Contractor Selection for Construction Projects

This assignment focuses on selecting the best contractor for a large construction project. It emphasizes the use of a negotiated contract with a weighted score system, considering factors like price, speed, and quality of previous work. The document provides context on different procurement methods, highlights the advantages of the negotiated contract method, and offers guidance for project owners in making informed decisions.

Running head: PROJECT EXECUTION PLANNING AND MANAGEMENT 1
Project Execution Planning and Management
Name:
Institution:

PROJECT EXECUTION PLANNNG AND MANAGEMENT 2
Project Execution Planning and Management
Introduction
WestLINK aim at increasing the chances of success of this project by integrating the
design and management of the activities. Thus, this report briefly analyses various project
delivery methods and recommend the best option based on the various assumptions and
rationale. Some of the project delivery methods that are briefly highlighted include design-
bid-build, design-build and CM@Risk among others. The report further highlights various
types of financial contract based on the most relevant project criteria. The discussed financial
contract type must be the most pertinent for this type of project and include Lump sum,
guaranteed maximum price and cost plus fixed fee contracts. Lastly, the report analysis and
recommend the most viable procurement method that can be used to widen the project scope
and size. Specifically, the report evaluates Competitive, Best value and Negotiated
procurement methods and recommends the most suitable one for a process of this magnitude.
Background of case study
The case involve the preparation of a comprehensive plan for a client on how to select
the best and most viable project delivery system, the financial contract type and the most
relevant procurement procedure. The Sydney motorway network is embarking on the
improvement and construction of various roads to supplement the existing one. In order to
attract funding from the Australian Government to effectively execute the project, this plan is
necessary. The proposal will ensure effective monitoring of the quality of the work and
ensure relevant approaches are undertaken towards the completion of the project. Some of the
inherent challenges that necessitate such a plan include the company’s inability to sustain the
fast-tracking and control of related costs. Correspondingly, without such a plan, it will be
difficult for the company to ensure that workers are safe from the massive traffic from
Paramatta road given that more than 140,000 vehicles occasionally move through the

PROJECT EXECUTION PLANNNG AND MANAGEMENT 3
corridor. Besides, a strict 2023 deadline for the project completion implies that WestLINK
must adhere to the specified plan that is subsequently detailed.
Project delivery methods
According to Mollaoglu-Korkmaz et al. (2011), project delivery method refers to a
detailed system that is used in the organization and financing specific projects, facilitating
operations and maintaining related services. Specifically, project delivery involves such
processes and mechanisms involve in the design and building projects. WestLINK must enter
into a contractual relationship with the Australian government among other important
agencies to effectively design and successfully construct the project.
There are numerous factors that influences the selection of project delivery methods.
For instance, the experience of the company to the contacted, qualifications and capabilities
must be taken into consideration. Likewise, the scale, form, purpose and project complexity
are also important factors that cannot be ignored whatsoever (Harold Kerzner, 2013). A
project sequence, establishment of timelines, costs and the inherent ability to fast-track
project progress are other important factors that will influence project delivery methods
(Laslo, 2010).
GOALS/
CRITERIA
CRITERI
A
WEIGHT
Project delivery methods
Design-bid-
build
Design-build CM@Risk
Scor
e
Weighte
d score
Scor
e
Weighte
d score
Scor
e
Weighte
d score
Project delivery
speed
30 5 150 8 240 5 150

PROJECT EXECUTION PLANNNG AND MANAGEMENT 4
Seamless
communication
20 5 100 5 100 5 100
Cost control 30 4 120 6 180 6 180
Work with local
subcontractors
20 5 100 6 120 5 100
Total 470 640 530
Design-build with a weighted score of 640 is recommended. This method involves a
single entity that is responsible for the design and construction of the project. The company
responsible for the project design must ensure that all relevant performance specifications are
met before suggesting the start of the actual project (Harold Kerzner, 2013). A single
contractor is tasked with developing a contractual relationship with the project owners to
identify related costs and better their relations at early stages.
The figure below shows this relationship.
Project owner
Design consultants
Subcontructors
Vendors/Supplies
Design-Build firm

PROJECT EXECUTION PLANNNG AND MANAGEMENT 5
Under this project delivery method, the involvement of a single entity will save the
project owner from the typically difficult bidding process, enhance communication and
facilitate effective control and design of the project (Kent & Becerik-Gerber, 2010).
However, the project owner must give clear details on the specific need and objectives
of the project coupled with regular management of the contract to ensure absolute
understanding of the stipulated activities (Burke, 2013). Also, the project owner has limited
option on the choice of the most appropriate project subcontractor and this may significantly
affect delivery.
This report recommend this project delivery method to execute the specified
construction activities. Under this project delivery method, the project owner is required to
seek professional design services who will provide a detailed project design before initiating
the actual construction activities. The project is opts to unify such relevant entities to conduct
the design and construction activities. According to Mollaoglu-Korkmaz et al. (2011), the
best project delivery method must adhere to various financial, organizational and time
constraints that are clearly stipulated under the agreement.
As outlined in the figure above, the project owner contracts a project design
professional who may include a design-build professional and subsequently seeks the
services of a general contractor who will facilitate construction process (Kent & Becerik-
Gerber, 2010). This project delivery method is recommended because it is tested and both the
project owner and contractor have increased control and involvement in the design process.
The table below gives a summary of recommended project delivery system.
Project
delivery
system
Project deliver roles
Owner
decision
maker
Project
management
Design Contracting Constructio
n
Coordination
of
construction
Construction
coordination
and

