Contract and Procurement Management: CQU Case Study Analysis

This case study analyzes the procurement management strategy for Central Queensland University's (CQU) new campus construction in Melbourne. The project involves developing a main lecture building, computer and engineering laboratories, and a motel. The assignment focuses on the lump sum procurement method, examining its suitability, time and cost considerations (projected to be completed in 132 days at a cost of $85,720.00), advantages, and disadvantages. The study also identifies potential risks, such as loss of control and stakeholder conflicts, and recommends hiring knowledgeable subcontractors, effective time management, and improved stakeholder engagement. The methodology emphasizes the low financial risk for contractors but high risk for clients. The study concludes with recommendations for CQU, including developing a time-based schedule and choosing an appropriate procurement method to ensure project success.

CONTRACT AND
PROCUREMENT MANAGEMENT
TERM1-2019 ASSESSMENT2: CASE STUDY

About Central Queensland
University
 Constructing new own
campus for meeting the
increasing students
demand.
 The construction includes
developing a main
lecture’s building.
 Laboratories for computer
and engineering
department
 Conference hall
 A motel

Procurement methods
Procurement is basically
referred to the term that is
used for describing the
activities that is taking place
with the help of client for
making better construction
within the building or the
organization.
The different types of
procurement methods are
lump sum route, design and
model , construction

Procurement route suggested
by PPMP20011
 Lump Sum procurement method is a
traditional way of procuring
construction. This includes working
on a fixed lump sum price that is
agreed by the workers before
starting the work.

Reason behind choosing the route
 Suitable for developing
a new site or a
building
 Offers better strategy
for small and large
scales
 Flexible for the project
 Focuses on managing
the activities along
with stakeholders

Time and Cost
 It is expected that the project of CQU will get
executed within 132 days.
 The campus will be available towards the students
by 2020.
 The total cost that is going to be spent over this
project is around $85,720.00

Schedule

Advantages
 Offers better result towards
the users within less time.
 Offers better expertise
towards the project
 Reduces client risk by fixing
the price.
 Huge amount of profit
margin towards the
contractor.
 The chances of changing
orders get minimized in this
type of procurement route.

Disadvantages
 Unless a team of
contractors are being
assigned to the company
the whole system may
get frustrated.
 Loss of control over the
project
 tender preparation turns
to be costliest activity to
perform.
 Huge time is needed to
prepare the documents

Risks with procurement
method
 Once the control is lost
over the project it
becomes difficult to
manage the activities
 It becomes difficult to
make a decision at critical
situations
 Operational decision gets
complicated
 Stakeholders conflicts
regarding interest tends to
occur

Recommendations
 Knowledgeable
subcontractors
needs to be hired
 Time
management
needs to be done
effectively
 Stakeholder
engagement
needs to be
improved

Methodology behind the route
 Lump sum route is considered to
be one of the low financial risks
from the perspective of
management contract.
 This is the most commonly used
standard for managing the project
as it offers better flexibility toward
the organization and also insures
that the project is being carried
out without any defect.
 However it is observed that this
methodology offers the minimum
risk towards the contractors and a
huge amount of risk remains
towards the clients.