Contract and Procurement Management: A Healthcare Project Analysis

This report provides a comprehensive analysis of contract and procurement management within the context of the Royal Victorian Eye and Ear Hospital redevelopment project. It begins by mapping the project's factors and characteristics to determine the most effective procurement strategy, emphasizing the importance of improved accessibility for patient care. The report then identifies and discusses various procurement routes, including constraints, givens, exclusions, assumptions, and limitations specific to the project's sub-projects. It assesses the suitability of each route, addressing critical factors such as cost, quality, and project schedule. Furthermore, the report delves into appropriate contract types for each sub-project, justifying the selections based on procurement routes and addressing associated risks. The analysis considers cost-plus contracts for initial construction, fixed-price contracts for emergency department completion, and time and materials contracts for other aspects, ensuring alignment with project priorities and regulatory compliance. The report concludes by highlighting the importance of effective contract and procurement management in maximizing financial and operational performance within healthcare infrastructure projects.

Contract and Procurement
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Procurement Strategy.......................................................................................................................3
Map the factors and characteristics for the project with the factor for the best procurement
strategy.........................................................................................................................................3
Procurement Routes.........................................................................................................................5
Case study requirements along with constraints, givens, exclusions, assumptions and
limitations....................................................................................................................................5
Most appropriate route for each sub – project and why they are suitable...................................6
Addressing group of factors including but not limited to following cost quality, project
schedule.......................................................................................................................................6
Contract Types.................................................................................................................................7
Risk Associated with Proposed Routes and Contract Types...........................................................8
Budget............................................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Contract and procurement management refers to strategic procedure of managing a contract
such as building a new infrastructure, outlet, etc. that helps to maximize financial as well as
operational performance of an organization (Özkan, Azizi and Haass, 2021).
The current assessment will be based on Royal Victorian Eye and Ear hospital, which falls
under the category of leading health care organizations in the world. The aim of current report is
to map the characteristics and factors of project with consideration for the best procurement
tactic. It will also specify the procurement routes, including constraints, assumptions and
limitations. Furthermore, the study will specify appropriate route for each project and why it is
suitable to make work successful. Lastly, the report will clarify the contract types for each sub
project along with justification based on procurement routes. It will also address a group of
forces, but not limited to cost, quality, and project schedule.
MAIN BODY
Procurement Strategy
Map the factors and characteristics for the project with the factor for the best procurement
strategy
The basis of the case study is analysed as how effectively and in appropriate manner the case is
being analysed and is described. The Royal Victorian Eye and Ear Hospital Redevelopment is
the priority based infrastructure project which is being served for the demands and services to be
provided to the people (Schenk, 2022). The more service opportunities are made available for the
people concerning by providence of operating rooms, additional overnight stay ward, operating
rooms, recovery spaces etc. The project has several stages which are being described in
appropriate manner and these are analysed and noted regarding the different stages of the project
which are –
 Stage 1 includes development of the project plans including scope, budget,
communication plan, risk management plan, detailed design plan etc.
 Stage 2 of the project includes operating rooms, recovery spaces, beds, construction of
buildings etc.
 Stage 3 includes completion of the emergency department.

