Traditional Procurement Approaches Research Articles

Challenges in the Integration of E-Procurement Procedures into Construction Supply Chains

The growing interest in digitalization signals a need for technology-oriented supply chain operations in the construction industry. Electronic procurement (e-procurement) aims to convert traditional procurement approaches into web-based/online platforms. Even though e-procurement is an effective tool that may improve supply chain management, the extent of e-procurement implementation has been slow to date. This study investigates the barriers that hinder e-procurement implementation in construction supply chains with the aim of prioritizing solutions to the identified barriers relative to time, cost, quality, and construction owner satisfaction. A comprehensive literature survey was performed, and a focus group discussion was organized for the purpose of the study, which resulted in the identification of 28 barriers. Then, a total of 131 construction practitioners were contacted to evaluate the barriers through a questionnaire survey. The responses were analyzed using the fuzzy Technique for Order Preference by Similarities to Ideal Solution (fuzzy TOPSIS) for prioritization. Finally, 15 semi-structured interviews were conducted to gain a deeper insight into the transformation process from the conventional procurement route to the e-procurement solution. Findings highlight that issues related to unexpected order cancellations, large variations in material costs, and the uncertain nature of the industry that requires a large number of changes are ranked as the most significant barriers. Given the highly competitive environment and the high demand for advanced technologies in the construction industry, a new paradigm can enhance the efficiency of supply chain operations. Exploring and eliminating the potential difficulties of adopting e-procurement in the procurement process may be a good start. Overall, this research is expected to facilitate the transformation of the procurement process by addressing the critical barriers identified by practitioners.

Antecedents and performance outcomes of circular procurement: An empirical study in China

Traditional procurement approaches and their prescribed business-as-usual practices are no longer sufficient in the face of society’s grand environmental and resource challenges. In response, this research presents circular procurement, which is grounded in the circular economy (CE) philosophy, as a business-not-as-usual approach to firm and supply chain level purchasing decisions. Drawing on institutional theory and the practice-based view of strategy, a conceptual model is developed that maps the antecedents as well as performance outcomes of circular procurement practices in terms of the environmental and economic (i.e., cost and financial) dimensions of performance. Survey data from 255 Chinese manufacturers is then analyzed alongside qualitative data from two post-survey case studies to achieve better interpretation of survey results. The findings indicate that coercive pressures and integrated management systems (IMS) are key antecedents of circular procurement practices among Chinese manufacturers. Furthermore, circular procurement practices show a significant and positive effect on environmental, cost, and financial performance. Interestingly, the association between environmental performance and circular procurement is relatively weak in comparison to economic performance. This research provides empirical evidence of the performance outcomes of circular procurement and contributes to the literature by advancing our understanding of its theoretical foundations. It further provides important practical and policy guidelines that can help to enhance the development of circular procurement.

Enhancing building maintainability through early supplier involvement in the design process

Abstract The post-construction phase represents a critical milestone in the project lifecycle. This is because design errors and omissions as well as construction defects are examined during this phase. The traditional procurement approaches that are commonly adopted in construction projects separate design from construction, which inhibits contractors, suppliers and other parties from providing the design team with constructive comments and feedback to improve the project design. Consequently, lack of considering maintainability aspects during the design process results in increasing maintenance and operation costs as well as reducing building performance. This research aims to investigate the role of early supplier involvement (ESI) in the design process as an approach for enhancing building maintainability. To achieve this aim, a research methodology consisted of literature review, case studies and survey questionnaire was designed to accomplish four objectives. Firstly, literature review was used to examine the concepts of building maintenance, maintainability, the design process and ESI. Secondly, three case studies were presented and analysed to investigate the role of ESI towards enhancing building maintainability during the design process. Thirdly, a survey questionnaire was conducted with a representative sample of architectural design firms (ADFs) in Egypt to investigate their perception and application of ESI towards enhancing building maintainability during the design process. Finally, the research developed a framework to facilitate ESI during the design process in ADFs in Egypt. Data analysis showed that ‘Difficulty of trusting external parties and sharing information with transparency’ was ranked the highest challenge of ESI in ADFs in Egypt.

