PhD Final Thesis April 2013.pdf - Anglia Ruskin Research Online

Thesis Keith Gale 2013• Variances between production costs for projects procured within frameworkagreements and those engaged through traditional procurement.• Variances in transaction costs between the two procurement methods.• Variance between performance monitoring costs arising from use of the twoprocurement methods.An investigation into such costs from published research proved difficult asdiscovered by Hillebrandt and Hughes (2000) and Hughes et al, (2006). Indeed, theinteraction of economics, competition and selection has an ‘ethereal and complexnature {that} does not lend itself to easy comprehension’ Flanagan et al, (2007).Notwithstanding difficulties with measurement and classification of financialviability, an opportunity was taken to explore significant amounts of financial datauncovered through the case study not normally accessible due to commercialsensitivities.Within the civil engineering field, cost prediction is undertaken on ‘an approximatequantities’ basis rather than an elemental cost per unit metric. A discussion ofmethods used in chapter 8 elected for a benchmarking system which matchedprofessional practice and proposed NRM rules (RICS, 2012). Results from t-testsundertaken to detect variances between pre-tender estimates and accepted tenders fordiscrete and framework agreement projects produced no significant difference invalue (Eta2 = 0.018). The reasoning made from these results is that production costsfor the case study projects have not been affected due to the transition from discreteto framework agreement procurement. A further test to reinforce this view involvedan ‘action research’ project tested by live market conditions. In this particularinstance a framework project was issued on a discrete tender basis. Results from theaction research project behaved as anticipated – with framework suppliers providingtenders within open market values.Further analysis of the financial viability of frameworks verses discrete projectsconcerned costs involved with engagement and performance monitoring. Referenceto published literature did not discover any directly comparable research into theseareas, but allied studies regarding cost of quality and key performance indicatorsprovided a basis for construction of hypotheses. Reasoning, from published literaturedetermined that either discrete or framework agreement would require the same levelof construction management resource for engagement and monitoring. This research276