The fast track to flexibility in public procurement

Abstract

Fast developing technology offers many opportunities for innovation and optimization in the public domain. However this sector is bound to European directives on public procurement transposed into national law and therefore bound to the mandatory procurement of, among others, their assets. This legislation provides a limiting framework in which, after awarding the contract, little room for design adjustments is perceived to be left. As a result assets, especially with long-term procurement processes, are not in accordance with current technological development. The limited amount of literature on this subject provides mitigation in very specific cases, but no overview of flexibilities in the procurement process exists, which is therefore the objective of this research. The Dutch railway sector was used as context of this research and since most process design choices are made by the procurer, the Nederlandse Spoorwegen (NS) [Dutch Railways].
First, the current process was mapped out using the functional modelling technique IDEF0 based on which a first identification of flexibilities was performed. Subsequently, a first version of a morphological chart (MC) was made. This is a product design tool, in this research used, tested and validated for institutional design, as a parallel research focus supporting the exploration of flexibilities. The MC was developed and validated on its content as well as its use as institutional design tool. Additionally, validated trends were identified in the combination of flexibility aspects, followed by the exploration of a future institutional design for the NS.
During this research four additional construction rules for the MC were found, being (1) within scope of action, (2) readability, (3) abstraction level and (4) informational value, for which a variety of practical solutions are suggested. These were adhered to in the developed MC and resulted in the validation of this tool to be useful as systematic, substantiated and concrete guidance in the discussion of process design.
Using these developed conditions for the MC enabled identification and representation of aspects enhancing flexibility, being split into three chapters being Product, Contract and Market Approach. Validated conceptual designs enhancing flexibility were created by combining different fragments of solutions into one conceptual design. Six of these were created, one being the “traditional” procurement, four were based on collaborative practices and the last was based on the product to be part of a network. These four conceptual designs based on collaboration focused on: a partnership for the separate development of innovation, international collaboration and supplier-procurer collaboration of a light and more extensive degree.
Applying this to the case of the NS shows that separate innovation and extensive collaboration are perceived to be most suitable as starting point of their future procurement design.
Altogether it can be concluded that commencing a shift from a vertical to a horizontal approach within the buyer-supplier interaction is essential, placing greater importance on formalizing the partnership rather than specifying precise outcomes. The required redesign for enhanced flexibility to intermediate design changes in public procurement processes can be obtained by using the developed MC as guidance for discussion on the process design...