In the world of procurement, failure is a consistently used word. Governments and large organizations struggle to find an efficient way to procure services for a reasonable price. In the Netherlands, experts found a solution to remedy the government’s failure in procurement. The solution was the Best Value Approach or Best Value Procurement. In 2010, the first significant test of the BV Approach was done by the Rijkswaterstaat to deliver the $1B fast track infrastructure projects, and by 2015, the BV Approach had become the “buzzword” of procurement and the professional procurement organization NEVI.
However, in the delivery of professional engineering services, larger, more traditional services which were built on a system of relationships between clients and vendors, clients controlling the expert, and the importance of “billable man-hours”. The transition from a traditional approach to a Best Value Approach is very challenging. Large traditional professional organizations naturally will have more difficulty adapting to the new approach.
Despite the many challenges that large organizations have in implementing Best Value Procurement, Royal HaskoningDHV was excited to be the first to test the approach in the professional services industry.
Royal HaskoningDHV is an independent, international engineering and project management consultancy with over 130 years of experience. Backed by expertise and experience of nearly 7,000 colleagues across the world, they work for public and private clients in more than 130 countries on five different continents. A visionary in the company, Elske Bosma, reached out to PBSRG for some guidance, and assistance in helping her company to become Best Value experts.
With the help of Dr. Dean Kashiwagi, Royal HaskoingDHV was able to to establish a core team of visionaries and to start running projects. The best value core team had the following objectives:
- Show increased value of the core team activities.
- Show that if the Best Value Approach and the best value core team were utilized, the amount of work acquired and the success rate will increase.
After three years of education, coordination, and work, the results were astonishing! In the ten projects, with a total scope of $42M, they had a 100% customer satisfaction, 0% deviations caused by their side, and a 20-30% cost efficiency. Along with the success in running projects, they showed that the hit rate for tenders went up 14% when best value support was available (See full article for full metrics)
The RHDHV organization has acquired best value capability. They have shown that a large engineering firm can gain the capability of the Best Value Approach and change the paradigm of professional engineers. Their case study shows that a large organization whose traditional paradigm does not match Best Value Procurement, has the capability to transform itself into the best value organization.