Contracts & Procurements at New Royal Adelaide Hospital

This document provides an overview of contracts and procurements at New Royal Adelaide Hospital. It discusses the procurement context, major complexities, risks, and best practices. It also outlines the primary duties and responsibilities of project and procurement managers.

Contracts & Procurements
New Royal Adelaide Hospital
4/11/2019

New Royal Adelaide Hospital
Table of Contents
Introduction...........................................................................................................................................2
Organization Background..................................................................................................................2
Procurement Context.........................................................................................................................2
Major Complexities...........................................................................................................................2
Environment & Organization Aspects, Project Leadership & Governance........................................3
Risks, Mitigations & Learnings.............................................................................................................3
Summary of Key Findings.....................................................................................................................6
Best Practices....................................................................................................................................6
Project & Procurement Managers: Primary Duties & Responsibilities..............................................7
Reflection Journal..................................................................................................................................8
References...........................................................................................................................................10
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New Royal Adelaide Hospital
Introduction
Organization Background
The organization for which this report is written is new Royal Adelaide Hospital (RAH).
There is a lot of change that is happening in the external environment of the organization. For
example, the competitors are now moving on to advanced tools and equipment for the
enhancement of the medical facilities. There are changes in the healthcare regulations and
policies. The customer expectations and requirements are also altering. With these external
factors in perspectives and the internal requirements of the organization, it is decided by the
hospital management to develop an advanced facility for the patients and move the existing
one to the improved one. The decision is taken after analysing the financial and non-financial
benefits that it may provide. There will be numerous activities and resources involved in the
project and the budget of AUD 2.3 Billion are finalized.
The project aim is to enhance the healthcare services, quality, patient experience, and the
engagement levels of the medical professionals. As a result, the new facility will have 800
patient beds along with inpatient facility and forty technical suites deisgned as per latest
methodologies. The healthcare tools are now being designed in an integrated manner by using
the concepts of Artificial Intelligence (AI) and Internet of Things (IoT) along with the
existing healthcare technology and medical guidelines. The reflection of the same will be
done in the new set-up (McMahon, 2015).
Procurement Context
Procurement is one of the significant areas that will be involved in the project. There will be
numerous healthcare, technical, infrastructural, and operations tools and equipment that will
be procured. South Australian Health will be the primary body that will be responsible and
accountable for the procurements. It has already initiated the process and has developed
Strategic Acquisition Plan. This plan will be first approved by State Procurement Board
(SPB) before it is brought in action (Scurfield, 2016).
The procurement plan focussed on the methodology to be adopted during the process, risk
management in the procurement process, and the roles & responsibilities of the resources
involved.
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New Royal Adelaide Hospital
Major Complexities
The project aim is to enhance the healthcare services, quality, patient experience, and the
engagement levels of the medical professionals. In order to achieve the project aim, it became
necessary to procure material and equipment in all of the areas involved, such as technical,
healthcare, infrastructure, and likewise. The acquisition plan that was developed failed to
include these details. It mainly focussed only on the healthcare aspect of the project and listed
down the details, assessment, and information on the healthcare tools and materials only. The
probity assurance levels also had some gaps (Azadegan & Ashenbaum, 2009).
There were certain project-specific risks that came up as an outcome. The risks associated
with project schedule were observed in which the enhanced probability of schedule overrun
was witnessed. The schedule that was estimated by the members of the project and
procurement teams did not match up with the actual values (Verbano & Crema, 2015).
Environment & Organization Aspects, Project Leadership & Governance
There were several regulatory bodies associated with the project that led to the emergence of
certain confusions and the absence on the clarity of the authority and ownership.
Communication management between all of these entities also came up as a primary cause of
concern for the project manager. This is because the stakeholders and the external entities
involved could not be present at a same time for discussing the project issues and risks. There
were numerous changes demanded by the clients at regular intervals due to the lack of
adequate governance and control. It also led to the leadership issues and demanded the use of
enhanced leadership styles and abilities (Tadelis, 2012).
Risks, Mitigations & Learnings
Risk Category of the
Risk
Mitigations Learnings
The emergence of too
many changes at regular
intervals of the process
could lead to the
situation of scope creep
and there could have
Contractual The use of defined change
management techniques and
processes applied since the
initiation of the project and
the approval of the changes
only when they are absolutely
It is certain that there will be
some changes in the project
during its timeline. However,
there must be a defined
change management and
control process in place. This
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been associated risks of
overrun of schedule or
budget.
necessary for the betterment
of the project (Zwikael &
Ahn, 2010).
process will make sure that
the handling of these changes
is adequately done.
Gaps in leadership Contractual SA Health shall make sure
that it exerts the required
control and makes use of
varied leadership styles.
It is necessary that the senior
managers and leaders apply
the leadership styles and
management methodologies
as per the demand of the
situation. They must not
remain restricted to the
traditional practices.
