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private finance,public roads configuring the supply chain in PFI highway construction
European Journal of Purchasing Supply Management 6 (2000) 227}235
Private nance, public roads: conguring the supply chain in PFI
highway construction
Mark Hall*, Robin Holt, Andrew Graves
Agile Construction Initiative, School of Management, University of Bath, Bath UK
Accepted 6 April 2000
Abstract
During the 1990s the UK witnessed a change in public procurement strategy. Under the private nance initiative (PFI) the
obligation of the UK Government shifted from procuring capital assets to purchasing (directly or indirectly) the #ow of supply
services from such assets. The concomitant change within the private sector requires its involvement not only in the construction of an
asset, but in its conception, its long-term nancial viability and its operational integrity. What is supplied through the construction
chain to the client is not an asset or components thereof, but services. The attitudes prevalent within the tender, design and
construction phases of a current PFI variant (the design build nance operate or DBFO) road project were investigated in order to
establish the potential impact upon the quality, cost and function of supply resulting from the change in procurement form. Attention
was paid to the crucial links in the supply chain, from the client through the rst and second tier suppliers, analysing the changes
instilled in those parties by their being exposed to the DBFO from of procurement. Signicant di!erences were found in how the
suppliers regarded the tender, design and construction phases. Where previously suppliers attention was paid to claims positioning
and the potential for leveraging prot through the identication of liabilities, under the DBFO problem-solving attitudes overrode
those of problem avoidance. This conrmed the prevailing opinion among the construction industry that DBFO road schemes
constitute a valuable in#uence over the mode of supply, worthy of development. ( 2000 Elsevier Science Ltd. All rights reserved.
Keywords: Construction pr
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