Project Contract And Procurement Management Plan
Project Delivery Method
The Greenwich private limited is the manufacturing company which is looking forward to renovate their working environment with the new technological innovation so that the operational capability of the team members can be improved and it directly helps to increase the turnover of the organization. The purpose of this paper is to develop a contract and procurement management plan by identifying the evaluation criteria and risks associated with the new project.
The project will be completed by following the design-bid-build method. The design phase is used to develop the construction engineering drawings for renovating the working environment of the enterprise. The conceptual systematic design should be developed by the engineer for identifying the requirement of the resources required in the development of the project. In the bidding phase, the tenders from various contractors are collected. The evaluation criteria and scoring is set for selecting the right contractor for managing the supply of the resources at the construction site. In the building phase, the contract is signed with the contractor to supply the resources on the construction and start the construction of the undertaken project. The advantage of using this methodology is that it takes the active participation of the project owner to identify and signed contract with the right contractor so that the project can be completed within the specified time and cost.
|
Project Title |
Greenwich private limited company |
|
Project Objectives |
The objectives of the project are: Identify the problem domain in the existing working system Identify the requirement of the new environment Identify the new technology required to be implemented Identify the projected cost of the project Identify the project timeline Identify the risks associated with the project Identify the success criteria of the project Determine the evaluation criteria Selection of the contract Identify terms and condition |
|
Project Scope |
The scope of the project focuses on: Setting selection criteria for tender process Develops evaluation criteria and weightage system Signing service level agreement with the selected contractor Setting of terms and condition Identify success criteria, constraints, and assumptions of the project |
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Project start date |
The start date of the project is 5 April, 2019 |
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Project finish date |
The finish date of the project is 10 Nov, 2019 |
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Critical factors |
Supply of the physical resources at construction site Supply of the human resources at construction site Allocation of tasks to the resources Project schedule Identify interdependencies between the project activities |
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Assumptions |
Team is highly skilled and expertise Availability of resources as desired |
|
Constraints |
Project should be completed within projected time Project should be completed within projected cost |
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Rationale |
The success criteria of the project are: Completion of project within available resources Completion of project within allocated time Completion of project within allocated cost |
|
Grading (Criteria, weight, and score) |
Safety and health credentials Cost Services and facilities provided Location of the contractor from the construction site Historical reputation Ethical behaviour of conduct Goodwill Availability of resources Online connectivity |
Evaluation Committee:
|
Name |
Role |
Responsibilities |
Key concern areas |
|
Jim Corbett |
Project director |
Identify the problem domain of the organization Proposing new project Develops requirement specification plan |
Organization problem domain and complexity which affect the growth and profitability of the company |
|
K.L. Lias |
Project Owner |
Approval of project Approval of project budget Approval of project time |
Project start up for the betterment of the organization |
|
S.D Belley |
Project Manager |
Approval of the project schedule Distribution of role and responsibilities Allocating resources and cost to the activities |
Project undergoing process |
|
Maggie Rose |
Planning engineer |
Preparation of the project schedule Identify critical path |
Project delay |
|
R.D. Thomson |
Financial Manager |
Preparation of the project budget |
Cost estimation plan |
|
L.N. Lui |
Procurement manager |
Managing contract with the contractor and sub-contractor |
Service level agreement |
|
Smith Jones |
Operation manager |
Operating procedure of the company |
Operational working of the company |
|
M.N. Prasad |
Senior Consultant |
Advice and innovative ideas |
New marketing trends |
|
Evaluation Criteria |
Criteria Weightage |
Sub Weightage |
Score (5 Point scal) |
Weighted Score |
Score |
|
Safety and health credential provided Machinery Plant Liaison equipment |
5% |
1 2 1 1 |
1 2 1 1 |
4 12 4 6 |
26 |
|
Quality of machinery used Quality controls Quality standard Quality Assurance |
10% |
2 3 5 |
3 4 5 |
5 0.560 0.440 |
6 |
|
Price of the resources Human Resources Physical Resources |
7% |
4 3 |
1 2 |
6 8 |
