Supplier Selection and Contract Management

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Assignment 2 (Value 40%)

Evaluation, Supplier Selection and Contract Management

Table of Contents

1 Introduction 2

2 Learning Outcomes 2

3 Scenario 2

4 Marking Scheme 2

5 Assignment Hints 2

6 References 3

1. Introduction

This assignment, worth 40% of your final mark, is designed to embed your learnings from the second four weeks of the course, specifically:

• How to develop evaluation criteria and an evaluation plan and undertake an evaluation to select a supplier; and
• How to write a Contract Management Plan and identify good and poor contract management.

2. Learning Outcomes

This assignment partially addresses learning outcomes 1 and 4 and completely addresses learning outcome 2.

3. Assignment Question

This assignment is in two parts:

Part 1 – Evaluation and Supplier Selection

For this part you are preparing the evaluation plan and evaluation criteria to support the selection of a Property Management Company who will manage leasing, cleaning and maintenance of the building fabric, hydraulic, electrical and mechanical services as well external parking areas and landscaping of your Organization’s buildings in Australia. Some buildings require refurbishments which will be managed by the PMC. The organisation has previously managed all the facilities with in house staff.

Historical data shows the following $$$ spent on cleaning and maintenance in 2019 by location:

City	Maintenance	Cleaning
Perth	3 500 000	2 000 000
Sydney	4 000 000	2 500 000
Brisbane	3 401 000	2 500 000
Melbourne	6 900 100	3 000 000
Adelaide	1 000 000	1 250 000
Darwin	1 500 000	850 000

For this assignment assume the following:

• All buildings are within the respective CBD’s;
• Contract to start 1 January 2021;
• Property Management companies offering all services are to be shortlisted;
• Your company uses a SAP corporate system and would require the successful PMC company to be able to interface with the relevant SAP application:
• The organization will retain the current in house asset manager
• The Adelaide and Melbourne buildings are in need of refurbishment starting in 2021 which is estimated to cost $ 5 000 000 for Adelaide and $ 8 000 000 for the Melbourne building.

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When choosing weightings remember they need to reflect the relative importance of the items against the historical data and organizational values. This will drive the Total Cost of Ownership and negotiation strategy.

You are required to:

• Produce an evaluation plan for this PMC selection, including an evaluation process that incorporates Total Cost of Ownership (TCO) and Value for Money (VfM);
• Design the evaluation criteria and weightings;
• Apply the criteria and weightings to arrive at a recommended PMC; and
• Provide, to be cited in the evaluation plan, at least two academic, professional or corporate references to support your material

Part 2 – Contract Management Plan

You are required to produce a suitable contract management plan for the successful PMC above, containing all of the relevant sections. At least two academic, professional or corporate references to support your material are to be included.

4. Marking Scheme Topic Criterion Details Marks Available Evaluation Plan Structure, depth and breadth. Includes all necessary headings, and information in a logical order. 25 Evaluation Criteria and calculation A reasonable set of evaluation criteria with sensible weightings and correct calculation or recommended FMC Contains sufficient information to unambiguously describe the criteria and rationale for their inclusion and weightings and calculation. 25 TCO and VfM Analysis A description A reasonable representation of the steps or calculations that will result in the best long term result. 10 Contract Management Plan Structure, depth and breadth. Includes all necessary headings and information in a logical order. 20 Presentation Clarity and quality of included material. Is logical and concise. Information is sufficiently detailed and technically correct. 20 TOTAL
   
   100
5. Assignment Hints

Always pay attention to the following:

• Information on assignments is given at the first lecture and regularly during the course. Attend or listen to the lectures.
• Review the assignments well ahead of time to ensure that you have time to source material and seek guidance if necessary;
• Read the questions carefully. Make sure you understand them; if not, seek clarification;
• Do not attempt the assignments before the material has been covered in class. This will cost you valuable time.

As with all assignments it is not the volume of material you provide but the quality. Remember that you must always:

• Answer the questions;
• Include everything necessary to tell a complete story – do not assume prior knowledge;
• Be logical;
• Be concise;
• Write to a high academic standard.
• Have a 2^nd party review your assignment prior to submission

Dates: Check UO and BB

Further Reading The Department of Finance (2015a) provides a good CMP template and Contract Review template (Department of Finance 2015b) and many other useful contract management documentation at the same website.

QUOTE

Success is not final, failure is not fatal: it is the courage to continue that counts. Winston Churchill

6. References

Department of Finance. 2015a. “Contract Management Plan.” Government of Western Australia Accessed October 30. http://www.finance.wa.gov.au/cms/Government_Procurement/Guidelines_and_templates/Community_Services_Templates_and_Guides/Community_Services_Templates.aspx.

Department of Finance. 2015b. “Contract Review.” Government of Western Australia Accessed October 30. http://www.finance.wa.gov.au/cms/Government_Procurement/Guidelines_and_templates/Community_Services_Templates_and_Guides/Community_Services_Templates.aspx.

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