Project Risk - Procurement and Quality Management

Question: Describe about the Project Risk, Procurement and Quality Management. Answer: 1: For successful management of any project, it is important to identify the stakeholders. As mentioned by Powell (2015) recognizing the objectives and risks related to the stakeholders management helps an organization to identify the partiality of success and threats related to a certain project. Here, in the case of Wembley stadium, the followings can be mentioned as a few significant stakeholders. The British Government West Dutsche Landbank Brook Field Multiplex Mott MacDonald The employees The community or locality In the Following part, a brief discussion over the stakeholders, organizational objectives, behavioral expectations and potential risks have been made: The Stakeholders Organizational Objectives Behavioural Outcomes Risks Strategic Factors Measures The British Government It will be a prestigious sports organization in the world and a period for the British sports world. The government will be helpful in the construction and management of the stadium. The government and the related organizations will provide financial and legal help in the non-stadium development of Wembley Stadium. Governmental funding can be rejected. The FA faced this issue, while collecting funding for the reconstruction of the stadium. Probable mitigation strategy: Here, the authority needs to maintain better co-ordination with the governmental authorities for ensuring required funding. The organization will provide almost 229 million British pound from visitor expenditure Almost 40 million British pounds will be generated as the tax amount to the British government. Constant governmental overview and evaluation on the development of the project is needed. The locality The stadium will provide a potentiality to the local community for economic growth. The locality will be helpful and co-operative in the construction and management of the stadium. As discussed by Mann (2012) in such cases, the establishment can expect to get competent employees from the local community. The decision regarding the demolition of the twin towers was opposed by the English heritage. Probable mitigation strategy: The importance of the decisions made by the authority needs to be discussed with the community members. 7500 employment opportunity will be generated with the establishment of this stadium. With the eminence and popularity of the stadium, it will collect a hug number of visitors. This will help in overall economic development of the locality. The establishment will not damage the environmental and social fabric of the locality. A representative of the local community needs to be included in the decision making body. The employees The stadium will be well secured and the employees will be happy to work here. The employees will be dedicated and motivated towards the development and management of the stadium. With the low level of the security concerns, and low level of security regarding the salary, the employees may stop working. Probable mitigation strategy: Labor association It will be a sustainable source of income. The stadium will provide a safe working environment. The employees and to discuss all the payment and security related issues prior to engagement. West Dutsche Landbank The stadium authority will maintain a good financial coordination. The bank will provide timely and expected amount of loans or funding to the Stadium or the owning association. The potentiality of bank loan or funding can b rejected. The Football Association failed to collect private financing. Probable mitigation strategy: More concentration can be put on the governmental or public financial organizations for investments. The organization will pay back the loan within the given time and with mentioned amount of interests. A member of the bank can b included within th financial management team of the project. Brook Field Multiplex The stadium authority will maintain an urge of improving the quality of accommodation and amenities. Multiplex will provide the promised service within the given time and allocation. The stakeholders can breach the contract or start demanding more investments. Probable mitigation strategy: Fixed cost contract need to be maintained. The contracting association that the Wembley stadium will keep the promise of maintaining constant flow of mentioned financial requirement. The association will provide a clear picture about their requirements from the sub-contractors. The cost will be reduced and income will be increased with the development of the project with time. A constant co-ordination is needed to be maintained with the client as subcontractors. Mott MacDonald The management of the Stadium will be fair in disbursing the payment claims. The promised quality service will be provided. The contractors may provide bad quality service. Probable mitigation strategy: A quality control team needs to be appointed. Low investment and high return will be expected. A quality control tam needs to be appointed. Figure 1: Stakeholders analysis of WembleyNationalStadiumLtd. Source: created by the author 2: The risks those can be identified as associated to the development of this project are followed: Failure in fund collection: As opined by Basu (2014) in the management of a project, it is important to maintain the constant flow of funding for successful management and implementation of the project. Here, in this context, the FA has faced the issue. They were failed to ensure enough private financing and even the government has declined the request of additional financing. The employees may stop working: as mentioned by Adriaanse and Robinson (2015) in 2004, the stadium authority faced this issue and the low level of employee security became a huge issue. The community disagreement: As the construction of the stadium had an emotional bond with the with the community members, the decision of demolishing the twin towers faced a huge level of opposition from the community. Breach of contract by the contractors: as discussed by Harris and McCaffer (2013) in a large project like Wemble Stadium, the contractors often surpasses the mentioned budget. It can be identified