Showing papers on "Procurement published in 1997"

Purchasing and Supply Chain Management

Abstract: SECTION ONE: UNDERSTANDING THE PROCUREMENT AND SOURCING PROCESS. Introduction to Purchasing. The Purchasing Process. Purchasing Organization. Purchasing Policy and Procedures. Purchasing as a Boundary Spanning Function. SECTION TWO: STRATEGIC SUPPLY MANAGEMENT. Procurement and Sourcing Strategy Development. Insourcing/Outsourcing. Supplier Evaluation and Selection. Supplier Quality Management. Supplier Management and Development. Global Sourcing. SECTION THREE: APPROACHES FOR MANAGING THE PROCUREMENT AND SOURCING PROCESS. Purchasing Tools and Techniques. Cost/Price Analysis. Negotiation. Managing Contracts. SECTION FOUR: ACTIVITIES THAT SUPPORT THE PROCUREMENT AND SOURCING PROCESS. Legal Issues and Purchasing Contracts. Inventory Management for Purchasers. Purchasing and Transportation. Purchasing Information Systems. Performance Measurement and Evaluation. SECTION FIVE: FUTURE DIRECTIONS. Future Trends: Purchasing and Sourcing Strategy.

Power distribution planning: a review of models and issues

Abstract: Power distribution planning is a complex task in which planners must ensure that there is adequate substation capacity (transformer capacity) and feeder capacity (distribution capacity) to meet the load demands. Decisions such as allocation of power flow, installation of feeders and substations, and procurement of transformers are costly ones which must be evaluated carefully. This paper provides a review of research problems as well as models related to the planning of substations and/or distribution feeders. Following a general discussion, we review existing research work under two major groups: planning under normal conditions, and planning for emergency. A discussion on relevant research opportunities is included.

Project characteristics for successful public-sector design-build

Abstract: The use of design-build project procurement is rapidly increasing in the public sector. Documented design-build success and imminent changes in federal procurement law are indicators of continued large-scale growth in the public sector. Rapid growth, combined with a lack of long-term experience among many public agencies, necessitates continued investigation of the underlying principles of design-build. Understanding which project characteristics are critical for success is fundamental for improved public agency implementation. To this end, a comprehensive research study was conducted on public-sector selection of design-build. This paper discusses results from a survey of 88 public-sector design-build personnel and structured interviews of federal agency representatives. Five primary project characteristics are discussed: well-defined scope, shared understanding of scope, owner construction sophistication, adequate owner staffing, and established budget. These suggest selection of design-build as an appropriate delivery strategy for successful project completion. Additionally, this paper addresses public-sector criteria of success; these include: staying on budget, conforming to user's expectations, and staying on schedule.

Is it time to abandon brain death

Abstract: Despite its familiarity and widespread acceptance, the concept of "brain death" remains incoherent in theory and confused in practice. Moreover, the only purpose served by the concept is to facilitate the procurement of transplantable organs. By abandoning the concept of brain death and adopting different criteria for organ procurement, we may be able to increase both the supply of transplantable organs and clarity in our understanding of death.

Information Management in Incentive Problems

Abstract: We extend the standard procurement model to examine how an agent is optimally induced to acquire valuable planning information before he choose an unobservable level of cost‐reducing effort. Concer...

Concurrent engineering in design-build projects

Abstract: The design and build procurement route has witnessed significant growth in the UK construction industry over the last ten years. It is now being used for both private and public sector projects of varying complexity. There are several advantages associated with this method of construction procurement including shortening of lead times, involvement of the contractor in the design process, greater price certainty, improved communication and reduced construction time amongst others. Conversely, there are also a number of disadvantages ascribed to the design and build method of procurement. Some of these include reduced design quality, inhibition of changes by clients, and high tendering costs. A new process model is proposed to address many of the procurement route's present shortcomings. In particular, the model facilitates concurrent project development in the design and build process through the integration of all project participants into a multi-functional matrix team capable of resolving potential ‘dow...

Managing drug supply : the selection, procurement, distribution, and use of pharmaceuticals

Abstract: This edition includes 48 chapters written by authors from around the world. The book provides a complete overview as well as step-by-step approaches on managing pharmaceutical systems in developing countries. It contains substantially revised sections on selection, procurement, distribution, and use in addition to new or considerably expanded sections on pharmaceutical policy, financing, organization, MIS, and human resources management.

