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Title: Best Value Procurement. A case study on governance and (in)stability of specifications within a complex procurement project.
Authors: Bruno, T
Keywords: Best Value Procurement
relational and contractual governance
(in)stability of specifications
service definitions
complex procurement projects
Issue Date: 1-Jan-2016
Publisher: Open Universiteit Nederland
Abstract: In order to cope with complexity, organizations are looking for effective procurement methods, such as Performance Based Contracting (PBC) where the buyer sets the specifications at the beginning of the procurement process (in terms of desired output). A variation on PBC is Best Value Procurement (BVP), where specifications are also set at the beginning, however under the responsibility of the supplier. The specifications are fixed and should not be altered during the project. The supplier is given much freedom to utilize his expertise, but also a lot of responsibilities for developing specifications and achieving results. The advantage for the procuring party is that all risks are transferred to the supplier. The question is whether BVP functions properly, because research appears to indicate that particularly in complex procurement projects, a constant dialogue between client and contractor is required to sharpen the specifications, in order to ensure that the client actually gets what he wants. Is BVP really the solution to deal with complexity? This study has addressed this gap as follows: (a) by conducting a case study in a complex procurementproject were BVP is applied as procurement method, (b) by examining the influence of the phenomena (in)stability of service definitions, relational and contractual governance and constant dialogue, (c) developing propositions regarding the influence of the phenomena. The results of the case study indicate that specifications have changed during the project, although this should not happen within a BVP context. Contrary to what the BVP method presumes, the contract between the procuring organization and the contractor was drawn up jointly. Also, a maximum price was adjusted in this case, something that should not have happened according to the BVP philosophy. Another notable outcome was that the parties did not only guide the project by means of the contract. Calamities, additional wishes and requirements and progress meetings were discussed on the basis of relational norms. Apparently, the BVP method has not been strictly applied and probably would not have worked. Remarkably, BVP was viewed by the respondents as a good method to cope with complexity in this case. The study contributes to theory development on complexity in procurementprojects. It also offers an extension of the theory of service definition methods and governance by stressing their influence during the sourcing process.
Appears in Collections:MSc Management Science

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