International Public Procurement Agreements - Problems of Implemetations in Switzerland

Öffentliche Beschaffung, Reform, Public Choice, Wohlfahrtstheorie, Schweiz, Public Procurement, Welfare economics, Switzerland

Roles in construction projects: analysis and terminology

Standard form contracts are typically developed through a negotiated consensus, unless they are proffered by one specific interest group. Previously published plans of work and other descriptions of the processes in construction projects tend to focus on operational issues, or they tend to be prepared from the point of view of one or other of the dominant interest groups. Legal practice in the UK permits those who draft contracts to define their terms as they choose. There are no definitive rulings from the courts that give an indication as to the detailed responsibilities of project participants. The science of terminology offers useful guidance for discovering and describing terms and their meanings in their practical context, but has never been used for defining terms for responsibilities of participants in the construction project management process. Organizational analysis enables the management task to be deconstructed into its elemental parts in order that effective organizational structures can be developed. Organizational mapping offers a useful technique for reducing text-based descriptions of project management roles and responsibilities to a comparable basis. Research was carried out by means of a desk study, detailed analysis of nine plans of work and focus groups representing all aspects of the construction industry. No published plan of work offers definitive guidance. There is an enormous amount of variety in the way that terms are used for identifying responsibilities of project participants. A catalogue of concepts and terms (a “Terminology”) has been compiled and indexed to enable those who draft contracts to choose the most appropriate titles for project participants. The purpose of this terminology is to enable the selection and justification of appropriate terms in order to help define roles. The terminology brings an unprecedented clarity to the description of roles and responsibilities in construction projects and, as such, will be helpful for anyone seeking to assemble a team and specify roles for project participants

Quality management in the public building construction process

The poor quality of public buildings in the Botswana construction industry has been surrounded by controversy and strongly held opinions. The work reported here attempts to indicate some salient issues affecting the quality management system, with particular reference to the construction phase. Three propositions are addressed by the work. First that quality problems related to public building processes in Botswana are primarily due to an inappropriate project organizational structure. Secondly, that the traditional building procurement system provides a poor quality management system. The third proposition is that the traditional building procurement system does not facilitate derived quality levels as defined by the contract drawings and specifications. Five objectives of this study are identified and various issues which are fundamental to the research are reviewed. The first is the way in which the Botswana public building sector is organized, focussing on the building construction process. The second is the review of quality management theories both in the manufacturing and construction industries. The third is the relationship between the project management structure and project quality management, and the quality of building. The fourth is the proposal of a conceptual framework of an appropriate quality management system. Finally, recommendations about how to deal with organization of public building projects in order to select appropriate quality management systems are given. Information is obtained on the research areas through the use of the following methods: 1. Consultations with quality management practitioners and review of the Quality Management literature. 2. Questionnaires to architects, quantity surveyors, engineers, construction firm executives, contracts managers, site managers, trade foremen and skilled tradespersons, on quality management problems and procurement systems. 3. Case studies investigating approaches to site quality management in general and the adequacy of quality management documents. 4. Semi structured interviews investigating public building clients views on the quality management system and project procurement systems. The data collected are analysed using triangulation (qualitative and quantitative methodologies) methodology and the main results are reported below. The primary conclusion to be drawn is that the quality management system purported to be in use in the Botswana public building sector differs significantly from that recommended in the theory, resulting in poor quality buildings. This is primarily due to the use of an inappropriate building procurement system. In general the traditional building procurement system in the Botswana public building sector is used as a 'default system'. There are indications to suggest that it is used merely because the clients and consultants have failed to consider the issue of appropriateness. An appropriate quality management model for the construction phase is proposed with a proviso that the Botswana public building sector should establish appropriate methods of selecting appropriate procurement systems as a prerequisite in formulating appropriate quality management systems for various projects

Performance-based contracting in the defence industry: Exploring triadic dynamics between government, OEMs and suppliers

