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The paper analyses how public buyers transition from procuring single products and services to procuring complex performance (PCP). The aim is to examine the change in the interactions between buyer and supplier, the emergence of value co-creation and the capability development during the transition process.

A multiple, longitudinal case study method is used to examine the transition towards PCP. The study deploys rich qualitative data sets by combining semi-structured interviews, focus group meetings and organisational reports and documents.

The transition towards PCP can be best described as a learning process which cumulates the knowledge and experience in the client-supplier interaction accompanied by changing contractual and relational capabilities. In public infrastructure this process is not initially motivated by the benefits of value co-creation, but is politically driven.

The study proposes three generic transition stages towards increased performance and infrastructural complexity moderated by contract duration. These stages may help managers of public agencies to identify the current procurement level and the contractual and relational challenges they need to master when facing higher levels of performance and infrastructural complexity.

The study adds to the limited empirical and conceptual understanding on the nature of long-term public-private interactions in PCP. It contributes through a rare focus adopting a longitudinal perspective on these interactions in the transition towards PCP.

While previous studies explored the argument that allies the notion of complexity to the complex product-service offerings being procured, this paper aims to explore whether there is a corollary with exchange governance complexity. More specifically, the paper analyzes the relationship between systemic complexity and complexity of contractual and relational exchange governance in procuring complex performance (PCP) arrangements.

A multiple, longitudinal case study method is used to examine the relationship between systemic complexity and exchange governance complexity. The study deploys rich data sets by combining government and company reports with 43 semi-structured interviews.

Preliminary conclusions suggest that as a response to increasing systemic complexity, organizations respond with increasing contractual governance complexity. However, better performing PCP arrangements illustrate that the use of simplified contractual governance in form of working agreements in combination with relational governance such as inter-personal relationships may be more effective to counteract complexity.

The paper questions whether organizations should respond with increasing exchange governance complexity to counteract systemic complexity. Managers must consider the manageability and enforceability of complex contracts in combination with the formation of inter-personal relationships and simplified working agreements.

This study adds to the limited empirical understanding on the nature of long-term public-private interactions in PCP. It also contributes through a rare focus on the relationship between systemic complexity and exchange governance complexity in PCP arrangements.

Social infrastructure projects such as hospitals are increasingly being procured through public private partnerships (PPP). Due to their complex nature and very high operational requirements, these healthcare projects need special attention in developing robust output specifications at the early procurement stage. The purpose of this paper is to present a model framework of output specifications for adoption by public sector clients in jurisdictions planning to develop hospital PPP/PFI (Private Finance Initiative) projects.

The research is based on an in-depth analysis of best practices from standard and sample project output specification documents used in Australia and the UK for completed hospital projects, reinforced by interviews with key stakeholders in the two countries.

Drafting output specifications for hospital PPP projects is perceived to be a difficult and challenging task due to the complexity and changing needs brought about by evolving health policy, technology and medical advancement. The overarching target of preparing good output specification is to achieve value for money, innovation, risk transfer (including catering for changes), whole life asset performance and establishing performance criteria to link up with the payment mechanism.

The proposed framework is built up from public sector requirements on the physical asset, operational services provided by the private sector, with links to payment mechanism and performance evaluation. It also addresses change mechanism as well as conditions upon hand-over back to the public sector.

Unlike traditional projects which are procured using prescriptive specifications, PPP/PFI projects are procured using performance based output specifications. This paper provides the foundation and a model framework for preparing comprehensive output specifications based on best practices in Australia and the UK, using hospital as the contextual background.

The aim of the paper is to identify and review the impact and challenges of new contractual arrangements on UK military procurement and other limited or oligopolistic markets.

The unit of analysis is the large-scale procurement programme. Two cases of major military platforms (naval and air defence) examine through-life maintenance or “contracting for availability” and build theory on procuring complex performance (PCP). Propositions are developed from the literature then tested and extended from the case analysis, supported by 35 interviews from buyer and supplier representatives.

Examining UK military platform procurement reveals a perspective not present in fast moving high volume supply chains. In oligopolistic markets such as defence, the Ministry of Defence (MOD) represents a market of one, seeking ambitious and non-incremental innovation from the prime contractor during the procurement process. The new contractual arrangements show an increasing shift in responsibility to the prime contractor who coordinates service support and supply chain incentivisation over extended, often multi-decade platform lifecycles.

The cases were conducted separately and later compared. Whilst based on defence sources, the paper concludes with general recommendations for all public-private complex procurements and seeks to explore other industry sectors as part of further research into PCP.

Examined from a theoretical and practical perspective, the cases reveal the challenges facing procurement in major public-private projects. The changing role identified reflects extended timescales and the quasi-market military procurement environment, compounded by current economic and politically charged conditions. Procurement by default increasingly plays a new shaping role in large-scale programme management driven by outcome-based contracting. Customers such as the MOD must re-evaluate their role under these new contractual arrangements, providing leadership and engaging with future contracting capability and innovation.

The study sets out to demonstrate how a lifecycle perspective on complex, public-sector procurement projects can be used for making qualitative assessments of procurement policy and practice and reveal those procurement capabilities that are most impactful for operating effectively.

