Random selection: winning the lottery in construction contracts

Robert Eadie, Martin McCavigan

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Government procurement accounts for 10%–15% of gross domestic product. The majority of this is below the European Union financial thresholds and completed under local policy. From 2012, random selection (RS) has been used as part of the selection mechanism. For the first time, this paper analyses and compares RS to the rotation process used in frameworks. The empirical data was gathered from the public sector client and private sectors via structured LimesurveyTM questionnaires. The results indicate that RS is considered transparent with high accountability. However, concerns are raised over safeguards against abuse or manipulation. The impact of using RS on quality, value for money and open competition indicated greater private sector concern. Agreement was achieved on it not always providing the best economic operator, that size of organisations involved does not matter and there is adequate competition. However, the procurement policy for the adoption of RS for certain contract types was deemed correct.
LanguageEnglish
Pages185-205
JournalInternational Journal of Procurement Management
Volume9
Issue number2
DOIs
Publication statusPublished - 1 Mar 2016

Fingerprint

Construction contracts
Lottery
Private sector
Economics
Government procurement
European Union
Operator
Accountability
Manipulation
Gross domestic product
Procurement
Empirical data
Questionnaire
Safeguards
Value for money
Abuse
Public sector

Keywords

  • Random Selection
  • Construction
  • Construction Contracts Government Policy
  • Government Procurement
  • United Kingdom

