University: PROJ6004 Contracts and Procurement Case Study Report

This report presents a comprehensive analysis of a contracts and procurement case study, focusing on the New Royal Adelaide Hospital. It examines the procurement context, including the project's lifecycle, complexities, and organizational aspects. The report identifies key risks such as cost overruns and technical skill gaps, proposing mitigation strategies and exploring best practices. It details the roles and responsibilities of project resources, including project and procurement managers, and analyzes the procurement process. The report also delves into leadership and governance aspects, emphasizing their importance for successful project outcomes. The student analyzes the responsibilities of procurement and project managers to ensure stakeholder satisfaction and successful project outcomes, offering insights into best practices and risk mitigation. The analysis includes recommendations for global project sponsors based on the Auditor General's report, providing a valuable resource for students and professionals alike. This report provides a thorough review of the subject matter.

Running head: CONTRACTS AND PROCUREMENT CASE STUDY
Contracts and Procurement Case Study – Report – Review of new Royal Adelaide Hospital
Auditor General Report
Name of the student:
Name of the University:

1CONTRACTS AND PROCUREMENT CASE STUDY
Table of Contents
1. Part A: Procurement context........................................................................................................2
1.1 Introduction to life cycle journey and current status of project.............................................2
1.2 Complexities..........................................................................................................................2
1.3 Discussion on project environment and organizational aspects............................................3
1.4 Leadership and governance...................................................................................................3
2. Part B: Apply judgment and initiative in the development of best practice................................4
2.1 Identification of key risks......................................................................................................4
2.2 Mitigation and possible learning...........................................................................................5
2.3 Roles and responsibilities of key project resources...............................................................6
2.3 Scope and the procurement process.......................................................................................7
3. Part C: Analyze the responsibilities of the procurement manager and project manager.............8
3.1 Explore roles of procurement managers................................................................................8
3.2 Explore roles of project and project managers......................................................................9
Part D.............................................................................................................................................10
4.1 Reflection summarizes ideas of procurement and contracts................................................10
Bibliography..................................................................................................................................12

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1. Part A: Procurement context
1.1 Introduction to life cycle journey and current status of project
The public procurement approach is referred to as a governmental activity used to either
purchase services or goods or carry out the operational functionalities of New Royal Adelaide
Hospital. This is Australia’s one of the most advanced complex clinical care service providers.
The phrase public procurement is generally used to refer those activities. Three different phases
of public procurement processes are there such as- Deciding which services and goods are to be
brought by the project team members, a process of placing the contract for acquiring the goods
and services and the administrative process useful to make the process effective and business
focused.
It is responsibility of the New Royal Adelaide Hospital to operate the procurement
processes in such a way so that it can resolve the procurement challenges. The procurement
process helps to measure integrated tools and technologies very effectively. However with the
procurement approach three of these phases are required to be integrated successfully. The
significant connection between three of these phases would become easier with implementation
of the procurement process. This process requires involvement of future procurement plan also.
It ensures that they have sufficient time to run procurement process.
1.2 Complexities
Various complexities are there which impacts the operational activities of the New Royal
Adelaide Hospital. The issues identified for this company are as follows:

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 Main issue which impacts the New Royal Adelaide Hospital is safety issues.
These identifies operational disputes are needed to be resolved by company
associates.
 Cost over allocation is another major issue that has been identified for the
operation of this specific hospital. If the finance manager fails to identify
appropriate cost for specific elements then the net cost assigned for the project
will exceed.
 For the operational and clinical activities of this specific project the other
identified issue is over crowd.
 The new hospital is also out of date as the design for this building is prepared
before 10 years
 The senior industrial officer of the hospital failed to implement all needful
strategies.
1.3 Discussion on project environment and organizational aspects
The project environment represents the connection, following which a project progresses
towards success. This impacts the process and it is much conditioned. This type of interaction is
offered by numerous factors such as operational, social, cultural, economical, financial and
organizational. Individually each of these factors are required to be
1.4 Leadership and governance
There is a huge difference between the terms leadership and governance. On the
development agenda, proper governance in the healthcare industry is increasing rapidly regarded
as a salient characteristic or theme. Governance and leadership in building the health system
include different strategic policy and regulatory frameworks. This framework ensures that all the

