Subject: Mr. Agha Nadir ID 168404 Mr.






















Subject: Project Risk Management








Presented by:                                                                            
 Presented to : Mr. Saif ur Rehman

Mr. Agha Nadir        ID 168404

Mr. Imran Khan        ID 168402






Case Study Salient Features:



•    A project has taken several years for pre-contractual requirements is now ready to invite tenders to construct.

•   Tendering contractors are forced to evaluate their fee in unrealistic time frame.

•    Tenderers have been through an extensive and costly prequalification exercise to evaluate the efforts and potential risk involved

•    A
site assessment team, dispatched to the site with instructions to gather all method and cost related information needed for preparing the bid

 Various construction techniques has to be investigated along with temporary work proposals

•    Lack
 ground  conditions    and  many
 other  factors  to
 be  overcome
 by  further investigation and inspired guesswork

•    Evaluation  of risk begins by questioning
 experienced  managers
 within contractors  organization
 and arriving at the consensus of the ‘gut feelings’ expressed

•   Possible claims opportunities are evaluated





Considering the case study, what type of problems encountered in risk management plan and how these are managed?



Type of Problems in the context of plan risk management :



•   Unrealistic time frame given to evaluate contract documents

•   Unaware project risks and uncertainties

•   High probability of quoting un-rational fee to cater risk involved



How the issues are Managed:




•   Organizing site assessment team

•   Evaluate opportunities for claims

•   Brainstorming sessions with experienced project managers

•    Establishing intuitive approach by looking at overall program and desk study







Author Foremost Evaluation and Recommendation: (Sheet 1 of 2)




Risk Transfer:

•    Apparently the client poses to transfer the risk on to the bidder

•    Lack of site information together with unrealistic time frame will lead to improper or incomplete evaluation of project risk.

•    The lesser the detail provided by the client, the greater the price quoted by the contractor to incorporate risk factor




Risk Sharing:

Contractors should not be expected to bear risks that cannot be cost-effectively quantified with sufficient certainty

Joint identification of risk by client and tendering contractors
are always preferable; means both parties should fully aware of the risks involved.







Author Foremost Evaluation and Recommendation: (Sheet 2 of 2)




Bidding Price and Risk Analysis:

•    Additional factors considered by the contractor beside initial cost to perform the work

•    Contractors’ perspective risk analysis governs the level of responsibility involved on completing the work

•    Terms of payment and cash flow? – client cannot dictate the type of contract

•    Cause potential imbalance between the risks involved in not winning the bid and risk associated with possible profits or losses if the contract is obtained.




Type of Contract to mitigate risk:

•    Contractor to take the ownership from his perspective and dictate the type of contract that covers maximum claims and incentives to mitigate risk.


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