summative assessment

Task 1 – Strategic Procurement Plan

Instructions to Learners:

This summative assessment can be completed in class or at any other convenient location.

Students are required to complete this task using digital tools and ensure to submit in an acceptable format, e.g. .docx, .pdf, .pptx, or as advised by your assessor.

Please use the following formatting guidelines to complete this assessment task:

Font Size: 12; Line Spacing: Double; Font Style: Times New Roman

Assessment activities can be completed either in real workplace environment or in a simulated environment such as your classroom. In both cases, appropriate evidence of the assessment activities must be provided.

Instruction to Assessors:

You must assess student’s assessment according to the provided Marking Criteria.

You must complete and record any evidence related to assessment activities including role-plays and presentations using appropriate forms which must be attached with student assessment submission.

You must provide students with detailed feedback within 10 working days from submission.

This assessment task requires you to formulate an organisation’s strategic procurement goals and act to gain support for strategic procurement directions. Further, it requires ensuring that the organisation’s strategic procurement direction is aligned with that of the government.

You are required to produce a Procurement Strategy; the attached template may be used as a starting point. Note: You should append a Stakeholder Engagement Plan to the Procurement Strategy. A sample template for the Stakeholder Engagement Plan follows.

Your produced Procurement Strategy should be systematic and comprehensive and address the following:

Executive summary

Provide a high-level summary of the procurement strategy including:

the procurement objectives;

the responsible organisation’s experience and capability in delivering projects under the preferred procurement delivery method and, as necessary, any strategies to mitigate procurement risk;

the outcomes of any market testing undertaken;

the evaluation methodology used to identify the preferred procurement methodology, including assessment criteria and rankings for both the procurement model options short-listing and detailed analysis processes;

a high-level table summarising the procurement options assessment (show the ranking of each option against the criteria used to select the recommended procurement strategy, including an assessment of the merits of alternative procurement methods for delivery);

an outline of the preferred procurement strategy, demonstrating that the preferred procurement strategy is appropriate for this investment; and

contractual issues

If a PPP procurement approach is being proposed additional details are required. The DTF Infrastructure Advice and Delivery, Partnerships Victoria Group can advise on these.

If project alliancing is being considered, full business case requirements are different; please contact the DTF Infrastructure Advice and Delivery, Alliancing and Contracting team for further advice.

Analyse key issues (data gathering)

Project oobjectives and dascription

Outline the key project objectives including:

AssignmentTutorOnline

Government policy and service delivery objectives.

Describe the primary benefits arising from addressing the problem(s) including:

Type and level of benefits (social, economic, environmental etc.);

Beneficiaries.

How benefits arise from solving the problem(s).

Describe dis-benefits that might or will arise from the investment.

Note: This section should deal with benefits associated with dealing with the problem; they should not pre-suppose any specific intervention or project option. For example, if the problem is increasing prisoner numbers or overcrowded prisons, the benefits should not presume that the solution is to build a new prison.

Describe the project, including scope, characteristics and timing including: any unique project characteristics;

procurement staging, for example, will the procurement process be simply the selection of a provider, or will it also include a preliminary stage to identify a preferred solution or technology;

project components that can be bundled or procured separately;

time dependencies, for example, closure of other infrastructure;

project duration and estimated schedule; and

Likely impacts on users and stakeholders.

Identify the preferred technical solution.

Project service delivery requirements

Describe the expected outcomes:

What factors will determine whether the procurement has been successful? This should include design, quality and performance criteria that can be used to measure benefits realisation and project success.

Have the critical project success factors been clearly defined and agreed and signed off with stakeholders?

Describe what is the capability to be acquired (i.e. what is being bought?)

How will value for money be achieved and measured?

Risk aanalysis

Describe key risks to the procurement/project, considering:

‘show-stopping’ risks.

Describe how identified risks will be managed through the procurement process, including:

implications of transferring risks; and

Implications of delivery models on risk.

Evidence presented in this section should demonstrate:

stress test modelling under various risk scenarios has been undertaken (do not limit this to the ideal or most likely scenario but consider consequences if one or more key risks emerge); and

Strategies to lower overall risk.

Opportunity aanalyses

Identify any opportunities (additional to intended benefits) that may arise during procurement and project delivery, and outline any strategies to capitalise and manage their potential.

Policy ccontext

Describe the government policies that impact on or influence the procurement, including:

the ability of each procurement method to address policy requirements;

probity risks and ethical issues; and

Outline how the project priorities align with other departmental and broader government projects and operations including:

Interfaces with other governmental projects, including location and timing synergies.

Market aanalyses

Provide an analysis of the market capability and capacity to meet the procurement objectives.