The resources did not
have the information of
the responsibilities that
they had to adhere. Also,
they were not aware of
the permissions and
rights that they had in the
project.
Contractual The resource management
plan shall be integrated in the
project plan and it shall
include the detailed
description of the project
resources and the activities to
be performed by them.
The human resources need to
have utmost clarity on the
responsibilities that they shall
carry out in a project. The
managers shall combine the
resource management
processes with the
communication mechanisms
so that the information
sharing is done properly.
The communication
structure and guidelines
did not match up with the
project requirements
Contractual The communication
management plan shall be
integrated in the project plan
and it shall include the
detailed description of the
project resources and the
activities to be performed by
them.
Communication is one of the
effective tools that can
determine and decide the
success of failure of the
project. The use of
communication tools and
varied channels shall be done
so that the communication
processes are streamlined.
Gaps in estimations Contractual The analysis of the project
objectives, requirements, and
all the information available
shall be done before making
The estimations that are done
in the project shall make use
of the information available
in the form of the business
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the final estimations. case and high-level
requirements. Apart from this
information, the management
shall also attempt to gather
information from the external
sources to make correct
estimations at all times.
There were issues and
gaps in the planning
process as the list of the
equipment to be procured
was not prepared
properly.
Procurement-based The procurement
management plan shall be
integrated in the project plan
and it shall include the
detailed description of the
project resources and the
activities to be performed by
them (Burtonshaw-Gunn,
2005).
The resources involved in the
project procurement process
shall be selected on the basis
of their skills. Negotiation
and communication skills of
these resources play an
extremely significant role in
determining the performance
of the resource and the
success of the procurement
activities.
Gaps in levels of probity
assurance
Procurement-based The estimations and planning
shall be done for all the
project areas.
There shall be reviews and
audits conducted at frequent
gaps so that the loopholes
that may be present in the
project are identified on time.
It will also make sure that the
resource engagement levels
are high at all times.
Poor governance and
control
Procurement-based The governing bodies in the
project shall prepare a review
cycle in advance. The
compliance requirements
shall also be completed.
It is necessary that the project
resources maintain
compliance towards the
defined regulations and
standards. The
communication of the same
shall be done by the senior
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New Royal Adelaide Hospital
management and authorities.
Regular changes in the
original set of the
requirements
Procurement-based The change control flow shall
be maintained in the project
by the project board.
There are chances that the
project sponsor or other
external stakeholders request
unwanted changes that may
also be irrelevant. The
change analysis shall be done
before the approval of such
changes.
Operational gaps and
errors
Procurement-based Operational trainings There is always scope for
improvement and the skill
enhancement shall be
achieved by improving on the
underlying abilities. The
trainings and professional
sessions shall be arranged for
the resources for this
purpose.
Summary of Key Findings
Best Practices
 The project execution and conduction shall be done in a defined series of phases and
process groups from the beginning till the closure.
 The governance and control in the project is necessary and the involvement of the
project board and senior management is relevant for the purpose.
 The procurement processes shall be reviewed regularly and on the basis of the
performance indicators determined in the initiation phase.
 The contractual processes shall be reviewed regularly and on the basis of the
performance indicators determined in the initiation phase.
 The project estimates shall be made on the basis of the internal and external
information. The tracking of these estimates shall be done during the entire project
timeline.
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 The use of enhanced communication channels shall be done on the internal and
external levels to ensure the utmost contribution of the resources and stakeholders
(Olatunji, 2014).
 There must be active use of documentation done to make sure that the project updates
are recorded and shared.
 The senior resources must ensure that the problem-solving and conflict resolution
exercises are carried out.
 It is certain that some estimated and some new changes occur in the project and these
shall be handled as per the guidelines defined.
 It is certain that some estimated and some new risks occur in the project and these
shall be handled as per the guidelines defined.
Project & Procurement Managers: Primary Duties & Responsibilities
There are different areas that are involved in the project and the management and integration
of these areas is the major responsibility of the Project Manager. The PM is the resource that
remains involved and active in the project from its initiation till the closure of the project
(Anantatmula, 2010). The PM performs the role of analysing the business case in the
initiation phase and prepared a charter document. This document is submitted to the sponsor
and external stakeholders for obtaining formal approval on the project (Lovell, 2011). The
planning of the project is mainly done by the PM in which there are sub-plans prepared.
These plans are prepared in the areas of schedule and cost management by including the
estimates for these areas. The tolerance levels for each of these areas are also defined by the
PM. The assistance and support from other resources may be taken in the process (Meng &
Boyd, 2017). The resource management plan is prepared by the PM in which the information
on the resources of the project, their responsibilities, and duties is included. It is certain that
there will be some changes and some risks that will occur in the project. The plans for both of
these areas are prepared by the PM along with the plans for handling stakeholders and
communication. Quality planning is also done by the PM so that there are no gaps in the
quality. Apart from the planning processes, the PM is also responsible for the overall project
control. The review cycles are also developed by the PM to make sure that the project is on
track. The interaction with the external stakeholders is also carried out by the PM. There may
be certain conflicts that may also emerge which are handled by the PM.
