The Essay On Contracts And Procurement Management's Importance In Risk Mitigation.

Procurement and contracts are integral to successful project management. Planning for purchases and acquisitions, requests for proposal, vendor selection, contract administration, and contract closure are integral parts of the process. Learning from Case Studies and benchmarking against better practices, standards and excellence is vital to understand complexity of issues and successful strategies for procurement and contract management. It will also ensure improved responsiveness to key issues, promote supplierclient relationships through proactive management of risks and ultimately deliver higher level of focus on performance-based outcomes.

context is about exploring the benefits of performance-based contracting to develop performance criteria, monitoring processes, contract terms and processes that ultimately achieves a strong focus on performance outcomes and behaviours. It builds on Assessment 2 by using the ideas and issues raised by blackboard discussion to identify key issues that can be consolidated by the Groups to achieve focussed actions for performancebased completions effort. Assessment 3 also builds on contract management by improved understanding of supplier and client relationships to deliver certainty of outcomes and improved value for all stakeholders.

 Individual/Group Report based on a study of the performance-based contracting model(s) and how this has been applied on complex projects and suggestions as to how this could be applied to the Case Study example (new Royal Adelaide Hospital). Students will also discuss key performance criteria, performance monitoring, contract terms
that drive performance outcomes and associated contract administration, contract management and the contractor’s role in management of project constraints. Assessment 3 will be undertaken progressively through Modules 5 and 6 and will involve an Individual/Group Report or PowerPoint Presentation that considers, where appropriate,
aspects below:
Performance drivers and performance-based outcomes;
Procurement management and completions effort that is vital to ensure successful delivery of projects;
Relationship management, ethics, transparency and other effective contract management processes;
Importance of completions documentation, project closure and lessons learnt;
Specific roles and responsibilities of project manager and procurement manager including in supplier development as part of completions effort or throughout the project life cycle (as appropriate).

Identification of the Issues and Risks Associated with New Royal Adelaide Hospital

The functions of a tangible contract management help in management of obligations in an effective way. It saves times and efforts of both parties. On the other hand, contracts can dictate the aspects of the key business strategies. There are several contractual parties seen to spend time as well as resources.

The documentation of procurement provides a significant input as well as output procedures in order to ensure fair bidding as well as review the proposals of suppliers and making sure accountability as well as performance. Present study deals with the importance of contracts and procurement in mitigating risks associated with Royal Adelaide Hospital. In addition, the best possible practice contract and procurement process for the organization and responsibilities of procurement manager for satisfaction and successful project are explained in the paper.

Procurement planning as well as adoption of effective procurement practices leads to develop better value for money consistently. It also assists in delivering higher quality project and minimized risks for agency.

Procurement planning engages analyzing the process of supply market working and evaluating the risks and defining the best practices as procurement strategy in order to meet demands of the project. In the present study, development of new Royal Adelaide Hospital has been selected as case study project, where a Public Private Partnership arrangement has been developed between the State Government and SA Health Partnership Pty Ltd. In this situation, it becomes vital to define the risks associated with the project and take effective contract and procurement management for the project.  

Identification of the issues and risks associated with new Royal Adelaide Hospital

Hastie, Sutrisna and Egbu (2017) stated that a project with substantial procurement element needs vital efforts by the project manage in order to ensure that contracts encounter the demands as well as constraints of the project plan. The contracting approach based on performance was pioneered by the US defence industry that has been adopted across the world. Effective implementation of contracts and procurement improves reliability, availability and certainty of delivery. It also helps to minimize cost of ownership.

The purpose of the project is developing, maintaining, financed and non-medical services as well as equipment used organization using a Public Private Partnership arrangement. The collaboration has been developed between the State and SA Health Partnership Private Limited as the chosen PPP proponent (Anthopoulos et al., 2016). The total value of the project is $1.85 billion approximately. However, the arrangements of project assurance are not completely understood by the Committee along with the governance committee. It creates risks in the project that results not delivering the project as planned. In this perspective, it is required to develop appropriate and effective contracts and procurement plan for Royal Adelaide Hospital that will be useful in delivering the project successfully.

Recommendations for Contracts and Procurement Management

Risk information provided to the specific Committee needed enhancement to provide a proper understanding and take effective strategies to mitigate them (Mesa, Molenaar & Alarcón, 2016). There was a lack of suitable and effective contract management framework as well as plans for clinical procurement. SA health follows the process of reviewing the status of professional services contracts consisting of identification of quantum, status as well as value of the contracts for ICT services’ vision. There was an opportunity for improving contract management practices through documentation that an officer had specific responsibility to make sure compliance with particular clauses of PPP Project Arrangement as well as through providing regular reporting on the compliance status.