Evidence presented in this section should demonstrate:

general market capacity and expected interest in this project;

the opportunity and need to influence and develop markets;

market familiarity with the type of project;

the market’s familiarity doing business with government; and

Market access to suppliers and resources, noting any expected supply anomalies in the availability of skills, materials or components.

This section should include (as appropriate):

current and forecast market activity levels;

supplier community characteristics;

supply chain characteristics and methods within applicable industries;

the market structure, for example, the number of players, if there is a monopoly; and

Maturity of the market.

Agency capability and management arrangements

Outline the capability of the agency to manage the procurement including:

the agency’s capacity to manage what is required in the procurement under different delivery models;

management capability in the agency;

where projects cross organisational boundaries, clear management arrangements are in place to ensure ongoing alignment of all organisations business objectives;

governance arrangements within the agency;

if there is a skilled and experienced procurement/project team with clearly defined roles and responsibilities (if not, if there is access to expertise for those fulfilling the roles);

reporting and monitoring arrangements;

if there are systems and processes in place for monitoring and controlling project expenditure and for measuring and tracking realisation of project benefits;

if governance arrangements are robust enough to ensure that bad news is not filtered out of reports to senior management; and

if processes and training are in place to ensure ethical behaviour to support accountability and openness in the procurement process, giving supplier’s confidence to participate and reduce the cost of managing risks (fraud, corruption etc.).

Procurement option evaluation process and outcomes

Outline the process used to evaluate procurement options and determine the preferred delivery model.

Present the outcomes of the procurement short-listing and detailed analysis.

Short–listing

Document the process and criteria for short-listing potential options, and present short-listing results:

Short-list an agreed range of procurement options to be considered in the detailed evaluation.

Outline the process and criteria used to short-list:

examine existing local, national and international precedents;

consider whether mandatory requirements exclude any delivery models; and

unique project characteristics.

Present the results of the short-listing:

Identify short-listed models, and clearly demonstrate the proposed options are capable of delivering the project.

Provide reasons for models not short-listed where applicable.

Detailed analysis

Document the process, criteria and rankings for detailed analysis of short-listed options.>

Establish a framework for the comparative analysis of procurement options, including the identification and ranking of a set of evaluation criteria and a system for rating the options against each criterion. The evaluation criteria should be informed by the project objectives, as well as analysis of information compiled during the data gathering stage of the procurement strategy development and documented in the preceding template sections.

This should include:

identifying the project objectives and unique aspects of the project that can be used to determine procurement model suitability (note: these would also be measures of project success);

drafting evaluation criteria against which to assess each procurement option, consistent with the overriding objectives for the project;

agreeing the relative materiality of each criterion, ranking the criteria in terms of high, medium or low priority (establish a rating system to facilitate a qualitative assessment of the procurement options against the evaluation criteria); and

Undertaking an assessment of key project risks relevant to selecting a procurement approach (building on the risk analysis already completed to date).

To assist you to shape the procurement objectives, consider completing the following table:

Procurement objective	Description	Priority	Ranking	Discussion
Risk management	Extent to which the delivery model supports effective risk management and mitigation	High/Med/Low	Higher priority – higher ranking	Explain why the objective has been given its particular ranking>
Time – time to market	Extent to which the delivery model facilitates rapid selection of contractors
Time – delivery speed/time to completion	Extent to which the deliver model facilitates rapid delivery
Innovation – outcomes	Extent to which the delivery model maximises opportunities for innovation in project outcomes
Innovation – delivery	Extent to which the delivery model maximises opportunities for innovation in delivery method and approach
Certainty – cost	Extent to which the delivery model provides the State with certainty regarding cost outcomes
Certainty – time	Extent to which the delivery model provides the State with certainty regarding time outcomes

Note: The table has been populated with generic procurement objectives and descriptions that should be edited to suit a specific project.

Document the process, criteria and rankings for detailed analysis of short-listed options.

