PROJ6004: Contracts and Procurement
Part 1: Introduction and Scope of the Project
Project Procurement Components
The project procurement process could be defined as a set of actions which is focused on obtaining the goods, common supplies, and other services which are needed during the course of the project full stop project procurement management is all about the processes which are used for making sure that the procurement of the project requirements has been successful.
The report is based on the case study of Torrens University. The case study highlights that the university is planning to expand its housing and rental facilities for students. This facility will accommodate at least 200 students and has been allotted a development tenure of 36 months. The project management will be done by a project management contractor who will be directly reporting to the head office at Sydney and a local project manager, which will be appointed by the university for monitoring the daily operations.
The report highlights project procurement components and its evaluation based on the case study’s full stop. It also highlights the key issues and risks which may come in the way of Torrens University for developing the accommodation facility. The project’s environment and the aspects of the organization are associated with that first the leadership and governance and the impact they can make on the outcomes. In addition to this, changes to roles and responsibilities of key project resources, changes in the procurement briefs or other specifications, and lastly, the process of procurement and its scope in the project.
There are six major components of a project procurement management plan. These entail the requirements needed to manage the procurement of the required resources and needs and needs for the project.
These components are as follows:
Initiating a request: Torrens University would have to initiate a request among them investors and other key stakeholders to propose the plan.
Developing the Requirements: The university would then have to develop the requirements. These requirements may include technical resources, the time allotted, budgeting requirements, constraints which might come in the way, etc.
Requesting Approval: after the requirements have been developed, the selected organization will have to request approval from all the investors and stakeholders in order to proceed with the plants. Without approval, the university will not be capable of carrying forward the plan of building accommodation facilities.
Authority of Purchasing: $35M has been proposed as the budget for the project. This seems very low compared to rates of the market and other similar projects that have been completed. It is the responsibility of the key purchase in Thor ATI to monitor all the expenses which have been made and Tally them with the budget allocated. If the expenses made are higher than the budget, they would have to make some arrangements.
Review of the Proposal: The management will then review the proposal with all the factors, and all the factors will be critically evaluated.
Closure Requirements of the Contract: All the requirements of the contract will be entailed and agreed upon for acceptance. They have to fulfill the required personnel.
Part 2: Highlight the Complexities
Key Issues and Risks
The potential risks which might come in the way of Torrens University in completing the proposed project are:
Inaccurate Analysis of the Internal Needs: there are chances that the selected organization fails to conduct an accurate analysis of its internal and external links. This may include confusion regarding what are the needs, the frequency of procurement, the budget allotted, the time frame with has to be followed, on what all facilities and services do the organization has access to who all can help the organization such as external project management facilities, what are the challenges which might come in the way of completing this project, etc.
Poor Selection of the Vendor: Poor selection of the vendor can cause irreplaceable risk and issues for the progress of the project. This may include delivery of low-quality products, not even delivering the product delayed delivery, the vendor might fail to adhere to the standards of ethical delivery, the supplier or the vendor might not be compliant with the rules and procedures of the organization.
Non-Complaint Processes of Contract Management: the project undertaken as per the case study is of very critical importance. That’s why the selected organization is advised to consider legislation of the procurement for streamlining the operations in the project procurement resource management. This holds special importance for the public in Educational Institutes because they are vulnerable to a lot of compliance risks full stop; for instance, there are some times when the legal requirements at every stage are not fulfilled, and dash, heavy fines, and penalties are paid for solving these issues. The University should develop a contract that is legally correct and address all the potential risks which might come with the usage of correct outdated and incomplete data.
The environment of the Project and Aspects of the Organization
The environment of the project highly critical and holds a lot of importance. This is so because the importance of the selected organization and the strategic valuation involved is very high. Also, from the financial point of view, the project demands to be treated effectively, and all the aspects should be taken care of for doing so.
The environment of the proposed project will comprise of various internal and external factors that are capable of influencing the project. It is the responsibility of the project manager that all the factors must be considered during the course of the project. In the given scenario, the external factors of the proposed project would be political, economic, social, technological, legal, and environmental. The internal factors of the project would be a set of objectives, schedule of the work, the scope of the work, and the budget full stop; it is essential to understand and control all the factors associated with a project so that the likelihood of failure or in curing any risks is minimized.
Aspects of the organization are of very high importance as it is one of the most prominent universities in Australia. Torrents University has been functioning for a lot of years and is a benchmark for providing quality education. It also holds strategic importance as its stakeholders are capable of bringing major changes and its functioning and can also be affected by it fully stopped the relationship between the environment of the project and the aspects of the organization is positive. If all the factors are controlled and monitored in a viable manner success of the project is confirmed.
Leadership and Governance and Their Influence on the outcomes
In the selected scenario, there will be two different leadership personnel, such as the local project manager and the Project Management Contractor. The relationship between leadership and the influence on the project is directly proportional first stop presence of two different personals for project management can be either beneficial or hazardous for the progress of the project. This is so because his presence of two people can streamline the operation and intensify the pace of the project. On the other hand, the presents of two different people can also lead to interpersonal conflicts, which can delay the deadlines and ultimately make the project suffer. It is upon the top-level management of Torrens University how they would like the lower-level management to influence the progress of the project. It would need constant monitoring and control in order to ensure that the influence of the dual leadership will lead to better outcomes.
