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Public Sector Procurement

Professor Steve Rowlinson

Department of Real Estate and Construction
The University of Hong Kong
Public Sector Procurement

Procurement – CIBW092 definition

• To research into the social, economic and legal aspects of
contractual arrangements, appointment systems and tendering
procedures used in relation to construction projects
• To establish and comment upon the practical aims and objectives
of contractual arrangements and to define the participants and
their responsibilities
• To review areas of commonality and differences
• To formulate recommendations and the selection and effective
implementation of project procurement systems
• To compare and contrast standard conventions for the various
systems of project procurement generally and specifically
Ref. Walker & Rowlinson; Rowlinson & McDermott

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Public Sector Procurement

Prerequisites
for Successful Procurement Strategies
• Innovation
• Efficiency
• Change
• Audit
• Relationship
• Accountability
• Partnering
• Effectiveness
• Alliance

• Finance
• Integration
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 Task 1

Does this happen in Hong Kong

now?

Why not?
Public Sector Procurement

Sourcing

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 Think….

• Where do Hong Kong’s construction materials

come from?

• Where does Hong Kong’s building and

construction expertise come from?

Public Sector Procurement 6

Public Sector Procurement

The context

Water

土 水
Fire Wind

火 風
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Public Sector Procurement

Stakeholders
Government Influential
influence associations Trade
Approval INSTITUTIONS associations
agencies Labour/Safety
associations
Regulators Institutional players
influencing the facility
Institutional players
influencing the project

The FACILITY Stakeholders

(product or
service)
The client

The PROJECT
(product or PLAYERS Suppliers
service) The supply chain
Contractors
Consultants
Sub-contractors 8
 Task 2

• Which of these stakeholders has the most:

• Positive influence
• Negative influence

on project performance?

Public Sector Procurement 9

Public Sector Procurement

Performance indicators
Stakeholder Performance Needs
Identified
Organisational Client’s Society’s
external stakeholder
performance performance performance
performance
needs needs needs
needs

Project How do we
What is measure
success? performance
measures success?

Performance Performance
communication monitoring
processes processes

Project control
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 Task 3

• Explain this model in terms of the

Hong Kong – Guangzhou rail link

Public Sector Procurement 11

Public Sector Procurement

Success Dimension (Shenhar et al.)

In the short to medium term view after project completion, there is very high
importance on project efficiency and customer impact, moderate importance of business
success and no importance of preparing for the future
High

4- Prepare the future

Relative Importance

3- Business success
Moderate

2- Impact on
customer
1- Project
efficiency

Time
Low

Frame
Project Short Medium Long Future
Completion Term Term Term
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Public Sector Procurement

Project Types
Required skill types

‘craft’ skills
‘Intangible’
‘Tangible’ ‘intellect’ skills

‘Soft’ elements
Pace
‘Hard’ elements
Complexity

Uncertainty
Environmental Project
Context characteristics

Strategic purpose
Value
perceptions Procurement
Rules + governance
Sponsor’s Choice
goals – PM Style,
Experience +
Organisational method known
Form 1
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 Task 4

• What creates complexity &

uncertainty?
• What is the strategic purpose of
the Central-Wanchai By-pass?
Public Sector Procurement 14
Public Sector Procurement

Governance

Vision
Mission Goals
The purpose Risk management
+ control

Authority
+power
Structures Delivery means
Capacity
Culture/
Organisational
Legal work ethic
design
requirements Controls/ Resources
Motivation
Financial governs
engineering Knowledge Care why
Informs
Know what Know how
Policy +
Accountability
procedures Know why
Work Regulations Audits
processes
Reporting Transparency
Codes of
Stakeholder
practice Performance
Disclosure
measures
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Public Sector Procurement

Construction Sector Transparency Initiative

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http://www.constructiontransparency.org/home
 Task 5

• Is our industry transparent?

• Give examples of positive and

negative responses

Public Sector Procurement 17

Public Sector Procurement

Stakeholder Assessment Tool

These stakeholders are
relatively remote but
This Stakeholder has influential (eg suppliers)
limited influence but the
power to kill the project
This is an influential
Stakeholder close to the
project (eg the Project
Manager)

The project clients may

have limited individual This group of Stakeholders
influence and be remote has significant influence and
but have a significant the power to kill the project
influence as a group (eg a Project Board)
The project team are close to
the project but have limited
individual influence
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Source: Weaver and Bourne - Project Fact or Fiction
Public Sector Procurement

Asset Management Project

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