Discuss about the Project Management Application: Case Study Of Regency Plaza.
Construction industry is very diverse which is connected with the economy of any nation heavily. In Australian economy, construction industry plays a significant role, with a total contribution 12.5% of the income of all industries which is higher than its proportion of total workforce. Project management of the construction industry is growing continuously, in context of practices and knowledge, with new innovative and effective development and research in the field. Many industries have accepted the project management, as a result of globalization, international markets and projects, all over the world. Almost population in the modern society is in a close relationship with industry (Deep, Singh, & Banerjee, 2017). Construction industry is full of risks. In 2016, 182 workers fatalities, that is equal to the 1.5 fatalities over 100,000 workers. This was the lowest rate since 2003. All this is because of the construction planning and risk management of the industry (El-Sayegh S. , 2014). This report contains a thorough discussion about the construction planning and risk management of the industry using the given case study of “Regency Plaza”. The report demonstrate the application of project management tools and techniques in complex construction project management situation and analyse the role of project cost supply chain logistics and contractual agreements.
In the construction project management the contract of the work are of different types. These contracts are defined as the procuring the work with some agreement on the payment of the work. On the basis of cost estimation for the contract these contracts are classified as
In the lump-sum or stipulated contract a traditional procuring of the project is followed and still this is the commonly used contract in construction industry. This contract is defined as a fixed price contract in which the constructor undertake the execution responsibility of the total work and charging a fixed amount (Chen, Partington, & Wang, 2008). This contract has an advantage of general predictability, assured maximum price and easy management. It provides a high degree of certainty as per cost the consideration. The payments of this contract are made after the each fixed time interval. This contract is also easy to supervise and manage. But on the other hand in this contract the regency plaza may face some barriers or issue such as it goes for a greater risk to the contractors. The quality change due to cost effectiveness and rejection of the change order request during the construction time also make regency plaza management to reject this type of contract.
This contract charges for the total cost of the work and additional fixed amount of fee, to be paid to the contractor, for the construction. This contract is cleared in terms of legal issues for any further changes. The Depending on the parties there may be different issues and benefits of this contract. This contract has many advantages for the investors like the final cost may be lower than that of in the normal contract, contractor has less incentives to control the total cost of the project etc. On the other side disadvantages of this contract like uncertainty of the final cost for the project, additional requirement for the administration etc. may come before the management of regency plaza. Regency plaza practiced this contract process as one of their choice for the procurement of the work. For finalizing the contract regency group adapted the bidding process in which there was a wide range of prices from different contractors.
This contract is defined as an agreement with the contract in which the final cost of the project will not exceed to the maximum price charged by the contractor for the complete construction. In this agreement if the actual cost is higher for the construction, then the contractor will bear the additional cost without changing the quality or work. In this contract regency plaza management has a legal advantage for any addition cost claim by the contractor and legally the management have an advantage in the situation if there is a quality change in the construction work at any stage of the construction.
The construction management contract includes a third party involvement to deal with the contractor for issues like extension of time claims, inspection of site etc. in this case regency plaza has already hired the representatives for the management of project. In this contract the advantages to the company are such as company management does not required to deal with the contractor directly and also has a legal advantage of client’s responsibility in any legal issue related to the work of contractor.
Design-build and Design-and-construct contract is best defined as the contract under which the contractor undertakes all the responsibility of designing and construction of the building as well (Kwak & Anbari, 2009). In this contract the contractor has to perform two different activities as
All these contracts have their own advantages and disadvantages. But the lump-sum contract is most commonly used type of the contract therefore, there should be some standard criteria to estimate the lump-sum cost of the project so that there are less chances for any legal issue during the work due to some uncertainty of work situations. For the regency plaza project I would recommend the cost of work plus fee with guaranteed maximum price the management has collaborated with the management teams already and now the contract was only required for construction purpose as well as this contract gives an advantage to the builder that the prices finalised in the contract will not change and the quality of the work will be maintained through-out the construction work. This agreement ensure the builder that there is lea uncertainty in the work quality and this can be beneficial for the marketing strategy also.