Part 3: Key Mitigations and Learning
The key risks highlighted are that of inaccurate analysis of the needs of the resources, poor selection of the vendor, and non-compliant compliant processes of the contract management. All of these risks are of a highly critical nature and possess the capability of menu plating the projected outcomes and that too in a negative way. In a negative way. For mitigating these risks following strategies, strategies have been mentioned:
Standardizing the process of the procurement: the selected organizations should plant the process of procurement in a way so that everyone who is on board is able to understand and follow the protocol which has been made for ensuring that the data fed is accurate, complete, and recent. If everyone is following a standard protocol, it is straightforward to identify the reasons for delays in the systems and to trace back the person responsible and accountable. In addition to this, the standard is procurement procedures can also be implemented for procuring staff. This will be easier as the staff would already know what they exactly have to do at which stage.
Improving communication with the user: it has been identified that many businesses tend to miss interpret the needs of the final client and therefore are unable to procure the products which are actually required. For there’s improving the communication and engaging the consumer is suggested so that the mitigation of the risks can be done. The importance of solid functional requirements should be emphasized in order to obtain a clarified view of the need of the user. This way, the organization would be able to create realistic and achievable timelines that can be adhered to in the process of procurement.
Developing and fostering a relationship with the vendors: the risk of poor selection of the vendors and suppliers could be mitigated by developing and fostering real as well as collaborative relationships with the vendors. This can facilitate the process of working together and minimizing the chances of delivery of the poor quality product or no delivery at all. Torrens University can use the latest procurement Technology for streamlining its processes of purchasing, communication and develop other mechanisms for feedback so that all the delays and obstacles in the vendor supply chain are removed.
Changes to Roles and Responsibilities of Key Project Resources
Key project resources will have to be modified in order to accommodate the resources with the mitigations and learning which have been mentioned. Changes in the form of budget and needs of the project can be witnessed. For implementing a proper vendor management plan, the budget of the project is expected to increase. For procuring all the resources required for accurate analysis of the internal dates and for making the behavior of the contract management compliant, the management has to frock your more resources. These resources are again expected to possess a heavy change in the budget allocated as well as the current knowledge of the people who are on board.
Changes to procurement briefs or specifications
Changes would be made in the budget and the requirements of the plan. The previous budget, which was 35 million dollars, will now be around 35.5 million dollars so as to accommodate the requirements of procurement plan management and the resources which have been incurred. As the proposed plan is of building and Accommodation facility, the required resources would be labor, raw materials, licenses, etc. The university would have to make changes in the existing plan so that the proposed project could be completed inefficient manner.
Process of procurement and its scope
The scope of the project is to build an in house rental accommodation for at least 200 students at torrents University. The process of procurement for this project would be:
Step 1: Identifying the needed goods and services
The procurement team at Torrens University has to realize what does it need for completing the project in an effective manner. By listing out the required goods and services full stop, the selected organization will gain a great amount of visibility.
Step 2: Considering a list of Vendors
The procurement team should consider a list of vendors and suppliers before choosing one. This is done in order to get the best deal and negotiation, which could help the organization managers expenses and get better quality products. In addition to this, the team should look for ideal trades in the selected vendor, which are accountability, ethics, easy communication, capabilities of production, and prioritizing interpersonal relationships.
Step 3: Negotiating the terms
After the supplier is selected, negotiation will fall into the picture. It is advised that you select an organization should analyze the previous contract and then try to negotiate a deal with the selected vendor. Negotiation is important so as to adjust with the budget allocated and Procure high-quality products.
Step 4: Finalizing the Order of Purchase
After the deal has been finalized, the purchase order is written out. It includes elements such as a description of the required services and goods, the total cost of the quantity of the resources, and the approval of the workflow by the organization. After the order of Patel husband is written out, it goes to the financial team as they are the ones who released these details to the vendors.
Step 5: Receiving the invoice and making the payment
After the vendor has received the details of the order, the invoice will be generated. The invoice will be given to the finance department, which will then review the payment and grant the money to the vendor.
Step 6: Delivery of the order and audit
After the payment is processed, the vendor will pack the goods and ship them. As soon as the package is received, the procurement team will check that all the goods are delivered or not, and the quality of the products suffice the requirements. After the inspection, the audit of the order will be made, and the details will be noted.
Conclusion
From the present report, it can be concluded that project procurement is a process that is focal that obtaining the required resources will be needed for completing the project. The components of project procurement are initiating a request, requesting an approval, authority of purchasing, review of the proposal, and closure requirements of the proposal.
The key risks and issues identified are inaccurate analysis of the internal needs, poor selection of the vendor, and non-compliant processes of contract management. The environment of the project is highly critical as Torrance University is one of the most prominent institutes of Australia, and aspects of the organization are also linked with the same.
Leadership and governance of the project will be done by two personnel, which are the project manager and project management contractor full stop. Their influence on the outcomes of the project could be both positive and negative, depending upon the interpersonal relationships. The key mitigations for the issues identified as standardizing in the process of procurement, improving the communication with the user, and developing and fostering good relationships with the vendors.