An evaluation of the performance of a large scale collaborative procurement initiative in the social housing sector

Abstract

Purpose – The purpose of this paper is to understand the factors relating to the implementation of a new procurement initiative that affect performance and value for money (VFM). The study is based on a four-year research project carried out on behalf of the Scottish Government to monitor and evaluate the performance and efficiency of a bulk procurement vehicle for social housing. Design/methodology/approach – The researchers had a brief to monitor and evaluate the implementation of the procurement process and its influence on cost and efficiency targets. The study employed a mixed method approach with annual rounds of qualitative and quantitative data collection from project stakeholders including the contractors, consultants, clients and sponsor. Confidential semi-structured interviews were conducted on conclusion of the project to gauge views on how well the procurement process worked from the various perspectives and to reflect on the influence of the process on VFM. Findings – The procurement programme failed to achieve the capital cost and efficiency savings targets quantified at the outset and on this measure alone VFM was not demonstrated, although there were a number of reported benefits. A major factor was the extent of process and behavioural change required from the project team and, although a procurement consultant was engaged to facilitate this, the theoretical benefits of “best practice” were not realized. The picture was further complicated by rapidly changing economic conditions experienced, and debate about the robustness of original cost savings targets. Research limitations/implications – The findings and conclusions are of relevance and interest to clients and construction organisations undergoing change through adopting novel procurement processes. Originality/value – The empirical nature of the study provides a comprehensive evidence base for the performance of a collaborative procurement programme and an understanding of the potential difficulties in attaining the theoretical benefits of procurement innovation.