CSM80016 Final Assignment
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CSM80016 Final Assignment
The Circumstances
You are employed by a company in Australia (Infrastruct Construction Pty Ltd), based in
Bendigo, Victoria and the CEO has decided that the company should bid for work in a new
area of business.
The CEO requires an executive summary to submit to the Board that: describes the new
area of business (sector) and its significant characteristics; describes the major risks and
opportunities of contracting; and recommends actions to minimise these risks.
To assist understanding of the new sector the CEO & board require analysis of three typical
substantially complete projects in the chosen sector and the cost, timing and resources
required to prepare a Tender (a contract proposal) for a future bid on a typical sized contract
in this new sector.
What Is Required in This Assignment?
You are to prepare a report to the CEO which will include an executive summary to go to the
company board as a briefing document. The report to the CEO must have enough
background supporting data to give the CEO confidence about the result, but only the
executive summary will go to the board.
The report will contain the following elements:
1. An executive summary to go to the Board.
2. A discussion about the major risks, and a recommended list of the estimated
allowances and contingencies required to be included in the pricing of a typical bid
for a future contract in this new sector. The company has a standard report format
for listings of Allowances and Contingency.
NOTE: This is not a comprehensive, formatted risk assessment to the Risk
standard, ISO 31000. Refer to your tutorial on ‘Risk & Contingency’ for the format.
3. An estimate of the costs of the bidding team, to prepare a quotation for a contract of
this type and value.
The estimate is to be summarised in a table by department (rows) and work phase
(columns & total).
Bidding Team Estimate cost table:
4. A schedule (prepared in MS Project 2010 or later) for the bid preparation. The
Schedule is to identify the work phase and department for each activity and is

