QUALITY MANAGEMENT

Constructions Project Management Risks’ Framework

Richard Hannis ANSAH*, Shahryar SOROOSHIAN**, Shariman BIN MUSTAFA*,

Oluyinka Samson OLUDAPO*

Abstract
The characteristic and inherent risks in construction projects present key difficulties to stakeholders and project
teams. Risk appraisal is a significant step toward potential variables identification and evaluation. In risk assessment,
adequate categorization and prioritization aid planning, budgeting and management of project related risks. In this
paper, an analysis of the risks associated with the delay sources in the internal environment of Malaysian construction
projects have been presented based on risk priority number (RPN) to determine the degree of severity, occurrence
and detection. Through literature review, eighty one risks under four main delay sources were extracted for further
analysis. From the results, the main risks include contractor’s financial problems, poor coordination by the contractor,
change orders, client’s financial problems, errors and defective work, poor materials management, poor
communication between consultant and contractor, unrealistic contract duration, poor procurement tools and
methods, unavailability of materials and labors, ineffective coordination by project managers, poor construction site
layout, changes in material types and specification, inaccuracies in estimation and budgeting, delays in approvals,
respectively. This study would provide a decision tool for prioritizing and categorizing risks in construction projects to
build a realistic and rational resources allocation guide.

Keywords: construction project, delay sources, project management, risks, risk priority number (RPN), Malaysia.

1. Introduction assessment, adequate prioritization aids planning and manage-

Risks are common in several projects around the world, from
automobile companies, through IT related businesses, pharma-
ceuticals, service industries (Ropel, 2011) to the construction
sector (Assaf and Al-Hejji, 2006; Iyer and Jha, 2006; Faridi and
El-Sayegh, 2006; Lowsley and Linnett, 2006; Sambasivan and
Soon, 2007; Alaghbari et al., 2007; Memon et al., 2011; Ibrahim
et al., 2012; Memon, 2014; Memon et al., 2014; Zayyana et al.,
2014). These increasing risks and the consequential delays over
the past decade, has urged research into the key risk factors or
variables to ensure effective and efficient control of time over-
runs in the project development cycle. Among such methods
include the use of failure mode and effects analysis (FMEA). Se-
veral companies regularly set up a risk assessment procedure
(FMEA) for performance improvement and profit maximization.
Projects consist of several risks that ought to be properly
scrutinized and address to avoid project failures (Carbone &
Tippett, 2004, Abdelgawad & Fayek, 2010; Sorooshian et al.,
2010). Basically, these risks are unique and are said to arise
from different sources (Norzima et al., 2011; Sorooshian, 2014).
The construction industry is heterogeneous, enormously com-
plex in nature and often involves significant budgets, and there-
fore reducing risks associated with project development should
be key for every project manager. Risks are complicated,
multifaceted and extremely challenging and seem to have a
number of uncertainties that must be dealt with at the early
stages of a project (Bing et al., 2005; Sambasivan and Soon,
2007). This is because project involves diverse number of par-
ties and interested groups who have different stake and value
system, expertize or experience, and desire outcome (Bing et
al., 2005; Ankit et al., 2013). Risk analysis ought to be carried
out in projects because every project varies in terms of size,
time duration, objectives, uncertainty, complexity, and pace, with
key inherent risks that must be critically assessed and mitigated
to avoid projects failures (Aziz, 2013; Sorooshian, 2014).
Even so, in most recent years, risk appraisal in construction
project management is a significant step toward potential delay
sources identification and evaluation (Sorooshian, 2014). In risk
———————
* Faculty of Industrial Management, Universiti Malaysia Pahang, Malaysia.
** Corresponding author: Shahryar Sorooshian; E-mail: sorooshian@gmail.com.
ment of project related risks; this is due to the realization that
risk categorization, prioritization, and analysis is crucial for
project success and better performance (Project Management
Institute, 2004; Thompson & Perry, 1992; Carbone & Tippett,
2004; Abdelgawad & Fayek, 2010; Aziz, 2013). However, there
seem to be no general consensus on the sources of risks and its
categorization (Memon et al., 2011; Ibrahim et al., 2012;
Kikwasi, 2012; Memon, 2014; Memon et al., 2014). Most studies
identify either causes or effects without effectively analyzing and
grouping the causes thoroughly (Ansah et al., 2016). However,
identification of the delay associated risks without establishing
their failure modes and priorities would not effectively ensure
reduction of failures in projects, or avoid major costly impact of
risky variables to projects in terms of budget, time and quality
considering the scarce resources of construction companies.
The existing body of knowledge has not been able to adequately
address the risks causing delays and this is the reason why
failures of projects persist (Sorooshian, 2014). Thus, a need for
further empirical research that concentrates on identification,
categorization and prioritization of individual risks in construction
projects development cycles.
In this paper, an analysis of the risks causing delays in the
internal environment of Malaysian construction projects have
been presented to determine the degree of severity, occurrence
and detection. The paper provides a decision tool for prioritizing
risks in construction projects to build a realistic and rational
resources allocation plan. The findings of this study would
facilitate adequate identification, categorization, prioritization,
planning, budgeting and management of the related risks in the
internal project environment.
2. Literature Review
In this section, we will focus on the analysis of the main body
of the existing literature which is positioned at the center of this
study; delay sources and associated risks.

