project risk and control. tender risk programme and method – tightness of completion lad’s...

Project risk and control

Tender risk• Programme and method– Tightness of completion

• LAD’s• Extent of change

– Construction method• Temporary works• Change of sequence• Reuse

– Ground conditions• Measurement and “contractors” risk• Who measures, how paid for consequential method-related

costs?

© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.

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Tender risk cont

•Subcontractors– Extent of quotation– Qualifications– Relationship with main contractor– Specificity

•Suppliers and materials– Fixed ? Price– Which rate to use?– Wastage allowance– Small load charges– Muscle?– Time for resend out


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Commercial opportunity

•An opportunity to make the tender more competitive– Sometimes called “scoping” allowance– Calculated figure which results in a net reduction of

the tender total– Usual to have a project commercial strategy

• Design team ability• Client approach• Quality of documentation• Type of procurement• Competitiveness of subcontract market• Valuation and variation provisions


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Reduction in tender price


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Contract risk

•Delay and disruption– Responsibility

• Delay-impact on overall handover• Delay-impact on sequencing

– Disruption• Direct measurable consequences• Can take place without any measurable delay

•Who is at fault– Contractor– Client– Both– No-one

•Who determines– Architect– Engineer– Approach of contract


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Delay- some terms• Compensable delay

– An employer risk event where the contractor is entitled to an extension of time and time-related costs

• Concurrent or parallel delay– Where there are two or more delays and at least one is an employer risk event and another a

contractor risk event• Critical delay

– Delay to a critical activity which causes delay to overall completion of the project• Excusable delay

– Where the contractor is relieved from delay damages and where there may be time and money entitlement under the contract

• Non-excusable delay– Delay caused by the contractor for which there is no relief from delay damages and no time or

money entitlement• Global delay

– Where actual completion exceeds planned completion but individual employer risk events are not identified

• Local delay– Delay to noncritical activities which do not impact the contract completion date.


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Claims

• Extension of time awarded– Relevant event/compensation event– No culpable delay– Culpable delay

• Loss and expense– Records, records, records

• Evaluation of prolongation expenses– Who and how


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Insolvency

•Risk rating•Definitions•Bankruptcy•Voluntary agreement•Administrative receivership•Administration•Winding up•Voluntary liquidation•Compulsory liquidation


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Termination and insolvency• The effect of termination

–Notices–Impact

• Subcontractor insolvency–Practical difficulties

•Programme•Evaluation of the work•Notional account and final account

• Employer insolvency–Practical difficulties

•Recovery•Contractual position•Subcontract position

• Contractor insolvency–Options available


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Subcontractor price weighting criteria


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Bidding activities


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Popularity?•Price only?•Reduced buyer/supplier trust•Need for completeness of tender information•No opportunity to offer comparable materials•Little opportunity for integrated procurement•Future in a price-oriented market?


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project risk and control. tender risk programme and method – tightness of completion lad’s...

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