Explaining the formation of business-environmentalist collaborations: Collaborative windows and the Paper Task Force

Abstract: Building on the agenda setting theory of Kingdon (1984), this paper develops a collaboration forming model to explain the creation of multi-party initiatives as an addition to Gray's (1985 and 1989) explanation for collaborations as a response to environmental turbulence, crisis, or complexity. It tests this model by examining the Paper Task Force, a collaboration of five multi-national companies, an environmental group, and a university intended to determine environmentally sound guidelines for paper procurement. The study finds that multi-stakeholder collaborations can require ‘collaborative windows’ for their formation. These windows occur when four process streams – problem, policy, organizational, and social/political/economic – converge. In the case of the Paper Task Force, the problem stream was an increasing recognition of the environmental burdens throughout the lifecycle of paper production. The policy stream included new governmental initiatives to make paper-making processes cleaner and use paper with more recycled content. The organizational stream consisted of an increasing willingness among corporations to improve their environmental performance combined with their development of paper making technology with lower environmental impacts. The social/political/economic stream included strong public support for the environment in the United States and demand for chlorine free paper in Europe. A collaborative entrepreneur, the Environmental Defense Fund, working with the other Task Force members, was able to join solutions to problems. Implications for other collaborative ventures are developed.

The economics of asymmetric information

Abstract: Preface - Introduction - PART 1: INVESTMENT FINANCE AND ASYMMETRIC INFORMATION - Asymmetric Information in the Market for Investment Finance - Investment Finance and the Selection Problem - Investment Finance and the Hidden Action Problem - Investment Finance and the Costly State Verification Problem - PART 2: ASYMMETRIC INFORMATION PROBLEMS IN THE INSURANCE MARKET - Insurance and Risk Aversion - Insurance and the Hidden Action Problem - Insurance and the Selection Problem - PART 3: THE LABOUR MARKET: EDUCATION, SIGNALLING, SCREENING AND EFFICIENCY WAGES - The Selection Problem and Education - The Hidden Action Problem and Efficiency Wages - PART 4: REGULATION, PUBLIC PROCUREMENT AND AUCTIONS - Regulation and Procurement - Auctions

Contracting Out and Accountability

Abstract: Governments are increasingly moving to contract out the provision of public services which have previously been delivered by public service departments Contracting out typically implies provision by private sector contractors However, it may also include in-house provision by public service departments or other public agencies where the right to provide is won through competitive tendering and is governed by contract At the Commonwealth level, the trend has been given added impetus by the Coalition government elected in 1996 (Reith J 996; National Commission of Audit 1996) The main rationale for contracting out is to improve efficiency in service provision by harnessing the virtues of competition, in particular the superior productivity engendered among competitive providers (Industry Commission (IC) 1996, B34; Appendix E) At the same time, there is a legitimate expectation that providers of public services paid for by public funds will be publicly accountable (IC 1996, BI) However, contracting out has the potential to reduce the extent of public accountability by transferring the provision of public services to members of the private sector who are generally not subject to the same accountability requirements as public officials Indeed, reduction in such accountability requirements may be one of the reasons for the greater efficiency of the private sector

Risk analysis for revenue dependent infrastructure projects

Abstract: Recent trends in the construction industry indicate continued use of alternative procurement methods such as design-build, construction management, build-operate-transfer, and privatization. Increased use of these evolving methods produces higher levels of uncertainty with respect to long term performance and profitability. The uncertainties inherent in implementing new procurement methods necessitate investigation of enhanced methods of pre-project planning and analysis. This is particularly true for revenue dependent privatization projects such as toll roads. Poor initial performance of toll road projects suggests traditional methods of project analysis are inadequate. Sustaining investor and stakeholder support of privatized revenue dependent projects is dependent upon successful financial performance. Enhanced risk analysis tools provide improved information for pre-project decision making and performance outcome. One such risk analysis method is the Monte Carlo. Monte Carlo methods are especially use...

