You are on page 1of 16

The TQM Journal

Quality in the public procurement process


Åsa Rönnbäck
Article information:
To cite this document:
Åsa Rönnbäck, (2012),"Quality in the public procurement process", The TQM Journal, Vol. 24 Iss 5 pp. 447
- 460
Permanent link to this document:
http://dx.doi.org/10.1108/17542731211261593
Downloaded on: 06 November 2014, At: 11:09 (PT)
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

References: this document contains references to 59 other documents.


To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 1337 times since 2012*
Users who downloaded this article also downloaded:
Wee Shu Hui, Radiah Othman, Normah Hj Omar, Rashidah Abdul Rahman, Nurul Husna Haron,
(2011),"Procurement issues in Malaysia", International Journal of Public Sector Management, Vol. 24 Iss 6
pp. 567-593
Peter E.D. Love, Peter R. Davis, David J. Edwards, David Baccarini, (2008),"Uncertainty avoidance: public
sector clients and procurement selection", International Journal of Public Sector Management, Vol. 21 Iss 7
pp. 753-776
Isaac Aje, (2012),"The impact of contractors' prequalification on construction project delivery in Nigeria",
Engineering, Construction and Architectural Management, Vol. 19 Iss 2 pp. 159-172

Access to this document was granted through an Emerald subscription provided by 383794 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for
Authors service information about how to choose which publication to write for and submission guidelines
are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as
providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee
on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive
preservation.
*Related content and download information correct at time of download.
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1754-2731.htm

Quality in public
Quality in the public procurement
procurement process
Åsa Rönnbäck
Viktoria Institute, Gothenburg, Sweden
447
Abstract Received 22 November 2010
Purpose – The purpose of this paper is to investigate four dimensions of how to integrate quality in Revised 24 May 2011
the public procurement process from three perspectives. The study was carried out in the public Accepted 30 August 2011
transportation industry where service provision has been outsourced.
Design/methodology/approach – An explorative case study was carried out using two data
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

collection methods. The first involved a document study that considered the integration of quality in
the public procurement process. This led to the second method, which involved conducting in-depth
interviews to follow up on the procurement and the role of quality with the participants.
Findings – The findings provide insights into how quality can be included in the public procurement
process and, in particular, how self-assessment can be used to evaluate the “best quality practice”. The
quality maturity of the industry also has an influence on three dimensions: the choice of quality model,
the weighting between price and quality and how the tenders perform their self-assessments.
Research limitations/implications – The study focuses on one case and presents explorative
findings. This has implications for future research, for which the set of procurement decisions
regarding the integration of quality must be analysed.
Practical implications – The integration of quality in the public procurement process involves
choosing a future business partner according to the “best quality practice”, not just the lowest price.
Including quality in the public procurement process can help facilitate the delivery of high-quality
services to customers when service provision has been outsourced.
Originality/value – This study contributes to the service quality literature by empirically
investigating how quality can be integrated in the public procurement process, which is a prerequisite
for contracting a desired service supplier.
Keywords Sweden, Public services, Public procurement, Transport management, Outsourcing,
Service quality, Self-assessment, Public transportation
Paper type Research paper

Introduction
The Swedish public transportation industry is facing the challenge of providing
high-quality service for its customers with limited resources (Donnelly, 1999; The
Swedish Government Official Reports 2001, p. 106; 2003, p. 67; Enquist et al., 2005;
Rönnbäck and Witell, 2009). There are a number of explanations for this situation. The
Swedish law of public procurement regulates how the public transport authorities
(PTAs) conduct their procurement of services. The law favours the bidder with the
lowest price and does not allow previous relationships with certain suppliers/operators
and their former experiences to affect the outcome of the procurement process. Another
characteristic of the public procurement is that the relationship has a distinct starting
point and end. Furthermore, the contract is written in advance by the purchasing
authority, so there are few possibilities to negotiate about the contract and adjust
its contents after it has been signed (see e.g. The Swedish Public Procurement Act,
Swedish Code of Statutes 2007a, 2007b). These conditions have been shown to hinder The TQM Journal
Vol. 24 No. 5, 2012
the development of inter-organisational business relationships and trust (Erridge and pp. 447-460
r Emerald Group Publishing Limited
Greer, 2002). Also, the PTAs have become focused on cost rationalisation, which has 1754-2731
led to reduced profitability of their service suppliers (Enquist et al., 2005). DOI 10.1108/17542731211261593
TQM This focus on cost and the neglect of quality can be explained by general
24,5 misconceptions, a lack of knowledge and limited experience with how to evaluate
service quality in a public procurement process (Corcoran and McLean, 1998). A review
of previous research shows that little interest has been paid either to public
procurement (Thai, 2001) or to how quality can be managed in contracts in business
service (Fisk et al., 1993; Brown et al., 1994; Furrer and Sollberger, 2007; Camén, 2010).
448 Previous research has been reluctant to include quality in public procurement as it is
considered a difficult subject that may lead to bias from a procuring authority towards
certain tenders (Laffont and Tirole, 1993). As a result, price is the only award criterion
that the procuring clients use. This focus on price has resulted in services being
reduced and depleted for the passengers of public transportation (Enquist et al., 2005).
Currently, eight out of Sweden’s 26 PTAs have adopted systematic approaches to
evaluating quality in public procurement. There are three alternative models for
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

