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Managing Risks in Design & Construction Projects

Ron Saporita, P.E.
Ron Saporita, P.E.
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ASME Press
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Risk control contains the elements of risk sharing, risk transfer and risk attenuation. Those risks that cannot be controlled, are by default, accepted.

Risk sharing is based on an evaluation of opportunities for success for each party. For example, if the contract contains unit prices, each party must anticipate a “worst case” shift in the proportion of low-cost to high-cost quantities and the associated change in costs or time impacts for differing conditions. A quantity variation clause could provide a mechanism to share the risks.

It is common for entities to utilize insurance policies and surety bonds to provide risk transfer. The contract may also transfer some time or cost risks to the contractor via various clauses (No Damages For Delay) or the delivery method.

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