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2.1. Risk in Construction Projects
The characteristic and inherent risks on construction projects
present key difficulties to stakeholders and project teams (Car-
bone & Tippett, 2004). In Malaysia, several delay associated
risks have been recorded in several projects (Majid, 2006;
Zayyana et al., 2014). These numerous records of risks in pro-
jects confirm that there is a pressing need for real causal factors
identification (Singh, 2009; Sorooshian, 2015). The factors may,
however come from various sources, from the internal to the
external environment of the project (Arman et al., 2009).
Nonetheless, delays are caused by risks. According to Ankit
et al. (2013), risk is any occurrence or action that affect the
accomplishment of project objectives. Thus, risk could be des-
cribed as the influencing factor(s) that negatively impact on the
time, budget, quality and the overall objectives of a project.
Risks in construction projects often cause time and cost over-
runs, litigation, loss of investment, settlements, total abandon-
ment, and sometimes affect company’s reputation and threaten
the economy (Sambasivan & Soon, 2007; Singh, 2009).
Risk management is key and should be emphasized to
project stakeholders to avoid failures of projects (Alberto & Mu-
hammad, 2013). Risk management is the process of identifica-
tion, assessment, response plan, monitoring and controlling of
risks. Thus, it reduces failures in projects, enhances reputation,
ensures profitability, protects and grows corporate assets as
well as enhances the shareholder value (Ankit et al., 2013).
There are plethora of views on the sources of risks asso-
ciated with time overruns or delays in the construction industry
(Ansah et al., 2015). The delay associated risks in the internal
project environment emanate from the project parties and these
may include; clients, engineers, designers, consultants, con-
tractors, subcontractors, suppliers, manufactures, among
others. According to Sorooshain (2014), the internal sources
occur due to malfunctions of any of the project parties including
the designer, client, contractor and other parties, which provide
labors, materials or services. The main sources of risks from
literature review included; risks related client; risks related to
contractors; risks related to consultant; risks related to materials
and their procurements; risks related to labor; and risks related
to contractual relationship and contract (Norzima et al., 2011;
Sorooshian, 2014; Ansah et al., 2015).
However, the review indicates different groupings of the
internal sources. The available risk factors causing time over-
runs are categorized into four main sources based on shared
characteristics: project management sources, project related
sources, project participant sources, and procurement
sources (Ansah et al., 2015).
The various risks associated with project management
sources may include the following; poor feedback, ineffective
coordination, poor decision making, poor project management
structure, ineffective communication, troubleshooting, inade-
quate experience, conventional project management tools, poor
monitoring, scheduling and planning, etc. (Abdelhamid, 2004;
Glenn, 2007; Sorooshian et al., 2010; Norzima et al., 2011; Aziz
& Hafez, 2013, Gonzalez et al., 2015).
The risks associated with project related are; change in
quality, change in plan, change in budget, change in schedule,
change in estimation, among others (Walker, 1995; Akinsola et
al., 1997; Dissanayaka & Kumaraswamy, 1999; Chua et al.,
1999; Alaghbari et al., 2007; Ramabodu & Verster, 2010;
Ashwini & Rahul, 2014).
The main project participants include; Client, Designer/En-
gineer, Consultant, Contractor and Subcontractor or Supplier.
These are further categorized into Client related sources, Con-
sultant related sources, Design related sources, and Contractor
related sources (Ansah et al., 2015). Generally, the risks include
joint ownership conflicts, change in orders, approval delays, fi-
nancial problems, technical skills, labor unavailability, ineffective
coordination, supervision and communication, frequent dispu-
tes, design omissions and errors, etc. (Dissanayaka & Kumaras-
wamy, 1999; Chan & Kumaraswamy, 1997; Alaghbari et al.,
2007; Ibrahim et al., 2012; Kikwasi, 2012; Aziz, 2013; Memon,
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2014; Memon et al., 2014; Owolabi et al., 2014; Ashwini &
Rahul, 2014; Zayyana et al., 2014; Sorooshian, 2015).
The risks in the procurement systems include; unavailability
of materials and price escalation, inefficient supervision and
management of materials, ineffective material procurement, ma-
terials delivery issues, contracting and tendering disputes, fun-
ding problems, inaccuracies in materials estimation, unclear and
ambiguous contract, unqualified contractors and subcontractors
selection, etc. (Dissanayaka & Kumaraswamy, 1999; Alaghbari
et al., 2007; Singh, 2009; Moubaydeen et al., 2013; Zayyana et
al., 2014).
3. Research Methodology
Following the synthesis of the literature review, the individual
risks were identified. Meanwhile, a preliminary analysis with
experts from government and construction companies was con-
ducted to check the construct items (identified risk variables),
and their suitability for the study’s domain. The variables were
further evaluated through semi-structured interview to determine
their failure modes using the RPN method.
3.1. Risk Priority Number (RPN)
