Contract and Procurement Management Analysis for TopEd Campus Project

This business report provides a comprehensive analysis of the TopEd educational institution's campus refurbishment project. It examines the project's scope, including the renovation of the sixteen-story building to accommodate increasing student numbers and evolving teaching technologies. The report analyzes the selection of appropriate procurement routes, with justifications based on cost, time, and quality considerations for different sub-projects. It details the chosen contract types (fixed price lump sum and unit price), outlining their advantages and disadvantages. The report also includes a breakdown of the project budget, focusing on operating expenditures and allocations for various aspects of the refurbishment, such as new construction, preservation, and equipment. Furthermore, the report addresses procurement risks, emphasizing the importance of risk management planning, identification, assessment, and control. It also discusses negotiation techniques for effective contract management. The report is a detailed study of the project, including the contractual agreements between the various parties involved.

Running head: CONTRACT & PROCUREMENT MANAGEMENT (PROJECT
MANAGEMENT)
CONTRACT & PROCUREMENT MANAGEMENT (PROJECT
MANAGEMENT)
Name of the Student
Name of the University
Author note

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CONTRACT & PROCUREMENT MANAGEMENT (PROJECT MANAGEMENT)
Executive Summary
The main objective of this business report is to analyze a case study of TopEd educational
institutions. This report analyzes the refurbishments of the institute campus. It also analyzes the
procurement route for that project from the given case study. It provides the features of the
client, limitations of the project and constraints. It selects the procurement route and reason for
selecting this. It provides excellent contractual agreements for several parties that are involved in
compliant with the procurement option. This business report critically analyzes the type of
contract. It provides budget estimates for this project.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Appropriate procurement routes..................................................................................................3
Contract type................................................................................................................................4
Budget breakdown...........................................................................................................................9
Negotiation techniques..................................................................................................................10
Conclusion.....................................................................................................................................18

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Introduction
Project management is the practice of the planning, execution, control and initiation and
termination of work of a group tom reach the exact goals and meet the specific success criteria.
The main goal of this business report is to analyze a case study of TopEd educational institution.
This report analyzes the refurbishments of the institute campus (Amann et al. 2014). It also
analyzes the route of procurement for that project from the provided case study. This business
report provides the various features of the clients. It describes the limitations of the projects. This
report elaborates on different kinds of constraints related to this project (Amann et al. 2014). It
describes the reason for selecting a specific procurement route. It provides the idea of the
contractual agreements for different parties that are involved in a complaint of the procurement
option. This business report critically analyzes the type of contract. It gives the budget estimates
required for this project.
Discussion
Appropriate procurement routes
The procurement route for sub project 1 is design and build. It is beneficial for cost and
time but at the expense of quality. In this particular case, the TopEd institute the company wants
to change the teaching spaces and break out area of the students (Birman 2013). For this reason
the cost and time will a great factor. In case of traditional main benefits will be on cost and
quality but at the expense of time. In case of management the benefits is on time and quality but
at the expense of cost. That is why it can be said that the procurement route for sub project 1 is
design and build. The procurement route for sub project 2 is management. It is beneficial for

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time and quality but at the expense of cost. This project is related to the refurbishment of
reception, CEO, library and many others. In this case the time and quality is very important. In
this case, the contractors should perform this sub contract by using good quality of materials and
they should invest huge amount of time to do the work. In case of Traditional cost and quality is
very important. But it is not applicable because contractors should give the highest priority to the
time and quality. In case of design and build benefits are from cost and time but at the expense of
quality (Birman 2013). As there is a requirement of good quality and time that is why it is not
applicable to this project.
Contract type
Contract type of sub project 1 is of fixed price in that lump sum type. It has lots of
advantages (Birman 2013).. These include :
 Lower risk for the owner, higher risk to the contractor
 Cost known at the outset
 Contractor will assign best personnel
 Contractor selection is easy
The unit price is not applicable in this particular case because:
• Final cost not known from the beginning.
• Staff needed to measure the finished quantities and report on the units not
completed.
• Unit price sometime tend to draw unbalanced bid.
Contract type of sub project 2 is unit price type. The advantages of this include:

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• Easy for contract selection.
• Early start is possible.
• Saves the heavy cost of preparing many bills of quantities by the contractors.
• Fair basis for competition.
• Changes in contract documents can be made easily by the owner.
The fixed price in that lump sum is not applicable in this particular case because:
• Changes are difficult and costly.
• Contractor is free to use the lowest cost of material equipment, methods etc.
• The contractor carries much of the risks.
• The tendered price may include high risk contingency.
• Competent contractors may not bid to avoid a high-risk lump sum contract

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Figure 1: Contractual Agreement

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According to this diagram, the TopEd Institute will communicate with the consultants as well as
contractors (De Araújo, Alencar and de Miranda Mota 2017). After the finalization of project
they will communicate the local subcontractors for further proceedings.
Procurement risks
At first, the consultant efficiently organizes the project. Moreover, the consultant and
contractors must aware of the route to the success of the project. The management of risk is very
much important for the Refurbished Campus project of TopEd institute (De Araújo, Alencar and
de Miranda Mota 2017). It depends on the responsibility of the project manager. The
Procurement risks can be performed into several sub-ordinate processes:
1. Planning Procurement Risk Management - It includes a series of steps that needs to
be carried out at the time of developing the risk management plan for Refurbishment of
the campus of TopEd institute (Decarolis 2014).
2. The contractors must able to identify different types of risks at the time of performing
different kinds of operations for building of lift in the campus and for managing health as
well as safety during this type of project (Djenidi et al. 2014).
3. They should identify the risks at the time of building the lift and providing the extra
space for the students as well as teachers (Kerzner 2017).
4. Risk Assessment Project is a process that enables the creation of risk profiles. It
provides an exact format for presenting the information (Kiage 2013). It gives the

