Does a price-driven Procurement Process Drive the Best Value?

How many infrastructure projects deliver all the benefits they could have done? Are the immediate and wider audience of customers, users and other stakeholders always satisfied with the outcomes of road and rail projects and with how they were delivered?

There’s probably no need for a detailed answer to any of those questions. We know that the sector has a long way to go to deliver the level of performance and outcomes that our road and rail infrastructure needs.

The question is, why? Are contractors not delivering what is being requested through ITTs? Or are ITTs and procurement focused too much on outputs and not enough on behaviours?

What Sort of Contractors do we Want?

Commissioning bodies want contractors that are easy to work with. They want efficient and open communications, attentive customer service and a trouble-free process. How often do they get it?

Maybe the problem is that these behavioural factors never get sufficient weighting when price dominates how project commissioners evaluate bids. The same argument could be made when projects are evaluated after delivery; the experience of working together should be something that is formally assessed.

The old adage that you get what you pay for may or may not be 100% true. What is unquestionable is that you frequently get what you asked for. A procurement process that leans towards price rather than value will tend to result in project delivery that leans towards… well, you know the rest.

If customers value responsiveness, innovation and transparency then these expectations need to be set in the procurement process. If you make it mainly about price, then it will be mainly about price.

Not everything can be specified as an output, particularly the culture and behaviours of a contractor and its supply chain. But positive behaviours should be recognised and rewarded. Unless we can migrate to procurement processes that value openness, teamwork, adaptability and shared goals, we can’t expect to move far from where we are, which is certainly not where the economy and the end users need us to be.

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