Reference no: EM131912239

Introduction

APIC CONSULT serves as a general contractor and project consultant to private companies and government agencies. Your manager just got a new project for APIC CONSULT and has asked you to study it and advise the client on selecting the best project delivery system, financial contract type, and procurement method for the project.

The project information is presented below which contains by a series of facts and assumptions. Remember that there will be more than one way to select the "most suitable' project delivery system and financial contract type. This selection depends on what you consider the most important factors related to the project (e.g., time, budget, quality, communication, ...). The key is to have a logical and systematic analysis that is consistent with your client's overall needs.

Based on the material provided to you on tutorial week5, you need to develop an evaluation matrix. Figure 1 is an example of an evaluation matrix which you need to prepare for delivery system, financial contract type and procurement method selection.

You are expected to document your answers and provide a detailed explanation of your decisions regarding the project delivery system and financial contract type. Please document all the assumptions you make and explain, in a very professional way, each number you assign to every cell in the matrix.

Project Description

The existing Sydney motorway network (including the M5 Motorway, M5 East and the M4 Motorway) carries high levels of average weekday and peak hour traffic, including large volumes of heavy vehicles from western Sydney to and from the Port Botany/Sydney Airport economic zone.

Parramatta Road just east of Norton Street is forecast to carry up to 80,000 vehicles per average weekday compared with 65,000 vehicles per average weekday in 2012.

This equates to 24 per cent growth

The M5 East is forecast to carry 112,000 vehicles per average weekday compared with 98,000 vehicles per average weekday in 2012. This equates to 14 per cent growth.

In an area of rapid growth that has deemed the current roads insufficient for growing demand and with an existing infrastructure, the Widening of the existing M4 Motorway from three lanes to four lanes each way from Church Street to Homebush Bay Drive is a major project was a major undertaking.

After an intensive selection process performed by NSW Government, the AUD 16.8 billion construction project was awarded to WestLINK , jointly with other contractors. Beginning with the award of the contract in early 2015, the difficult task of constructing 33 kilometers of motorway to link western and south-western Sydney with the city began and the work affected the daily lives of many individuals. The WestLINK project will be delivered in 3 stages to 2023.

After a massive demolition undertaking, the reconstruction process included widening the new freeway from 4 to 8 lanes, increasing the vertical clearances, and constructing auxiliary lanes between interchanges. The new and improved highway is expected to introduce a great relief on traffic management system and remove an estimated 4,000 trucks a day from Parramatta Road and putting them underground-triggering the opportunity for neighborhood revitalization.

The Australian Government has committed a concessional funding ($1.5 billion) to the project so that WestLINK can deliver Stage 1 and Stage 2 concurrently in partnership with the NSW Government.

The organizational structure for the M4 widening project is incredibly complex. The project is composed of three very large prime contractors, two very large design firms, three consultants, and two hundred subcontractors. Each group brought with them a unique way of doing business and a distinct company culture.

Dividing up the project and deciding who oversaw which portions of the work was also very complex. With so many different entities participating in the construction, it could be very easy for things to slip through the cracks and for finger-pointing to ensue. Therefore, the selection of an appropriate Project Organization was extremely important.

At the beginning, several contractors who were interested in this project included JPM Co., TOP Construction, and KLG Solution. However, the bonding and working capacity that the project required was so high that none of these contractors would have been able to take on the whole job alone.

Hence all the three prime contractors together created WestLINK Construction, a joint-venture company, which was awarded the primary contract for the project. WestLINK hired three design teams to work with its in-house contractors and owner-retained consultants.

Besides the contractors and the designers, WestLINK also hired two consulting companies as its owner-retained consultant to provide technical and management expertise: Larson and Sons and McCartney Inc.

Larson and Sons was the lead responsible for communicating with the design team to ensure that the work was up to date. This allowed WestLINK to be fairly detached from the project, performing only brief reviews on quality and

overlooking the design teams. Larson and Sons were the technical and management experts while McCartney Inc. was in charge of design issues.

There will be about 180 subcontractors that bid on specialty jobs. In order to ensure that local firms would be employed, subcontracting assignments is established based upon a Competitive Procurement Process for any contract in excess of AUD 1.5 million.

Lastly, there were extensive uses of performance specifications in the RFP (Request for Proposals); and WestLINK assigned the responsibility to the builders to monitor the quality for all quantities of work related to their approaches.

Project Challenges

There were five main challenges faced by this project:

enormous challenge to keep more than 140,000 vehicles moving through the project corridor with a speed limit of 80 kilometre per hour.

Maintaining a fast-track schedule, while controlling costs.

Prioritizing the safety of workers and the public by diverting traffic from Paramatta road.

Creating a unified cohesive team at the management level that included several individuals from the owner, WestLINK and many other organizations.

Meeting the deadline for the 2023. For WestLINK, it was extremely important that the deadline is met with no cost overrun the Government budget.

Deliverable details

1) Project Delivery Method

Recommend the best project delivery method (this is given by the LECTURER) for the M4 widening project based on the criteria that YOU think is most crucial to this project.

Be mindful that the types of delivery methods that need to be evaluated are Design-Bid-Build, Design-Build and CM@Risk. You must document all your assumptions and rationale for the selection of the project delivery system.

All your suggested grading (the criteria, weights, and scores) should come with justification and explain why you gave such grade to each element of the selection matrix.

2) Financial Contract Type

Evaluate and recommend the best financial contract type for the M4 widening project (from the list provided by the LECTURER) project based on the criteria that YOU think are crucial to this project. The types of contract that need to be evaluated are Lump sum contract, Guaranteed Maximum Price Contract and Cost Plus Fixed Fee Contract. All grading must be justified and explained.