| A new approach to service providers |
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| With
the performance-based approach,
service providers propose the
number of workers required for
the job. |
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The Civil Aviation
Authority of Singapore (CAAS) is adopting a new
paradigm. It is increasingly taking a performance-based
approach to developing its tender specifications
for providers of maintenance and security services.
This is in contrast to its previous approach, which
was prescriptive-based.
For
a prescriptive-based tender, CAAS would define the
work/service schedule in terms of when to do, what
to do and how to do the job. For example, CAAS would
specify in detail the parameters pertaining to working
hours (shift system), manpower requirements and
logistic requirements.
But it is changing its way of doing things. CAAS
is now gradually adopting the performance-based
tender method where tenderers are required to propose
the inputs to perform the specified scope of work
based on performance standards set by CAAS.
The reason is that CAAS has over the years accumulated
historical data and records and can effectively
develop outcome specifications. Its staff have also
received training in performance measurement and
gained relevant knowledge from other agencies.
The new tender specifications have enabled CAAS
to enjoy cost savings.
Provision of maintenance
services
For example, CAAS called a performance-based tender
for three term contracts in March 2003. The term
contracts covered maintenance, minor works, servicing
and the repair of the mechanical, air-conditioning
and electrical systems in Changi Airport Terminals
1 and 2 and other airport buildings.
By revising the tender specifications, CAAS saves
$5.33 million (35.8%) per year.
Provision of security
services
In May 2004, a performance-based tender was called
for the provision of security services in Changi
Airport. The change in tender specifications resulted
in a reduction of 53 men required to provide the
security services. This translated to savings amounting
to $3.95 million (19.5%) per year.
More benefits
The results of the above tenders show that performance-based
tenders are more cost effective than prescriptive-based
tenders. The new approach also benefits the service
providers.
For example, the service providers can quote more
competitively for the performance-based tender because
they can determine the inputs (e.g. manpower and
resources) required to perform the specified scope
of work instead of having to comply with predetermined
inputs. The service providers also have the opportunity
to be innovative and improve their productivity
and efficiency in performing the jobs.
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Prescriptive-based |
Performance-based |
| Maintenance schedule |
Paint road markings every
quarter |
Paint road markings when
needed |
| Manpower requirements |
Fixed number of workers
to be provided |
Service provider proposes
number of workers |
| Fixed shift system |
Three shifts within the
24-hour timeframe |
Service provider suggests
shift system |
| Logistic requirements |
Service provider to provide
specified requirements |
Service provider proposes
logistic requirements |
| The
differences between prescriptive-based and
performance-based tender specifications. |
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