logo

Construction Assignment: Procurement Approach

   

Added on  2020-05-28

15 Pages4393 Words182 Views
Procurement of Construction of the Spencer Street Station 1REPORT ON THE PROCUREMENT OF CONSTRUCTION OF THE SPENCER STREETSTATIONA Report Paper on Procurement ByStudent’s NameName of the ProfessorInstitutional AffiliationCity/StateYear/Month/Day

Procurement of Construction of the Spencer Street Station 2INTRODUCTIONThis report paper critically analyses the procurement approach by describing the procurement method that has been used in the construction project of the Spencer Street Station. The current procurement approach that has been used by the Southern Cross Station Authority is discussed in this report paper and also proposal of the more suitable procurementapproach. The consortium concession period, client, location, and size of the construction project as well as the definition of the bundling of DCOM and PPP. The Spencer Street Station which is commonly known as the Southern Cross Station is the project being procured which is intended to be transformed into a world-class inter-modal transport facility that is capable of managing 15 million commuters yearly and increasing to million commuters yearly by the year 2020. The procurement process that was used previously by the Southern Cross Station Authority was the Public-Private Partnership procurement approach. This suggested procurement approach was faced with numerous disadvantages which were noticed after its implementation, these shortcomings include contractual disputes and delay and cost returns. The suggested procurement approach for this Southern Cross Project is relational contracting procurement approach. The amount needed to transform this project is quoted to be AUD$700 million which will make the station to serve interstate, regional, and metropolitan bus and rail commuters[ CITATION Nou10 \l 2057 ]. The procurement process of the station would be managed by the Southern Cross Station Authority since it is a statutory body established to represent Victorian State Government and was charged with managing the delivery phases and procurement of the station overseeing and re-development its operation. Civic Nexus Pty Ltd is a private sector

Procurement of Construction of the Spencer Street Station 3consortium which signed a Development and Service Agreement with the building and designing the operational responsibility for the station over a duration of 30 years. Procurement method can be defined as the procedure used in converting requisitions and requirements into contracts or purchase orders. The procurement methods can be broadly categorized into private procurement methods and public procurement methods[ CITATION Sue12 \l 2057 ]. The following are procurement strategies that can be implemented by the Southern Cross Station Authority before awarding the construction tender to the Civic Nexus Pty Ltd which is a private sector consortium include:Strategic Project AllianceAlliance contracting strategy is an agreement where parties enter into an agreement tocooperatively work and share reword as well as the risks determined against the indicators of performance. The service providers and the owners work as a single integrated group to provide a given project under the framework of the contract where their commercial interest is similar to the real objectives of the project. Alliancing entails a formal contract in which the parties assume to act in the project's best interest and this is the major difference from Public-Private Partnership procurement strategy where the responsibility to act in such a way is voluntary completely[CITATION Inf15 \l 2057 ]. The contractor should realize the profit from a contract so as to commercially survive since this is how it is being understood generally, although not recognized universally. There is also a need to know that the client has an influence directly on the way in which the profit is being made by the contractor, through the procurement strategy section. The major principle of philosophy in the choice of an alliance approach is the recognition that the profit of the contractor should be earned through performance and not through the ability of the contractor to win and make claims. The strategic project alliance procurement method was

Procurement of Construction of the Spencer Street Station 4not used by the Southern Cross Station Authority is issuing the railway's station transformation project to the Civic Nexus Pty Ltd since the government cannot influence directly on the ways this private sector consortium is making its profit during the constructionof the project[ CITATION Bow14 \l 2057 ]. Relational ContractingRelational contracting is a contracting or transaction mechanism which aims at giving explicit recognition to the commercial partnership amongst the parties to the contract. The benefits, responsibilities, and essence of the contract are apportioned transparently and fairly with delivery mechanisms that aim at partnership and trust. At construction project level, this can promote working relationships amongst every stakeholder of the project by facilitating effective and efficient construction, enhancing returns of the finance, as well as minimizing the incidence and making conflict resolution much easier[ CITATION Alb17 \l 2057 ]. The relational contracting strategy can, however, extend more than the project in question such as the relationship between the parties in a longer duration, or construction industry profitability or productivity. The implementation of the relational contracting strategy can enable a critical contribution to the social capital development as well as the fourpillars of sustainable societies which include competitiveness, creative citizens, citizenship, and connectedness. The purpose of the relationship is basically an economic one that is intended to enable the transaction between organizations and to issue a framework for the exchange conduct. The Relational Contracting strategy cannot be implemented in this projectof transforming the Spencer Street Station since the relationship between the government (Southern Cross Station Authority) and the construction company (Civic Nexus Pty Ltd) is not to be extended further after this construction project has been completed[ CITATION Cli16 \l 2057 ]. These four pillars are shown in figure 1 below:

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Procurement Method Report
|25
|6099
|235

Report on Procurement Process for Redevelopment
|20
|4374
|181

Procurement and Contracts
|7
|1811
|48

Strategic Construction Procurement Assignment
|9
|1653
|27