Lahdenperä, P (2012) How to proportion capability and fee percentage for team comparison in competitive early involvement. In: Smith, S D (ed.) Proceedings of 28th Annual ARCOM Conference, 3-5 September 2012, Edinburgh, UK.
Abstract
Early involvement of the construction team is increasingly utilized in challenging projects to incorporate versatile expertise in their planning. For public owners this is a challenge since they are obliged to use competitive, transparent team selection based on the 'most economically advantageous criterion' which ensures that both price and quality viewpoints are taken into account. In the case of early involvement, the price component naturally does not include the total price, but may consist only of the fees of competing service providers. This study examines such a selection situation and seeks to find a way to integrate the fee component in a multi-criteria selection system and determine reasonable fees for different levels of capabilities. The study builds on the productivity difference between different competences, derived from a survey of practitioners, and determines an indifference curve arithmetically for the planning of a selection method. The influence of the owner’s risk attitude and risk premiums are also taken into account based on the pricing methods of the theory of finance.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | alliancing; early involvement; contractor selection; partnering; procurement |
| Index terms: | practitioner, competence, pricing, contractor selection, partnering, risk attitude, alliancing, risk premium, public owner, survey, selection method, construction team, productivity, owner |
| Subjects: | data collection methods, practitioner, project delivery, economic analysis, contractual arrangements, decision-making and reasoning, tendering, management, personnel development, sociology, partnership management |
| Topics: | Human Resources, Research Practice, Project Management, Business Strategy, Procurement, Stakeholder Management, Roles and Professions |
| Descriptive scope: | 3 PCE |
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