Six to Eight Method Helps Reduce Efforts of Management

The assignment content discusses various delivery models for construction projects, including Construction Management, Direct Managed, and Public-Private Partnership (PPP). The recommended strategy is the BOOT approach, which has been used successfully in previous NSW projects. To ensure the success of the project, critical success factors must be implemented. The tendering and procurement method involves three stages: inception, development, and implementation. The key determinant for successful project delivery is the procurement strategy document.

Project Management

Table of Contents
Introduction......................................................................................................................................5
Tendering and procurement method................................................................................................5
Stages of procurement.....................................................................................................................6
1. Inception stage......................................................................................................................6
2. Development stage................................................................................................................9
Funding decision............................................................................................................................10
3. Implementation stage..........................................................................................................10
Investigation of documents............................................................................................................11
Procurement strategy..................................................................................................................11
Standard form of contract..............................................................................................................12
Risk management strategy.............................................................................................................13
Case study......................................................................................................................................14
Business Diversity.........................................................................................................................15
PPP method....................................................................................................................................15
Analysis of method........................................................................................................................16
Guidelines of the model.............................................................................................................17
Findings.........................................................................................................................................20
Suggestions....................................................................................................................................21
Recommendation...........................................................................................................................21
Conclusion.....................................................................................................................................21
References......................................................................................................................................23

Executive Summary
The PPP procurement and tendering methods helps to meet the shortfall of funds and project
completion on time. The stages of procurement strategy include inception, development, and
implementation stage. The investigation of documents includes procurement strategy which
helps to take the effective decision to complete the project on time. The standard of contract
includes AS2124-1992, NPWC3-1981, GC21, AS4000-1997, AS212-1992, AS4300-1995,
and AS4916-2002. The checklist approach is used to examine the risk which helps to identify the
areas of risk and that can be mitigated to eliminate the various obstacles in completing the
project. The case studies include Newcastle Mater hospital, Northern beaches heath service and
the new Maitland hospital. The business diversification such as coffee shops, hospitals and
others helps to meet the shortfall of funds. The various approaches of PPP method include
BOOT, BOT, DBFM, and BOO. The BOOT approach is recommended with the implementation
of CSF.

Introduction
In this present paper, we will discuss the tendering and procurement method investigation which
is suitable for the extension to the Mater Hospital in Newcastle. The paper also describes the
analysis of procurement and tendering method, stages of procurement, investigation of
supporting documents, risk management strategy, and findings.
The strategies for procuring the major infrastructure process remain the same for twenty-five
years. It helps to reduce the major hurdles in completing the project such as cost overruns and
incidence of time. The objective and requirements of the project owner need to be matched with
the procurement strategy. It is necessary to understand the characteristics and requirements of the
project before selecting the procurement method. The bespoke solution is required in order to
meet the objectives of a project. The objective identification and prioritize them is one of the
most difficult tasks because the procurement method is selected on the basis of project objective
and scope. According to the New South Wales government, the choosing of procurement method
requires establishing the appropriate overall arrangement, contract system and criteria to manage
the procurement by the agency. The building of successful procurement method requires seven
steps: choosing of house project executive, principal advisor appointment, carefully decides the
requirement of consumers, total time duration of the project, choosing of procurement path,
choosing of the particular company to work with and designing a site.
Tendering and procurement method
The procurement method is defined as the form of contract and procurement process which is
used to with the respective delivery model as documented in the strategy of procurement.

Stages of procurement
1. Inception stage
Step: 1
Data gathering
In this stage, the data is gathered and documented all the relative information of the project so
that the effective profile can be developed against the potential delivery model and methods of
procurement. It is the essential precursor to the development of specification and project brief
which are the key documents to explain the characteristics of project, requirements of project
owner and formation part of the procurement process which is issued to the market. Following
areas needs to be covered for gathering data:
a. Objective
It comprises of social, operational agency objective, safety related, economic and any legal
benefit of the project.
b. Requirements
It includes the requirements of the project such as delivery of core services.
c. Characteristics
It includes location, site status, project value, scale and size, geographical conditions,
disposal needs and demolition, project features, quality standards, design, scope, key
challenges, opportunities and others.
d. Risk
It includes the risk management plan which helps to mitigate the risk related to the project
such as agency risk culture, political risk, market risk, site issues, and shareholders related