Among the most beneficial tools in reliability, failure modes
and effects analysis (FMEA) standout as a structured technique
for identifying all failure modes in a system, in dependability
programs, evaluating their effect, and planning for corrective
actions (Abdelgawad & Fayek, 2010). In other words, FMEA is a
proactive process technique or reliability tool for evaluating de-
signs, systems, services and processes for potential occurrence
of failure (Bowles, 2003; Carbone & Tippett, 2004). This tool
assigns numerical weightings to individual risks causing failures
in systems and processes. In the context of the conventional
FMEA, the level of criticality of a failure mode is determine by
computing the RPN (Bowles, 2003; Abdelgawad & Fayek,
2010). It is connected with identification of failure mode using
severity, occurrence and detection indexes and RPN, and then
propose an action plan. This technique is commended by the
international standards such as MIL-STD-1629A U.S. Depart-
ment of Defense 1980 (Abdelgawad & Fayek, 2010). A tech-
nique based on analyzing the root causes, identifying potential
failures and examining failure impacts in order to mitigate the
impacts.
The fundamental goal for using this approach is that FMEA-
RPN presents a robust for prioritization of risks associated with
construction project delays and set comprehensive understan-
ding of its probability, detectability and severity. This approach
calculates each failure mode and assigns severity, frequency
and detectability values. Risks can be expressed in numerical
result. RPN uses a qualitative scale to assign values to failure
modes and then determine their weight. This study prioritizes
construction project risks to ensure effective allocation to the
risky variables and to avoid major costly impact on projects in
terms of budget, time and quality. Consequently, project teams
can assign limited resources to solve the crucial risks that bring
huge challenges on projects. Also, by ranking the importance of
the risk, project team could identify the priority risk(s) that should
be solved in order to minimize the loss. RPN application brings
success, allowing an organization to avoid repeated costly
mistakes and helping project teams to deal with the key risks
(Ankit et al., 2013).
3.2. Theoretical Background of RPN
The RPN analysis will be calculated through Microsoft Word
2013. The computation of descriptive statistics including the
Mean will be highlighted to indicate the measure of the
tendency. Meanwhile, RPN is calculated by the product of three
main indicators namely: Severity (S); Occurrence (O); and De-
tection (D) (Ansah et al., 2016). Severity gives a numerical
subjective estimate of how seriousness (effect) of risk variable to
a project. Occurrence assigns a numerical subjective estimate
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of the probability or frequency or likelihood that cause of a failure Also, highest group RPN values for consultant were
mode will occur in the construction project. Detection assigns a recorded at 1170, 632 and 570 for poor communication between
numerical subjective estimate of the effectiveness of control to consultant and contractor, frequent disputes with design
prevent or detect the cause before the failure reaches the end engineers and lack of project experience respectively,
user. The formulae for RPN is given as: S x O x D (Sellappan & meanwhile, the lowest ranked risks were recorded at 562, 534
Palanikumar, 2013). and 294 for quality assurance/control problems, poor testing and
RPN is not a measure of risk, but rather a risk priority. It gives inspection and delays in document reviews and approvals
a model to apply scarce resources to the most critical issues. respectively (see figure 4).
Also, scaling have higher priority and not necessarily higher The top group RPN in order of magnitude for designer were,
RPN. Table 1 shows the nine point scale (Ansah et al., 2016). low level of modern design technology application, mistakes,
incomplete and defective design documents, and lack of expe-
Table 1. Qualitative Scale for Severity, rience with values 810, 760 and 288 respectively (see figure 5).
Occurrence and Detection Furthermore, the highest priorities in order magnitude with
respect to contractor were recorded at 1848, 1754 and 1480 for
financial problems, poor communication and coordination with
Rank Detection Occurrence Detection other parties, and errors and defective work, however, the
lowest priorities were recorded at 450, 270 and 170 for ineffi-
1 None Almost Never Almost Certain cient supervision and management of site, poor scheduling and
planning of project and lack of experience respectively (see
2 Very Minor Remote Very High
figure 6).
3 Minor Very Slight High Lastly, from figure 7, the top group RPN in order of magni-
4 Very Low Slight Moderately High tude for procurement were poor materials management,
unrealistic contract duration, and poor procurement tools and
5 Low Low Moderate methods with values 1298, 1122 and 1074, however, the lowest
6 Moderate Medium Low values were recorded at 480, 456 and 294 for unclear and am-
biguous contract agreement, contracting and tendering dis-
7 High Moderately High Very Low putes, and ineffective material procurement respectively. Mean-
8 Very High High Remote while, Table 2 illustrates the overall group priorities and their
Serious/ Very High/ Very Remote/
respective ranking.
9
Hazardous Almost Certain Almost Impossible