Warner (2017) argued that for procurement bundles of opportunity, timing and cost that are risks for the project. Hence, it is important to crystallize the project and settle by commercial settlements with state. In this situation, it is important to report to the procurement board of the state on the particular status of clinical equipment procurement program. It can be helpful to improve frequency and content provided.

On the contrary, lack of effective repot provided to the Committee regarding the process developed in order to install clinical equipments agreed to Master work program (Warner, 2017). Moreover, the information given to the Committee did not report the key risks and status effectively related to the process of procurement as well as installation procedure in terms of the State encountering the time frames, which is specified in the project agreement.

Recommendations for contracts and procurement management

In order to overcome the risks, it is required to ensure a robust framework approved as well as implemented in the project (Amann et al., 2014). SA health needs to finalize the work that is undertaken for developing a structure in order to give independent assurance. Implementation of quality assurance review of monthly iPMO reports that are given for governing the committees making sure information. In addition, formally reviewing as well as approving the membership as well as terms of reference for the operation board is important (Roehrich & Lewis, 2014). It is to essential defining as well as documenting the key milestones to report the purposes as well as PPP contact work stream into the single report ensure regular preparation.

Hashim, Sapri and Low (2016) argued that finalizing the development as well as deployment of JIRA system as well as associated processes to help with management and tracking ICT procurements in the project through several stages of procurement lifecycle. In addition, development and implementation of the status of procurement of ICT services can be helpful. It is also recommend that SA health finalizes as well as approve draft strategic acquisition plan, is required for the purpose of procurement of ICT services for the project (Hashim, Sapri & Low, 2016). In addition, it is recommended that SA Health makes sure that approval for revising the approved procurement approach need to support the approach that is properly documented.  

Summary of Common Themes

Franz and Leicht (2016) stated that the procurement has an important role in ensuring the parties to the contract encounter contractual obligations. On the contrary, a contract management tool by which the key strategies as well as activities are required to manage new project agreement. The manuals did not able to identify the person for ensuring the compliance with specific clauses of the agreement. It did not provide regular monitoring and reporting the progress (Meehan, Menzies & Michaelides, 2017).

However, developing policies guidance regarding the approval of the key changes to risk information is recorded and implementing the mechanism that ensures compliance with the policy. It is needed to ensure the specific key changes made to information recorded in the risk registers. It is required to present to the governance committees. It is required to highlight and disclose to the particular committee (Manthou, Bialas & Stefanou, 2016). Deploying a mechanism making sure consistency in the information recorded in the risk resisters as well as enhancing the associated policy guidance is the responsibilities of procurement manager for satisfaction and successful project.

Summary of common themes

Gee, Weaver and MacKerron (2017) mentioned that project managers are involved in the process of negotiations with several project stakeholders consisting of supplier, distributors as well as regulatory bodies. In healthcare, the procurement manager requires to buy clinical equipments, medicines as well as services at the best possible way and cost that encounters safety and health requirements of patients. It has been advised by SA Health that new Royal Adelaide Hospital procurement work stream has been currently developed in more effective contract management procedure (Islam et al., 2018).

In addition, development of formal robust procedure for monitoring the progress in key aspects of the project is crucial. It is also essential to develop and implement an effective communication strategy and development of effective internal communication strategy for the issues associated with the clinical involvement is one of the major responsibilities of procurement managers. The process improvements are essential for approving the key changes to the risk information as well as making highlight of the changes to the committee of project management and ensuring the consistency of the information recorded for supporting the risks registers.

The procurement work stream is generally progressing execution of contacts and procurements for the projects. The procurement manager need to focus on the process and resultant financial commitment that are initiated in the absence of formal approved budget because of  the costs and without oversight of the specific committee (Budgett, Gopalakrishnan & Schnelle, 2017).

In addition, defining as well as documenting the key milestones to report the purposes as well as the PPP Contract Administration provide regular reports of the progress made in encountering the targets are the responsibilities of procurement managers in the new Royal Adelaide Hospital project (Kautsch, Licho? & Whyles, 2015). Development of details models with clinicians as well as documenting in a structured way processed by the procurement managers can assist for satisfaction and successful project.

The above study concludes that contract management has a significant role in the new Royal Adelaide Hospital project as the project involves with effective communication as well as sharing knowledge of the existing PPPs, which is difficult to the process of enhancing and greeting success in the project. On the other hand, effective procurement management in the project involves the procedure of selecting the vendors, developing payment terms, selecting suitable staffs for the projects. In addition, it helps in strategic vetting, negotiating contracts as well as actual buying of the products. Hence, it is important to pursue effective contract and procurement management, as it would be helpful to acquire the products, services and fulfill target of the project.

