The Modern System

 A Short History of Building Procurement: Part 3

By the beginning of the 1800s builders were becoming recognised as an occupation, and as their firms developed they often specialised in certain types construction, such as civil engineering during the boom in railway building later in the century. Others, such as William Cubitt, became developers, building housing to meet demand from the rapid growth of cities. By the middle of the 19^th century large contracting businesses had taken on the form that in many ways we still see today, and procurement and contracting was using the same, or a recognizably similar, system.

There were two key characteristics of this new procurement system. First was the use of detailed drawings and design, completed before the work began. The second was the preparation of cost estimates for the project, on the basis of the design drawings. The two significant outcomes of these characteristics, that became the foundations of the modern system, were the shift to competitive tendering and the growth of the professions.

The construction of Westminster in the 1830s was one of the first buildings to be done with detailed drawings from the architect and a bill of quantities (BQ) with full estimates based on them. Under the system of measure and value costs had been determined on completion by a measurer, originally a tradesman, and over time this became a specialised task. As the new method of procurement and contracting appeared measurers became more important, as prices had to be agreed between the architect, client and builder before work began. Measurers became quantity surveyors.

A series of government commissions on building procurement produced reports that sometimes, but not always, favoured competitive tendering. Nevertheless, as the system became more widespread government departments came round to the idea that it was the best way of obtaining value for money. By the middle of the 19^th century competitive tendering on the basis of design and price specification had become the usual practice.

The new profession of quantity surveying was therefore an essential element in the new system. The procurement method where clients invite tenders on the basis of completed designs made it necessary for the client to know whether the tender prices were reasonable, so every element of the design had to be quantified in terms of materials and labour, and priced. While bills of quantities date back to the middle of the 18^th century, by the close of the century something close to a modern BQ was coming into use. An 1828 parliamentary committee investigating the Office of Works and Public Buildings found the practice had become well-established. So bills of quantities become fundamental to the contracting system in Britain, and later became part of the required contractual documentation. It is worth noting that other European countries did not find the detailed bill as essential.

Not all of the projects using the new system were won through competitive tendering, often contracts were negotiated with firms familiar to the client or architect. In these early days of fixed-price contracting, the idea of competition was controversial. Much of the opposition to the contracting system was really opposition to competitive tendering, rather than to the idea of a single contract with an agreed sum. Competition was believed to lead to lower standards as contractors would bid low to win work and could not possibly match those prices without reducing standards.

It was also feared the contractors would abuse the system through collusion on bid prices or corrupt practices. Fears that have been justified more than once, as too bid rigging, cover pricing, unsuccessful tender fees and market sharing, which were all reported to occur then are sometimes found today. The protection against such practices was initially based on the idea of only employing ‘respectable’ builders, and the idea of respectability was seen as protection against the consequences of competition. Rather than reliance on builders’ respectability the best protection against abuse came to be seen as careful pricing of specifications and close supervision of the work by the architect, or other agent.

One key element of the builder’s respectability was possession of sufficient capital and employees to carry out a job without subcontracting, which was regarded as a dubious practice. Clients wished to avoid subcontracting, so it was often done secretly. The original large contractors employed craftsmen in every trade and were expected to complete most of a project under their own management. However, the advantages of subcontracting led to its widespread adoption by the middle of the 19^th century. The advantages then still exist today, such as flexibility of employment, managing risk and liability, and specialisation, which was important as the development of new materials and new components required new skills (for example patent glazing, iron and steel frames, gas, and later electrical and lighting).

This was also a time a rapid technological innovation and development, both by and for contractors. Satoh has six chapters on 19^th century technical advances in his Building in Britain, covering: stone, wood, bricks, components, pumps and lifting machinery. Like other industries the widespread availability of steam power was transformational in the application of new machinery in the contractors’ workshops, and the use of mechanization on building sites slowly increased. There was also an ongoing transfer of site work into the workshops. For the largest firms these were huge, William Cubitt (contractor brother of property developer Thomas Cubitt) had 25 acres on the Isle of Dogs in 1845, complete with wharves, sawmills, cement kilns, an iron foundry, brickfields, a pottery and so on, linked by an internal railway and employing about 800 men.