Cite this

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title = "Random selection: winning the lottery in construction contracts",
abstract = "Government procurement accounts for 10{\%}–15{\%} of gross domestic product. The majority of this is below the European Union financial thresholds and completed under local policy. From 2012, random selection (RS) has been used as part of the selection mechanism. For the first time, this paper analyses and compares RS to the rotation process used in frameworks. The empirical data was gathered from the public sector client and private sectors via structured LimesurveyTM questionnaires. The results indicate that RS is considered transparent with high accountability. However, concerns are raised over safeguards against abuse or manipulation. The impact of using RS on quality, value for money and open competition indicated greater private sector concern. Agreement was achieved on it not always providing the best economic operator, that size of organisations involved does not matter and there is adequate competition. However, the procurement policy for the adoption of RS for certain contract types was deemed correct.",
keywords = "Random Selection, Construction, Construction Contracts Government Policy, Government Procurement, United Kingdom",
author = "Robert Eadie and Martin McCavigan",
note = "Reference text: Chan, D. and Kumaraswamy, D. (1997). ‘A comparative study of causes of time overruns in Hong Kong construction projects’. International Journal of Project Management. Vol. 15 No.1. pp. 55-63. Barden, K. (2010), ‘Managing Risk in the Procurement Process’, Government Product News, American City and County, (Available on-line at: http://americancityandcounty.com/procurement-prof/managing-risk-procurement-process [Accessed October 2014]). BSI/PAS 91 (2013) ‘Construction related procurement – prequalification questionnaires’, (Available on-line at: http://shop.bsigroup.com/upload/PASs/PAS91-2013.pdf [Accessed October 2014]). Cabinet Office (2014a), ‘Transposing EU procurement directives’, (Available on-line at https://www.gov.uk/transposing-eu-procurement-directives [Accessed October 2014]). Cabinet Office (2014b), ‘Transposing EU procurement directives’, (Available on-line at https://www.gov.uk/government/consultations/transposing-the-2014-eu-procurement-directives [Accessed October 2014]). CPDNI (2012), ‘PGN 05-12 Simplified Approach to Procurements over £30,000 and below EU Thresholds’, (Available on-line at: http://www.dfpni.gov.uk/pgn-05-12-04022013-simplified-over-30k.pdf [Accessed October 2014]). DFP, (2012), ‘Northern Ireland Public Procurement Policy’, Belfast: NI Government. Eadie, R., Rodgers, J., McKeown, C. and Smyth, P. (2012) ‘An analysis of public sector prequalification procedures in Northern Ireland’, International Journal of Procurement Management, Vol. 5, No. 3, pp.273–288. EC European Commission (2014), ‘Public procurement reform’, (Available on-line at: http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/reform_proposals/index_en.htm [Accessed October 2014]). Eur-lex. (2004a), ‘European Union Directive 2004/17 on coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors’, (Available on-line at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:134:0001:0113:en:PDF [Accessed October 2014]). Eur-lex. (2004b), ‘European Union Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts’, (Available on-line at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004L0018:En:HTML [Accessed October 2014]). Eur-lex. (2014a), ‘Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts’, (Available on-line at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.094.01.0001.01.ENG [Accessed October 2014]). Eur-lex. (2014b), ‘Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC’, (Available on-line at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.094.01.0065.01.ENG [Accessed October 2014]). Eur-lex. (2014c), ‘Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC’, (Available on-line at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.094.01.0243.01.ENG [Accessed October 2014]). Foundation for EU Democracy (2008), ‘Consolidated Reader-Friendly Edition of the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) as amended by the Treaty of Lisbon (2007)’, (Available on-line at: http://www.eudemocrats.org/fileadmin/user_upload/Documents/D-Reader_friendly_latest{\%}20version.pdf [Accessed October 2014]). Northern Ireland Assembly (2008), ‘Appendix 4 Memoranda and Papers from Department of Finance and Personnel’, (Available on-line at: http://archive.niassembly.gov.uk/finance/2007mandate/reports/Report_19_08_09R_memoranda.htm [Accessed October 2014]). OECD Organisation for Economic Co-operation and Development (2009), ‘Principles for Integrity in Public Procurement’ OECD publications (Available on-line at: http://www.keepeek.com/Digital-Asset-Management/oecd/governance/oecd-principles-for-integrity-in-public-procurement_9789264056527-en#page1 [Accessed October 2014]). OGC Office of Government Commerce (2008), ‘Framework Agreements OGC Guidance on Framework Agreements in the Procurement Regulations’, (Available on-line at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/62063/ogc-guidance-framework-agreements-sept08.pdf [Accessed October 2014]). Parliament UK (2014), ‘Committee on Standards in Public Life’, (Available on-line at: http://www.parliament.uk/site-information/glossary/committee-on-standards-in-public-life/ [Accessed October 2014]). Rubin, A., and Babbie, E. (2009) ‘Research Methods of Social Work’, Thomson Wadsworth, UK. PAS91Portal (2014), ‘The Northern Ireland Central Procurement Directorate (CPD NI) is #PAS91 compliant. visit http://pas91construction.co.uk’ (Available on-line at: https://twitter.com/PAS91portal/status/474518577241133056 [Accessed October 2014]). SIB Strategic Investment Board, (2012), ‘About SIB’, (Available on-line at: http://www.sibni.org/index/about_sib.htm [Accessed October 2014]). SIB Strategic Investment Board, (2005), ‘Investment Strategy for Northern Ireland 2005/2015’, Belfast: NI Government., (Available on-line at: http://www.sibni.org/isnifulldocument141205.pdf [Accessed October 2014]). TSO, (2011), ‘Public Contracts (Amendment) Regulations 2011’, (Available online at: http://www.legislation.gov.uk/uksi/2011/2053/note/made [Accessed October 2014]). TSO, (2009), ‘Public Contracts (Amendment) Regulations 2009’, (Available online at: http://www.legislation.gov.uk/uksi/2009/2992/contents/made [Accessed October 2014]). TSO, (2006), ‘Public Contracts Regulations 2006’ HMSO London, (Available online at: http://www.opsi.gov.uk/si/si2006/uksi_20060005_en.pdf [Accessed October 2014]). WTO World Trade Organisation (2014), ‘Agreement on Government Procurement’, (Available on-line at: http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm [Accessed October 2014]).",
year = "2016",
month = "3",
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doi = "10.1504/IJPM.2016.075264",
language = "English",
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journal = "International Journal of Procurement Management",
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}

Random selection: winning the lottery in construction contracts. / Eadie, Robert; McCavigan, Martin.

