Project Management for Operators of Large Assets

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PROJECT MANAGEMENT FOR OPERATORS OF LARGE ASSETS

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1. Reflection of AS 4120-1994

1.1 Definitions

Tender- A submission made by a prospective supplier responding to the invitation to tender. The tender makes an offer for the supply of goods and services.

Tendering-refer to the supplier requiring to complete a construction work as compared to the process of selecting consultancy services.

1.2 Statements of Ethics

The bidding announcement provided appropriate and relevant information pertaining to the instruction of bidders, construction method, and specified material, supplementary information, permitted adequate and reasonable time to prepare the bids. The bidders were entitled to level playing field to ensure that all bidders had a competitive advantage. The tendering process was fair, simple and concise with possible diligence in offering separate and alternative pricing. An award evaluation was based on the principle of due fairness and responsibilities. The bid practices were standardized and successful bidder was determined on the level of base bids. The contract shall be executed promptly in accordance to the applicable laws and legislations of the terms of contract.

1.3 Tendering procedures covered, including:-

1.3.1 Obligations of the Principal:-

1.3.1.1 Project definition

The project for this tendering is the construction of the Escarpment Boardwalk in the Northern Bank of the River in Parramatta. The Escarpment Boardwalk is a construction in the City of Parramatta that will contain a comprehensive cycleway network occurring through the local government area that will facilitate an alternative transportation mode. The boardwalk will also become a facility for health and recreation activity with the primary component of the networking in the Parramatta Valley Cycleway that traverses the Parramatta River front. When complete, the boardwalk will the link the off roads accessing Parramatta Park, Parramatta CBD and Westmead health facility.

1.3.1.2 Tender documents

Tender documents for the construction of the Escarpment Boardwalk include an invitation to tender, a filled in tender form, pre-construction information, site waste management plan, a contract form, a contract condition, an amendment, a building information modelling (BIM), a BIM protocol, a contractual document, a tendering pricing document, employers information, Escarpment Boardwalk design drawing and specifications (Chen, & Luo, 2014). Copies of the Escarpment Boardwalk tender document are obtained from the City of Parramatta website in the tendering link. Tendering documents can also be obtained from arrangement with the City’s Council Procurement Office through phone call on 9806, 5320.

1.3.1.3 Selecting tenders

Tender selection will be done on the basis of bidder’s interest demonstration of the believe that they have a good level of competition to bidding. The bidders are obligated to demonstrate reasonable costs of the project with actual market testing of major contracts that continue to show a solution for procurement (Chen, & Luo, 2014). The financial tender selection will be based on a cohesion entity with adequate technical feasibility of the project completion.

1.3.1.4 Call for tenders

Call for tenders of the construction of the Escarpment Boardwalk will be advertised in the City of Parramatta website. The tender will target local contractors, who have resources and capable of completing the work within the project period of 5 months.

1.3.1.5 Tendering methods

The Escarpment Boardwalk construction will be done through selective tendering where the city will make an announcement to invite contractors to make application. The applicants will receive a list of information required during the bidding process. A pre-qualify selection will be done where the selection merit will be done according to a contractor with experience, financial soundness and having resources to complete the work.

1.3.1.6 Tendering inquiries

Tendering inquiries will be made through the City of Parramatta website. Interested bidders can also directly contact the City of Parramatta procurement office through mail or phone. The purpose of inquiry is to determine whether there are other issues that have changed since the public of the advertisement.

1.3.1.7 Amendments to tender documents

Amendment of the tender documents may occurs. The potential bidders should understand that the conditions of the project and financing can be done at different levels while designing complementary modifications of the tender documents (Chen, & Luo, 2014). Activities that will be based on the Amendment documents include clarification of the project activities depending on the conditions for change.