PROJECT EXECUTION PLANNNG AND MANAGEMENT 6
administration
Design-
build
Owner
(O)
General
contractor
(GC)
GC GC GC O GC and O
General
contr.
owner CM CM GC GC GC CM
Advisory
mgmt.
Owner Construction
manager
(CM)
CM O GC CM CM
The delivery method is also appropriate because the project has a strict 2023 deadline,
and WestLINK is absolutely committed towards meeting the stipulated deadline without any
significant cost overrun. The contractor and owner will also be able to fast trace the
construction phases and identify possible costs earlier enough. The contractor is also solely
responsible for any risk in the design and this is explicitly stipulated in the contractual
agreement (Meskendahl, 2010).
Financial contract type: Lump Sum contract
GOALS/
CRITERIA
CRITE
RIA
WEIGH
T
Financial contract types
Lump Sum Unit price GMP CPFF
Score Weighted
score
Score Weighted
score
Score Weight
ed
score
Score Weight
ed
score
Project delivery
speed
30 7 210 5 150 4 120 5 150
Cost control 20 6 120 6 120 5 100 4 80
Quality work 25 6 150 4 100 6 150 6 150

PROJECT EXECUTION PLANNNG AND MANAGEMENT 7
Risk sharing 25 4 100 6 150 5 125 4 100
Total 100 580 520 495 480
After selecting the best project delivery system for the execution of the project,
WestLINK must select the most appropriate contract type that will facilitate the process
based on the above criteria. According to Mollaoglu-Korkmaz et al. (2011), a contract refers
to an agreement between two or more individuals or bodies to avail specified tasks in
exchange for certain payment or compensation. However, contract type highlights the layout
that will be used to pay for the services that are stipulated under the contract.
The recommended financial contract for this project is lump sum (also known as fixed
price contract) with a total weighted score of 580. Under this contract, the project owner is
obligated to pay the contractor a particular amount for completing a scale or work without
necessarily providing a comprehensive cost breakdown. Specifically, the project owner
agrees to pay the contractor an indicated contracted amount after the contract has been
validated (Touran et al., 2010). The contractor is solely responsible for any cost overrun and
can only issue a change not related to costs in the contract through an official order to the
owner. Cost overruns can be as a result of the escalated cost of building materials, poor
supplier performance and possible labour unrests.
A single lump sum price is all that the project owner is obligated to pay the contractor
before the validation of the contract (Schwalbe, 2015). Also, given the strict 2023 project
deadline, the contractor must complete the project within the stipulated fixed cost under the
agreement. The contractor can make profit from this contract is the project costs are below
the estimated expenses (Kerzner, 2013). Also, the project owner is not eligible to claim the
remaining amount after project completion.

PROJECT EXECUTION PLANNNG AND MANAGEMENT 8
This type of contract is recommended because it eliminates the need for extensive
project design and administration. Thus, the project owner must first give a clear definition of
the project to enable the contractor to give a rough estimate of the total costs (Kerzner, 2013).
If the project owner has a relatively tight time-frame, limited construction experience or tight
budget constraints, then this type of financial contract is recommended. According to
Mollaoglu-Korkmaz et al. (2011), lump sum contract obligates the contractor to avail
specified services under the fixed lump sum amount as postulated under the contractual
agreement. Under this contract type, if the estimated costs goes up, the profits are likely to
go down.
Procurement method: Negotiated contract
GOALS/CRITERIA CRITERIA
WEIGHT
Procurement method
Competitive Negotiated Best Value
Score Weighted
score
Score Weighted
score
Score Weighted
score
Project delivery
speed
35 4 140 8 280 6 210
Product quality 35 6 210 7 245 6 210
Selection flexibility 30 5 150 5 150 5 150
Total 100 560 675 570
Project owners are tasked with selecting the best contractor based on the price, speed
quality of previous work or a combination of both (Touran et al., 2010). The project owner
should conduct a comprehensive assessment of the contractors and make the best decision.
The recommended procurement method for selecting a contractor for a project of this
magnitude is the negotiated contract with a weighted score of 675. Under this procurement

PROJECT EXECUTION PLANNNG AND MANAGEMENT 9
method, a contractor is pre-selected based on market reputation and general qualification for
the project (Pinto, 2007). The method is time saving as there are no bidding processes
allowing the construction activities to start and move as quickly as possible.

PROJECT EXECUTION PLANNNG AND MANAGEMENT
10
References
Burke, R. (2013). Project management: planning and control techniques. New Jersey, USA.
DESIGN-BUILD DONE RIGHT. A DESIGN-BUILD INSTITUTE OF AMERICA
PUBLICATION, April 2015
Harold Kerzner, (2013) Project Management: A System Approach to Planning, Scheduling,
and Controlling. Chapter 19.
Kent, D. C., & Becerik-Gerber, B. (2010). Understanding construction industry experience
and attitudes toward integrated project delivery. Journal of construction engineering
and management, 136(8), 815-825.
Kerzner, H. (2011). Using the project management maturity model: strategic planning for
project management. John Wiley & Sons.
Kerzner, H. (2013). Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Laslo, Z. (2010). Project portfolio management: An integrated method for resource planning
and scheduling to minimize planning/scheduling-dependent expenses. International
journal of project management, 28(6), 609-618.
Meskendahl, S. (2010). The influence of business strategy on project portfolio management
and its success—a conceptual framework. International Journal of Project
Management, 28(8), 807-817.
Mollaoglu-Korkmaz, S., Swarup, L., & Riley, D. (2011). Delivering sustainable, high-
performance buildings: Influence of project delivery methods on integration and
project outcomes. Journal of Management in Engineering, 29(1), 71-78.
Pinto, J. K. (2007). Project management: achieving competitive advantage. Upper Saddle
River, NJ, USA: Pearson/Prentice Hall.
Schwalbe, K. (2015). Information technology project management. Cengage Learning.