Assessing Infrastructure Project Innovation Potential as a Function of Procurement Mode

Abstract

The delivery of infrastructure projects as long-term capital investments is impacted in most cases by critical issues of budget constraints, program delays, quality and safety concerns, and an increasingly complex stakeholder environment. Innovation, as it relates to the physical, process, organizational/contractual, and financial/revenue dimensions of a project, has a central role to play in not only contributing to the requirements set for a wide variety of project performance metrics but also improving upon them. Proposed in this paper is a theory in the form of a set of factors (drivers/inhibitors to innovation) and related state values that influence the potential for the identification and adoption of innovations that improve project efficiency or offer increased value. This theory is embedded in a supporting assessment framework to assist with selecting and structuring a project’s procurement mode to enhance the innovation potential of a project from the perspective of a government agency tasked with such decisions. The framework was developed in response to a lack of tools to help practitioners with tasks relating to innovation assessment, especially in regard to conducting a public sector comparator analysis when a public–private partnership procurement mode is being considered among others; and aligning terms and conditions in bid documents, requests for proposals, and concession agreements in a way that fosters beneficial innovations to the extent that factor states can be controlled. The framework provides the project evaluation process with a means of assessing project innovation potential at the very front end of the procurement mode selection process, and is meant to be comprehensive yet simple and easy to use in practice. It can also be used by researchers to help analyze on a postproject basis reasons why innovations were or were not adopted for a specific project context. The framework is applied to case studies on two infrastructure projects in Scandinavia and the United States to demonstrate its application and to assess the role that choice of procurement mode had in influencing the innovations used.