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strategic are combined and existing in the current system. Both the governance and leadership
plan are required to be collaborated and implemented together to meet the hospital objectives,
goals and aims. Without effective leadership and governance project cannot progress towards the
success line.
It is virtually not possible to reach the goals and objectives without following
professional strategies and regulations. From the constant push and constant changes the
operational complexities can also increase frequently. Higher level productivities, competitive
advantages and commercial revenue can be obtained with effective and ethical leadership and
governance. Leadership approach is referred to as a process that helps to influence the
performance of every individual and the entire healthcare industry as well in terms of complex
clinical operation. It will successfully offer better products and operational services to the
healthcare industry named New Royal Adelaide Hospital. It will help to motivate the project
manager and the associate team members and respectively manages risks.
2. Part B: Apply judgment and initiative in the development of best practice
2.1 Identification of key risks
The risks those have been identified from the supplementary report of New Royal
Adelaide Hospital are as follows:
Over allocation of cost: The aim of New Royal Adelaide Hospital is to conduct a review
for providing an update on the current status of the company. At the project initiation phase, the
needful resources should be identified and respectively information are required to be collected
from the resource. In order to deliver the project in time within the estimated budget a WBS I

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should be prepared. It will reduce the work pressure from the project team members and divide
the large project into smaller segments. If the project resources are not properly identified then
the cost will exceed the standard estimation. The financial result of New Royal Adelaide
Hospital will be interrupted. The estimated lifecycle cost and service cost are respectively $2
Million and $6.2 Million.
Over allocation of time: Time over allocation is referred to as identified another major
risk for the project. At the project initiation phase if the project manager fails to assign needful
time for specific activities then again the estimated time will exceed the preliminary timeline.
Time and cost are directly proportional to each other which mean that if the time increases then
the cost assigned for each project will also increase. It may lead the complete project towards
massive failure.
Lack of technical skills: If the project associates fail to possess sufficient technical skills
then the project will be interrupted due to lack of technical knowledge.
2.2 Mitigation and possible learning
Mitigation strategies for the cost over allocation risk: In order to resolve the risk of over
allocated cost at the project initiation phase, the finance manager requires conducting a
feasibility study considering all the financial elements. It will help the finance manager to realize
that whether the project outcome will be beneficial for the New Royal Adelaide Hospital or not.
Mitigation strategies: In order to mitigate this risk proper project schedule is also
required to be prepared by the project manager at the project initiation phase.
Mitigation strategies for technical skill lack: In order to resolve the risk of technical
skills the hospital authority requires arranging and developing technical training and

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development program for their associates. It will help to improve the technical abilities of the
project team members
2.3 Roles and responsibilities of key project resources
Resources Roles Responsibility
Project manager Internal The responsibility of the
project manager is to control
and monitor the progress of
the project developed by New
Royal Adelaide Hospital. It will,
help the project manager to
realize the current status of the
project.
Finance manager Internal The finance manager is
responsible to conduct a
feasibility study for the
project. It will help the project
manager to realize that
whether the project will be
beneficial or not.
Operation manager Both internal and external The responsibility of the
project operation manager is
to make sure that all the
operations are running

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absolutely well.
HR manager Internal The HR manager is
responsible to select, hire and
recruit technically
knowledgeable and skilled
employees o their hospital to
make sure that
Project sponsor External The responsibility of the
project sponsor is to invest
needful amounts of capitals to
their project so that they can
implement the project
successfully considering the
project objectives, goals and
aims.
2.3 Scope and the procurement process
In order to design, develop and implement the procurement process the phases those are
required to be followed by the project manager and project team members include:
 Identification of needful services and goods
 Exploration and selection of proper vendors
 Submission of accurate purchase requisition
 Create purchase services

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 Receiving proper feedback respectively for the goods and services
 Payment accordingly for the services
 Recording for audits
3. Part C: Analyze the responsibilities of the procurement manager and
project manager
3.1 Explore roles of procurement managers
The responsibility of the procurement manager is to follow all the procurement aspects
based on the project perspectives. The procurement manager should evaluate suppliers,
interviewing vendors and visit the supplier’s plant considering the4 distribution centers. The
procurement manager should ensure that all the storing, manufacturing and shipping conditions
are being offered. Various contracts are to be negotiated that attending trade shows, conferences
and meetings as well. The procurement manager is responsible collaborating the suppliers and
staffs in order to gain advantages and to meet the objectives. The other role of the project
procurement manager is to agree upon the policies to keep the project workflow absolutely
steady and constant. The unrolling contracts should be monitored and evaluated by the project
procurement manager. Whatever services and goods New Royal Adelaide Hospital will provide
must maintain review details and records. Overall the project procurement manager is
responsible to direct, coordinate and evaluate the facilities of procurement professionally. They
should develop the key relationship along with the key stakeholders and all strategic supply
partners. They must perform each procurement as well as contracting project activities that
include tender management, qualification negotiation. By negotiating the contract with better
suppliers the procurement manager can offer best price services to the owner company. It will

