Best Value Procurement (BVP) in Norwegian Construction Projects

The traditional contractor selection method, based on lowest price, has resulted in conflict, low quality products and a waste of resources. The need for an alternative supplier selection method has resulted in Best Value Procurement (BVP). BVP seeks to increase project value by utilizing the expertise of the contractor, while reducing the client’s management, direction and control. Currently, pilot projects in the Norwegian construction industry are testing the method. This paper addresses 1) how BVP is implemented in practice, 2) what the experiences with BVP are, and 3) how BVP should be performed in future projects. The research was carried out through a literature study and two Norwegian case studies. A building project and a medium-size infrastructure project in the Norwegian public sector were investigated through nine semi-structured, in-depth interviews and document studies. The findings show that the practical use of BVP is in accordance with the theoretical approach. Furthermore, the experiences with BVP are mainly positive. However, some challenges have been identified, such as the clients’ and contractors’ lack of knowledge and experience with the BVP method. This may reduce the potential project value. The conclusion is that BVP is an effective and promising method for contractor selection and project management. However, for the success of future projects using the method, clients and contractors may benefit from more knowledge and experience with BVP. This can be done by training and by being persistent in using BVP in future projects. This paper is a revised version of a paper that has been published in the proceedings of the Creative Construction Conference 2018

Factors affecting transaction costs and collaboration in projects

Author's accepted version (postprint).This is an Accepted Manuscript of an article published by Emerald in International Journal of Managing Projects in Business on 06/05/2019.Available online: https://www.emerald.com/insight/content/doi/10.1108/IJMPB-09-2018-0197/full/pdf?title=factors-affecting-transaction-costs-and-collaboration-in-projectsacceptedVersio

Why conflicts occur in roads and tunnels projects in Norway

Conflicts within the Norwegian construction industry have reached unacceptable levels. The grievance of these disputes, whether it is the number of conflicts or the expense involved in these conflicts, is under discussion. This article examines the reasons for these conflicts in a comprehensive and inclusive manner. Twenty-five respondents with expertise and understanding of most conflicts in the Norwegian construction industry were interviewed. Results from a questionnaire sent to 1799 contractors have also been included in this study. Sixteen reasons for disputes were identified out of which four comprised the root causes. Tender specification and contract understanding came in first followed by “final settlement-payment related”, corroborating previous findings. The third and fourth root causes of conflicts were “low priced contracts” and “changes in projects” respectively. Our findings point to design deficiencies and defective contract plans as significant causes of conflicts, confirming the view of construction experts. The third root cause of conflicts might explicate some aspects of the first and second major causes of disputes. It is also important to mention that though this is the general view, one can also see how every group involved in this study interpret major causes of conflicts. Our findings also point to “communication between clients and contractor”, “carried out quantities” and “client restriction to time extension” as among the chief causes of conflicts, confirming the view of construction experts. Client understanding of contractors’ anxiety and quest for sound contracting process are aspects that Norwegian clients are currently engaging in, for the sake of conflict reduction and prevention in future construction projects

Public-Private Partnership: A Bibliometric Analysis and Historical Evolution

The broad and extensive application of public-private partnership (PPP), as well as the divergent documented definitions and experiences, have led to a translucent perspective of PPP and strained academia and industry to reach a consensus on the major practice of this concept. Early contractor involvement (ECI), governance tools, and relational contracting are only a few of the frameworks attributed to PPP. This issue has received limited attention from researchers, despite the focus of review studies on different disciplines of PPP. Hence, this paper puts forward the idea of conducting a comprehensive review to not only shed light on the major practice of PPP but also provide a wider outlook on this concept based on the research carried out since 1979. A narrative review is initially accomplished to identify the major drivers and milestones that have contributed to the evolution of PPP. Employing bibliometric analysis in the following phase assists in conducting a multi-dimensional assessment of studies published within the last five decades. The economic and societal practices of PPP throughout its evolution path signified the dominant application of this concept as a business model. The bibliometric analysis revealed that PPP has contributed to various sectors, i.e., urban development, public infrastructure, transportation, health, and education, just to name a few. In addition, economic and organizational management of PPP was revealed as a major research stream that was accompanied by sustainable development. As a matter of fact, economic and environmental sustainability are the major cross-disciplinary elements that form an interplay between the drivers and attributes of PPP. Value for money (VfM), technology, and innovation, along with smart infrastructure (SI) and smart cities (SCs), are identified as the major directions for the future research agenda associated with PPP.Public-Private Partnership: A Bibliometric Analysis and Historical EvolutionpublishedVersio

