Procurement And Contract Management Of New Royal Adelaide Hospital AG Essay.

1. Critically evaluate the risks associated with contract and procurement management approaches and make recommendations to global project sponsors with regard to ‘best practice’ in this area.

2. Apply judgement and initiative in the development of ‘best practice’ contract and procurement process for global project management, identifying the external factors that need to be considered and mitigated for in every instance.

3. Analyse the responsibilities of the procurement manager and project manager necessary to ensure stakeholder satisfaction and successful project outcomes.

Advantages of Procurement in Project Management

Procurements and contracts are extremely vital issues for successful completion of a project management. Master planning for acquisition and purchases, requests for proposal, selection of vendors, contract administration, and contract closure are inevitable parts of the process. Learning from the case study of New Royal Adelaide Hospital AG Report and benchmarking against best practices, guidelines and competence is essential to perceive the tangled issues and triumphant blueprint for procurement and contract management. This case study will also fortify upgraded responsiveness to the basic key issues, improvises the supplier client association through exasperating management of risks and finally administer higher level of focus on performance-based consequences. In the following study an attempt is done to uncover complexities in the procurement circumstances, identifying the key issues, looking at leadership, governance and key themes that will allow improving, and focusing, on the reflection and learning.  

Procurement actually means purchasing or acquiring goods. Those who provide procurement services are often named as vendors or contractors. Advantages of procurement minimize fixed and recurrent costs, deliver flexibility, increase accountability, and also allow the organization to focus on the core business and promote specific skills and technology (Phillips, 2013). Project procurement process follows –

1. Planning,
2. Solicitation and contract award,
3. Contract management,
4. Asset or disposal 

Analyzing the function, difficulty, expenses, with the amenities administered, it can be explained that the new RAH project is an optimistic one. Its significance is immense in delivering magnified and feasible medical care, protection and consequences dedicated to the citizens living in South Australia (Schwalbe, 2015). This project formulates the fragments of the reformation program being evolved to safeguard an accessible and renewable medical and health care system for the state in forthcoming years (Heagney, 2016).

Opting for a huge number of acquirement options, the range, schedule and expenses of project improvisations were no longer settled with Project Co. These were accounted as an unavoidable hazard (Heldman, 2015). These threats gradually were materialized and resolved with Project Co. It followed the State that extended a trade agreement in September 2015. Acquirement or Procurement schedule could be upgraded according to the prevalence and the matter delivered that notified to the State Procurement Board in regard to the clinical instruments (Turner, 2016). There was an inadequacy of influential reporting delivered to the concerned Project Committee discussing the development formulated in establishing clinical instrument clusters in comparison to the span of time period that was earlier designed along with program of the Project Work.  The specific negotiated contract for equity affirmation amenities for the medical tools and apparatus program have not produced enough elaborations on the disposition and influence of facilities offered, the basic output and the investigation results.  Specific statistics and facts presented to the authority could not energetically investigate the position, level and probable dangers related to the procurement and fitting procedure in connection to the State facing the stipulated time periods particularized in the Project deal (Snyder & Stackpole, 2013). ICT procurements need to be improvised in differentiating layers of all round growth and completion. 

Function and Significance of New RAH Project

The new RAH assignment has serious complications and perils towards as the building structure manufacturing work moves on for completion, facility experimentation is executed and metamorphosis designing supports to hit the improvised bulls eye on November 2016. SA Health and the governance committees were structured and formulated to monitor the project. The following statements throw light on a synopsis of some of the key challenges occurring in this project that draws main focus and attention of the management authorities. A complete assessment of the key issues are as follows- analysis of the impact that comprises presumptuous threat assurance, of enhancing the statutory consummation dates by 76 days and delay of the inauguration of the health care center, introducing a business case for the project, development of ongoing planning of the service delivery, regulating, assimilating an effect of the conversion of the Health reforms mentioned in the business case.  The risks related to execution of the undertaking ICT systems, consisting target fulfilling process, administering deadlines, fulfilling financial goals and concluding emergency systems and disposition. 

For the indispensable to the triumphant consignment of this complicated project operation it is crucial to organize and sustain vigorous governance compromises and influential management supervision procedures. It should be emphasized that organized management and responsible governing methods and operations are researched and updated all through the project tenure. The discussion emphasized on the project estimation and evaluation of the agreement fixed to qualify the proposal by the State that must have been administered within the particular time span, and with proper financial planning along with the purposive convenience. Discrete focus is given here to project administration, administration and investigating agreements including:

 Project administration and organizational design

 Affirmation processes 

Commercial designing

 Risk or unpredictable situation management

 Industrial and financial management

Administration and management of deals

 Procurement disposition and so on.

