An integrated model for supplier selection in the public procurement sector of defence
| Author | Christodoulos Nikou,Ioannis Filiopoulos,Socrates J. Moschuris |
| Date | 01 March 2017 |
| DOI | 10.1177/0020852316634446 |
| Published date | 01 March 2017 |
| Subject Matter | Articles |
International Review of
Administrative Sciences
2017, Vol. 83(1S) 78–98
!The Author(s) 2016
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DOI: 10.1177/0020852316634446
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International
Review of
Administrative
Sciences
Article
An integrated model for
supplier selection in the public
procurement sector of defence
Christodoulos Nikou
University of Piraeus, Greece
Socrates J. Moschuris
University of Piraeus, Greece
Ioannis Filiopoulos
National Technical University of Athens, Greece
Abstract
Public procurement in defence includes the supplier selection issue. The purpose of this
article is to suggest a model that combines Analytic Hierarchy Process with Voronoi
Diagrams/Thiessen Polygons and Reilly’s law in order to propose away to effectively use
European Directive 2009/81/article 23. It also endeavours to expand the model by
providing tools that increase its applicability, as well as providing a flexible and cost-
effective tool for supplier selection to public procurement managers, allowing quick
decision-making. It is also applicable in the correspondent private sector.
Points for practitioners
The model attempts to enrich supplier selection methods in the public procurement of
defence. Its analysis may assist in: assessing potential suppliers more objectively, using a
combination of well-established tools; presenting results to management that may
reduce budgetary planning and avoid supply disruptions; enhancing the spirit of cooper-
ation among departments of an organization/agency. It allows the joining of mathematics
with experience and an important aspect of the legal frame in the public procurement of
defence. Practitioners may also conclude that it is expandable to other sectors due to
its flexibility.
Keywords
Analytic Hierarchy Process, public procurement, Reilly’s law, security of supply, Thiessen
Polygons, Voronoi Diagrams
Corresponding author:
Christodoulos Nikou, Department of Industrial Management and Technology, University of Piraeus, 80 Karaoli
and Dimitriou Street, 18534, Piraeus, Greece.
Email: chrisnikou@gmail.com; cnikou@unipi.gr
Introduction
Public procurement in defence, otherwise called military logistics, presents interest
for the security of a country (logistics also have a military context; see Webster’s,
1993). It is an important financial aspect of a Ministry of Defence (MoD) function
since the money spent for that purpose is usually a significant part of its budget.
Several data support this. For example, the combined defence budgets of the
European Union (EU) add up to E180 billion (Institute for Security Studies,
2005). Additionally, in 2011–12, the largest spender in the total procurement
expenditure of the UK central government was the MoD, reaching an amount
of £20.1 billion (UK National Audit Office, 2013). Furthermore, in 2009, contract
obligations for the US MoD included $330 billion for defence-related supplies and
services (Apte et al., 2011). This financial significance, the ascertainment that
attracting a great number of potential suppliers in public procurement in order
to maximize reliable competitiveness is a common strategy (Laios, 2010), the
importance of fiscal transparency in the smooth functioning of public procurement
(Berkay and U
¨stu
¨ner, 2015; Herald, 2012) and the fact that handling the supplier
agenda is a part of military leadership (Wong et al., 2003) lead to the conclusion
that selecting an efficient supplier constitutes a major precondition for an MoD’s
stable functioning.
Defence procurement in the EU is governed by European Directive (ED) 2009/
81,
1
which established the legislative framework for the procurement of defence-
and security-related articles and provided the path for the establishment of a
European defence equipment market. Nevertheless, defensive equipment remains
one of the main concerns for each EU member state because of its importance to
their sovereignty, and purchasing procedures in this sector are naturally distin-
guished by the importance of their efficient ends, achieving high levels of
Security of Supply (SoS). SoS focused on Critical Application Items (CAI), con-
stitutes the triggering issue for the construction of this integrated supplier selection
model. SoS is a term introduced by article 23 of ED 2009/81. SoS introduces each
country’s ability to specify the characteristics of procurement in defence so that it
works in favour of their interests. It may imply a variety of requirements designed
in favour of each nation’s specific interests, including, for example, the provision of
critical services and maintenance to ensure support for purchased equipment
throughout its life-cycle (ED 2009/81). CAI refers to the essential items for a
weapon system’s performance or operation, or the operating personnel (USA
DoD, 2006). Consequently, after citing a short analysis of the aforementioned
terms, it may be concluded that a public procurement case, under the characteris-
tics of those terms, will need a solid, thus mathematically and experience-based,
supplier selection procedure since its outcome may affect sensitive sectors in
defence (i.e. the safety of personnel).
The objective of this article is to suggest a way to effectively use article 23 of ED
2009/81 by combining an Analytic Hierarchy Process (AHP) and Voronoi Diagrams
(VD) within the frame of a supplier selection procedure for CAIs and the specificities
of the armed forces (i.e. sensitive equipment, quick decision-making, etc.). The main
Nikou et al. 79
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