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Determination of Project Procurement Method with a Graphical Analytic Model

Author

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  • Kwo-Wuu Wang

    (Management College, National Defense University, Taoyuan City 33449, Taiwan)

  • Yuan-Yu Hsu

    (Department of Civil Engineering, Chung Hua University, Hsinchu City 30012, Taiwan)

  • Wen-der Yu

    (Department of Construction Engineering, Chaoyang University of Technology, Taichung City 41349, Taiwan)

  • Shao-tsai Cheng

    (Department of Construction Management, Chung Hua University, Hsinchu City 30012, Taiwan)

Abstract

Procurement is a key stage affecting the successful delivery of a sustainable project. Previous project procurement practice employed either the Lowest Tender (LT) method for homogeneous projects or the Best Value (BV) method for heterogeneous projects. Recently, a new type of procurement method for moderately heterogeneous project, the Heterogeneous Lowest Tender (HLT), was introduced and it has proven to be more beneficial and sustainable to clients in terms of both cost-effectiveness and the delivery performance of project products/results. However, statistics also showed that only 0.33% of public works adopt HLT for project procurement in Taiwan due to the lack of a useful method selection model. To solve this problem, this paper proposes an enhanced graphical method that is based on a previously defined Price Elasticity of Performance (PEP) measure, namely the Graphical Analysis Method for Price Elasticity of Performance (GAM-PEP), to select a more appropriate method from among the three prevailing project procurement methods: LT, BV, and HLT, so that the sustainability objectives of a project can be better realized. Finally, a real-world case construction procurement project was selected to demonstrate the feasibility of the proposed model. It is concluded that the proposed GAM-PEP outperforms the previous models in determining the most sustainable project procurement method.

Suggested Citation

  • Kwo-Wuu Wang & Yuan-Yu Hsu & Wen-der Yu & Shao-tsai Cheng, 2018. "Determination of Project Procurement Method with a Graphical Analytic Model," Sustainability, MDPI, vol. 10(10), pages 1-17, October.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:10:p:3583-:d:174247
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