Opportunity In Bidding To Highway Project Evaluation Report

Reporting on the Opportunity in the Bidding to the Highway Project

Dear Ladies and Gentleman

It has been decided by our company that it has extended some of its activities into the new venture of business, that has made its report prepared in evaluating the business opportunity in its construction in the highway Victoria/ Australia. The sole aim of the project is to upgrade to the Sunshine Avenue Road to the Calder Freeway and its goal is to enter into the market as the head contractor or the deputy of the Project Management. The CEO has made clear instructions in preparing the report that is to focus on the risks that is present in this new area and then to schedule and estimate it. This report will be considered as one of the most significant risks that will help in the mitigation or to eliminate the risks.The analysis of the risks is shown to be a risk that can be easily controlled and that will not help in the suspension of the project, that has been identified  by the team like the:

• Lack of proper workmanship
• Delays due to the shortage in the number of the skilled labor
• Proficiency and a beginner’s experience in the highway and the road projects
• Suspension or delays due to bad weather
• Suspension due to the activities that may be caused by the existing infrastructures

In this report, it is expected that the cost for the preparation of the bid and its process may include the need to:

14 employees from 6 departments.

 Around Four months to prepare the bid from 6th March 2017 to 3th July 2017.

The estimated cost that has been made is $262,874. The scheduled summary that has been found through the attachment includes the working details, start and finish dates and the details of the employees. The work in the new business area always need proposals and appreciations in our consideration. 

The risks that has been mentioned are important that has high attention level that will be required in implementing the different mitigation and the recommendation level.

There is a need for the investigation in the environmental area to visit the site through a careful planning that includes the necessary information as well.

The ideal contracting or the project delivery system will help to eliminate the contracting and the financial risks like for example avoiding the price system in a fixed way over the project overrun. The more the popularity is in Australia is through the system of the Alliance System for the large amount of the projects that may be our future project.

There is a need to keep on the seeking for the professional and the skilled staffs in the projects in the technical and the administration sectors to plan, conduct and that will manage our projects in the future.

Time of Bid Preparation

The competency in the system needs to be high as well that should be operated prior and during the execution of the project amongst all its partners and project planners in order to achieve the results that is supposed to be intended. 

The cost of the preparation of the bid will come upto $262,874 that includes the cost of the site visits and its clarification.

The calculations of the working time are 38 hours per week that is required to achieve the assumptions that has the 8 hours of working on a daily basis that considers one day off after every alternate four weeks that is shown in the calendar project (Etienne et al. 2016).

From the table 3.2 it clearly shows that the total cost for an individual to work in the process of bidding and as a Bid co ordinator will cost the highest as it involves the maximum amount of labor work. The bid clarification and the costs of the site visits has also been added there. 

The site visits will be required to collect necessary information that has to be on fixed dates and the budgets regarding the bid clarification needs to met with approval from the stakeholders.  

This table discusses the costs and the hours of the estimating department that has paid the highest value on the hours and costs along with its estimation activities that has the highest value. But in reality this definition scope will be paid the highest value on the site visits that is conducted in the work phase and the added costs will be around $116,441. 

The preparation of the Bid is almost of every four months that is from 6 March 2017 to the 3^rd of July and the working time is from is 8hours/ day and 5 days / week that also considers one day as a public holiday. This also occurs once in every four weeks to achieve the 38 hours/ week. Lastly, it can be said that the bid coordinator has the highest value and cost of the work hours.  

From the above table it is clear that the bid coordinator will have the highest cost values and the working hours.

Low activities floated for long two days that includes the standards of the price for the bid and the project planning

The schedule of the work will finish as the planned in the 3^rd July 2017 

M80 Ring Road Upgrade (Tulla Sydney Alliance)

In the section of the literature review the key aspects for the similar projects in some of the same areas like the construction of the roads and the highways will be reviewed. So that the future risks would not affect the business opportunity of the new firm.

