https://doi.org/10.24928/2024/0100

Whose Game Is It? Do Small and Medium Size Enterprises Win Alliance Contracts?

Eelon Lappalainen¹, Aku Hänninen², Olli Seppänen³, Petri Uusitalo⁴ & Timo Heiskanen⁵

¹Doctoral Candidate, Department of Civil Engineering, Aalto University, Finland, [email protected], orcid.org/0000-0002-7573-344X
²Master of Science, Ideastructura Ltd., Finland, [email protected], orcid.org/0000-0001-9451-2725
³Associate Professor, Department of Civil Engineering, Aalto University, Finland, [email protected], orcid.org/0000-0002-2008-5924
⁴Postdoctoral Researcher, Department of Civil Engineering, Aalto University, Finland, [email protected], orcid.org/0000-0002-5725-906X
⁵Master of Science, Diamond Consulting Ltd., Finland, [email protected]

Abstract

This empirical archival study investigates the distribution of alliance contracts (ACs) between small and medium-sized enterprises (SMEs) and large enterprises (LEs). Previous research has identified concerns about ACs in relation to the participation of SMEs in public procurement markets in the construction sector. The aim of this study was to understand how these contracts are distributed in the construction sector and to provide additional information for industry players on ACs. The study analyzed 80 investment alliance projects from 2011 to 2023, demonstrating a decreasing trend in SME participation against an increase in LE involvement. The findings revealed a concentration of ACs among a few LEs, with a significant portion of SMEs not participating in these alliances. While 81 SMEs have engaged in Finnish ACs, this number is small compared to the total number of SMEs in the industry, pointing to an imbalanced contract distribution favoring LEs. The study also noted a steady rise in the relative share of alliances in the overall construction market. This research sheds light on the challenges of asymmetric AC distribution and offers valuable insights for public works procurement bodies, industry consultants, and AC participants and researchers, highlighting the need for balanced contract allocation.

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Reference

Lappalainen, E. , Hänninen, A. , Seppänen, O. , Uusitalo, P. & Heiskanen, T. 2024. Whose Game Is It? Do Small and Medium Size Enterprises Win Alliance Contracts?, Proceedings of the 32nd Annual Conference of the International Group for Lean Construction (IGLC 32) , 583-596. doi.org/10.24928/2024/0100

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