This study takes a rare longitudinal perspective to examine performance-based contracting (PBC) in the context of the development of a major capital defence project. It employs a triadic framework to examine changes in actors and their roles over time in fulfilling the project. The triads involve both contractors as suppliers and government entities. More specifically, using a historical narrative method the study suggests that over the 30 year span of the new warship’s development, different parties occupy the nodes of triads where the roles or functions of the principal and agents in the contract change over time. Our use of a triadic perspective enables us to trace both the withdrawal of the government customer from a position of authority and the specific strategy of one supplier to occupy the vacated role as systems integrator. The study makes three distinct contributions: firstly, to our understanding of PBC through tracing the development of the conditions that enable PBC in largescale long-term public-private contracting such as clear role delineation. Second, it adds to understanding of principal-agent behaviour in triadic public-private projects, suggesting that customer and supplier roles need to be perceived as supply network dynamics. Third, it suggests reasons why this defence acquisition underperformed, focusing on the mediation of the customer’s value requirement through powerful players seeking to extend their control. We argue PBC must be re-assessed in complex environments to include less direct financial measures such as long-term market share and adopt a more nuanced approach to contractual management than simply transferring risk.We wish to acknowledge the financial assistance provided by the Chartered Institute of Purchasing & Supply and the Institute of Supply Management

From the Theory of the Firm to FDI and Internalisation: A Survey

This paper surveys recent contributions on the Internalisation issue, based on different theories of the firm, to show how the make-or-buy decision, at an international level, has been assessed through the opening up of the “black box” - traditionally explored by the theorists of the firm – and the simultaneous endogenization of the market environment – as in the International Economics tradition. In particular, we consider three Archetypes – Grossman-Hart-Moore treatment of hold-up and contractual incompleteness, Holmstrom-Milgrom view of the firm as an incentive system, Aghion-Tirole conceptualisation of formal and real authority in organisations – and show how they have been embedded in industry and general equilibrium models of FDI to explain the boundaries of global firms.FDI, Internalisation, International Economics, Incomplete contracts

A Typology of Strategic Behaviour in PPPs for Expressways: Lessons from China and Implications for Europe

In line with governance trends around the world, a growing number of expressways in the People’s Republic of China are managed as Public-Private Partnerships (PPPs). The tremendous growth in demand for mobility in newly emerging economies has led to a gap between investment needs and available public funding. Using private funds is potentially helpful in closing this gap and accommodating the social and economic needs of motorization. By some, it is also hoped that contracting-out and involvement of the private sector will lead to higher transparency and accountability. However, in line with what has been found in various transport infrastructure modes, during uncertain and hazy transition periods that arise after infrastructure reforms, many forms of potentially pernicious strategic behaviour can pop up. Strategic behaviour emerges from information a-symmetry between private and public players, where the former act as agents and the latter as principals. In this article, China’s evidence on various types of strategic behaviour in the management of expressways is found. Several PPP projects for expressways in China are investigated empirically. And conclusions are drawn as to what possible cures are effective countermeasures of strategic behaviour, and what are the implications for Europe

Project Risk Management in Public-Private Partnerships: An Equitable Risk Allocation Decision Model based on Psychometrics

