Running Head: CONTRACTS AND PROCUREMENT

Assessment 2: Contracts and Procurement

Student’s Name

University Name

Date
CONTRACTS AND PROCUREMENT 2

Executive Summary

Procurement and Contracts play a considerable role in the successful implementation of

the project. Planning related to purchases, acquisition, proposal, selecting vendor, administration

and contract closure are all important steps of the process. The report discusses the case study

about Wembley Stadium. It is one of the magnificent stadium all over the world with a sitting

capacity of 90, 000. Due to its design, it is one of the expensive stadiums and the second largest

in Europe. It discusses the procurement process, component, tender evaluation, complexity or

issues faced in the contract and procurement management. It also discusses the project

environment, leadership, governance and organisational aspects and the strategies that can solve

the contract and procurement-related problem

Some of the key findings learnt from the Wembley Stadium case study are as follows:

 Adequate efforts and time need to be invested in the planning phase to make clear and

realistic objectives.

 Construction procurement should be based on team partnering, capabilities and

performance instead of using cost and competitive tendering as selection criteria.

 Sufficient resources should be available for the project depending on the realistic

estimates.

 Project teams must operate as an organised unit in which there is a clear allocation of

roles and responsibilities.

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Contents
Introduction ..................................................................................................................................... 4
Discussion ....................................................................................................................................... 5
Part A........................................................................................................................................... 5
Procurement context, scope, components and tender evaluation ........................................... 5
Part B: .......................................................................................................................................... 7
Complexities and key issues .................................................................................................... 7
Organisation and Project environment ................................................................................... 9
Leadership and governance and how these have influenced outcomes ................................ 10
Part C:........................................................................................................................................ 10
Key mitigations ...................................................................................................................... 10
Changes to roles and responsibilities.................................................................................... 11
Conclusion .................................................................................................................................... 12
References ..................................................................................................................................... 14
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Introduction

The study discusses the Contracts and Procurement of the case study The English

national stadium project at Wembley. The New Wembley National Stadium is one of the

biggest and astonishing stadiums in the world. It was designed with a seating capacity of around

90,000 individuals and is considered as one of the most costly stadium that has an outlay of £

798 million (Wembley Stadium, London, n.d.). The start-up process of the process was

complicated due to the numerous funding sources as well as the specific stakeholder criteria. The

FA had a strong inclination for a mere stadium for football, while the Sport England preferred to

see a multi-purpose venue for sports. Like other construction companies, Wembley Stadium is

also a victim of the controversies, rumors and accusations.

The uncertainty over scope leads to a delay in the funding approval and the demolition

began. Finally, the floor system was planned to adapt the stadium for sports purpose, but this

would reduce the capacity of the stadium to about 60,000 (Naybour, P, 2010). In the stadium,

there were no athletics events and no scheduled events. Part A of the report discusses the

procurement process, component and tender evaluation. Part B explains the complexities, project

environment, leadership, governance and organisational aspects. Part C emphasis on the key

mitigation strategies and how it requires changes followed by the conclusion that summaries the

entire report.
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Discussion

Part A

Procurement context, scope, components and tender evaluation

Figure 1: Procurement cycle

(Source: spendmatters.com, 2019)

Figure 1 shows the procurement process. The first step in the life cycle process is

identifying the purpose of carrying out the project. The project is carried out to construct a new

English national stadium at Wembley by Football Association and its subsidiary that has an

estimated cost of £757 million (House of Commons Committee of Public Accounts, 2004). Once

the requirements are identified, the next step is Tendering. During this stage, the contractor will

review and compare the tender with the quotations or proposals received. This takes into account

the cost, time-efficiency, needs and desire of the customers, procurement culture, etc. The next
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step is evaluation and criteria. The evaluation is done on the basis of the technical and financial

criteria. The technical criteria include work experience and knowledge in the particular domain,

while financial criteria involve the cost of carrying out the project. Once the evaluation and

scoring are done of the tender, the next step is to award the contract. Under this stage, the

organisation chooses the best proposal that suits all its requirements and selection criteria. After

the contractor is hired, a plan is made in order to ensure that the goods and services are delivered

on time and within the specified budget.

In our case study, the delays began at the beginning of the project. The contracting

system uses a twin-track strategy and superior treatment was granted to Multiplex, as a result,

Multiplex got the contract. An inquiry by David James argued that it was not sure that the

procurement process meets best practice standards and there were no evidences of showing

corruption (House of Commons Committee of Public Accounts, 2019). A warning was given to

Multiplex in December 2003 about increasing costs and a delay in the process by nearly a year

Cleveland Bridge was eliminated from the project and substituted with all the accompanying

start-up problems by the Dutch company Hollandia. A steel rafter fell that force 3,000 workers to

empty the stadium and increased queries about the completion date that was passed (Naybour, P,

2010). In March 2006, the sewers were collapsed as a result of the ground movement. This

problem was the pipes that were not appropriately laid and take time to fix. One of the team

members of the Multiplex made a statement that has an effect on the successful competition of

the stadium on the scheduled date.

