PROJ6004 Contracts and Procurement- Leadership and Governance

In addition to this, a definite focus is required for dealing with various challenges from SA health and confirming successful supply of anticipated advantages of the project. The Director of the assurance program plays a vital role in the regulation and controlling of daily operations of the project (Staples, & Dalrymple, 2016). The duty of the Director also involves reporting Committee regarding the important aspects of the RAH program and its monthly progress. The Operation Board of new RAH project assists with the operational leadership and supervision for a unified program and effective change to operational commissioning. However, the assurance arrangement needed to be improved for providing the significant governance committee with autonomous framework on the program and growth reached. The new RAH project aims at cultural changes across the entire system of SA Health by building an atmosphere which motivates and helps the staff members in accepting and using new structural values and work patterns.  It includes using a dedicated attitude and effective methodologies for consistent care of the patients by collaborating with SA’s Health Care scheme.

Part B: Identify key risks, mitigations and possible learning. Where learning have wider implications, identify how those learning may require changes to roles and responsibilities of key project resources, changes to procurement briefs or specifications, scope and the procurement process itself. Identify dependencies and common themes.

In order to deliver the RAH project successfully, the responsibilities was allocated to the team of SA Health and RAH program. For this purpose, the team developed a risk mitigation system which is based on the structure of SA health risk management. It enabled the team to build policies and practices associated with risk mitigation of the project. The SA Health analysed the project risks and their respective management tactics for addressing them. SA Health is recommended to improve and standardize its risk assessment strategies and constantly supervise and inform on the progress of the project as well as risk mitigation strategies on a continuous basis. The key challenges of the project focused on the dependencies as well as interdependencies with different work streams.

Also, the hospital project was functioning with the enterprise ICT programs for detecting the entire plan. The plans were observed to be at different status of development and progress in context of completion. For facilitating a reliable approach to procurement of ICT services, and improving transparency, the optimum use of available resources was ensured. There were still various areas left, where arrangement of contract management for new RAH procurements needed expansion and up gradation. A strategic acquisition scheme was requited to be implemented there for developing an effective outlook to procure the ICT services (Ke et al., 2016). The Health Care Plan of South Australia is driven by strategic tools such as including a crucial concept of a ‘hospital in a park’ for making design themes.

The new RAH Committee has been assigned the responsibility of taking decisions and advising the government on subjects which possess material effect on the project business case. The members of the committee play the role of directing and giving strategic advices on the project. The Board of RAH operations has the duty to build a coordinated program ensuring a sound delivery of the related tasks for each stream and in the alignment of the provided time period and budget. On the other hand, a Project Director is appointed to fulfil the needs of Project Agreement which requires smooth administration of the powers delegated by the state. The Director of the project management oversees the whole infrastructure through the design and construction stages and consequently the supply of facilities in management services as per the requirements of Project Agreement.

Finally, the main role is also played by the Integrated Program Management Executive who is engaged in providing supervision and timely recording and reporting of the performance of the Project Program. The responsibilities of the Executive also include providing assistance in the completion of the works in an effective manner. The first phase of the project execution involved the cost of more than $400,000, which outlined the scope of the ICT tasks for the new RAH while another phase managed and controlled the formulation of the integrated program. In January, 2015, this stage was assigned to the contractor who was responsible for the completion of the defined scope of the project. An analysis of the potential market indicates that sine the resources were not in abundant amount, a decision was made for not continuing with the next stage of the project. Also, the risks were high in the delivery process of ICT program, an alternative plan was designed for executing the project. While initiating the healthcare services, the project environments were considered, which call for the strict compliance with the availability of resources as well as time. The coverage of probity services necessitated a well-organized process of procurement in alignment with the setting up of clinical equipment procurement process.

Part C: Summary of key findings and also identify best practices for procurement and contracts management (in particular PPP procurement) and explore roles of project and procurement managers in ensuring successful delivery.

The project of New Royal Adelaide Hospital is the biggest social set up project carried out by the state.  Its construction also involves maintaining and financing with the non-medical facilities and machines using a Public Private Partnership (PPP) system. This project has been found between the state and appropriate PPP supporter which is SA Health Pty Ltd. In June 2011, the overall price of the arrangement was $1.85 billion. It was estimates by the capital cost of design and Project Company. It did not involve the Health Department and state fund for Ageing which assisted in the operational budget of more than $200 million. This amount was allocated for the entire development of the hospital project and also contained the components which were to be provided and funded by South Australian government. It also includes the financing for district functions and medical apparatus.

In order to deliver the project successfully, there is a need for building a good contract management and procurement practices for reducing the confusions and conflicts. Using of PPP model can be better option for the purpose of executing priority projects prior to the project’s schedules, at a lower cost and without making huge investments from the public sector.  The financial opportunities should be explored by using innovative financial tools. It will assist in dealing with the existing tough bank funding arrangements. The best practices include determining appropriate projects accurately and then conducting a comprehensive preparation for the project and develop effective procedures for the progressing contract management roles across the life cycle of the PPP contract.