as a breach of contract. The likelihood of the risks can be identified as bellow: Impact Trivial Minor Moderate Major Extreme Risks Failure in fund collection The employees may stop working The community disagreement Breach of contract by the contractors Likely Very likely Possible Unlikely Very likely Probability Risks Failure in fund collection The employees may stop working The community disagreement Breach of contract by the contractors Figure 2: Risk matrix 1 on WembleyNationalStadiumLtd. Source: Created by the author Here, with this risk matrix, it can be noted that, the impact of failure in fund collection, stoppage of work by the employees will provide a huge impact over the management of the project. Moreover, the potentiality of failure in fun collection is quite moderate. On the other hand, the impact of breach of contract by the contractors is major for the project, while, the community disagreement will have a moderate impact. In the context of likelihood of the risk occurrence, the possibility of breach of contract by the contractors is moderate. However, the possibility of stoppage of work by the workers and the community disagreement is minor. However, with some mitigating strategies, the risk potentiality of this particular project can be altered. As discussed by Mead and Gruneberg (2013) for successful management of a particular project, it is important to identify the magnitude of the risks and lay down pragmatic and suitable strategies to lessen the risk. The probable mitigating measures: Issus with fund collection: The FA needed to engage a low number of investors. However, as mentioned by John Wiley et al. (2014) in the context of big projects, it is needed to involve the strong financial supporters. Moreover, here, the FA needed to involve only the public investors. Issues with contractors: As mentioned by McGeorge and Zou (2012) here, the organizations need to opt for a fixed price contract. A fixed price contract will be cost driven. It will be helpful in compelling the constructors manage the task within the given allocation. Moreover, in case of quality control, a qualified and credible evaluating team is needed to be appointed. Issus with labors: As discussed by Mead and Gruneberg (2013) in the construction management projects, the security hazards are the most likely threats. Here, the organizations need to maintain well-structured labor organizations or pre- determined contracts with the labours. It will decrease the cases of labor agitation. Issues with community: As discussed by Lawson, Ogden and Goodier (2014) while dealing with the projects which have some public sensitivity, it is required to make the community know about the decision and collect the consensus from them. Impact Trivial Minor Moderate Major Extreme Risks Failure in fund collection The employees may stop working The community disagreement Breach of contract by the contractors Likely Very likely Possible Unlikely Very likely Probability Risks Failure in fund collection The employees may stop working The community disagreement Breach of contract by the contractors Figure 3: Risk matrix 2 on WembleyNationalStadiumLtd Source: created by the author Here, it can be identified that with the recommended mitigation measures, both the impact and likelihood of the potential risks related to the project can be minimized. According to the author, with the help of Monte Carlo method, the risk of financial instability will best be analyzed. With this particular method, with the help of random sampling method, the probability of the risks and their potential impact of this risk will b examined. As discussed by Ibrahim and Shakantu (2016) this particular method, technique helps in forecasting the likely outcome of an event and thereby helps in making informed project decisions. Topic 3: While discussing about the contract management issues, it is needed to identify the sectors those involves the project management in a sustainable manner. WembleyNationalStadiumLtd. provided its major contract of construction to the Brook Field Multiplex. This managerial plan proved to be a complete failure because the contract management plan lacked a few important issues. Here, in this case study, the following issues can be identified as poorly managed by the managerial authority of WembleyNationalStadiumLtd. The authority provided the contract to the Brook Field Multiplex, which was a company from abroad. As mentioned by Gardner (2015) for managing a construction project, it is important to hire the contractors who are well aware of the local subcontractors, it helps them to manage the project more efficiently and with better co-ordination. Here, in the selected case, by opting for a foreign-based company, the WembleyNationalStadiumLtd. failed to use the advantage of experience in the construction management. Secondly, as mentioned by Roberts (2014) as Brook Field Multiplex was a company which was operational out of England, it became too hard for them to find out the most potential, reliable and competent subcontractors. It made them experience loss in the project of about 300million (Powell 2015). As discussed by Chern (2016) Brook Field Multiplex claimed almost 253million as compensation of its loss in the project from one of its subcontractors. Moreover, as mentioned by Philp (2013) from the very beginning of the project, the Brook Field Multiplex was provided a substantial preference regarding the tender collection. As discussed by Riley and Cotgrave (2014) the procurement process lacked a level playing field. In addition to this, while managing a construction project, it is important for a contracting and the vendor to measure the contract performance. Here, in this case study, the Brook Field Multiplex and WembleyNationalStadiumLtd. both failed to do this. It led them to experience delay in the completion of the project, subsequent legal and economic complexities. As mentioned by Adriaanse and Robinson (2015) it led Multiplex paying penalties for the late finishing of the contract. Last but not the least, as mentioned by Sage, Dainty and Brookes (2014) involving too many stakeholders, created issues in the contact management. The WembleyNationalStadiumLtd. involved too many stakeholders for better financing, but it created issues with the requirement. The Brook Field Multiplex, got the contract over a certain requirement plan, but the vendor continuously changed the requirements in the project. As mentioned by Eduardo Yamasaki Sato and de Freitas Chagas Jr (2014) the company threatened to sue WNSL over changes in the design which they suggest the main reason responsible for the project being late. Thus, these contractual issues can be identified as poorly managed by the WembleyNationalStadiumLtd and The Brook Field Multiplex, which led to the failure of this construction management project. 