Reflection

The modules are helpful to understand the financial aspects of procurement and assist in reviewing the cost of procurement. In addition, the module helps me to identify the financial aspects as well as contracts along with inter-decencies with the risks. The risks/ mitigations as well as opportunity creation through enhanced contract management can be explored with the help of this module. The judgment as well as initiative for participating in the discussion board in order to clarify the process of procurement as well as financial aspect of complicated projects and discussion as well as framework against the new Royal Adelaide Hospital case study is obtained through the third module. It helps for better understanding the remaining procurement as well as financial risks and themes required for critical review.

The fourth modules helps in better understanding the key procurement documentation, limitations as well as contract negotiation aspects. It explores the standardized procurement documentation as well as standard contracts. Participating at individual as well as group to unpack the complicated issues for the case study is achieved. In addition, I can apply judgment and initiative for participating in the discussion board in order to clarify the procurement limitations as well as negotiation procedures. The ideas can be exchanged along with dissemination of knowledge.

The fifth module helps me to learn regarding the performance-based contracting model as well as exploring its relevance at the time of procurement execution as well as closeout phases. It helps to comprehend the significance of developing performance criteria and the process of measuring as well as the key contractual terms and conditions. The strategic aspects of contract administration as well as the role of facilitating the effective contract management can be analyzed with the help of this topic.

The sixth module assists me to comprehend the significance of relationships of complicated projects as well as reinforce the key procedures that will make sure effective procurement. In addition, I have learnt about the ways to manage relationships with the suppliers as well as vendors within bounds of ethics as well as transparency. It assists in understanding the supplier development strategies as well as sharing the best practices of strategic supplier development.

References

Amann, M., K. Roehrich, J., Eßig, M., & Harland, C. (2014). Driving sustainable supply chain management in the public sector: The importance of public procurement in the European Union. Supply Chain Management: An International Journal, 19(3), 351-366.

Anthopoulos, L., Reddick, C. G., Giannakidou, I., & Mavridis, N. (2016). Why e-government projects fail? An analysis of the Healthcare. gov website. Government Information Quarterly, 33(1), 161-173.

Budgett, A., Gopalakrishnan, M., & Schneller, E. (2017). Procurement in public & private hospitals in Australia and Costa Rica–a comparative case study. Health Systems, 6(1), 56-67.

Franz, B. W., & Leicht, R. M. (2016). An alternative classification of project delivery methods used in the United States building construction industry. Construction Management and Economics, 34(3), 160-173.

Gee, S., Weaver, M. W., & MacKerron, G. (2017). Innovation in Limited Markets: Managing PCP Projects in the UK Defence Industry. In Case Study of Innovative Projects-Successful Real Cases. InTech.

Grimsey, D., & Lewis, M. K. (2017). The problems of large (mega) projects: Evaluating Public–Private Partnerships and Other Procurement Options. In Global Developments in Public Infrastructure Procurement. Edward Elgar Publishing.

Grimsey, D., & Lewis, M. K. (2017). Implementing a partnership agenda: Evaluating Public–Private Partnerships and Other Procurement Options. In Global Developments in Public Infrastructure Procurement. Edward Elgar Publishing.

Hashim, H. A., Sapri, M., & Low, S. T. (2016). Public private partnership (PPP) facilities management for healthcare services in Malaysia: The challenges of implementation. Journal of Facilities Management, 14(4), 350-362.

Hastie, J., Sutrisna, M., & Egbu, C. (2017). Modelling knowledge integration process in early contractor involvement procurement at tender stage–a Western Australian case study. Construction Innovation, 17(4), 429-456.

Islam, R., Hossain, S., Bashar, F., Khan, S. M., Sikder, A. A., Yusuf, S. S., & Adams, A. M. (2018). Contracting-out urban primary health care in Bangladesh: a qualitative exploration of implementation processes and experience. International journal for equity in health, 17(1), 93.

Kautsch, M., Licho?, M., & Whyles, G. (2015). Tools of innovative public procurement in health care in Poland. Innovation: The European Journal of Social Science Research, 28(3), 312-323.

Manthou, V., Bialas, C., & Stefanou, C. J. (2016). Benefits and barriers of e-sourcing and e-purchasing in the healthcare sector: A case study. In Automated Enterprise Systems for Maximizing Business Performance (pp. 71-87). IGI Global.

Meehan, J., Menzies, L., & Michaelides, R. (2017). The long shadow of public policy; Barriers to a value-based approach in healthcare procurement. Journal of Purchasing and Supply Management, 23(4), 229-241.

Mesa, H. A., Molenaar, K. R., & Alarcón, L. F. (2016). Exploring performance of the integrated project delivery process on complex building projects. International Journal of Project Management, 34(7), 1089-1101.

Roehrich, J., & Lewis, M. (2014). Procuring complex performance: Implications for exchange governance complexity. International Journal of Operations & Production Management, 34(2), 221-241.

Warner, M. (2017). Local content in procurement: creating local jobs and competitive domestic industries in supply chains. Routledge.