In 1834 the Builders’ Society was formed in London, partly in response to the rise of the labour movement as the influence of the guilds declined with competitive tendering, and by coincidence the same year as the founding of the Royal Institute of British Architects (RIBA). Its main purpose however, according to Satoh (1995: 96), was to hold together builders “who being asked to tender on a specification that did not contain an arbitration clause had all declined. The arbitration clause seems to have indicated what was to be done in the case of controversy between owner and builder.” These arbitration clauses were the source of many disputes and conflicts between contractors and architects, and led eventually to the Conditions of Contract agreement, much later.

Architects strongly favoured traditional contracts for price over contracting in gross, at a fixed sum for the whole project. The reason given by Satoh is “the tedium of preparing the correct drawings and specifications beforehand” (1995: 292) rather than preparing designs and giving directions as the work progressed, as they used to do. However, as conflicts between owners and contractors became more common, and intense, under the new competitive system, architects realized the importance of the role of the project superintendent. With the central role of the architect as client representative becoming established, the RIBA wanted to ensure architects were seen as acting on behalf of their clients. Concerned about potential conflict of interests and protecting clients the RIBA, in 1887, prohibited members from getting involved and profiting from the organisation of building work.

The idea of the contract is to make clear what the obligations of each party has, but no one has ever devised a contract that eliminates all possibility of disputes over interpretation and performance. As the contracting system developed it was the architect who came to determine the conditions under which work was let, and was responsible for resolving disputes. Under the modern system these contracts gave architects a unilateral power to determine payment to contractors, which was sometimes abused to benefit clients, and was the source of bitter complaints from contractors.

In 1870 the terms of a document called the Heads of Conditions of Builders Contracts was agreed between architects (RIBA) and the Builders’ Society This established the basic outline and principles of the standard building contract which could then be varied to particular circumstances, and addressed the concern of builders who felt that previous contracts made no provision for variations in materials prices or the cost of extra work. Bills of quantities were introduced as part of the contract in 1902, after many revisions in the meantime, and this remained the basic form until 1931 when the Joint Contract Tribunal was set up and the standard forms of contract came into use. These are still the basis of the majority of building contracts in the UK today.

As well as the conflicts between architects and builders, there was considerable rivalry between architects and engineers. This began in the early 19^th century as the pace of technological innovation increased and new materials arrived – iron, then steel, followed by reinforced concrete at the end of the century - and mechanical engineering emerged (a British specialization) with the new machines. Architects knew little about these innovations and left them to engineers. By 1800 architecture and engineering were separate professions with separate training. Architects studied with older architects and in schools of architecture, while engineers went to engineering faculties. The antagonism found in the UK between architects and engineers in the early 19^th century was also present in America. Fitch (1973: 126) describes a ‘great schism’ that developed as architects struggled to master the requirements of new forms of building and new materials and the mutual contempt between them and the new profession of engineers.

The disengagement of architects and design from building and construction occurred at a time when engineers were also focusing on design rather than delivery, due to increasing specialisation and differentiation between different types of engineers (such as mechanical, structural, civil, electrical and sewerage). Both architects and engineers neglected estimating, which was left to the new profession of quantity surveyors. Thus each of the construction professions developed their own language, skill sets, and cultures, nevertheless sharing a mutual sense of superiority over builders and contractors.

Moving On

By the end of the 19^th century in the UK there was a fully developed procurement and contracting system with practices well understood by all the parties concerned, and this system continued, with its essential characteristics unchanged, into the 20^th century. Nevertheless, it also continued to generate controversy and conflict, and an increasingly litigious industry.

In the first half of the 20^th century the modern system was refined and further developed. Bowley (1966) outlined four new ways of contracting as characteristic of the period between 1944 and 1960s. First was selective tendering, where only contractors known to be capable are invited to tender. Second were negotiated contracts, often used by local housing authorities to bring the contractor in at an earlier stage. Third was serial contracts, with contractors having successfully completed one project were re-engaged on later ones. Fourth were package deals as they were called then, now more commonly referred to as design and build, used particularly for the mass housing programs with high-rise buildings in the 1960s.

None of these were really new. All of them had been used before in various forms and they have all reappeared, sometimes renamed, at various times, to the present. A proliferation of contract forms continued, as attempts to overcome inadequacies of the traditional system, into an ever expanding variety of contracts and procurement systems to choose from. How effective this has been is a topic in its own right. 

