Procurement Process And Related Aspects

Assessment 1 is designed around the review of a Case Study from a current large-scale public private partnership hospital project that aims to create a modern health-care facility in South Australia. This assessment comprises of four parts:Words Introduction summarising the procurement context (life cycle journey and where the project is currently), uncover complexities (and key issues), discuss project environment and organisation aspects, leadership and governance and how that has influenced the current situation.

Identify key risks, mitigations and possible learnings. Where learnings have wider implications, identify how those learnings may require changes to roles and responsibilities of key project resources, changes to procurement briefs or
specifications, scope and the procurement process itself. Identify dependencies and common themes.

Summary of key findings and also identify best practices for procurement and contracts management (in particular PPP procurement) and explore roles of project and procurement managers in ensuring successful delivery. Nominal word limit of 500 words. The Reflection Journal summarises the student’s ideas and thoughts and key aspects pertaining to Module 1 and Module 2 including any key aspects picked-up as a result of the review of the Essential and Highly
Recommended Learning Resources and critical self-assessment of how some aspects may apply to student’s current or future roles. 

NRAH and Procurement

The process of procurement has emerged as one of the most important ones within the framework of the contemporary work and helps the organizations to obtain the kind of materials or goods that are needed (Wang et al., 2016). As opined by Dave et al. (2016), procurement is mainly concerned with the process of finding, agreeing as well as acquiring of products or goods are external agencies. However, there are various factors that the organizations need to take into effective consideration during such a process like the risks involved, financial constraints and others (Patrucco, Luzzini & Ronchi, 2016).

Roberts and Siemiatycki (2015) are of the viewpoint that the effectiveness of the process under discussion here depends to a large extent on the efficiency with which the organization is being able to mitigate the adverse effects of the risks involved in the process and also address the financial and other kinds of constraints. This report will shed light on the process of procurement and its various related aspects in the particular context of the new Royal Adelaide Hospital (NRAH).

NRAH and Procurement

  The NRAH is a part of the initiative of the Australian national government to improve the health care facilities which are available to the Australian people (Rah.sa.gov.au, 2018). The total estimated cost of the project is more than $2.4 billion and is the 3^rd most expensive building of the world along with the most expensive building of Australia (News.com.au, 2018). The hospital is known for the technical advancements like the use of robots and others along with the personalized rooms which it offers to the patients (Abc.net.au, 2018).

In this regard, it needs to be said that the hospital in terms of the life cycle journey is at the growth stage and it is expected that it would offer better health care services in comparison to the earlier RAH. However, because of the procurement process which was used the hospital faced various kinds of issues along with a delay 17 months and several additional costs (News.com.au, 2018).

The major drawback of the project under discussion here and the procurement that it used was the fact that the project completely disregarded the needs of the patients and also that of the health care professionals (Abc.net.au, 2018). According to News.com.au (2018), the project is not only an ambitious one but at the same time attempted too much and that too within a very short time. More importantly, the project also failed to take into effective financial cost and other factors relevant to the project.

Risks and their mitigation

The project was directly under the supervision of the national government of Australia although it was built by the contractors which undertook and completed the work on behalf of the national government (Abc.net.au, 2018). Furthermore, the national government is expected to repay the cost of the project to the contractors by 2046 and after that the NRAH would be the property of the national government (News.com.au, 2018). The effective collaboration between the national government and the constructed greatly facilitated the effective completion of the project although there were some disputes related to finance and others.

Risks and their mitigation 

As opined by Oelze et al. (2016), there are various kinds of risks involved in the process of construction of a building and the success of the concerned project depends to a great extent on the effectiveness with which these risks are being mitigated. In the particular context of the construction of the NRAH there were various kinds of risks involved in the process like the financial risks, construction risks and others. For example, it was seen that the national government as well as the contractors had miscalculated the cost of construction and the net result of this was the fact that the government had to bear additional cost (Abc.net.au, 2018).

The national government ended up paying more than $600 for the miscalculation in the cost of the construction of the new hospital (News.com.au, 2018). Furthermore, it is also seen that the contractors thoroughly disregarded the needs of the patients as well as the health care professionals. The net result of this is the fact that the emergency room of the concerned is too small as well as narrow to accommodate all the patients which it gets. As a matter of fact in the past eight months since its initiation alone more than four patients had lost their lives because of the delay in the health care services (Abc.net.au, 2018).