Template evaluation matrix

The results of an assessment should be summarised in an evaluation matrix, such as the following example:

Evaluation criteria	Importance of criteria	Option 1	Option 2	Option 3	Option 4
Operational flexibility The extent to which each procurement option enables the government to retain flexibility in terms of the operational profile
Risk management The extent to which each procurement option provides incentives effectively and efficiently to manage and reduce risks, thereby minimising the whole-of-life-cost to the government
Time to deliver project The extent to which each procurement option is able to support achieving an operational supply by X date.
Market interest The extent to which each procurement option assists in maximising market interest amongst the appropriate market participants with the relevant skills, expertise and capacity to deliver the project
Value for money The extent to which each procurement option assists in maximising the government’s value for money from implementing the project: design and construction innovation other innovation factors whole-of-life cost considerations risk allocation competitive tension government development and tender costs and resources external development and tender costs
Budget certainty The extent to which each procurement option assist in providing earlier budget certainty to the government
Flexibility (future scope changes) The extent to which each procurement option assists the government in managing and implementing changes to the functional requirements of the project over time (particularly in relation to any variation in the required capacity of the plant)
Stakeholder management The extent to which each procurement option assists the government in managing stakeholders through the delivery of the project
Overall rating

Suggested evaluation criteria rating system:

4 – the procurement option is extremely effective in satisfying the requirements of the criterion;

3 – the procurement option is effective in satisfying the requirements of the criterion;

2 – the procurement option just satisfies the requirements of the criterion; or

1 – The procurement option is ineffective in satisfying the requirements of the criterion.

Preferred procurement option

Demonstrate that the preferred procurement methodology addresses the key procurement objectives.

Provide a value-for-money assessment of the preferred procurement option.

Outline how the preferred procurement model will be tailored to the given project.

Complete the delivery strategy options analysis:

How will the market be engaged and how will the engagement be reflected contractually?

Advise about approaches for tendering and contracting with an analysis on which is most appropriate and implications of the procurement methodology options (risk and opportunity – the risk management strategy can influence choice of procurement methodology).

Is there a case for limited tendering, a Partnerships Victoria PPP or alliancing?

Are there post-construction services that could be bundled into the constructions contract (e.g. financing, maintenance, ongoing service delivery) in which case a PPP could be considered?

There may be a need for more than one procurement activity such as separating acquisition from support or procuring design services independently of construction.

Acquisition can be performance based.

Industry standard practices may exist and can be used or there may be a need to innovate in the interests of getting optimal alignment between suppliers and buyers.

The procurement methodology needs to be worked out for the life of the procurement and include post-contract activity to ensure delivery of contracted benefits, obtain ongoing improvements, mange relationships with suppliers and control the costs and performance schedule.

Summarise the commercial structure to be implemented to deliver the project using the preferred procurement model, including the contractual framework, proposed contract term, potential risk allocation and potential payment mechanism. Address any legislative requirements.

Your Assessor will set the context for this Assessment Task, which may be an actual workplace or a simulated environment.

Stakeholder Engagement Plan

[Note that text in italics indicates guidance and can be deleted when the document is complete.]

Purpose:

[What are you trying to achieve?]

Evaluation:

[Clarify the engagement evaluation criteria, evaluation methodology and process for feedback of evaluation summary to participants]

Scope:

[Clarify scope of engagement including negotiable and non-negotiable matters]

Outcomes being sought:

[What is the expected outcome of the engagement process?]

Key Stakeholders:

[Stakeholders should be identified as per the Stakeholder Identification and analysis process. What capacity building considerations are needed?]

Communication strategy:

[See Attached. This may need its own document]

Timing of engagement:

[Timeframes for the engagement and any constraints around time]

Levels of Engagement/influence:

[What level of engagement/influence is appropriate for each stakeholder/stakeholder group in relation to the purpose of the engagement process?]

Method(s) of Engagement:

[What are the appropriate methods of engagement for each stakeholder/stakeholder group].

[Who will be the owner/s of the engagement process? Who will administer the process (coordination, invitations, and scribe)? Who will facilitate the stakeholder engagement/s? Who will analyse the findings? Who will provide feedback to stakeholders?].

[Where will stakeholder engagements take place? Are these locations inclusive of stakeholder’s needs and potential accessibility issues? Have bookings been made for meetings? What is a suitable number of participants for each stakeholder engagement? How will the rooms be arranged for participants?]. [Schedule the evaluation process and devise the strategy for providing feedback to participants and stakeholders/stakeholder groups and capturing relevant lessons learnt.]

Risk and issues management:

[What are the potential risks relating to each engagement process? What issues need to be resolved? How will these risks and issues be managed?]

STAKEHOLDER COMMUNICATION STRATEGY TEMPLATE

[Note that text in red indicates guidance and can be deleted when the document is complete.]

[The Communication Strategy Template is provided with example content and requires editing in accordance with the government agency’s needs. Stakeholder information should be transferred from the Stakeholder Identification process. This template allows the identification of each stakeholder’s areas of interest/influence along with the key messages and content necessary to achieving the purpose of the stakeholder engagement].

A communication strategy should commence with the identification of relevant stakeholders/stakeholder groups and their areas of interest and influence, followed by the identification of information to be shared. Consideration should be given to the relevance and complexity of information shared to ensure it meets the needs of each stakeholder group.

