What Are The Important And Most Key Point On Construction Project Is Risk?

750 Words Jun 2nd, 2015 3 Pages
6.0 Risk allocation:

The important and most crucial key point in construction project is risk. All the new methods researches and new innovations in construction management is to reduce the risk in project, to increase cost certainty, reduce time extensions in projects and satisfy the clients. Every procurement method has the risk allocations in different ratios depending up on method. While choosing the procurement methods the risk associated to every possible procurement method should be assed by the client. Risk is shared between the contractors and principal some times it may be recovered by the insurance and sometimes relocated by other parties. In the contract the client and the contractor or other partied describe how risk is shared between them. If the client allocates more risk on to the contractor there is a chance in increase on risk on the client to due to the increase in project budget. As he contractor gets the allowance for unforeseen situations. So passing on the more risk to the contractor increase the contract price eventually.
There are some risks, which cannot be passed to the contractor like change in design after the contract is awarded to the contractor after the contract is awarded by the principle. The provision of contract shows who is liable of what risks and which parties take the responsibility for the risk arise in the construction. If the contractor is not given enough allocation of risk there may be a situation where contractor may face…

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