Ethics of Climate Change Adaptation -The Case of Torrential Rains in Norway

This article analyses adaptation to climate induced challenges in form of torrential rains hitting urban landscapes in Norway with increased frequency. Specifically, it investigates the influence of the industry structure on ethical challenges when the climate changes. A meta-analysis of the scientific output from a major multi-disciplinary research program is carried out. In addition, the methods include use of expert opinions, literature review and document studies. Climate change adaptation challenges disciplines within civil engineering and natural sciences. Following this, established practices need alteration as specialists face new ethical challenges. Practical climate change adaptation requires the ability to overcome silo mentality among the involved disciplines. Challenges involve acknowledging responsibility, transparency, and information quality. Engineering takes place in an environment of incomplete knowledge. In addition, there is a high degree of decentralised decision-making and directives, and laws and regulations are often lagging after the experienced challenges. Consequently, individual experts experience increased ethical challenges. Systemic circumstances apprehension is necessary for reducing societal risks within climate change adaptation. Both education of engineers and cooperation between specialists from different disciplines is needed to master the altered framework conditions.publishedVersio

The emergence of lean construction in the Norwegian AEC industry

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Valg av kontraktsstrategi i bygg- og anleggsprosjekt

Both national and international literature indicate that effiency and productivity in building and construction projects can be optimized. The literature also indicate that the reasons for selections in the front-end of projects can be evaluated more thoroughly, since they have large impact on both the execution and the result of a project. The owner of a project can use front-end assessments when selecting contract strategy, since they contribute to clarify the purposes, define the framework and explain the uncertainty in the project. The contract strategy consists of selection of prequalification, selection criteria, contracting method, work descriptions, contract model, contract type, incentives and contract regulations. What contract strategy that suits a project will depend on several parameters. The main objective of the research work was to reveal how results from front-end assessments can be used to optimize selection of contract strategies for single projects. Other objectives was to evaluate which front-end assessments that influence on selection of contract strategy, what else that influences this selection and what is recommended practice for it. One objective was to find out which contract strategies public owners select in their projects. The last three objectives dealt with recommendations of which information front-end assessments should give, which methods for front-end assessments that are applicable and how such assessments can be used to optimize selection of contract strategies. The two first hypothesises formulated in advance of the research work were that public owners select contract strategy in building and construction projects on basis of former experiences and that they do not select according to recommended practice. The third hypothesis was that front-end assessments give parameters that are necessary for selection of contract strategy according to recommended practice. The empirical material is mainly gathered through literature studies, a documentation study and tape recordings from semi-structured interviews. The research approach is based on an overweight of qualitative methods, an intension to suggest actions and a deductive way of thinking. The selection of cases and respondents has mainly been strategic. Both information from front-end assessments, other project specific information and general information will influence on what contract strategy the owner should select for the project. There are two extremes as far as contract strategy is concerned. The owners can transfer all the responsibility for the uncertainty to the contractors, or they can keep it. Between these extremes there are all the other contract strategies with various combinations of instruments for selection of contractor, instruments for dividing responsibility and instruments for the process. In 20 of the 22 examined governmental projects the contract strategies had large similarities. The last two projects were pilots for a Public Private Partnership model, where selections of contract strategies were based on terms set by the Norwegian Storting. The trend was that the examined public owners selected contract strategies were they kept much of the responsibility for the uncertainty. The documentation from the 20 projects did not always verify that the selection of contract strategy was based on information from front-end assessments. However, some of the assessments gave more gainful information than the others. The reason for selection of contract strategy in three of the 22 projects were more thoroughly examined through interviews with key personnel. These interviews gave, in combination with a literature study, information on how spesific and general information about a project should influence on selection of contract strategy. The contract strategies have two extremes, where maximum responsibility and steering possibility is transferred to the contractor or kept by the owner. In Public Private Partnership projects the owner transfers the responsibility for financing and operation, but except from that there are many similarities with the contract strategy where the owner transfers a maximum of the responsibility to the contractor. The hypothesis that public owners select contract strategy on basis of former experiences is not quite right, since there are more parameters that decides these choices. Another conclusion is that the selection of contract strategy often