Project Procurement: Public-Private Partnerships and Risk Mitigation

This essay provides an introduction to project procurement methods, with a specific focus on Public-Private Partnerships (PPPs). It discusses various procurement approaches, highlighting PPPs as a contractual agreement between public and private entities to deliver public facilities or services. The essay also addresses common risks associated with procurement contractual processes, such as delivery, fraud, quality, and cost risks, using the case of the new Royal Adelaide Hospital as an example of the consequences of failing to mitigate these risks. It suggests that a well-designed PPP model could have aided in the project's delivery and financial agreements, emphasizing the importance of risk regulation practices in project management. Desklib offers a platform for students to access this and other solved assignments.

Running head: INTRODUCTION TO PROJECT AND PROCUREMENT 1
Introduction to Project and Procurement
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INTRODUCTION TO PROJECT AND PROCUREMENT 2
Introduction to Project and Procurement
Generally speaking, there are various procurement methods which the procurement department
in an organization uses. Some of these methods include request for quotations, request for
proposal, open tendering, restricted tendering, single-source procurement, Public Private
Partnership (PPP or 3P), and single-source procurement. However, the actual names of these
procurement approaches may vary depending on an organization and industry, but the process
remains similar. All of them adhere to a tight legal framework to make sure all standards are met
and that there is quality in the selection process. Public Private Partnership (PPP) refers to a
contractual concord between a private entity and a public agency. It is through this agreement,
the assets and skills of each party (private and public) are shared to deliver a facility or a service
for usage for the general public. As a procurement method, PPP is used as a funding model for
public infrastructure projects like new power plants, airport, and telecommunication system.
During the contractual agreement, the public party is represented by the government at
national/state, and or local level. If well adopted Public Private Partnership method can transfer
significant risks that can alter the procurement process in a project (Abbott, 2015).
The procurement contractual process is prone to various risks which can actually lead to the
failure of the entire procedure. Some of the general ones include delivery, fraud, quality, and cost
risks. Most of them involve financial dealings, like corporation loan and exposure to loan
default. The case of the new Royal Adelaide Hospital represents a clear failure of the national
government to mitigate risks, uncertainty, and financial costs in project delivery. Lack of a treaty
management outline for the medical equipment procurement program, cost of project
modifications, and poor budgeting strategies were some of the financial risks which remained at

INTRODUCTION TO PROJECT AND PROCUREMENT 3
the time the audit was written. According to the State Procurement Board of South Australia,
these risks could have been easily mitigated by establishing efficient risk regulation practices and
procedures which consist of the identification, implementation and constant monitoring of risk
mitigation strategies (Keys, 2018). The new RAH could have been built, financed, maintained,
and provided with non-medical amenities and equipment using a Public Private Partnership
(PPP) agreement. A well designed PPP model could have helped to deliver the project as well as
its underlying financial contractual concords.

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References
Abbott, T. (2015, June). Public Private Partnerships . Retrieved August 4, 2018, from KPMG:
https://assets.kpmg.com/content/dam/kpmg/pdf/2015/06/public-private-partnerships-
june-2015.pdf
Keys, P. (2018, January). AGFMA . Retrieved 8 4, 2018, from AGFMA NewsletterJanuary 2018
– issue 11:
https://www.dpti.sa.gov.au/__data/assets/pdf_file/0008/407978/DOCS_AND_FILES-
12168162-v1A-AGFMA_Newsletter_January_2018.pdf