Public-private partnership (P3) procurement has grown into an internationally acclaimed means of achieving value for money while procuring public infrastructure projects. Unlike conventional infrastructure procurement models, P3s transfer a considerable amount of project risk away from the public sector to the private sector. During a long, methodical procurement phase, public and private partners reach a final risk allocation agreement over forecasted risks regarding a project’s potential design, build, finance, operation, and maintenance. This thesis begins with exploring the P3 procurement phase, highlighting relevant project actors and stages leading up to the signing of a final contract. The concepts of risk and project risk management are studied under the assumption that P3 project partners operate under a principal-agent relationship, where public authorities are tasked with aligning private partner motivations with their own motivations through contractual incentives. A core literature database provides 54 identified P3 project risks along with their suggested sectorial allocations. Exactly half – 27 – of these risks are deemed contentious because they are not unanimously allocated to a given sector within the database. These 27 contentious P3 project risks were subjected to an expert questionnaire asking Canadian practitioners to allocate them to a preferred sector based on a five-point semantic differential scale. The respondent pool was equally comprised of public and private sector practitioners from an array of specialized occupations relevant to P3 project risk management. Expert input was subjected to various quantitative methods that measured: (i) levels of agreement within sectors over risk allocation preferences, (ii) levels of agreement between sectors over risk allocation preferences, and (iii) overall risk allocation preferences based on the five-point semantic differential scale. It is found that: (i) both sectors enjoy strong levels of agreement over risk allocation preferences, (ii) 6 of 27 risks show statistically significant levels of disagreement between sectors over their allocation preferences, and (iii) there are risks that should generally be borne by either the public or private sector pending individual P3 project circumstances. The research findings should enable scholars and practitioners alike to establish more concrete conceptions of where P3 project risks should generally be allocated pending circumstantial conditions unique to different P3 projects. Where risks cannot be broadly allocated due to circumstantial conditions, a review of the study’s final risk allocation model provides contextual considerations that influence their allocation. Concluding sections acknowledge this study’s methodological and theoretical limitations. Recommendations for future studies to consider, both methodological and theoretical, are provided

The changing tide: Federal support of civilian-sector R and D

The involvement of the Federal government in civilian sector research and development is discussed. Relevant policies are put in an historical perspective. The roles played by industrial research and public funding are reveiwed. Government support of basic an generic research, clientele-oriented applied research, and research with commercial ends is studied. Procurement, anti-trust, and patent policies, all of which affect the climate for private research and development, are examined

Systemic risk in public sector outsourcing contracts

The research presented in this thesis responds to a call towards the expansion of current perceptions of risk in complex organisational settings. Observing the literature, it becomes apparent that risk in projects is frequently treated as independent, thereby disregarding the interrelatedness or ‘systemicity’ of these risks, and/or any other causal dynamics. The systemicity of risk is therefore of fundamental importance to this research, particularly in terms of its definition which is sparsely covered within the literature, making it a suitable first research question. In addition to this, where a project represents an undertaking that has commissioned for by a permanent organisation, and is to be delivered by a temporary organisation, the verdict as to whether or not the commissioned project is deemed as being successful is heavily dependent upon the project’s ability to protect against unwanted risk. At the forefront of the commissioned project is the contractual relationship that has been established between the buyer and seller, which sets out the obligations of the contracting parties. Since the contract governs the legality and functionality of the project, it must therefore be designed to balance and mitigate risk effectively.To improve knowledge and awareness of the risk dynamics encased within a project’s legal documentation, multiple methods of analysis have been incorporated within the research design in order to extract meaningful data from a sample of MOD case studies, each of which comprise of a set of framework contracts, project documentation and interviews. In doing so, the thesis identifies the extent to which public sector organisations like the MOD account for systemic risk in their contracting procedures and reveals the shortcomings in the design and implementation of these fundamental legal agreements. Whilst the core methods introduced within this thesis represent well-established and justifiable qualitative methods (such as hermeneutics), the research provides a novel methods contribution through the development of a visual mapping tool. Throughout the research process, the visual tool has demonstrated its capacity to equip the contract writer with greater insight into the dynamic characteristics of risk that are inherent within a contract. Triangulating the data that was extracted using multiple methods, a set of key findings were deduced which reveals the current flaws that originate in the front-end phase of the project, the structural design choices made when constructing (or implementing) the formal contract and the unrealistic relational expectations that underpin the contractual agreement. As a result, it is believed that the research has contributed new knowledge to both the academic and practitioner realms, yet recognises that there is scope for further research to be undertaken. It is envisaged that such future research would benefit from further piloting, expanding the application of the research methodology towards other complex organisations within the public sector, whilst testing the robustness of the newly developed risk mapping tool