Supporting Material to be presented:

[Outline any documentation that will be presented e.g. draft specification, proposed community outcome, trends, usage data etc.].

Limitations to Disclosure:

[Include any information that is not appropriate to be shared]. Negotiable and Non-

Negotiable Matters:

[It is likely that there will be matters that can-not be negotiated. It is important to determine these matters upfront and disclose to stakeholders where appropriate].

Risks:

[Are there any perceived or real risks in relation to the sharing of information?].

Business introduction and operation, service or project

A brief introduction about what your business and the business model is, industry, if it is public, private or PPP.

Executive Summary (Describe and use the table)

(Summary should include:

Procurement objectives (SMART)*, preferred procurement delivery method, any strategies to mitigate risks, the evaluation methodology, an outline of the preferred procurement strategy, demonstrating that the preferred procurement strategy is appropriate for this investment; contractual issues)

*Specific (simple, sensible, significant).

Measurable (meaningful, motivating).

Achievable (agreed, attainable).

Relevant (reasonable, realistic and resourced, results-based).

Time bound (time-based, time limited, time/cost limited, timely, time-sensitive)

Procurment Objectives:

You can change the procurement objcetives according to your objectives.

Procurement objective	Description	Priority	Ranking	Discussion
Risk management	Extent to which the delivery model supports effective risk management and mitigation	High/Med/Low	Higher priority – higher ranking	Explain why the objective has been given its particular ranking>
Time – time to market	Extent to which the delivery model facilitates rapid selection of contractors
Time – delivery speed/time to completion	Extent to which the delivery model facilitates rapid delivery
Innovation – outcomes	Extent to which the delivery model maximises opportunities for innovation in project outcomes
Innovation – delivery	Extent to which the delivery model maximises opportunities for innovation in delivery method and approach
Certainty – cost	Extent to which the delivery model provides the State with certainty regarding cost outcomes
Certainty – time	Extent to which the delivery model provides the State with certainty regarding time outcomes

Procurement Targets

Develop targets or key performance indicators (KPIs) for your organisation’s procurement objectives. Targets may be value based, time based, qualitative or quantitative, or outcome or output focused. Defining high level procurement targets is at the discretion of the organisation. (Describe or use a table format)

Procurement Function	Description – how it can be achieved/how many/quality	Due date if applicable

Please add more rows if needed

Analyse key issue (Describe – if needed summarise using the table)

Project objectives and description

Outline the key project objectives including:

Government policy and service delivery objectives.

Describe the primary benefits arising from addressing the problem(s) including:

Type and level of benefits (social, economic, environmental etc.);

beneficiaries; and

How benefits arise from solving the problem(s).

Describe dis-benefits that might or will arise from the investment.

Note: This section should deal with benefits associated with dealing with the problem; they should not pre-suppose any specific intervention or project option. For example, if the problem is increasing prisoner numbers or overcrowded prisons, the benefits should not presume that the solution is to build a new prison.

Describe the project, including scope, characteristics and timing including:

any unique project characteristics;

procurement staging, for example, will the procurement process be simply the selection of a provider, or will it also include a preliminary stage to identify a preferred solution or technology;

project components that can be bundled or procured separately;

time dependencies, for example, closure of other infrastructure;

project duration and estimated schedule; and

Likely impacts on users and stakeholders.

Identify the preferred technical solution.

Key Issue	Description	Technical solution

Policy context

Describe the government policies that impact on or influence the procurement, including:

how policy implications will be managed throughout the procurement;

the ability of each procurement method to address policy requirements;

probity risks and ethical issues

Outline how the project priorities align with other departmental and broader government projects and operations including:

interfaces with other governmental projects, including location and timing synergies.

Please make sure you describe about the internal organization policies as well.

Market Analysis, supplier analysis, spend analysis

Part 4A: Market Analysis

Provide an analysis of the market capability and capacity to meet the procurement objectives. Evidence presented in this section should demonstrate:

the ability of the market to deliver the project objectives and produce what is needed;

general market capacity and expected interest in this project;

the opportunity and need to influence and develop markets;

market familiarity with the type of project;

the market’s familiarity doing business with government; and

market access to suppliers and resources, noting any expected supply anomalies in the availability of skills, materials or components.

Part 4B: Supplier Analysis

Obtain a high level overview of your organisation’s suppliers to determine and ‘segment out’ those that are strategically important to your organisation and/or that account for a significant proportion of your overall spend. Identify top suppliers by category and not just by spend, to ensure critical suppliers are not missed. You can use the following table to summarise the supplier analysis:

Category	Supplier 1	Supplier 2	Supplier 3

You can add more rows or columns if needed.

