Procurement Plan for University Building Project: Detailed Analysis

This procurement plan outlines the strategic approach for constructing a new building for design and environment at a university, aiming to expand course offerings and foster sustainability. It details the project's scope, including a three-story concrete frame structure with a glass facade, and sets a contract commencement date of June 25, 2021, with a partnering contract model. The plan encompasses sourcing and delivery methodologies, emphasizing strategic sourcing to leverage purchasing power and a collaborative approach for project execution. It also addresses funding through a financial institution loan, estimated contract value, and a detailed procurement timetable with key dates. Risk analysis, including financial and information risks, is conducted, alongside a focus on a 'buy local' policy to support the local economy. The plan further explores procurement research, including alternative methods and strategies, stakeholder engagement, and sustainability considerations. It outlines the evaluation process, insurance requirements, and contract management aspects, including governance and performance requirements, culminating in post-contract evaluation. Appendix A provides a risk register for the project. The plan emphasizes cost optimization, stakeholder involvement, and sustainable design principles.

Procurement Plan
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Agency:
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Approved by:
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PROCUREMENT PLAN
Table of Contents
1. SUMMARY OF PROPOSED PROCUREMENT 4
1.1 BACKGROUND AND STRATEGIC AIMS 4
1.2 DESCRIPTION AND SCOPE OF THE PROJECT 4
1.3 ESTIMATED CONTRACT COMMENCEMENT DATE 4
1.4 PROCUREMENT METHOD 4
1.4.1 Sourcing and Delivery Methodology 4
1.5 CONTRACT MODEL AND TERM 4
1.6 FUNDING 4
1.7 ESTIMATED CONTRACT VALUE 4
1.8 APPROVAL TO PROCEED 4
2. PROPOSED PROCUREMENT TIMETABLE 5
2.1 KEY PROPOSED DATES 5
3. RISK ANALYSIS 6
4. BUY LOCAL POLICY 7
4.1 PLANNING THE PROCUREMENT 7
4.1.1 LOCAL BUSINESS CAPACITY 7
4.1.2 LOCAL CONTENT 7
4.1.3 EARLY TENDER ADVICE 7
5. PROCUREMENT RESEARCH 8
5.1 ALTERNATIVE PROCUREMENT OPTIONS 8
5.1.1 PROCUREMENT AND DELIVERY STRATEGIES
CONSIDERED 8
5.2 NUMBER OF RESPONDENTS 8
6. STAKEHOLDER RESEARCH 9
7. SUSTAINABILITY ISSUES 10
8. PROCUREMENT METHODOLOGY AND STRATEGY 11
8.1 PROCUREMENT METHOD 11
8.2 EVALUATION PROCESS AND REQUIREMENTS 11
8.2.1 EVALUATION PROCESS 11
8.2.2 PRE-QUALIFICATION REQUIREMENTS 11
8.2.3 COMPLIANCE AND DISCLOSURE REQUIREMENTS 11
8.2.4 QUALITATIVE REQUIREMENTS 11
8.3 INSURANCE REQUIREMENTS 12
8.4 EVALUATION RATING SCALE 12
8.5 TENDER/REQUEST BRIEFING SESSION 14
8.6 EVALUATION COMMITTEE 14
9. CONTRACT MANAGEMENT16
9.1 GOVERNANCE 16
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9.2 CONTRACT MANAGEMENT PLAN 16
9.3 PERFORMANCE REQUIREMENTS 16
9.4 PROMOTION AND MARKETING 16
10. POST CONTRACT EVALUATION 17
APPENDIX A – RISK REGISTER 18
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1. SUMMARY OF PROPOSED PROCUREMENT
1.1 BACKGROUND AND STRATEGIC AIMS
 The procurement is required to build a new building for design and environment in
university. It will help in opening a new school for students. Moreover, aim is to expand the
university courses in different area.
 A procurement plan will help in saving cost directly through triple bottom line. Also,
procurement savings include pre, post contract award activity. In this through suppliers
materials will be selected (Aldenlöv & et.al., 2017). Furthermore, the stakeholders will be
involved in adding values to project. This is because procurement support in saving cost
within project. It is done through proper planning where cost optimization occurs.
 However, goods are acquired through suppliers which benefit both supplier and contractor.
Here, direct purchasing is done through third parties.
 Procurement strategy is useful in acquiring goods and services through a systematic
process. By this the need of project is identified and goods are delivered in specified time.
 There are several principles followed in procurement as it helps in proper completion of
project.
 The expected outcomes in this project will be developing a sustainable design of school
building. Apart from it, cost incurred will be less as compared to estimated.
1.2 DESCRIPTION AND SCOPE OF THE PROJECT
The overall project will be constructed in land of 12,000 square feet. The building type will be
concrete frame consisting of three floors and including a terrace. Also, building will include
windows covered with glass. The materials used in building include concrete and iron rods.
The inclusion will include boundary walls, passage, etc. which will cover a small portion of school.
