Leyla Bozkurt in Financieele Dagblad on innovation partnerships

The Financieele Dagblad newspaper has confirmed the trend that innovation-oriented procurement is increasingly gaining ground. Leyla Bozkurt provided an explanation of the innovation partnership procurement procedure. That procurement procedure offers many advantages to both principals and contractors. The article, which addresses innovation and sustainability in public contracts in the building sector, describes several specific real-life examples, which demonstrate that if procurement officers are open to “different manners of procurement”, the market will also embrace them. Builders simply also need green principals to work in a more sustainable and greener manner.

Leyla Bozkurt explains in the article what the advantages of Project Sterke Lekdijk were (and are). She organised that contract for the reinforcement of the dyke between Amerongen and Schoonhoven together with a team of Hoogheemraadschap De Stichtse Rijnlanden. The project, that has a budget of €400-€500 million and will run for a period of ten years, was awarded this past summer to Van Oord, Mourik and the Lekensemble, a consortium of Heijmans, GMB and De Vries & Van de Wiel.

The Financieele Dagblad wrote:

“The contracting authority intentionally opted for an innovation partnership, says lawyer Leyla Bozkurt of Maverick Advocaten. Together with a water authority team, she organised the public procurement process for the reinforcement of the dyke between Amerongen and Schoonhoven. The project was awarded this past summer to Van Oord, Mourik and a consortium of Heijmans, GMB and De Vries & Van de Wiel.

The innovation partnership is a relatively new instrument that can be used in public procurement procedures since 2016. Also in this case, no price was agreed on beforehand. The tenderers submitted innovative ideas, had to be transparent about the costs, indicate how they intended to control those costs, and state which persons they would be engaging. Bozkurt: “That HR component is very important. The persons engaged must be able to work together well in a team and may not automatically fall back on hierarchical principal-contractor relationships.”

No price agreement, but not more expensive

The fact that no price was agreed on beforehand with the Sterke Lekdijk contractors does not mean that the project will turn out to be more expensive, according to Leyla Bozkurt of Maverick Advocaten. Open accounting is used and incentives have been introduced.

For instance, a contractor does not start the implementation of its first project until it lives up to the expectations, works together well with the other builders and offers insight into the costs. If it performs well, it may be awarded one or more of the six sub-assignments. If it performs poorly, it may even lose it assignment to another party. On the other hand, the contractors now already know what they may earn on the projects. A margin has already been agreed for overheads, profit and risk.

It is in both parties’ interest to make as realistic an estimate of the costs of the projects as possible and to limit the loss as soon as possible in the event of setbacks. Bozkurt: “The current estimate of €400-€500 million seems a lot of money, but the bottom-line result will most likely not be more expensive, or will even be cheaper, than that of a standard project. Delays, additional costs and conflicts are less likely to occur. And the quality of the dyke reinforcement will ultimately be higher.”

In her opinion this setup is also excellently suited for the healthcare, ICT and public transport sectors. Power imbalances and explosive cost increases still occur in ICT contracts in particular.

Zero-emission dyke reinforcement

There was certainly no lack of interest: no fewer than 33 parties signed up. That number was reduced to eight builders/consortiums during the procurement procedure, with three of which contracts were ultimately signed. In addition to methods of dyke reinforcement with minimal impact on the landscape, the procedure also gave rise to the aim for zero-emission dyke reinforcement. An unparalleled objective in a project of this size.

Bozkurt: “During the procurement procedure already, Heijmans, GMB and De Vries & Van der Wiel started to set up a network of cooperating organisations to achieve that objective. The idea was also suggested to jointly order equipment and exchange knowledge. That idea has now been adopted by more contractors and suppliers.”

The Emissieloos Network Infra (ENI) has now grown into a partnership of 27 parties, consisting of importers and developers of building equipment, start-ups and suppliers of batteries and hydrogen systems. The ambitions are high, says project manager Edwin Lokkerbol of ENI: “The Directorate-General for Public Works and Water Management and the water authorities are aiming for zero emission implementation by 2030. We wish to achieve that aim by 2026 already.”

More information on innovative procurement can be found in this blog and in our information portal. See here for the innovation partnership of Project Sterke Lekdijk.

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Leyla Bozkurt

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