Improved reliability in planning large-scale infrastructure project delivery through Alliancing

PurposePrice reliability for complex and highly complicated infrastructure projects is problematic. Traditional project delivery approaches generally fail in achieving targeted end cost reliability. However, integrated project delivery (and particularly Alliancing), develop a far more reliable and robust project delivery plan and outturn time-cost targets. This paper aims to explore why this may be the case.Design/methodology/approachThis case study investigated the project design, planning, cost/time estimation approach and how risk/uncertainty was dealt with. Five senior project delivery experts from an organisation that delivers multi-billion-dollar infrastructure projects in Australia were interviewed. These five experts collectively had 100+ cross-disciplinary experience years delivering complex infrastructure projects.FindingsAlliancing adopts a radically different approach to project design, time/cost planning and risk assessment and management to traditional project delivery approaches. Key findings explain how the project alliance agreement designs-in processes that maximises team integration and collaboration. Analysis concludes that design thinking is used to craft and shape collaborative behaviours and project governance. Additionally, including project owner and facilities operator representatives in the project team adds valuable insights, expertise and knowledge contributing to planning reliability.Research limitations/implicationsThis study is exploratory and focussed on complex infrastructure projects so findings cannot be generalised.Practical implicationsWe unpack Alliancing processes that develop the target outturn cost plan, comprising a holistic and realistic plan to design a project to meet expected project outcomes. This case study may serve as an exemplar for complex project delivery.Social implicationsThis paper illustrates how Alliancing more effectively delivers best value than traditional procurement approaches through its TOC-TAE processes.Originality/valueThe paper contributes to the scant existing academic literature analysing these processes. Its novel contribution is explaining how Alliancing treats unexpected events that in traditional delivery forms trigger expensive and time-energy-wasting disputation. This case study may serve as an exemplar for complex project delivery.

Risk analysis in social housing delivery: A public–private partnerships approach

AbstractFaced with fiscal pressure and concerns over bureaucratic inefficiency, policymakers at Australia's state government level are evaluating instruments to improve social housing services. A public–private partnerships (PPPs) procurement approach is one such instrument for increasing housing supply to address housing affordability in Australia. To determine the value of pursuing a project through a PPP delivery versus a traditional procurement approach, public administrators need to determine discount rates for comparing different cash flows streams on a consistent basis. Additionally, they must estimate public sector comparator (PSC) to determine public sector's risk exposure in social housing delivery and allocating constrained housing budgets. This research assesses the discount rates and estimates the risk profile of social housing delivery faced by public agencies. Three case studies were utilised to present project estimate probability distributions for gaining insight into risk exposure in social housing delivery and helping housing budget allocation at the state government level. The findings recommend the use of an estimated 30‐year treasury bond rate (3.14%) as the PSC discount rate for social infrastructure. Additionally, the results suggest the use of a PPP discount rate for social housing of 6.01%, given a risk‐free rate of 3.14% and a systematic risk premium of 2.87%.

A framework for implementing integrated project delivery in architecture design firms in Egypt

PurposeThis paper aims to develop a framework for implementing the integrated project delivery (IPD) approach during the design process in architecture design firms (ADFs) in Egypt.Design/methodology/approachA research methodology consists of literature review, case studies and survey questionnaire was designed to achieve the abovementioned aim. First, literature review was used to identify and categorise the challenges of implementing IPD during the design process. Second, four case studies were analysed to investigate the values delivered to the client or missed due to the use of IPD or traditional procurement approaches, respectively. Finally, a survey questionnaire was carried out with a representative sample of ADFs in Egypt to investigate their perception towards the challenges of IPD implementation in Egypt. Based on the results of the above, the research developed a framework to facilitate the implementation of IPD in ADFs in Egypt.FindingsThrough literature review, the research identified 30 challenges that hamper the implementation of IPD in ADFs. These challenges were categorised due to their nature into five groups, namely, integration, cooperation, commitment and trust challenges, knowledge, experience skills and decision-making challenges, cultural challenges, legal and contractual challenges and technical and financial challenges. Results of data analysis showed that “poor communication and spirit of collaboration between project stakeholders” was ranked the highest influential challenge as IPD is based on collaboration and trust between project participants. In addition, “lack of training and motivation in investing for using IPD” was ranked the lowest influential challenge due to the poor attention paid to training in the construction industry. Moreover, despite the benefits of IPD implementations in many countries worldwide, it is not implemented in the Egyptian context. This necessitated taking action towards developing a framework to facilitate IPD implementation in ADFs in Egypt.Research limitations/implicationsThe research focussed on ADFs in Egypt.Practical implicationsAdopting the proposed framework developed through this research will help implementing IPD during the design process in ADFs.Originality/valueThe research identified, categorised and analysed the challenges that obstruct the implementation of IPD in ADFs. The research tackled a topic that received scant attention in construction literature in the Middle East generally and Egypt in particular. In addition, this paper presented a framework to facilitate the implementation of IPD during the design process, which represents a synthesis that is novel and creative in thought and adds value to the knowledge in a manner that has not previously occurred.

