Construction Contract Risk Management: Analysis of UK Report Risks

This report analyzes a technical article on construction contract risk management, focusing on UK practices. The article discusses the identification and management of risks within contracting processes, classifying risks as either subjective or objective. Subjective risks, based on experience and knowledge, are highlighted due to the lack of sufficient historical data for objective assessment. The report examines various risk analysis techniques, including scenario analysis and probability analysis, and emphasizes the importance of team collaboration in contract management. It also explores methods for assessing contract risks, such as brainstorming, and outlines strategies for managing these risks through policy creation and a three-stage risk management system. The conclusion stresses the necessity of effective risk management policies to protect company assets and mitigate potential risks associated with contracting processes.

Running head: CONTRACT 1
Technical Article about Construction Contract Risks
Name of student
Institution
Date

CONTRACT 2
Dr. Francis K. Adams is one of the technical article authors about contract risk
management whose article is entitled “a study of practices in the United Kingdom." Adam’s
article discusses risks sorrounding the analysis, idendification, and management of
contracting processes by a company (Adams, 2008). This assignment presents a summary of
the author’s technical contract report through a close analysis and identification of risks
present in the construction projects by the United Kingdom professionals.
Adams classifies risks as either subjective or objective. He declares the objective risks
whick are identified through actual observation, calculations when risks occur and the effects
of a project. The potential risks or actual risks include the analytical calculations which are
complicated experimental evidence or long term experience. Subjective risks are risks that are
assessed according to beliefs on the risk rather than the objective recorded risk information.
Subjective risks are of high quality based on knowledge and the experience of the risk.
It is biased for the author when he argues that construction contracts risks are mainly
subjective because they lack enough historical data to enable them to qualify as objective
techniques for accessing risk impact. The listed construction contract risks include the
scenario analysis, event tree analysis, probability analysis, simulation analysis among others.
Also, vesting the responsibility of determining and negotiating contracts solely to the contract
manager shows bias on the other members of the team.
The techniques of identifying an active risk are aimed at answering the question: what
are the risk sources which might cause failure. The objective of analyzing risk method is to
investigate possible numbers that quantify beliefs about uncertainty. This progresses from
data collection, severity, and the probability of risk event. The method examines all potential
sources of risks, how they interrelate and how they can be controlled.

CONTRACT 3
The ways to assess contract risk methods include brainstorming, synectics, checklists,
prompt lists, pondering, risk records among many others. Brainstorming allows all team
members to contribute in the proper contract management when it comes to bidding and
tender allocation (Haapio & Siedel, 2013). Through their ideas, contracting remains safer than
when the entire process is done solely by the contract manager. Contract managers needs to
consult other members involved in policy making before forming contracting decisions.
Adams also provides the ways on how to manage contract risks. Creation of contract
risk management policies aims at creating awareness and proper understanding of the nature,
severity, and type of risks. Further, coming up with risk management strategies helps project
managers in accessing the impact that the perseived risks may have to the company once they
occur. He also provides three stage risk management system which includes the identification
of the risk, analyzing and evaluation of the risks and risk response management.
In conclusion, without the establishment of risk management policies, contract
management staff will find it difficult to mitigate contracting risks. Therefore, companies
should establish effective risk management policies to protect company assets and reduce risk
occurrence. This would help in mitigating the potential risk sorrounding all contracting
processes by the company.

CONTRACT 4
References
Adams, F. K. (2008). Construction Contract Risk Management: A Study of Practices in the
United Kingdom. Cost Engineering, 50(1), 22-33.
Haapio, H., & Siedel, G. J. (2013). A Short Guide to Contract Risk. Taylor and Francis.