Project name: M80 Ring Road Upgrade (Tulla Sydney Alliance)

Name of the client: Vic roads

Names of the contractor (Major Construction Companies):

• Thiess Pty Ltd
• Parsons Brinckerhoff
• Hyder Consulting

The project is concerned with the designing that is almost 6.7 km Calder Freeway to the Sydney Road that is like a section of 38km. The M80 Ring Road has been upgraded to the traffic environment that has installed and supplied a flyover bridge that includes the 19 curved steel opens that has the traffic management drawings, infrastructure conflicts that includes the relocation through the communication services, gas and water. The project started from July 2009 till May 2013. Adopting the delivery system for this project is from the Alliance Contracting type. The key method for this construction is substantial communication that has excellent traffic management system that is only limited to the suspensions and the expected delays. The outer beams that has been cantilevered that is off the central beam and will make the connection in the mid Span that has difficult maneuvers that is almost over the Tullamarine Freeway and has occurred at night with a 3D employment of the model so that the crane lifts can be optimized.

The basic formula that has been used to convert $ value to today’s value of dollar has been shown below:

The value of the project can be derived from the following formulas

F = P x (1+i) ⁿ    

• F: Future value of money
• P: Principle value of money – $657,000,000 Since Dec 2009
• i: inflation rate assumed as 4%
• n:  = numbers of year

The result shows the cost of project nowadays:

                                  F = P x (1+i) ⁿ

                                  F = $ 657,000,000 x (1 + 0.04) ^8= $ 899,149,866

 The encountering the risks of the project has been basically accounted to understand the suspension and the delays of the project:

• Delay due to the weather has considerable amount of risks that needs working in the traffic environment that is one of the important risk from where the project got affected.
• The heritage and the environment is another substantial risk that has made a breakdown description of the costs that is due in this project.
• A suspension in this activity has been caused by the infrastructure that has utility services, project routes, fibre optic cables, overhead electricity lines and the pipelines of gas and underground water.
• The existing infrastructure needs to be demolished so that a 24hour freeway closure to the safety of the workforce can be maintained. The excellent traffic management has been reduced to the expectancy delays that has made delivery as a free outcome.

There is a requirement to upgrade to the West Gate Free Way that is eventually a part of the Monash- West Gate (M1). The construction is involved in extending and widening the bridgeworks, motorway, access ramps reconfiguration and the reconstruction of the existing traffic lanes. The project started in the year 2007 in October and was supposed to finish it on December 2010. The project also included extending the road to 5.6 km between the Citylink Tunnels and the West Gate Bridge. Almost more than 77,394 of the asphalt, 64, 364 concretes, 11, 311 steel, 5, 513 m of pipe and 87,000 m3 of the contaminated materials has been reused in the construction of the project. Designing the project fixing for the common delivery of the system has been constructed in a successful way in the field of their work.

Description

Major companies: 

• Thiess Contractors
• Baulderstone Hornibrook.
• Parsons Brinkerhoff.
• Hyder Consulting 

The key constructional activity has a special requirement of enforcing the steel that has been made to deck up the road and the structure of the barrier. For the asphalt, a new size of the coarse gravel or the stone were used so that it could produce the courses of the pavement at a 19 mm stone size instead of the 26.5 mm so that it can be avoided to make any possible pavement failures in the late constructions that has a high durability. Almost a 20 m long structure column has been constructed to deck up the road through different locations and also needs to be in form of the precast with a high tolerance level in the hexagonal cage segments (Estrad and Romero 2016). There were also some of the supplement stations like the storage areas, construction compounds, storage facility for the equipment, constructional materials etc.

In December 2010, the value of project is $600 million. To convert to today’s dollars, we will use the basic formula to convert $ value to today’s dollar:

F = P x (1+i) ⁿ

Where:

– F: $ today value of project (2016)

– P: $ value of project in June 2009 (mid of project construction period)

– i: inflation rate. Will be assumed 4%

– n: number of calculated period.

F=600,000,000*(1+0.04) ^9.5 = $870,899,364

The transport and the traffic are the two most different risks that needs to be encountered on this project. The road environment is different in the construction project that eventually results in reducing the efficiency and the performance of their travel modes. The changes in the road environment includes speed reductions, results in the temporary roads or the cumulative impacts are some of the potential constructions in the three sections. The contractors could reduce the impacts that is evident in the road activities by easily making a reschedule of the constructional works and making a developed action plan that will help in reducing the impacts. These are some of the actions that needs to be complied with the standards of the practices of the VicRoads and the Management code of practices.

Aboriginal cultural heritage that has to be destructed in the occurrence in the occasional context. The preparation of the contractor has to be approved in making the cultural Heritage Management.

The risks that has been explained below might cause great loss. One of those greatest risks is the cost overrun.

