Commercial Management
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COMMERCIAL MANAGEMENT |
Risk Management |
Contract Strategies |
Drafting |
The complexity of construction projects means that the project definition in terms of both physical form and organisational structure will be based on consideration of only a relatively small number of risks. We adopt a practical approach by defining the fundamental decisions to be made by each participant in the project and to model the project in terms of categories of sources of risk. This then allows a general structured approach that can be applied to any construction project and increases the awareness of participants.
Experience suggests that participant in a project are well able to identify risks based on their own experience. Adopting a risk management approach which is based solely in past experience and dependent on judgment may work reasonably well in a stable low risk environment. It is unlikely to be effective where there is change since this requires the extrapolation of past experience, which could be misleading. A structured approach is required. Such a structure cannot and must not replace the experience and expertise of the participant, rather it brings additional benefits which assist to:
- Clarify objectives
- Identify the nature of the uncertainties
- Introduce effective communication systems
- Improve decision making
- Introduce only effective risk control measures
- Protect the project objectives
- Provide knowledge of risk history
Effective Risk Management requires a multi-disciplinary approach. It remains true that because of the interplay of different and often conflicting requirements and pressures, that there is never one simple solution to the management of a particular risk. Inevitably Risk Management requires examination of engineering, legal and insurance related solutions. Whether Contractor, Consultant or Promoter, the right team needs to be assembled with the relevant multi-disciplinary experience of that particular type of project and its location. This is necessary not only to allow alternative responses to be explored, but also to ensure that the right questions are asked and the major risks identified.
Experience shows that at the critical stages of the project a concentrated unstructured session, in some cases intermittently over a period of weeks, is necessary to enable the specialist information within the knowledge of each member of the team to be extracted. In many cases the implications of fact known by one member will only be appreciated by another member of the team. If the risks have been identified then they can be monitored during the project life cycle. In some cases the risk event may not materialise and estimates and contingencies may be revised. This then is the organisational aspect of Risk Management. It is not restricted only to the Promoter but should be carried out by each project participant. Each should examine the risk apparently attributed to him, and decide how he should best prepare for the risk of event if it occurs.
Risk Management, requires first an identification of the particular risks and secondly an examination of the engineering and legal responses to allow the risk to be redirected or avoided or transferred to a particular project.
Daniel Atkinson has acted as, and can provide the service of, facilitator in the structured approach to Risk Management, using his knowledge and experience of commerce, construction and law together with his skill developed in training and dispute resolution.
Your choice of the right procurement strategy is vital to successful conclusion of your project. An essential feature of successful modern construction is adopting the right contract strategy based on risk allocation and apportionment. Today there are so many forms of contract and increasing legislation that it is becoming more difficult to adopt the right strategy and then make it work. These difficulties are increased in international contracts with different cultures and unfamiliar legal systems.
Daniel Atkinson prepares Contract Strategies for projects and gives advice on various contracting arrangements and procurement methods to allow an informed choice of strategy. The service is based on years of experience of different types of project as both an engineer and as a lawyer.
The approach is to recognise and build on the experience of your project team. In many cases the role is to act as a facilitator to develop and explore the right strategy and reality test pre-conceptions and conclusions.
Deciding how you wish to contract is only part of successful procurement and contracting. You need to draft documentation to be clear, concise and enforceable.
Daniel Atkinson has experience of many different forms of contract and particularly of disputes under different arrangements, as well as drafting different contracts. We can draft documentation to implement different procurement strategies, including amended standard forms, warranties and bonds, contracts for Design and Construct, PFI, BOT, DBFO and other finance schemes. We can draft target cost reimbursable forms, sub-contracts and standard terms of business.