Darwin International Airport Terminal Expansion Project Report

This report provides a comprehensive analysis of the Darwin International Airport Terminal Expansion project. It begins with an introduction outlining the project's objectives, which included expanding the international and domestic terminals, adding a gate lounge, new screening zones, and improved retail spaces. The discussion section delves into the project's background, highlighting Watpac Limited's involvement and the project's scope. The report then explores various project delivery methods, focusing on the Design-Build method chosen for this project, and different financial contract types, with a recommendation for a Guaranteed Maximum Price contract. The report also examines the negotiation procurement method and concludes with a risk management plan, including a risk register and quadrant analysis to address potential cost-based, delivery, natural, and construction-related risks. The report concludes by emphasizing the importance of selecting appropriate methods and strategies for the project's successful completion.

Running head: 'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION'
PROJECT
'Darwin International Airport Terminal Expansion' Project
Name of the Student
Name of the University
Author note

1'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
Table of Contents
1. Introduction..................................................................................................................................2
2. Discussion....................................................................................................................................2
2.1 Background of the Project.....................................................................................................2
2.2 Project Delivery Method........................................................................................................3
2.3 Financial Contract Type........................................................................................................5
2.4 Procurement Method.............................................................................................................6
2.5 Risk Management Plan..........................................................................................................8
2.5.1 Risk Register...................................................................................................................8
2.5.2 Risk Quadrant Analysis..................................................................................................9
3. Conclusion.................................................................................................................................10
References......................................................................................................................................11

2'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
1. Introduction
The project is based on discussing the project case based on understanding the methods
based on project delivery for a concerned project. The discussion in this report is based on the
analysis of the different kind of project techniques, delivery methods, type of financial contract
and other aspects in relation to the ‘Darwin International Airport Terminal Expansion’ project
(Watpac.com.au 2019). The design and implementation of the project plan has been undertaken
by Watpac Limited. It is the first form of project that has been undertaken by the company based
on the involvement of design and construction of the major kind of extension for the airport.
The project based on the expansion of the airport would be based on including factors
based on expanding certain areas within the international and domestic terminals. It would also
aim for the delivery of work for the additional gate lounge at the departure area of the airport.
The project would also entail the inclusion of new screening zones, improved systems for
baggage and providing highly furnished retail and office areas.
The discussion for this project discusses about the importance of the best kind of
procurement method that would be crucial for the given project. The discussion would also
discuss the important risks that could put an impact over the project and thus should be mitigated
for the long-term benefits of the project.
2. Discussion
2.1 Background of the Project
Watpac is considered as one of the leading contractor that has employed more than 900
people across Australia. The business units of the company mainly comprise of marine,
construction and civil infrastructure. The competitive advantage of Watpac is developed over the

3'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
implication of the diversified strategy of business, which combines balance sheet and national
reach to the local form of networks and expertise.
The project based on the expansion of the Darwin International Airport and the inclusion
of different kind of facilities would be the first form of project that would include every form of
inclusions (Sears et al. 2015). This project has mainly been undertaken to form the strategy of
the company based on the motive of expanding the core processes of the business into various
new operating regions. Along with the expansion of the terminals, the primary purpose of the
expansion project would be based on enhancing the capacity of the airport, facilitating the
amenities provided to the passenger and delivering immigration and emigration facilities.
The work over the project commenced from April 2013 and hence the expansion for the
terminals would be carefully strategized based on minimizing the impact over the entire list of
existing operations within the airport. The construction project had mainly been scheduled to be
completed within the mid of 2014.
2.2 Project Delivery Method
The method based on project delivery could be understood as a system that can be used
by the contractors or owners proposing the project plan. They are mainly based for performing
analysis over the requirements, financing and organizing over the design, performing the
construction operations and performing maintenance over the services (Bilbo et al. 2015). The
delivery method over the project also includes the process of processing the different kind of
legal agreements with more than involved stakeholder parties.
The different forms of project delivery methods that could be discussed within the
context of the project are:

