Project Management: The Performance of Public Private Partnerships in Scotland - Assignment Example

A project can be defined as a program of work to bring about a beneficial change. We can say that a typical project starts when someone's idea is embosomed by a wider group - first informally, through discussions with colleagues and then through a more formal process (involving senior management, the management committee or board). Next they have to cope with fund-raising process. When the funding bid is successful the project can start. This means that the staff can be appointed and the work can begin. Generally, a project is characterized by: a start and an end; a multi-disciplinary team (brought together for the project); constraints of costs, time and quality; a scope of work. For example, a new piece of legislation, market imperatives, management initiatives and new technology create projects that need to be managed, often across departmental or disciplinary lines. Project Management is a methodology and a discipline which can bring significant benefits to organizations. It ensures that limited resources are used on the right projects; manages complex changes in an organized way; assesses risks, defines goals and key success area and sets quality objectives. That is why Project Management is told to be the best method of implementing change. To understand the methodology we have to analyze the project life cycle. The elements of a project life cycle are: The preparation stage - involves the project manager and sponsor and approval of an outline project justification, plan and project budget The start up stage - involves the selection and briefing of the project team and some discussion on the roles and organization The Feasibility or Research stage - establish whether the project is feasible and establish the risks and key success measures The defining and planning stage - means to plan the project in more detail by writing and publishing a full definition of the project and determining a project plan. The production of a Project Plan, or Schedule, is a key part of the development of any project. The schedule The implementation stage - involves the execution of the project as agreed The close down stage - involves the satisfactory delivery of the products or services that achieve the beneficial gain. Formal methods of project management offer a framework to manage this process and provides a series of procedures to manage the project through its life cycle. According to the Lasa Computanews Guide to Project Management, the key elements are: to define the project accurately and systematically clarifying objectives to divide the project up into manageable tasks and stages to control the project through its stages using the project definition as a baseline. Highlighting risks and developing specific procedures to deal with them. To provide mechanisms to deal with quality issues Clarifying roles to provide the basis for effective teamwork. There are lots of different project management methodologies available. But they are all variations on the same theme and have a lot in common. Many project management systems are proprietary. Project management consultants sell them as a package of services that will include training sessions and consultancy alongside documentation that will include templates and guidance notes. These packages don't come cheap - they cost hundreds or thousands of pounds. But this approach may be a cost effective solution for larger organizations that want to set up a structure to manage a number of projects. Practically, they are paying to set up a framework that includes: training for staff, consultancy and support to manage projects within the organization. However, in RCIAS Good Practice Bulletin No3 there are noted some of the common issues identified within the Research Councils or the wider public and private sectors: Procurement Strategy, Guidelines, Supply of management information, Training, Contract Signing Powers, Use of consultants. The Procurement Strategy issue is determined by the fact that few councils have a formal and authorized procurement strategy. Guidelines often contained elements of strategy but the authority for the development of best practice and the utilization of procurement skills was unclear. As RCIAS Good Practice Bulletin No3 shows, a developed strategy should provide: A clear description of procurement arrangements Authority for the timely application of procurement expertise For its application to all non-payroll expenditure wherever it may potentially add value and give assurance on propriety and regularity. A strategy approved at Management Board or council level and published widely within the Council. Best practice includes: Early participation of procurement staff Development of supplier base and modern procurement practice (procurement cards, aggregation and e-commerce) Restriction of right to negotiate prices, enter into contracts and to amend or alter contracts to procurement staff trained to exercise the necessary skills