accord with recommended practice from literature, but that does not happen in all the examined projects. The hypothesis about front-end assessments giving necessary parameters for selecting contract strategy is right, but at the same time the owner need to know more parameters than those given by the front-end assessments. During the research work five academic papers were published. This thesis is a superstructure based on empirical datas, discussions and conclusions in these papers. The papers are independent, written in English and adapted to an international reading audience. Because public owners in Norway use characteristic contract regulations, the content in this thesis will be of most interest for readers confident with the Norwegian language.Både nasjonal og internasjonal faglitteratur inneholder en erkjennelse av at produktiviteten og effektiviteten i bygg- og anleggsprosjekt har et forbedringspotensial. Videre har litteraturen en erkjennelse av at det kan være en løsning å vurdere valgene som blir gjort i tidligfasen av prosjekt grundigere, siden disse har stor påvirkning på både gjennomføringen og sluttresultatet. Byggherren kan bruke metoder for tidligfasevurderinger ved valg av kontraktstrategi, siden de blant annet kan bidra til å definere rammene, klarlegge usikkerheten og avklare målene for prosjektet. Kontraktstrategien består av valg av eventuell prekvalifisering, tildelingskriterier, kontraheringsform, ytelsesbeskrivelser, avtaleform for prosjekteringsfasen, entrepriseform, kontraktstype, insentiver og kontraktsbestemmelser. Hvilken kontraktstrategi som passer for et prosjekt vil være avhengig av flere forhold. Hovedproblemstillingen for arbeidet har vært å avklare hvordan resultatene fra tidligfasevurderinger kan benyttes til å velge de mest formålstjenlige kontraktstrategiene i hvert enkelt prosjekt. Delproblemstillingene har blant annet handlet om å vurdere hvilke tidligfasevurderinger som påvirker valg av kontraktstrategi, hva annet som påvirker dette valget og hva som er anbefalt praksis for valg kontraktstrategier. En delproblemstilling handlet om hvilke kontraktstrategier offentlige byggherrer velger for sine prosjekt. Andre delproblemstillinger handlet blant annet om å anbefale hvilken informasjon tidligfasevurderinger bør gi, hvilke metoder for tidligfasevurderinger som er praktisk anvendbare og hvordan tidligfasevurderinger kan brukes for å velge de mest formålstjenlige kontraktstrategiene. De to første hypotesene som ble formulert i forkant av forskningsarbeidet var at offentlige byggherrer velger kontraktstrategi i bygg- og anleggsprosjekt etter sedvane og at de ikke velger i samsvar med anbefalt praksis. Den tredje hypotesen var at tidligfasevurderingene gir informasjon som er nødvendig å kjenne for å kunne velge kontraktstrategi i samsvar med anbefalt praksis. Det empiriske materialet er i hovedsak hentet fra litteraturstudier, et dokumentasjonsstudium og båndopptak fra semi-strukturerte intervjuer. Tilnærmingen til problemstillingene som ligger til grunn for arbeidet bærer preg av kvalitative metoder, en intensjon om å foreslå tiltak og en overvekt av deduktiv tenkemåte. Valgene av case og intervjuobjekter har stort sett vært strategiske. I forhold til valg av kontraktstrategi så vil både informasjon fra tidligfasevurderinger, annen prosjektspesifikk informasjon og generell informasjon virke inn på hva som er mest gunstig valg. Når det gjelder hva som er mest formålstjenlig kontraktstrategi så er det to ytterpunkter. Enten kan byggherrene overføre alt ansvaret for usikkerheten og alle styringsmulighetene til leverandøren, eller så kan de beholde det. Mellom disse to ytterpunktene finnes det kontraktstrategier med ulike kombinasjoner av virkemidlene for utvelgelse, for fordeling av ansvar og for prosess. Av de 22 prosjektene som ble undersøkt i dokumentasjonsstudiet hadde 20 kontraktstrategier med store likhetstrekk. De to andre undersøkte prosjektene var pilotprosjekt for Offentlig Privat Samarbeid (OPS), og der var Stortinget pådriver for valg av kontraktstrategi. Trenden var at de undersøkte, statlige byggherrene beholdt mye av ansvaret for usikkerheten i prosjektene gjennom sine valg av kontraktstrategier. I dokumentasjonen fra de 20 prosjektene var det ikke alltid at det kom fram at informasjonen fra metodene for tidligfasevurderingene avgjorde valg av kontraktstrategi. Informasjonen fra noen av metodene var mer anvendbare enn informasjonen fra andre. Bakgrunnen for valg av kontraktstrategi i de 22 prosjektene ble undersøkt nærmere gjennom intervju med nøkkelpersoner fra tre av prosjektene. Disse intervjuene ga i kombinasjon med et litteraturstudium grunnlag for å si hvordan både den prosjektspesifikke og generelle informasjonen om et prosjekt bør påvirke valget av kontraktstrategi. Kontraktstrategiene har to ytterpunkter, der maksimalt med ansvar og styringsmuligheter enten er plassert hos leverandøren eller hos byggherren. I OPSprosjekt overfører byggherren ansvaret for finansiering og drift etter ferdigstillelse, men ellers er mye likt med kontraktstrategien der byggherren overfører maksimalt med ansvar for usikkerheten og styringsmulighetene. Hypotesen om at offentlige byggherrer velger kontraktstrategi etter sedvane stemmer ikke helt, siden det er flere forhold som avgjør disse valgene. En annen konklusjon er at valg av kontraktstrategi skjer delvis i samsvar med anbefalt praksis i litteraturen, men at det ikke skjer i alle de undersøkte prosjektene. Hypotesen om at tidligfasevurderinger gir informasjon som det er nødvendig å kjenne for å kunne velge kontraktstrategi stemmer, men samtidig må byggherren ha mer informasjon enn det tidligfasevurderingene gir. I løpet av forskningsarbeidet er det publisert fem vitenskapelige artikler. Avhandlingen er en overbygning av artiklene som sammenstiller dataene, drøftingene og konklusjonene. De fem artiklene står på egne ben, er skrevet på engelsk og er forsøkt tilpasset et internasjonalt publikum. Siden norske, offentlige byggherrer må forholde seg til særegne kontraktstandarder er nok innholdet i avhandlingen av størst interesse for lesere som behersker norsk

