Mieke Hoezen, Hans Voordijk and Geert Dewulf
The competitive dialogue (CD) aims to align complex demands of principals with possible solutions that contractors have to offer. It is, however, unclear how formal and informal…
Abstract
Purpose
The competitive dialogue (CD) aims to align complex demands of principals with possible solutions that contractors have to offer. It is, however, unclear how formal and informal structures and processes in the CD are interrelated. The purpose of this paper is to provide insights in to the development of and the relationship between interaction processes during negotiations and commitments in terms of formal and informal contracts during a CD‐procured project.
Design/methodology/approach
Based on a case study of a complex construction project, an event‐driven explanation is provided of the sequence in which a discrete set of critical events occur.
Findings
Critical events show that problems of understanding are caused by differences between the formal legal and the informal psychological contract of one of the parties involved. During all phases of a project, the parties involved oscillate between negotiations and commitments, depending on whether there is understanding or not. Negotiations and commitments act as substitutes. The formal legal contract and the informal psychological contract are complementary.
Practical implications
The competitive dialogue develops less promisingly than hoped for due to risk aversion actions by at least one of the parties involved. Insights of this study help to create more cooperative working relationships and to reduce failure costs of large complex projects.
Originality/value
The in‐depth case study offers a unique opportunity to reconstruct an intensive procurement process by detailed first‐hand information in a specific case.
Details
Keywords
Mieke Hoezen, Hans Voordijk and Geert Dewulf
The purpose of this study is to provide insights in how formal bargaining and informal sense making interact and solve problems of understanding between principal and contractor…
Abstract
Purpose
The purpose of this study is to provide insights in how formal bargaining and informal sense making interact and solve problems of understanding between principal and contractor during procurement through the competitive dialogue (CD) of a complex construction project.
Design/methodology/approach
In an in‐depth case study, a process approach is taken to study how formal bargaining and informal sense making interact in a discrete set of critical events during negotiations in the procurement stage.
Findings
The critical events show that problems of understanding arise due to risk aversion and differences in expectations by at least one of the parties involved. In most of the events observed, aspects of the project context are behind the development of problems of understanding.
Practical implications
Negotiations develop in either positive or negative cycles. If managers of both the procuring authorities and the contractors are aware of these cycles, they might be able to influence and use them to their mutual benefit.
Originality/value
By studying the dynamics in interaction processes between principal and contractor during the procurement stage obstacles and preconditions for an effective CD are shown.