risks. The review of stakeholder's environment and analysis of present options must be done
to manage the risk related to stakeholders. The checklist is used by the authors rather than
standardized risk analysis which helps to consider various types of risk factors. The checklist
approach helps assess the risk in a tailored form. The robust analysis is considered for
assessing the risk in the high-value complex projects. It is important to consider the risk
related to the delivery of the project which helps to manage the risk in an efficient and
effective manner.
e. Agency capability
There are various project delivery methods which need to be considered by the project
owner. The various factors must be considered such as the capability of human resource, the
level of oversight the agency, ability of an agency to manage the specific delivery model on
the new contract form.
f. Market position
The appetite of the market for risk and views related to the various delivery models with
respect to each activity such as soundings of market and briefings of an industry. The D&C
delivery model is suitable for the high-value projects.
The early contractor involvement (ECI) is defined as the two stage delivery model which is
used to resemble the project alliance model at the first stage of the project and in stage D & C
model is applied. The model is mainly designed to maintain the cost, good relationship and
outcomes of construction by fostering the involvement of contractor of construction at the
preliminary stages of project delivery which includes design and development of a project. It
is the delivery model which helps to reduce the risk by maintaining the cost, outcome, and
relation which are the successor of the project completion on time.

Step: 2
Preliminary screening
In this stage, the project owners of member agency analyze the profile of the project which is
developed in the first step. There are various delivery models which are selected according to
the characteristics of the project such as D&C, traditional, PPP, managed, ECI and direct
managed. The procurement and contracting in the nonresidential sectors and delivery models
is highly innovative and fluid. The owners of projects are encouraged for the investigation of
delivery models which may be allocated in the guide.
The PPP delivery model is taken as the part of preliminary screening which helps to examine
the financial approach of the project. The PPP model enables to eliminate the model from the
mixture of potential models, and it also helps to provide the sufficient justification to confirm
the suitability of model. The guidelines of national public-private partnership policy and
guidelines include identification of core versus non-core services, the value of money and
public interest.
Step: 3
Procurement optional analysis
In this stage, the analysis of the delivery model is done which helps to determine the
potential of risk and its impact on the achievement of the value for money outcome. The
analysis helps to reduce the risk. The risk is analyzed through the development of the range
of bespoke criteria and evaluate the recommended delivery model then the significance of
risk is analyzed which helps to determine the ability of effective risk management. The

various recommendations are made by Australis and the APCC such as suitability matrix,
procurement delivery model assessment tool, ranking schedule, template evaluation matrix,
and procurement options analysis which helps to examine the recommended delivery project.
Step: 4
Recommended delivery model
The above three steps help to determine the recommended delivery model which can be
tailored according to the requirements and risk profile of the project. The number of delivery
models can be used to develop the hybrid model which can be used in the various
components of the large project. The D&C delivery model can be used for operations and
maintenance responsibilities (Walker et al., 2016). After deciding the recommended delivery
model then the form of contract can be decided by the project owner which is used to arrange
the delivery with the successful contractor and ready to procure the work of infrastructure in
line with the purchasing of government in the relevant justification.
2. Development stage
In the development stage, the project delivery is processed through which the aim of the project
is realized, and it must be supported by the adequate procurement strategy which ensures the
delivery of the project on time. It is the most important stage from the perspective of project
management. The optimum time is achieved through the commencement of development process
as early as possible in the project life cycle because it is a part of evolution and definition of the
project. It is a very critical stage from the perspective of funding, and it is the part of good
project management.

Funding decision
It is necessary to develop the procurement strategy in a timely manner because the agency
member needs to submit the details to the government in support of an investment decision and
then it needs to be approved by the government. The steps of developing procurement strategy
are shown in the figure below:
3. Implementation stage
In this stage, the recommended procurement strategy is implemented in which the definition
phase is commenced and continues till the delivery phase. It also includes a transition to

operation phase on which the delivery of the project depends. In this stage the implementation is
started from establishing the business needs, and then it ends at the review of the project.
Investigation of documents
It is defined as the documents which are used to present the outcome from the analysis of
procurement options and it helps to determine the recommended delivery model and method of
procurement for a particular project. The selection of method is based on the circumstances and
characteristics.
Procurement strategy
It is the core document of the project because it presents the outcomes of an analysis of rigorous
procurement options which is considered by the owner of a project to determine the
recommended delivery model and procurement method of a project. At the time of project
evolution phase, the appropriate strategy is developed which is the key determinant for the
successful project delivery. The strategy is more than high-level plan because it explains the

