In this series of posts, we focus on dispute "avoidance" strategies our clients can implement during the project. We asked Andrew Englehart of Construction Process Solutions to provide us his views on effective risk management and claims avoidance.
Mr. Englehart's first step about picking the risk management team is below.
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Effective Risk Management and Claims
Avoidance via a Project-Specific Plan
by Andrew T. Englehart, Principal, Construction Process Solutions, Ltd, www.cpsconsult.com
Step 1: Picking your Risk Management Team
“Claims Avoidance” does not mean
“document the #!$$%%##@& out of the project.” (That is another topic . . . how
to minimize losses due to claims once you do find yourself embroiled in one.
Another blog, another day.) If that is
your strategy to maximize project return, you are already acknowledging you are
going to have some defeats in some battles, but hopefully not lose the war.
(Though having a “standing army” of the right documentation (again, a different
blog for a different day) is necessary to being a sovereign construction
company (or project owner) in today’s world.)
Effective claims avoidance requires
a plan that must be developed at the outset of the project during the “nuts
& bolts” planning of the project. The first material step in developing the
Risk Management Plan is to identify possible impediments to the success of the
project. This is a large elephant and needs to be eaten 1 bite at a
time. BUT, before even getting to that process, you must pick the right team
members that will identify those (possible) risks, and who will then work
through developing the Risk Management Plan. The team should have depth and
breadth. Examples: Depth . . . team members should range from executive level
personnel down to the key labor foremen on the project. Those tradesmen with
boots on the ground are a construction company’s front line risk assessors and
they have seen it all. The breadth should have a similar wide range, including
the estimator who estimated the key parts of the project, and all the way to
the safety coordinator, and perhaps even the shop manager. Perhaps the lead
engineer or draftsperson? Without these
diverse perspectives and the information that can be provided, the resultant
planning process will likely end in a myopic and distorted plan, ultimately
being unsuccessful in its goal in maximizing project return via minimizing
project risk.
It’s refreshing that this “team
approach” to identifying risks and developing Risk Management plans is
increasingly being used across a project, incorporating multiple organizations
(owners, designers, contractors, etc.) in a collaborative fashion. Sadly, many
of these planning processes, and the resultant plans, are defective because the
teams are generally focused on the upper level management and executive level,
and miss where the risk battles start, on the project front lines on a day to
day basis among those with boots on the ground.
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