Management and enforcement of contracts to completion Standards and behavior in connection with procurement Setting of targets & performance monitoring. The Contract Signing Powers issue shows that Signing powers are defined as the authority to obtain tenders, negotiate prices and to place, manage and amend contracts. Some Councils had good clear guidance on the separation of budget authority from the authority (and expertise) to negotiate, price and to sign contracts, but did not make this as clear. The good practice should provide clear separation of authority to specify and approve expenditure (by Budget holders) from the supply of tenders and the negotiation, pricing, placing and management of contracts (by procurement specialists). Signing powers linked to a review of the procurement experience and training provided for relevant staff The exercise of signing powers periodically checked by the Council Head of Procurement or by his staff under delegated arrangements to ensure compliance with best practice (using appropriate management information). The improper use of signing powers result in their withdrawal. When changes in staff occur, signing powers not automatically transferred but reviewed centrally and formally re-issued in accordance with appropriate experience or training provided. Case Study : The Performance of Public Private Partnerships in Scotland. Procurement and Construction Performance The PPP procurement process is expensive and represents a greater burden for smaller projects. The mean time taken to procure the PPP projects surveyed was 28 months, which was generally perceived to be slower than non- PPP procurement. We note, though, that the increased costs and timescales associated with procurement should be weighed against their impact on overall timing and value for money. It is also worth noting that 'bundling' of smaller projects can help to spread procurement costs across several discrete projects. The proportion of projects delivered on time showed a significant improvement over historical experience. There was also greater price certainty during construction in the PPP projects surveyed than has been the case historically using conventional procurement. Nevertheless, on more than half of projects, the price changed at the preferred bidder stage because of a change to the design or service specification. Contractual Relationships Survey evidence showed that the majority of relationships between authorities and contractors are good. In interviews it was clear that both parties recognized the benefits of developing a long-term partnership. Payment mechanism deductions are being implemented on the majority of projects. Recommendations The evidence supports the strong view that PPP transfers construction risk to the private sector more effectively than historical procurement methods and is likely to deliver value for money where there is strong competition and the projects are large. This is clearer in certain sectors, for example water, than in others, such as health. A survey confirmed that the well known problem of transaction costs for smaller projects is also an issue in Scotland. Bibliography: 1. Caroline Low, Daniel Hulls, Alan Rennison; May 2005. Summary of initial research report on the performance of Public Private Partnerships in Scotland. Scottish Executive Publications. On the Internet at http://www.scotland.gov.uk/Publications/2005/05/05153838/38399 2. Procurement Guide - Project Organization. 2002. On the Internet at http://www.ogc.gov.uk/sdtoolkit/reference/ogc_library/achievingexcellence/ae2.pdf 3. Adam, Frederic; Sammon, David; Carton, Fergal. Project Management Issues in Implementing ERP - Towards an Approach more suited to ERP Projects. On the Internet at http://www.aim2004.int-evry.fr/pdf/Aim04_Adam_Sammon_Carton.pdf 4. Morris, Peter W.G. October 2003. The irrelevance of project management as a professional discipline. On the Internet at http://www.crmp.net/papers/Moscow%202003.pdf 5. Chadwick, D.W.; Otenko, O. The PERMIS X.509 Role Based Privilege Management Infrastructure. On the Internet at http://sec.isi.salford.ac.uk/download/SACMATfinal.pdf 6. Eddowes, Lee Anthony. 2004. The Application of Methodologies in e-Government. Electronic Journal of e-Government. On the Internet at http://www.ejeg.com/volume-2/volume2-issue2/v2-i2-art5.htm 7. http://www.spottydog.u-net.com/guides/faq/faq.html 8. Bourn, John. November 1998. Guidelines on Best Practice for the Audit of Privatizations. Working Group on the Audit of Privatization. On the Internet at http://www.nao.org.uk/intosai/wgap/bestprac.htm 9. Procurement performance measures - in liabilities management. On the Internet at http://www.ukaea.org.uk/contract/downloads/ppmlm.pdf 10. Modern procurement practice in local government - local performance indicators for procurement. On the Internet at http://www.idea.gov.uk/publications/publications022.pdf 11. IMPACT ASSESSMENT & PROJECT MANAGEMENT CYCLE (PMC). On the Internet at http://www.enterprise-impact.org.uk/word-files/ProjectManagement.doc Read More