The Effects of Military Spending on Economic Activity: Evidence from State Procurement Spending

Abstract: The authors use state data from the period 1963-94 to estimate the response of employment growth to military procurement spending. The state-year panel provides greater variation in both variables than aggregate data. There are two main findings. First, military procurement spending does explain a statistically significant degree of the variation in employment growth across states, even in the presence of fixed effects for time and state and other controls. Second, the authors find evidence in support of a nonlinear relationship between procurement spending and employment growth. In particular, large adverse state procurement shocks have proportionately larger effects on state employment growth rates. Copyright 1997 by Ohio State University Press.

Best-value contracting criteria

Abstract: Federal government constmc­ tion contracting in the US his­ torically has focused on avvard­ ing contracts to the lowest responsive, responsible bidder [7]. This assumes that by carefully crafting a com­ plete, unambiguous set of project plans and specifications, price becomes the sole competiti,·e factor [2]. More subtly, this approach assumes that onlv construction costs matter. A government need not con­ sider procurement, project management, lost opportunity, or similar costs. Best-\·alue procurements focus on selecting the contractor with the offer most advantageous to the government, when price and other factors arc considered. These other factors include technical and managerial merit, financial health, and past performance [8]. Best-value procurements allow government contracting agencies to evaluate offers on the basis of total procure­ ment costs, construction quality issues, completion elates, additional features, and technical irmm·ations. More importantly, best-value procurements force the earlv development of detailed project and pro­ curement plans and create solicitations that contain accurate source-selection criteria. This combination of early planning and quality-based contracting yields significant benefits in construction timeliness, cost containment, and customer satisfaction. requirements, translates them into design criteria, solicits architect-engineering firm proposals, and selects the design firm (normally making the selection based on quality rather than price). The design firm prepares comprehensive, detailed plans and specifications that outline not only what to build but how to build it. ;\contracting specialist next attempts to turn the design package into an unam­ biguous solicitation package that results in a contract to constmct a facility meet­ ing the customer's requirements. These documents, after exhaustive review by several agencies, theoretically outline the government's complete requirements in terms of features, quality, and timeliness. Ideally, construction cost remains the sole factor used to determine the successful offeror. Constmction contractors develop detailed bids and carefully review each detail in the solicitation to calculate the minimum cost proposal. Selection of the low bidder theoretically selects the con­ tractor with the most innovative, cost­ cffecti\·e solution to the problem. A low bid also could indicate a quality contrac­ tor with excess capacity or one already mobilized in the area. In anv event, a low­ bid award docs exactly what the name implies: it selects the contractor who promises to construct the facility at the lowest construction cost [1]. This ap­ proach has several obvious advantages:

Buying Green: Government Procurement as an Instrument of Environmental Policy

Abstract: Governments often favor environmentally superior products in procurement, even if Abstract they cost more than alternatives. This article analyzes the effects of such green procurement policies. If marginal production costs are increasing, private market responses counteract changes in government purchasing (crowding out), thus reduc ing policy effectiveness. If significant scale economies exist, however, then private responses may reinforce changes in procurement. Procurement policies change both the market shares of brown and green products and total production. Whereas the changes in market share usually reduce environmental costs, the changes in total production can go either way. As a result, there are circumstances in which green procurement policies increase environmental costs.

The Australian Government's Industry Commission Examines Competitive Tendering and Contracting by Public Sector Agencies

Abstract: llTplth a vigorous debate emerging U/ on when and how competitive VY tendering and contracting should be used by the public sector, the Australian government asked its Industry Commission to examine these issues. The commission is the government's independent adviser on macroeconomic reform with a charter to take an economywide view. After a year-long public inquiry, the commission made 25 specific recommendations on how governments can make the best use of competitive tendering and contracting (CTC).On the first issue, when to use CTC, the debate largely revolves around the following: * Whether the formal separation between service specification and delivery enhances the achievement of policy goals; * Whether introducing competition among providers leads to more efficient and effective provision of services. The commission concluded that there are no simple answers to these questions. The suitability of a service for CTC will depend on the nature of the service, the circumstances of the responsible agency, and the potential market of nongovernment providers. However, the commission could see no rationale for declaring across government that some services were out of bounds for CTC, often described as core functions, and others were always suitable or noncore. Much of the debate on when, or indeed whether to use CTC has focused on its cost-effectiveness. Key issues are: * Can CTC provide cost savings that are maintained in the long term? * Are any cost savings the result of unintended reductions in quality? * Do savings largely represent efficiency gains or are they simply transfers from one group to another? After examining the Australian and international evidence, the commission concluded that CTC generally reduces costs, although there are instances where costs have increased. The commission also found that quality has improved under CTC in many cases, and declined in others, but there is no systemic reason to expect a decline in quality when CTC is done well. A full evaluation of CTC needs to take into account how the effects feed through the economy. The magnitude of the economywide effects of contracting depends on several factors. General equilibrium modelling by the commission suggests that for Australia the long-term gains might be in the range of 0.3 to 1.7 percent of GDP a year.

