Construction Of Queen’s Wharf In Brisbane: Project Background, Delivery Method, And Financial Contract

Project selection

Discuss about the Construction of Queen’s Wharf.

The organization named “APIC CONSULT” generally serves as a general contractor as well as project consultant to various private companies and government agencies which mainly undertake the construction of Queen’s Wharf in Brisbane that mainly aims to connect the various Botanic gardens, Queen’s Street Malls, South Bank as well as Brisbane river. This project is mainly selected as it will put Brisbane on the map as one of the tourists as well as entertainment destination in Australia.

The project reflects on the construction of “Queen Wharf” in Brisbane with the help of the organization named “APIC CONSULT”. It is identified that the project is mainly undertaken because Queen’s Wharf Precinct is the birthplace of European settlement and thus it holds the culturally significant buildings and places in Australia. In order to keep this buildings and places alive, proper restoration work as well as repurposing is needed. Thus, the organization undertake the construction of Queen’s Wharf so that the visitors as well as local people can be able to enjoy the beautifully restored spaces including cultural, dining, hotel as well as entertainment.

It is identified that for the construction, demolition of the non-heritage building generally occurred in the year 2017 however in the year 2018, excavation as well as shoring activities for the future integrated resort development generally took place. The basement excavation is generally expected to be continued until late 2019 when the entire site will get ready for foundations. It is assumed that the total investment will be around $3.6 billion. The development of the project mainly includes world class integrated resort, residential precinct, as well as public infrastructures including public space, pedestrian bridge and repurposed buildings.

The various project delivery methods are elaborated below:

Design and build contract: It is one of the project delivery system that is mainly utilized in order to deliver a project where both construction as well as design services are mainly contracted by a single entity (Yoon, Jung & Hyun, 2016).  It is identified that it generally relies on single point of responsibility contract that is mainly utilized for reducing the risk of the owner by overlapping both construction as well as design phase of the project.

Design Bid Build contract: It is generally known as the design tender. It is considered as one of the project delivery method in which both the agency as well as owner contracts with various entities for the construction as well as design of the project (Gad et al. 2015). There are generally three main sequential phases including the design phase, bidding phase and construction phase which are utilized for project delivery method.

Background of the case project

[email protected] Contract: In this project delivery method, the owner is mainly responsible of hiring the construction manager and will be responsible for the construction of the whole project (Bilbo et al. 2015). It is identified that the construction manager needs to establish proper GMP that is Guaranteed Maximum price which will be provided to the subcontractor after the project design gets completed.

 A table for the Weight and criteria of different project delivery system is provided in the table below:

Criteria	Weight	Project Delivery System
		DB contract	DBB Contract	[email protected] Contract
		Score	Weighted score	Score	Weighted score	Score	Weighted score
Deliverable speed	25	7	175	5	125	8	200
Quality	30	7	210	5	150	4	120
Time	25	1	25	6	150	5	150
Communication	20	6	120	4	80	8	160
Total	100		530		505		630

From the above table, it is reflected that [email protected] have higher score which is 8 and weighted score is 200 whereas the score for DB is 7 and DBB is 5. This is generally due to the pressure that the construction manager faces and they generally have proper time and resources in order to complete the project within the expected time. Communication is also one of the significant factors that assists in successful project completion. It is reflected that score of DB is 6, DBB is 4 and [email protected] is 8 and thus it is identified that construction manager generally has proper skill set for successfully communicating. In addition to this, the quality of the project is considered as one of the key factors for the success of the project. It is found in context to quality, the score of DB is 7, DBB has score of 6 whereas the score of [email protected] is 4. It is found that DB contract has highest point because they the designer as well as builder work together for the project in order to maintain the quality of the project. Moreover, it is found that in context to time DBB has highest as compared to DB and [email protected] This is generally because the build team of the project has the blueprint with the help of the client and they work hard to complete it soon. After properly, analyzing the scores of project delivery methods, it is identified that [email protected] is better for this project as compared to DB and DBB

Financial contract is defined as one of the contract that helps in binding two or more number of parties. The contract is considered as one of the key for creating the relationship between the buyer and the seller as it generally provides a framework in order to deal with each other. The different types of financial contracts are elaborated below:

Fixed Fee-Cost plus Contract: It is found that this type of contract is generally required when the estimated project cost is not known and therefore the contractor have fixed fee for it (Roberts, 2015).  It is found that fixed fee type of contract is quite easier and it generally put the client to a simpler way for making a proper decision.

Delivery method: Different types of delivery method

Lump sum contract: In this type of contract, the contractor took the responsibility for the labour as well a material. This contract generally assists in providing a better protection and it does not have fixed cost (Delmolino et al. 2016). This contract is very much hard to make and it creates lot of difficulties for project initiation.