evaluating tenders: price only, the use of key performance indicators (KPIs) and
self-assessment. Seven of the eight PTAs that have included quality in the procurement
have attempted a self-assessment model. However, no research has yet investigated
the pros and cons of using a self-assessment model to evaluate quality in the public
procurement process. Due to the limited experience in managing quality as a factor in
public procurement, this paper uses three perspectives to explore four dimensions of
how to integrate quality through the use of a self-assessment model in the public
procurement process. The four dimensions are:
(1) what model to use;
(2) the balance between price and quality;
(3) how tenders perform their self-assessments; and
(4) the use of internal and/or external examiners.
The dimensions are investigated from three perspectives: the tenders, the PTA and the
examiners, i.e. all participants that influence the results of the procurement process.
The study focuses on the business-to-business relationship between a PTA and
three tenders involved in public procurement with regard to contracting a future
business partner in train traffic for a period of nine years (2009-2018). Two data
collection methods were used. The first involves a self-assessment model in public
procurement as well as the study of the tenders’ quality reports and the results from
third-party evaluation. The second uses interviews to follow-up on the public
procurement with the parties involved, that is, the tenders, the PTA and the examiners
who conducted the third-party evaluation of the tenders’ quality reports.

Framing the research


Evaluation of the quality of services in public procurement
Evaluating service quality in public procurement can be difficult because of the service
characteristics: intangibility, heterogeneity, inseparability and perishability (Zeithaml
et al., 1985; Edgett and Parkinson, 1993; Schneider and White, 2004). First, intangibility
refers to services as activities rather than physical objects, which goods are. Second,
the activities are produced by people, which means that no two services will be alike.
Third, the customers are involved in the production of a service, which means that
production and consumption cannot be separated. Fourth, services cannot be
inventoried, stored, warehoused or reused. These characteristics separate the purchase
of services from the purchase of goods ( Jackson et al., 1995), since the procuring Quality in public
clients must assess a supplier’s ability to deliver a product that cannot be realistically procurement
tested prior to purchase (Corcoran and McLean, 1998). This provides a challenge
for outsourced service provision, since the way in which the service suppliers act and
how they treat the customers has a direct effect on how customers perceive and value
the service (Nilsson et al., 2001).
Three alternative models have been identified in the review of the practices for 449
evaluating the service quality of tenders used by PTAs in the Swedish public
procurement process: price only, the use of KPIs and self-assessment. KPIs can be
defined as an item of information collected at regular intervals to track the
performance of a system (Fitz-Gibbon, 1990). KPIs are usually long-term
considerations and consist of both financial and non-financial measurements, given
that financial indicators alone are considered insufficient for measuring performance
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

(Kaplan and Norton, 2001, 2005). An alternative, or complement, to KPIs is


self-assessment, which has been defined as “a comprehensive, systematic and regular
review of an organisation’s activities and results referenced against a model of business
excellence” (EFQM, 2010). A self-assessment process “allows the organisation to
clearly discern its strengths and areas in which improvements can be made and
culminates in planned improvement actions which are then monitored for progress”
(EFQM, 2010). Besides these, there are other existing models that can be used in public
procurements with regulatory compliance, e.g. the Capability Maturity Model (CMM)
(Paulk et al., 1993), balanced scorecard (Weimer and Seuring, 2009) and ISO 9001
(Anderson et al., 1999; Corbett, 2006).

A framework for investigating self-assessment approaches to evaluating the quality of


services in public procurement
This study includes three perspectives of how to include quality through self-
assessment in the public procurement process; these are the tender, the PTA and the
examiner perspectives. Furthermore, the framework consists of four dimensions:
(1) what model to use;
(2) the balance between price and quality;
(3) how tenders perform their self-assessments; and
(4) the use of internal and/or external examiners.
The first dimension concerns the model that should be used. There are advanced
and basic models for self-assessment. The advanced models include “The SIQ Model
for Performance Excellence”, a national model used in the Swedish Quality Award,
“The EFQM Excellence Model”, used in the European Quality Award and “The Criteria
for Performance Excellence” used in the Malcolm Baldrige National Quality Award
(MBNQA). A more basic self-assessment model is the “Springboard” (Hellsten, 1997).
Unlike other self-assessment models, such as the EFQM or the SIQ Model, all of the
“Springboard” criteria are estimated equally.
The second dimension deals with the balance between price and quality, or price
and non-price criteria. The public sector has a long tradition of using the lowest bid
as the award criterion for contracts (Palaneeswaran et al., 2003; Waara and Bröchner,
2006) and generally focuses more on price than private sector clients (Pottinger, 1998).
However, non-price criteria in the public sector are increasing. Waara and Bröchner
TQM (2006) found that a typical pattern was a 70 per cent price weighting combined with
24,5 three non-price criteria.
The third dimension considers how the tenders perform their self-assessments.
This includes who performs the self-assessments (internal resources and/or external
consultants); their prior experience with self-assessment; the degree to which
managers and employees are engaged and involved; how much time has been invested
450 in this work; the degree to which calculated scores agree with results of third-party
evaluation; and whether the tenders follow-up the results from the third-party
evaluation and establish improvement plans. Previous research shows that
organisations with little experience of third-party evaluations have difficulty
starting improvements based on the feedback from examiners. However,
organisations with more experience are more successful with such work (Loomba
and Johannessen, 1997; Conti, 2001). Also, the establishment of improvement plans
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