With the suppliers- mention their names, cost estimate, time for delivery and/or any other comments

Part 4C: Spend Analysis:

Prepare a short profile of your organisation’s anticipated spend against core procurement categories. You can make use of tables/graphs/descriptions. You can use the following points to determine your spend analysis:

Forecast by category—logically group similar items. These could then be listed based on level of expenditure.

Forecast spend by goods or services.

Forecast spend by key suppliers (could be listed based on critical to business and extremely high risk, etc.).

Forecast spend for major areas of procurement, total or major areas of spend for capital expenditure and operational expenditure by year.

Types of spend, i.e. how are goods and services being purchased? (e.g. percentage under state purchase contracts, panels).

Opportunity analysis

Identify any opportunities (additional to intended benefits) that may arise during procurement and project delivery, and outline any strategies to capitalise and manage their potential.

Project Service Delivery requirement

Describe the expected outcomes:

What factors will determine whether the procurement has been successful? This should include design, quality and performance criteria that can be used to measure benefits realisation and project success.

Have the critical project success factors been clearly defined and agreed and signed off with stakeholders?

Describe what is the capability to be acquired (i.e. what is being bought?)

How will value for money be achieved and measure

Risk analysis

Describe key risks to the procurement/project, considering:

the project risk management plan; and

‘show-stopping’ risks.

Describe how identified risks will be managed through the procurement process, including:

implications of transferring risks; and

implications of delivery models on risk.

Risks may address the following areas: organisational risk, category risks (inventory), supplier related risks and/or market related risks.

Identified Risk	Responsible	Likelihood	Impact	Mitigation Strategy
		H/M/L	H/M/L

Add more rows if needed

agency capability and management arrangements

Outline the capability of the agency to manage the procurement including:

the agency’s capacity to manage what is required in the procurement under different deliver models;

management capability in the agency ;

where projects cross organisational boundaries, clear management arrangements are in place to ensure ongoing alignment of all organisations business objectives;

governance arrangements within the agency;

if there is a skilled and experienced procurement/project team with clearly defined roles and responsibilities (if not, if there is access to expertise for those fulfilling the roles);

reporting and monitoring arrangements;

if there are systems and processes in place for monitoring and controlling project expenditure and for measuring and tracking realisation of project benefits;

if governance arrangements are robust enough to ensure that bad news is not filtered out of reports to senior management; and if processes and training are in place to ensure ethical behaviour to support accountability and openness in the procurement process, giving supplier’s confidence to participate and reduce the cost of managing risks (fraud, corruption etc.)

Procurement option evaluation process and outcomes

Outline the process used to evaluate procurement options and determine the preferred delivery model

Present the outcomes of the procurement short-listing and detailed analysis

The results of an assessment should be summarised in an evaluation matrix, such as the following example:

Evaluation criteria	Importance of criteria	Option 1	Option 2	Option 3	Option 4
Operational flexibility The extent to which each procurement option enables the government to retain flexibility in terms of the operational profile
Risk management The extent to which each procurement option provides incentives effectively and efficiently to manage and reduce risks, thereby minimising the whole-of-life-cost to the government
Time to deliver project The extent to which each procurement option is able to support achieving an operational supply by X date.
Market interest The extent to which each procurement option assists in maximising market interest amongst the appropriate market participants with the relevant skills, expertise and capacity to deliver the project
Value for money The extent to which each procurement option assists in maximising the government’s value for money from implementing the project: design and construction

innovation other innovation factors whole-of-life cost considerations risk allocation competitive tension government development and tender costs and resources external development and tender costs
Budget certainty The extent to which each procurement option assist in providing earlier budget certainty to the government
Flexibility (future scope changes) The extent to which each procurement option assists the government in managing and implementing changes to the functional requirements of the project over time (particularly in relation to any variation in the required capacity of the plant)
Stakeholder management The extent to which each procurement option assists the government in managing stakeholders through the delivery of the project
Overall rating

Suggested evaluation criteria rating system:

4 – the procurement option is extremely effective in satisfying the requirements of the criterion;

3 – the procurement option is effective in satisfying the requirements of the criterion;

2 – the procurement option just satisfies the requirements of the criterion; or

1 – the procurement option is ineffective in satisfying the requirements of the criterion.

STAKEHOLDER ENGAGEMENT PLAN

Stakeholder Identification (Name/Title/Position)	Stakeholder Classification (Internal/External)	Assessment Information	Potential strategies for engagement – gaining support and reducing objections	Risks	Communication Strategy	Timing of Engagement