With slim margins for error in construction, it becomes critical to identify and mitigate risk from the start. However, risk can be an uncomfortable subject, and therefore, may not be addressed until something risky is happening. Once construction begins, schedules are tight, budgets are set and there’s little room for adjustment, thus leaving more opportunity for risk and for relationships to suffer.
Collaborative delivery projects, such as design-build, progressive design-build or CMAR, provide the perfect opportunity to address risk before construction starts. Through risk management workshops, owners, project stakeholders, regulatory agencies, engineers, and contractors meet to establish a project-specific risk matrix. The workshop helps identity foreseeable project risks; outline team impacts; assess probability and severity; determine response and plan of action; and determine cost and allocation of risk. It is recommended to complete the workshop early in the preconstruction/design process or following the 30% design milestone.
After the workshop is complete, the risk matrix serves as a living document to be reviewed and updated throughout the construction process. These updates can and should be made during progress meetings to keep risk management at the forefront and to help teams proactively look ahead at obstacles.
By following these best practices, teams can identify risks early in a project lifecycle, discuss risk management rationally in a low pressure setting and develop risk mitigation plans that can be referenced throughout construction.
The Water Design Build Council’s Design-Build Handbook has a very good chapter on Managing Risk and Liability, and states this situation best: “While neither the owner nor design-builder should accept all of the project risks, each party must be willing to accept appropriate risks to realize the benefits of the design-build delivery.” The handbook goes on to identify common construction project risks and provides guidelines on how to classify risks and common allocation between owner and design-builder.
How do you mitigate risk on projects?