Dealing with project risks

Construction projects are managed using the knowledge available to all project partners. The findings can be broken down into confirmed and unconfirmed findings as well as unknown and unrecognized findings. Unconfirmed findings include issues that have a probability of less than 1, known as project risks, which can be recorded in a risk register. The basic principle applies that no construction project is risk-free.

Project risks make up a significant part of the overall consideration in construction projects. Initially, the proportion of risk is high. As the project progresses and knowledge is gained, project risks can be increasingly better assessed. Opportunities identified at an early stage can be better exploited and risks can be better managed.

The alliance agreement is based on the principle of joint risk-bearing. The client and realization partner share responsibility for all processes in the project as far as possible. Those risks that are to be borne by one alliance partner alone are explicitly listed in the alliance agreement.

For the purpose of joint risk management, the alliance partners implement the methods for integral risk management as early as the procurement phase. For the procurement phase, the client determines which method (semi-quantitative, quantitative) is to be used to determine the financial risk provision.

With regard to the agreement on target costs 1, the costs for financial risk provisioning are derived from the risk register maintained jointly by all alliance partners. The costs for risk-reducing and opportunity-increasing measures must be taken into account in the work costs (see Figure 7).

Flat-rate risk surcharges are not recommended due to a lack of transparency and the risks associated with such surcharges.