Procurement Manager is the resource that is the primary resource involved in the
procurement and contractual processes and their management. The negotiations with the
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New Royal Adelaide Hospital
third-party vendors along with the maintenance of regular communications with these entities
are done by the resource. The resource is also responsible for the contractual process. The
determination of the contract type and the process is also on the resource. The risk
management associated with these processes is also one the resource.
Reflection Journal
The project provided me the opportunity to understand the several norms, processes,
methods, and guidelines involved with the procurement process. Also, it provided me the
chance to have an understanding on the in-depth details of project management as a whole.
My key learnings from the project involved all of the project areas. It is probable that there
will be a few changes in the project amid its course of events. I could acquire that there must
be a characterized change management and control process set up. This procedure will ensure
that the treatment of these changes is sufficiently done. It is important that the senior
leadership resources apply the administration styles and management approaches according
to the interest of the circumstance. They should not stay confined to the conventional
practices. The chiefs shall also include the asset management forms with the communication
systems so the data sharing is done legitimately. Communication is one of the compelling
apparatuses that can decide and choose the accomplishment of disappointment of the project.
The utilization of communication apparatuses and fluctuated channels will be done as such
that the communication forms are streamlined. The estimations that are done in the project
will utilize the data accessible as the business case and abnormal state prerequisites. Aside
from this data, the management will likewise endeavor to assemble data from the outer
sources to make right estimations consistently. The assets engaged with the project
procurement process will be chosen based on their abilities. Exchange and communication
abilities of these assets assume an incredibly huge job in deciding the execution of the asset
and the accomplishment of the procurement exercises. There will be surveys and reviews
directed at regular holes so the escape clauses that might be available in the project are
distinguished on schedule. It will likewise ensure that the asset commitment levels are high
consistently. It is fundamental that the project assets keep up consistence towards the
characterized guidelines and norms. The communication of the equivalent will be finished by
the senior management and specialists. There are chances that the project support or other
outer stakeholders demand undesirable changes that may likewise be insignificant. The
change investigation will be done before the endorsement of such changes. There is
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dependably scope for development and the aptitude improvement will be accomplished by
enhancing the fundamental capacities. The trainings and expert sessions will be orchestrated
the assets for this reason.
There are some of the risks that may emerge in the project and I could acquire the guidelines
on the management of these risks especially in the areas of procurements and contracts
management.
In the future, I would like to improve upon my understanding of the contract types and the
assessment of the risks using quantitative analysis techniques.
.
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References
Anantatmula, V. (2010). Project Manager Leadership Role in Improving Project
Performance. Engineering Management Journal, 22(1), 13-22.
http://dx.doi.org/10.1080/10429247.2010.11431849
Azadegan, A., & Ashenbaum, B. (2009). E-procurement in services: the lagging application
of innovation. International Journal Of Procurement Management, 2(1), 25. doi:
10.1504/ijpm.2009.021728
Burtonshaw-Gunn, S. (2005). Management of Risk in private funded international
infrastructure projects. The International Conference On Business & Technology
Transfer, 2004.2(0), 24-29. doi: 10.1299/jsmeicbtt.2004.2.0_24
Lovell, R. (2011). Power and the project manager. International Journal Of Project
Management, 11(2), 73-78. doi: 10.1016/0263-7863(93)90014-e
McMahon, P. (2015). New Royal Adelaide Hospital report: November 2015. Audit.sa.gov.au.
Retrieved 05 April 2019, from https://www.audit.sa.gov.au/LinkClick.aspx?
fileticket=lKSniN7sYQk
%3D&tabid=283&portalid=0&mid=959&forcedownload=true
Meng, X., & Boyd, P. (2017). The role of the project manager in relationship management.
International Journal Of Project Management, 35(5), 717-728.
http://dx.doi.org/10.1016/j.ijproman.2017.03.001
Scurfield, A. (2016). Procurement's key role in healthcare technology. Supply Management.
Retrieved 05 April 2019, from
https://www.cips.org/supply-management/opinion/2016/september/procurements-key-
role-in-healthcare-technology/
Tadelis, S. (2012). Public procurement design: Lessons from the private sector. International
Journal Of Industrial Organization, 30(3), 297-302.
http://dx.doi.org/10.1016/j.ijindorg.2012.02.002
Verbano, C., & Crema, M. (2015). Risk indicators for managing the energy procurement
process. International Journal Of Productivity And Performance Management, 64(2),
228-242. http://dx.doi.org/10.1108/ijppm-06-2013-0102
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Zwikael, O., & Ahn, M. (2010). The Effectiveness of Risk Management: An Analysis of
Project Risk Planning Across Industries and Countries. Risk Analysis, 31(1), 25-37.
doi: 10.1111/j.1539-6924.2010.01470.x
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