Construction-Projects

The uncertainty in undertaking a construction project comes from many resources and often involves many participants. Since each stakeholder tries to minimize its own risk, the conflict among various parties can jeopardize a project. The inability of the project owner to identify and manage the unexpected often leads to undesirable outcomes.

Risk management has become an inseparable requirement for large construction projects. It deals with the risk assessment, hazard identification, and risk control. A systematic process of identifying, evaluating, and responding to uncertainties is key to successful project management. Project risks are uncertain events that, if occur, can have a negative effect on a project’s objectives.

Common construction uncertainties

The unexpected rise in cost and delayed completion in a project is usually caused by contractors, scheduling and the environment. It is not uncommon for these factors to arise. The impact of schedule and cost overrun influences the construction industry as well as the overall economy. Considering the complex nature of construction projects and pressure to meet deadlines, project planning and scheduling should be done in a manner which accommodates changes without affecting the overall project goals.

  • Poorly project scope management
  • Sudden increase in construction material
  • Lack of project controls
  • Issues with suppliers and subcontractors
  • Poorly written contract
  • Environmental or weather conditions
  • Unknown site conditions

The unexpected rise in cost and delayed completion in a project is usually caused by contractors, scheduling and the environment. It is not uncommon for these factors to arise. The impact of schedule and cost overrun influences the construction industry as well as the overall economy. Considering the complex nature of construction projects and pressure to meet deadlines, project planning and scheduling should be done in a manner which accommodates changes without affecting the overall project goals.

Risk management

Potential risk should be identified as early as possible during the preconstruction phase of a project. As a project owner or contractor, you can hold brainstorming sessions with the stakeholders to highlight risks. Think of all the possible situations that could have a negative impact on the project. Make sure you hire professional project control experts to make the risk identification process more efficient.

Once all the potential risks are identified, define each risk based on their probability of becoming reality, and the possible impact these risk could have on the project. High probability risks should be managed first. Risks can be avoided, eliminated, reduced, transferred, or accepted.

Contingencies in construction

Contingency is one of the most misinterpreted and misapplied word in the construction industry. It refers to the resources that are added to the base estimated amount so that project managers can deal with the changes. The budget allocated to cope with uncertainties during construction is also a part of the contingency plan.

There are potential situations where there could be delays in activities which lead to delay in the overall project duration. Delayed activities, consequently, can affect the budget, quality, and safety of the project. Therefore, it is critical to employ the right tools and expertise to estimate time and cost contingencies as they are prime factors in achieving a successful project. Scheduling and cost management software play a key role in estimating time and cost contingencies.

Who we are

Specialty Plant Services (SPS) is a well-reputed project controls company in Canada which uses proven proprietary software and years of experience to deliver state-of-the-art project controls services which include cost management, scheduling, information modeling, progress measurement, reporting and more. Visit our website for more information!