Although the hospital boasts of 2300 car parking spot yet the parking space for the ambulances have been made too narrow (News.com.au, 2018). The end result of this is the fact that the patients are not able to reach the health care professionals on time and this has also resulted in the death of a number of patients. The same holds true with the waiting rooms and the place wherein the documents are signed by the exiting patients.

This result in the rooms being occupied by the patients for a longer duration of time and thus many patients who actually need the services fail to get rooms (Abc.net.au, 2018). More importantly, many patients have even complained about the quality of the food which is being served to them and the technology that is being used by the hospital at times lapses (News.com.au, 2018). The net result of this is the fact that there are instances wherein the operation theatres have become powerless because of technical snaps.   

Best practices for procurement and contracts management

The Health Ministry of the nation along with the national government had taken various mitigation measures for the mitigation of these risks (Abc.net.au, 2018). For example, it is seen that the national government had hired contractors to improve the infrastructure of the emergency rooms and also the parking lots for the ambulances (News.com.au, 2018). Furthermore, attempts have been made by the authorities to use the site of the old RAH for providing emergency and other services to the patients (Rah.sa.gov.au, 2018).

In addition to these, initiatives are being made to improve the quality of technology which is being used by the hospital to deliver health care services to the patients through the procurement of better technological resources (Abc.net.au, 2018). The authorities have realized the pitfalls of the projects and in conjugation with the health care professionals and other experts they are trying to overcome these issues so as to deliver better quality facilities to the patients. The common theme in all these procurement changes which the authorities are making is to improve the quality of health care services and also to mitigate the risks that the project is facing in the most effective manner (News.com.au, 2018).

Best practices for procurement and contracts management

The risks as well as the pitfalls of the NRAH project clearly indicates the importance of effective planning, contract management and other policies that the organizations need to follow for the process of procurement. As opined by Osei-Kyei and Chan (2015), one of the most important processes related to procurement is that of effective planning since it helps the organizations to considerably reduce the cost of the project and helps in its timely completion as well. In this regard, the notions of lean and agile procurements are important ones to note (De Araújo et al., 2017).

As the case of NRAH clearly indicates due to lack of effective planning there was not only a delay in the completion of the project but also the national government ended up incurring additional costs as well. Edler and Yeow (2016) are of the viewpoint that the role of the project managers is an important one in the effective completion of the projects and ensures that the project is being completed in a manner which will take into effective consideration the needs of the organization. As becomes evident from the case of the NRAH the authorities clearly failed to take into effective consideration the perspective of the hospital and also of the patients and this ended up costing the lives of many patients.

As opined by Perrenoud et al. (2017), the procurement managers also play a vital role in the completion of a project and are imbued with the responsibility of analyzing the needs of the entire construction process. In this regard, it needs to be said that in the majority of the construction sites a lot of material is been wasted and this adds up to the cost incurred by the organization (Knutsson & Thomasson, 2014).

However, the use of the methods of lead procurement helps the procurement managers to overcome this problem. In addition to this, had the authorities followed the method of agile procurement they would have been able to not only explore the different options which were available for the completion of the project but also to complete it in a much effective manner as well (Ghazali, Rashid & Sadullah, 2018).

The processes of effective supervision and governance are also important ones to note in this regard since they contribute in a substantial manner towards the completion of the project (Wang et al., 2016). In this context it needs to be said that had the national government used effective governance and supervision techniques then it would have been able to complete the project in a much better manner. Formulation of cost effective contracts is another option which the authorities could have utilized for the completion of the concerned project (Dave et al., 2016). These in short are some of the best practices or recommendations that the governmental authorities might have followed for the effective completion of the project under discussion here.

Personal Reflection 

I personally believe that the concept of procurement is one of the most important ones from the perspective of the process of project management. Furthermore, as the course work materials clearly indicated that this process helps in the effective completion of the projects through helping the organizations to obtain the materials that are necessary for the project. In addition to this, I also believe in the fact that the effectiveness of a particular project and also its completion depends to a large extent on the collaboration of the project managers with the organization. This collaboration not only enables the project managers to understand the needs of the project but also complete the project in a better manner. More importantly,

I also hold the viewpoint that the procurement managers play a substantial role in the effective management as well as the completion of the projects. This is also important from the viewpoint of the cost which is being incurred by the organizations for the completion of the projects.

