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Outsourcing of Facility Management Activities and Procurement Design

Author

Listed:
  • 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)

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.

Suggested Citation

  • Alessandro Avenali & Giorgio Matteucci & Fabio Nonino, 2010. "Outsourcing of Facility Management Activities and Procurement Design," DIS Technical Reports 2010-13, Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza".
  • Handle: RePEc:aeg:wpaper:2010-13
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    File URL: http://www.dis.uniroma1.it/~bibdis/RePEc/aeg/wpaper/2010-13.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Anthony M. Kwasnica & John O. Ledyard & Dave Porter & Christine DeMartini, 2005. "A New and Improved Design for Multiobject Iterative Auctions," Management Science, INFORMS, vol. 51(3), pages 419-434, March.
    3. 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.
    4. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
    5. 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.
    6. 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.
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