Assessment Details: Design of Project Delivery System influences the success or failure of the implementation phase of projects and programs. It is not just about selecting a contact model; it...

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Assessment Details:


Design of Project Delivery System influences the success or failure of the implementation phase of projects and programs. It is not just about selecting a contact model; it provides a framework for procurement of goods and services needed to implement the project.




This assessment task is based on the review and evaluation of selected project delivery (contract) method. Students will be required to select one of the following five main contract types identified by Kerzner and complete a critical review and evaluation of that contract type
in an industry of their choice.


The five main types listed on pg 975-1014 of the textbook1
are:


1. Fixed-price


2. Cost-plus-fixed fee or Cost-plus-percentage fee


3. Guaranteed-Maximum-shared-savings


4. Fixed-price-incentive-fee


5. Cost-plus-incentive-fee


This assessment task includes three components:




1. A detailed literature review on the selected contract type, including the typical delivery models and contexts
in the field or industry of interest.


2. A detailed evaluation of the suitability of the methodology for successful project delivery in the chosen field or industry of interest.


3. A consideration of the relevance of the contract type together with conclusions and recommendations for future use of the method.








Assessment 3: Critical review and evaluation of a selected topic Due date: Week 9 Group/individual: Individual Word count / Time provided: 2000 words Weighting: 30% Unit Learning Outcomes: ULO-1, ULO-2, ULO-3, and ULO-4 Assessment Details: Design of Project Delivery System influences the success or failure of the implementation phase of projects and programs. It is not just about selecting a contact model; it provides a framework for procurement of goods and services needed to implement the project. This assessment task is based on the review and evaluation of selected project delivery (contract) method. Students will be required to select one of the following five main contract types identified by Kerzner and complete a critical review and evaluation of that contract type in an industry of their choice. The five main types listed on pg 975-1014 of the textbook1 are: 1. Fixed-price 2. Cost-plus-fixed fee or Cost-plus-percentage fee 3. Guaranteed-Maximum-shared-savings 4. Fixed-price-incentive-fee 5. Cost-plus-incentive-fee This assessment task includes three components: 1. A detailed literature review on the selected contract type, including the typical delivery models and contexts in the field or industry of interest. 2. A detailed evaluation of the suitability of the methodology for successful project delivery in the chosen field or industry of interest. 3. A consideration of the relevance of the contract type together with conclusions and recommendations for future use of the method. 1 Kerzner, H 2017, Project management: A systems approach to planning, scheduling, and controlling, 12th edn, John Wiley & Sons, New Jersey. ( Page | 6 ) ( Asia Pacific International College Pty Ltd. Trading as Asia Pacific International Colleg e 55 Regent Street, Chippendale, Sydney 2008: 02-9318 8111 PRV12007; CRICOS 03048D Approved: ) Marking Criteria and Rubric: The assessment will be marked out of 100 and will be weighted 30% of the total unit mark Marking Criteria Not satisfactory (0-49%) of the criterion mark) Satisfactory (50-64%) of the criterion mark Good (65-74%) of the criterion mark Very Good (75-84%) of the criterion mark Excellent (85-100%) of the criterion mark Literature Review of Project Contract method. (30% marks) Lack of evidence of academic writing. No clear understanding and exploration of literature review topics related to project delivery systems and no demonstration of evidence from current/past academic studies. Has demonstrated basic comprehension of the subject. Limited additional evidence and insights that add significant value to the topic. Mostly, one singular viewpoint that does not integrate the viewpoints of the group into a coherent structure to address the given topic. Some resources selected are of the appropriate type and directly address the given topic. Often demonstrates a clear comprehension of the subject in the reading/topic with many additional evidence and insights often cited. Good link between practice vs. theory to the topic. Often integrates multiple viewpoints and weave both class and group views into a coherent structure. Generally, resources selected are of the appropriate type and directly relate to the given topic. Generally, demonstrates a clear comprehension of the subject in the reading/topic with many additional evidence and insights. Very good link between practice vs. theory to the topic. Generally, integrates multiple viewpoints and weave both class and group views into a coherent structure. Most resources selected are of the appropriate type and directly relate to the given topic. Has demonstrated a clear comprehension of the subject in the reading/ topic with additional evidence and insights. Has added significant value of practice vs. theory to the topic. Integrates multiple viewpoints and weave both class and group views into a coherent structure. All resources selected are of the appropriate type and directly relate to the given topic. Evaluation and Critical Analysis of the selected project delivery method in the identified industry. (40% marks) Is missing or provides poor quality critical reasoning. Is missing or provides poor quality or inappropriate supporting evidence. Is missing or provides inaccurate evidence and logic of argument. Is missing or provides Inaccurate discussion of weight of existing evidence. Uses limited critical reasoning and argument and supporting evidence. Presents limited evidence and logic of argument. Provides a limited discussion of weight of existing evidence Uses good critical reasoning and argument, supported by good quality, relevant evidence. Presents good evidence and logic of argument Provides a discussion of weight of existing evidence. Uses high- quality critical reasoning and mostly clear and logical arguments, well supported by high quality, relevant evidence. Presents evidence and excellent logic of argument. Provides good discussion of weight of existing evidence, demonstrating a