Construction Project Management Portal

Risks in Construction Projects

23

The environmental protection movement has contributed to the uncertainty for construction because of the inability to know what will be required and how long it will take to obtain approval from the regulatory agencies. The requirements of continued re-evaluation of problems and the lack of definitive criteria which are practical have also resulted in added costs. Public safety regulations have similar effects, which have been most noticeable in the energy field involving nuclear power plants and coal mining. The situation has created constantly shifting guidelines for engineers, constructors and owners as projects move through the stages of planning to construction. These moving targets add a significant new dimension of uncertainty which can make it virtually impossible to schedule and complete work at budgeted cost. Economic conditions of the past decade have further reinforced the climate of uncertainty with high inflation and interest rates. The deregulation of financial institutions has also generated unanticipated problems related to the financing of construction.

Continue reading

Advertisements

May 19, 2012 Posted by | Risk Management | Leave a comment

Foundations for Risk Management

12

TheĀ Foundations for Risk ManagementĀ presented herein will be the basis for the tools and other content that the Risk Management Program committee will deliver at the upcoming convocation. These Foundations were developed by engineers in private practice to help engineering firms focus their practice on avoiding and minimizing risk.
The first five Foundations deal with the process of the engineering business and the last five deal with project management.

1. Culture

Create a culture of managing risk and preventing claims
Creating a culture of risk management and claims prevention entails instilling in your company an overriding vision that stresses quality control and managing risk as a vital part of your business practice.
This vision must become a core value of the firm and come from the top down. Stress the importance of risk management as often as possible among the staff, as well as the consequences of ignoring it. Creating this culture requires both strategic and operational planning. It should involve all levels of the staff and even involve clients. Quality must take precedence over profits. When quality is established, profits tend to follow.

Continue reading

May 19, 2012 Posted by | Risk Management | Leave a comment