Before taking decision regarding the ways to procure the project, it becomes essential to get a clear understanding of what can be the ultimate solution to the concerned needs of the general public in terms of strategy and technical viewpoints. The project manager should identify and compare a large number of practices and then prefer the best one after the evaluation. It should also include ‘Do nothing’ alternative as zero base. When the project is identified adequately and skilfully according to economic assessment, the PPP Certification Guide will screen the project as a PPP. This needs outlining of the general scope and undertaken of a basic investigation regarding whether the procurement in terms of PPP is suitable for the project or not. At the closure of this stage, a decision should be taken for proceeding with the comprehensive appraisal analysis for the project as well as the contract management based on the screening report of PPP. The report should cover an explanation of how the project procurement will be supervised under a specific plan and associated schedule.

For a successful delivery of the project, the management principles form an essential part of the execution. The project manager is responsible for both strategic as well as operational improvement of the project. The project manager plays a role in assigning duties to the members suitable for them and ensures that every task is completed within the given time frame. An effective running of the functions is ensured by the manager specifically within the supply chain. The different activities which are undertaken and monitored by the manager as a part of improvement programs are:

• Shifting from a local to international supply chain
• Outsourcing of major functions related to manufacturing and assembly
• Supplier rationalization
• Cost control arrangements
• Using corporate deals
• Time consumption reduction strategies
• Technology placement
• Stock management

Overall, the project management facilitates the procurement of required services by developing a strategic plan. In the absence of a project foundation, it is difficult to make any strategy which is useful in delivering the successful project.

Part D: Copy of the Reflection Journal that summarises student’s ideas and thoughts and key aspects pertaining to Module 1 and Module 2 including any key aspects picked-up as a result of the review of the Essential and Highly Recommended Learning Resources and critical self-assessment of how some aspects may apply to student’s current or future roles.

From the analysis of the case study, I have learnt that managing risk is an integral part of any project management. For attaining an effective procurement on a large and complex project, risk management functions should be considered properly. It includes sensitivity analysis and scenario assessment for the project, along with procurement appraisal, contingency approval plans, and negotiation of contract condition (Olatunji, 2014). I have also learnt that evaluation and treatment of risk and systematic identification contributes crucially to the success of the contract management and procurement. On the other hand, if the procurement is managed in an effective manner, the project risks are broadened and may produce negative outcomes in the accomplishment of the goals.

My reflection showed that basically, there are 3 kinds of procurement risk management which include prior and organized documentation of risks and designing of plans for tackling them. The practice also includes appropriate delegation of roles and responsibilities and implementation of a total risk management method. It assists in proper identification of the procurement of goods and services and the involvement of risks (Rendon, 2015). The size of the capital outlays indicates the likely losses in the project if they are managed improperly or with inadequate resources. I have learnt that project undertaken in South Australia, particularly in the construction industry. It has been noticed that the concept of knowledge management has become a hot issue in the present time. In the initial stages of project management practices, explicit skills and accommodating strategies guide the project managers and the whole team in achieving the tasks (Igarashi et al., 2015). It also helps in setting a role model for the newly appointed project leaders.

In spite of the differences that arise in the working of subject matter professionals, relevance is given to the ways in which knowledge is obtained and in the role of members in using their skills into action. This attitude of the team leader paves the path for a successful project management. I have observed the whole event occurred during the construction of RAH in the case study. It reflects on how deliberation use of internal as well as external knowledge is helpful in dealing with the risky situation. Moreover, I came to know about the outlook of the project managers in a high power distance scenario and its impacts on the completion of the project.

I have learnt that the profit and loss of a construction project is highly influenced by the nature and assets of the project. The relationship with the suppliers, and contractors, is also useful in reducing the total operational costs of the project. The project plan should also include the analysis of the market position, welfare and the safety of the workers, and public. The overall results of the project can be determined effectively in the context of time, cost, quality, technical performance, and value for money (Rendon, & Rendon, 2015). I have learnt the major sources of project performance risks which are:

• Changes in the number of production units
• Forces majeure
• Design alterations
• Changes in government regulations
• Change in exchange price
• Overly ambitious schedules
• Issues with suppliers or contractors
• Limited resources and skills
• Management policies

References

Olatunji, O. A. (2014). Views on building information modelling, procurement and contract management. Proceedings of the Institution of Civil Engineers-Management, Procurement and Law, 167(3), 117-126.

Rendon, R. G. (2015). Benchmarking contract management process maturity: a case study of the US Navy. Benchmarking: An International Journal, 22(7), 1481-1508.

Igarashi, M., de Boer, L., & Michelsen, O. (2015). Investigating the anatomy of supplier selection in green public procurement. Journal of Cleaner Production, 108, 442-450.

Rendon, R. G., & Rendon, J. M. (2015). Auditability in public procurement: An analysis of internal controls and fraud vulnerability. International Journal of Procurement Management, 8(6), 710-730.

Ke, Y., Davis, P., & Jefferies, M. (2016). A conceptual model of psychological contracts in construction projects. Construction Economics and Building, 16(3), 20-37.

Staples, W., & Dalrymple, J. (2016). Construction Procurement and State Government Strategy: Aligned or Disconnected?. Australian Journal of Public Administration, 75(2), 222-235.