Your consultancy firm, which specialises in construc�on contract administra�on, has been
awarded the contract for the construc�on of a community hub in a suburban area. The fourstory building will house a library, community centres, and leisure centres, including a car park
and an amphitheatre. Ini�ally, your firm proposed a Cost-Plus contract with an addi�onal
percentage fee for overheads and profit margin, based on the Architect’s ini�al design
drawings, preliminary bill of quan��es, and specifica�ons.
However, the local council, seeking government funding and aiming to finalise financial
budgets and cost plans, now wishes to engage your company as a construc�on contractor
under a Lump Sum contract fee. This change in contract structure is par�cularly crucial for the
car park and amphitheatre construc�ons, iden�fied as rela�vely simple based on a
comprehensive risk assessment. The rest of the project, encompassing the integra�on of
mul�ple Sustainable Development Goals (SDGs) outlined by the United Na�ons, is deemed
unique and complex.
In response to this shi� in contract structure, your general manager has tasked you with
dra�ing a hybrid contract proposal that combines elements of the Lump Sum contract fee and
the Cost-Plus contract price with an addi�onal percentage fee. This proposal should address
the complexi�es of the project, reflect the integra�on of SDGs, and provide a balanced
approach to risk management and cost control.
Your tasks:
a) Conduct a literature review on contract administra�on, focusing on commonly used
contract price and project delivery op�ons (5%).
b) Iden�fy key risks and opportuni�es associated with contract administra�on in the
construc�on project, considering the shi� from Cost-Plus to Lump Sum (5%).
c) Analyse the challenges and opportuni�es linked with “cost plus fee” and “lump sum”
contracts in the context of the community hub project (5%).
d) Iden�fy the types of insurances builders should obtain to deliver this project in
alignment with suitable provisions of Australian Generic Standards of Contracts (5%).
e) Provide your research of academic and industry resources for parts 1a – 1d as in-tex