I believe that the procurement managers through an effective analysis of the demands and also the needs of the project are required to provide the best possible options to the organizations and also to reduce the cost incurred by it as well. More importantly, they also help in a substantial manner towards the timely completion of the projects by virtue of offering the raw materials and other goods on a timely basis. Thus, it can be said that within the cannon of project management the process of procurement has emerged as an indispensible entity.

Conclusion 

             To conclude, the success or the failure of a project depends to a large extent on the process of procurement which has been used for the completion of the project. The process of procurement is an important one within the spectrum of project managers since it helps the project managers to not only procure the required materials for the completion of projects but also helps in the mitigation of risks as well.

In addition to this, it is also seen that effective collaboration is needed on the part of the project managers, procurement managers and the organizations for the completion of projects. The case of Royal Adelaide Hospital clearly indicates the need for the effective collaboration of these entities for the completion of any project. More importantly, the organizations also need to take into effective consideration the processes of planning, agile procurement, lean procurement and others for the completion of projects.

References 

Abc.net.au, (2018). Australia's most expensive building: What you need to know. [online]. Retrieved from https://www.abc.net.au/news/2017-01-24/new-royal-adelaide-hospital-all-you-need-to-know/8206416

Dave, B., Kubler, S., Främling, K., & Koskela, L. (2016). Opportunities for enhanced lean construction management using Internet of Things standards. Automation in construction, 61, 86-97. Retrieved from https://www.sciencedirect.com/science/article/pii/S0926580515002149

De Araújo, M. C. B., Alencar, L. H., & de Miranda Mota, C. M. (2017). Project procurement management: A structured literature review. International Journal of Project Management, 35(3), 353-377. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0263786317300595

Edler, J., & Yeow, J. (2016). Connecting demand and supply: The role of intermediation in public procurement of innovation. Research Policy, 45(2), 414-426. Retrieved from https://www.sciencedirect.com/science/article/pii/S0048733315001638

Ghazali, F. E. M., Rashid, S. A., & Sadullah, A. F. M. (2018). Disparity between the Procurement Process Best Practice for Public Private Partnership (PPP) Projects in the UK and Malaysia. Proceedings of the Institution of Civil Engineers-Management, Procurement and Law, 1-29. Retrieved from https://www.icevirtuallibrary.com/doi/abs/10.1680/jmapl.17.00057

Knutsson, H., & Thomasson, A. (2014). Innovation in the Public Procurement Process: A study of the creation of innovation-friendly public procurement. Public Management Review, 16(2), 242-255. Retrieved from https://www.tandfonline.com/doi/abs/10.1080/14719037.2013.806574

News.com.au, (2018). $2bn bungles at Australia’s most expensive building puts ‘lives at risk’. [online]. Retrieved from https://www.news.com.au/lifestyle/health/billion-dollar-bungles-at-the-royal-adelaide-hospital-australias-most-expensive-building-puts-lives-at-risk/news-story/21e0e5a278e9a4d1f5cab0b153c702e9

Oelze, N., Hoejmose, S. U., Habisch, A., & Millington, A. (2016). Sustainable development in supply chain management: The role of organizational learning for policy implementation. Business Strategy and the Environment, 25(4), 241-260. Retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1002/bse.1869

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Patrucco, A. S., Luzzini, D., & Ronchi, S. (2016). Evaluating the effectiveness of public procurement performance management systems in local governments. Local Government Studies, 42(5), 739-761. Retrieved from https://www.tandfonline.com/doi/abs/10.1080/03003930.2016.1181059

Perrenoud, A., Lines, B. C., Savicky, J., & Sullivan, K. T. (2017). Using best-value procurement to measure the impact of initial risk-management capability on qualitative construction performance. Journal of Management in Engineering, 33(5), 04017019. Retrieved from https://ascelibrary.org/doi/abs/10.1061/(ASCE)ME.1943-5479.0000535

Rah.sa.gov.au, (2018). RAH | Royal Adelaide Hospital. [online]. Retrieved from https://www.rah.sa.gov.au/

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