 Stage 4 includes completion of outpatient consulting rooms and handing it over to the
government authority (de Oliveira, Lopes and Abreu, 2021).
These are some of the major stages which are included within the report and this helps in
understanding the concerns related to growth and redevelopment of the Hospital in appropriate
and significant manner. For further analysis, it is depicted that the factors are being analysed for
understanding how the redevelopment is being done in appropriate manner. The key factors
which are to be noted is that the major construction of the hospital redevelopment was started in
October 2018 and is planned to be completed and is planned to be completed for operation in
April 2023 (Young and et.al., 2019). Apart from this, there are major key factors which are
analysed and are identified for considering the project scopes and the main constraints through
which the project is being hindered. Along with this, there are some major characteristics which
are identified and are concerning the redevelopment of the hospital in appropriate manner. These
characteristics are mentioned as –
 Patient Care and Comfort – The 13 cubicle emergency department is designed to use
advanced technology in appropriate manner. This helps in knowing that better services
are provided to the patients to urgent ophthalmology and ear, nose and throat services so
that they recover soon and this helps in knowing the concerns regarding the better
facilities which are made available to them.
 Accessibility Improvisation – The redevelopment in the hospital helps in making and
ensuring the concerns regarding the redevelopment by consolidating the patient clinical
services on the lower three floors of the building. This helps in improving the navigation
of the patients and providing connections between the hospital towers in significant
manner (Windapo, Olugboyega and Odediran, 2020).
 Developing Environmental Sustainable Designs – By linking the bridges which are
designed which helps in providing the increased natural light in appropriate manner at
large scale.
These are some major characteristics which are being denoted and are addressed by considering
the privileges which will be provided to the patients and the services which will be provided and
initiated for facilitating the patients at large scale. The factor to be considered for the best
procurement strategy is improving accessibility. This factor will help in analysing and creating
value for providing the facilities to the patients in signified and appropriate manner. By fulfilling

the needs and demands of the patients the clinical facilities will be provided to the patients and
they will be able to inculcate the facilities regarding the services specifically the clinical services
and facilities to be provided to them (Greenhalgh, Squires and Mahamadu, 2021). This factor is
analysed for considering the aspects related to improvement which is done in accessing the
facilities and services at large scale. The navigation provided to the patients is the positive aspect
which is related to creating value for the redevelopment of the hospital building in effective and
significant manner.
Procurement Routes
Case study requirements along with constraints, givens, exclusions, assumptions and limitations
The case study requirements which are being identified for The Royal Victorian Eye and
Ear Hospital Redevelopment are –
Requirements -
 37 beds and chairs on the same day.
 15 overnight say inpatient beds.
 Future significant expansion space.
 Improved training, research and teaching facilities to be consolidates in the upper levels
of the building.
 New 13 – cubicle department for emergency (Elhag, Eapen and Ballal, 2019).
 Seven operating rooms and 13 recovery spaces located on one floor.
These are some of the major requirements which are being identified and services which are to
be provided to the patients. Along with this, there are some major constraints which are
identified as –
Constraints – These constraints are mentioned as –
Sub – Project 1 – Form completion date and high quality are the major priorities
Sub – Project 2 – Quality should be optimised as it is the top priority.
Sub – Project 3 – Fixed costs and schedule achievement should be achieved.
Along with this, there are some givens which are mentioned as –
Givens –
 The project ongoing operations must comply with the relevant regulations and best
practice standards and construction safety regulations (Gottschling, 2018).

 Contractor can start construction work on sub – project 1 when 30% of the civil work
design is completed.
 The variations in technology must be allowed in sub – project 2.
 The contractors have to plan services according to the impacts of the construction works
so that the noise and vibrations are managed in the hospital.
 No variations must be allowed only changes in the sub – project 1.
Assumptions –
 The assessment for environment has already been completed fort the project which is
ongoing.
 No change in the rules and regulations of local and state government.
 Communication and ongoing engagement process with the stakeholders which includes
the community leaders at large scale (Hu and Chong, 2020).
Most appropriate route for each sub – project and why they are suitable
The most appropriate route for each – project is identified and mentioned as –
 For sub project 1 the procurement route is identified and is categorized as – contractor
can start the construction on this project when at least 30% of the civil work design is
completed.
 For sub project 2 the procurement route is identified as – for sub project 2 the spaces of
the building are important to be completed and this signifies the concerns related to
completing this project (Shehu, Ibrahim and Inuwa, 2019).
 For sub project 3 the procurement route is signified as – The project must comply with
relevant regulations and best practices for constructing the safety regulations.
They are suitable for redevelopment of The Royal Victorian Eye and Ear Hospital and this will
help in initiating the concerns regarding the redevelopment of the hospital in signified manner.
Addressing group of factors including but not limited to following cost quality, project schedule
The group of factors which are included but are not limited to following cost quality, time,
project schedule is being identified in appropriate manner. The group of factors are identified as
– time, cost of the project, quality of the services in appropriate manner. Apart from this, there
are different factors which are being identified and these are concerned as – communication,