deployment of recommended delivery model and procurement method in order to deliver the
project successfully (Bower et al., 2013).
The effective procurement strategy is developed by considering various aspects such as complete
understanding of project, examine market capabilities and capacity, evolution of potential
delivery models and procurement methods, involvement of stakeholders and experts at the time
of planning process, risk considered to achieve the desired outcomes and apply analytical
techniques at the time of decision making process (Regan et al., 2015).
Standard form of contract
The AS2124-1992 is the standard general condition which is used for the major works of
construction which are straightforward infrastructure projects in the sector of nonresidents
building and civil (Amann et al., 2014). Other standard forms are explained below:
1. NPWC3-1981
It is defined as the national public works committee form of contract, and it was published in
1981. The contract is still used by the members of agencies in NT and VIC.
2. GC21
It is the standard form of contract for construction which is used state agencies of NSW and
it is also used in the ACT.
3. AS4000-1997
It is the standard form of contract which is replaced by AS2121-1992, and it is available for
use. It is not widely used by the member agencies mainly in the civil sector.

4. AS212-1992
It is presently being revised, and it will be available for APCC member agencies and
Austroads after standard Australia process completion. In the updating of AS212-1992, the
APCC is directly involved in this process.
5. AS4300-1995
It is a form of contract which is used by the D&C projects for delivering the project under
D&C delivery model. The agencies in NSW, SA, and the ACT also use the GC21 form of
contract and the VIC, and NT use an NPWC3-1981 form of contract (Coggins et al., 2016).
6. AS4916-2002
The modified version of AS4916-2002 is used in QLD and the WA use modified version of
AS2124-1992. The amended department of health construction management contracts is used
by the VIC agencies (Morledge et al., 2013).
Risk management strategy
The checklist approach is used to assess the risk which helps to examine the risk in a customized
manner. The aspects of risk are identified through the prioritization of key objectives of the
project, and then the management of risk process is established with the successful project
outcomes. The high degree of risk is confronted by the client because of unique bespoke nature.
There is various type of risk involved such as project completion on time, cost overruns,
financial risk and others which directly impacts on the sore business of the client. The
procurement strategy must be developed in order to balance the risk against the objective of the
project. The weighted list of prioritizing must be developed which helps to consider high
weighted risk in the overall procurement system (Teo et al., 2013).

The establishment of the adequate project team is required to deliver the project on time with the
adequate cost of the project. The procurement method helps to manage the risk through
managing the risk in a most efficient and effective manner. The risk is minimized through
mitigation approach which helps to manage the various aspects of the risk. The prayer approach
is defined as the approach which is used to solve the problem at the highest end.
Case study
Case: Newcastle Mater hospital
In this case the redevelopment of mater hospital is taken by the mercy health care and Bovis lend
lease. The needs of hospital is identified which is far exceeds from the funding availability. Then
the project is transferred to the project company for the time period of twenty eight days. The
project includes redevelopment, relocation and expansion of service, and enhancement of
radiotherapy facilities (Jefferies et al., 2013). The values of the project are financing and
infrastructure. In the first stage, the expression of interest is evaluated and detailed proposal is
evaluated. The contract was agreed which comprises of project deed, D&C contract, operating
contract, financing agreement and side deeds. The project risk, design and construction
obligations, policy and procedure manuals, supporting services, project financials and benefits
analysis of the project is done.
Case: Northern beaches health service
It is a case of redevelopment project of NBHS which include building of New Northern beaches
hospital, redesign of community health services, and redevelopment of Mona Vale hospital. In
the procurement process the RFP process is evaluated then the criteria of evolution include

operator, operational requirements, transition, asset solution, and commercial & financial
structure.
Case: The new Maitland hospital
This case discuss the project planning is done to meet the services of hunters growing needs in
the particular region. The vacant crown land at metfold is preferred which is submitted to the
NSW government for the approval. This program helps to sustain the health of public servics
Business Diversity
The shortfall of funds can be solved through business diversification such as café shops in
hospitals, car parking facilities, and office space which aid finance to the hospital and help to
cover the shortfall of funds (Barlagne et al., 2013).
PPP method
It is defined as the method which is used to procure the public infrastructure. The distinct
features of the method includes, private financing, whole life contract, service provision rather
than the consideration of assets (Zou et al., 2008). The risk is transferred to the party who can
handle the risk most appropriately and the private sector generally delivers the better value of
money then public sector. Following are the types of projects under PPP methods:
1. BOOT: In this approach the private company owns, build, and operate the facility. The
ownership is transferred to the government after the completion of work.

