Procurement Management Business Report: WIFI Reach Project
Table of Content Page Numbers
Executive Summary 4
1.0 Introduction 5
2.0 Problems Identified in the WIFI Project 6
2.1 Planning and Improper Procurement Procedures 6
2.1.1 Requirement documentation 6
2.1.2 Setting scope 7
2.1.3 Resource selection criteria 7
2.2 Lack of project information to stakeholders 7
2.3 Political influence 8
2.4 Breach of Contract 9
2.4.1 Some cases of breach of contract 9
2.4.2 Express and implied terms 9
2.4.3 Legislation 9
2.4.4 Sale of Goods Act 1979 9
3.0 Contract types in Public Procurement 10
3.1 WIFI Project Contract Identification – Fixed Price Contract 10
3.2 WIFI Project Contract Evaluation 10
3.2 WIFI Project Contract Evaluation 11
4.0 Recommendations to the Problems Identified in WIFI Project 11
4.4 Reimbursement loss Established 13
5.0 WIFI Reach Project Completion Action Plan (Quality Control) 13
5.1. Stage 1: Current Works 13
5.2. Stage 2: Evaluating the Present level of Project Completion 13
5.3. Stage 3: Solutions to Problems found 14
5.4. Stage 4: Operation and Maintenance 14
6.0 Conclusion 15
Referencing List 16
Referencing List 17
An important part of management is the necessity of cost balance, attain efficiency, and make profits to the company that is been managed. Procurement management structures the foundation through which managers can engage in making competence of business operations and getting onboard other stakeholders (Pinto, 2007). This business report proposes an in-depth scrutiny of the procurement practices put into practise by WIFI Reach Project.
Tasked by the ministry of health to execute a WIFI Reach project the National Health Authority setup a project team with the responsibility of linking ten hospitals and eighty local medical health centres to the internet and WIFI facilities. Findings and discussions in the report will disclose the problems the project came across during procurement and contractual process. The report will suggest recommendations that the project team can put in place to resolve the encountered problems. The report will put in place an action plan to help execute the project within the period left.
WIFI Reach Project is about introducing a new communication method using the internet and computers in a Public health setting within a developing country. The country has a small population but scattered over a large area whose health care comes under the national health authority. It derives its mandate from the countries ministries of health for the execution of primary and secondary health care within the country. It operates in all the seven regions of the country where an office has been established in each region. The national health authority is responsible for eighty local medical centres and ten hospitals in the country that are government supported. The local medical centres are facilities where patients access medical care through doctors and nurses. The budgets of the local medical centres are managed individually by doctors managing the centres.
The WIFI Reach Project is significant because it is a new way that may help health delivery through new technology, and access to an up to date patient information through quick access of a centralised database. A diagnostic support may come handy with a specialist doctors’ feedback via email, and this may enhance health care. According to Novillo-Ortiz, Hernández-Pérez and Saigí-Rubió (2017) been able to gain dependable and excellent health data and medical guidance can improve health.
The report has identified planning and improper procurement procedures, lack of project information to stakeholders, political influence and breach of contract as problems with the WIFI project. The report will discuss measures to resolve the problems found. The identified contract with the WIFI project is a fixed-price contract. To address the problems identified the terms and conditions involving Stakeholder Engagement, Usage of the Time and Materials Contract Form, E-Procurement and Reimbursement of loss Established will be addressed to solve procurement issues. Quality control will be a justified action plan for effective completion of the WIFI Reach project.
2.0 Problems Identified in the WIFI Project
Planning is key to the successful execution of any project management.
To have value for money in procurement, proper planning is needed to execute the task. This was not so in the WIFI Project. A Procurement Plan describes the products and services that is to be bought from external suppliers. According to IAPWG (2012) the ultimate aim of procurement planning is to harmonised and combine action to fulfil a need for goods and services by an appropriate method, time and within a reasonable cost. PMK (2016) explained that Planning in Procurement entails Requirements documentation, setting scope and resource selection criteria.
