A Cross-Purchasing Portfolio Application of Best Value Procurement: Lessons Learned from Six Cases at Ballast Nedam

Abstract

Ballast Nedam like any other business in the industry encounters failure due to purchasing based on low cost. Research shows that these tend to arise because of poor planning, non-compliance to agreements and incomplete project evaluations among others. Taken into account the effort put into the purchasing process one wonders why this kind of purchasing approach is still practiced. Best Value Procurement uses the expertise of subcontractors to streamline the total value chain by making the potential values and risks explicit and the management of each accountable to one party in the chain. The question is whether this kind of purchasing approach could and should be the approach to any given purchase done. In this paper lessons learned from six cases at construction company Ballast Nedam are described. Successful and less successful implementations are shown, as well as lessons learned on each of the PIPS filters. Conclusion is that the BVP/PIPS can be used in both construction and non-construction purchasing and in onetime projects as well as with IDIQ contracts.