Somewhere in March 2006, the developer made a statement that the stadium would not

be able to complete until 2007. It was planned to move both events and concerts to appropriate

locations. It was revealed on 19 June 2006 that the stadium was scheduled to inaugurate at the
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beginning of 2007. The Football Association subsidiary, WNSL, also promised to pay about £ 36

m to Multiplex in addition to the price of the initial fixed-price contract (Naybour, P, 2010). That

implies that on 19 May that year, Wembley Stadium was prepared for the FA Cup Final of 2007

(Gillett, 2017). On 3 March 2007, the website of the Wembley Stadium makes an announcement

that the stadium would be open for Brent’s local residents. However, the event was postponed by

almost 15 days and was organised on March 17. Eventually, on March 9, 2007, the keys of the

Wembley stadium were given to the holders to the holders for opening and using it in the future

for several activities like concerts, football matches etc (Naybour, P, 2010).

Part B:

Complexities and key issues

There are several complexities and issues faced during the project. Some of them are as follows:

 Inadequacy in understanding the needs: Prior to starting the project, it is significant to

understand what is needed and at what time. Failure to so will result in an incomplete and

inappropriate project. In the given study, there is an inadequate need analysis and a large

number of private and public players were involved in the study that increases the

complexities. There is an involvement of unnecessary players, even though the project

can be successfully implemented by the key payers.

 Inefficiency in contract management: Procurement and contracts are considered as

planned opportunities to make partnership without emphasisng on the cost-saving and

other issues that generally occurs before beginning the project. The Association of

Football announced in April 2001 that it would not be able to drive the venture by its own

and need the involvement of other investors. As a result, it made a statement to the State
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Secretary for Press, Sport and Culture in order to take government assistance and finance

related advice in maintaining the fund previously provided by Sport England. The

competition issues lead to delays and increases in valuation and the project is expected to

be completed in 2006. It involves a fee of £ 757 million. Out of this amount, £ 161million

is to be given to the general public area (National Audit Office, 2003).

 Inefficient supply chain management: The management of the supply chain is tough if

there is no transparency in the system and complex supply monitoring method. The given

project involves private players and thus, personal money of these private players, there

is no explanation about the evaluation capital of the project and esteem of the

administration.

 Unsuitable Finance Mix: Since the project is linked with the private players and

Football Association, the major portion of the funds was obtained from the business

sponsors. Also, it was also looking for benefits from the public sector, which involves

help from the three players in the public sector. But the project has limited repayable

money and did not provide any assurance, thus, affecting the grant recovery.
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Organisation and Project environment

Figure 2: Key events in the history of the project

(Source: National Audit Office, 2003)

The term project environment includes all those factors that affect the implementation of

the project. These factors include leaders, resources, event issues surrounding etc. The figure 2

shows that the Department of Sport England contributes around 19 percent of the total funds

required for the successful completion of the project. It has paid the amount of roughly £120

million to the Stadium as its full grant. The department has also promised to pay £20 million that

assumes to pay from April 2004 (National Audit Office, 2003). Money from the several other

departments is being provided to Wembley National Stadium Limited to bear the costs of

specified infrastructure upgrades. This cost needs to be incorporated in the project plans made to

obtain permission. This provides £ 9 million for improving Park station of Wembley and support

all the listed public transport facilities, connectivity and enhancement to the environment

(National Audit Office, 2003). In determining the significance of the overall renewal of the
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Wembley, the London Development Agency is providing £ 21 million that leads to the total

public sector contribution of about 21% of the total project funding (National Audit Office,

2003).

Leadership and governance and how these have influenced outcomes

The figure 2 shows Leadership and governance in our case study and how they have

influenced the outcome. Some of the key leaders involved in the study are Sport England,

Wembley Stadium Limited, The Department for Media, Sports and Culture commissions

(Bekker, 2015). These leaders play a significant play in the governance of the project and its

successful completion. The Department believes that Wembley countrywide Stadium leads to

fruitful results that have a strong executive group that manages and supervises the venture and

influential governance of the company. An arrangement was set up by the general public quarter

funders that measure the progress of the project and deliver it to the customers with a warranty.

Moreover, there is an inclination of the Soccer Association and Wembley Countrywide Stadium

limited that involves and preserves the government

Part C:

Key mitigations

Some of the key strategies to mitigate the risks and complexities faced during the project are as

follows:

 The introduction of the software packages is helpful in eliminating the complexities as it

helps in receiving and researching the transaction information for each and every step.

Moreover, this software is also helpful in mutual contracts associated with the suppliers

and vendors (Ghadge, Dani, Ojha, and Caldwell, 2017).

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 To remove the inefficiency in contract management, there is a need for centralised

documents library associated transactional information and suppliers that can provide

finance, marketing and top-level management report. These documents help in data

analysis that makes terms and conditions of the contract transparent.

 Cloud-Based and Artificial Intelligence-Based software are helpful effective supply chain

management as they provide an easy solution for monitoring suppliers and management.

Moreover, it also helps in contracts and procurement functions.