requires the commitment among middle and top management, which is considered
as critical to obtain lasting improvements (Hillman, 1994; Van der Wiele et al., 1995,
Porter and Tanner, 1996; Van der Wiele and Brown, 1999).
The fourth and final dimension in this study concerns the use of internal and/or
external examiners. Previous research has illuminated a number of risks in third-party
evaluations. For example, Laffont and Tirole (1993) found the potential for firm-specific
favouritism by a purchasing authority towards a bidder. In addition, Loomba and
Johannessen (1997) identified the potential for conflicts of interest in third-party
evaluations. They found that examiners judging a third-party evaluation sometimes
also worked as consultants for competing organisations (Loomba and Johannessen,
1997). In addition, the accuracy of feedback given in third-party evaluation depends on
the training of the examiners (Coleman et al., 2000). This calls for experienced and
unbiased examiners in the public procurement process.

Empirical investigation
In order to achieve the aim of developing a better understanding of how to include
quality in public procurement, an empirical study was conducted using two data
collection methods: a document study followed by an interview study. The document
study comprised the results of the procurement regarding the quality aspect, that is,
the self-assessment work of the tenders, and the feedback reports from the third-party
evaluation. This was followed by the interview study, which involved the tenders,
the PTA and the examiners.

Research setting and design of the quality criterion


The research was conducted in Sweden’s public transportation industry, which
includes PTAs that manage transport and procure services from privately owned
traffic companies. The study is limited to one PTA and three tenders involved in public
procurement in relation to contracting a future business partner in train traffic. This
was the PTA’s first procurement including the quality factor and, therefore, considered
how the operators worked with quality management. The choice of quality model
and the balance between price and quality were based on the quality maturity of the
PTA and the industry overall (Sousa and Voss, 2002). Quality maturity is represented
as the “levels of quality management adoption” (Lascelles and Dale, 1991) and is
estimated here through self-assessment. Because the quality maturity was considered
to be rather low, a basic quality model (a self-assessment model) was used. The PTA set
the price factor to 80 per cent and the quality factor to 20 per cent.
Sample, data collection and analysis Quality in public
Three tenders (A, B, C) were involved in the procurement process. Three participants procurement
were interviewed for tender A, one for tender B and one for tender C. The two
participants involved in the procurement were interviewed at the PTA. Furthermore,
three examiners were involved in the evaluation and two were interviewed. All
participants influenced the results of the procurement process.
The interview guide consisted of three parts, one for each category of interviewee. 451
For the tenders, the interview guide consisted of an introduction, a review of how the
tender had practised self-assessment and a comparison with possible experiences
of other quality models. The improvement work itself followed the self-assessment
and the final section included any remaining questions about the model itself, the
self-assessment work and the overall procurement process. For the PTA, the interview
guide consisted of an introduction and a section about the procurement process. For
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

examiners, the guide also consisted of an introduction, as well as a practising part of


the evaluation and the model. Based on the process of grounded theory, the interviews
were then recorded and transcribed for further analysis (see e.g. Strauss and Corbin,
1990). The analysis was carried out by using marginal remarks identifying keywords,
focusing on the integration of quality in the public procurement process. This included
the preconditions, the process and the outcome. This enabled the data to be coded
and organised in order to gain an understanding of the characteristics of the
dimensions; and the three groups of participants’ views on these. After analysing
all the interviews separately, the keywords were then summarised and compared to
each other (see Table II).

Results
The outcome of the public procurement process
The first data collection method consisted of studying the documents from the tenders’
self-assessment work and the third-party evaluation. Table I presents the results
of the third-party evaluation, showing the calculated percentages distributed on the
four criteria of the model: customer collaboration, leadership, development
and involvement of employees, processes, as well as the total calculated score and
percentage for each tender.
As Table I shows, the “development and involvement of employees” criterion had
the highest average score among the three tenders (28 per cent), while the “processes”
criterion had the lowest average score (13 per cent). Furthermore, the variation between

Development
Customer and involvement Total
Criterion collaboration Leadership of employees Processes percentage
tender % % % % and score

A 21 13 23 4 15 ¼ 150
points
B 13 20 29 8 18 ¼ 180
points Table I.
C 16 39 31 27 28 ¼ 280 The distribution of
points percentages and scores
Average 17 24 28 13 of third-party evaluation
TQM the tenders was also highest in this area (A: 4 per cent, B: 8 per cent, C: 27 per cent).
24,5 Interestingly, tender C had much higher scores for the leadership and processes
criteria. With 280 points, tender C was also the winner in terms of quality. Despite these
results, tender C’s costs were almost double those of tender B. Because the price factor
had been set to 80 per cent of the total evaluation, the winner of the total procurement
was tender B.
452 After the self-assessments of the tenders and the third-party evaluation, the aim
was to follow-up on the procurement by interviewing the involved parties, that is,
tenders A, B and C, the two participants from the PTA and two of the examiners.
Table II summarises the results of the interview study related to the three perspectives
and the four dimensions. Not all dimensions are relevant to all three perspectives.

