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CONSTRUCTION MANAGEMENT 1
OVERVIEW:
CONSTRUCTION
RISK
MANAGEMENT
PROCESSES
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1. Delays
2. Documentation Errors
3. Change Management
4. Sub-Contractor Default
5. Supply Chain Isues
6. Poor Project Management
7. Labor Shortages
8. Poorly Defined Scope of Work
9. Health and Safety Hazards
10. Payment Disputes
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Stem from a variety of places, The 2nd highest cause of disputes globally
including: was Errors and Omissions in Contract
Poor Project Management Documents - Arcadis 2022 Global
Permitting & Inspections Construction Disputes Report
Supply Chain Disruptions The leading cause of Construction Disputes in North
Change Orders America in 2021 was “Poorly Drafted or Incomplete
Accidents and Unsubstantiated claims" – Arcadis Report
Adverse Weather
The risk of errors is compounded by the sheer volume of
documents required to complete a project, including:
Drawings Payment Claims
Submittals Lien Waivers
Contract Documents Change Orders, and
Notices many others
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3 Change Management
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3 Change Management
The more time and effort spent on investigating site conditions and reviewing
drawings and site plans for accuracy, the fewer changes required after breaking
ground.
Owners and Contractors should follow a clear and efficient process for
communicating and managing changes, doing everything possible to reduce the time
between RFIs and change order approval.
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10 Payment Disputes
Arise Frequently due to: Mitigating Measures:
Funding/Financing Delays
Owner & Contractor should Observe:
Change Orders
Retainage Comprehensive Documentation
Lien Waivers Clear Communication
Back-Charges Close Adherence to Contract
Work Quality Disputes Requirements.
Payment Problems:
Disrupt Contractor Cash Flow The time to get paid in construction is
Increase the Risk of Default among the longest of all industries.
Increase an Owner’s Risk of Lien Claims
Contractors and Suppliers Take Action
Recover Unpaid Contractual Amounts
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CONSTRUCTION
OCCUPATIONAL SAFETY AND
HEALTH
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