On procurement Bowley (1966: 352) said “It is difficult to see how any system more wasteful of technical knowledge, intellectual ability and practical and organising experience could have been invented.” While it is hard to disagree with the sentiment, this rather seems to overlook the evolution of procurement methods as new versions, and contracts, developed as a response to problems and issues found in existing procedures.

Conclusion

This history of building procurement has focused on England and its development in London, because that is where many of the major projects were built. These developments are widely relevant today because England shaped much of modern language, laws, institutions, and governance. Competitive tendering, enforceable contracts, subcontracting, surveying and measurement of costs with a BQ are now widespread, but these all came with the modern system that was developed in the UK. Other countries have different histories, especially the US and elsewhere in Europe, but the modern system of procurement and English common law is the foundation on which they are built.

What this short history shows is how, over a period of 200 years, a system of procurement and contracting based on measurement and specification, replaced the older systems of direct employment of craftsmen at day rates and measure and value. As this new system was developed and maintained it had great continuity, and is an important element in understanding how difficult innovation in procurement actually is. The surprisingly few fundamental changes seen since the modern system of procurement came into widespread use in the early 19^th century does not mean there have been no changes. What the history shows is that procurement methods evolve slowly, in response to problems and issues with the methods in use and to changes in both the organization of work and the structure of society.

Despite being constantly criticised and modified around the edges, procurement at the end of the 20^th century is still found have serious issues and be in need of radical change. Inquiries in many countries (such as the UK, Australia, Singapore, Hong Kong, Japan, Holland) came to the conclusion that deficiencies in procurement should be remedied, often by government intervention and/or contractual reform. In one view:

It is like a game. There are rewards and penalties, rules and roles. Some cheat, or at least take advantage, where others wouldn’t. Some play the game straight and true, others are always looking for an angle to make another dollar or two. Or three. Contracts describe what is to be provided under what conditions. Some people put the contract in a desk drawer and forget about it, others use it as a means of extracting increased payments. The contract sets the rules but it is the individual who decides how play will be conducted. (Morris 2013: 176).

These comments echo those made in the mid-nineteenth century. Satoh closes his book with a series of quotes from opponents of the modern system (1995: 297-99). These include: poor quality work due to low price bidding, or subcontracting; builders undercutting each other to win work; the lack of provision for variations in fixed price contracts; unjustified claims by contractors; arbitrary decisions by superintendents and architects; non-payment by clients; and collusion between contractors. To address these issues the contracting system incorporated increasingly detailed drawings and specifications, and a schedule of prices was often attached for claims and variations. The unilateral nature of the contract led to the drafting of the Conditions of Contract, which were revised over time.

In many ways, in procurement and contracting in the building and construction industry, the more things change the more they appear to stay the same. This may, however, not be true of the 21^st century.

This is part 3 of a three part series, the preceding parts are on Pre-Modern Building Procurement and The Great Transition. A pdf of the full document is here.

The Ratchet Effect in Construction

An Economic Perspective on Construction Procurement 

The incentive problem in short-term contracting is the main issue addressed here. This problem in construction has often been seen from the perspective of the principal-agent problem, where the focus is on motivating the agent and monitoring outcomes. By taking the incentive problem as the focus of the discussion the emphasis shifts away from the relationship between the principal and the agent, which is well understood, to the effort a contractor will make to minimise costs or improve performance. This aspect of principal-agent relations has been a major theme in labour economics, the economics of regulation and elsewhere.

The process of procurement has a number of side effects. While the intention is to purchase, the method determines outcomes. For building and construction projects the method generally used is a form of auction, typically a common-values low bid auction, where bidder costs are the same or similar and the project is awarded to the lowest bidder. This process has all the characteristics of economic models of one period contracts in short-term contracting under information asymmetry. It is also the case that the major public and private sector clients are repeat clients as they regularly bring projects to the market, and this is equivalent to the two periods in models of regulation

Here some of the insights into the behaviour of suppliers or contractors from the economics of regulation is applied to construction contracting. The approach is interesting because it is now generally accepted that procurement can be treated as a subset of regulation, following the model developed by Laffont and Tirole, which treats regulation as a principal-agent problem, with the government as regulator the principal, and the regulated firm (in fact its manager) as the agent. The regulator can observe realized production costs, but not how much effort the firm puts into cost-reduction (a post-contractual hidden effort problem). Importantly, the firm knows more about cost-reducing technology than the regulator (a pre-contractual hidden information problem).

