SBM3302 Project Execution Planning and Management: Watpac Case

This case study delves into project execution planning and management within Watpac Company, a prominent construction and mining contractor in Australia. It evaluates various project delivery methods such as Design-Bid-Build (DBB), Design-Build (DB), and Construction Management at Risk (CM@Risk), recommending CM@Risk for its superior communication and efficiency. The analysis extends to financial contract types, including Lump Sum, Cost-Plus Fixed Fee, and Guaranteed Maximum Price (GMP), suggesting GMP for its client benefits. The study also examines procurement methods, favoring competitive procurement for its structured approach. Furthermore, it touches upon risk management and quality management plans essential for project success. This document is available on Desklib, a platform offering a wide range of study resources for students.

Project Execution Planning and Management
Project Execution Planning and Management
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Project Execution Planning and Management
1. Introduction.
The main aim of the project intends to identify and accomplish the application of the project
execution and management. As an APIC CONSULT official I will concentrate on Watpac
Company a leading company for construction and mining contracting business in Australia. I
will focus to evaluate the importance of the project delivery method to the company, evaluation
of the financial contract to the business, evaluating the procurement method applied in the
company, designing a risk management plan for the business and lastly design a quality
management plan which will include both the qualitative and the quantitative metrics for the
project (Kerzner & Kerzner,2017).The project will inspect how the company has been
constructing various buildings in the country and how the company’s project succeeded in
expanding the Adelaide Airport Terminal Expansion project.
2. Background of the project.
Watpac construction has a 30 year history in construction of some of the Australia’s huge
buildings in various fields such as the sports buildings ,health and science buildings ,defense
building ,educational building construction and the in the industrial sectors within and outside
the country (Turner, 2014). Watpac won the project in last 3 months which was to expand the
Adelade airport. The project was estimated to consume more the $200 million as it was indicated
by the management board of the company. This was to support the anticipated passengers growth
in next 8 years from now .The contract specifically targets to expand the international inbound
passenger processing, the expansion of the immigration facilities in the country and also
expansion of the existing international airline lounges (Kerzner, 2011). The project is anticipated
to end in next 3 years from now whereby it includes the demolition, relocations of the services,

Project Execution Planning and Management
landside works and fencing of the entire airline, construction of the entry roadsides to the airport
and designing new civil works within the airport.
During the selection for the project there were a few challenges which faced the project (Serra &
Kunc, 2015).
I. Challenge in controlling the large number of employees within the company.
II. Keeping a track on the cost while controlling different schedule in the project.
III. Government regulations which are always changing .This has been difficult for the
contractors to ensure they working in appropriate rules as encoded by the law.
IV. The issue of time constraints in the project has propagated huge drawbacks due to
increasing projects therefore contractors for the company may be unwilling to stay in the
schedule thus shifting (Serra & Kunc, 2015.
V. Integrating apt technology with the project incurred some constraints.
3. Project delivery method
Design-Bid –Build (DBB).
The project engineer here works directly with the owner of the project so as to come up with the
constructions plans and the appropriate specifications needed .The Watpac company has
accomplished many of the DBB projects that’s running form the private sector to the public
sectors in the market (Touran et al, 2010).The method is suitable for the company since upon
completion of the used design the owner will choose the best construction bids as per the plans.
The lowest bidder is the awarded to the contractor.

Project Execution Planning and Management
Design –Build (DB).
The DB delivery method actually saves the project owner both the time and the cost by trying
to overlap most of the construction designs and the phases of the project. The company will be
in position to innovate solutions and come up with the engineering opportunities that will be in
position to meet the necessary budgets and schedules needed by the project (Touran et al, 2010).
Construction management at risk (CM@Risk).
Involves the concept of partnering whereby the owner of the project hires appropriate
manager who will be responsible for the entire project. The company advocates for the
qualification, project partnering, the idea of efficiency of construction and the quality of the
engineers (Touran et al, 2010).Communication is the key aspect that controls the whole
management .It involves
active communication and the effective collaborations.
Goal Goal
weight
Project delivery
DB contract DBB contract CM@Risk contract
Score Weighted
score
score Weighted
score
Score Weighted
score

Project Execution Planning and Management
Efficiency 15 8 156 7 134 11 240
Communication 15 6 130 5 110 11 240
Quality of the services. 25 10 230 7 160 6 120
55 24 516 19 404 28 600
Efficiency.
The CM@Risk scores the highest value compared to the DB and the DBB thus suggesting that
more emphasize on the construction managers in the project .This will best level since it
Indicates that the appropriate time that the project will take up to its completion (Swarup et al,
2011).
Communication.
Every project incurs different communication patterns .As indicated by the table above the idea
of communication plays a big role in the DB part of the contract. This is because this part
involves much collaborations and pattern ship which is facilitated by effective
communication (lo ,2014). Therefore it will be good for the company to adhere to this level of
CM@risk since it will sustain the project.

Project Execution Planning and Management
Quality of the services.
Quality starts from the employees. That is the intensity of the service to be offered by the
workers, their level of competency and in general the working efficiency. The quality is
important in every project and in our case the DB contract illustrates the best score. This level
involves the incorporation of the design and the builder of the project.Therefore suggesting
that maximum corporation between the design and the builder will automatically guarantee the
construction of suitable project (lo ,2014).
Recommendation
Therefore, to my point of view according to the table the company will accomplish its goals in
construction by taking into consideration the contract of CM@Risk .From the drawbacks and
the communication challenges in other contract then I prefer the project to utilize the CM@Risk
level which will sustain the project.
4. Financial contract type.
Financial contract binds two parties involved in the business that is buyer and the seller. It
forms the basis on how to handle each other and therefore the manager need to choose the
appropriate contract for the project (Paulson, & Schnitkey, 2013).

