Contractual Arrangements in Commercial Projects

This week's topic in PPMP20011 Portfolio Template is about Contractual Arrangements in Commercial Projects. The objective is to have a broad understanding of commercial planning and commercial projects. The document explains the spectrum of Contractual Arrangements, legal conditions for a Contract, kind of contracts existed in the Channel Tunnel, benefits of formalizing the contract process, and the importance of the type of contract for governing contractor and buyer behaviors.

(Insert Student Name) / (Insert Student Number) - PPMP20011 Portfolio Template for Week 10
PPMP20011 Portfolio Template – Week 10
Description of
topics including
reading samples
Learning outcomes
of the unit
Learnings from your experience, this and prior unit reading,
assignments
Supporting
documentation
including your prior
learning
Week 10 Topic:
Contractual
Arrangements in
Commercial Projects.
Case Study for the
Chunnel Project;
Australia National
Audit Office (2012)
Developing and
Managing Contracts -
Getting the right
outcome, achieving
value for money;
Kerzner (2013) Chapter
19 Contract
Management;
Law handbook;
Wikipedia Australian
Contract Law;
PMBOK (2013) Chapter
12 Project Procurement
1. Describe the
operation of diverse
and complex
government and non-
government project
contractual
arrangements
relevant to a range of
managed services,
ICT, and build
agreements.
The objective of this week’s topic is to make sure you have a broad
understanding of commercial planning and commercial projects.
Try to ask yourself the questions that were posed in this week’s lecture :
1. What is the spectrum of Contractual Arrangements?
The contractual agreements are the written contracts that are decided between
the people involved within a project consisting of two parties or more than two
individuals and have been decided on the terms and conditions on a mutual
agreement. All the arrangements and terms mentioned within the arrangement
is abided by the law and needless to say that all the parties involved with in the
arrangement shall agree physically on the paper. The contractual agreement
mostly depends upon the people associated with the entire arrangement within
a project.
2. What are the legal conditions for a Contract?
The contracts need to follow several legalities when an arrangement is made in
the form of a contract between two parties or more than two individuals. A
contract needs to follow all the legalization processes as otherwise it can
happen that the contract or arrangement between a project might get nullified.
the legal conditions that a contract should include are the acceptance of the
offer with a mutual consent of all the parties, the consideration of special cases,
the legal capabilities of the concerned parties, the lawfulness of the project, the
agreement set in a mutual basis regarding all the concerned parties and mutual
understanding to all the obligations within the project.
PPMP20011 Unit Profile
PPMP20011 Moodle
Web site
Have you any insights
you can add from other
units you have studies or
readings you’ve made?
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(Insert Student Name) / (Insert Student Number) - PPMP20011 Portfolio Template for Week 10
Description of
topics including
reading samples
Learning outcomes
of the unit
Learnings from your experience, this and prior unit reading,
assignments
Supporting
documentation
including your prior
learning
Management;
Procurement Rules
- Australian;
- Victorian;
- WA;
- NSW;
- QLD;
- USA.
Guardian News article
7th April 2004 Deep in
debt.
3. What kind of contracts existed in the Channel Tunnel?
The channel tunnel construction in Australia also had contracts to bind up the
entire project. It was found that Fixed Price Contract type and Cost Price
Contract where utilised as the type of agreement or contracts for the
construction of channel tunnel in Australia agreed upon by all the parties
involved.
Australia National Audit Office (2012) try to explain:
4. What benefits flow from the formalisation of the contract process?
The formulation of the contract process is only benefited when no information is
hidden from all the members involved with the project as per the Contract. The
entire process needs to be absolutely transparent for all the people who are
involved within the project and have the ability to be affected by the
progression of the entire project. Therefore formulation of the contract process
is actually essential as per the Australia National Audit Office (2012).
Kerzner (2013) Chapter 19 Contract Management try to explain:
5. How important is the type of contract for governing contractor and
buyer behaviours?
All the relationships between the supplier, buyer and contractor is properly
allocated and managed within the contract management profession of a project.
All the behaviours that the contractor and the buyer is expected to deliver
within the project is well managed with the utilisation of this procedure and on
the other hand it also helps in the enhancement of the efficiency in operations
for the organisation. In this case they have the ability to for them to capitalise
the opportunities and enhance the growth that the organisation naturally aims
at.
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(Insert Student Name) / (Insert Student Number) - PPMP20011 Portfolio Template for Week 10
Description of
topics including
reading samples
Learning outcomes
of the unit
Learnings from your experience, this and prior unit reading,
assignments
Supporting
documentation
including your prior
learning
Law handbook & Wikipedia Australian Contract Law try to explain:
6. What needs to be in place for a contract to exist?
contracts are essentially necessary to exist within a project to make sure that all
the people in world within the team in the project is aware of what to do and
what not to do. Although it is only accepted as a feasible contract when all the
mentioned terms and conditions are bound by an enforceable and legal law
according to the country that the organisation is set in and all the parties within
the project team agrees to the contract.
PMBOK (2013) Chapter 12 Project Procurement Management try to explain:
7. How much interaction is there between the other knowledge areas and
the procurement processes?
The project procurement law states that all the accepted communication is
considered to be viable if the procurement plan is determined by the procedure
that is chosen. For the project procurement process as well, the interactive
terms and conditions needs to be chosen beforehand which would also include
the rules, protocols and procedures that needs to be included within the project
according to the consent taken from both the bidders and the project team
members. This contract would include the obligations common sense,
conditions as well as the rights of the procurement process.
Government Procurement Rules try to explain:
8. For an organisation selling to government, is it possible to standardise
the sales, procurement, and response process?
When an organisation is on the verge of being sold to the government, is it still
possible that all the process of standardizing the sales, procurement and
response is inline exactly in the same way that the organisation used to conduct
as a individual private organisation. This specifies that all the organisational
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(Insert Student Name) / (Insert Student Number) - PPMP20011 Portfolio Template for Week 10
Description of
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reading samples
Learning outcomes
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assignments
Supporting
documentation
including your prior
learning
policy within the reach out of the reach of the government can still function in
the same way regardless of it being sold to the government as the people
working under them and the services they provide to the customers are based
on the standardization. However all the policies would now be assisted by the
government after it is sold.
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(Insert Student Name) / (Insert Student Number) - PPMP20011 Portfolio Template for Week 10
References
Kerzner H. 2013. Project Management: A Systems Approach to Planning, Scheduling, and Control, 11th Edition. Hoboken, USA: John Wiley & Sons.
Peña-Mora F., and Tamaki T. 2001. "Effect of Delivery Systems on Collaborative Negotiations for Large -Scale Infrastructure Projects”. Journal of
Management in Engineering. Vol:April 2001 pp.105-121
PMI. 2013a. A Guide to the Project Management Body of Knowledge (PMBOK Guide) 5th Edition. USA: Project Management Institute.
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