The tenders’ perspective


Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

The first dimension considered the model. Tender B preferred the self-assessment
model to the model based on KPIs. Tender A preferred the model based on KPIs and
the EFQM model. Another procurement process took place in parallel at another PTA
and involved all three tenders. The quality model used was a slightly modified version
of the SIQ model. Tender C was positive about this model, saying, “The criteria of the
model [y] are more connected to the concrete processes; for example, the launch of
traffic, the negotiations of time tables, preventive maintenance and assuring personnel
resources, instead of the more general criteria”.
The second dimension dealt with the balance between price and quality. Although
the quality factor was set to no more than 20 per cent in this procurement, tenders B
and C both felt that the quality factor would be of decisive importance. Tender B said,
“Yes, I thought [y] that we would be quite close concerning the costs [y] Calculating
costs is not that difficult”.
The third dimension concerned how the tenders performed their self-assessments.
Tender A engaged an external consultant since they did not have the necessary
experience. At tender B, the CEO himself took on the self-assessment despite having
any previous experience of self-assessment. Tender C had some previous experience in
this area and the quality manager performed the assessment, with help from the CEO
and other managers. The self-assessment took two weeks in total for tender A, about
one week for tender B and two weeks for tender C. The entire procurement process
took five weeks for tender A, three and a half weeks for tender B and about five weeks
for tender C. When estimating the level (percentage rating) for each criterion of the
model, two out of three tenders calculated their scores higher than the examiners did
and the third tender did not submit any ratings at all. Furthermore, when the interview
study was conducted about four months after the contract was signed, only one of the
tenders (C) had used the results from the self-assessment to improve their processes.

The PTA’s perspective


The PTA wanted a quality model that was general and relatively easy to use and chose
the “Springboard” model. The PTA integrated the quality factor in the procurement at
this time since they had worked with the “Springboard” model and identified their own
strengths and weaknesses. The purpose was not to require more from the operators
than they themselves could live up to.
This was the first time the PTA had included the quality factor in its procurement
process. Neither the CEO nor development manager had any previous experience of
including quality in a procurement process. Because of their own low-quality maturity,
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

(3) How tenders perform (4) The use of internal and/


(2) The balance between their self-assessments or external examiners
price and quality (quality (time invested/performed (time invested/performed
being of decisive self-assessment/prior self-assessment/prior
Dimension perspective (1) What model to use importance) experience) experience)

Tender A: EFQM A: no A: two weeks/consultant/ –


extensive
B: Springboard B: yes B: one week/CEO/none
C: SIQ Model (modified) C: yes C: two weeks/quality
manager/some
PTA Springboard No – One internal and two
external
Examiner Internal: Springboard No – Two weeks/development
manager/minor
External: EFQM No Ten hours/consultant/
extensive

dimensions
Quality in public
procurement

A comparison of the three


453

perspectives and four


Table II.
TQM the PTA decided to set the weighting of the quality factor to 20 per cent. Although
24,5 quality had a much lower weighting than price, it could have had decisive importance.
The development manager said, “When it came to evaluating and comparing the
individual business models [y] is when the quality factor could have determined
the outcome [y] it became much closer between tenders A and B than in the first
phase when the gross costs were calculated. However, tender C was relatively far
454 behind, both in terms of the business model and the gross costs, but had [y] written
the best quality report – though not so much better than the other two – which made
them the winner”.
In order to evaluate the quality factor, two external examiners and one internal
examiner were engaged. As the PTA explained, “We wanted to engage external
examiners who [y] had experience; that was important for us in order to be objective”.
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

The examiners’ perspective


The two external examiners were trained in both the advanced SIQ model and the
basic “Springboard” model. The internal examiner had worked with the “Springboard”
within the PTA’s organisation and had two roles: to follow the continuity of the whole
procurement process and to perform the third-party evaluation.
The evaluation began with an individual assessment of the tenders’ quality reports.
A consensus was then reached during a meeting with all three examiners. The internal
examiner said, “Maybe we spent two weeks in total for the evaluation [y] we could
have spent a little more time [y] With that, there was no guarantee that the results
would have turned out so much better”. The external examiner said, “I spent 10 hours
on each of the three tenders [y] The material was extensive and in that respect the
time was too short”.
The external examiner reflected on the evaluation and the “Springboard” quality
model: “The model is relatively easy to use [y] It may be a good introduction for
organisations if they have not worked with quality management for a long time”. The
external examiner also suggested alternative models: “I would recommend the EFQM
model because it is relatively uncomplicated but it also makes it possible for European
actors to compete on the same conditions as the Swedish”. The tenders had low scores
when it came to presenting results. The external examiner said, “The focus on results
disappeared and it is a very important criterion. Maybe there should be some common
key measurements in the next process”.

