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Project Description
The analyzed project is the Rügen Bridge, otherwise known as the Rugia Bridge or the second Strelasund Crossing. The construction of this bridge is finished, and the result is currently situated in Germany between two islands – Stralsund and Rügen as a viaduct for motor transport. Planning of the bridge started in the summer of 2004 and ended in the fall of 2007 (Phereclus, 2017). During this time, the company in charge of the project had not only built a bridge, the core part of which is 4100 meters long, but also contracted other businesses to prepare the surface, smooth out and fill in the land, and deal with the issue of corrosion. The Rugia Bridge is a cable-stayed bridge that has three lanes. It is made of steel and concrete (Schüßler-Plan, 2017). The bridge’s surface is covered with a unique corrosion protection system.
The system used in this bridge was considered innovative at the time of the construction. Schüßler-Plan (2017) notes that “parallel stranded cables were used for the very first time in Germany on the cable-stayed bridge.” The unique systems used in this design prompt the idea of the Rugia Bridge being a complex project that required outsourcing. According to Phereclus (2017), the company that was in charge of the bridge’s project planning and corrosion protection, the cost of the project amounted to 125 million Euros. The actions of this firm can be considered the primary safety-related part of planning, as their duties included all analyses and check-ups of the place and the calculation for the final project. The company Max Bögl Steel and Plant Construction Inc. & Co. was in charge of the bridge’s installation, while the pre-planning and tendering processes were outsourced to Schüßler-Plan. The combination of these companies’ activities is discussed in the following analysis.
Make-or-Buy Analysis
The procurement part of the construction process for this project was sourced out for a number of reasons. First of all, the services of Phereclus were required as this firm performed activities that the building company was not skilled enough to do on its own. The safety requirements for this bridge did not allow the company to analyze the state of the land plot without outside help, as the construction type was new to the business. The unique system that was mentioned above has not been used in the country before which called for additional safety considerations. Moreover, the duties for planning had to be bought elsewhere as well because Max Bögl Steel and Plant Construction Inc. & Co. most probably did not possess workers and necessary equipment for safety measurement and landfilling activities. Just as the steel for the bridge was purchased from another vendor, the corrosion protection system was also bought from another firm. Thus, the procurement plan had to be outsourced.
Furthermore, the process of project calculation was outsourced to Phereclus as their planning included preparation and post-production quality control. They also managed the procurement of all supplies for corrosion protection as the contracting company did not know which materials would be the best for the situation. Although another company did not manage the purchasing of steel, the acquisition of materials and equipment required for surface preparation, corrosion protection, and other finishing touches had to be outsourced to ensure a high quality of the final product. Outsourcing allows companies to guarantee the safety and the quality of its finished product. It is much easier for construction firms to hire other professionals to perform activities for which the former are not equipped adequately. In this case, the problem of corrosion protection became the main reason for outsourcing.
Here, the issue of knowing the best materials is crucial to deciding to buy another company’s services. It is the main advantage of outsourcing as opposed to keeping all activities within the project team. While it was possible for the construction company to give the job to its employees, it would require much more money to train workers and purchase materials and equipment. The services of another firm are cheaper as a result, as they already possess necessary machinery, have educated professionals, and have connections with materials’ suppliers. Another benefit of outsourcing is the ability of the company to distribute managing duties to other people. Therefore, Phereclus’ management, for instance, became responsible for its workers and their performance, while the main company did not need to oversee every step of the process.
The main drawback of outsourcing is the issue of control. While it is beneficial that the management team does not have to oversee every step, the hired firm’s unregulated performance may be unsatisfactory in the end. If the company decided to keep all parts of the project within the team, its managers would be able to check the quality of every operation. Outsourcing, on the other hand, does not have the same level of control.
Sometimes outsourcing is not needed, as the company can quickly adapt its existing resources for new operations. While here it is not the case, some construction projects can be done by a single organization even if it has to train its workers or choose different materials. The decision usually depends on financial expenses and time constraints. The scheduled deadline seems fair as the company finished the project in three years. Due to the fact that the technique used in the construction of this bridge was new for the country, it was reasonable to spend additional money on outsourcing some parts of the project. Moreover, safety considerations are also justified as this bridge is the main connection between two islands and is used by vehicles often.
Contract Type Selection
A number of contracts can be discussed in this situation, including the fixed price model, the time and material model, and the dedicated team model. The first type can be used in short-term projects with a defined goal, where the communication and control are not of the highest priority. It usually has a fixed price and does not result in overpayments (Walker, 2015). The second type, the time and material model, is a better fit for longer projects, as it does not require both parties to estimate all costs at the beginning of construction. In this case, the hired team has a flexible budget. However, this type of contract has no set deadlines. Finally, the dedicated team model contract offers the most interaction out of all described contract types. Here, the hired team works on a single project at the time of the production. It is continuously monitored by the company and becomes a part of the personnel. This type of contract is expensive and time-consuming, but us is also highly efficient.
The duration of the described project was relatively long, as the outsourced firm had to prepare the land for construction, oversee the process, and apple corrosion protection at the end. The budget for the project was most likely not very flexible as it was a set of operations which the hired business performed often. The final product was clear, and the tasks flexibility was rather low. The fixed price model contract could work if companies agreed on a specific budget and trusted each other to deliver the best results without supervision.
References
Phereclus. (2017). Project example: Second Strelasund Crossing. Web.
Schüßler-Plan. (2017). Rügen Island bridge. Web.
Walker, A. (2015). Project management in construction (6th ed.). West Sussex, UK: John Wiley & Sons.
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