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Construction-Risk assessment at tender stage

20th November, 2019

Before the construction at the tendering stage, the contractor should do a proper risk assessment. There are two kinds of risk in the construction process. First one is the risks which can quantify (quantifiable risks). And the other one, which cannot be quantified (unquantifiable risks). Where risks can be quantified, mathematically is considered as measurable risks. Whenever element or construction process is uncertain or mathematically unable to quantify, those risks are treated as unquantifiable risks. Mainly the reasons for the unquantifiable risks are due to the lack of information. Information is lack because the client does not present them, or the given data to obtain that information are not sufficient (or either contractor cannot understand the provided information).

Understanding the Risks at tender stage

There are three types of risks which a contractor can found at the tender stage.

  1. Risks due to the nature & condition of the project– Normally, the nature of the project can cause severe threats to the project itself. A SImple example, A contractor who is an expert in building contracting should not work on road construction because the contractor lacks proper tools, machinery and workmanship required to execute a road. Some amended terms and condition in the contract can create severe damage to the contractor at the construction stage.
  2. Risks which can be created by the consultants– Improper designs, lack of information provided by the consultant can be usual at the tender stage. Contractors should always be aware of these risks.
  3. Risks arise from the improper estimation process– Improper estimation process can always cause risks at the later stage. Inexperienced estimation personals, Avoiding critical pieces of information are the most typical reasons for the improper estimation process.
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