The Regency Plaza was a mixed use project consisting of the 300- room Regency Plaza hotel and 96 luxury condominiums. This building was a 22 storey steel and concrete structure with a brick and granite façade. It is important to plan before implementation of any project work in construction industry, the whole process of implementation and other possible challenges which may occur at the time project implementation (Vasista, 2017). This planning of the project before starting of the construction work include many tasks like preliminary design, tender invitations, detailed design, risk identification, financial investors etc. Just prior to the beginning of the construction work there are many challenges for the client like; time constraints, government regulations, lack of communication, managing document and files, integrating technology etc. In case of regency plaza project pre-planning there were some issues related to the design like layout and size of the floor plate, column spacing and elevator core location. Other challenges were about the number of condominium units to be built in the project work. In order to mitigate all these barriers prior to the construction work a project management team is required to deal with all these barriers to the construction. In this scenario the regency plaza management had appointed the Hodgkins as the project manager and KDS associates for the project management related to the construction work of their respective parts. At last the project decided to be proceeded with 96 units of condominium rather previously designed 72 units. To meet the on time delivery of project with a low cost and high delivery, a timeline for the delivery of project is set in the project scheduling. To meet this target the timeline setting is much more important for the activities associated with the project and their inter-relationship during the construction work. The key objective of schedule management is to avoid missing the deadlines which are set to deliver the project components at every stage. In this approach the schedule management identify different stages of the project, phases, and activities which are assigned to respective team members. The management schedule these activities, restricting them to meet their deadline which measures the important dates used to check the progress of the work. The management interfaces directly with cost, effect and quality optimization also the activities and roles must be defined, co-ordinated and monitored to meet the on time delivery of project. In this way the monitoring will prevent any extra cost of material and labour for poor work done without monitoring of the quality as poor quality may result in rework.
Construction work on any project would be easy to implement if it is carried out in different phases. It makes the project planning and management team to work on individual phases easy. Work breakdown of any project is defined as the “deliverable oriented decomposition of the whole work which is to be executed by the team”. It will define the scope for manageable part of the management that the team can understand each stage of the project very clearly, as each level off the WBS provides a further detailing of the project interrelated to the previous level (Hans, 2013). For example
In this way the total project for the construction of a house is divided into three different levels in which the management team can focus on individual level separately and will be able to execute their work more effectively.
Cost breakdown is similar to the work breakdown structure in project managing practices. To cost of construction predefined for respective work tasks. This is important practice to manage and control the total cost of the project. In this structure formation the cost analysis and working within the predetermined cost makes the project to be completed within the proposed budget. For the regency plaza project I would go for a cost breakdown structure prepared for individual activity. In this type of cost breakdown structure the cost of individual activity will be predetermined and a same budget will be provided for the activity. In this way there will be a complete control over the total cost of the project as well as the activity. In this way it will be easy to maintain the limits of budget for individual activity.
Communication management plan
Communication management planning considers performance of the organization environment and also includes the culture and expectations of the organization. This management require the information and communication needs of the stakeholders. A clear and effective communication requires the handling of communication in a well-defined structure and the selection of best mode or type of the communication (Soliman, 2017). The communication plan has the following component in its structure:
To address the stakeholder’s expectations I decided to use all three types of the communication to maintain the communication throughout the construction work. The formal written mode helped us to communicate for serous changes required and formal verbal communication during the presentation and speeches. The third mode, informal verbal communication, was used to minimize any communication gap between the different contractors throughout the work (Haron, Devi, Alias, Tahir, & Harun, 2017).
Stakeholders concern more about the cost of project and its outcome therefore, while addressing the stakeholders every detail related to the changes to be made is required during the meeting (El-Sayegh S. M., 2014). These details describe about the changes and its effect on the cost of project as well as the profit increment due to proposed changes (Teixeria & Pereira, 2015). The presentation of these changes requires the cost required, its effect on total budget and its benefit for the project profit etc. for example Hodgkins propose that the condominium portion must have 96 unit in place of 72 and that was expected to hit the project’s pro forma projection to $134 million in gross sale and $26 million in profit from the condominium sales and Grogan proposed to make changes in base building which were claiming for $25,000 for the out of sequence work.
The management wanted a firm commitment for the whole construction work; therefore, I choose to go for bidding process to allocate the construction work to the contractor. When the bids came there was a wide range of bid prices. After four weeks of thorough analysis and review of the bidding prices we came to negotiate with the three lowest bidders. The lowest price in the bidding process for tender was a bid of $157 million proposed by the Kelly Construction and they were also convinced to cut their estimated time by 3 months. This makes the schedule very tight but as there were only few changes, they did not expect any problems in reaching their deadline (Chen, Partington, & Wang, 2008). And Kelly construction agreed to meet the deadline expected by our plan and they got the project. This closure of the contract was made for the Kelly construction and asked them to start the construction as soon as possible.
