Risk Analysis of the International Construction Project
By: Paul Stanford Kupakuwana
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Cost Engineering Vol. 51/No. 9 September 2009
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ABSTRACT
This analysis ud a ca study methodology to analy the issues surrounding the partial collap of the roof of a building housing the headquarters of the Standards Association of Zimbabwe (SAZ). In particular, it examined the prior roles played by the team of construction professionals. The analysis revealed that the SAZ’s traditional construction project was generally characterized by high risk. There was a clear indication of the failure of a contractor and architects in preventing and/or mitigating potential construction problems as alleged by the plaintiff. It was reasonable to conclude that between them the defects should have been detected earlier and rectified in good time before the partial roof failure. It appeared justified for the plaintiff to have brought a negligence claim against both the contractor and the architects. The risk analysis facilitated, through its multi-dimensional approach to a critical examination of a construction problem, the identification of an effective risk management strategy for future construction projects. It further rved to emphasize the point that clients are becomi
ng more demanding, more discerning, and less willing to accept risk without recompen. Clients do not want surpri, and are more likely to engage in litigation when things go wrong.
儒字开头的成语KEY WORDS:Arbitration, claims, construction, contracts, litigation, project and risk The structural design of the reinforced concrete elements was done by consulting engineers Knight Piesold (KP). Quantity surveying rvices were provided by Hawkins, Leshnick & Bath (HLB). The contract was awarded to Central African Building Corporation (CABCO) who was also responsible for the provision of a specialist roof structure using patented “gang nail” roof truss. The building construction proceeded to completion and was handed over to the owners on Sept. 12,
1991. The SAZ took effective occupation of the headquarters building without a certificate of occupation. Also, the defects liability period was only three months .
The roof structure was in place 10 years before partial failure in December 1999. The building insurance coverage did not cover enough, the City of Harare, a government municipality, issued the certificate of occupation 10 years after occupation, and after partial collap of the roof .
At first the SAZ decided to go to arbitration, but this failed to yield an immediate solution. The SAZ then decided to proceed to litigate in court and to bring a negligence claim against CABCO. The pre
paration for arbitration was reud for litigation. The SAZ’s quantified loss stood at approximately $ 6 million in Zimbabwe dollars (US $1.2m) .
After all parties had examined the facts and evidence before them, it became clear that there was a great probability that the courts might rule that both the architects and the contractor were liable. It was at this stage that the defendants’ lawyers requested that the matter be ttled out of court. The plaintiff agreed to this suggestion, with the terms of the ttlement kept confidential .
The aim of this critical analysis was to analy the issues surrounding the partial collap of the roof of the building housing the HQ of Standard Association of Zimbabwe. It examined the prior roles played by the project management function and construction professionals in preventing/mitigating potential construction problems. It further assd the extent to which the employer/client and parties to a construction contract are able to recover damages under that contract. The main objective of this critical analysis was to identify an effective risk management strategy for future construction projects. The importance of this study is its multidimensional examination approach.
中小企业融资难Experience suggests that participants in a project are well able to identify risks bad on their own experience. The adoption of a risk management approach, bad solely in past experience and dep
endant on judgement, may work reasonably well in a stable low risk environment. It is unlikely to be effective where there is a change. This is becau change requires the extrapolation of past experience, which could be
misleading. All construction projects are prototypes to some extent and imply change. Change in the construction industry itlf suggests that past experience is unlikely to be sufficient on its own. A structured approach is required. Such a structure can not and must not replace the experience and experti of the participant. Rather, it brings additional benefits that assist to clarify objectives, identify the nature of the uncertainties, introduces effective communication systems, improves decision-making, introduces effective risk control measures, protects the project objectives and provides knowledge of the risk history .