RPN is an important for priority setting. In the traditional

approach, RPN with higher values represent higher priority.
Even though RPN in the traditional approach creates 1,000 cell,
there are just 120 distinctive RPN values. A few values cannot
occur (17, 22 and 925), however, others including 60, 72, and
120 have multiple occurrence for around 24 (Selvan et al.,
2013). In this paper, RPN approach is not only used to evaluate
the risks but as a tool for visualizing risks priority that detect the
most critical failures and provides a model to allocate the scarce
resource for project failure mitigation.
Figure 1. Overall Priority for Project Related

4. Results
Following the preliminary analysis, 10 key experts from a
total of 11 companies responded. To ensure the experts provide
reliable and comparable quantitative data for the assessment, a
semi-structured interview approach was used. Using the RPN
method, the critical failure modes existing in construction pro-
jects in Malaysia were analyzed to determine severity, occur-
rence, and detection (see table 2). In this section, we introduce
the risks in Malaysian construction project development pro-
cesses.
The highest group RPN values for project related were
recorded at 720, 672, 654 for change in schedule, change in
estimation, change in budget respectively, meanwhile, the Figure 2. Overall Priority for Project Management
lowest ranked risks were recorded at 228 and 396 for change in
quality and change in plan respectively (see figure 1).
Similarly, the top group RPN values in descending order for
project management were computed at 900, 870 and 756 for
ineffective coordination, poor construction site layout and inade-
quate experience, whilst the lowest RPN values were recorded
at 450, 306 and 264 for poor health and safety programs, poor
troubleshooting skills and poor monitoring of work respectively
(see figure 2).
Again, from figure 3, the top group RPN in order of mag-
nitude for client are change orders, client’s financial problems
and delays in approvals with values 1710, 1488 and 814, howe-
ver, the lowest values were recorded at 378, 368 and 330 for
mistrust towards project team and interference, slow decision
making and lack of client’s project management skills respec-
tively. Figure 3. Overall Priority for Client

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Table 2. Overall Group Priorities and Ranking

Overall
RPN1 RPN2 RPN3 RPN4 RPN5 RPN6 RPN7 RPN8 RPN9 RPN10 Mean
RPN
Project Related Sources
Change in Estimation 75 105 75 45 75 45 105 45 75 27 67.2 672
Change in Budget 105 75 75 105 45 27 75 45 27 75 65.4 654
Change in Schedule 75 45 75 75 45 75 75 105 75 75 72 720
Change in Plan 45 27 75 27 27 9 9 3 3 3 22.8 228
Change in Quality 45 75 75 27 27 9 45 9 9 75 39.6 396
Project Management Sources
Ineffective Coordination 75 105 105 75 105 105 75 75 75 105 90 900
Poor Decision Making 125 125 175 75 9 9 9 1 1 3 53.2 532
Poor Troubleshooting Skills 45 45 45 105 9 9 9 9 3 27 30.6 306