A summary of the three perspectives on quality in the public procurement process


Table II compares the four dimensions related to the three perspectives (tender, PTA,
examiner) from the interview study. The dimensions were:
(1) what model to use;
(2) the balance between price and quality;
(3) how tenders perform their self-assessments; and
(4) the use of internal and/or external examiners.
The results show that the “Springboard” is the most preferred quality model; most
participants did not expect quality to be of decisive importance, although two out of
three tenders did; two out of three tenders spent two weeks on the self-assessments
using internal resources with varying degrees of experience, and calculated their
scores higher than the examiners did. Only one tender followed up the feedback from Quality in public
examiners and established improvement plans; and the PTA engaged two external procurement
and one internal examiner, who spent ten hours and two weeks, respectively, on the
third-party evaluation. The external examiners had no link to any of the tender’s
organisations and had extensive experience.
Conclusions and discussions 455
Previous research has highlighted the difficulty of evaluating quality in public
procurement (Laffont and Tirole, 1993) but also the fact that it is a critical process and
an important prerequisite for contracting a desired service provider (Miles, 2007).
Because there are few opportunities to negotiate the contract and make adjustments
once it has been signed (see e.g. the Swedish Public Procurement Act, Swedish Code
of Statutes 2007a, 2007b), the chance for procuring clients to add quality requirements
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

for their service suppliers occurs during the public procurement process.
A procuring client must consider several issues when taking on a public
procurement. In order to capture these, the study took a comprehensive view covering
three perspectives (tender, PTA, examiner) and four dimensions:
(1) what model to use;
(2) the balance between price and quality;
(3) how tenders perform their self-assessments; and
(4) the use of internal and/or external examiners.
This study has produced four main implications derived from the dimensions
explored. First, purchasers must decide which model to use when evaluating tenders:
price only, use KPIs or self-assessment. When including quality, the model should
correspond with the quality maturity of the procuring client and tenders (see also
Sousa and Voss, 2002). In this procurement, the PTA considered the quality maturity to
be rather low and, therefore, used a basic quality model based on self-assessment
(see also Sousa and Voss, 2002). This research has shown that self-assessment
generates several improvement opportunities for the tenders (see Table I; see also Finn
and Porter, 1994; Gadd, 1995; Porter and Tanner, 1996; Van der Wiele et al., 1995;
Brown and van der Wiele, 1996; Eriksson, 2004). In addition, self-assessment takes
a comprehensive view that covers the whole system (Gadd, 1995; Zink and Schmidt,
1998), as opposed to alternatives such as KPIs that focus on performance, which can be
insufficient (see also Weimer and Seuring, 2009). Although self-assessment
incorporates measurements, this important aspect had an insignificant role when
using the basic “Springboard” model. A basic self-assessment model could therefore
increase its focus on performance by integrating KPIs. Another approach is to use
a self-assessment model such as the EFQM, which places greater emphasis on results
(see also Puay et al., 1998). Like the CMM, the self-assessment models have been
associated with negative aspects, such as resource-intensive and time-consuming,
which makes it more difficult for smaller organisations to work with these types of
practices (see e.g. Ghobadian and Woo, 1994; Eriksson, 2004; Persse, 2006), in
particular in a public procurement with a time limit.
The second implication is that, if quality is included, a suitable weight in relation to
price must be chosen. The balance between price and quality should also agree with
the quality maturity of the PTA and tenders (see also Sousa and Voss, 2002). This was
the first time that this PTA included quality in the public procurement and chose an
TQM 80/20 weighting based on the rather low-quality maturity in the industry. A review of
24,5 the eight out of Sweden’s 26 PTAs that have included quality in the procurement using
a systematic approach, they use different combinations for the weighting of price
and quality, such as 60/40, 75/25 and 80/20. Despite these forerunners, the public sector
as a whole, and specifically the public transportation industry, is highly focused on
price and uses the lowest bid as the solitary award criterion for contracts
456 (Palaneeswaran et al., 2003; Camén, 2003; Enquist et al., 2005; Waara and Bröchner,
2006). Although quality had a much lower weighting than price in this procurement,
two out of three tenders thought it could have had decisive importance since they
have experience of calculating their costs quite close. This shows that quality is an
important factor that has to be considered as it can determine the outcome of a
procurement process, despite having a low weighting compared to price.
The third implication deals with how the tenders perform their self-assessments.
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