Guaranteed Maximum Price: This is the contract where the contractor is mainly compensated for the actual costs that is mainly incurred on top. The contractor has the responsibility of limiting the cost if there is cost overrun (Fernández & Gulan, 2015).

The table that is provided below reflects the weight and criteria of the project:

Criteria	Weight	Financial Contract type
		Fixed fee – Cost plus Contract	Lump Sum Contract	Guaranteed Maximum Price Contract
		Score	Weighted score	Score	Weighted score	Score	Weighted score
Contractor’s responsibility	25	7	175	5	125	6	150
Risk	20	4	80	6	120	5	100
Cost	30	5	150	6	180	7	210
Time	25	7	175	4	100	5	125
Total	100		555		525		585

From the table above, it is identified that in context to the responsibility of the contractor, fixed fee contract has the highest score in compared to other financial contracts which suggests that they are responsible for completing the project within the expected time. They are generally responsible of gaining much amount by finishing the task within shorter time and thus they put risk on the client which is not suitable for the construction of Queen’s Wharf. In context to risk, Lump contract has highest risk as the clients of the project know about the project inside and they generally calculate the limit of the cost for the construction of the project. In addition to this, cost is generally considered as one of the significant factors for the project. It is identified that Guaranteed maximum price have the highest score. They generally have proper price limit in order to make the project. It is found that with the help of guaranteed maximum price, the contractor is required to provide the left-over costs to the clients. Moreover, in context to time, it is found that fixed fee financial contract has the highest score and this is mainly because in this type of financial contract, there is no budget constraint and therefore the project manager does not have limit before the initiation of the project. It is found that Guaranteed Maximum price is considered to the best option as fixed cost from the government is approved in order to complete the project with the help of the contractor within the expected time.

 Procurement methods are considered as the procedures that is mainly utilized by procuring the entity for acquiring goods, services as well as works. The various types of procurement methods are elaborated below:

Selection of project delivery method for the project

Competitive: Competitive procurement mainly involves in the opening of a process to tenders in order to obtain the best value. Competitive procurement generally involves the buter to receive bids from sellers or vendors in order to evaluate those bids before the selection of a supplier (Brennan, 2016). 

Negotiated: This is the best method as it is utilized in order to select a contractor without involving in any type of formal advertising or formal price competition. It is found that the rules as well as regulations that are generally employed for specifying the selection of the contractor are generally made as the best advantage for the government (Kornevs, Kringos & Meijer, 2016).

Best Value: This is one of the procurement system that generally looks at number of factors other than the price, including quality as well as expertise during the selection of the contractors and vendors (Gur, Lu & Weintraub, 2017).  In this system, the value that is associated with various procured goods or services are generally described in comparison to the benefits as well as costs.

Criteria	Weight	Procurement contract
		Competitive	Negotiated	Best Value
		Score	Weighted score	Score	Weighted score	Score	Weighted score
Responsibility	25	7	175	5	125	6	150
Risk	20	4	80	6	120	5	100
Cost	30	5	150	6	180	7	210
Time	25	7	175	4	100	5	125
Total	100		555		525		585

From the table above, it is found that in context to responsibility, negotiated has the highest value where in context to cost, best value has the highest cost. On the other hand, it is found that negotiation has the highest score when risk is analyzed whereas competitive procurement contract is at the top when time of the project is concerned. In addition to this, it is found that best value is considered as one of the best option for the organization. This is because it generally looks at number of factors other than the price, including quality as well as expertise during the selection of the contractors and vendors

Risk	Description	Impact	Probability	Mitigation
Schedule slippage	Due to slippage of schedule, it will be quite difficult to finish the project on time.	High	Medium	It is very much necessary to manage the schedule of the project quite effectively.
Improper management	Due to improper management, the project managers are unable to finish the project within the expected deadline.	Medium	Medium	Proper management is necessary for completing the project within the expected time and budget.
Lack of experienced workers	Due to lack of experience, the project managers generally face lot of difficulty in finishing the project.	Medium	High	Experienced workers must be hired.
Lack of project budget	Due to improper budget, the project manager generally faces financial challenges	High	High	The budget of the project must be managed properly.

Problem	Purpose	Outcome	Responsible
Low quality of materials	The main purpose is to use proper quality of materials.	The utilized material quality got improved.	Quality analyst
Inexperienced workers	Due to inexperience workers, it is quite difficult to manage the work.	Experienced workers need to be hired	Human resource manager
Improper management	Due to improper management, it is quite difficult to finish the project.	Proper management is achieved within the project.	Operation manager

 

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