14 |
|
Ethical code of conduct |
8% |
8 |
5 |
21.064 |
21.064 |
|
Ethical behaviour |
5% |
5 |
3 |
4.0574 |
4.0574 |
|
Historical records Supply of resources Quality of resources Management of demand and supply |
10% |
3 4 3 |
3 1 5 |
3 6 8 |
17 |
|
Goodwill Patents Trademark |
5% |
2 3 |
3 4 |
4 8.039 |
12.039 |
|
Reputation of the company |
4% |
4 |
5 |
3.128 |
3.128 |
|
Identification of risks Risk Identification Risk Level Risk Severity Risks Likelihood Risks Ranking Risks Mitigation policies |
6% |
1 2 1 1 0.5 0.5 |
2 3 4 4 5 3 |
3 4 1 1 7 8 |
24 |
|
Services and facilities provided On-time delivery of physical resources On-time delivery of human resources Quality of resources provided |
8% |
3 2 3 |
4 5 2 |
12 10 7 |
29 |
|
Capacity of resources delivered Quantity of physical resources Quantity of human resources Quantity of skilled and expertise labour |
7% |
3 2 2 |
2 3 3 |
5.024 7 9 |
21.024 |
|
Location of the company from the construction site Distance Connectivity |
3% |
2 1 |
3 3 |
12 19 |
31 |
|
Capability of solving issues and complaints Grievance handling program Friendly environment |
7% |
3 4 |
4 5 |
4 8 |
12 |
|
Training and development program organized for the team members Appointment of trainee Duration of training period |
4% |
2 2 |
3 4 |
6 9 |
15 |
|
Monitoring and control |
6% |
6 |
5 |
18.0583 |
18.0583 |
|
Reviewing of the policies Reviewing of term and condition Reviewing of quality standard Reviewing of capacity |
5% |
2 2 1 |
3 4 4 |
19.21 |
19.21 |
It should be commenced that the procurement process will follow the ethical code of conduct in the delivery of physical and human resources to the construction site. The auditing of the evaluation report should be done periodically during the review process. The evaluation report should be signed by arranging the round table discussion and interviews of the contractor for supplying the required resources within the estimated time of the project. The moral principles followed by the contractor company helps in influencing privilege to manage contract with them. The ethical standards and principles should be developed for the organization so that the conflict and chaos can be avoided at top priority. It helps in bringing transparency in the working agenda.
The Guaranteed maximum price contract should be signed with the contractors and sub-contractor to initiate the supply of physical and human resources according to the requirement placed by the team members to complete the given activities of the project. The GMP contract helps in hiring contractor at maximum price and is efficient in cost saving procedures and controlling the project processes.
- The fixed price of the contract is set during the project initiation phase in the service level agreement.
- It helps in minimizing the variation in the undergoing processes with respect to time, cost, and resource allocation.
- The contract can be expandable according to the change request posted by the project director.
- The alternative solutions are provided to keep balance between supply and demand of the resources.
- The potential risks associated with the project life cycle can be minimized.
- The negotiation process can be easily handled with the contractor
- It signs the pre-agreement with the contractor
- Less administration is required
- The positive alliance is developed with the contractor
During the working of the project, the issues and challenges occurs between the human resources than contractor will take the step forward for resolving the issues and conflict among the team members. The proper communication strategy should be placed to settle down the disputes at an early stage of the project (Merrit, and Ricketts, 2012).
The escalation and setting down of the disputes should be reported to the project manager and project director.
The legal agreement should be signed between the resources if disputes are not settled down properly between the working parties because it will affect the completion of project on time.
- Two years contract is signed with the contractor which can be expandable for 1 year according to the future requirement
- Safety and health credentials should be provided by the contractor to the resources used
- The contract can be terminated if unethical code of conduct is shown by the contractor
- Good quality resources should be provided
- Availability of resources according to demand placed
- Monitoring and control policies
- Minimum price of resources
- Handling of chaotic working environment
|
Service Agreement particulars |
Description |
|
Contractor Company Title |
L & T contractor company |
|
Client company title |
Greenwich Private limited |
|
Date of commencement |
12 May, 2019 |
|
Term of agreement |
2 years + 1 year expandable |
|
Framework |
Sole Authority |
|
Contract Value |
$ 160,000 |
|
Duration of project |
2 Years |
|
Resources |
Physical and Human Resources |
|
Location |
BTown-104, Queensland, Australia |
|
Project Director Sign off |
|
|
Contractor Sign off |
|
|
Email contractor: |
|
|
Email client: |
|
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Telephone |
7895940123 |
Variations:
- The change request placed by the contract manager can be handled at top priority (Passenheim, 2015)
- The changes in the agreement are assessed as breach.