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intended to provide the subtotals for the above Bidding Team Estimate cost table.
5. An appendix summarising your background research (a summary is required for
each project and articles should be referenced with the URL rather than printed out.
The summary is to focus on the risks actually encountered in the chosen sector and
how they were managed.)
For your background research you will analyse the three (3) projects of the type of work that
the CEO considers your company should consider bidding.
In addition to articles produced by project participants such as the owner or contractor, your
research must include references to news articles about the project or similar relevant
independent reports not produced by a Project participant (marks will be deducted for each
project in your research, that fails to meet this requirement).
If you can, you should choose projects that relate to the field of study for which you
are enrolled (e.g. civil infrastructure, production engineering, electronics, architecture,
etc.) and they are to be of a similar contract size and the same sector. A list of some
suitable (mostly civil) sectors is suggested in Item 2 below. That list is not
comprehensive, and you may choose other sectors, provided you have the
agreement of the lecturer.
For the purposes of this assignment, you are to choose three (3) projects that are:
• at least 80% complete, and not started prior to 1990,
• an initial project value of at least $400 million and be up to about $2 billion,
• projects that are from the same sector,
• projects that are approximately the same value,
• projects built in Australia,
• if possible, from a sector related to the course that you are doing.
Points to be considered when choosing projects and sectors:
1. The type of project that you choose must be agreed on Canvas Assignment #3,
with the lecturer before you commence the assignment. The projects reported upon
must have been constructed after 1990 and preferably had significant issues that
resulted in news articles about major claims, and delays. There will be a limit to the
number of students who will be permitted to choose the same sector and projects. So
get your requests in early! First come best served.
2. Read carefully through all this assignment and do some preliminary research
before you choose a topic. To enable you to meet the requirements of this
assignment you must make sure that you have sufficient background knowledge
and/or there is sufficient information available on the topic that you want to select. If
not, you need to choose another topic for which you can find more information.
Some Suggestions for Suitable Project Sectors –
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Infrastructure projects such as: Highway extensions and upgrades, Tunnels, Steel or
concrete bridges, Ports (harbours), Long distance pipelines, Railways, Desalination
plants, Earth/rock fill or concrete dams, Airports, Hospitals.
Large scale property development such as: High rise buildings, Satellite townships,
Sport venues, Shopping complexes.
Other project types (particularly in your own field of study) such as: Software
development, Manufacturing plant, Product development, or as may be agreed with
the lecturer.
Some key search words: ‘construction’ or ‘Project’ with ‘cost or program overruns’
and similar). Also see your lecture notes, but you must do your own original research.
Another area of research into possible sectors is to look at the Engineers Australia
infrastructure report card 2010 and following, to be found at Engineering Construction
on Infrastructure Nov 2017. This reference describes various categories of
infrastructure and contains key words and references you can use to Google project
details.
Various completed projects are described in detail in the Australian Constructors
award for Project Insights , to be found at https://www.constructors.com.au/publications/.
Project values can be found in media releases or by searching. Note that these
presentations put a favourable light on the projects and you should also search
press articles and other more independent internet information such as delays,
disputes or cost over runs.
The three (3) projects of the same sector and approximate value that you choose must
be selected and submitted on Canvas before 5 pm Friday 7th October 2022 (end wk
10).
Your submission must give a short description of each project including:
1. a one or two sentence description of the scope,
2. a representative photo
3. the location,
4. the Client and the main Contractors organisation name,
5. the project value
6. when the project started and % complete or finish date,
This submission will be accessed progressively up to the deadline so make sure you start
early.
NOTE: If too many students choose the same projects those who ask first with the above
summary information will be accepted and the others will need to find alternative projects. So
be early! You will be advised by email if the projects you nominate are accepted, or not.
Students in the same team will not be permitted to choose the same topics.
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Report on New Business Opportunities
The CEO has instructed you to prepare a detailed report to evaluate new business
opportunities for contracts in Australia. When the CEO has reviewed your executive report
and agrees with its content it will be presented to the company Board of Directors with
recommendations to them to bid for this new work.
Your task is in parts, as detailed here:
Part 1: Executive summary to the Board
The executive summary is in the form of a 1-page (of text) summary plus summary reports
as attachments or inserts.
The executive summary must contain the following:
1. Describe the new area of business (sector) and its significant characteristics.
2. Outline the major risks and opportunities of contracting, that are expected in this
new sector. (Note this is a discussion of the most significant risks, not simply a
repeat of your lists).
3. Recommends the sorts of actions to manage & minimise these risks.
4. Summarises the costs, resources and time to produce a tender for a future project of
a typical size in this new sector.
5. Finishes with a conclusion including recommended actions.
6. Attach the following summary reports:
i) Listing of the significant allowances required to mitigate the major risks.
(Allowances have a probability over 50% and include estimates of expenditure to
manage significant contingencies)
ii) Listing & value of the significant contingencies (Value = probability x cost if it
occurs) required to allow for the major risks of contracting for work in the new
sector,
iii) Summaries of the costs & resources by department and stage, to prepare a
typical tender for a contract in this new sector of business.
Part 2: A contingency assessment summarising the major risks of contracting
this work.
The contingency assessment and recommendations for mitigation must be summarised, with
reference made to significant difficulties encountered, taken from your three research
projects, as reported in the press, about existing contracts of this type. The attachments to
the report will include a contingency assessment for a typical project in this sector and
include a recommendation for the treatment of at least five major risks, specific to this sort of
construction.
See the Contingency & Risk model supplied, for the standard format excel model required
for this contingency assessment. Refer to your tutorial on ‘Risk & Contingency’ for further
detail.
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Part 3 & 4: An estimate of the costs and a schedule to prepare a tender bid for
a contract of this type.
For this you need to establish a budget estimate on an ‘Excel’ spread sheet for yourself (you
are the bid manager) and project team involved in bid preparation:
Plan and schedule activities and resources to complete the report in the time allocated.
Schedule to be prepared using ‘Microsoft Project 2010 or later’ software.
Part 3 Estimate Preparation: Additional information for this item
For this you need to:
• Establish a budget estimate on an ‘Excel’ spreadsheet for yourself (you are the bid
manager) and project team involved in bid preparation:
• Plan and schedule activities and resources to complete the report in the time
allocated. Schedule to be prepared using ‘Microsoft Project’ software.
Part 3 Estimate Preparation: Additional information for this item
You have been advised that, for a contract in the range from $400 million to $1 billion the
total cost to prepare a bid for such works is expected to be about 0.1% of the contract value
($400,000 to $1,000,000) and take 8 months to complete. Note: that a competent estimate of
bidding costs for this work will fall within this cost range.
Establish a budget estimate on an ‘Excel’ spreadsheet:
 An hourly cost rate for each of the individuals and departments assigned to the
report preparation is to be used as the basis for the estimate.
Note: The hourly rate calculation method to be use is as outlined in Chapter 8.4.3 of the
course text. Hourly rates are to be without preliminaries and with no provision for corporate
overhead and profit.
Refer to the table below for a list of annual salaries and resources on the bidding
team. Annual salary is the total paid salary per year.
• Each employee receives 4 weeks Annual Leave, 11 days Public Holidays,
and 2 weeks Sick Leave annually, plus a 17.5 % loading on their base salary
during Annual Leave, and long service leave (13 weeks after 10 years of
service). Note that company policy is to make provision for the full amount for
sick leave and long service leave even though employees may not take the
full amount of this leave.
• Statutory loadings (superannuation (10%), payroll tax (3.4%), workers
compensation insurance (3.2%), other insurance (2%)) as a percentage of
total salary paid to the employee
• Ignore in the calculations any severance pay based on period of service
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• Salaried employees do not receive site allowance or overtime payments
• Add business unit overheads at the rate of 35% of the direct costs.
• List any estimated costs for travel and accommodation separately.
Note: As in most organisations, the costs for the CEO salary and Board of Directors
fees are paid for out of company overheads and profit and so have zero cost in your
estimate.

