Case Study: Performance Information Procurement System (PIPS) in the Netherlands

29 Jan Case Study: Performance Information Procurement System (PIPS) in the Netherlands

By Dean Kashiwagi, Jacob Kashiwagi

January 2011

Abstract
The Dutch construction industry experienced a problem with collusion for five years ending in 2003. Innovative Dutch visionaries perceived a potential relationship between an inefficient, transaction laden, over-regulated low price award environment and supplier collusion. Kashiwagi and the Performance Based Studies Research Group (PBSRG) introduced the Construction Industry Structure (CIS) and best value Performance Information Procurement System to the Netherlands in 2004. Heijmans (third largest Dutch contractor) and the Rijkswaterstaat brought the PIPS technology into the Netherlands by signing licenses in 2006, Santema and Scenter/Delft University of Technology followed later in 2006, and became the first successful research group to build a PBSRG type research platform. In 2009, the Rijkswaterstaat utilized Scenter’s expertise to deliver $800M of fast track infrastructure construction utilizing the best value PIPS concepts. The preliminary test results included the following: collusion problems may be caused by client delivery system, problem with construction industry performance is a process issue and not a technical issue, best value PIPS can solve Dutch construction problem issues and is a paradigm shift more than a legal issue, validation of the PBSRG model of simultaneous basic theoretical research, prototype testing, and implementation using industry funding may be the quickest way to change industry practices.