- Negotiation process with the project director can be approved for contract variations
- Scope and risks should be discussed
- Proper documentation of the variation should be prepared
The service level agreement should be developed to provide insurance cover to the human resource in case of any casualty occurs during the working hours of the organization.
|
Name of the insurer |
Policy Number |
Amount of insurance |
Date of Expiry |
Excluded value |
|
Xxxx |
Xxxx |
Xxxx |
Xxxx |
Xxxx |
Communication Strategy
|
Project Audience |
Messages |
Frequency |
Communication tools |
Receiver |
|
Project director |
Identify the problem domain of the organization Proposing new project Develops requirement specification plan |
Weekly |
Formal Letters Audio and Video teleconferencing Circulars Notices Online chats Newsletter |
Project Owner Project Manager |
|
Project Owner |
Approval of project Approval of project budget Approval of project time |
Monthly |
Formal Letters Audio and Video teleconferencing Circulars Notices Online chats Newsletter |
Project Director Project manager |
|
Project Manager |
Approval of the project schedule Distribution of role and responsibilities Allocating resources and cost to the activities (Wilson, 2012) |
Daily |
Formal Letters Audio and Video teleconferencing Circulars Notices Online chats Newsletter |
Project Director Project Owner Senior consultant |
|
Planning engineer |
Preparation of the project schedule Identify critical path |
Within 15 days |
Formal Letters Audio and Video teleconferencing Circulars Notices Online chats Newsletter |
Project manager |
|
Financial Manager |
Preparation of the project budget |
Weekly |
Formal Letters Audio and Video teleconferencing Circulars Notices Online chats Newsletter |
Project manager |
|
Procurement manager |
Managing contract with the contractor and sub-contractor |
Weekly |
Formal Letters Audio and Video teleconferencing Circulars Notices Online chats Newsletter |
Project Manager Financial Manager |
|
Operation manager |
Operating procedure of the company |
Weekly |
Formal Letters Audio and Video teleconferencing Circulars Notices Online chats Newsletter (Monnappa, 2017) |
Project Manager |
|
Senior consultant |
Advice and innovative ideas |
Daily |
Formal Letters Audio and Video teleconferencing Circulars Notices Online chats Newsletter |
Project Manager |
Project schedule
|
Project Activities |
Duration |
Start Date |
Finish Date |
|
Posting of the proposal |
5 days |
10 April, 2019 |
14 April, 2019 |
|
Setting of the evaluation committee |
3 days |
15 April, 2019 |
17 April, 2019 |
|
Meeting of the evaluation committee |
6 Days |
18 April, 2019 |
23 April, 2019 |
|
Approval of the proposal |
3 days |
24 April, 2019 |
26 April, 2019 |
|
Setting of advertisement |
10 Days |
27 April, 2019 |
6 May, 2019 |
|
Collecting Tenders |
12 Days |
7 May, 2019 |
18 May, 2019 |
|
Preparing of Service level agreement |
7 Days |
19 May, 2019 |
25 May, 2019 |
|
Setting of evaluation score |
5 Days |
26 May, 2019 |
30 May, 2019 |
|
Establishment of procurement contract |
4 Days |
31 May, 2019 |
3 May, 2019 |
Key Performance Indicators
|
Key Performance indicators |
Standard value for KPI |
Frequency |
Date of commencement |
Data source |
|
Delivery of resources on time |
95% |
Weekly |
16 May, 2019 |
Audit report |
|
Delivery of raw material |
88% |
Monthly |
20 May, 2019 |
Audit Report |
|
Cost estimation |
100% |
Once |
25 May, 2019 |
Audit Report |
|
Time Estimation |
100% |
Once |
15 Aug, 2019 |
Audit Report |
Risk Management plan
The risks which are identified during the signing process of contract agreement with the contractor are listed below:
|
Risk Identified |
Risks Description |
|
No legal documentation with contractor |
The legal documentation is not signed with the contractor. The process of delivering resources to the construction site is carrying on the basis of verbal communication which can create complexity and chaos at the end of the project (Mansfield community, 2013). |
|
Historical performance of the contractor is not analysed properly |
The market analysis is not properly done to know their performance and efficiency of delivering the resources according to the demand placed by the site engineer |
|
Termination of the contract cannot be done |
Without having any legal document, the contract cannot be terminated because the working of the company is not based on any term and condition (Lockamy and McCormack, 2015 |
|
