How Can Procurement Contribute to Network Performance? Streamlining Network, Project and Procurement Objectives

Abstract

The core business of governmental organizations like Rijkswaterstaat in the Netherlands is the optimal management of road-end waterway networks. The coming years many maintenance, renewal and extension projects will be executed in these networks. Projects give a disturbance in functionality of the network. Network management is to keep this disturbance as low as possible and make functionality of the networks as high as possible. In reality however projects define their own objectives. To realize projects market involvement is necessary. Rijkswaterstaat has a procurement policy which aims at optimizing the transaction i.e. best quality for a competitive prize. However, through projects and transactions objectives seem to fade away from the core business of Rijkswaterstaat. Involvement of the market in public networks is about finding the right balance between keeping control on product and production processes and shifting freedom in design and related responsibility to the market. The more freedom is given to the market in the project transaction, the more difficult it is to manage the network on super project level. Dutch government policy tends to shift more and more freedom and responsibility to the market. A comparison with other types of networks shows that this is adverse to the policy in more business driven networks. Disturbances are kept as short and controlled as possible. The main question in this paper is how value optimization in projects and procurement can add value for network governance in public networks and at the same time leave enough design freedom to the market for the development of a more resource based construction industry in infrastructure. From the comparison of different networks potential instruments are discussed.