Improving the Current Procurement System in Saudi Arabia: A University Case Study

Improving the Current Procurement System in Saudi Arabia: A University Case Study

By Majed Alzara, Mohammed Algahtany, Jacob S. Kashiwagi, Abdulrahman Al-Tassan, Dean Kashiwagi

December 2017

Public projects in Saudi Arabia have faced performance issues. The primary procurement system used in Saudi Arabia (low-bid) does not consider the contractors’ performance. A case study conducted at a university campus in northern Saudi Arabia showed low project performance. The current procurement system was analyzed and modified to utilize the concepts of the Best Value Performance Information Procurement System (BV PIPS). BV PIPS has demonstrated high levels of project performance in previous tests. A large survey was conducted of 761 classified contractors and 43 universities’ representatives. Survey respondents were asked to quantify their view regarding the current procurement system, rate their level of agreement regarding Best Value principles, and rate their level of agreement with the newly proposed procurement system which integrates Best Value principles. The results of the survey show that both, clients and contractors, are dissatisfied with the current procurement system, and agree with the new procurement system. The survey also suggests that respondents agree with Best Value principles suggesting that contractors’ performance should be tracked, and procurement should be conducted using both price and past performance information. The authors recommend that the newly proposed procurement model should be implemented in more projects in Saudi Arabia to further validate the Best Value system and improve the performance of projects in the country. Key Words Performance, cost, overruns, low-bid, public construction, selection, clarification, contractor, Saudi Arabia, Best Value performance information procurement system, BV PIPS.

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