Master of Engineering

Civil and Structural

MCS504: Project, Design and Construction Management

Pre-recorded Lecture

Topic 1
Project Management

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Topics
The following topics will be discussed in this session:

1. What is a project?

2. Overview of different project delivery mechanisms

3. What is project management?

4. The role of a project manager

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
 What is a Project?

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
What is a Project?
A project is a temporary endeavor to
create a unique product, service, or Scope
result.
Large or small, a project always has the
following three components:
1. Scope: Unique product, service, result, Schedule Resources
or combination of one or more
products, services or results.
2. Schedule: Established dates when
project work starts and ends.
3. Required resources: Necessary amounts
of people, funds, and other resources.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
What is a Project?
Projects may:
• have repetitive elements, which do not change the fundamental and
unique characteristics of the project work;
• differ from one another in terms of deliverables, stakeholders involved,
resources used, constrains, and the way processes are tailored to
provide deliverables;
• produce deliverables of a social, economic, material, or environmental
nature;
• be undertaken at all organisational levels;
• involve a single individual or a group or a single organisational unit or
multiple organisational units from multiple organisations.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
What is a Project
Examples of projects include but are not limited to:
• Developing a new recreational complex
• Expanding a consultancy service
• Merging two organisations
• Improving a business process within an organisation
• Acquiring and installing a new computer hardware system for use in an
organisation
• Exploring for oil and gas in a region
• Modifying a computer software program used in an organisation
• Conducting research to develop a new product
• Constructing a swimming pool

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Overview of Different Project Delivery
Mechanisms

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Project Delivery Mechanisms
• To determine how a project shall be delivered is one of most crucial
tasks while carrying out a project.
• The factors to be considered when selecting a project delivery
mechanism include:
– Risks involved
– Level of control required by the owner over project development and
execution
– Time constraints
– Experience and capabilities of project parties
– Complexity and size of project
– Available resources

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
The common project delivery mechanisms in construction industry are:
• LSTK – Lump Sum Turn Key
• DBB – Design Bid Build
• DB – Design Build
• DBO – Design Build Operate
• EPC – Engineering Procurement Construction
• EPCM – Engineering Procurement Construction Management
• ECI – Early contractor Involvement
• Concessions
• BOOT – Build Own Operate Transfer
• BOO – Build Own Operate
• Alliancing
CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
LSTK– Lump Sum Turn Key:
• Combination of Lump Sum Owner
(LS) contract and Turnkey (TK).
• Owner agrees to pay a specified
contracted amount for Turn Key
Contractor
completing work to a contractor.
• Contractor is responsible for
completing the project under Engineer /
Suppliers
Other
their financial risk. Consultants Contractors

• The scope of work includes start-

up of the facility and
achievement of the normal
operation status under the
contractor’s responsibility.
CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
DBB – Design Bid Build:
• This method typically involves
three sequential project Owner
phases:
– Design phase: which
requires the services of a
Designer
designer (Architect/Engineer)
Selected Contractor

(architect/engineer);
– Bid phase: when a
contractor is selected; and Sub-Contractor Sub-Contractor Sub-Contractor

– Build or construction phase:

when the project is built by
the selected contractor.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
DB – Design Build:
• This method of project delivery includes
one entity (design-builder), and a single
contract with the owner to provide all Owner

design (architectural, engineering) and

construction services.
Design
Builder

Engineer / Other
Suppliers
Consultants Contractors

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
DBO – Design, Build, Operate
• Typically entails private-public partnership.
• The public sector owns and finances the project.
• The private sector designs, builds, and operate the project.
• Typically consists of a turnkey contract, where the private sector is paid
a sum for design-build, and an operating fee for the operating period.
• The responsibility of design, construction and operation lies with private
sector including the repairs and replacement during the operation
period.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
EPC – Engineering, Procurement, Construction:
• The EPC contractor will carry out the detailed engineering design of the
project, procure all the equipment and materials necessary, and then
construct to deliver a functioning facility or asset to their clients.

Owner

EPC
Contractor

Engineer / Other
Suppliers
Consultants Contractors

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
EPCM – Engineering, Procurement, Construction Management:
• The EPCM contractor acts as the owner’s agent and creates (on behalf of
the owner) direct contractual relationships between the owner and the
suppliers and trade contractors.
• The contractor is not directly involved in the construction but is
responsible for administering the construction contracts.