1.3.1.8 Receipt of tenders

The tenders are received through the online platform through the City’s Website. The tender submission processes may be amended to the extent necessary to accommodate the system requirements of the construction. During receipt, city nominated two procurement officers to receive the tenders. Reception include secure and confidential storage of the received tenders. The process include setting a specific receive time and reception begins immediately the time collapse (Chen, & Luo, 2014). All Tenders received and their movements should be logged using the Tender Registration Schedule template. The completed Registration Schedule should be kept on file as the official record of the receipt of tenders.

1.3.1.9 Closing of tenders

The tenders will be closed upon selecting a successful tender where all protocols of the tender will be followed.

1.3.1.10 Evaluation of tenders

After tender opening, the tenders will be evaluated on the basis of determined responsiveness, detailed examination of technical provision, financial evaluation, combined technical and financial score and post qualification due diligence requirement. These stages will follow the pre-qualification process as highlighted in the conditions of states of bid document where the conditions for evaluation are not limited to certificate of registration, valid tax compliance certificate, certificate of confirmation of directors and shareholders of the company, class of licenses, proof of payment of tender document, provision of bid security and certification of any other condition given for the tender.

1.3.1.11 Negotiation and selection

Bidding & Negotiation involves organizing a bidding process, making a contractor selection, and negotiating a construction contract. For the current project, there is no contractor in mind hence negotiations should be done. Negotiating the construction contract should be conducted judiciously. The selection will make use of highly experienced architects who will ensure that a proven selection process will result to the best contractor. Selection and negotiation will be completed together where each potential contractor for a variety of standard qualities pertinent to a successful project. Contractors are also free to sell themselves.

1.3.2 Obligations of the Tenderers:-

1.3.2.1 Genuine belief

Tenders should be submitted when tenderers understand their obligation. Tenders are only submitted if Tenderers genuinely believe that they have the capability and resources to undertake the work being tendered. Tenderers that may have a conflict of interest (at a personal or company level) must declare that interest as soon as the conflict is known to allow appropriate assessment and resolution by the Client and it’s Probity Auditor. In the case of Selected or Invited Tenders in which a Tenderer decides not to proceed with the Tender, the Tenderer promptly advises the Client. It is noted that in the case of Pre-Qualified

Tenders, Tenderers should be required to provide an undertaking to tender if selected.

1.3.2.2 Return of documents

Tenderers are to return, with their tender such planning information and charts as described in the invitation to tender, and (where applicable), this shall be related to the milestones in the Pricing Schedule. This information shall, when agreed with the Contract Manager, form part of any contract. Tenderers are to return with their tender proof of qualification for all professional staff they propose to use for the execution of the contract. It is the tenderer's responsibility to familiarise itself with the work to be performed, contract conditions, location of work, programme and all other matters requiring consideration in order that the tender will be firm and comprehensive.

1.3.2.3 Evaluation of tender documents

Evaluation of tender documents is done to enhance select qualified tenderer for contracting. For the Escarpment Boardwalk tenders will be evaluated on the basis of several outlined criteria. Tendering organisation or any directors or partner or any other person who has powers of representation, decision or control been convicted of any of the following offences:

- Rejection for Bankruptcy

- Grave professional misconduct

- Convictions of a business related offence

- Non-fulfillment of social security and tax obligations and personal misconduct as deemed possible

Financial Standing

Tenders will be due for acceptance on the basis of financial standing as provided by the Audited Statements of Accounts for the last two years (or alternative means of demonstrating financial status if trading for less than a year). Evidence of Employers Liability and Public Liability insurance (EH normally requires a minimum of $5M cover).

Technical Capacity/Ability

Tenders will also be evaluated for consideration if tenderers provide evidence of working in similar projects in the past three years. The tenderer must demonstrate compliance with invitation to tender documentation and following of all tender requirement.