• Technical complexity that is primarily due to the size and the duration of the project is a complete difficulty.
• The changes in the technological and the economic risks and also the external risk is primarily due to the modifications.
• The inadequacy in the management of the project is primarily due to the low productivity and the poor labor relations.
• Unrealistic estimations due to the involvement of the uncertainties.

The Adelaide is the biggest road project that is from 1960 and provides an outstanding value for money. The length is 23 km and is divided into four lanes joining the Sturt Highway that is at the Gawler Bypass. The project includes 11 bridges and 460000 tons of asphalt and 3.5 million cubic metres of the earthworks. The pavement is specially designed for the smoothest roads in Australia. Almost 3000+ people have been employed during this project that had a strong focus on the safety and connections with the local community. The construction of the project started late in 2008 and was completed by 2010. This is run by the delivery system like the construct and the design system.

The departments like transport, energy and infrastructure has been accounted to the delivery system in the expressway.

Major companies

York civil

Fulton Hogan

The alliance team made changes to the designing concept that might drive significant improvements in their area of functions. A revised layout of the Montague street which is a unique innovation that is interchangeable to the single urban diamond point that has made the movement of the traffic and its capacity in a safe queue way. There is also an implementation in the sustainability initiatives that needs to be changed by the specifications of the environment. A staged ram opening was done in the year 2009, where the travelling speed is improved on an average freeway by 20 km per hour in the Westbound and 10km per hour in the eastbound which is specially during the peak travelling times. Sustainability initiatives has also been implemented that has contributed enough change in the environmental specifications of the VicRoads. A reduction was also made on the carbon footprint of the project by only 34% that is with the use of the alternative materials and low embodied energy products and also with the re use of the generated waste products. Lastly 87,000m3 landfill space was avoided by eliminating more than 12,000 movements of the truck on the public roads that has been reduced to feel the consumption by only 11,000 tons of the carbon dioxide. 

In December 2010, the value of project is $564 million. To convert to today’s dollars, we will use the basic formula

F = P x (1+i)ⁿ   

– F: $ today value of project (2017)

– P: $ value of project in September 2009 (mid of project construction period)

– i: inflation rate. Assumed as 4%

– n:  = number of calculated period.

F=564,000,000*(1+0.04)⁹ = $802,747,862

Risks encountered on the projects

The estimations are unrealistic and has eventually increased the costs of the projects. From the report there is a need to increase in the costs.

Unrealistic estimates: The changes that is present in the project might cause to increase the cost of the project which starts from the value $370 million, but the final cost of the project at the end was $564 million that had a cost of an increased by 66%. As per the report of the Australian Constructional Achievement Award it can be said that the increase is specifically to maximize the scope of the work on NEXY. Hence there is a shortage in the sources that needs to be talked about that will eventually increase the cost that cannot be governed only if the increase is on the variations or the cost overrun.

Delivery of materials in the bridges: In this project a total of 15 bridges has been constructed. The South Australian State was eventually not ready to gear up for this road project hence in this case the material is a logistical challenge for the project. In order to find out the location a plan was executed by the contractor along with the alignment that will help the beams to be safely stored without affecting the work of the construction.

There are some of the significant factors for the cost and the time overrun in the highway and the road projects that has lack of efficiency in the equipment efficiency, delay in payments by the owner, poor communication and political situation between the constructional parties.

There is a need to reduce the risks that has both time and cost overrun that may cause some of the factor, time and cost delay that needs to be controlled by the company. The time schedule for the delivery of the material in the process sites, quality monitoring activities or setting a reasonable slack in their schedule to avoid the delay in the employment and the project of the skilled labor. Hence, the external factors can be controlled by setting in the allowances and thee contingency. This will eventually reduce the impacts on the cost and the time overrun (Estrada and Romero 2016).  

References

Estrada, A. and Romero, D., 2016. Towards a Cost Engineering Method for Product-Service Systems based on a System Cost Uncertainty Analysis. Procedia CIRP, 47, pp.84-89.

Etienne, A., Mirdamadi, S., Mohammadi, M., Malmiry, R.B., Antoine, J.F., Siadat, A., Dantan, J.Y., Tavakkoli, R. and Martin, P., 2017. Cost engineering for variation management during the product and process development. International Journal on Interactive Design and Manufacturing (IJIDeM), 11(2), pp.289-300.

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