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.
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