 There is a need to focus on the finance mix strategy and should have obtained money

from private financing (Cridland, 2016). Private financing is one of the best and secure

ways to eliminate the risk associated with the project.

Changes to roles and responsibilities

Learning about mitigations strategies leads to changes in roles and responsibilities. First,

there is a need to develop a procurement document by the project manager. The procurement

document helps in maintaining proper records of the work done by the suppliers, the method

used in the procurement and technique used in delivering the project. Second, the project

managers should make sure that both the project as well as its scope should be mentioned in the

contract made by the suppliers. Alternatively, there is a proper work statement that contains

information about the products as well as services offered by the suppliers (Yan, Chi and Chien,

2019). Third, the project managers should prepare the list of team members with their tasks and

responsibilities assigned to them. This will help in smoothing the staffing process and knowing

the accurate number of both internal and external team members. Fourth, once the contract with

the supplier is prepared, the next step is to decide when the supplier will carry out their

operation. The contract manager should keep a printout of the supplier’s schedule and attach it
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with other necessary documentation. It is the duty of the manager to monitor that the suppliers

are carried out their operations as per the schedule.

Fifth, once the output is verified by the suppliers, the project manager should verify the

output by him. These outputs must be verified for the quality standards and metrics given in the

contract of the vendors. Sixth, apart from estimating the cost offered by the suppliers and

monitoring the cost of the vendors, the project manager should think of the alternatives related to

cost-saving and suggest changes to the vendors. Sixth, the manager should keep track of the

vendor's performance and ensure that all the tasks and responsibilities are carried out as per the

schedule. Seventh, project managers should also identify and analyse the risk associated with the

project. In our Wembley case study, the manager should identify the risk first and then try to

remove the risk in order to execute the plan successfully. The project manager should also be

adoptable of the changes taking place in the environment so that the contracting and procuring

department can make the final decision with the assistance of the project manager. The Wembley

project manager should consider the externalities and cost-saving alternatives.

Conclusion

After analysing the case study, we can conclude that Wembley Stadium had faced several

complexities. However, the experience is gained with every ineffectively managed project. These

experiences proved to be beneficial in the long run. The same learning can be obtained from the

Wembley stadium case study. The Dysfunctional relationship is one of the reasons that affect the

smooth functioning of the project. The process of procurement should be on the basis of just and

fair means. In addition to this, the procurement process should be based on key performance
CONTRACTS AND PROCUREMENT 13

criteria. The shareholders should be up to date with the time, budget and other activities related

to the project.

To sum up all the findings, it is believed that the project fails due to several reasons apart

from the lack of professional management. Each and every stage involves a certain type of risk.

It is evidenced by the Wembley project where the wrong decision by the project manager turns

out to be a nightmare Multiplex lacks professional and management skills that lead to the

degradation of his market reputation. If Multiplex had shown proficient skills, they would have

been the best one in the market place.

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References
Bekker, M. C. (2015). Project Governance–the definition and leadership dilemma. Procedia-

Social and Behavioral Sciences, 194, 33-43.

Cridland, S. (2016). A critical exploration into modern strategies used by sports stadia to

enhance the fans experience–a case study approach (Doctoral dissertation, Cardiff

Metropolitan University). Retrieved

https://pdfs.semanticscholar.org/0bb2/31e3284bb3a51bf83b60c6f433cd02ab8b6a.pdf

[Retrieved on 8 November 2019]

Ghadge, A., Dani, S., Ojha, R., & Caldwell, N. (2017). Using risk sharing contracts for supply

chain risk mitigation: A buyer-supplier power and dependenceperspective. Computers &

Industrial Engineering, 103, 262-270.

Gillett, A & Tennent, K. (2017). Dynamic Sublimes, Changing Plans, and the Legacy of a

Megaproject: The Case of the 1966 Soccer World Cup. Project Management Journal, 48

(6), 93–116.

House of Commons Committee of Public Accounts. (2004). The English national stadium

project at Wembley. Retrieved from

https://publications.parliament.uk/pa/cm200304/cmselect/cmpubacc/254/254.pdf

[Retrieved on 8 November 2019]

National Audit Office. (2003). The English national stadium project at Wembley. HC 699

Session 2002-2003. Retrieved from https://www.nao.org.uk/wp-

content/uploads/2003/06/0203699.pdf [Retrieved on 8 November 2019]

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Naybour, P. (2010). Wembley Case Study. Retrieved from

https://www.parallelprojecttraining.com/blog/wembley-case-study/ [Retrieved on 8

November 2019]

Spendmatters.com . (2019). Retrieved from https://spendmatters.com/2019/05/03/beginners-

guide-to-the-procurement-cycle/ [Retrieved on 8 November 2019]

Wembley Stadium, London. (n.d.). Retrieved from https://www.designbuild-

network.com/projects/wembley/ [Retrieved on 8 November 2019]

Yan, M. R., Chi, H. L., Yang, J. Y., & Chien, K. M. (2019). Towards a City-Based Cultural

Ecosystem Service Innovation Framework as Improved Public-Private-Partnership

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