Agency theory, institutional theory and the lifecycle analysis technique are combined to abductively develop a framework to identify, analyse and compare complex procurement policies and practices in public sector organisations. Defence is the focal case and is compared with cases in the Nuclear, Local Government and Health sectors.

The study provides a framework for undertaking a lifecycle analysis to understand the challenges and capabilities of complex, public-sector buyers. Eighteen hierarchically-arranged themes are identified and used in conjunction with agency theory and institutional theory to explain complex procurement policy and practice variation in some of the UK’s highest-profile public buyers. The study findings provide a classification of complex buyers and offer valuable guidance for practitioners and researchers navigating complex procurement contexts.

The lifecycle approach proposed is a new research tool providing a bespoke application of theory by considering each lifecycle phase as an individual but related element that is governed by unique institutional pressures and principal-agent relationships.

This paper explores how public buyers' capabilities promote collaboration with private suppliers to obtain enhanced performance in complex projects.

The authors conducted two case studies on the procurement of complex military projects by the Brazilian armed forces involving public buyers and private suppliers. The authors followed the Gioia methodology to inductively analyze data from interviews, official documents, media articles and project meeting notes.

The authors identified public procurement capabilities that are antecedents of collaborative trust-based relationships with suppliers in complex public-private projects. The authors unpack these capabilities in three subsets: abilities to manage the bidding and contracting process, to handle relationships with prominent stakeholders, such as audit control bodies and to manage knowledge acquired within and across current and past projects. By developing these capabilities, public buyers can build collaborative trust-based relationships with suppliers, which enable the conciliation of operational performance (i.e. on-time delivery, budget and scope compliance) and policy goals (i.e. inclusion of local suppliers in supply chains).

The authors extend the literature on the enablers of trust and collaboration in buyer-supplier relationships by providing a detailed account of which capabilities are necessary on the buyer side in complex projects, especially when accountability standards create barriers for collaborative practices. The authors also reinforce the importance of the operations and supply chain management scholarship in policy debates by showing how buyer-supplier interactions can create value in complex projects with public and private sectors.

The paper argues that indirect capabilities – the ability to access other organizations' capabilities – are an important and neglected part of firm strategy in procuring complex performance (PCP) settings, and that this is especially so if these settings are treated as genuinely complex, rather than merely complicated. Elements of indirect capabilities are identified. The paper aims to discuss these issues.

This is a theoretical paper, drawing on complexity notions and Penrose's analysis of endogenous innovation to drive a disequilibrium-oriented discussion of the capabilities required by firms in a PCP setting.

Six inter-related elements of indirect capabilities are proposed and discussed: IT infrastructure, boundary management practices, contracting, interface artefacts, valuing others' capabilities and relating direct to indirect capabilities. These are important in PCP settings and in other operations and supply settings characterised by complexity.

This paper reconsiders the way complexity has been treated in the PCP literature and develops an extended discussion of the notion of indirect capabilities. It potentially provides the basis for an operations and supply strategy more attuned to the demands of shifting inter-organizational networks.

The purpose of this paper is to focus on the challenges faced by the public and private sectors in developing output specifications for Australian public private partnership (PPP) projects. In particular, this study aims to examine how the stakeholders (including facilities managers) should cater for future changes in output specifications and make them flexible enough to meet the evolving project objectives.

The research is based on 19 semi‐structured interviews with key stakeholders from the public and private sectors in three States of Australia where PPP procurement has been used, including New South Wales (NSW), Queensland and Victoria. The results are triangulated with relevant literature for supports and contrasts.

For PPP projects, a good set of output specifications is conducive to the achievement of value for money, innovation, risk transfer, whole life asset performance through a clear abatement regime and an effective linkage of performance criteria to the payment mechanism. For existing specifications, it was found that too many and complex KPIs were specified, which were difficult to monitor, measure and implement by the client. Very prescriptive specifications hindered innovations and did not allow appropriate risk allocation. Further, the research study suggests that after the global financial crises, the private sector had less appetite to take the patronage risks in road and rail PPP projects. To mitigate these pitfalls, it is imperative that output specifications need to be aligned with the type of PPP projects they represent; in particular foreseeable changes should be addressed by some pre‐agreed framework to facilitate negotiation.

The significant contribution of this research is the identification of the common issues faced in drafting output specifications for Australian PPP projects. Stakeholders of future PPP projects should find the lessons useful for achieving value for money and appropriate risk transfer, stating the user requirements through clear and concise output specifications rather than input or prescriptive specifications in procuring social and economical PPP projects. Their relationships with facilities management are highlighted.

Faced with reduced budgets and rising service expectations, public authorities are increasingly cooperating with private businesses. This paper examines an alternative procurement- and service delivery concept, Performance-based Logistics (PBL). It has been introduced by the US and UK armed forces. However, other nations, such as Germany, are still reluctant to follow. This article has two aims: First, to identify the conceptual characteristics of PBL, and second, to analyze potential reasons why although PBL is popular in some nations, others are so reluctant to introduce it. This will be done using a mixed method approach. The concept of PBL will be introduced by deductively developing a conceptual model of PBL using a business model framework. The analysis of PBL application will be performed using an in-depth case study from the German defense sector. This will be framed by a literature review and concluded by managerial recommendations.