Procurement strategy: Piloting a new approach in Norway
Thursday 18 November 2021
Support Tool for Effective Procurement Strategy (STEPS)
Despite decades of theoretical study and experimentation in practice, “how to” actually procure infrastructure still lacks a complete and evidence-based guide, relying heavily on subjective perception and judgement. Procurement strategy mistakes can substantially increase the cost of infrastructure, delay its delivery, or reduce its quality and value to the public.
The OECD has trialled a new evidence- based tool to inform procurement decisions on major projects called Support Tool for Effective Procurement Strategy or STEPS. The tool was applied to two major road projects in Norway. STEPS can improve the efficiency and effectiveness of public procurement of infrastructure and beyond. It should improve the Value for Money propositions of both traditional and privately financed infrastructure projects. It is also an effective tool against bid rigging, the effects of abnormally low bids, and corruption in public procurement. Because the procurement choices of the public sector impact the market structure of the infrastructure supplier market, it could be considered an instrument of implicit market regulation, working against market concentration.
At the Spring Network Meeting in 2021 Dejan Makovsek first introduced the new approach to procurement strategy (see here). At the time the pilot with the tool in Norway was still ongoing. Now results are in and the master report demonstrates the application of STEPS and how it helps informing procurement strategy in major projects.
If you would like to know more about the approach and/or have any questions feel free to contact Dejan Makovsek (email@example.com).
[Please click here for a link to the OECD STEPS report]