risk in procurement and the client Flashcards
What are the types of clients in procurement?
Repeat clients, occasional clients, one-off clients
These categories help understand the nature of client relationships and project continuity.
Who is responsible for making different decisions in a project?
Clients and users
Users play a key role in briefing for buildings.
How do individuals tend to manage risk?
Intuitively
This can lead to insufficient risk management practices.
What advantages do project managers have in risk management?
More explicit risk management
This helps in identifying and addressing risks effectively.
What is risk management?
A tool to identify critical issues and evaluate the impact of risks
It also involves developing a strategy for minimizing risks.
What are the benefits of good risk management?
- Reduces risk
- Tackles unforeseen circumstances
- Identifies project objectives and priorities
- Identifies constraints on the project
These benefits contribute to overall project success.
What are the possible responses to risk?
- Avoid (abandon project)
- Reduce (redesign)
- Pass on
- Keep
- Remove hazards
These strategies help manage risk effectively.
What does risk management help with?
Control of risk
It also identifies opportunities as well as threats.
What affects procurement strategies?
- Information and decisions communicated
- Timetable for making decisions
- Extent to which changes can be made without cost penalty
- Relationships between client and advisors
These factors influence project execution and outcomes.
What is the traditional route in procurement?
Contractor constructs the building for lump sum or monthly cost to a design supplied by the client
The contractor takes on financial risk for construction waste.
In the traditional route, who assumes responsibility for the risk from the performance of the design team?
The client
This creates a risk-sharing dynamic in project execution.
What is construction management?
Client employs design team and separately engages construction manager
The construction manager coordinates design and construction activities.
What does management contracting involve?
Management contractor appointed by client to manage building process
This contractor is responsible for construction work and communicates directly with trade contractors.
What is the design and build procurement method?
Contractor is responsible for designing and constructing the building for a fixed sum
This method transfers design risk to the contractor.
What happens in a build own-operate transfer arrangement?
Contracting organizations run a building for a number of years in exchange for rent
Ownership reverts back to the client after the period.
What is partnering in procurement?
A series of relationships among organizations committed to mutual objectives
This approach emphasizes problem resolution and continuous improvement.
What do different procurement routes lead to?
Different relationships between client, designers, and contractors
These relationships affect project dynamics and communication.
Fill in the blank: Procurement route affects _______.
information flow, timetable for making decisions, and management of change during the process
Understanding these effects is crucial for effective project management.
