Procurement strategy in major infrastructure projects: Piloting a new approach in Norway
Summary
Infrastructure investment has been at the forefront of the political debate for more than two decades.
Despite decades of theoretical study and experimentation in practice, “how to” actually procure infrastructure still lacks a complete and evidence-based guide, relying heavily on subjective perception and judgement. Procurement strategy mistakes can substantially increase the cost of infrastructure, delay its delivery, or reduce its quality and value to the public.
The OECD has trialed a new evidence- based tool to inform procurement decisions on major projects called Support Tool for Effective Procurement Strategy or STEPS. The tool was applied toon two major road projects in Norway. STEPS can improve the efficiency and effectiveness of public procurement of infrastructure and beyond.
It should improve the Value for Money propositions of both traditional and privately financed infrastructure projects. It is also an effective tool against bid rigging, the effects of abnormally low bids, and corruption in public procurement. Because the procurement choices of the public sector impact the market structure of the infrastructure supplier market, it could be considered an instrument of implicit market regulation, working against market concentration. STEPS thus supports a range of OECD recommendations and G20
positions on infrastructure governance, private investment in infrastructure, and procurement in general.