WestConnex (NSW) Construction Projects: A Case Study Report

This report provides a comprehensive analysis of the WestConnex (NSW) construction projects, focusing on project delivery methods, financial contract types, procurement methods, and risk management strategies. The report begins with an overview of the WestConnex project, including its background and objectives. It then evaluates and recommends the most suitable project delivery method (Design-Build), financial contract type (Guaranteed Maximum Price Contract), and procurement method (Best Value) for the project. The selection of each method is supported by detailed rationale and evaluation criteria. The report also includes a risk management plan, identifying potential risks and proposing mitigation strategies. The analysis is based on the provided case study and relevant research, offering valuable insights for construction project management.

Running head: WESTCONNEX (NSW) CONSTRUCTION PROJECTS
WestConnex (NSW) Construction Projects
Name of the Student
Name of the University
Author note

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Table of Contents
1. The Target Company...................................................................................................................2
2. The Background of the Project Case...........................................................................................2
3. Recommendation towards the best Project Delivery Method.....................................................3
4. Evaluation Recommendation for the best Financial Contract Type............................................5
5. Evaluation and Recommendation for the Best Procurement Method.........................................7
6. Risk Management Plan................................................................................................................9
References......................................................................................................................................12

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1. The Target Company
The company chosen for the project is West Connex, who is responsible for expansion of
the underground motorway, which is presently under the phase of construction during Sydney in
New South Wales, Australia (Project Details 2020). The West Connex motorway project is
considered as a joint venture project of Australian Governments and New South Wales.
2. The Background of the Project Case
The West Connex would be supporting the Australian Governments and New South
Wales Government for providing 33 km of motorway based on linking the south-western and
western of Sydney with the city along with Port Botany and Smith Airport. The West Connex
would be constructing the M5 and M4 corridors and thus would comprise of approximately 14
km above the ground level (WestConnex | Faster. Safer. More reliable 2020). It would also
comprise of approximately 19 km for the tunnels, which would include a new tunnel that would
be able to link the two new corridors.
During the year 2015, the costs of construction that were being estimated by West
Connex had raised an expectation that the project would cost at AUD $16.8 billion. The present
forecasts estimated for the project have been projected at AUD $20 billion. The project would
help in the creation of 10,000 jobs while it has an expected completion date of 2023.
The Australian Government had provided an initial funding of $25 million on 7th March
2013 for the purpose of assisting the NSW government based on performing advance planning
and development of a business case for the help of West Connex. The NSW Government had
provided $30 million for the purpose of the project development. Hence, for the development of

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the project in a proper manner, the Australian Government along with the NSW Government had
committed towards the funding of $1.5 billion based on the delivering West Connex for the
project. The innovative form of financing model would be enabling towards the Stage 1 and 2 for
the West Connex to be delivered in a concurrent manner (WestConnex 2020). This would also
enable the New M5 for delivering in a concurrent manner while also helping the company to
extend and widen M4. This project would aid towards unlocking the expertise of private sector
while also ensuring that maximum value would be achieved from taxpayers.
3. Recommendation towards the best Project Delivery Method
The various types of methods of project delivery are described as follows:
a. Design-Bid-Build – This method can be discussed as the most traditional form of
project delivery method in which the construction agency would contact other designers who
would also be held responsibility for designing the project. They would help towards providing
complete form of construction and design services (Carpenter and Bausman 2016). Using this
method, the construction agency would award another construction agency for the purpose of
completion of each of the construction-based documents.
b. Design-Build – In this project delivery method, the responsible construction agency
would procure both the construction and design services within the same contract from a legal,
single entity that would be referred towards the design builder (Chen et al. 2016). In this method,
Request for Proposals (RFP) would be used rather than other form of bid procedures.
c. CM@Risk – In this method, the appointed construction agency would be able to
construct a document separately with the construction manager and designer. The agency would
also be able to perform design with another engineering firm for providing towards facility

