Determination of Project Procurement Method with a Graphical Analytic Model

Kwo-Wuu Wang, Yuan-Yu Hsu, Wen- der Yu and Shao-tsai Cheng
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Kwo-Wuu Wang: Management College, National Defense University, Taoyuan City 33449, Taiwan
Yuan-Yu Hsu: Department of Civil Engineering, Chung Hua University, Hsinchu City 30012, Taiwan
Wen- der Yu: Department of Construction Engineering, Chaoyang University of Technology, Taichung City 41349, Taiwan
Shao-tsai Cheng: Department of Construction Management, Chung Hua University, Hsinchu City 30012, Taiwan

Sustainability, 2018, vol. 10, issue 10, 1-17

Abstract: Procurement is a key stage affecting the successful delivery of a sustainable project. Previous project procurement practice employed either the Lowest Tender (LT) method for homogeneous projects or the Best Value (BV) method for heterogeneous projects. Recently, a new type of procurement method for moderately heterogeneous project, the Heterogeneous Lowest Tender (HLT), was introduced and it has proven to be more beneficial and sustainable to clients in terms of both cost-effectiveness and the delivery performance of project products/results. However, statistics also showed that only 0.33% of public works adopt HLT for project procurement in Taiwan due to the lack of a useful method selection model. To solve this problem, this paper proposes an enhanced graphical method that is based on a previously defined Price Elasticity of Performance (PEP) measure, namely the Graphical Analysis Method for Price Elasticity of Performance (GAM-PEP), to select a more appropriate method from among the three prevailing project procurement methods: LT, BV, and HLT, so that the sustainability objectives of a project can be better realized. Finally, a real-world case construction procurement project was selected to demonstrate the feasibility of the proposed model. It is concluded that the proposed GAM-PEP outperforms the previous models in determining the most sustainable project procurement method.

Keywords: best value; lowest tender; project sustainability; heterogeneous procurement (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:10:y:2018:i:10:p:3583-:d:174247

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