Teo, P L; Bridge, A J; Gray, J and Jefferies, M C (2011) Developing a research method to test a new first-order decision making model for the procurement of public sector major infrastructure. In: Egbu, C and Lou, E C W (eds.) Proceedings of 27th Annual ARCOM Conference, 5-7 September 2011, Bristol, UK.
Abstract
Given global demand for new infrastructure, governments face substantial challenges in funding new infrastructure and simultaneously delivering Value for Money (VfM). The paper begins with an update on a key development in a new early/first-order procurement decision making model that deploys production cost/benefit theory and theories concerning transaction costs from the New Institutional Economics, in order to identify a procurement mode that is likely to deliver the best ratio of production costs and transaction costs to production benefits, and therefore deliver superior VfM relative to alternative procurement modes. In doing so, the new procurement model is also able to address the uncertainty concerning the relative merits of Public-Private Partnerships (PPP) and non-PPP procurement approaches. The main aim of the paper is to develop competition as a dependent variable/proxy for VfM and a hypothesis (overarching proposition), as well as developing a research method to test the new procurement model. Competition reflects both production costs and benefits (absolute level of competition) and transaction costs (level of realised competition) and is a key proxy for VfM. Using competition as a proxy for VfM, the overarching proposition is given as: When the actual procurement mode matches the predicted (theoretical) procurement mode (informed by the new procurement model), then actual competition is expected to match potential competition (based on actual capacity). To collect data to test this proposition, the research method that is developed in this paper combines a survey and case study approach. More specifically, data collection instruments for the surveys to collect data on actual procurement, actual competition and potential competition are outlined. Finally, plans for analysing this survey data are briefly mentioned, along with noting the planned use of analytical pattern matching in deploying the new procurement model and in order to develop the predicted (theoretical) procurement mode.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | infrastructure; procurement; research method; value |
| Index terms: | transaction cost, case study, production cost, partnership, face, institutional economics, public sector, survey, funding, decision-making, procurement decision, competition, dependent variable, value-for-money |
| Subjects: | data collection methods, economic analysis, psychology, evaluation, manufacturing engineering, statistical analysis, financial analysis, administrative law, procurement strategy, decision analysis, partnership management, market analysis |
| Topics: | Stakeholder Management, Risk Management, Procurement, Cost Management, Business Strategy, Engineering Principles, Research Practice, Organizational Design, Legal Issues, Value Management |
| Descriptive scope: | 5 PCTEA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here