Innovation in the Transportation Marketplace
Through Effective Procurement:
Findings from an Experts' Workshop
Table of Contents | Appendices
APPENDIX D. - Remarks by James Lammie
(Parsons Brinckerhoff, Inc.)
The Procurement Challenge
an Industry Perspective
Comments - J. L. Lammie
If our goal is innovation in the marketplace through effective procurement, we must look at several questions:
- Do we understand the procurement policy and what the barriers are to innovation?
- Do we understand the industry sector - infrastructure - and what it takes to foster innovation:
- Can we identify any broad successes and understand why they were successful?
Mort Downey and Fenton Cary looked at this issue from the top, from the Federal Policy Level. But looking from the bottom up, we see very little federal policy filtering through - we see 50 state jurisdictions covering highways, hundreds of local agencies controlling transit and thousands of design and construction firms working on infrastructure projects. At each level conflicts between procurement policy and innovation are frequent. Procurement policy in state and local agencies does not favor innovation, deviation from policy or assumption of risk, particularly from the governmental side with only a little more positive contribution in the private sector. There are public agencies, for example, that require that any procurement over $5,000 must have Board approval. Boards and commissions want the best of proven technology, not a new innovative system. Public safety, post audit of every transaction, and political sensitivities tend to discourage innovation. The acceptance of innovation requires a strong leader to generate the necessary agency cultural change. Supportive federal policies, particular with funding support do provide a framework for change.
Mort noted that we are catching up on the backlog on highway bridges - but there is still a long way to go. Bridges offer one of the most fertile areas for innovation. Unfortunately, the public safety risk is a major barrier to bridge innovation. One vital question is how do we communicate new ideas, experience and lessons learned within our profession so that new methods are spread faster? In PB, all engineers in a given discipline are linked within a Practice Area network, via E-mail, which is used to communicate lessons learned and to request information when a problem is encountered. The Transportation Research Board has recently published a list of "Syntheses" of information on various highway topics and problem areas. AASHTO provides a continuing forum and CERF is using a number of sub groups to provide data on specific users. In transit, the FTA PMO process provides an excellent vehicle to communicate lessons learned but it is underutilized. Unfortunately our decentralized structure, post audit culture, and a difficult news paper and TV search for the guilty makes it very difficult for an agency to try something new or to try something and then admit that it didn't work.
Perhaps the major issue for innovation or modification of procurement procedures relates to who will bear the risk. Today owners often try to push all the risk to the contractor. This has been a significant element in the spread of design build.
This is not to say that the trend is to less innovation - only that it could be much better. Design Build has fostered innovation - but not to the degree originally anticipated. The Value Engineering Change Proposal has provided some new ideas after contract award. Some states, such as Florida, have opened up the procurement process to permit test of new ideas. "Partnering" and "Alliancing" have often developed a more positive climate for change. Sometimes new ideas generate strong differences of opinion and rapid discussion and objective appeal process may often facilitate bypassing the procurement bureaucracy on new ideas. One major project owner recently adapted a policy that any staff member could say "yes" to innovation, but only the client's project manager could say no.
During the question session, I could provide many examples of policies which foster innovation, and comment on many organizations, such as CERF, which sponsor innovation. But, I note that I am now out of time.
10/5/99
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