Performance Based Procurement System

Description

Successful delivery of construction and other services has been an issue for the past 20 years. Despite technical advances such as Building Information Management (BIM), LEAN Practices, forward thinking/scheduling, costing software, and design enhancements, the construction industry, as well as others, continue to have performance issues. The conventional price based award system, which selects vendors based solely on price, has lower performance because the party who knows less (the client or client?s representative) is giving instructions to the party (vendor) who should be an expert. Price based awards, which do not recognize or give credit to differences in vendor quality, value, and performance, will motivate contractors to be more reactive, offer lower quality, not pre-plan, nor utilize expertise.

Researchers at Arizona State University have developed the Performance Information Procurement System (PIPS), a best value delivery system based on logic and best value practices. It promotes the success of both the client and the vendor by maximizing their respective objectives and goals through an efficient structure. The PIPS process provides clients with a tool to assist them in making an informed decision based on performance information (and not based solely on price or marketing information). The process is unlike any other best-value tool in the industry. Not only does PIPS assist in selecting a high performing vendor, but the process also has a mechanism to document and manage the vendor/service during the project. This tool has proven to be just as valuable as the selection process itself.

Potential Applications

Any organization that is looking to contract vendors for services.

  • Private Sector ? Construction and other services procured by companies such as General Dynamics C4S, ON Semiconductor, Salt River Project
  • Educational Institutes ? Universities, colleges, and public schools across the nation have utilized PIPS
  • Governmental Agencies ? The U.S. Army Medical Command, Arizona State Parks, State of Alaska, U.S. General Services Administration and other government entities have all used PIPS

Benefits and Advantages

  • PIPS is the only best value process that has been extensively tested and documented. (Over 700 tests delivering services worth over $2.3B)
  • 98% client satisfaction
  • Delivers best value at the lowest cost
  • Simplifies process by using dominant information that everyone understands
  • Leadership based minimizing management activity
  • Motivates continuous improvement without requiring management/direction from the buyer?s representatives.
Case ID:
M00-047P
Published:
08-03-2011
Last Updated:
05-16-2018

Inventor(s):

Dean Kashiwagi

Patent Information

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