Attributes On Construction Project Success: Analysis Of CPB Contractors’ Potential Bid For West Gate Tunnel Project

The Project

Bidding decisions are very critical for any construction company across the world. This is because the decision on whether to bid or not for a construction project marks the genesis of a possible long journey that will have numerous implications on the company’s finances, business relationships and networks, reputation and track record. Some of the factors that influence the decision on whether to bid or not include: complexity and scope of the project, competition, experience or capability of the company, risks, costs and potential benefits, among others (Ugochukwu & Okolie, 2013); (Watt, et al., 2010). This report presents an analysis on whether CPB Contractors should bid for West Gate Tunnel Project or not. This is one of the major infrastructure projects to be undertaken by the Victorian government and therefore its successful delivery is very essential for the government, residents and business people in Melbourne and Victoria as a whole.

West Gate Tunnel is a mega infrastructure project that is expected to transform and improve mobility of people and vehicles in and around Melbourne, Victoria. The $6.7 billion project has three major precincts: West Gate Freeway that involves widening and upgrading the freeway from eight to twelve lanes; new twin tunnels running from Maribyrnong River and West Gate Freeway; and port to city comprising of an elevated highway along Footscray Road and a bridge over the Maribyrnong River (ECOM, 2018). The total length of the toll road is 5.5 km and its completion is scheduled for 2022. Once complete, the project is expected to create 6,000 new jobs in the region (Road Traffic, 2018). Other expected benefits of the West Gate Tunnel Project are: create a much-needed West Gate Bridge alternative; take about 22,000 and 28,000 vehicles from Bolte Bridge and West Gate Bridge respectively a day; minimize travel time during peak hours by about 20 minutes; build about 9 ha of open space and over 14 km of cycling and walking paths; include bridge and road strengthening for carrying heavier loads; remove more than 9,000 trucks from local roads; and generate about $11 billion to the Victorian economy (Transurban Limited, 2018). Therefore this project has a several social, economic and environmental impacts.

CPB Contractors is a Sydney-based construction company of CIMIC Group. The company is specialized in the design, construction, ownership and operation of a wide range of infrastructure projects such as roads, airports, tunnels, railways, ports, energy, water and resource facilities, and social infrastructure. The company’s main operations are in Australia, New Zealand, Asia, India, Papua New Guinea and New Zealand. Its operations are based on the principles of innovation, integrity, delivery, accountability and safety. CPB Contractors has numerous partnerships both with government entities and private companies. The company’s main goals are to build strong relationships and networks across the world by delivering high quality projects within stipulated time and budget. This will help in improving the company’s track record and client satisfaction. Most importantly is that the company is targeting to apply innovative technologies in project delivery so as to reduce costs and improve sustainability of projects.

Company Information

West Gate Tunnel is a mega infrastructure project that can only be delivered successfully by a company that is familiar with this kind of complex projects and has requisite resources to accomplish it. CPB Contractors has been in the construction industry for many years and has a team of knowledgeable, experienced and dedicated professionals who take pride in having been involved in delivering some of Australia’s most iconic and important projects. The decision on whether the company should bid for the West Gate Tunnel Project are not will be determined by the following factors:

Project Needs and Scope

West Gate Tunnel is a very important engineering and infrastructure project for residents and visitors of Melbourne, Victoria. The project involves numerous engineering works such as tunneling, construction of new roads and bridge, widening of existing roads, construction of open public spaces, cycling and walking paths, and building and installation of road facilities and furniture. This project can only be delivered by a company that has adequate knowledge and experience in similar projects. CPB Contractors has accomplished numerous similar projects in the past and therefore that the requisite qualifications to manage the needs and scope of this project. Therefore based on the project needs and scope, CPB Contractors is able to bid for this project successfully.

Resources

A project can only be delivered successfully by a company that has all the resources needed for effective and efficient execution of the project (Enshassi, et al., 2010); (Hwang & Kim, 2016). This is one of the main factors considered when evaluating, prequalifying and selecting companies in the construction industry (Kog & Yaman, 2014). The estimated cost of West Gate Tunnel Project is $6.7 billion and therefore this is a project that has to be delivered by a company with vast resources. CPB Contractors has a wide range of resources that are needed for delivery of this kind of complex projects. This includes state-of-the-art equipment (such as tunnel boring machines), experienced personnel and financial resources. The company’s workforce is about 23,000 people that operate across different countries (CPB Contractors, 2018). In the twelve months period that ended December 31, 2017, CPB Contractors’ construction revenue was about $7.6 billion and as of the same date, construction work in hand for the company was about $15 billion (CIMIC Group, 2018). The company has the capacity to hire new staffs with desirable knowledge and expertise, purchase or lease needed equipment, and finance other operations associated with the project. Therefore CPB Contractors has the necessary resources to undertake West Gate Tunnel Project.

