e-procurement;reverse auctions;electronic transactions;procurement innovation
The MENA Journal of Business Case Studies
Copyright © 2016 Timothy G. Hawkins and Michael J. Gravier. Distributed under Creative Commons CC-BY 4.0
Government e-procurement initiatives have the potential to transform local institutions, but few studies have been published of strategies for implementing specific e-procurement tools, particularly involving procurement by a foreign government adapting to local culture in the Middle East/North Africa (MENA). This case describes procurement at a forward operating base (FOB) in Kuwait in support of operations in Iraq. The government procurers had to deal with a phenomenon unique to the MENA region: wasta. Wasta is a form of social capital that bestows power, influence, and connection to those who possess it, similar to guanxi in China. This study explores the value proposition and limitations of electronic reverse auctions (eRA) with the purpose of sharing best practices and lessons learned for government procurement in a MENA country. The public value framework provides valuable theoretical insights for the implementation of a new government e-procurement tool in a foreign country. In a culture dominated by wasta, the suppliers enjoyed the transparency and merit-based virtues of eRA’s that transferred successfully into the new cultural milieu: potential to increase transparency, competition, efficiency, and taxpayer savings. The practices provided herein are designed specifically to help buyers overcome structural barriers including training, organizational inertia, and a lack of eRA policy and guidance while implementing a new e-procurement tool in a foreign country.