PM 10 Project Execution Planning and Management Report, Auburn

This report presents a comprehensive analysis of project execution planning and management for the construction of a new administrative building at Auburn Hospital. It begins with a project background, highlighting the need for improved administrative infrastructure. The report then recommends the Design-Build (DB) method as the best project delivery method, justifying the choice based on factors like schedule acceleration and the owner providing design specifications. It proceeds to evaluate and recommend the Cost-Plus Fixed Fee contract type, emphasizing its suitability due to the non-constraint of cost and the ability to achieve maximum value. Furthermore, the report suggests the Negotiated procurement method, citing its efficiency in terms of time and contractor selection based on reputation. Finally, the report provides a risk management plan, identifying potential risks and proposing mitigation strategies to ensure successful project execution. The report provides a detailed analysis of the project, including a project delivery selection matrix, a project financial contract selection matrix, and a project procurement selection matrix.

Running head: PM
Project Execution Planning and Management
Name of Student
Name of University
Author Note

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Table of Contents
1. Project Background.........................................................................................................2
2. Best Method of Project Delivery: Recommendation.......................................................3
3. Best Financial Contract type: Evaluation and Recommendation....................................7
4. Evaluation and Recommendation of Best Procurement Method...................................10
5. Risk Management Plan..................................................................................................13
References..........................................................................................................................17

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Project Title: Construction of a New Administrative Building in Auburn Hospital
1. Project Background
Auburn Hospital is located in the western suburb of Sydney, Australia. The hospital
provides basic medical services and has a 24 hour emergency facility. It has a capacity of 155
beds. The basic facilities offered by the hospital include medical, surgical, maternity and
pediatrics facility (Wslhd.health.nsw.gov.au. 2020). The organization aims in providing quality
healthcare services to ensure that maximum support is provided to the patients.
The organization has recently been facing certain administrative issues related to
management and delivery of the services. The lack of any separate and proper administrative
department is a major concern and hence, the hospital authority has planned to execute a project
of developing a separate administrative building that will we used for managing and
implementing all the major administrative task. A project of developing an entire administrative
building is proposed which will ensure better management of the key administrative works of the
hospital. The hospital administration works encompasses management of the patient services,
policies, quality assurance and management of public relation. The successful completion of this
particular project will ensure quality improvement related to patient services and the general
work processes of the hospital. Development of an entire building for management of the
administrative work is being proposed as in future this building can act as an extended hospital
unit if needed and hence the construction and infrastructural requirements should be planned
accordingly. Time is a constraint in this project and therefore the administrative building is to be
developed as soon as possible.

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Since this project is a high priority project, the success of the project largely depends on
choice of an appropriate project delivery method, making an accurate choice of the contract and
the procurement method and on effectiveness of the risk management process. Since this is a
construction project, there are certain key risks involved with the project that are required to be
managed. A risk assessment is therefore necessary to be executed to ensure successful project
execution.
2. Best Method of Project Delivery: Recommendation
The chosen project is a construction project and therefore, choice of suitable project
delivery method is reliant on several criteria. A project delivery method is system that is mainly
opted by an organization or project owner to effectively organize, manage and maintain an
operation by entering into legal agreements. The choice of an appropriate delivery method is
dependent on owner’s experience, the complexity of the project, the time needed to execute the
project, project sequencing, cost budget and financial challenges. Since the chosen project is a
construction project, three project delivery method can be considered, which are Design and
Build Contract (DB), Design Bid Build (DBB) and CM@Risk.
A DB delivery method involves a single individual to offer both design needs and
constructional needs for a project and therefore, a design builder is obligated to fulfill the
specific design needs and performance needs (Sullivan et al. 2017). In this particular project
delivery method, the contractor is mainly at the risk in their contractual association with the
project owner.