4'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
1. Design-Bid-Build (DBB) – The DBB method of project delivery is considered as the
traditional form of method based on project delivery, which is mainly employed in different
construction projects. The DBB method helps in forming a clear form of separation between the
design process and construction over the project. The project owner is responsible for developing
and forming of contract documents (Nikou Goftar, El Asmar and Bingham 2014). They thus
require help from a construction engineer or a design architect by creating a certain set of
blueprints and forming a detailed specification of the entire project. After the forming of
documents for the project, bids would be solicited from construction contractors by focusing
over the presented documents. After a formal approval over the project, the contract would then
be awarded to the most responsible and lowest responsive bidder.
2. Design-Build (DB) – In these type of projects, the owner of the project would hire a
certain team under a single contract based on delivering the project from its initiation till
completion. As the construction team would be responsible for creating construction plans over
the various components, hence the changes within the pricing would be kept to a minimum
value. In this kind of delivery method, the owner would develop and propose a conceptual plan
for the entire project (Chen et al. 2015). They would then solicit bids from different joint
ventures of engineers, architects and builders based on designing and constructing the project.
The DB method helps in supporting an ability for delivering a certain project within a
tight schedule. This is mainly due to the reason that different individual components could be
piled together to achieve the final date of completion.
3. Construction Manager at Risk (CMAR) – This kind of method is defined as a new
form of method employed for project delivery. In this method, the owner of the proposed project
plan would select the Construction Manager who would be responsible for developing the

5'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
different aspects of the project (Serpella et al. 2014). The proper form of selection of the
construction manager would be made by making use of certain criteria in relation with the cost of
construction, quality, track records, ability to meet to the expectations of the project schedule and
the type of approach used for the project. In this kind of method of delivery, the work over the
process design and construction would be contracted in a separate manner.
After the discussion over the three forms of methods of project delivery, it could be
discussed that the project delivery method, which could be used for the chosen project is Design-
Build method. Watpac Limited had announced that the finalising of the contract over the project
had been finalised with a contractual amount of $42 million. The contract had been done based
on design and construction contract based on the major purpose of undertaking the expansion
work over the airport.
2.3 Financial Contract Type
The financial contract type is defined as a term based in signifying the differences present
within the contract structure that would include arrangements for compensation and considering
the total amount of risk. There are different forms of contract types that could be used for the
project. These are thus discussed as follows:
1. Lump sum contract – This form of contract can be defined as the traditional forms of
procurement, construction and thus is considered as the common kind of construction contract.
Under this kind of contract, a single kind of ‘lump sum’ price factor would be agreed before the
entire process of work would begin (Love et al. 2014). This is also known as fixed price contract
in which the contractors would undertake responsibilities for completing the contractual work
based on a total sum of money.

6'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
2. Guaranteed Maximum Price Contract – This form of contractual agreement would
be signed with a contractor. In this type of contract, the sum of contract would not exceed after a
specified maximum sum of money. This form of contractual mechanism would be mainly used
on design and build contracts in which the contractor would have sole responsibility over the
completion of the design proposed by the client (Mesa, Molenaar and Alarcón 2016). They
would also be responsible for carrying out other forms of construction works and hence they
would be in a good position based on controlling of cost factors.
3. Cost-Plus Fixed Fee Contract – This form of contract discusses the factors that the
contractor would be paid based on the normal expenses acquired for a project. It would be also
provided with an additional kind of fixed fee based on the provided services. These techniques
would thus allow the contractor to collect some kind of profits incurred over the project (Davies
et al. 2017). This form of contract would thus encourage economic mode of production based
within various industries.
In order to accomplish the project based on expanding the terminals of the Darwin
International Airport, the guaranteed maximum price contract would be assigned. In this project,
the Watpac Limited who has been assigned the responsibility over the construction works would
be solely responsible for different cost overruns. The savings incurred from the results of cost
overruns would thus be returned to the owner of the project.
2.4 Procurement Method
The entire choice for the methods of procurement would be considered as crucial for the
success of the project. There are different kind of methods of procurement, which could be
impactful for the project. These are discussed as follows:

