A Contractor's Experience of a Best Value Approach Project in Norway
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Most road construction projects in Norway use the Design-Bid-Build delivery method. In the Design-Bid-Build method the project owner goes into contract with a project designer that designs the project, before interested contractors bid on the project, and the project is awarded based on lowest price. With New Roads entering the Norwegian construction industry as a new project owner, the Best Value Approach has been chosen as a possible new method. This method is completely new in Norway, but results from the US and the Netherlands show increased efficiency, with projects delivering on schedule and within budget with less conflicts. The Norwegian construction industry has struggled with low efficiency for a long time, and with project increasing in size and complexity, the time has come for testing a new method in Norway. The Best Value Approach makes the contractors compete on delivering the best value, instead of only the lowest price. This implies that a set of criteria, in addition to price, is part of the procurement process. The contractors are rated in past performance, ability to identify and mitigate risks, potential added value to the project, and the experience and qualifications of key personnel, as well as the tender amount. These are pre-defined and weighted, so the importance of each criteria is known. New Roads has gone into contract with BetonmastHæhre on delivering a road project from Rugtvedt to Dørdal in Norway, using the Best Value Approach in the procurement phase. When the impact of a procurement and delivery method is studied, it is usually seen from the project owner's perspective. In this thesis the method is studied from the contractor's perspective to study their experiences of the method. Several open interviews has been conducted, in order to find focus areas that the contractor found important and different from previous projects. Three focus areas was defined, one from the procurement phase, one from the execution phase, and one area regarding the general experience of the process. The procurement phase focus area was regarding the importance of the tender amount criteria when awarding the project. The claim that the tender amount criterion was more significant than what the criterion weight would imply was studied. This was conducted by analyzing how achievable scores were in the different criteria, and how the points from the tender amount was calculated. Results show that the tender amount at least has the potential of being a key factor, and the project owner has the potential of influencing the significance of each criterion without adjusting the weights. In addition to this, time consumption for meetings and reporting in the execution phase was studied. New Roads Corporation is a new project owner in Norway, and has a new set of routines regard the contract follow-up. Even though the execution phase is using the fairly well-known turnkey contract, and not the best value approach, the interviewees felt that time spent in meetings was significantly higher than in previous similar projects. This was studied by handing out a time tracking sheet to the project manager of the project, which handed it out to available personnel in various positions within the project. The same sheet was handed out to the project manager of a second project, that follows the same turnkey contract, albeit with a different project owner. This was also handed out to available personnel, so that a comparison could be conducted. The results show that time spent in meetings or on reports, in the studied project is significantly higher than in the reference project, with some participants reporting spending close to 90\% of a total work month in meetings or on reports. Especially internal meetings seem to be major time consuming. The possible reasons for this is discussed, with the most probable reasons being that internal meetings are necessary in order to prepare for the other meetings, and that project owner implemented focus areas becomes time consuming for the contractor.