Procurement Methods on Delivering - Free Samples to Students

Question: Discuss about the Procurement Methods on Delivering. Answer: Introduction: Federation Square is Melbournes tourist attraction site for all the citizens in Australia. It is located between the three major public places in Melbourne, which are: the Atrium, St. Pauls Court and the Square. Next to it is the Princes Bridge, Yarra River and the Flinders Street which are also three main structures that are the square is identified with. Federation Square is basically a home for major cultural practices, tourist attraction site as well as business attraction site. For instance, there are restaurants, bars, cafes and hotels among other businesses and business industries. Nowadays, it has become Melbournes main and major tourist attraction site as well as modern meeting place for the people living in Australia. In the mid and late 1960s, the construction of the square was started being led by the State government and Melbournes city council. The construction was budgeted by both parties who also decided to finance it. However, the construction plan did not work out s imply because of the design challenges and problems caused by differences of both parties. The development of the Square came to an end when the two parties discovered that the estimated budget could not be met since there were no more funds to finance the project. However, with time other constructors came up with extremely great ideas which give more hope for the project to be completed rather than leave it at such a mess after demolition of business and important buildings and structures around the area. Since the government and the Melbourne city council failed in financing the project to its completion and their chosen designers proved to be useless, there came other constructors and designers with different views who provided better solutions to the project problems. Nevertheless, the best designer and constructor was chosen to complete the project accordingly. Design Competition and Controversy With the information mentioned above, there was a large number of other constructors that came up after the tender annunciations were made. In the year 1997, the project was given to Lab Architecture Studio who worked with Bates smart architects. However, they were not supposed to start the project from scratch simply because it had been started and then stopped. Their job was to find the best way to connect the Flinders Street with the Yarra River and provide the best connection between the Square and the surrounding buildings and business structures. Nonetheless, this type of design also exceeded the budgeted costs which was originally $128 million and now became $267 million making it seem very unrealistic and uneconomical. The challenges and problems of the project development increased especially with the fact that the government needed to complete the Square before the Centenary of Federation event. Therefore, the squares deck structure was completed by the Leighton Contractors within the $14 million budget. However, because of the implementation of the fast track system during the construction of the deck, more problems arose in relation to the projects construction and completion status. For instance, the Multiplex Contractors were given the tender to complete other portion of the project but later sued the government and the city council claiming a compensation of $19.1 million which was as a result of delayed agreements and lack of formal contractual arrangements. Later on, the Multiplex Contractors were still chosen to complete the project but under the Victorian Government. They agreed to the offer under a free contract arrangement and were to be responsible of all the challenges, losses, discrepancies and risks among other things that would arise during the construction period. Therefore, the square was completed after the change in government and after the visitation of the previous designs and structure with the aim of correcting and advancing them. Additionally, the square was completed on a different budget of $467 million (Australian) which basically is much higher than the previous budget. The Federation Square was officially opened in the year 2002 and has been functional to date. These are also referred to as the procurement systems which basically are the project delivery systems. This means that they are the methods that are responsible for assigning an organizations construction project and authority to a certain contractor by defining the projects objectives, goals and management expectations (Naoum et al, 2015). A successful procurement method will depend on the contractor management team as well as the selected procurement methods itself. Therefore, this means that both the hiring business and the contracting organization must be able to understand the method and give the reasons for choosing the method over the others (Guo et al, 2014). In addition to that, they should all be able to agree on the methods that is most likely going to achieve and meet the businesss objectives and goals and one that have more benefits than risks compared to other methods (Porwal et al, 2013). With that in mind, the following are some of the project procurement methods tha t can used by organizations when constructing or renovating their projects: In this method, the project structure designer and the contractor are completely different and allocated different roles. Therefore, the employer (organization that owns the project) must admit to the fact that the designer is just there to design the projects structure while the contractor just follows the design. In addition to this two parties, the employer should hire a consultant whose responsibility is to overlook the construction costs, project design and offer professional advice to the employer relating to those two issues (Yu et al, 2013). The contractor, also subcontractor is also responsible for providing the workforce or rather the labor force, the supplies and all other equipment and materials needed to complete the project. However, in case of the subcontractors, they can be selected through applying for tender system which is supervised by the lead contractor manager. This is simply because they will have to work under his/her authority. This method has proved to be u sed in many businesses and is a very effective and efficient method for any kind of business to use (Davis et al, 2017). Advantages of Traditional Method The cost of using the method can be altered when need be. Changes are possible and easy to manage than other methods. There will be accountability for every activity undertaken simply because every party has specific responsibilities to carry out. The client always has the lead and authority over what design to be implemented. The client is able to choose the best contractors because of the competitive equity applied during tender process and contractor choosing. The client is able to get professional advice from different parties who are experts on those fields. Disadvantages May be expensive to implement incase the project design is not complete and the project has already commenced. Takes time to complete than other methods because the process is sequential and therefore one