2. BOT: The acronym is build own operate transfer in in which the facilities are operating,
finance, designed and maintained by the concession company. The ownership may not be
with the company.
3. DBFM: The acronym is design build operate and maintain in which the designing, building,
finance and maintenance is done by private sector.
4. BOO: The acronym is build own operate in which the private company build, operate and
owned with the encouragement from the government. The funding is also done by the
private company (Verweij et al., 2015).
Analysis of method
The procurement methods are bifurcated into three steps, namely, inception, development, and
implementation. There are various models of delivering the project. The models are analyzed
below:
1. Construction
It is the most common method used to deliver the infrastructure project in Australia. The
designing and stages of construction are considered separately under this model. The designs are
prepared by the project owner through using the resources of consultants, or in-house and
contractor are subsequently involved in the line construction with an agreed program, project
documentation, and pre-existing designs. This model is used for small and major infrastructure
projects. The negative aspect of this method is that the scope and design cannot be changed. The
lifecycle is not taken into account, and the propensity of stakeholders relations is very poor
(Sanchez et al., 2013).

Guidelines of the model
Following are the guidelines to use the model for delivering the project successfully:
1. Sufficient time framework is completing the design and then following up the work of
construction separately.
2. The innovation in the designing of the project is not required, but the scope of the must
be well defined which helps to deliver the project on time.
3. The conditions of the site must be properly examined which helps to use the resources
carefully.
4. The pool must be of large members with strong competition.
5. The high degree of a cost is required at the time of award.
Below figure shows the structure of typical construction.
2. D&C
In this method the contractor is engaged in construction and design of the project. The
common variants include construct, maintain and design. The structure is responsible for the
maintenance of post construction (Teo et al., 2012). The method helps to start the project

immediately after the contract award. The negative aspect of the method is that the longer
period is required to enable the preparation of preliminary designs. Below figure shows the
structure of a model.
3. Managing contract
It is used to construct the large building complex, and it is based on the collaborative
principles. This method helps to reduce the efforts of management. The negative impact of
the method is that the bids of the models are limited. Below figure shows the structure of
method.
4. Construction management
It is used for the construction of buildings by the involvement of project owner and
contractor in the designing of a project. It is often confused with the managing contractor
model. The project owner must have sufficient experience in managing the project in an
effective manner. The negative aspects of the model are that there is no single point of

accountability and risk is not diversified it remains with the project owner. Below figure
shows the structure of a method.
5. Direct managed
In this model the owner of the project directly manages the delivery of the project. T he
project owner coordinates the design activities, control the quality requirements, and create
the preliminaries of the management of project (Jin et al., 2014). The negative aspect of the
model is that the project owner interfaces the risk and retains the delivery of a project. Below
figure shows the structure of a project.
6. PPP
In this model the range of structure and concepts are used for the allocation of risk and
responsibilities between the private and public sector. It is used in the long term. It helps in
the integration of responsibilities such as design, financing, construction, and reimbursement.

The negative impact of the project is that success of the project relies on the functionality and
specifications of the project. Below figure shows the structure of the model (Liu et al., 2016).
Findings
From the above analysis, it is found that once the recommended strategy is determined, then the
suitability is validated by the project owner through benchmarking against other projects. The
market surroundings are useful for analyzing the alternatives in various circumstances which
helps to recommend the suitable delivery model. In the major infrastructure projects, the delivery
is done through PPP, alliance, and D&C delivery model and the project owner wants to
benchmark the project through timings in the efficiencies in major project procurement report
which helps to identify the validation activities of the project.

Suggestions
The cost of the project can be reduced through using activity based management which helps to
reduce the non-value added costs of the project and improves the operation which helps to
deliver the project successfully.
Recommendation
The BOOT approach is recommended for the project because the NSW has also used this
approach for the delivery of various other projects. The reasons for selecting this approach
includes experience of public sector with the suggestive method, previous successful delivery of
projects with this approach, it is accordance with the policies of government of adopting
BOOT’S for private public partnership and the contractual structure is understand by the public
and private sector very well. The critical success factor must be implemented after using this
strategy which helps to ensure the success of project.
Conclusion
The tendering and procurement method involves three stages of procurement, namely, inception,
development, and implementation. The inception includes data gathering, preliminary scanning,
optional procurement analysis, and recommended the delivery model. In the development stage,
the process is started by establishing the business needs, and it ends by reviewing the project.
The decision of funding must be approved by the government which is started by analyzing the
procurement options, and it ends on approving the procurement strategy by the government. In
the implementation stage, the recommended strategy of procurement is applied which includes
definition and delivery stage of the project. The investigation of documents includes the

procurement strategy document which is the key determinant for the successful project delivery.
The standard form of contract includes NPWC3-1981, GC21, AS4000-1997, AS212-1992,
AS4300-1995, and AS4916-2002. The checklist approach is used to examine the risk in a
customized manner. The identification of risk helps to manage the risk in a most efficient and
effective manner.

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