According to PMK (2016) projects cannot be executed deprived of the proper necessities. Requirements documentation in project management defines in what way each requirement fulfils the business requirements for the project. Requirements must be calculable, visible, reliable, comprehensive and satisfactory to the stakeholders.
There are numerous benefits of requirement documentation. It captures the project requirements and certifies that they meet the hopes of the stakeholders. It aids to recognise what is desired to yield the anticipated outcome of the final output. Furthermore, the requirements similarly help the project team plan on which way they must implement the quality control for the project.
Other aspects of the requirements documentation that are helpful to project managers are the traceability of the business and project objectives, guidelines for the organization and its guiding ethics.
The requirements documentation must flow in a certain order. The set-up may exhibit from a modest text that outlines the requirements that are considered by the stakeholder. Alternatively, it can be intricate and comprise a comprehensive explanation of the project, a supervisory summary, and numerous addons to backing the project.
2.1.2 Setting scope
According to APM (2018) scope is the procedure whereby outputs or results and benefits are acknowledged, distinct and controlled.
The Gov.scot (2016) states that all selection criteria should be appropriate and balanced towards the theme of the contract.
According to APM (2018) stakeholders is referred to as individuals and groups having a curiosity in the project, due to the fact that they are partakers and the end result may affect them. Due to this reason stakeholders must be managed. APM (2018) states that stakeholder management is the methodical identification, investigation, planning and execution of arrangements planned to involve with stakeholders. Stakeholders management is a set of practises that connects the constructive stimuli and curtails the outcome of the negative effects.
According to APM (2018) stakeholders management includes four main stages:
- identify stakeholders;
- assess their interest and influence;
- develop communication management plans;
- engage and influence stakeholders.
The above illustration explains the importance of stakeholders to every project. The case study reveals that doctors’, nurses and other senior managers were concerned about the benefit of the project to health delivery in terms of the disruption of service. There were concerns of rumours of corruption by the government and another rumour was that Mil had a family ties with project board. On the other hand, if stakeholder’s management had been adhered to this problem would not have arisen.
2.3 Political influence
Parry (2013) and Symonds (2013) have a common point of view in how politics may positively or negatively affect a project implementation.
According to Parry (2013) there are two sides of politics in a project, comprising of the positive and the negative side. The positive politics can be valuable and needed, the want for an advanced profile for instance. The negative politics can have negative consequence on the projects, brandishing an authority at the projects’ expense for a personal gratification. Negative politics are reasons for self-protection, for further gains as the WIFI project board made it clear that the project must be seen to be a success for future funding from the sponsors. This may have a damaging impact on the project team as it is so clear that the execution of the project has a different meaning to the government. This can lead to all sort, for example not tendering properly for a qualified bidder to win the contract for the project and there can be a conflict of interest in awarding the contract because the contract winner may do the governments bidding.
According to Symonds (2013) the kind of working relationship and chemistry that grow amongst the associates of project team and personnel involved in a project, including stakeholders top executives and government, may predict how effortlessly a project advances and finally how effective it becomes. In a team where there is harmony, conflict is easily dealt with no negative impact on the project. Project aims, and objectives can be thwarted easily if there is so much friction amongst the entire stakeholders that can result in a delay or complete collapse of the project. Whatever the politics it should not be ignored. Examine the two sides to the cause of the conflict and find a solution to it. Evade Complicating the Circumstances that led to the politics. In finding a solution to the negative politics remind all and sundry of the benefits each will earn as an individual.
Farrer (2017) explains that a breach of contract happens once an individual party does not honour his side of a responsibility levied on them under a contract, without a genuine or legal explanation.
- Failure to executing a job under the contract
- Not honouring payment promise
- Failing to bring goods implied in the contract
- Delayed executing the contract on the agreed time.
By Farrer (2017) many contracts specifically detail their expectation under the contract. Example is in terms of the provided goods and its quality. Contracts through legislation can Sometimes be implied through the terms.