In their model there are two types of firms: low effort firms will not try very hard to reduce their production costs, while high effort firms will be very responsive to cost reduction incentives. Therefore the problem is modeled as one of information asymmetry, with the focus on discovering the manager’s type, whether they are a high-effort Type 1 or a low-effort Type 2.

The first type responds to contractual incentives while the second does not, so the principal can use incentives to induce more information revelation from the agent, i.e. to get the agent to disclose whether they are a Type 1 or Type 2 manager, and the regulator can make transfers to the firm. Such transfers are clearly necessary in the case of procurement, where the principal/client pays the firm/contractor for work performed under a contract to supply goods and/or services.

In this context what is called the commitment problem arises, because the optimum outcome possible in the first period, or round of tenders, cannot be repeated twice. The problem turns on the existence of asymmetric information. In each of the two periods the government/regulator wants to procure a public good, and if they could credibly commit to a long-run (two-period) contract the optimal two period outcome would be the same as the one-period optimum twice. They call this the perfect commitment outcome. The perfect commitment outcome requires credible commitment to a long-run contract.

If the regulator cannot make credible long-run commitments, long-run contracts are ruled out. With the regulator unable to write a long-run contract with the regulated firm, it has instead to govern the relationship by a sequence of short-run (one-period) contracts.

This gives rise to what is known as the ratchet effect, an outcome of the regulated firm’s unwillingness to reveal whether it is a Type 1 or Type 2 firm in the first period, because that would mean the regulator no longer faces asymmetric information, and allow the regulator to take any gains by the firm from, for example, cost reductions that might be the result of the firm’s efforts or use of new technology.

Laffont and Tirole proved that after period 1 the regulator will in general not know the firm’s true type. Intuitively, the ratchet effect implies that information unfolds slowly, as the manager tries to protect his information rents by not revealing his true type. Thus the ratchet effect happens when an agent works hard and shows a good result, but the principal then may demand an even better result in the future. Anticipating this, the rational agent has little incentive to work hard in the first place, and this tendency for performance standards to increase after a period of good performance is called the ratchet effect.

Early formal models of ratchet effects emerged in the 1980s, and ratchet effects were predicted in specific informational and contractual environments where hidden action and hidden information must be present, and the parties must be in a repeated relationship yielding some quasi-rents to both where binding multi-period agreements are not feasible.

How does this apply to building and construction?

Is it likely that construction contractors respond to clients’ requests for bids by attempting to preserve hidden information? Is it possible they will not want to reveal themselves as a Type 1 cost-minimising firm? There seems to be three reasons.

Firstly, it reduces competition to a straightforward shootout on price, but because all tenderers have similar costs this is just a decision on margin, based on current and expected workload. Therefore the competition in any given tender is likely to be driven as much by contractors’ workload considerations as their estimated cost of the project. Even without cartel arrangements this is a form of managed competition, whereby the tenderers will not deviate too far from the client’s expected cost for the project, which will also be similar to industry estimates, thus avoiding revelation of a significant cost advantage on one project that might jeopardise margins on future projects.

Secondly, it allows for gradual improvements in productivity and efficiency, which are neither disruptive nor expensive to contractors, but will deliver a windfall gain to the contractor if a project comes in well under budget or schedule, which may be the result of some innovation by the contractor. This gain will, of course, be hidden from the client and from competitors as much as possible.

This suggests that there might be many cost reducing innovations available to contractors at any time, but the pressure to apply them will be muted by market conditions and a contractor’s appreciation of competitors’ likelihood of using them. Innovation is used here as a broad term that covers any and all product and process developments that can reduce final construction costs. There are costs and risks associated with innovation, so it is in the interests of all bidders to minimise these costs to themselves.

Thirdly, the winning bidder will always have the option of revealing themselves to be a Type 1 firm, if for some reason they want to. There will usually be some innovation available that will reduce project costs, but will be costly (i.e. require upfront investment) to the contractor. Thus the success of many major contractors in winning repeat work through negotiation rather than tendering is explained. By pushing the innovation boundary to reduce costs on the period 1 project the contractor gets the period two project without tendering costs at the new level of the client’s price expectation. (This does not exclude more traditional methods of cost reduction such as cash farming or subcontractor oppression of course).

