Case Study: Performance Information Procurement System (PIPS) with the Arizona Department of Environmental Quality

The Arizona Department of Environmental Quality (ADEQ) experienced a problem with the quality of their services. The agency was expending a large amount of resources, both time and money to control contractors' work with unexpected poor quality work. ADEQ partnered with Dr. Dean Kashiwagi and the Performance Based Studies Research Group (PBSRG) early in 2014 to find a solution to the procurement problems. PBSRG introduced the Performance Information Procurement System (PIPS) and began implementation on four test projects. Three of the projects have moved into the execution phase delivering almost $100K savings in the procurement process alone. The three main causes of the issues were: lack of a system identifying the quality of vendors, management, direction, and control (MDC), and lack of a system to track vendor performance. Best value PIPS is a paradigm shift from the traditional price-based model and has succeeded in mitigating these challenges for the industry, while also validating the PBSRG model.