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Subcontractor Selection Process Through Vendor Bids: A Case of An Outsourcing Service in Construction
IIM Kozhikode Society & Management Review Pub Date : 2020-07-31 , DOI: 10.1177/2277975220942078
Shobha Ramalingam 1
Affiliation  

Subcontractors handle a large portion of the work in construction projects. The ability of the general contractor to deliver projects on time, within budget and with the expected level of quality are significantly dependent on the performance of subcontractors. Thus, selecting the right subcontractor for the right task is a determining factor for project success. Literature has identified several criteria for subcontractor selection that predominantly includes financial capacity, ability to complete on time and reputation and quality of workmanship. However, as projects are becoming more global and complex, ensuring selection and award through a fair and competitive formal process becomes imperative. Nevertheless, an understanding of a formal process, backing the selection criteria, seems to be lacking; more so in the context of engineering outsourcing services. Vendor bid analysis is one such service, wherein the general contractor packages the bids received from several subcontractors to a team in a different country who evaluate and enable the general contractor to select and award the subcontractors for project tasks. To this end, an exploratory case study was conducted in an outsourcing firm in India that provide services to general contractors in the USA to understand the formal process of subcontractor selection across organizational boundaries along with its inherent risks and challenges. Data was collected through a participatory research approach, supplemented with participant observation and team interviews which were analysed through inductive reasoning and cross-case comparison methods. The findings showed a formalized 5-phase process across the organizational interface that included assess, identify, evaluate, negotiate and optimize phases. Further, delving into the evaluate, negotiate and optimize phases, the nuances in outsourced projects and the firms strategy to overcome them were evident, such as selection criteria and negotiation strategy adopted in the case of a single bidder with high pricing to mitigate probable bid-rigging practices or ensuring constant training to overcome the challenges due to lack of trade and country specific know-how. In addition, through a reflective approach, the value addition services provided to the general contractor aimed to optimize the process and improve project governance. These findings are expected to provide practical implication for firms in similar business and act as a steppingstone to conduct further robust research.



中文翻译:

通过供应商竞标的分包商选择过程:以建筑外包服务为例

分包商处理建筑项目中的大部分工作。总承包商在预算范围内按时交付项目并达到预期质量水平的能力在很大程度上取决于分包商的绩效。因此,为正确的任务选择合适的分包商是项目成功的决定因素。文献确定了分包商选择的几个标准,主要包括财务能力,按时完成的能力,声誉和工艺质量。但是,随着项目变得越来越全球化和复杂,确保通过公平竞争的正式程序进行选择和授予奖项变得势在必行。然而,似乎缺乏对正式程序的理解并支持选择标准。在工程外包服务方面更是如此。供应商投标分析就是这样一种服务,其中总承包商将从几个分包商收到的投标打包到不同国家的团队,该团队评估并允许总承包商选择和授予分包商以完成项目任务。为此,在印度的一家外包公司进行了探索性案例研究,该公司向美国的总承包商提供服务,以了解跨组织边界的分包商选择的正式过程及其固有的风险和挑战。通过参与式研究方法收集数据,辅以参与者观察和团队访谈,并通过归纳推理和跨案例比较方法进行分析。评估,识别,评估,协商优化阶段。此外,在评估谈判优化阶段中,外包项目中的细微差别以及克服这些问题的公司策略是显而易见的,例如在单个竞标者中采用高定价以降低可能的竞标价格时所采用的选择标准和谈判策略。操纵实践或确保进行持续的培训以克服由于缺乏贸易和特定于国家/地区的专有技术而带来的挑战。此外,通过反思性方法,向总承包商提供的增值服务旨在优化流程并改善项目治理。这些发现有望为从事类似业务的公司提供实际的启示,并为开展进一步的稳健研究打下基础。

更新日期:2020-07-31
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