In line with previous research, this study showed that the tender with the higher
quality maturity – tender C – used internal resources to conduct the self-assessment,
engaged several managers including the CEO, calculated its scores more accurately
and followed up the feedback from examiners and established improvement plans.
This paper suggests to follow the process of conducting self-assessment that tender C
used in order to obtain lasting improvements (see also Hillman, 1994; Van der Wiele
et al., 1995; Porter and Tanner, 1996; Loomba and Johannessen, 1997; Van der Wiele
and Brown, 1999; Conti, 2001).
Fourth, a procuring client must decide whether to use internal and/or external
examiners. Three examiners were involved in this procurement, two of which were
external and one of which was internal. The external examiners were trained in self-
assessment, had previous experience of third-party evaluation in quality award
processes and were unbiased. The internal examiner had practised the “Springboard”
model within the PTA’s organisation and had a presumption of the quality of the tenders
involved in the procurement. Because the accuracy of feedback given in
the third-party evaluations is depended on the experience and training of the
examiners (Coleman et al., 2000), this paper suggests to engage experienced examiners in
a procurement process. Experienced, trained and unbiased examiners may also help
prevent possible favouritism. Still, previous research has shown that the compliance
level for having independent members in public auditing committees is relatively low
(Haron et al., 2005). As a final note, this paper has shown that by including quality in the
public procurement, the tenders are evaluating on the basis of “best quality practice”.
However, the public procurement is an isolated event and as this paper has shown, only
one of the tenders followed up the results from the third-party evaluation and established
improvement plans. Hence, the idea is to create a system that is dynamic and has a
service level that improves over time (Edler and Georghiou, 2007; Rönnbäck and Witell,
2009). There is minimal scope for this in the current tendering process in Sweden’s public
transportation system (Burwick and Sjövall, 2007; Enquist and Eriksson, 2007; Enquist
et al., 2011). The public transportation industry is characterised by a culture of quality
control. This research has shown that self-assessment is a promising approach to depart
from the culture of quality control towards quality management (see e.g. Dooley, 2000).
Self-assessment is not only useful for evaluating the quality of tenders in the public
procurement process but also for following up on the self-assessments with the operators
during the time of the contract, focusing on continuously improving quality for
customers (see also Edler and Georghiou, 2007). The ISO 9000 series are designed to be
used for internal and external audits, while organisations using self-assessment have the
possibility to participate in a quality award process which from the organisations’ Quality in public
perspective is a non-regular, non-compulsory proceeding. In order to transform procurement
self-assessment into a more dynamic approach, this paper suggests integrating the
procedure of certification, internal and external audits in the self-assessment process.
This paper is a first attempt to address the practice self-assessment in the public
procurement process. However, more research is needed in order to illuminate if these
implications are also valid in other contexts, both in those with policy and regulatory 457
constraints but also in non-regulatory environments.

References
Anderson, S.W., Daly, J.D. and Johnson, M.F. (1999), “Why firms seek ISO 9000 certification:
regulatory compliance or competitive advantage?”, Production and Operations
Management, Vol. 8 No. 1, pp. 28-43.
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

Brown, A. and van der Wiele, T. (1996), “Quality management self-assessment in Australia”,
Total Quality Management, Vol. 7 No. 3, pp. 293-307.
Brown, S.W., Fisk, R.P. and Bitner, M.J. (1994), “The development and emergence of service
marketing thought”, International Journal of Service Industry Management, Vol. 5 No. 1,
pp. 21-48.
Burwick, M. and Sjövall, L. (2007), “Ansvar/Roller/Avtal”, report ‘Koll Framåt’ – Look forward
for the entire public transport industry about problems regarding decentralisation, role
play between principals, PTAs and operators, and production orientation of contracts in
contemporary public transport in Sweden, The National Action Programme for Traffic
System Long-Term Development, VV Publication.
Camén, C. (2003), Lägesbild kring kontraktsförhållanden inom kollektivtrafiken i Sverige, working
paper, Service Research Center (CTF), Karlstad University, Karlstad (in Swedish).
Camén, C. (2010), “Service quality on three management levels – a study of service quality in
public tendering contracts”, Journal of Quality and Service Sciences, Vol. 2 No. 3, pp. 317-34.
Coleman, G.D., Koelling, C.P. and Geller, S.E. (2000), “Training and scoring accuracy of
organisational self-assessment”, International Journal of Quality and Reliability
Management, Vol. 18 No. 5, pp. 512-27.
Conti, T. (2001), “Why most companies do not get the most out of their self-assessments”,
Proceedings from the 55th Annual ASQ Congress, Charlotte, NC, 9-11 May.
Corbett, C.J. (2006), “Global diffusion of ISO 9000 certification through supply chains”, Journal of
Manufacturing and Service Operations Management, Vol. 8 No. 4, pp. 330-50.
Corcoran, J. and McLean, F. (1998), “The selection of management consultants: how are
governments dealing with this difficult decision? An explorative study”, International
Journal of Public Sector Management, Vol. 11 No. 1, pp. 37-54.
Donnelly, M. (1999), “Making the difference: quality strategy in the public sector”, Managing
Service Quality, Vol. 9 No. 1, pp. 47-52.
Dooley, K. (2000), “The paradigms of quality: evolution and revolution in the history of the
discipline”, Advances in the Management of Organizational Quality, Vol. 5, pp. 1-28.
Edgett, S. and Parkinson, S. (1993), “Marketing for service industries – a review”, The Service
Industries Journal, Vol. 13 No. 3, pp. 19-39.
Edler, J. and Georghiou, L. (2007), “Public procurement and innovation – resurrecting the demand
side”, Research Policy, Vol. 36 No. 7, pp. 949-63, available at: www.sciencedirect.com
(accessed 17 May 2011).
EFQM (2010), “European Foundation for Quality Management”, available at: www.efqm.org
(accessed 24 August 2010).
TQM Enquist, B. and Eriksson, T. (2007), “Affärsmässighet and Kulturförändring”, (Report ‘Koll
Framåt’ – Look forward for the entire public transport industry about the lack of business
24,5 orientation and service culture in contemporary public transport in Sweden), The National
Action Programme for Traffic System Long-Term Development, VV Publication.
Enquist, B., Camén, C. and Johnson, M. (2011), “Contractual governance for public service value
networks”, Journal of Service Management, Vol. 22 No. 2, pp. 217-400.
458 Enquist, B., Johnson, M. and Camén, C. (2005), “Contractual governance for sustainable service”,
Quality Research in Accounting & Management, Vol. 2 No. 1, pp. 29-53.
Eriksson, H. (2004), “Organisational value of participating in quality award processes”, doctoral
thesis No. 8, Division of Quality and Environmental Management, Department of Business
Administration and Social Sciences, Luleå University of Technology, Luleå.
Erridge, A. and Greer, J. (2002), “Partnerships and public procurement: building social capital
through supply relations”, Public Administration, Vol. 80 No. 3, pp. 503-022.
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

