Contract & Project Risk Management & Compliance
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One of the critical outcomes of contract and project management is to ensure that risks to owners and contractor are identified and controlled in a proactive way so that both parties are satisfied with the project outcome. While world class project and contract management cannot, of itself, make risk “go away”, it can, and should, identify the risks and opportunities, determine who is responsible for managing each individual risk, and for the consequences should the risk occur.
We have developed this interesting and fast paced 2 part series to provide participants with:
- Knowledge to move contracts and project management from the tactical/reactive to the more important proactive/strategic focus
- Critical understandings of the risk mitigation process
- How to examine both the threats and opportunities facing contracts and projects from both a top-down and bottom-up perspective using a proven risk management processes
- Skills in allocating contract and procurement risk
- Ability to identify the warning signs of cost overruns, schedule delays, and poor quality, as early as possible in the project to minimize or mitigate the impact
The seminar is split into two modules:
MODULE I – Contract Risk Management & Compliance
MODULE II – Project Risk Management & Compliance
Each module is structured and can be taken as a stand-alone course; however, delegates will maximise their benefits by taking Module 1 and 2 back-to-back as a two-week seminar.
The Primary Objectives of the 2 part series are to help Delegates to:
- Apply useful techniques to identify, analyze, mitigate and monitor risks in the project life cycle.
- Use a practical, six-step process to manage project risk.
- Review the impacts of different approaches to risk allocation.
- Explore different contract types to transfer risks.
- Consider the contractual techniques to ensure effective risk allocation.
- Learn how to create an effective risk monitoring plan and risk management strategies.
Participants will increase competencies through a variety of instructional methods including lecture, exercises, reviewing published articles, checklists, videos, and group discussions. A comprehensive seminar manual enabling practical application and reinforcement is provided.
Delegates are encouraged to bring real problem examples with them, for discussion on a confidential basis, and to share their experience of particular issues. Time will be allowed for general discussions, and for one-to-one discussion with the trainer.
The organization will benefit by:
- Expanding the expertise of personnel involved in project and contract development and management will allow project, contract, and general management teams to be more effective.
- The total cost of ownership will be understood and reduced by properly identifying and managing the risks during the project life cycle.
- Clear allocation of risk will reduce the possibility of contractor disputes, and any that do arise should be settled more quickly, with less cost, delay and disruption.
- Reducing project failure, poor quality, costly changes, and cost overruns resulting from poor understanding and management of risk.
- Implementing better risk management through the understanding of the relationship between scope, cost, and time hich improves the chance of project success.
- Developing an appreciation of the true effect of contractual indemnities which will enable better decision-making as to contract structures and ensure that risk is passed to others properly and in a cost effective manner.
Attendees will gain by participation in this program as a result of:
- Increased understanding of risk and opportunities through the development of risk identification and assessment skills.
- Able to control multiple project risks using concise strategies.
- Make risk and opportunity integral components of your next project plan
- Better ability to allocate risk, and to select the appropriate project processes and contractual regime to achieve the organizations goals.
- Improve the ability to reduce the negative impact of poorly-managed risk on a project or a company.
- Identify threats and opportunities and weigh their relative value in your project
Day1 - Types and Management of Risk
- The Need for Contractual Relationships
- Defining Risk
- Categories of R for Both Sides of a Contract
- Risk Assessment Process
- Managing Risk
- Qualifying Suppliers
- Defining Internal Control
- Proportionality of Control
Day2 - Minimizing and Transferring Risks
- Transferring Risk Through Contract Types
- Firm Fixed Price or Lump Sum Contracts
- Cost reimbursable Contracts
- Incentive Contracts
- Award-Fee Pricing Arrangements
- Cross Indemnities
Day3 - Risk Related Terms & Conditions
- External events
- Force majeure
- Strikes and other labour disputes
- Risk and Title
- Use of ICC Incoterms
- Assignment and Novation
- Clauses that Flow Down to Sub-contractors
- Risks Associated with Sub-Contractors
Day4 - Dealing with Financial Risks
- Controlling Risk Associated with Payments
- Currency Risk
- Economic Risk
- Fraud and Corruption
- Limiting or excluding liability
- Distinctions between liability in contract, and the general law
- “Gross negligence”
- A review of some sample clauses from standard contracts, and other real documents
Day5 - Remedies When Bad Stuff Happens
- Mistakes and Misrepresentations
- Impracticability of Performance
- Remedies Generally
- Types o Remedies
- Liquated damages
- Discussion of real examples (delegates are encouraged to bring real or made up examples for discussion)
- Review of seminar and question and answer session
Risk Management Framework and Planning
- Key definitions
- Project Management Body Of Knowledge (PMBOK) – 6 risk management processes
- Project risk management goal
- Purpose of risk management
- Benefits of risk management
- Responsibilities in risk management
- Integrating risk management into the project management process
- Components of risk
- Types of risk
- Six steps of risk management
- Plan the approach to risk management
- Risk Identification
- Risk Assessment & Quantification
- Risk Response Plan Development
- Risk management plan execution
- Evaluating risk response results
Risk Planning (Step 1)
- Plan the approach to risk management
- Planning inputs, tools & outputs
Risk Identification (Step 2)
- Identification inputs & tools
- Identification guidelines
- Risk identification techniques
- Risk categories
- Risk identification outputs
Review of Cost & Schedule Estimating in Relation to Risk
- Cost estimating classes & types
- Cost estimating methods
- Accuracy, allowances, contingency & management reserve
- Work Breakdown Structures (WBS)
- Schedule diagramming – critical path method (CPM)
- Resource management
- Earned value method (EVM)
Risk Assessment & Quantification (Step 3)
- Risk analysis inputs
- Risk analysis guidelines
- Probability analysis
- Impact analysis
- Risk analysis approaches – qualitative & quantitative
- Risk analysis tools & techniques
- Statistical sums in risk analysis
- Program Evaluation & Revue Technique (PERT)
- Monte Carlo simulation
- Decision trees
- Project risk rating & prioritizing
- Risk analysis outputs
Risk Response Plan Development (Step 4)
- Risk response development inputs, tools & techniques
- Risk response strategy guidelines
- Response strategies for threats
- Response planning & network diagramming
- Response analysis
- Alternative responses
- Reserves – contingency & management
- Response planning outputs
Risk Response Control
- Risk management plan execution (Step 5)
- Risk response control tools
- Risk response control guidelines
- Risk strategy execution
- Evaluating risk response results (Step 6)
- Risk documentation
Who should attend
- Contracts, Tendering, Purchasing, Procurement, and Project personnel
- Contract Administration, Engineering, Operational, and Maintenance personnel
- Risk, Claims, Financial, and Audit personnel
- And all others who are involved in the planning, evaluation, preparation and management of tenders, specifications, awards, and contracts that cover the acquisition of materials, equipment, and services and who are in organizations whose leadership want high levels of competency in those involved in these activities