The project for which this procurement manual is made is in the plant and construction sector; specifically, the project is about the procurement and installation of major equipment in a thermal power station. Among the equipment to be installed include generators, boilers, and turbines, along with their accompanying components and accessories. The customer for the project is the electric power generating company that generates electricity using thermal power. The major customers targeted include IPP’s (independent power producers), government agencies, and wholesale power producers. Below are the basic details of the thermal power plant
The desired goal for the project is quick delivery and installation to get the power generator up and working through modularized step by step approach to delivery. This will enhance efficiency as well as help ensure safety and optimal operation. The supplier will arrange for transportation of all equipment, including extra ordinary loads, to the site of the power plan for installation. The power plant has major equipment and components that are replaced based on a set schedule, after being used for a period of time. This is done to ensure operational efficiency in power generation, as well as to ensure safety of the entire plant and those working in and around the plant. As such, the providers need to have the capacity and experience to manage the project scope and meet the objectives of this project.
Justification
Over 80% of all electricity generated in Australia uses coal energy (‘Origin Energy’, 2015); this is not only bad for the environment in terms of pollution and emissions; coal mining adversely affects the environment where it is extracted and adversely affects the health of those mining it as well. In line with global trends including the need to conserve the environment and help offset the concept of global warming and climate change, as well as shift to cleaner sources of energy, the authorities are in favor or a thermal power generating plant, with suitable backup to generate electricity. This has been the trend in recent years, with concentrated solar power (CSP) generation being quickly adopted. The Australian outback has the fitting weather and solar radiation that can support large scale thermal power generation (Maher, 2015). The CSP power plants can be considered large scale to very large scale as generating power in megawatts using CSP requires considerable capacity to harness and convert solar energy into kinetic, and then electric energy (Clifton & Boruff, 2010). This also requires a suitable capacity to effectively trap and concentrate solar energy, creating thermal energy that is then converted into kinetic energy to generate clean and renewable electricity. The main aspects of constructing s CSP power plant is efficient tracking and concentration of the solar power, as well as the storage and efficient conversion of the thermal energy into kinetic, and subsequently, electric energy (‘Australian Renewable Energy Agency’, 2017). This tender requires the successful construction, installation, testing, and commissioning of a thermal power generator that uses solar energy where the solar rays must be harvested and harnessed to reach critical thermal level, and then converted into kinetic energy for generating electricity.
Contract Process
The thermal power plant is a complex project that can be long drawn and result in legal and other project issues that can take equally long to settle (Eberhard & World Bank, 2016). The limitations of available resources, and the triple constraints of project finance, scope, and time place enormous challenges on the project hence the need for effective planning and execution (Westland, 2018). To manage the project, this tender will have a project contract governing the relations between the client and the supplier. To ensure no legal issues and challenges, the project will have a project manager who understands the project requirements as well as the governing laws and regulations that pertain to the project. The project must therefore be effectively governed, right from the tie the objectives and deliverables are set to the evaluation of delivered work post contract, as per Alie (2015)
This project is going to be a large scale project that requires a well structured financing plan in order for the objectives of the project to be met. The project financing will follow the model of limited, non-resource financing and will be achieved through a separate financing vehicle. The fact that this is a non-resource project helps create the distinction between traditional corporate financing and project financing. One major aspect of corporate finance is repayment to investors and creditors; a responsibility that lies with the sponsoring company that is itself backed by its entire balance sheet, as well as the project itself. This model ensures that investors and creditors are secured in the event that the project fails or faces a major challenge; the creditors and investors will be paid through the balance sheet and revenues from the sponsoring company (Cumming, 2012). For large scale and capital intensive projects such as this one, project financing is used to provide financial resources for the execution of the project. Using the project financing model where a single financing contract is negotiated is better than several smaller project financing agreements as this reduces legal and operational costs due to the economies of large scale. However, financing a large scale project through hard currency also exposes the vendor to various risks and in such an event, the host government can fail to back the project by signing an agreement to renew, or extend the concession (Al-Thani & Merna, 2013). The government can further change rules and regulations or expropriate the cash and assets of the projects for political capital or fail to support the projects’ access to hard currency in the event of a market downturn.