A number of other influential administrative dispositions as well as advantages influencing on the project venture, like metamorphosis planning, operational engagement, health improvement inventiveness, constitutes the preparedness strategy for the project. The new RAH Program and SA healthcare system are consistently scrutinizing and re-evaluating the systems, methods and practices. Such issues were thrown much light from the decisions and action items by the governance authority. Much focused were the consequences from inspection by individual advisers and their continuous analysis system.

This segment emphasizes the recommendations on administrative governance, enterprise and PPP conditioning program; the ICT program and procurement functions. There was a need to improvise a particular assurance framework of the project. It was necessary to deliver an individual assurance on the achieved program and progress to the core regulating committee of the project. Whole-of-life expenditure for medical instruments was not outlined. There were particular chances to enhance and upgrade data and incidence notifications by the Project Director to SA Health. SA Health had not finished the improvised commercial case for the project and assured to formulate a rapid, instant procedure to control the development offering hindrances to the business plan. This is a complicated project ever undertaken by the State. The governance and structure has undergone many transformations and changes since the beginning.

Procurement Issues in New RAH Project

The new RAH Program comprises of a number of work divisions with the thread of an integrated project management office which has been formulated by SA health. They also introduced a number of administrative committees including an improvised controlling committee and an execution planning system on board. On January, 2014 to provide a supervisory position controlling over the work streams, an interim Program Director was engaged for the project. The suggestions and recommendations raised by the individual counselor in their very first evaluation have got wide appraisal. Certain duties connected to the management of the Project assignment were relocated from SA Health to DPTI. Within such revolutionary circumstances, the Health Ministry engaged the Executive Director, the building construction and management DPTI as the Project Director of the proposed assignment. DPTI has to provide explanations and illustrations for controlling the conveyance of the framework. They have to go through the process of the project planning, designing and different levels of construction for the spontaneous delivery of management services.

The evaluation of the risks associated with contract and procurement management approaches and the recommendations to global project sponsors in regard to ‘best practice’ have been discussed in this segment. The new RAH plan is an intrinsically high danger project in relation to its intensity scale, difficulty, cost, the facilities allotted and the significance of the project in relation of accelerating their supportable medical services and their huge success to the citizens of South Australia (Thomas, Phillips, & Coventry, 2014). The PPP design assumed to convey the unrevealed deal procedures and detailed explanations regarding project. Certain problems related to the project have been shifted during the procedures that discuss the risks in connection with the planning, plot, design, execution regarding the construction of the hospital services (Smith, Jaggar, & Love, 2016).

Specific danger issues were maintained by the State authority as they were accountable for particular influential fundamental viewpoints of the project, including works funded by the state authority, medical services, medical tools and equipments, health ICT enterprise process. Medical instruments and ICT are some of the issues that influence the construction schemes.

The Agreement of this project explains important legal commitment demanding the State authority to accomplish number of activities within particular time span. Postponement of the project considered to be credited to the government to reveal it to valuable commercial vulnerability, summarizing to the cost of the project design.

The conveyance of the model of medical care in connection to the new RAH was confirmed and determined over various operational processes through execution and amalgamation.

Management Supervision Procedures for Successful Project Delivery

SA health has incorporated an advisory firm to deliver probity assurance services regarding procurement and risk management. The agreement with the advisory comprised of managing a higher level reassessment of procurements that have been undertaken in the development issues.

The risks include – slow delivery of projects, cost compulsion, inability to fulfill the PPP legitimate essentials along with the provoking of commercial disclosure, inadequate administration of declaration formed the State authority, manufacturing discord, insufficient service of medical enterprise ICT systems.

The clumsy move to the new RAH plot resentfully influenced the secured transformation of amenities and sufferers who seek medical support, improper training of staff, insufficient conveyance of the calculated interest and impacts, inappropriate transportation of a feasible representation of care, mismatch with transformation to the State’s medical and health care plans and crucial deliberate orientation.

Ineffective supervision and description of the system of fitting arrangements and procurement caused inconvenience by not fulfilling the criteria on the particular dates mentioned and this caused monetary penance for the State. The Project Director had circulated notices to the concerned authority. They needed statistics to recognize the value and schedule of improvisation of ongoing functions and activities, as a consequence of medical instruments and tools selected by the State authority.

The new RAH project cannot be regulated successfully or productively through the procurement of ICT services. All new RAH ICT procurements should be updated as substantial matter of importance, the advancement and execution of the JIRA system must be finalized and connected, methods should be assisted with controlling and following ICT procurements among the different layers of the procurement life process. There should be a development and implementation on consistent supervision and description to the Committee and, to the higher authorities on the situation of the new RAH project regarding the procurement of ICT services. 

