How have you managed risk on you project and advised of mitigation strategies?
- Flex Row Busbar Orientation (A/E error)
* Works were completed in Cell 2, Cell 3 progressing and Cell 4 not started.
* Advised that works needed to be completed out of hours to maintain programme.
* Advised that cable on 8-week lead, need to reuse cables and new cables from Cell 4
* Advised that an order needs to be placed for additional cable with restocking agreed - 6-week look aheads for labour - reducing inefficient work and standing time
* If workfaces are not opening up (BWIC, containment), drop labour count
* Keep monitoring and give notice to increase the headcount
* Factoring overtime work as a risk pot by using blended overtime rate - KPIs for cabling and terminations
* Based on current progress vs forecast, current labour won’t achieve required output
* Notified the Subcontractor of this, who said labour availabilty difficulties
* I advised Sisk that this was a critical path activity which could not afford to slip
* Advised that weekend and shift work should be available at no cost to Sisk
* Also advised that the Subcontractor needed to propose operatives with least fatigue
How do you complete tender risk analysis and advise of risks?
Goodman Tender AMS01:
Lowest Compliant Bid - Chillers
* Recent tender I compiled a risk register highlighting risk on MEP packages
* I had proposed lowest compliant bid, however large range between bidders
* If the lowest bidder were to renege, the package would be at a loss
* I advised a risk value between the lowest and next compliant bid be taken
Sprinkler Package
* I only had two tender returns on the sprinkler package with large disparity (€1m)
* Risk budget between the lowest and highest bid and then discounted for likelihood
Scope gaps, missing scope, exclusions, plugged figures:
* Bidders make exclusions ans miss scope when bidding
* When levelling the bids I advise of budgets to make their bids compliant
Creating integrated commercial reports and using them to identify trends. Then advising how to mitigate risks, and advise of cost mitigation strategies.
Rising cost on packages, which is disproportionate to progress is an indicator for inefficient working and this can be forecasted.
Where packages show this trend, I investigate the reasoning for the overrun and advise of ways to recover the costs.
Ways to recover the cost are through Client Vairation, Subcontractor contra charge, budget transfers, reducing headcount, delaying commencement, rescheduling.
How do you create a CVR from scratch. Then how do you manage and advise of profitability thoughout the project?
Need the following to create a CVR:
1. Main contract and Subcontract agreements to base position and margin
2. Access to live cost via a database e.g. COINS
3. Access to Main Contract and Subcontract variation and risk registers
4. Access to the constuction programme
Advising:
* By reviewing variation and risk registers alongside contracts I can advise of cost recovery
* By reviewing planned vs actual costs I can spot trends an suggest ways to mitigate overspend (e.g. reschedule, drop headcount).
Assessing loss and expense claims
- Check validity; e.g. timely notification of the issue
- Review progress and other issues which may have impacted the work
- Review whether causation logic is correct including impact on cost & time
- Review whether the contractor has acted reasonably to mitigate losses
- Review cost and time impact proposal; ensuring they are substantiated
Phase 1: Electrical Contractor, claimed for loss and expense due to power delay for Cx. I reviewed their proposal whilst also reviewng their progress and historical notices progress issues. Whilst the power was delayed, they were concurrently delayed as equipment wasn’t tagged. The reason for that was poor labour availablilty for cable pull and terminations, which was well documented.
Advising the project team re. risk mitigation
- Keep records of on-site progress and issues day-to-day
- Confirm all site conversations with an email and ‘cc’ me
- Inform them of current scope and what is additional (integration works)
- Advise them re. timely notification of change and time barring of entitlements
Assessing risk allocation, design responsibility, and programme impacts to determine the most appropriate subcontractor and procurement route
- Risk allocation: tender risk analysis sheet
- Design responsibility: ensure CDP is captured in full (no limits on quants to AE docs)
- Programme impacts: material lead times, programme logic, histograms
Issued a report regarding procurement strategies (CWL01.02)
- Presented a report to Sisk directors re. procurement analysis and strategies
- Split sections (prelims, electrical, mechanical, recommendations)
- Levelled bids and identified opportunities where Sisk can self deliver
- Sisk were having all MEP works under Tier 1 Subcontractors
- Advised they can self deliver, providing prelim efficiencies with blended MEP team
- Also Subcontract direct with Tier 2s removing a compounding of profit margins
Provisional sums in FIDIC, experience and advice
Variation and adjustments are in FIDIC Clause 13 and Provisional Sums are within Clause 13.5.
The Provisional sum is essentially a placeholder for undefined works and once the scope is defined. The value of the works is fully substantiated and the contractor is reimbursed for their cost plus the agreed fee.
I have handled provisional sums for the Telecoms and Security packages on CPH01.
What do you need to do prior to applying liquidated damages in FIDIC?
Issue a Notice referenceing Clause 2.5 ‘Employer Claims’ of their intention to claim liquidated damages. This can be as soon as practicable after becoming aware of the delay.
There is also Clause 8.6 (Rate of Progress) where the Engineer may notify the Contractor of slow progress and risk of meeting the Completion Date. They can request that the Contractor submits a revised programme remedying the delay.
Advising values to be traded on variations
I tend to advise values to be traded on unsecured variations:
1. Secondary containment within the hacs; trade 0 from VOs, fund from risk
2. Transformer Sump Pump - trade 0, cost = 0, trade full value once agreed
3. AOVs - initial position was no entitlement, trade 0, once substantiated cost = value
Subcontract liabilities, advice
A liability is and an oblgation owed to a creditor. It represents a transaction which must take place in future, but has yet to be costed.
They are important to track as they represent the true financial position of the project and as the transaction has yet to take place, they will not be recorded on as a transaction on COINS.
I advise of Subcontractor liabilities on a monthly basis, which informs Sisk accounting of expenditure prior to payment.
Managing project risk registers
- I chaired risk meetings on CPH01
- Recording risks as well as advising of likelihood and severity
- Examples; busbar orientation, Suir KPIs, delayed start for security, workface availability (6-week lookahead).
- Advised of risk budgets and mitgation / rectification. e.g. overtime work to save programme, order long lead materials and return excess, drop labour and carry E/O overtime costs to catch up.
Loss and expense claims under FIDIC, examples
Loss and expense dealt with differently under FIDIC; both need to be notified and claimed for separately….