Inadequate Experience 125 125 125 125 75 25 45 27 9 75 75.6 756
Poor Monitoring of Work 27 45 45 27 9 9 9 9 9 75 26.4 264
Poor Scheduling and Planning 27 45 45 75 45 75 45 75 45 75 55.2 552
Poor Construction Site Layout 125 125 75 75 105 75 75 45 45 125 87 870
Poor Health and Safety Programs 125 125 125 27 9 9 9 3 9 9 45 450
Poor Managerial Support and Actions 75 45 75 75 75 75 45 27 9 27 52.8 528
Project Participants Sources
Client
Lack of Client’s Project Management Skills 45 27 75 45 9 9 9 27 9 75 33 330
Joint Ownership Conflicts 75 75 45 75 45 105 75 45 45 75 66 660
Change Orders 75 105 105 405 105 245 245 125 125 175 171 1710
Delays in Approvals 105 105 75 75 175 45 75 27 27 105 81.4 814
Slow Decision Making 125 75 75 45 9 9 9 3 9 9 36.8 368
Client’s Financial Problems 125 245 245 343 105 75 75 75 75 125 148.8 1488
Mistrust towards Project
75 75 45 45 75 15 27 3 9 9 37.8 378
Team & Interference
Consultant
Lack of Project Experience 75 75 45 75 45 75 45 45 45 45 57 570
Poor Testing and Inspection 75 45 75 45 75 45 45 27 27 75 53.4 534
Delays in Document Reviews and Approvals 27 45 45 27 9 9 9 9 9 105 29.4 294
Quality Assurance/Control Problems 75 125 125 75 45 45 27 9 9 27 56.2 562
Poor Communication between Consultant &
105 75 105 175 105 175 175 75 75 105 117 1170
Contractor
Frequent Disputes with Design Engineers 27 45 75 75 45 75 245 9 9 27 63.2 632
Designer
Mistakes, Incomplete & Defective Design Documents 45 75 125 45 75 45 125 45 75 105 76 760
Lack of Experience 45 75 45 45 9 15 9 9 9 27 28.8 288
Low Level of Modern Design Technology Application 45 75 75 105 75 105 75 105 75 75 81 810
Contractor
Lack of Experience 27 45 27 27 15 9 9 1 1 9 17 170
Use of Old Technology 45 75 75 125 75 27 75 75 75 125 77.2 772
Poor Communication and Coordination with Other
125 245 245 245 147 175 75 105 147 245 175.4 1754
Parties
Inefficient Supervision and Management of Site 27 75 75 45 75 27 45 27 27 27 45 450
Poor Scheduling and Planning of Project 75 45 45 27 9 9 9 3 3 45 27 270
Financial Problems 105 343 105 105 245 245 175 175 245 105 184.8 1848
Errors and Defective Work 175 105 105 175 175 75 125 125 175 245 148 1480
Procurement Sources
Unavailability of Materials and Labors 75 45 75 45 105 147 45 75 75 343 103 1030
Changes in Material Types & Specification 75 147 75 175 147 75 75 9 9 75 86.2 862
Ineffective Material Procurement 45 75 75 27 9 9 9 9 9 27 29.4 294
Poor Procurement Tools & Methods 105 105 105 75 75 105 105 105 147 147 107.4 1074
Delivery of Materials Delays 27 45 45 9 9 9 9 9 9 343 51.4 514
Contracting and Tendering Disputes 125 125 125 27 9 9 9 9 9 9 45.6 456
Inaccuracies in Estimation and Budgeting 125 75 125 75 75 45 75 75 45 125 84 840
Unclear and Ambiguous Contract Agreement 9 105 105 75 75 9 75 9 9 9 48 480
Selection of Unqualified Contractors & Subcontractors 125 125 125 125 9 1 9 1 1 9 53 530
Poor Materials Management 75 147 105 75 105 147 175 147 175 147 129.8 1298
Unrealistic Contract Duration 45 147 75 175 175 75 175 75 75 105 112.2 1122