Project Execution Planning and Management
Lump sum contract.
The contract subjects the owner to pay the a contractor a lump sum of money immediately
the project is over. This is done without the cost breakdown meaning that after the completion
of the work no more measurement is required between the parties involved. This tends to be
suitable since the contractor of the company will estimate appropriate money needed for the
project as per agreement during the planning. The contractor charges the appropriate amount
as the requirement by the owner (Paulson, & Schnitkey, 2013).
Cost-Plus Fixed Fee Contract.
The contract level requires the owner to pay the contractor agreed amount as stipulated by
the documented cost of the project.
Guaranteed Maximum Price Contract (GMP).
The contractor of the project is compensated for the actual costs
that may be incurred during the project plus other fixed fee that may be a subject to the
ceiling price that may be incurred during the project. Here the contractor is accountable for the
cost overruns unless in some situations whereby the GMP is increased through the formal
order change of the project in the company (Paulson, & Schnitkey, 2013).

Project Execution Planning and Management
Project goal Weight of
goal
Financial control type
Cost-Plus Fixed
Fee Contract.
Lump Sum contract Guaranteed
Maximum Price
Contract
Score Weighte
d score
Score Weighted
score
Score Weighted
score
Contractor’s role. 15 8 180 6 130 7 160
Threats to client. 20 4 70 8 150 5 110
Expenses of the project. 25 5 140 8 220 8 210
Time required completing
the project.
15 9 210 4 80 5 130
75 26 600 26 580 25 610
Contractor’s role.
Form the work above the fixed fee records the highest score suggesting that the fee for the

Project Execution Planning and Management
project is fixed and therefore indicating that the company will become responsible for the
project thus in position to accomplish the project as quick as possible .The project fetches the
highest fee as the cost increases (Agarwal etal,2011).
Threats to client.
Every project is associated with the risk especially to the client. From the table above the
lump sum financial contract shows the highest level that can protect the client. The level
fetches the highest score suggesting that client are familiar with the contract and they have
access of every single step involved in the project .Client can estimate the scope for constructing
the project (Agarwal etal,2011).
Expenses of the project.
The table shows the lump sum and the guaranteed maximum price has the highest cost .Both
have different assumptions that is; the contractor will be in position to use as many resources as
possible. When there is excess amount in the lump sum used then the contractor will benefit
from the excess measure as a profit provided the work is complete but the case is different in the
guaranteed maximum price whereby the contractor is guaranteed to return the excess amount to
the client (Agarwal etal,2011).
Time required completing the project.

Project Execution Planning and Management
The fixed fee cost plus contract rule has the highest score since it does not involve any challenge
when designing the budget. The project doesn’t not incur large use of the resources plus the
scope of operation is small thus utilizing short time.
Recommendation
To my point of view, the company should concentrate on the guaranteed maximum price since
does not incur most challenges as compared to the other levels. The guaranteed maximum price
is beneficial to the client especially when there is excess amount after completion of the work.
5. Procurement method.
Competitive procurement.
Competitive negotiation procurement is always appropriate for the projects which will exceed
more than the $150,000 .Here the contracting agency requires the subject involved to detail all
objectives that need to be achieved (García-Serrano & Malo,2013).
The following steps are followed in preparing a competitive procurement in the project.
I. Request for proposal (RFP) which describes the contracting agencies involved in the
project together with the requirements and the objectives. It needs to be approved by the state or
the agency involved in advertising (Purdy, 2010).
II. The procurement is first advertised and then the RFP is sent to appropriate contractors of
the project. After a period of almost seven weeks depending on the complexity of the proposal a
receipt is sent after to indicate the deadline for the project.

Project Execution Planning and Management
III. After three weeks of evaluation the contract is given to the selected body whose costs and
the proposal tend to be beneficial for the contracting agency.
Negotiated procurement.
The method of procurement is suitable when;
I. There is a public agency –natural disaster that may deter or hinder the publishing of the
intedent project (García-Serrano & Malo,2013).
II. When there is single product or service in the project that need to be analyzed by the
contractor.
In order for the negotiation procurement to obtain approval for the procurement in the company
it should submit the appropriate document that will solicit the entire competition (Garcia &
Malo,2013). The negotiation demands a copy that will be used for public advertisement of the
project, a copy that describes the RFP and the last copy that includes letters from the respondents
and the contractors.
Recommendation
The best value is obtained from the competitive procurement of the project (García-Serrano &
Malo,2013). The request for proposal has adequate steps that amount for effective procurement
method for the project. The company will be in position to get any relevant information that is
needed by their clients thus working appropriately.
6. Risk management plan.

Project Execution Planning and Management
The body plans, identifies and analyze the project risks .Parts of risk management plan are; risk
Planning, identifying risk, analyzing the risk and coming up risk response plans (Masterman &
Masterman, 2013).
Risk register.
A risk register is shared between the project shareholders so as to allow them to be aware of what
is to be provided in the project and how achieve each issue as discussed in the project (Routledge
et al,2012).
Risk name Probability Impact Risk Priority Response
plans
Additional
supply
material cost
by the
contractor.
4 7 28
Low
risk.
Prioritizing
the risk to the
project.
Project
sponsors, the
clients and
the owners of
the project.
Accounting
for the team
involved
In the project.
Filling the
incident form.
Risk Quadrant Analysis.
Both probability and the impact need to be considered in determining risk in a project.
Probability and matrix impacts are defines the chances of the risk as outlined in the risk register