The school will be located within campus and facing south
1.3 ESTIMATED CONTRACT COMMENCEMENT DATE
The proposed contract commencement date is 25th June' 2021
1.4 PROCUREMENT METHOD
1.4.1 Sourcing and Delivery Methodology
Proposed sourcing method – it is a method in which various suppliers are evaluated so
that it is endured that materials are delivered in specified time with cost optimisation. In this project
strategic sourcing method will be used. This method is taken because it will help in gathering
information in effective way so that university can leverage their purchasing power in best way in
the market. With help of it, cost structure is developed which helps in building strong relation with
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suppliers and purchasing products at low cost. There are several steps followed in this like
gathering data and analysing it.
Delivery methodology – It refers to method of delivery project outcomes. This method
allows contractor to manage only one project at a time. At initial stage university and contractor
works collaboratively with each other. Therefore, any change in process or budget are addressed by
project team in creative way. This is a method in which the flow of work is unified from initial to
completion stage. It also helps in saving cost and reducing risk to a great extent as contractor works
with integrated team.
1.5 CONTRACT MODEL AND TERM
The proposed contract term is 3 years.
The contract model is partnering contract GC21 model.
In this project is basically completed through collaborative contracting. In this main aim is
to create a trustworthy environment to facilitate a project successfully. Furthermore, parties
involved in this are not legally forced to enter into contract ( Fig, 2018). This model is taken
because here, a workshop is organised where parties identify common goals and discuss
procedure for handling and avoiding dispute during a contract.
1.6 FUNDING
In order to complete a project there are different types of funding available. It depends on scope
of project that what type of funding is suitable. Moreover, it is very important to select proper
funding source as it can directly impact on completion of project. Besides this, it enables
stakeholders to allocate funds accordingly. There are various sources of funding available that
is as follows :-
 Bank loan
 Venture capital
 Loan from financial institution
For this project loan from financial institution can be taken. For this Credit Union Australia
(CUA) institute is selected. The funding has been approved by John Smith (project manager) as
well as stakeholders. Through this source funding needs of project is fulfilled.
1.7 ESTIMATED CONTRACT VALUE
The estimated contract value of project will be approx $150000 approx. The additional cost
required for project will be $ 25000
The cost estimation is done on basis of previous projects that are been undertaken. In previous one
the land was of similar size that is approx. 10,000 square feet. Besides this, there were three floors
constructed including a garden area.
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1.8 APPROVAL TO PROCEED
Name – John Taylor
Title – Director of University
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2.
3. PROPOSED PROCUREMENT TIMETABLE
3.1 KEY PROPOSED DATES
The key dates for the proposed procurement are as follows:
STAGE TARGET DATE
Early Tender Advice notification 15/04/19
Procurement Plan submitted for approval 18/04/19
Endorsement/Approval of Procurement Plan 25/04/19
Request/Tender documentation completed 30/04/19
Draft Request/Tender advertised for industry comment 02/05/19
Pre-Tender Industry Forum 03/05/19
Approval of Request/Tender documentation 05/05/19
Request/Tender advertised 06/05/19
Request/Tender briefing 08/05/19
Request/Tender closes 15/05/19
Request/Tender evaluation and recommendation 20/05/19
Evaluation Report submitted to Delegate for approval 22/05/19
Contract Management Plan developed 25/05/19
Endorsement/Approval of Evaluation Report 26/05/19
Contract negotiations 28/05/19
Letter of Acceptance 30/05/19
Contract commencement date 01/06/19
Contract Completion date 01/06/22
Post Contract Evaluation Meeting 10/06/22
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4. RISK ANALYSIS
There can occur certain risk in new building construction that can impact highly on completion of
project. The risk will also affect on cost or quality raw of materials used. Therefore, it is necessary
to identify risk so that it can be mitigated. There are several types of risk associated with project
that is as follows :-
Financial – This risk can arise due to poor evaluation of cost estimation in project. It will impact
the budget and resources allocated for project (Young, Nagpal & Adams, 2016).
Information – It is the most common risk that can occur in procurement plan. Due to lack of
information of about delivery method, sources of funding, etc. will affect development of plan.
Moreover, contractor should also have knowledge about
Poor market response – In this response of suppliers may be unusual. This will result in making
Inadequate assessment criteria – In this risk can arise as contractor may use different criteria for
evaluation. Thus, methods or process selected may vary or differ with one another.
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5. BUY LOCAL POLICY
The University buy local policy focuses on buying from local staff to support local
economy. This helps in growth and development of supplier. Another aspect through
which procurement support this policy is delivering long term value for money for
university. By using sustainable materials in building, project value is generated.
Besides this, it ensures that all goods and services are manufactured and delivery in
sustainable manner.
This procurement level is at initial stage. It only gives a brief description of how
suppliers are to be involved. Also, the information gathered from suppliers will be
primary one. It will include data about their products, location, etc.
5.1 PLANNING THE PROCUREMENT
5.1.1 LOCAL BUSINESS CAPACITY
Local businesses have the capacity to meet the contract size and scope
requirements, based on:
• previous, similar or current contracts – did local businesses respond;
• discussions with relevant industry associations
• number of potential local business respondents;
• generic nature of the specification/scope of works;
• flexibility for respondents to respond to all or some of the required services;
and
• a potential for local industry development.