Factors to Consider in Making Bidding Decision

Past Projects

Experience and performance of past projects are very essential in bidding for new projects (Alzahrani & Emsley, 2013); (Xiong, et al., 2014). Companies that have successfully completed similar projects in the past have an advantage in submitting successful bids because they know the needs of the project, potential risks and suitable strategies of overcoming obstacles for successful delivery of the project (Watt, et al., 2009); (Wibowo, et al., 2015). CPB Contractors has completed numerous projects in the past. These projects have given the company vast experience, good reputation and exemplary track record in the construction industry. Some of these projects are provided in Table 1 below

In the past 15 years, CPB Contractors has completed over 82 construction projects in different parts of Australia and New Zealand alone. This shows that the company has developed strong working relationships with the federal, state and local governments in Australia and New Zealand. Delivery of good quality work and within stipulated budget and timeline are also some of the reasons why the company is constantly winning government and private projects in the region.

There are several other projects that are being undertaken by CPB Contractors currently. Some of these projects are provided in Table 2 below (CIMIC Group Limited, 2018).

Table 1: CPB Contractors’ current workload

The company has an experienced team of professionals that has successfully managed all these projects. Because of its capability and experience in efficient project management systems, the company is still bidding for new projects. The advantage of ongoing projects is that the company can share the resources it has, such as equipment, in delivering these projects (El-Mashaleh, et al., 2014). For example, CPB Contractors can use the tunneling boring machines used in Metro tunnel rail works to perform works in West Gate Tunnel Project. This helps in minimizing cost of project delivery. Additionally, the company can develop only one health and safety management plan and apply it across similar projects. This also helps in reducing cost of project implementation.

Delivery of construction projects is affected by a wide range of risks (Ye, et al., 2013). These risks are a major threat to successful accomplishment of construction projects. It therefore requires a company to perform comprehensive risk assessment so as to identify risks, analyze them and develop strategies of avoiding or managing them (Yan, et al., 2018). This has to be done after reviewing all the project specifications, plans and documents (Jones, 2017). CPB Contractors has delivered several similar projects in the past and therefore the company is able to identify potential risks associated with this project and develop suitable techniques of avoiding or managing them. Potential risks include: unpredicted site conditions, incomplete project documents, safety concerns, project variations, financial constraints, accelerated timelines, etc. CPB Contractors is familiar with all these risks and the appropriate measures that can be taken to avoid or manage them effectively.

Past Projects

There are definitely several other companies that will be bidding for this project. However, CPB Contractors has a competitive advantage over most of these companies, considering its capability and track record. Competitive advantage is a very vital factor in making bidding or no-bidding decision (Aznar, et al., 2017). As stated before, the company has worked with Victorian government and other state governments in Australia, in delivery of numerous infrastructure projects. So far, all the projects awarded to the company have been delivered successfully. Inasmuch as other companies will be working to be the lowest tenderer, CPB Contractors will be working to be the best tenderer. This is because the company understands and has what is required to deliver quality final product for the project, on time. Delivery projects on time is very key towards client satisfaction and consideration for future projects (Williams, et al., 2015). It has both private and public partners that will facilitate successful delivery of the project. In this regard, competition is not a threat a tall for successful bidding of this project by CPB Contractors. For this reason, the company should proceed and bid for the project.

All construction companies always want to make profit from any project they undertake (Jarkas, 2013). CPB Contractors is not exempted and the company has qualified staffs to accurately estimate the cost of the project accounting for labour, material and equipment costs. Determining profit estimates starts with calculating the cost the company will incur to complete the project. Once the cost is determined, the company has to compare it with the quoted project value by the client. The company has to make the decision to bid for the project only if it will make profit. Since the company has accomplished similar projects in the past and also undertaking others currently, determining the cost of completing this project is not a difficult task. The company can also use its expertise and many years of experience to reduce cost by applying innovative construction materials and methods, reducing delivery time, sharing materials, equipment and labour being used in other projects undertaken by the project, avoiding or managing risks, proper allocation and utilization of resources, and minimizing wastage. Therefore based on the company’s expertise, experience and track record, there is a great chance of making substantial profit from this project. For this reason, the company should bid for the project.

Conclusion

The West Gate Tunnel Project is a $6.7 billion infrastructure project that has numerous potential benefits for the Victorian economy and all residents and visitors in the region. Considering the scope, complexity and necessity of the project, it can be delivered best by a company that has a track record in similar projects and which has adequate capacity to complete it. CPB Contractors has been in the construction industry for many years and has accomplished numerous similar projects in Australia. The company understands the need and scope of the project because it has accomplished similar projects in the past. It has the necessary technical, human and financial resources to deliver the project successfully. It understands potential risks associated with this project hence can develop and implement appropriate measured to prevent or manage them effectively. The company has completed several similar projects in the past in different parts of Australia and New Zealand and therefore is potentially poised to deliver this project successfully. There are also other projects that the company is undertaking currently, which can help to reduce the cost and facilitate successful delivery of the project. The competition in the market is not a threat to the company due to the company’s strong track record, performance and capability. Last but not least, the company can make profit from the project because it understands all the necessary approaches of reducing wastage, avoiding delays and minimizing overall costs of the project. Therefore the company’s resources, expertise, experience, past performance, track record, competitive advantage, goals and principles make it suitable to bid for this project. The company should go ahead and bid for the project as there are higher chances that it will be selected as the best tenderer and complete the project successfully.

Ongoing Projects

References

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