7'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
1. Competitive – Competitive form of procurement method is mainly requested
whenever an intended mode of commitment would be provided with a single supplier (Uttam and
Roos 2015). Price quotations would normally be requested based on different organizations and
firms.
2. Negotiated – This form of procurement method would mostly be used based on the
selection of a contractor without any form of competition based on formal price and formal
advertising (Dzeng, Lin and Wang 2014). The rules and regulations based on the employment of
the negotiation method would specify the selection of proper contractor based on making the best
kind of advantages.
3. Best Value – This kind of procurement method would look into different factors other
than the product price that includes expertise and quality but would focus over the selection of
contractors and vendors (Naoum and Egbu 2015). In the best form of value system, the different
value of procured services and goods would be discussed over a certain comparison over the
benefits and costs.
Based on the discussion over the project, the negotiation procurement method would be
selected. In this project, Watpac Limited would perform a certain negotiation with the
management team at Darwin International Airport based on preparing for the design bids and
preparing for the contract.

8'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
2.5 Risk Management Plan
2.5.1 Risk Register
Risk Description Likelihood Impact Owner Risk Mitigation
Cost-based Risks – The sum of contract
incurred for the project might expire before the
completion of the steps organised for the
project (Gurcanli, Bilir and Sevim 2015). The
project would thus require extra amount of
funds for its completion.
Medium High Project Sponsor The project manager should estimate the
entire costing over the project (Larsen et al.
2015). They should the bid for the project to
Watpac Limited and thus the project should
progress.
Delivery methods – The project might require
additional amount of time for its completion.
Thus, the project might not be completed
within the given deadline and might need an
expansion over the project time period.
High Medium Project
Manager
The project manager should deliver the
project scheduling plan to the project owner
and thus they should plan for designing the
project as per the plan.
Natural Risks – Different natural risks based
within the project such as earthquakes, heavy
rains and other would lead to disruption over
the work over the activities over the project
(Muhwezi, Acai and Otim 2014).
Low Low Project Owner The natural risks within the project includes
fire hazards and different such form of
hazards (Gatzert and Kosub 2016). These
hazards could be mitigated by taking proper
form of necessary action beforehand.
Construction-related Risks – Some kind of
construction related risks such as severe
accidents caused to people might disrupt the
work over the project (Zhang et al. 2016).
Other risks such as accidents caused by
construction instruments and other vehicles
could lead to disruption of the project.
Medium Medium Project
Manager
Some form of construction related risks
related to accidents could be mitigated by
taking precautionary measures before the
engineers would work in the construction
area (Sousa, Almeida and Dias 2015).

9'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
2.5.2 Risk Quadrant Analysis
(Figure 1: Risk Quadrant Analysis)
(Source: Created by author)
Worker accidents
Accidents due to vehicles
Collapse in structure of building
Severe weather conditions
Extreme Pollution
Incomplete project within the
mentioned deadline
Poor form of negotiation within
contract
Cost overruns
Faults within the cost structure
Cost-based
Risks
Delivery
methods
Construction-
related Risks
Natural Risks

10'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
3. Conclusion
Based on the discussion from the above report, it can be concluded that this form of
project would require a high form of planning and consideration of each of the project aspects.
The project is based on determining the best form of factors for designing and expanding the
Darwin International Airport. This discussion primarily describes the method of project delivery
that needs to be incurred for the project. Thus this discussion focuses over three forms of
delivery methods that are mainly used when assigning a contract for a project. After the
discussion over the delivery method, the report discusses the type of financial contract that
would be signed for the project. Different kind of financial contract are proposed for the project
among which the most usable for of method has been selected. In the final stage of the report, the
main discussion focuses over the type of procurement method that has been used for the project.
The report also discusses the plan for risk management that would be need to be implemented
within the project. This plan focuses over the most common forms of risks that might get
incurred for the project. Hence, from the discussion over the crucial aspects, it could be
concluded that the best form of methods have been thus used for the project that could lead
towards the successful delivery of the project.

11'DARWIN INTERNATIONAL AIRPORT TERMINAL EXPANSION' PROJECT
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