Construction Procurement Assignment Brief
(For UK Based Students & Distance Learning Students)
Megaprojects are large-scale, complex ventures that typically cost billions of dollars, take many years to develop and build. Theyinvolve multiple public and private stakeholders, are transformational, and impact millions of people (Flyvbjerg, 2014). Hirschman(1967) calls such projects”privileged particles of the development process” and points out that often they are “trait making,” that is,thatthey are designed to ambitiously change the structure of society, as opposed to smaller and more conventional projects that are “trait taking,” i.e., they fit into pre-existing structures and do not attempt to modify these.Megaprojects, therefore, are not just magnified versions of smaller projects. Megaprojects are a completely different“animal” in terms of their level of aspiration, lead times, complexity, and stakeholder involvement. Consequently, they are also a very different type of project to manage.Megaprojects typically cost USD 1 billion or more from incubation to go-live.
Across the world, megaprojects are increasingly used as the preferred delivery model for goods and services across a range of businesses and sectors such asinfrastructure, water and energy, information technology, industrial processing plants, mining, supply chains, enterprise systems, strategic corporate initiatives and change programs, mergers and acquisitions, government administrative systems, banking,defence, intelligence, air and space exploration, big science, urban regeneration, and major events.Examples of megaprojectsinclude amongst others high-speed rail lines; airports; seaports; motorways; hospitals; national health or pension ICT systems; national broadband; the Olympics; large-scale signature architecture; dams; wind farms; offshore oil and gas extraction;aluminium smelters; the development of new aircrafts; the largest container and cruise ships; high-energy particle accelerators; and the logistics systems used to run large supply-chain-based companies like Amazon and Maersk. Also, it should be noted thatmegaprojects can be found around the globe both in the largest economies and emerging markets, and are financed either by private or public sector players or as public-private partnerships.
Apart from their size and complexity, megaprojects have another unfortunate feature. Research suggests that90% of megaprojects are significantly delayed, over budget, or fall short of their promised benefits. This is true for megaprojects from all sectors and across the globe. Rich countries do not seem to performanybetter than poorer countries, and megaprojects in one sector areequallynot managed better than in other sectors. Also, over the past few decades, megaproject performance in terms of on-time, on-budget, and on-quality delivery has not become significantly better. Theshortcomings in megaprojects emanate from various factors which include amongst othersan enormous degree of uncertainties; a large number of diversified stakeholders and actors; long project life cycle;complex procurement arrangementsand high level of technological complexities.The actors in a megaproject must thus innovate to solve construction problems and achieve the basic goals set by theclient.
At the heart of asuccessful implementation ofmegaprojects liesthe implementation of a complex procurementarrangement.Procurement is one of the critical technical issues in megaproject management with regard to successful project development and operation in both the short and the long term.The UK National Audit Office (2004) defines procurement as:
“the whole-life process of the acquisition of goods, services and works…, beginning when a potential requirement is identified and ending with the conclusion of service contract or ultimate disposal of an asset”.
Thus, the procurement arrangements for the acquisition of megaprojects naturallyought to be efficient and effective.However, studies and practicereport that procurementarrangementsin mega projectsacquisitionhaveinmost casesneitherbeen effectivenorefficient. They have largely beenvery limited and fragmented.Governments and practitionersacross the globeacknowledge that there should be reforms to governance and institutional procurement arrangements to promote better decision-making inareas such asproject selection, funding, financing and the delivery of services etc., for new and existing megaprojects.
It is in this regard that the UK’s Major Projects Authority (MPA), apart of the Efficiency and Reform Group in the Cabinet Office,working with HM Treasury and other government departments to provide independent assuranceandimproving the way management and delivery of majorprojectsis conductedhasrequestedyou towrite a reporton procurement of megaprojects. This is to enablethem create a central knowledge basethat collects state-of-the-art research findings on the subject. Theintentions are that new research findings in turn will assist in stimulating further research and discussion in the area and also provide some useful procurementguidancefor practitioners. The MPA have stated that a diligent assessment of procurement alternatives is a prerequisite to assureValue forMoney(VfM)in Mega projects.
Thus, in thisreport,you have been requested inyour capacity asaConstruction Procurement Consultanttocritically discuss:
-thekey driversof megaprojects commonly found worldwide;-the barriers in procurement of mega projectsgloballyand particularly in the UK;-theCriticalSuccessFactors(CSFs) inthe procurement process for megaprojects; and-youroutlineproposal of aninnovativeprocurementecosystem of megaprojects in the UKin pursuance of superior Value for Money (VfM)
Word Count: 3000
1.Discussion of key driversof mega projects commonly found worldwide.- [10 Marks]2.Analysis ofbarriers inprocurement of mega projects worldwide and particularly in the UK – [30Marks]3.An outline CriticalSuccessFactors(CSFs)in the procurement process of mega projects – [35 Marks]4.An outline proposalofan innovative procurement ecosystem for mega projects in the UKin pursuance of superior Value for Money (VfM) – [15Marks]5.Presentation, referencing, graphics – [10 Marks]
The University Learning Development Centre (LDC) gives very sound advice on the writing and structuring or coursework in general and reports in particular and can be consulted.
1. The report should NOT be an assembly of referenced material from which the reader may infer an answer. Referenced material should be used to reinforce or substantiate a point being made in the report. The explanations given should be explicit and focused on the case study problem. Material should be synthesised in the context of the case study and recommendations given.
2. Use bullet lists carefully. Do not end a section within the report or even the report itself with a bulleted list. Lists must always be rounded off with a sentence or paragraph summarising the final point of that section.
3. Every report should have a conclusion and every report of this nature should have recommendations. The client will be seeking assistance from the expert, understanding of specific Project finance issues.
4. Read over the report before submission.
5. Check your reports for no page numbers, obvious spelling mistakes and font changes (a classic sign of block copying).
6. Make sure you include your name, especially if one is submitting online or via email.
7. If appendices have been included then they should be referred to in the text. It is not for the reader to discover them and wonder at their relevance.