Farrer (2017) states that the “Consumer Rights Act 2015 and the Sale of Goods Act 1979” are two significant parts of the law which relay to breach of contract.
Farrer (2017) explains that the Sale of Goods Act 1979 is applicable anywhere there is a possible break of contract in business-to business agreements.
In the business contract between the national health authority and medical innovations limited there has been a breach of contract by way of the project fallen behind schedule. Due to the lack of proper project plan implementation and a work breakdown schedule, it had also led to procurement issues and many more. There has been issues with communication with all stakeholders and due to this technical teams have had a difficult time executing their duties at the various hospitals and health centres. There appears to be a few number of personnel working on such a huge project. When any personnel fall ill, it has a negative impact on the project and that seems to be the case in the WIFI project. In this instance where there has been a breach MIL should be liable for financial damage.
The contract management process is the collaboration between the merchant and the customer that certifies the two parties meet their individual responsibilities in any procurement affiliation (Procurement Centre, 2017). According to the Telegraph (2015) procurement is the act of gaining something for business purposes and which may comprise of a variety of things made up of possessions, materials, skills and services for the business to run smoothly un interrupted. Per Harrin (2014) view, every project execution goes with spending money, the involvement of money means contract and there are three types of procurement contract.
- Fixed price contracts
- Cost-reimbursable contracts
- Time and materials contracts.
The contract type between the National Health Authority and Medical Innovations Limited is a Fixed Price Contract. According to Harrin (2014) a fixed price contract exerts all the risk from the buyer to the seller. It is good news for the project’s risk register but a big budget expenditure for the project. In this instant the seller accepts all the risk associated with the project by way of price increase to cater for any risk that may arise. The benefits for a fixed price contract are that it gives you a pre-knowledge of the cost involved for the execution of the project and such information is very handy.
This contract form gives an opportunity to the buyer, the National Health Authority to deliberate on the fees charged for the project and negotiate for price reduction if deemed necessary. Other benefits include suing Medical Innovations Limited in case it fails to complete the project at the specified time and to the required standard.
On the other hand, to agree to a specific price can be to NHL disadvantage because there are new innovations arising each day from the information technology world. The specification today may be obsolete for tomorrows performance and therefore a massive price reduction in product price. Since price has been agreed on initially with MIL, it will pocket the extra profit accrued due to price reduction of the product.
Despite the miserable view been played out by the development on the WIFI Reach Project, these terms and conditions if introduced into the project’s procurement management process will remedy the glitches being met.
Procurement process and the right approach to the project execution is engaging all the stakeholders that will be affected by the procurement and the execution of the project. In the WIFI Reach Project, probable stakeholders whose consultation was so important in the project execution were patients, healthcare practitioners, and other supportive staff engaged by the various health institutions. The importance of stakeholder meeting is that it backs the purposes of procurement management by allowing the procurement crew to understand the strategic problems confronted by the stakeholders. The process can thus be modified to guarantee stakeholder’s prospects are met, value for money to the provision delivery that the patients hope for, it solves agreement requirements, and give additional worth to the project in the public perception (Gatti, 2013).
The following procedures are supportive when shaping the values to implement during stakeholder meeting; recognising the main stakeholders is a positive approach to enabling the project to become a success. The WIFI Reach Project, exhibited a typical example where doctors the main operators of the network being built were not consulted of their views on the project. Secondly, defining the communication outline for delivering data must be vibrant and brief.
4.2 Usage of the Time and Materials Contract Form
In relative to the potential dangers recognised with the engagement of a first-time supplier in relative to the letter of credit arrangement, it is advisable to alter the terms to time and materials contracts. Uncertainties from the suppliers end which becomes a problem to the project team is mitigated. (Lysons and Farrington, 2006).
Figuring out the project cost via the sums of the price of supplies and labour hours will warrant that the MIL Ltd will be working with optimal competence to recuperate their costs else the danger looms over their investment.