project completion timings, cost of the project in appropriate manner. For completing the project
there are concerns related to addressing how the completion is being addressed within the
positive and negative aspects at large scale. These factors are important to address and create
value for the concerns which helps in denoting the positive and negative concerns at large scale.
This is the major aspect which is denoted as concerning the project of the redevelopment to be
completed in an appropriate manner (Ashworth and Perera, 2018).
These are some of the factors which are being analysed and are managed by addressing the
completion of the project in appropriate and significant manner at large scale.
Contract Types
The Royal Victorian eye and ear hospital focus on redevelopment of their infrastructure,
in term of developing plans related to three major projects such as construction of building,
operations rooms, completion of emergency department and completion of outpatient rooms as
well as all other functions.
In the case of first project, Cost plus contract, is suitable because the project contractor
provides a budget to the organization in which actual cost of overall project, including materials,
labour, and unpredictable expenses are added (Every Type of Contract You Could Ever Possibly
Encounter, 2020). The current form of contract is also included in category of cost-
reimbursement contracts, which are suitable for a specific or varied situations such as when
buyers agree to pay the final cost of a project such as completion of building and operations
rooms as well as all civil works. In the context of first project, a specific procurement route has
taken, according to which contractor can only begin their work when at least 30% of civil work
design is complete (What is a Cost Plus Contract? Advantages and Disadvantages, 2021). Cost
plus contract include the estimate of overall amount related to resources. It will satisfy the main
points in appropriate manner and these are cost, time, and quality.
In regard to project two, Fixed price contract is appropriate, according to which
payment does not rely on key assets that utilized or time expended. This project is related to
completion of emergency department for which management do not need to make any additional
changes or requirement. For emergency department contractor can make appropriate
assumptions and then fixed the price, according to which they can start their work once some
space or area of project is ready. It is fact that proposed contract type will satisfy the main

elements of work based on key priorities in the project constraints specify above. It helps to
deliver the project and complete the same according time line that has been decided by the
management. It is fact that the fixed price contract, will enable contractor to work well and
delivery the quality through the same, which is essential for them to do that. It will enable them
to appropriately estimate sum allowable costs of labour and raw materials that require
developing emergency department in the premise that help to cure patients’ health issues, related
to ear and eye appropriately.
In the context of third project, time and materials contract is relevant because
outpatient rooms and all other functions development or completion is based on time and assets
that require to complete the same work. The current form of contract is like a cost plus contract,
but still quite different or might be more straightforward that is good for a contractor and
company, who provide the project to them. In these information, hospital authority can pay
contractor for the time they spend and efforts put to complete the work as well as resources in
term of raw material used to achieve and provide desire results. It is fact that the time and
materials contract is used in situation where it is not possible to assume or estimate the size of
work or when requirement for completion are predicted to modify in appropriate way, that
provide expect and satisfactory results. It will consider all the main points related to project and
delivery on time, without delay.
Risk Associated with Proposed Routes and Contract Types
While producing a project and selecting route related to that, management faced number
of issues, due to risks associated with these two practices, and these are mentioned below. Each
risk present in form of table.
Risks include with contract
types
Risks description and their impact
Inability to appropriately
forecast project costs and
More charges.
The current risk is associated with fixed price contract, and
occur if any change order is needed and the project is not
completed at a lower than predicted costs that's where issue
might be occurred, in term of risk (Bravo, 2022). It will put
negative impact on completion of building, operating rooms

