Quasi-firms for real innovations

The construction industry is notorious for its (lack of) innovativeness. Many papers, reports\ud and articles have been written on this subject already for more than three decades.\ud The explanations presented can be summarized by such terms as fragmentation,\ud segmentation and segregation when referring to the industries’ structure and by qualifications\ud such as opportunistic, hostile, antagonistic and conflictive when referring to its\ud culture. In this paper it is argued that the main reason for the innovation status quo is\ud the fact that the construction industry, when compared to other industries, lacks real\ud producers- producers who develop products and compete with each other in terms of\ud these products. It is particularly this kind of competition which is identified as a source\ud to stimulate innovation. In construction, production capabilities are tested on the market\ud and not product capabilities. As a result, design decisions are not tested on the market.\ud It is this flaw which is examined in this paper, and possible improvements are suggested.\ud Endurable strategic alliances, as quasi-firms, are proposed as the equivalent of\ud producers. Essential herein is the pivotal position of design. An organizational innovation\ud as such could change the way business is done in the construction industry. It\ud would alter its structure as well as its culture

Aanbesteden van GWW-werken door gemeenten

Discussiestuk voor de commissie Bouwzaken van de Vereniging Nederlandse Gemeente

Construction procurement by Dutch municipalities

Over the last decade the European Union (EU) has had a strong impact on the way public organisations introduce market philosophies in their policies. The EU directives on procurement, the battles against cartels, the globalisation and harmonisation of markets, all lead to extra attention to the procurement practice of public agencies. This paper focuses on the procurement practice of one of these public organisations, the municipalities in the Netherlands. Statistical data suggest that Dutch municipalities prefer limited tendering procedures, and seem to avoid public tender procedures. This paper reports on research into the reasons for such preference. Analysis of municipalities' procurement and tendering practice uncovered an intricate mechanism for maintaining project control. Municipalities implicitly use the prospect of future assignments to restrain contractors' misbehaviours. By doing so municipalities reduce uncertainties and risks. Contractors' demeanour becomes more flexible, cooperative and quality orientated because of this mechanism. Through the use of this mechanism the municipality-contractor relationship has developed to a kind of co-makership relation. This phenomenon is categorically overlooked in the standard market paradigms. Bending the procurement and tendering practice towards more public tendering is expected to make project control more troublesome