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The DBB is a traditional contract type where separate parties are accountable for
designing and developing the project. Design is finished before bidding for the price of
construction.
The CM@Risk method entails a construction manager to provide a project within a
guaranteed maximum price (GMP) (Liu et al. 2017). The GMP is set at the begining of the
project and the owner will not pay more than that amount even if the project goes over budget.
The assumptions of the project are indicated as follows-
1. The project will be executed in a time of 10 months
2. The design specification will be provided by the owner
3. The budget of the project will be finalized before the start of the construction project.
Prior to the selection of the suitable model, the current project condition related to
delivery schedule, level of design, complexity and innovation, and cost are needed to be
assessed. The project selection factors are evaluated in the following table-

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Delivery
Method
Primary
Selection
factors
Criteria Weightage of the
criteria as per
project
Score
[Out of
10]
Justification of the score
DBB Delivery
Schedule
Manageable Schedule High 9 The project is required to be
completed as soon as possible
Complexity
and Innovation
Agency have more control on
Design
Low 6 The project is not complex
Level of
Design
100% Design Accuracy High 10 The design specification will be
provided by the owner
Cost Competitive bidding provides
low cost
Low 7 The price will be finalized on
basis of the design
specifications
DB Delivery
Schedule
Has a potential of accelerating
the schedule
High 10 Since the schedule is a
constraint, schedule acceleration
might be a necessity

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Complexity
and Innovation
Designer and Builder collaborate
to enhance innovation
Low 7 The project has less complexity
Level of
Design
Advanced and precise designing High 10 High designing efficiency is
needed to execute the project
within schedule
Cost Can be implemented in moderate
cost
Low 7 The cost is not a constrain in
this project
CM@Risk Delivery
Schedule
Construction can start before
design
High 6 The delivery schedule is needed
to be accelerated
Complexity
and Innovation
Provides a highly innovative
process through 3rd party
collaboration (Minchin et al.
2014)
Low 7 The design has less complexity
Level of
Design
Lower designing accuracy High 5 High level of design accuracy is
needed
Cost Early contractor involvement
provides a cost saving
Low 8 Cost is not a risk factor in this

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opportunity project.

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Table 1: Project Delivery Selection Matrix
On analyzing the scores obtained from table 1, the project delivery method that is
recommended for this project is a design build contract.
Rationale for selecting DB delivery Method:
The choice of DB project delivery method is justified as the construction project is
required to be indicated as soon as possible (Park and Kwak 2017). The DB delivery method has
a prospective to fast-track the schedule by implementing a parallel “design build” process.
However, one obstacle associated with this delivery method is that undefined events in the
project can affect the schedule and cost. However, this is not an issue, since the project
specifications will be provided by the project owner.
3. Best Financial Contract type: Evaluation and Recommendation
On choosing a successful project delivery technique, it is essential to evaluate the best
financial contract type for the project. The contracts that are evaluated in this case are “Lump
sum contract”, “Cost-Plus Fixed Fee Contract” and “Guaranteed Maximum Price Contract”. In a
lump sum type of contract the contractor assumed the full accountability of the cost of labour and
material. In cost plus fixed fee, the expenditure of the project can vary but fee remains firm
(Chen et al. 2016). In this contract, the owner is at less risk while the contractor is at high risk.
In Guaranteed Maximum Price contract, the contractor is compensated for the actual project cost.

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Financial
Contract type
Selection
Criteria
Weightage of the
criteria as per
project
Score
[Out of
10]
Justification of the score
Lump sum
contract
Value For
Money
High 7 All the works are agreed on a particular cost and if the project
is implemented in a less cost, the contractor keeps the profit
hence it is less effective for the chosen project
Criticality of
Schedule
High 8 Since contractor cannot gain additional profit, it is possible
that the contract will try to finish the project on time (Tran et
al. 2018)
Cost and
Contractual
Difficulties
Medium 6 Contractual and cost related issue might arise if the project
goes over budget or is delayed
Guaranteed
Maximum Price
Contract
Value For
Money
High 8 GMP will ensure that the contractor is compensated for the
actual cost sustained on the project (Rumane 2016)
Criticality of
Schedule
High 7 Since the cost is fixed there is less impact on the schedule
Cost and Medium 6 Issues might arise if the project is delayed or goes over budget