Competitive Dialogue in Norwegian Public Infrastructure Projects

Competitive dialogue (CD) is a relatively new procurement procedure introduced in 2004 by the European Parliament for particularly complex contracts. The Norwegian Public Roads Administration (NPRA) has limited experience with the procedure, but they are planning to use it in several future projects. Limited research was found concerning the practical issues of CD. This paper explores the experiences of Norwegian practitioners to identify such issues and suggests measures for the success of future projects using the procedure. In addition to a literature study, a document study and 22 semistructured in-depth interviews with key informants from six cases selected from the Norwegian public infrastructure projects were carried out. Both the client and the suppliers value the potential of CD. However, several challenges were identified, such as lack of practical experience with CD, ethical challenges, determining the most economically advantageous tender (MEAT) criteria, evaluation based on the MEAT criteria, and varying market interest. This paper contributes to construction engineering and management practice to increase the understanding of CD by suggesting what kinds of measures ought to be taken for the success of future projects using the procedure

Styring av statlig prosjektledelse: Empiri og økonomiske prinsipper

Rapporten tar opp utfordringer departement og etatsledelse står overfor dersom økonomiske incentiver skal inn i styringen av statlig prosjektledelse. Økonomiske incentiver påvirker innsatsen og prioriteringene hos prosjektledelsen. Hvorvidt påvirkingen er til det positive, avhenger av om belønningen knyttes opp til de relevante bidragene fra prosjektledelsen. Incentivene som etableres i etatene påvirker også hvilke prosjektledere som rekrutteres og hvilke typer prosjekter etatene er tjent med å fremme. Rapporten diskuterer mulighetene for konkurranseutsetting – eller out-sourcing av statlig prosjektledelse