Contracts and Procurement

Running head: CONTRACTS AND PROCUREMENT
Contracts and Procurement
[Name of the Student]
[Name of the University]
[Author note]

1CONTRACTS AND PROCUREMENT
Part A:
Introduction:
New Royal Adelaide hospital has been designed so as to form the largest health and
research precinct in South of Australia. This new RAH is associated with representing the social
infrastructure which is the largest project that has ever been conducted by the government.
Execution of the project has been done by means of a private partnership or the PPP arrangement
which exists between both the parties (Swift et al., 2017). The one of them is the Australian state
and another one is the Health Partnership Pty Ltd. This partnership is maintained for the purpose
of building, maintaining, financing and providing of non-medical services as well as the
equipment for the biggest hospital of Australia which is also the most expensive one.
First of all for the purpose of understanding the context it is very essential to make sure
that the hospital is associated with representing a procurement project. Procurement generally
refers to the business management function which is associated with making sure of the fact that
the identification along with the sourcing, management and access to the different external
resources which are needed by the organization or might be requiring the fulfillment of the
strategic objectives (Redwood et al., 2017). So it can be stated that the procurement generally
exists so as to explore the new opportunities along with the strategies of the market which are
best suited for the Hospital.
The new RAH procurement is having a term of project management of 35 years which
also consists of the design and the construction term which is approximately 5years and the
besides this the operation term is approximately 30 years (Mignone et al., 2016). Execution of
the agreement was done in the year of 2011 in the month of May and achieved the financial close

2CONTRACTS AND PROCUREMENT
in the same year 2011 in the month of June which is to be concluded by the month of June of
2046.
The project is having an approximate lifecycle of 30 years and the term of the project
agreement is around 35 years where the design and construction term is approximately five
years. The execution of the agreement was done in the year of 2011 in the month of May which
had a total nominal budget of around $2.3 billion. The budget consisted of a cost of $1.85 billion
for the designing and the construction which was funded by the Project Co. and besides this the
State was associated with funding for the work of almost $417 billion (Merschbrock et al., 2018).
This initially made new RHA promise about overcoming the expectations as well as the visions
as a health provider in Australia. The contractual obligations that were put forward from the state
as well as from the Project Co. along with the structure which was planned mainly consisted of
the following things:
 There would be existing almost 700 multi-day beds along with 100 same-day beds
 Standardized rooms for single patients
 Existence of 40 technical suites which consists of the intervention suites, operating theaters
and the procedural rooms
 Primary technology is to be used such as the automated guided vehicles
 Tagging of the biomedical as well as the clinical equipment are to be tagged electronically.
So it can be sated that the project agreement is associated with indicating the obligations
faced by signing parts in which the State would be entirely responsible for the completion of the
works funded by the State and this would be continuing to be responsible for supplying of the
clinical services as well as equipment for the hospital (McBean, 2015). Additionally would also
be responsible for the stipulation of the Project Co so as to build a facility which would be

3CONTRACTS AND PROCUREMENT
meeting all the purposes and specifications which are detailed in the specification of the States
output and besides this it would also be responsible for providing of a range of facilities related
to managing of the services at the time of operating.
Part B:
The decision making by any business is transcendental and might be consisting of risks
which generally varies in amount and this is the reason due to which the organizations must
associate themselves in making plans for mitigation of the risks along with following the plans
so as to minimize the various kind of threats so as to optimize the benefits as well as the
performance (Walker, 2015). Business risk management generally refers to the practice related to
making attempts so as to reduce the risks that are going have a negative effect upon the business
along with looking for opportunities so as to have a positive impact. Due to this reason the risk
management process is considered to be way by which the business would become capable of
identifying, analyzing and evaluating the various kind of risks so as to forecast the potential
scenarios as well as the circumstances that might be associated with having a huge impact upon
the business and for reducing the impact (Lock, 2016). The risk management would also be
helping in improving the relationships with the customers and the suppliers along with the
employees and the community so as to manage the prospect. Due to this reasons companies
should necessarily be associated with facing the difficulties along with minimization of the
consequences.
In the RHA project there exists different kind of risks which be associated with having a
huge impact upon the development of the entire project some of the general risks which have
been discovered includes the following: