Sample Business Studies Paper on Procurement, Contract Administration, and Law

Determining the most appropriate procurement method can be challenging because the selection criteria involve many factors. The criteria for selecting the right procurement method revolve around the concepts of time, cost, and quality. However, these concepts cannot be solely used to chose be used to choose the right procurement route due to the underlying complexity associated with the priorities of a particular procurement strategy with the needs of the client. Instead, the concepts of time, cost, and quality should aid the decision-making process. In this light, this section will provide the right procurement route for a Pharmaceutical company that wants to build a vaccine production facility as soon as possible. The key to selecting the right procurement route is paying attention to the client’s specific needs and the project’s complexity.

The Needs of the Company and the Specific Features of the Project

The goal of identifying the client’s specific needs is to ensure that the company is satisfied with its building and how it has been procured. First, the vaccine production facility is needed as soon as possible. This implies that the project is required within a very strict timeframe. It also implies that early completion is highly required to the extent that the client wants the project started before the construction design is finished. The certainty of the completion time is very important to this particular client.

Besides, it is an urgent project and requires strict quality, clinical, and regulatory standards. In this case, it is important to choose a procurement route that can ensure the project’s quality in terms of the design concept, construction materials, and workmanship. Given the project’s complexity, it is necessary to settle for a procurement route that can guarantee the building’s high specialization. The building would also require technological advancements to enhance its desired functionalities in adherence to the three principle facets of vaccine facilities’ conceptual design that include the three principle facets include design, technology, and operations. The design of the vaccine manufacturing facility must be good manufacturing practice (GMP) compliant (Gandara, Affleck and Stoll, 2018).  This is to enhance biosafety and contaminant compliance to ensure the employees have a safe working environment and that infectious agents do not leak to the outside environment.  The facility must be designed to ensure the production flow’s efficiency to guarantee the end-users’ safety.

The technology facet provides the platform and technology for the vaccine manufacturing process. In this case, the right equipment must be procured to enhance the vaccine production process’s efficiency.  It is also worth noting that the client is convinced that the project will be rewarding upon completion and provide a generous budget. However, the budget is not unlimited. For these reasons, it is important to note that the three concepts of time, quality, and cost mentioned earlier are at play. They must be used to guide the decision-making process.

Why Management Contracting Strategy is Suitable for The Company

Given the nature of the project and the client’s specific requirements, I think that the right procurement route is the management contracting procurement strategy. The level of urgency of the project requires that the construction time should be reduced. The management procurement route allows an early start on sight to lead to the project’s early completion.  Just like the design and construct route, the management contracting strategy can allow the design and the building process to proceed in parallel, in turn, reducing the project time. The management contracting strategy is the best route in relation to the complexity of the project. The management contracting procurement route creates a good collaborative environment and teamwork among the design consultant, the contractor, and the client (Love et al., 2008).  This will ensure integrating the design and construction skills at an early stage of development, mitigating the project’s complexity. Teamwork and collaboration on the client, design consultant, and contractor can enhance quality assurance.

The other procurement route may jeopardize the quality in one way or another making them unsuitable for this project. For example, the collaborative route may compromise on quality to meet cost targets. The design and construct route limit the client’s control over the design details and the contractor’s design expertise, which may compromise the building’s quality (Love et al., 2009). On the same note, the traditional route is unsuitable because it places the responsibility for the quality wholly on the contractor, which may not be appropriate for urgent projects with the strict quality requirement.

Q2 Procurement Route for The Prison Trust

Based on the project’s conditions and the client’s needs, I think that the right procurement route for the Prison trust in a collaborative procurement approach. Refurbishing 30 existing prisons and building 5 new ones requires a procurement strategy that can enhance the delivery of more for less. The collaborative approach enables clients, design consultants, and contractors to deliver greater efficiencies through combined purchasing power. The collaborative procurement approach is deemed the most effective route in this instance because it helps in building a strong relationship that can, in turn, enhance the delivery of the project in the most efficient way. This strategy enables enhanced collaboration with internal departments, suppliers, other procurement organizations, and mission-driven organizations.  The cross-functional teams must collaborate to ensure an ideal souring situation across all aspects of the project, enabled through collaboration with internal departments. This gives the internal departments a voice when it comes to making supplier selection decisions. In this way, the prison trust will achieve cost efficiency while delivering quality services simultaneously.

Making collaborations with suppliers is a strategic way of acquiring the best quality materials or services at reduced costs. Besides, collaboration with supplies can enhance process improvement and encourage the development of innovative ideas. Also, fostering collaborations with other procurement firms, especially large firms, can enable the Prison Trust to leverage those procurement organizations’ economies of scale. This can enable them to take advantage of large supplier discounts often offered to large organizations that can allow the trust to access quality construction materials and services at reduced costs (Naoum and Egbu, 2015). To achieve this objective, the firm can join a buying consortium of procurement organizations, especially those that can coordinate third-party group purchases. This helps in reducing the cost without the need to reinvent the wheel.

Collaboration strategy can help bring about a mutual effort that can effectively mitigate potential complexities that may arise in each phase of the project. However, one setback of the collaborative procurement route is that quality may sometimes be compromised to meet the targeted budget costs (Agapiou, 2020). This is why collaborating with larger procurement organizations can provide leverage to access quality materials at a reduced cost. Besides, forming a conglomerate with organizations that share the same interests is one of the most effective ways of benchmarking the performance. In this way, the Prison Trust can measure how they are performing against their peers with regard to material quality, service delivery, and project completion time. The collaboration procurement route can help develop or acquire procurement-related expertise that would otherwise be impossible to achieve if operating in isolation.

  1. b)

The collaboration procurement is the most effective procurement route for Prison trust since it is interested in delivering its projects in the most efficient ways. However, if the Prison Trust decides to separate the project and treat each project singly, then the most effective procurement route would be the traditional procurement strategy. The traditional procurement route entails separating design from construction. In this case, the client can have each of the renovation project and the new prisons designed by a consultant of their choice. The consultant can then design project details and also be responsible for cost control measures. The client can then invite contractors to submit quotations or tenders for each project.  Treating each project separately can enhance the outcome’s quality since the client can have closer control over every project. However, it can be hard to manage since the client or project managers may have to communicate with many people simultaneously. The traditional procurement strategy also requires a lot of time, which may not be an issue in this case since the project delivery period is spread over the 4-year time frame

Q3:

  1. Advantages and Disadvantages of using PFI

One of the advantages of PFI is that it enhances the on-time delivery of key projects.  Traditionally, governments have to raise money to fund public infrastructure projects such as roads, bridges, hospitals, prisons, defense contracts, social housing, and schools.  In some cases, the governments may not have the money to initiate these projects and are compelled to raise the capital through other means such as the bond market.  The process of raising the money may sometimes be cumbersome and time-consuming and may eventually delay the delivery of public projects. However, through PFI, public projects can be delivered on time.

Another benefit of PFI is that it helps transfer risks from the government to the private entity. Every project comes with risks and opportunities. As the private sector wants to explore the opportunities, they also bear risks that the government would otherwise bear. It allows the governments to outsource the non-core activities allowing it to focus on highly sensitive projects. PFI saves government money that can be invested in pressuring sectors. Also, the PFI fosters a good relationship between the public and private sectors.

However, as mentioned earlier, using PFI is also associated with some cons. For instance, it reduces the influence of the government on public investments. This makes it difficult for the government to control the completed projects whose contractual periods have not yet matured. In this way, the private firm overcharges the finished project users with little or no government intervention. Also, the term of payment may be unfavorable to the government. The repayment term includes the invested capital plus the interest. The only problem with this arrangement is that it passes the burden to future taxpayers. In some projects, the contractual agreement includes construction and maintenance costs, which increases future tax burden and the project’s costs.

  1. The Advice to the client on the Actions to Take to address Poor Maintenance Issues

The risk of service disruptions and increasing costs arise in situations where authorities fail to prepare for contract maintenance in advance adequately. In this case, until the assets are returned to the public sector, it is appropriate that the client should negotiate with the SPV to determine if the service provider wants to continue running the asset.  This instance aims to ensure that maintaining the PFI contract is aligned with both the current and the future ownership of the schools.  The client must ensure that the service provider is incentivized to use their resources to manage the asset effectively.

The lapse in asset maintenance may result from a lack of the services provided that are likely to end upon the PFI contract expiry. The service provider may be relaxed, knowing that they may not retain the contract when the asset is handed over to the new management. For this reason, the client must communicate with the service provider and inform them that the contract still has ten years to expire. When approaching the service provider, the client should objectively seek to understand if the service provider wishes to maintain the contract for the remaining ten years that the contract will be active. Suppose the service provider expresses an interest in holding on to the contract. In that case, the client should communicate the minimum asset working conditions that must be maintained at all times, without which a replacement of the service provider would be initiated with immediate effect.

The client must maintain sufficient knowledge of all assets’ condition to sustain their qualities at all times. Though it is the SPV’s responsibility to maintain the asset conditions and report to the authority, the client must monitor the asset conditions at all times. To achieve this, the client must frequently request critical data such as ongoing asset conditions and maintenance expenditure from the SPV. The client also must cooperate with relevant authorities to ensure that information is shared freely among the stakeholders.

 

 

 

 

Reference List

Agapiou, A., 2020. Factors influencing the selection of a procurement route for UK offsite housebuilding. Proceedings of the Institution of Civil Engineers-Management, Procurement and Law, pp.1-12.

Gandara, C., Affleck, V. and Stoll, E.A., 2018. Manufacture of third-generation lentivirus for preclinical use, with process development considerations for translation to Good Manufacturing Practice. Human gene therapy methods29(1), pp.1-15.

Love, P.E., Davis, P.R., Edwards, D.J. and Baccarini, D., 2008. Uncertainty avoidance: public sector clients and procurement selection. International journal of public sector management.

Love, P., Davis, P., Baccarini, D., Wilson, G., and Lopez, R., 2009. Capital works procurement: The selection of a building procurement method. Cooperative Research Centre for Construction Innovation, CRC Construction Innovation, Brisbane, Australia.

Naoum, S. and Egbu, C., 2015. Critical review of procurement method research in construction journals. Procedia Economics and Finance21, pp.6-13.