Poor Quality of resources provides |
The quality standard is not mention in the verbal contract which can create chaotic environment because the contractor cannot supply the desired quality of raw material |
|
Delay in delivery of resources |
The resources are not delivered on time because the contract is not signed with the two working parties. |
Risk Register
|
Risks Identification |
Risks Severity |
Risks Level |
Risks Likelihood |
Risks Ranking |
Risk mitigation plan |
|
No legal documentation with contractor |
3 |
High |
4 |
7 |
Signed a legal service level agreement with the contractor |
|
Historical performance of the contractor is not analysed properly |
2 |
Medium |
2 |
4 |
Market analysis and goodwill of the contractor should be measured before signing contract |
|
Termination of the contract cannot be done |
1 |
Low |
2 |
3 |
Legal document should be read thoroughly before signing the document (Kharaiweish, 2013) |
|
Poor Quality of resources provides |
2 |
Medium |
2 |
4 |
The quality of the raw material should be checked before delivery of resources to the site (Habib, 2014 |
|
Delay in delivery of resources |
3 |
High |
3 |
6 |
The location of the contractor should be near to the site and have a good connectivity |
- Extension of 2 years is provided according to the requirement of the client company after the completion of the tenure (Kang, 2010).
- No training and development program organized after the completion of the project
- Documentation should be properly handover to the project manager
- Status report of KPIs and milestones should be provided periodically (James, 2012)
- Work should be completed according to the planned project activities
- The termination of the contract can occur in following condition:
- Agreement terms and conditions are not properly followed
- Health and safety credentials are not properly driven
- Insurance cover is not properly provided
- Unethical behaviour at work place
- Quality standards of raw material is not met
Conclusion:
It can be conclude that the auditing of the evaluation report should be done periodically during the review process. The evaluation report should be signed by arranging the round table discussion and interviews of the contractor for supplying the required resources within the estimated time of the project. The proper communication strategy should be placed to settle down the disputes at an early stage of the project
References
Habib, M. 2014. Supply chain management: Its future implications. Open journal of social science, 2014(2). Accessed March 2, 2019. https://www.worldcat.org/title/purchasing-and-supply-chain-management/oclc/967523255.
James, A. 2012. “A New Introduction To Supply Chain And Supply Chain Management: Definition And Theories Perspectives”. International Journal Of International Business Research 5 (1). Accessed March 2, 2019. https://www.worldcat.org/title/purchasing-and-supply-chain-management/oclc/967523255.
Kang, B. (2010). Research support building and infrastructure modernization. 1st ed. Available at: https://www-ssrl.slac.stanford.edu/lcls/reviews/rsb_project/2009_rsb_may18-19/supporting_docs/rsb_risk_management_plan.pdf
Kharaiweish, M. (2013). Project Monitoring and control measures. International Journal of computer science and information technology, 5(5). Retrieved from: https://airccse.org/journal/jcsit/5513ijcsit03.pdf
Lockamy, A., McCormack, K. 2015. The development of a supply chain management process maturity model using the concept of business process orientation. 1st ed. Accessed March 2, 2019. https://pdfs.semanticscholar.org/c5cf/b8482b9644502f55256e9adbd708001179b1.pdf
Mansfield Community. (2013). Introduction to project management. 1st ed. Retrieved from https://www.mansfield.vic.gov.au/Libraries/Community_Development/Intro_to_Project_Management_Manual.sflb.ashx
Merrit, F., and Ricketts, J. (2012). Building design and construction handbook. 1st ed. Retrieved from https://www.uop.edu.jo/download/research/members/[Architecture_Ebook]_Building_Design_and_Construction_Handbook.pdf
Monnappa. (2017). Project scope management: What it is and why it is important. 1st ed. Retrieved from https://www.simplilearn.com/project-scope-management-importance-rar89-article
Passenheim, O. (2015). Project Management. 1st ed. Retrieved from https://home.hit.no/~hansha/documents/theses/projectmanagement.pdf
Wilson, D. (2012). Project Governance. Retrieved from https://www.masterresearch.com.au/downloads/pdfs/Project_Governance_V2.pdf