Facility management outsourcing through multi-attribute auctions. (2017)

• Record Type: Journal Article
• Authors: Avenali, Alessandro; Matteucci, Giorgio; Nonino, Fabio; Reverberi, Pierfrancesco
• Is Part Of: International journal of applied decision sciences. Volume 10:Number 3(2017)
• Page Start: 233
• Page End: 253
• Publication Date: 2017
• Subjects: facility management activities -- outsourcing -- incomplete contracts -- procurement design -- multi-attribute auctions -- endogenous score; Decision making -- Periodicals; Management science -- Periodicals; 658.403005
• Languages: English
• ISSNs: 1755-8077

Abstract

We introduce a multi-attribute auction-based mechanism with an endogenous score as a means to innovate the procurement of facility management (FM) activities in private and public sectors. The mechanism allows the procurer to request bids on several measurable technical and economic attributes of the supply of FM services. The procurer also assigns weights to such features to signal their importance to the sellers, while the score obtained with respect to each attribute is endogenously determined on the basis of the submitted offers for the attribute. The proposed mechanism mitigates the most relevant drawbacks due to the lack of skills and of crucial information on the outsourced non-core activities, while requiring the procurer very little auction design effort. On the one hand, the mechanism can extract from suppliers valuable private technical knowledge as well as the information on the supply cost. On the other hand, it saves the procurer from detailing ex ante both the score which will be assigned to any possible bid for every attribute and the exact value to require for any technical feature of the supply.