Finn, M. and Porter, L.J. (1994), “TQM self-assessment in the UK”, The TQM Magazine, Vol. 6
No. 4, pp. 56-61.
Fisk, R., Brown, S. and Bittner, M.J. (1993), “Tracking the evolution of the service marketing
literature”, Journal of Retailing, Vol. 69 No. 1, pp. 61-103.
Fitz-Gibbon, C.T. (1990), Performance Indicators, BERA Dialogues, No. 2, Multi Lingual Matters,
Clevedon, Philadelphia.
Furrer, O. and Sollberger, P. (2007), “The dynamics and evolution of the service marketing
literature: 1993-2003”, Service Business, Vol. 1 No. 2, pp. 93-117.
Gadd, K.W. (1995), “Business self-assessment. A strategic tool for building process robustness
and achieving integrated management”, Business Process Re-engineering & Management
Journal, Vol. 1 No. 3, pp. 66-85.
Ghobadian, A. and Woo, H.S. (1994), “Characteristics, benefits and shortcomings of four major
quality awards”, International Journal of Quality and Reliability Management, Vol. 13
No. 2, pp. 10-44.
Haron, H., Jantan, M. and Pheng, E.G. (2005), “Audit committee compliance with Kuala Lumpur
stock exchange listing requirements”, International Journal of Auditing, Vol. 9 No. 3,
pp. 187-200.
Hellsten, U. (1997), “The Springboard: a strategy for continuous improvement of small and medium-
sized companies”, Total Quality Management & Business Excellence, Vol. 8 Nos 2/3, pp. 183-6.
Hillman, P.G. (1994), “Making self-assessment successful”, The TQM Magazine, Vol. 6 No. 3, pp. 29-31.
Jackson, R.W., Neidell, L.A. and Lunsford, D.A. (1995), “An empirical investigation of the
differences in goods and services as perceived by organizational buyers”, Industrial
Marketing Management, Vol. 24 No. 2, pp. 99-108.
Kaplan, R.S. and Norton, D.P. (2001), “Transforming the balanced scorecard from performance
measurement to strategic management: part 1”, Accounting Horizons, Vol. 15 No. 1,
pp. 87-104.
Kaplan, R.S. and Norton, D.P. (2005), Strategy Maps Converting Intangible Assets into Tangible
Outcomes, Harvard Business School Press, Boston, MA.
Laffont, J.J. and Tirole, J. (1993), A Theory of Incentives in Procurement and Regulation, MIT
Press, Cambridge, MA.
Lascelles, D.M. and Dale, B.G. (1991), “Levelling out the future”, Total Quality Management,
Vol. 2 No. 6, pp. 325-30.
Loomba, A.P.S. and Johannessen, T.B. (1997), “Malcolm Baldrige National Quality Award.
Critical issues and inherent values”, Benchmarking for Quality Management & Technology,
Vol. 4 No. 1, pp. 59-77.
Miles, I. (2007), “Knowledge-intensive services and innovation”, in Bryson, J.R. and Daniels, P.W. Quality in public
(Eds), The Handbook of Service Industries, Edward Elgar, Cheltenham, pp. 277-93.
procurement
Nilsson, L., Johnson, M.D. and Gustafsson, A. (2001), “The impact of quality practices on
customer satisfaction and business results: product versus service organizations”, Journal
of Quality Management, Vol. 6 No. 1, pp. 5-27.
Palaneeswaran, E., Kumaraswamy, M. and Ng, T. (2003), “Targeting optimum value in public
sector projects through ‘best value’-focused contractor selection”, Engineering, 459
Construction and Architectural Management, Vol. 10 No. 6, pp. 418-31.
Paulk, M.C., Curtis, B., Chrissis, M.B. and Weber, C.V. (1993), “‘Capability maturity model’,
Version 1.1”, IEEE Software, Vol. 10 No. 4, pp. 18-27.
Persse, J.R. (2006), Process Improvement Essentials: CMMI, Six Sigma and ISO 9001, O’ Reilly
Media, Sebastopol, CA.
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

