We have been researching project risk management to identify where procurement sits in regard to detailed risk management plans for a project. Unsurprisingly, there is a widely varying emergent position. Our research shows that:
- Many projects have little expert procurement support due to lack of resource skills and availability.
- Stakeholder risks are badly managed, specifically where the project impacts on the public, e.g. banking services I.T. system changes.
- Contracts are awarded before designs are completed thus leading to exceptional project costs increases and at another
extreme, ending the project and paying compensation to the contractor(s). - Memoranda of Understanding issued that are unclear on which facets are obligations
- Contractors appointed without a robust procurement process, in some cases without any competitive tendering.
- Inadequate project management and contract management resulting in key milestones being missed, costs to increase and resultant poor relationship management.
- Fraudulent use of sub-contractors that is not visible until remedial action threatens project delivery
- Advance payments made to contractors without appropriate security being in place
- Contract includes provision for the payment of damages for delays to project but never applied.
- There is often a lack of formal close out, leaving uncertainties in regards to release of bonds and when guarantee periods commence.
Procurement can play an essential pro-active role in identifying and managing many risks. Procurisk™ is a tool that can be
of great assistance.If you would like to know more about Procurisk™ please give me, Ray Gambell, a call on +44 (0) 1744 20698 or email me [email protected]