2: To eliminate the potential contract management issues, it is need for the managers to include some specific mitigation strategy or remedial options within the plan itself. Now, according to the author, it was important to embed some sections for eliminating the above discussed contract management issues from the contractmanagementplan of the Brook Field Multiplex and the WembleyNationalStadiumLtd. It will be easy to understand, if the actions can be discussed in response to every selected issues with separate tone. Selection of the contractors: Here, the WembleyNationalStadiumLtd. failed to select the most suitable contractor for the project. As theprojectmanager, the author suggests to include a point in the tender notice that the contractor needs to be a UK based company. Here, as mentioned by Caesar (2016) a committee can be constituted which will collect the names of the competent local companies, and suggest them to the management team. Moreover, while selecting the company the committee will examine the track of experience of the companies in the selected nation and project type. Moreover, it will be the best to include the representatives of the stakeholders as members of this particular committee (Mackay, Letts and Casey 2014). Issus with tender collection: Moreover, as discussed by while giving tenders it is needed to be honest and providing it to the most competent organization. Here, the WembleyNationalStadiumLtd. failed to ensure this. According to the author, the organization needed to appoint a committee for marinating better corporate governance. However, the organization, appointed a compliance officer to verify the level of mitigation of the demands of the public sector investors. He has nothing to do with the tender allocation. Moreover, the officer was the CEO of the WembleyNationalStadiumLtd. hence; it was not easy to remove biasness from this project. Here, the organization needed to appoint a committee who would be responsible for the selection of the contractors. In addition to this, as mentioned by Taherdoost and Keshavarzsaleh (2015) a committee comprising the representatives of the stakeholders would be helpful in ensuring impartiality in the tender allocation procedure. Including third parties in the can also be helpful in eliminating biasness from the selection procedure. As mentioned in the case study, there were no pre-set rules for the selection of the contractors. here, the author suggests to set some pre-determined selection criteria, based on which the competence of the bidding companies will be examined. As mentioned by Meri?kov and Nemec (2013) it provides a biasfree ground for the bidding companies to compete for the tenders. Selection of the subcontractors: Brook Field Multiplex made a huge mistake by providing contract to the Mott MacDonald. Bing a company based on foreign land, it was unable to select the most competent company in the UK. Here, the company needed to maintain a strict tack checking process before selecting the subcontractors. Here, the contract management plan needed to include a clear specification of the required experience from the subcontractors end. It would b helpful for the company to avoid the issue of mismanagement of the task by Mott MacDonald. As mentioned by Harris and McCaffer (2013) Mott MacDonald`sconstruction blueprint for the stadium steel work was not fitting thee purpose. Moreover, the preliminary designs were not proper ,constructible, coordinated and reliable. However, for the Brook Field Multiplex, it would be based to give the contract to a company from its own group of acquaintance. Brook Field Multiplex also failed to ensure the best quality products and services from Mott MacDonald. It was because of the low level of managerial control and lack of examination of the service offerings. As mentioned Barczak, Jones and Shindledecker (2015) in such cases, it is needed to for the contactors to appoint a supervisor for quality control. Changes in the requirements: While disseminating contracts, the bidders bid depending on the requirements of the vendors. Hence, it is necessary for the vendors not to change the requirements in the middle of the project. As mentioned by Safa et al. (2016) as the project involved too many investors, the requirements went unbound, which make the Brook Field Multiplex face loss in the project. It was important for both the contractor and the vendor to be specific in requirement and service delivery. According to the author, the contracting company Brook Field Multiplex needed to maintain a cost specific agreement with the vendor organization WembleyNationalStadiumLtd. it would be helpful for them to restrict the vendor to make sudden changes within the plan. Moreover, as discussed by Girth (2014) if the company took the way of implementing the project tasks in fragmented manner, it would be easier for them to manage with the ever changing demands of the vendor. Here, the company may go for creating an evaluation committee for the successful management of the project. As per the authors idea, the committee will comprise of representatives of both the contracting and the vendor organization. With the development of every phase, the committee will evaluate the progress and level of mitigation of the vendors demand. Thus, it will be possible to make changes in the project by the contracting company, in the middle of the task. In conclusion, it can be said that the construction management project involving the WembleyNationalStadiumLtd. was a big failure because of the incompetence in project management. 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