The need for sensemaking and negotiation in procurement situations

Mieke Hoezen, Leentje Volker

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Abstract

Since most of the infrastructure projects are being built with public money, public procurement regulations apply. Compared to regular partnerships, it is hard to develop trust in procurement situations. Inspired by transaction costs economics, procurement processes are still considered as predominantly legal processes that are required before starting a project. Consequently the legal requirements usually prevail over the social process of deciding about the right partner to collaborate or the best propopal that would ensure project success. Nevertheless, the right partner and well-thought process design are critical for project success. We argue that procuring services and works for construction projects requires parallel processes of organisational sensemaking and bargaining. Therefore tender processes should be considered as an essential step in project management and designed accordingly. We aim at demonstrating why procurement processes should be considered as negotiation processes in which the procurement system facilitates the actors in making decisions instead of forcing them into a predefined (legal) system. The research is based on insights from two empirical case studies: one case about a Design Build contract for a Provicial Government House and once case about a Design, Build, Finance, Maintain contract for a large Tunnel. Empirical data from these cases indicate that sensemaking processes are necessary to induce mutual support for the contractual arrangement and a joint project execution. Difficulties in making sense of the project, the contract partner or the context result in execution problems that harm the success of the construction project. The findings of the cases are reflected upon literature from the field of organisation sciences about decision making and negotiating processes. In the conclusion we propose how sensemaking and negotiation can be included in the current procurement processes in construction.
Original languageEnglish
Title of host publicationWorking Paper Proceedings
Subtitle of host publicationEngineering Project Organizations Conference Rheden, The Netherlands July 10-12, 2012
EditorsA. Javernick-Will, P. Chinowsky
Place of PublicationEstes Park, Colorado
PublisherUniversity of Colorado
Pages1-18
Publication statusPublished - 10 Jul 2012
EventEngineering Project Organization Conference, EPOC 2012 - Rheden, Netherlands
Duration: 10 Jul 201212 Jul 2012
http://www.epossociety.org/EPOC2012/index.htm

Conference

ConferenceEngineering Project Organization Conference, EPOC 2012
Abbreviated titleEPOC
CountryNetherlands
CityRheden
Period10/07/1212/07/12
Internet address

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