In: International Journal of Procurement Management, Vol. 9, No. 2, 01.03.2016, p. 185-205.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Random selection: winning the lottery in construction contracts

AU - Eadie, Robert

AU - McCavigan, Martin

N1 - Reference text: Chan, D. and Kumaraswamy, D. (1997). ‘A comparative study of causes of time overruns in Hong Kong construction projects’. International Journal of Project Management. Vol. 15 No.1. pp. 55-63. Barden, K. (2010), ‘Managing Risk in the Procurement Process’, Government Product News, American City and County, (Available on-line at: http://americancityandcounty.com/procurement-prof/managing-risk-procurement-process [Accessed October 2014]). BSI/PAS 91 (2013) ‘Construction related procurement – prequalification questionnaires’, (Available on-line at: http://shop.bsigroup.com/upload/PASs/PAS91-2013.pdf [Accessed October 2014]). Cabinet Office (2014a), ‘Transposing EU procurement directives’, (Available on-line at https://www.gov.uk/transposing-eu-procurement-directives [Accessed October 2014]). Cabinet Office (2014b), ‘Transposing EU procurement directives’, (Available on-line at https://www.gov.uk/government/consultations/transposing-the-2014-eu-procurement-directives [Accessed October 2014]). CPDNI (2012), ‘PGN 05-12 Simplified Approach to Procurements over £30,000 and below EU Thresholds’, (Available on-line at: http://www.dfpni.gov.uk/pgn-05-12-04022013-simplified-over-30k.pdf [Accessed October 2014]). DFP, (2012), ‘Northern Ireland Public Procurement Policy’, Belfast: NI Government. Eadie, R., Rodgers, J., McKeown, C. and Smyth, P. (2012) ‘An analysis of public sector prequalification procedures in Northern Ireland’, International Journal of Procurement Management, Vol. 5, No. 3, pp.273–288. EC European Commission (2014), ‘Public procurement reform’, (Available on-line at: http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/reform_proposals/index_en.htm [Accessed October 2014]). Eur-lex. (2004a), ‘European Union Directive 2004/17 on coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors’, (Available on-line at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:134:0001:0113:en:PDF [Accessed October 2014]). Eur-lex. (2004b), ‘European Union Directive 2004/18 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts’, (Available on-line at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32004L0018:En:HTML [Accessed October 2014]). Eur-lex. (2014a), ‘Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts’, (Available on-line at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.094.01.0001.01.ENG [Accessed October 2014]). Eur-lex. (2014b), ‘Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC’, (Available on-line at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.094.01.0065.01.ENG [Accessed October 2014]). Eur-lex. (2014c), ‘Directive 2014/25/EU of the European Parliament and of the Council of 26 February 2014 on procurement by entities operating in the water, energy, transport and postal services sectors and repealing Directive 2004/17/EC’, (Available on-line at: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2014.094.01.0243.01.ENG [Accessed October 2014]). Foundation for EU Democracy (2008), ‘Consolidated Reader-Friendly Edition of the Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU) as amended by the Treaty of Lisbon (2007)’, (Available on-line at: http://www.eudemocrats.org/fileadmin/user_upload/Documents/D-Reader_friendly_latest%20version.pdf [Accessed October 2014]). Northern Ireland Assembly (2008), ‘Appendix 4 Memoranda and Papers from Department of Finance and Personnel’, (Available on-line at: http://archive.niassembly.gov.uk/finance/2007mandate/reports/Report_19_08_09R_memoranda.htm [Accessed October 2014]). OECD Organisation for Economic Co-operation and Development (2009), ‘Principles for Integrity in Public Procurement’ OECD publications (Available on-line at: http://www.keepeek.com/Digital-Asset-Management/oecd/governance/oecd-principles-for-integrity-in-public-procurement_9789264056527-en#page1 [Accessed October 2014]). OGC Office of Government Commerce (2008), ‘Framework Agreements OGC Guidance on Framework Agreements in the Procurement Regulations’, (Available on-line at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/62063/ogc-guidance-framework-agreements-sept08.pdf [Accessed October 2014]). Parliament UK (2014), ‘Committee on Standards in Public Life’, (Available on-line at: http://www.parliament.uk/site-information/glossary/committee-on-standards-in-public-life/ [Accessed October 2014]). Rubin, A., and Babbie, E. (2009) ‘Research Methods of Social Work’, Thomson Wadsworth, UK. PAS91Portal (2014), ‘The Northern Ireland Central Procurement Directorate (CPD NI) is #PAS91 compliant. visit http://pas91construction.co.uk’ (Available on-line at: https://twitter.com/PAS91portal/status/474518577241133056 [Accessed October 2014]). SIB Strategic Investment Board, (2012), ‘About SIB’, (Available on-line at: http://www.sibni.org/index/about_sib.htm [Accessed October 2014]). SIB Strategic Investment Board, (2005), ‘Investment Strategy for Northern Ireland 2005/2015’, Belfast: NI Government., (Available on-line at: http://www.sibni.org/isnifulldocument141205.pdf [Accessed October 2014]). TSO, (2011), ‘Public Contracts (Amendment) Regulations 2011’, (Available online at: http://www.legislation.gov.uk/uksi/2011/2053/note/made [Accessed October 2014]). TSO, (2009), ‘Public Contracts (Amendment) Regulations 2009’, (Available online at: http://www.legislation.gov.uk/uksi/2009/2992/contents/made [Accessed October 2014]). TSO, (2006), ‘Public Contracts Regulations 2006’ HMSO London, (Available online at: http://www.opsi.gov.uk/si/si2006/uksi_20060005_en.pdf [Accessed October 2014]). WTO World Trade Organisation (2014), ‘Agreement on Government Procurement’, (Available on-line at: http://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm [Accessed October 2014]).