Empowering the Purchasing Function: Moving to Team Decisions

Abstract: INTRODUCTION The 1990s have been witness to many new trends in organizations, particularly with regard to people and quality. Organizations have sought to become more efficient by reducing staff through layoffs and early retirements, shedding peripheral businesses, and outsourcing activities previously performed internally. The remaining work has been accomplished with fewer people while product/service quality has been maintained or increased. Employee reductions have particularly affected middle-level managers and created flatter organizations. In such environments people are given more responsibility and increasingly expected to work in teams. These changes have also significantly affected the purchasing function by requiring the adoption of team approaches to doing business. Examples of these team approaches include both Early Supplier Involvement (ESI) in design and commodity sourcing teams. The primary drivers of the team approach are the pace of change and the need to enhance quality. Team performance varies greatly in organizations. In many cases teams act as surrogates for traditional individual decision making and are merely a collection of individuals who view team decision making as a hindrance. Meanwhile, in other organizations teams have become primary instigators of change. Competition is drastically changing the way effective purchasing departments conduct business. In today's environment, firms require expertise, flexibility, speed and low cost - maintaining the status quo means losing ground to the competition. Additionally, rapid and frequent change may result in confusion about purchasing department goals and how to best attain them. The result of this confusion is often a lot of action that leads nowhere. To accommodate this need to react effectively, some organizations have designed new organizational structures. For example many companies have formed a sourcing council consisting of representatives from many functions, to ensure that all major procurements of products and services are handled on a competitive basis while considering important inputs from key functions and users.[1] Purchasing is a critical link in the entire value-added process, having both internal and external customers. Internal customers include engineering, maintenance, marketing, and other users; external customers include all the suppliers from which the firm buys its goods and services. Purchasing's placement in the process makes it an ideal candidate for using empowered teams in contributing to overall organizational effectiveness. Empowerment is a philosophy congruent with the goals of Total Quality Management (TQM) and continuous improvement. TQM principles require total employee involvement in order to meet or exceed customer needs and expectations. The TQM process extends from development of goods and services to serving the customer after the sale. Purchasing is expected to continually assess and improve quality through the use of statistical and process improvement techniques.[2] To achieve these results, the TQM environment fosters employee empowerment. Part of empowerment is maintaining one's positive self-esteem and connectedness to others and to the organization. One of the methods used by organizations to reinforce connection is the use of teams. As a result, this research, while focused on empowerment, also addresses issues of teaming, TQM, and continuous improvement. THE EMPOWERMENT PROCESS Empowerment means to enable, to allow, or to permit, and can be either self-initiated or initiated by others.[3] It is a method for creating and redistributing power.[4] In the traditional sense, power is one's ability to control or change another's behavior. Empowerment occurs when power goes to the employees, who then experience a sense of ownership and control over their jobs.[5] The empowerment process starts with a self-assessment by participants of their own relative position regarding empowerment. …

Bidding strategies for conventional and trenchless technologies considering social costs

Abstract: With recent rapid advances in trenchless technologies, acceptance of such methods for inspection, repair, upgrade, and installation of underground infrastructure systems has been increasing. Trenchless technology has greatly reduced the footprint of the construction site and the need for much of the trenching that is normally associated with underground construction. The reduction of the construction footprint and the amount of trenching has greatly impacted a class of costs called social costs. Social costs can be considered the costs of a construction project which are not carried in the construction bid such as traffic delays, reinstatement of public and private property, and public perception. Social costs are not clearly defined, nor is their estimation straightforward. What is the actual cost for replacing a lawn damaged through trenching or the political cost for closing a main thoroughfare close to an election? Inclusion of social costs with project costs can greatly impact the normal tendering process. Inclusion of social costs allows the municipality to estimate the true costs of the project and therefore identify the most economically efficient bid based on minimizing the total cost. From the taxpayers point of view the inclusion of at least a subset of the social costs in the selection process is desirable. However, from the point of view of a competitive bidder, inclusion of costs not under their control (social costs) in the selection process makes the determination of the optimal bid difficult for a contractor. This paper discusses traditional bidding strategies in which the bidder can optimize the bid based on a probabilistic approach using the expected-value approach to bidding under the assumption that the low-bid method is used. This paper also puts forward two methods for the estimation of social costs which can be used in conjunction with the bidding methodology discused. A worked example demonstrates the application of one of the estimation methods and the bidding methodology.(A)