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Contractual
Difficulties
Cost-Plus Fixed
Fee Contract
Value For
Money
High 10 Contractor is paid all the normal expenses along with their
service fee (Surahyo 2018)
Criticality of
Schedule
High 9 The compensation or fee of the contractor is fixed and hence
the contractor aims in completion of the project as soon as
possible
Cost and
Contractual
Difficulties
Medium 7 Since the fee is determined at fixed at the start, there are less
chances of the project facing any cost or contractual difficulty

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Table 2: Project Financial Contract Selection Matrix
On basis of the score obtained from table 2, the contract type recommended for
construction of administrative building project is Cost-Plus Fixed Fee Contract.
Rationale for selection of Cost-Plus Fixed Fee Contract-
The choice of this contract is justified as cost is not a constrained in the project. The fee
can be determined on basis of the project design, specification and complexity and therefore, it is
possible to achieve maximum value for money from this type of contract (Singh 2017).
4. Evaluation and Recommendation of Best Procurement Method
A construction project generally involved planned procurement activities. The
construction of administrative building in Auburn Hospital requires selection of one of the
procurement methods among Competitive, Negotiated and Best Value. The viability of each
option for the construction of new administrative building project is graded and justified in the
following matrix.

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Procurement
Method
Selection Criteria Weightage of the
criteria as per
project
Score
[Out of
10]
Justification of the score
Competitive Delivery schedule High 5 The open bidding process can be time consuming
(Tran, Molenaar and Gransberg 2016)
Risk assessment and
level of control
High 7 Aims in obtaining goods at lowest price
Contractor and Staff
Qualification and
experience
Medium 9 Since a transparent bidding process is followed, there
is a high chance of working with the contractors
having proper work experience
Negotiated Delivery schedule High 10 Contractor is chosen on basis of reputation and hence
the entire process moves fast
Risk assessment and
level of control
High 9 Reputed contractors are only considered (Kavanagh
2016)

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Contractor and Staff
Qualification and
Experience
Medium 9 Contractors having enough experience in the field are
chosen (Hensher 2015)
Best Value Delivery schedule High 7 The process include releasing an RFP and reviewing
the proposal. Although it takes less time than
competitive bidding, the entire process is lengthy
Risk assessment and
level of control
High 8 Level of control is high
Contractor and Staff
Qualification and
Experience
Medium 8 Contractor is chosen on basis of their experience

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Table 3: Project procurement Selection Matrix
One basis of the score obtained from table 3, the procurement method that can be
suggested for the project is Negotiated procurement.
Rationale for selection of Negotiated procurement -
Negotiated procurement is appropriate for the project as it will ensure that less time is
allocated to the procurement of the goods as in negotiated contract, the contractor is selected on
basis of reputation. Hence with this procurement process, it is possible to occomplish the project
on time and therefore, the choice of this method is justified (Bellantuono et al. 2014).
5. Risk Management Plan
The construction of a new administrative building at Auburn Hospital, involves certain
amount of risk that is required to be assessed and mitigated. For effective risk mitigation, a risk
management plan is prepared. The risk register below identifies and assesses the critical risk in
the undertaken project-

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Risk
ID
Risk Category Trigger Probability
of
Occurrence
Severity Risk
Owner
Risk
Response
R1 Poorly
Written
Contract
Contractual Selection of ineffective contract and
procurement process
Low High Project
Owner
Mitigate
R2 Safety
Hazards
Administrative
and operational
Absence of any safety equipment
and safety guidance in the
construction site (Szymański 2017)
High High Project
Supervisor
Avoid
R3 Project
Delays
Schedule Scope creep/resource shortage Low High Project
Manager
Mitigate
R4 Shortage
of Labor
Resources Choice of ineffective project
delivery method
Low Low Resource
Manager
Accept
R5 Scope
Creep
Operational Incorrect requirement
identification/specification
Low Low Project
Manager
Accept

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Table 4: Demonstrating the Risk Register
The assessment of the above identified risk are indicated in the risk quadrant below-
Likelihood Of Occurrence
High III.LEVERAGE I. STRATEGIC
R2
Low IV.ROUTINE
R4,R5
II.BOTTLENECK
R1,R3
Low High
Relative Impact
Table 5: Representing the risk quadrant Analysis
Risk Mitigation Plan-
The risk quadrant analysis indicate the R2 is the most critical risk followed by R1 and
R3. While there are less chances of the project facing the risk of R4 and R5. The mitigation plan
for the identified risk are indicated in the steps below-
1. The identified risks are to be mitigated by implementation of effective methods. The
plan for mitigation of R2, is implementation of safety equipment and manual to eliminate the
risk. The chances of occurrence of R1 is less and can be mitigated by choosing a contract and
procurement on basis of good reputation of the contractor. R3 can be mitigated by developing a
feasible schedule. R4 can be mitigated by choosing the correct procurement method. R5 can be
reduced by developing a feasible plan.