critical approach to the evidence. Uses sophisticated critical reasoning and clear and logical arguments, well supported by high quality, well-chosen evidence. Clearly presents evidence and sophisticated logic of argument. Discusses the weight of existing evidence in depth, demonstrating a sophisticated critical approach to the evidence. Relevance, Conclusions and recommendations (20% marks) Is missing or provides inaccurate conclusion and/or recommendations, Provides a limited conclusion and some recommendations, with limited Provides accurate conclusions and reasonable recommendations Provides accurate conclusions and feasible recommendations Provides sophisticated conclusions and without sufficient consideration of drawn logically drawn logically from recommendations consideration of limitations of the from the evidence, the evidence, drawn logically from limitations of the evidence. considering the considering the the evidence, evidence. Is missing or Articulates options major limitations limitations of the considering the does not articulate for risk management, of the evidence. evidence. limitations of the options for risk including limited Articulates options Articulates options evidence. Clearly management. Is critique of the for risk for risk articulates options missing or provides options and management, management, for risk including inaccurate critique of recommendations. including some including some sophisticated the options and critique of the critique of the critique of the recommendations options and options and options and recommendations recommendations recommendations. Referencing (5% Includes identifying Includes identifying All references All references cited Harvard formatting marks) information with information with cited correctly correctly using style and citation of many errors in format. some errors in using citation style citation style. Paper references in the Paper is poorly format. Paper shows with some minor is generally well body of the report. organized and difficult some organization. errors. Paper is organized and most Paper is coherently to read – does not At times, difficult to generally well of the argument is organized, and the flow logically from one read and does not organized and easy to follow. logic is easy to part to another. flow logically from most of the Writing is mostly follow. Include few references one part to another. argument is easy clear. Writing is clear and without following Few references with to follow. Writing concise and Harvard style errors. is mostly clear but persuasive. reference guidelines may lack or no reference. conciseness Structure, Paper is poorly Paper shows some Paper is generally Paper is generally Paper is coherently grammar and organized and difficult organization. At well organized and well organized and organized and the presentation (5% to read – does not times, difficult to most of the most of the logic is easy to marks) flow logically from one read and does not argument is easy argument is easy to follow. There are no part to another. There flow logically from to follow. There follow. There are spelling or are several spelling one part to another. are some spelling only a few minor grammatical errors and/or grammatical There are some and/or spelling or and terminology is errors; technical terms spelling and/or grammatical grammatical errors, clearly defined. may not be defined or grammatical errors; errors; technical or terms are not Writing is clear and are poorly defined. technical terms are terms are clearly defined. concise and Writing lacks clarity generally are poorly generally are Writing is mostly persuasive. and conciseness. defined. poorly defined. clear. Writing is mostly clear but may lack conciseness. someTitle Contract Management1 975 Related Case Studies (from Related Workbook Exercises PMBOK Guide, Kerzner/Project Management (from Kerzner/Project Management 5th Edition, Reference Case Studies, 4th Edition) Workbook and PMP/CAPM Exam Section for the PMP Study Guide, 11th Edition) Certification Exam • The Scheduling Dilemma* • Multiple Choice Exam • Procurement • To Bid or Not to Bid* • Crossword Puzzle on Procurement Management • The Management Reserved* Management 19.0 INTRODUCTION In general, companies provide services or products based on the require- ments set forth in invitations for competitive bids issued by the client or the results of direct contract negotiations with the client. One of the most important factors in preparing a proposal and estimating the cost and profit of a project is the type of contract expected. The confidence by which a bid is prepared is usually dependent on how much of a risk the contractor will incur through the PMBOK® Guide, 5th Edition Chapter 12 Procurement Management *Case Study also appears at end of chapter. 1. The title of this chapter has been changed from Procurement Management in the Ninth Edition to Contract Management in this edition. Contract management includes procurement management. Procurement manage- ment is the buyer’s side of contract management, and sales/proposal management is the seller’s side of contract management. All those sellers (contractors) managing project contracts may not find it necessary to use the PMBOK® Guide, Chapter 12, because they may not be procuring anything. 19 c19.qxd 1/3/13 5:16 PM Page 975 Kerzner, Harold, and Harold R. Kerzner.
Project Management : A Systems Approach to Planning, Scheduling, and Controlling, John Wiley & Sons, Incorporated, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/apicollege/detail.action?docID=1113482. Created from apicollege on 2019-07-22 16:16:51. C op yr ig ht © 2 01 3. J oh n W ile y & S on s, In co rp or at ed . A ll rig ht s re se rv ed . contract. Certain types of contracts provide relief for the contractor since onerous risks2 exist. The cost must therefore consider how well the contract type covers certain high- and low-risk areas. Prospective clients are always concerned when, during a competitive bidding process, one bid is much lower than the others. The client may question the validity of the bid and whether the contract can be achieved for the low bid. In cases such as this, the client usu- ally imposes incentive and penalty clauses in the contract for self-protection. Because of the risk factor, competitors must negotiate not only for the target cost figures but also for the type of contract involved since risk protection is the predominant influential factor. The size and experience of the client’s