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design. The agency would be able to select a proper construction manager who would be able to
perform construction works and construction management services.
PROJECT DELIVERY METHOD SELECTION TECHNIQUES AND IMPORTANCE
DBB DB CM@Risk
Selection Factors
1. Project Complexity and Design Innovation + ++ –
2. Project Delivery Schedule X ++ +
3. Project Cost Considerations – ++ X
4. Level of Design + ++ NA
5. Risk Assessment Methods NA ++ +
Rating Key
++ Most appropriate delivery method
+ Appropriate delivery method
– Least appropriate delivery method
X Fatal Flaw (discontinue evaluation of this method)
NA Factor not applicable or not relevant to the selection
From the proper analysis, it can be discussed that Design-Build can be considered as the
highly appropriate kind of delivery method for the project. In the above table, different factors
have been considered based on the consideration of the project. It can be seen and understood

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that the DB method of project delivery would be most appropriate for the M4 Widening project
(Mesa, Molenaar and Alarcón 2016). Under the DB method for project delivery, only one entity
of construction agency would be chosen by the Government who would hold responsibility over
the various factors to be happening over the project.
They would be primarily responsible for controlling the engineering and architectural
design services and perform the different construction phases. The construction entity would also
hold responsibility for performing a thorough risk assessment over the different phases of work.
During conducting the risk assessment procedures, different assumptions were conducted, which
could lead to risks towards the project (Aibinu and Papadonikolaki 2016). Based on the
assessment of risks towards the project, the construction agency would then take appropriate
steps towards mitigating them accordingly.
4. Evaluation Recommendation for the best Financial Contract Type
During the construction work to be performed for the project, various contract types
would need to be assessed and then the most appropriate type would need to be selected
accordingly. The different kind of contract type that could be suitable for the West Connex
construction project are being discussed as follows:
a. Lump sum contract – In this contract type, it would involve a total kind of fixed price
based on conducting the entire set of construction activities. This contract type also incurs
maximum number of benefits or incentives based on early termination of benefits. Failure to
completion of the project within the stipulated period would incur penalties that could also be
termed as liquidated benefits based on performing late project termination (Zainordin et al.
2019). These kind of contract are being mainly provided when there would be a clear form of

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project scope and a well-planned schedule, which would be reviewed and properly agreed by the
various stakeholders.
b. Guaranteed Maximum Price Contract – This kind of contract can be defined as a
certain agreement type in which the contractor would be agreeing towards the contract sum and
would not exceed beyond the specified sum of money. This kind of mechanism of contract is
mostly imposed on Design-Build contract methods in which the construction contractor would
have maximum accountability for completion of the design proposed by the client (Tran et al.
2018). They would also be responsible for performing the construction works so that they would
be in a better position of controlling the project costs.
c. Cost-Plus Fixed Fee Contract – During this kind of contract method, the involvement
of purchases, actual costs and other kind of expenses would also be incurred that would be in
direct generation from the construction activity. These contracts help in defining the fact that a
certain specific information would need to be supported in relation to a specific information
about a certain pre-estimated and pre-negotiated amount. Under this amount, the profit and
overhead amount would also be decided (Hensher, Ho and Knowles 2016). Each of the costs that
would be incurred for the project should be prepared in a detailed manner and thus should also
be classified under indirect and direct costs.
From the comparison and analysis of the different financial contract types as mentioned
for the project, the Guaranteed Maximum Price Contract would be considered as appropriate for
the West Connex project. Since, the project is under the different development phases, it would
be the responsibility of the construction contractor for completion of the design and carrying out
the various works of construction. Based on considering the particular contract type, it can be