1.3.2.4 Formulation of tender and estimates with respect to:-

1.3.2.4.1 Project labour

The contractor shall comply with the existing local labour laws, regulations and labour standards. In this regard, the contractor shall formulate and enforce an adequate safety program with respect to all work under this contract, whether performed by the contractor or his sub-contractors. The contractor has assurance from the Employer of cooperation where the implementation of these safety measures requires joint cooperation. Upon written request of the employer the contractor will remove or replace any of his employees employed under this contract. The contractor shall obey, in accordance with the Workman’s Compensation Act and other regulations in force, pay compensation for loss or damage suffered in consequence of any accident or injury or disease resulting from his work to any workman or other person in the employment of the contractor or any sub-contractor.

1.3.2.4.2 Project plant

Major items of construction plant and equipment proposed for use in carrying out the Contract must be outlined in the tender application. Contractors should understand that only reliable plant in good working condition and suitable for the work required of it shall be shown on this schedule. The tenderer will also indicate on this schedule when each item will be available on the work station. Included also should be a schedule of plant, equipment and material to be imported for the purpose of the contract, giving details of make, type, origin and CIF value where appropriate.

1.3.2.4.3 Project materials

Engineer shall award the Contractor payment of such sum as in his opinion shall be reasonable giving regard to all material and relevant factors including the Contractor’s on costs and overheads, and the nature of the instruction to adjourn the contract. Included also should be a schedule of plaint, equipment and material to be imported for the purpose of the Contract, giving details of make, type, origin and CIF value as appropriate.

1.3.2.4.4 Project sub-contractors

If the tenderer wishes to sublet any portions of their works under any heading, he must give below details of the sub-contractors he intends to employ for each portion failure to comply with this requirement mat invalidate the tender.

· Portion of Works to be sublet with the full name of the sub-contractor and address of head office.

· Sub-contractor’s experience of similar works carried out in the last 3 years with contract value.

1.3.2.5 Submission of tenders

All tenders are submitted online. Tenders must be received by the City at the online link specified in clause the city's website and on the date and time specified in the Letter of Invitation, subject to the provisions of the invitation clause. Proof of posting will not be accepted as proof of delivery and any tender delivered after the above stipulated time, from whatever cause arising will not be considered.

1.4 Confidentiality

After the public opening of tenders, information relating to the examination, clarification, evaluation and comparisons of tenders and recommendations concerning the award of Contract shall not be disclosed to tenders or other persons not officially concerned with such process until the award of Contract is announced. Any effort by a tenderer to influence the Employer in the process of examination, evaluation and comparison of tenders and decisions concerning award of contract may result in the rejection of the tenderer’s tender.

2. Financing justification and financial arrangements of the project by the Principal, including:-

2.1 Source of funds, i.e. capital funds or operational expenses

The source of funding for the project will be highlighted from consideration of the firms owned by the individual contractors. The tender will include audited financial statement of the last five years of the firms that will fund the project. The financial statements must be certified and supported by the tax return certificates.

2.2 Project selection criteria

The project selection criteria will be based scoring and satisfactorily meeting the following criteria requirement:

· Ability to meet timescale

· Compatibility the project variables

· Pricing of the tender

· Approach undertaken to the work involved

· Provision of warranty support period and design life

· Ability to compliance and specification

· Proposal for liaison with employers staff and other parties of the project

· Demonstration of quality assurance and quality checking systems

· Health and Safety arrangements

· Contingency arrangements

The above list of criteria measure will be weighed and measured in terms of percentage. The highest scoring tender is likely to proceed to the final interview for selection.

3. Contractual terms, including:-

3.1 Nature of Contract

The nature of the construction project is complex. A variety of factors make the construction contract different from most of other contracts. The complexities include the length of the project, the size of the project, the price, amount of work and change of proceeds, allocation of risks of contract, factors of consultation, additional costs that are being incurred, the structure of the virgin ground, demolition of existing structures and extension of linking infrastructure (Lam et al., 2007). The construction project include foundation digging, regulation and provision of administration site-based complications.

3.2 Service of Notices

The contract will have services of notices and the procedures for notifying changes in the address of services of notice. The service of notice include a contract naming a company officer who will receive services of notices. The contact should be within the construction site and contract signed must accommodate services of notice. The means of intended delivery is by mail.