Though the construction work is delayed, but it has progressed successfully. The budget for State funded works for the project had been accelerated on June 2011. The enhancement is mainly credited to access funding for the replacement from the previous existing hospital to the new, under construction hospital. The total costs were $417 million. The State put considerable effort to compromise with Project Co when the scope of medical facilities needed by the State have been confirmed by the commercial company. As a huge and dynamic project of this size and design such changes were not desirable. The crossed deal was an adjusted result in comparison to that primarily expressed with the rigid regulations and situations propounded by the project deal dispositions. SA Health tried to manage some emerging risks until the rigid conditions made great effort to influence the infrastructure and health issues. Project governance disposition sustained to be enlarged while wide range of problems, issues and risks were located, identified and demonstrated.

Risk Management and Best Practices for Contract and Procurement

SA Health has to throw light particularly on a number of challenges to ensure successful delivery of the project’s desired profits and benefits. As the design, development and construction stage ascends near to ending the project advances through a tough phase of its administration and projection. The extra emphasis has been given on executioner engaging and the transformation of facilities and services and construction of the new hospital. It was explained by the SA health that it directly follows and controls project administration and disposition to cater the complicate necessities for the project. Accepting such advancements, supporting to the merchandising negotiation mentioned in the Deed conditions and the related contextual payments, proofs that SA Health has undertaken divided responsibility for delays of the project issues and commercial as well as financial settlements. This illustrates that the innumerable complicated tasks that consist of the project are administered and projected and connected in a way that might settle the stipulated timing and expenses of getting into the new RAH. The administrative plotting must complement resourceful and regular intimation of upcoming perils for punctual reply, necessary functions and ultimate declaration by concerned authorities and partners. SA Health must take complete responsibility and convenience of the expansion of time and phase.  

No combined evidence of the essence, utility and positioning of procurements was available for the new RAH ICT Program. The work force for the project was according to the system of upgrading the entire system with particulars of ICT procurement. The insufficiency of a vigorous procedure to control and trail ICT procurements was prominent among the various layers of the procurement life process. The work force in the system of advancement evolved the JIRA process system to control and maintain procurements process and identify the exact condition of the present situation. No necessary progress documents were submitted to the senior authority on the progression and advancement of procurement designs. It was essential to modify commercial and finance related reports delivered to the Committee.  It must provide project information of the actual disbursement, illustrating significant discrepancy between exact and budget/forecast expenditure and registering the fund modifications that was not fulfilled by SA, and should produce an official vigorous procedure to determine advancement for the economic and commercial plan.

Opportunity, expenditure of the planning of the project implementations were less supported and were contemplated as the ultimate danger, reporting to SPB could be improved – frequency and content lack of effective reporting regarding advancement made in installing clinical equipment bundles. The deal for probity affirmation amenities for the medical instrument program could not deliver enough deliberations in connection to the type and range of facilities included. The detailed statistics represented to the Committee have failed to report the status and fundamental perils related to the procurement and fitting procedure in terms of the State.

Key Risk Factors for New RAH Project

For the new RAH ICT project properly calculated strategic design was not formulated. An elaborate accession format and plan were improvised. The design stipulated that the plan of the procurement had to be finished in particular phases with the proposed cost of $40 million. The initial stage for the new RAH was to extend, and interpret the necessary expenses and document with an un-segregated program of ICT works. The next phase was to handle the execution of the ICT Program. The stage was granted to a contractor who successfully discharged the works in January 2015. Followed by the demonstration of the prospective business, a settlement was upgraded not to advance to the next phase. This was contemplated that the methods and measures were inadequate and the insecurities were too large to call off wider viewpoints of conveying the project program.

The enterprise ICT programs were formulated to notify detailed designs and plotting to the procurement procedure of the new RAH ICT program. These particular designs and plans were executed at different levels of completion and competency.  The necessity to arrange and execute the deliberate purchase plan to confirm a continuous perspective to obtain the ICT services, increase clarity and co-operate to protect the competent and essential use of methods and measures. Numerous departments needed reformation where deal handling procedures for new RAH, ICT procurements took place. 

SA Health care authorities have executed plans to control designs and facilities to predict the results of the new RAH project. The above mentioned designs and planning have transformed during the progression of the project, in reply to suggestions gained by a series of deeply engaged affirmation services. These reviews comprised of understanding affirmation on the new RAH Program. This revealed the progress made by SA Health to promulgate issues highlighted by the consultants as improvement strategies. The financial declaration that was announced does not mirror the commercial and financial directives of the contract implemented and interchanged among the Health Ministry and Project Co. Critical analysis distinguished a number of sectors connecting to project administration, commitment, and management and announcing informative systems and procedures that needed consistent improvisation. The detection involved the structures and properties that are essential to explicitly handle project dangers and risks. A huge number of substantial transformations took place in methods and practices in connection to the matters developed. This detection contained reconsidering assertive projections for the program. This further executed a project planning. This reconsidered announcement on the situation of medical instrument procurements, and growing risk of budgetary and commercial and economic management that was officially informed to the new RAH Steering Committee. Research synopsis was officially submitted to SA Health in September 2015. SA Health declared an elaborate reply to the affairs that were lifted high, advertising ventures that are previously withdrawn or recently advocated. The large number of the advocacy had been executed or taken advanced remedial measures by the SA Health authority.