The research which will be conducted by contractor to examine level of capability
of local business to meet procurement are as follows:
At the level of Australia capital territory contractor will research by approaching
civil and trade contractor and suppliers. Civil contractors will help in meeting
customer values, innovative thinking and adaptability. The advice from
contractors that is Delcon Pvt. Limited and Berne Fleming Civil will helps in
cementing reputation and meting procurement requirement which are based on
making optimum utilization of resources, collaboration and safety at project.
Further, suppliers who will assist in managing quality and time supply of raw
material will be Cervcrop, midway concrete and Citiwest rentals.
For managing surplus knowledge over project contractors will approach
Australian Construction industry Forum, Association of Australian consulting
architects and Australian Constructors Association. Discussion with these
individuals will assist the contractor in managing safe and competitive
construction of building as per requirement of client. The information from
discussion of association will helps in gaining knowledge over safe an, raw
material and construction standards of Australia.
5.1.2 LOCAL CON TENT
The anticipated level of local content for this contract is as follows:
· The majority of the products, materials and services and the degree the contract
outcomes are anticipated to be sourced locally;
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· A local ACT builder is likely to source products from elsewhere, but is likely
to source labour locally;
· The contractor will seek raw material and equipment’s from the suppliers
which are listed under Australia Building and Construction Commission (ABCC)
which will ensure supply of quality raw material and equipment’s. The commission
conducts investigation compliance with ethical construction standard and
therefore it will help in meeting procurement needs.
This estimation is based on:
· the level of local content for previous, similar or current contracts; and
· The level of equipment’s will be advanced in order to manage efficiency in
labor work and minimize risk of uncertain working condition like working at height,
delay in work, use of defective machinery or equipment’s and working in
uncertain conditions.
5.1.2 EARLY TENDER ADVICE
An early tender advice notice shall be placed on Tenders UC for this proposed
procurement.
6. PROCUREMENT RESEARCH
6.1 ALTERNATIVE PROCUREMENT OPTIONS
The alternative procurement methods that could be used are as follows:
 Traditional methodology
 Management contracting method
 Public Private Partnership method
6.1.1 PROCUREMENT AND DELIVERY STRATEGIES CONSIDERED
The procurement strategies to be considered are as follows:
Single Stage tendering: This is applicable only at the time of tendering initiation and
includes the necessary details for making a budget. Thus, this gives clarity to the
employer about several prospective suppliers, tender quotations with other negotiations.
Two Stage tendering: This is a procurement type where appointment of a contractor takes
place initially to define the scope and complete outline. Later, the contractor is also
appointed to contract and construct (Mapulanga, 2015). Thus, there is dual benefits of
hiring a single contractor who is involved in all the stages and help in cost optimization
for the employer.
Open Tender: It is that open competition or bidding at competitive levels where the bids
are taken and adds value in terms of financial gains. However, it is useful only for simple
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goods and not beneficial for complicated procurements. The entire focus in this type has
been on following the regulations and instructions in context to standards given by EA
code of ethics etc.
Leasing: This is one of the delivery strategies to be considered by the employer to gain
capital after completion of the building. Here, a contract must be established between the
leaser and the land owner for specific period and fixed amount. This is beneficial when
safeguarding the equipment and space with cash outflow.
Public/private partnerships: This is useful when the infrastructure solutions has been
achieved and support in reducing the delays. Additionally it focuses on effective timely
provision and retain the ownership assets (Turkalj & Mahacek, 2015).
In regard to the above, two stage tendering process will be beneficial and is
considered as the best method to adopt. In this project, it promotes collaborative approach
to deliver the value along with client's commercial position. One of the effective measures
is cost efficiency that is attainable through appointment of contractor on lump sum
contract. This is helpful in negotiations and highlight the requirements for design fees,
risk margins, pre-construction services. Moreover, this procurement strategy will help in
achieving the regional objectives of constructing a building with sustainable materials and
economical. The contract structure is required when hiring the contractor for all stages
and the non contract options are Here, Credit Union Australia (CUA) will be applicable
and is existent.
6.2 NUMBER OF RESPONDENTS
It is anticipated that 20 respondents will be received, based on the scale of this
project of the university. The brand name and reputation is important for any contractor to
be associated with and thus, experienced, technically sound and skilled people are
required. Herein, the majority of respondents are likely to represent medium firms from
Australia. These firms are conscious and sustainable friendly towards the construction
sector. Moreover, the aim is to build resilient and positive places for people to safeguard
the well being.
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7. STAKEHOLDER RESEARCH
A stakeholder analysis was done in order to consult with proposal of procurement. The stakeholder
included were University trustee, government, suppliers, etc. By analyzing information it was
identified that supplier’s response was positive and they were highly interested in building new
school in university. In addition to it, University professors said that they will also contribute and
provided useful info about land. There were several policies as well which were given by local
authorities to be followed. Through this, it was easy to make changes in procurement plan. Besides
this, by gathering data of suppliers cost analysis was done. Thus, it was easy to initiate project.
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