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procedure for risk p prioritization and rapid identification of strategies for decreasing
and/or eliminating the risks.
5. The risk control project includes the application of risk mitigation techniques and draft
action plans to reduce or eliminate the risks, raised during at the time of the meeting of
this type of project management (Kusi, Aggrey and Nyarku 2014). Identifying risks in
this type of project is a preliminary step in the management of project risk. Contractors
can detect the risks by using some special tools (Le Quéré et al. 2015). All data collected
and analyzed to detect risks is an essential basis for risk analysis for this project, risk
assessment and, moreover, for a correct survey of the future potential risks (Lee, Lin and
Pasari 2014). Category of the risk, both the TopEd institute and contractors can be
influenced by several factors, which are majorly segregated into three groups.
1. The risk appetite is the uncertainty of a component that can take the risk in
anticipation of a reward (Liu et al. 2014).
2. Risk tolerance is the degree, amount or volume risk of the TopEd institute or
the contractors involved in this project (Luo et al. 2015).
3. Risk Threshold refers to a measurement that is related to the effect of risk on
this kind of project; in this situation, contractors may have an interest (Makabira
and Waiganjo 2014). Below the limit of the threshold of risk, the TopEd
management will not allow the risk. Above this threshold of risk, the institute will
tackle this kind of risk.
Identification of Procurement Risk is the process of detecting which type of risks
may hamper the project and documenting their characteristics (Masunaga 2013.). The

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major advantages of this procedure are to perform the documentation of existing risks
and the knowledge and abilities provided by this type of project to anticipate events of
risk. There are lots of participants to identify risks include contractors, management of
TopEd institute, consultants and many others (Meredith, Mantel Jr and Shafer 2017). The
risks may involve in providing medical equipment. If it is a costlier instrument it can
exceed the budget (Morris 2013). The consultant can suggest the authority to purchase
the cheapest as well as god quality instrument to avoid the risk. For developing the smart
library in the institute the contractors should suggest purchasing study tables, audiovisual
aids, bookshelves and cabinets, CCTV cameras and many others. For implementing this
type of things a budget structure needs to construct. It will not create any issue if the
budget is not exceeding the estimated budget (Nojavan et al. 2015). If it is exceeding the
estimated budget then it will create a great problem for the TopEd institute. The risks can
be identified in the Refurbishment of the ground floor. It is because of the cost of raw
materials (Olatunji 2014). If it is greater than the given cost estimation then it will create
a severe problem for the TopEd educational institute.
Risk analysis phase of a project enables the estimation and evaluation of all
potential risks that may arise during implementation (Pecherskaya et al. 2016). The risk
analysis of the project is an effective way of ensuring that the strategies used to manage
severe risks of this project. It is a beneficial approach. Risk Analysis of this project
includes various kinds of steps to detect the effect of uncertainty in this project (Pellerin
et al. 2013). These activities are: risk identification, assessment of the likelihood and
impact of the project estimate. The purpose of risk management analysis is to detect and
estimate severe threats and then selecting the correct methodology to decrease or

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eliminate risks (Pomposi, Kushnir and Giannini 2015). Management risk analysis
consists of three coherent activities:
1. Detecting threats;
2. Assessment of their chance of occurring;
3. Estimating the effect on the project in terms of working time.
4. in this regard, ability to create a checklist of risk analysis, list elaborates a
series of steps to be taken to complete each assignments.
5. Detect threats. This activity is to identify all the possible events that appear to
be risky for the project.
6. It is suggested that for investigating the detected risk a database needs to be
created by the TopEd institute as well as the consultant. It describes the risks in
detail and also assesses the risk (Rendon and Rendon 2015). The assessment can
be performed by using the given budget plan of the project and performance
targets. The institute can use several methods and analytical techniques to assess
the risk associated with it (Rendon 2015). The methods are to use the Program
Evaluation and Review Techniques. It is used to detect the probability of risks and
assess possible changes from the original structure of the project.
7. The institute needs to estimate the ultimate impact of this kind of project
(Schapper, Malta and Gilbert 2017). The smart way to estimate the impact the
risk is to perform the multiplication of the likelihood of the risk to the amount of
the required reduction in expenditure. The institute should remove the risk and

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return the project into its rhythm (Schrijvers et al. 2015). Once the value of the
risks of the project is detected and estimated then the process of analyzing the
management is accelerated towards the searching procedures of risk management.
Budget breakdown
Sample budget for the refurbishment of library
Operating Expenditures 2019 actual 2020 budget
Study tables $308200 $318200
Computers $ 95,200 $96600
Audio visual aids $91100 $92500
Bookshelves and cabinets $18800 $18500
CCTV cameras $14660 $14760
Contingencies $6100 $6200
Overheads $14850 $15762
Total Operating Expenditures $534910 $562522
Budget breakdown table
Allocation Expected Budget
New Construction $20000
Preservation $40000
Lab Equipments $60000
Raw Materials $70000
CCTV camera $50000
Overhead $30000
Total Budget $240000