The general argument made here is that the ratchet effect in the procurement process used in building and construction (typically auctions of single projects) will limit cost reductions from productivity and efficiency gains by contractors and subcontractors. This is an outcome of the unwillingness of bidders to reveal their hidden knowledge to clients, who will then expect future performance at the improved level. This is because clients typically only offer a single project at a time, or sometimes a bundle of projects, instead of sequences of projects. Thus short term contracting under information asymmetry.

Construction Industry Collusion

Christian Brockmann’s Big Idea 

The issue of market power in the construction industry is not one that gets a lot of discussion, despite the associated issues of competitive behaviour and appropriate regulation. A distinctive contribution is Christian Brockmann’s ideas on collusion and corruption, where three related arguments were made. First he put forward an analysis of bidding for projects as an auction that typically results in a price below marginal cost for the winning contractor. Second, he then argues the logical response of contractors as bidders to this outcome is collusion, which is illegal. Third, he identifies the auction and bidding process as an abuse of market power by clients that should be regulated. It’s worth reviewing Brockmann’s arguments and their validity, as he provides a somewhat different perspective on the issue of construction industry collusion.

In a market with a single buyer, as with a building or construction client, it is possible to gain market power through bargaining with potential suppliers. Bargaining power is found in bilateral negotiations over terms and conditions of supply between trading partners. In a bargaining framework buyer power is the ability to extract concessions or a surplus from a supplier, typically through individually negotiated discounts. Buyer power in this case is the bargaining strength a buyer has with respect to suppliers with whom it trades, where bargaining strength depends on the ability to credibly threaten to impose an opportunity cost if it is not granted a concession. The most important issue is therefore the relative bargaining power on the buyer and seller sides of the negotiation.

Competitive tendering, in Brockmann’s view, is the exercise of such bargaining power by clients. By using an auction to select the winning bidder based on lowest price (known as a first price sealed bid auction), projects are won by bidders who are willing to sacrifice margins or have underestimated costs (the ‘winner’s curse’). In this case the ‘individually negotiated discount’ would be the difference between a contractor’s marginal cost and the market price for the project.

In a first-price procurement auction, the low bidder is awarded the contract. In a common-values auction, the cost of performing the contract is common to all bidders but is uncertain, bids are based on estimates, and this sort of auction can result in the winner’s curse. Therefore bidding estimated cost, on average, results in a loss because the lowest of several independent estimates of the true cost, on average, is less than the true value, and rational bidders avoid the winner’s curse by bidding above their cost estimates.

The problem with first-price sealed bid auctions is that increasing the bid too little results in lost revenue to the contractor while too much loses the competition. Also, the larger the number of bidders the less likely a bid at equilibrium price will win. Brockmann argues that these sealed-bid auctions have four characteristics, and in the estimating and bidding process all these effects will overlap and aggregate:

1. Are biased with regard to estimating errors, driving the low-bid award price below equilibrium price;
2. Are biased with regard to information, driving the low-bid award price below equilibrium price; this is especially true in a two-phase award process, when the auction is followed by price negotiations;
3. Are biased with regard to uncertainty, resulting in over-optimistic assumptions and driving the award price below equilibrium price;
4. As institutions are biased with regard to technology, driving the award price below equilibrium price.

In the diagram above P* is the equilibrium (market) price and P^a is the auction price. The outcome of the auction is a price below the equilibrium price, and this augments the clients’ surplus (C) by the same amount that it reduces the contractors’ surplus. In addition there is a decrease in both surpluses (A+B), a deadweight loss, which measures the reduction of social welfare. The reason the winning bid is below marginal cost is because tenderers cannot estimate their costs accurately, due to non-systematic errors across the work breakdown structure used to get estimates. If estimating errors are normally distributed the lowest bid will be below the mean price (in auction theory this is known as the ‘winner’s curse’, where the winning bid makes a loss), which can be taken as the market price. The curve on the right hand side of the graph is the distribution of costs of the tenderers, the mean price is P*.

Brockmann concludes clients have buyer power, and the industry’s response to their use of that power is to collude in a variety of ways. Although a list is not proof, widespread evidence of collusion in the building and construction industry would suggest, in many circumstances, this can be the case. For example:

• The Japanese dango system of market sharing on public works;
• The Dutch industry cartel (650 companies fined €239 by NMa in 2003);
• The lift and elevator cartel (EU Competition Commission €992 fine in 2007);
• Montreal’s ‘Fabulous 14’ control almost 80% of public work;
• The Scandinavian ‘Big 3’ do around 70% of all building and construction;
• 112 UK companies were caught in a price-fixing case in 2009;
• The steel, cement and concrete industries are repeat offenders for anti-competitive practices in many countries;
• Australian ACCC cases include fire installation, unsuccessful tender fees and housing contractors, and a 2015 Royal Commission uncovered illegal payments between contractors, unions and crime figures, as did the Charbonneau Commission in Montreal.