EPCM
Owner
Contractor

Construction
Suppliers Others
Contractors

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
ECI – Early Contractor Involvement:
• Mostly entails a Collaborative Procurement Contract (collaboration
occurs when two or more participants work together to achieve a
common outcome whilst recognising that each party has different
business objectives) to develop a tender for the construction phase of a
project.
• In a typical ECI model, there are three phases:
1. Expression of Interest (EOI), where the contractors are invited to submit
an EOI
2. Request for Proposal (RFP), where the shortlisted contractors are invited
to submit a Proposal through the RFP process
3. Early Contractor Involvement (ECI), where mostly two contractors are
engaged under ‘ECI agreement’ to prepare a risk adjusted price/tender
for the Construction Phase.
CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
• The competition between the two contractors at this stage prior to
contract award drives early innovation capture and a robust tender
price.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
Concessions:
• Typically entails a private-public partnership.
• It is a contract between the public-sector (e.g. government) and the
private-sector (contractor), that grants the private sector the right to
invest in, construct and operate an asset for the stated time period
under certain terms and conditions.
• It may include exemptions or relaxations to the private-sector such as a
tax break.
• Generally, the public is the customer and main source of revenue.
• The ownership of assets rests with the public-sector, and all rights are
reverted back to the public-sector at the end of the concession.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
BOOT – Build, Own, Operate, Transfer:
• Typically entails a private-public partnership, where a private
organisation (contractor) conducts a large development project under
contract to public-sector (owner).
• The public-sector may provide limited funding or some other benefit
(such as tax exemption or other concessions) to the private-sector.
• The private-sector partner assumes the risks associated with planning,
constructing, operating and maintaining the project for a specified time
period.
• Revenue is collected from the consumers of the development, typically
the general public.
• At the end of the specified period, the ownership and operation of the
project is transferred back to the public-sector entity, either freely or for
an amount stipulated in the original contract.
CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
BOO – Build, Own, Operate:
• Typically entails a private-public partnership.
• The private-sector builds, owns and operates the facility or structure
independently.
• The public-sector doesn't provide direct funding but may offer other
financial incentives such as tax-exempt status, concessions etc.
• Revenue is collected from the consumers (typically the general public) of
the facility.
• Unlike BOOT, the ownership of the project remains with the private-
sector.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Delivery Mechanisms
Alliancing:
• Typically entails a private-public partnership.
• The public-sector works collaboratively with private-sector to finance
the project, and agrees to share the risk and opportunities.
• Often includes Early Contractor Involvement (ECI).
• Can be adopted when other project delivery mechanisms do not fit the
project’s needs.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
What is Project Management?

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 Project Management
Project management is the
application of knowledge, skills,
tools, and techniques to project
activities to meet the project
requirements.
• Incudes on time, in budget, to
scope execution/delivery.
• Entails management of risk
throughout the project.
• Involves people side of managing
projects.

Source: Pinto, Jeffrey K., and P. W. Morris. The Wiley guide to managing projects. John Wiley & Sons, 2004.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Management
• Includes five processes:
– Initiate: identifying and defining business needs, expectations, resources,
stakeholders.
– Plan: detailing the project scope, time frame, resources required, risks
involved, communication and delivery mechanisms.
– Execute: establishing, managing and communicating with project team
and other stakeholders, and implementing the project plan.
– Control: tracking the progress, and taking necessary actions to ensure
achieving desired results and successful implementation of the project.
– Close Out: finishing all project activities.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Project Management
• Successfully performing these processes requires:
– Information
– Communication
– Commitment

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
The Role of a Project Manager

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Role of Project Manager
“It’s not enough for project managers to have technical skills. We
need leadership, conflict resolution and negotiation skills”
(Mark Langley, CEO – PMI)

Project manager: A person who has the overall responsibility for the
successful initiation, planning, design, execution, monitoring, controlling
and closure of a project.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Role of Project Manager
• Role and responsibilities of a project manager:
– Planning and defining project scope
– Activity planning and sequencing
– Resource planning
– Developing schedules
– Time estimating
– Cost estimating
– Developing a budget
– Documentation
– Controlling risk and minimise uncertainty
– Creating charts and schedules
– Risk analysis
CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
Role of Project Manager
– Decision making
– Managing risks and issues
– Resolving conflicts
– Monitoring and reporting progress
– Team leadership
– Strategic influencing
– Business partnering
– Working with vendors
– Scalability, interoperability and portability analysis
– Controlling quality
– Benefits realisation
– Detecting unstated assumptions
CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
References
Textbook:
• J. K. Pinto, P. W. Morris, The Wiley Guide to Managing Projects. John
Wiley & Sons, 2004.
Reference materials:
• N. Graham, S. E. Portny, Project Management for Dummies, UK Edition.
John Wiley & Sons, 2010.
• R. Stellingwerf, A. Zandhuis, ISO 21500 Guidance on Project
Management – A Pocket Guide. Van Haren, 2013.
• Project Management Institute, A Guide to the Project Management
Body of Knowledge (PMBOK guide), 6th Edition. Project Management
Inst, 2017.

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
References
Reference materials:
• http://fidic.org/sites/default/files/epcm_loots_2007.pdf
• http://fidic.org/node/757
• https://www.projectsmart.co.uk
• https://projectmanager.com.au
• https://www.infrastructure.gov.au
• https://whatis.techtarget.com/definition/BOO-project-build-own-
operate-project

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971
References
• https://www.theprojectdefinition.com/lstk-lump-sum-turnkey/
• http://alliancecontractingelectroniclawjournal.com/wp-
content/uploads/2017/04/Forrest-J.-2005-%E2%80%98Legal-
Considerations-of-Alliance-Contracts%E2%80%99.pdf
• https://ppp.worldbank.org/public-private-
partnership/agreements/concessions-bots-dbos

CRICOS Provider Number: 03567C | Higher Education Provider Number: 14008 | RTO Provider Number: 51971