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2. After risk mitigation, control measures are to be implemented in the project. A project
supervisor will be chosen to monitor and control the mitigated risk (Serpella et al. 2014).
Effective risk monitoring and control is necessary to ensure that the mitigated risk does
not returns to the project. Furthermore, risk monitoring is necessary to eliminate the chances of
facing new risks in the project.

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References
Bellantuono, N., Ettorre, D., Kersten, G.E. and Pontrandolfo, P., 2014. Multi-attribute auction
and negotiation for e-procurement of logistics. Group Decision and Negotiation, 23(3), pp.421-
441.
Chen, Q., Xia, B., Jin, Z., Wu, P. and Hu, Y., 2016. Choosing appropriate contract methods for
design-build projects. Journal of Management in Engineering, 32(1), p.04015029.
Hensher, D.A., 2015. Cost Efficiency under Negotiated Performance-based Contracts and
Benchmarking Are There Gains Through Competitive Tendering in the Absence of an
Incumbent Public Monopolist?. Journal of Transport Economics and Policy (JTEP), 49(1),
pp.133-148.
Kavanagh, P., 2016. A case for negotiated performance-based contracting rather than
competitive tendering in government public transport (bus) service procurement. Research in
Transportation Economics, 59, pp.313-322.
Liu, J., Xie, Q., Xia, B. and Bridge, A.J., 2017. Impact of design risk on the performance of
design-build projects. Journal of Construction Engineering and Management, 143(6),
p.04017010.
Minchin, E., Ptschelinzew, L., Migliaccio, G.C., Gatti, U., Atkins, K., Warne, T., Hostetler, G.
and Asiamah, S., 2014. Guide for design management on design-build and construction
manager/general contractor projects (No. Project 15-46).

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Park, J. and Kwak, Y.H., 2017. Design-bid-build (DBB) vs. design-build (DB) in the US public
transportation projects: The choice and consequences. International Journal of Project
Management, 35(3), pp.280-295.
Rumane, A.R., 2016. Project Delivery Systems. In Handbook of Construction Management (pp.
59-88). CRC Press.
Serpella, A.F., Ferrada, X., Howard, R. and Rubio, L., 2014. Risk management in construction
projects: a knowledge-based approach. Procedia-Social and Behavioral Sciences, 119(2014),
pp.653-662.
Singh, A.K., 2017. A Review of Types of Construction Contract.
Sullivan, J., Asmar, M.E., Chalhoub, J. and Obeid, H., 2017. Two decades of performance
comparisons for design-build, construction manager at risk, and design-bid-build: Quantitative
analysis of the state of knowledge on project cost, schedule, and quality. Journal of construction
engineering and management, 143(6), p.04017009.
Surahyo, A., 2018. Types of Construction Contracts. In Understanding Construction
Contracts (pp. 45-52). Springer, Cham.
Szymański, P., 2017. Risk management in construction projects. Procedia engineering, 208,
pp.174-182.
Tran, D., Molenaar, K.R. and Gransberg, D.D., 2016. Implementing best-value procurement for
design–bid–build highway projects. Transportation Research Record, 2573(1), pp.26-33.

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Tran, D.Q., Brihac, A., Nguyen, L.D. and Hoon Kwak, Y., 2018. Project cost implications of
competitive guaranteed maximum price contracts. Journal of Management in
Engineering, 34(2), p.05018001.
Wslhd.health.nsw.gov.au. 2020. Auburn Hospital - WSLHD. [online] Available at:
<https://www.wslhd.health.nsw.gov.au/Auburn-Hospital> [Accessed 16 March 2020].