3.3 Assignment and Subcontracting

No single subcontract may be for more than 10 percent of the Contract Price nor shall the sum of all subcontracts exceed 25 percent of the contract price. No one subcontractor may be awarded subcontracts to a total value greater than 10 percent of the Contract Price. All subcontracts greater than 2 percent of the Contract Price are to have the prior consent of the Engineer. The Contractor shall however, not required such consent for purchases of materials or to place contracts for minor details or for any part of the Works of which the manufacturer of supplier is named in the Contract. Any such consent shall not relieve the Contractor from any liability or obligation under the Contract and he shall be responsible for the acts, defaults and neglects of any subcontractor, his agents, servants or workmen as fully as if they were the acts, defaults or neglects of the Contractor, his agents, servants or workmen.

3.4 Statutory Requirements

The construction project comply with statutory laws and regulations of the land. Law as used in this paragraph includes statutes and regulations adopted as well as executive orders, authoritative interpretations and other rules and directives issued by legally constituted authority.

3.5 Examination and Testing

The Candidate shall carefully examine the project site and shall investigate and be satisfied as to the conditions to be encountered, the character and quantity of surface and subsurface materials or obstacles to be encountered, rights of way and easements at or near the site, the work to be performed, and the materials to be furnished as required by the RFP. Any failure by the Candidate to acquaint itself with information that is available or with reasonable investigations that may be available will not relieve it from responsibility to properly estimate the difficulty or cost to perform the work. Such examination does not require independent underground soil borings unless required elsewhere.

3.6 Progress and Programming of the Works

The work will progress as programed and the foreman shall prepare daily reports, which include worker count and work in progress provided upon employer request.

3.7 Suspension of the Works

In case of work suspension because of any reason whatsoever, the project designer or planner will be responsible for all material left. The material should be properly stored with proper drainage and under erection of temporary structures.

3.8 Delay or Disruption Costs

The project must be designed and planned in a manner that there will be no delay of the work. However, delays must be adequately accounted for without development of alternatives to project continuity. The project contractor must submit at least four alternative to mitigate project delays.

3.9 Defects Liability

The project contractor must have defects liability certificate. The certificate must show how the project manager and the correction of defects will contribute to the contractor action. The project liability period must also be named in the contract.

3.10 Variations

The employer reserves the right to accept any project variations and deviations of alternative offer. The variations and deviations of alternative offers are considered as factors with excess of a requirement for tender document. The results may be accrual and without unsolicited benefits to the employer that account to tender evaluation.

3.11 Certificates and Payments

Certificates of payment are mechanisms that allow clients to make payment to the contractors before the project is complete. The certificates of payment outline the payment agreements and particular milestones on how the payment is made.

3.12 Default or Insolvency

The contractor’s insolvency is likely to adversely affect the range of parties in the project including employer. The insolvent contractors are compelled to impecunious compromise of quality that allocate sufficient resources to the project aims and cutting costs. Project payment default or insolvency may result to project underperformance or drop of project quality.

3.13 Termination

Project termination occur after project insolvency. Insolvency and breach of contract may lead to project termination. In constructions contracts the insolvency party is can terminate the project upon the project entering insolvency. If the project enters formal insolvency the employer will withhold all money until the project is complete.

3.14 Claims

Claims can occur from designers, contractors, lenders and owners in the construction project. The parties involved may be making claims or waiving claims occurring in the construction contracts. Claims are made satisfactory when the parties involved agree to the quality of the claim.

3.15 Dispute Resolution and Arbitration

In this project, the employer is not at liberty to arbitrate disputes among subcontractors. The employer is also not at liberty for arbitrated disputes of the subcontractors that concern responsibility for performing any part of the project.

4. Quality Assurance and Control requirements, including:

4.1 Customer quality focus

The project contractor shall be fully responsible for the quality of materials and workers skill in the project. The contractor shall not rely upon the inspection and testing provided by the employer other than those special inspections and tests performed by the employer’s selected laboratories for which there are written reports.