and other civil works in the organization. Another risk that also
associated with the current type of contract is more charges that
may lead to increase demand of additional amount, over than
the decided or fixed budget. It will impact both the contractor
and hospital authority as well, in negative manner.
Lead to longer timeline of
project and total cost is
uncertain
Along with above type of contract, there are two risks also
associated with cost plus contract. It encompasses risk of taking
longer time in the context of project completion and contractor
as well as organization is unable to predict total cost that affect
the overall work.
Failure and delay In the context of time and materials contract, two different
types of risks are associated such as current. Both types of risks
are putting impact on owner and contractor, in term of
increasing pressure. The current category of contract,
encompasses some issues or risks such as failure. This risk
occurs when final cost is unclear and individuals have less
understanding related to that. Therefore, it also becomes the
reason of project delivery delay.
Risks associated with
proposed contract routes
Necessary planned responses for each sub project
Lack of clarity With selection of any route, either one or two, or three, there
are some risks associated. When contractor start the work, if 30
percent of civil work design is complete, it creates an issue for
them and that is lack of clarity, because the selected percent of
work is not suitable to proceed further with a major project in
which different things would be done (ZHANG and LIN,
2018). In the context of project 1, it would be recommended
that contractor can start their work after completion of 40
percent civil work design, which specify the activities that they

accountable to taken and also clarify others to do the same.
Sudden changes require Another risk that associated with project procurement contract
route two is current one, which occurs when the requirement
related to change emerge and impact the productivity of project
planning and other activities. Forecasting is the best response
in the context of sub-project, which drive the attention of
management toward forecasting some major or minor changes
that will affect the continuation of project work negatively. The
best thing about this response is that it help to eliminate
maximum level of risk occurrence that affect the way
management, high authority and contract perform or work.
Regulatory changes In regard to third procurement route, regulatory change is the
main risk that encompasses in the project third. This risk is
quite challenging for the hospital authority and contractor to
overcome in appropriate manner. The best response that
stakeholders can do in the context of risk is developing a
session, during which they make an important discussion, with
each team members, contractor and other stakeholders who are
engaged in all three projects and also accountable to meet the
others needs in appropriate and satisfactory manner. With the
current response form, they can work well and in ethical
manner, which is essential for everyone to do that.
Budget
There are cost estimations which are identified as important to be considered within the
circumstances related to the budget formation and calculation in appropriate and significant
manner (Frieze, Krivelevich and Michaeli, 2022). The budget is framed to be analysed by
understanding the concerns related to how effectively the specific percentage is being drawn
upon and the presumed income and expenses are being drawn for concerning the aspects related

to addressing the profits and growth of the projects which is being undertaken in appropriate
manner.
The budget is being explained here with all the essential requirements in appropriate manner
and this helps in signifying the concerns related to including the essential and major key
concerns in appropriate and significant manner. The budget has been prepared of Sub – Project 1
which concerns the construction of buildings, operating rooms and all civil works. This is how
the budget has been prepared in appropriate manner which helps in signifying the aspects related
to creating value for the amount which is of total $50 million. The budget is explained as below
–
Particulars Amount ($ in millions)
Raw Material $10
Labour Costs $7
Equipment Costs $8
Transportation Costs $5
Land and Building $20
Total $50 million
CONCLUSION
On the basis of above discussion, it has been concluded that risk analysis and
identification has improved the performance of organization, in term of developing the
appropriate project plans that helped to deliver all three projects successfully. Management has
taken the pleasure of obtaining quality in their work and completing operating rooms as well as
other functions, by selecting and then using the best routes. Furthermore, by summing up above
analysis, it has been summarized that selection of appropriate contract has enabled contractor to
deliver their best work by following the sustainable and ethical practices, which they are
accountable to taken into their consideration. The implementation of strategic strategy has
allowed organization to reach desire outcomes, as it had achieved the goals and objectives.
Moreover, high authority has completed their work according to developed budget that enables

them to move ahead and toward enhancing patients satisfactory level, especially when they reach
to the hospital.

REFERENCES
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Frieze, A., Krivelevich, M. and Michaeli, P., 2022. Fast construction on a restricted
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