PRJ5108 Project Delivery and Procurement Assignment Sample
Word count: 3000 words
Weighting: 30% (20% and 10%)
Unit Learning Outcomes: ULO1, ULO2, ULO3, ULO4
Design of Project Delivery System and contract management influence the success or failure of the Implementation phase of projects. It is not just about selecting a contract model; it provides a framework for procurement of goods and services needed to implement the project. This assessment task is based on the delivery system, procurement and contract management of the “Case project”, where students use real-life project as the vehicle for learning and developing their competencies in this unit of study. The case project should be selected by students in their field of interest. The selected project can be a proposed or an initiated project, but it must not be in the construction phase nor a completed project. Each group should be finalised by 3-4 members within the second week of the Trimester. One member for each group should inform their details (names, Ids and project title) to the class teacher through an email or by using the Discussion Forum .
This assessment task includes the following components:
1. The background and the objectives of the case project.
2. High level WBS and the Statement of Work of the case project.
3. Literature review on the case project, including the typical delivery models, contracting methods and contexts.
4. A brief state of why a particular delivery method is selected for the case project. Provide SWOT analysis of the selected project delivery method.
5. Students will also discuss about suggested implementation plan for the case project. In the implementation plan:
a. Students are required to discuss about the preparation of Request for Proposal (RFP) and biding processes for selecting the contractor.
b. Student is required to discuss about the preferred contract types for the design and construction of the case project.
c. Students are required to discuss about the risk management plan related to the selected project delivery method and contracting.
d. Students are also required to discuss about the administration of the construction management of the case project to ensure that all the deliverables are achieved within the estimated time and cost.
e. Students are required to discuss about the plan of continuous monitoring of seller performance, and the management plan of all changes to the seller’s authorised baseline.
PROJECT MANAGEMENT METHOD ANALYSIS OF HAWSONS IRON PROJECT IN AUSTRALIA
Project management is an essential part of the development phase of a particular project. The main aim of the report is to discuss the various project management steps undertaken by an ongoing project. The project under consideration is Hawson’s Iron Project with an estimated “Bankable Feasibility Study” rate of nearly $12.4 million dollar for additional works and available additional funding of $200 million.
2. Background and Objectives of Case Project
The main aim of developing the project is to make it the producer of the world’s highest-grade iron product. Based on the reports published by the company, it can be stated that the “. Prefeasibility Study (PFS)” has shown that the areas chosen for the project are the world’s leading undeveloped high-quality iron ore concentrate (Hawsons.com.au, 2022). From a report, it has been observed that since the iron ore industry ponders its “green steel future” hence the demand for iron ore is on the rise (Parker, 2022). The Hawsons Iron is recognized as a “state-significant development” by the New South Wales government.
The major objectives of the project have been identified to be as follows:
? To provide premium rates for high-grade products and hence reward the shareholders.
? To expand access to skilled mining workers.
? To focus on rewarding the shareholders and also deliver jobs for Broken Hill, Australia.
? To focus on the development of a 20 million tonne per annum (Mtpa) project for delivering superior economics.
? To improve the existing infrastructure of the planned 20Mtpa production of iron ore by the highly skilled miners of Broken Hill.
3. High-Level WBS and Statement of Work of The Case Project
From the studies of Huda and Berawi (2021), it can be mentioned that the development of a high-level work breakdown structure helps in increasing the accuracy of the project. In the case of the mentioned project, the work breakdown structure has been designed in a manner that helps in identifying the ways in which the project can have a better deliverable. The chronological order of work for the mentioned project is as follows:
? Identification of the regional geology
? Analysis of the property geology
? Implementation of the Mining Lease Application (MLA 460)
? Identification of the reasons for a premium pricing of the iron ore
? Gathering investors and shareholders for funding the project
Based on the identified work breakdown structure it can be mentioned that the mining. The image below has helped in showing the Gantt chart along with the timeline for the project. A detailed digital work breakdown structure has been provided below as well.
The statement of work for the mentioned project involves an important cautionary statement that helps in the development of low-level geological confidence that is associated with the mineral resources (Hawsons.com.au, 2022). A detailed classification of the resources has also been done that helps in the development of an open pit operation. Based on the studies of Gorman and Dzombak (2018), it can be mentioned that the development of the combined total mineral resources helps in extending the mining life in a better manner.
Figure 1: Gantt chart Timeline
(Source: Created by the Author)
Figure 2: Gantt chart
(Source: Derived from Libre)
Figure 3: Work-Breakdown Structure
(Source: Created by the learner)
From the WBS and the statement of work, it can be stated that the PFS has helped in allowing the modification of the mineral resources in a better manner. From the above work breakdown structure, it can be stated that the development of the iron project can be divided into five steps. The work breakdown structure has helped in signifying that the identification of the regional geology as one of the first tasks. This is mainly because identification of the regional geology helps in identifying the minerals present in the area. For the area under consideration the image below has helped in showing the probable reserves that have been found in the
Broken Hill Region.
Figure 4: The Probable Resources in the Broken Hill Hawson’s Iron Project
(Source: Hawsons.com.au, 2022)
4. Literature review
4.1 Delivery Models
Hawson iron project is a project located in the West Part of New South Wales. In order to accomplish the project as a part of project deliverables, the EPCM model has been recognised as the most suitable project deliverable. Therefore the SWOT analysis of EPCM is as follows:
Table 1: SWOT analysis
4.2 Contracting methods and context
In order to accomplish the project, the application of the Lump-Sum contract will be more accurate as it provides the contractors with easier and enough time to secure funds for a project. As per the views of Baek et al. (2022), a project manager or a project contractor can easily identify how much amount of funds will be required to accomplish the project. With the help of this project, before initiating the project, Government Australia and the project contractor calculated information such as Positive Equity Returns and the Net present value of the project. The Positive equity return of the project is 1.1 billion whereas the Net present value of the project is £1.1 billion. The project will give 30% IRR or Internal Rate of return and 14.7% DTR (Farrell et al. 2022). Despite this Lump Sum offers an easier assessment of soil conditions which was quintessential for the project. Despite this, the contract model makes the selection process less tedious. Therefore, the adoption of the Lump sum model helped the contract and the Government of Australia to reduce the overhead expenses of the Hawsons iron project and also allowed the contractors to make stable cash flow.
