it is a peer assessment, so you can do on behalf of me
Running Head: PRACTICAL CASE STUDY PRACTICAL CASE STUDY 2 PPMP20011 Contract and Procurement Management Term 2 – 2020 Practical Case Study Name: Student ID: Analysis of Case Study Due to COVID-19, CQU’s ability to attract students from outside Australia may be significantly affected. To ensure that this does not affect the institution’s student population, it is considering expanding its facilities so as to accommodate a large number of domestic students. This will be achieved by opening a new campus in regional areas with the main lecture building, computer and engineering laboratories, and conference hall. The new campus should be of high-quality standards. However, the institution has a very strict budget. Further, time is very limited as all the project’s elements should be ready before the new academic year begins. To achieve project goals with these constraints, an experienced project management team should be brought to the ground. PPMP20011 has been appointed to undertake their roles. This paper sheds light on the contract types and procurement routes that best suit the project. A budget breakdown is also provided. Selection of Procurement Routes for Each Project Alliancing Alliancing, in this case, would involve PPMP20011 working together with the institution’s directors with the aim of achieving the project’s goals. This is the best route that would be used in establishing the conference hall. Advantages First of all, the conference is supposed to have facilities and infrastructure that are up to date. This implies that thorough research should be carried out so as to identify the most recent models of infrastructure and facilities. At the same time, different activities leading to the establishment of the conference hall will need to be managed. PPMP20011 will not manage to do the supervision and manage all these activities whilst at the same time identifying what kind of latest models of infrastructure and facilities should be purchased. CQU directors will be needed to help do the research, which they have experience in, and present to PPMP20011. This will reduce the time needed to have these up to date facilities and infrastructure in place. Also, since the institution’s employees will take part in the project, it means that the consultancy firm will be helped address costs that would be incurred by hiring researchers and, thus, lower costs. Disadvantages Having two parties in the procurement will mean that any variations may be difficult and expensive to manage. This is because one party may assume it is the other’s role to manage the change. Secondly, communication will also be very important when alliancing is used. Ineffective communication between the directors and PPMP20011, which is most likely to happen as the parties have not worked together before, may bring about the delay, thus affecting the time spending in the completion of different activities under the construction of the conference hall. Management (Packaged) Route If this method is used, it means that the construction work will be completed in a series of separate work packages, which will be managed by PPMP20011. It best suits the establishment of the main lecture hall, which will be designed in a way that accommodates 500 students. The consultancy firm will come up with the drawings, specifications of the project, and the cost plan. Advantages A major advantage of the procurement route is the fact that the design will be able to proceed parallel to the construction. This will make an early start possible. This will help reduce overall time, which is the main priority under the subcontract. Secondly, the completion of the project within the specified period will be PPMP20011’s priority. This will motivate them to employ the necessary skills and knowledge to ensure that the project is completed on time. Finally, CQU will have a low-risk option with respect to time and costs, which are major priorities under the construction of the main lecture hall. This is because all work will be completed by PPMP2011, which has expertise in managing procurement projects. Disadvantages Ppmp20011 will not be responsible for any defaults as long as they have fully complied with the terms of management. In this case, if any defaults result, then CQU may be unable to complete the project in time as the budget is strict, and the time is also limited. Design and Build Procurement Route Using this method will mean that PPMP20011 will design as well as construct the works. PPMP will be responsible for the control, construction, organization, planning, and designing of the work. The route will be most effective if used in the construction of computer and engineering laboratories. Advantages It is only PPMP20011 who will solely be responsible for the control, construction, organization, planning, and designing of the construction work. This means that there will be no confusion, and the team will be able to ensure that all activities are carried out. This will help reduce time wastage. This will be important in the reduction of cost, which is the main priority when constructing the labs. Secondly, early start on the site is possible; it can overlap construction and design. Also, it gives price certainty in the early stages of the project. This will allow CQU to plan itself well and make the best decision on which materials and resources