Unique Factors of Best Value Procurement from the Perspective of Nigerian Construction Professionals

The construction industry is vital to the economic development of any country. It has a major role in providing built infrastructures in an innovative and cost-effective way using an effective procurement approach. In contrast, the most widely used procurement method in Nigeria is the traditional procurement approach which is known for plaguing the industry with the poor working condition and poor performances thus, reducing the sustainability and quality of products and services. For this reason, there is a need for a procurement approach which utilises expertise to minimise the risk of non-performance and create a win-win environment for both client and contractors, while increasing transparency and add value to the project such like, the Best Value Procurement. Against the background, this paper aims to establish the perception of the Nigerian construction professionals on the unique factors of the Best Value Procurement. The paper outlines the following objectives: To identify the unique factors of the Best Value Procurement and, to establish the perception of the Nigerian construction professionals on the Best Value Procurement unique factors. Using a questionnaire survey, data was collected form 314 construction professionals involving Quantity Surveyors, Architects, Builders and Civil Engineers. Kruskal Wallis Test and mean score ranking was used for data analysis. The findings show that the professionals generally agree that the Best Value Procurement unique factors can bring about transparency, accountability, increase project performance and the contractor is the best to control risk and adds value to the project. This paper derives its significance from the need to stabilise the procurement system in Nigeria by transferring the risk and control to contractors who must act in the best interest of the client.

Green supplier selection with an uncertain probabilistic linguistic MABAC method

In recent years, with the increased voice for protecting the environment by the people all over the world, the governments also have actively adopted more and more measures to further promote environmental conservation and sustainable development. Traditional procurement approaches have not well updated to the current needs of the society, especially for the retail industry which is in relation to the national economy due to numerous products and different suppliers being involved. Therefore, the need for green procurement is more important. The qualified green supplier selection is the core of green procurement, which is the utmost importance in the business competition throughout the supply chain in today’s strong business competition. Thus, in order to obtain the optimal green supplier, integration of Entropy weights and multi-attributive border approximation area comparison (MABAC) under uncertain probabilistic linguistic sets (UPLTSs) has offered a novel integrated model, in which information Entropy is utilized for calculating objective weights with UPLTSs to acquire the final ranking result of green supplier. Besides, so as to indicate the applicability of devised method, it is confirmed by a numerical case for green supplier selection. Some comparative studies are made with some existing methods. The proposed method can also serve for selecting suitable alternative successfully in other selection problems.

A developed software agent-knowledge-assisted procurement management tool for retailing enterprise

PurposeThis study aims to develop a software agent-knowledge procurement management tool to address uncertainties from external and internal environments, such as record failure, slow logistics auditing and distribution delay toward improving procurement management in retailing enterprises.Design/methodology/approachQuantitative methodology was used to collect data using a self-administered survey from randomly selected procurement staffs, marketers and customers to measure their perception regarding the feasibility and acceptance of the implemented agent-knowledge-based procurement management tool.FindingsResults from empirical analysis reveal that the implemented tool facilitates collaboration and interaction among buyers, sellers and procurement managers toward enhancing procurement managers’ flexibility to handle unexpected exceptions. In addition, results confirm the feasibility of the implemented tool in supporting procurement management toward handling inventory failure exception, which occurs in traditional procurement approaches. Moreover, descriptive results from user acceptance test verify that the tool was accepted by the respondents.Research limitations/implicationsThe limitation of this study is that the implemented tool is evaluated using data collected from respondents in Malaysia retailing enterprise only; thus, the results cannot be generalized to other enterprises and country. In addition, research implications from this study design a methodological and comprehensive software agent-knowledge-based model that support buyers, sellers and procurement managers with information to facilitate buying and selling operations.Practical implicationsPractically, the designed software agent-knowledge-based model describes how software agents collaborate with each other to facilitate procurement tasks and also use the knowledge base in the implemented tool to provide information sharing platform that manages the dynamics of procurement operations.Social implicationsThis research integrates software agents which are autonomous programs that carryout pre-defined task on behalf of end users. Socially, this study would be useful for procurement managers in developing mechanisms for instilling insights in retailing operations.Originality/valueThis research is among the first to attempt to develop a software agent-knowledge-based model to support procurement management in the retailing enterprise domain. It contributes to promote e-procurement practices by implementing a software agent-knowledge-oriented tool to address uncertainties experienced in retailing enterprise. It is envisaged that this study will provide basis for future research into e-procurement practices for retailing businesses in Malaysia and beyond.