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help the company to develop new processes, changes according to the offered goods and
services. The manager must identify cost reduction opportunities so that the company can
achieve their preliminary financial goals.
3.2 Explore roles of project and project managers
In the broadcasting sense it has been identified that, project manager plays the most
important role in any business organization starting from the project initiation phase up to the
project closure phase. Apart from project development life cycle the project manager should also
focus on project organizing, directing and project completion. Overall, the actual aim of the
project manager for any project is to develop, design and organize the details project in such a
way so that it can be completed within estimated timeline and budget. During the project
progress period, the project manager needs to control and monitor its elements also to make sure
that the cost is not exceeding and the time is not over running.
Based on the details and background of the project the project manager requires to plan
and define the project scope. Apart from that they should plan the project activities sequentially.
Appropriate resource plan is another role of the project manager to avoid issues of over
allocation of resources, cost and time. Considering the complexity of each project activity the
project manager should develop a project schedule. The project schedule will help the project
manager and project team members to accomplish the project within estimated time and budget.
There are some other responsibilities requires to be followed by the project manager are time
estimation and cost estimation to conduct a feasibility study. Apart from that, risk assessment,
team leadership, monitoring is the other roles must be conducted by the project manager. Based
on the monitoring and reporting progress the project should govern the project towards the goals
and objectives. Strategic influence, business partnering, scalability, interoperability are the other

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operational areas on which the project manager needs to be focused on. Besides all this, the main
role of the project manager is to manage the entire project so that all operational activities get
completed by accurate time and budget.
Part D
4.1 Reflection summarizes ideas of procurement and contracts
Procurement management plan helps the project team members of New Royal Adelaide
Hospital to discuss the different types of procurement contracts those are widely used in the
project management prcatices. I have realized that, procurement management helps the suppliers
and contractors to procure needful services and goods while required. These days it is found that
procurement management has become one of the most essential practices. Before implementing
a procurement plan for New Royal Adelaide Hospital the head of health community
acquaintances and the other associates require to have proper ideas or concept regarding
projection, functional, matrix and operational details. I have learned that, there can be different
reasons for which procurement plan is required. When the project manager fails to handle the
project requirements, understand the actual requirement of the project, lack of experts to carry
out the process, when the project associates are not confident enough to handle the process and
while the procurement cannot be procured outside the business organization at a noteworthy
discount. The project manager and the project team members can hire additional services to
fulfill the procurement practices as the project and business requirements. In order to
successfully implement procurement practice external consultant can also be hired by the
working health community of New Royal Adelaide Hospital. An accurate procurement practice
can identify or suggest the ways through which the existing process can be even improved. I

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have realized that for those cases outsourcing is not possible that time procurement process may
fail to meet the expectations. Under the Public Private Partnership (PPP) arrangement, the
facilities which help to plan, design, construct and finance the details of the New Royal Adelaide
Hospital are also fall under the procurement practice category. It is learned that, PPP which
operates under project agreement covers details hospital activity operation and their effectiveness
in the success lines. Moreover, I have learned that a successful procurement management plan
gives opportunities to save money, time as well as stress by training the company staffs. The
operational risks of New Royal Adelaide Hospital have been reduced with the procurement plan.
I have also learned that the procurement management plan will give opportunities to the New
Royal Adelaide Hospital to hire expertise and buy needful goods and services. On the other
hand, among the different types of contracts (such as fixed price contract, cost reimbursable
contract and time and time and material based contracts) the project manager and the company
head require to choose the most suitable contract type. The main advantage which can be
obtained from the lump sum or fixed price contract is that both owners and clients are allowed to
involve in this contract. Besides that, the Firm Fixed Price contract is the other contract used to
make sure that the clients are agreed to the money and time estimated by the contractors. It has
been found that, in order to generate extra commercial revenue and competitive advantages in
the competitive healthcare industry implementation of the procurement management plan is very
essential.