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Train from above on the rails

How the Swedish Transport Administration contributes to an efficient supplier market

Our goal is to contribute to efficient supplier markets. This is a prerequisite for our procurements to be able to create the highest possible value for citizens and businesses.

The summary below describes overall what is being done within the Swedish Transport Administration to contribute to efficient supplier markets.

Our role as employer

Over the past ten years, our ambitions as a employer have continuously developed and improved. An important insight that we have brought with us is the importance of having a well-thought-out structure for how the employer and supplier interact, especially when it comes to solving problems at an early stage. There is an ambition to create better conditions for industry partners to cooperate and thereby create better results for all parties.

The Swedish Transport Administration's ambition as an employer is to be perceived and act in a value-creating, active and clear way. A project is underway in 2021 with the aim of further developing the employer role, where collaboration, processes, risk management, leadership and technical regulations are subprojects.

Our business strategy for contracts and technical consultants

We use so-called type contracts and type assignments. The type contract or type assignment chosen is determined based on the complexity and uncertainty of the project, the freedom the supplier can enjoy in project implementation and the need for innovation or other benefits (see heading below).

Each type contract or type assignment has a defined overall strategy. Standard projects with sufficient degrees of freedom advocate, for example, the contract models Collaboration Basic, design and construct contract and fixed price. Complex projects with very high uncertainty advocate, among other things, the contract model Collaboration High in combination with ongoing accounts with financial incentives and target costs.

Innovation or other benefits

In 2019, the Swedish Transport Administration's business strategy was revised, with the aim of creating driving forces and opportunities for innovation. The new version means that "innovation or other benefits" becomes a parameter to consider in all procurements. This creates a greater opportunity to procure contracts that drive innovation and productivity linked to opportunities and threats in the project's risk analysis. When analysing that the innovation or other benefit parameter is up-to-date, the strategy advocates that bonuses or added value can be used as a driving force in procurement.

Risk management and risk allocation

Our starting point is to create conditions for a reasonable sharing of risk between customer and supplier through the risk being borne by the party that has the best conditions for managing and reducing the risk.

Packaging

Packaging for serial production is done by combining individual objects that together create conditions for serial production and economies of scale. This is then placed in relation to the competitive situation. Packaging is also done in the form of framework agreements relating to land contracts. Current framework agreements and forthcoming framework agreement procurements create conditions for smaller companies to compete with larger ones.

Sustainability and competition on equal terms

We are investing in the systematic steering and follow-up of social requirements (taxes, minimum wages, zero tolerance of child labour, a good work environment etc.), reduced negative impact on the environment and work environment, as well as employment promotion measures that will provide opportunities for people who are far from the labour market. The Swedish Transport Administration makes special efforts to control suppliers' compliance with social requirements, including in the form of audits. The aim is to ensure that our suppliers do not create for themselves competitive advantages by violating the social requirements that we set in implemented procurements.

We invest in sustainability and also see this as a way of creating competition on equal terms. In 2020, audits of social and environmental requirements regarding selected contracts were carried out. Work on audits will continue in 2021.

Supplier team work develops employer and suppliers

The purchasing organisation has established national supplier teams and contact persons for the 150-200 largest suppliers. The suppliers have been divided into A and B suppliers based on purchase volume and supply risk.

Our supplier teams follow up and assess suppliers' deliveries at national level. For the suppliers, the teams are a clear entrance and communication channel to the Swedish Transport Administration. The teams and contact persons are responsible for relations with their suppliers and for maintaining dialogue on performance, areas for improvement and clear communication.

The supplier follow-up system Experience

Since 2016, we have regularly evaluated suppliers' performance with the Experience tool. Experience is a support system where projects and deliveries from different suppliers can be systematically assessed and evaluated. This is based on standardised assessment templates in which the buyer can score delivery implementation in terms of delivery reliability (time), quality, finance, the environment, safety, transport, documentation, technique and development and collaboration and communication.

Experience is an important tool in the work of continuous improvement. Such systematic follow-up develops both the supplier and the Swedish Transport Administration, and in the long run it develops the entire industry.

Follow-up of the satisfied supplier index (NLI)

Since 2011, measurement of the satisfied supplier index (NLI) has been a recurring survey aimed at following the suppliers' satisfaction with the Swedish Transport Administration as a customer. The NLI measurement shall provide feedback on the Swedish Transport Administration's work with suppliers and give the Swedish Transport Administration the opportunity to act on the comments collected in the survey. The measurement shall also serve as an indicator in the work to streamline internal processes and improve external relations. The survey consists of some thirty questions in several areas and goes out to our 150–200 largest suppliers.

Trends for foreign suppliers

We are one of many parties in an increasingly globalised construction market. We strive to attract foreign companies that want to establish themselves in Sweden, in order to achieve increased competition and innovation. In recent years, it has become more common for Swedish and foreign companies to cooperate in various forms of alliances, especially in large Transport Administration projects.

By involving and competing for the assignments, foreign companies can also achieve increased competition, which is particularly important for those areas where the number of national bidders is low. But it can also increase the influx of new methods, technologies and skills.

Trends for small and medium-sized suppliers

For many years now, work has been under way to reduce barriers to entry for SMEs so that they can more easily participate in our procurements. We have many smaller projects that are suitable for small and medium-sized companies, and we also have special framework agreements for land contracts that will allow smaller companies to learn the market (open to all companies regardless of size).

In order to further improve the possibility of submitting tenders and implementing projects for SMEs, five supply teams have been set up, one in each region working to reduce barriers to entry. There is a need to develop the market for small and medium-sized consulting companies.