A Conceptual Framework for Evaluating the Success of Public-Private Partnership (PPP) Projects

The PPP strategy has become an increasingly important procurement option in both developed and developing countries of the world for delivering public works and services. However, despite an increasing reliance on the public-private partnership strategy, success evaluation of PPP projects is less clear in the normative literature. While success measurement in traditional procurement approaches is relatively straightforward, PPPs, due to their multifarious nature, require more rigour in establishing the explanatory factors and evaluating the extent of their contribution in influencing the success of PPP projects. Using Structural Equation Modelling (SEM) approach, this article developed a conceptual framework for evaluating the success of PPP projects. The framework should assist policy makers both in the public and private sectors in objective evaluation of the success of PPP projects.

The Influence of Trust in Traditional Contracting: Investigating the "Lived Experience" of Stakeholders

The traditional procurement approach is ever-present within the construction industry. With fundamental design principles founded on definitive risk allocation, this transactional based approach fails to acknowledge or foster the cooperative relationships considered to be vital to the success of any project. Contractual design encourages stakeholders to defend their own individual interest to the likely detriment of project objectives. These failings are not disputed, however, given that trust is a fundamental requirement for human interaction the influence of trust is potentially important in terms of stakeholder relationships and ultimate project success. Trust is therefore examined within this context. A conceptual framework of trust is presented and subsequently used to code and analyse detailed, semi-structured interviews with multiple stakeholders from different projects. Using a phenomenological investigation of trust via the lived experiences of multiple practitioners, issues pertaining to the formation and maintenance of trust within traditionally procured construction projects are examined. Trust was found to be integral to the lived experiences of practitioners, with both good and bad relationships evident within the constructs of traditional procurement mechanisms. In this regard, individual personalities were considered significant, along with appropriate risk identification and management. Communication, particularly of an informal nature, was also highlighted. A greater emphasis on project team selection during the initial stages of a project would therefore be beneficial, as would careful consideration of the allocation of risk. Contract design would also be enhanced through prescriptive protocols for developing and maintaining trust, along with mandated mechanisms for informal communication, particularly when responding to negative events. A greater understanding regarding the consequences of lost trust and the intricacies of trust repair would also be of value.

Fostering Value Co-creation in Construction: A Case Study of an Airport Project in India

Infrastructure projects are often large in scale and have great impact on the public in terms of environment, finance, safety and international status. Research studies have been conducted extensively to investigate ways to enhance performance of construction projects, but little emphasis has been put on the importance of the value co-creation process. The airport project in this study adopts the collaboration and value co-creation process between the client and the contractor from the initial stage towards project completion. In the traditional value creation process, clients and construction firms have distinct roles of consumption (i.e., value receiver) and production (i.e., value creator), in which value is created by the design and development of construction products and the value is then exchanged in the markets, amongst consumers and producers. However, value created in this way is created independently of clients. The service-dominant logic, on which value co-creation is grounded, provides a new paradigm for re-examination of value provision through construction projects. The paper aims to explore the importance of value co-creation in the context of an airport project and, more importantly, how value co-creation can be fostered in the construction industry. The project case demonstrates the client and contractor as value co-producers. Dierent from the traditional procurement approaches which often lack comprehensive consideration of alternatives and /or common goals in the project inception stage, the client and contractor collaborated early in the alternative bidding process and in value management workshops conducted before the inception of construction. In the process of building the client-contractor relationship to achieve the above (value) outputs, two key features are (1) early contractor involvement in the contribution of constructability expertise and (2) the change in the client's attitudes to embrace value co-creation.

Public-Private Partnerships: a review of theory and practice of performance measurement

Purpose – This paper reviews the normative literature of performance measurement within the context of Public-Private Partnerships (PPPs). The purpose of this paper is to examine the effectiveness of current ex post evaluations of PPPs and identify a feasible direction to comprehensively and effectively measure the performance of PPP infrastructure projects. Design/methodology/approach – An in-depth literature review is conducted in this paper. The focus of the review is associated with the general performance measurement and performance measurements of PPPs. Findings – This paper identifies that conventional ex post evaluation is not robust enough to measure the performance of PPP projects. Based on the characteristics of PPPs, the life-cycle (process-based) evaluation under performance measurement system is a promising approach to comprehensive and effective PPP performance measurement. Practical implications – The outcomes of this paper can be used as a theoretical base for the development of PPP performance measurement framework. Originality/value – Performance measurement is essential to business success, whether it is at the organisation or project level. Limitations on public funds have encouraged more and more governments across the world to use PPPs to procure economic and social infrastructure projects. Similar to traditional procurement, ex post evaluation is being widely used in PPP projects. However, PPPs are more complicated than other traditional procurement approaches. Exploration of literature suggests that limited research has been undertaken to examine if conventional ex post evaluation is sufficient to measure the performance of PPPs. This paper will bridge this significant knowledge gap.