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5. Discussions
The assessment of the risks in the project development cycle
based on RPN is realized. The internal sources of risks were
found to be the project management, project related, project
participants and procurement. However, these sources have
individual risks that contribute to time overruns or delays, which
have been identified and evaluated.
The overall top risks in descending order include contractor‘s
financial problems, poor communication and coordination by the
contractor with other parties, change orders, client’s financial
problems, errors and defective work, poor materials manage-
ment, poor communication between consultant and contractor,
Figure 4. Overall Priority for Consultant unrealistic contract duration, poor procurement tools and me-
thods, unavailability of materials and labors, poor construction
site layout, changes in material types and specification, inaccu-
racies in estimation and budgeting, delays in approvals, low
level of modern design technology application, use of old tech-
nology, mistakes, incomplete and defective design documents,
inadequate experience, and change in schedule respectively.

Figure 5. Overall Priority for Designer
Figure 6. Overall Priority for Contractor
6. Conclusion
In this paper, a risk categorization and analysis were pre-
sented to assist in the management of the risks in the internal
construction environment. To ensure every aspect of the iden-
tified risks is captured, first the study identified the sources and
then further identified the individual risks associated with the
sources. The study undertook a preliminary analysis to check
the comprehensiveness and rigor of the construct items. This
was followed by a semi-structured interview and finally, an ana-
lysis of the results. The results of the analysis showed con-
tractor‘s financial problems, poor communication and coordi-
nation by the contractor with other parties, change orders,
client’s financial problems, errors and defective work as the
most highest risks. The findings from this study would serve as
a guide and method for construction companies planning to
evaluate their current project state, thus, determining the major
risks and allocating reasonable resources and efforts to mini-
mize the risks in the project development. Overall, the study
makes a significant contribution to knowledge, risk identification
and assessment, and if well understood, would maximize project
value, quality as well as reducing time, cost, and lead a better
performance of Malaysian construction industry.

Q-as

Figure 7. Overall Priority for Procurement

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