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Part 4 Scheduling the Work
Draw up a schedule to plan your preparation of the bid, using the following
information:
4.1 Planning the Bid Preparation
The bid is to be completed in eight months. The team activities required to prepare
the report are listed below and in the approximate sequence. You are to include site
visits for project evaluation initially and prior to submission of the bid. (Refer to items
4 and 14 below).
You are to prepare a Gantt Chart schedule for these activities, assigning your best
estimate of the duration that will be required for each. The above cost estimate that
you prepare will also relate to this schedule. Some activities may have ‘Float’ and are
expected to overlap with complex logic to meet the completion date specified:

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Start Date is 6 Feb 2023 and the calendars are to include Victorian public holidays:
(See https://business.vic.gov.au/business-information/public-holidays/victorian-publicholidays-2022).

4.3 Maintaining the Activity Codes
For internal reporting requirements during preparation of the report you need to
identify:
Work Phase –
Scope Definition (Design, site visit, build strategy)
Estimation (Take off, pricing, planning & contingency)
Review (Internal review up to CEO review)
Submission (Final Price, Pricing Schedule, Documents & Submission)
Persons Responsible:–

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Departments –
Administration
Marketing
Construction
Engineering
Contracts
Estimating
Planning
Create Activity Code dictionaries and Activity Codes from the information above.
Part 5: Background Research and Report (for Submission to the CEO):
5.1 What You are required to do in Part 5
To prepare the report you need to undertake a literature review of key aspects of this
proposed new field of activity. Your report is to include brief information on three (3)
projects. All the projects must be in Australia. The projects reported upon must have been
constructed after 1990 and had significant risks to manage, complexity, or demonstrated
delays, cost overruns and other risk occurrences. They should also be of a similar size
(largest to be less than three times the smallest cost) and complexity.
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The purpose of this information is to inform the CEO of your company of the key aspects of
the proposed new sector, and especially of the risks and contingencies that might be
required to be successful.
5.2 Background Analysis of the Projects
Prepare a brief analysis in your own words of each of the three (3) projects that you have
chosen. Paragraphs of text copied and pasted from articles or downloaded from the internet
are not acceptable.
The analysis should include for each project a summary of:
• Names of the Client, Project Manager and major construction companies
• a description of the project, location(s), start & finish date.
• Project delivery system(s) used (see Chapter 2.4 of your notes).
• Key construction methods & temporary infrastructure required to carry out the works.
• $ value of project, converted to today’s dollars (Aust. Bureau of Statistics
construction indices to be used for escalation over time. Note that CPI is not valid for
construction escalation and the use of CPI calculators will lose you marks.
• Contingency risks encountered on the project such as risks that contribute to cost &
time overruns, and any contractor response to the risks, or systems employed to
manage the risks.
The analysis should then list for each contingency issue,
• A description of each risk the project encountered
• the schedule, cost and other impact of each
• As best you can discover, what caused the impact and what could or has been done
to treat (mitigate, avoid, transfer etc) the risk.
• For systems to reduce risk, a description of the actions taken, and risks minimized
due to these actions or systems employed.
References are to be acknowledged in an appendix and cross referenced to the text.
This assignment is to be prepared and submitted by individual students. Although you may
discuss this assignment with other students the work must be your own without receiving
undue assistance.
The Swinburne University policy on plagiarism applies to this assignment and students are
required to submit work which is of their own making. Undue assistance from current or past
students work includes the application of ‘templates’ from another students work.
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The assignment is due is by the date and time listed in Canvas.
The assignment is to be submitted in electronic format, ready to print, and uploaded via the
‘Assignment’ section of Canvas by the closing time.
References:
Cost Engineering, an Australian Perspective, Second Edition L J Pole
Microsoft Project – see week 6 student resources for download instructions.
Manuals and learning material for MS Project 2016: