Prasetya, Antonius; Denicol, Juliano; Broyd, Tim; (2024) Megaproject procurement strategy: A systematic literature review. In: Proceedings of the EURAM 2024 Annual Conference. European Academy of Management (EURAM): Bath, UK. (In press).

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Abstract

Megaprojects are well-known for their large network of suppliers, which are procured by the client organizations (contracting authorities) and represent a significant part of the megaproject cost. This systematic literature review explores the procurement literature in megaprojects, supporting megaproject clients in the process of designing a procurement strategy. A total of 4,516 titles and abstracts papers were analysed (identification, screening, and eligibility tests), and 94 papers were fully reviewed and included in the final sample. Six main categories were established: 1) understanding the outcomes; 2) engaging the market; 3) packaging the works; 4) selecting the delivery model; 5) selecting the contracting model; 6) defining and implementing a successful tender process. Those categories are broken down into subcategories for further analysis. We present the Megaproject Procurement Strategy (MPS) framework, identifying two stages of the procurement process. First, breaking down megaprojects into several packages based on the internal capabilities, megaproject goals, megaproject characteristics, and market conditions to establish packaging and interface strategy. Second, choosing the most suitable delivery model, contracting model, and tender process that is suitable for each package. Several theories provide foundation to the framework (e.g. Transaction cost theory, resource-based theory, principal-agent theory) and inform the client to design an aligned strategy that considers internal factors (e.g. internal capabilities, megaproject characteristics), also external factors (e.g. market conditions).

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