Construction professionals need to know how to balance the contingencies of risk with their specific contractual, financial, operational and organizational requirements. Many construction professionals look at risks in dividually with a myopic lens and do not realize the potential impact that other associated risks may have on their business operations. Using a holistic risk management approach will enable a firm to identify all of the organization’s business risks. This will increa the probability of risk mitigation, with the ultimate goal of total risk elimination .怎么养头发
Recommended key construction and risk management strategies for future construction projects have been considered and their explanation follows. J.W. Hinchey stated that there is and can be no ‘best practice’ standard for risk allocation on a high-profile project or for that matter, any project. He said, instead, successful risk management is a mind-t and a process. According to Hinchey, the ideal mind-t is for the parties and their reprentatives to, first, be intentional about identifying project risks and then to proceed to develop a systematic and comprehensive process for avoiding, mitigating, managing and finally allocating, by contract, tho risks in optimum ways for the particular project. This process is said to necessarily begin as a science and ends as an art .
According to D. Atkinson, whether contractor, consultant or promoter, the right team needs to be asmbled with the relevant multi-disciplinary experience of that particular type of project and its location. This is said to be necessary not only to allow alternative respons to be explored. But also to ensure that the right questions are asked and the major risks identified. Heads of sources of risk are said to be a
convenient way of providing a structure for identifying risks to completion of a participant’s part of the project. Effective risk management is said to require a multi-disciplinary approach. Inevitably risk management requires examination of engineering, legal and insurance related solutions .他眼里星辰璀璨
It is stated that the u of analytical techniques bad on a statistical approach could be of enormous u in decision making . Many of the techniques are said to be relevant to estimation of the conquences of risk events, and not how allocation of risk is to be achieved. In addition, at the prent stage of the development of risk management, Atkinson states that it must be recognized that major decisions will be made that can not be bad solely on mathematical analysis. The complexity of construction projects means that the project definition in terms of both physical form and organizational structure will be bad on consideration of only a relatively small number of risks . This is said to then allow a general structured approach that can be applied to any construction project to increa the awareness of participants .
蜜桃兄妹The new, simplified Construction Design and Management Regulations (CDM Regulations) which came in to force in the UK in April 2007, revid and brought together the existing CDM 1994 and the Construction Health Safety and Welfare (CHSW) Regulations 1996, into a single regulatory package.
The new CDM regulations offer an opportunity for a step change in health and safety performance and are ud to reemphasize the health, safety and broader business benefits of a well-managed and co-ordinated approach to the management of health and safety in construction. I believe that the
development of the skills is imperative to provide the client with the most effective rvices available, delivering the best value project possible.
Construction Management at Risk (CM at Risk), similar to established private ctor methods of construction contracting, is gaining popularity in the public ctor. It is a process that allows a client to lect a construction manager (CM) bad on qualifications; make the CM a member of a collaborative project team; centralize responsibility for construction under a single contract; obtain a bonded guaranteed
maximum price; produce a more manageable, predictable project; save time and money; and reduce risk for the client, the architect and the CM.
CM at Risk, a more professional approach to construction, is taking its place along with design-build, bridging and the more traditional process of design-bid-build as an established method of project delivery.
The AE can review the CM’s approach to the work, making helpful recommendations. The CM is allowed to take bids or proposals from subcontractors during completion of contract documents, prior to the guaranteed maximum price (GMP), which reduces the CM’s risk and provides uful input to d
esign. The procedure is more methodical, manageable, predictable and less risky for all.
The procurement of construction is also more business-like. Each trade contractor has a fair shot at being the low bidder without fear of bid shopping. Each must deliver the best to get the projec. Competition in the community is more equitable: all subcontractors have a fair shot at the work .
风信子花期A contingency within the GMP covers unexpected but justifiable costs, and a contingency above the GMP allows for client changes. As long as the subcontractors are within the GMP they are reimburd to the CM, so the CM reprents the client in negotiating inevitable changes with subcontractors.
There can be similar problems where each party in a project is parately insured. For this reason a move towards project insurance is recommended. The traditional approach reinforces adversarial attitudes, and even provides incentives for people to overlook or conceal risks in an attempt to avoid or transfer responsibility.
A contingency within the GMP covers unexpected but justifiable costs, and a contingency above the GMP allows for client changes. As long as the subcontractors are within the GMP they are reimburd to the CM, so the CM reprents the client in negotiating inevitable changes with subcon
tractors.
There can be similar problems where each party in a project is parately insured. For this reason a move towards project insurance is recommended. The traditional approach reinforces adversarial attitudes, and even provides incentives for people to overlook or conceal risks in an attempt to avoid or transfer responsibility.