The construction of the condominium portion was expected to meet million in gross sales and making a $26 million profit. The duration of the construction work was 29 months. But at ending time the project was delayed and only 30 units were sold out. The project was designed for 22 storey building construction. The first 2 floors were designed to be used by both the hotel and condominium users, nest 8 floors were hotel rooms and the nest 12 floors are containing the condominium units. The plaza was provided with 300 parking spaces. The changes made by Hodgkins reduced the floor (Szymanski, 2017)area of each condominium unit to 1400 square feet to construct 96 units.
In construction project main points, for the assessment of employee performance appraisal, working within deadline, less impact on cost increment, fewer changes to be made and working with the design properly. All the assessment is based on these outcomes and the performance appraisal also depends on these assessments. In regency plaza project the work was delayed already making the contractor failed to meet the deadline. This made a bad impression for their appraisal but the cost factor was favourable for the contractor.
Team reassignment is to be done at time, when one team is failing to meet the deadline or affecting the work process of other activities interrelated to the one. When the contractor declines to work for further construction, management has to reassign the task, to other contractor or subcontractor (Ibrahim, Kaka, Trucco, Kagioglou, & Aouad, 2018). At the time of regency plaza construction many times there was a situation when the contractors asked to make some changes in the design for their convenience or sometimes to meet the budget problems but the issues were handled very carefully and made no reassignment during the construction. The project was carried out with proper planning and essential preparations. The management team managed the work from tendering to the marketing.
Conclusion
During the construction work there were some changes which were delaying the project to meeting the deadline could be resolve if the designing part was discussed in detail with the contractors and the changes require made at the beginning. Hodgkins was worried about the project. Condominium sales were slow and the local economy appeared to be weakening. The project was behind the schedule and over budget. The general contractor was angry about both the number and frequency of changes that were taking place on the project. Since there were issues related to design came to knowledge working on site but some of them which were general could make the gap of deadline minimum. Overall management of the project was enough good to be beneficial in terms of the profit and fulfilled the demand for project planning and management.
References
Chen, P., Partington, D., & Wang, J. N. (2008). Conceptual Determinants of Construction Project Management Competence: A Chinese Perspecctive. International Journal of Project Management, 26(6), 655-664.
Deep, S., Singh, M. K., & Banerjee, R. (2017). Risk Management in Construction Projects as per Indian Scenario. International Journal of Civil Engineering and Technology, 8(3), 127-136.
El-Sayegh, S. (2014). Projecct Risk Management Practices in UAE Construction Inndustry. International Jouranl of Project Organization and management, 6(1/2), 121-137.
El-Sayegh, S. M. (2014). Project Risk Management Practices in UAE Construction Indusrty. International Journal Project Organization and Management , 6(1-2), 121-137.
Hans, R. T. (2013). Work Breakdown Structure: A Tool for Software Project Scope Verification. International Journal of Software Engineering and Applications, 4(4), 19-25.
Haron, N. A., Devi, P., Alias, A. H., Tahir, M. M., & Harun, A. N. (2017). Project Management Practoces and its Effects on Project Succedd in Malaysia Construction Industry. International Conference on Architecture and Civil Engineering (pp. 1-7). Material Science and Engineering.
Ibrahim, Y. M., Kaka, A. P., Trucco, E., Kagioglou, M., & Aouad, G. (2018). Semi-autometic Development of the Work Breakdown Structure (WBS) for Construction Projects. Retrieved from https://www.irbnet.de/daten/iconda/CIB16457.pdf
Kwak, Y. H., & Anbari, F. T. (2009). Analyzing Projecct Management Research: Perspective from Top Management Journals. International Journal of Project Management, 27, 435-446.
Soliman, E. (2017). Communication Problema Causing Government Projects Delay: Kuwait Case Study. International Journal of Construction Project Management, 9(1), 1-18.
Szymanski, P. (2017). Risk Managemeent in Construction Projects. Procedia Engineering , 208, 174-182.
Teixeria, C. S., & Pereira, L. L. (2015). Pereira Diamond: Benefits Management Framework. The International Journal of Business & Management, 3(3), 47-56.
Vasista, T. G. (2017). Strategic Cost Management for Construction Project Success: A Syatematic Study. International Journal of Civil Engineering and Urban Planning, 4(1), 41-52.
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