Despite Best Value Procurement having huge successes all over the world, organizations find it hard to sustain such an environment. Many companies revert back to the traditional way of doing business. How can a best value environment be sustainable? This question can only be answered by those with experience in a supporting a continual effort. One of the biggest continuing efforts is in the Netherlands.
The History of Best Value
In 2010 Best Value Procurement (BVP) was used as the procurement method for the $1B Rijkswaterstaat “fast track” projects. The results were that procurement costs were reduced by 50% construction time reduced by 25% and 90% of all cost and time deviations were caused by the owner. Best Value Procurement became a “buzzword” in the Dutch procurement and the following results were documented:
- Various authors have published numerous Best Value books in the Europe.
- The number of Dutch attendees at the Annual Best Value Certification Conference in Tempe, Arizona, has tripled over the last five years.
- Even NEVI, the Dutch professional procurement group, licensed the Best Value (BV) Performance Information Procurement System (PIPS) technology from Arizona State University (ASU) and started educating and certifying procurement personnel and consultants.
Changes to Become Sustainable
Although Best Value in The Netherlands has progressed, they would still need to change from using Best Value Procurement (Procurement Tool) to the Best Value Approach (Procurement Approach). They would need to change the following:
- The culture of consensus, trust and assumption
- Minimize the decision making of the procurement personnel.
- Create accountability for a procured service until final delivery.
- Change the “silo-based” organization to a transparent, efficient and effective supply chain.
- Change the project management model from MDC to utilization of expertise.
- Use performance metrics
The University Buy in
Hanze University of Applied Sciences (Hanze UAS) was first introduced to the Best Value in 2011 with Antoinette Bos as one of the visionaries. One of the first projects at Hanze UAS was a multi-functional printing service, which showed positive results of Less than 1% deviation in costs for a 1.4M Euro contract, 0% deviation to schedule (includes implementation), and performance metrics on quality.
Lessons from Experience
Due to this success, Hanze UAS utilized Best Value Procurement on a IT project procuring an integrated telephone services. They viewed Best Value as more of procurement tool, than an approach to procurement. The ran the selection phase. It ended up that Vendor A was the high prioritized vendor and he moved on to the clarification period. During this time, the vendor showed multiple indicators that they could not perform all the requirements of the clarification phase. Despite the vendor’s inability to fulfill all the clarification phase deliverables the client made the decision to proceed trusting in the vendor’s expertise. Hanze UAS received a flood of complains, and low satisfaction ratings from their users and employees. Vendor A was dismissed as the expert and used only to support the job.
Since this point in time, Hanze UAS has switched from using best value as a procurement tool to using it as an approach. Hanze UAS has now done 7 outsourced projects that have resulted of 12.3M Euros with a 1.51% cost deviation, 1.05% schedule deviation, and high performance marks. They have learned to truly adopt the Best Value Approach.
The Best Value (BV) effort in the Netherlands has changed from a BV procurement system to a BV approach to delivering services. This has required changes in the dutch culture and mind set.
The case study is one of the few that show the evolution of the BV PIPS delivery system in the Netherlands. It shows that paradigm shifts take time, regardless of how simple the process may seem. It also shows how huge a change the BV PIPS approach makes in the delivery of services.