The results of this study indicated the existence of significant differences in some of the risk factors in terms of the level of risk occurrence in TEBP. The risk factors were eventually clustered into eight major groups for TEBP. The post hoc comparisons using the least significant difference test also indicated differences between the contractors and consultants in the ranking of risks occurrence in TEBP, but no significant differences between clients/contractors and clients/consultants.Research limitations/implicationsThe findings in this study are limited to the public TEBP procured via competitive tendering; therefore, the results might not be applicable when other procurement methods are being considered. Besides, the study classified the project participants based on organizations and not on the different ownership status of the projects, such as federal or state government-owned TEBP. However, the literature shows that likelihood of risk occurrence could vary due to the degree of project ownership.Practical implicationsThe information provided with respect to the most frequently occurring risk factors would enhance the performance of public TEBP.Originality/valueThis study contributes to the existing body of knowledge on the subject within a previously unexplored context where insights were provided on the most frequently occurring risk factors on the public TEBP.

Are policy tools and governance modes coupled? Analysing welfare-to-work reform at the frontline

ABSTRACT This paper considers the link between policy tools and governance modes – the characteristic ways frontline staff are meta-governed. It asks: Are substantive policy tools coupled to procedural tools (governance modes) that can guide local service delivery agencies and the work of individuals delivering welfare services? The substantive policy tools in this case are those typically utilised to reform welfare-to-work services: contracting-out of services and competitive tendering, and the regulation of quasi-markets. These are hypothesised to flow through to procedural policy tools in the form of corporate and market incentives and regulatory (bureaucratic) methods that shape how work is done (governance modes), privileging certain practice orientations at the frontline. Policy makers seek to shape these meta-level governance modes because they should result in systemic change, based on a reconfiguration of policy actors and their interrelationships, for both service delivery agencies and the individuals working in them. We identified four ideal-type governance modes (bureaucratic, corporate, market and network) and tracked which of these were dominant in-practice at the frontline in Australia and the UK at two levels: office and personal, at four points in time (1998, 2008, 2012 and 2016). We found that the dominant mode of organisation at the office level was corporate, followed by bureaucratic in both nations. But the bureaucratic mode had grown in strength over time, particularly in Australia, and as a personal priority for staff, as re-regulation occurred. The results indicate a coupling between substantive policy tools and governance modes at the frontline of welfare-to-work.

Influence of Competitive Tendering on the Performance of Devolved System of Governments in Kenya

The purpose of study is to examine the influence of competitive tendering on the performance of devolved systems of governments in Kenya. A cross-sectional approach is adopted with primary data collected. The data yielded a response rate of 229 from 10 devolved systems of governments in Kenya, which were drawn mainly from supply chain and finance departments. The data collected was put through rigorous statistical analysis to test content validity as well as reliability. Further, a simple linear regression model was used to test relationships between competitive tendering and the performance of devolved systems of governments in Kenya. The finding proposes that successful execution of competitive tendering increases the performance of devolved systems of governments. The use of the competitive tendering method assists governments in attracting a huge pool of suppliers where they can choose their potential suppliers competitively and thus instil public confidence in the accountability of public resources. The study provides relevant knowledge in formulating a policy framework on efficient and effective management of the public procurement process in devolved systems of governments. Also, the study shows that if the competitive tendering method is properly embraced, it will increase the performance of devolved systems of governments. However, the study limited only to the competitive tendering method and yet it can only be applied in certain thresholds. Thus, a similar study can be conducted in the same sector but using other alternative procurement methods. The study provides a holistic approach in the application and use of the competitive tendering methods for improving the performance of devolved systems of governments. Also, the identified gaps provide future direction in research and encourage the adoption of the competitive tendering method as a way of promoting accountability of the use of public resources in the devolved systems of governments.