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New ways to procure leads to more roads and railway for the money

Published: 17 November 2017

The Swedish Transport Administration's new strategies for procuring infrastructure investment and maintenance will provide more road and railway for taxpayers' money.

Professor Per-Erik Eriksson, Luleå University of Technology, has, in cooperation with the Swedish Transport Administration (Trafikverket), developed new guidelines that give suppliers greater freedom to develop innovative and cost-effective solutions for Sweden's road and rail networks.

Trafikverket purchases materials and services for SEK 40 billion each year and and is the largest customer in the Swedish infrastructure sector. They therefore have a unique opportunity to promote suppliers' development of new products and production methods. The government also places high demands on Trafikverket to drive the development of the infrastructure sector, both in terms of increased efficiency in terms of road and rail for money, and innovation and sustainable development.

Focus on function

The Swedish Transport Administration has initiated a project by testing three new types of procurement strategies to strengthen suppliers' opportunities and driving forces for innovation and sustainable development.

– Contracts where the assignment is very specified often make it more difficult for the supplier and complicates new innovative solutions. The Swedish Transport Administrations new procurement strategies give greater opportunity to establish contracts with less detail management of the technical solutions you buy, says Per Erik Eriksson, Professor at Luleå University of Technology.

Instead, the focus is on the function to be delivered and on cooperation with the supplier who gets greater freedom to design effective and innovative solutions, which also requires new forms of compensation and collaboration models. Most suppliers, especially the larger companies, are pleased with new ways to procure as a complement to traditionally contracts focusing on performance.

New model for procurement

Per Erik Eriksson has developed the model and framework that today forms the essence of The Swedish Transport Administrations new procurement guidelines. The model thus forms the basis for a very large part of the Swedish Transport Administration's procurement and defines how to choose and tailor procurement strategies to the unique conditions of the projects.

The goal is to promote the right balance between competition and cooperation with suppliers:  more challenging project conditions in terms of complexity and uncertainty requires more focus on cooperation. The model is based on many years of research and interviews with clients, suppliers and projectors in case studies of many different types of construction projects, not just in the infrastructure sector.

Åsa Markström, Head of Purchasing and Logistics at the Swedish Transport Administration, welcomes the cooperation that the agency has with Luleå University of Technology. A new order and procurement strategy and the changes it has lead to within the Swedish Transport Administration, is the basis for the cooperation.

The aim of the research collaboration is to answer questions such as the effect of changes and new strategies has on the market and if more benefits are gained from the investment by increasing productivity, innovation and competition in the construction market.

– Cooperation with Sweden's joint researchers with expertise in procurement for increased innovation and sustainability in the construction industry is very important for the Swedish Transport Administration, to increase knowledge about the impact of different procurement strategies on the market. With the help of the research effort, the Swedish Transport Administration wants to create a learning organization and industry through the researchers working closely with us, and the results are delivered continuously, she says.

The research collaboration continues with Per-Erik Eriksson leading the research project "Public procurement strategies for sustainable development in the infrastructure sector". The project is funded by Formas, the Swedish Transport Administration and the ProcSIBE research platform ("Procurement for Sustainable Innovation in the Built Environment"), in collaboration with the Royal Institute of Technology, Linköping University of Technology and Lund University.

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