Answered Same DayApr 22, 2021SBM1202

Answer To: Assessment Details: Design of Project Delivery System influences the success or failure of the...

Tanmoy answered on Apr 24 2021
157 Votes
Review & Evaluation of Cost Plus Incentive Fee Contract Project Delivery Method
Review & Evaluation of Cost Plus Incentive Fee Contract Project Delivery Method
Industry - Construction
Srikanth
Cost Plus Incentive Fee Contract Method – Building Construction Industry
Cost plus Incentive Fee Contract Method
Cost plus incentive fee contract method is a type of fixed priced contract which provides additional financial incentive to the contractors for executing and maintai
ning cost of the project at a low cost. In this contract the contractors get awards in the form of incentives on meeting the demands of client’s criteria as per the contract agreement.
Cost plus incentive fees are kind of a reimbursement method and are also modified as fixed price agreements. The best example is of the cost plus incentive fee contract. The client pays a certain amount of incentive to the contractor on maintaining the cost of the project under the budgeted threshold. Hence, the cost plus incentive contract method is a form of savings where the contractor earns an incentive on completion of the contracted work ahead of the schedule. The incentive procedures in this type of contract is pre-agreed and negotiated between the client and the contractor. The concept of incentive in cost plus incentive fee scheme comes into play when the actual cost of project achieved is lower than the projected or originally agreed cost of contract. A cost plus incentive fees should include in itself the below components:
1. Target Cost of the project
2. Base pay for the contractor
3. A method to calculate the bonus and incentive
4. Minimum payment to be made to the contractor
5. The maximum amount that should be paid to the contractor
Additional components that must be included in the contract are as follows:
1. Target price
2. Minimum price
3. Maximum price
4. Fee or price adjustments methodology
The calculation of fees to be paid to the contractors should be based on the above methods built for the contracts and must be paid only once the project is fully completed. The financial risk of the project is shared mutually among the contractor and the client during the cost plus incentive fees contract.
Hence, cost plus incentive fees contract is considered as hybrid contract as it a combination of cost plus contracts and firm fixed price. The cost plus incentive contract utilizes special types of contracts and the contractor and the client of the business determines the techniques to divide the risk associated with the project. This is based on either of the parties associated with the business. ((UpCounsel; Cost plus incentive fee contract: Everything you need to know; 2020)
Both the parties in the contract have the opportunity to discuss on the viewpoint of the business and reach an agreement that is beneficial for both from the business and project point of view. The incentive fees can increase more than the target fees potentially with justified reasons. This is only possible only when the actual cost realized is below the target cost. But, if the actual cost is more than the target cost, then the target fees will decrease. This is as per the policy of the cost plus incentive contract. These potential variations are built in the treaty as a method of providing the contractor with the bonus incentives to administer the project efficiently and economically.
If the actual total cost of the project realized is higher or lower than the target cost as decided in the contract, the contractor will be paid the total allowable cost with one of the two probable amendments which are as below:
1. Minimum incentive fees will be paid if the total actual costs incurred during the tenure of the project is more than the total target cost.
2. The contractor will receive maximum incentive fees if the total actual cost recognized after the completion of the project is less than the total target cost.
Construction project management with cost plus incentive contract method
The construction project is mission based and is considered to be completed only when the structure is fully finished. While project management deals with the life cycle of the project through various methodologies and techniques which helps to control the time, cost, quality and goals of the project. Project management in construction industry deals with different disciplines in the lifetime of the project which includes from architectural to engineering and from public works to city planning and management.
The different types of construction projects are:
1. Residential building and reconstruction projects
2. Construction of heavy industrial equipments
3. Commercial and institutional constructions
4. Heavy engineering constructions
Hence, the...
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