Factors influencing early supplier/contractor involvement in public procurement and their impacts on the outcome of the partnership
Creators: name: ALIABADI, Elham
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350903
subject: Logistics

description: This research aims to develop a conceptual framework to be used to enhance and improve outcome of public-private partnerships. Public procurement is the process of purchasing goods, services or a combination of both for government. Each government has a different purchasing procedure. Given the current trend of globalization and the need to facilitate projects more quickly and with higher quality, the need for partnership is increasing. The most prevalent forms of partnership are early contractor involvement (ECI) and early supplier involvement (ESI). These methods aim to develop longer-term positive relationships. Originated in the UK in 1998, and adopted later in Australia in 2005, ECI and ESI strive to involve the contractor at the early stage of the project before the statutory procedures have been implemented. ECI has recently been adopted by governments and public companies around the globe in an attempt to achieve better relationships and successful delivery. Given the growing use of ECI and ESI in public project in Australia, it is necessary to conduct more studies about different aspects of this novel procurement option in order to enhance the public sector's ability to deliver high-quality capital projects. However, while previous studies have identified various impactful factors in the process of ECI/ESI, there has been little research measuring the impact of all the corresponding measures on the ECI/ESI outcome through empirical research.

Underpinned by transaction cost theory (TCT), social capital theory (SCT) and resource-based theory (RBT), this study investigates the impact of the main factors on ECI/ESI partnership. It also measures their effect on outcomes from cost and quality perspectives. A detailed review of the literature is conducted to develop the hypotheses based on which the proposed direct and indirect impacts of the factors in the model are developed. Data used in this research were gathered from a survey of suppliers participating in ECI/ESI in Australia, 302 valid responses were analyzed using structural equation modelling.
 
This research has identified communication, capability and trust as the most important factors impacting on ECI/ESI partnerships. This impact is particularly visible through changes in final project quality and cost. While all three factors have positive direct effects, trust - as a mediating factor for communication and capability - plays a crucial role in improving project outcomes. Improving suppliers' capability to meet buyers' needs and increasing the quality and frequency of communication between buyer and the supplier creates higher levels of trust, which in turn also leads to improvements in the final partnership outcome. 

The outcomes of this research are twofold. The first outcome is to assist the public sector in improving the budget and timing of projects conducted via ECI/ESI. The second outcome is to develop a process model for effectively managing the client-contractor relationship in ECI and ESI projects. The model also assists the suppliers to advance their awareness of their strengths and weaknesses from the outset. With generalisable empirical evidence, the findings of this study reveal that through ECI/ESI practitioners can benefit from improvements in costs, quality and timing of the project.

Finally, this study found that improving the influential factors relating to communication, capabilities and trust could generate estimated improvements of up to 30% on current public procurement project costs. The results provide insight for industry practitioners and the federal government on procurement process improvement and policymaking.