Assessing Health and Safety Requirements in Construction Contracts in Botswana

The purpose of this study was to investigate the effect of contractor selection andrequirements on Health and Safety compliance in Botswana. Literature was reviewed, a questionnairesurvey was conducted and the statistical analysis undertaken. According to Murie (2007), one of the weaknesses of adopting traditional procurement approach is that the successful tender will frequently be the one that, among others, does not provide H&S protective equipment or have insurance coverage for accidents, and has the largest proportion of informal workers, who are not covered in practice by any legal or social protection. The study has provided usefulinformation involving key stakeholders involvement in H&S performance in constructionindustry. The traditional method could thus impede on Health and Safety management from project preplanningthrough to construction on site.

Ghana's public procurement reform and the continuous use of the traditional procurement system

PurposeThe purpose of this paper is to examine the performance of the traditional procurement approach (TPA) under Ghana's procurement reform and explore if other possible procurement strategies could help to improve value for money in the Ghanaian public sectors. The fundamental questions to be addressed are: “Is the procurement reform addressing the deficiencies in the public sector procurement?”; “Are clients and professionals satisfied with the present procurement system?”; “What are the possible alternatives?”; and “What procurement selection criteria should be adopted?”.Design/methodology/approachTo answer the above questions, an extensive literature review was conducted which provides the background to public procurement reform and reveals the status of the TPA in the public sector. Based on the outcomes of the literature review, three rounds of questionnaire surveys and face‐to‐face discussions were undertaken. The targeted population was carefully selected from different sectors of the industry and regions of the country.FindingsThe results of the study reveal the deficiencies in contractors’ performance arising from the use of TPA with a focus on time, budget, buildability and relationships among participants. It also ranks the criteria for procurement selection and suggests the D & B method as the most favourable alternative procurement strategy. Suggestions were made in the area of tendering processes, collaborative working, contractors’ competence, government's work efficiency, and whole‐life performance criteria.Practical implicationsThis study evaluates the TPA performance after Ghana's procurement reform in 2003 and provides guidelines to the industry and government for further procurement reform aimed at improving value for money.Originality/valueThis research provides a systematic study on the public procurement reform and the TPA adopted in Ghana's public sector. The essential problems associated with the TPA in the industry are identified and analyzed, the procurement selection criteria are examined and an alternative procurement approach is postulated.

Improving Building Performance through Integrating Constructability in the Design Process

A. A. E. Othman · Improving Building Performance through Integrating Constructability in the... · pp 333-347 The traditional procurement approaches commonly adopted in construction projects and the involvement of multitude of various project participants with diverse objectives, skills and interests tended to separate design from construction. This separation obstructs contractors from providing designers with construction feedback and suggestions for design improvement, which ultimately hampers the improvement of building performance. Because of the importance of the design phase and the vital role played by contractors in the construction industry, this paper aims to investigate the integration of construction knowledge and contractor’s experience in the design process as an approach for improving building performance. In order to achieve this aim, a research methodology is designed to accomplish four objectives. Firstly, reviewing the nature of the construction industry; constructability; architecture and the design process and measuring building performance. Secondly, presenting case studies of successful projects benefited from applying the concept of constructability during the design process. Thirdly, developing an innovative framework to facilitate the integration of construction knowledge and contractor’s experience in the design process and establishing the strategies that support its application. Finally, summarising research conclusions and recommendations useful to construction professionals and further research. Findings of the research showed that integrating the concept of constructability during the design process improves building performance (e.g. reducing construction time, cost and waste as well as improving quality and productivity) and enhances the relationships between project participants. The research adds a valuable contribution to the built environment body of knowledge through presenting a practical approach for integrating construction knowledge and contractor’s experience in the design process. Improving Building Performance through Integrating Constructability in the Design Process

Harnessing Market Competition in PPP Procurement: The Importance of Periodically Taking a Strategic View

Public‐Private Partnerships (PPP) procurement is routinely portrayed as offering greater scope for harnessing competitive market forces to secure Value for Money (VfM) than traditional procurement approaches ( OECD 2008 ). The aim of this article is (a) to demonstrate the importance of periodically taking a more systematic and strategic view when assessing VfM in PPP procurement ( OGC 2003 ), and (b) to develop an analytical framework for such an analysis. Road infrastructure procurement in South East Queensland is used as a case study to test the usefulness of the proposed framework, and to show how a narrow focus on individual contracts increases the risk of overlooking overdependence on one supplier ( OGC 2003 ). Discussion focuses on the need to combine detailed analysis of individual contracts with longitudinal analyses of market competitiveness when assessing best VfM.