Problems and risks related to contracted a new company relate both to cost, safety measures and legal liability. The primary consideration is cost, as this is the major problem related to the issue mentioned above. The first requirement for the new company would then have to be a cost that is as close as possible to the price to date charged by Walkers Ausgas before the increase. Being a transport company, safety is also of utmost importance. Hence, it has to be ensured that the new company will deliver a service either of similar or higher quality than Walkers Ausgas. Pricing and quality therefore have to be in optimal balance in order to minimize the risk of legal liability.
Specifically then, the risks include the following:
Safety is one of the most important issues at Kingsgrove. Ensuring that proper testing and certification measures are in place minimizes the risk of accident and injury to customers. In turn, this provides Kingsgrove with a sound reputation as not only an environmentally conscious, but also a safety conscious company. Contracting a new company to test and certify CNG tanks incurs considerable risks regarding safety, as not relationship of trust has thus far been built with the new company.
There is a high risk to Kingsgrove, as its reputation and legal liability issues are at stake. The supplier also faces high risks of reputation and legal liability. In terms of safety, the customers face a low to medium risk, as they have little power relating to safety measure implementation.
The risk here is fairly low, as both companies will obviously make every attempt to ensure that all safety measures are in place. This will be accomplished by proper management and delegation.
When contracting a new company, Kingsgrove faces a minimal risk of cost increase. The new company is chosen in terms of its cost-effective service. In terms of cost then, remaining with Walkers Ausgas presents a higher risk than contracting a new, less costly company. In these terms, the risk to the customer is also minimal. In terms of public relations, targeted documentation can be made available to customers to explain any minor price increases.
In order to reach to optimal solution for both the pricing and safety risks, a number of steps need to be implemented. Furthermore, to minimize the risks, it is necessary to implement management techniques that will ensure the optimal performance of all involved. Of course, as Maintenance Manager, I cannot handle all the components of the project myself, and will need to delegate several of the tasks. My specific role as manager is then to make sure that all tasks are carried out in a satisfactory manner. My delegation practices will be implemented by creating a number of teams to handle the responsibilities as follows:
4.1 Information Gathering research team will be appointed to handle this task. To make the best possible choice with regard to the cost-benefit balance, thorough research is necessary, which will be the responsibility of the research team. The team will be required to find as many companies as possible who provide the type of services that Kingsgrove is looking for. They will also be required to find potential sources with such information, such as the Internet, public records, and other sources. Other companies in the transport safety industry can also be contacted for potential sources of contractors.
The research team will then contact representatives from each company and gather information relating to costs, safety standards, and other relevant issues. This can be done by means of a short questionnaire, personal interview, or telephone interview. The team will then present the manager with a comparative report, listing all the potential companies with their pricing and service practices. The report will not include those companies whose prices are in the range of the new Walkers Ausgas price structure, as this is the primary problem to eliminate. The manager will then review the list and meet with an assessment team in order to select potential service providers.
4.2 Proposal Invitation
When the list has been reviewed, the manager makes a selection of the most likely companies to provide the required service. The list is reissued to the research team, whose next task is to contact each company with an invitation to tender their services. Interested companies are presented with a tender form to be submitted by a predetermined deadline. The final task of the research team is to collect these proposals and organize them according to reference checks. The final proposals are then submitted to the Tender Evaluation Committee.
4.3 Assessment Criteria and Selection Process
Tender Evaluation Committee (TEC) is brought into being for the decision process. This committee is responsible for evaluating the received proposals in terms of certain selection criteria. Reports are submitted regarding the level of compliance of each proposal, and to make recommendations regarding the final decision. The final decision rests with the Maintenance Manager. A variety of evaluation criteria are implemented for the selection of final service providers. These include the commercial evaluation, technical evaluation and pricing analysis. The table below delineates the evaluation components:
Weighting of 10% of overall criteria.
Level of compliance
Weighting of 30% of overall criteria.
Details of Services
Weighting of 60% of overall criteria
Financial model by Steve Bacci
Credit check - Peter Bannon
It should be clear from the above that, although weighted significantly in terms of the other criteria, the financial benefit is not the only important component of the evaluation. With the safety of customers and staff in mind, it is essential that criteria for proper service provision be met along with financial criteria. The above-mentioned risks of future liability and the possibility of bodily injury as a result of poor services play a major part in the evaluation. Hence it is important to make a detailed assessment of each service provider's existing infrastructure, experience and track record in terms of services to other entities. It is also important to ensure that the chosen service provider has sufficient resources in terms of time and personnel in order to ensure that high quality accompanies acceptable cost.
After further meetings to discuss the assessment of each candidate, the TEC submits its reports, findings and recommendations to the Maintenance manager for final approval and implementation. The management strategy in the selection process will be democratic, providing Committee members with the opportunity to voice any concerns regarding the final selection. The manager gives these concerns due consideration when making the final selection.
Implementation is a vital step in the process of this project in terms of management. This step will prove whether the management process occurred in a sufficiently organized way. It is vitally important that all concerns be given full attention before the final selection is made. There should therefore be open communication channels between committee leaders, their subordinates, and the manager. If these channels are obstructed, the project runs the risk of failure due to a lack of full information reaching top management. When managed adequately, however, the implementation of the project should proceed without difficulty.
The following timetable has been drawn up in order to implement the project:
Estimated Completion Date
1. Identification of potential candidates
2. Send out RFP
3. Deadline for Submission of Proposals by potential candidates
4. Review of Proposals, reference checks, interviews, submission of proof of compliance
5.Selection of successful candidate
6.Notification and award of Contract
September 8. 2006
7. Contract outline and legal review
8. Sign Contract and begin Service schedule
5.1 Resources and Risks
Required resources for the project are minimal in terms of finding the proper contract. Costs will basically be incurred by office expenses and time required from personnel serving on teams and committees.
Risks have been fully delineated and tabled above in this document. The most important element is proper management and communication. All parties involved should be in continual communication with each other and management. Furthermore, information should be documented thoroughly and clearly to ensure that all aspects of the project have been covered.
It is recommended that each step of the project be thoroughly planned, researched, and presented to the Maintenance Manager. Risks should be thoroughly delineated and discussed, with strategies to minimize and deal with any foreseen problems. Means and channels of communication should be established between the manager, committee members, leaders and subordinates before the start of the project. For optimal success, every team member needs to be absolutely certain of his or her position and role in the project.
Before beginning the project, executive approval is needed. For this purpose, a meeting with all interested parties is called. Once again, the proper management procedure and communication strategy are necessary to successfully plan and begin the process. The purpose of the…