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Contract and Procurement Management – Case Study Assignment
Introduction: Recently, Central Queensland University (CQU) has achieved a high ranking record (Well above average) in research excellence in various disciplines including Engineering. As a result, increasing number of students are expected to apply and join CQU in all campuses mainly Melbourne Campus.
CQU has got a plan to meet this increment. Therefore, CQU has purchased a new land of 40 Acers to construct its own campus at Melbourne as to absorb this expansion. CQ university has acquired this property (it is now CQU) and intends to construct a unique campus to meet the increasing student’s numbers as well as to provide a proper university life within the Melbourne campus. CQU has high expectations to achieve.
Project Elements: CQU is looking forward to including the following elements in the new project:
1. Main lecture’s building (can accommodate 300 Students).
2. Computer and engineering Laboratories.
3. A Motel where it can accommodate staff and visitors coming for across other campuses (up to 50 rooms).
4. Conference hall with up to date facilities and infrastructure (250 people) – The work is intended to take place in phases giving the following facts:
The CQU Requirements:
1) CQU has already got the land and its under the university control.
2) CQU has high expectations to get an innovative and high quality project.
3) All project parts (elements) to be completed simultaneously within the timeframe (ASAP).
4) CQU has not got good experience in this type of development .Therefore CQU has appointed your consultancy firm called PPMP20011 Company to MANAGE the project on its behalf.
5) Your firm (PPMP20011) is an experienced consultancy firm who provides good and in-depth advices to clients on how to proceed and what can be done and what cannot upon evaluation of the project elements and project constraints.
CQU main concerns (limitations) are as follow:
I. Time: where this building has to be ready before the new academic year in January 2020
II. Quality of the work
II. Cost: CQU has a strict budget which cannot exceed.
Priorities: The three parameters (Quality, Cost and Time) are of great importance to the University and CQU has revealed the priority of the constrains as follow:
1^st: COST: Not to exceed the allocated budget
2^nd: TIME (ASAP) before the new year. Otherwise they will pay the new year rent
3^rd: QUALITY: up to the modern campuses
Your Task As Management Consultant Company –
You are the construction manager to the CQuniversity and you are asked to advise CQU on the following:
Under the current conditions explained above, you need to respond to the following: Main points to address: These are your TASKS
1. What is the best procurement route (method) your PPMP20011 consultant company will advise CQ to follow keeping in mind the constraints and priorities as well as the experience of CQU as project owner.
Report to address different routes and compare them based on the below elements.
Explain each route in details (how does it work).
What is its advantages/disadvantages of each.
Risks associated with it.
How this route can be good/ bad in the case of CQU.
Reflect on the constraints and the CQ experience.
2. Why do you think this is the best route (giving the project factors).Justify your selection.
You may need to summarise this in a group of factors including but not limited to:
1- Time
2- Cost
3- Quality (level of service)
4- Changing orders
5- Claims
6- Risk
7- Management capacity and ability/experience
8- Responsibility and other issues
3. What is the advantages of this route over other routes (traditional/non-traditional).
Explain advantages and disadvantages of the recommended route.
Why do you think this a good route over others in the case of the CQU.
4. What are the risks associated with this selected rout for both the owner and the contractor.
If you recommend a specific procurement route, what are the risks associated with this route from CQU pointview (owner). What are risks from contractor view.
5. How does this route will satisfy the main points (Cost, time, and Quality).
Explain in details what the methodology (procedure is).
6. Select the best contract type for this project (Fixed price (lump sum, unit price etc.) Or reimbursement (CPF, CPFF, etc…)
What type of contract you recommend (based on the selected route).
Why do you think this is a suitable contract?
Advantages/disadvantages and how this satisfy the project requirement and element.
Make sure CQU look for high quality with priority to time and cost.
Justify how this can be the best contract type.
Hint: You may use different type of contracts for different project component. This means (lecture building could have different contract than the laboratories and the Motel and others).
Expected Outcome from Company:
You are expected to discuss at least four main procurement routes (i.e DBB, DB, Management …..)
You are expected to apply each route to explain the above 6 main points to
Highlighting advantages and disadvantages of each route as well as how each route can meet the three main constrains by the owner
Recommend the BEST ROUTE according to the CQU priority list.
For the recommended route you are expected to explain the contractual arrangement through drawing a diagram show the contractual relationship among the CQU, PPMP20011, Contractor, subcontractor.