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May 10, 2023

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Assignment Topic: Project Procurement Report
You are required to write a report to recommend the best project procurement strategy for a client. You
are provided with some information on the proposed scheme in terms of the requirements and constraints
to allow an appropriate procurement strategy to be developed.
Main sections in this report
Introduction: 200 words
Body:
Section 1: develop and justify a packaging strategy (contract packagestructure) for the project (800
words)
Section 2: develop and justify a contracting strategy for key tier 1supplier(s). This includes the
following: (2,000 words)
– Buyer-supplier commercial relationship (400 words),
– Supplier selection/tendering method and criteria (400 words),
– Reimbursement method (400 words),
– Standard form of contract (400 words),
– Contract incentives (400 words)
Section 3: recommend tiered dispute resolution methods that are appropriate for the buyersupplier commercial relationship in this project and must be used to resolveany commercial
disputes that may occur between the client and its supplier(s).
(800 words)
Conclusion: 200 words
Report Structure
The report should have the following sections:
– Title Page
– Executive summary (not included in the word count)
– Table of Contents (not included in word count)
– List of tables and figures (not included in word count)
– Introduction (~200 words)
– Main Body of Report
– Section (I) The project’s contract packaging strategy (i.e., procurement route/delivery model)
(~800 words)
– Section (II) The contracting strategy (~2,000 words)
– Section (III) Multi-tier dispute resolution arrangement (~800 words)
– Conclusion (~200 words)
Reference list (not included in word count)
Appendix (not included in word count)
Project background/context
A large utility/energy company (the client) operating in Wales and in many European countries has been
granted permission by the Welsh government to develop an offshore wind farm off the coast of South
Wales. The project supports local, regional, and national energy strategies aiming to create a cleaner,
greener, and more prosperous environment. It will help the UK in achieving its net zero targetand becoming
carbon neutral by 2045.
The large-scale renewable energy generation project aims to deliver up to 150MW of clean energy and
could include up to 50 wind turbines. The offshore wind farm will be capable of generating and providing
renewable electricity equivalent to the needs of around 100,000 Welsh homes annually.
As the last coal-powered power plant in Wales was decommissioned in 2020 and a few other plants
generating electricity from fossil fuel are coming to the end of their useful life by the end of 2025, the
required offshore wind farm must be operational by this time. To avoid energy shortage and acceleratethe
country’s transition to clean energy, the project’s deliverables must be delivered in a relatively short
timescale.
The Client/Project requirements
Planning permission has been granted. This is an urgent project, and the client wants to have the facility in
operation by the end of 2025. The client has the funds made available, but achieving cost certainty is
important before committing to the project.
The client does not wish to retain the design risk and requires the contractor to guarantee operational and
performance requirements will be met in time. The contractor must meet the performance specifications
including the power generation requirement per wind turbine and the total production capacity of the wind
farm. The wind farm must have a minimum design life of 25 years. The client will operate the wind farm
using its own in-house resources to supply its customers with clean energy. As the owner and operator of
the wind farm, the client will operate the plant using its in-house resources throughout its operational life.
The client has hired you as a project management consultant and instructed you to write a report
recommending the most appropriate procurement strategy to meet the project’s objectives. Based on the
information given in this brief, and by drawing on evidence from relevant literature, you are required to
produce a report that is comprised of three main sections as explained in the introduction.
Important Notes.
1. Develop and critically review procurement and contracting strategies for a project.
2. Critically evaluate different types of delivery models or procurement routes.
3. Critically evaluate different types of commercial relationships and supplier
reimbursementmethods.
4. Recommend a suitable standard form of contract and typical contractual terms to
incentivize suppliers.
5. Discuss different types of contractual and commercial risks.
6. Critically discuss various alternative dispute resolution techniques and recommend appropriate
methods to manage the conflict and resolve the disputes arising from the parties’ commercial
relationship.
Relevant Resources
– APM Guide to Contracts and Procurement, 6 & 7
th Editions
– APM Body of Knowledge
-Bent Flyvjberg
– Commercial Management Theory and Practice by Lowe,David
– Commercial Management of Projects by Lowe, David,
– FIDIC (Federation Internationale Des Ingenieurs-Conseils)
– NEC (New Engineering Contracts)
– Other relevant peer reviewed journal articles from 2012 upwards

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