Project condition
One of the most significant factors in such a project that must be taken into consideration at the initial stages is the condition of the project because future plans for the project depend directly on the projects’ condition. The condition of the project should be taken into consideration by a expert as the overall viability and working of the project depends on its present condition. Poor judgment can result in the project failing or not being able to meet its objectives especially if a different strategy related to the working of the project is not used.
The project team
The team that will run and execute the project to its completion are the most important aspect of the project; they, in addition to relevant stakeholders, are directly responsible for, and play a big role in getting the project executed to completion. The project team incorporates the stakeholders for the project, the sponsors (the executive and business sponsors), as well as a project board, the project manager and assistant project managers, and the project delivery team consisting of specific persons with defined roles such as the project accountant, was well as contractors that form part of the project team. The most important and highly visible person in the project team is the project manager, who bears the greatest responsibility for the successful delivery of the project. The project manager is responsible for planning, execution, controlling, and getting approval for changes to be made for the project, as well as motivating other project members to be able to achieve the project objectives. The team members work based on the project plan developed by the project manager in order to achieve the project goals and objectives (Cobb, Schön, Allex, & Harman, 2012).
Execution
The project manager works with members of the project team to process the project. The goal and objectives of the project determine how the project is executed and this in turn n determines the planning for the entire project and its execution. If the project is not executed as per the set goals and objectives, then the project manager is liable for whatever failures experienced.
Labor
This is among the important inputs for the project because its successful execution requires skills provided by human labor. The project will require strategic human resource acquisition to get the right personnel for the right job; the labor should be made up of highly skilled persons that will ensure the project is executed and completed as per the objectives.
Plant
The project will be located at a strategic place that ensures it can harness maximum solar energy and does not interfere with existing activities, artifacts, or infrastructure. Further, raw materials must be acquired for setting up the pant, along with other materials that must be transported to the site, so it should also be accessible. Further, circulating water must b discharged and the system designed with a safety release in the event of an accident or malfunction that causes pressure build up (Maithani, 2008).
Materials
|
Description |
Weighting |
|
Excavation works |
0,05 |
|
Circulating water system discharge |
0.3 |
|
Circulating water system structure |
0.1 |
|
Intake canal for the circulating water system |
0,1 |
|
Waste water treatment and disposal |
0.1 |
|
Land |
0.15 |
|
Batching and crashing plant |
0.05 |
|
Underground utility and firefighting location |
0.15 |
On average, 30% of the entire project budget is usually taken up by purchase of equipment and materials. Materials and equipment purchase can be defined either as being domestic or foreign. An external procurement office and team will handle all foreign procurement, preferably at the source to attain efficiencies, and cost effectiveness (‘Cargenie Mellon University’, 2014). The purchasing for materials requires all technical considerations to be taken into account. Subcontractors will play an important role in the successful delivery of the project; subcontractors will be involved in the design and technical specifications, as well as other elated works. Subcontractors will also deal with issues such as site condition, environmental concerns, performance limits, the outline of the power plant, and sea and industrial water quality. Technical aspects include the operating conditions of the plant, and responsibility for various performance aspects (Marzouk, El Kherbawy, & Khalifa, 2013)
Changes in projects are inevitable in most cases, and this requires prior preparation and anticipation of these changes. These changes, including scope creep, have the effect of adversely affecting the final project delivery and overall project success. As such, what is required is an effective risk management strategy, coupled with a strict scope control and management plan. The main objective is to decrease or limit the scope changes required for such a massive project, as well as an effective risk management plan. The control of scope also requires that changes to scope are highly controlled and follow a well-defined process where scope changes are recorded in the scope management document and with justification, and then approvals sought from the sponsors before changes to the scope can be made. The project manager takes the lead in dealing with any changes to the project scope (Coventry, 2015).
