The Chief Executive Officer of a large capital-intensive organization currently undertaking a large number of construction type projects is considering what should be the best type of contractual arrangement it should adopt for its next major project. Clearly concerned about 'securing of supply* in order to ensure that the project is delivered on time, the Chief Executive Officer has heard that similar organisations are preferring to adopt 'lump-sum turnkey* type of contractual arrangements. The Chief Executive Officer however has admitted that she is not as clear as to what this actually means and therefore has requested that you undertake the necessary research and prepare a report for the Senior Management to consider. As part of the report the Senior Management team have also requested some further information specifically relating to contract management should your recommendation be accepted.
Your report should provide the necessary information to assist the organization to clearly understand:
1) what are the defining characteristics of a 'lump-sum turnkey’ contractual arrangement,
2) how would it differ from other types of contractual arrangements.
3) what would be the advantages and disadvantages of the organization adopting a 'lump-sum turnkey* contractual arrangement
Based on the assumption that the lump-sum turnkey contractual arrangement is adopted, the Senior Management team have also requested that you provide further information about contract management: More specifically:
4) what is the purpose in developing a contract management plan?
5) what are the main elements that should be included in the contract management plan (and why)?
6) nominate your top 5 key performance indicators that you would recommend be included in the contract management plan (and why)?