4.2 Quality leadership

Team leaders in the project must at all times possess leadership, communication and negotiation skills with maintained technical and commercial capabilities. The most important skills of the leadership within this project is the ability to maintain critical project objectives in the tendering process. Leaders must be able to solve the project’s conflict of interest.

4.3 Involvement of people

The project involves stakeholders. Early involvement of stakeholders is recommended. Stakeholders need to feel that they are part of the project and can contribute positively to the project. The stakeholders can become involved in project planning. The submission is considered in the basis of project layout occurring in early stages.

4.4 Process approach

The process approach use the most efficient construction method strategies that stay in technical details of worker performance development. The general approach models support of building processes and the re-engineering support of contract implementation with an approach of creating a multiple variant approach to process building and process realization.

4.5 Systems approach

The systems approach focuses on the concepts of information flow within the construction management platform. The system approach defines the information system that will be used in decision-making using structural techniques that enable model information creation with a returned administrative assistance of the improve process flow (Gann, & Salter, 2000).

4.6 Continuous improvement

Continuous improvement process suggests that the process improvement is ongoing improvement with improved products of services and processes. The efforts of continuous improvement are incremental with time breakthrough improvements.

4.7 Mutual benefit

The mutual benefit leads to stakeholders work with the purpose of assigning responsibilities and liabilities. A party is likely to attempt developing matters of subjects that lay emphasis on agreed steps that require address of matters as compared to allocating blame.

5. Safety requirements, including:-

5.1 Safety management review

Within the construction site, the contractor should exercise precaution at all times to protect the persons working on the site and all properties. The contractor is required to install adequate safety guards and provide protective devices, machinery equipment and permanently installed projects to provide and maintain proper and temporary walks, guards, roads, lights, railing and warning signs were application (Huang, & Hinze, 2006). The project construction should comply with applicable laws that relate to safety precautions, which include safety regulations and prevention of accidents.

5.2 Safety measurement and evaluation

The contractor must designate other employees who are responsible for implementing the safety protocol. The safety measurement will be determined by the number and types of safety measures in place to develop regulations of prevention of accidents (Chan, & Chan, 2004). The contractor will outline onsite safety programs including trade sites.

5.3 Safety implementation

Safety implementation policies include designated employees where safety programs undergo renovations, remodel work, expansion and existing building exposure onsite with a lead-containing paint material and flashing pipe joints. Safety programs in the construction site should comply and address all applicable laws.

5.4 Safety planning

The construction project will outline safety planning where hazardous situations will be regarded as safety measures for responsible verification of the local, state and workplace safety guidelines that must be observed (Huang, & Hinze, 2006). In the event of accident the safety program should make available employees copies and the accident report with respective insurance carrier.

5.5 OHS policy

The OHS Policy describe a method for stating how contractors, employees, employers and visitors are expected to behave in a construction site (OHS Policy, n.d). The OHS Policies provides a list of guidelines that are used to enhance safety management plans with work method plans that harmonize the policies of the construction site.

Reference list

OHS Policy n.d. OHS Policies at your fingertips. http://ohspolicy.com.au/

Chan, A.P. and Chan, A.P., 2004. Key performance indicators for measuring construction success. Benchmarking: an international journal, 11(2), pp.203-221.

Chen, L. and Luo, H., 2014. A BIM-based construction quality management model and its applications. Automation in construction, 46, pp.64-73.

Lam, K.C., Wang, D., Lee, P.T. and Tsang, Y.T., 2007. Modelling risk allocation decision in construction contracts. International journal of project management, 25(5), pp.485-493.

Huang, X. and Hinze, J., 2006. Owner’s role in construction safety. Journal of construction engineering and management, 132(2), pp.164-173.

Gann, D.M. and Salter, A.J., 2000. Innovation in project-based, service-enhanced firms: the construction of complex products and systems. Research policy, 29(7-8), pp.955-972.