5. Suggested Implementation Plan of Project
5.1 Preparation of Request for proposal (RFP) and bidding process for selecting a contractor
Based on the studies of Khaderiet al., (2019), it can be mentioned that a “Request for Proposal (RFP)” is referred to as a business document that helps in announcing the project. Furthermore, an RFP helps in soliciting bids from the contractors. From the studies provided, it has been identified that an RFP is a final document that is provided to the prospective suppliers for major complexity procurements. The major components of RFP include the following:
? A proposed “Statement of Work (SOW)”
? All the technical specifications
The RFP of the mentioned project has been provided in the table below:
Table 2: RFP for Project
(Source: Created by the Author)
5.2. Preferred contract types for the design and contract of the project
The most common type of contract employed in the project management process involves the “Firm-fixed-price contracts”. From the studies of Roestamyet al., (2022), it can be stated that the main reason behind the widespread use of the project involves the process of fixing the budget at a certain amount. Moreover, from the studies of Tijan et al., (2019), it has been identified that the implementation of the said contract helps is advantageous since it offers benefits to the company on terminating early. The contracting laws of the country also play an important role in deciding the terms of the contract.
Based on the laws of the contract it is important to focus on the negotiation objectives. It is always suggested that when incorporating the said contract method, it is important to obtain a fair and reasonable price for the deal. The image below has helped in portraying the different forms of the agreement in negotiation.
Figure 5: Contract Negotiation forms
Furthermore, it is highly suggested that while setting the terms of the contract, it is important to focus on the possible areas of conflict in the project life cycle. The possible areas of conflict have been illustrated below.
Figure 6: Areas of conflict in a contract
Based on the above image it can be mentioned that the conflict areas in a project development life cycle include mainly the technical and financial areas. However, the implementation of the said contract method helps in better completion of the project in comparison to the others. As per the research of Polzin et al., (2019), it has been mentioned that a fixed-price contract is most beneficial since it comes with a pricing guarantee. In the case of the mentioned project, since the goal of the project is evolutionary, implementation of the mentioned contract would mean greater areas of funding and hence offer the best solution for the completion of the project. However, it has been observed that the biggest disadvantage of the said method is that it is the least flexible method of contracting. However, this disadvantage seems small in comparison to the strict scope of work that can be predefined with the help of the said contracting method.
5.3 Risk Management Plan of the project delivery method and contracting
Risk Management plan for contracting
Table 3: Risk factors in Contract
Risk factors in Project delivery
Table 4: Risk factors in project delivery
5.4. Administration of the construction management of the case project
The most important factor behind the implementation of the construction management practice in the mentioned project is the better accuracy of the deliverable. From the studies of Calzada Olvera (2022), it has been seen that mining projects such as the mentioned one have certain problems such as the planning and designing phase. In the case of the mentioned project, a possible roadblock in the budgeting system has also been identified. Hence, from the studies of Araba et al., (2021), it can be mentioned that the process of construction management helps in the proper evaluation of the budget for a particular project. Furthermore, taking into account the aspects of construction management it can be stated that the methods of budgeting and project management become quite easy. In a construction project, there are various steps and workforce involved in the development of the project and hence implementing the steps of construction management in the mining project would lead to a better decision-making process.
Thus, it can be mentioned that administering the processes of construction management in the mining project would help in increasing the accuracy of the said deliverable. From the studies of Fobiriet al., (2022), it can be opined that the implementation of various cloud-based systems for construction management helps in gaining real-time insight into various project management sites. Thus, being a mining project, the cloud-management system if incorporated into the mentioned system would lead to tracking the onsite progress of the project as well. Overall, it can be mentioned that the administration of the construction management process in the mining project helps in increasing the success of the project.
5.5. Continuous monitoring of the seller's performance, and management plan of all changes to the seller’s authorized baseline
A constant monitoring of the seller’s performance is important in identifying the areas lacking proper vendor management. From the research of Dutta et al., (2020), it can be mentioned that the development of a proper seller monitoring system is important in a project since it helps in the proper maintenance of the supply chain process as well. From the studies of Koke and Moehler (2019), it can be stated that the principles of value management are the most critical path of time phasing each task. Hence, for the betterment of this phase, it can be mentioned that the process of monitoring the changes to the authorized baseline is important. Moreover, it helps in identifying slippages in the scope of work and helps in the overall management of the project. In other words, it can be stated that the implementation of the seller monitoring process helps in the continuous monitoring of the supply chain aspect of the project management in detail.
Therefore from the above discussion it can be said that project management is an integral part of a project as it helps in creating well-defined goals to improve team effectiveness. The report highlights RPF for the project work where the project discusses various factors such as current roadblocks and barriers of the project and the scope of the project work. Despite this, the project also depicted an in-depth SWOT analysis of the EPCM method where strengths, weaknesses, opportunities and threats of the EPCM model in the context of the case study have been delineated in the brief. Notwithstanding it, the project also delineated various risk factors in contract and project deliveries in the context of a given case study.
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