A Performance-based Qualification and Evaluation Model for e-Procurement

2. A Performance-based Qualification and Evaluation Model for e-Procurement Breakout Session # WC10 – 669 : 202 Pedro Maia Graça L. Valadares Tavares CESUR – Technical University of Lisbon 18th July 2010 2:30 pm – 3:45 pm 1

3. Background CESUR – Technical University of Lisbon Research Institute System Engineering Interdisciplinary and systemic approach to procurement and contract management Spin-offs Bestsintese– Knowledge Management and Innovation eWay – ICT and Knowledge Brokerage

4. EU Directives Full multicriteria model for tender evaluation ePublic procurement for open resctricted and negotiated contracts Green Public Procurement Small Business Act

5. eProcurement in Portugal Full multicriteria model for tender evaluation ePublic procurement for open resctricted and negotiated contracts eOrdering and eInvoicing Green Public Procurement Small Business Act

6. eProcurement in Portugal Mandatory eTendering for open restricted and negotiated process Multiattribute utility theory model to evaluate tenders National wide website for contract notices and awards Tighter thresholds for overrun costs and durations.

7. eProcurement Impact in PT E-Health Portugal (50 tenders 2009) Cost reduction - 18 % National Survey (150 Gov., 100 Vend., 2009) Less time – 62% (Gov); 69% (Vend) Less cost – 78,6% (Gov); 60% (Vend) More Value for money – 77% (Gov)

8. eProcurement Life-cycle

9. eProcurement Life-cycle eCatalogues PQQ SIAP Model

10. EvaluationModel

11. EvaluationModel eCatalogues Tenders Contract evaluation KPI Supplier Evaluation KPI

12. SIAP3000 – - Evaluation Model

13. 1. Evaluation criteria tree • Hierarchical structure • Exhaustive criteria set • Independent criteria

14. 1. Evaluation criteria tree • Hierarchical structure • Exhaustive criteria set • Independent criteria

15. 2. Descriptors (measurers) • Define measurers • Variables • Units • Standarts

16. 2. Descriptors (measurers) • Descriptors • Price = Contract value in K$ • Duration = Time in days from awarding to preliminary reception • Technology = Adopted technology

17. 3. Scoring rules

18. 3. Scoring rules Price v (i,1) 100 0 900 1.500

19. 3. Scoring rules Time v (i, 2) 100 0 days 200 400

20. 3. Scoring rules Technology

21. 4. Criteria weights • Mathematically (sorry!): The ratio expresses the trade-off between k and j: for one unit of variation on j, how much should be variation on k How to elicit the criteria weights? OPTIONCARDS MODEL – Implicit elicitation

22. 5. Multicriteria model v (i)= λ1.V(i, 1) + λ2.V (i,2) + λ3.V (i,3) λ1 = 0,6 λ2 = 0,2 λ3 = 0,2

23. 5. Final scores

24. Advanced Analysis • Sensitivity analysis • Weights (TRIDENT) • Scores • Negotiation • …

25. eProcurement Life-cycle

26. Performance-based Contract Evaluation How to use KPI to get on-going contract performance improvement?

27. Performance-based Contract Evaluation • Aims: • To setup incentives for good performance contractexecution • To pre-specifytheconceptofgood performance • To motivateadapatativecontractmanagement to get a hightlevelof performance eveninthepresenceofunfavorableevents • To avoidfollowingthevendor “black-list”

28. Performance-based Contract Evaluation • Addaptative weights

29. Performance-based Contract Evaluation Case: St. Anthony Hospital – Porto Good-will Overrun duration Overrun cost

30. Performance-based Contract Evaluation • Case: St. Anthony Hospital – Porto • Good-will = Accepting minor changes, responsiveness to quality defectsand requirements • Overrun Cost = % unexpected incurred costs • Overrun Duration = % unexpected duration