Early contractor involvement approaches in public project procurement

Publication Date05 Nov 2018
DOIhttps://doi.org/10.1108/JOPP-11-2018-021
Pages355-378
AuthorPaulos Abebe Wondimu,Ali Hosseini,Jadar Lohne,Ola Laedre
SubjectPublic policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public finance/economics,Taxation/public revenue
Early contractor involvement
approaches in public
project procurement
Paulos Abebe Wondimu,Ali Hosseini,Jadar Lohne and Ola Laedre
Norwegian University of Science and Technology, Trondheim, Norway
Abstract
Purpose Early contractor involvement (ECI) faces many barriers when it is implemented in public
procurement, given that it is different from traditional business practices. Primarily, public owners face a
major challenge, as theyshould treat all bidders equally. The purpose of this paper is to explore suitableECI
approachesthat public owners could use.
Design/methodology/approach In addition to a literature and document study, 14 semi-structured in-
depth interviews with key personnel from 11 cases selected from Norwegian public bridge projects were carried out.
Findings In all, 23 unique approachesof ECI were identied during this research (16from literature and 7
new from case projects). The ndingsprovide a new direction to ECI through introducing new approaches of
ECI from the caseprojects.
Originality/value This paper for the rsttime presents several alternatives ofECI approaches for public
owners with the intention of illustrating ECI is actually possible in the public project procurement.
Furthermore, it presents for the rst time success factors of ECI with the intention of increasing the
understandingof ECI concept from a public procurement perspective.
Keywords Public procurement, Early contractor involvement
Paper type Research paper
1. Introduction
Public owners have the objective to realize projects in a timely and cost-effective manner, but
they are increasingly facing complex projects. For example, the Norwegian Public Roads
Administration (NPRA) is currently planning a mega project, E39 Coastal Highway Route,
alongthewestcoastofNorway.Oneofthemainambitions of this project is to make the E39
ferry free. Eight long and deep fjords need to be crossed by bridges and tunnels. Most of them
will be crossed by bridges of unprecedented complexity. The project is estimated at a cost of
approximately US$40bn (NTP, 2016). NPRA needs innovative soltuions for this project. How to
procure contractors for these complex bridge projects to obtain innovative solutions and how
to use their knowledge and experience to make the project time and cost-effective is
challenging for the NPRA. In response to this challenge, early contractor involvement (ECI) has
been identied as one of the solutions proposed by an NPRA group of experts (Vegvesen, 2012).
In the literature, it is widely accepted that contractors have better construction
knowledge and experience than the client and the designer (Song et al.,2009;Walker and
Lloyd-Walker, 2012). Traditional project delivery methods (for example, design-bid-build
[DBB] with unit price contracting, open bidding and owner quality control) facilitate
transparent checks and balances. One shortcoming of the traditional methods is that
contractors who are going to carry out the projects are not involved in developingthem.
However, the growth of increasingly more complex projects demandsalternative (evolving)
project delivery methods to ensure appropriate project delivery, contract compliance, and
Public project
procurement
355
Journalof Public Procurement
Vol.18 No. 4, 2018
pp. 355-378
© Emerald Publishing Limited
1535-0118
DOI 10.1108/JOPP-11-2018-021
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1535-0118.htm
quality assurance (Molenaar et al., 2007). One of the evolving approaches is ECI
(Lahdenperä, 2016;Molenaaret al.,2007).
The main ambition of ECI is typically understoodto be bringing construction knowledge
and experience into the pre-construction phases of projects. Of particular interest is the
improvement in value for money and project delivery time in comparison to traditional
project delivery methods(Scheepbouwer and Humphries, 2011).
The integration of constructionknowledge and experience is most benecial in the early
phases of the project (Lahdenperä, 2013). These phases are usuallycharacterized by having
the largest potential to inuence the design withminimum impact on cost (Kristensen et al.,
2015;Rekonen and Björklund, 2016). Research identies that the construction industry has
had positive experiencesfrom practicing ECI (Lahdenperä, 2013;Naoum and Egbu, 2016).
Even if ECI has several advantages, it faces many barriers to implementation. These
barriers mainly arise from the fact that the practice involved differs from traditional
business practices (Song et al., 2009;Lahdenperä, 2013). Of particular importance are the
formal barriers such as international and national legislation to the implementation of
ECI (Kolman, 2014). Predominantly, public owners face a major challenge if they want to
implement ECI as the contractor selection methods involved typically defy established
standards (Lahdenperä, 2013). For instance,it is demanding for European public owners to
involve the contractor before the project is described in detail as EU public procurement
directives oblige owners to usecompetitive and transparent team selection procedures.It is
difcult to use competitive and transparent team selection procedures before the project
is detailed. Furthermore, they are obliged to use both price and quality as selection criteria
during the early team selection. However,in an early phase of a project, it is challenging to
use price as one of the selection criteria due to various uncertainties (Lahdenperä, 2013;
European Parliament,2004;European Parliament, 2014).
Norwegian public owners are obliged to follow international agreements throughout
national public procurement regulations. This includes the World Trade Organization
(WTO) and European Economic Area (EEA) agreements (Lædre, 2006). The main purpose
of these agreements is to achieve the equal treatment of all bidders by obliging public
owners to specify clearly whatprocurement procedures they intend to use before starting to
procure (Lædre, 2006;Schnitzer, 2010). However, these agreements create additional
challenges for publicowners considering ECI (Lahdenperä, 2013).
The few sources identied from within the EU context have documented how public
owners implement ECI in their projects and faced the existing (mainly legal) barriers.
Likewise, many authors have not discussed the success factors of ECI with the intention of
increasing the understanding of the ECI conceptfrom a public procurement perspective. By
using a multiple-casestudy approach, this paper addresses the knowledgegaps.
The research questionsaddressed are:
RQ1. What do public ownersdo to implement ECI?
RQ2. What are the successfactors for ECI?
RQ3. How could the implementedECI approaches be improved in practice?
The rst research question is addressed through a literature review and empirical research
in 11 Norwegian bridge projects. The second research question is addressed through
empirical research into these bridge projects. The third research question is addressed by
analyzing the ndings from the rst and secondresearch questions.
JOPP
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