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Outsourcing of Facility Management Activities and Procurement Design

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  • Alessandro Avenali

    ()
    (Dipartimento di Informatica e Sistemistica "Antonio Ruberti" Sapienza, Universita' di Roma)

  • Giorgio Matteucci

    ()
    (Dipartimento di Informatica e Sistemistica "Antonio Ruberti" Sapienza, Universita' di Roma)

  • Fabio Nonino

    ()
    (Dipartimento di Informatica e Sistemistica "Antonio Ruberti" Sapienza, Universita' di Roma)

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    Abstract

    We introduce a multi-attribute combinatorial auction-based mechanism, called contract clause mechanism (CCM), as a mean to innovate procurement design related to outsourcing of facility management activities. The CCM allows a procurer and sellers to dynamically and simultaneously bargain the characteristics of distinct procurement contracts. The procurer does not directly call for goods and/or services; in fact, firstly he involves sellers in defining a collection of contract clauses related to different features of the supply of goods/services; secondly he requests bids on such clauses. The procurer also assigns scores to clauses to signal their relevance to the sellers. Submitted offers concern bundles of sets of clauses and define detailed procurement contracts. CCM allows procurers to mitigate the relevant problem concerning the lack of competences on the non-core activities, since CCM can partially extract from sellers their private knowledge as well as information on the supply cost.

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    File URL: http://www.dis.uniroma1.it/~bibdis/RePEc/aeg/wpaper/2010-13.pdf
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    Bibliographic Info

    Paper provided by Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza" in its series DIS Technical Reports with number 2010-13.

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    Date of creation: 2010
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    Handle: RePEc:aeg:wpaper:2010-13

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    Keywords: procurement design; multi-attribute auctions; combinatorial auctions; contracts; facility management;

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    1. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
    2. Avenali, Alessandro, 2009. "Exploring the VCG mechanism in combinatorial auctions: The threshold revenue and the threshold-price rule," European Journal of Operational Research, Elsevier, vol. 199(1), pages 262-275, November.
    3. Teich, Jeffrey E. & Wallenius, Hannele & Wallenius, Jyrki & Koppius, Otto R., 2004. "Emerging multiple issue e-auctions," European Journal of Operational Research, Elsevier, vol. 159(1), pages 1-16, November.
    4. DeMartini, Christine & Kwasnica, Anthony M. & Ledyard, John O. & Porter, David, 1998. "A New and Improved Design For Multi-Object Iterative Auctions," Working Papers 1054, California Institute of Technology, Division of the Humanities and Social Sciences.
    5. Quélin, Bertrand & Duhamel, François, 2003. "Bringing Together Strategic Outsourcing and Corporate Strategy:: Outsourcing Motives and Risks," European Management Journal, Elsevier, vol. 21(5), pages 647-661, October.
    6. Pitchford, Rohan & Snyder, Christopher M., 2004. "A solution to the hold-up problem involving gradual investment," Journal of Economic Theory, Elsevier, vol. 114(1), pages 88-103, January.
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