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discussed that the primary responsibility of the construction would be transferred to the
contractor (Moazzami et al. 2015). The contractor might tender and set a high price for the
project. This would be based on assessment of the risks that might be incurred for the project.
Thus, under this contract, the price would be allocated based on a proper estimation of each
factor.
5. Evaluation and Recommendation for the Best Procurement Method
In consideration to the project being constructed by West Connex, the best form of
procurement method would need to choose effectively. The different procurement method in
relation to construction projects are discussed and compared below:
a. Competitive – The competitive form of procurement method of bidding is primarily
used for the procurement of different raw materials, equipment and supplies. During this
procurement type, non-professional services and maintenance services would also be need to be
procured within the project (Baiden, Abdul-Razak and Danku 2015). The competitive
procurement proposals are being mainly used by technical and professional services in which the
approach of the contractor towards the work and different other factors would need to be
primarily evaluated before awarding of the contract of procurement.
b. Negotiated – During the negotiated form of procurement method, a certain negotiation
would need to be performed from a single supplier of materials, which would be considered as
mostly appropriate for performing high-specialised works. In this type of procurement method,
there would be only a certain limited number of potential suppliers, who would also be
responsible for extending the present scope of any existing contract. Based on using this
procurement method, the proposing client would be gaining a certain confidence of establishing

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a work contract with the particular known supplier (Kavanagh 2016). Additionally, with this
contract, it would also help in the reduction of the costs and duration of tendering, which could
further facilitate towards early involvement of supplier towards the project.
c. Best Value – In this procurement method, different concepts such as the addition of
quality issues could be accommodated within the process of evaluation. During the process of
selection, various elements could be added for the purpose of determining the best kind of value
that would help in reflecting towards the quality as well as the consideration over the quality
issues (Perrenoud et al. 2017). This kind of procurement method has been used by various
construction organizations during performing their project works.
Based on consideration of the various factors affecting the West Connex project, it would
be recommended that the agency should select the use of best value procurement method towards
their project. This would be used in consideration of the quantification of the best-value elements
for the bid of construction. During choosing of the procurement method, a factor of screening
would also be performed. Upon selecting this method, different aspects would be taken under
consideration and hence the procurement would thus be handed to the construction agency.

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6. Risk Management Plan
Based on understanding over the construction activities, the risk management plan for the West Connex construction project
could be determined as follows:
Risks Risk Type Likelihood Impact Risk Owner Risk Mitigation Plan
The project might run out of
schedule due to low
estimation over project
activities and inefficient
approaches of managing
individual project activities
(El-Sayegh and Mansour
2015)
Technical High High Project
Manager,
Construction
Manager
Each of the activities that have been
scheduled for the project should need to
completed during that particular period
and timing. Moreover, the project
manager should also estimate the
completion time of each activity based
on proper consultation with all involved
teams.
Risk in prices of raw
materials could lead to
negative impacts towards the
rise of market prices. Thus,
the budget estimated for the
entire project would increase
to a great extent.
Financial Medium High Financial
Manager,
Procurement
Manager,
Project
Manager
A contingency budget should be
selected and thus the budget should be
approved from the Government
accordingly. This would ensure that the
project could be accommodated within
the proper allocated budget.
Lack of skills and expertise
within some workers might
result in the time delay for
the entire project.
Contractual Low Medium Construction
Manager
The skill set of workers and their
experience level for the concerned
project should be selected and chosen
accordingly (Gurcanli, Bilir and Sevim
2015). After a prior estimation of their
skill sets, the construction manager

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would need to put them into the project
accordingly.
The project might face the
resistance from local public
as some areas would be
blocked during the
construction phase. This
would lead to problems for
the pedestrians and other
people and hamper their
daily work routines during
the entire construction phase.
Political Medium Medium NSW
Government,
Australian
Government
The Government should develop a
strong approach for ensuring that the
daily routine of people within the city
would not be affected due to the project.
Moreover, the Government should
explain the benefits of the project in
order to gain maximum support from the
citizens and ensure a smooth work flow
during the project.

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Risk Quadrant Analysis
(Figure 1: The Risk Quadrant Analysis for the project)
(Source: Created by author)