There are many other examples. Brockmann says For contractors collusion “is a business decision and the players are business unit managers” and “Individuals have only the chance to walk away from the game as this will continue to be played by others”. In his view collusion is more of a structural problem than an ethical dilemma, with large groups of contractors involved individual decisions have no effect on the behaviour of the group.

Brockmann also, uniquely as far as I know, argues for regulation of buyer power. How this might be achieved is left as an open question that he does not discuss, beyond noting the industry’s frequent encounters with competition regulators around the world. However, he does discuss the difficulty in getting people to behave ethically under these conditions of procurement through auctions and settlement through claims and variations. While collusive behaviour by contractors is illegal, he strongly believes many clients can and do behave unethically when negotiating with contractors:

Why is it ethically acceptable that buyers have such market power? Why is it acceptable they can use ‘shrewd’ negotiating tactics? Collusion is both an ethical and structural problem. It will persist as long as the institutions of procurement are not changed, giving both sides equal power and reinstituting perfect competition on the project market through regulation of the buyer’s behaviour.

This is a challenging argument that raises the role of clients in shaping the behaviour of the industry. It is also a key factor in the important issue of improving procurement processes. Nevertheless, despite the theoretical neatness of the argument on auctions and estimating errors, there are more than a few points that are controversial. Among these are:

1. If competitive tendering produces undesirable outcomes, a proposition many would disagree with, should the bid closest to the mean be selected, or the second lowest bid as in a Vickrey auction? Or another alternative?
2. How can perfect competition be found in the market for major projects when there are a limited number of credible bidders? Oligopolies are notoriously conducive to collusion.
3. There is also the problem of information asymmetry. A well-informed client with a reasonably accurate estimate might well have an advantage over potential suppliers, but for the great majority of projects the clients are infrequent and inexperienced and could be disadvantaged.

 The problems of poorly informed clients and profitless contracting have a long history, in the 1830s London builders refused to tender for many projects under the building agreement in use at the time. Even earlier, Marshall Vauban, a military engineer and builder of fortifications for the French monarchy, insisted suppliers should be selected on quality not just on price. In a letter from 1685 to his Minister he complained about buyer behaviour and delays due to budget cuts, and argued:

Breaking of contracts, failures to honour verbal agreements and new adjudications, only serve to attract those firms which do not know which way to turn, rogues and ignoramuses, and to make those with the knowledge and capability of directing firms, beat hasty retreats.

I would add that they delay and inflate considerably the cost of these works, which are the worst since these cuts and the cheapness sought are imaginary. For the contractor is ruined … He does not pay the merchants who supply the materials, pays badly his employees, cheats on those he can, has only the worst, and since he is cheaper than the others, uses the poorest materials, quibbles about everything and is always crying for mercy …

… go back to plain dealing; pay the price for the works and do not deny an honest salary to a constructor who fulfills his duties; that will always be the best deal you can find.

While this was, and is, good advice, clients and their advisers are deeply committed to tendering and awarding the contract to the lowest bid, despite the fact that it is unlikely a competitive tender will result in a fair price. The purpose of a tender is price discovery, particularly for non-standard goods, and the industry is adept at bidding low to win work then making a project profitable.

On the other hand, the widespread evidence of collusive tendering and anti-competitive practices undermines the rationale for such reliance on competitive tendering. When you get situations like Japan and Holland, where industry associations have facilitated market sharing agreements across the country, it’s pretty clear the traditional system of tendering and contracting is deeply troubled.

 

Brockmann, C. 2011. Collusion and Corruption in the Construction Sector, in Gerard de Valence (ed.), Modern Construction Economics: Theory and Application, Oxford: Spon. Quote on page 59.

Letter from Vauban cited by Callender, G. 2003. A Short History of Procurement, in P. Nagel (ed.), Supply Chain Management: A Procurement Perspective, Melbourne: Hargreen Publishing, 2-9.