stage must be completed to be able to start the next. For instance, the design must be complete before the contractor is vetted or hired. Design and Construct Method This method is one of the most used methods especially when the client wants to shift all or most of the risks to the contractor. In this method, the contractor is capable of assuming all of the risks or rather the larger portions of the risks (Davis et al, 2008). This means that, the responsibility to prepare the scope or the scheme of the project, project design development and documentation and the construction all fall on the shoulders of the contractor. Also, it means that the contactor has to be chosen by the client right after identifying the project that they need. However, the clients specifications, requirements and expectations should be stated and direct. Additionally, the client can also opt to hire a consultant whose responsibility is to offer professional advice on what the project should be all about as well as what to expect from the project. apart from the duties mentioned above to be performed by the contractor, he/she has the responsibility of hiring the subcontra ctors or rather the labor force, avail the materials to be used therefore dealing with the suppliers and manage and supervise the construction process. Therefore, it is believed that this process gives a lot of power and authority to the contractors over the project but also installs most of the project risks on them. On that note, the contractors who use this procurement methods are usually more cautious, more professional and use certain skills and expertise to be able to succeed with the project completion. Advantages The client is able to deal with only one contractor which reduces the wastage of resources and time when dealing with many different parties. The chances of the project improving and functioning in a better manner increase because of the input provided by the contractor concerning the project design. Time and money wastage is reduced due to possible construction and design activity overlapping. Costs less because of the reduced possibilities of changing the project design. Disadvantages It is expensive to change the project scope in case change is required. The contractor is supposed to commit to a project concept at an early stage which means that the details are withheld and therefore may cause challenges later. It may become a big challenge for the client to briefly state the project requirements and expectations. There are greater risks that the project design does not meet or achieve the precise intended requirements of the project itself. Management Procurement Method This method is composed of three categories with different procedures and techniques of performing a project procurement process. These methods are: management constructing, design management and design and manage methods. I will discuss all the three methods. In this case of the management contracting, the client has the capability of appointing the management contractor as well as a team of independent project management advisors. The management contractor is in charge of all the construction works from the beginning to the end of the project. The team of professional are responsible for advising the client regarding the project designs and when it comes to the choice of the contractor who is chosen later in the process. However, for this methods to be successful, there must be honesty, cooperation and openness between the three parties simply because they are bound to rely on each other. In his methods, the client is also capable of changing the designs and project requirements as the construction goes on (Cheng, 2014). This is so simply because of the method is flexible and therefore can accommodate any changes necessary. In this method, the contractor is paid a fee to manage, develop and coordinate the design and construction activities of the project but should be done professionally and with expertise. Also he is supposed to come up with a program that is supposed to help improve the project effectiveness and efficiency after its completion. In addition to that, the management contractor plays the role of mediating between the client and the contractor and therefore does not take part in the project design development or construction. This means that the agreement terms and conditions are directly between the client and the contractor. This method is basically one of the best method where a client can manage time, costs and quality of the project. Furthermore, the contractor has the chance to share his ideas, inventions and innovations with the clients the best way possible. Also, the contractor has the capability of starting the project development even when the project details are not complete. The design contractor is paid a certain fee to cater for the services of supervising and taking charge of the designing team as well as the construction works. This is basically the same as the management contracting methods but with a small difference of additional responsibility. In this method, the design manager is supposed to choose the designing team as well as the contracting team. Also, they have to take control of the budgets and all the activities that are carried out during the project construction period. Advantages of Management Procurement Method The client is able to deal with only one party, either the designer or contractor manager and therefore offers more time for collaboration and team work. Overlapping of designing and contracting activities is possible therefore saving time and money during the process The process is able to identify and state the roles, responsibilities and risks for all the parties before the project construction commences. The possibility of project improvement increases because of the input provided by the contractor. The project designs are flexible and therefore leaves a room for change when need be. Disadvantages of Management Procurement Method The cost of the project is not ascertained until the project is complete The client losses direct control of the project design as well as the progress of the construction process The client must be informed and very active during the whole project construction process. It may be challenging for the client to briefly specify the requirements of the project and therefore may lead to confusion and disagreements when exact results are not achieved. Public Private Partnership Method This is a method that has been used mostly by the government authority whereby they seek help from the private sectors to be able to provide the social and infrastructural amenities for the citizens. Apparently it has been widely used by most governments in different parts of the world and has proved to be effective and very efficient (Jefferies et al, 2016). Generally, the method encompasses of different parties and procedures to be undertaken by the parties. For instance, there is the designing process, planning and construction process which are all done by different groups or parties. In addition to that, the financing is also done by a different party but is mostly the government or the authority itself. However, the financing process can also be done by a different party apart from the