Advisory Services for Procurement and Risk Management

Regarding purchasing, sourcing and contract management an effective and powerful procedure have been improvised to enhance the procurement activity. This propaganda needs public authorities to ensure some basic principles. In this regard, beneficial procedures and systems must be incorporated to the shape and size of the organization. The intensity of scale and expansion of their recent and predicted procurement functions are utilized. The methods should be standardized and assimilated into a complete synchronized system. The processes may differ for various kinds of procurement but the essential procurement approaches and their quality and standards must be homogeneous into commercial propaganda and systems to safeguard compliance and consistency of solicitation.

In the procurement processes an exact utilization of proper technology is demonstrated. It must include the illustration of integration that is achieved among the operational procedures and financial affairs. Financial systems should complement provision of exact management knowledge to the procurement function analysis. There are particularized processes for calculating, measuring and summarizing statements on procurement and contract management implementation with the purpose of all round development all through the financial year.

The role of managers and project managers are highly significant in procurement process. There must be various officials with full time procurement responsibilities; an organizational chart must be there to show off the actions which bring resources into reality, and delineating proposals for the procurement stratagem; the categorizing of each officer with the permanent procurement role must be corresponding with the character of the spend portfolio; the scale of the full time procurement roles should be commensurate with the temperament of the disbursed investment portfolio and the responsibility predicted for the progression of full time procurement team;

Every official engaged with a permanent and fixed procurement responsibility should possess an suitable job identification explaining their characters on the following matters:

Strategy origination,

Imposition of organization,

Acquisition planning,

Consultation and advice.

Each person specification must possess potentials that immediately connect to the responsibilities of a specific designation; a proper mixture of necessary and advantageous experiences, realization and potential strength, contextual to the situation, leadership skills; change management capacities; analytical abilities; decision making powers; facilitation skills; negotiating qualities; influencing and consultative skills, mentoring and so on. 

Conclusion

The above case study throws light on the procurement and execution of the construction works. Construction and manufacturing works are beautifully progressed with collection of works being perfectly administered, commissioned and completed. At the same time the risk of executing the plan and the role of different factors related to this have been illustrated effectively. SA Health will sustain to deliver all the necessary medical services, and procurement finances, designs and constructions are delivered by the State’s private sector partner. The project develops and undergoes a complex series of project life process in the design and construction planning. There is a huge transition of the delivery of project works starting from the prevailing hospital to the new one which is under manufacturing level. Planning and designing of the construction and their actual work have been in advanced stage by the vigilant observation of the procurement officials concerned and also with the help of contractual builders. The state funded works remain to be in the advancement mode and these works are encouraged by DPTI. Going through the whole case study it can be concluded that the whole process confronts lack of policy guidance and fails to the major extent in minimizing the recorded risk factors. The analysis also shows that there was at times inadequacy of funding which emerged out of improper financial planning that resulted lack of detailed analysis, documentation and improper research findings by the concerned officials. The state funding was huge in this new RAH project and was the largest manufacturing initiative for the health sector in the global world. The procurement program here is constituted with the administering of the huge number of contracts regarding installation of medical and clinical instruments with different norms, values, constitutional risks and complicacies.

References

Collyer, F., Harley, K., & Short, S. (2015). Money and markets in Australia's healthcare system. Sydney University Press.

Heagney, J. (2016). Fundamentals of project management. AMACOM Div American Mgmt Assn.

Heldman, K. (2015). PMP Project Management Professional Exam Deluxe Study Guide: Updated for the 2015 Exam. John Wiley & Sons.

Holzer, D. (2015). The BIM Manager's Handbook, Part 1: Best Practice BIM. John Wiley & Sons.

Phillips, J. (2013). PMP, Project Management Professional (Certification Study Guides). McGraw-Hill Osborne Media.

Saunders, C., & Carter, D. J. (2016). Right care, right place, right time: improving the timeliness of health care in New South Wales through a public–private hospital partnership. Australian Health Review.

Schwalbe, K. (2015). Information technology project management. Cengage Learning.

Smith, J., Jaggar, D. M., & Love, P. (2016). Building cost planning for the design team. Routledge.

Snyder, C. S., & Stackpole, C. S. (2013). A User's Manual to the PMBOK Guide. John Wiley & Sons.

Thomas, M., Phillips, I. C., & Coventry, B. J. (2014). Risk Management and Human Factors. In General Surgery Risk Reduction. Springer London.

Turner, R. (2016). Gower handbook of project management. Routledge.