PY - 2016/3/1

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N2 - Government procurement accounts for 10%–15% of gross domestic product. The majority of this is below the European Union financial thresholds and completed under local policy. From 2012, random selection (RS) has been used as part of the selection mechanism. For the first time, this paper analyses and compares RS to the rotation process used in frameworks. The empirical data was gathered from the public sector client and private sectors via structured LimesurveyTM questionnaires. The results indicate that RS is considered transparent with high accountability. However, concerns are raised over safeguards against abuse or manipulation. The impact of using RS on quality, value for money and open competition indicated greater private sector concern. Agreement was achieved on it not always providing the best economic operator, that size of organisations involved does not matter and there is adequate competition. However, the procurement policy for the adoption of RS for certain contract types was deemed correct.

AB - Government procurement accounts for 10%–15% of gross domestic product. The majority of this is below the European Union financial thresholds and completed under local policy. From 2012, random selection (RS) has been used as part of the selection mechanism. For the first time, this paper analyses and compares RS to the rotation process used in frameworks. The empirical data was gathered from the public sector client and private sectors via structured LimesurveyTM questionnaires. The results indicate that RS is considered transparent with high accountability. However, concerns are raised over safeguards against abuse or manipulation. The impact of using RS on quality, value for money and open competition indicated greater private sector concern. Agreement was achieved on it not always providing the best economic operator, that size of organisations involved does not matter and there is adequate competition. However, the procurement policy for the adoption of RS for certain contract types was deemed correct.

KW - Random Selection

KW - Construction

KW - Construction Contracts Government Policy

KW - Government Procurement

KW - United Kingdom

UR - http://www.inderscience.com/info/inarticle.php?artid=75264

U2 - 10.1504/IJPM.2016.075264

DO - 10.1504/IJPM.2016.075264

M3 - Article

VL - 9

SP - 185

EP - 205

JO - International Journal of Procurement Management

T2 - International Journal of Procurement Management

JF - International Journal of Procurement Management

SN - 1753-8432

IS - 2

ER -