EC public procurement law

Abstract: Foreword 1. Introduction 2. The Development of Public Procurement Framework 3. The Principles of Public Procurement Regulation 4. Public Sector Procurement 5. Advertisement and Publicity in Public Sector Procurement 6. Qualitative Selection in Public Sector Procurement 7. Public Contracts in Public Sector Procurement 8. Contracting Authorities in Public Sector Procurement 9. Award Procedures in Public Sector Procurement 10. Award Criteria in Public Sector Procurement 11. Utilities Procurement 12. Publicity and Advertisement in Utilities Procurement 13. Qualification and Qualitative Selection in Utilities Procurement 14. Award Procedures and Award Criteria in Utilities Procurement 15. Compliance with Public Procurement Rules 16. Enforcement of Public Procurement Rules 17. Public Procurement as a Policy Instrument Index.

Public purchasing in the European Union: some evidence from contract awards

Abstract: Explains that the public sector is a major buyer of goods and services. In the mid‐1980s discriminatory (buy national) public purchasing was identified as one of the barriers to the completion of the Single European Market. Studies suggested that a more liberal public purchasing regime would bring significant economic benefits with increased competition for contracts reducing public sector procurement costs and facilitating the creation of a more competitive European industrial base. These ideas led to a series of European Union procurement directives designed to prohibit preferential public purchasing. Uses data on contract awards from 1993 to investigate the extent to which public purchasing still discriminates in favour of domestic firms. This evidence casts doubts on the true extent of openness in EU public procurement markets.

Latham as half‐way house: a relational competence approach to better practice in construction procurement

Abstract: This paper is based on research being undertaken by the Centre for Strategic Procurement Management (funded by BAA) considering best practice in construction procurement. The primary aim of the study is to establish how supply chains in construction may be managed more efficiently and effectively. This involves the amalgamation of conventional views on industry problems and initiatives for improvement, the theoretical and empirical consideration of supply chain optimisation, the identification of ‘best practices’ in the procurement process, and the development of suitable change management strategies to allow organizations to move towards better practice. This paper discusses the limitations behind the current thinking for reforming the UK construction industry, and how Latham's ‘team’ approach will not succeed where clients adopt a ‘traditional’ approach to procuring their construction needs. There is a need to differentiate between ‘process’ and ‘commodity’ spend in construction. It is argued that the benefits of a collaborative approach can only be realized by those clients managing ‘fit‐for‐purpose’ supply relationships to satisfy their regular process requirements. An approach known as relational competence analysis is suggested as a methodology for helping clients to determine what is ‘fit for their purpose.

Competition as a means of procuring public services: Lessons for the UK from the US experience

Abstract: Competition is now widely used as the means of choosing the providers of essential public services in the USA and the UK. Many different approaches are found in the USA and there are useful lessons for the UK. With particular reference to mental health and substance abuse services, describes the effects of using competitive tendering on users, providers, purchasers and citizens and examines the problems of specification, transaction costs, the use of consultants, supply, the level playing field, trust, innovation, local accessibility and accountability. Ends with discussion of co‐operation and collaboration and the emergence of monopolies and integrated delivery systems in the USA and concludes by finding politics and political decision making of overriding importance.

Information Technology Outsourcing by State Governments in Australia

Abstract: Outsourcing of IT services is being undertaken at a rapid rate within the public sector in Australia. This paper investigates the adoption of this practice by a sample of state government enterprises and departments from South Australia, Victoria and New South Wales which have tendered long-term IT outsourcing contracts. The motivation, decision-making process and extent of outsourcing are examined in further detail. In addition, the tendering process, contract and risk management are investigated to determine whether consideration has been given to the full economic costs involved in entering into longer term contracts.