Porter, L. and Tanner, S. (1996), Assessing Business Excellence – A Guide to Self-assessment,


Butterworth-Heinemann, Oxford.
Pottinger, G. (1998), “Property services: the private sector response to competitive tendering”,
Property Management, Vol. 16 No. 2, pp. 92-102.
Puay, S.H., Tan, K.C., Xie, M. and Goh, T.N. (1998), “A comparative study of nine national quality
awards”, The TQM Magazine, Vol. 10 No. 1, pp. 30-9.
Rönnbäck, Å. and Witell, L. (2009), “Value-creation in outsourced service provision in public
transportation”, The TQM Journal, Vol. 21 No. 5, pp. 517-29.
Schneider, B. and White, S. (2004), Service Quality: Research Perspectives, 2nd ed., Sage
Publications, Newbury Park, CA.
Sousa, R. and Voss, C.A. (2002), “Quality management re-visited: a reflective review and agenda
for future research”, Journal of Operations Management, Vol. 20 No. 1, pp. 91-109.
Strauss, A. and Corbin, J. (1990), Basics of Qualitative Research – Grounded theory procedures
and techniques, SAGE Publications, Newbury Park, CA.
Swedish Code of Statutes (2007a), “1091, The Procurement Act”, (Lagen om offentlig
upphandling) Swedish Code of Statutes, Swedish law.
Swedish Code of Statutes (2007b), “1092, The Procurement Act”, (Lagen om upphandling
inom områdena vatten, energi, transporter och posttjänster) Swedish Code of Statutes,
Swedish law.
Swedish Government Official Report (SOU) (2001), “Kollektivtrafik med människan i centrum,
delbetänkande från kollektivtrafikutredningen”, 106, Fritzes, Stockholm (in Swedish).
Swedish Government Official Report (SOU) (2003), “Kollektivtrafik med människan i centrum,
delbetänkande från kollektivtrafikutredningen”, 67, Fritzes, Stockholm (in Swedish).
Thai, K.V. (2001), “Public procurement re-examined”, Journal of Public Procurement, Vol. 1 No. 1,
pp. 9-50.
Van der Wiele, T. and Brown, A. (1999), “Self-assessment practices in Europe and
Australia”, International Journal of Quality & Reliability Management, Vol. 16 No. 3,
pp. 238-51.
Van der Wiele, T., Dale, B.G., Williams, A.R.T., Carter, G., Kolb, F., Luzon, D.M., Schmidt, A. and
Wallace, M. (1995), “Self-assessment: a study of progress in Europe’s leading organizations
in quality management practices”, International Journal of Quality & Reliability
Management, Vol. 13 No. 1, pp. 84-104.
Waara, F. and Bröchner, J. (2006), “Price and nonprice criteria for contractor selection”, Journal of
Construction and Management, Vol. 132 No. 8, pp. 797-804.
TQM Weimer, G. and Seuring, S. (2009), “Performance measurements in business process outsourcing
decisions – insights from four case studies”, Strategic outsourcing: An international
24,5 journal, Vol. 2 No. 3, pp. 275-92.
Zeithaml, V., Parasuraman, A. and Berry, L.L. (1985), “Problems and strategies in services
marketing”, Journal of Marketing, Vol. 49 No. 2, pp. 33-46.
Zink, K.J. and Schmidt, A. (1998), “Practice and implementation of self-assessment”,
460 International Journal of Quality Science, Vol. 3 No. 2, pp. 147-70.

Further reading
Enquist, B. (1999), “Från produktionsparadigm till serviceparadigm? (From a production to a
service paradigm)”, Karlstad University Studies 1999:3, Karlstad University, Karlstad
(in Swedish).
Downloaded by Dokuz Eylul University At 11:09 06 November 2014 (PT)

About the author


Åsa Rönnbäck is a Senior Researcher (PhD) at the Viktoria Institute and works as a Consultant
in connection with quality improvements in the context of public transportation. She conducts
her research on quality management systems and self-assessment. Prior to her doctoral studies,
she worked as quality manager in the Swedish Air Force. Åsa Rönnbäck can be contacted at:
asa.ronnback@viktoria.se

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com


Or visit our web site for further details: www.emeraldinsight.com/reprints

You might also like