to consider for their budget to be sufficient for the completion of the subproject. Disadvantages Since it is only PPMP20011 who will be responsible for the control, construction, organization, planning, and designing of the work, it may have no time to compare tenders and also determine which ones offer the best value for the money. In this case, some cheap tenderers may end up not being considered. Also, aesthetic quality, which is a major factor for consideration for the entire project, may end up being given lower priority in favor of ease of fabrication. Contract Type There are different contract types that can be applied in the different sub-contracts of the CQU new project. Fixed Price, lump sum, is the best contract type in the construction of computer and engineering laboratories. In this case, PPMP20011 will be responsible for the execution of the contract work for a state amount of money. The nature of the work is well defined as far as cost, time, and quality are concerned. This implies that PPMP20011 will be able to price the works accurately. Cost Plus Award Fee (CPAF) is the best contract type to use for the case of the main lecture hall. In this case, the seller receives their costs and addition in terms of the award fee (Ricks, Robertson, & Jolliffe, 2013). The extra amount is based on achieving satisfaction, as described in the performance objectives listed in the contract. Here, the project will be completed in a series of separate work pages. Using CPAF will make it easy to evaluate the project against the performance objectives and determine the most appropriate award fee. For the construction of the conference hall, the most appropriate contract type is Cost Plus Incentive Fee Contract (CPIF). This method requires all costs plus the incentive fee to be reimbursed based on the degree with which performance objectives have been achieved. The incentive is, however, calculated based on the agreed formula (Nguyen et al., 2018). Since alliancing will be used in the conference hall, it means that CQU directors will assist in some areas. They will need to, therefore, come up with a formula for determining the incentives. CPIF will help achieve this goal. Budget In the construction of the conference hall, there are three major items that will be needed. They include labor, machine, and materials. Under materials, we will have iron sheets, cement, and building blocks (machine cut stones). It will take about a month (25) working days to have the conference hall completed. This implies that, with eight working hours every day, a total of 200 hours will need to be paid. Also, about ten casual laborers will be needed. In Australia, an average of AU$ 35 is paid to these laborers. Therefore, labor alone will cost the institution 35*200*10, which is AU$ 70,000. Machines will be rented. Every day, they cost AU$70. Therefore, this will be a cost of 70*25, which is AU$1,750. About 400 3-meter iron-sheets will be needed. That will cost the institution 400*50, which is AU$20,000. 200 20-kg cement bags will be needed. This will cost 200*8, which is equal to AU$1,600. 4 lorries of machine cut stones will be needed. This will cost 4*500, which is AU$2,000. It is assumed that a lorry of machine-cut stones costs AU$500, a 20-kg bag of cement is worth AU$8, and a 3-meter of the high-quality iron sheet is AU$50 worth. Here below is a budget breakdown for the construction of the hall. Item Cost (AU$) Labor 70,00 Machinery 1,750 Cement 1,600 Machine-cut stones 2,000 Iron sheets 20,000 Total 100,350 Negotiations Best Alternative to a Negotiated Agreement (BATNA) BATNA is the alternative for the party in cases where there are unsuccessful negotiations (Sebenius, 2017). The BATNA for CQU and PPMP20011 should be compromising. In this case, the two parties should forgo their ideal outcomes and settle for an outcome that is satisfying for each one of them. The strategy should only be used if the two parties appear to disagree so much on a certain issue. It can be of great importance in maintaining respect and avoiding misunderstanding as all parties get satisfied by the outcome arrived. The strategy can also be important in helping the two parties save time and avoid wasting so much of it in solving common problems. References Nguyen, T. M., Tran, H. T., Guillen, A. T., Bui, T. X., & Matsunaga, S. S. (2018). Acquisition War-Gaming Technique for Acquiring Future Complex Systems: Modeling and Simulation Results for Cost Plus Incentive Fee Contract. Mathematics, 6(3), 43 Ricks, S. S., Robertson, T. I., & Jolliffe, D. D. (2013). Problems with award-fee contracts in the Department of Defense. NAVAL POSTGRADUATE SCHOOL MONTEREY CA Sebenius, J. K. (2017). BATNA s in Negotiation: Common Errors and Three Kinds of “No.” Negotiation Journal, 33(2), 89-99 Running head: Contract and Procurement Management Contract and Procurement Management14 PPMP20011: Contract & Procurement management Executive Summary The paper relates to the consideration of Project 3: Conference hall with CQU. The project would be completed with the collaboration of PPMP20011 consultant taking account of the project. This would be associated with various procurement strategies, contracts, budgeting and negotiation strategies that would work with the best interest of the client. Table of Contents Introduction4 Procurement Route4 Potential procurement Routes4 Pros and Cons based on constraints5 Selection and