government. Therefore this means that in this method, the government completely leaves the project in the hands of the contractors and designers who partake the responsibility of providing the ex pected project. Nevertheless, the projects success lies completely on the partnership between all the parties and the participation of each of them. However, there are other forms of the Public Private Partnership methods which include the following: This is where a project developers are given the opportunity to use or work on the project for a period of time and then later passes to the government to manage and maintain for the rest of the period. In this method the system allows the developer to develop the project design using his/her own finances, construct the project and manages it for a certain period of time agreed and then transfers it to the government to continue its management. In this method the project developer develops, builds, constructs and operates the project by themselves. Therefore, this means that the ownership is not transferred to the government. Other PPP methods are: Design, Build, Finance and Operate (DBFO), Build, Own, Operate, Subsidize, and Transfer (BOOST), Build, Transfer, Own (BTO), Build, Own, Operate and Transfer (BOOT) to name just a few. These methods have become very common to the governments and have brought adverse effects to the process of amenities provision by the government. Advantages of PPP Method The government receives massive help from professionals and experts on the specific field or project The possibility of completing the project increases and becomes more certain In some methods, the government is able to regain the control and management of the project before or after completion. The cost of constructing some projects becomes less since there is the cost sharing aspect when it comes to some methods. The government may not regain the control of the project in some methods. In case of project failure, the blame falls on the government only which means that it assumes all or larger part of the risks involved. Most Effective Procurement Method According to the case study, the construction of the Federation Square in Australia involved the use of the Public Private Partnership procurement method and specifically the Build, Operate and transfer method. The government and Melbourne city council was involved and also financed the project construction. To add to that, the government and the city council later took control of the management and control of the project after completion which is certainly a good way to collect taxes and develop the countrys economy business wise and many other aspects. However, during the construction of the square, there were so many challenges and problems that came up which lead to the problem of the project not being completed on time (Guo et al, 2014). Apparently, the only project aspect that was completed on time was the deck structure that was delivered by Leighton Contractors on time as well as on budget some of the other problems included the following: Lack of enough money to finance the whole project Lack of qualified contractors to complete the whole project Lack of official documentations and agreements to facilitate the project construction process to the end Frequent political interference from the government and the city council which led to time wastage. In that case, the best method that could have been used for the procurement process of the federation Square construction is the design and construct method. In this method the city council of Melbourne and the government will be able to deal with just one party whose responsibility will be to design and construct the square. The contractor is usually in charge of all the works and the project designs whose specifications and requirements are stated by the client. Therefore, the government and Melbourne city council will have a say when it come to the project design and how they want to appear. However, they should be able to state clearly the objectives and goals that it is supposed to achieve so that the contractor can follow their ideas (Naoum et al, 2016). In addition to that, most of the risks that may arise during the construction will be assumed by the contractor which means that he will have to put more skills, knowledge and time to the project development and construction. The use of this method will reduce some of the challenges that the government and Melbourne city council faced during the construction of the Federation Square. Some of the challenges that may be reduced include: the process of hiring different parties and contractors to finish up the square, the challenge of looking for different designers to come up with a structure of the square, the problem of looking for workforce to carry out the project and the challenge of supervising the project from the beginning to the end. Most of these challenges seem to arise from the responsibility of the project designer and contractor who in the case of design and contract method will be the one person. Also, the government will get the advice of the contractor when it comes to design choosing which will later contribute to the chances of functionality and project improvement once it is finished. I addition to that, the government will have the opportunity to change the project design in case they ne ed to. This method is better than traditional method because of the fact that if during Federation Square Construction the management procurement or traditional methods was used, the government would still be dealing with many parties which become stressful and cumbersome. As for the PPP method, it was the method that was used but still did not produce the expected results neither nor on budget. Therefore, even with the fact that the government will have to fund the project from beginning to end, by using the design and construct method it will have reduced the chances of project failure. This method may not have been used by many governmental projects but it has proven to be very effective for the few that that have used it to procure their projects. Apparently, the client will always have power over the project and therefore giving the method more credit over the others. Conclusion There are various types of project procurement methods that can be used to construct different project. From the analysis, the Federation Square construction was really a long and tiresome process for the government and the Melbourne city council because of the many challenges that they faced. However, this shows that every organization should ensure that it has undergone through all the procurement methods and understood each of them before they decide the method to use. Also, they should be able to know the advantages and disadvantages of each method so that they can be able to make the right choice. Therefore, as for Federation Square, the method that should have been used is the design and contract method because of its benefits and especially to the government itself. References Naoum, S., Egbu, C. (2015). Critical review of procurement method research in construction journals.Procedia Economics and Finance,21, 6-13. Osei-Kyei, R., Chan, A. P. (2015). 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