Constructing the Team, Term Paper Example

You are the director of procurement for an inner-city school district. The district needs to construct a new elementary school building and have it ready for use in time for the beginning of the next school year, which is ten months away. There is a reasonable amount of money available to fund the construction, if you and your colleagues in the construction department make the right decisions and take the appropriate measures. It will not be possible to raise more funds for the schools through taxes or bond issues. What method of construction delivery would you recommend to the superintendent of schools, and why would you recommend that method? Your choices of method are: design-bid-build, design-propose-build, any of several permutations of design-build, construction manager, and public-private partnership.

In this scenario, the ideal construction delivery method is design-build. Since the school district has a reasonable amount of money available to fund the construction and it is not possible to raise more funds for the schools through taxes and bonds, it is essential to select a construction method that is able to set a defined budget for the project and not have to accommodate the demands of design professionals and contractors. The design-build method is a solution to this problem because the design professional and contractor is the same individual, which leads to many advantages throughout the construction process.

The main advantage of using the design-build method in this situation is directly related to the amount of funds available for building. When a contractor/designer is selected, he or she will be able to budget the project in a way that accommodates the school’s goals. Although this aspect of the project can be met with assistance, the contractor will be able to decide the budget that would best suit the school’s needs, and ultimately gain approval through the school board. The design-build method ensures that there will be little deviation from this proposed budget because the managers and supervisors would have already approved the document. Therefore, it is less likely that the builders will decide to add or change things as the building is designed. This is necessary for the school district because they do not have the ability to raise additional funds for the project.

Although cost-certainty and single point responsibility are benefits of the design-build, method, additional benefits that the school district can expect from this construction method include enhanced communication between the architect and contractor and speed of completion. Since the contractor and architect are on the same page throughout the project, there will be less disputes. Thus, the predicted time to completion for this project will likely be on schedule throughout the project as a consequence of using this method. This will ensure that additional labor costs are not needed, again protecting the school’s financial request.

Discuss the principal sources of risks associated with the funding and construction of the mid-town tunnel through a public private partnership. Categorize the risks as to type of risk.

The principal sources of risks associated with the funding and construction of the mid-town tunnel through a public private partnership is due primarily to the complicated character of these contracts. The nature of this partnership requires the need to determine all possibilities in a particular construction scenario, which is made more difficult by the fact that long-term business relationships are never completely predictable. In the case of building a mid-town tunnel, it is necessary to consider all of the problems that can be encountered and factor this into both the budget and total time it will take to complete the project. Depending on pre-existing structures, the stability of the ground, the number of people who live nearby the construction sites, and a variety of other factors, there are many risks associated with this particular type of project. Therefore, the project team has many detailed considerations to make before the project can initially commence.

An additional disadvantage in allowing the construction and funding of a mid-town tunnel by a public private partnership is that there are significant legal costs associated with contract negotiation. Research has shown that tendering costs amount to 3% total of the projects cost, while legal fees represent only 1% of the project cost in conventional procurement (Murray &Langford, 2008). Therefore during the procurement process, it is essential to consider the total cost of working with a public private partnership. In addition to the legal fees, the company must conduct a large degree of research to analyze the aforementioned risk scenarios. Therefore, the company or agency that awards the contract may be paying more for these services than necessary or originally intended.

Conventional procurement is more significantly protected against these risks. Since contracts do not typically exceed five years for these workers, there is a lesser need to account for long-term risks that may be unpredictable. If the contract is renewed, the team will be able to simply reassess the project and account for risks that could potentially occur during the next five years. In addition, the costs for these projects are much smaller, thereby reducing risk more significantly.

Throughout the contract period, the public private partnership is more likely to renegotiate the contract in order to account for changes that occur throughout the project. This is primarily due to an inability to predict risks long-term, so the procurement team will not be able to expect the initial project terms to be applicable throughout its duration. In situations where no pricing policy has been determined for the situation in the initial contract, the company can expect to pay a large sum of money to compensate for this change.

Other risks include performance enforcement due to the difficulty of formulating the project’s dimensions and political acceptability because the private sector party could potentially go bankrupt. Awarding a contract to public private partnerships is risky because due to the occasionally weak definitions of performance enforcement that are typically included in a contract, aspects such as customer relations are not well considered. This could potentially tarnish the reputation of the agency that awards the contract. In addition, political acceptability can result in a great loss of money due to bankruptcy. Although risks can be reduced to an extent by including loss sharing or profit sharing provisions in the contract, the advantages of the public private partnership is reduced because the extent of risk transfer is reduced as well.

Identify typical errors that are made in procurements of information technology. Discuss how proper planning and source selection can minimize such errors.

Procurements of information technology require special consideration because contracts are typically submitted virtually and remain in the virtual domain. Therefore, a major error associated with this type of procurement is failed quality control; the document must read succinctly and as well as it would have been if it was submitted in paper. An additional consideration is that the requirements must actually define what is being procured. This can refer to proper language use throughout the document in addition to a variety of other factors. For example, definitions must be used correctly. Research has indicated that fixing a requirement error after delivery can cost one-hundred times the cost of fixing the implication error (VTA, n.d.). Thus, it is necessary to ensure that the submitted document has been proofread thoroughly before submission.

Proper planning and source selection can minimize these errors because this will ensure that mistakes are not made throughout the process. Ultimately, the source selection process is able to define how actions will be conducted, organized, and initiated. Therefore, this will help outline the procurement because once terms are defined initially, they will not be incorrectly defined in the final submission. Furthermore, source selection enables evaluation of the plan as it is enacted, which will provide the reader with a greater understanding of outcomes. Proper planning is tied into source selection because it is ideal to break down the project plan as it is written. As mentioned above, proof reading is a necessary process, but is a less tedious task if care was taken during the initial drafting.

References

Murray M, Langford D. (2008). Chapter 11. Constructing the Team: The Latham Report, from Construction Reports. Retrieved from http://onlinelibrary.wiley.com/doi/10.1002/9780470758526.ch11/summary

VTA. (n.d.). Chapter 8 – Describing the Need: Specifications and Requirements. Retrieved from  http://www.vita.virginia.gov/uploadedfiles/vita_main_public/unmanaged/scm/procurement_manual/chapter_08_-_ng_partnership/scm_chapter08.pdf