A large public project such as this requires value for many, which implies that the project must have a comprehensive project management plan. Quality management encompasses quality control and quality assurance. The goal of any project management initiative is to ensure the desired quality is attained (Rever, 2007).
Quality Planning: Here, the quality arrangement is made. Each arrangement ought to have a coveted goal or objective and quality arrangement is no special case. The objective of value administration ought to be obviously imparted to every one of the partners in a venture. After the objective is characterized, the measures to guarantee the level of standard ought to be worked out. In what manner will the clients be fulfilled? What is the level of value that the partners are anticipating? How to decide whether the quality measures will prompt extend achievement? At the point when every one of the responses to these inquiries are set up, errands ought to be appointed to individual colleagues and quality arrangement is started (Association of Energy Engineers, 2011).
Quality Assurance: This is a procedure that moves alongside venture all through the lifecycle. Quality confirmation is tied in with assessing if a venture is moving towards conveying quality administrations. On the off chance that all the quality attributes are set up the quality arrangement can continuing in a powerful way. At the point when quality objectives are not accomplished or are not during the time spent getting accomplished, vital advances and remedial activities ought to be distinguished. Guaranteeing restorative activities too falls in the period of value confirmation.
Quality Control: Here, operational systems are utilized as a part of request to guarantee quality benchmarks. Whenever an issue emerges identifying with quality or if the quality arrangement isn’t executed in the coveted way, restorative activities ought to be compelling. Quality control includes observing task results and conveyance to check on the off chance that they are meeting wanted outcomes or not. If not then elective activities ought to be actualized.
The project governance plan is an essential procedure created as a major aspect of the administration period of the project administration process. This is because the responsibilities and accountabilities associated with a project need to be well laid down, just as happens with organizations’ usual business ventures; this is more so or capital investment projects such as this. The project governance document and methodology provides a logical, repeatable, and robust framework for decision making to govern the capital investments of an organization. With a well defined governance framework, the organization will have a structured way to conduct both its usual activities as well as project activities (Graham, 2015)
Documentation management: Project documentation is a a crucial component for any successful project management. Documentation performs two major functions that include making sure the project requirements are fulfilled and establishing traceability with respect to what has already been done, the person responsible, and when it was done. Documentation can be managed manually, although the preferred method is through the use of various software, especially project management software. Each document must be recorded with a version, an authors, and any revisions done, along with the dates of these revisions. This can be aided by project management tools to enhance the effective management of different sectors of a project activity in the organization.
Reporting: This refers to the use of both informal and formal reports to communicate project status; reporting is an important tool for effective project management given that it creates visibility and it provides a framework thorough which expectations can be better managed with regard to stakeholders and the project team members. The reporting is able to enhance the management of project scope, budget, and time for the project to ensure they are in track. As such, reporting should be done periodically, but regularly enough to allow the team to rectify a situation, should a report show that one constraint is being overshot. The project manager pr project supervisor is charged with the role and responsibility for reporting project progress
Conflict in project management is inescapable and it is never about if it will happen, but when it will happen. As part of their day to day activities, project managers and administrators face various types and forms of conflicts from various sources, including both internal and external sources when dealing with various stakeholders and their expectations. While there is awareness about conflicts in projects, there is little awareness of its dynamics, and especially how to effectively resolve these disputes. With knowledge and awareness of the various available action alternatives they can use, a real opportunity exists to diffuse and eventually resolve the conflict. Further, valuable lessons can be learned from the conflict episode in order to better avoid or resolve similar conflicts in the future. Further, conflicts should not be avoided because not all conflicts are necessarily bad; some conflicts result in positive outcomes and better project delivery (Pinto & Kharbanda, 2015.
In every project, different attributes must be taken into consideration; a project can have several small attributes but care must be taken because such small attributes can adversely impact the project. Solving problems and conflicts in projects can be a challenge; as such, one excellent way to resolve conflicts quickly is through mediation. This approach has a structured process that enables the mediator to analyze, handle, control, and guide the project parties in the conflict towards a resolution of their conflict. Once the conflict mediation process begins, the management of the conflict itself will go through three major phases; the initiation, meetings that can be private or joint, and the outcome where there can be an agreement of non agreement. Mediation is the best approach to resolving conflicts because it is based on a collaborative approach to solving issues.