The suitability of this contract is at a time the supplied product comprises human proficiency from the vender. The importance of this to the WIFI Reach Project is that the vender as a necessity must show the appliance and the technical support throughout the implementation of the project and preservation services after the project for a period of six months.
As acknowledged in the procurement process by the project team there were delays in the completion of the PQQ process. Issues of this nature can be resolved by the incorporation of IT technologies, by using e-procurement. The procurement and sales contract between the purchaser and vender are done on the internet and systems that are void of human dealings. Though it speeds up procurement process it also polices the system against corrupt practice. This method of procurement will keep track of correspondence between the purchaser and vender, and in terms of auditing it can track easily anomalies during transactions that have taken place and during bidding for contracts it will flag all indiscretions (Silvius and Schipper, 2014).
To lessen the job placed on the seven team members, the e-procurement process will remove the physical inspection of the PQQ forms. this will be scrutinized on the internet and may be sanctioned or refused based on the limits set in the vending software. In general, the project board will cut down on costs that may come about due to travel expenses to guarantee supplier compliant. On the other hand, is all built into the quality assurance of the programme for procurement. Any discrepancies are checked and corrected before the product is dispatched.
When it has been determined that there has been a breach of contract. In certain cases, financial awards are granted the loser. This serves also as a deterrent to the accused not to operate in that manner anymore (Farrer, 2017).
5.0 WIFI Reach Project Completion Action Plan (Quality Control)
Six months into the project, it was evident that the project was behind schedule, this therefore called for a change in the strategy used as the project had an execution period of a year. Within the six months period a total of three hospitals and twenty-four local medical centres have been linked to the internet services making it fully operational. The projects aim is to have all the ten hospitals and eighty local medical centres connected to the internet and other benefits associated with it. It appeared this was not the case because they had seven hospitals and fifty-six local medical centres remaining to be linked to the internet and other resources as part of the project. The revised strategy is to take care of what caused the delays and eliminate completely such occurrence in the previous strategy that was implemented.
In the last six months three hospitals and twenty-four local medical centres were connected to internet service and other resources as part of the project. The absence of the project engineer’s ill health impacted negatively on the project execution. The unwillingness of the medical staff at both the local medical centres and the hospitals have resulted heavily to the progression of the entire project.
Looking at the local medical centres and hospitals that have not been linked to the internet the project team should classify the sum of all the resources necessary to complete the project. It is evidently clear that the project execution team must be given further network technicians to increase the execution pace of the work. A location review survey must be completed to govern the level of abilities of existing systems.
5.3. Stage 3: Solutions to Problems found
The additional engagement of engineers and technicians on board the team will strengthen the team numbers to finishing the task of the project in the remaining local medical centres and hospitals. The board of the project team must negotiate with the local medical centres and hospitals management team to straighten out the unreceptive behaviours meted out to the project executors and not for a repeat of it again.
This phase will encompass the tooling of users on how to properly use the networks that have newly been installed. It is also the stage where coordination, implementation and security problems are monitored and resolved for the smooth and uninterrupted running of the internet connection when the project has come to an end.
Built on the scrutiny of the WIFI Reach Project, many interpretations may be deduced that narrate how procurement managers are faced with numerous difficulties in trying to put in place a strategy for obtaining supplies from outside stakeholders. Preferably, fairness and accountability must be the supreme rules to follow in the hope of fruitful meeting between the parties involved. This is particularly accurate once the political setting impacts in what way a project is projected to be managed, as demonstrated in the case study. The best method in operation is plans that may support in anticipation the occurrence of many difficulties that may disturb project performance in relative to procurement. This calls for moderation approaches when introduced may mitigate any risky outcome on procurement management.
The significance of good policies throughout the procurement stage in any project has the capability to impact the success of the project. This relays to the availability of the correct resources at the needed period for use in the production procedure. The idea that procurement must be shelfed in a single department of an organization is a negative approach. Contrary to this, organisations and project teams must seek the general interaction of all stakeholders associated to establish the correct products are obtained from rightful suppliers.
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