Best value procurement

Abstract

The market industry is rapidly changing and modifications are taking place. Over the years, it has been noticed that project success is a challenging issue, which requires several endeavours from project parties. The procurement system is characterized as a tool, the implementation of which delivers project results. The procurement system is classified into four distinct categories; traditional, design & build, strategic & integrated, partnering. Based on those, the most popular procurement technique historically is the traditional method. The traditional method is mostly applied successfully in small projects, when less complexity and uncertainty emerge. However, the complexity and uncertainty have largely increased, marking the traditional method slightly impractical for successful results. In that case, a new procurement method is introduced, the Best Value Procurement (known as BVP) method. A critical advantage of the BVP is the embodiment of complexity and collaboration demands into its process. Despite its advantages and ambitions, the BVP does not always secure a successful result. Therefore, the main question that will be addressed in this research is:

“How could public organizations implement Best Value Procurement (BVP) to benefit the project
delivery?”

To answer the main research question, a deep investigation through the BVP concept (elements, activities etc.) was executed. Firstly, an extensive literature review was exercised in order to cover the BVP method on the theoretical side. Based on the literature results, a theoretical BVP framework was established. Secondly, the findings acquired from the literature review were examined, leading to the exploratory interviews. Interviews are exploring the practical side of the BVP and how is applied in practice. Seven interviewees were selected. An understanding of differences and similarities between theory and practice was essential. Using the findings from the frameworks’ comparison, a list of adjustments (or recommendations) for improving the BVP method is established. Interviews with experts were held. Three experts, coming from public organisations and consultancy firms apply their knowledge and expertise in order to improve the BVP method. Thereafter, an alternative BVP framework was established. The alternative BVP framework incorporates components (elements, activities, including parties, final deliverables), the influence of which is characterized as critical for the BVP success. Public organisations frequently apply the BVP method in their projects. Being BVP initiators in the market industry, public organisations should implement BVP carefully. The alternative BVP framework, proposed in the research, could be used by public clients in order to achieve successful project outcomes. For a successful implementation of the BVP method, special attention should be attributed to the main alterations:

General highlights:
1. An introduction of Stage zero; training sessions, about BVP philosophy, are becoming available
through every single project participant
2. An introduction of final deliverables (per step); setting clearly the deliverables to be received
at the end of every stage

Selection stage:
1. Interviews inclusion as part of the evaluation process, not separate activity of the selection
stage
2. Consultants and tender managers are getting an important role throughout the selection
stage
3. Once the selection stage finishes, the evaluation committee or client has to select only one
contractor. Multiple contractors should not be accepted...