Safety during such a construction project is paramount not only for its success, but to ensure the project is not interrupted or injuries and fatalities occur. Safety must be looked at in th wider context of individual safety as well as safety to the environment. The organization must be aware of, and implement an elaborate workplace health and safety program that aligns with, and fulfills the needs of the relevant work place health and safety laws and regulations. Once they have a WHS policy document, they must train their staff on the need for safety, with safety officers appointed to spearhead the the WHS before and during the execution of the project. Safety must be part of the culture of the organization and all staff must follow basic safety principles, including wearing personal protective clothing, taking care not to cause any damages to the environment. Any safety related issues must be immediately reported as per the requirements of the WHS policies for further remedial action to be taken.
References
Alie, S. S. (2015, October 6). Project governance #1 critical success factor. Retrieved from https://www.pmi.org/learning/library/project-governance-critical-success-9945
Al-Thani, F. F., & Merna, T. (2013). Corporate risk management. Hoboken, NJ: Wiley.
Association of Energy Engineers. (2001). E-Business: Energy & facility management. Lilburn, GA: Fairmont Press.
‘Australian Renewable Energy Agency’. (2017, March 8). Paving the way for concentrated solar thermal in Australia – Australian Renewable Energy Agency. Retrieved from https://arena.gov.au/news/paving-way-concentrated-solar-thermal-australia/
‘Cargenie Mellon University’. (2014). Cost Estimation. Retrieved from https://www.cmu.edu/cee/projects/PMbook/05_Cost_Estimation.html
Clifton, J., & Boruff, B. J. (2010). Assessing the potential for concentrated solar power development in rural Australia. Energy Policy, 38(9), 5272-5280. doi:10.1016/j.enpol.2010.05.036
Cobb, A. T., Schön, S., Allex, W., & Harman, C. (2012). Leading project teams: The basics of project management and team leadership.
Coventry, T. (2015, October 6). Requirements management – planning for success! Retrieved from https://www.pmi.org/learning/library/requirements-management-planning-for-success-9669
Cumming, D. J. (2012). The Oxford handbook of entrepreneurial finance. (Oxford handbook of entrepreneurial finance.) Oxford [u.a.: Oxford Univ. Press.
Eberhard, A. A., & World Bank. (2016). Independent power projects in Sub-Saharan Africa: Lessons from five key countries. Hoboken, NJ: Wiley.
Graham, N. (2015). Project management for dummies. Chichester: For Dummies.
Maher, S. (2015, June 24). Paths to renewable energy efficiency. Retrieved from https://www.theaustralian.com.au/national-affairs/climate/paths-to-renewable-energy- efficiency/news-story/cbf394490daa720df1b4f0c0adfbfc8b
Maithani, P. C. (2008). Renewable energy in the global context. New Delhi: Concept Pub. Co.
Marzouk, M. M., El Kherbawy, A. A., & Khalifa, M. (2013). Factors influencing sub-contractors selection in construction projects. HBRC Journal, 9(2), 150-158. doi:10.1016/j.hbrcj.2013.05.001
‘Origin Energy’. (2015, January 22). Electricity Generation In Australia – Origin Energy. Retrieved from https://www.originenergy.com.au/blog/about-energy/energy-in-australia.html
Pinto, K. J., & Kharbanda, O. P. (2015). Project Management and Conflict Resolution. Retrieved from https://www.pmi.org/learning/library/project-management-organizational-conflict- resolution-2035
Rever, H. (2007). Quality in project management–a practical look at chapter 8 of the PMBOK® guide. Retrieved from https://www.pmi.org/learning/library/quality-project-management- tools-7177
Westland, J. (2018, March 22). The Triple Constraint in Project Management: Time, Scope & Cost. Retrieved from https://www.projectmanager.com/blog/triple-constraint-project-management- time-scope-cost
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